UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
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General Form for Registration of Securities
of Small Business Issuers under Section 12(b) or (g)
of the Securities Exchange Act of 1934
FAIRCHILD INTERNATIONAL CORPORATION
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(Name of Small Business Issuer in its Charter)
Nevada 91-1880015
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(State or other jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
Suite 600, 596 Hornby Street, Vancouver, B.C. Canada V6C 1A4
------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(604) 646-5614
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(Issuer's Telephone Number)
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value
-----------------------------
(Title of Class)
<PAGE>
Table of Contents
Part I
Item 1. Description of Business..........................................3
Item 2. Management's Discussion and Analysis or Plan of Operation........7
Item 3. Description of Property..........................................8
Item 4. Security Ownership of Certain Beneficial Owners and Management...8
Item 5. Directors, Executive Officers, Promoters and Control Persons.....9
Item 6. Executive Compensation..........................................10
Item 7. Certain Relationships and Related Transactions..................11
Item 8. Description of Securities.......................................11
Part II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters.....................13
Item 2. Legal Proceedings...............................................14
Item 3. Changes in and Disagreements with Accountants...................14
Item 4. Recent Sales of Unregistered Securities.........................14
Item 5. Indemnification of Directors and Officers.......................15
Part F/S
Financial Statements........................................................16
Part III
Item 1. Index to Exhibits...............................................
Item 2. Description of Exhibits.........................................
Signatures..................................................................
<PAGE>
PART I
To simplify the language in this Registration Statement, Fairchild International
Corp. is referred to herein as "the Company" or "We."
Item 1. Description of Business
Business Development.
We were incorporated in Nevada on June 20, 1997. On June 24, 1999 we changed our
name to Fairchild International Corporation. On February 15, 1999 we reverse
split our stock on a one (1) share for twenty (20) share basis. On September 13,
1999 we forward split our stock on a ten (10) share for one (1) share basis to
adjust for our February 15, 1999 reverse stock split. Unless indicated
otherwise, all statements herein reflect both of these stock splits. We have not
been involved in any bankruptcy, receivership or similar proceeding. We have not
been involved in any material reclassification, merger, or purchase or sale of a
significant amount of assets not in the ordinary course of business.
Business of Issuer.
We have operational losses and no revenues. From June 19, 1997 to February 25,
1999, we were engaged in the mining business. We are no longer engaged in the
mining business. We plan to develop a website marketing various anti-aging and
nutritional products such as vitamin supplements and homeopathic arthritis and
skin care products. Our website is in the developmental stages and is not yet
operational.
We have obtained the domain names, youthfulyou.com and healthypharmacy.com. We
plan to offer products through the healthypharmacy.com site. We have not yet
determined our intended use for the youthfulyou.com site. We plan to contract
with Netcom Canada to connect our web site to the Internet. We have contracted
with Zappworx Visual Management to develop and maintain our web site. We
launched our website as a "work in progress" on November 1, 1999 and expect to
have our web site operational by early 2000. At that time, we plan to take
orders via our website; however, there is no assurance that we will develop that
capability or be operational at that time.
Web site shoppers will be able to browse our site and place their secured orders
on line. We plan to process orders by online credit card or cyber cash systems.
We have not secured contracts with providers of credit card or cyber cash
systems. Upon credit approval, we will arrange for delivery of the ordered
products via courier service such as Federal Express or United Parcel Service.
To date, we have not entered into agreements for the shipment of our products
with any courier services. Customers will be able to place orders seven days a
week, twenty-four hours a day to be delivered to their specified destination.
We will attempt to offer our products at prices competitive with other shopper
websites. Initially, we anticipate approximately 20-30 products in our online
catalogue format with new
<PAGE>
product lines being added as web traffic and sales increase. We have not yet
developed any criteria for the selection of products for our web site.
We intend to sell our products to male and female consumers over the age of 35.
We have not agreed to a marketing alliance with any company at this time. We
intend to use both traditional and non-traditional means of advertising. We
anticipate that our primary source of advertising will be the Internet. We also
plan to advertise through e-mail distribution. We have not entered into formal
contracts with search engines or other potential advertising or marketing
outlets.
We currently do not have any products and we have not selected any specific
products to offer on our web site.
Status of any Publicly Announced New Product.
We have no publicly announced new products.
Competitive Business Conditions.
The online retail industry is highly competitive with respect to price, service,
quality and Internet marketing. There are numerous, well-established, large
competitors in the online industry with comprehensive web sites, possessing
substantial financial, marketing, personnel and other resources. In contrast,
our company is in the developmental stages and lacks such resources. There can
be no assurance that we will be able to respond to various competitive factors
affecting our business. We plan to attempt to gain a competitive advantage over
our competitors by working directly with wholesalers enabling us to to obtain
and pass on to a diverse consumer base quality products at competitively lower
prices.
Anti-aging, nutritional and dietary supplement markets are highly competitive.
The development of online product catalogs will involve an ever-changing and
evolving process. We will attempt to competitively price products on our
website, provide superior quality products, and achieve success through
efficient customer service and effective marketability strategies. We are
limited, however, by among other factors, the developmental character of our
company, the unpredictability and uncertainty of our future revenues and the
intensely competitive nature of the anti-aging and vitamin product industry in
which established companies and new entrants may have a distinct competitive
advantage. There are many well-established competitors with substantially
greater financial revenues. Many of these competitors have been in existence for
substantially longer periods of time than we have and may be better established
in the market where we plan to operate. Further, they may have sufficient
revenue streams to engage in extensive advertising and promotional campaigns far
in excess of our marketing capabilities. Our competition cannot be determined
with any certainty because certain data is not available from private
competitors. Accordingly, our competition is difficult to assess with any
preciseness, and there is no guarantee that we will be able to compete in the
industry, within which we operate. As such, our operations may be adversely
effected.
Manufacturing. We do not currently manufacture any products, and we rely on
third-party manufacturers.
<PAGE>
Raw Materials and Suppliers.
We anticipate that the principal suppliers of our products will be wholesale
distributors, who generally act as suppliers to retail stores. We plan to enter
contract negotiations with several distributors of anti-aging products. A delay
in establishing suppliers or distributors could have an adverse effect on our
revenues and cash flow. In the event that we are unable to locate manufacturers
of anti-aging products or if any manufacturer that we depend upon in the future
ceases operations or cannot continue to manufacture our retail products our
business could be adversely affected.
Herbal supplements and anti-aging products contain ingredients that are
harvested by and obtained from third-party suppliers. Some of these ingredients
are harvested internationally, only once per year or on a seasonal basis. An
unexpected interruption of supply, such as a harvest failure, could cause our
operations to be adversely affected.
We do not have contracts with any suppliers, entities or persons committing
suppliers to provide the materials required for the production of anti-aging
products. There can be no assurance that suppliers will provide the raw
materials needed for anti-aging products in the quantities requested or at a
price that our manufacturers are willing to pay. In the past five years, natural
vitamin E, beta-carotene and melatonin have been subject to unusual price
fluctuations as a result of supply shortages and/or increased demand. Because we
do not control the actual production of these raw materials, it is also subject
to delays caused by interruption in production of materials based on conditions
not within our control. Such conditions include job actions or strikes by
employees of suppliers, weather, crop conditions, transportation interruptions,
natural disasters or other catastrophic events. Our manufacturers' inability to
obtain adequate supplies of raw materials for anti-aging products at favorable
prices, or at all, as a result of any of the foregoing factors or otherwise,
could have a material adverse effect on our business.
Dependence on Certain Customers.
As of the date of this registration we have not developed a customer base. We do
not believe that we will be dependent upon any single customer once we have
developed a customer base; however, there can be no assurance that we will not
become dependent upon one or a few customers.
Intellectual Property.
Although many of the products that we intend to sell will rely upon proprietary
technology, we do not own any registered patents, trademarks, copyrights or
franchises. Other than the Praxis Pharmaceuticals, Inc. (hereinafter "Praxis")
agreement discussed below, we are not a party to any royalty agreement or other
agreement providing for proprietary interests.
Praxis Licensing Agreement. On May 11, 1999 we entered into an agreement with
Praxis, effective September 30, 1999, to acquire an exclusive license to make,
use and sell pharmaceutical products and processes relating to arthritis and
dermal wrinkles. We have agreed to pay $250,000 for research on the products and
issue 2,600,000 common shares of our common stock in consideration for the
license. An initial payment of $62,500 (paid) is due on closing, followed by
<PAGE>
three quarterly installments of $50,000, commencing January 1, 2000 and a final
payment of $37,500 on October 1, 2000. We will pay Praxis a royalty of 35% of
the net proceeds earned from sales of products sold under the terms of this
agreement.
Government Approvals
We are currently, not subject to direct regulation by any government agency,
other than regulations applicable to businesses generally and regulations
applicable to commerce on the Internet. However, due to the increasing
popularity and use of the Internet, it is possible that a number of laws and
regulations may be adopted with respect to the Internet, covering issues such as
user privacy, pricing, and characteristics and quality of products and services.
Furthermore, the growth and development of the market for Internet commerce may
prompt calls for more stringent consumer protection laws that may impose
additional burdens on those companies conducting business over the Internet. The
adoption of any additional laws or regulations may decrease the growth of the
Internet, which, in turn, could decrease the demand for our Internet products
and increase our cost of doing business or otherwise have an adverse effect on
our business, results of operations and financial condition. Moreover, the
applicability to the Internet of existing laws in various jurisdictions
governing issues such as sales tax, libel and personal privacy is uncertain and
may take years to resolve.
In addition, as our service becomes available over the Internet in multiple
states and if we begin to sell to numerous consumers residing in various states,
such jurisdictions may claim that we are required to qualify to do business as a
foreign corporation in each such state and foreign country. Our failure to
qualify as a foreign corporation in a jurisdiction where it is required to do so
could subject our business to taxes and penalties for failure to qualify. Any
such existing or new legislation or regulation, including state sales tax, or
the application of laws or regulations from jurisdictions whose laws do not
currently apply to our business, could have a material adverse effect on our
business, results of operations and financial condition.
Our manufacturers are subject to extensive and rigorous governmental regulation
concerning the protection of the environment and the quality of manufacturing.
Federal, state and local regulatory agencies actively enforce these regulations
and conduct periodic inspections to determine compliance with such government
regulations. The Food and Drug Administration (the "FDA") enforces regulations
regarding the quality of manufacturing, Good Manufacturing Practices ("GMP"),
through periodic surveillances and audits. In particular, the FDA regulates the
safety, manufacturing, labeling and distribution of cosmetics, dietary
supplements, including vitamins, minerals and herbs, food additives, food
supplements, over-the-counter drugs and prescription drugs, medical devices and
cosmetics. We anticipate that the FDA will promulgate GMP, which are specific to
dietary supplements and require at least some of the quality control provisions
contained in the GMPs for drugs. GMP regulation would require supplements to be
prepared, packaged and held in compliance with such rules, and may require
similar quality control provisions contained in the GMP regulation for drugs.
There is no assurance that, if the FDA adopts GMP regulations specific to
dietary supplements, manufacturers of anti-aging products will be able to comply
with such GMP rules upon promulgation or without incurring material expenses to
do so.
<PAGE>
In addition, the Federal Trade Commission (hereinafter the "FTC") has
overlapping jurisdiction with the FDA to regulate the labeling, promotion and
advertising of dietary supplements, over the counter drugs, cosmetics and foods.
Failure to comply with applicable regulatory requirements may result in fines,
suspension of approvals, cessation of distribution, product recalls and criminal
prosecution, any of which would have a material adverse effect on us if other
manufacturers could not be arranged within a reasonable time.
Changes in existing regulations, the interpretation thereof or adoption of new
regulations could impose costly new procedures for compliance. Such new
procedures could prevent us from obtaining or affect the timing of additional
regulatory approvals. The FTC and state and local authorities regulate the
advertising of over-the-counter drugs and cosmetics. The Federal Food, Drug and
Cosmetic Act, as amended (the "Food and Drug Act"), and the regulations
promulgated thereunder, and other federal and state statutes and regulations,
govern, among other things, the testing, manufacture, safety, effectiveness,
labeling, composition storage, record keeping, approval, advertising and
promotion of our products.
In general, products falling within the FDA's definition of "new drugs" require
pre-market approval by the FDA while products falling within the FDA's
definition of "cosmetics" do not require pre-market approval. We feel that
anti-aging products, fall within the FDA's definition of "cosmetics" and
therefore do not require pre-market approval. There can be no assurance,
however, that the FDA will concur in this view. In the event that we fail to
comply with applicable regulations with respect to any products, we may be
required to change our labeling, formulation or possibly cease manufacture and
marketing of such products. The FDA may require post-marketing testing and
surveillance to monitor the record of our products and continued compliance with
regulatory requirements. The FDA also may require the submission of any lot of a
product for inspection and may restrict the release of any lot that does not
comply with FDA standards, or may otherwise order the suspension of manufacture,
recall or seizure if a non-compliant product is discovered. Product approvals
may be withdrawn if compliance with regulatory standards is not maintained or if
problems concerning safety or efficacy of a product are discovered following
approval.
We may also be subject to foreign regulatory authorities governing testing or
sales of certain of our products. Despite the fact that FDA approval may be
obtained, approval of a product by the comparable regulatory authorities of
foreign countries must be obtained in certain cases prior to the commencement of
marketing of the product in those countries. There can be no assurance that any
product developed or marketed by us will be approved by the FDA or any foreign
regulatory authority.
Research and Development.
In our past two fiscal years, we have spent approximately $112,500 on product
research and development. We do not anticipate that this cost will be borne
directly by the customers; however, there can be no such assurances.
<PAGE>
Compliance with Environmental Laws.
Other than environmental laws to which corporations may generally be subject, we
do not believe that we are subject to any environmental law compliance. If such
compliance should become necessary, we do not believe expenses associated with
such compliance would be material to our operations.
Employees.
As of the date of this registration statement, we have three (3) total and one
(1) full-time employee. None of our employees are members of a union. We believe
that our relationship with our employees is favorable. We do not intend to add
additional employees in the foreseeable future.
Item 2. Plan of Operation
THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS REGISTRATION STATEMENT.
We eventually plan to develop specialized e-commerce sites on the Internet. Over
the next twelve months, we plan to focus on development of an Internet portal
for alternative health care products. We hope that this site will offer products
of our Company, as well as those of other companies. In addition, we plan to
offer information on related topics on the website. We are currently unable to
satisfy our cash requirements without the financial support of our management.
We anticipate that we will meet our cash requirements for the foreseeable future
through financial support of our management. Eventually, we will need to raise
additional funds, if we plan to implement an advertising and marketing plan to
advance our website. We have not yet determined how we plan to obtain these
additional funds.
Since we have entered into an agreement with Praxis for research and
development, we will encounter significant research and development expenses
over the next twelve months. In addition to the terms of the Praxis agreement,
we may seek to conduct other research and development, which would result in
expenses beyond those outlined in the agreement with Praxis.
Since we outsource most of our operations, we do not anticipate establishing our
own manufacturing facilities over the next twelve months. Beyond this time
frame, we plan to make a decision with regard to purchase or sale of any plant
and significant equipment in the long term after products are introduced to the
public through our website, if ever.
As conditions dictate, we will engage additional employees. We do not plan to
make any significant changes in the number of employees over the next twelve
months.
Item 3. Description of Property
We currently occupy space at Suite 600, 596 Hornby Street, Vancouver, B.C.
Canada V6C 1A4. This property is approximately 250 square feet and is occupied
by us on a proportional cost basis on a month-to-month basis. We feel that we
will be able to occupy these premises or obtain other adequate space if
necessary.
<PAGE>
Item 4. Security Ownership of Certain Beneficial Owners and Management
The table below sets forth information with respect to the beneficial ownership
of the Common Stock by (a) each person known by the Company to be the beneficial
owner of five percent or more of the outstanding common stock, and (b) all
executive officers and directors individually and as a group, as of September
22, 1999. Unless otherwise indicated, the Company believes that the beneficial
owner has sole voting and investment power over such shares.
Security Ownership of Certain Beneficial Owners.
Number of Percentage
Title of Name and Address Beneficially Ownership
of Class of Beneficial Owner Owned Shares of class
Common Winston Cabell 737,000 8.78%
28 Royalist Road
Mosman NSW 9083 WA 6000 Australia
Common David Lane 757,000 9.02%
1632 McPherson Drive
Port Coquetlam, B.C. V3C 6C9 Canada
Common Amanda Paton 510,000 6.08%
406 Jasmine Lane
Longwood, FL 32779
Common David Stadnyk Ste. 600 1,375,000
595 Hornby Street
Vancouver, B.C. Canada
Security Ownership of Management.
Number of Percentage
Name and Address Beneficially Ownership
Title of Beneficial Owner Owned Shares of class
President Byron Cox Ste. 600 200,000 2.38%
Director 595 Hornby St. Vancouver, B.C. Canada
All Officers 1 person 200,000 2.38%
& Directors
Change in Control.
<PAGE>
There are no arrangements, which may result in a change in control of the
Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons
Directors and Executive Officers.
The following sets forth the names and ages of the Company's officers and
directors. The shareholders elect the directors of the Company annually, and the
officers are appointed annually by the board of directors.
Name Age Position Term of Office
Byron Cox 62 President, Director Annual
Byron Cox
Mr. Cox has served as President and Director of the Company since March 12,
1999. From 1992 to the present, Mr. Cox has worked at Alexander-Cox & Company,
Vancouver, B.C., as the company's President, where he provides investment
advisory services specializing in raising capital and investing in emerging
growth companies, as well as developing investor relations programs,
particularly on American Stock Exchanges. Mr. Cox holds a B.A. from the
University of Toronto, a Diploma in Business Administration (Marketing) from
Ryerson Polytechnic Institute and a certificate in Strategic Marketing
Management from the Harvard Business School. He holds professional accreditation
in the American Public Relations Society, as well as the Canadian Public
Relations Society.
Significant Employees.
There are no employees not mentioned above who are expected to make a
significant contribution to the business.
Family Relationships.
There are no family relationships among directors, executive officers, or
persons nominated for such positions.
Involvement in Certain Legal Proceedings.
In October of 1997, a bankruptcy receiving order was made against Record
Publishing, Inc. (Estate No: 25-060808) in Canada. Mr. Cox was an officer of
this Company at the time of the bankruptcy.
Other than the aforementioned, there have been no bankruptcies, criminal
proceedings, or other legal proceedings during the past five years which would
be material to the evaluation of the ability or integrity of any director,
executive officer, or any person nominated for such positions in the Company.
<PAGE>
Item 6. Executive Compensation
The following table present, for the fiscal years ended December 31, 1998, the
compensation paid by the Company to the Company's chief executive officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Name and Other Annual Restricted Securities LTIP
Principle Salary Bonus Compensation Stock Underlying Payouts Other
Position Year ($) ($) ($) Award(s) ($) Options (#) ($) ($)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Byron Cox, 1997 0 0 0 0 0 0 0
President 1998 0 0 0 0 0 0 0
1999 $28,000 0 0 0 0 0 0
- -------------------------------------------------------------------------------------------------
</TABLE>
Item 7. Certain Relationships and Related Transactions
Certain Transactions.
Stadnyk Consulting Agreement. On March 15, 1999, we entered into a consulting
agreement with David Stadnyk who was our prior Director, President and Secretary
and who is a beneficial owner of our common stock, for services as a public
relations and business consultant. We paid a retainer of $25,000 and issued
500,000 shares of our stock to him as compensation for these services. In
addition, we granted him the option to purchase 500,000 shares of our common
stock at $0.05 per share and the option to purchase an additional 500,000 shares
of our common stock at $0.15 per share. These options are exercisable for a
period of one year from the date of the agreement. Further, the agreement
provides that, should we obtain listing on the NASDAQ small-cap market, Mr.
Stadnyk would have a period of two years from the date of such listing to
exercise an option to purchase 5% of the outstanding common stock of the Company
at $0.50 per share. The agreement is for a period of twelve months. Other than
the aforementioned, we do not intend to enter into any transactions with our
beneficial owners.
Praxis Licensing Agreement. On May 11, 1999 we entered into an agreement with
Praxis, effective September 30, 1999, to acquire an exclusive license to make,
use and sell pharmaceutical products and processes relating to arthritis and
dermal wrinkles. We have agreed to pay approximately $250,000 for research on
the products and issue 2,600,000 common shares of our common stock in
consideration for the license. An initial payment of $62,500 (paid) is due on
closing, followed by three quarterly installments of $50,000, commencing January
1, 2000 and a final payment of $37,500 on October 1, 2000. We will pay Praxis a
royalty of 35% of the net proceeds earned from sales of products sold under the
terms of this agreement. David Stadnyk was a prior officer of Praxis. He no
longer maintains this position.
Parents
We are not a subsidiary of any parent company.
Item 8. Description of Securities
Common Stock.
<PAGE>
In General. We are authorized to issue 50,000,000 shares of common stock, par
value $0.001 per share, of which 8,388,210 shares were issued and outstanding as
of September 22, 1999. All of the issued and outstanding common stock is fully
paid and non-assessable.
Voting. Each share of our common stock designated at issuance to have voting
rights would entitle the holder thereof to one vote in the election of directors
and in all other matters upon which stockholders are entitled to vote. The
holders of shares of common stock do not have cumulative voting rights, which
means that the holders of more than 50% of the outstanding voting shares in an
election of directors can elect all of the directors to be elected, if they so
choose. In such event, the holders of the remaining shares will not be able to
elect any of our directors.
Dividends. Each share of common stock entitles the holder thereof to receive
cash dividends, as the Board of Directors may declare from funds legally
available therefore. However, we do not intend to declare any dividend on our
common stock in the foreseeable future.
Rights. There are no preemptive rights with respect to our common stock. Upon
liquidation, dissolution or winding up of the affairs of the Company, and after
payment of creditors, the assets legally available for distribution will be
divided ratably on a share-for-share basis among the holders of the outstanding
shares of common stock, after giving preference to any preferred shares
outstanding. The Board of Directors reserves the right to fix or determine the
designations, rights, preferences or other variations on each class of capital
stock of the Company.
Preferred Stock.
In General. We have authorized 1,000,000 shares of preferred stock, par value
$0.01. As of September 22, 1999, there were no preferred shares issued and
outstanding.
Voting. Each share of our preferred stock designated at issuance to have voting
rights would entitle the holder thereof to one vote in the election of directors
and in all other matters upon which stockholders are entitled to vote. The
holders of shares of preferred stock do not have cumulative voting rights, which
means that the holders of more than 50% of the outstanding voting shares in an
election of directors can elect all of the directors to be elected, if they so
choose. In such event, the holders of the remaining shares will not be able to
elect any of our directors.
Dividends. Each share of preferred stock entitles the holder thereof to receive
cash dividends as the Board of Directors may declare from funds legally
available therefor. However, we do not intend to declare any dividend on our
common stock in the foreseeable future.
Rights. There are no preemptive rights with respect to the preferred stock. Upon
liquidation, dissolution or winding up of the affairs of the Company, and after
payment of creditors, the assets legally available for distribution will be
divided ratably on a share-for-share basis among the holders of the outstanding
shares of preferred stock, before giving preference to any common
<PAGE>
shares outstanding. The Board of Directors reserves the right to fix or
determine the designations, rights, preferences or other variations on each
class of capital stock of the Company.
Debt Securities
We currently have no debt securities outstanding.
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
Market Information.
Our common stock is traded on the NASDAQ Over the Counter Bulletin Board
("OTCBB") under the symbol FRCD. There is no active trading market for the
common stock. The following bid quotations have been reported for the period
beginning July 8, 1998, our initial quotation date, and ended September 30,
1999:
Bid Quotations
Period High Low
- ------ ---- ---
Quarter Ended:
September 30, 1998 $3/4 $1/4
December 31, 1998 $9/16 $0.05
Quarter Ended:
March 31, 1999 $0.40 $0.13
June 30, 1999 (1) $17 1/2 $6 7/8
September 30, 1999 (2) $9 $0.22
(1) Prices reflect reverse split 1:20 on April 15, 1999.
(2) Prices reflect forward split 10:1 on September 14, 1999.
Such quotations reflect inter-dealer prices, without retail mark-up, markdown or
commission. Such quotes are not necessarily representative of actual
transactions or of the value of our 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 approximately 11 member firms of the NASD are
currently acting as market makers for the common stock. There is no assurance
that an active trading market will develop which will provide liquidity for the
Company's existing shareholders or for persons who may acquire common stock
through the exercise of warrants.
Holders.
As of September 22, 1999, there were approximately 56 holders of record of our
8,388,210 shares of common stock outstanding. Of these 8,388,210 shares,
2,358,490 are restricted securities 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. Certain of the shares of common stock are held in "street" name
and
<PAGE>
may, therefore, be held by several beneficial owners. Our transfer agent is
American Securities Transfer & Trust, Inc. located at 12039 West Alameda
Parkway, Lakewood, CO 80228.
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.
Dividends.
We have not paid a cash dividend on the common stock since inception. The
payment of dividends may be made at the discretion of our Board of Directors and
will depend upon, among other things, our operations, our capital requirements
and our overall financial condition. As of the date of this registration
statement, we have no intention to declare dividends.
Item 2. Legal Proceedings
We are currently unaware of any pending legal proceeding or any proceeding
contemplated by a governmental authority in which we may be involved.
Item 3. Changes In and Disagreements With Accountants
We have not had any resignation or dismissal of our principal independent
accountants. As of the date of this registration statement, Steele & Co.,
located in Vancouver, British Columbia, serve as our independent accountants and
have prepared the audited statements included as exhibits hereto.
Item 4. Recent Sales of Unregistered Securities.
On June 20, 1997, we sold 2,500,000 shares of our common stock for $50,000.00.
On August 7, 1997, we sold 128,250 shares of our common stock for $51,300.00. On
August 15, 1997, we sold 41,611 shares of our common stock for $41,611.00.
On August 31, 1998, we issued 508,312 shares of our common stock for Business
Consulting Services valued at $223,657.50. On October 20, 1998, we issued
150,000 shares of our common stock for $15,000.00. On December 10, 1998, we
issued 250,000 shares of common stock for Public Relations Services valued at
$56,000.00. On December 10, 1998 we also issued 650,000 options to purchase our
common stock at prices above market in exchange for public relation services.
On March 15, 1999, we sold 3,000,000 shares of our common stock for $150,000.00.
On March 15, 1999, we issued 500,000 shares of our common stock for Business
Consulting Services valued at $25,000.00. We also issued 100,000 options to
purchase our common stock at prices above market. On April 1, 1999, we sold
1,000,000 shares of our common stock for $300,000.00. We relied upon Rule 504 of
Regulation D for the above issuances of our common stock. These securities were
issued without a restrictive legend. We relied upon the following facts in
determining that Rule 504 was available: (a) We were not subject to the
reporting requirements of Section 13 or 15 (d) of the Exchange Act; (b) we were
not a development stage Company without a specific business plan nor a company
whose business plan was to merge with
<PAGE>
an unidentified private entity; (c) the aggregate offering price within any
twelve months did not exceed $1,000,000.No commissions were paid in these
offerings.
Additionally, on August 5, 1997 we issued 310,000 shares of our common stock for
the acquisition of real property valued at $310,000. These shares were issued
with a restrictive legend and were issued pursuant to Section 4(2) of the
Securities Act of 1933.
In October 1999, we issued 2,600,000 shares of our common stock to Praxis, Inc.
pursuant to the terms of our May 11, 1999 agreement with them for research,
development and licensing. These shares were issued pursuant to section 4(2) of
the Securities Act of 1933.
Item 5. Indemnification of Directors and Officers
Section 78.7502 of the NRS provides that Nevada corporations may limit, through
indemnification, the personal liability of their directors or officers in
actions, claims or proceedings brought against such person by reason of that
person's current or former status as an officer or director of the corporation.
Indemnification of directors or officers is available if the person acted in
good faith and in a manner the person reasonably believed was, at least, not
opposed to the best interests of the corporation. In the event of a criminal
action or proceeding, indemnification is not available if the person had
reasonable cause to believe their action was unlawful.
Further, in an action brought by the corporation or in the right of the
corporation, if the person, after exhaustion of all appeals, is found to be
liable to the corporation, or if the person makes payment to the corporation in
settlement of the action, indemnification is available only to the extent a
court of competent jurisdiction determines the person is fairly and reasonably
entitled to indemnification. Such discretionary indemnification is available
only as authorized on a case-by-case basis by: (1) the stockholders; (2) a
majority of a quorum of the board of directors consisting of members of the
board who were not parties to the action, suit or proceeding; (3) if a majority
of a quorum of the Board of Directors consisting of members of the Board who
were not parties to the action, suit or proceeding so orders, by independent
legal counsel in a written opinion; or (4) if a quorum of the Board of Directors
consisting of members of the Board who were not parties to the action cannot be
obtained, by independent legal counsel in a written opinion.
To the extent that a director or officer of a corporation is successful in
defending against an action, suit or proceeding brought against that person as a
result of their current or former status as an officer or director, the
corporation must indemnify the person against all expenses actually and
reasonably incurred by the person in connection with their defense. Nevada law
also allows Nevada corporations to advance expenses of officers and directors
incurred in defending a civil or criminal action as they are incurred, upon
receipt of an undertaking by or on behalf of the director or officer to repay
such expenses if it is ultimately determined by a court of competent
jurisdiction that such officer or director is not entitled to be indemnified by
the corporation because such officer or director did not act in good faith and
in a manner reasonably believed to be in or not opposed to the best interests of
the corporation.
Section 78.751 of the NRS provides that any indemnification provided for by NRS
78.7502 (by court order or otherwise) shall not be deemed exclusive of any other
rights to which the
<PAGE>
indemnified party may be entitled and that the scope of indemnification shall
continue as to directors or officers who have ceased to hold such positions and
to their heirs, executors and administrators.
Section 78.752 of the NRS allows corporations to provide insurance, or other
financial arrangements such as a program of self-insurance, for their directors
or officers. Such insurance may provide coverage for any liability asserted
against the person and liability and expenses incurred by the person in their
capacity as a director or officer or arising out of their status as such,
whether or not the corporation has the authority to indemnify the person against
such liability and expenses. However, no financial arrangement made under
Section 78.752 may provide protection for a person adjudged by a court of
competent jurisdiction, after exhaustion of all appeals there from, to be liable
for intentional misconduct, fraud or a knowing violation of law, except with
respect to the advancement of expenses or indemnification ordered by a court.
Our By-laws provide for the indemnification of its directors and officers to the
maximum extent provided by law. It is the position of the Securities and
Exchange Commission and certain state securities administrators that any attempt
to limit the liability of persons controlling an issuer under the federal
securities laws or state securities laws is contrary to public policy and
therefore unenforceable.
<PAGE>
PART F/S
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(EXPRESSED IN U.S. DOLLARS)
UNAUDITED - SEE NOTICE TO READER
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
[LETTERHEAD OF STEELE & CO.]
NOTICE TO READER
We have compiled the balance sheet of Fairchild International Corporation (a
development stage company) as at September 30, 1999 and the statements of
operations and deficit and cash flow for the nine month periods ended September
30, 1999 and 1998 from information provided by management. We have not audited,
reviewed or otherwise attempted to verify the accuracy or completeness of such
information and, accordingly, we do not express an opinion on them. Readers are
cautioned that these statements may not be appropriate for their purposes.
Vancouver, Canada /s/ Steele & Co.
November 15, 1999 ---------------------
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1999
(EXPRESSED IN U.S. DOLLARS)
1999
----
ASSETS
CURRENT
CASH $ 173,181
=========
LIABILITIES
CURRENT
ACCOUNTS PAYABLE $ 13,226
OWING TO RELATED PARTIES 41,184
---------
54,410
---------
STOCKHOLDERS' EQUITY
SHARE CAPITAL
AUTHORIZED
50,000,000 COMMON SHARES WITH A PAR VALUE
OF $0.001 PER SHARE
1,000,000 PREFERRED SHARES WITH A PAR VALUE
OF $0.01 PER SHARE
ISSUED AND FULLY PAID (NOTE 2)
8,388,170 COMMON SHARES 868,769
DEFICIT ACCUMULATED DURING THE
DEVELOPMENT STAGE (749,998)
---------
TOTAL STOCKHOLDERS' EQUITY 118,771
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 173,181
=========
APPROVED BY THE DIRECTORS
UNAUDITED - SEE NOTICE TO READER
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND DEFICIT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(EXPRESSED IN U.S. DOLLARS)
1999 1998
---- ----
EXPENSES
BANK CHARGES AND EXCHANGE $ 2,310 $ 2,125
CONSULTING 664 14,460
LICENSING AGREEMENT AND RELATED
RESEARCH AND DEVELOPMENT 96,500 --
OFFICE AND SECRETARIAL 8,519 507
PROMOTION AND TRAVEL 97,396 133,061
PROFESSIONAL FEES 32,954 7,963
RELATED PARTY ADMINISTRATION CHARGES 42,692 19,477
RENT 3,525 819
SHAREHOLDER INFORMATION 4,099 2,255
TELEPHONE 1,655 848
TRANSFER AGENT FEES 3,408 2,516
-------- --------
293,722 184,031
MINERAL INTERESTS AND EXPLORATION COSTS -- 26,264
-------- --------
NET LOSS FOR THE PERIOD 293,722 210,295
DEFICIT BEGINNING OF THE PERIOD 456,276 130,662
-------- --------
DEFICIT END OF THE PERIOD $749,998 $340,957
======== ========
BASIC LOSS PER SHARE $ 0.04 $ 0.07
======== ========
UNAUDITED - SEE NOTICE TO READER
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(EXPRESSED IN U.S. DOLLARS)
1999 1998
---- ----
CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
NET LOSS FOR THE PERIOD $(293,722) $(210,295)
ITEM NOT AFFECTING CASH FLOW
ISSUE OF SHARES FOR SERVICES -- 123,658
CHANGE IN NON-CASH OPERATING ITEM
ACCOUNTS PAYABLE 5,876 1,325
--------- ---------
(287,846) (85,312)
--------- ---------
FINANCING ACTIVITIES
OWING TO RELATED PARTIES (14,568) 17,497
SHARE CAPITAL ISSUED FOR CASH 475,000 142,911
SHARE SUBSCRIPTIONS -- (92,911)
--------- ---------
460,432 67,497
--------- ---------
CHANGE IN CASH FOR THE PERIOD 172,586 (17,815)
CASH BEGINNING OF THE PERIOD 595 68,115
--------- ---------
CASH END OF THE PERIOD $ 173,181 $ 50,300
========= =========
UNAUDITED - SEE NOTICE TO READER
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
1. ACCOUNTING POLICES AND NOTES
The accounting policies followed by the Company are unchanged from those
outlined in the audited financial statements for the year ended December
31, 1998. The notes to the financial statements at December 31, 1998
substantially apply to the interim financial statements at September 30,
1999 and are not repeated here. All adjustments have been made which, in
the opinion of management, are necessary in order to make these financial
statements not misleading.
2. SHARE CAPITAL
SHARES CONSIDERATION
------ -------------
Common shares issued and fully paid
Balance at December 31, 1998 7,776,347 $ 393,769
========== ==========
Consolidated on a 1 new share for
20 old shares basis 388,817 $ 393,769
Issued during the period
For cash
@ $0.50 per share 350,000 175,000
@ $.3.00 per share 100,000 300,000
---------- ----------
838,817 $ 868,769
========== ==========
Split on a 10 new share for 1 old share
basis and balance at September 30, 1999 8,388,170 $ 868,769
========== ==========
On September 13, 1999, the common shares were split on a 10 new shares for
1 old share basis.
3. COMMITMENT - PHARMACEUTICAL RESEARCH AND DEVELOPMENT
The Company has entered into Research, Development and License Agreements,
effective September 30, 1999, to acquire an exclusive license to make, use
and sell pharmaceutical products and processes relating to arthritis and
dermal wrinkles. The Company has agreed to pay $250,000 by October 1, 2000
for research on the products and issue 2,600,000 post-split common shares
in consideration for the license. The agreement is with a company under
common management.
UNAUDITED - SEE NOTICE TO READER
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(FORMERLY GOANNA RESOURCES INC.)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1998
(EXPRESSED IN U.S. DOLLARS)
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
[LETTERHEAD OF STEELE & CO.]
INDEPENDENT AUDITORS' REPORT
To the Shareholders of
Fairchild International Corporation
(formerly Goanna Resources Inc.)
We have audited the accompanying balance sheets of Fairchild International
Corporation (formerly Goanna Resources Inc.) (a development stage company) as of
December 31, 1998 and 1997 and the related statements of operations and deficit,
changes in stockholders' equity and cash flow for the periods then ended. These
financial statements are the responsibility of the Company's management. 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 provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fairchild International
Corporation (formerly Goanna Resources Inc.) as at December 31, 1998 and 1997
and the results of its operations and its cash flow for the periods then ended
in conformity with generally accepted accounting principles consistently
applied.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered losses from operations, has a net
capital deficiency and there is no revenue stream from operations. As a result,
there is uncertainty about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Vancouver, Canada /s/ Steele & Co.
October 8, 1999 ---------------------
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(FORMERLY GOANNA RESOURCES INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
(EXPRESSED IN U.S. DOLLARS)
1998 1997
---- ----
ASSETS
CURRENT
CASH $ 595 $ 68,115
========= =========
LIABILITIES
CURRENT
ACCOUNTS PAYABLE $ 7,350 $ 4,922
OWING TO RELATED PARTIES (NOTE 4) 55,752 44,744
--------- ---------
63,102 49,666
--------- ---------
COMMITMENTS (NOTE 7)
STOCKHOLDERS' EQUITY (DEFICIENCY)
SHARE CAPITAL (NOTE 5)
AUTHORIZED
50,000,000 COMMON SHARES WITH A PAR VALUE OF
$0.001 PER SHARE
1,000,000 PREFERRED SHARES WITH A PAR VALUE
OF $0.01 PER SHARE
ISSUED 7,776,347 COMMON SHARES
(1997 - 5,620,000) 393,769 56,200
SHARE SUBSCRIPTIONS -- 92,911
DEFICIT ACCUMULATED DURING
THE DEVELOPMENT STAGE (456,276) (130,662)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) (62,507) 18,449
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 595 $ 68,115
========= =========
APPROVED BY THE DIRECTORS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(FORMERLY GOANNA RESOURCES INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1998
AND THE PERIOD FROM JUNE 20, 1997 (DATE OF INCORPORATION)
TO DECEMBER 31, 1997
(EXPRESSED IN U.S. DOLLARS)
CUMULATIVE
TO PERIODS ENDED
DECEMBER 31 DECEMBER 31
1998 1998 1997
---- -------------------
ADMINISTRATION EXPENSES
ADVERTISING $ 9,008 $ 5,517 $ 3,491
BANK CHARGES AND FOREIGN EXCHANGE 10,129 9,631 498
CONSULTING 23,876 7,194 16,682
OFFICE, RENT AND SECRETARIAL 6,683 2,891 3,792
PROFESSIONAL FEES 24,310 12,964 11,346
PROMOTION 212,374 198,038 14,336
RELATED PARTY ADMINISTRATION
CHARGES 45,986 32,349 13,637
SHAREHOLDER INFORMATION 10,459 2,255 8,204
TELEPHONE AND UTILITIES 1,341 849 492
TRANSFER AGENT FEES 4,158 3,366 792
TRAVEL 8,325 4,264 4,061
-------- -------- --------
356,649 279,318 77,331
MINERAL INTERESTS AND
EXPLORATION COSTS 99,627 46,296 53,331
-------- -------- --------
NET LOSS FOR THE PERIOD (NOTE 6) $456,276 325,614 130,662
========
DEFICIT BEGINNING OF THE PERIOD 130,662 --
-------- --------
DEFICIT END OF THE PERIOD $456,276 $130,662
======== ========
NET LOSS PER SHARE $ 0.05 $ 0.02
======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(FORMERLY GOANNA RESOURCES INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1998
AND THE PERIOD FROM JUNE 20, 1997 (DATE OF INCORPORATION)
TO DECEMBER 31, 1997
(EXPRESSED IN U.S. DOLLARS)
<TABLE>
<CAPTION>
COMMON SHARES TOTAL
------------- CAPITAL IN STOCK-
EXCESS OF HOLDERS'
SHARES AMOUNT PAR VALUE DEFICIT EQUITY
------ ------ --------- ------- ------
<S> <C> <C> <C> <C> <C>
COMMON SHARES
ISSUED FOR CASH
@ $0.01/SHARE 5,000,000 $ 5,000 $ 45,000 $ -- $ 50,000
ISSUED FOR MINERAL
INTERESTS
@ $0.01/SHARE 620,000 620 5,580 -- 6,200
ISSUED FOR CASH
@ $0.20/SHARE 256,500 257 51,043 -- 51,300
@ $0.50/SHARE 83,222 83 41,528 -- 41,611
---------- ---------- ---------- ---------- ----------
5,959,722 5,960 143,151 149,111
NET LOSS FOR THE
PERIOD ENDED
DECEMBER 31, 1997 -- -- -- (130,662) (130,662)
---------- ---------- ---------- ---------- ----------
SHAREHOLDERS'
EQUITY AT
DECEMBER 31, 1997 5,959,722 5,960 143,151 (130,662) 18,449
COMMON SHARES
ISSUED FOR CASH
@ $0.05/SHARE 300,000 300 14,700 -- 15,000
@ $0.11/SHARE 454,545 455 49,545 -- 50,000
ISSUED FOR
SERVICES
@ $0.112/SHARE 500,000 500 55,500 -- 56,000
@ $0.22/SHARE 562,080 562 123,096 -- 123,658
---------- ---------- ---------- ---------- ----------
7,776,347 7,777 385,992 (130,662) 263,107
NET LOSS FOR THE
YEAR ENDED
DECEMBER 31, 1998 -- -- -- (325,614) (325,614)
---------- ---------- ---------- ---------- ----------
7,776,347 $ 7,777 $ 385,992 $ (456,276) $ (62,507)
========== ========== ========== ========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(FORMERLY GOANNA RESOURCES INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOW
FOR THE YEAR ENDED DECEMBER 31, 1998
AND THE PERIOD FROM JUNE 20, 1997 (DATE OF INCORPORATION)
TO DECEMBER 31, 1997
(EXPRESSED IN U.S. DOLLARS)
CUMULATIVE
TO PERIODS ENDED
DECEMBER 31 DECEMBER 31
1998 1998 1997
---- ----------------------
CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
NET LOSS FOR THE PERIOD $(456,276) $(325,614) $(130,662)
ITEM NOT AFFECTING CASH FLOW
ISSUE OF SHARES FOR SERVICES
AND MINERAL INTERESTS 185,858 179,658 6,200
CHANGE IN NON-CASH OPERATING ITEM
ACCOUNTS PAYABLE 7,350 2,428 4,922
--------- --------- ---------
(263,068) (143,528) (119,540)
--------- --------- ---------
FINANCING ACTIVITIES
OWING TO RELATED PARTIES 55,752 11,008 44,744
SHARE CAPITAL ISSUED
FOR CASH 207,911 157,911 50,000
SHARE SUBSCRIPTIONS -- (92,911) 92,911
--------- --------- ---------
263,663 76,008 187,655
--------- --------- ---------
CHANGE IN CASH FOR THE PERIOD $ 595 (67,520) 68,115
=========
CASH BEGINNING OF THE PERIOD 68,115 --
--------- ---------
CASH END OF THE PERIOD $ 595 $ 68,115
========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(FORMERLY GOANNA RESOURCES INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998
(EXPRESSED IN U.S. DOLLARS)
1. ACCOUNTING POLICIES
a. Incorporation and Basis of Presentation
The Company was incorporated in the State of Nevada, U.S.A. on June
20, 1997. These financial statements have been prepared in
accordance with accounting principles and practices generally
accepted in the United States.
b. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying disclosures. Although these estimates
are based on management's best knowledge of current events and
actions the Company may undertake in the future, actual results
ultimately may differ from the estimates.
c. Foreign Currency
Transactions in foreign currency are translated at rates prevailing
on the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies have been translated into U.S.
dollars at the rate of exchange prevailing at the year end. Exchange
gains and losses from foreign currency translation adjustments are
included in current costs.
d. Income Taxes
The Company has incurred operating losses and resource-related
expenditures which are available for tax credit carry-forward. No
certainty exists whether it is more likely than not that some
portion of these amounts will be realized by a reduction of future
taxes payable and no deferred tax asset has been recognized.
e. Uncertainty Due to Year 2000 Issue
The Year 2000 Issue arises because many computerized systems may
recognize the year 2000 as some other date, resulting in errors when
information using year 2000 dates is processed. The effects of the
Year 2000 Issue may be experienced before, on or after January 1,
2000, and, if not addressed, the impact on operations and financial
reporting may range from minor errors to significant systems failure
which could affect an entity's ability to conduct normal business
operations. It is not possible to be certain that all aspects of the
Year 2000 Issue affecting the Company, including those related to
the efforts of customers, suppliers, or other third parties, will be
fully resolved.
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(FORMERLY GOANNA RESOURCES INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998
(EXPRESSED IN U.S. DOLLARS)
2. GOING CONCERN CONSIDERATIONS
As at December 31, 1998, the Company had not reached a level of operations
which would finance day to day activities. These financial statements have
been prepared on the assumption that the Company is a going concern,
meaning it will continue in operation for the foreseeable future and will
be able to realize assets and discharge liabilities in the ordinary course
of operations. Different basis of measurement may be appropriate when a
company is not expected to continue operations for the foreseeable future.
The Company's continuation as a going concern is dependent upon its
ability to attain profitable operations and generate funds therefrom
and/or raise equity capital or borrowings from third parties and related
parties sufficient to meet current and future obligations. The Company
suffered losses from operations of $325,614 and $130,662 for the periods
ended December 31, 1998 and 1997 and had a net capital deficiency of
$62,507 at December 31, 1998.
3. MINERAL INTERESTS
The Company has acquired rights to prospecting licenses in Western
Australia under agreements entered into with the registered holders of the
interests. Subsequent to the year end, the Company abandoned its rights to
the prospecting licenses by not making the required payments and share
issuances. The Company has no further obligations relating to these
property licences.
4. OWING TO RELATED PARTIES
The Company shares office facilities and has common management and
directorships with a number of public and private corporate related
parties. The Company is charged for office rentals and administrative
services on a proportional cost basis. Administration expenses of $21,879
(1997 - $13,637) were paid to a company controlled by a director and
administrative fees of $10,470 (1997 - $Nil) were paid to a director.
Management believes that the methods of cost allocations and resultant
costs are reasonable. Accounts with companies with common management and
directorships, management and directors are unsecured with no fixed terms
of interest or repayment.
5. SHARE CAPITAL
a. Authorized
50,000,000 common shares with a par value of $0.001 per share
1,000,000 preferred shares with a par value of $0.01 per share
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(FORMERLY GOANNA RESOURCES INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998
(EXPRESSED IN U.S. DOLLARS)
5. SHARE CAPITAL (CONTINUED)
b. Common Shares Issued Shares Consideration
------ -------------
For cash at a value of $0.01 per share 5,000,000 $ 50,000
For mineral interests at a value of
$0.01 per share 620,000 6,200
--------- ---------
Balance at December 31, 1997 5,620,000 56,200
For cash at a value of $0.05 per share 300,000 15,000
For cash at a value of $0.11 per share 454,545 50,000
For cash at a value of $0.20 per share 256,500 51,300
For cash at a value of $0.50 per share 83,222 41,611
For services at a value of $0.112 per share 500,000 56,000
For services at a value of $0.22 per share 562,080 123,658
--------- ---------
Balance at December 31, 1998 7,776,347 $ 393,769
========= =========
Subsequent Consolidation 388,817 $ 393,769
========= =========
c. Subsequent Event
On March 15, 1999, the Company completed a consolidation of common
shares by the issue of 1 new share for 20 old shares. On May 28,
1999, the name of the Company was changed to Fairchild International
Corporation.
Subsequent to the year end, the Company issued post-consolidation
shares as follows.
300,000 shares at $0.50 per share
100,000 shares at $3.00 per share
50,000 shares at $0.50 per share for services
6. INCOME TAXES
The Company has incurred resource related expenditures and operating
losses which are available to reduce future years' taxable income. As at
December 31, 1998, tax losses of approximately $456,000 were available for
carry forward. No future benefits have been recognized in the accounts.
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
FAIRCHILD INTERNATIONAL CORPORATION
(FORMERLY GOANNA RESOURCES INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998
(EXPRESSED IN U.S. DOLLARS)
7. COMMITMENTS - PHARMACEUTICAL RESEARCH AND DEVELOPMENT AGREEMENTS
The Company has entered into an agreement, effective September 30, 1999,
to acquire an exclusive license to make, use and sell pharmaceutical
products and processes relating to arthritis and dermal wrinkles. The
Company has agreed to pay $250,000 for research on the products and issue
260,000 common shares in consideration for the license. An initial payment
of $62,500 (paid) is due on closing, followed by three quarterly
instalments of $50,000, commencing January 1, 2000 and a final payment of
$37,500 on October 1, 2000. The agreement is with a company under common
management.
STEELE & CO.
CHARTERED ACCOUNTANTS
<PAGE>
EXHIBIT INDEX
EXHBIT # ITEM PAGE
Ex. 3.1 Articles of Incorporation
Ex. 3.2 Bylaws
Ex. 4 Share Certificate
Ex. 10 Material Contracts - Praxis Pharmaceuticals, Inc.
Ex. 27 Financial Data Schedule
<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.
FAIRCHILD INTERNATIONAL CORP.
Dated: Nov. 23, 1999 By: /s/ Byron Cox, President and Director
-------------- -------------------------------------
Exhibit 3.1
ARTICLES OF INCORPORATION
OF
GOANNA RESOURCES INC.
ARTICLE I
The name of the corporation is Goanna Resources Inc. (the "Corporation").
ARTICLE II
The amount of total authorized capital stock which the Corporation shall
have authority to issue is 50,000,000 shares of common stock, each with $0.001
par value, and 1 ,000,000 shares of preferred stock, each with $0.01 par value.
To the fullest extent permitted by the laws of the State of Nevada (currently
set forth in NRS 78.195), as the same now exists or may hereafter be amended or
supplemented, the Board of Directors may fix and determine the designations,
rights, preferences or other variations of each class or series within each
class of capital stock of the Corporation.
ARTICLE III
The business and affairs of the Corporation shall be managed by a Board of
Directors which shall exercise all the powers of the Corporation except as
otherwise provided in the Bylaws, these Articles of Incorporation or by the laws
of the State of Nevada. The initial Board of Directors shall consist of two
members. The names and addresses of the persons who shall serve as the directors
until the first annual meeting of stockholders and until their successors are
duly elected and qualified are as follows:
Name Address
---- -------
Kathryn Laffy 122 Broome Street
Cottesloe WA 6011
Australia
David Lane 1632 McPherson Drive
Port Coquitlam, B.C. V3G 6C9
Canada
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ARTICLE IV
The name and address of the incorporator of the Corporation is Lori Ann Y.
Fujioka, Esq., do Dill Dill Carr Stonbraker & Hutchings, P.C., 455 Sherman
Street, Suite 300, Denver, Colorado 80203.
ARTICLE V
To the fullest extent permitted by the laws of the State of Nevada
(currently set forth in NRS 78.037), as the same now exists or may hereafter be
amended or supplemented, no director or officer of the Corporation shall be
liable to the Corporation or to its stockholders for damages for breach of
fiduciary duty as a director or officer.
ARTICLE VI
The Corporation shall indemnify, to the fullest extent permitted by
applicable law in effect from time to time, any person against all liability and
expense (including attorneys' fees) incurred by reason of the fact that he is or
was a director or officer of the Corporation, he is or was serving at the
request of the Corporation as a director, officer, employee, or agent of, on in
any similar managerial or fiduciary position of, another corporation,
partnership, joint venture, trust or other enterprise. The Corporation shall
also indemnify any person who is serving or has served the Corporation as a
director, officer, employee, or agent of the Corporation to the extent and in
the manner provided in any bylaw, resolution of the shareholders or directors,
contract, or otherwise, so long as such provision is legally permissible.
ARTICLE VII
The owners of shares of stock of the Corporation shall not have a
preemptive right to acquire unissued shares, treasury shares or securities
convertible into such shares.
ARTICLE VIII
Only the shares of capital stock of the Corporation designated at
issuance as having voting rights shall be entitled to vote at meetings of
stockholders of the Corporation, and only stockholders of record of shares
having voting rights shall be entitled to notice of and to vote at meetings of
stockholders of the Corporation.
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ARTICLE IX
The initial resident agent of the Corporation shall be the Corporation
Trust Company of Nevada, whose street address is 1 East 1st Street, Reno, Nevada
89501.
ARTICLE X
The provisions of NRS 78.378 to 78.3793 inclusive, shall not apply to the
Corporation.
ARTICLE Xl
The purposes for which the Corporation is organized and its powers are as
follows:
To engage in all lawful business; and
To have, enjoy, and exercise all of the rights, powers, and
privileges conferred upon corporations incorporated pursuant to Nevada law,
whether now or hereafter in effect, and whether or not herein specifically
mentioned.
ARTICLE XII
One-third of the votes entitled to be cast on any matter by each
shareholder voting group entitled to vote on a matter shall constitute a quorum
of that voting group for action on that matter by shareholders.
ARTICLE XIII
The holder of a bond, debenture or other obligation of the Corporation may
have any of the rights of a stockholder in the Corporation to the extent
determined appropriate by the Board of Directors at the time of issuance of such
bond, debenture or other obligation.
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FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
JUL 07 1999
No. C 13229-97
-----------
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
OF
GOANNA RESOURCES INC.
We, the undersigned President and Secretary of Goanna Resources Inc., do hereby
certify:
That the Board of Directors of said corporation pursuant to a written consent to
action in lieu of a meeting, dated the 28th day of May, 1999, adopted a
resolution to amend the original articles as follows:
Article I is hereby amended to read as follows:
ARTICLE I
The name of the corporation is Fairchild International Corporation (the
"Corporation").
The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation is 838,817, and that the said change
and amendment have been consented to and approved by a majority vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.
/s/ Byron Cox
----------------------------------------
Byron Cox, President
/s/ Byron Cox
----------------------------------------
Byron Cox, Secretary
CITY OF VANCOUVER )
)
PROVINCE OF BRITISH COLUMBIA )
On June 24, 1999, personally appeared before me, a Notary Public, BYRON COX,
who acknowledged that he executed the above instrument.
/s/ [ILLEGIBLE]
----------------------------------------
Notary Public
(NOTARY STAMP OR SEAL)
ELMER ALEXANDER YUSEP
Barrister & Solicitor
1100 - 510 BURRARD ST.
VANCOUVER, B.C. V6C 3A8
Exhibit 3.2
GOANNA RESOURCES INC.
BYLAWS
- --------------------------------
Adopted as of June 20, 1997
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GOANNA RESOURCES INC.
BYLAWS
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
Offices
1.1 Registered Office.......................................................1
1.2 Principal Office........................................................1
ARTICLE II
Stockholders
2.1 Annual Meeting..........................................................1
2.2 Special Meetings........................................................1
2.3 Place of Meeting........................................................2
2.4 Notice of Meeting.......................................................2
2.5 Adjournment.............................................................2
2.6 Organization............................................................2
2.7 Closing of Transfer Books or Fixing of Record Date......................2
2.8 Quorum..................................................................2
2.9 Proxies.................................................................3
2.10 Voting of Shares........................................................3
2.11 Action Taken Without a Meeting..........................................3
2.12 Meetings by Telephone...................................................4
-i-
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Section Page
- ------- ----
ARTICLE III
Directors
3.1 Board of Directors; Number; Qualifications; Election ...................4
3.2 Powers of the Board of Directors: Generally.............................4
3.3 Committees of the Board of Directors....................................4
3.4 Resignation.............................................................4
3.5 Removal.................................................................5
3.6 Vacancies...............................................................5
3.7 Regular Meetings........................................................5
3.8 Special Meetings........................................................5
3.9 Notice..................................................................5
3.10 Quorum..................................................................5
3.11 Manner of Acting........................................................5
3.12 Compensation............................................................5
3.13 Action Taken Without a Meeting..........................................6
3.14 Meetings by Telephone...................................................6
ARTICLE IV
Officers and Agents
4.1 Officers of the Corporation.............................................6
4.2 Election and Term of Office.............................................6
4.3 Removal.................................................................6
4.4 Vacancies...............................................................7
4.5 President...............................................................7
4.6 Vice Presidents.........................................................7
4.7 Secretary...............................................................7
4.8 Treasurer...............................................................8
4.9 Salaries................................................................8
4.10 Bonds...................................................................8
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Section Page
- ------- ----
ARTICLE V
Stock
5.1 Certificates............................................................8
5.2 Record..................................................................9
5.3 Consideration for Shares................................................9
5.4 Cancellation of Certificates...........................................10
5.5 Lost Certificates......................................................10
5.6 Transfer of Shares.....................................................10
5.7 Transfer Agents, Registrars, and Paying Agents.........................10
ARTICLE VI
Indemnification of Officers and Directors
6.1 Indemnification; Advancement of Expenses...............................10
6.2 Insurance and Other Financial Arrangements Against
Liability of Directors, Officers, Employees, and
Agents.................................................................11
ARTICLE VII
Acquisition of Controlling Interest
7.1 Acquisition of Controlling Interest....................................11
ARTICLE VIII
Execution of Instruments; Loans, Checks and Endorsements;
Deposits; Proxies
8.1 Execution of Instruments...............................................11
8.2 Loans..................................................................11
8.3 Checks and Endorsements................................................12
8.4 Deposits...............................................................12
8.5 Proxies................................................................12
8.6 Contracts..............................................................12
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Section Page
- ------- ----
ARTICLE IX
Miscellaneous
9.1 Waivers of Notice......................................................12
9.2 Corporate Seal.........................................................13
9.3 Fiscal Year............................................................13
9.4 Amendment of Bylaws....................................................13
9.5 Uniformity of Interpretation and Severability..........................13
9.6 Emergency Bylaws.......................................................13
Secretary's Certification.....................................................13
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BYLAWS
OF
GOANNA RESOURCES INC.
ARTICLE I
Offices
1.1 Registered Office. The registered office of the Corporation required
by the General Corporation Law of Nevada, Nevada Revised Statutes, 1957 ("NRS"),
Chapter 78, to be maintained in Nevada may be, but need not be, identical with
the principal office if in Nevada, and the address of the registered office may
be changed from time to time by the Board of Directors.
1.2 Principal Office. The Corporation may have such other office or
offices either within or outside of the State of Nevada as the business of the
Corporation may require from time to time if so designated by the Board of
Directors.
ARTICLE II
Stockholders
2.1 Annual Meeting. Unless otherwise designated by the Board of Directors,
the annual meeting shall be held on the date and at the time and place fixed by
the Board of Directors; provided, however, that the first annual meeting shall
be held on a date that is within 18 months after the date on which the
Corporation first has stockholders, and each successive annual meeting shall be
held on a date that is within 18 months after the preceding annual meeting.
2.2 Special Meetings. Special meetings of stockholders of the Corporation,
for any purpose, may be called by the Chairman of the Board, the president, any
vice president, any two members of the Board of Directors, or the holders of at
least 10% of all of the shares entitled to vote at such meeting. Any holder or
holders of not less than 10% of all the outstanding shares of the Corporation
who desire to call a special meeting pursuant to this Section 2 of Article II
shall notify the president that a special meeting of the stockholders shall be
called. Within 30 days after notice to the president, the president shall set
the date, time, and location of a stockholders' meeting. The date set by the
president shall be not less than 30 nor more than 120 days after the date of
notice to the president. If the president fails to set the date, time, and
location of special meeting within the 30-day time period described above, the
stockholder or stockholders calling the meeting shall set the date, time, and
location of the special meeting. At a special meeting no business shall be
transacted and no corporate action shall be taken other than that stated in the
notice of the meeting.
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2.3 Place of Meeting. The Board of Directors may designate any place,
either within or outside the State of Nevada, as the place for any annual
meeting or special meeting called by the Board of Directors. If no designation
is made, or if a meeting shall be called otherwise than by the Board, the place
of meeting shall be the Company's principal offices, whether within or outside
the State of Nevada.
2.4 Notice of Meeting. Written notice signed by an officer designated by
the Board of Directors, stating the place, day, and hour of the meeting and the
purpose for which the meeting is called, shall be delivered personally or mailed
postage prepaid to each stockholder of record entitled to vote at the meeting
not less than 10 nor more than 60 days before the meeting. If mailed, such
notice shall be directed to the stockholder at his address as it appears upon
the records of the Corporation, and notice shall be deemed to have been given
upon the mailing of any such notice, and the time of the notice shall begin to
run from the date upon which the notice is deposited in the mail for
transmission to the stockholder. Personal delivery of any such notice to any
officer of a corporation or association, or to any member of a partnership,
constitutes delivery of the notice to the corporation, association or
partnership. Any stockholder may waive notice of any meeting by a writing signed
by him, or his duly authorized attorney, either before or after the meeting.
2.5 Adjournment. When a meeting is for any reason adjourned to another
time or place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken. At
the adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
2.6 Organization. The president or any vice president shall call meetings
of stockholders to order and act as chairman of such meetings. In the absence of
said officers, any stockholder entitled to vote at that meeting, or any proxy of
any such stockholder, may call the meeting to order and a chairman shall be
elected by a majority of the stockholders entitled to vote at that meeting. In
the absence of the secretary or any assistant secretary of the Corporation, any
person appointed by the chairman shall act as secretary of such meeting. An
appropriate number of inspectors for any meeting of stockholders may be
appointed by the chairman of such meeting. Inspectors so appointed will open and
close the polls, will receive and take charge of proxies and ballots, and will
decide all questions as to the qualifications of voters, validity of proxies and
ballots, and the number of votes properly cast.
2.7 Closing of Transfer Books or Fixing of Record Date. The directors may
prescribe a period not exceeding 60 days before any meeting of the stockholders
during which no transfer of stock on the books of the Corporation may be made,
or may fix a day not more than 60 days before the holding of any such meeting as
the day as of which stockholders entitled to notice of and to vote at such
meetings must be determined. Only stockholders of record on that day are
entitled to notice or to vote at such meeting.
2.8 Quorum. Unless otherwise provided by the Articles of Incorporation,
one-third of the outstanding shares of the Corporation entitled to vote,
represented in person or by proxy, shall
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constitute a quorum at a meeting of stockholders. If fewer than one-third of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting without further notice for a period not to
exceed 60 days at any one adjournment. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified. The
stockholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of stockholders so
that less than a quorum remains.
If a quorum is present, the affirmative vote of a majority of the shares
represented at the meeting and entitled to vote on the subject matter shall be
the act of the stockholders, unless the vote of a greater number or voting by
classes is required by law or the Articles of Incorporation.
2.9 Proxies. At all meetings of stockholders, a stockholder may vote by
proxy, as prescribed by law. Such proxy shall be filed with the secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
6 months from the date of its creation, unless it is coupled with an interest,
or unless the stockholder specifies in it the length of time for which it is to
continue in force, which may not exceed 7 years from the date of its creation.
2.10 Voting of Shares. Each outstanding share, regardless of class, shall
be entitled to one vote, and each fractional share shall be entitled to a
corresponding fractional vote on each matter submitted to a vote at a meeting of
stockholders, except as may be otherwise provided in the Articles of
Incorporation or in the resolution providing for the issuance of the stock
adopted by the Board of Directors pursuant to authority expressly vested in it
by the provisions of the Articles of Incorporation. If the Articles of
Incorporation or any such resolution provide for more or less than one vote per
share for any class or series of shares on any matter, every reference in the
Articles of Incorporation, these Bylaws and the General Corporation Law of
Nevada to a majority or other proportion or number of shares shall be deemed to
refer to a majority or other proportion of the voting power of all of the shares
or those classes or series of shares, as may be required by the Articles of
Incorporation, or in the resolution providing for the issuance of the stock
adopted by the Board of Directors pursuant to authority expressly vested in it
by the Articles of Incorporation, or the General Corporation Law of Nevada.
Cumulative voting shall not be allowed. Unless the General Corporation Law of
Nevada, the Articles of Incorporation, or these Bylaws provide for different
proportions, an act of stockholders who hold at least a majority of the voting
power and are present at a meeting at which a quorum is present is the act of
the stockholders.
2.11 Action Taken Without a Meeting. Unless otherwise provided in the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at a meeting of the stockholders may be taken without a meeting if a
written consent thereto is signed by stockholders holding at least a majority of
the voting power, except that if a different proportion of voting power is
required for such an action at a meeting, then that proportion of written
consents is required. In no instance where action is authorized by written
consent need a meeting of stockholders be called or notice given. The written
consent must be filed with the minutes of the proceedings of the stockholders.
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2.12 Meetings by Telephone. Unless other restricted by the Articles of
Incorporation or these Bylaws, stockholders may participate in a meeting of
stockholders by means of a telephone conference or similar method of
communication by which all persons participating in the meeting can hear each
other. Participation in a meeting pursuant to this Section constitutes presence
in person at the meeting.
ARTICLE III
Directors
3.1 Board of Directors; Number; Qualifications; Election. The Corporation
shall be managed by a Board of Directors, all of whom must be natural persons at
least 18 years of age. Directors need not be residents of the State of Nevada or
stockholders of the Corporation. The number of directors of the Corporation
shall be not less than one nor more than twelve. Subject to such limitations,
the number of directors may be increased or decreased by resolution of the Board
of Directors, but no decrease shall have the effect of shortening the term of
any incumbent director. Subject to the provisions of Article III of the
Corporation's Articles of Incorporation, each director shall hold office until
the next annual meeting of shareholders or until his successor has been elected
and qualified.
3.2 Powers of the Board of Directors: Generally. Subject only to such
limitations as may be provided by the General Corporation Law of Nevada or the
Articles of Incorporation, the Board of Directors shall have full control over
the affairs of the Corporation.
3.3 Committees of the Board of Directors. The Board of Directors may, by
resolution or resolutions passed by a majority of the whole Board, designate one
or more committees, each committee to consist of one or more directors, which,
to the extent provided in the resolution or resolutions or in these Bylaws,
shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and may have power to
authorize the seal of the Corporation to be affixed to all papers on which the
Corporation desires to place on a seal. Such committee or committees shall have
such name or names as may be determined from time to time by resolution adopted
by the Board of Directors. Unless the Articles of Incorporation or these Bylaws
provide otherwise, the Board of Directors may appoint natural persons who are
not directors to serve on committees.
3.4 Resignation. Any director of the Corporation may resign at any time by
giving written notice of his resignation to the Board of Directors, the
president, any vice president, or the secretary of the Corporation. Such
resignation shall take effect at the date of receipt of such notice or at any
later time specified therein and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective. When
one or more directors shall resign from the Board, effective at a future date, a
majority of the directors then in office.
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3.5 Removal. Except as otherwise provided in the Articles of
Incorporation, any director may be removed, either with or without cause, at any
time by the vote of the stockholders representing not less than two-thirds of
the voting power of the issued and outstanding stock entitled to voting power.
3.6 Vacancies. All vacancies, including those caused by an increase in the
number of directors, may be filled by a majority of the remaining directors,
though less than a quorum, unless it is otherwise provided in the Articles of
Incorporation. A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office. A director elected to fill a
vacancy caused by an increase in the number of directors shall hold office until
the next annual meeting of stockholders and until his successor has been elected
and has qualified.
3.7 Regular Meetings. A regular meeting of the Board of Directors shall be
held without other notice than this Bylaw immediately after and at the same
place as the annual meeting of stockholders. The Board of Directors may provide
by resolution the time and place, either within or outside the State of Nevada,
for the holding of additional regular meetings without other notice than such
resolution.
3.8 Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the president or a one-third of the directors
then in office. The person or persons authorized to call special meetings of the
Board of Directors may fix any place, either within or outside Nevada, as the
place for holding any special meeting of the Board of Directors called by them.
3.9 Notice. Notice of any special meeting shall be given at least two days
previously thereto by written notice delivered personally or mailed to each
director at his business address. Any director may waive notice of any meeting.
A director's presence at a meeting shall constitute a waiver of notice of such
meeting if the director's oral consent is entered on the minutes or by taking
part in the deliberations at such meeting without objecting. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of notice of
such meeting.
3.10 Quorum. A majority of the number of directors elected and qualified
at the time of the meeting shall constitute a quorum for the transaction of
business at any such meeting of the Board of Directors, but if less than such
majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
3.11 Manner of Acting. If a quorum is present, the affirmative vote of a
majority of the directors present at the meeting and entitled to vote on that
particular matter shall be the act of the Board, unless the vote of a greater
number is required by law or the Articles of Incorporation.
3.12 Compensation. By resolution of the Board of Directors, any director
may be paid any one or more of the following: his expenses, if any, of
attendance at meetings; a fixed sum for
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attendance at such meeting; or a stated salary as director. No such payment
shall preclude any director from serving the Corporation in any other capacity
and receiving compensation therefor.
3.13 Action Taken Without a Meeting. Unless otherwise provided in the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at a meeting of the Board of Directors or a committee thereof may be
taken without a meeting if, before or after the action, a written consent
thereto is signed by all the members of the Board or of the committee. The
written consent must be filed with the minutes of the proceedings of the Board
or committee.
3.14 Meetings by Telephone. Unless other restricted by the Articles of
Incorporation or these Bylaws, members of the Board of Directors or of any
committee designated by the Board, may participate in a meeting of the Board or
committee by means of a telephone conference or similar method of communication
by which all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this Section constitutes presence in
person at the meeting.
ARTICLE IV
Officers and Agents
4.1 Officers of the Corporation. The Corporation shall have a president, a
secretary, and a treasurer, each of whom shall be elected by the Board of
Directors. The Board of Directors may appoint one or more vice presidents and
such other officers, assistant officers, committees, and agents, including a
chairman of the board, assistant secretaries, and assistant treasurers, as they
may consider necessary, who shall be chosen in such manner and hold their
offices for such terms and have such authority and duties as from time to time
may be determined by the Board of Directors. One person may hold any two or more
offices. The officers of the Corporation shall be natural persons 18 years of
age or older. In all cases where the duties of any officer, agent, or employee
are not prescribed by the Bylaws or by the Board of Directors, such officer,
agent, or employee shall follow the orders and instructions of (a) the
president, and if a chairman of the board has been elected, then (b) the
chairman of the board.
4.2 Election and Term of Office. The officers of the Corporation shall be
elected by the Board of Directors annually at the first meeting of the Board
held after each annual meeting of the stockholders. If the election of officers
shall not be held at such meeting, such election shall be held as soon
thereafter as may be convenient. Each officer shall hold office until the first
of the following occurs: until his successor shall have been duly elected and
shall have qualified; or until his death; or until he shall resign; or until he
shall have been removed in the manner hereinafter provided.
4.3 Removal. Any officer or agent may be removed by the Board of Directors
or by the executive committee, if any, whenever in its judgment the best
interests of the Corporation will be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the
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person so removed. Election or appointment of an officer or agent shall not of
itself create contract rights.
4.4 Vacancies. A vacancy in any office, however occurring, may be filled
by the Board of Directors for the unexpired portion of the term.
4.5 President. The president shall, subject to the direction and
supervision of the Board of Directors, be the chief executive officer of the
Corporation and shall have general and active control of its affairs and
business and general supervision of its officers, agents, and employees. He
shall, unless otherwise directed by the Board of Directors, attend in person or
by substitute appointed by him, or shall execute, on behalf of the Corporation,
written instruments appointing a proxy or proxies to represent the Corporation,
at all meetings of the stockholders of any other corporation in which the
Corporation shall hold any stock. He may, on behalf of the Corporation, in
person or by substitute or by proxy, execute written waivers of notice and
consents with respect to any such meetings. At all such meetings and otherwise,
the president, in person or by substitute or proxy as aforesaid, may vote the
stock so held by the Corporation and may execute written consents and other
instruments with respect to such stock and may exercise any and all rights and
powers incident to the ownership of said stock, subject however to the
instructions, if any, of the Board of Directors. The president shall have
custody of the treasurer's bond, if any. If a chairman of the board has been
elected, the chairman of the board shall have, subject to the direction and
modification of the Board of Directors, all the same responsibilities, rights,
and obligations as described in these Bylaws for the president.
4.6 Vice Presidents. The vice presidents, if any, shall assist the
president and shall perform such duties as may be assigned to them by the
president or by the Board of Directors. In the absence of the president, the
vice president designated by the Board of Directors or (if there be no such
designation) the vice president designated in writing by the president shall
have the powers and perform the duties of the president. If no such designation
shall be made, all vice presidents may exercise such powers and perform such
duties.
4.7 Secretary. The secretary shall perform the following: (a) keep the
minutes of the proceedings of the stockholders, executive committee, and the
Board of Directors; (b) see that all notices are duly given in accordance with
the provisions of these Bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the Corporation and affix the seal to all
documents when authorized by the Board of Directors; (d) keep, at the
Corporation's registered office or principal place of business within or outside
Nevada, a record containing the names and addresses of all stockholders and the
number and class of shares held by each, unless such a record shall be kept at
the office of the Corporation's transfer agent or registrar; (e) sign with the
president or a vice president, certificates for shares of the Corporation, the
issuance of which shall have been authorized by resolution of the Board of
Directors; (f) have general charge of the stock transfer books of the
Corporation, unless the Corporation has a transfer agent; and (g) in general,
perform all duties incident to the office of secretary and such other duties as
from time to time may be
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assigned to him by the president or by the Board of Directors. Assistant
secretaries, if any, shall have the same duties and powers, subject to
supervision by the secretary.
4.8 Treasurer. The treasurer shall be the principal financial officer of
the Corporation and shall have the care and custody of all funds, securities,
evidences of indebtedness, and other personal property of the Corporation, and
shall deposit the same in accordance with the instructions of the Board of
Directors. He shall receive and give receipts and acquittances for monies paid
in or on account of the Corporation, and shall pay out of the funds on hand all
bills, payrolls, and other just debts of the Corporation of whatever nature upon
maturity. He shall perform all other duties incident to the office of the
treasurer and, upon request of the Board, shall make such reports to it as may
be required at any time. He shall, if required by the Board, give the
Corporation a bond in such sums and with such sureties as shall be satisfactory
to the Board, conditioned upon the faithful performance of his duties and for
the restoration to the Corporation of all books, papers, vouchers, money, and
other property of whatever kind in his possession or under his control belonging
to the Corporation. He shall have such other powers and perform such other
duties as may be from time to time prescribed by the Board of Directors or the
president. The assistant treasurers, if any, shall have the same powers and
duties, subject to the supervision of the treasurer.
The treasurer shall also be the principal accounting officer of the
Corporation. He shall prescribe and maintain the methods and systems of
accounting to be followed, keep complete books and records of account, prepare
and file all local, state, and federal tax returns, prescribe and maintain an
adequate system of internal audit, and prepare and furnish to the president and
the Board of Directors statements of account showing the financial position of
the Corporation and the results of its operations.
4.9 Salaries. Officers of the Corporation shall be entitled to such
salaries, emoluments, compensation, or reimbursement as shall be fixed or
allowed from time to time by the Board of Directors.
4.10 Bonds. If the Board of Directors by resolution shall so require, any
officer or agent of the Corporation shall give bond to the Corporation in such
amount and with such surety as the Board of Directors may deem sufficient,
conditioned upon the faithful performance of that officer's or agent's duties
and offices.
ARTICLE V
Stock
5.1 Certificates. The shares of stock shall be represented by
consecutively numbered certificates signed in the name of the Corporation by its
president or a vice president and by the treasurer or an assistant treasurer or
by the secretary or an assistant secretary, and shall be sealed with the seal of
the Corporation, or with a facsimile thereof.
8
<PAGE>
Whenever any certificate is countersigned or otherwise authenticated by a
transfer agent or transfer clerk, and by a registrar, then a facsimile of the
signatures of the officers or agents, the transfer agent or transfer clerk or
the registrar of the Corporation may be printed or lithographed upon the
certificate in lieu of the actual signatures. If the Corporation uses facsimile
signatures of its officers and agents on its stock certificates, it cannot act
as the registrar of its own stock, but its transfer agent and registrar may be
identical if the institution acting in those dual capacities countersigns or
otherwise authenticates any stock certificates in both capacities. In case any
officer who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
delivered by the Corporation, the certificate or certificates may nevertheless
be adopted by the Corporation and be issued and delivered as though the person
or persons who signed the certificates, or whose facsimile signature has been
used thereon, had not ceased to be an officer of the Corporation. If the
Corporation is authorized to issue shares of more than one class or more than
one series of any class, each certificate shall set forth upon the face or back
of the certificate or shall state that the Corporation will furnish to any
stockholder upon request and without charge a full statement of the
designations, preferences, limitations, and relative rights of the shares of
each class authorized to be issued and, if the Corporation is authorized to
issue any preferred or special class in series, the variations in the relative
rights and preferences between the shares of each such series, so far as the
same have been fixed and determined, and the authority of the Board of Directors
to fix and determine the relative rights and preferences of subsequent series.
Each certificate representing shares shall state the following upon the
face thereof: the name of the state of the Corporation's organization; the name
of the person to whom issued; the number and class of shares and the designation
of the series, if any, which such certificate represents; the par value of each
share represented by such certificate or a statement that the shares are without
par value. Certificates of stock shall be in such form consistent with law as
shall be prescribed by the Board of Directors. No certificate shall be issued
until the shares represented thereby are fully paid.
5.2 Record. A record shall be kept of the name of each person or other
entity holding the stock represented by each certificate for shares of the
Corporation issued, the number of shares represented by each such certificate,
the date thereof and, in the case of cancellation, the date of cancellation. The
person or other entity in whose name shares of stock stand on the books of the
Corporation shall be deemed the owner thereof and thus a holder of record of
such shares of stock, for all purposes as regards the Corporation.
5.3 Consideration for Shares. Shares shall be issued for such
consideration, expressed in dollars (but not less than the par value thereof) as
shall be fixed from time to time by the Board of Directors. That part of the
surplus of a corporation which is transferred to stated capital upon the
issuance of shares as a share dividend shall be deemed the consideration for the
issuance of such dividend shares. Such consideration may consist, in whole or
in part, of money, promissory notes, other property, tangible or intangible, or
in labor or services actually performed for the Corporation, contracts for
services to be performed or other securities of the Corporation.
9
<PAGE>
5.4 Cancellation of Certificates. All certificates surrendered to the
Corporation for transfer shall be canceled and no new certificates shall be
issued in lieu thereof until the former certificate for a like number of shares
shall have been surrendered and canceled, except as herein provided with respect
to lost, stolen, or destroyed certificates.
5.5 Lost Certificates. In case of the alleged loss, destruction, or
mutilation of a certificate of stock, the Board of Directors may direct the
issuance of a new certificate in lieu thereof upon such terms and conditions in
conformity with law as it may prescribe. The Board of Directors may in its
discretion require a bond, in such form and amount and with such surety as it
may determine, before issuing a new certificate.
5.6 Transfer of Shares. Upon surrender to the Corporation or to a transfer
agent of the Corporation of a certificate of stock duly endorsed or accompanied
by proper evidence of succession, assignment, or authority to transfer, and such
documentary stamps as may be required by law, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, and
cancel the old certificate. Every such transfer of stock shall be entered on the
stock book of the Corporation which shall be kept at its principal office or by
its registrar duly appointed.
The Corporation shall be entitled to treat the holder of record of any
share 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 share on the
part of any other person whether or not it shall have express or other notice
thereof, except as may be required by the laws of Nevada.
5.7 Transfer Agents, Registrars, and Paying Agents. The Board may at its
discretion appoint one or more transfer agents, registrars, and agents for
making payment upon any class of stock, bond, debenture, or other security of
the Corporation. Such agents and registrars may be located either within or
outside Nevada. They shall have such rights and duties and shall be entitled to
such compensation as may be agreed.
ARTICLE VI
Indemnification of Officers and Directors
6.1 Indemnification; Advancement of Expenses. To the fullest extent
permitted by the laws of the State of Nevada (currently set forth in NRS
78.751), as the same now exists or may hereafter be amended or supplemented, the
Corporation shall indemnify its directors and officers, including payment of
expenses as they are incurred and in advance of the final disposition of any
action, suit, or proceeding. Employees, agents, and other persons may be
similarly indemnified by the Corporation, including advancement of expenses, in
such case or cases and to the extent set forth in a resolution or resolutions
adopted by the Board of Directors. No amendment of this Section shall have any
effect on indemnification or advancement of expenses relating to any event
arising prior to the date of such amendment.
10
<PAGE>
6.2 Insurance and Other Financial Arrangements Against Liability of
Directors, Officers, Employees, and Agents. To the fullest extent permitted by
the laws of the State of Nevada (currently set forth in NRS 78.752), as the
same now exists or may hereafter be amended or supplemented, the Corporation may
purchase and maintain insurance and make other financial arrangements on behalf
of any person who is or was a director, officer, employee, or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, for any liability asserted against such
person and liability and expense incurred by such person in its capacity as a
director, officer, employee, or agent, or arising out of such person's status as
such, whether or not the Corporation has the authority to indemnify such person
against such liability and expenses.
ARTICLE VII
Acquisition of Controlling Interest
7.1 Acquisition of Controlling Interest. The provisions of the General
Corporation Law of Nevada pertaining to the acquisition of a controlling
interest (currently set forth NRS 78.378 to 78.3793, inclusive), as the same now
exists or may hereafter be amended or supplemented, shall not apply to the
Corporation.
ARTICLE VIII
Execution of Instruments; Loans, Checks and Endorsements;
Deposits; Proxies
8.1 Execution of Instruments. The president or any vice president shall
have the power to execute and deliver on behalf of and in the name of the
Corporation any instrument requiring the signature of an officer of the
Corporation, except as otherwise provided in these Bylaws or where the execution
and delivery thereof shall be expressly delegated by the Board of Directors to
some other officer or agent of the Corporation. Unless authorized to do so by
these Bylaws or by the Board of Directors, no officer, agent, or employee shall
have any power or authority to bind the Corporation in any way, to pledge its
credit, or to render it liable pecuniarily for any purpose or in any amount.
8.2 Loans. The Corporation may lend money to, guarantee the obligations
of, and otherwise assist directors, officers, and employees of the Corporation,
or directors of another corporation of which the Corporation owns a majority of
the voting stock, only upon compliance with the requirements of the General
Corporation Law of Nevada.
No loans shall be contracted on behalf of the Corporation and no evidence
of indebtedness shall be issued in its name unless authorized by a resolution of
the Board of Directors. Such authority may be general or confined to specific
instances.
11
<PAGE>
8.3 Checks and Endorsements. All checks, drafts, or other orders for the
payment of money, obligations, notes, or other evidences of indebtedness, bills
of lading, warehouse receipts, trade acceptances, and other such instruments
shall be signed or endorsed by such officers or agents of the Corporation as
shall from time to time be determined by resolution of the Board of Directors,
which resolution may provide for the use of facsimile signatures.
8.4 Deposits. All funds of the Corporation not otherwise employed shall be
deposited from time to time to the Corporation's credit in such banks or other
depositories as shall from time to time be determined by resolution of the Board
of Directors, which resolution may specify the officers or agents of the
Corporation who shall have the power, and the manner in which such power shall
be exercised, to make such deposits and to endorse, assign, and deliver for
collection and deposit checks, drafts, and other orders for the payment of money
payable to the Corporation or its order.
8.5 Proxies. Unless otherwise provided by resolution adopted by the Board
of Directors, the president or any vice president may from time to time appoint
one or more agents or attorneys-in-fact of the Corporation, in the name and on
behalf of the Corporation, to cast the votes which the Corporation may be
entitled to cast as the holder of stock or other securities in any other
corporation, association, or other entity any of whose stock or other securities
may be held by the Corporation, at meetings of the holders of the stock or other
securities of such other corporation, association, or other entity or to consent
in writing, in the name of the Corporation as such holder, to any action by such
other corporation, association, or other entity, and may instruct the person or
persons so appointed as to the manner of casting such votes or giving such
consent, and may execute or cause to be executed in the name and on behalf of
the Corporation and under its corporate seal, or otherwise, all such written
proxies or other instruments as he may deem necessary or proper in the premises.
8.6 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.
ARTICLE IX
Miscellaneous
9.1 Waivers of Notice. Whenever notice is required by the General
Corporation Law of Nevada, by the Articles of Incorporation, or by these Bylaws,
a waiver thereof in writing signed by the director, stockholder, or other person
entitled to said notice, whether before, at, or after the time stated therein,
or his appearance at such meeting in person or (in the case of a stockholders'
meeting) by proxy, shall be equivalent to such notice.
12
<PAGE>
9.2 Corporate Seal. The Board of Directors may adopt a seal circular in
form and bearing the name of the Corporation, the state of its incorporation,
and the word "Seal" which, when adopted, shall constitute the seal of the
Corporation. The seal may be used by causing it or a facsimile of it to be
impressed, affixed, manually reproduced, or rubber stamped with indelible ink.
9.3 Fiscal Year. The Board of Directors may, by resolution, adopt a fiscal
year for the Corporation.
9.4 Amendment of Bylaws. The provisions of these Bylaws may at any time,
and from time to time, be amended, supplemented or repealed by the Board of
Directors.
9.5 Uniformity of Interpretation and Severability. These Bylaws shall be
so interpreted and construed as to conform to the Articles of Incorporation and
the laws of the State of Nevada or of any other state in which conformity may
become necessary by reason of the qualification of the Corporation to do
business in such state, and where conflict between these Bylaws, the Articles of
Incorporation or the laws of such a state has arisen or shall arise, these
Bylaws shall be considered to be modified to the extent, but only to the extent,
conformity shall require. If any provision hereof or the application thereof
shall be deemed to be invalid by reason of the foregoing sentence, such
invalidity shall not affect the validity of the remainder of these bylaws
without the invalid provision or the application thereof, and the provisions of
these Bylaws are declared to be severable.
9.6 Emergency Bylaws. Subject to repeal or change by action of the
stockholders, the Board of Directors may adopt emergency bylaws in accordance
with and pursuant to the provisions of the laws of the State of Nevada.
SECRETARY'S CERTIFICATION
The undersigned Secretary of Goanna Resources Inc. (the "Corporation")
hereby certifies that the foregoing Bylaws are the By1aws of the Corporation
adopted by the Board of Directors as of the 20th day of June, 1997.
By /s/ David [ILLEGIBLE]
--------------------------------------
, Secretary
13
Exhibit 4
================================================================================
FAIRCHILD INTERNATIONAL CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
[ILLEGIBLE] AUTHORIZED SHARES [ILLEGIBLE] PAR VALUE
---------- ----------
NUMBER SHARES
---------- ----------
-------------------------
CUSIP 303719 20 7
-------------------------
SEE REVERSE
FOR [ILLEGIBLE]
THIS CERTIFIES THAT
Is The Owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF $.001 PAR VALUE COMMON STOCK OF
FAIRCHILD INTERNATIONAL CORPORATION
transferable only on the books of the Company in person or by duly authorized
attorney upon surrender of this Certificate properly endorsed. This Certificate
is not valid unless countersigned by the Transfer Agent and Registrar.
IN WITNESS WHEREOF, the said Company has caused this Certificate to be
executed by the facsimile signatures of its duly authorized officers and to be
sealed with the facsimile seal of the Company.
Dated:
COUNTERSIGNED AND REGISTERED:
American Securities Tranfer & Trust, Inc.
P.O. Box 1596
Denver, Colorado 80201
By
------------------------------------------
Transfer Agent & Registrar [ILLEGIBLE]
FAIRCHILD INTERNATIONAL CORPORATION
CORPORATE SEAL
NEVADA
================================================================================
THIS PROOF MUST HAVE
PROOF YOUR O.K. AND SIGNATURE
BEFORE PRINTING
O.K. AS IS _____ O.K. AS CORRECTED _____
Signature ______________________________
Exhibit 10
RESEARCH, DEVELOPMENT AND LICENCE AGREEMENT
Dated the 11th day of May, 1999
BETWEEN:
PRAXIS PHARMACEUTICALS, INC.,
a body corporate incorporated pursuant
to the laws of the State of Utah,
one of the United States of America
and having an office at
ANUTECH Court, North Road, in the
City of Canberra, ACT, Australia
("Praxis")
- and -
FAIRCHILD INTERNATIONAL INC., a body corporate
incorporated pursuant to the laws of
the Province of British Columbia, Canada
and having an office at
Suite 600, 595 Hornby Street,
City of Vancouver, British Columbia, Canada
("FAIRCHILD")
WHEREAS:
A. The Australian National University is the owner of certain patents related
to an invention entitled "Phosphosugar-based anti-inflammatory and/or
immunosuppressive drugs" and certain patent applications related to an invention
entitled "Novel phosphosugars and phosphosugar-containing compounds having
anti-inflammatory activity" which are described in more detail herein;
B. ANUTECH PTY Ltd. ("Anutech"). the commercialization company of the
Australian National University, has entered into an agreement as agent for and
on behalf of the Australian National University with Praxis pursuant to which
Praxis has been granted an exclusive licence for the use of the inventions
described above in specified areas of application;
C. Praxis has and intends to continue to conduct research and development
<PAGE>
- 2 -
related to The above described inventions;
D. Praxis wishes to obtain funding from FAIRCHILD to conduct research in the
area of arthritis and dermal wrinkles and related to the above inventions;
E. FAIRCHILD wishes to obtain an exclusive, world-wide licence to make use
and sell products and processes developed by Praxis relating to arthritis and
dermal wrinkles;
NOW THEREFORE, in consideration of the mutual terms and conditions
contained herein, the parties hereto agree as follows:
PART I - DEFINITIONS AND INTERPRETATION
Section 1 - Definitions
In this Agreement, including this Section, the following defined
terms have the meanings indicated:
(a) "Anutech Licence Agreements" means the agreement entered into
between Anutech and Praxis dated 27th October, 1997, a copy of which
is attached hereto as Schedule "D";
(b) "Closing Date" means September 30th. 1999
(c) "Confidential Information" means confidential or proprietary
information, trade secrets, know-how and technical information
related to the inventions claimed pursuant to the Patents and any
other information disclosed in confidence by Praxis to FAIRCHILD or
by FAIRCHILD to Praxis;
(d) "Field of Use" means arthritis and dermal wrinkles;
(e) "Intellectual Property" means any and all methods, devices,
techniques, discoveries, inventions (whether or not patentable),
know-how, ideas,
<PAGE>
- 3 -
processes, trade secrets and other proprietary information,
including any patent right, copyright, trade secret or similar
right.
(f) "Licensed Patent Applications" means:
(i) the patent applications relating to the invention entitled "Novel
phosphosugars and phosphosugar-containing compounds having
anti-inflammatory activity", including United State Patent
Application No. 08/953305. Australian Application No 41866/97 and
any patent applications filed now or in the future in any country
which disclose and claim the same inventions or the priority of
Australia, Provisional Application PO 3098/96, filed October 18,
1996; and
(ii) all patent applications related to the New Intellectual Property;
(g) "Licensed Patents" means:
(i) the patents described on Schedule "A" hereto;
(ii) all patents issued out of the Patent Applications;
(iii) any patents issued in any country disclosing and claiming the same
inventions as those claimed in the patents referred to in clauses
(i) and (ii) hereof; and
(iv) all divisions, re-issues, re-examinations, continuations, renewals
and extensions of the foregoing;
(h) "Licensed Product" means any product the manufacture or use of which is
covered by a Valid Claim;
(i) "Licensed Technology" means:
(i) the inventions disclosed and claimed in the Licensed Patent
Applications and Licensed Patents,
(ii) any additional Intellectual Property related to the inventions
referred to in clause (i), their description, use, or application;
and
(iii) all Confidential Information in any way related to the inventions
referred to in clause (i) hereof and the Intellectual Property
referred to in clause (ii) hereof;
<PAGE>
- 4 -
(j) "Net Revenue" means all consideration received by FAIRCHILD:
(i) for the sale or other disposition of Licensed Products; and
(ii) pursuant to the terms of any sublicences granted by FAIRCHILD in
accordance with Section 11(3);
less the following:
(A) all costs incurred by FAIRCHILD in the development of Licensed
Products, including, without limitation, payments made by
FAIRCHILD to Praxis pursuant to Section 8, costs and expenses
incurred by FAIRCHILD pursuant to Section 13 and expenses
incurred by FAIRCHILD in connection with obtaining Regulatory
Approvals, including those referred to in Section 17;
(B) all costs of direct materials, labour and overhead expenses
required in the manufacture and production of Licensed
Products;
(C) costs incurred by FAIRCHILD in connection with the marketing,
selling and distribution of Licensed Products:
(D) any tax or government charge (other than an income tax) levied
on the sale, transportation or delivery of Licensed Product;
(E) trade and quantity discounts or rebates actually allowed and
taken; and
(F) credits or allowances given or made for rejection or return of
previously sold Licensed Products.
(k) "New Intellectual Property" means Intellectual Property that is developed
by Praxis during the conduct of the Research Projects performed by Praxis
in accordance with Section 8;
(l) "Regulatory Approval" means any approvals, licenses, registrations or
authorizations of any relevant authority having jurisdiction necessary for
the development, use, importation, packaging, marketing, distribution,
sale, storage and transportation of the Licensed Products;
<PAGE>
-5-
(m) "Research Projects" means the Research and Development Projects relating
to dermal wrinkles and arthritis conducted in accordance with Section 8;
(n) "Shares" means shares in the capital stock of FAIRCHILD described as Class
A Common and having the rights set out on Schedule "B" hereto;
(o) "Valid Claim" means a claim of any issued and unexpired Licensed Patent
which claim has not been held unenforceable, unpatentable or invalid by a
decision of a court or government body of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, which has
not been rendered unenforceable through disclaimer or otherwise, and which
has not been lost through an interference proceeding or by abandonment.
Section 2 - Governing Law and Jurisdiction
This Agreement shall be governed by and interpreted in accordance
with the laws in force in the Province of British Columbia. The parties hereby
submit to he jurisdiction of the Courts of British Columbia.
Section 3 - Currency
All monetary units, except as expressly stated otherwise in this
Agreement, are in United States dollars.
Section 4 - Affiliates
For the purpose of this Agreement, a company is an Affiliate of a
party if:
(a) the party owns or controls, directly or indirectly, 50% or more of
the voting stock of that company;
(b) the party owns or controls, directly or indirectly, sufficient
voting stock in that company to elect a majority of the directors of
that company;
<PAGE>
-6-
that company to elect a majority of the directors of that company;
(c) that company owns or controls, directly or indirectly, 50% or more
of the voting stock of the party;
(d) that company owns or controls, directly or indirectly, sufficient
voting stock in the party to elect a majority of the directors of
the party;
(e) an organization owns or controls, directly or indirectly, 50% or
more of the voting stock of the party and that company; or
(f) an organizations owns or controls, directly or indirectly,
sufficient voting stock in the party and the company to elect a
majority of the directors of the party and that company.
Section 5 - Schedules
The following Schedules are incorporated into and form part of this
Agreement;
Schedule "A" - Patents
Schedule "B" - Share Rights
Schedule "C" - Research Projects
Schedule "D" - Anutech License
PART II - PURCHASE AND SALE OF SHARES
Section 6 - Subscription and Purchase
(1) In consideration for the licensing rights to the Praxis Intellectual
Property, FAIRCHILD hereby agrees to transfer, on or before the Closing Date,
260,000 pre-split shares or 2.6 million post-split shares of Fairchild
International Inc. to Praxis, and guarantees that the Shares will be issued as
fully paid up and non-accessible Shares; that the Shares be allotted and that a
certificate for the Shares be issued to Praxis
<PAGE>
-7-
(2) Praxis shall certify as at the Closing Date that the following
representations and warranties are correct:
(a) Praxis is engaged primarily in the business of developing a unique
panel of natural carbohydrate based compounds and exploiting
commercial applications of such;
(b) there are no material lawsuits against Praxis, or its directors or
officers that are related to the business of Praxis, nor, to the
best of the knowledge of Praxis and its directors and officers are
any being contemplated;
(c) Praxis is current in all taxes owed, including payroll taxes, and on
all debts, accounts payable and leases;
(d) Praxis has provided copies of its most recent financial statements
to FAIRCHILD and the information contained in such financial
statements is complete and accurately reflects Praxis' situation,
financial and otherwise;
(e) a copy of every material executed lease, licence, partnership or
collaboration agreement (whether technical, marketing, manufacturing
or other) stockholder agreement, loan agreement, employment
agreement, purchase and sale agreement has been provided to
FAIRCHILD;
(f) a comprehensive listing and description of all Intellectual Property
in the name of Praxis or obtained by Praxis through licensing has
been provided to FAIRCHILD as have copies of file wrappers for all
Licensed Patent Applications and there are no existing or potential
patent disputes of which Praxis is aware or for which Praxis has not
provided full and complete disclosure to FAIRCHILD;
(g) a complete and current listing of Praxis' capital structure and the
terms and conditions associated therewith has been provided to
FAIRCHILD, including a list of all shareholders, options, Warrants,
puts and other instruments that may affect FAIRCHILD's equity
position after shareholdings are fully diluted;
(h) there are no material written or oral agreements with any other
person or corporation pursuant to which Praxis or it directors or
officers have agreed to do anything beyond the requirements of the
formal written contracts referred to in clause (e);
<PAGE>
-6-
(i) the transfer of the Shares to Praxis contemplated by this Agreement
will not constitute a breach of any contract or commitment to which
FAIRCHILD is a party;
(j) Praxis has filed all necessary tax returns;
(k) this Agreement has been duly authorized, executed and delivered by
Praxis and is a legal, valid and binding obligations of Praxis
enforceable by FAIRCHILD in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency and other laws
affecting the rights of creditors generally;
(l) the execution and delivery of this Agreement by Praxis and the
completion of the transactions herein will not result in a breach or
violation of any of the provisions of any obligation of Praxis under
any contract to which Praxis may be a party; any judgment, decree,
order or award of any court governmental body or arbitrator having
jurisdiction over Praxis; or any applicable law, statute, ordinance,
regulation or rule;
(m) the issue of the Shares to Praxis is in compliance with the
constating documents of FAIRCHILD; and
(n) Praxis is not a non-resident of Canada within the meaning of
Section 116 of the Income Tax Act (Canada).
(3) if at any time prior to the Closing Date:
(a) Praxis shall have failed to comply with any term or condition
contained herein;
(b) any representations and warranties set out in Section 6(2) is
incorrect in any material respect;
(c) there is any material default under debts owed by Praxis which
default has not been cured within any applicable grace period; or
(d) any material final judgments are rendered against Praxis;
FAIRCHILD may terminate this Agreement upon written notice to Praxis.
<PAGE>
-9-
(4) All registration and recording fees payable to third parties in connection
with the closing of the transactions outlined in this Section 6 shall be borne
by Praxis.
Section 7 - Purchase of Additional Shares
Praxis shall not purchase any Shares in addition to those to which Praxis
is entitled pursuant to Section 6 unless such purchase is made in conjunction
with or pursuant to an agreement between Praxis and FAIRCHILD for the
acquisition by Praxis of voting control of FAIRCHILD.
PART III - RESEARCH AND DEVELOPMENT
Section 8 - Research Projects
(1) Praxis shall conduct the Research Projects and perform all work described
in Schedule "C".
(2) Praxis shall commence work on October 1st, 1999 and shall use reasonable
efforts to complete the Research Projects in accordance with the work schedule
included as part of Schedule "C".
(3) The Research Projects shall be performed by Praxis in a thorough and
diligent manner in accordance with Good Laboratory Practices and normal
professional standards.
(4) Praxis shall report to FAIRCHILD at the times and in the manner set forth
in Schedule "C".
(5) FAIRCHILD shall pay to Praxis the total sum of $250,000.00 USD after
deduction for any loans to the company, payable as an initial payment of $62,500
USD
<PAGE>
-10-
and then in three equal quarterly installments of $50,000 USD payable on the
first day of each month commencing on January 1st, 2000 and a single, and final,
quarterly payment of $37,500 USD on October 1st, 2000, such payments to be
exclusive of any taxes, whether municipal, provincial, federal or Goods and
Services. The funds paid by FAIRCHILD to Praxis pursuant to this Section 8 shall
only be used by Praxis for the conduct of the Research Projects and shall only
be expended in accordance with the budget included as part of Schedule "C"
unless Praxis obtains prior written authorization from FAIRCHILD.
(6) FAIRCHILD and Praxis shall, not less than once every three (3) months,
review and evaluate progress on the Research Projects. Following such reviews
milestones as set out in Schedule C may be revised as and when needed by mutual
agreement between FAIRCHILD and Praxis.
(7) Praxis shall use reasonable efforts to ensure that the technology used in
the Research Projects does not infringe on any patents or proprietary rights of
other persons.
Section 9 - Records and Confidentiality
(1) Praxis shall maintain complete and accurate records of the activities
conducted and results obtained pursuant to the Research Projects, all in
accordance with good scientific practice. Upon written request from FAIRCHILD
Praxis shall provide copies of any such records to FAIRCHILD.
(2) Praxis shall keep full, accurate and complete records of books of account
relating to financial aspects of the Research Projects. FAIRCHILD, or a
designate of FAIRCHILD, may from time to time upon reasonable prior written
notice to Praxis examine, audit or have examined or audited the records and
books of account of Praxis.
<PAGE>
-11-
(3) All data, reports, plans, records, logs and other information relating to
the Research Projects shall be treated by Praxis and FAIRCHILD as the
confidential property of both parties and both parties shall use all reasonable
efforts to ensure that such information is kept strictly confidential during the
term of this Agreement and for a period of ten (10) years thereafter. Nothing
herein shall prevent Praxis from using, disclosing or authorizing disclosure of
information:
(a) which is or becomes part of the public domain through no act or
failure on the part of Praxis;
(b) which was in Praxis' possession prior to its development pursuant to
the Research Projects or prior to receipt or acquisition from
FAIRCHILD;
(c) which is disclosed to Praxis by a third party without a covenant of
confidentiality, provided that such third party is, to the knowledge
of Praxis, under no obligation of confidentiality with respect to
the information; or
(d) with the prior written authorization of FAIRCHILD.
Section 10 - Ownership of New Intellectual Property
(1) New Intellectual Property shall promptly be disclosed by Praxis to
FAIRCHILD and thereafter shall be included as part of the Licensed Technology
and licensed to FAIRCHILD pursuant to Section 11.
(2) All expenses connected with Preparing, filing, prosecuting, obtaining
maintaining and enforcing intellectual property rights related to the New
Intellectual Property shall be borne by FAIRCHILD.
<PAGE>
- 12 -
PART IV - LICENCE
Section 11 - Grant
(1) Praxis hereby grants to FAIRCHILD an exclusive, world-wide sublicence
under the Licensed Patent Applications and Licensed Patents, and an exclusive,
worldwide sublicence under the New Intellectual Property, to use the Licensed
Technology and to make, use and sell any products, compounds, compound uses,
processes, applications, methods or procedures within the Field of Use.
(2) FAIRCHILD shall be entitled to grant further sublicences of the rights
granted by Praxis to FAIRCHILD pursuant to Section 11(1) hereof. FAIRCHILD shall
advise Praxis in writing of any and all sublicences granted by FAIRCHILD in
accordance with this Section 11(3) and shall provide Praxis with the following
information:
(a) name of the sublicencee;
(b) the amount of any licence fee or royalties payable by the
sublicencee; and
(c) such further information as may be reasonably requested by Praxis
(3) FAIRCHILD may assign this Agreement to an Affiliate of FAIRCHILD or may
transfer or assign the rights and obligations of FAIRCHILD pursuant to Parts
III, IV or V, or any combination thereof, to an Affiliate of FAIRCHILD.
FAIRCHILD shall advise Praxis in writing of any such transfer or assignment.
Notwithstanding any such transfer or assignment, FAIRCHILD shall at all times
remain liable to Praxis for the performance of the obligations set out herein,
including the obligation to pay to Praxis a share of Net Revenue in accordance
with Section 12.
<PAGE>
- 13-
Section 12 - Revenue
(1) Net Revenue shall be apportioned between the parties and FAIRCHILD shall
pay to Praxis an amount equal to thirty five percent (35%) of Net Revenue of
Praxis products for so long as there are Valid Claims.
(2) All payments required to be made pursuant to Section 12(1) shall be made
according to Section 8(5).
Section 13 - Records and Reports
(1) FAIRCHILD shell keep full, accurate and complete records and books of
account relating to Net Revenue and any amounts payable by FAIRCHILD to Praxis
pursuant to Section 12 hereof.
(2) All payments made by FAIRCHILD to Praxis pursuant to Section 12 shall be
accompanied by a report providing such information as is reasonably required by
Praxis to determine an accurate determination of the amounts payable by
FAIRCHILD to Praxis in accordance with Section 12.
(3) Praxis may from time to time, upon reasonable prior notice to FAIRCHILD,
have the records and books of account maintained by FAIRCHILD in accordance with
Section 13(1) hereof audited or examined by a duly authorized independent
chartered accountant to ascertain the accuracy of the payments made. All costs
of any audit, examination or report shall be payable by Praxis, unless the
report discloses an underpayment of five (5%) percent or more, in which case the
cost of the audit, examination or report shall be payable by FAIRCHILD.
Section 14 - Protection. Enforcement and Infringements
<PAGE>
- 14 -
(1) Praxis shall permit FAIRCHILD to control and direct (including the
selection of patent agents or patent attorneys) the preparation, filing and
prosecution of all patent applications the subject of this Agreement included
within the Field of Use of the Licensed Technology, including the New
Intellectual Property. Without limiting the generality of the foregoing, Praxis
shall, upon FAIRCHILD's request and at FAIRCHILD's cost and expense, file and
prosecute patent applications to protect the Licensed Technology in any country
that a patent application has not been filed. FAIRCHILD shall consult with
Praxis on the content of all patent applications and related filings. Praxis
shall bear all costs related to the preparation, filing, prosecution and
maintenance with respect to the Licensed Patents described on Schedule "A", the
Licensed Patent Applications described in Section 1(g)(i) and any other patents
or Licensed Patent Applications that disclose and claim the same inventions.
FAIRCHILD shall pay all costs of preparing, filing, prosecuting and maintaining
all Licensed Patent Applications and Licensed Patents related to the New
Intellectual Property.
(2) If either party believes that any Licensed Patents are being infringed by
another person, that party shall promptly notify the other party and shall
provide any evidence of infringement which is reasonably available. FAIRCHILD
shall have the first right and option, but not the obligation, to bring an
action for infringement, at FAIRCHILD's sole cost and expense, against the
alleged infringer. If FAIRCHILD elects to take such action, the conduct of the
action shall be entirely under the direction and control of FAIRCHILD. If
FAIRCHILD exercises the rights contained herein, FAIRCHILD may name Praxis as a
party plaintiff in such action, suit or proceeding if reasonably necessary under
the circumstances, provided that FAIRCHILD shall indemnify and hold Praxis and
Anutech harmless from any costs or expenses incurred in connection with such
action, suit or proceeding. Any damages or sums recovered by FAIRCHILD in any
such action, suit or proceeding, or any settlement thereof, shall be retained by
FAIRCHILD, but, to the extent that the recovery reflects lost sales of Licensed
Products, the net amount after deducting expenses incurred by FAIRCHILD, shall
be included as part of Net Revenue.
<PAGE>
- 15 -
(3) If FAIRCHILD elects not to pursue an action for infringement, whether
alone or jointly with Praxis, Praxis shall have the right and option, but not
the obligation, at Praxis's sole cost and expense, to bring the action for
infringement against the alleged infringer. Any damages or sums recovered by
Praxis in such action, suit or proceeding, or any settlement thereof, shall be
retained by Praxis, but, to the extent that the recovery reflects lost sales of
Licensed Products, Praxis shall pay to FAIRCHILD one-half of the net amount
after deducting expenses incurred by Praxis.
(4) The parties shall cooperate in defending any impeachment, interference or
infringement action, suit or proceeding brought against either Praxis or
FAIRCHILD related to the Licensed Technology.
(5) The parties shall not take any actions that may be reasonably known to
compromise the position of the other party with respect to legal proceedings
commenced or to be commenced or being defended by the other party.
(6) The parties shall render all reasonable assistance, including providing
all documents in their possession and any witnesses as are or may be required in
the conduct of any proceedings referred to herein. If any party renders such
assistance at the request of another party, be requesting party shall reimburse
the assisting party for expenses incurred to render such assistance.
Section 15 - Warranties, Indemnities and Insurance
(1) Praxis represents and Warrants to FAIRCHILD that, as of the Closing Date:
(a) Praxis owns or has valid and enforceable licenses of the Licensed
Technology free and clear of all liens, charges, security interests
and
<PAGE>
- 16 -
encumbrances, licences and other restrictions;
(b) the Anutech Licence Agreement is in full force and effect, unamended
and that neither Praxis nor Anutech are in default of any of the
terms and conditions contained therein;
(c) to the best of Praxis's knowledge and belief, the practising of the
Licensed Technology will not infringe the rights of any other
person; and
(d) to the best of Praxis's knowledge and belief, it is not aware of any
activities or conduct of any other person that would constitute
infringement of the Licensed Technology.
(2) The parties shall assume and be liable for their own losses, damages and
expenses of any nature whatsoever which they may suffer, sustain, pay or incur
by reason of any matter or thing arising out of, or in any way related to this
Agreement, except for such losses, costs, damages and expenses as are the result
of the wilful breach of any term herein by the other party or the wilful or
negligent acts or omissions of the other party.
(3) Each party shall indemnify and hold harmless the other party, its
employees and agents, from and against any and all claims, demands and costs
whatsoever that may arise out of, directly or indirectly, the indemnifying
party's performance of this Agreement or that of the indemnifying party's
employees or agents. Such indemnifications shall survive this Agreement.
(4) Praxis shall, at its own expense and without limiting its liabilities
herein, maintain comprehensive or commercial general liability insurance with an
insurer in an amount not less than $1,000,000.00 per occurrence (annual general
aggregate, if any, not less than $2,000,000.00), insuring against bodily injury,
personal injury and property damage, including loss of use thereof. Such
insurance shall include blanket contractual liability.
<PAGE>
-17-
(5) From the date that any Product arising out of the the Licensed Technology
is first applied for therapeutic human use (and for the term or foreseeable term
of the human use) FAIRCHILD undertakes to hold product liability insurance to
the value of at least $10,000,000.00. Such policies shall name Praxis as
additional insureds and shall be purchased from a reputable insurer.
Certificates evidencing the coverage shall be provided to Praxis.
Section 17 - Regulatory Approvals
(1) FAIRCHILD shall use reasonable efforts to obtain Regulatory Approvals.
(2) Praxis shall assist FAIRCHILD in obtaining Regulatory Approvals in the
various countries by providing such information and data as may be in the
possession of Praxis necessary for or of assistance in obtaining any Regulatory
Approvals. FAIRCHILD shall be responsible for all regulatory, agency, filing,
inspection and other fees and expenses and charges incurred in connection with
obtaining any Regulatory Approvals pursuant to Section 17(1).
(3) Praxis shall ensure that all information and data generated by Praxis that
is related to the Clinical Trials or would be of any assistance to FAIRCHILD in
obtaining Regulatory Approvals shall be maintained in a form suitable for
submission to regulatory authorities and shall at all times be kept secure and
confidential.
PART VI - GENERAL
Section 18 - Term and Termination
(1) The term of this Agreement shall expire on the expiration of the last
Licensed Patent. Upon the expiration of this Agreement, FAIRCHILD's licence
<PAGE>
-18-
pursuant to Section 11 shall become a fully paid-up, perpetual licence.
(2) This Agreement may be terminated at any time upon the mutual agreement of
the parties.
(3) If:
(a) either party has breached any of its obligations pursuant to this
Agreement and fails to remedy such breach or to commence and
diligently pursue reasonable steps to remedy such breach within
sixty (60) days after notice in writing from the other party;
(b) either party becomes bankrupt or insolvent or takes the benefit of
any statute for bankrupt or insolvent debtors or makes any proposal,
assignment or arrangement with its creditors, or any steps are taken
or proceedings commenced by any person for the dissolution, winding
up or termination of either parties existence or the liquidation of
its assets; or
(c) a trustee, receiver, receiver manager or like person is appointed
with respect to the business or assets of a party;
the party in default may terminate this Agreement by giving written notice to
the party in default.
(4) If Praxis is in default of any of its obligations related to the
performance of the Research Projects, and has failed to remedy such breach
within sixty {60) days after notice in writing from FAIRCHILD, FAIRCHILD may
terminate the Research Projects immediately upon written notice to Praxis. If
FAIRCHILD terminates the Research Projects in accordance with this Section
18(4).
(a) FAIRCHILD shall reimburse Praxis for costs and expenses incurred in
accordance with the budget included as part of Schedule "C" to the
date of termination.
(b) FAIRCHILD shall have no further obligation with respect to the
conduct of
<PAGE>
-19-
the Research Projects or any costs and expenses related thereto.
(c) notwithstanding the termination of the Research Project, all New
Intellectual Property developed prior to the date of termination
shall be disclosed by Praxis to FAIRCHILD and shall be included as
part of the Licensed Technology and licensed to FAIRCHILD pursuant
to Section 11 and
(d) FAIRCHILD shall have the right to complete the Research Project, or
any part thereof at its own cost and expense and any results;
improvements to Intellectual Property sublicenced from Praxis under
the terms of this Agreement; new patents and patent applications
arising from this shall be deemed to be New Intellectual Property.
(5) The following sections shall survive termination of this Agreement: 1, 2,
3, 4, 5, 9 and 15.
Section 19 - Publicity
(1) A copy of all public announcements and press releases which either party
intends to release or make regarding products or technology covered by the
licence shall be provided to the other party prior to being released or made.
Any public announcement or news release that names, refers to or in any way
identifies both parties shall be approved by both parties prior to being
released or made. Each party shall respond to a request for approval within five
(5) working days of receipt of the copy and the approval of each party shall not
be unreasonably withheld.
(2) If either party is prevented from complying with Section 19(1) as a result
of the requirements of a Securities Commission or other regulatory body, the
party shall not be considered to be in breach of this Agreement, but shall use
reasonable efforts to consult with and keep the other party informed.
(3) The parties shall not use each other's name in any advertising material
without the prior written consent of the other party, which consent may be
arbitrarily
<PAGE>
-20-
withheld.
(4) Subject to subsection (3), FAIRCHILD shall be responsible for and have
control of labelling of Licensed Products.
Section 20 - Compliance with Laws
The parties shall observe and comply with all applicable laws,
ordinances. codes and regulations of Government agencies, including Federal,
Provincial, Municipal and local governing bodies having jurisdiction.
Section 21 - Relationship
Nothing in this Agreement shall be construed as:
(a) constituting either party as the agent, employee or representative
of the other party; or
(b) creating a partnership or as imposing upon either party any
partnership duty, obligation or liability to the other party.
Section 22 - Notices
All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be sent to the following addresses or
such other addresses as the relevant party may notify from time to time:
TO: William B Cowden, CEO
Praxis Pharmaceuticals Inc.
GPO Box 1978
Canberra, ACT, Australia 2601
Facsimile: 61 2 6279 9758
<PAGE>
-21-
TO: Byron Cox
FAIRCHILD INTERNATIONAL Inc.
#600 - 595 Hornby Street
Vancouver, British Columbia V6C 1A4
Facsimile: (604) 646-5649
Notices sent by prepaid registered mail shall be deemed to be received by the
addressee on the 7th day (excluding Saturdays, Sundays, statutory holidays and
any period of postal disruption) following the mailing thereof. Notices
personally served or transmitted by facsimile shall be deemed received when
actually delivered or transmitted, provided such delivery shall be made during
normal business hours.
Section 23 - Assignment
Except as expressly permitted pursuant to Section 11, the parties shall
not assign this Agreement or any part thereof, or any rights hereunder without
the prior written consent of the other party, such consent not to be
unreasonably withheld.
Section 24 - Further Assurances
The parties shall with reasonable diligence take all action, do all
things, attend or cause their representatives to attend all meetings and execute
all further documents, agreements and assurances as may be required from time to
time in order to carry out the terms and conditions of this Agreement in
accordance with their true intent.
Section 25 - Settlement of Disputes
(1) If there is any dispute or disagreement related to or arising out of this
Agreement (the "Disagreement") the parties shall refer the Disagreement for
resolution
<PAGE>
- 22 -
to their respective Chief Executive Officers, or their nominees.
(2) If the Disagreement is not resolved pursuant to Section 25(1) within
thirty (30) days (or such longer period as agreed upon between the parties), a
mediator shall be appointed by the parties who shall assist the parties in
resolving the Disagreement.
(3) If the Disagreement is not resolved under Section 25(2) within thirty (30)
days (or such longer period as agreed upon between the parties) either party may
refer the Disagreement to be resolved by arbitration conducted as follows:
(a) either party may require arbitration by giving written notice to
arbitrate to the other party, which written notice shall identify
the nature of the Disagreement;
(b) if the parties are able to agree upon a single arbitrator, the
arbitration shall be conducted before the single arbitrator;
(c) if the parties have been unable to agree upon the selection of a
single arbitrator within two (2) weeks after receipt of the notice
requiring arbitration, each party shall within one (1) further week,
by notice in writing given to the other party, nominate one neutral
arbitrator. If ether party fails to nominate an arbitrator in
accordance with this clause, the arbitrator so nominated shall
proceed to conduct the arbitration alone. If both parties nominate
neutral arbitrators in accordance with this clause, the two
arbitrators so nominated shall nominate a third arbitrator within
one (1) week of their nomination;
(d) the arbitrator or arbitrators shall immediately proceed to hear and
determine the Disagreement, The parties agree that it is important
that all Disagreements be resolved promptly and the parties
therefore agree that the arbitration shall be required to be
conducted expeditiously and that the final disposition shall be
accomplished within two (2) weeks. The parties shall ensure that the
arbitrator or arbitrators upon accepting the nomination shall agree
that the arbitrator has time available for the timely handling of
the arbitration in order to achieve final disposition within two (2)
weeks;
(e) the decision of the arbitrator or arbitrators shall be rendered in
writing without reasons and shall be promptly served upon both
parties. If the
<PAGE>
-23-
arbitration is being conducted before a panel of three arbitrators,
the decision of any two of the three arbitrators shall be decision
of the arbitration panel. The decision of the arbitrator or
arbitrators shall be binding upon the parties;
(f) in the event of the death, resignation, incapacity, neglect or
refusal to act of any arbitrator, and if the neglect or refusal
continues for a period of five (5) days after notice of such has
been given by either party, another arbitrator shall be nominated
to replace the arbitrator by the person who has originally nominated
that arbitrator;
(g) the costs of the arbitration shall be in the discretion of the
arbitrators, and shall be borne by the parties in accordance with
the decision of the arbitrators.
Section 26 - Enurement
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF the parties hereto have executed this Agreement
as of the day and year first above written.
PRAXIS PHARMACEUTICALS, INC.
Per: /s/ [ILLEGIBLE]
------------------------------------
Per:
------------------------------------
FAIRCHILD INTERNATIONAL INC.
Per: /s/ [ILLEGIBLE]
------------------------------------
Per:
------------------------------------
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