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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
|X| ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1999
|_| TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____to______
Commission file number 0-26775
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
(Name of small business issuer in its charter)
Nevada 88-038402
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
101 Convention Center Drive, Suite 310, Las Vegas, Nevada 89109
(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number (702) 735-7001
Securities to be Registered Pursuant to Section 12(b)of the Act:
Title of each class Name of each exchange on which registered
NONE NONE
Securities Registered Pursuant to Section 12(g of the Exchange Act:
Common Stock, $.001 par value per share
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |_|
The issuer's revenues for its most recent fiscal year (December 31, 1999) are
50,000.
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The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the average bid and asked price of such
common stock, as of March 30, 2000, was approximately $29,000,000.
The number of shares of the Common Stock issued as of March 30, 2000 is
16,575,909.
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
FORM 10-KSB
GENERAL FORM FOR REGISTRATION OF SECURITIES
Table of Contents
Part I
Item 1. Description of Business............................................
Item 2. Description of Property...........................................
Item 3. Legal Proceedings.................................................
Item 4. Submission of Matters to a Vote of Security Holders...............
Part II
Item 5. Market For Common Equity and Related Stockholder Matters..........
Item 6. Management's Discussion and Analysis
or Plan of Operation.....................................
Item 7. Financial Statements..............................................
Item 8. Changes in and Disagreements with Accountants.....................
Item 9. Directors, Executive Officers, Promoters
and Control Persons......................................
Item 10. Executive Compensation...........................................
Item 11. Security Ownership of Certain Beneficial
Owners and Management....................................
Item 12. Certain Relationships and Related Transactions...................
Item 13. Exhibits and Reports on Form 8-K.................................
Signatures.................................................................
2
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PART I
Item 1. Description of Business
Note
The public may read and copy any materials we file with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549.The public may obtain information on the operation of the Public Reference
Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site
that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC and the address of that
site is http://www.sec.gov. Our Internet address is www.anticort.com.
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 5, 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.
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 described below.
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort (tm) discussed
below.
The Company is a researcher and developer of pharmaceuticals for the
treatment of conditions and diseases where, in the opinion of the Company and
without clinical support, elevated levels of the stress hormone cortisol play a
significant role in the immune system. The Company has developed a drug
Anticort, 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. Management hopes that Anticort
may be shown to return levels of cortisol to normal when tested in clinical
research settings. Initially, the Company is focused on the application of
Anticort to benefit people with AIDS. While not a cure for AIDS, the Company
believes that Anticort, if clinically proven, may help people with AIDS. The
Company plans to manufacture Anticort itself and market it through one or more
licensees, wholesalers and pharmacies.
Cortisol, sometimes dubbed the stress hormone, is manufactured by the adrenal
gland. The adrenal gland is located above the human kidney gland and is
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popularly known to help individuals cope with the stress of everyday life,
especially in cases of elevated stress like in situations involving fear,
danger, or overwork. The gland supplies energy factors, such as glucose (a form
of sugar), also with the commonly known "adrenaline" and other factors. However,
when manufactured in large amounts as a result of continuous stress and/or
inherited genetic conditions, such as depression, and allergies, cortisol works
against the body, than for the body, in the opinion of Management, without
clinically proven support.
Anti-cortisol or steroidogenesis drugs, subject to clinical studies, which we
hope will conclusively confirm their efficacy or value, and approval of the U.S.
Food and Drug Administration ("FDA") for human use, are pharmaceutical compounds
intended to prevent or counteract the effects of elevated cortisol by reducing
cortisol in the human body, our belief without clinical support.
Our Company is seeking to complete the development, including clinical testing
and obtaining FDA approval, of our own anti-cortisol or steroidogenesis drug
called ANTICORT.
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort (tm).
Background of Anti Cortisols
It is essential to understand the foundational component upon which the
Company's products and technologies are based: a hormone called cortisol.
Cortisol is a hormone manufactured by the cortex, the outer layer of the
adrenal gland, located on top of the kidneys. In order to manufacture cortisol
the adrenal gland requires as a material the exogenous cholosterol, i.e.,
provided by outside foods. Such cholosterol is needed for cortisol production.
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, may be harmful to the body. The foregoing is our
opinion, and is not clinically proven.
The Product
ANTICORT(TM) is a drug, based upon procaine hydrochloride ("HCl"), subject
to clinical proof and governmental approvals, developed in capsule form, to
hopefully lower cortisol. HCl is better known as a local anesthetic used to numb
small portions of skin. Procaine is believed, in our opinion without clinical
proof, to lower cortisol, previously elevated. It is this aspect of procaine vs.
cortisol, that attracted our attention, and our decision to test it clinically;
i.e. as an anticortisol in the treatment of diseases associated with elevated
levels of cortisol. We, of course, hope to prove our opinion through clinical
trials.
While Management believes, pending future, if any, clinical proof, that
Anticort may help with high cortisol diseases, such as AIDS, and, later subject
to clinical studies, viral hepatitis B and C, aging and Alzheimer's, for reasons
of strategy, the Company is focusing its initial attention on AIDS. Note that
there is no clinical proof that the foreging diseases are due to high cortisol.
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort(tm).
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Anticort remains subject to substantial clinical trials, and related
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.
Beliefs, Claims
Management believes there is an association of elevated cortisol with certain
diseases. There are no clinical reports or studies that support this. However,
the common wisdom was that elevated cortisol follows the diseases, i.e. elevated
cortisol is often a result of these diseases and, as such, there was little
interest in dealing or researching this result. However, in a published
scientific paper by Dr. Alfred T. Sapse, Chairman of our Company, Stress,
Cortisol, Interferon and "Stress" Diseases I. Cortisol as Cause of Stress
Diseases, published in Medical Hypothesis 13: 31:44, 1984 in Glasgow, UK,
evidence, not clinically supported, was presented that high cortisol may cause
the diseases or symptoms of the diseases. This leads us to the natural
conclusion, which is our hope to prove through clinical trials, that if
anticortisol/steroidogenesis inhibitor drugs were to be utilized by persons
having such diseases, the application should be capable of inducing
statistically significant or beneficial results. (No clinical support exists.)
(Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort (tm).)
This 1984 article was the origin of our Cortisol/Anticortisol Concept, developed
by Dr. Sapse, a scientist, which stated simply that "if elevated cortisol is
found in certain diseases, then the use of anticortisol should be considered."
Since the publication of this paper, there were two Cortisol/Anticortisol
International Conferences, one in Paris (1995), and the second in Las Vegas
(1996). These conferences were attended by top researchers from 20+ countries,
including major universities and research centers such as the Russian Academy of
Medicine, Pasteur Institute of Paris, France; National Institute of Health
(NIH), representatives from 20+ U.S. universities and major pharmaceutical
companies, among them Abbott and Glaxo - Wellcome.
Asked by colleagues to pick out one disease where cortisol is elevated, and
where an anticortisol drug may presumably lower the level of cortisol and induce
beneficial effects, Dr. Sapse chose the AIDS/HIV+ diseases. As such, a decision
was made to focus the development and use of ANTICORT(TM) in the treatment of
the immune deficiency in an AIDS/HIV+ population. (This decision is not
clinically proven.)
Clinical Trials
A decision was made to prepare and submit an Investigation New Drug Application
(IND) to the FDA, requesting approval to clinically test ANTICORT(TM) in an HIV+
population, with CD4 cells over 300, viral load of more than 10,000 copies and
under anti-HIV medication.
This IND application was reviewed and modified, with the oversight of comments
and consideration of the requirements of the FDA, many times over a period of
one year, and ultimately received FDA approval to commence clinical studies of
the type Phase I dose related, to be followed by Phase II double blind studies.
This first Phase I study, carried out under the approval of the FDA (FDA
IND#52,663) is in progress right now at the AIDS Research Alliance, an
independent testing organization, in Los Angeles. The purpose of the study, in
summary, is to administer increased doses of ANTICORT(TM) to see if a) there are
any side effects, and b) to ascertain if any improvements would be noticed as
one or more levels of ANTICORT(TM) are used. The study is under way, and there
are no results to report either way at this time.
<PAGE>
Government authorities in the United States and other countries extensively
regulate the research, development, testing, manufacture, promotion, marketing
and distribution of drug products. Drugs are subject to rigorous regulations by
the FDA in the Untied States and similar regulatory bodies in other countries.
The steps ordinarily required before a new drug may be marketed in the United
States, which are similar to steps required in most other countries, include,
and may not be limited to:
- preclinical laboratory tests, preclinical studies in animals and
formulation studies and the submission to the FDA of an investigational new drug
(IND) application for a new drug or antibiotic (this has been accomplished by
the Company, as noted above--IND application) ;
- adequate and well-controlled clinical trials to establish the safety and
efficacy of the drug for each indication;
- the submission of a new drug application to the FDA; and
- FDA review and approval of the new drug application prior to any
commercial sale or shipment of the drug.
Preclinical tests include laboratory evaluation of product chemistry toxicity
and formulation, as well as animal studies. The results of Preclinical tests are
submitted to the FDA as part of an investigation new drug application. A 30-day
waiting period after the filing of each investigation new drug application is
required prior to the commencement of clinical test in humans. At any time
during this 30-day period or at any time thereafter, including as it may apply
to the Company, the FDA may halt proposed or ongoing clinical rails until the
FDA authorizes trials under specified terms. The investigational new drug
application process may be extremely costly and substantially delay development
of our product. Moreover, positive results of Preclinical tests will not
necessarily indicate positive results in clinical trials.
Clinical trials to support new drug applications are typically conducted in
three sequential phases, but the phases may overlap.
- -During Phase I - the initial introduction to the drug into healthy human
subjects or patients. The drug is tested to assess body metabolism, reactions
and safety, including side effects associated with increasing doses.
- -Phase II usually involves studies in limited patient populations to:
- assess the efficacy of the drug in specific, targeted indications;
- assess dosage tolerance and optimal dosage; and
- identify possible adverse effect and safety risks.
- - Phase III: if a compound is found to be potentially effective and to have an
acceptable safety profile in Phase II evaluations, Phase III, also called
pivotal studies, or advanced clinical trails, are undertaken to further
demonstrate clinical efficacy and to further test for safety within an expanded
patient population at geographically dispersed clinical study sites.
After successful completion of the required clinical testing, generally a new
drug application is prepared for filing, in which case the original application
must be resubmitted with the additional clinical information. Once the
submission has been accepted for filing, the FDA has 180 day to review the
application and respond to the applicant. The review process is often
significantly extended by FDA requests for additional information or
clarification. The FDA may refer the new drug application to an appropriate
advisory committee for review, evaluation and recommendation as to whether the
application should be approved, but the FDA is not bound by the recommendation
of an advisory committee.
If FDA evaluations of the new drug application and the manufacturing facilities
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are favorable, the FDA may issue either an approval letter or an approvable
letter. An approvable letter will usually contain a number of conditions that
must be met in order to secure final approval of the new drug application and
authorization of commercial marketing of the drug for certain indications. The
FDA may refuse to approve the new drug application or issue a no approval
letter, outlining the deficiencies in the submission and often requiring
additional testing or information.
The duration of the Phase I, for the US clinical trial of Anticort, may be about
six months, since only one dosage would be used, one at a time, in sequential
order, but the industry recognizes this may take more time, but there is no
guarantee of how long it will take or whether it will be successful.
In the case of Anticort, the Phase II study consists of double blind clinical
testing, using the dose of drug that looked the most promising in the Phase I b.
Double blind studies mean that the drug would be administered under a code
number known only by the monitor of the study, by which patients would receive a
capsule containing either the active drug or a placebo, i.e., an inactive
ingredient (for example, sugar, oatmeal, etc) identical in color with the
original product. The duration of the phase II, double blind, where the product
is used in one or two groups of 40 patients (twenty on the active ingredient and
twenty on placebo) would take about 12 to 14 months.
The phase II double blind studies would be followed by phase III pivotal
studies, where the drug would be administrated, still on double blind basis, to
200-3000 patients.
Only after these studies, if successful, an NDA (New Drug Application) would be
submitted to the FDA requiring the issuance of an approval or approvable letter.
In the case of AIDS, the situation is different since it deals with a killer
disease, for which help is needed as soon as possible. As such if a drug shows
promises of being effective it might be put on a fast track status with
subsequent conditional or compassionate approval. Approval if granted, would
take less time and without going to the extensive Phase III. In certain cases,
where a drug is showing outstanding statistical and clinical results, approval
might be granted after only one clinical study, with the obligation to continue
with additional studies, even after approval.
In the case of Anticort we do not know or foresee future events, as such there
is no guarantee that the drug would be successful when used in HIV positives
individuals or the duration of clinical studies needed, or that "first track"
status will apply. We may fail.
Also, in 1998, an Investigational New Drug Application was submitted to the
Comisa de Medicamente (the Country of Romania counterpart to the U.S. FDA),
which included U.S. documentation and protocols, to carry out a clinical study
with a child dosage or version of ANTICORT(TM), in the treatment of five groups
(four on ANTICORT(TM) and one on placebo) of children with HIV+. After receiving
the approval to proceed, this study was started, and is in the advanced stage at
the University of Craiova, Dept. of Pediatric Infectious Diseases, Romania. We
expect the final results in September-October of 2000, after which, subject to
favorable results, we will submit a New Drug Application, requesting
ANTICORT(TM) infacaps (children dosage capsules) approval in Romania. (No
reportable results, either way, are yet available.)
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort.
Steps to Commercial Viability, Expenses, and Timeframe
The interest of the Company is to finalize the development of a commercially
viable product. This requires certain steps to be taken. Some of these steps can
be anticipated, others may be necessary as we proceed. No assurance can be given
<PAGE>
that we will be successful in undertaking any or all the necessary steps. The
steps taken by the Company and which must be taken are, for the most part,
focused upon, hopefully, obtaining final FDA approval of ANTICORT, and are
believed to be substantially the same as ones taken by other pharmaceutical
companies in trying to secure approval for drugs.
The Company, in collaboration with the AIDS Research Alliance (abbreviated as
"Alliance" sometimes in this document) in Los Angeles, started the assiduous
task of developing a protocol, which by itself represented more than one year's
work, due to the changing aspects of AIDS therapy. A protocol is a game plan
whereby a pharmaceutical company, like our Company, and a testing organization,
like the Alliance, agree on what test should be done, what results will be
considered significant or important enough to look for, and the timing and other
points of the testing.
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort.
In the normal course of events, and assuming that the results are as favorable
as we believe they will be, we should expect to go to the FDA around August
2000, to ask for "fast track" approval. The FDA would normally have 90 days to
respond, by either approving the product, something we think could be advocated
given the threat of the rapid extension of AIDS in the world; or the FDA might
request additional studies. It should be added that another clause in FDA
regulations states that if only one study shows remarkable results, then the FDA
might consider the study to put it on "fast track" and eventually approve it. We
hope there may be at least one remarkable result, and that the FDA will allows
us, with no guarantee, to proceed on a fast track.
As noted above, under the above "Clinical Trials," the FDA may designate a
product application on "fast track" approval. If a drug is "fast track," then
the FDA puts the application at the top of its approval committee schedule list.
This provides for a rapid turn around for the administration part of the FDA
approval process, and could, approximately, save from 6 to 18 months (in
Management's opinion based on its own knowledge of the matter and without
independent confirmation) in the approval process. If the Company's application
is not designated for "fast track" approval, then it will have to follow the
normal approval process summarized above under "Clinical Trials."
Research and Development
We estimate we spent, on research and develpment, including payments towards
clinical studies, approximately $50,648 and $145,291 during the fiscal years
ended December 31, 1998 and 1997, respectively, and approximately $376,591 for
the year ended December 31, 1999.
Our expeditures, unaudited, to December 1999, approximate $3,000,000 on ANTICORT
by our Company, including subsidiary, relate mostly to working capital, and the
additional research on ANTICORT, attendance at International AIDS Conferences,
helping to participate in and the organizing of the two International
Conferences on Cortisol/Anticortisol, expenses incurred over a year with the
AIDS Research Alliance in Los Angeles, trips, documentation and submission of
the Investigational New Drug Application in Romania, and other research related
expenses.
It is of interest to note that it is our belief, from our knowledge of the
industry, that the rule of thumb for a pharmaceutical corporation to reach the
Phase I status is approximately $10,000,000, and so we believe we are doing well
to try and streamline our expenditures.
Regarding future expenses, leading to where we would apply for final FDA
approval, should the research studies present results that are favorable, are
estimated by the Company, with the advice of consultants like CATO Research
Ltd., a specialized organization located in Durham, North Carolina, to be
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approximately $10,000,000. ("CATO"-is a research and development organization,
with offices in Wahington D.C., North Carolina, and elsewhere, that assists
pharmaceutical and biotechnology companies design, and execute development
strategies as to products.) Our President is a Senior Vice President of CATO. If
we reach this point, and this is expended, additional money will be necessary
for sales and marketing, manufacturing, working capital and other similar cost;
again, once we are, hopefully, in production and selling the product. This may
mean millions more will be needed by the Company, and it is difficult to
estimate the figure at this date.
We hope that the clinical studies, and namely Phase I and II, will be completed
by year end 2000 or early 2001. By early 2001, approximately February, 2001, we
hope to be in process with the FDA for their review and consideration of final
FDA approval, with final approval by mid 2001. Our best guess, without any
guarantee, is that product manufacturing and sale on a commercial basis may
start some time next year before year end 2001. We are, however, open to
potential licensing by our Company of the product for other countries, and
success in this endeavor, with no assurance, could result in licnese and similar
revenues sooner.
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort (tm).
We hope to meet the capital needs to undertake the steps through, primarily
private funding, and later public registered financing, if possible.
In summary, on February 10, 2000, the Company obtained a commitment, in the form
of a written agreement, for $2,000,000 (of which, $425,000 has been received)
from a shareholder, Mr. Alfred Peeper, who confirmed he was an accredited
investor as such term is defined under Regulation D of the SEC, to subscribe for
restricted shares in the Company, at a price equal to 80% of the 30 day low bid
price, just before subscription, in one or more subscriptions, upon request of
the Company, subject to the Company; providing him with piggyback registration
rights to include his shares in a future registration of the Company, and that
the Company is in good standing with the State of Nevada, publicly trading, and
the Company is not in breach of the terms of the subscription. The Company
anticipates drawing down or receiving $500,000 during the first month of April,
2000, and the balance on a monthly basis, in such amounts as requested by the
Company, until year end 2000. The Company believes that the funding, once and if
completed, as well as others in potential private placements and an eventual
registered public offering, if successful, will assist the Company in meetings
its cash needs, but there is no guarantee.
Patents and Trademarks
In 1997, 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. The trademark number, issued by the U.S.Patent
and Trademark Office, is 2,176,048. 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
<PAGE>
United States or in other countries. While these patents are pending, the
Company cannot estimate when these will be issued, or rejected.
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 tried to protect its 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.
Markets for Anticort(R)
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort (tm).
Initially the Company will focus on the use of Anticort(R) in HIV+
patients. It was recently estimated that 33.8 million people worldwide are
infected with HIV, 16.3 million dead already, 5.3 new cases in 1999 alone, and
16,000 newly infected people every day.
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.
This focus will require the successful completion of clinical studies.
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort (tm).
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 towards attacking the virus, with a number of leading
pharmaceutical companies actively engaged in research and development of
protease inhibitors and other anti-HIV agents in the fight against HIV and AIDS,
with at least 12 products of this type present on the market.
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.
On-Going Clinical Studies
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort (tm).
Aids Research Alliance Clinical Project. On November 18, 1996, the Company
<PAGE>
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.
The FDA granted the Company IND# 52,663, and based upon documentation received,
approved commencement of clinical studies. The Company believes this is
significant. The significance of the FDA granting IND# 52,663 and allowing the
clinical study to commence is a recognition that our documentation has merit, in
the sense that there are no red flags to potential side effects of the product.
Still, the pending studies are still needed to document not only the safety of
the product, but also its efficiency. While exact figures are not known, our
knowledge of the industry leads us to estimate that a majority or more of the
applications filed with the FDA by other applicants are rejected. We believe the
FDA allowing us to proceed is an important milestone in the development of the
product, and is one we have succesfully achieved. This, however, should not be
interpreted that we have final FDA approval. 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. As of
January 2000, the AIDS Research Alliance has completed the first step of the
study (i.e. the first dose of ANTICORT(TM)) and is enrolling patients for the
second step,(second dose). Through March 17, 2000, approximately $291,800 had
been paid to the AIDS Research Alliance. If the Company cannot continue to pay
the Alliance as the study progresses, or delays in paying, the Alliance may
cease or terminate its work, with a failure to continue the study bringing the
Company to a standstill and material adverse effect to the Company.
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.
The Company is currently involved in litigation with Altachem, as disclosed
under the Section titled "Legal Proceedings" below. Since the Company is,
nevertheless, pursuing its own studios, Management's opinion is that the loss of
the Canadian study will not have a material impact on the Company or its plans.
Romanian Study. 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 take about 12 months. The study, due to changes
<PAGE>
in protocol and lack of special instrumentation that finally arrived in
September 1999, started in September 1999. Outside the United States, the
Company ability to market its product will also be contingent upon receiving
marketing authorizations from the appropriate regulatory authorities. The
foreign regulatory approval process, in summary, may often include all or many
of the risks and issues associated with FDA approval set forth above. The
requirements governing the conduct of clinical trials and marketing
authorizations vary widely from country to country.
The process of obtaining a New Drug Application in Romania, involves the results
obtained in children HIV positives after using Anticort in different dosages
over a one-year treatment. At the present time, the Romanian study reached the
second half level, that means that the children were under treatment for six
months (March, 2000) and it is estimated it would be completed after another six
months treatment in Sept-Oct. 2000. If the results are statistically favorable,
a New Drug Application (NDA) will be submitted in November 2000 to the
regulatory Romanian agency (Comisia Medicamentului). From discussions with
Romanian FDA officials, the process of approval may take 2-3 months, due to the
fact that AIDS in children is involved, but there is no guarantee that the
regulatory Romanian organization would approve it as such, not require more
information or tests; or will not raise issues or matters that should be
clarified. Assuming that an approval or approvable letter would be issued, and
there is no guaranties that this type of approval shall be received, the Company
would be granted a conditional/provisional approval, meaning that the Company
will still be under obligations to complete a number of additional clinical
studies within a minimum of one, or maximum two, years.
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.
This long-term project, which still has no scheduled termination date, is
intended to provide answers, if any, to the potential role of Anticort in
cancers and aging.
The Retinitis Pigmentosa (RP) Transgenic Mice Project. RP Transgenic Mice,
are mice which develop an eye condition similar to retinitis pigmentosa (RP).
The disease experienced by such mice, similar to RP, eventually results in
blindness in most if not all cases. This disease is induced or intentionally
caused in the laboratory to then permit researchers to apply a drug or treatment
to such mice in the hopes of then being able to measure an improvement or cure.
The further hope is that the same drug or treatment will then also be useful in
a treatment or cure of RP. 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,
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort (tm). 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.
<PAGE>
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 eventually generate sales of the Anticort(R)
product by setting a compelling price point and by developing, with the help of
our consultants, a 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 as part of this strategy, which is under development and we
hope to complete prior to, hopefully, final FDA approval.
The Company is limited in the final formulation and execution of its
marketing strategies to not only conform to the condition of the Company,
including its resources, at appropriate points in the future, but also to
regulatory provisions of the FDA as to marketing and sale. When the Company has
it product in late stages of the FDA process, the Company plans to hire a
marketing firm, or consultant, that specializes in the pharmaceutical industry,
relating to marketing and sales, and the Company intends to then finalize its
marketing and sales plans.
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 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 Institute of Health
(NIH) and representatives from major multinational - pharmaceutical
companies. There were presentations at this conference relating to
potential 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.
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort (tm).
Licensing Agreements
In February 1996 SI, Inc., our Subsidiary, 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.
<PAGE>
It is believed that the Agreement is terminated, and the parties are in
litigation. See the section herein, "Legal Proceedings."
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.
The Company also engaged, at the end of 1998, a consultant, for 200,000
shares, to help with services in connection with advising the Company on
business strategies, identifying new business opportunities & licenses,
including identifying other companies involved in pharmacutical development as
potential partners or targets for acquisition.
Employees
The Company has four full-time employees.
Item 2. 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.
Item 3. Legal Proceedings
On November 4, 1999 the Company filed suit in Nevada, District Court,
Clark County, Case No. A410592, against Altachempharma, Ltd. of Alberta, Canada,
formerly known as Steroidogenesis Inhibiors Canada, Inc. and Steroidogenesis
Inhibitors Canada, Inc. (the "Defendants") seeking a declaratory judgement,
damages and other relief as determined by the Court in relation to a dispute
with the Defendants. Steroidogenesis Inhibitors Canada, Inc. ("SI Canada"), is
the licensee for the Canadian territory as to the ANTICORT (TM) product, and
Altachempharma, Ltd. is believed to be the parent. The Company claims that the
Defendants have interfered with the arrangements which were made with Pashua
Parners, L.P. ("Pashua"), an entity which intended to provide funding and other
benefits to the Company. While the Company was in the course of finalizing
arrangements with Pashua, the Defendants took the position that they were
entitled under the License Agreement to step into the shoes of Pashua as to the
pending transaction, even though they were a mere licensee for one Territory.
Likewise, even though the Company has not been served, the Company believes that
on or about January, 2000, a suit was filed in the Queens Bench in Calgary
Canada by a Defendant against the Company seeking to enforce the Defendant's
position above, and the Company has retained counsel in Canada to represent and
assist the Company. The Company believes that the Agreement with SI Canada
providing it with a license as to Canada is terminated due to the actions of the
licensee in breach of contract. The Company intends to vigourously pursue and
<PAGE>
defend these suits upon advice of counsel.
Item 4. Submission of Matters to a Vote of Stockholder Matters
None
Item 5. Market For 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 the quarter ended December 31,
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
Quarter Ended September 30, 1999 1.97 0.4375
Quarter Ended December 31, 1999 .875 .3125
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 12 member firms of the NASD are
currently acting as market makers for the common stock.
As of February 3, 2000 there were 205 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 February 3, 2000 there were 15,593,909 shares of common stock issued
and outstanding. Of those shares 12,412,604 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, 6,644,962 shares held by affiliates may be sold pursuant
to a registration statement or pursuant to Rule 144.
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.
<PAGE>
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 6. 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. (As to fund raising, the
Company has received capital in private placements of restricted stock to
persons known by Management and believed to be accredited investors.) In
summary, on February 10, 2000, the Company obtained a commitment for $2,000,000
(of which, $425,000 has been received) from a shareholder, Mr. Alfred Peeper,
who confirmed he was an accredited investor, as such term is defined under
Regulation D of the SEC, to subscribe for restricted shares in the Company, at a
price equal to 80% of the 30 low bid price, just before subscription, in one or
more subscriptions, upon request of the Company, subject to the Company:
providing him with piggyback registration rights to include his shares in a
future registration of the Company, and that the Company is in good standing
with the State of Nevada, publicly trading, and the Company is not in breach of
the terms of the subscription. The Company believes that the funding, once and
if completed, as well as others in potential private placements and an eventual
registered public offering, if successful, will assist the Company in meetings
its cash needs, but there is no guarantee. 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.
While the Company is in the FDA Clinical Trial Phase it has not generated
any revenues to meet capital needs, it has been succesful in obtaining capital
infusions in private transactions from existing shareholders or persons familiar
with Management. These sporadic private placments are only to persons who are,
in Management's opinion, accredited investors, willing to assume the risk of
loss of their entire investment, and Management hopes that these subscriptions
will continue. The Company is seeking an underwriter to underwrite a public
offering of securities, and has already commenced discussions with interested
parties in New York, primarily, in the hope that one will be engaged. However,
no committment exists for continued investments, or for any underwriting, but
the Company has thus far been able to meet its capital needs, and believes that
extensive discussions with various potential sources of funding may eventually
reach definitive agreements with related fundings. The recent additon of members
to Management, namely Mr. Wollen and Dr. Long, who have extensive contacts with
<PAGE>
investors, funds, venture capitalists, broker dealers, and the like, will help
in this pursuit. The Board of Directors is prepared to file an SEC Form SB-2
Registration Statement in the near future to, with conformity with applicable
laws and regulations, offer registered securities to the market. It is
contemplated that this will be undertaken with an underwriter, though one has
not been isolated, or on a self-underwritten basis. No definitive plans are in
place, but the Board is actively discussing options. Given the Company has been
able to substantially meet its cash needs during the past 12 months, and
Management's estimation of what may occur in the months ahead, the Company
believes it will be able to continue to find avenues to obtain capital needed
for operations.
The Company needs to complete various research and development steps as
part of its plans. These steps include the completion of Phase I and start and
completion of Phase II clinical trials as to its ANTICORT product. These steps
also include the application and obtaining of FDA final approval, and
development of a complete product manufacturing and marketing plan or plans. 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
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
Anticort(R) directly, or 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.
Readers are cautioned that there is no guarantee of the Company successfully
obtaining the necessary governmental approvals for Anticort (tm).
Liquidity and Capital Resources
The Company had cash of $494 and $1,706 at December 31, 1998, and 1999,
respectively. From its organization through December 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. The Company paid $291,800 of the $650,000 contract
amount, through March 15, 2000.
The Company has incurred research development stage losses since
inception. These losses consist primarily of research and related expenditures,
marketing costs, and consulting, and administrative overhead and expenses,
incurred while the Company seeks to complete development of its product, which
includes studies and obtaining FDA final approval. No significant revenues have
been earned by the Company, or cash flow from operations, to help pay these
operating needs.
These losses were $1,671,255 and $1,009,972 during the years ending 1999
and 1998, respectively. The increase in the loss during 1999 was primarily the
result of increased expenditures for research and development, consultants for
business, public relations, and financial strategies, and legal expense.
The Company's investing activity consists of purchases of technology
rights, office furnishings, and patent registration costs. The cumulative totals
for such expenditures are $ 108.969, $47,796, and $55,547, respectively, through
December 31, 1999.
<PAGE>
Both the operating and investing cash flow deficits have been chiefly
funded through proceeds from private financing. This financing consists
primarily of issuance of stock for cash, or alternatively the conversions of
debt, in the form of loans or debentures, in to stock.
If we are unable to obtain necessary financing, the Company will have to
close its doors, or simply put, cease active operations, but not necessarily
abandon the project. Employees of the Company, and third parties, are committed,
not on a contractual but on a verbal or moral basis, to seeing the project
through, but may not be successful if there is no money to meet working capital
demands. However, in the light of the new additions to the Management of the
Company, consisting of persons (namely Dr. Long and Mr. Wollen) whom potential
investors, and other funding sources, may find comfort in due to their joining
Management, we hope to secure additional financing in private transactions, or
in a future registered public offering without any guarantee, of course, of
success.
On a long term basis, the Company will need substantial capital to
complete the business plan described herein. Depending upon the success of its
efforts, substantial capital will be needed if the Company were to obtain FDA
final approval and went forward to manufacture and distribute its product.
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 received one binding commitment for
equity or debt financing, but has not 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.
In summary, on February 10, 2000, the Company obtained a commitment, in the form
of a written agreement, for $2,000,000 (of which, $425,000 has been received)
from a shareholder, Mr. Alfred Peeper, who confirmed he was an accredited
investor as such term is defined under Regulation D of the SEC, to subscribe for
restricted shares in the Company, at a price equal to 80% of the 30 day low bid
price, just before subscription, in one or more subscriptions, upon request of
the Company, subject to the Company; providing him with piggyback registration
rights to include his shares in a future registration of the Company, and that
the Company is in good standing with the State of Nevada, publicly trading, and
the Company is not in breach of the terms of the subscription. The Company
anticipates drawing down or receiving $500,000 during the first month of April,
2000, and the balance on a monthly basis, in such amounts as requested by the
Company, until year end 2000. The Company believes that the funding, once and if
completed, as well as others in potential private placements and an eventual
registered public offering, if successful, will assist the Company in meetings
its cash needs, but there is no guarantee.
Mid 1999, before Mr. Wollen became an officer of the Company, his company,
Windermere Capital, L.L.C., advanced, on behalf of Pashua Partners, a company
which was under negotiations for a funding of the Company, the sum of $50,000 as
an initial payment of a $500,000 intended loan to the Company. The funding
transaction was not completed due to matters relating to certain litigation (See
Part II, Item 2, Legal Proceedings). The Company and Mr. Wollen, have not
finalized the arrangement for the repayment of this advance, but Mr. Wollen has
not made any demands.
Item 7. Financial Statements
Please see the attached Financial Statements and accompanying footnotes,
which should be read with the statements.
<PAGE>
8. Changes In and Disagreements With Accountants
None.
Item 9. 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> <C>
Alfred T. Sapse, M.D. 74 Since Oct. 1997 Chairman of the Board
Board
Walker Long, M.D. 50 Since Feb. 2000 Director and
President
Mr. Albert "Bert" Wollen 53 Since Feb. 2000 Director and Chief
Executive Officer
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
Paul Burkett 77 Since Oct. 1997 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, since October
31, 1997. 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). Subsequent
to termination of his employment with Spectrum Pharmaceuticals (March 1992), Dr.
Sapse moved from Miami, Florida to Las Vegas, Nevada.
Between June of 1992 and May 1993, he gathered information about procaine, the
main ingredient of the drug ANTICORT(TM). This documentation, including
preclinical, clinical, pharmacological data and clinical trials spanned over 60
years , i.e. since 1940. Once all of this documentation was in his possession,
and the design of the final formulation of his ANTICORT drug was ready, Dr.
Sapse proceeded to form Cortisol Medical Research, Inc. on May 24, 1992, a
Nevada Corporation.
<PAGE>
Subsequently. Dr. Sapse conveyed his interest in ANTICORT(TM), the main asset of
Cortisol Medical Research, Inc., into a new Nevada corporation, Steroidogenesis
Inhibitors, Inc. on September 5, 1994, which was capitalized for 10,000,000
shares, out of which 5,100,000 shares were issued to Cortisol Medical Research
in exchange for the ANTICORT(TM) rights. Other terms of the transaction were
that should SII raise$5 MM through a Private Offering or IPO, then Cortisol
would be paid $250,000, plus a sliding scale royalty. It should be noted that,
at that time, Dr. Sapse was President of both Cortisol Medical Research, Inc.
and Steroidogenesis Inhibitors, Inc., and remains so up to the present time.
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.
Dr. Long has been a Director, and the President, of the Company since
February 14, 2000. Dr. Long is the Senior Vice President of Research and
Development for CATO Research Laboratories, Durham, North Carolina, since May,
1999 and is a Research Professor of Pediatrics, School of Medicine, University
of North Carolina at Chapel Hill, since 1994. From 1994 to 1998 he was the U.S.
publication editor for the internationally known Journal of Pharmaceutical
Medicine. He has been a member of the faculty of the School of Medicine since
1983. From January, 1996 to the end of 1998, he was a Director of the Office of
Telemedicine at the University, focusing upon digital technology innovations in
the field of medicine. From 1983 to 1993, he was the Director of Clinical
Research at The Wellcome Research Laboratories at Burroughs Wellcome Co.
(Research Triangle Park, North Carolina), and during such tenure was
instrumental in obtaining FDA approval for two medications, and has received a
number of national and international honors in his field. He has authored and
published over 100 professional publications. He also has delivered, upon
invitation, over 50 national and international presentations at scientific and
medical conferences. He is a graduate of the University of North Carolina,
School of Medicine, 1981.
Mr. Wollen has been a Director, and the Chief Executive Officer, of the
Company, since February 14, 2000. He has pursued the formation and development
or acquisition of technology, biotechnology and similar businesses in the U.S.
From 1985 to February 1993, he was an executive with Ladenburg Thalmann & Co.,
an investment-banking and brokerage firm, located in New York, serving as
Syndicate Manager. From approximately April, 1995, he was Chairman of the Board
of Telcom Technologies, Inc., Pamona, California, and participated in the sale
of the Company to AVT Corporation, a publicly trading company (NAS:AVTC), until
January, 1996.
From approximately February, 1995, to December, 1999, he was one of four
co-founders and Managing Directors of Raintree Capital, L.L.C., a limited
liability company which founded a company called FirstAmerica Automotive,
devoted to the sale of new automobiles of various manufacturers, and invested
capital of the four founders into Telcom Technologies, Inc., discussed above,
and owned three hotel resorts in Mexico until December 1999.
From May of 1998 until September of 1999, he was a Director and the Executive
Vice President of Automotive Realty Trust of America, a private real estate
investment trust.
From November, 1998, he has been the President and owner of a consulting company
<PAGE>
called Windermere Capital, L.L.C., which provides general business consulting.
From November, 1999, he has been a Director of Mission Capital Partners, L.L.C.,
a company that is seeking to participate in merger and other opportunities as an
advisor, but has not yet undertaken any transactions.
Welter "Budd" Holden, Director, since October 31, 1997. For the past five
years, Mr. Holden, who acts as an independent consultant, has advised various
projects in, primarily, Hollywood and Los Angeles, California, as to
architectural and interior design. 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 October 31, 1997. 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,
since October 31, 1997. 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.
From January, 1995, to October, 1995, Dr Greeson pursued consulting with various
businesses on an independent contractor basis.
From November, 1995, to October 31, 1997, Dr. Gresson was Executive Vice
President, Secretary and a Director of Stereoidogenesis Inhibitors, Inc. the
subsidiary of the Company.
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, since October 31, 1997. Over
approximately 10 years ago, Mr. Kubota 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. Since February, 1995, he is the
President of Nanko 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.
H. Thomas Winn, Director, since March 31, 1999. 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, since October 31, 1997. 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.
<PAGE>
From 1986 to the present, he remains a Director on the Board of Aaminex Capital
Corporation, Houston Texas, which is a company that owns inactive mining
properties in Nevada and shares of stock in Nevada Gold and Casinos, Inc.
Form approximately July, 1993 to the present, he has been a Vice President and a
Director of Nevada Gold and Casinos, which is a part owner of a gaming casino in
Colorado.
From March, 1998, to the present, he has been the President of Goldfield
Resources, a wholly owned subsidiary of Nevada Gold and Casinos. Goldfield
Resources owns approximately 500 non-active mining claims.
Cynthia C. Thompson, Director, since March 31, 1999. Ms. Thompson is the
Chief Executive Officer and founder, since May, 1998, of United States Service
Company, a nationwide service company serving food and beverage original
equipment manufacturers and food service vendors. In May, 1998 Ms. Thompson
founded and has been President, of 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.
From approximately May, 1987 to May, 1993, Ms. Thompson was representative at
E.F. Hutton/Shearson Lehman Brothers, Austin Texas, a brokerage firm, in the
Regional Institutional Group department assisting with bank and institutional
accounts.
From May, 1993, to May, 1994, she was a corporate accounts representative with
Oppenheimer & Company, Inc., a brokerage firm.
From May, 1994, to May, 1998, she was the Director, Corporate Finance
department, of D.E. Frey & Company, Inc., a brokerage firm.
Item 10. Executive Compensation
The following tables and notes present for the two years ended December
31, 1999, the compensation paid by the Company to the Company's chief executive
officer and to the Company's most-highly compensated executive officers other
than the Company's chief executive officer who were serving at December 31,
1999.
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, 1999 $60,000 $ 5,000(1)
Chairman of the 1998 $12,000 -- -- --
Board, Chairman 1997 $66,000 -- -- --
1996 $-0- -- -- --
Janet Greeson, 1999 $60,000
Director, 1998 $55,000 $ 500,000(2) -- --
Exec. V. Pres. 1997 $-0- -- --
1996 $-0- -- --
Tom Kubota, 1999 $-0- $ 5,000(1)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Director and Vice 1998 $-0- --
President 1997 $-0- $ 437,500(3) --
1996 $-0- --
</TABLE>
- ----------
(1) The value of the restricted stock award has been determined by multiplying
the shares awarded by the average of the high and low bid price, on March
31, 1999 of $1.43, less a discount considering the restriction.
(2) 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.
(3) 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.
(4) The restricted shares are held by Nanko Investments, Inc., a company owned
and controlled by Mr. Kubota.
As of the year ended December 31, 1999, 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
Name Shares Value
---- ------ -----
Alfred T. Sapse 3,700,000 $1,619,012
Tom Kubota 1,300,000 $ 568,750
Janet Greeson 773,000 $ 338,187
The value of the restricted shares has been determined on the basis of the
closing bid price of $.4375 for the Company's shares of Common Stock on December
31, 1999.
Dividends will be paid on any shares of restricted stock awarded to any of
the named officers or their affiliates.
Item 11. 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 February 3,2000. 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)(7) 3,700,600 23.73%
3525 Leor Court
Las Vegas, NV 89121
Welter Holden(2)(7) 350,250 2.24%
<PAGE>
205 Bradford Street
Provencetown, MA 02657
James D. Monllos(2)(7) 236,612 1.51%
9721 Peacock Hill Circle
Las Vegas, NV 89117
Janet Greeson(2)(7) 773,000 4.95%
8058 Pinnacle Peak Ave.
Las Vegas, NV 89113
Tom Kubota(2)(4)(7) 1,300,000 8.33%
2006 Barranca
Newport Beach, CA 92660
Paul Burkett(2) 209,500 1.34%
4518 Whitset
Studio City, CA 91604
Cynthia Thompson(2)(5)(7) 35,000 .22%
3040 Post Oak Blvd. #695
Houston, Texas 77056
H. Thomas Winn(2)(7) 40,000 .25%
3040 Post Oak Blvd. #675
Houston, Texas 77056
Cortisol Medical Research(6)(7) 2,325,600 14.91%
2915 W. Charleston #7
Las Vegas, NV 89102
Walker Long, M.D.(2)(7) 0 0
4364 S. Alston Ave.
Durham NC 27713
Albert "Bert" Wollen (2)(7) 0 0
Windermere Capital
1059 Sage Rd.
Houston TX 77056
All officers and Directors 6,644,962 42.61%
as a group (10 persons)(8)
- ----------
(1) Calculated on the basis of 593,909 shares of Common Stock issued and
outstanding.
(2) Officer and Director.
(3) Includes 2,325,600 shares held by Cortisol Medical Research, Inc., a
corporation controlled by Dr. Sapse.
(4) Includes 1,300,000 shares of common stock.
(5) 25,000 shares are held by Intuitive Solutions International, Inc., which
Ms. Thompson controls, and 10,000 are held in her name.
(6) Cortisol Medical Research is controlled by Dr. Sapse.
(7) Includes, in accordance with Rule 13d-3, shares of which an officer or
director may be deemed the beneficial owner of.
- -----------------------
Item 12. Certain Relationships and Related Transactions
The following transactions are believed by Management to be on terms as
fair to the Company as those the Company could have obtained from unrelated
<PAGE>
third parties and arms-length negotiations.
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.
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.
None of these shares have been given to him.
In April 1998 the Company issued 200,000 restricted shares to Janet
Greeson and 100,000 restricted shares to Rudy LaRusso, a former Director and
officer, 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.
The Subsidiary, Stereoidogenesis Inhibitors, Inc., acquired, for 5,100,000
shares, the ANTICORT technology rights from an entity controlled by the
President of the Company, and also by agreeing to pay an additional $250,000 in
the event of an offering (Private or IPO) of $5,000,000 or more, and licensing
rights on a sliding scale.
Subsequently, the Subsidiary, Stereoidogenesis Inhibitors, Inc., in
exchange for foregoing a debt of $108,968, by the President to the Subsidiary,
secured the cancellation of the $250,000 committed in the event of an offering
and the cancellation of licensing rights mentioned above.
Regarding certain consulting fees of $6000 being paid to an entity owned
by a family member, this entity provided, and is providing, to the Chairman of
the Company, a fully equipped executive office, maintenance and rent included,
besides occasional advice.
Dr. Long is an officer of CATO. The Company is under negotiations with
CATO as to the establishment of a relationship for CATO to possibly sponsor
clinical trials, similar to those started already by the Alliance. The Board has
determined that any final agreement or payments or other considerations to CATO
will be determined by the Board.
Mid 1999, before Mr. Wollen became an officer of the Company, his company,
Windermere Capital, L.L.C., advanced, on behalf of Pashua Partners, a company
which was under negotiations for a funding of the Company, the sum of $50,000 as
an initial payment of a $500,000 intended loan to the Company. The loan was not,
including terms, finalized since the funding transaction was not completed due
to matters relating to certain litigation (See Part II, Item 2, Legal
Proceedings). The Company and Mr. Wollen, have not finalized the arrangement for
<PAGE>
the repayment of this advance, but Mr. Wollen has not made any demands.
SIGNATURES
In accordance with Section 13 OR 15 (d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
STEROIDOGENESIS INHIBITORS
INTERNATIONAL, INC.
Dated: April 11, 2000 By: /s/ Albert "Bert" Wollen
---------------------------- -------------------------------------
Albert "Bert" Wollen, Chief Executive
Officer and
Director
Dated: March 24, 2000 By: /s/ Albert "Bert" Wollen
---------------------------- -------------------------------------
Albert "Bert" Wollen, Chief Executive
Officer (principal financial officer)
<PAGE>
STEROIDOGENESIS INHIBITORS
INTERNATIONAL, INC.
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
<PAGE>
TABLE OF CONTENTS
Independent Auditor's Report 3
Consolidated Balance Sheet as of December 31,
1999 & 1998 (Audited). 4
Consolidated Statements of Operations for the period
from Inception (September 5, 1994) to December 31,
1999 (Unaudited) and the Years Ended December
31, 1999 and 1998 (Audited). 5
Consolidated Statements of Stockholders' Equity (Deficit) for the period
from Inception (September 5, 1994) to December 31, 1999 (Unaudited)
and for the Years Ended December 31, 1999 and 1998 (Audited). 6
Consolidated Statements of Cash Flows for the period
from Inception (September 5, 1994) to December 31,
1999 (Unaudited) and for the Years Ended December
December 31, 1999 and 1998 (Audited). 7
Notes to Financial Statements. 8-14
2
<PAGE>
REPORT OF INDEPENDENT AUDITOR'S
To the Board of Directors
Steroidogenesis Inhibitors International, Inc.
We have audited the accompanying consolidated balance sheets of Steroidogenesis
Inhibitors International, Inc. (a development stage company), and subsidiary as
of December 31, 1999 and 1998, and the related consolidated statements of
operations, stockholders' equity (deficit), and cash flows for the years ended
December 31, 1999 and 1998. All information included in these financial
statements is the representation of the owners of the Company. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform 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 to above present
fairly, in all material respects, the financial position of Steroidogenesis
Inhibitors International, Inc. and subsidiary as of December 31, 1999 and 1998,
and the results of its operations, and its cash flows the years ended December
31, 1999 and 1998, in comformity with generally accepted accounting principles.
The accompanying, cumulative statements regarding the period from inception
(September 5, 1994) through December 31, 1999, of operations, stockholders'
equity (deficit) and cash flows include activity prior to our engagement as
auditors upon which we have not performed procedures. Therefore, we do not
express an opinion on them.
Decatur, Georgia
3
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS (AUDITED)
DECEMBER 31, 1999 &1998
(A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>
ASSETS
1999 1998
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,706 $ 494
Note receivable-related party (note 8) 11,478 13,090
----------- -----------
13,184 13,584
----------- -----------
FIXED ASSETS:
Furniture & fixtures, at cost 47,062 29,216
Accumulated depreciation (16,894) (10,715)
----------- -----------
30,168 18,501
----------- -----------
OTHER ASSETS:
Patent registration costs 55,547 35,418
Purchased technology rights, net of accumulated
amortization of $23,610 & $12,713 for 1999 and
1998, respectively 85,359 96,256
Other 17,720 11,542
----------- -----------
158,626 143,216
TOTAL ASSETS $ 201,978 $ 175,301
----------- -----------
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 283,498 $ 68,905
Short-term borrowing (note 3) 50,000 30,000
Short-term borrowings, related parties (note 8) 132,000 0
----------- -----------
465,498 98,905
----------- -----------
LONG-TERM LIABILITIES
Deferred revenue (note 4) 250,000 250,000
----------- -----------
715,498 348,905
----------- -----------
COMMITMENTS (note 5)
SHAREHOLDERS' EQUITY:
Common stock, 25,000,000 share authorized at .001 par,
15,443,909 issued and outstanding (note 7) 15,444 10,005
Common stock reserved to complete recapitalization (note 2) 111 124
Paid in capital in excess of par, net of offering costs 5,284,603 3,958,690
Accumulated deficit (5,813,678) (4,142,423)
----------- -----------
(513,520) (173,604)
----------- -----------
TOTAL LIABILITIES & EQUITY $ 201,978 $ 175,301
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 5,1994) TO DECEMBER 31,1999
(UNAUDITED)
AND THE YEARS ENDED DECEMBER 31,1999 & 1998 (AUDITED)
(A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>
09/5/94
TO
12/31/99
(UNAUDITED) 1999 1998
<S> <C> <C> <C>
REVENUES: $ 50,000 $ 50,000 $ 0
------------ ------------ ------------
EXPENSES:
General & administrative 5,150,699 1,309,874 943,258
Research & testing 657,601 379,491 50,648
Interest 13,945 13,945 0
Depreciation, and amortization 41,433 17,945 16,066
------------ ------------ ------------
5,863,678 1,721,255 1,009,972
------------ ------------ ------------
Net loss (5,813,678) (1,671,255) (1,009,972)
Weighted average number of
shares outstanding 8,031,458 13,391,109 9,407,694
------------ ------------ ------------
Earnings per share, basic & diluted $ (0.72) $ (0.12) $ (0.11)
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONS, INC.
(A DEVELOPMENT STATE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EOUITY (DEFICIT)
FROM INCEPTION (SEPTEMBER 5, 1994 TO DECEMBER 31, 1999 (UNAUDITED)
AND FOR THE YEARS ENDED DECEMBER 31,1999 & 1998 (AUDITED)
<TABLE>
<CAPTION>
Shares
Number Par Value Reserved
of Common for Paid in
Shares Stock Conversion Capital
----------- ----------- ------- -----------
<S> <C> <C> <C> <C>
Inception at September 5, 1994 0 $ $ $
Shares issued for cash, net of offering costs 6,085,386 609 635,481
Warrants issued for cash
Shares issued as compensation for services 714,500 71 1,428,929
Loss, from inception through 12/31/96
----------- ----------- ------- -----------
December 31, 1996 6,799,886 680 0 2,064,410
Issuance of stock, prior to acquisition 206,350 21 371,134
Recapitalization (note 2)
Acquisition of subsidiary for stock (note 2) 1,503,000 150 46,545
Shares of parent redeemed, par value $.0001 8,509,236 (851) 851
Shares of public subsidiary issued, par value $. 7,689,690 7,690 820 8,510
Loss, development stage, 1997
----------- ----------- ------- -----------
December 31, 1997 7,689,690 7,690 820 2,474,430
Add'l. conversion of parent 696,022 696 (696)
Shares issued for cash to public, net of offering 693,500 694 605,185
Shares issued in cancallation of debt 525,000 525 524,475
Shares issued as compensation (note 7) 400,000 400 349,600
Loss, devalopment stage, 1996
----------- ----------- ------- -----------
December 31, 1996 10,004,212 10,005 124 3,953,690
Conversion of parent's shares 13,000 13 (13)
Shares issued in cancellation of debt 30,000 30 29,970
Shares issued to public, net of offering costs 45,000 45 41,367
Shares issued as compensation (note 7) 3,569,250 3569 462,113
Shares issued pursuant to convertible debentures:
Detachable warrants issued (note 7)
Detachable warrants exercised (note 7) 100,000 100 148,900
Debentures converted to stock (note 7) 1,682,447 1,682 640,438
Loss, development stage, 1999
----------- ----------- ------- -----------
December 31, 1999 15,443,909 $ 15,444 $ 111 $ 5,276,478
=========== =========== ======= ===========
<CAPTION>
Total Total
Paid in Retained Shareholders'
Warrants Capital Earnings Equity
--------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Inception at September 5, 1994 $ $ $ $ 0
Shares issued for cash, net of offering costs 635,481 635,481 636,090
Warrants issued for cash 5,000 5,000 5,000
Shares issued as compensation for services 1,428,929 1,429,000
Loss, from inception through 12/31/96 (2,152,843) (2,152,843)
--------- ----------- -------------- -----------
December 31, 1996 5,000 2,069,410 (2,152,843) (82,753)
Issuance of stock, prior to acquisition 371,134 371,155
Recapitalization (note 2)
Acquisition of subsidiary for stock (note 2) 46,545 46,695
Shares of parent redeemed, par value $.0001 851 0
Shares of public subsidiary issued, par value $. 8,510 0
Loss, development stage, 1997 (979,635) (979,635)
--------- ----------- -------------- -----------
December 31, 1997 5,000 2,479,430 (3,132,478) (644,538)
Add'l. conversion of parent 0 0
Shares issued for cash to public, net of offering 605,185 605,879
Shares issued in cancallation of debt 524,475 525,000
Shares issued as compensation (note 7) 349,600 350,000
Loss, devalopment stage, 1996 (1,009,945) (1,009,945)
--------- ----------- -------------- -----------
December 31, 1996 5,000 3,958,690 (4,142,423) 173,604
Conversion of parent's shares 0
Shares issued in cancellation of debt 29,970 30,000
Shares issued to public, net of offering costs 41,367 41,412
Shares issued as compensation (note 7) 462,113 465,682
Shares issued pursuant to convertible debentures:
Detachable warrants issued (note 7) 152,125 152,125 152,125
Detachable warrants exercised (note 7) 149,000 (100) 0
Debentures converted to stock (note 7) 640,438 642,120
Loss, development stage, 1999 (1,671,255) (1,671,255)
--------- ----------- -------------- -----------
December 31, 1999 $ 8,125 $ 5,284,603 $ (5,813,678) $ (513,520)
========= =========== ============== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 5,1994) TO DECEMBER 31, 1999
(UNAUDITED)
AND THE YEARS ENDED DECEMBER 31, 1999 & 1998 (AUDITED)
(A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>
09/5/94
TO
12/31/99
NET CASH USED BY OPERATING ACTIVITIES: (UNAUDITED) 1999 1998
<S> <C> <C> <C>
Net loss $(5,813,678) $(1,671,255) $(1,009,945)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 41,433 17,945 16,066
Expenses paid through issuance of stock 2,305,127 479,627 350,000
(Increase) decrease in assets:
Notes receivable-related party (11,478) 1,412 (13,090)
Other assets (17,720) (6,313) (11,407)
Increase (decrease) in liabilities:
Accounts payable 283,498 214,793 (31,526)
Deferred revenue 250,000
----------- ----------- -----------
(2,962,818) (963,791) (699,902)
----------- ----------- -----------
NET CASH USED BY INVESTING ACTIVITIES:
Purchased technology rights (108,969)
Purchase of furniture and equipment (47,796) (18,580) (15,706)
Patent registration costs (55,547) (20,129) (8,492)
----------- ----------- -----------
(212,312) (38,709) (24,198)
----------- ----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES:
Proceeds from warrants 152,125 152,125
Proceeds from debentures, net of discounts 628,175 628,175
Proceeds from stock offering, net of costs 1,659,536 41,412 605,879
Shod-term loan proceeds 737,000 182,000 30,000
----------- ----------- -----------
3,176,836 1,003,712 635,879
----------- ----------- -----------
CHANGE IN CASH 1,706 1,212 (88,221)
CASH AT BEGINNING OF PERIOD 0 494 88,715
----------- ----------- -----------
CASH AT END OF PERIOD $ 1,706 $ 1,706 $ 494
=========== =========== ===========
NON-CASH FINANCING & INVESTING ACTIVITIES:
Purchase of net, non-cash assets of subsidiary
for stock $ 195 $ $
Short-term debt retired through issuance
of stock $ 555,000 $ 30,000 525,000
Debentures converted through stock issuance $ 667,875 $ 667,875
Income taxes & interest paid with cash 0 0 0
</TABLE>
The accompan~ng 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 Steroidogenesis Inhibitors, Inc., in Nevada in September, 1994. The Company
was organized to engage in securing the patent for and the licensing of a drug
called ANTICORT, a trademarked, proprietary drug. The product was developed by
Cortisol Medical Research, Inc., the majority shareholder, from whom the Company
purchased the rights. The product was developed for the treatment of diseases
related to deficiencies in the immune system.
In October, 1997, the Company acquired WEBX Media, Inc. (the Subsidiary), a
non-operating public shell through an exchange of stock. Subsequent to the
acquisition, the Company changed its name to Steroidogenesis Inhibitors
International, Inc.
The accompanying financial statements have been prepared on the basis that it is
a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has
incurred a loss since inception of $5,813,678. As such, the financial statements
reflect recurring losses, working capital deficiencies, negative cash flows from
operating activities, and adverse key financial ratios.The Company is dependent
upon outside capital to continue in existence and to achieve profitable
operations.
Management's plans for dealing with the adverse effects of the conditions cited
above is to raise working capital through equity financing arrangements.
Subsequent to December 31, 1999, the Company entered into a committment with an
investor through which up to $2,000,000 will be advanced, collateralized by
restricted registered stock. Under the agreement, the advances are converted
periodically through the issuance of stock at a discounted market price. Through
such, the Company had received advances of $425,000 through March 6, 2000.
Furthermore, Management notes that many expenditures can be deferred until funds
are available to continue development. While such a strategy would not be
preferred due to a competitive market, Management is willing to pursue it if
necessary.
b. Basis of Consolidation:
The accompanying financial statements include the accounts of the Company and
its subsidiary. All intercompany balances and transactions have been eliminated
in consolidation.
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.
8
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to financial 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 $7,045 and $5,100 for the years ended December 31,
1999 and 1998, respectively.
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.
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 $10,900 for the years
ended December 31, 1999 and 1998, respectively.
e. Earnings per share
The Company calculates earnings per share in accordance with SFAS 128. At
December 31, 1998, there were no dilutive warrants or options outstanding. At
December 31, 1999, there were 50,000 detachable warrants with a cashless
exercise feature in which the number of shares to be issued depended upon the
trading price of the stock on the date of exercise. These options were converted
subsequent to the balance sheet for approximately 38,800 shares. Because the
Company has had development stage losses, the effect of including these
securites in the calculation of earnings per share would be to reduce the loss
per share rendering the cashless exercise feature as non-dilutive.
f. 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.
9
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to financial statements
2. Reverse Acquisition of Subsidiary:
On October 21, 1997, the Company acquired 100% of the outstanding stock of WEBX
Media, Inc., through a reorganization agreement. Under the agreement, the
principal shareholders of the Company exchanged their stock on a share for share
basis for the stock of the Subsidiary. At the time of the acquisition, the
Subsidiary was non-operating public shell with no significant assets. The
Company then converted such shares into shares of the Subsidiary for the purpose
of becoming a public company.
The Company exchanged 1,503,000 shares pursuant to the acquisition. Of these
shares, 1,000,000 were issued for services pertaining to the acquisition. See
note 8, Related Party Transactions, and note 7 a.& b., Stock Transactions. The
balance of the shares were issued to the shareholders of the Subsidiary.
The Company has accounted for this transaction as a capital transaction; a
retirement of the Company shares and issuance of Subsidiary shares. Because the
Subsidiary shares have stated par value of $.001 compared to Company shares at
$.0001, the exchange resulted in a reclassification from 'additional paid in
capital' to 'par value', as reflected in the Statements of Stockholders' Equity
(Deficit).
At the acquisition date, approximately 88% (6,186,000 of 7,006,236 shares) of
the Company stock held prior to the acquisition was converted. The Company
reserved additional Subsidiary shares to convert the balance of the remaining
Company shareholders as they were located. During 1998 and 1999, an additional
10% of the shareholders of record at the acquisition date had converted their
shares.
3. Short-term borrowing:
At December 31, 1999, the Company had an amount due to an entity for $50,000
which accrues interest at 8% per year. The entity has agreed to retire the
amount in exchange for stock.
Also, at December 31, 1999, the Company had amounts due from two entities
totalling $132,000. These loans are unsecured, due on demand, and do not accrue
interest. One of the loans is from an entity in which an officer of the Company
has a majority interest. The other loan is from an entity owned by a family
member of the officer. These entities have agreed to retire these amounts
through the issuance of stock. 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.
10
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to financial statements
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. The revenue will be recognized
as expenses are incurred in providing such assistance. Pursuant to an amendment
to the licensing agreement, during 1999, the Company received $50,000 when
SI-Canada became a public company. The Company is currently involved in
litigation with this entity. See Note 10.
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. Accrued at December 31, 1999, and paid in early January was $64,825.
The Company made office space rental payments of approximately $16,000 during
1998, pursuant to an agreement expiring during 1999. During 1999, 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.
Rent paid during 1999 was $22,942.
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.
11
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to financial statements
7. Stock transactions:
a. Stock warrants and options:
The Company had outstanding stock options at December 31, 1998 & 1999.
A summary of the status of the Company's outstanding warrants and options at
December 31, 1999 and 1998, and changes during the years ended on those dates is
presented below:
Weighted
Weighted Average
Average Contractual
Shares Price Life
---------- ----- --------
Outstanding & exercisable at 12/31/97 100,000 $3.50 06/30/00
Granted during the year ended 12/31/98 1,218,500 5.00 12/31/99
---------- ----- --------
Outstanding & exercisable at 12/31/98 1,318,500 4.88 01/15/00
Granted during the year ended 12/31/99 150,000 .32 03/15/04
Exercised during 12/31/99 (100,000) .01 02/14/04
Expired at 12/31/99 (1,218,500) 5.00 12/31/99
--------- -----
Outstanding & exercisable at 12/31/99 150,000 2.65 09/30/01
=========
The 1,218,500 options granted during the year ending December 31, 1998, were
pursuant to a 506 offering. This included the 525,000 shares of stock issued in
satisfaction of the short-term debt at December 31, 1997.
During the year ended December 31, 1999, 150,000 detachable warrants were issued
with convertible debentures. The warrants were valued at the difference between
the exercise price at the trading price of the stock on the date the warrants
were issued. Of the warrants issued, 100,000 were exercised during 1999. The
remaining warrants had a cashless exercise feature which adjusted the amount of
shares to be issued for the trading price of the stock on the date exercised. In
full satisfaction of those outstanding detachable warrants, 38,807 shares were
issued in February, 2000.
12
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to financial statements
b. Stock as compensation:
The Company issues stock as compensation for services and supplies, valuing such
issues premised upon the fair market value of the stock or the services,
whichever is more clearly determinable.
During 1998, the Company issued 400,000 shares for services rendered by
non-employees.
During 1999, the Company issued 3,569,250 shares of stock as compensation,
valuing such issuances at $465,682.
An additional 100,000 shares were issued in January for services incurred and
accured during 1999.
c. Stock option plan
The Company has a stock option plan under which 2,500,000 shares are reserved.
At December 31, 1999, no options have been granted pursuant to the plan.
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 1999 & 1998, consulting fees
of $24,000 were paid to an entity owned by a family member of a director. At
December 31, 1999, a director of the Company has been advanced $11,478. It is
scheduled to be repaid during the year ending December 31, 2000.
Directors of the Company received stock as compensation for consulting services
during 1999 and 1998 which was valued at $161,150 and $300,000, respectively.
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.
13
<PAGE>
STEROIDOGENESIS INHIBITORS INTERNATIONAL, INC.
Notes to financial statements
10. Litigation
SII-Canada, to whom certain licensing rights were sold as described in Note 4,
is suing STGI claiming default under a provision of the licensing agreement
pertaining to licensing rights outside of Canada. SII-Canada contends they are
entitled to worldwide rights of the technology, or in the alternative, damages
of $100 million. A default judgement exists in Canada but the Company's attorney
is certain that the Company will be successful in setting aside that claim due
to questionable service of the initial notice.
The Company will vigorously defend against the suit and is confident regarding
the outcome. The Company is countersuing seeing termination of the agreement and
damages of $15 million.
14
<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
99 Agreement of Funding between Oriental New Investments, Ltd. and the
Company dated February 10, 2000
- ----------
* 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
99 Agreement of Funding between Oriental New Investments, Ltd. and the
Company dated February 10, 2000
- ----------
* To be filed by amendment
38
<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.
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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.
18
<PAGE>
(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
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
<PAGE>
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
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
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
<PAGE>
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.
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 _______________ )
<PAGE>
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
<PAGE>
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.
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
================================================================================
{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
================================================================================
<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.
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(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
13
<PAGE>
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.
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
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;
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;
-2-
<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
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<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.
-15-
<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.
-16-
<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.
5
<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:
<PAGE>
<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.
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
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
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.
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: _____________________________
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
Exhibit 99
TO: STEREOIDOGENESIS INHIBITORS INTERNATIONAL, INC. ("STGI")
This document is to confirm my agreement as a commitment for the continued
funding of monies to STGI up to the $2,000,000 I am committed to.
The agreement is as follows:
1. I will be a subscriber of common stock shares (the "Shares") in STGI for up
to $2,000,000, which Shares may be issued, at my election, to my company,
Oriental New Investments, Ltd., or myself.
2. My subscription shall be undertaken from time to time until January 1, 2001or
the subscription of up to $2,000,000 if same occurs sooner.
3. From time to time, up to a total of $2,000,000, upon "Notice" to me
requesting I subscribe, from STGI, I shall subscribe for the amount of shares
and at the price in the Notice, if same conforms to this document, and provided
the "Conditions" below are satisfied or in effect.
4. Upon receipt of the Notice, I shall undertake the subscription by payment of
the price for the Shares no later than 5 business days from the receipt of the
Notice. (The Notice may be supplied to me by fax.)
5. Payment of the subscription shall be made by wire transfer to STGI at a price
per share equal to 80% of the 30 day average low bid price for STGI shares as
quoted immediately preceding the delivery of the Notice to me.
6. The Shares will be issued to me by STGI within 5 business days of payment.
7. The Shares will be subject to the standard Rule 144 restrictive legend but
shall have piggyback registration rights so as to be included by STGI for sale
in any public registered offering, not including registrations for stock to
consultants or employees or registrations that cannot legally include the
Shares, during 12 months from the date of this document.
8. I am an "accredited investor" under Regulation D of the SEC (having net
assets in excess of $1,000,000 or income over $200,000 for each of the last two
years and expectation of same for this year). I have not relied upon any
statement or representations to me other than those expressly herein.
9. Any subscription shall only occur if the following "Conditions" are
satisfied:
a. STGI is in good standing in the State of Nevada;
b. STGI is a publicly trading company; and
1
<PAGE>
c. STGI has not breached any promise to me herein.
The agreement herein is governed by Nevada law. This document cannot be amended
or assigned by me without the written consent of STGI, and may be executed in
counterparts. I agree to cooperate and sign reasonable documents as necessary to
give effect to the foregoing.
Date: Effective February 10, 2000
/s/ ALFRED PEEPER
- ---------------------------------
Alfred Peeper
(Oriental New Investments, Ltd.)
