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FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES PURSUANT TO
SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
STEROIDOGENESIS INHIBITORS INTERNATIONAL
(Exact name of registrant as specified in its charter)
Nevada
(State of Incorporation)
[ Applied For ]
(IRS Employer Identification Number)
101 Convention Center Drive, Suite 310, Las Vegas, Nevada 89109
(Address of Principal Executive Offices)
(702) 734-6413
(Registrant's Telephone Number, Including Area Code)
Securities to be Registered Pursuant to Section 12(b)of the Act:
Title of each class to be registered
NONE
Name of each exchange on each class to be registered
NOT APPLICABLE
Securities to be Registered Pursuant to Section 12(g)(1) of the Act:
Common Stock, $.001 par value per share
(Title of Class)
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STEROIDOGENESIS INHIBITORS INTERNATIONAL
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
Table of Contents
Part I
Item 1. Description of Business............................................4
Item 2. Management's Discussion and Analysis
or Plan of Operation.....................................14
Item 3. Description of Property...........................................16
Item 4. Security Ownership of Certain Beneficial
Owners and Management....................................17
Item 5. Directors, Executive Officers, Promoters
and Control Persons......................................19
Item 6. Executive Compensation............................................22
Item 7. Certain Relationships and Related Transactions....................24
Item 8. Description of Securities.........................................25
Part II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters..............28
Item 2. Legal Proceedings.................................................29
Item 3. Changes in and Disagreements with Accountants.....................29
Item 4. Recent Sales of Unregistered Securities...........................29
Item 5. Indemnification of Directors and Officers.........................30
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Part F/S
Financial Statements.......................................................34
Part III
Item 1. Index to Exhibits.................................................35
Item 2. Description of Exhibits...........................................35
Signatures.................................................................36
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This Registration Statement contains certain forward looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. The
Registrant intends that such forward looking statements be subject to the safe
harbors created thereby. These forward looking statements include statements
regarding (i) the Registrant's research and development plans, marketing plans,
capital and operations expenditures, and results of operations; (ii) potential
financing arrangements; (iii) potential utility and acceptance of the
Registrant's existing and proposed products; and (iv) the need for, and
availability of, additional financing.
The forward-looking statements included herein are based on current
expectations and involve a number of risks and uncertainties. These forward
looking statements are based on assumptions regarding the Registrant's business
which involve judgments with respect to, among other things, future economic and
competitive conditions and future business decisions, all of which are difficult
or impossible to predict accurately and many of which are beyond the control of
the Registrant. Although the Registrant believes that the assumptions underlying
the forward looking statements are reasonable, any of the assumptions could
prove inaccurate and, therefore, actual results may differ materially from those
set forth in the forward looking statements. In light of the significant
uncertainties inherent in the forward looking information contained herein, the
Registrant or any other person that the objectives or plans of the Registrant
will be achieved should not regard the inclusion of such information as any
representation.
PART I
Item 1. Description of Business
History and Development of the Company
Steroidogenesis Inhibitors International (the "Company") was originally
incorporated as Webx Media, Inc., in the state of Nevada on March 26, 1996. The
Company was originally organized to engage in the business of providing
entrepreneurs and small business owners with a presence on the Internet. The
Company was not successful in launching its business and did not engage in any
business activity until its combination with Steroidogenesis Inhibitors, Inc.,
as described in the next paragraph.
On October 21, 1997, the Company entered an agreement to acquire up to
100% but no less than 86% of the issued and outstanding shares of
Steroidogenesis Inhibitors, Inc., a Nevada corporation ("SI, Inc.") organized on
September 2, 1994. In connection with the agreement, the Company issued an
additional 4,497,000 restricted shares to effect a share exchange with the
shareholders of Steroidogenesis Inhibitors, Inc. and acquired 88.51% of the
common stock of SI, Inc.
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The Company changed its name to Steroidogenesis Inhibitors
International ("SII") on November 6, 1997, and control of the Company changed as
the result of the reorganization, issuance of shares and the appointment of new
officers and directors of the Company. The Company then focused its plan of
operations on the business of developing a new class of pharmaceuticals called
cortisol modulators or steroidogenesis inhibitors, which can be used to treat
AIDS and other high-cortisol life-threatening diseases.
The Company is a researcher and developer of pharmaceuticals for the
treatment of conditions and diseases where elevated levels of the stress hormone
cortisol play a significant role in destroying the immune system. The Company
has developed a proprietary drug Anticort(R), based upon a high dose of a
stabilized and complex form of procaine hydrochloride ("HCL"). Patients
suffering from AIDS, HIV and other serious diseases such as Alzheimer's,
Parkinson's and Cushing's have increased levels of cortisol, a powerful
immuno-suppressive hormone. Anticort(R) has been shown to return levels of
cortisol to normal when tested in clinical research settings. While not a cure
for AIDS, the Company believes that Anticort(R) is a life extender. The Company
plans to manufacture Anticort(R) itself and market it through one or more
licensees, wholesalers and pharmacies.
Background of Anti Cortisols
The Company will focus on completing testing and marketing of its
Anticort(R) product which addresses the HIV market. Its potential action is in
improving the immune system. To understand the additional markets addressed by
the Company's products, it is essential to understand the foundational component
upon which the Company's products and technologies are based: a hormone called
cortisol.
Cortisol (hydrocortisone) is a hormone manufactured by the cortex, the
outer layer of the adrenal gland, located on top of the kidneys. It is the
dominant hormone of a group of hormones called glycocorticosteroids. In order to
manufacture cortisol the adrenal gland requires as a material the exogenous
cholesterol, i.e., provided by outside foods. Such cholesterol is needed for
cortisol production. Cholesterol is provided 80% by the intake of fatty foods
(exogenous cholesterol) and 20% by the human body through its own internal
manufacturing process (endogenous cholesterol).
A substantial reduction in the intake of exogenous cholesterol can
drastically limit the capacity of the adrenal glands to manufacture cortisol,
thus depriving many diseases (from diabetes to arteriosclerosis) of their
building material. These, as well as many other diseases which result from high
levels of cortisol, will regress on low fat diets. This might explain the
success, and sometimes impressive success, of certain low-fat diet programs.
However, cholesterol also performs vital functions in the human body, including
the manufacturing of sex hormones. Thus, a reduction in the intake of
cholesterol is desirable, but might affect other vital functions of the body.
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Cortisol production varies with its circadian rhythm during a 24-hour
period. At 8:00 a.m., it is about 20 ug/dl to help the individual meet the
challenges of the day. When the typical business day has come to an end at about
5:00 p.m., the level drops to about 7 ug/dl and by midnight, it is down to 2
ug/dl. It is estimated that the total amount of cortisol produced by the human
body, under normal conditions, is about 20 mg over a 24-hour period.
Cortisol is present in the blood as either "total cortisol" or as "free
cortisol," total cortisol being the one routinely measured. Disturbances in the
circadian rhythm of cortisol levels can cause the appearance of a variety of
conditions: (1) insomnia, when cortisol levels are elevated during late evening
and early morning hours; (2) jet lag, when traveling long hours on a plane; (3)
Space Adaptation Syndrome, when encountered in orbital capsules or in space
programs; and (4) stress diseases.
Cortisol is a vital hormone which helps the human body cope with
stress. When needed, the body responds by increasing the levels of adrenaline
and other hormones in the blood, and by mobilizing large amounts of glucose and
other anti-stress factors to provide the energy and zest needed in conditions
that require instant action (i.e., fight or flight). Once the stressful
situation is over, the level of cortisol returns to normal. But, if the
stressful situation is continuous over an extended period of time, or is
relatively permanent as in a stressful job, the level of cortisol remains
elevated and does not return to normal. It is under these conditions that
cortisol, a necessary and vital hormone during times of crises, becomes a most
destructive force in the human body. Elevated cortisol can destroy practically
every cell, tissue and organ in the human body, resulting in the so-called
"stress diseases."
The location and the natures of these "stress diseases," whether in the
skin (acne, psoriasis, eczema, scleroderma or aging), in the stomach (ulcers),
pancreas (diabetes), heart (myocardial infarction), or brain (strokes), will be
governed by two factors: the hereditary makeup of the individual and the
environmental stress to which the individual is exposed (for example, job,
family, or finances).
The Product
Anticort(R) is a proprietary drug based upon a high dose of stabilized
and complex form of procaine hydrochloride ("HCL") better known as a local
anesthetic. In addition to being a local anesthetic, procaine HCL has other
pharmacological capabilities that are becoming better known including:
1. Procaine is a monoamine oxidase inhibitor ("MAOI") of the type A and
B, thus being an anti-depressant, but totally different from other
antidepressants and almost totally devoid of side effects.
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2. Procaine has anti-cortisol/Steroidogenesis inhibitory
activity at two levels of the hypopothalamus, pituitary and adrenal
gland ("HPA") axis.
3. Procaine increases the production of the corticotropin-releasing
hormone ("CRH") and is at the top of drugs recommended by a team from
the United States National Institute of Health ("NIH") for the
treatment of atypical depression, auto-immune diseases, Alzheimer's and
chronic fatigue syndrome.
4. The Company has initial indications that Anticort(R) has
substantial anti-apoptosis activity, with cortisol by itself being
capable of inducing apoptosis. Apoptosis is a process by which immune
cells commit suicide, en masse, following silent orders sent out by,
among other, viruses such as HIV, cancers of ll types and by cortisol.
Scientists all over the world are now looking for anti-apoptosis
drugs--one of the hottest items in contemporary medicine.
Anticort(R) has been used in small clinical pilot studies involving
high cortisol diseases, such as AIDS, viral hepatitis B and C, aging and
Alzheimer's with immediate positive results. However, for reasons of strategy,
the Company is focusing its attention on AIDS, the most visible infectious,
high-cortisol disease presently known.
The compelling case for the effectiveness of Anticort(R) is based upon
recent findings which will likely alter the course of AIDS research in the
United States. These findings indicate that the HIV virus, itself, is capable of
damaging only a very small fraction of the immune system. However, HIV has the
uncanny ability to stimulate an increase in the level of cortisol a powerful
immuno-suppressor hormone which is manufactured by the adrenal gland cortex. It
is the hypothesis of the Company's president, Dr. Alfred Sapse, and recently of
other scientists, that cortisol is the main culprit which causes most of the
immune system damage in AIDS patients and not the AIDS virus itself
The Company has developed a capsule-form product called Anticort(R)
which has been tested on a limited basis in clinical research settings and shown
to return the level of cortisol previously elevated to more normal levels.
Anticort(R) is not a cure for AIDS but has the potential to improve an immune
system previously damaged by cortisol, thus becoming a life extender and
eventually returning the patient to a more normal productive life.
The Company believes that should Anticort(R) be proven successful, as
preliminary results seem to indicate in this condition, then it would add
substantial credibility to the Company's next target markets: Alzheimer's,
Parkinson's, Cushing's and depression. Of course, as this material describes
under the caption "Clinical Studies," below, the Company's Anticort(R) product
remains subject to substantial clinical study programs and requirements,
including those imposed by the United States Food and Drug Administration, and
the Company cannot provide any assurance that these tests will ultimately be
proven successful or that the Company's Anticort(R) product will be commercially
marketable.
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Patents and Trademarks
In 1997 and in exchange for $108,968, Cortisol Medical Research, Inc.,
an anticortisol research and development company founded by the Company's
President, Dr. Sapse, in 1982, has assigned all patents pending or to be filed
relating to Anticort(R) to SI, Inc., the Company's subsidiary. The Company has
filed an application for, and was issued, a U.S. Trademark for the name
"Anticort(R)" on July 28, 1998. Dr. Sapse has applied for two United States
Patents for his "Circadian Rhythm Cortisol Chart and Methods of Use Thereof,"
and has assigned his rights in this application to the Company. He has also
filed an application for a United States patent for "Composition of Anti-HIV
Drugs and Anti-Cortisol Compounds and Method for Decreasing the Side Effects of
Anti-HIV Drugs in a Human," and has assigned his rights in this application to
the Company. The second patent application relates to the use of Anticort(R) by
individuals infected with HIV in order to decrease the side effects of anti-HIV
drug therapy. Among the protections which the Company believes would be
available to it upon the filing of patent applications and issuance of
appropriate patents would be a patent relating to the method of manufacturing
the Company's Anticort(R) product, which method the Company believes is
currently protected as a trade secret. Dr. Sapse may also prepare and file
applications for additional patents, although neither he nor the Company can
anticipate when such applications, if any, may be filed or whether the Company
will be granted any additional protection for its intellectual property in the
United States or in other countries.
While the Company and its management believe that the Company has
protected certain of its intellectual property rights, and upon the filing of
additional patent applications through Dr. Sapse will further strengthen the
protection of its intellectual property, the Company cannot assure any existing
or prospective owner of its securities that such protections will be a safeguard
in all circumstances against the duplication of the Company's product. The
Company cannot provide any assurance that any patents which may be issued will
not be challenged, invalidated or circumvented, or that any rights granted to
the Company under those patents will provide proprietary protection or
competitive advantages to the Company. Also, the Company has relied, and will
continue to rely, on trade secrets to protect its technology, especially where
patent protection has not been applied for or may not be appropriate or
obtainable. The Company has protected its proprietary technology and processes
in part by confidentiality agreements with its employees, consultants and
certain contractors. However, these agreements could be breached or, in any
event, the Company's trade secrets could otherwise become known or independently
discovered by competitors, as to which the Company may have no intellectual
property protection.
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Markets for Anticort(R)
The Company's products based on Anticort(R) can be applied to many
different worldwide markets. Initially the Company will focus on the use of
Anticort(R) in HIV+ patients. It was estimated in 1997 that 14 million people
worldwide are infected with HIV and this number is projected to reach 100
million people worldwide by the year 2000.
As funds become available to the Company to continue research and
development of the anti-cortisol formulation, the Company will begin to direct
its attention to Alzheimer's, Parkinson's, Cushing's and depression diseases,
all high cortisol diseases.
Competition
The Company anticipates facing competition in the HIV and AIDS markets,
including by companies testing drugs to increase immune resistance
(immuno-modulators) of these patients. Among the competitors are companies that
are researching gamma interferon (Genentech) and interleukin 2 (IL-2 Chiron)
both in San Francisco and the GMSCF (granulocyte macrophage colony stimulating
factor) by Immunex, in Seattle.
The Company may also face competition from companies that are directing
their AIDS research toward attacking the virus itself through protease
inhibitors. Currently, a number of leading pharmaceutical companies are actively
engaged in research and development of protease inhibitors in the fight against
HIV and AIDS. Hoffman-LaRoche, Inc. developed "Saquinavir," which is
successfully being marketed as a protease enzyme inhibitor. Merck & Co., Inc.,
has also developed a protease inhibitor, "Indinavir." Abbott Laboratories has
also developed a protease inhibitor, "Ritonavir," and Agouron and other
companies are developing products which may compete with Anticort(R).
The pharmaceutical industry is highly competitive, with numerous large
and small companies performing research and development. While the Company
realizes it may be competing with companies that have greater resources, it is
confident that, if and when its Anticort(R) product receives FDA approval, it
can effectively market its products and maintain a competitive position.
Clinical Studies
Aids Research Alliance Clinical Project. On November 18, 1996, the
Company submitted an Investigational New Drug Application ("IND") to the FDA
titled:
A PHASE II RANDOMIZED PLACEBO CONTROLLED DOUBLE BLIND STUDY WITH
Anticort(R) (BRAND NAME OF PROCAINE HYDROCHLORIDE) IN HIV POSITIVES.
TREATMENT-NAIVE, ASYMPTOMATIC INDIVIDUALS, WITH CD4 COUNTS BETWEEN 200
AND 500 CELLS/MMP AND VIRAL LOADS OF MORE THAN 10,000 COPIES.
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The FDA granted the Company IND# 52,663, and based upon documentation
received, approved commencement of clinical studies. During 1997, due to
changing rules issued by the FDA, regarding the use of naive (untreated) versus
treated HIV+ patients, and following extensive conferences with FDA
representatives, the Company was advised to modify its initial protocol into a
phase Ib/IIa study, by which the phase Ib would consist in a dose related study,
i.e., to see which concentration of Anticort(R) would be most effective, if any,
and devoid or minimal side effects, followed by the double blind study (Phase
IIa). The purpose of this study in HIV positive patients under anti-HIV therapy
is to stimulate or bring back to life an immune system severely damaged by
cortisol. As it has become known recently, while the level of HIV under anti-HIV
therapy drops below detectable levels, the immune system very often does not
respond to the therapy. In that event, the patient becomes predisposed to a new
virus proliferation and to the appearance of opportunistic or infectious
diseases and cancers of the Kaposi sarcoma type, as well as others. The Company
had selected the AIDS Research Alliance of Los Angeles to conduct its clinical
studies at a cost of approximately $660,000. A protocol for a clinical study
with Anticort(R) along these lines was finalized, submitted to the FDA, and
approved without any changes. As of July 1, 1999, the AIDS Research Alliance has
completed patient selection and received the necessary supply of Anticort(R) for
the study.
Canadian Study. The Company has entered into a license with Altachem
Pharmaceuticals, a Canadian company formerly called Steroidogenesis Inhibitors
Canada, Inc. ("Altachem") as exclusive licensee of Anticort in Canada. (See
"Licensing Agreements," below.) Altachem has informed the Company that the
Canadian Health Protection Branch ("HPB"), which is the Canadian equivalent of
the FDA, has granted an approval which will permit a clinical using Anticort(R)
following the same protocol that the Company is using in the United States. The
purpose of the Canadian study is to support and extend the results of the
domestic study and eventually to lead to the approval of Anticort(R) in Canada.
This approval, if obtained, would be used to attempt Anticort's approval in
other United Kingdom countries and for other European Economic Community
countries.
Romanian Studies. A clinical study using Anticort(R) infacaps, the
junior version of adult Anticort(R), is in progress in Romania following
approval in October 1998 by the Romanian equivalent of the FDA (the Comisia de
Medicamente). This study, to be carried out in five groups of HIV- positive
children, (four groups on variable doses and one on a placebo), is intended to
boost the immune system of children damaged by HIV and elevated levels of
cortisol. It is estimated that this study will tale 8-10 months. If the results
are favorable, the Company would seek approval for use of the drug in Romania,
which in turn might open the market to African, Middle Eastern and Southeastern
Asian countries with which Romania has drug reciprocity treaties.
The Company has also provided a sample of Anticort to the Institute of
Oncology and the Pasteur Institute in Bucharest, Romania, to be tested in tissue
cultures to determine, the effect, if any, on cancerous cells and on the life
span of certain cells (fibroblasts). Procaine,
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the active ingredient in Anticort, has been shown to extend the life span of
fibroblasts by 33%. This long-term project is intended to provide answers, if
any, to the potential role of Anticort in cancers and aging, both of which are
high-cortisol conditions.
The Cortisol Chart. The Company has applied for a patent for its
cortisol chart. (See "Patents and Trademarks," above.) At the present time
cortisol is measured routinely by reference labs all over the world at 8 a.m.
and 5 p.m. and, if normal, is reported as such without taking into consideration
that cortisol levels vary widely during a twenty-four hour period. Dr. Sapse and
others in cortisol research believe that this thirty year old method of
reporting is inaccurate and practically misleading since it does not take into
consideration that cortisol, while apparently normal at 8 a.m. and 5 p.m., might
be abnormal, even to immunosuppressive levels, during the night or at other
times, and as such is not detected by traditional measurements. If this is so,
as the Company believes, large masses of people may be suffering from high
cortisol symptoms or diseases while being told that their cortisol levels are
normal.
In order to develop the Cortisol Chart the Company has carried out a
cortisol measuring study in France using 100 healthy volunteers in which
cortisol was measured every three hours for twenty-four hours, The results
indicated for the first time that there are wide variations of normal cortisol
in what is known as the circadian rhythm of cortisol, with the consequence that
cortisol, to be correctly reported, has to be measured throughout the day and
night. The study resulted in the creation of a new diagnostic tool called The
Circadian Rhythm of Cortisol Chart. This tool permits the evaluation of the
cortisol levels in a patient to explain previously unexplained symptoms and if
elevated suggest treatment through an anti-cortisol regimen. The Chart can also
alert individuals with high-cortisol symptoms and suggest ways of using
anti-cortisols to prevent these high-cortisol symptoms from becoming
high-cortisol diseases.
The Retinitis Pigmentosa (RP) Transgenic Mice Project. The Company has
commenced an experimental study in association with specialized departments at
Georgetown University and the University of Utah to be carried out on transgenic
mice where Anticort(R) will be used in order to prevent or alleviate RP induced
genetically in these mice. RP is a term encompassing a group of hereditary
retinal degenerative diseases, from night blindness in adolescence to
progressive loss of peripheral vision after the age of fifty. The mice
experiment is an attempt to prevent the appearance of genetic RP, in whole or in
part, by using Anticort, the rationale being that Anticort's main ingredient,
procaine HCL, is an anti immuno-suppressive disease drug. There is no guarantee,
of course, that successful results will be obtained.
Satellite Clinical Studies. The Company intends to commence up to six
open clinical studies involving 25-30 patients each to be carried out
domestically and overseas. These studies would be intended to determine whether
Anticort would be beneficial in the treatment of multiple sclerosis,
treatment-resistant depression, prostate and breast cancers,
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psoriasis and anorexia nervosa, all of which are associated with elevated
cortisol. The ability to commence these studies depends on the Company's
obtaining significant funding. Even if these preliminary studies resulted in
positive findings, the Company would have to meet various regulatory
requirements before additional testing or use of Anticort could occur.
Marketing Strategy
At the present time, the Company plans to manufacture Anticort(R)
itself and market it through licensees, wholesalers and pharmacies. Variables
that will impact the pricing structure include demand, cost, competitors and
strategic objectives. The Company intends to increase sales of the Anticort(R)
product by setting a compelling price point and by using the marketing strategy
to create end user demand for the product. The Company intends to price its
Anticort(R) product at a relatively low, affordable level.
In efforts to enhance the Company's credibility within the medical
community, Dr. Sapse attended major medical conferences and presented position
papers. The conferences included the following:
o The VII International Conference on AIDS; Harvard-Amsterdam (Holland)
1992, the IX International Conference on AIDS, Berlin (Germany), June
1993; the VIII International Conference on AIDS in Africa, Marrakech
(Morocco), 1993; the Japanese Conference on AIDS, Tokyo (Japan), 1994;
the Philippines Rotary Club Conference on AIDS, Manila (Philippines),
1994; Infectious Diseases News (USA), 1994.
o In June 1996, the First Conference on Cortisols/Anticortisols took
place at the Chateau de Filleval near Paris, France. Dr. Sapse opened
this Conference with a keynote address on the role of
cortisols/anti-cortisols in the medicine of today and tomorrow. This
speech was published in many lay and medical media of the world.
o In July 1996, at the VIII AIDS World Conference, Vancouver, Canada, Dr.
Sapse presented the results of Anticort(R) in 62 patients with HIV+
and Aids carried out in Brazil.
o Dr. Sapse was invited by the Consulate Service of the U.S. Embassy in
Germany to participate in the EXOPHARM 96, held in Leipsiz, Germany,
October 1996.
o The Second International Conference on Cortisol/Anticortisols,
sponsored by the University of California Irvine (UCI), and organized
by the Company, took place at the Mirage Hotel, Las Vegas, Nevada,
November 1997. This conference, dealing mostly with Dr. Sapse's
cortisol/anticortisol concept, was attended by more than 140
participants from more than 20 countries, including representatives
from the Academy of Medicine, Moscow, Russia; Pasteur Institute, Paris,
France, the National
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Institute of Health (NIH) and representatives from major multinational
- pharmaceutical companies. There were presentations at this conference
relating to treatments with Anticortisols in depression, aging, kidney
diseases, which, in the opinion of the Company's management, created
new opportunities for the potential use of anticortisols in connection
with many diseases, including ones with no known treatment at the
present time.
Licensing Agreements
In February 1996 SI, Inc., entered into a licensing agreement with
Altachem. The agreement grants Altachem exclusive rights to manufacture, use,
distribute and sell Anticort in Canada for $300,000, which has been paid to SI,
Inc. Altachem also has the right to acquire licensing rights in certain other
British Commonwealth countries on payment of licensing fees. The term of the
agreement is ten years, commencing when the Canadian government grants all
approvals necessary for the sale of the licensed products in Canada.
In order to increase distribution and market share, the Company intends
to enter other licensing agreements for its products. The Company anticipates
that the principal elements of any licensing agreement would be the following:
1. Definition of the territory and cash advance at the signing of the
contract.
2. The licensee will finance all the work, research and other matters
needed to secure their own regulatory agency approval for
Anticort(R). Conversely, some of the licensing countries might
elect to wait until the Company receives FDA approval in the United
States. In this event, the Company would subsequently send them the
United States eventual approval plus the necessary documentation so
the licensees would be able to secure their own approval without the
time and money required for their own testing.
3. Royalties representing a minimum guaranteed dollar amount, subject
to annual increases.
The Company is presently in negotiation with foreign representatives to
license Anticort(R) in other countries. The Company is seeking additional
licensing agreements and joint ventures with entities interested in AIDS and/or
viral hepatitis B drugs, with a view to getting Anticort(R) tested and approved
in other countries.
Employees
The Company has four full-time employees.
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Item 2. Management's Discussion and Analysis or Plan of Operation
The following discussion and analysis should be read in conjunction
with the Financial Statements appearing elsewhere in this Registration
Statement.
Plan of Operations
The Company was original incorporated in the State of Nevada on March
26, 1996, to engage in providing entrepreneurs and small business owners with an
internet presence. The Company was not successful in developing any business and
did not engage in any business activity until October 1997. In October 1997, the
Company acquired approximately eighty-six percent (86%) of the outstanding
shares of SI, Inc., which remains the Company's sole subsidiary. Since the
acquisition of its controlling interest in SI, Inc., the Company has focused its
operations on developing its proprietary drug, Anticort(R). To develop
Anticort(R) the Company has been engaged in research and clinical studies.
The Company remains a development stage company with immaterial
revenues and substantial general and administrative expenses, including expenses
related to its clinical studies programs. The Company's cash has been provided
from its fund-raising activities, all of which have been conducted on a private
basis, and from the SI, Inc., license agreement with Altachem. The Company plans
to complete its clinical studies, particularly the study authorized by the FDA,
and, eventually, assuming the success of those studies, to market its
Anticort(R) product directly or through licensing agreements with third
parties.
The Company's plan of business is more particularly described in Item 1
of this Registration Statement under the caption "Description of Business." The
information which follows is a narrative description of the Company's results of
operations, liquidity and capital resources.
Results of Operations
The Company had revenues of $1,296 from its date of organization
through December 31, 1998. It had no revenues in calendar years 1997 or 1998.
The Company had a net loss of $306,538 in 1997 and $1,010,546 in 1998. The
Company's general and administrative expenses increased from $333,202 during
1997 to $943,258 in 1998. General and administrative expenses in calendar year
1997 included attendance at and participation by the Company in a medical and
scientific conference in France. Also in 1997, the Company organized the Second
International Conference on Cortisol/Anti-Cortisols sponsored by the University
of California Irvine in November 1997.
Management does not believe that the Company will develop any material
revenues until the Company completes a clinical study which demonstrates the
efficacy of Anticort(R) for significant medical purposes and the Company
subsequently manufactures and markets
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Anticort(R) directly, with a joint venture marketing or manufacturing company,
or pursuant to one or more licensing agreements. See Item 1, "Description of
Business" for a discussion of the Company's existing and proposed licensing
agreements, clinical studies and marketing strategy.
Liquidity and Capital Resources
The Company had cash of $494 at December 31, 1998, $258,322 at March
31, 1998, and $3,562 at March 31, 1999. From its organization through March 31,
1999, the Company has been substantially dependent on the proceeds of various
offerings of its debt and equity securities to fund its operating expenses. The
Company has not engaged in any material borrowing activity, has no loan
arrangement with any commercial lending institution, and is unlikely to receive
traditional commercial debt financing in the foreseeable future. Management
estimates the Company's operating expenses to be a minimum of $25,000 and a
maximum of $50,000 per month, depending upon the Company's payments to outside
research and other consultants. The Company is also dependent upon the proceeds
of financing from the sale of its securities to fund its clinical studies,
particularly the clinical study to be conducted by the AIDS Research Alliance in
California. The Company's contract with the AIDS Research Alliance requires it
to pay $650,000 for the clinical study, and the study cannot commence until the
entire amount is paid to AIDS Research Alliance directly or an escrow basis. The
Company paid $227,000 of the $650,000 contract amount in March 1999.
The Company continues to explore opportunities with various investors,
joint venture candidates, and prospective licensees. As of the date of this
Registration Statement, the Company has not received any binding commitment for
equity or debt financing, nor has it entered into any joint venture or licensing
agreement with respect to its Anticort(R) product other than the licensing
agreement between SI, Inc., and Altachem. Management believes that the Company
can continue to operate on a maintenance basis at a cost of no more than $25,000
per month for the foreseeable future, provided that the Company obtains
sufficient cash from one or more of the sources described above to meet its
operating expenses.
15
<PAGE>
Item 3. Description of Property
The Company's executive offices are currently located at 101 Convention
Center Drive, Suite 310, Las Vegas, Nevada 89109. The 1,100 square foot office
space is rented at a price of $2,650 per month. The Company does not have any
laboratory or research facilities.
16
<PAGE>
Item 4. Security Ownership of Certain Beneficial Owners and Management
The table below sets forth information with respect to the anticipated
beneficial ownership of the Common Stock by (i) each of the directors of the
Company, (ii) each person known by the Company to be the beneficial owner of
five percent or more of the outstanding Common Stock, and (iii) all executive
officers and directors as a group, as of June 30, 1999. Unless otherwise
indicated, the Company believes that the beneficial owner has sole voting and
investment power over such shares.
Name and Address of Number of Shares Percentage
Beneficial Owner of Beneficially Owned Ownership of Class(1)
- ------------------- --------------------- ---------------------
Alfred T. Sapse(2)(3)(9) 4,856,400 31.46%
3525 Leor Court
Las Vegas, NV 89121
Welter Holden(2) 350,250 2.27%
205 Bradford Street
Provencetown, MA 02657
James D. Monllos(2)(9) 236,612 1.53%
9721 Peacock Hill Circle
Las Vegas, NV 89117
Janet Greeson(2)(9) 2,014,250 13.05%
8058 Pinnacle Peak Ave.
Las Vegas, NV 89113
Tom Kubota(2)(4)(9) 2,500,000 15.03%
2006 Barranca
Newport Beach, CA 92660
Rudy LaRusso(2)(5)(9) 300,000 1.93%
218 Homewood Road
Los Angeles, CA 90049
Paul Burkett(2) 237,000 1.54%
4518 Whitset
Studio City, CA 91604
Cynthia Thompson(2)(6)(9) 100,000 .65%
3040 Post Oak Blvd. #695
Houston, Texas 77056
17
<PAGE>
H. Thomas Winn(2) 100,000 .65%
3040 Post Oak Blvd. #675
Houston, Texas 77056
Cortisol Medical Research(7) 3,459,400 22.41%
2915 W. Charleston #7
Las Vegas, NV 89102
Nanko Investments, Inc.(8) 2,000,000 12.17%
2006 Barranca
Newport Beach, CA 92660
All officers and directors 10,694,512 64.28%
as a group (9 persons)(9)
- -----------------
(1) Calculated on the basis of 15,438,128 shares of Common Stock issued and
outstanding.
(2) Officer and Director.
(3) Includes 3,764,400 shares held by Cortisol Medical Research, Inc., a
corporation controlled by Dr. Sapse.
(4) Includes 1,000,000 shares of common stock and 1,000,000 shares of
common stock underlying warrants issued to Nanko Investments, Inc., a
company controlled by Mr. Kubota, and 200,000 shares underlying options
purchased by Mr. Kubota in 1998 individually.
(5) Includes 100,000 shares underlying warrants issued to Mr. LaRusso.
(6) These shares are held by Intuitive Solutions International, Inc., which
Ms. Thompson controls.
(7) Cortisol Medical Research is controlled by Dr. Sapse.
(8) Nanko Investments, Inc., is controlled by Mr. Kubota, an officer and
director of the Company.
(9) Includes, in accordance with Rule 13d-3, shares of which an officer or
director is the beneficial owner.
-----------------------
18
<PAGE>
Item 5. Directors, Executive Officers, Promoters, and Control Persons
The following table sets forth the directors, executive officers and
other significant employees of the Company, their ages, and all offices and
positions with the Company. Officers and other employees serve at the will of
the Board of Directors.
<TABLE>
<CAPTION>
Term Served As Positions
Name of Director Age Director/Officer With Company
---------------- --- ---------------- ------------
<S> <C> <C>
Alfred T. Sapse 73 Since Oct. 1997 President, Chairman of the
Board
Welter Holden 66 Since Oct. 1997 Director
James D. Monllos 45 Since Oct. 1997 Director
Janet Greeson 52 Since Oct. 1997 Director, Secretary,
Executive Vice President
Tom Kubota 58 Since Oct. 1997 Director, Vice President
Randy LaRusso 60 Since Oct. 1997 Director, Vice President
Paul Burkett 76 Since June 1998 Director
Cynthia Thompson 39 Since March 1999 Director
H. Thomas Winn 59 Since March 1999 Director
</TABLE>
Alfred T. Sapse, M.D., Chairman of the Board and President. Dr. Sapse
is a medical research scientist. During his 45 year career, Dr. Sapse has
focused on immunology, biochemistry and AIDS research and has published 32
research papers in medical journals in the United States of America including
the American Medical Association (AMA), Japan, the United Kingdom, Canada,
France, Holland and Switzerland. In addition, Dr. Sapse has developed several
formulations of anti-cortisol/steroidogenesis inhibitors for products intended
for the treatment of high-cortisol diseases including AIDS, Alzheimer's,
depression, and narcotic addiction. Dr. Sapse received his first U.S. Patent in
1977 for his method of treating geriatric depression; two more patents in 1990
for the treatment of Alzheimer's and drug addiction and has patents pending on
Anticort(R). Dr. Sapse's credentials in medical research span several decades,
including his degree from the School of Medicine, University of Bucharest,
Romania in 1952, his residency in Ophthahnology at the University Eye Clinic,
Geneva, Switzerland in 1963-1964, and his post doctoral work in Microbiology at
the University of California at Los Angeles (UCLA)
19
<PAGE>
from 1969 to 1972. His research experience background includes his work as
Director of the laboratory of Ophthalmic Immunology at Cedars-Sinai Medical
Center in Los Angeles, California, from 1965-1971, and Assistant Research IV in
the Department of Bacteriology at UCLA from 1969-1972. He is a National
Institute of Health ("NIH") Special Research Fellow and had received more than
$400,000 for his research work.
Dr. Sapse served as President of Rom-Amer Pharmaceuticals, Ltd.,
Beverly Hills, California from 1970 to 1976; President of International Health
Resorts, Inc., from 1977 to 1982; President and Director of Research of Cortisol
Medical Research, Inc. in Miami, Florida from 1983 to the present, Vice
President of R&D with Spectrum Pharmaceutical Corporation in Newport Beach,
California from 1989-1992; and as President and Director of Research of the
Company since October 1997.
Welter "Budd" Holden, Director. Mr. Holden is a graduate of the Pratt
Institute in Brooklyn, New York, where he received a degree in architectural and
interior design. He was an art director for the first colorized live television
variety shows broadcast by NBC in the 1950's and 1960's.
James D. Monllos, Director. Since 1992, Mr. Monllos has been the owner
and President of Las Vegas International Entertainment Company and the Wild West
Wrestling League, Inc., both of which are engaged in the entertainment business.
Janet Greeson, Ph.D., Director, Secretary and Executive Vice President.
Dr. Greeson received a doctorate in psychology from Columbia-Pacific University,
Mill Valley, California, and is an MBA candidate at the University of Southern
California, Los Angeles, California. She is the author of numerous books and
publications, one of which, a well-known publication, is entitled, "It's Not
What You're Eating, It's What's Eating You." She has fourteen years of executive
leadership and financial expertise as chief executive officer and chairman of "A
Place for Us," an acute psychiatric treatment services provider.
Dr. Greeson was appointed by President Jimmy Carter to lead the Navy in
the development, implementation and integration of psychiatric treatment
programs for addictive diseases. Her programs have been used worldwide and
provided intervention and counseling to thousands of personnel and their
families by the U.S. Navy Alcoholic Rehabilitation Services Treatment Centers,
which she participated in initiating. These centers continue to be operational.
She served as coordinator for the Conference on Teenage Alcoholism at the
request of Nancy Reagan and developed similar programs for Mother Theresa in
Rome, Italy, and Calcutta, India. She has also served as a trainer for Promises
Recovery Centers in England.
Tom Kubota, Director and Vice President. Mr. Kubota has served as a
Vice President of Drexel Burnham Lambert, Beverly Hills, California, and held
similar positions at Stern, Frank, Meyer and Fox and Cantor Fitzgerald. He is
the President of Nanko
20
<PAGE>
Investments Corporation, Newport Beach, California, which specializes in capital
formation services for high technology and natural resources companies. Mr.
Kubota has provided consulting services for the Company for which he has been
compensated.
Rudy LaRusso, Director and Vice President. Mr. LaRusso is a graduate of
Dartmouth College. He was employed by Great Western Savings and McDonnell &
Company, a New York Stock Exchange Member. Mr. Russo served as a Vice President
and Director of Chanco Medical Industries, a hospital chain management company
and, was the Chief Executive Officer of Carex International, Inc., an operator
of convalescent hospitals. He was Chairman and Chief Executive Officer of BAE
Industries, an after-market auto parts company. He is President of LaRusso &
Associates, Inc., which is engaged in providing investment advice for
professional athletes.
H. Thomas Winn, Director. Mr. Winn has served as the Chairman, Chief
Executive Officer, President and a Director of Nevada Gold & Casinos, Inc., a
public gaming and real estate development firm, since January 1994. He has also
served as Chairman and President of Aaminex Capital Corporation, a consulting
and venture capital firm since 1983.
Paul J. Burkett, Director. Mr. Burkett has been a Director of Nevada
Gold & Casinos, Inc., since 1976 and has also served on the Board of Directors
of Aaminex Capital Corporation since 1976. Mr. Burkett has been involved in the
mining industry for over forty years. His business over the past five years has
concentrated on independent mining and real estate ventures.
Cynthia C. Thompson, Director. Ms. Thompson is a financial and business
advisor and has been employed by E. F. Hutton; Shearson, Lehman Brothers;
Oppenheimer & Company; and D. E. Frey & Company. Ms. Thompson is the Chief
Executive Officer and founder of United States Service Company, a nationwide
service company serving food and beverage original equipment manufacturers and
food service vendors. In 1998 Ms. Thompson founded Intuitive Solutions
International, Inc., a Houston, Texas, firm engaged in capital formation and
operations management consulting. Ms. Thompson has also participated in
providing debt and equity financing to Nevada Gold & Casinos, Inc., of whom
Messrs. Winn and Burkett are directors.
21
<PAGE>
Item 6. Executive Compensation
The following tables and notes present for the two years ended December
31, 1998, the compensation paid by the Company to the Company's chief executive
officer and to the Company's four most-highly compensated executive officers
other than the Company's chief executive officer who were serving at December
31, 1998.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
Awards Payouts
------------------------------- ----------------
Restricted Securities
Name and Stock Underlying All Other
Principal Position Year Salary ($) Award(s)($) Options/SARs(#) Compensation($)
(a) (b) (c) (f) (g) (i)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alfred T. Sapse, 1998 $12,000 --- --- ---
Chairman of the 1997 $66,000 --- --- ---
Board, President 1996 $-0- --- --- ---
Janet Greeson, 1998 $55,000 $500,000(1) --- ---
Director and 1997 $-0- --- ---
Secretary 1996 $-0- --- ---
Tom Kubota, 1998 $-0- ---
Director and Vice 1997 $-0- $437,500(2) 1,000,000(3) ---
President 1996 $-0- ---
Rudy LaRusso, 1998 $30,000 $250,000(1) --- ---
Director and Vice 1997 $-0- --- ---
President 1996 $-0- --- ---
</TABLE>
- --------------
(1) The value of the restricted stock award has been determined by
multiplying the shares awarded by $2.50 which is the closing bid
price of the Company's common stock on the available date closest to
the award in April 1998.
(2) The value of the restricted stock award has been determined by
multiplying the shares awarded by $.4375 which is the sole closing bid
price available to the Company for its common stock in calendar year
1997.
(3) The restricted shares and options are held by Nanko Investments, Inc.,
a company owned and controlled by Mr. Kubota. The options are
exercisable at an exercise price of $5.00 per share and expire
February 5, 2002. To date none of these options has been exercised.
------------------
As of December 31, 1998, the number and value of the aggregate
restricted stockholdings of the persons named in this table, including shares
held by them indirectly, was as follows:
22
<PAGE>
Name Shares Value
---- ------ -----
Alfred T. Sapse 4,856,400 $2,428,200
Tom Kubota 1,300,000 $ 650,000
Janet Greeson 2,014,250 $1,007,125
Rudy LaRusso 200,000 $ 100,000
The value of the restricted shares has been determined on the basis of
the closing bid price of $.50 for the Company's shares of Common Stock on
December 31, 1998.
Dividends will be paid on any shares of restricted stock awarded to any
of the named officers or their affiliates.
23
<PAGE>
Item 7. Certain Relationships and Related Transactions
On November 4, 1997, the Company exchanged approximately 88.51% of its
shares of Common Stock with shareholders of SI, Inc. Thomas Kubota, an officer,
director and principal shareholder of the Company, was an officer, director and
principal shareholder of the Company prior to the completion of the share
exchange with SI, Inc. Mr. Kubota's consulting company, Nanko entered into a
consulting agreement with the Company at the time of the exchange agreement.
Pursuant to that consulting agreement, Nanko agreed to act as a financial
consultant to the Company and, as consideration, received 1,000,000 shares of
common stock of the Company and an option for the purchase of 1,000,000 common
shares exercisable at a price of $5.00 per share through February 2002.
Subsequent to the execution of the 1996 licensing agreement between SI,
Inc., and Altachem, Altachem granted Dr. Sapse the right to receive up to
300,000 shares of common stock without specified consideration. The shares
underlying this right were subsequently reverse split on a one-share for
two-share basis. Of the 150,000 post-split Altachem shares which may become
available to Dr. Sapse, 59,851 shares are to be given to him periodically over a
period of three years and 90,149 shares will be given to him if Altachem
achieves certain performance objectives, as to which Dr. Sapse has no control.
In April 1998 the Company issued 200,000 restricted shares to Janet
Greeson and 100,000 restricted shares to Rudy LaRusso, both of whom are officers
and directors of the Company, in consideration of their services to the Company.
In April 1999 the Company issued 1,000,000 shares each to Dr. Sapse and
Dr. Greeson or their nominees in consideration of their services to the Company.
Also at that time, the Company issued 100,000 shares to each of the directors
other than Drs. Sapse and Greeson in consideration of their service as directors
of the Company.
The Company paid Renee, Inc., whose President, Renee Sapse, is Dr.
Sapse's wife, $24,000 in 1998 and $12,000 in 1999 for office space and
maintenance of Dr. Sapse's auxillary office.
24
<PAGE>
Item 8. Description of Securities
The following statements do not purport to be complete and are
qualified in their entirety by reference to the detailed provisions of the
Company's Articles of Incorporation and Bylaws, copies of which will be
furnished to an investor upon written request therefor. See "Additional
Information."
Common Stock
The Company is presently authorized to issue 25,000,000 Shares of $.001
par value Common Stock. As of June 30, 1999, the Company had 15,438,128 shares
issued and outstanding.
The holders of Shares are entitled to equal dividends and distributions
per share with respect to the Common Stock when, as and if declared by the Board
of Directors from funds legally available therefor. No holder of any shares has
a pre-emptive right to subscribe for any securities of the Company nor are any
common shares subject to redemption or convertible into other securities of the
Company. Upon liquidation, dissolution or winding up of the Company, and after
payment of creditors and preferred stockholders, if any, the assets will be
divided pro-rata on a share-for-share basis among the holders of the shares. All
shares now outstanding are fully paid, validly issued and non-assessable. Each
share is entitled to one vote with respect to the election of any director or
any other matter upon which shareholders are required or permitted to vote.
Holders of the Company's shares do not have cumulative voting fights, so that
the holders of more than 50% of the combined shares voting for the election of
directors may elect all of the directors, if they choose to do so and, in that
event, the holders of the remaining shares will not be able to elect any members
to the Board of Directors.
Warrants
The Company has issued common stock purchase warrants as follows:
o Warrants for the purchase of 1,000,000 shares of common stock at $5.00
per share exercisable through February 2002
o Warrant for the purchase of 1,218,500 shares at a price of $5.00 per
share expiring in December 1999 and callable at $.01 per Warrant.
o Warrant to purchase 100,000 shares of common stock at a price of $.01
per share exercisable through March 2, 2002.
o Warrant exercisable without cash payment to purchase 50,000 shares of
common stock through March 2004.
25
<PAGE>
The exercise price and the number of shares issuable upon exercise of
the Company's warrants are generally subject to adjustment in certain events,
including the issuance of shares as a dividend on shares of common stock,
subdivisions or combinations of the Common Stock or similar events. Except as
stated in the preceding sentence, the warrants do not contain provisions
protecting against dilution from the sale of additional shares for less than the
exercise price of the warrants or the current market price of the Company's
securities.
Holders of warrants are generally entitled to notice in the event of
any reclassification of the shares, any consolidation of the Company with, or
merger of the Company into, any other entity or merger of any other entity into
the Company (other than a merger that does not result in any reclassification,
conversion, exchange or cancellation of any outstanding share), or any sale or
transfer of all or substantially all of the assets of the Company.
The Company has reserved from its authorized and unissued shares a
sufficient number of shares for issuance on exercise of warrants. During the
period in which a warrant is exercisable, exercise of such warrant may be
effected by delivery of the warrant, duly endorsed for exercise and accompanied
by payment of the exercise price and any applicable taxes or governmental
charges, to the Warrant Agent or, if their is no Warrant Agent for a warrant
then to the Company. The shares issuable on exercise of a warrant will be, when
issued in accordance with the warrant, fully paid and non-assessable. The
holders of warrants have no rights as stockholders of the Company until they
exercise their warrants.
The Company has entered into a Warrant Agency Agreement with Pacific
Stock Transfer Company (the "Warrant Agent") dated February 27, 1998, as to
warrants for the purchase of 1,218,500 shares of common stock exercisable at
$5.00 per share until December 1999. The Warrant Agency Agreement appoints the
Warrant Agent to act as agent for the Company in connection with these warrants
and describes the terms and conditions under which a warrant holder may exercise
its warrants. The Warrant Agency Agreement also provides the terms of redemption
by the Company of these warrants and provides protection against dilution
including adjustment for subdivisions and/or combinations of dividends,
adjustment for distributions, reclassification, exchange and substitution,
reorganization, mergers, consolidations or sale of assets.
26
<PAGE>
Stock Option Plan
The Company has adopted a 1997 Stock Option Plan and has reserved
2,500,000 Shares of Common Stock for issuance upon the exercise of options which
the Board of Directors has the authority to grant to key employees, officers,
directors and consultants of the Company as part of the Plan. To date no options
have been granted pursuant to the 1997 Stock Option Plan.
27
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
The Company's Common Stock is traded on the NASD OTC Bulletin Board
under the symbol STGI.
The following bid quotations have been reported for the period
beginning October 1, 1997, when the Company's Common Stock was first priced for
trading on the OTC electronic bulletin board and ending June 30, 1999. To the
extent that the Company is unable to determine a bid price on a quarterly date,
the prices below are determined on the closest date available to the Company:
Bid Prices
----------
Period High Low
------ ---- ---
Quarter Ended June 30, 1997 $15.625 $ 7.50
Quarter Ended September 30, 1997 14.625 11.625
Quarter Ended December 31, 1997 3.00 1.75
Quarter Ended March 31, 1998 5.125 2.50
Quarter Ended June 30, 1998 6.25 4.00
Quarter Ended September 30, 1998 4.625 1.25
Quarter Ended December 31, 1998 2.75 0.375
Quarter Ended March 31, 1999 2.50 0.375
Quarter Ended June 30, 1999 2.5625 0.4375
Such quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission. Such quotes are not necessarily representative of
actual transactions or of the value of the Company's securities, and are in all
likelihood not based upon any recognized criteria of securities valuation as
used in the investment banking community.
The Company has been advised that 13 member firms of the NASD are
currently acting as market makers for the common stock.
As of June 30, 1999, there were 178 holders of record of the Company's
common stock. Certain of the shares of common stock are held in "street" name
and may, therefore, be held by several beneficial owners.
As of June 30, 1999, there were 15,438,128 shares of common stock
issued and outstanding. Of those shares 13,114,104 shares are "restricted"
securities of the Company within the meaning of Rule 144(a)(3) promulgated under
the Securities Act of 1933, as amended, because such shares were issued and sold
by the Company in private transactions not involving a public offering. Of these
restricted securities, 9,394,512 shares held by affiliates may be sold pursuant
to a registration statement or pursuant to Rule 144.
28
<PAGE>
In general, under Rule 144, as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the Company (in general, a person who has a control relationship with the
company) who has owned restricted securities of common stock beneficially for at
least one year is entitled to sell, within any three-month period, that number
of shares of a class of securities that does not exceed the greater of (i) one
percent (1%) of the shares of that class then outstanding or, if the common
stock is quoted on NASDAQ, (ii) the average weekly trading volume of that class
during the four calendar weeks preceding such sale. A person who has not been an
affiliate of the company for at least the three months immediately preceding the
sale and has beneficially owned shares of common stock for at least two (2)
years is entitled to sell such shares under Rule 144 without regard to any of
the limitations described above.
No prediction can be made as to the effect, if any, that future sales
of shares of common stock or the availability of common stock for future sale
will have on the market price of the common stock prevailing from time-to-time.
Sales of substantial amounts of common stock on the public market could
adversely affect the prevailing market price of the common stock.
The Company has never paid a cash dividend on its common stock. The
payment of dividends may be made at the discretion of the Board of Directors of
the Company and will depend upon, among other things, the Company's operations,
its capital requirements, and its overall financial condition.
Item 2. Legal Proceedings
None.
Item 3. Changes In and Disagreements With Accountants
The Company received an audited balance sheet as of March 31, 1996, and
related statements of stockholder's equity and cash flow from its inception
through March 31, 1996, from Shahzad Latif, CPA, Ltd., Las Vegas, Nevada. The
Company also received like audited financial statements from Shahzad Latif, CPA,
Ltd., as of September 12, 1996, and for the period from inception through
September 12, 1996. The Company sought or obtained audited financial statements,
or sought or engaged an auditor other than Shahzad Latif, CPA, Ltd., until its
engagement or its current auditor, Tabor & Co., P.C., Decatur, Georgia, for its
1998 year-end audit. Current management does not believe that the Company has
dismissed any auditor nor that any auditor has resigned.
Item 4. Recent Sales of Unregistered Securities
On October 21, 1997, the Company exchanged 4,497,000 restricted shares
of the Company for 4,497,000 shares of Steroidogenesis Inhibitors, Inc., a
Nevada corporation
29
<PAGE>
("SI, Inc."), held by SI, Inc., shareholders. The Company relied upon Section
4(2) of the Securities Act of 1933, as amended (the "Securities Act"), to effect
the transaction.
On February 27, 1998, the Company commenced a private offering of its
common stock and warrants at a price of $1.00 per unit. The Company sold
1,218,500 units, each consisting of one share of common stock and a warrant to
purchase one share of the Company's common stock at a price of $5.00 expiring
December 1999. There were no underwriting discounts or commissions paid. The
Company relied upon Section 4(2) of the Securities Act and Rule 506 to effect
the sales.
In December 1998 and January 1999, the Company issued a total of
200,000 shares of Common Stock to The Augustine Equity Fund for consulting
services. The shares were sold pursuant to Section 3(b) of the Securities Act of
1933 and Regulation D, Rule 504.
On February 26, 1999, the Company issued 90,000 shares to Harvey
Productions, Inc., for television production services performed for the Company.
These securities were issued pursuant to Section 3(b) of the Securities Exchange
Act of 1934, as amended ("Securities Exchange Act") and Regulation D, Rule 504.
On March 3, 1999, the Company sold $400,000 of 2% convertible
debentures and a warrant to purchase 100,000 shares of common stock at an
exercise of $.01 per share at any time from issuance through March 2, 2002, to
GEM Singapore Pte Ltd. pursuant to Section 3(b) of the Securities Exchange Act
and Regulation D, Rule 504. Subsequent to the issuance of the convertible
debentures, and warrants, GEM converted the debentures into 770,000 shares of
common stock, but has not exercised its warrants.
On March 31, 1999, the Company issued to Generation Capital Associates
426,666 shares of common stock and a cashless warrant to purchase 50,000 shares
of common stock for a period of five years at a price of $200,000. These shares
and warrants were issued pursuant to Section 3(b) of the Securities Act of 1933
and Regulation D, Rule 504
The Company issued 300,000 shares to directors for services in 1998 and
2,700,000 shares in 1999 to officers and directors pursuant to Section 4(2) of
the Securities Act.
Item 5. Indemnification of Officers and Directors
The statutes, charter provisions, bylaws, contracts or other
arrangements under which controlling persons, directors or officers of the
registrant are insured or indemnified in any manner against any liability which
they may incur in such capacity are as follows:
(a) Section 78.7502 of the Nevada Business Corporation Act provides
that each corporation shall have the following powers:
30
<PAGE>
1. A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the corporation, by reason
of the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with the action, suit or proceeding if he acted in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interest of the corporation, and, with respect to any criminal action
or proceeding had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, does not, or
itself create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a
party or is threatened to be made party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses,
including amounts paid in settlement and attorneys' fees actually and reasonably
incurred by him in connection with the defense or settlement of the action or
suit if he acted in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the corporation. Indemnification
may not be made for any claim, issue or matter as to which such a person has
been adjudged by a court of competent jurisdiction, after exhaustion of all
appeals therefrom, to be liable to the corporation or for amounts paid in
settlement to the corporation, unless and only to the extent that the court in
which the action or suit was brought or other court of competent jurisdiction,
determines upon application that in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for such expenses as
the court deems proper.
3. To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections 1 and 2, or in defense
of any claim, issue or matter therein, he must be indemnified by the corporation
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection with the defense.
31
<PAGE>
4. Any indemnification under subsections 1 and 2, unless
ordered by a court or advanced pursuant to subsection 5, must be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agents is proper in the
circumstances. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a
quorum consisting of directors who were not parties to the act, suit or
proceeding;
(c) If a majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding so orders, by
independent legal counsel, in a written opinion; or
(d) If a quorum consisting of two directors were not
parties to the act, suit or proceeding cannot be obtained, by independent legal
counsel in a written opinion.
5. The certificate or articles of incorporation, the bylaws or
an agreement made by the corporation may provide that the expenses of officers
and directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in advance
of the final disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if it
is ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. The provisions of this subsection
do not affect any rights to advancement of expenses to which corporate personnel
other than directors or officers may be entitled under any contract or otherwise
by law.
6. The indemnification and advancement of expenses authorized
in or ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a
person seeking indemnification or advancement of expenses may be entitled under
the certificate or articles of incorporation or any bylaw, agreement, vote of
stockholders of disinterested directors or otherwise, for either an action in
his official capacity or an action in another capacity while holding his office,
except that indemnification, unless ordered by a court pursuant to subsection 2
or for the advancement of expenses made pursuant to subsection 5, may not be
made to or on behalf of any director or officer if a final adjudication
establishes that his acts or omissions involved intentional misconduct, fraud or
a knowing violation of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a
director officer, employee or agent and inures to the benefit of the heirs,
executors and administrators of such a person.
32
<PAGE>
7. The registrant's articles of incorporation limit liability
of its officers and directors to the full extent permitted by the Nevada
Business Corporation Act.
33
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
STEROIDOGENESIS INHIBITORS
INTERNATIONAL
Dated: July 17, 1999 By: /s/ Alfred T. Sapse
--------------- -------------------------------------------
Alfred T. Sapse, President and Director
34
<PAGE>
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
STEROIDOGENESIS INHIBITORS INTERNATIONAL
Dated: July 17, 1999 By: /s/ Alfred T. Sapse
--------------- ----------------------------------------
Alfred T. Sapse, President and Director
35
<PAGE>
PART F/S
Index to Financial Statements
Consolidated Financial Statements (Audited)
Report of Independent Auditors Accountant................................
Balance Sheet - December 31, 1998........................................
Statements of Operations from Inception (03/26/96)
and for the Years Ended December 31, 1998 and 1997......................
Statements of Stockholders' Equity from Inception (03/26/96)
and the Years Ended December 31, 1998 and 1997..........................
Statements of Cash Flows from Inception (03/26/96)
and for the Years Ended December 31, 1998 and 1997......................
Notes to Financial Statements............................................
Consolidated Interim Financial Statements (Unaudited)
Consolidated Interim Balance Sheets as of
March 31, 1999 and 1998.................................................
Consolidated Interim Statements of Operations for
the Three Months Ended March 31, 1999 and 1998..........................
Consolidated Interim Statements of Stockholder's
Equity for the Three Months Ended March 31, 1999 and 1998...............
Consolidated Interim Statements of Cash Flows for
the Three Months Ended March 31, 1999 and 1998..........................
Notes to Interim Statements..............................................
36
<PAGE>
STEROIDOGENESIS INHIBITORS
INTERNATIONAL, INC.
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998
<PAGE>
TABLE OF CONTENTS
Report of Independent Auditors. 3
Consolidated Balance Sheet as of December 31, 1998. 4
Consolidated Statements of Operations from Inception
(March 26, 1996) through December 31, 1998, and
for the Years Ended December 31, 1998 and 1997. 5
Consolidated Statements of Stockholder's Equity from
Inception (March 26, 1996) through December 31,
1998 and for the Years Ended December 31, 1998
and 1997. 6
Consolidated Statements of Cash Flows from Inception
(March 26, 1996) through December 31, 1998 and for
the Years Ended December 31, 1998 and 1997. 7
Notes to Financial Statements. 8 - 12
<PAGE>
TABOR AND CO., P.C.
CERTIFIED PUBLIC ACCOUNTANTS
111 CHURCH STREET
P.O. BOX 369
DECATUR, GEORGIA 30031
------
(404) 377-0151
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors
Steroidogenesis Inhibitors International, Inc.
We have audited the accompanying consolidated balance sheet of Steroidogenesis
Inhibitors International, Inc. (a development stage company) and subsidiary as
of December 31, 1998, and the related consolidated statements of operations,
stockholders' equity (deficit), and cash flows for the period from inception
(March 26, 1996) through December 31, 1998, and for the years ended December
31, 1998 and 1997. All information included in these financial statements is
the representation of the owners of the Company. Our responsibility is to
express an opinion of these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit proves a reasonable basis for
our opinion.
In our opinion, the consolidated financial statements referred above present
fairly, in all material respects, the financial position of Steroidogenesis
Inhibitors International, Inc. and subsidiary as of December 31, 1998, and the
results of its operations, and its cash flows for the period from inception
(March 26, 1996) through December 31, 1998, and the years ended December 31,
1998 and 1997, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company is in the development stage and,
as such, is dependent upon external financing in order to complete its
development program. See Notes 1.a., 7.d, and 9. This raises substantial doubt
about the Company's ability to continue as a going concern. These financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Tabor and Co., P.C.
- ------------------------
Decatur, Georgia
March 26, 1999
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
(A DEVELOPMENT STAGE COMPANY)
ASSETS
CURRENT ASSETS:
Cash $ 494
Note receivable-related party (note 8) 13,090
----------------
13,584
----------------
FIXED ASSETS:
Furniture & fixtures, at cost 29,216
Accumulated depreciation (10,715)
----------------
18,501
----------------
OTHER ASSETS:
Patent registration/ testing costs (note 1.d.1) 99,896
Purchased technology rights, net of accumulated
amortization of $12,713 (notes 1&2) 96,256
Costs in excess of identified net assets of subsidiary, net of
accumulated amortization of $80,633 (notes 1&2) 624,420
Other 11,542
----------------
832,114
----------------
TOTAL ASSETS $ 864,199
================
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 68,905
Short-term borrowing (note 3) 30,000
----------------
98,905
LONG-TERM LIABILITIES
Deferred revenue (note 4) 250,000
----------------
348,905
----------------
COMMITMENTS (note 5)
SHAREHOLDERS' EQUITY:
Common stock, 25,000,000 share authorized at .001 par,
10,004,212 issued and outstanding (note 7) 10,005
Paid in capital in excess of par, net of offering costs 1,864,462
Accumulated deficit, development stage (1,329,321)
Minority interest in subsidiary (29,852)
----------------
515,294
----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 864,199
================
The accompanying notes are an integral part of these financial statements
-4-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FROM INCEPTION (MARCH 26, 1996) AND FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997
(A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>
03/26/96
THROUGH
12/31/98 1998 1997
-------- ---- ----
<S> <C> <C> <C>
REVENUES: $ 1,296 $ 0 $ 0
------------ ------------ ------------
EXPENSES:
General & administrative 1,289,848 943,258 333,202
Depreciation and amortization 99,047 86,544 12,358
------------ ------------ ------------
1,388,895 1,029,802 345,560
------------ ------------ ------------
Net loss, prior to allocation to minority interest (1,387,599) (1,029,802) (345,560)
Loss allocated to minority interest 58,278 19,256 39,022
------------ ------------ ------------
Net loss $ (1,329,321) $ (1,010,546) $ (306,538)
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
-5-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FROM INCEPTION (MARCH 26, 1996) AND THE YEARS ENDED
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
Number Par Value
of Common Paid in Offering
Shares Stock Capital Costs
---------- --------- ---------- --------
<S> <C> <C> <C> <C>
Initial capitalization by founding officers 200,000 $ 200 $ 5,800 $
Shares issued for cash to public, net of offering costs 303,000 303 29,997 (9,258)
Loss, development stage, 1996
---------- --------- ---------- --------
December 31, 1996 503,000 503 35,797 (9,258)
Acquisition of subsidiary for stock (Note 2) 7,186,690 7,187 326,994
Loss, development stage, 1997
---------- --------- ---------- --------
December 31, 1997 7,689,690 7,690 362,791 (9,258)
Continuing acquisition of subsidiary 696,022 696 31,669
Shares issued for cash to public, net of offering costs 693,500 694 692,806 (87,621)
Shares issued in cancellation of debt 525,000 525 524,475
Shares issued as compensation (Note 7) 400,000 400 349,600
Loss, development stage, 1998
---------- --------- ---------- --------
December 31, 1998 10,004,212 $ 10,005 $1,961,341 $(96,879)
========== ========= ========== ========
</TABLE>
<PAGE>
[RESTUBBED]
<TABLE>
<CAPTION>
Total Minority Total
Paid in Retained Interest in Shareholders'
Capital Earnings Subsidiary Equity
---------- ------------ ----------- -------------
<S> <C> <C>
Initial capitalization by founding officers $ 5,800 $ $ $ 6,000
Shares issued for cash to public, net of offering costs 20,739 21,042
Loss, development stage, 1996 (12,237) (12,237)
---------- ----------- ---------- -----------
December 31, 1996 26,539 (12,237) 14,805
Acquisition of subsidiary for stock (Note 2) 326,994 (36,556) 297,625
Loss, development stage, 1997 (306,538) (39,022) (345,560)
---------- ----------- ---------- -----------
December 31, 1997 353,533 (318,775) (75,578) (33,130)
Continuing acquisition of subsidiary 31,669 64,982 97,347
Shares issued for cash to public, net of offering costs 605,185 605,879
Shares issued in cancellation of debt 524,475 525,000
Shares issued as compensation (Note 7) 349,600 350,000
Loss, development stage, 1998 (1,010,546) (19,256) (1,029,802)
---------- ----------- ---------- -----------
December 31, 1998 $1,864,462 $(1,329,321) $ (29,852) $ 515,294
========== =========== ========== -----------
</TABLE>
The accompanying notes are an integral part of these financial statements
-6-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FROM INCEPTION (MARCH 26, 1996) AND FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997
(A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>
03/26/96
THROUGH
12/31/98 1998 1997
----------- ----------- ---------
<S> <C> <C> <C>
NET CASH USED BY OPERATING ACTIVITIES:
Net loss, development stage $(1,329,321) $(1,010,546) $(306,538)
Adjustments to reconcile net loss to net cash used in
operating activities:
Loss allocated to minority interest (58,278) (19,256) (39,022)
Depreciation and amortization 99,047 86,544 12,358
Expenses paid through issuance of stock 350,000 350,000 0
(Increase) decrease in assets:
Notes receivable (13,090) (13,090) 1,075
Inventory 0 0 1,089
Prepaids & other current assets 0 0 8,321
Other assets (11,542) (11,380) 3,098
Increase (decrease) in liabilities:
Accounts payable 5,884 (31,526) 37,161
----------- ----------- ---------
(957,300) (649,254) (282,458)
----------- ----------- ---------
NET CASH USED BY INVESTING ACTIVITIES:
Purchase of furniture and equipment (15,706) (15,706) 0
Patent registration costs (note 1.d.1)) (72,970) (59,140) (13,830)
----------- ----------- ---------
(88,676) (74,846) (13,830)
----------- ----------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES:
Proceeds from stock offering, net of costs 691,470 605,879 58,549
Short-term loan proceeds 355,000 30,000 325,000
----------- ----------- ---------
1,046,470 635,879 383,549
----------- ----------- ---------
CHANGE IN CASH 494 (88,221) 87,261
CASH AT BEGINNING OF PERIOD 0 88,715 1,454
----------- ----------- ---------
CASH AT END OF PERIOD $ 494 $ 494 $ 88,715
=========== =========== =========
NON-CASH FINANCING & INVESTING ACTIVITIES:
Purchase of net, non-cash assets of subsidiary
for stock $ 336,423 $ 97,347 $ 239,076
Short-term debt retired through issuance
of stock $ 525,000 $ 525,000 $ 0
</TABLE>
The accompanying notes are an integral part of these financial statements
-7-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to financial statements
1. Summary of Accounting Policies:
a. The Company:
Steroidogenesis Inhibitors International, Inc.(the Company) was incorporated as
WEBX Media, Inc., in Nevada on March 26, 1996. The Company was originally
organized to engage in the business of web page design for small businesses. The
Company was not successful in launching its business and was substantially
dormant through October 21, 1997, when it entered into an agreement to acquire
approximately 90% of the stock of Steroidogenesis Inhibitors, Inc. (the
Subsidiary), a Nevada corporation organized in September, 1994, which is engaged
in the business of developing pharmaceuticals for the treatment of diseases
related to deficiencies in the immune system. Subsequent to the acquisition, the
Company changed its name and focus to completing the testing and marketing of
Anticort, a trademarked, proprietory drug.
The Company is actively seeking additional capital to complete the testing
required for FDA approval and an international patent filing. During 1998, the
Company sold approximately 1,218,500 shares in an offering pursuant to Reg D
Section 506. At December 31, 1998, the Company has an offering under Section
504. Successful completion of the drug approval endeavors is dependent upon
raising sufficient capital to continue its efforts..
b. Basis of Consolidation:
The accompanying financial statements include the accounts of the Company and
its subsidiary, Steroidogenesis Inhibitors, Inc.
At December 31, 1997 and 1998, the Company owned approximately 88% and 98% of
the stock of the Subsidiary, respectively. The Company intends to acquire the
balance of the minority interest through exchanging its own stock for the
remaining minority stock on a share for share basis. Remaining minority shares
approximate 135,000 at December 31, 1998.
The acquisition of the Subsidiary occurred October 21, 1997. In accordance with
generally accepted accounting principles, the results of the Subsidiary's
operations through the acquisition date are not included in the consolidated
operating statements.
c. Plant, Property, and Equipment:
Fixed assets purchased are recorded at cost. Depreciation is provided using the
straight line method over the estimated useful lives of the assets. Depreciation
expense was approximately $400 and $5,100 for the years ended December 31, 1997
and 1998, respectively.
-8-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to financial statements
d. Intangibles:
1) Legal fees associated with registering Anticort, and derivative patents are
recorded at cost. Amortization, once the patent is approved, will be
calculated using the straight-line method, over the estimated useful lives
of the patents.
Clinical testing costs have and are being incurred pursuant to both registering
the patent and securing FDA approval for Anticort. Such testing has been
capitalized as patent registration costs.
2) Purchased technology rights are recorded at cost and are being amortized
using the straight line method over the estimated useful life of the
technology. Amortization of purchased technology was approximately $1,800
and $10,900 for the years ended December 31, 1997 and 1998, respectively.
3) Costs in excess of the identified net assets of the Subsidiary are recorded
based upon the estimated fair market value of the stock issued to secure the
ownership interest (See Note 2). Such costs are being amortized using the
straight line method, over the estimated useful life of the technology
rights acquired.
e. Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
2. Acquisition of Subsidiary:
On October 21, 1997, the Company acquired approximately 88% of the outstanding
stock of Steroidogenesis Inhibitors, Inc., by exchanging its stock on a share
for share basis with the principal shareholders of the Subsidiary. At the time
of the acquisition, liabilities of the Subsidiary exceeded the carrying value of
its assets by approximately $310,000.
The fair market value of the acquired technology rights is contingent upon the
outcome of events and circumstances. Such events and circumstances include but
are not limited to sucessfully completing the patent process and the clinical
testing for FDA approval, and actions of competitors. Because of the inherent
uncertainty regarding such a valuation, management established the value of the
Subsidiary as a derivative of the price for the Company's stock received in a
Reg D offering made during 1996.
-9-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to financial statements
Acquired assets and liabilities are reflected in the accompanying balance sheet
at their historic cost to the subsidiary less any applicable amortization
expensed subsequent to the acquisition date. The difference between the purchase
price and the net worth of the Susidiary at the acquisition date is reflected in
the balance sheet as " Costs in excess of identified net assets of the
subsidiary".
During 1998, the Company continued to exchange its stock to secure additional
shares of the Subsidiary, acquiring an additional 10%. The Company's intention
is to secure the balance of the minority shares through such stock exchanges.
3. Short-term borrowing:
The Company had a short-term borrowing without interest at December 31, 1998,
for $30,000. The liability was satisfied by issuing 30,000 shares of common
stock subsequent to the balance sheet date.
4. Deferred revenue:
The Subsidiary received $250,000 from Steroidogenesis Inhibitors Canada, Inc.,
(SI- Canada) for a licensing agreement prior to the acquisition date. The
licensing agreement has a duration of ten years beginning with the date the drug
is approved for use in Canada. Pursuant to the agreement, the Company has agreed
to provide assistance in securing such approval.
5. Commitments and Contingencies:
The Company has contracted with the Aids Research Alliance to perform clinical
testing required pursuant to the Company's efforts to secure FDA approval for
Anticort. Approximately $227,000 of the $650,000 contract was paid during March
1999. The Company is seeking additional capital to complete the contract
payments.
The Company engaged an investor relations consultant in exchange for 200,000
shares of stock, 100,000 of which was issued by December 31, 1998. The balance
was issued subsequent to the balance sheet date.
The Company made office space rental payments of approximately $16,000 during
1998, pursuant to an agreement expiring during 1999. Subsequent to the balance
sheet date, the Company entered into a three-year lease for office space calling
for payments of $22,270, $32,080, $33,032, and $11,116, for 1999 through 2002,
respectively.
-10-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to financial statements
6. Income taxes:
Both the Company and its Subsidiary have incurred substantial tax losses since
inception. Realization of the tax benefits of such are dependent upon future
taxable income within the period of time permitted by the tax code (20 years
from the year of loss). Because future earnings are uncertain, the future
benefits of carryforward losses have not been accrued.
7. Stock transactions:
a. Stock warrants and options:
At December 31, 1998, the Company had outstanding options for 1,000,000 shares
with an exercise price of $5.00 per share through February, 2002. Also, there
are 1,218,500 outstanding, callable warrants with an exercise price of $5.00 per
share. These warrants expire December, 1999, and are callable at $.01 per share.
The Subsidiary has outstanding options for 100,000 shares at an exercise price
of $3.50 per share which expire June, 1999.
b. Stock as compensation:
The Company issues stock as compensation, valuing such issues premised upon the
fair market value of the stock or the services, whichever is more clearly
determinable.
During 1997, the Company issued 1,000,000 shares as compensation for services
relating to the acquisition. These services were recorded at approximately
$46,500.
During 1998, the Company issued 400,000 shares as compensation. These shares
were recorded at $350,000.
c. Stock option plan
The Company has a stock option plan under which 2,500,000 shares are reserved.
At December 31, 1998, no options have been granted pursuant to the plan.
d. Other:
Subsequent to the balance sheet date, the Company issued approximately 3,000,000
shares of stock. Nearly 90% of that stock was placed in escrow pertaining to
raising capital through convertible debentures. Through such, the Company
secured $400,000, half of which was retired through converting 290,924 escrowed
shares.
-11-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to financial statements
The balance of the stock issued through the report date was for cash, in
settlement of short-term borrowings, or as compensation.
8. Related party transactions:
The Subsidiary purchased the technology rights (Note 1.d.2) from an entity
controlled by the president of the Company for $108,968. SI-Canada, subsequent
to securing the licensing agreement with the Company (Note 4), issued 300,000
share to the president of the Company. Also, during 1998, consulting fees of
$24,000 were paid to an entity owned by a family member of the president.
A director and officer of the Company owns the investment company which received
1,000,000 shares and options as compensation for consulting pursuant to the
acquisition.
Directors of the Company received 300,000 shares of compensation for consulting
services during 1998 which were valued at $300,000.
9. Risks and uncertainties:
Marketability of the product is dependent, among other things, upon securing
additional capital to successfully complete the clinical testing of the product,
securing FDA approval, and procurement of viable patents.
-12-
<PAGE>
STEROIDOGENESIS INHIBITORS
INTERNATIONAL, INC.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 1999 & 1998
<PAGE>
TABLE OF CONTENTS
Consolidated Interim Balance Sheets (unaudited) as
of March 31, 1999 & 1998. 3
Consolidated Interim Statements of Operations (unaudited)
for the Three Months Ended March 31, 1999 & 1998. 4
Consolidated Interim Statements of Stockholder's Equity
(unaudited) for the Three Months Ended March 31, 1999 & 1998. 5
Consolidated Interim Statements of Cash Flows (unaudited)
for the Three Months Ended March 31, 1999 & 1998. 6
Notes to Interim Statements. 7 - 11
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
CONSOLIDATED, INTERIM BALANCE SHEETS
(UNAUDITED)
MARCH 31, 1999 & 1998
<TABLE>
<CAPTION>
ASSETS 1999 1998
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 3,562 $ 258,322
Note receivable-related party (note 8) 14,298 0
----------- -----------
17,860 258,322
----------- -----------
FIXED ASSETS:
Furniture & fixtures, at cost 29,216 13,510
Accumulated depreciation (11,993) (6,358)
----------- -----------
17,223 7,152
----------- -----------
OTHER ASSETS:
Patent registration/ testing costs (note 1.d.1) 326,782 40,756
Purchased technology rights, net of accumulated
amortization of $15,437 & $ 4,431 (notes 1&2) 93,532 104,428
Costs in excess of identified net assets of subsidiary, net of
accumulated amortization of $98,259 & $25,929
(notes 1& 2) 606,794 606,114
Other 30,006 180
----------- -----------
1,057,114 751,478
----------- -----------
TOTAL ASSETS $ 1,092,197 $ 1,016,952
=========== ===========
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 17,431 $ 30,863
Short-term borrowing (note 3) 200,000 695,000
----------- -----------
217,431 725,863
LONG-TERM LIABILITIES
Deferred revenue (note 4) 250,000 250,000
----------- -----------
467,431 975,863
----------- -----------
COMMITMENTS (note 5)
SHAREHOLDERS' EQUITY:
Common stock, 25,000,000 share authorized at .001 par,
10,580,636 issued and outstanding (note 7) 10,581 8,065
Paid in capital in excess of par, net of offering costs 2,258,361 551,842
Accumulated deficit (1,608,909) (446,400)
Minority interest in subsidiary (35,267) (72,418)
----------- -----------
624,766 41,089
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,092,197 $ 1,016,952
=========== ===========
See accompanying notes to the consolidated, interim financial statements (unaudited)
</TABLE>
-3-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
CONSOLIDATED, INTERIM STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 & 1998
1999 1998
---------- ----------
REVENUES: $ 0 $ 0
---------- ----------
EXPENSES:
General & administrative 263,360 121,418
Depreciation and amortization 21,643 19,293
---------- ----------
285,003 140,711
---------- ----------
Net loss, prior to allocation to minority interest (285,003) (140,711)
Loss allocated to minority interest 5,415 13,086
---------- ----------
Net loss $ (279,588) $ (127,625)
========== ==========
See accompanying notes to the consolidated,
interim financial statements (unaudited)
-4-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
CONSOLIDATED, INTERIM STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 &1998
<TABLE>
<CAPTION>
Number Par Value Total
of Common Paid in Offering Paid in
Shares Stock Capital Costs Capital
--------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
December 31, 1997 7,689,690 $ 7,690 $ 362,791 $ (9,258) $ 353,533
Continuing acquisition of subsidiary 175,010 175 7,916 7,916
Shares issued in cancellation of debt 200,000 200 199,800 (9,407) 190,393
Net loss for the three months ended March 31, 1998
---------- ------- ---------- --------- ----------
March 31, 1998 8,064,700 $ 8,065 $ 570,507 $ (18,665) $ 551,842
========== ======= ========== ========= ==========
December 31, 1998 10,004,212 $10,005 $1,961,341 $ (96,879) $1,864,462
Stock as compensation 210,500 210 160,290 160,290
Stock for cash 45,000 45 44,955 (13,140) 31,815
Shares issued in cancellation of debt 320,924 321 229,679 (27,885) 201,794
Net loss for the three months ended March 31, 1999
---------- ------- ---------- --------- ----------
March 31, 1999 10,580,636 $10,581 $2,396,265 $(137,904) $2,258,361
========== ======= ========== ========= ==========
</TABLE>
<PAGE>
[RESTUBBED]
<TABLE>
<CAPTION>
Minority Total
Retained Interest in Shareholders'
Earnings Subsidiary Equity
----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
December 31, 1997 $ (318,775) $ (75,578) $ (33,130)
Continuing acquisition of subsidiary 16,246 24,337
Shares issued in cancellation of debt 190,593
Net loss for the three months ended March 31, 1998 (127,625) (13,086) (140,711)
----------- ---------- ------------
March 31, 1998 $ (446,400) $ (72,418) $ 41,089
=========== ========== ============
December 31, 1998 $(1,329,321) $ (29,852) $ 515,294
Stock as compensation 160,500
Stock for cash 31,860
Shares issued in cancellation of debt 202,115
Net loss for the three months ended March 31, 1999 (279,588) (5,415) (285,003)
----------- ---------- ------------
March 31, 1999 $(1,608,909) $ (35,267) $ 624,766
=========== ========== ============
See accompanying notes to the consolidated, interim financial statements (unaudited)
</TABLE>
-5-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
CONSOLIDATED, INTERIM STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 & 1998
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
NET CASH USED BY OPERATING ACTIVITIES:
Net loss $(279,588) $(127,625)
Adjustments to reconcile net loss to net cash used in
operating activities:
Loss allocated to minority interest (5,415) (13,086)
Depreciation and amortization 21,643 19,293
Expenses paid through issuance of stock 160,500 0
(Increase) decrease in assets:
Notes receivable (1,208) 0
Prepaids & other current assets (18,479) 0
Increase (decrease) in liabilities:
Accounts payable (51,474) (69,568)
--------- ---------
(174,021) (190,986)
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES:
Purchase of furniture and equipment 0 0
Patent registration costs (note 1.d.1)) (226,886) 0
--------- ---------
(226,886) 0
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES:
Proceeds from stock offering, net of costs 31,860 (9,407)
Short-term loan proceeds 372,115 370,000
--------- ---------
403,975 360,593
--------- ---------
CHANGE IN CASH 3,068 169,607
CASH AT BEGINNING OF PERIOD 494 88,715
--------- ---------
CASH AT END OF PERIOD $ 3,562 $ 258,322
========= =========
NON-CASH FINANCING & INVESTING ACTIVITIES:
Acquisition of subsidiary for stock $ 0 $ 24,337
Short-term debt retired through issuance
of stock $ 230,000 $ 200,000
See accompanying notes to the consolidated, interim financial statements (unaudited)
</TABLE>
-6-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to consolidated, interim financial statements (unaudited)
1. Summary of Accounting Policies:
a. The Company:
Steroidogenesis Inhibitors International, Inc.(the Company) was incorporated as
WEBX Media, Inc., in Nevada on March 26, 1996. The Company was originally
organized to engage in the business of web page design for small businesses. The
Company was not successful in launching its business and was substantially
dormant through October 21, 1997, when it entered into an agreement to acquire
approximately 90% of the stock of Steroidogenesis Inhibitors, Inc. (the
Subsidiary), a Nevada corporation organized in September, 1994, which is engaged
in the business of developing pharmaceuticals for the treatment of diseases
related to deficiencies in the immune system. Subsequent to the acquisition, the
Company changed its name and focus to completing the testing and marketing of
Anticort, a trademarked, proprietory drug.
The Company is actively seeking additional capital to complete the testing
required for FDA approval and an international patent filing. Successful
completion of the drug approval endeavors is dependent upon raising sufficient
capital to continue its efforts.
b. Basis of Consolidation:
The accompanying financial statements include the accounts of the Company and
its subsidiary, Steroidogenesis Inhibitors, Inc.
At March 31, 1999 and 1998, the Company owned approximately 90% and 98% of the
stock of the Subsidiary, respectively. The Company intends to acquire the
balance of the minority interest through exchanging its own stock for the
remaining minority stock on a share for share basis. Remaining minority shares
approximate 134,000 at March 31, 1999.
c. Plant, Property, and Equipment:
Fixed assets purchased are recorded at cost. Depreciation is provided using the
straight line method over the estimated useful lives of the assets. Depreciation
expense was approximately $1,258 and $753 for the three months ended March 31,
1999 and 1998, respectively.
-7-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to consolidated, interim financial statements (unaudited)
d. Intangibles:
1) Legal fees associated with registering Anticort, and derivative patents are
recorded at cost. Amortization, once the patent is approved, will be
calculated using the straight-line method, over the estimated useful lives
of the patents.
Clinical testing costs have and are being incurred pursuant to both registering
the patent and securing FDA approval for Anticort. Such testing has been
capitalized as patent registration costs.
2) Purchased technology rights are recorded at cost and are being amortized
using the straight line method over the estimated useful life of the
technology. Amortization of purchased technology was approximately $2,724
for the three months ended March 31, 1999 and 1998.
3) Costs in excess of the identified net assets of the Subsidiary are recorded
based upon the estimated fair market value of the stock issued to secure the
ownership interest (See Note 2). Such costs are being amortized using the
straight line method, over the estimated useful life of the technology
rights acquired.
e. Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
2. Acquisition of Subsidiary:
On October 21, 1997, the Company acquired approximately 88% of the outstanding
stock of Steroidogenesis Inhibitors, Inc., by exchanging its stock on a share
for share basis with the principal shareholders of the Subsidiary. At the time
of the acquisition, liabilities of the Subsidiary exceeded the carrying value of
its assets by approximately $310,000.
The fair market value of the acquired technology rights is contingent upon the
outcome of events and circumstances. Such events and circumstances include but
are not limited to sucessfully completing the patent process and the clinical
testing for FDA approval, and actions of competitors. Because of the inherent
uncertainty regarding such a valuation, management established the value of the
Subsidiary as a derivative of the price for the Company's stock received in a
Reg D offering made during 1996.
-8-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to consolidated, interim financial statements (unaudited)
Acquired assets and liabilities are reflected in the accompanying balance sheet
at their historic cost to the subsidiary less any applicable amortization
expensed subsequent to the acquisition date. The difference between the purchase
price and the net worth of the Susidiary at the acquisition date is reflected in
the balance sheet as " Costs in excess of identified net assets of the
subsidiary".
During 1998, the Company continued to exchange its stock to secure additional
shares of the Subsidiary, acquiring an additional 10%. The Company's intention
is to secure the balance of the minority shares through such stock exchanges.
3. Short-term borrowing:
The Company had short-term borrowings without interest at March 31, 1998, for
$695,000 representing proceeds for stock purchases for which the stock had not
yet been issued. The liability was satisfied by issuing the shares subsequent to
the balance sheet date.
At March 31, 1999, the Company had convertible debentures totalling $200,000.
The debentures were converted for stock subsequent to the balance sheet date.
4. Deferred revenue:
The Subsidiary received $250,000 from Steroidogenesis Inhibitors Canada, Inc.,
(SI- Canada) for a licensing agreement prior to the acquisition date. The
licensing agreement has a duration of ten years beginning with the date the drug
is approved for use in Canada. Pursuant to the agreement, the Company has agreed
to provide assistance in securing such approval.
5. Commitments and Contingencies:
The Company has contracted with the Aids Research Alliance to perform clinical
testing required pursuant to the Company's efforts to secure FDA approval for
Anticort. Approximately $227,000 of the $650,000 contract was paid during
March,1999. The Company is seeking additional capital to complete the contract
payments.
The Company made office space rental payments of approximately $6,800 during the
three months ended March 31, 1999 and 1998, pursuant to an agreement expiring
during 1999. Subsequent to the balance sheet date, the Company entered into a
three-year lease for office space calling for payments of $22,270, $32,080,
$33,032, and $11,116, for 1999 through 2002, respectively.
-9-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to consolidated, interim financial statements (unaudited)
6. Income taxes:
Both the Company and its Subsidiary have incurred substantial tax losses since
inception. Realization of the tax benefits of such are dependent upon future
taxable income within the period of time permitted by the tax code (20 years
from the year of loss). Because future earnings are uncertain, the future
benefits of carryforward losses have not been accrued.
7. Stock transactions:
a. Stock warrants and options:
At March 31, 1999, the Company had outstanding options for 1,000,000 shares with
an exercise price of $5.00 per share through February, 2002. Also, there are
1,218,500 outstanding, callable warrants with an exercise price of $5.00 per
share. These warrants expire December, 1999, and are callable at $.01 per share.
The Subsidiary has outstanding options for 100,000 shares at an exercise price
of $3.50 per share which expire June, 1999.
b. Stock as compensation:
The Company issues stock as compensation, valuing such issues premised upon the
fair market value of the stock or the services, whichever is more clearly
determinable.
During the three months ending March 31, 1999, the Company issued 210,500 shares
as compensation. These shares were recorded at $160,500.
c. Stock option plan
The Company has a stock option plan under which 2,500,000 shares are reserved.
At March 31, 1999, no options have been granted pursuant to the plan.
d. Other:
During the three months ended March 31, 1999, the Company issued approximately
3,000,000 shares of stock. Nearly 90% of that stock was placed in escrow
pertaining to raising capital through convertible debentures. Through such, the
Company secured $400,000, half of which was retired through converting 290,924
escrowed shares. These shares are reflected as "issued and outstanding shares".
-10-
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to consolidated, interim financial statements (unaudited)
The balance of the stock issued through March 31,1999, was for cash, in
settlement of short-term borrowings, or as compensation.
8. Related party transactions:
The Subsidiary purchased the technology rights (Note 1.d.2) from an entity
controlled by the president of the Company for $108,968. SI-Canada, subsequent
to securing the licensing agreement with the Company (Note 4), issued 300,000
share to the president of the Company. Also, during the three months ending
March 31, 1999 and 1998, consulting fees of $6,000 were paid to an entity owned
by a family member of the president.
9. Risks and uncertainties:
Marketability of the product is dependent, among other things, upon securing
additional capital to successfully complete the clinical testing of the product,
securing FDA approval, and procurement of viable patents.
-11-
<PAGE>
PART III
Item 1. Index to Exhibits
Exhibit No. Description Page No.
2.1 Agreement and Plan of Reorganization
3.1 Articles of Incorporation, as amended
3.2 By-Laws
4.1 Form of common stock certificate
4.2 Form of common stock purchase warrant*
4.3 Warrant Agency Agreement*
4.4 The Webx Media, Inc., 1997 Stock Option Plan
10.1 License Agreement between Cortisol Medical
Research, Inc., and Steroidogenesis Inhibitors,
Inc., dated September 6, 1994
10.2 Exclusive Licensing Agreement between Steroidogenesis
Inhibitors, Inc., and Steroidogenesis Inhibitors Canada,
dated February 10, 1996
10.3 Consulting Agreement between Performance
Strategies, Inc., and the Company dated July 15, 1998
10.4 Form of Consulting Agreement between The Augustine
Equity Fund and the Company dated December 17, 1999
10.5 Agreement between AIDS Research Alliance Agreement
and the Company dated March 5, 1999
10.6 Form of Consulting Agreement between Lexxus Capital
and the Company dated May 14, 1999
10.7 Assignment between Alfred T. Sapse, M.D., and
Steroidogenesis Inhibitors International dated July 15, 1999
10.8 Assignment between Steroidogenesis Inhibitors,
Inc., and the Company dated July 15, 1999
- -----------------
* To be filed by amendment
Item 2. Description of Exhibits
None.
36
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
STEROIDOGENESIS INHIBITORS INTERNATIONAL
Dated: July 17, 1999 By: /s/ Alfred T. Sapse
--------------- -----------------------------------------
Alfred T. Sapse, President and Director
37
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
2.1 Agreement and Plan of Reorganization
3.1 Articles of Incorporation, as amended
3.2 By-Laws
4.1 Form of common stock certificate
4.2 Form of common stock purchase warrant*
4.3 Warrant Agency Agreement*
4.4 The Webx Media, Inc., 1997 Stock Option Plan
10.1 License Agreement between Cortisol Medical
Research, Inc., and Steroidogenesis Inhibitors,
Inc., dated September 6, 1994
10.2 Exclusive Licensing Agreement between Steroidogenesis
Inhibitors, Inc., and Steroidogenesis Inhibitors Canada,
dated February 10, 1996
10.3 Consulting Agreement between Performance
Strategies, Inc., and the Company dated July 15, 1998
10.4 Form of Consulting Agreement between The Augustine
Equity Fund and the Company dated December 17, 1999
10.5 Agreement between AIDS Research Alliance Agreement
and the Company dated March 5, 1999
10.6 Form of Consulting Agreement between Lexxus Capital
and the Company dated May 14, 1999
10.7 Assignment between Alfred T. Sapse, M.D., and
Steroidogenesis Inhibitors International dated July 15, 1999
10.8 Assignment between Steroidogenesis Inhibitors,
Inc., and the Company dated July 15, 1999
- -----------------
* To be filed by amendment
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("the Agreement"), dated as
of the 21st day of October, 1997, by and between Webx Media, Inc., a Nevada
corporation ("Webx") and Steroidogenesis Inhibitors, Inc., a Nevada corporation
("SII") and the selling shareholders of SII executing this agreement with
reference to the following:
A. Webx is a Nevada corporation organized on March 26, 1996. Webx
is listed on the NASD OTC Bulletin Board under the symbol "WEBX". Webx
has authorized capital stock of 25,000,000 shares, $.001 par value, of
which 5,000,000 shares are issued and outstanding and 303,000 shares
may be traded publicly.
B. SII is a Nevada corporation, organized on September 2, 1994.
SII has authorized capital stock of 10,000,000 shares, $.01 par value,
of which 7,018,236 shares are issued and outstanding.
C. The respective Boards of Directors of Webx and SII have deemed
it advisable and in the best interests of Webx and SII that SII be
acquired by Webx, pursuant to the terms and conditions set forth in
this Agreement.
D. Webx and II propose to enter into this Agreement which provides
among other things that up to 100% but no less than 86.74% of the
outstanding shares of SII be acquired by Webx, in exchange for shares
of Webx and such additional items as more fully described in this
Agreement.
E. The parties desire the transaction to qualify as a tax-free
reorganization under Section 368 (a)(1)(B) of the Internal Revenue Code
of 1986, as amended.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
THE ACQUISITION
1.01 At the Closing, up to 100% (7,018,236 shares) but no less than
86.74% (6,087,700) of the issued and outstanding common shares of SII shall be
acquired by Webx in a share for share exchange for shares of Webx. The shares of
Webx to be issued in this transaction shall be issued as set forth in Exhibit A
to this Agreement.
1.02 SII has issued shares of its common stock pursuant to a private
place to shareholders in various states. Webx will attempt to acquire these
shares on the same terms provided an exemption from registration is available in
the states where the stockholders reside.
1
<PAGE>
1.03 At the Closing, the SII shareholders will deliver certificates for
the issued and outstanding shares of SII, duly endorsed so as to make Webx
the sole holder thereof, free and clear of all claims and encumbrances and Webx
shall deliver a transmittal letter directed to the transfer agent of Webx
directing the issuance of shares to the shareholders of SII as set forth on
Exhibit A of this Agreement.
1.04 Following the reorganization and pursuant to the conditions set
forth in paragraph 5.01 (e) and (f) there will be a total of no less than
7,790,700 and no more than 8,721,236 common shares, $.001 par value, issued and
outstanding in Webx.
1.05 Following the reorganization, SII will be a majority owned
subsidiary of Webx.
ARTICLE 2
THE CLOSING
2.01 The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of SII on or before
November 30, 1997, (the "Closing Date") at 11:00 a.m. or at such other place or
date and time as may be agreed to in writing by the parties hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF Webx
Webx, and the Officers and Directors of Webx personally, hereby
represents and warrants to SII as follows:
3.01 Webx shall deliver to SII on or before Closing, each of the
following:
(a) Financial Statements. Audited financial statements of Webx
including, but not limited to, balance sheets and profit and loss
statements for the period ending December 31, 1996 prepared in
accordance with generally accepted accounting principles and unaudited
financial statements of Webx for the period ending September 30, 1997
prepared by management and which fairly present the financial condition
of Webx at the dates thereof. (Schedule A)
(b) Property. An accurate list and description of all property,
real or personal, owned by Webx of a value equal to or greater than
$1,000.00. (Schedule B.)
(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule A. (Schedule
C.) A complete and accurate list of all debts, liabilities and
obligations of Webx incurred or owing as of the date of this Agreement.
(Schedule C.1.)
(d) Leases and Contracts. A complete and accurate list describing
all material terms of each lease (whether of real or personal property)
and each contract, promissory note, mortgage, license, franchise, or
2
<PAGE>
other written agreement to which Webx is a party which involves or can
reasonably be expected to involve aggregate future payments or receipts
by Webx (whether by the terms of such lease, contract, promissory note,
license, franchise or other written agreement or as a result of a
guarantee of the payment of or indemnity against the failure to pay
same) of $1,000.00 or more annually during the twelve-month period
ended December 31, 1996, or any consecutive twelve-month period
thereafter, except any of said instruments which terminate or are
cancelable without penalty during such twelve-month period.
(Schedule D.)
(e) Loan Agreements. Complete and accurate copies of a loan
agreements and other documents with respect to obligations of Webx for
the repayment of borrowed money. (Schedule E.)
(f) Consents Required. A complete list of all agreements wherein
consent to the transaction herein contemplated is required to avoid a
default thereunder; or where notice of such transaction is required at
or subsequent to closing, or where consent to an acquisition,
consolidation, or sale of all or substantially all of the assets is
required to avoid a default thereunder. (Schedule F.)
(g) Articles and Bylaws. Complete and accurate copies of the
Certificate and Articles of Incorporation and Bylaws of Webx together
with all amendments thereto to the date hereof. (Schedule G.)
(h) Shareholders. A complete list of all persons or entities
holding capital stock of Webx or any rights to subscribe for, acquire,
or receive shares of the capital stock of Webx (whether warrants,
calls, options, or conversion rights), including copies of all stock
option plans whether qualified or nonqualified, and other similar
agreements. (Schedule H.)
(i) Officers and Directors. A complete and current list of all
Officers and Directors of Webx. (Schedule I.)
j) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate for each present
employee of Webx who received $1,000.00 or more in aggregate
compensation from Webx whether in salary bonus or otherwise, during
the year 1996, or who is presently scheduled to receive from Webx a
salary in excess of $1,000.00 during, the year ending December 31,
1997, including in each case the amount of compensation received or
scheduled to be received, and a schedule of the hourly rates of all
other employees listed according to departments. (Schedule J.)
(k) Litigation. A complete and accurate list (in all material
respects) of all material civil, criminal, administrative, arbitration
or other such proceedings or investigations (including without
limitations unfair labor practice matters, labor organization
activities, environmental matters and civil rights violations) pending
or, to the knowledge of Webx threatened, which may materially and
adversely affect Webx. (Schedule K.)
3
<PAGE>
(1) Tax Returns. Accurate copies of all Federal and State tax
returns for Webx for the last fiscal year. (Schedule L.)
(m) Agency Reports. Copies of all material reports or filings (and
a list of the categories of reports or filings made on a regular basis)
made by Webx under ERISA, EEOC, FDA and all other governmental agencies
(federal, state or local) during, the last fiscal year. (Schedule M.)
(n) Banks. A true and complete list (in all material respects), as
of the date of this Agreement, showing (1) the name of each bank in
which Webx has an account or safe deposit box, and (2) the names and
addresses of all signatories. (Schedule N.)
(o) Jurisdictions Where Qualified. A list of all jurisdictions
wherein Webx is qualified to do business and is in good standing.
(Schedule O.)
(p) Subsidiaries. A complete list of all subsidiaries of Webx.
(Schedule P.) The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint
ventures, or similar entities in which Webx has an interest, direct or
indirect.
(q) Union Matters. An accurate list and description (in all
material respects) of all union contracts and collective bargaining
agreements of Webx, if any. (Schedule Q.)
(r) Employee and Consultant Contracts. A complete and accurate
list of all employee and consultant contracts which Webx may have,
other than those listed in the schedule on Union Matters. (Schedule R.)
(s) Employee Benefit Plans. Complete and accurate copies of all
salary, stock options, bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, group insurance,
disability, death benefit or other benefit plans, trust agreements or
arrangements of Webx in effect on the date hereof or to become
effective after the date thereof, together with copies of any
determination letters issued by the Internal Revenue Service with
respect thereto. (Schedule S.)
(t) Insurance Policies. A complete and accurate list (in all
material respects) and a description of all material insurance policies
naming Webx as an insured or beneficiary or as a loss payable payee or
for which Webx has paid all or part of the premium in force on the date
hereof specifying any notice or other information possessed by Webx
regarding possible claims thereunder, cancellation thereof or premium
increases thereon, including any policies now in effect naming Webx as
beneficiary covering the business activities of Webx. (Schedule T.)
4
<PAGE>
(u) Customers. A complete and accurate list (in all material
respects) of the customers of Webx, including presently effective
contracts of Webx to be assigned to Webx, accounting for the principle
revenues of Webx, indicating the dollar amounts of gross income of each
such customer for the period ended September 30, 1997. (Schedule U.)
(v) Licenses and Permits. A complete list of all licenses, permits
and other authorizations of Webx. (Schedule V.)
3.02 Organization, Standing and Power. Webx is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada with all requisite corporate power to own or lease its properties and
carry on its businesses as are now being conducted.
3.03 Qualification. Webx is duly qualified and is licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
its business operations. Such jurisdictions, which are the only jurisdictions in
which Webx is duly qualified and licensed as a foreign corporation, are shown in
Schedule O.
3.04 Capitaization of Webx. The authorized capital stock of Webx
consists of 25,000,000 shares of Common Stock, $.001 par value, of which the
only shares issued and outstanding are 5,000,000 issued to shareholders listed
on Schedule H, which shares were duly authorized, validly issued and fully paid
and nonassessable. There are no preemptive rights with respect to the Webx
stock.
3.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate actions, including but not limited to duly and
validly authorized action and approval by the Board of Directors, on the part of
Webx. This Agreement constitutes the valid and binding obligation of Webx
enforceable against it in accordance with its terms, subject to the principles
of equity applicable to the availability of the remedy of specific performance.
This Agreement has been duly executed by Webx and the execution and delivery of
this Agreement and the consummation of the transactions contemplated by this
Agreement shall not result in any breach of any terms or provisions of Webx's
Certificate and Articles of Incorporation or Bylaws or of any other agreement,
court order or instrument to which Webx is a party or bound by.
3.06 Absence of Undisclosed Liabilities. Webx has no material
liabilities of any nature, whether fixed, absolute, contingent or accrued, which
were not reflected on the financial statements set forth in Schedule A or
otherwise disclosed in this Agreement or any of the Schedules or Exhibits
attached hereto.
5
<PAGE>
3.07 Absence of Changes. Since September 30, 1997, there has not been
any material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of Webx, except for changes resulting from
completion of those transactions described in Section 5.0 1.
3.08 Tax Matters. All taxes and other assessments and levies which Webx
is required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by Webx in separate bank accounts for such payment or are represented by
depository receipts, and all such withholdings and collections and all other
payments due in connection therewith (including, without limitation, employment
taxes, both the employee's and employer's share) have been paid over to the
government or placed in a separate and segregated bank account for such purpose.
There are no known deficiencies in income taxes for any periods and further, the
representations and warranties as to absence of undisclosed liabilities
contained in Section 3.06 includes any and all tax liabilities of whatsoever
kind or nature (including, without limitation, all federal, state, local and
foreign income, profit, franchise, sales, use and property taxes) due or to
become due, incurred in respect of or measured by Webx income or business prior
to the Closing Date.
3.09 Options, Warrants, etc. Except as otherwise described in Schedule
H, there are no outstanding options, warrants, calls, commitments or agreements
of any character to which Webx or its shareholders are a party or by which Webx
or its shareholders are bound, or are a party, calling for the issuance of
shares of capital stock of Webx or any securities representing the right to
purchase or otherwise receive any such capital stock of Webx.
3.10 Title to Assets. Except for liens set forth in Schedule C, Webx is
the sole unconditional owner of, with good and marketable title to, all assets
listed in the schedules as owned by it and all other property and assets are
free and clear of all mortgages, liens, pledges, charges or encumbrances of any
nature whatsoever.
3.11 Agreements in Force and Effect. Except as set forth in Schedules D
and E, all material contracts, agreements, plans, promissory notes, mortgages,
leases, policies, licenses, franchises or similar instruments to which Webx is a
party are valid and in full force and effect on the date hereof, and Webx has
not breached any material provision of, and is not in default in any material
respect under the terms of, any such contract, agreement, plan, promissory note,
mortgage, lease, policy, license, franchise or similar instrument which breach
or default would have a material adverse effect upon the business, operations or
financial condition of Webx.
3.12 Legal Proceedings, Etc. Except as set forth in Schedule K. there
are no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of either Webx or the shareholders
thereof, threatened, in which, individually or in the aggregate, an adverse
determination would materially and adversely affect the assets, properties,
business or income of Webx. Webx has substantially complied with, and is not in
default in any material respect under, any laws, ordinances, requirements,
regulations or orders applicable to its businesses.
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3.13 Governmental Regulation. To the knowledge of Webx and except as
set forth in Schedule K, Webx is not in violation of or in default with respect
to any applicable law or any applicable rule, regulation, order, writ or decree
of any Court or any governmental commission, board, bureau, agency or
instrumentality, or delinquent with respect to any report required to be filed
with any governmental commission, board, bureau, agency or instrumentality which
violation or default could have a material adverse effect upon the business,
operations or financial condition of Webx. Webx has made all filings required by
the Securities Act of 1933, as amended, and such filings did not contain any
material misstatement or omit to state a material fact required to make the
statements therein not misleading. All securities issued by Webx were offered
and sold pursuant to an effective registration statement or an exemption from
registration and applicable state securities laws. Webx has offered and sold to
the public, 303,000 shares which shares are publicly tradeable.
3.14 Brokers and Finders. Webx shall be solely responsible for payment
to any broker or finder retained by Webx for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated herein.
3.15 Accuracy of Information. No representation or warranty by Webx
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to SII pursuant hereto or in
connection with the transactions contemplated hereby (including without
limitation all Schedules and exhibits hereto) contains or will contain any
untrue statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
3.16 Subsidiaries. Except as listed in Schedule P, Webx does not have
any other subsidiaries or own capital stock representing ten percent (10%) or
more of the issued and outstanding stock of any other corporation.
3.17 Consents. Except as listed in Schedule F, no consent or approval
of, or registration, qualification or filing with, any governmental authority or
other person is required to be obtained or accomplished by Webx or any
shareholder thereof in connection with the consummation of the transactions
contemplated hereby.
3.18 Improper Payments. Neither Webx, nor any person acting on behalf
of Webx has made any payment or otherwise transmitted anything of value,
directly or indirectly, to (a) any official or any government or agency or
political subdivision thereof for the purpose of influencing any decision
affecting the business of Webx (b) any customer, supplier or competitor of Webx
or employee of such customer, supplier or competitor, for the purpose of
obtaining, retaining, or directing business for Webx or (c) any political party
or any candidate for elective political office nor has any fund or other asset
of Webx been maintained that was not fully and accurately recorded on the books
of account of Webx.
3.19 Copies of Documents. Webx has made available for inspection and
copying by SII and its duly authorized representatives, and will continue to do
so at all times, true and correct copies of all documents which it has filed
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with the Securities and Exchange Commission and all other governmental agencies
which are material to the terms and conditions contained in this Agreement.
Furthermore, all filings by Webx with the Securities and Exchange Commission,
and all other governmental agencies, including but not limited to the Internal
Revenue Service, have contained information which is true and correct, to the
best knowledge of the Board of Directors of Webx, in all material respects and
did not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements made therein not misleading or
which could have any material adverse effect upon the financial condition or
operations of Webx or adversely effect the objectives of this Agreement with
respect to SII including, but not limited to, the issuance and subsequent
trading of the shares of common stock of Webx to be received hereby, subject to
compliance by the shareholders of SII with applicable law.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SII
SII, and the Officers and Directors of SII personally, hereby
represents and warrants to Webx as follows:
4.01 SII shall deliver to Webx, on or before Closing, the following:
(a) Financial Statements. Unaudited financial statements of SII as
of July 31, 1997, which fairly represent the financial condition of SII
at the date thereof (Schedule AA)
(b) Property. An accurate list and description of all property,
real or personal owned by SII of a value equal to or greater than
$1,000.00. (Schedule BB.)
(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule AA. (Schedule
CC.) A complete and accurate list of all debts, liabilities and
obligations of SII incurred or owing as of the date of this Agreement.
(Schedule CC. 1.)
(d) Leases and Contracts. A complete and accurate list describing
all material terms of material leases (whether of real or personal
property) and each contract, promissory note, mortgage, license,
franchise, or other written agreement to which SII is a party which
involves or can reasonably be expected to involve aggregate future
payments or receipts by SII (whether by the terms of such lease,
contract, promissory note, license, franchise or other written
agreement or as a result of a guarantee of the payment of or indemnity
against the failure to pay same) of $1,000.00 or more annually during
the twelve-month period ended December 31, 1996 or any consecutive
twelve-month period thereafter, except any of said instruments which
terminate or are cancelable without penalty during such twelve-month
period. (Schedule DD.)
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(e) Loan Agreements. Complete and accurate copies of all loan
agreements and other documents with respect to obligations of SII for
the repayment of borrowed money. (Schedule EE.)
(f) Consents Required. A complete list of all agreements wherein
consent to the transaction herein contemplated is required to avoid a
default thereunder; or where notice of such transaction is required at
or subsequent to closing, or where consent to an acquisition,
consolidation, or sale of all or substantially all of the assets is
required to avoid a default thereunder. (Schedule FF.)
(g) Articles and Bylaws. Complete and accurate copies of the
Articles of Incorporation and Bylaws of SII, together with all
amendments thereto to the date hereof (Schedule GG.)
(h) Shareholders. A complete list of all persons or entities
holding capital stock of SII or any rights to subscribe for, acquire,
or receive shares of the capital stock of SII (whether warrants, calls,
options, or conversion rights), including copies of all stock option
plans whether qualified or nonqualified, and other similar agreements.
(Schedule HH.)
(i) Officers and Directors. A complete and current list of all
Officers and Directors of SII. (Schedule II.)
j) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate or each present
employee who is presently scheduled to receive from SII a salary in
excess of $1,000.00 during the year ending December 31, 1997, including
in each case the amount of compensation received or scheduled to be
received, and a schedule of the hourly rates of all other employees
listed according to departments. (Schedule JJ.)
(k) Litigation. A complete and accurate fist (in all material
respects) of all material civil, criminal, administrative, arbitration
or other such proceedings or investigations (including without
limitations unfair labor practice matters, labor organization
activities, environmental matters and civil rights violations) pending
or, to the knowledge of SII threatened, which may materially and
adversely affect SII. (Schedule KK.)
(1) Tax Returris. Accurate copies of all Federal and State tax
returns for SII if any. (Schedule LL.)
(m) Agency Reports. Copies of all material reports or filings (and
a list of the categories of reports or filings made on a regular basis)
made by SII under ERISA, EEOC, FDA and all other governmental agencies
(federal, state or local). (Schedule MM.)
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(n) Banks. A true and complete list (in all material respects), as
of the date of this Agreement, showing (1) the name of each bank in
which SII has an account or safe deposit box, and (2) the names and
addresses of all signatories. (Schedule NN.)
(o) Jurisdictions Where Qualified. A list of all jurisdictions
wherein SII is qualified to do business and is in good standing or has
applied for qualification. (Schedule OO.)
(p) Subsidiaries. A complete list of all subsidiaries of SII
(Schedule PP.) The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint
ventures, or similar entities in which SII has an interest, direct or
indirect.
(q) UnionMatters. An accurate list and description (in all
material respects of union contracts and collective bargaining
agreements of SII, if any. (Schedule QQ.)
(r) Employee and Consultant Contracts. A complete and accurate
list of all employee and consultant contracts which SII may have, other
than those listed in the schedule on Union Matters. (Schedule RR.)
(s) Employee Benefit Plans. Complete and accurate copies of all
salary, stock option, bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, group insurance,
disability, death benefit or other benefit plans, trust agreements or
arrangements of SII in effect on the date hereof or to become effective
after the date thereof, together with copies of any determination
letters issued by the Internal Revenue Service with respect thereto.
(Schedule SS.)
(t) Insurance Policies. A complete and accurate list (in all
material respects) and description of all material insurance policies
naming SII as an insured or beneficiary or as a loss payable payee or
for which SII has paid all or part of the premium in force on the date
hereof, specifying any notice or other information possessed by SII
regarding possible claims thereunder, cancellation thereof or premium
increases thereon, including any policies now in effect naming SII as
beneficiary covering the business activities of SII. (Schedule TT.)
(u) Customers. A complete and accurate list (in all material
respects) of the customers of SII, including all presently effective
contracts of SII to be assigned to SII, accounting for the principle
revenues of SII indicating the dollar amounts of gross revenues of each
such customer since January 1, 1997. (Schedule UU.)
(v) Licenses and Permits. A complete list of all licenses, permits
and other authorizations of SII. (Schedule VV.)
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4.02 Organization, Standing and Power. SII is a company duly organized
validly existing and in good standing under the laws of the state of Nevada with
all requisite corporate power to own or lease its properties and carry on its
business as is now being conducted.
4.03 Qualification. SII is duly qualified and licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
business operations. Such jurisdictions, which are the only jurisdictions in
which SII is duly qualified and licensed as a foreign corporation, or has
applied for qualification, is shown in Schedule OO.
4.04 Capitalization of SII. The authorized capital stock of SII
consists of 10,000,000 shares of common stock, $.01 par value, of which the only
shares issued and outstanding are 7,018,236 common shares issued to the
shareholders listed on Schedule HH, which shares were duly authorized, validly
issued and fully paid and nonassessable. There are no preemptive rights with
respect to the SII stock.
4.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action, including but not limited to duly and validly
authorized actions and approval by the Board of Directors, on the part of SII.
This Agreement constitutes the valid and binding obligation of SII, enforceable
against it in accordance with its terms, subject to the principles of equity
applicable to the availability of the remedy of specific performance. This
Agreement has been duly executed by SII and the execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement shall not result in any breach of any terms or provisions of SII's
Articles of Incorporation or Bylaws or of any other agreement, court order or
instrument to which SII is a party or bound.
4.06 Absence of Undisclosed Liabilities. SII has no material
liabilities of any nature, whether fixed, absolute, contingent or accrued, which
were not reflected on the financial statements set forth in Schedule AA or
otherwise disclosed in this Agreement or any of the Schedules or Exhibits
attached hereto.
4.07 Absence of Changes. Since July 31, 1997, there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of SII except for changes resulting from
completion of those transactions described in Section 5.02.
4.08 Tax Matters. All taxes and other assessments and levies which SII
is required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by SII in separate bank accounts for such payment or are represented by
depository receipts, and all such withholdings and collections and all other
payments due in connection therewith (including, without limitation, employment
taxes, both the employee's and employer's share) have been paid over to the
government or placed in a separate and segregated bank account for such purpose.
There are no known deficiencies in income taxes for any periods and further, the
representations and warranties as to absence of undisclosed liabilities
contained in Section 4.06 includes any and all tax liabilities of whatsoever
kind or nature (including, without limitation, all federal, state, local and
foreign income, profit, franchise, sales, use and property taxes) due or to
become due, incurred in respect of or measured by SII income or business prior
to the Closing Date.
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4.09 Options, Warrants, etc. Except as otherwise described in Schedule
HH, there are no outstanding options, warrants, calls, commitments or agreements
of any character to which SII or its shareholders are a party or by which SII or
its shareholders are bound, or are a party, calling for the issuance of shares
of capital stock of SII or any securities representing the right to purchase or
otherwise receive any such capital stock of SII.
4.10 Title to Assets. Except for liens set forth in Schedule CC, SII is
the sole and unconditional owner of, with good and marketable title to, all the
assets and patents listed in the schedules as owned by them and all other
property and assets are free and clear of all mortgages, liens, pledges, charges
or encumbrances of any nature whatsoever.
4.11 Agreements in Force and Effect. Except as set forth in Schedules
DD and EE, all material contracts, agreements, plans, promissory notes,
mortgages, leases, policies, licenses, franchises or similar instruments to
which SII is a party are valid and in full force and effect on the date hereof,
and SII has not breached any material provision of, and is not in default in any
material respect under the terms of, any such contract, agreement, plan,
promissory note, mortgage, lease, policy, license, franchise or similar
instrument which breach or default would have a material adverse effect upon the
business, operations or financial condition of SII.
4.12 Legal Proceedings, Etc. Except as set forth in Schedule KK, there
are no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of SII, threatened, in which,
individually or in the aggregate, an adverse determination would materially and
adversely affect the assets, properties, business or income of SII. SII has
substantially complied with, and is not in default in any material respect
under, any laws, ordinances, requirements, regulations or orders applicable to
its businesses.
4.13 Governmental Regulation. To the knowledge of SII and except as set
forth in Schedule KK, SII is not in violation of or in default with respect to
any applicable law or any applicable rule, regulation, order, writ or decree of
any court or any governmental commission, board, bureau, agency or
instrumentality, or delinquent with respect to any report required to be filed
with any governmental commission, board, bureau, agency or instrumentality which
violation or default could have a material adverse effect upon the business,
operations or financial condition of SII.
4.14 Broker and Finders. SII shall be solely responsible for payment to
any broker or finder retained by SII for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated herein.
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4.15 Accuracy of Information. No representation or warranty by SII
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to Webx pursuant hereto or in
connection with the transactions contemplated hereby (including without
limitation all Schedules and Exhibits hereto) contains or will contain any
untrue statement of a material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
4.16 Subsidiaries. Except as listed in Schedule PP, SII does not have
any other subsidiaries or own capital stock representing ten percent (10%) or
more of the issued and outstanding stock of any other corporation.
4.17 Consents. Except as listed in Schedule FF, no consent or approval
of, or registration, qualification or filing with, any other governmental
authority or other person is required to be obtained or accomplished by SII or
any shareholder thereof, in connection with the consummation of the transactions
contemplated hereby.
4.18 Improper Payments. No person acting on behalf of SII has made any
payment or otherwise transmitted anything of value, directly or indirectly, to
(a) any official or any government or agency or political subdivision thereof
for the purpose of influencing any decision affecting the business of SII, or
(b) any political party or any candidate for elective political office, nor has
any fund or other asset of SII been maintained that was not fully and accurately
recorded on the books of account of SII.
4.19 Copies of Documents. SII has made available for inspection and
copying by Webx and its duly authorized representatives, and will continue to
do so at all times, true and correct copies of all documents which it has filed
with any governmental agencies which are material to the terms and conditions
contained in this Agreement. Furthermore, all filings by SII with governmental
agencies, including but not limited to the Internal Revenue Service, have
contained information which is true and correct in all material respects and did
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements made therein not misleading or
which could have any material adverse effect upon the financial condition or
operations of SII or adversely affect the objectives of this Agreement.
4.20 Investment Intent of Shareholders. Each shareholder of SII
represents and warrants to Webx that the shares of Webx being acquired pursuant
to this Agreement are being acquired for his own account and for investment and
not with a view to the public resale or distribution of such shares and further
acknowledges that the shares being issued have not been registered under the
Securities Act and are "restricted securities" as that term is defined in Rule
144 promulgated under the Securities Act and must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available.
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ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO THE
EFFECTIVE TIME OF THE ACQUISITION
5.01 Conduct and Transactions of Webx. During the period from the date
hereof to the date of Closing, Webx shall:
(a) Conduct its operations in the ordinary course of business,
including but not limited to, paying all obligations as they mature,
complying with all applicable tax laws, filing all tax returns required
to be filed and paying all taxes due;
(b) Maintain its records and books of account in a manner that
fairly and correctly reflects its income, expenses, assets and
liabilities.
(c) Elect Tom Kubota, Rudy LaRusso, Alfred T. Sapse, Eugene Boyle,
Walter Holden, James D. Monllos, and Janet Greeson to the Board of
Directors of Webx.
(d) Submit Resolutions to the Shareholders to approve a name
change from Webx Media, Inc. to Steroidogenesis Inhibitors
International.
(e) Cancel 4,297,000 shares of common stock of Webx issued and
outstanding to Barsten Capital, Inc., upon the closing of the
reorganization.
(f) Issue 1,000,000 shares of restricted common stock of Webx to
Nanko Investments, Inc. ("Nanko") as consideration for consulting
services upon the closing of the reorganization.
Webx shall not during such period, except in the ordinary course of
business, or as otherwise contemplated or required by this Agreement, without
the prior written consent of SII
(a) Sell, dispose of or encumber any of its properties or assets;
(b) Declare or pay any dividends on shares of its capital stock or
make any other distribution of assets to the holders thereof,
(c) Except as otherwise contemplated and required by this
Agreement, issue, reissue or sell, or issue options or rights to
subscribe to, or enter into any contract or commitment to issue,
reissue or sell, any shares of its capital stock or acquire or agree to
acquire any shares of its capital stock,
(d) Except as otherwise contemplated and required by this
Agreement, amend its Articles of Incorporation or merge or consolidate
with or into any other corporation or sell all or substantially all of
its assets or change in any manner the rights of its capital stock or
other securities;
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(e) Except as contemplated or required by this Agreement, pay or
incur any obligation or liability, direct or contingent, of more than
$1,000,
(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other
party, or make loans or advances to any other party;
(g) Make any material change in its insurance coverage,
(h) Increase in any manner the compensation, direct or indirect,
of any of its officers or executive employees; except in accordance
with existing employment contracts;
(i) Enter into any agreement or make any commitment to any labor
union or organization;
(j) Make any capital expenditures.
(k) Allow any of the foregoing actions to be taken by any
subsidiary of Webx.
5.02 Conduct and Transactions of SII During the period from the date
hereof to the date of Closing, SII shall:
(a) Obtain an investment letter from each shareholder of SII in a
form substantially like that attached hereto as Exhibit B.
(b) Conduct the operations of SII in the ordinary course of
business.
SII shall not during such period except, as otherwise contemplated or
required by this Agreement, in the ordinary course of business, without the
prior written consent of Webx:
(a) Sell, dispose of or encumber any of the properties or assets
of SII;
(b) Declare or pay any dividends on shares of its capital stock or
make any other distribution of assets to the holders thereof;
(c) Issue, reissue or sell, or issue options or rights to
subscribe to, or enter into any contract or commitment to issue,
reissue or sell, any shares of its capital stock or acquire or agree to
acquire any shares of its capital stock;
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(d) Amend its Articles of Incorporation or merge or consolidate
with or into any other corporation or sell all or substantially all of
its assets or change in any manner the rights of its capital stock or
other securities,
(e) Pay or incur any obligation or liability, direct or
contingent, of more than $1,000;
(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other
party, or make loans or advances to any other party;
(g) Make any material change in its insurance coverage,
(h) Increase in any manner the compensation, direct or indirect,
of any of its officers or executive employees; except in accordance
with existing employment contracts;
(i) Enter into any agreement or make any commitment to any labor
union or organization;
(j) Make any material capital expenditures.
(k) Allow any of the foregoing actions to be taken by any
subsidiary of SII.
ARTICLE 6
RIGHTS OF INSPECTION
6.01 During the period from the date of this Agreement to the date of
Closing of the acquisition, Webx and SII agree to use their best efforts to give
the other party, including its representatives and agents, full access to the
premises, books and records of each of the entities, and to furnish the other
with such financial and operating data and other information including, but not
limited to, copies of all legal documents and instruments referred to on any
schedule or exhibit hereto, with respect to the business and properties of Webx
or SII, as the case may be, as the other shall from time to time request;
provided, however, if there are any such investigations: (1) they shall be
conducted in such manner as not to unreasonably interfere with the operation of
the business of the other parties and (2) such right of inspection shall not
affect in any way whatsoever any of the representations or warranties given by
the respective parties hereunder. In the event of termination of this Agreement,
Webx and SII will each return to the other all documents, work papers and other
materials obtained from the other party in connection with the transactions
contemplated hereby, and will take such other steps necessary to protect the
confidentiality of such material.
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ARTICLE 7
CONDITIONS TO CLOSING
7.01 Conditions to Obligations of SII. The obligation of SII to perform
this Agreement is subject to the satisfaction of the following conditions
on or before the Closing unless waived in writing by SII.
(a) Representations and Warranties. There shall be no information
disclosed in the schedules delivered by Webx which in the opinion of
Sll would materially adversely affect the proposed transaction and
intent of the parties as set forth in this Agreement. The
representations and warranties of Webx set forth in Article 3 hereof
shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing as though made on and as of the
Closing, except as otherwise permitted by this Agreement.
(b) Performance of Obligations. Webx shall have in all material
respects performed all agreements required to be performed by it under
this Agreement and shall have performed in all material respects any
actions contemplated by this Agreement prior to or on the Closing and
Webx shall have complied in all material respects with the course of
conduct required by this Agreement.
(c) Corporate Action. Webx shall have furnished minutes, certified
copies of corporate resolutions and/or other documentary evidence
satisfactory to counsel for SII that Webx has submitted with this
Agreement and any other documents required hereby to such parties for
approval as provided by applicable law.
(d) Consents. Execution of this Agreement by SII and any consents
necessary for or approval of any party listed on any Schedule delivered
by Webx whose consent or approval is required pursuant thereto shall
have been obtained.
(e) Financial Statements. SII shall have been furnished with
audited financial statements of Webx including, but not limited to,
balance sheets and profit and loss statements for the period ending
December 31, 1996 and unaudited financial statements for the period
ending September 30, 1997. Such financial statements shall have been
prepared in conformity with generally accepted accounting principles on
a basis consistent with those of prior periods and fairly present the
financial position of Webx as of September 30, 1997.
(f) Statutory Requirements. All statutory requirements for the
valid consummation by Webx of the transactions contemplated by this
Agreement shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents,
approvals, permits and orders of all federal and state governmental
agencies required to be obtained by Webx for consummation of the
transactions contemplated by this Agreement shall have been obtained.
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(h) Changes in Financial Condition of Webx. There shall not have
occurred any material adverse change in the financial condition or In
the operations of the business of Webx, except expenditures in
furtherance of this Agreement
(i) Absence of Pending Litigation. Webx is not engaged in or
threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement
or the consummation of the transactions contemplated hereunder.
(j) Authorization for Issuance of Stock. SII shall have received
in form and substance, a letter instructing and authorizing the
Registrar and Transfer Agent for the shares of common stock of Webx to
issue stock certificates representing ownership of Webx common stock to
SII shareholders in accordance with the terms of this Agreement and a
letter from said Registrar and Transfer Agent acknowledging receipt of
the letter of instruction and stating to the effect that the Registrar
and Transfer Agent holds adequate supplies of stock certificates
necessary to comply with the letter of instruction and the terms and
conditions of this Agreement.
(k) Approval. Webx shall have (i) elected Tom Kubota, Rudy
LaRusso, Alfred T. Sapse, Eugene Boyle, Walter Holden, James D.
Monllos, and Janet Greeson to the Board of Directors of Webx; (ii)
approved the name change from Webx Media, Inc. to Steroidogenesis
Inhibitors International and (iv) approved the Agreement and Plan of
Reorganization.
7.02 Conditions to Obligations of Webx. The obligation of Webx to
perform this Agreement is subject to the satisfaction of the following
conditions on or before the Closin unless waived in writing by Webx.
(a) Representations and Warranties. There shall be no information
disclosed in the schedules delivered by SII, which in the opinion of
Webx, would materially adversely affect the proposed transaction and
intent of the parties as set forth in this Agreement. The
representations and warranties of SII set forth in Article 4 hereof
shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing as though made on and as of the
Closing, except as otherwise permitted by this Agreement.
(b) Performance of Obligations. SII shall have in all material
respects performed all agreements required to be performed by it under
this Agreement and shall have performed in all material respects any
actions contemplated by this Agreement prior to or on the Closing and
SII shall have compiled in all respects with the course of conduct
required by this Agreement.
(c) Corporate Action. SII shall have furnished minutes, certified
copies of corporate resolutions and/or other documentary evidence
satisfactory to Counsel for Webx that SII has Submitted with this
Agreement and any other documents required hereby to such parties for
approval as provided by applicable law.
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(d) Consents. Any consents necessary for or approval of any party
listed on any Schedule delivered by SII whose consent or approval is
required pursuant thereto, shall have been obtained.
(e) Financial Statements. Webx shall have been furnished with
unaudited financial statements of SII as of July 31, 1997, which fairly
represent the financial condition of SII at the dates thereof
(f) Statutory Requirements. All statutory requirements for the
valid consummation by SII of the transactions contemplated by this
Agreement shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents,
approvals, permits and orders of all federal and state governmental
agencies required to be obtained by SII for consummation of the
transactions contemplated by this Agreement shall have been obtained.
(h) Employment Agreements. Existing SII employment agreements will
have been delivered to counsel for Webx.
(i) Changes in Financial Condition of SII. There shall not have
occurred any material adverse change in the financial condition or in
the operations of the business of SII, except expenditures in
furtherance of this Agreement.
(j) Absence of Pending Litigation. SII is not engaged in or
threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement
or the consummation of the transactions contemplated hereunder.
ARTICLE 8
MATTERS SUBSEQUENT TO CLOSING
8.01 Covenant of Further Assurance. The parties covenant and agree that
they shall, from time to time, execute and deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such further
or other actions as the other party or parties to this Agreement may reasonably
deem necessary in order to carry out the purposes and intent of this Agreement.
8.02 Webx shall initiate, per agreement with Nanko and SII dated
October 16, 1997, a best efforts private placement pursuant to an exemption from
registration under Regulation D or Regulation S, for 1,500,000 shares of the
Company's common stock at a price of $1.00 per share, within ninety (90) days
from the closing date of this Agreement.
19
<PAGE>
8.03 Webx shall initiate, per agreement with Nanko and Sll dated
October 16, 1997, a best efforts private placement pursuant to an exemption from
registration for 1,000,000 shares of the Company's common stock at a price of
$10.00 per share within twelve months of the closing date of this Agreement,
provided the Company has progressed with positive Phase II FDA testing
requirements.
ARTICLE 9
NATURE AND SURVIVAL OF REPRESENTATIONS
9.01 All statements contained in any written certificate, schedule,
exhibit or other written instrument delivered by Webx or SII pursuant hereto, or
otherwise adopted by Webx, by its written approval, or by SII by its written
approval, or in connection with the transactions contemplated hereby, shall be
deemed representations and warranties by Webx or SII as the case may be. All
representations, warranties and agreements made by either party shall survive
for the period of the applicable statute of limitations and until the discovery
of any claim, loss, liability or other matter based on fraud, if longer.
ARTICLE 10
TERMINATION OF AGREEMENT AND ABANDONMENT
OF REORGANIZATION
10.01 Termination. Anything herein to the contrary notwithstanding,
this Agreement and any agreement executed as required hereunder and the
acquisition contemplated hereby may be terminated at any time before the Closing
as follows:
(a) By mutual written consent of the Boards of Directors of Webx
and SII.
(b) By the Board of Directors of Webx if any of the conditions
set forth in Section 7.02 shall not have been satisfied by the Closing
Date.
(c) By the Board of Directors of SII if any of the conditions set
forth in Section 7.01 shall not have been satisfied by the Closing
Date.
10.02 Termination of Obligations and Waiver of Conditions; Payment of
Expenses. In the event this Agreement and the acquisition are terminated and
abandoned pursuant to this Article 10 hereof, this Agreement shall become void
and of no force and effect and there shall be no liability on the part of any of
the parties hereto, or their respective directors, officers, shareholders or
controlling persons to each other. Each party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and any
of the documents evidencing the transactions contemplated hereby, including
fees, expenses and disbursements of counsel.
20
<PAGE>
ARTICLE II
EXCHANGE OF SHARES, FRACTIONAL SHARES
11.01 Exchange of Shares. At the Closing, Webx shall Issue a letter to
the transfer agent of Webx with a copy of the resolution of the Board of
Directors of Webx authorizing and directing the issuance of Webx shares as set
forth on Exhibit A to this Agreement.
11.02 Restrictions on Shares Issued to SII. Due to the fact that SII
will receive shares of Webx common stock in connection with the acquisition
which have not been registered under the 1933 Act by virtue of the exemption
provided in Section 4(2) of such Act, those shares of Webx will contain the
following legend:
The shares represented by this certificate have not
been registered under the Securities Act of 1933.
The shares have been acquired for investment and
may not be sold or offered for sale in the absence
of an effective Registration Statement for the
shares under the Securities Act of 1933 or an
opinion of counsel to the Corporation that such
registration is not required.
ARTICLE 12
MISCELLANEOUS
12.01 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Nevada excluding the conflicts of laws.
12.02 Notices. All notices necessary or appropriate under this
Agreement shall be effective when personally delivered or deposited in the
United States mail, postage prepaid, certified or registered, return receipt
requested, and addressed to the parties last known address which addresses are
currently as follows:
If to "Webx" If to "SII"
Webx Media, Inc. Steroidogenesis Inhibitors, Inc.
1210 North Barsten Way Magna Executive Center
Anaheim, CA 92806 2001 East Flamingo Road
Las Vegas, NV 89119
With copies to:
Ronald L. Poulton, Esq.
Poulton & Yordan
4 Triad Center, Suite 500-A
Salt Lake City, Utah 84180
21
<PAGE>
12.03 Amendment and Walver. The parties hereby may by mutual agreement
in writing signed by each party, amend this Agreement in any respect. Any term
or provision of this Agreement may be waived in writing at any time by the party
which is entitled to tile benefits thereof, such waiver right shall include,
but not be limited to, the right of either party to:
(a) Extend the time for the performance of any of the obligations
of the other;
(b) Waive any inaccuracies in representations by the other
contained in this Agreement or in any document delivered pursuant
hereto;
(c) Waive compliance by the other with any of the covenants
contained in this Agreement, and performance of any obligations by the
other; and
(d) Waive the fulfillment of any condition that is precedent to
the performance by the party so waiving of any of its obligations under
this Agreement. Any writing on the part of a party relating to such
amendment, extension or waiver as provided in this Section 12.03 shall
be valid if authorized or ratified by the Board of Directors of such
party.
12.04 Remedies not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies by
Webx or SII shall not constitute a waiver of the right to pursue other available
remedies.
12.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.06 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of Webx and SII and its
shareholders.
12.07 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto, represent the entire agreement of the undersigned regarding the
subject matter hereof, and supersedes all prior written or oral understandings
or agreements between the parties.
12.08 Each Party to Bear its Own Expense. Webx and SII shall each bear
their own respective expenses incurred in connection with the negotiation,
execution, closing, and performance of this Agreement including, counsel fees
and accountant fees.
12.09 Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
22
<PAGE>
Executed as of the date first written above.
"Webx" "SII"
Webx Media, Inc. Steroidogenesis Inhibitors, Inc.
a Nevada corporation a Nevada corporation
By: /s/ Tom Kubota By:
--------------------------------- ------------------------------
Tom Kubota Alfred T. Sapse
Director and President/Treasurer Director and President
and Personally as to Article 3 and Personally as to Article 4
By: /s/ Kathy Ultimo By: /s/ Eugene Boyle
--------------------------------- ------------------------------
Kathy Ultimo Eugene Boyle
Director and Secretary Director and CFO
and Personally as to Article 3 and Personally as to Article 4
By: /s/ C.C. Nuckols
------------------------------
C.C. Nuckols
Director
and Personally as to Article 4
By: /s/ Walter Holden
------------------------------
Walter Holden
Director
and Personally as to Article 4
By:
------------------------------
Orla K. Lucas
Director
and Personally as to Article 4
By: /s/ James D. Monollos
------------------------------
James D. Monollos
Director and Treasurer
and Personally as to Article 4
23
<PAGE>
By: By: /s/ Janet Greeson
--------------------------------- ------------------------------
Stanley Nelson Janet Greeson
Director Director and Executive Vice President
and Personally as to Article 3 and Personally as to Article 4
Selling Shareholders of Steroidogenesis Inhibitors, Inc.
Cortisol Medical Research
By: /s/ Alfred T. Sapse By:
--------------------------------- ------------------------------
Alfred T. Sapse, President Stanley Nelson
By: /s/ Alfred T. Sapse By: /s/ Janet Greeson
--------------------------------- ------------------------------
Alfred T. Sapse, Individually Janet Greeson
By: /s/ Eugene Boyle By: /s/ Orla K. Lucas
--------------------------------- ------------------------------
Eugene Boyle Orla K. Lucas
By:
---------------------------------
C.C. Nuckols
By: /s/ Walter Holden
---------------------------------
Walter Holden
By: /s/ James D. Monllos
---------------------------------
James D. Monllos
24
<PAGE>
EXHIBIT A
Name of Shareholder Number of Shares
to Receive Webx Shares of Webx to be Issued
Cortisol Medical Research 4,475,000
Dr. Alfred Sapse 490,000
Eugene Boyle 5,250
Cardwell C. Nuckols 108,720
Walter Holden 250,000
James D. Monllos & Candace Monllos, JTWRS 112,470
James D. Monllos 100,000
Eugene Boyle & Dr. Janet Greeson, JTWRS 216,000
Orla K. Lucas 54,000
Little Flower Limited Family Partnership 375,000
TOTAL NUMBER OF WEBX
SHARES TO BE ISSUED 6,186,690
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
MAR 26 1996
No. 6679-96
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
ARTICLES OF INCORPORATION
OF
WEBX MEDIA, INC.
FIRST. The name of the corporation is:
WEBX MEDIA, INC.
SECOND. Its registered office in the State of Nevada is located at 93
Desert Rain Lane, Henderson, Nevada 89014, that this Corporation may maintain an
office, or offices, in such other place within or without the State of Nevada as
may be from time to time designated by the Board of Directors, or by the By-Laws
of said Corporation, and that this Corporation may conduct all Corporation
business of every kind and nature, including the holding of all meetings of
Directors and Stockholders, outside the State of Nevada as well as within the
State of Nevada.
THIRD. The objects for which this Corporation formed are: To engage in
any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be
conferred upon corporations by any existing law.
1
<PAGE>
(B) May at any time exercise such rights, privileges and
powers, when not inconsistent with the purposes and objects for which this
corporation is organized.
(C) Shall have power to have succession by its corporate name
for the period limited in its certificate or articles of incorporation, and when
no period is limited, perpetually, or until dissolved and its affairs wound up
according to law.
(D) Shall have the power to effect litigation in its own
behalf and interest in any court of law.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and
personal estate and mortgage or lease any such real and personal estate with its
franchises. The power to hold real and personal estate shall include the power
to take the same by devise or bequest in the State of Nevada, or in any other
state, territory or country.
(G) Shall have power to appoint such officers and agents as
the affairs of the corporation shall require, and to allow them suitable
compensation.
(H) Shall have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada, for the
management, regulation and government of its affairs and property, the transfer
of its stock, the transaction of its business, and the calling and holding of
meetings of its stockholders.
2
<PAGE>
(I) Shall have power to dissolve itself.
(J) Shall have power to adopt and use a common seal or stamp,
and alter the same. The use of a seal or stamp by the corporation on any
corporate documents is not necessary. The corporation may use a seal or stamp,
if it desires, but such use or nonuse shall not in any way affect the legality
of the document.
(K) Shall have power to borrow money and contract debts when
necessary for the transaction of its business, or for the exercise of its
corporate rights, privileges or franchises, of for any other lawful purpose of
its incorporation; to issue bonds, promissory notes, bills of exchange,
debentures, and other obligations and evidences of indebtedness, payable at a
specified time or times, or payable upon the happening of a specified event or
events, whether secured by mortgage, pledge or otherwise, or unsecured, for
money borrowed, or in payment for property purchased, or acquired, or for any
other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell,
assign, transfer, mortgage, pledge or otherwise dispose of the shares of the
capital stock of, or any bonds, securities or evidences of the indebtedness
created by, any other corporation or corporations of the State of Nevada, or any
other state or government, and, while owners of such stock, bonds, securities or
evidences of indebtedness, to exercise all the rights, powers and privileges of
ownership, including the right to vote, if any.
3
<PAGE>
(M) Shall have power to purchase, hold, sell and transfer
shares of its own capital stock and use therefor its capital, capital surplus,
surplus, or other property or fund.
(N) Shall have power to conduct business, have one or more
offices, and hold, purchase mortgage and convey real and personal property in
the State of Nevada, and in any of the several states, territories, possessions
and dependencies of the United States, the District of Columbia, and foreign
countries.
(O) Shall have power to do all and everything necessary and
proper for the accomplishment of the objects enumerated in its certificate or
articles of incorporation, or any amendment thereof, or necessary or incidental
to the protection and benefit of the corporation, and, in general to carry on
any lawful business necessary or incidental to the attainment of the objects of
the corporation, whether or not such business is similar in nature to the
objects set forth in the certificate or articles of incorporation of the
corporation, or any amendment thereof.
(P) Shall have power to make donations for the public welfare
or for charitable scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or
limited, or joint ventures in connection with any lawful activities.
FOURTH. The aggregate number of shares the corporation shall have
authority to issue shall be TWENTY FIVE MILLION (25,000,000) shares of common
stock, par value one mill ($.001) per
4
<PAGE>
share, each share of common stock having equal rights and preferences, voting
privileges and preferences.
FIFTH. The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be provided by the By-Laws of this
Corporation, providing that the number of directors shall not be reduced to
fewer than one (1).
The name and post office address of the first Board of Directors shall
be one (1) in number and listed as follows:
NAME POST OFFICE ADDRESS
Michael Butler 93 Desert Rain Lane
Henderson, Nevada 89014
SIXTH. The capital stock, after the amount of the subscription price,
or par value, has been paid in, shall not be subject to assessment to pay the
debts of the corporation.
SEVENTH. The name and post office address of the Incorporator signing
the Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
Michael Butler 93 Desert Rain Lane
Henderson, Nevada 89014
EIGHTH. The resident agent for this corporation shall be:
MICHAEL BUTLER
5
<PAGE>
The address of said agent, and the registered or statutory address of this
corporation in the state of Nevada shall be:
93 Desert Rain Lane
Henderson, Nevada 89014
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders, to make,
alter or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and above its
capital stock paid in; to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one
(1) or more committees, each committee to consist of one or more of the
Directors of the Corporation, which, to the extent provided in the resolution,
or in the By-Laws of the Corporation, shall have and may exercise the powers of
the Board of Directors in the management of the business and affairs of the
Corporation. Such committee, or committees shall have such name, or names as may
be stated in the By-Laws of the Corporation, or as may be determined from time
to time by resolution adopted by the Board of Directors.
6
<PAGE>
When and as authorized by the affirmative vote of the Stockholders
holding stock entitling them to exercise at least a majority of the voting power
given at a Stockholders meeting called for that purpose, or when authorized by
the written consent of the holders of at least a majority of the voting stock
issued and outstanding, the Board of Directors shall have power and authority at
any meeting to sell, lease or exchange all of the property and assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions as its Board of Directors deems expedient and for the best
interests of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.
TWELFTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director or officer; provided however, that the foregoing provision shall
not eliminate or limit the liability or a director or officer (i) for
7
<PAGE>
acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law, or (ii) the payment of dividends in violation of Section
78.300 of the Nevada Revised Statutes. Any repeal or modification of this
Article by the stockholders of the Corporation shall be prospective only and
shall not adversely affect any limitation on the personal liability of a
director or officer of the Corporation for acts of omissions prior to such
repeal or modification.
THIRTEENTH. This Corporation reserves the right to amend, alter, change
or repeal any provision contained in the Articles of Incorporation, in the
manner now or hereafter prescribed by statute, or by the Articles of
Incorporation, and all rights conferred upon Stockholders herein are granted
subject to this reservation.
8
<PAGE>
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a Corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 22nd day of March, 1996.
/s/ Michael Butler
--------------------
Michael Butler
STATE OF NEVADA )
: ss.
COUNTY OF CLARK )
0n this the 22nd day of March, 1996, in Las Vegas, Nevada before me,
the undersigned, a Notary Public in and for Las Vegas, State of Nevada
personally appeared Michael Butler, known to me to be the person whose name is
subscribed to the foregoing document and acknowledged to me that he executed the
same.
[STATE SEAL} NOTARY PUBLIC /s/ Wendi Rosen
STATE OF NEVADA -------------------
COUNTY OF CLARK Notary Public
WENDI ROSEN
My Appointment Expires Oct. 21, 1998
I, Michael Butler, hereby accept as Resident Agent for the previously named
Corporation.
3/22/96 /s/ Michael Butler
- ------- --------------------
Date Michael Butler
<PAGE>
SECRETARY OF STATE
[STATE SEAL}
STATE OF NEVADA
CORPORATE CHARTER
I, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that WEBX MEDIA, INC. did on March 26, 1996 file in this office
the original Articles of Incorporation; that said Articles are now on file and
of record in the office of the Secretary of State of the State of Nevada, and
further, that said Articles contain all the provisions required by the law of
said State of Nevada.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed the Great Seal of State, at my office, in
Carson City, Nevada, on March 26, 1996.
[STATE SEAL] /S/ DEAN HELLER
-------------------------------
Secretary of State
By /S/ Deborah Jennings
-------------------------------
Certification Clerk
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
NOV 06 1997
No. C6679-96
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
WEBX MEDIA, INC.
Webx Media, Inc., a Nevada corporation (the "Company"), organized under
the laws of the State of Nevada, on March 26, 1996, hereby adopts the following
Amendment to its Articles of Incorporation pursuant to the provisions of Nevada
Law. The following Amendment was adopted by shareholders of the Company pursuant
to Section 78.320 of the Nevada Corporation Laws whereby shareholders of the
Company holding a majority of the issued and outstanding shares consented to
action taken by the Company's Board of Directors.
I
The Articles of Incorporation shall be amended to read as follows:
ARTICLE I - CORPORATE NAME
The name of the Company shall be Steroidogenesis Inhibitors
International.
II
The date of the consent to the adoption of the foregoing amendment by
the shareholders was November 3, 1997.
III
The number of shares issued and outstanding in the Company as of
November 3, 1997 was 5,000,000. The number of shares that consented in favor of
the above amendment was 4,497,000.
<PAGE>
Dated this 4th day of November, 1997
WEBX MEDIA, INC.
By: /s/ Tom Kubota
-----------------------
Tom Kubota, President
By: /s/ Rudy LaRusso
-----------------------
Rudy LaRusso, Secretary
STATE OF ________________ )
:ss
COUNTY OF _______________ )
On the 4th day of November, 1997, personally appeared before me Tom
Kubota and Rudy LaRusso, and duly acknowledged to me that they are the persons
who signed the foregoing instrument as President and Secretary respectively and
that they have read the foregoing instrument and know the contents thereof and
that the same is true of their own knowledge except as to those matters upon
which they operate on information and belief and as to those matter believe them
to be true.
/s/ Patricia A. Vevers
----------------------
NOTARY PUBLIC
Residing in: Las Vegas, Nevada
My Commission Expires: Oct. 10, 2000
NOTARY PUBLIC
STATE OF NEVADA
[STATE SEAL] County of Clark
Patricia A. Vevers
My Appt. Expires
No.: 96-6026-1 October 10, 2000
2
<PAGE>
BYLAWS
OF
WEBX MEDIA, INC.
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office of the Corporation
shall be located in the City of Henderson, Nevada, Clark County, State of
Nevada.
SECTION 2. OTHER OFFICES. In addition to the principal office at 93
Desert Rain Lane, Henderson, Nevada, other offices may also be maintained at
such other place or places, either within or without the State of Nevada, as may
be designated from time to time by the Board of Directors, where any and all
business of the Corporation may be transacted, and where meetings of the
stockholders and of the Directors may be held with the same effect as though
done or held at said principal office.
ARTICLE II
MEETING OF THE STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. The annual meeting of the shareholder,
commencing with the year 1996, shall be held at the registered office of the
corporation, or at such other place as may be specified or fixed in the notice
of said meetings in the month of or the month preceding the due date of the
annual list of the officers and directors of the corporation at such time as the
as the shareholders shall decide, for the election of directors and for the
transaction of such other business as may properly come before said meeting.
SECTION 2. NOTICE OF ANNUAL MEETING. The Secretary shall mail, in the
manner provided in Section 5 of Article II of these Bylaws, or deliver a written
or printed notice of each annual meeting to each stockholder of record, entitled
to vote thereat, or may notify by telegram, at least ten and not more than sixty
(60) days before the date of such meeting.
SECTION 3. PLACE OF MEETINGS. The Board of Directors may designate any
place either within or without the State of Nevada as the place of meeting for
annual meeting or for any special meeting called by the Board of Directors. A
waiver of notice signed by all stockholders may designate any
<PAGE>
place either within or without the State of Nevada, as the place for holding of
such meeting. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal office of Corporation in the
State of Nevada, except as otherwise provided in Section 6, Article II of these
Bylaws, entitled "Meeting of All Stockholders".
SECTION 4. SPECIAL MEETINGS. Special meetings of the stockholders shall
be held at the principal office of the Corporation or at such other place be
specified or fixed in a notice hereof. Such meetings of the stockholders may be
called at any time by the President or Secretary, or by a majority of the Board
of Directors then in office, and shall be called by the President with or
without Board approval on the written request of the holders of record of at
least fifty percent (50%) of the number of shares of the Corporation then
outstanding and entitled to vote, which written request shall state the object
of such meeting.
SECTION 5. NOTICE OF MEETING. Written or printed notice stating the
place, day and hour of the meeting and, in case of special meeting, the purpose
for which the meeting is called, shall be delivered not less than ten (10) nor
more than sixty (60) days before the date of the meeting, either personally or
by mail, by or at the direction of the President or the Secretary to each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addresseed to the stockholder at his/her address as it appears on the records of
the Corporation, with postage prepaid.
Any stockholder may at any time, by duly signed statement in writing to
that effect, waive any statutory or other notice of any meeting, whether such
statement by signed before or after such meeting.
SECTION 6. MEETING OF ALL STOCKHOLDERS. If all the stockholders shall
meet at any time and place, either within or without the State of Nevada, and
consent to the holding of the meeting at such time and place, such meeting shall
be valid without call or notice and at such meeting any corporate action may be
taken.
SECTION 7. QUORUM. At all stockholder's meetings, the presence in
person or by proxy of the holders of a majority of the outstanding stock
entitled to vote shall be necessary to constitute a quorum for the transaction
of business, but a lesser number may adjourn to some future time not less than
seven
<PAGE>
(7) nor more than twenty-one (21) days later, and the Secretary shall thereupon
give at least three (3) days' notice by mail to each stockholders entitled to
vote who is absent from such meeting.
SECTION 8. MODE OF VOTING. At all meetings of the stockholders the
voting may be voice vote, but any qualified voter may demand a stock vote
whereupon such stock vote shall be taken by ballot, each of which shall state
the name of the stockholder voting and the number of shares voted by him/her
and, if such ballot be cast by proxy, it shall also state the name of such
proxy, provided however, that the mode of voting prescribed by statute for any
particular case shall be in such case followed.
SECTION 9. PROXIES. At any meeting of the stockholders, any stockholder
may be represented and vote by a proxy or proxies appointed by an instrument in
writing. In the event any such instrument in writing shall designate two or more
persons to act as proxies, a majority of such persons present at the meeting, or
if only one shall be present, then that one shall have and may exercise all of
the powers conferred by such written instrument upon all of the persons so
designated unless the instrument shall otherwise provide. No such proxy shall be
valid after the expiration of (6) months from the date of its execution, unless
coupled with an interest, or unless the person executing it specified therein
the length of time for which it is to continue in force, which in no case shall
exceed seven (7) years from the date of its execution. Subject to the above, any
proxy duly executed is not revoked and continues in full force and effect until
any instrument revoking it or duly executed proxy bearing a later date is filed
with the Secretary of the Corporation. At no time shall any proxy be valid which
shall be filed less than ten (10) hours before the commencement of the meeting.
SECTION 10. VOTING LISTS. The officer or agent in charge of the transfer
books for shares of the corporation shall make, at least three (3) days before
each meeting of stockholders, a complete list of the stockholders entitled to
vote at such meeting, arranged in alphabetical order with the number of shares
held by each, which list for a period of two (2) days prior to such meeting
shall be kept on file at the registered office of the corporation and shall be
subject to inspection by any stockholder at any time during the whole time of
the meeting. The original share ledger or transfer book, or duplicate thereof,
kept in this state, shall be prima facie evidence as to who are the stockholders
entitled to examine such list or share ledger or transfer book or to vote at any
meeting of stockholders.
<PAGE>
SECTION 11. CLOSING TRANSFER BOOKS OR FIXING OR RECORD DATE. For the
purpose of determining stockholders entitled to notice or to vote for any
meeting of stockholders, the Board of Directors of the Corporation may provide
that the stock transfer books be closed for a stated period but not to exceed in
any case sixty (60) days before such determination. If the stock transfer books
be closed for the purpose of determining stockholders entitled to notice of a
meeting of stockholders, such books shall be closed for at least fifteen (15)
days immediately preceding such meeting. In lieu of closing the stock transfer
books, the Board of Directors may fix in advance a date in any case to be not
more than sixty (60) days, not less than ten (10) days prior to the date on
which the particular action, requiring such determination of stockholders, is to
be taken. If the stock transfer books are not closed and no record date is fixed
for determination of stockholders entitled to notice of meeting of stockholders,
or stockholders entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the resolution of the Board
of Directors declaring such dividend is adopted, as the case may be, shall be
the record of date for such determination of shareholders.
SECTION 12. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the
name of another corporation, domestic or foreign, may be voted by such officer,
agent or proxy as the Bylaws of such corporation by prescribe, or, in the
absence of such provisions, the Board of Directors of such corporation may
determine.
Shares standing in the name of deceased person may be voted by his/her
administrator or executor, either in person or by proxy. Shares standing in the
name of the guardian, conservator or trustee may be voted by such fiduciary
either in person or by proxy, but no guardian, conservator, or trustee shall be
entitled, as such fiduciary, to vote shares held by him without a transfer of
such shares into his/her name.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court at which such receiver was
appointed.
A stockholder whose shares are pledged shall be entitled to vote such
shares until shares have been transferred into the name of the pledgee, and
therafter the pledgee shall be entitled to vote the shares so transferred.
<PAGE>
Shares of its' own stock belonging to this corporation shall not voted,
directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding shares at any time, but shares of its own stock
held by it in a fiduciary capacity may be voted and shall be counted in
determining the total number of outstanding shares at any given time.
SECTION 13. INFORMAL ACTION BY STOCKHOLDERS. Any action is required to be
taken at a meeting of the stockholders or any other action which may be taken at
a meeting of the stockholders except the election of directors may be taken
without a meeting if a consent in writing setting forth the action so taken
shall be signed by all of the stockholders entitled to vote with respect to the
subject matter thereof.
SECTION 14. VOTING OF SHARES. Each outstanding share entitled to vote shall
be entitled to one (1) vote upon each matter submitted to vote at a meeting of
stockholders.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS. The Board of Directors shall have the control
and general management of the affairs and business of the Corporation. Such
directors shall in all cases act as Board, regularly convened, by a majority,
and they may adopt such rules and regulations for the conduct of their meetings
and the management of the Corporation, as they may deem proper, not inconsistent
with these Bylaws, Articles of Incorporation and the laws of the State of
Nevada. The Board of Directors shall further have the right to delegate certain
other powers to the Executive Committee as provided in these Bylaws.
SECTION 2. NUMBER OF DIRECTORS. The affairs and business of this
Corporation shall be managed by a Board of Directors consisting of not less than
one (1) or more than seven (7), until changed by amendment to these Bylaws
adopted by the shareholders amending this Section 2, Article III, and except as
authorized by the Nevada Revised Statutes, there shall in no event be less than
one (1) Director.
SECTION 3. ELECTION. The Directors of the Corporation shall be elected at
the annual meeting of the stockholders except as hereinafter otherwise provided
for the filling of vacancies. Each
<PAGE>
Director shall hold office for a term of one (1) year and until his successor
shall have duly chosen and shall have qualified, or until his death, or until he
shall resign or shall have removed in the manner hereinafter provided.
SECTION 4. VACANCIES IN THE BOARD. Any vacancy in the Board of Directors
occurring during the year through death, resignation, removal or other cause,
including vacancies caused by an increase in the number of directors, shall be
filled for the unexpired portion they constitute a quorum, at any special
meeting of the Board called for that purpose, or at any regular meeting thereof,
provided, however, that in the event the remaining directors do not represent a
quorum of the number set forth in Section 2 hereof, a majority of such remaining
directors may elect directors to fill any vacancies.
SECTION 5. DIRECTORS MEETINGS. Annual meeting of the Board of Directors
shall be held each year immediately following the annual meeting of the
stockholders. Other regular meetings of the Board of Directors shall from time
to time by resolution be prescribed. No further notice of such annual or regular
meeting of the Board of Directors need be given.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called by or at the request of the President or any Director. The person or
persons authorized to call meetings of the Board of Directors may fix any place,
either within or without the State of Nevada, as the place for holding any
special meeting of the Board of Directors called by them.
SECTION 7. NOTICE. Notice of any special meeting shall be given at least
twenty-four (24) yours previous thereto by written notice if personally
delivered or five (5) days previous thereto if mailed to each Director at his
business address, or by telegram. If mailed, such notice shall be deemed to have
been delivered when deposited in the United States mail so addressed with
postage thereon prepaid. If notice is given by telegram, such notice shall be
deemed to be delivered when the telegram is delivered to the telegragh company.
Any Director may waive notice of any meeting. The attendance of a Director at
any meeting shall constitute a waive of notice of such meeting, except where a
Director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
<PAGE>
SECTION 8. CHAIRMAN. At all meetings of the Board of Directors, the
President shall serve as Chairman, or in the absence of the President, the
Directors present shall choose by majority vote a Director to preside as
Chairman.
SECTION 9. QUORUM AND MANNER OF ACTING. A majority of Directors, whose
number is designated in Section 2 herein, shall constitute a quorum for the
transaction of business at any meeting and the act of a majority of the
Directors present at any meetings at which a quorum is present shall be the act
of the Board of Directors. In the absence of a quorum, the majority of the
Directors present may adjourn any meeting from time to time until a quorum be
had. Notice of any adjourned meeting need not be given. The Directors shall act
only as a Board and the individual Directors shall have no power as such.
SECTION 10. REMOVAL OF DIRECTORS. Any one or more of the Directors may be
removed either with or without cause at any time by the vote or written consent
of the stockholders representing not less than two-thirds (2/3) of the issued
and outstanding capital stock entitled to voting power.
SECTION 11. VOTING. At all meetings of the Board of Directors, each
Director is to have one (1) vote, irrespective of the number of shares of stock
that he may hold.
SECTION 12. COMPENSATION. By resolution of the Board of Directors, the
Directors may be paid their expenses, if any of attendance of each meeting of
the Board, and may be paid a fixed sum for attendance at meetings or a stated
salary of Directors. No such payment shall preclude any Director from serving
the Corporation in any other capacity and receiving compensation therefor.
SECTION 13. PRESUMPTION OF ASSENT. A Director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken, shall be conclusively presumed to have assented to the action
unless his/her dissent shall be entered in the minutes of the meeting or unless
he/she shall file his/her written dissent to such action with the person acting
as the Secretary of the meeting before the adjournment thereof or shall file
forward such dissent by certified or registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a Director who voted in favor of such action.
<PAGE>
ARTICLE IV
EXECUTIVE COMMITTEE
SECTION 1. NUMBER AND ELECTION. The Board of Directors may, in its'
discretion, appoint from its membership an Executive Committee of one (1) or
more Directors, each to serve at the pleasure of the Board of Directors.
SECTION 2. AUTHORITY. The Executive Committee is authorized to take any
action which the Board of Directors could take, except that the Executive
Committee shall not have the power either to issue or authorize the issuance of
shares of capital stock, to amend the Bylaws, or a resolution of the Board of
Directors. Any authorized action taken by the Executive Committee shall be as
effective as if it had been taken by the full Board of Directors.
SECTION 3. REGULAR MEETINGS. Regular meetings of the Executive Committee
may be held within or without the State of Nevada at such time and place as the
Executive Committee may provide from time to time.
SECTION 4. SPECIAL MEETINGS. Special meetings of the Executive Committee
may be called by or at the request of the President or any member of the
Executive Committee.
SECTION 5. NOTICE. Notice of any special meeting shall be given at least
one (1) day previous thereto by written notice, telephone, telegram or in
person. Neither the business to be transacted, nor the purpose of a regular or
special meeting of the Executive Committee need be specified in the notice of
waiver of notice of such meeting. A member may waive notice of any meeting of
the Executive Committee. The attendance of a member at any meeting shall
constitute a waiver of notice of such meeting, except where a member attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
SECTION 6. QUORUM. A majority of the members of the Executive Committee
shall constitute a quorum for the transaction of business at any meeting of the
Executive Committee; provided that if fewer than a majority of the members are
present at said meeting a majority of the members present may adjourn the
meeting from time to time without further notice.
SECTION 7. MANNER OF ACTING. The act of the majority of the members present
at a meeting at which a quorum is present shall be the act of the Executive
Committee, and said Committee
<PAGE>
shall keep regular minutes of it's proceedings which shall at all times be open
for inspection by the Board of Directors.
SECTION 8. PRESUMPTION OF ASSENT. A member of the Executive Committee who
is present at a meeting of the Executive Committee at which action on any
corporate matter is taken, shall be conclusively presumed to have assented to
the action takes unless his/her dissent shall be entered in the minutes of the
meeting or unless he/she shall file his written dissent to such action with the
person acting as Secretary of the meeting before the adjournment thereof, or
shall forward such dissent by certified or registered mail to the Secretary of
the Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a member of the Executive Committee who voted in
favor of such action.
ARTICLE V
OFFICERS
SECTION 1. NUMBER. The officers of the Corporation shall be a President,
Vice President, a Treasurer and a Secretary and such other or subordinate
officers as the Board of Directors may from time to time elect. One (1) person
may hold the office and perform the duties of one or more of said officers. No
Officer need to a member of the Board of Directors.
SECTION 2. ELECTION, TERM OF OFFICE, QUALIFICATIONS. The officers of the
Corporation shall be chosen by the Board of Directors and they shall be elected
annually at the meeting of the Board of Directors held immediately after each
annual meeting of the stockholders except as hereinafter otherwise provided for
filling vacancies. Each officer shall hold his/her office until his/her
successor has been duly chosen and has qualified, or until his/her death, or
until he/she resigns or has been removed in the manner hereinafter provided.
SECTION 3. REMOVALS. Any officer or agent elected or appointed by the Board
of Directors may be removed by the Board of Directors at any time whenever in
its' judgment the best interests of the Corporation would be served thereby,
and such removal shall be without prejudice to the contract rights, if any, or
the person so removed.
SECTION 4. VACANCIES. All vacancies in any of office shall be filled by
the Board of Directors without undue delay, at any regular meeting, or at a
meeting specially called for that purpose.
<PAGE>
SECTION 5. PRESIDENT. The President shall be the Chief Executive Officer of
the Corporation and shall have general supervision over the business of the
Corporation and over its' several officers, subject, however, to the control of
the Board of Directors. He/she may sign, with the Treasurer or with the
Secretary or any other proper officer of the Corporation thereunto authorized by
the Board of Directors, certificates for shares of the capital stock of the
Corporation, may sign and execute in the name of the Corporation deeds,
mortgages, bonds, contracts or other instruments authorized by the Board of
Directors, except in cases where signing and execution thereof shall be
expressly delegated by the Board of Directors or by these Bylaws to some other
officer or agent of the Corporation; and in general shall perform all duties
incident to the duties of the President, and such other duties as from time to
time may be assigned to him/her by the Board of Directors.
SECTION 6. VICE PRESIDENT. The Vice President shall in the absence or
incapacity of the President, or as ordered by the Board of Directors, perform
the duties of the President, or such other duties or functions as may be given
to him by the Board of Directors from time to time.
SECTION 7. TREASURER. The Treasurer shall have the care and custody of all
the funds and securities of the Corporation and deposit the same in the name of
the Corporation in such bank or trust company as the Board of Directors may
designate; he may sign or countersign all checks, drafts and orders for the
payment of money and may pay out and dispose of same under the direction of the
Board of Directors, and may sign or countersign all notes or other obligations
of indebtedness of the Corporation; he/she; may sign with the President or Vice
President, certificates for shares of stock of the Corporation; he/she shall at
all reasonable times exhibit the books and accounts to any director or
stockholder of the Corporation under application at the office of the Company
during business hours, and he/she shall, in general, perform all duties as from
time to time may be assigned to him/her by the President or by the Board of
Directors. The Board of Directors may at its discretion require that each
officer authorized to disburse the funds of the Corporation be bonded in such
amount as it may deem adequate.
SECTION 8. SECRETARY. The Secretary shall keep the minutes of the meetings
of the Board of Directors and also the minutes of the meetings of the
stockholders; he/she shall attend to the giving and serving of all notices of
the Corporation and shall affix the seal of Corporation to all certificates of
stock, when signed and countersigned by the duly authorized officers; he/she may
sign
<PAGE>
certificates for shares of stock of the Corporation, he/she may sign or
countersign all checks, drafts and orders for the payment of money; he/she shall
have charge of the certificate book and such other books and papers as the Board
may direct; he/she shall keep a stock book containing the names alphabetically
arranged, of all persons who are stockholders of the Corporation, showing their
places of residence, the number of shares held by them respectively, the time
when they respectively became the owners thereof, and the amount paid thereof,
and he/she shall in general, perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him/her
by the President or by the Board of Directors.
SECTION 9. OTHER OFFICERS. The Board of Directors may authorize and empower
other persons or other officers appointed by it to perform the duties and
functions of the officers specifically designated above by special resolution in
each case.
SECTION 10. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The Assistant
Treasurers shall respectively, as may be required by the Board of Directors,
give bonds for the faithful discharge of their duties in such sums and with such
sureties as the Board of Directors shall determine. The Assistant Secretaries as
thereunto authorized by the Board of Directors may sign with the President or
Vice President certificates for shares of the capital stock of the Corporation,
issued of which shall have been authorized by resolution of the Board of
Directors. The Assistant Treasurers and Assistant Secretaries shall, in general,
perform such duties as may be assigned to them by the Treasurer or the Secretary
respectively, or by the President or by the Board of Directors.
ARTICLE VI
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Except as hereinafter stated otherwise, the Corporation shall indemnify all
of its' officers and directors, past, present and future, against any and all
expenses incurred by them, and each of them including but not limited to legal
fees, judgments and penalties which may be incurred, rendered or levied in any
legal action brought against any or all of them for or on account of any act or
omission alleged to have been committed while acting within the scope of their
duties as officers or directors of this Corporation.
<PAGE>
ARTICLE VII
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The Board of Directors may authorize any officer or
officers, agent or agents to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
Corporation and no evidence of indebtedness shall be issued in its' name unless
authorized by the Board of Directors or approved by loan committee appointed by
the Board of Directors and charged with the duty of supervising investments.
Such authority may be general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. A check, draft or other orders for payment
of money, notes or other evidences of indebtedness issued in the name of the
Corporation shall be signed by such officer or officers, agent or agents of the
Corporation and in such manner as shall from time to time be determined by
resolutions of the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE VIII
CAPITAL STOCK
SECTION 1. CERTIFICATE FOR SHARES. Certificates for shares of stocks of
the Corporation shall be in such form as shall be approved by the incorporators
or by the Board of Directors. The certificates shall be numbered in the order of
their issue, shall be signed by the President or Vice President and by the
Secretary or the Treasurer, or by such other person or officer as may be
designed by the Board of Directors; and the seal of the Corporation shall be
affixed thereto, which said signatures of the duly designated officers and of
the seal of the Corporation. Every certificate authenticated by a facsimile of
such signatures and seal must be countersigned by a Transfer Agent to be
appointed by the Board of Directors, before issuance.
<PAGE>
SECTION 2. TRANSFER OF STOCK. Shares of the stock of the Corporation may
be transferred by the delivery of the certificate accompanied either by an
assignment in writing on the back of the certificate or by written power of
attorney to sell, assign, and transfer the same on the books of the Corporation,
signed by the person appearing by the certificate to the owner of the shares
represented thereby, together with all necessary federal and state transfer tax
stamps affixed and shall be transferable on the books of the Corporation upon
surrender thereof so signed or endorsed. The person registered on the books of
the Corporation as the owner of any shares of stock shall be entitled to all
rights of ownership with respect to such shares.
SECTION 3. REGULATIONS. The Board of Directors may make such rules and
regulations as it may deem expedient not inconsistent with the Bylaws or with
the Articles of Incorporation, concerning the issue, transfer and registration
of the certificates for shares of stock of the Corporation. If may appoint a
transfer agent or registrar of transfers, or both, and it may require all
certificates to bear the signature of either or both.
SECTION 4. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Directors may, in its discretion
and as a condition precedent to the issue thereof, require the owner of such
lost or destroyed certificate or certificates, or his/her legal representative,
to advertise the same in such manner as it shall require and/or give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate
alleged to have been lost or destroyed.
ARTICLE IX
DIVIDENDS
SECTION 1. The Corporation shall be entitled to treat the holder of any
share or shares of stock as the holder in fact thereof and, accordingly, shall
not be bound to recognize any equitable or other claim to or interest in such
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as expressly provided by the laws of Nevada.
<PAGE>
SECTION 2. Dividends on the capital stock of the Corporation, subject to
the provisions of the Articles of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to law.
SECTION 3. The Board of Directors may close the transfer books in its
discretion for a period not exceeding fifteen (15) days preceding the date fixed
for holding any meeting, annual or special of the stockholders, or the day
appointed for the payment of a dividend.
SECTION 4. Before payment of any dividend or making any distribution of
profits, there may be set aside out of funds of the Corporation available for
dividends, such sum or sums as the Directors may from time to time, in their
absolute discretion think proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for any such other purpose as the Directors shall think
conducive to the interest of the Corporation, and the Directors may modify or
abolish any such reserve in the manner in which it was created.
ARTICLE X
SEAL
The Board of Directors shall provide a Corporate Seal which shall be in
the form of a circle and shall bear the full name of the Corporation, the year
of its' incorporation and the words "Corporate Seal. State of Nevada."
ARTICLE XI
FISCAL YEAR
The fiscal year of the Corporation shall end on the 31st day of December
of each year.
ARTICLE XII
WAIVER OF NOTICE
Whenever any notice whatever is required to be given under the provisions
of these Bylaws, or under the laws of the State of Nevada, or under the
provisions of the Articles of Incorporation, a waiver in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
<PAGE>
ARTICLE XIII
AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted at any regular or special meeting of the stockholders by a vote of the
stockholders owning a majority of the shares and entitled to vote thereat. These
Bylaws may also be altered, amended or repealed and new Bylaws may be adopted at
any regular or special meeting of the Board of Directors of the Corporation (if
notice of such alteration or repeal be contained in the notice of such special
meeting) by a majority vote of the Directors present at the meeting at which a
quorum is present, but any such amendment shall not be inconsistent with or
contrary to the provision of any amendment adopted by the stockholders.
KNOW ALL MEN BY THESE PRESENTS that the undersigned, being the Secretary
of WEBX MEDIA, INC., a Nevada corporation hereby acknowledges that the above and
foregoing Bylaws were duly adopted as the Bylaws of said Corporation on March
29th, 1996.
IN WITNESS WHEREOF, I hereunto subscribe my name this 29th day of March,
1996.
/s/ Sharon K. Butler /s/ Jeffrey D. Snyder
- ------------------------------ --------------------------------
SHARON K. BUTLER, PRESIDENT JEFFREY D. SNYDER, SEC/TREAS.
DIRECTOR DIRECTOR
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
<S> <C>
[CHEMICAL COMPOUND STRUCTURE]
- ---------------- STEROIDOGENESIS INHIBITORS ----------------
NUMBER INTERNATIONAL SHARES
3738 INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
- ---------------- 25,000,000 SHARES COMMON STOCK AUTHORIZED, $.001 PAR VALUE ----------------
-----------
CUSIP 859820 10 2
This -----------
certifies SEE REVERSE FOR
that CERTAIN DEFINITIONS
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF
STEROIDOGENESIS INHIBITORS INTERNATIONAL
transferable on the books of the corporation in person or by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are subject to the laws of the State of Nevada, and to the Certificate
of Incorporation and Bylaws of the Corporation, as now or hereafter amended. This certificate is not valid unless countersigned by
the Transfer Agent. WITNESS the facsimile seal of the Corporation and the signature of its duly authorized officers.
COUNTERSIGNED
PACIFIC STOCK TRANSFER COMPANY
P.O. Box 93385
Las Vegas, NV 89193
By _____________________________
AUTHORIZED SIGNATURE
DATED
/s/ Alfred Sapse [SEAL] /s/ Janet Greeson
---------------------- ----------------------
PRESIDENT SECRETARY
====================================================================================================================================
</TABLE>
<PAGE>
THE "WEBX MEDIA, INC."
1997 Stock Option Plan
Section 1. Purpose; Definitions.
1.1 Purpose. The purpose of the Webx Media, Inc., (the "Company") 1997
Stock Option Plan (the "Plan") is to enable the Company to offer to its key
employees, officers, directors, consultants, advisors and sales representatives
whose past, present and/or potential contributions to the Company and its
Subsidiaries have been, are or will be important to the success of the Company,
an opportunity to acquire a proprietary interest in the Company. The various
types of long-term incentive awards which may be provided under the Plan will
enable the Company to respond to changes in compensation practices, tax laws,
accounting regulations and the size and diversity of its business.
1.2 Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "Agreement" means the agreement between the Company and
the Holder setting forth the terms and conditions of an award under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto and the regulations promulgated
thereunder.
(d) "Committee" means the Stock Option Committee of the Board
or any other committee of the Board, which the Board may designate to administer
the Plan or any portion thereof. If no Committee is so designated, then all
references in this Plan to "Committee" shall mean the Board.
(e) "Common Stock" means the Common Stock of the Company, par
value $.001 per share.
(f) "Company" means Webx Media, Inc., a corporation organized
under the laws of the State of Nevada.
(g) "Deferred Stock" means Stock to be received, under an
award made pursuant to Section 9, below, at the end of a specified deferral
period.
(h) "Disability" means disability as determined under
procedures established by the Committee for purposes of the Plan.
1
<PAGE>
(i) "Effective Date" means the date set forth in Section
13.1, below.
(j) "Employee" means any employee, director, general partner,
trustee (where the registrant is a business trust), officer or consultant or
advisor.
(k) "Fair Market Value", unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, means, as
of any given date: (i) if the Common Stock is listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the
last sale price of the Common Stock in the principal trading market for the
Common Stock on the last trading day preceding the date of grant of an award
hereunder, as reported by the exchange or Nasdaq, as the case may be; (ii) if
the Common Stock is not listed on a national securities exchange or quoted on
the Nasdaq National Market or Nasdaq SmallCap Market, but is traded in the
over-the-counter market, the closing bid price for the Common Stock on the last
trading day preceding the date of grant of an award hereunder for which such
quotations are reported by the OTC Bulletin Board or the National Quotation
Bureau, Incorporated or similar publisher of such quotations; and (iii) if the
fair market value of the Common Stock cannot be determined pursuant to clause
(i) or (ii) above, such price as the Committee shall determine, in good faith.
(l) "Holder" means a person who has received an award under
the Plan.
(m) "Incentive Stock Option" means any Stock Option intended
to be and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(n) "Nonqualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
(o) "Normal Retirement" means retirement from active
employment with the Company or any Subsidiary on or after age 65.
(p) "Other Stock-Based Award" means an award under Section 10,
below, that is valued in whole or in part by reference to, or is otherwise based
upon, Stock.
(q) "Parent" means any present or future parent corporation of
the Company, as such term is defined in Section 424(e) of the Code.
(r) "Plan" means the Webx Media, Inc., 1997 Stock Option Plan,
as hereinafter amended from time to time.
(s) "Restricted Stock" means Stock, received under an award
made pursuant to Section 8, below, that is subject to restrictions under said
Section 8.
(t) "SAR Value" means the excess of the Fair Market Value (on
the exercise date) of the number of shares for which the Stock Appreciation
Right is exercised over the exercise price
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that the participant would have otherwise had to pay to exercise the related
Stock Option and purchase the relevant shares.
(u) "Stock" means the Common Stock of the Company, par value
$.001 per share.
(v) "Stock Appreciation Right" means the right to receive from
the Company, on surrender of all or part of the related Stock Option, without a
cash payment to the Company, a number of shares of Common Stock equal to the SAR
Value divided by the exercise price of the Stock Option.
(w) "Stock Option" or "Option" means any option to purchase
shares of Stock which is granted pursuant to the Plan.
(x) "Stock Reload Option" means any option granted under
Section 6.3, below, as a result of the payment of the exercise price of a Stock
Option and/or the withholding tax related thereto in the form of Stock owned by
the Holder or the withholding of Stock by the Company.
(y) "Subsidiary" means any present or future subsidiary
corporation of the Company, as such term is defined in Section 424(f) of the
Code.
Section 2. Administration.
2.1 Committee Membership. The Plan shall be administered by the Board
or a Committee. Committee members shall serve for such terms as the Board may in
each case determine, and shall be subject to removal at any time by the Board.
2.2 Powers of Committee. The Committee shall have full authority,
subject to Section 4, below, to award, pursuant to the terms of the Plan: (i)
Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv)
Deferred Stock, (v) Stock Reload Options and/or (vi) Other Stock Based Awards.
For purposes of illustration and not of limitation, the Committee shall have the
authority (subject to the express provisions of this Plan):
(a) to select the officers, key employees, directors,
consultants, advisors and sales representatives of the Company or any Subsidiary
to whom Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred
Stock, Reload Stock Options and/or Other Stock-Based Awards may from time to
time be awarded hereunder.
(b) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, number of shares, share price, any restrictions or limitations, and
any vesting, exchange, surrender, cancellation, acceleration, termination,
exercise or forfeiture provisions, as the Committee shall determine);
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(c) to determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an award
granted hereunder;
(d) to determine the terms and conditions under which awards
granted hereunder are to operate on a tandem basis and/or in conjunction with or
apart from other equity awarded under this Plan and cash awards made by the
Company or any Subsidiary outside of this Plan;
(e) to permit a Holder to elect to defer a payment under the
Plan under such rules and procedures as the Committee may establish, including
the crediting of interest on deferred amounts denominated in cash and of
dividend equivalents on deferred amounts denominated in Stock;
(f) to determine the extent and circumstances under which
Stock and other amounts payable with respect to an award hereunder shall be
deferred which may be either automatic or at the election of the Holder; and
(g) to substitute (i) new Stock Options for previously granted
Stock Options, which previously granted Stock Options have higher option
exercise prices and/or contain other less favorable terms, and (ii) new awards
of any other type for previously granted awards of the same type, which
previously granted awards are upon less favorable terms.
2.3 Interpretation of Plan.
(a) Committee Authority. Subject to Section 4 and 12, below,
the Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any award issued under the Plan (and to determine the form and
substance of all Agreements relating thereto), to otherwise supervise the
administration of the Plan. Subject to Section 12, below, all decisions made by
the Committee pursuant to the provisions of the Plan shall be made in the
Committee's sole discretion and shall be final and binding upon all persons,
including the Company, its Subsidiaries and Holders.
(b) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term or provision of the Plan relating to Incentive
Stock Options (including but limited to Stock Reload Options or Stock
Appreciation rights granted in conjunction with an Incentive Stock Option) or
any Agreement providing for Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify the Plan under Section 422 of the Code, or,
without the consent of the Holder(s) affected, to disqualify any Incentive Stock
Option under such Section 422.
Section 3. Stock Subject to Plan.
3.1 Number of Shares. The total number of shares of Common Stock
reserved and available for distribution under the Plan shall be 2,500,000
shares. Shares of Stock under the Plan
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may consist, in whole or in part, of authorized and unissued shares or treasury
shares. If any shares of Stock that have been a granted pursuant to a Stock
Option cease to be subject to a Stock Option, or if any shares of Stock that are
subject to any Stock Appreciation Right, Restricted Stock, Deferred Stock award,
Reload Stock Option or Other Stock-Based Award granted hereunder are forfeited
or any such award otherwise terminates without a payment being made to the
Holder in the form of Stock, such shares shall again be available for
distribution in connection with future grants and awards under the Plan. Only
net shares issued upon a stock-for-stock exercise (including stock used for
withholding taxes) shall be counted against the number of shares available
under the Plan.
3.2 Adjustment Upon Changes in Capitalization, Etc. In the event of any
merger, reorganization, consolidation, recapitalization, dividend (other than a
cash dividend), stock split, reverse stock split, or other change in corporate
structure affecting the Stock, such substitution or adjustment shall be made in
the aggregate number of shares reserved for issuance under the Plan, in the
number and exercise price of shares subject to outstanding Options, in the
number of shares and Stock Appreciation Right price relating to Stock
Appreciation Rights, and in the number of shares and Stock Appreciation Right
price relating to Stock Appreciation Rights, and in the number of shares subject
to, and in the related terms of, other outstanding awards (including but not
limited to awards of Restricted Stock, Deferred Stock, Reload Stock Options and
Other Stock-Based Awards) granted under the Plan as may be determined to be
appropriate by the Committee in order to prevent dilution or enlargement of
rights, provided that the number of shares subject to any award shall always be
a whole number.
Section 4. Eligibility.
Awards may be made or granted to key employees, officers, directors,
consultants, advisors and sales representatives who are deemed to have rendered
or to be able to render significant services to the Company or its Subsidiaries
and who are deemed to have contributed or to have the potential to contribute to
the success of the Company. No Incentive Stock Option shall be granted to any
person who is not an employee of the Company or a Subsidiary at the time of
grant.
Section 5. Required Six-Month Holding Period.
Any equity security issued under this Plan may not be sold prior to six
months from the date of the grant of the related award without the approval of
the Company.
Section 6. Stock Options.
6.1 Grant and Exercise. Stock Options granted under the Plan may be of
two types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms, not inconsistent
with this Plan, or with respect to Incentive Stock Options, not inconsistent
with the Code, as the Committee may from time to time approve. The Committee
shall have the authority to grant Incentive Stock Options, Non-Qualified Stock
Options, or both types of Stock Options and which may be granted alone or in
addition to other awards
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granted under the Plan. To the extent that any Stock Option intended to qualify
as an Incentive Stock Option does not so qualify, it shall constitute a separate
Nonqualified Stock Option. An Incentive Stock Option may be granted only within
the ten-year period commencing from the Effective Date and may only be exercised
within ten years of the date of grant or five years in the case of an Incentive
Stock Option granted to an optionee ("10% Stockholder") who, at the time of
grant, owns Stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company
6.2 Terms and Conditions. Stock Options granted under the Plan shall be
subject to the following terms and conditions:
(a) Exercise Price. The exercise price per share of Stock
purchasable under an Incentive Stock Option shall be determined by the Committee
at the time of grant and may not be less than 100% of the Fair Market Value of
the Stock as defined above; provided, however, that the exercise price of an
Incentive Stock Option granted to a 10% Stockholder shall not be less than 110%
of the Fair Market Value of the Stock. The exercise price per share of Stock
purchasable under any options granted that are not Incentive Stock Option, shall
be determined by the Committee at the time of grant.
(b) Option Term. Subject to the limitations in Section 6.1,
above, the term of each Stock Option shall be fixed by the Committee.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Committee and as set forth in Section 11, below. If the Committee provides,
in its discretion, that any Stock Option is exercisable only in installments,
i.e., that it vests over time, the Committee may waive such installment exercise
provisions at any time at or after the time of grant in whole or in part, based
upon such factors as the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment,
exercise and waiting period provisions are applicable in a particular case,
Stock Options may be exercised in whole or in part at any time during the term
of the Option, by giving written notice of exercise to the Company specifying
the number of shares of Stock to be purchased. Such notice shall be accompanied
by payment in full of the purchase price, which shall be in cash or, unless
otherwise provided in the Agreement, in shares of Stock (including Restricted
Stock and other contingent awards under this Plan) or, partly in cash and partly
in such Stock, or such other means which the Committee determines are consistent
with the Plan's purpose and applicable law. Cash payments shall be made by wire
transfer, certified or bank check or personal check, in each case payable to the
order of the Company, provided, however, that the Company shall not be required
to deliver certificates for shares of Stock with respect to which an Option is
exercised until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof. Payments in the form of Stock
shall be valued at the Fair Market Value of a share of Stock on the day prior to
the date of exercise. Such payments shall be made by delivery of stock
certificates in negotiable form which are effective
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to transfer good and valid title thereto to the Company, free of any liens or
encumbrances. Subject to the terms of the Agreement, the Committee may, in its
sole discretion, at the request of the Holder, deliver upon the exercise of a
Nonqualified Stock Option a combination of shares of Deferred Stock and Common
Stock; provided that, notwithstanding the provision of Section 9 of the Plan,
such Deferred Stock shall be fully vested and not subject to forfeiture. A
Holder shall have none of the rights of a stockholder with respect to the
shares subject to the Option until such shares shall be transferred to the
Holder upon the exercise of the Option.
(e) Transferability. Unless otherwise determined by the
Committee, no Stock Option shall be transferable by the Holder other than by
will or by the laws of descent and distribution, and all Stock Options shall be
exercisable, during the Holder's lifetime, only by the Holder.
(f) Termination by Reason of Death. If a Holders' employment
by the Company or a Subsidiary terminates by reason of death, any Stock Option
held by such Holder, unless otherwise determined by the Committee at the time of
grant and set forth in the Agreement, shall be fully vested and may thereafter
be exercised by the legal representative of the estate or by the legatee of the
Holder under the will of the Holder, for a period of one year (or such other
greater or lesser period as the Committee may specify at grant) from the date of
such death or until the expiration of the stated term of such Stock Option,
which ever period is the shorter.
(g) Termination by Reason of Disability. If a Holder's
employment by the Company or any Subsidiary terminates by reason of Disability,
any Stock Option held by such Holder, unless otherwise determined by the
Committee at the time of grant and set forth in the Agreement, shall be fully
vested and may thereafter be exercised by the Holder for a period of one year
(or such other greater or lesser period as the Committee may specify at the time
of grant) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.
(h) Other Termination. Subject to the provisions of Section
14.3, below, and unless otherwise determined by the Committee at the time of
grant and set forth in the Agreement, if a Holder is an employee of the Company
or a Subsidiary at the time of grant and if such Holder's employment by the
Company or any Subsidiary terminates for any reason other than death or
Disability, the Stock Option shall thereupon automatically terminate, except
that if the Holder's employment is terminated by the Company or a Subsidiary
without cause or due to Normal Retirement, then the portion of such Stock Option
which has vested on the date of termination of employment may be exercised for
the lesser of three months after termination of employment or the balance of
such Stock Option's term.
(i) Additional Incentive Stock Option Limitation. In the case
of an Incentive Stock Option, the aggregate Fair Market Value of Stock
(determined at the time of grant of the Option) with respect to which Incentive
Stock Options become exercisable by a Holder during any
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calendar year (under all such plans of the Company and its Parent and
Subsidiary) shall not exceed $100,000.
(j) Buyout and Settlement Provisions. The Committee may at any
time, in its sole discretion, offer to buy out a Stock Option previously
granted, based upon such terms and conditions as the Committee shall establish
and communicate to the Holder at the time that such offer is made.
(k) Stock Option Agreement. Each grant of a Stock Option shall
be confirmed by and shall be subject to the terms of, the Agreement executed by
the Company and the Holder.
6.3 Stock Reload Option. The Committee may also grant to the Holder
(concurrently with the grant of an Incentive Stock Option and at or after the
time of grant in the case of a Nonqualified Stock Option) a Stock Reload Option
up to the amount of shares of Stock held by the Holder for at least six months
and used to pay all or part of the exercise price of an Option and, if any,
withheld by the Company as payment for withholding taxes. Such Stock Reload
Option shall have an exercise price equal to the Fair Market Value as of the
date of the Stock Reload Option grant. Unless the Committee determines
otherwise, a Stock Reload Option may be exercised commencing one year after it
is granted and shall expire on the date of expiration of the Option to which the
Reload Option is related.
Section 7. Stock Appreciation Rights.
7.1 Grant and Exercise. The Committee may grant Stock Appreciation
Rights to participants who have been, or are being granted, Options under the
Plan as a means of allowing such participants to exercise their Options without
the need to pay the exercise price in cash. In the case of a Nonqualified Stock
Option, a Stock Appreciation Right may be granted either at or after the time of
the grant of such Nonqualified Stock Option. In the case of an Incentive Stock
Option, a Stock Appreciation Right may be granted only at the time of the grant
of such Incentive Stock Option.
7.2 Terms and Conditions. Stock Appreciation Rights shall be subject to
the following terms and conditions:
(a) Exercisability. Stock Appreciation Rights shall be
exercisable as determined by the Committee and set forth in the Agreement,
subject to the limitations, if any, imposed by the Code, with respect to related
Incentive Stock Options.
(b) Termination. A Stock Appreciation Right shall terminate
and shall no longer be exercisable upon the termination or exercise of the
related Stock Option.
(c) Method of Exercise. Stock Appreciation Rights shall be
exercisable upon such terms and conditions as shall be determined by the
Committee and set forth in the Agreement and by surrendering the applicable
portion of the related Stock Option. Upon such exercise and surrender,
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the Holder shall be entitled to receive a number of Option Shares equal to the
SAR Value divided by the exercise price of the Option.
(d) Shares Affected Upon Plan. The granting of a Stock
Appreciation Rights shall not affect the number of shares of Stock available
under for awards under the Plan. The number of shares available for awards under
the Plan will, however, be reduced by the number of shares of Stock acquirable
upon exercise of the Stock Option to which such Stock Appreciation right
relates.
Section 8. Restricted Stock.
8.1 Grant. Shares of Restricted Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be awarded, the number of shares to be awarded, the price
(if any) to be paid by the Holder, the time or times within which such awards
may be subject to forfeiture (the "Restriction Period"), the vesting schedule
and rights to acceleration thereof, and all other terms and conditions of the
awards.
8.2 Terms and Conditions. Each Restricted Stock award shall be subject
to the following terms and conditions:
(a) Certificates. Restricted Stock, when issued, will be
represented by a stock certificate or certificates registered in the name of the
Holder to whom such Restricted Stock shall have been awarded. During the
Restriction Period, certificates representing the Restricted Stock and any
securities constituting Retained Distributions (as defined below) shall bear a
legend to the effect that ownership of the Restricted Stock (and such Retained
Distributions), and the enjoyment of all rights appurtenant thereto, are subject
to the restrictions, terms and conditions provided in the Plan and the
Agreement. Such certificates shall be deposited by the Holder with the Company,
together with stock powers or other instruments of assignment, each endorsed in
blank, which will permit transfer to the Company of all or any portion of the
Restricted Stock and any securities constituting Retained Distributions that
shall be forfeited or that shall not become vested in accordance with the Plan
and the Agreement.
(b) Rights of Holder. Restricted Stock shall constitute issued
and outstanding shares of Common Stock for all corporate purposes. The Holder
will have the right to vote such Restricted Stock, to receive and retain all
regular cash dividends and other cash equivalent distributions as the Board may
in its sole discretion designate, pay or distribute on such Restricted Stock and
to exercise all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that (i) the Holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Stock until the Restriction Period shall have
expired and unless all other vest requirements with respect thereto shall have
been fulfilled; (ii) the Company will retain custody of the stock certificate or
certificates representing the Restricted Stock during the Restriction Period,
(iii) other than regular cash dividends and other cash equivalent distributions
as the Board may in its sole discretion designate, pay or distribute, the
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Company will retain custody of all distributions ("Retained Distributions") made
or declared with respect to the Restricted Stock (and such Retained
Distributions will be subject to the same restrictions, terms and conditions as
are applicable to the restricted Stock) until such time, if ever, as the
Restricted Stock with respect to which such Retained Distributions shall have
been made, paid or declared shall have become vested and with respect to which
the Restriction Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in this Plan or the Agreement or
otherwise established by the Committee with respect to any Restricted Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock and any
Retained Distributions with respect thereto.
(c) Vesting; Forfeiture. Upon the expiration of the
Restriction Period with respect to each award of Restricted Stock and the
satisfaction of any other applicable restrictions, terms and conditions (i) all
or part of such Restricted Stock shall become vested in accordance with the
terms of the Agreement, subject to Section 11, below, and (ii) any Retained
Distributions with respect to such Restricted Stock shall become vested to the
extent that the Restricted Stock related thereto shall have become vested,
subject to Section 11, below. Any such Restricted Stock and Retained
Distributions that do not vest shall be forfeited to the Company and the Holder
shall not thereafter have any rights with respect to such Restricted Stock and
Retained Distributions that shall have been so forfeited.
Section 9. Deferred Stock.
9.1 Grant. Shares of Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom and the time or times at which grants of Deferred
Stock shall be awarded, the number of shares of Deferred Stock to be awarded to
any person, the duration of the period (the "Deferral Period") during which, and
the conditions under which, receipt of the shares will be deferred, and all the
other terms and conditions of the awards.
9.2 Terms and Conditions. Each Deferred Stock award shall be subject to
the following terms and conditions:
(a) Certificates. At the expiration of the Deferral Period (or
the Additional Deferral Period referred to in Section 9.2 (d) below, where
applicable), shares certificates shall be issued and delivered to the Holder, or
his legal representative, representing the number equal to the shares covered by
the Deferred Stock award.
(b) Rights of Holder. A person entitled to receive Deferred
Stock shall not have any rights of a stockholder by virtue of such award until
the expiration of the applicable Deferral Period and the issuance and delivery
of the certificates representing such Stock. The shares of Stock issuable upon
expiration of the Deferral Period shall not be deemed outstanding by the Company
until the expiration of such Deferral Period and the issuance and delivery of
such Stock to the Holder.
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(c) Vesting; Forfeiture. Upon the expiration of the Deferral
Period with respect to each award of Deferred Stock and the satisfaction of any
other applicable restrictions, terms and conditions all or part of such Deferred
Stock shall become vested in accordance with the terms of the Agreement, subject
to Section 11, below. Any such Deferred Stock that does not vest shall be
forfeited to the Company and the Holder shall not thereafter have any rights
with respect to such Deferred Stock.
(d) Additional Deferral Period. A Holder may request to, and
the Committee may at any time, defer the receipt of an award (or an installment
of an award) for an additional specified period or until a specified event (the
"Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock awards (or such
installment).
Section 10. Other Stock-Based Awards.
10.1 Grant and Exercise. Other Stock-Based Awards may be awarded,
subject to limitations under applicable law, that are denominated or payable, in
value in whole or in part by reference to, or otherwise based on, or related to,
shares of Common Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, purchase rights, shares of
Common Stock awarded which are not subject to any restrictions or conditions,
convertible or exchangeable debentures, or other rights convertible into shares
of Common Stock and awards valued by reference to the value of securities of or
the performance of specified subsidiaries. Other Stock-Based Awards may be
awarded either alone or in addition to or in tandem with any other awards under
this Plan or any other plan of the Company.
10.2 Eligibility for Other Stock-Based Awards. The Committee shall
determine the eligible persons to whom and the time or times at which grants of
such other stock-based awards shall be made, the number of shares of Common
Stock to be awarded pursuant to such awards, and all other terms and conditions
of the awards.
10.3 Terms and Conditions. Each Other Stock-Based Award shall be
subject to such terms and conditions as may be determined by the Committee and
to Section 11, below.
Section 11. Accelerated Vesting and Exercisability.
If (i) any person or entity other than the Company and/or any
stockholders of the Company as of the Effective Date acquire securities of the
Company (in one or more transactions) having 25% or more of the total voting
power of all the Company's securities then outstanding and (ii) the Board of
Directors of the Company does not authorize or otherwise approve such
acquisition, then, the vesting periods of any and all Options and other awards
granted and outstanding under the Plan shall be accelerated and all such Options
and awards will immediately and entirely vest, and the respective holders
thereof will have the immediate right to purchase and/or receive any and all
Stock subject to
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such Options and awards on the terms set forth in this Plan and the respective
agreements respecting such Options and awards.
Section 12. Amendment and Termination.
Subject to Section 4 hereof, the Board may at any time, and from time
to time, amend, alter, suspend or discontinue any of the provisions of the Plan,
but no amendment, alteration, suspension or discontinuance shall be made which
would impair the rights of a Holder under any Agreement theretofore entered into
hereunder, without the Holder's consent.
Section 13. Term of Plan.
13.1 Effective Date. The Plan shall be effective as of July 16, 1997.
("Effective Date").
13.2 Termination Date. Unless terminated by the Board, this Plan shall
continue to remain effective until such time no further awards may be granted
and all awards granted under the Plan are no longer outstanding.
Notwithstanding the foregoing, grants of Incentive Stock Options may only
be made during the ten-year period following the Effective Date.
Section 14. General Provisions.
14.1 Written Agreements. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms of the Agreement executed by the
Company and the Holder. The Committee may terminate any award made under the
Plan if the Agreement relating thereto is not executed and returned to the
Company within 10 days after the Agreement has been delivered to the Holder for
his or her execution.
14.2 Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.
14.3 Employees.
(a) Engaging in Competition With the Company. In the event a
Holder's employment with the Company or a Subsidiary is terminated for any
reason whatsoever, and within one year after the date thereof such Holder
accepts employment with any competitor of, or otherwise engages in competition
with, the Company, the Committee, in its sole discretion, may require such
Holder to return to the Company the economic value of any award which was
realized or obtained by such Holder at any time during the period beginning on
that date which is six months prior to the date of such Holder's termination of
employment with the Company.
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(b) Termination for Cause. The Committee may, in the event a
Holder's employment with the company or a Subsidiary is terminated for cause,
annul any award granted under this Plan to return to the Company the economic
value of any award which was realized or obtained by such Holder at any time
during the period beginning on that date which is six months prior to the date
of such Holder's termination of employment with the Company.
(c) No Right of Employment. Nothing contained in the Plan or
in any award hereunder shall be deemed to confer upon any Holder who is an
employee of the Company or any Subsidiary any right to continued employment with
the Company or any Subsidiary, nor shall it interfere in any way with the right
of the Company or any Subsidiary to terminate the employment of any Holder who
is an employee at any time.
14.4 Investment Representations. The Committee may require each person
acquiring shares of Stock pursuant to a Stock Option or other award under the
Plan to represent to and agree with the Company in writing that the Holder is
acquiring the shares for investment without a view to distribution thereof.
14.5 Additional Incentive Arrangements. Nothing contained in the Plan
shall prevent the Board from adopting such other or additional incentive
arrangements as it may deem desirable, including, but not limited to, the
granting of Stock Options and the awarding of stock and cash otherwise than
under the Plan; and such arrangements may be either generally applicable or
applicable only in specific cases.
14.6 Withholding Taxes. Not later than the date as of which an amount
must first be included in the gross income of the Holder for Federal income tax
purposes with respect to any option or other award under the Plan, the Holder
shall pay to the Company, or made arrangements satisfactory to the Committee
regarding the payment of, any Federal, state and local taxes of any kind
required by law to be withheld or paid with respect to such amount. If permitted
by the Committee, tax withholding or payment obligations may be settled with
Common Stock, including Common Stock that is part of the award that gives rise
to the withholding requirement. The obligations of the Company under the Plan
shall be conditioned upon such payment or arrangements and the Company or the
Holder's employer (if not the Company) shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the Holder from the Company or any Subsidiary.
14.7 Governing Law. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Nevada (without regard to choice of law provisions).
14.8 Other Benefit Plans. Any award granted under the Plan shall not be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or any Subsidiary and shall not affect any benefits under any
other benefit plan now or subsequently in effect
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under which the availability or amount of benefits is related to the level of
compensation (unless required by specific reference in any such other plan to
awards under this Plan).
14.9 Non-Transferability. Except as otherwise expressly provided in the
Plan, no right or benefit under the Plan may be alienated, sold, assigned,
hypothecated, pledged, exchanged, transferred, encumbranced or charged, and any
attempt to alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void.
14.10 Applicable Laws. The obligations of the Company with respect to
all Stock Options and awards under the Plan shall be subject to (i) all
applicable laws, rules and regulations and such approvals by any governmental
agencies as may be required, including, without limitation, the Securities Act
of 1933, as amended, and (ii) the rules and regulations of any securities
exchange on which the Stock may be listed.
14.11 Conflicts. If any of the terms or provisions of the Plan or an
Agreement (with respect to Incentive Stock Options) conflict with the
requirements of Section 422 of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of said
Section 422 of the Code. Additionally, if this Plan or any Agreement does not
contain any provision required to be included herein under Section 422 of the
Code, such provision shall be deemed to be incorporated herein and therein with
the same force and effect as if such provision had been set out at length herein
and therein. If any of the terms or provision of any Agreement conflict with any
terms or provision of the Plan, then such terms or provision shall be deemed
inoperative to the extent they so conflict with the requirements of the Plan.
Additionally, if any Agreement does not contain any provision required to be
included therein under the Plan, such provision shall be deemed to be
incorporated therein with the same force and effect as if such provision had
been set out at length therein.
14.12 Non-Registered Stock. The shares of Stock to be distributed under
this Plan have not been, as of the Effective Date, registered under the
Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to register the
Stock or to assist the Holder in obtaining an exemption from the various
registration requirements, or to list the Stock on a national securities
exchange.
14
<PAGE>
SCHEDULE T
INSURANCE POLICIES
OF
WEBX MEDIA, INC.
None
<PAGE>
SCHEDULE U
CUSTOMERS
OF
WEBX MEDIA, INC.
None
<PAGE>
SCHEDULE V
LICENSES AND PERMITS
OF
WEBX MEDIA, INC.
None
<PAGE>
LICENSE AGREEMENT
This License Agreement (this "Agreement") is made effective as of the
6th day of September, 1994 between
CORTISOL MEDICAL RESEARCH, INC. (CMR), of Las Vegas, Nevada, a Nevada
Corporation and STEROIDEGENESIS INHIBITORS, INC., a Nevada Corporation.
HERETO, the parties agree as follows:
GRANT OF LICENSE
In consideration of 5,100,000 shares of STEROIDEGENESIS INHIBITORS,
INC. Common Stock, a 3-5% licensing fees on ANTICORT net sales (on a sliding
scale), and $250,000 to be paid, if and when STEROIDEGENESIS INHIBITORS, INC.
would successfully conclude a private/IPO financing of 5MM or more, CORTISOL
MEDICAL RESEARCH, INC. grants to STEROIDEGENESIS INHIBITORS, INC. exclusive,
world wide license to ANTICORT, an anti-AIDS drug, developed by CMR, together
with all technology, and the know-how related to the use of ANTICORT.
PATENT(S)
STEROIDEGENESIS INHIBITORS, INC., at its own expense, shall file and
pursue patent(s) application(s) on ANTICORT, which said patent(s) to be issued
in DR. ALFRED T. SAPSE'S name, but to be used by STEROIDEGENESIS INHIBITORS,
INC. for the duration of said patents, or seventeen years after the issuance of
the patents.
<PAGE>
TRANSFER OF RIGHTS
This Agreement shall be binding on any successors of the parties.
ENTIRE AGREEMENT
This Agreement contains the entire agreement of the parties and there
are no other promises or conditions in any other agreement whether oral or
written. This Agreement supersedes any prior written or oral agreements between
the parties.
AMENDMENT
This Agreement may be modified or amended, if the amendment is made in
writing and is signed by both parties.
SEVERABILITY
If any provision of this Agreement shall be held to be invalid or
unenforceable for any reason, the remaining provisions shall continue to be
valid and enforceable. If a court finds that any provision of this Agreement is
invalid or unenforceable, but that by limiting such provision it would become
valid or enforceable, then such provision shall be deemed to be written,
construed, and enforced as so limited.
WAIVER OF CONTRACTUAL RIGHT
The failure of either party to enforce any provision of this Agreement
shall not be construed as a waiver or limitation of that party's right to
subsequently enforce and compel strict compliance with every provision of this
Agreement.
<PAGE>
APPLICABLE LAW
This Agreement shall be governed by the laws of the State of Nevada.
/s/ XXXXXXXXXXX /s/ XXXXXXXXXXX
- -------------------------------- ------------------------------------
for Cortisol Medical Research for Steroidogenesis Inhibitors, Inc.
<PAGE>
SCHEDULE D
LEASES AND CONTRACTS
OF
STEROIDOGENESIS INHIBITORS, INC.
<PAGE>
1. LICENSING AGREEMENT
CORTISOL - SII
<PAGE>
LICENSE AGREEMENT
This License Agreement (this "Agreement") is made effective as of the
6th day of September, 1994 between
CORTISOL MEDICAL RESEARCH, INC. (CMR), of Las Vegas, Nevada, a Nevada
Corporation and STEROIDEGENESIS INHIBITORS, INC., a Nevada Corporation.
HERETO, the parties agree as follows:
GRANT OF LICENSE
In consideration of 5,100,000 shares of STEROIDEGENESIS INHIBITORS,
INC. Common Stock, a 3-5% licensing fees on ANTICORT net sales (on a sliding
scale), and $250,000 to be paid, if and when STEROIDEGENESIS INHIBITORS, INC.
would successfully conclude a private/IPO financing of 5MM or more; CORTISOL
MEDICAL RESEARCH, INC. grants to STEROIDEGENESIS INHIBITORS, INC. exclusive,
world wide license to ANTICORT, an anti-AIDS drug, developed by CMR, together
with all technology, and the know-how related to the use of ANTICORT.
PATENT(S)
STEROIDEGENESIS INHIBITORS, INC., at its own expense, shall file and
pursue patent(s) application(s) on ANTICORT, which said patent(s) to be issued
in DR. ALFRED T. SAPSE'S name, but to be used by STEROIDEGENESIS INHIBITORS,
INC. for the duration of said patents, or seventeen years after the issuance of
the patents.
<PAGE>
TRANSFER OF RIGHTS
This Agreement shall be binding on any successors of the parties.
ENTIRE AGREEMENT
This Agreement contains the entire agreement of the parties and there
are no other promises or conditions in any other agreement whether oral or
written. This Agreement supersedes any prior written or oral agreements between
the parties.
AMENDMENT
This Agreement may be modified or amended, if the amendment is made in
writing and is signed by both parties.
SEVERABILITY
If any provision of this Agreement shall be held to be invalid or
unenforceable for any reason, the remaining provisions shall continue to be
valid and enforceable. If a court finds that any provision of this Agreement is
invalid or unenforceable, but that by limiting such provision it would become
valid or enforceable, then such provision shall be deemed to be written,
construed, and enforced as so limited.
WAIVER OF CONTRACTUAL RIGHT
The failure of either party to enforce any provision of this Agreement
shall not be construed as a waiver or limitation of that party's right to
subsequently enforce and compel strict compliance with every provision of this
Agreement.
<PAGE>
APPLICABLE LAW
This Agreement shall be governed by the laws of the State of Nevada.
/s/ XXXXXXXXXX /s/ XXXXXXXXXX
- -------------------------------- ------------------------------------
for Cortisol Medical Research for Sreroidogenesis Inhibitors, Inc.
<PAGE>
SCHEDULE B
EXCLUSIVE LICENSING AGREEMENT
THIS AGREEMENT made by and between the parties herein below, to wit:
As Parties of the First Part:
STEROIDOGENESIS INHIBITORS, INC., a Corporation incorporated under the
laws of the State of Nevada, and having its principal office and place
of business at 2001 E. Flamingo Blvd., Suite 100-B, Las Vegas, Nevada
89119, USA (hereinafter simply called "SI"), and DR. ALFRED T. SAPSE,
(hereinafter simply called "SAPSE") (SI and SAPSE collectively referred
to as the "Developers")
As a Party of the Second Part:
STEROIDOGENESIS INHIBITORS CANADA INC., a Corporation incorporated
under the laws of the Province of Alberta, Canada, and having its
principal office and place of business at Suite 1002, Park Plaza, 10611
- 98 Avenue, Edmonton, Alberta, T5K 2P7, Canada, herein represented by
its Director President, Ms. Anne Ryan (hereinafter simply called "SI
Canada").
WHEREAS:
1. SI is engaged in the development, manufacture and sales of certain
pharmaceutical products, having successfully developed a product designated
ANTICORT, for AIDS treatment, including all technical knowledge necessary for
its production in commercial scale;
2. SI Canada is engaged in the marketing of medical hospital, dental and
laboratory products and is capable of carrying out the marketing of ANTICORT;
3. SI Canada is desirous of obtaining an exclusive license to manufacture, use,
distribute and sell ANTICORT;
<PAGE>
NOW THEREFORE, in consideration of mutual covenants and agreements herein
contained, the Parties have agreed as to a license based on the following
clauses and conditions:
1 INTERPRETATION
1.1 Definitions
Unless otherwise stated, in this Agreement:
1.1.1 "Agreement" means this technology license agreement, together with any
amendments to or replacements of this technology license agreement;
1.1.2 "Effective Date" means the 10th day of February, 1996;
1.1.3 "Improvements" shall mean any future improvements, innovations,
inventions, modifications, designs, plans, drawings, specifications,
techniques, processes, data and technical information, whether
patented or unpatented, made or acquired by the Developers during the
term of this Agreement relevant to the use of, or the manufacture of
the Products;
1.1.4 "Methods and Technical Know-how" shall mean all information,
processes, knowledge and experience of a technical and commercial
nature, including trade secrets and the Specifications relating to
techniques for the use of, or methods of or practices in the use of,
or the manufacture of the Products;
1.1.5 "Parties" means the Developers and SI Canada;
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<PAGE>
1.1.6 "Patent Rights" means all issued patents, as well as any pending
applications and includes all reissues, renewals, extensions,
divisions, continuations and continuations-in-part related thereto,
wherever filed or obtained, covering the Technology or the Products or
any method, technique or process which may be practiced using the
Technology or the Products. A list of all issued patents and pending
applications as at the Effective Date is set forth in Schedule A;
1.1.7 "Products" shall mean ANTICORT and any cortisol treatment related
products developed by the Developers as Improvements;
1.1.8 "Proprietary Information" means any information, including know-how,
show-how, confidential and other trade secret information, developed
or owned by the Developers relating to the design, manufacture,
operation or use of the Technology or the Products and not generally
known to others in the industry or readily ascertainable by proper
means which gives the Products an advantage over other competitors.
Proprietary Information shall not include information which:
(a) at the time of its disclosure is already part of the public
knowledge;
(b) after disclosure hereunder, becomes part of the public knowledge
by publication or otherwise through no fault of SI Canada;
(c) prior to the time of disclosure hereunder, was received by SI
Canada in writing from a third party who had a lawful right to
disclose it and who did not require SI Canada to hold it in
confidence; or
(d) after the time of disclosure hereunder was received by SI Canada
in writing from a party who had a lawful right to disclose it and
who did not require SI Canada to hold it in confidence.
-3-
<PAGE>
1.1.9 "Proprietary Marks" means ANTICORT and any other trade names,
trade marks and other commercial symbols established by SI related to
the Products or the Technology from time to time;
1.1.10 Specifications" shall mean all specifications, methods, applications,
technical data, drawings, adjustment, calibration and testing
procedures, criteria, qualities, requirements and all other
information in connection with the use of the Technology or the
manufacture of the Products published or promulgated by or for the
benefit of SI and its licensees, manufacturers, distributors and
vendors including any manual, specification booklet, letter, notice,
memorandum or other written form from time to time;
1.1.11 "Technology" means all property forming part of, or existing or
arising as a result of, the Patent Rights, the Methods and Technical
Know-how, the Proprietary Information, the Specifications and any
Improvements;
1.1.12 "Territory" means Canada, such of the member nations of the British
Commonwealth as have been added to the Territory from time to time
pursuant to Section 2.3 and any other country in respect of which SI
agrees to grant SI Canada the license contained in this Agreement.
1.2 Extended Meaning
All words importing the singular number shall include the plural and the
plural the singular, and all references to gender shall include the male, female
and neuter, as the context shall require or imply. A reference to dollars, "$"
or amounts of money means lawful money of the United States.
-4-
<PAGE>
1.3 Articles and Headings
The division of this Agreement into articles and sections and the insertion
of headings are for convenience of reference only and shall not affect the
construction or interpretation hereof. A reference to an article or a section
number shall, unless otherwise stated, be a reference to an article or section
of this Agreement.
1.4 Meaning of Expressions
"Herein", "hereof" or "hereunder" and similar expressions when used in a
section shall be construed as referring to the whole Agreement and not that
section only.
1.5 Schedules
Any schedules attached to this Agreement shall form part of this Agreement.
2 GRANT OF LICENSE
2.1 Authority
The Developers represent that SI is the owner of the Technology, has the
right to license the Technology in the Territory and has not granted to any
other person any rights forming part of the Technology in relation to the
Territory or any part thereof. SAPSE agrees not to take any steps related to the
Technology which would cause SI to be unable to fulfill its obligations under
this Agreement.
2.2 SI hereby grants to SI Canada, effective from the Effective Date and
continuing throughout the term of this Agreement, the exclusive right and
license, upon the terms and
-5-
<PAGE>
conditions herein specified, to manufacture, use, distribute and sell the
Products in the Territory, and in connection therewith to use all Technology.
Without limiting the generality of the foregoing:
(a) the licenses granted herein shall not authorize SI Canada to act as the
agent or the attorney in fact of the Developers or either of them, and
(b) the exclusivity rights granted shall prevent the Developers or any
person claiming under them other than SI Canada from manufacturing,
using distributing or sell the Products in the Territory.
2.3 At any time and from time to time within one year from the Effective Date,
SI Canada shall have the option to expand the Territory to include, in addition
to Canada, any other country, still available for contractual agreement, which
was a member of the British Commonwealth as at the Effective Date. Such option
may be exercised by notice to SI of the name of the country to be included in
the Territory accompanied by a deposit of $10,000. The total amount payable to
SI for the licenses and rights for any country added to the Territory by SI
Canada will be the applicable amount stated in Section 4.2. The expansion of the
Territory shall be effective as of the date of notice to SI.
2.4 In the event that SI receives a bona fide written offer from a third party
to purchase the license rights for any country or countries which are subject to
the option rights of SI Canada set out in Section 2.3, SI will have the right to
give written notice to SI Canada (including all terms of the written offer) to
exercise its option regarding that country or those countries within forty-five
(45) days, failing which SI will be at liberty to sell the license to the third
party according to and only according to the terms of the written offer. The
price payable by SI Canada in the event SI Canada chose to exercise its option,
will be the lesser of the price established by Section 4.2 and the price
contained in the third party offer. The appropriate price will be payable on the
set terms and conditions as were contained in the written offer.
-6-
<PAGE>
2.5 SI shall forthwith advise SI Canada in writing, of the sale by SI of a
license related to the Technology for any country including all countries not
subject to the option.
2.6 Distributors and Sub-manufacturers
Subject to the following requirements, SI Canada shall have their right to
sub-license its rights to manufacture, market, develop and use the Technology
and the Products in the Territory and to appoint distributors and
sub-manufacturers of the products:
(a) SI Canada shall not sub-license its rights or appoint any distributor or
sub-manufacturer until it has entered into an agreement with the
sub-licensee, distributor or sub-manufacturer containing terms and
conditions relating to the use and protection of Proprietary Information
and the Technology which are substantially the same as the terms and
conditions of this Agreement; and
(b) in the event of a violation by a sub-licensee, distributor or
sub-manufacturer of the terms and conditions of an agreement relating to
the use and protection of Proprietary Information, SI Canada shall
immediately notify SI thereof and SI shall, on request of SI Canada and
to the extent permitted by law, be entitled to participate with SI
Canada in enforcing any cause of action SI Canada may have in respect of
the alleged violation.
SI Canada will be responsible at its expense for preparing and processing any
registration it considers desirable to protect its exclusivity related to the
Technology in the Territory. The Developers shall promptly execute all documents
reasonably necessary to be executed by the owners (or inventors) of the
Technology. SI Canada shall have no liability related to any failure on its part
to obtain any registration required to protect the Technology or any part
thereof from use by others. Nothing in this Section shall restrict the rights of
the
-7-
<PAGE>
3 DURATION
3.1 Subject to earlier termination as provided in this Agreement, the licenses
and rights granted to SI Canada pursuant to this Agreement shall continue from
creation until the date which is ten (10) years after the date on which the
Products have first received all approvals from the appropriate Canadian
government authorities required for the sale of the Products as pharmaceutical
products in Canada. The licenses and rights granted to SI Canada for any country
which forms part of the Territory on the expiry date of the initial term of this
Agreement and in which SI Canada (or its sub-licensees or sub-manufacturers or
distributors) continues to distribute and sell the Products shall be
automatically renewed for a further period of ten (10) years.
4 LICENSE FEES AND ROYALTIES
4.1 The total compensation payable by SI Canada to SI for the licenses and
rights granted to SI Canada for Canada pursuant to this Agreement shall be a fee
of $200,000, the receipt of which SI acknowledges and the royalty described in
Section 4.3.
4.2 The total compensation payable by SI Canada for any country added to the
Territory pursuant to Section 2.3 will be whichever of the following fees is
applicable:
(a) for Great Britain $150,000
(b) for any other country $200,000 or any lesser
amount specified pursuant to the
application of Section 2.4
-8-
<PAGE>
(provided that there will be deducted from the first country added to the
Territory pursuant to Section 2.3 the sum of $30,000) and the royalty described
in Section 4.3.
4.3 In addition to the fixed fees referred to in Sections 4.1 and 4.2, SI Canada
will pay a variable fee equal to ten (10%) percent of the "manufacturing value"
of the sales of Products effected by SI Canada in the Territory. The
"manufacturing value" will be the price charged by SI Canada to wholesalers for
Products manufactured by or on behalf of SI Canada, excluding any taxes required
to be collected or charged by SI Canada in relation to such sale, which will
ultimately be sold in the Territory.
4.4 This variable fee will be payable on the 20th day of April, July, October
and January of each year and each quarterly payment shall include payment in
respect of all sales to wholesalers made in the prior quarter.
4.5 Where any sale is made and SI Canada either is unable to recover payment for
Products delivered or subsequently refunds payment due to a problem with the
Products delivered, the sale will not be included for the purposes of
calculating the variable fee payable and, where payment of the variable fee has
already been made relative to that sale, appropriate adjustments will be made on
the quarterly account next following the write-off of the receivable or the
making of the refund, as they case may be.
4.6 Where a sale is in a currency other than United States dollars, the
"manufacturing value" for that sale will be converted to United States dollars
using the exchange rate quoted by the Royal Bank of Canada on the business day
next following the date of SI Canada's invoice to the wholesaler for the sale.
5 SI'S OBLIGATIONS
5.1 SI will:
-9-
<PAGE>
(a) supply to SI Canada the Specifications, including without limitation the
formula for the Products and all the technical knowledge necessary for the
production of the Product and further including laboratory test results,
experimental animal tests, clinical use in patients, manufacturing data and
manufacturing secrets, as well any Improvements free from any additional
remuneration besides that already provided for in his Agreement;
(b) supply technical assistance to any physicians and researchers utilized by SI
Canada for clinical tests of the Products in Canada or other countries in
the Territory, all in accordance with the parameters of the World Health
Organization (WHO);
(c) supply quantities of the Products sufficient for the making of clinical
studies by SI Canada in Canada and other countries in the Territory;
(d) supply technical assistance to SI Canada as required to satisfy the
requirements of competent health related government departments or
ministries in the Territory;
(e) supply, whenever requested by SI Canada, on at least thirty (30) days prior
notice, the service of SAPSE for appearances in the Territory for
interviews, for meetings with scientists, for lectures to the health
authorities, press media, etc. SI Canada will be responsible for all travel
expenses and a per diem fee of One Thousand United States Dollars (US
$1,000). Such services shall not exceed more than two (2) days per month,
unless expressly agreed otherwise by the parties;
(f) supply, whenever requested by SI Canada, and within the reasonable
availability of SI's technical team, technical assistance in the Territory
with payment of all travel expenses and a fee of Four Hundred United States
Dollars (US $400) per man per day;
-10-
<PAGE>
(g) all reasonable technical assistance and co-operation from the Developers,
including without limitation proper completion and execution of applications
for patents and trade marks, required to obtain available protection of the
Technology in any country in the Territory.
5.2 If, for reasons not attributable to SI Canada, the Technology cannot be
protected by appropriate registrations in any country included in the Territory
and if as a result SI Canada is not able to enjoy exclusive rights to the
manufacture, use, distribution or sale of the Products in that country, SI
Canada may terminate the license in relation to that country by notice to SI. In
that circumstance SI will refund any fixed fees paid in relation to such license
pursuant to Sections 4.1 and 4.2 and will also assume all the expenses of such
termination.
6 OBLIGATIONS OF SI Canada
6.1 SI Canada shall:
(a) be responsible for the making, at its expense, of all clinical testing
and documentation required to obtain all approvals required to sell the
Products in a country in the Territory by the competent governmental
authorities (the approvals in each country being referred to as the
"Approval") in the shortest period of time practicable, keeping SI
informed on the proceedings and conclusion of all such tests and
approval of the Products;
(b) when an Approval is obtained, begin, within ninety (90) days of the
obtaining of the Approval, the production of the Products in accordance
with the quality standards prevailing in the pharmaceutical industry in
the country in question and in compliance with the Specifications
supplied by SI;
-11-
<PAGE>
(c) maintain accurate books and records relating to the production,
packaging, and shipment of Products, the rejection of Products and the
non-payment of Products, as well as any other records required to be
maintained by applicable laws or hereunder and shall retain all such
records for a period of at least four (4) years;
(d) prepare and submit to SI, monthly quality control reports as required
herein;
(e) maintain updated records, authorizations, and licenses required by
Canadian and foreign legislation for the production and distribution of
the Products in the Territory, including ensuring that the appropriate
licenses are maintained in good standing by any distributors that SI
Canada may retain in any countries within the Territory; and
(f) promote, at its own expense and to the reasonable satisfaction of SI,
the sale of the Products throughout the Territory, including:
(i) exposing the Products to the medical community and the public and
private entities connected with public health,
(ii) advertising and promoting the sale of the Products and making
regular and sufficient contact with the present and future
customers of the Products in the Territory, and
(iii) maintaining adequate sales and warehouse facilities and a
sufficient stock of Products to ensure prompt delivery to
customers.
-12-
<PAGE>
7 ACCESS TO SI CANADA'S AND DISTRIBUTOR'S PREMISES
7.1 At all reasonable times and on reasonable prior notice during the term of
this Agreement, SI's representatives shall be permitted free access to the
premises of SI Canada, its distributors and subcontractors, for inspection
purposes so that SI may ascertain whether the production, handling, and storage
of the Products are being correctly performed in accordance with the provisions
of this Agreement.
8 INDEMNIFICATION WARRANTIES
8.1 SI Canada shall indemnify SI for any costs, expenses, claims or liabilities
that the latter may incur as a result of any breach of this Agreement or
negligence by SI Canada, its directors, employees or representatives. SI shall
immediately communicate to SI Canada notice of any claim or proceeding, whether
by court proceedings or otherwise, that may result in civil liability to SI and
SI Canada shall, on posting security reasonably sufficient to protect SI
relative to such claim or proceeding, be entitled to assume control of the
defence and settlement of such claim or proceeding.
8.2 SI shall indemnify SI Canada for any costs, expenses, claims or liabilities
that the latter may incur as a result of any breach of this Agreement or
negligence by SI, its directors, employees or representatives. SI Canada shall
immediately communicate to SI notice of any claim or proceeding, whether by
court proceedings or otherwise, that may result in civil liability to SI Canada
and SI shall, on posting security reasonably sufficient to protect SI Canada
relative to such claim or proceeding, be entitled to assume control of the
defence and settlement of such claim or proceeding.
-13-
<PAGE>
9 USE OF THE TRADEMARK ANTICORT
9.1 While this Agreement is effective, the Products shall always be marketed
under the trademark ANTICORT, which is currently under registration in the
United States of America, and the registration of which in Canada and the other
nations in the Territory shall be undertaken by SI or such other Proprietary
Marks as are being used generally by SI in relation to the Products. SI Canada
shall indicate on the label of every unit of the Products sold that it is
produced under license from SI.
9.2 SI Canada shall refrain from using or permitting its distributors to use any
Proprietary Marks as though owned by it or them. The foregoing shall not prevent
SI Canada or its authorized distributors from advertising the Products and in
connection therewith using the Proprietary Marks then generally being used by
SI.
10 TERMINATION
10.1 SI shall have the right to terminate this Agreement and the rights and
licences granted hereunder, without prejudice to SI's right to rely on any other
legal right or remedy, if any of the following events of default occur:
(a) if either SI Canada
(i) defaults in the due and punctual payment of any amount payable
under this Agreement, when and as due; or
(ii) breaches any of the other terms or conditions of this Agreement;
and
-14-
<PAGE>
if in either event the default or breach continues for a period of
45 days after written notice has been given to SI Canada by SI
requesting that the default or breach be remedied, or:
(b) if SI Canada makes or purports to make a general assignment for the
benefit of creditors or any proceedings are instituted under any
statute relating to insolvency, or bankruptcy of SI Canada, or if a
custodian, receiver, manager, trustee or any other person with like
powers is appointed to take charge of all or any part of SI Canada's
undertaking, business, property or assets.
11 OBLIGATIONS FOLLOWING TERMINATION
11.1 Upon termination of this Agreement for any reason whatsoever, SI Canada
shall:
(a) return to SI all confidential or propriety business or technical
material relating to the Products,
(b) cease using SI's Proprietary Marks and thereafter refrain from holding
SI Canada out as a producer or distributor for the Products, and
(c) comply with the confidentiality obligation prescribed by clause 18 for
a minimum of three (3) years after the date of termination.
12 GOVERNING LAW
12.1 This Agreement shall be made and construed in accordance with the laws of
Alberta and of Canada and, to decide any dispute that may not be amicably
settled by the Parties, the competent civil court of the Province of Alberta is
hereby chosen.
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<PAGE>
13 ENFORCEABILITY
13.1 It is agreed that should any clause of this Agreement be unenforceable or
prohibited by law or by any court or tribunal decision, the other clauses and
conditions shall be valid and enforceable. In the event such court decision
involves a partial alteration of any provision hereof, then such clause shall be
amended, and is hereby amended, so as to be in compliance with the said
legislation or court decision, without prejudice to the other clauses and
conditions, which will remain valid and enforceable.
14 COMPLIANCE WITH LOCAL LAWS
14.1 SI Canada shall perform its obligations hereunder in full compliance with
applicable local laws and regulations. SI Canada shall be responsible for any
non-compliance of the Products with any local laws and regulations, SI Canada
shall be responsible for notifying SI, as soon as reasonably possible after
becoming aware of the same, of any laws or regulations, whether in effect or
proposed, which may adversely affect the obligations and the rights of SI or SI
Canada or the sale of the Products in the Territory.
15 NO ASSIGNMENT
15.1 SI Canada shall be entitled to contract with public or private research
institutes or organizations to conduct the clinical trials and research
necessary to obtain all approvals of the Products required, as well as with
foundations of national renown and governments for the due sponsorship and
financing of such trials and research, but shall remain in any event always
responsible to SI with respect to the faithful performance of this Agreement.
Subject to Section 2.6, SI Canada cannot assign this Agreement to any other
person without the prior approval to such assignment by SI which approval shall
not be unreasonably or arbitrarily withheld.
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<PAGE>
16 AMENDMENTS
16.1 This Agreement cannot be amended or altered except by a written instrument
signed by the Parties. All waivers of any rights under this Agreement must also
be in writing and will only apply to the extent specified.
16.2 If any of the Parties believe the Agreement should be amended to further
the mutual obligations of the parties, it may advise the others of any changes
proposed and upon receipt of such a proposal, the Parties agree to discuss the
same in good faith.
17 NOTICES
17.1 Any notice or notification, order, instruction or other document to be
delivered or supplied pursuant to the terms hereunder shall be in writing and
shall be deemed to have been given if personally delivered or mailed by prepaid
registered mail or faxed to:
If to SI or SAPSE, when addressed to:
2001 E. Flamingo Blvd., Suite 100-B
Las Vegas, Nevada 89119
U.S.A.
Attention: Dr. Alfred T. Sapse, President
Fax:(702) 737-7016
If to SI Canada, when addressed to:
Suite 1002, Park Plaza
10611 - 98 Avenue
Edmonton, Alberta
T5K 2P7, Canada
Attention: Mrs. Anne Ryan, President
Fax: (403) 922-4489
-17-
<PAGE>
17.2 Any notice delivered personally shall be deemed to be received when left
during normal business hours at the address specified above, any notices sent by
prepaid registered mail shall be deemed to have been received on the third (3)
business day following posting and any notice sent by fax will be deemed to be
received on the next business day. Either party shall be entitled to change its
address for notice to such other address as may be substituted from time to time
by notice in writing to the other.
18 FORCE MAJEURE
18.1 Neither Party shall be liable to the other for any failure to perform or
delay in the performance of, its obligations hereunder, nor be deemed to be in
breach of this Agreement if such failure or delay has arisen from "Force
Majeure". "Force Majeure" means circumstances and conditions beyond the control
of the party affected thereby which render it impossible for such party to
fulfill its obligation under this Agreement or which will delay such
fulfillment. Force Majeure shall include, but not be limited to, the following
matters: war; acts of foreign enemy; civil war; earthquake; flood, fire or other
natural physical disaster, strike or lock-out. Shortages of labour, materials,
transportation or utilities shall not constitute Force Majeure unless caused by
circumstances which are themselves Force Majeure. Lack of finances or inability
to perform because of the financial condition of a party shall not constitute
Force Majeure.
18.2 If either Party is prevented from, or delayed in, performing any of its
obligations under this Agreement by Force Majeure, such party shall as soon as
possible notify the other party of the circumstances constituting Force Majeure
and of the obligations the performance of which will thereby be delayed or
prevented and the party giving the notice shall thereupon be excused the
performance or punctual performance, as the case may be, of such obligations for
the period of time directly attributable to such prevention or delay.
-18-
<PAGE>
19 CONFIDENTIALITY
19.1 SI Canada undertakes to maintain all Proprietary Information strictly
confidential, and shall not reveal Proprietary Information to third parties,
except and to the extent required by law or by court decision, or as necessary
to enable SI Canada, its employees, subcontractors and sub-licensees to perform
obligations under this Agreement or to manufacture, use, distribute or sell the
Products within the Territory.
19.2 SI Canada shall procure from its employees, subcontractors and
sub-licensees written commitments whereby they will undertake to abide by this
confidentiality obligation.
Being thus in full agreement, the Parties cause this Agreement to be
executed in four (4) counterparts of equal tenor, by their duly authorized legal
representatives.
In Las Vegas, Nevada:
Date: February 10, 1996
-----------------------------------------
STEROIDOGENESIS INHIBITORS, INC.
Per: /s/ Alfred T. Sapse
-------------------------------------------
Alfred T. Sapse, M.D., President
ALFRED T. SAPSE
In Edmonton, Alberta:
Date: February 10, 1996
-----------------------------------------
STEROIDOGENESIS INHIBITORS CANADA INC.
Per: /s/ Anne Ryan
------------------------------------------
Anne Ryan, President
-19-
<PAGE>
Agreement Between
THIS AGREEMENT made by and between the parties herein below, to wit
STEROIDOGENESIS INHIBITORS CANADA INC.
Suite 1002, Park Plaza, 10611 - 98 Avenue, Edmonton, Alberta, T5K 2P7, Canada -
(herein simply called SI Canada)
AND
STEROIDOGENESIS INHIBITORS INC.
2001 E Flamingo Blvd., Suite 100B, Las Vegas, Nevada, 89119, USA
(Hereinafter simply called SI)
WHEREAS: SI Canada has not, on the date below, finalized its payment for license
to SI, the following terms, which the above parties agreed to, will apply:
1. Not withstanding the signatures of a certain Schedule B "Exclusive Licensing
Agreement" between SI and SI Canada of February 10, 1996, SI Canada would pay
to SI the amount of US $90,000 still owed by SI Canada to SI on or before
March 31, 1996. Failure to pay these funds by March 31, 1996 will invalidate
the whole and entire Schedule B "Exclusive Licensing Agreement".
2. Upon final payment, SI (Sapse) will release the Specifications, Improvements,
Methods and Technical Know-how, Proprietary Information, and Technology to SI
Canada who will hold these items in a secured location, in accordance with
the non-disclosure terms stated in the licensing agreement, until they are
required for Product production.
Date February 10, 1996
Steroidogenesis Inhibitors Canada Inc. Steroidogenesis Inhibitors Inc.
Per: /s/ Anne Ryan Per: /s/ Alfred T. Sapse
--------------------------------- ----------------------------
Anne Ryan, President Dr. Alfred T. Sapse, President
<PAGE>
AGREEMENT
between
As parties to the first part:
STEROIDOGENESIS INHIBITORS INC., a Corporation incorporated under the
laws of the state of Nevada, having its principal office and place of
business at 2001 E. Flamingo Blvd., Suite 100-B, Las Vegas, Nevada,
89119, USA (hereinafter called "SI") and DR. ALFRED T. SAPSE,
(hereinafter called "SAPSE"). (SI and SAPSE collectively referred to
as the "Developers")
and
As parties of the second Part:
STERIODOGENESIS INHIBITORS CANADA INC., a Corporation incorporated
under the laws of the Province of Alberta, Canada, and having its
principal office and place of business at Suite #48, 240 - Baseline
Road, Sherwood Park, Alberta, T8H IS8, Canada, herein represented by
its Director, President and CEO, Mr. Warren Jackson (hereinafter
simply called "SI Canada").
WITH REFERENCE to:
AMENDMENT TO
SCHEDULE B, EXCLUSIVE LICENSING AGREEMENT
"Effective Date, 10th of February, 1996"
THIS AGREEMENT made by and between the parties herein below to wit:, that in
consideration of this Amendment, it is agreed that:
1. SI Canada will pay to SII, $50,000.00 USD, (fifty thousand dollars), upon
the signing of the Amendment to the Schedule B, Exclusive Licensing
Agreement, "Effective Date, 10th of February, 1996".
1 of 2
<PAGE>
2. SI Canada will pay to SI, an additional payment of $50,000.00 USD, (fifty
thousand dollars), this payment to be "Payment in Full", five to ten business
days after SI Canada is a Publicly Traded Company, trading on the Alberta
Stock Exchange. Failure to do so, will bring about the cancellation of the
AMENDMENT to SCHEDULE B, EXCLUSIVE LICENSING AGREEMENT, effective date 10th
of February, 1996, between SI Canada and SI, USA.
3. England, New Zealand, Australia and Brienic are four countries exempt from
the Commonwealth Countries referred to in Section 2.3 of SCHEDULE B,
EXCLUSIVE LICENSE AGREEMENT, Dated 10th of February, 1996, as an optional
country for inclusion into the Territory of SI Canada.
4. SI will provide to SI Canada a signed letter, on SI letterhead, stating the
approximate dollar value spent to date on the development of ANTICORT up to
the IND Approval to test stage.
5. SI will provide to SI Canada proof of Patent or Patent Pending protection in
the various countries applied for.
Being this in full agreement, the parties cause this Agreement to be executed
in four (4) counterparts of equal tenor, by their duty authorized legal
representatives.
In Las Vegas, Nevada, Dated: July 7, 1997,
STERIODOGENESIS INHIBITORS INC.
Per: /s/ Alfred T. Sapse
----------------------------------------
Alfred T. Sapse, M.D., President
STERIODOGENESIS INHIBITORS CANADA INC.
Per: /s/ Warren Jackson
----------------------------------------
Warren Jackson, President & CEO
2 of 2
<PAGE>
AMENDMENT TO
SCHEDULE B
EXCLUSIVE LICENSING AGREEMENT
"Effective Date, 10th of February, 1996"
THIS AGREEMENT made by and between the parties herein below to wit:
As parties to the first part:
STEROIDOGENESIS INHIBITORS INC., a Corporation incorporated under the
laws of the state of Nevada, having its principal office and place of
business at 2001 E. Flamingo Blvd., Suite 100-B, Las Vegas, Nevada,
89119, USA (hereinafter called "SI") and DR. ALFRED T. SAPSE,
(hereinafter called "SAPSE"). (SI and SAPSE collectively referred to
as the "Developers")
As parties of the second Part:
STERIODOGENESIS INHIBITORS CANADA INC., a Corporation incorporated
under the laws of the Province of Alberta, Canada, and having its
principal office and place of business at Suite #48, 240 - Baseline
Road, Sherwood Park, Alberta, T8H 1IS8, Canada, herein represented by
its Director, President and CEO, Mr. Warren Jackson (hereinafter
simply called SI Canada").
AMENDMENT TO SECTION 2.3
IT IS AGREED that section 2.3 of this agreement be amended to:
2.3 At any time from time to time within one year from the date of the drug
approval, SI Canada shall have the option to expand the Territory to include, in
addition to Canada, any other country still available for contractual agreement
which was a member of the British Commonwealth as at the Effective Date. Such
option may be exercised by notice to SI of the name of the country to be
included
1 of 2
<PAGE>
in the Territory accompanied by a deposit of $10,000. The total amount payable
to SI for the licenses and rights for any country added to the Territory by SI
Canada will be the applicable amount stated by Section 4.2 The expansion of the
Territory shall be effective as of the date of notice to SI.
Being this in full agreement, the parties cause this Amendment to be executed in
four (4) counterparts of equal tenor, by their duly authorized legal
representatives.
In Las Vegas, Nevada:
Date: July 7, 1997
---------------------------------------
STERIODOGENESIS INHIBITORS INC.
Per: /s/ Alfred T. Sapse
----------------------------------------
Alfred T. Sapse, M.D., President
ALFRED T. SAPSE
STERIODOGENTESIS INHIBITORS CANADA INC.
Per: /s/ Warren Jackson
----------------------------------------
Warren Jackson, President & CEO
WARREN JACKSON
2 of 2
<PAGE>
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (hereinafter "Agreement") is made
this 15th day of July, 1998, by and between Performance Strategies, Inc., a
Colorado corporation (hereinafter "Consultant"), whose principal place of
business is 9861 Titan Park Circle, Littleton, Colorado 80125 USA, and
Steroidogenesis Inhibitors International, (hereinafter "Client"), whose
principal place of business is 2001 E. Flamingo Blvd., Suite 100B, Las Vegas, NV
89119.
RECITALS
WHEREAS, Consultant is willing and capable of providing, on a
"best efforts" basis, various consulting and financial public relations services
for and on behalf of Client in connection with Client's interactions with
broker-dealers, shareholders and members of the general public (collectively
herein, the "Services"); and
WHEREAS, Client desires to retain Consultant as an independent
contractor to provide Client the Services, and Client desires to be retained in,
said capacity, upon the terms and conditions hereinafter set forth;
NOW THEREFORE, for and in consideration of the mutual promises
and covenants contained herein, and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Engagement. Client, upon the terms and conditions set forth herein
engages Consultant to perform and render such services of an advisory or
consultative nature in order to inform the brokerage community, Client's
shareholders and the general public concerning financial public relations and
promotional matters relating to Client and its business. Consultant promises and
agrees to perform and render the Services upon the terms and conditions set
forth herein and any and all such necessary, convenient and incidental work and
services required to provide said Services on a "best efforts" basis.
2. Scope of Consultant's Services. It is the intention of the parties
that Consultant will gather readily available and known public information
relating to Client and confer with the officers and directors of Client in an
effort to consolidate the information obtained into a summary form for
dissemination to interested parties. It is further intended that Consultant will
then distribute such information concerning Client to registered representatives
of broker-dealers and other persons, legal and natural, whom Consultant
determines, in its sole discretion, are capable of effectively disseminating
such information to the general public. Consultant shall not provide any
investment advice or recommendations, either express or implied, regarding
Client to any third parties; rather, Consultant will focus on contacting
persons and entities, generally via telephone communications, print media, and
person-to-person meetings, in order to familiarize said third parties with the
information concerning Client which Consultant has collected and is otherwise
available to the general public. Consultant shall not disseminate any
information concerning client without the express written authorization of
Client. Consultant agrees to submit written drafts of any and all such
information to the Client for Client's review and comment prior to dissemination
<PAGE>
by Consultant. Client agrees to diligently review each such draft on a timely
basis, to expeditiously provide written comments to Consultant and to authorize
the release of such information by Consultant when deemed appropriate by Client
in its sole and absolute discretion. Under no circumstances shall Client
authorize the dissemination of any information by the Consultant that contains
any misstatement of a material fact or that omits to state any material fact
that is necessary to make any of the statements made, in light of the
circumstances under which they are made, not misleading.
3. Independent Contractor. Consultant agrees to perform the Services
pursuant to this Agreement as an independent contractor, according to its own
manner and methods not inconsistent with the provisions herein, and without
direction and control of Client. Consultant, solely and exclusively, will
employ, direct, supervise, discharge, and fix the compensation, working
conditions and practices of its employees, be responsible for their payment and
will comply with all laws relating to such payment of employees. Consultant will
provide, at its sole expense, Employer's Liability and Workers' Compensation
insurance for all of its employees together with any other form of insurance
required by law to be provided for the protection of its employees. Further,
Consultant, solely and exclusively, shall be responsible for paying all taxes,
including insurance and contributions for social security and unemployment, and
self-employment taxes, which are measured by wages, salaries, or other
renumerations paid to Consultant's owners, directors, officers, shareholders,
employees, agents, or representatives, levied under existing laws, rules, or
regulations. Consultant, solely and exclusively, shall be responsible for, and
shall exercise complete control of its employees in all matters, disputes or
grievances arising out of or in any way connected with Consultant's operations.
4. Third Party Work of Consultant. Although Consultant may choose to
only perform work solely for Client for a defined period, nothing contained
herein shall be interpreted or construed, expressly or by implication, as
preventing Consultant from entering into similar agreements with others, or
holding itself out to the public as available to engage in such agreements with
others. Consultant shall notify Client of its performance of consulting services
for third parties which could conflict with Consultant's obligations under this
Agreement. Upon receiving such notice from Consultant, Client may terminate this
Agreement by notice in writing or consent to Consultant's outside consulting
activities. Client's failure to terminate this Agreement shall constitute
Client's ongoing consent to Consultant's outside consulting activities.
5. Term of Agreement. This Agreement shall be in full force and effect,
unless earlier terminated pursuant to the termination provisions provided
herein, for an initial term of six (6) months commencing July 15, 1998 and
terminating January 14, 1999. This Agreement may be extended for additional
renewal terms of six (6) months each upon such terms as may be agreed between
the parties in writing.
6. Time, Place and Manner of Performance. Consultant shall be available
for advice and counsel to the officers and directors of Client at such
reasonable and convenient times and places as may be mutually agreed upon in
writing between the parties. Notwithstanding the foregoing, Consultant shall, in
its sole discretion, allocate the amount of time required to provide any
specific service to Client.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed in several counterparts, by their respective, corporate,
partnership or business officers or owners, as the case may be, thereunto duly
authorized, as of the day and year first written above.
PERFORMANCE STRATEGIES, INC. STEROIDOGENESIS INHIBITORS INC.
By: /s/ Charles E. Jordan By: /s/ Alfred Sapse
------------------------------ ----------------------------
Charles E. Jordan, President Dr. Alfred Sapse, President
SUBJECT TO BOARD
OF DIRECTORS APPROVAL
<PAGE>
CONSULTING AGREEMENT
This Agreement is effective as of the 17th day of December, 1998, by
and between Steroidogenesis Inhibitors International, a Nevada corporation (the
"Company"), and The Augustine Equity Fund, a Canadian corporation (the
"Consultant").
WHEREAS, the Company is a publicly held company; and
WHEREAS, the Company desires to retain the Consultant to provide
certain services for the Company, as more particularly described in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. Duties and Involvement.
a. The Company hereby engages Consultant to provide
recommendations concerning the Company's capital structure and methods of
obtaining capital on a debt or equity basis; recommend and implement a plan to
increase investor and broker-dealer awareness of the Company; to review,
recommend, and assist in the implementation of broker and investor relations
programs; and assist in the preparation for and format of due diligence meetings
with brokers.
b. Consultant acknowledges that neither it nor any of its
employees or affiliates is an officer, director, or agent of the Company, that
in rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company, and that it
is not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
2. Term. This Agreement shall continue for three (3) years from the
date first above written.
3. Compensation.
a. As consideration for the services to be provided by
Consultant to the Company, the Company hereby issues and sells to the Consultant
or its designees One
1
<PAGE>
Hundred Thousand (100,000) shares of the Company's common stock, par value
$.0001, in accordance with and pursuant to the exemption from registration
available under Regulation D, Rule 504, promulgated under Section 3(b) of the
Securities Act of 1933, as amended.
b. The compensation payable to Consultant under Section 3.a.
hereof shall be Consultant's sole compensation and payment for the services to
be rendered by Consultant pursuant to this Agreement, and Consultant shall be
responsible for, and shall itself pay, the out-of-pocket expenses of Consultant
related to the performance of Consultant's services hereunder.
4. Services Not Exclusive. Consultant shall devote such of its time and
effort as may be necessary to the discharge of its duties hereunder. The Company
acknowledges that Consultant is engaged in other business activities and that it
will continue such activities during the term of this Agreement. Consultant
shall not be restricted from engaging in other business activities during the
term of this Agreement.
5. Confidentiality. Consultant acknowledges that it will have access to
confidential information regarding the Company and its business. Consultant
agrees that it will not, during or subsequent to the term of this Agreement,
divulge, furnish, or make accessible to any person (other than with the written
permission of the Company) any knowledge or information or plans of the Company
with respect to the Company or its business, including, but not limited to, the
products of the Company, whether in the concept or development stage or being
marketed by the Company on the effective date of this Agreement or during the
term hereof.
6. Investment Representation
Access to Information. The Company represents and warrants that it
has provided Consultant access to all information available to the Company
concerning its condition, financial and otherwise, its management, its business
and its prospects. The Company represents that it has provided Consultant with a
copy of the Company's private placement memorandum dated February 27, 1998,
together with the Company's unaudited financial statements for the nine months
ended September 30, 1998. Consultant acknowledges that it is aware that because
of the Company's financial position, the nature of the Company's business and
products in development, the shares sold to Consultant as compensation hereunder
involve a high degree of risk. Consultant further represents that it and its
advisors have been afforded the opportunity to discuss the Company with the
Company's management and to ask such questions of them as it has deemed
necessary.
2
<PAGE>
The Company represents that it has provided and will continue to provide
Consultant with any information or documentation necessary to verify
the accuracy of the information contained in the documents described in this
Section 6.
7. Assignment. This Agreement may not be assigned by either party
hereto without the written consent of the other but shall be binding upon the
successors of the parties; provided, however, that Consultant shall have the
right to sell or assign the shares sold hereby in accordance with prevailing
securities laws.
8. Arbitration. Any dispute arising between the Company and Consultant
arising out of or related to this Agreement or breach thereof shall be settled
by arbitration, which shall be conducted in Las Vegas, Nevada. Any award made by
such arbitrators shall be binding and conclusive for all purpose thereof, may
include injunctive relief as well as orders for specific performance, and may be
entered as a final judgment in any court of competent jurisdiction. No
arbitration arising out of or relating to this Agreement shall include, by
consolidation or joinder or in any other manner, parties other than the Company
or Consultant and other persons substantially involved in common questions of
fact or law whose presence is required if complete relief is to be afforded in
arbitration. The cost and expenses of such arbitration shall be borne in
accordance with the determination of the arbitrators and may include reasonable
attorney's fees. Each party hereby further agrees that service of process may be
made upon it by registered or certified mail or personal service at the address
provided for herein.
9. Notices. All notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given: (i)
when delivered personally to the party to be notified; or (ii) three (3)
business days after deposited in the U.S. or Canadian mail, postage paid via
registered or certified mail, return receipt requested. Notices to the Company
shall be addressed to its president at its principal executive office and to the
Consultant at the address set forth beneath the signature line, or to such other
addresses as either party may designate upon at least ten days' notice to the
other party.
10. Governing Law. This Agreement shall be construed by and enforced in
accordance with the laws of the State of Nevada.
11. Entire Agreement. This Agreement contains the entire understanding
and agreement between the parties. There are no other agreements, conditions or
representations, oral or written, express or implied, with regard thereto. This
Agreement may be amended only in writing signed by both parties.
3
<PAGE>
12. Non-Waiver. A delay or failure by either party to exercise a right
under this Agreement, or a partial or single exercise of that right, shall not
constitute a waiver of that or any other right.
13. Headings. Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.
14. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same agreement.
15. Binding Effect. The provisions of this Agreement shall be binding
upon the parties, their successors and assigns.
16. Severability. If any provisions of this Agreement except paragraphs
1 and 3, or application thereof to any person or circumstance, shall be deemed
or held to be invalid, illegal or unenforceable to any extent, the remainder of
this Agreement shall not be affected and the application of such affected
provision shall be enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement be effective as of the day and year first above written.
ATTEST: STEROIDOGENESIS INHIBITORS
INTERNATIONAL, a Nevada
Corporation
______________________________ By:____________________________________
Alfred T. Sapse, President
ATTEST: THE AUGUSTINE EQUITY FUND
______________________________ By:____________________________________
(Title)
4
<PAGE>
AGREEMENT
THIS AGREEMENT is made and entered into this 5th day of March, 1999, by
and between AIDS RESEARCH Alliance (ALLIANCE), a California nonprofit public
benefit corporation having an office at 621A North San Vicente Boulevard, West
Hollywood, California 90069, and Steroidogenesis Inhibitors International
Corporation (SII), a Nevada corporation having an office at 2001 E. Flamingo
Road, Suite 100-B, Las Vegas. NV 89119.
I. Purpose
This agreement is intended to enable Alliance and SII to obtain an
initial evaluation, through a trial to be conducted by Alliance in accordance
with a protocol that has been approved by both parties, of the positive and
negative effects on human subjects of an experimental drug developed by SII and
known as Anticort. SII will provide sufficient quantities of Anticort for the
trial. Alliance will conduct and compile the results of the trial in accordance
with this agreement and the protocol.
II. Anticort Trial Protocol
The Anticort trial shall be conducted in accordance with this agreement
and the protocol (the Protocol) approved by both Alliance and SII attached as
Exhibit A hereto. No modification, revision or amendment to the Protocol shall
be valid or effective for any purpose unless in writing and duly executed by
both Alliance and SII in the same manner as the Protocol attached as Exhibit A
hereto.
III. Delivery of Anticort
Throughout the course of the trial, SII shall deliver to Alliance such
quantities of Anticort as are, in the judgment of Alliance, sufficient to enable
Alliance to conduct the trial in accordance with the Protocol. All Anticort
delivered to Alliance shall have been manufactured, finished and filled in
accordance with the Good Manufacturing Practice regulations promulgated by the
United States Food and Drug Administration in Title 21 of the Code of Federal
Regulations, and packaged in a condition that permits consumption by humans in
accordance with all applicable laws and regulations of the State of California.
IV. Implementation of the Protocol
(a) Upon receipt of Anticort from SII in accordance with Section III
Alliance shall, subject to sections IV and XI, make all reasonable
efforts to implement the Protocol.
<PAGE>
SII shall consult and cooperate with Alliance on all aspects of and at
all times during the course of the Anticort trial.
(b) SII shall be responsible for payment of the costs of conducting the
Anticort trial in accordance with this section IV and section XI.
Alliance and SII agree that, based on the best information available to
each of them as of the execution of this agreement, the total costs of
the Anticort trial are, unless adjusted or revised in accordance with
paragraph (c) of this section IV, not expected to exceed the amount
shown on the budget attached as Exhibit B to this agreement. SII shall,
upon execution of this agreement, pay to Alliance the sum of
$226,885.75, representing an initial installment payment of thirty-five
percent (35%) of the total costs projected in the attached budget. The
balance of the budget amount shall be placed in an escrow account at the
bank of Alliance's direction. Interest earned while the funds are in the
escrow account shall accrue to the benefit of SII. Funds may be
withdrawn from the escrow account by Alliance in the amount equal to the
percentage of such costs, as adjusted or revised pursuant to paragraph
(c) of this section IV upon reaching the milestones indicated in the
following table:
<TABLE>
<CAPTION>
Amount (unless
Installment % of Total budget amended per
Number Budget section IV) Due Upon
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Enrollment of the first
2 5% $32,412.25 cohort of patients (the
first dose level of the
study - per the protocol)
- --------------------------------------------------------------------------------------------------
Completion of Week 4
3 5% $32,412.25 (Day 21) of the first
cohort.
- --------------------------------------------------------------------------------------------------
Enrollment of the second
4 5% $32,412.25 cohort of patients (the
second dose level of the
study - per the protocol)
- --------------------------------------------------------------------------------------------------
Completion of Week 4
5 5% $32,412.25 (Day 21) of the second
cohort.
- --------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Enrollment of the third
6 5% $32,412.25 cohort of patients (the
third dose level of the
study - per the protocol)
- --------------------------------------------------------------------------------------------------
Completion of Week 4
7 5% $32,412.25 (Day 211) of the third
cohort.
- --------------------------------------------------------------------------------------------------
Enrollment of the fourth
8 5% $32,412.25 cohort of patients (the
fourth dose level of the
study - per the protocol)
- --------------------------------------------------------------------------------------------------
Completion of Week 4
9 5% $32,412.25 (Day 21) of the fourth
cohort.
- --------------------------------------------------------------------------------------------------
Completion of Week 11
10 10% $64,824.5 (Day 70) of all patients
in all four cohorts.
- --------------------------------------------------------------------------------------------------
Delivery of all study data
11 (final) 10% $64,824.5 and the study report, as
provided for in the
Protocol.
- --------------------------------------------------------------------------------------------------
</TABLE>
(c) The amount of costs projected in the budget may be adjusted or
revised at such times and in such amounts as may be agreed upon
by Alliance and SII in connection with any modification,
revision or amendment to the Protocol. Study participants who
drop out of the study prior to completion will be replaced with
additional participants. Such replacements, if there are any,
shall increase the budget accordingly. Alliance shall be paid on
a pro-rata basis for any participants who drop out of the study,
pursuant to the visit-based, line-item budget. Any augmentations
to the budget necessitated by the replacement of drop-outs shall
be paid in the 10th installment, prior to the final delivery of
the study data and study report.
(d) SII may rely on the clinical study monitor hired by SII to
monitor this study to verify that budget milestones have been
reached.
<PAGE>
V. Representations and Warranties By SII
SII hereby represents and warrants to Alliance that it has clear and
unencumbered legal right and title to the use of Anticort, and that the delivery
to Alliance of Anticort and the use of Anticort pursuant to this agreement does
not and will not constitute a breach, infringement or other invasion of the
rights of any other individual, corporation or other entity to own, license,
exploit, possess or use for any purpose Anticort or any other substance, product
or tangible thing which any third party may claim Anticort is derived from or is
in any way related to.
VI. Audits or Investigations
For a period commencing with the execution of this agreement and
continuing through the end of the fifth anniversary of the date on which the
administration of Anticort to a human subject during the Anticort trial last
occurred, Alliance and SII each agree to notify the other within three business
days of the receipt of any inquiry from, or notice of an audit or investigation
of the Anticort trial by, any federal, state or local regulatory or enforcement
agency, and shall consult with each other prior to responding to any such
inquiry, audit or investigation.
VII. Ownership and Publication of Data, Results and Papers
(a) Subject to paragraphs (b), (c) and (d) of this section VII, all
writings of any kind and description delivered by either party to the other
concerning Anticort, or containing data from or results of the Anticort trial,
shall be owned by the author thereof and shall not be disclosed or delivered to
any third party for any purpose, other than pursuant to an order from a court of
competent jurisdiction, without the express written consent of the owner.
(b) Notwithstanding paragraph (a) of this section VII, Alliance or SII
may prepare formal research papers concerning the Anticort trial on a joint or
independent basis provided, however, (i) that each party shall provide due
credit for and acknowledgment of the role played by the other in the design and
implementation of the Anticort trial, (ii) that each party preparing a paper on
an independent basis shall provide the other with thirty (30) calendar days
notice in advance of the initial submission thereof, on a formal or informal
basis, to a publication, academic institution, professional society or other
organization and shall, upon request by written notice received at least three
(3) calendar days prior to the date for such initial submission, permanently
delete from the manuscript of such paper all reference to or credit for the
participation of the other party and (iii) upon request by written notice from
SII to Alliance of an intent to file a patent application for or in any way
relating to Anticort. Alliance shall delay the initial submission of any paper
for a period of ninety (90) days from receipt of such notice.
<PAGE>
(c) Notwithstanding paragraph (a) of this section VII, each party may,
upon the express written consent of the other party, disclose the existence of
the Anticort trial and the participation of the other party therein through one
or more communications to third parties.
(d) Notwithstanding paragraph (a) of this section VII, Alliance
expressly acknowledges and agrees that any and all patents, patent applications,
intellectual property and any and all inventions, discoveries, indications,
treatments, improvements, new technologies or other developments, whether
patentable or unpatentable and regardless of whether copyrightable (the
"Discoveries"), resulting from or arising out of the Anticort trial shall at all
times be and remain the sole and exclusive property of SII, and that Alliance
and its employees or agents shall execute and deliver to SII all instruments
required to confirm, convey or assign exclusive ownership of the Discoveries in
or to SII. SII hereby grants to Alliance a royalty-free nonexclusive right to
use the Discoveries in the course of the Anticort trial and in any research
undertaken by Alliance in the future on a nonprofit basis, and to publish its
findings with respect thereto in accordance with paragraph (b) of this
section VII.
VIII. Indemnification
SII and Alliance shall each indemnify, defend and save harmless the
other, and the directors, officers, employees and agents thereof, from and
against any and all liability, losses, damages errors and omissions and/or
expense arising from or relating to the Anticort trial, including, but not
limited to, defense costs and legal fees, as follows:
(a) SII shall indemnify Alliance from and against all claims for
damages for personal injury arising from, resulting or allegedly resulting from
the Anticort trial including, without limitation, bodily injury, emotional
distress, death, or other personal injury of any kind or description provided
that such personal injury is not attributable to the negligence or wrongful act
of Alliance or its agents and employees. Negligence or wrongful act shall
include the conduct of research contrary to the Protocol in one or more material
respects.
(b) Alliance shall indemnify SII from and against all claims for
damages for personal injury arising from, resulting or allegedly resulting from
the Anticort trial attributable to the negligence or wrongful act of Alliance
or its agents and employees including, without limitation, bodily injury,
emotional distress, death, or other personal injury of any kind or description.
Negligence or wrongful act shall include the conduct of research contrary to the
Protocol in one or more material respects.
(c) SII shall indemnify Alliance from and against all claims by third
parties for damages for or injunction against property damage arising from,
resulting or allegedly resulting from the Anticort trial including, without
limitation, any past, present or future damage to any property belonging to or
in the care, custody or control of Alliance, SII or any third party, including
physical damage
<PAGE>
to or loss of real property or tangible personal property, or any past, present
or future damage to or impairment of intangible property, including intellectual
property protected or allegedly protected by patent, patent pending, trademark,
copyright or common law or any claim of right under a patent, patent pending,
trademark, copyright or common law.
(d) SII shall indemnify Alliance from and against all claims or
expenses in or arising from any civil or criminal proceeding or inquiry brought
or commenced by any governmental agency arising from or relating to the Anticort
trial, unless such claims or proceedings arise from or are attributable to the
negligence or wrongful act of Alliance or its agents or employees. Negligence or
wrongful act shall include the conduct of research contrary to the Protocol in
one or more material respects.
IX. Disclaimer of Alliance Liability
SII agrees that Alliance, and the directors, officers, employees or
agents of Alliance, shall not be liable to and owe no duty to SII for any losses
incurred by SII and the directors, officers, employees or agents of SII
resulting from or incurred under this agreement including, without limitation,
bodily injury, death, personal injury, or any past, present or future damage to
any property, including physical damage to or loss of property belonging to SII
while such property is in the care, custody or control of Alliance, or any past,
present or future damage to or impairment of intangible property, including
intellectual property protected or allegedly protected by patent, patent
pending, trademark, copyright or common law or any claim of right under a
patent, patent pending, trademark, copyright or common law.
X. Insurance
Alliance and SII each hereby represent and warrant to the other that it
currently maintains comprehensive general liability insurance, including errors
and omissions or professional malpractice liability insurance, in the amounts of
not less than $1,000,000 per occurrence and $2,000,000 aggregate. Without
limiting the indemnification obligations of each party pursuant to section VIII,
or the disclaimer of Alliance liability pursuant to section IX, each of Alliance
and SII shall, for a period of two years commencing with the execution of this
agreement, (i) maintain insurance coverage at or above the current occurrence
and aggregate limits of the policies specified in the first sentence of this
section IX and (ii) obtain endorsements naming the other as an additional
insured under each such policy.
XI. Termination
Either Alliance or SII may, at any time, advise the other by written
notice that implementation or completion of the Protocol, or performance of this
agreement, has become
<PAGE>
impossible due to circumstances beyond the control of the party giving such
notice. This agreement and the Anticort trial shall terminate thirty (30)
calendar days following such notice. In the event of termination pursuant to
this section XI, the obligations of Alliance shall be limited to (i) returning
to SII all Anticort then currently in the possession of Alliance, (ii) executing
and delivering to SII all instruments required to effect compliance by Alliance
with its obligations pursuant to paragraph (d) of section VII and (iii)
providing SII with copies of all papers, tapes, disks, diskettes or other
tangible materials currently in its possession that would have been provided to,
or would have become the basis for other papers to be provided to, SII pursuant
to section VII of this agreement and the Protocol provided, however, that
Alliance shall have no obligation to create or in any way edit any papers,
tapes, disks, diskettes or other tangible documents, writings or other
materials. In the event of termination pursuant to this section XI, Alliance
shall be entitled to payment for, and SII shall pay within ten (10) business
days of receipt of an invoice therefor, all direct and indirect costs actually
incurred by Alliance in connection with the Anticort trial which, as of the date
of termination, remain unreimbursed through one or more of the installments
already paid by SII pursuant to section IV. Alliance and SII expressly agree and
acknowledge that, notwithstanding the termination of this agreement pursuant to
this section XI, the provisions of sections VI, VIII, X and XI shall survive and
remain in effect in accordance with their respective terms.
XII. Use of Parties Names
Alliance and SII will obtain prior written permission from each other
before using the name, symbols and/or trademarks of the other party in any form
of publicity. This shall not include legally required disclosure by Alliance or
SIT that identifies the existence of this Agreement.
XIII. Waivers
No waiver by either party of a breach of any provision of this
agreement shall constitute a waiver of any other breach of such provision.
Failure of either party to enforce at any time, or from time to time, any
provision of this agreement shall not be construed as a waiver thereof.
XIV. Entire Agreement and Construction With Protocol
This agreement shall constitute the complete and exclusive statement of
the understanding of the parties concerning their respective rights and
obligations arising from, relating to or concerning the Anticort trial. In the
event of any conflict or inconsistency between this agreement and the Protocol,
the provisions of this agreement shall govern and shall be given conclusive
effect.
<PAGE>
XV. Modifications
No modification, amendment, waiver or release of any provision of this
agreement or of any right, obligation, claim or cause of action arising
hereunder shall be valid or binding for any purpose unless in writing and duly
executed by both Alliance and SII in the same manner as this agreement.
XVI. Governing Law
This agreement shall be governed by and construed in accordance with
the laws of the State of California.
XVII. Notices
All notices by either party to the other hereunder, including notice of
a change in the address information set forth below, shall be in writing and
shall be delivered either by first class mail, postage prepaid, or by facsimile
transmission during regular weekday business hours which shall be effective only
upon receipt by the sender of confirmation by telephone of the date and time of
receipt thereof from a full time employee of the recipient, and shall be
addressed as follows:
Alliance: AIDS RESEARCH Alliance
Attention: Gregory Britt, CEO
621A North San Vicente Boulevard
West Hollywood, CA 90069
Fax: (310) 358-2431
SII: Steroidogenesis Inhibitors International Corporation
Attention: Alfred Sapse, M.D.
President
2001 Flamingo Road, Suite 100-B
Las Vegas, NV 89119
Fax: (702) 733-9505
<PAGE>
IN WITNESS WHEREOF, each of Alliance and SII have caused this agreement
to be subscribed in its behalf by its duly authorized officer on the day, month
and year first above written.
AIDS RESEARCH ALLIANCE SII CORPORATION
By /s/ Gregory S. Britt By /s/ Alfred Sapse, M.D.
--------------------- -----------------------
Gregory S. Britt Alfred Sapse, M.D.
Chief Executive Officer President
<PAGE>
LEXXUS CAPITAL
405 Lexington Avenue, 47th Floor
New York, New York 10174
212-972-3350
CONSULTING AGREEMENT
--------------------
This agreement ("Agreement") is entered into, this 14th day of May, 1999 between
Steroidogenesis Inhibitors, International ("Company") and Lexxus ("Consultant").
WHEREAS, Consultant has experience in corporate acquisitions, corporate finance,
financial public relations, and knowledge in the development of secondary
trading markets and
WHEREAS, the Company desires to engage Consultant to assist in raising capital
through the Public Markets, developing secondary trading markets for the
Company's securities, and for advice on financial public relations and
investment banking matters.
NOW THEREFORE, the Company and Consultant agree as follows:
1. CONSULTANT'S SERVICES
Consultant will provide the Company consulting service for one year in
connection with the following matters:
o Assist in compiling such financial information along with any other "due
diligence" information that may be required to assist the Company in raising
Equity Capital.
o Assist in raising capital for the purpose of implementing the Company's
transitional and organizational business plan.
o Assume responsibility for communications and correspondence with brokers,
money Managers, and Investors as it relates to corporate developments.
o Develop additional brokers relations program.
o Provide sponsorship for the Company at Regional Investment Banker Syndicate
seminars and other Broker Dealer sponsorship meetings, as it is mutually
agreeable between the Company and the Consultant.
o Consult with the Company about it's present and future securities structure.
o Provide additional guidelines regarding stock distribution and shareholder
relations program.
o Assist in coordination of financial public relations, including the delivery
of one CFA report to the Company.
o Assist in writing and/or editing all new announcements and vetting them to the
shareholders, and appropriate wire services as well as the public at large.
o Participate in and coordinate road trips for Company executives to provide
introductions and information to brokers, investment bankers, financial
analysts, and money managers about the Company.
o Develop Broker Database followed by other "target" areas as considered
beneficial by the Company.
<PAGE>
o Five Thousand dollars ($5,000.00) per month as a monthly retainer, payable in
cash or free trading stock, at the option of the Company.
o A ten percent Consulting Fee for any financing provided in the Company, plus
up to 3% in unaccountable expenses; or a five percent override for the
introduction of Financing through a Broker or as Investment Banker. The 10 per
cent commission can be paid in either cash or stock, or a combination thereof,
as determined by the consultant.
o Reimbursement of expenses on a Pre-approved basis by the CEO.
o Reimbursement of reasonable out of pocket expenses incurred by Consultant in
performance of the services contemplated by this Agreement.
o An incentive stock option, to be discussed as it relates to the Company's
reporting status with the SEC; i.e. based on the current availability, while
the Company is nonreporting and after fully reporting status is achieved.
3. INDEMNIFICATION
The Company agrees to indemnify and hold harmless Consultant and their agents
and employees against any losses, claims, damage or liabilities, joint or
several, to which Consultant or any other such person may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions, suits or proceedings in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material, or arising out
of or based upon the omission or alleged omission to state therein or necessary
to make the statements therein not misleading and will reimburse Consultant or
any such other person for any such legal or other expenses reasonably incurred
by Consultant or any such person in connection with investigation or defending
any such loss, claim, damage, liability or action, suit or proceeding provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in, or omission or alleged
omissions in reliance upon and in conformity with written information furnished
to the Company by Consultant specifically for use in preparations thereof. This
Indemnity agreement will be in addition to any liability which the Company may
otherwise have.
Consultant will indemnify and hold harmless the Company, each of it's directors,
each of it's officers, or persons, if any, who control the Company within the
meaning of the Act against any losses, claims, damages or liabilities to which
the Company or any such other person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages, or liabilities to which the
Company or any such other person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages, or liabilities (or actions, suits, or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact that may arise out of
or are based upon the omission to state therein a material fact that may arise
out of or are based upon the omission or the alleged omission to state therein
a material fact required to be stated therein or
<PAGE>
necessary to make the statement therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omissions in reliance upon and in conformity
with written information furnished in the Company by the Consultant specifically
for use in the preparation thereof and will reimburse any legal or other
expenses reasonably incurred by the Company or any such other person in
connection with investigating or defending any such loss, claim, damage,
liability, or action, suit or proceeding. This Indemnity Agreement will be in
addition to any liability which the Consultant might have.
Promptly after receipt by an indemnified party under this section of notice of
the commencement of any action, suit or proceeding, such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying party under
this section, notify the indemnifying party of the commencement thereof: But the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
section. In any case such action, suit or proceeding is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent may wish jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnifying party will not be liable to such indemnified party under this
section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
cost of investigation.
4. TERMINATION
This Agreement may be terminated by mutual agreement of the parties at any time
or by either party on thirty days written notice to the other party. The
provisions on Indemnification shall survive any termination of the Agreement by
either party.
5. COMPLETE AGREEMENT: MODIFICATION
This Agreement together with it's Exhibits, constitute the entire understanding
of the parties with respect to the matters it purports to cover, and no promise,
representation, or warranty other than those set out herein, shall be of any
force or effect. No modification or amendment of this Agreement shall be of any
force unless reduced to writing, signed by all of the record shareholders, and
deposited with the Corporation.
6. DESCRIPTIVE HEADINGS
The Descriptive Headings of this Agreement are for convenience only and shall
not control or affect the meaning or construction of any provision of this
Agreement.
<PAGE>
7. COUNTERPARTS
This Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one Agreement.
8. GOVERNING LAW AND VENUE
The interpretation and construction of this Agreement shall be governed by the
laws of the state of New York for the contracts made and to be performed in New
York. All obligations under this Agreement to purchase or sell shares or to give
notices for performance will be in New York, New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of this date first set forth herein.
Company _____________________ Consultant: _______________________
By: _________________________ By: _______________________________
Date: _______________________ Date: _____________________________
<PAGE>
Exhibit 10.7
This assignment is made by Dr. Alfred T. Sapse, M.D. residing at 3525
Leor Court, Las Vegas, Nevada 89121, ("ASSIGNOR") to Steroidogenesis Inhibitors
International, a corporation organized under the laws of the State of Nevada and
having an office at 101 Convention Center Drive, Suite 310, Las Vegas, Nevada
89109 ("ASSIGNEE").
FOR ONE U.S. DOLLAR ($1.00) AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION, the receipt of which is hereby acknowledged, ASSIGNOR does hereby
sell, assign and transfer to ASSIGNEE the entire right, title and interest,
together with all rights of priority, in and to my invention entitled CIRCADIAN
RHYTHM CORTISOL CHART AND METHODS OF USE, as described and/or claimed in an
application for patent of the United States of America, Serial No. ________. A
declaration for the application has been executed on ________________.
ASSIGNOR further does hereby sell, assign
and transfer to ASSIGNEE the entire right, title and interest, together with all
rights of priority, in and to ASSIGNOR'S invention as described and/or claimed
in any and all applications for patents based on the invention, including
divisionals, continuations, renewals, substitutes and reissues thereof, and all
rights of priority resulting from any of these patent applications, as well as
all foreign counterparts and extensions thereof, together with all patents
issuing on any of these applications for the full terms of all of the patents
which may be granted on the invention.
ASSIGNOR HEREBY AUTHORIZES ASSIGNEE to make applications for, to
prosecute such applications, and to receive patents for the invention in the
United States and any foreign countries, in ASSIGNEE's name.
ASSIGNOR HEREBY PROMISES AND AGREES that ASSIGNOR will execute or
procure any further necessary assurance of title to the invention and any
patents which may issue on the invention. ASSIGNOR will, at any time, upon the
request and without further consideration, but at the expense of ASSIGNEE,
deliver any testimony in any legal proceedings and execute all papers and do all
other things that may be necessary or desirable to perfect the title to the
invention, or any patents which may be granted therefor, in ASSIGNEE, its
successors, assigns, or other legal representatives. ASSIGNOR will, at any time,
upon the request and at the expense of ASSIGNEE, execute any continuations,
divisionals, reissues, or any other additional applications for patents for the
invention or any part or parts thereof and any patents issuing thereon are
hereby assigned to ASSIGNEE. ASSIGNOR will make all rightful oaths, and do all
lawful acts required for procuring and enforcing any of the patents, without
further compensation, but at the expense of ASSIGNEE, its successors, assigns or
other legal representatives.
ASSIGNOR HEREBY AUTHORIZES AND REQUESTS the Commissioner of Patents and
Trademarks to issue any and all Letters Patent of the United States for the
invention, resulting from any of the aforesaid applications to the ASSIGNEE.
Dr. Alfred T. Sapse, M.D., ASSIGNOR
Page 1
<PAGE>
STATE OF NEVADA :
: SS:
COUNTY OF CLARK :
Before me personally appeared Dr. Alfred T. Sapse, M.D., to me known to
be the same person described in and who executed the foregoing instrument, and
acknowledged that he executed the same, of his own free will and for the
purposes set forth.
Sworn to before me and subscribed in my presence this 15th of July,
1999.
Sarah H. Thompson
Notary Public
Page 2
<PAGE>
ASSIGNMENT
This assignment is made by Steroidogenesis Inhibitors, Inc., a
corporation organized under the laws of the State of Nevada and having an office
at 101 Conventin Center Drive, Suite 310, Las Vegas, Nevada 89109 ("ASSIGNOR")
to Steroidogenesis Inhibitors International, a corporation organized under the
laws of the State of Nevada and having an office at 101 Conventin Center Drive,
Suite 310, Las Vegas, Nevada 89109 ("ASSIGNEE").
FOR ONE U.S. DOLLAR ($1.00) AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION, the receipt of which is hereby acknowledged, ASSIGNOR does hereby
sell, assign and transfer to ASSIGNEE the entire right, title and interest,
together with all rights of priority, in and to my invention entitled
COMPOSITION OF ANTI-HIV DRUGS AND ANTI-CORTISOL COMPOUNDS AND METHOD FOR
DECREASING THE SIDE EFFECTS OF ANTI-HIV DRUGS IN A HUMAN, as described and/or
claimed in an application for patent of the United States of America, Serial No.
09/234,532, filed January 21, 1999. ASSIGNOR further does hereby sell, assign
and transfer to ASSIGNEE the entire right, title and interest, together with all
rights of priority, in and to ASSIGNOR'S invention as described and/or claimed
in any and all applications for patents based on the invention, including
divisionals, continuations, renewals, substitutes and reissues thereof, and all
rights of priority resulting, from any of these patent applications, as well as
all foreign Counterparts and extensions thereof, together with all patents
issuing on any of these applications for the full terms of all of the patents
which may be granted on the invention.
ASSIGNOR HEREBY AUTHORIZES ASSIGNEE to make applications for, to
prosecute such applications, and to receive patents for the invention in the
United States and any foreign countries, in ASSIGNEE's name.
ASSIGNOR HEREBY PROMISES AND AGREES that ASSIGNOR will execute or
procure any further necessary assurance of title to the invention and any
patents which may issue on the invention. ASSIGNOR will, at any time, upon the
request and without further consideration, but at the expense of ASSIGNEE,
deliver any testimony in any legal proceedings and execute all papers and do all
other things that may be necessary or desirable to perfect the title to the
invention, or any patents which may be granted therefor, in ASSIGNEE, its
successors, assigns, or other legal representatives.
ASSIGNOR HEREBY AUTHORIZES AND REQUESTS the Commissioner of Patents and
Trademarks to issue any and all Letters Patent of the United States for the
invention, resulting from any of the aforesaid applications to the ASSIGNEE.
Steroidogenesis Inhibitors, Inc.
----------------------------------
Alfred T. Sapse, for assignor
Page 1
<PAGE>
STATE OF NEVADA :
: SS:
COUNTY OF CLARK :
Before me personally appeared, Dr. Alfred T. Sapse, to me known to
be the same person described in and who executed the foregoing instrument, and
acknowledged that he executed the same, of his own free will and for the
purposes set forth.
Sworn to before me and subscribed in my presence this 15th of July 1999.
Sarah H. Thompson
---------------------------------
Notary Public
Page 2
