<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(B)
OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
ADVANCED PLANT PHARMACEUTICALS, INC.
(Name of Small Business Issuer in its charter)
Delaware 59-2762023
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
75 Maiden Lane 10038
New York, NY (Zip Code)
(Address of principal executive offices)
Registrant's telephone number: (212) 402-7878
Securities to be registered under Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- - ------------------- ---------------------------------
<S> <C>
COMMON STOCK Nasdaq OTC Bulletin Board
par value $.0007
</TABLE>
Securities to be registered under Section 12(g) of the Act:
None
----
Title of class
<PAGE> 2
ADVANCED PLANT PHARMACEUTICALS, INC.
INDEX TO REGISTRATION STATEMENT ON FORM 10-SB
Items in Form 10-SB
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I
Item 1. Description of Business........................................... 3
Item 2. Management's Plan of Operation.................................... 6
Item 3. Description of Property........................................... 7
Item 4. Security Ownership of Certain Beneficial Owners and Management.... 7
Item 5. Directors, Executive Officers, Promoters and Control Persons...... 8
Item 6. Executive Compensation............................................ 9
Item 7. Certain Relationships and Related Transactions.................... 10
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......................... 17
PART F/S
Financial Statements...................................................... 19
PART III
Item 1. Index to Exhibits................................................. 35
</TABLE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-SB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-SB that are not statements of
historical fact may be deemed to be forward looking statements. Without limiting
the foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"estimate," or "continue" or comparable terminology are intended to identify
forward-looking statements. The Company believes that the assumptions and
expectations reflected in such forward-looking statements are reasonable based
on information available to the Company on the date of this report. The Company
cannot give any assurances that these assumptions and expectations will prove to
have been correct or that the Company will take any action that its management
may be presently planning. These statements by their nature involve substantial
risks and uncertainties and actual results may differ materially depending on a
variety of factors, many of which are not within the Company's control.
<PAGE> 3
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Business development. Advanced Plant Pharmaceuticals, Inc. (the "Company"
or "APPI") was incorporated in the State of Delaware in 1986, under the name
Ventra Management, Inc. ("Ventra"). On July 20, 1994, Ventra amended its
Certificate of Incorporation to change its name to Advanced Plant
Pharmaceuticals, Inc.
Business of the Company; principal products and services. The Company is a
development stage company that utilizes whole plants to develop all natural
dietary supplements. The Company has what it believes is a unique thirteen step
process (the "Process") utilizing whole plants for the production of dietary
supplements. The Company believes that its Process will (i) preserve, in the
dietary supplements produced with such Process, virtually the whole of the
natural ingredients found in the plant and (ii) will result in all of the
dietary supplements produced with such Process using the same plants in the same
proportions, having near identical ingredient formulations. The Company believes
that the current technology used by other producers of dietary supplements
extracts natural ingredients and nutrients from a plant through an extraction
process using alcohol which, the Company believes, changes the chemical
formation of the plant and destroys many of the natural ingredients the plant
has to offer. The Company's Process, however, utilizes the whole plant without
the use of alcohol and allows the use of nearly the whole of the natural
ingredients available from the plant.
The Company has applied its Process to manufacture garlic in the form of a
dietary supplement. According to Paavo Airola, P.H.D., author of The Miracle of
Garlic, Garlic is believed to have preventive and/or therapeutic benefits in the
treatment of high blood pressure, atherosclerosis, tuberculosis, arthritis and
cancer. The Company hopes to expand its product line, using the Process, to
produce dietary supplements from herbs such as St. John's Wort, Kava Kava, Ginko
Biloba and Echinacea. While the Company hopes to apply for a patent on its
Process, the Company, as of the date of this report, does not have the necessary
funds to make or prosecute any patent application.
The Company has also developed two dietary supplements, Lo-Chol and
Perthon/Abavca (the latter hereafter referred to as "ACA"), which are comprised
of several specific botanical components. The labels for these products contain
statutory disclaimers in accordance with the requirements of the Federal Food,
Drug and Cosmetic Act, as amended by the Dietary Supplement Health and Education
Act of 1994, stating that the products have not been evaluated by the Food and
Drug Administration ("FDA") and that the products are not intended to diagnose,
treat, cure, or prevent diseases, and the label does not contain a claim that
the product will diagnose, mitigate, treat, cure, or prevent a specific disease
or class of disease.
The Company believes that its patented, all natural, dietary supplement,
Lo-Chol, comprised of six specific botanical components, is a cholesterol
lowering agent. The Company's belief with respect to the cholesterol lowering
qualities of Lo-Chol is based on a
<PAGE> 4
study of four hundred people performed in Australia by several physicians hired
by the Company to do such study in 1990. Such study indicated that when used in
the context of good dietary practices, Lo-Chol not only lowers total cholesterol
and triglycerides, but also increases HDL (High Density Lipoprotein which is
health associated cholesterol) and balances the proportion of HDL to LDL (Low
Density Lipoprotein which is disease associated cholesterol). Because the
Company believes that Lo-Chol, as a dietary supplement, does not need to be
approved by the FDA, such studies performed with Lo-Chol were not performed in
accordance with FDA standards and therefore the Company cannot give any
assurance that this dietary supplement would receive FDA approval as an
effective treatment for high cholesterol. Furthermore, pursuant to the federal
statute referred to above, the label used for the Lo-Chol package cannot make a
claim that Lo-Chol lowers cholesterol or triglycerides.
The Company has also developed an all natural dietary supplement called
ACA which the Company believes is an immune system enhancer. The Company
believes that ACA has the ability to improve the quality of life of patients
suffering from HIV-AIDS; specifically, to reverse glandular swelling, promote
weight gain, improve response to skin hypersensitivity tests and increase the
circulating concentration of helper T cells (CD4-positive cells). The Company's
belief with respect to the therapeutic qualities of ACA is based on a limited
study of fifteen patients suffering from HIV-AIDS in Australia performed by
several physicians hired by the Company to do such study between 1989 and 1993.
Such study of the effectiveness of ACA was not performed in accordance with FDA
standards and therefore the Company cannot give any assurance that this dietary
supplement would receive FDA approval as an effective treatment for HIV-AIDS.
Although the Company believes that ACA, as a dietary supplement, does not need
to be approved by the FDA, ACA has received from the FDA the status of an
investigational new drug ("IND") which permits the Company to proceed with Phase
II clinical trials. Furthermore, pursuant to the federal statute referred to
above, the label used for the ACA package cannot make a claim that ACA is an
effective treatment for HIV-AIDS.
DISTRIBUTION OF PRODUCTS. The Company plans to market and sell its
dietary supplements to customers in domestic and foreign markets. In June 1999,
the Company entered in to an exclusive distribution agreement with Ambar
Pharmacies and Health, Inc. ("Ambar") for the sale of the Company's products in
Israel. Such distribution agreement is for a period of two years and requires
Ambar to purchase a minimum of $88,290 of the Company's products in the first
two years. On July 1, 1999, the Company entered into an exclusive distribution
agreement with Manayer Najd Trading & Medical Supplies Co. ("MNM") for the
distribution of the Company's products in Saudi Arabia and with Manayer Egypt
Trading & Medical Supplies Co. ("MEM") for the distribution of the Company's
products in Egypt. Each agreement is for a period of five years from the date
that MNM and/or MEM receives a registration certificate from their respective
countries. Such distribution agreements commit MNM and MEM to purchase L0-Chol
and ACA from APPI for not less than an aggregate of $4,681,140. Under both
contracts, no assurance can be given that such registration certificate can be
secured and if it is not, the Company will not receive income under such
contracts. The Lo-Chol and ACA capsules to be sold by such distributors will be
manufactured for the Company by third party manufacturers. The Company has also
made minimal sales of its products (less than $1,000 in the aggregate) over the
Company's Internet site at http://www.Advanced Plant Pharm.com. There is no
<PAGE> 5
assurance that profitable operations can be attained through the commercial sale
of the Company's products.
Status of newly announced products. Research and development has been
completed on Lo-Chol and ACA. The Company is ready to market, distribute and
sell its products on a local and international level. The Company maintains an
Internet site at http://www.Advanced Plant Pharm.com for access to information
on the Company and for purchase of the Company's products on-line. The Company's
products are also available for purchase on other web sites.
Sources of material. The Company uses a raw material supplier located in
Brooklyn, New York, as its main supplier and source for the specific plants and
other ingredients used for manufacturing its dietary supplements. The Company
believes that there are many other suppliers from which it can purchase the
plants and other ingredients it needs.
Patents and trademarks. The Company has a patent for its herbal
composition, Lo-Chol, patent No. 5,707,631, that was issued by the U.S. Patent
Office to the Company on January 13, 1998. Lo-Chol is patented as an
all-natural, fully standardized, dietary supplement comprised of 6 specific
botanical components to act synergistically to help maintain healthy cholesterol
levels.
Government regulations. In accordance with the Federal Food, Drug and
Cosmetic Act, as amended by the Dietary Supplement Health and Education Act of
1994 ("FD&C Act"), the Company meets specific requirements in labeling their
products. Specifically, the statute requires that dietary supplements be labeled
as such, that the dietary support claim be submitted to the FDA within thirty
days after its first use, that the labeling bear a statutorily-prescribed
disclaimer stating that the claim has not been evaluated by the FDA and that the
product is not intended to diagnose, treat, cure, or prevent diseases, and that
the labeling does not contain a claim that the product will diagnose, mitigate,
treat, cure, or prevent a specific disease or class of disease.
Number of employees. The Company currently employs three full time
employees and two part time consultants.
c) REPORTS TO SECURITY HOLDERS:
The Company is not currently subject to the reporting requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended.
However, upon effectiveness of this Form 10 S-B and in accordance with Nasdaq
Rule 6530 the Company intends hereafter to file annual and quarterly reports
with the Securities and Exchange Commission ("SEC"). The public may read and
copy any materials filed by the Company with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may
obtain information on the operation of the SEC's Public Reference Room by
<PAGE> 6
calling the SEC at 1-800-SEC-0330. The Company is an electronic filer and the
SEC maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC which may be viewed at http://www.sec.gov. The Company maintains an
Internet site at http://www.Advanced Plant Pharm.com.
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
Plan of Operation.
(i) The Company believes that it currently has enough cash on hand to
enable it to operate for the next twelve months, assuming that it does not
undertake in-house manufacturing of its products. The Company has had minimal
sales of its products and has primarily financed its operations, research and
development with the proceeds of the sale of its common stock (See section
entitled - Recent Sales of Unregistered Securities). The Company may be
materially adversely affected if it is unable to secure sufficient funds to
finance any proposed manufacturing and distribution activities.
(ii) The Company intends to use its Process to expand the Company's
product line to include herbal dietary supplements such as St. John's Wort, Kava
Kava, Ginko Biloba and Echinacea. The Company estimates that the initial
production and preliminary marketing of these four herbal products to potential
domestic and international distributors and wholesalers will cost approximately
$60,000.
(iii) The Company does not expect to purchase or sell any manufacturing
facilities or significant equipment over the next twelve months.
(iv) The Company does not foresee any significant changes in the number of
employees it will employ over the next twelve months.
The Year 2000
The concern known as "The Year 2000" problem or "Y2K" issue is the result
of computer programs being written using two digits rather than four to define
the applicable year. Failure of a computer program to recognize a date using
"00" as 2000 instead of 1900 could result in a system failure or miscalculations
causing disruptions of operations. To date, the Company is unaware of any
situation of non-compliance which would materially adversely effect its
operations or financial condition. The Company has three computers used for the
operation of its office, which the Company believes are Y2K compliant. The
Company does not own or operate any equipment which has computer imbedded
technology used in its operations. There can be no assurance that the computer
systems of other companies with which the Company transacts business will be Y2K
compliant and the Company has not made any inquiries to ascertain Y2K compliance
by such other companies.
<PAGE> 7
ITEM 3. DESCRIPTION OF PROPERTY
The Company does not own any property. The Company, which leases its
principal offices located at 75 Maiden Lane, New York, New York 10038, renewed
its lease for another six month term in May, 1999.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, to the best of the Company's
knowledge, as of July 19, 1999, with respect to each person known by the Company
to own beneficially more than five percent (5%) of the Company's issued and
outstanding shares of common stock, par value $.0007 ("Common Stock"), and the
name and shareholdings of each director, executive officer and all directors and
executive officers as a group.
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title Of Name And Address Amount And Nature Percent of
Class Of Beneficial Owner Of Beneficial Owner Class
----- ------------------- ------------------- -----
<S> <C> <C> <C>
Common David Lieberman 25,950,000 (a)(1) 23.49%
37 Harotem Street
Ashdod, Israel 77572
Common Barry Clare 805,000 (b)(2) .73%
27 Curtis Place
Lynbrook, NY 11563
Common Yacov Yechekel 10,000,000 9.21%
1 Baba Sali Street
Betar Elit, Israel
Common Officers and Directors 26,755,000 (1)(2) 24%
as a group (2 persons)
</TABLE>
<PAGE> 8
(a) David Lieberman is the sole member of the Board of Directors of the
Company.
(b) Barry Clare is the Chief Operating Officer of the Company.
(1) Includes 1,950,000 shares which Mr. Lieberman has the right to acquire
upon exercise of stock options.
(2) Includes 750,000 shares which Mr. Clare has the right to acquire upon
exercise of stock options.
On July 16, 1999, the Company entered into a Technology Purchase Agreement
with Mr. C.J. Lieberman whereby the Company acquired exclusive rights and
interests to the Process which utilizes virtually the whole of the nutrients
found in plants to manufacture herbal dietary supplements. Pursuant for such
agreement the company is required to issue 18,000,000 shares and may be required
to issue an additional 25,000,000 shares of its common stock to C.J. Lieberman
(See Section entitled (Certain Relationships and Related Transactions).
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors and Executive Officers
The following table sets forth as of July 19, 1999, the name, age and
position of each executive officer and director and the terms of office of each
executive officer and director of the Corporation.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
David Lieberman 36 Director, President
Barry Clare 40 Chief Operating Officer
</TABLE>
David Lieberman, has served as the Company's President since July 1, 1996
and as its Director since June 1996. Since 1991, he has worked in the offices of
the Chief Rabbi of Bnai Brak, Israel. He also serves as a consultant for Osem
Industries, Inc., an international food conglomerate located in Israel.
Barry Clare has served as the Company's Chief Operating officer since
April 1998. Mr. Clare served as the President of American Breaktime Industries,
Inc., a private company engaged in the vending and food service business in the
New York Metropolitan area for eight years until 1994. From 1994 to 1996, Mr.
Clare served as Vice President and as a
<PAGE> 9
Director of International Investment Banking Corp., a privately held
corporation, and from 1996 to 1998 served as Vice President and as a Director
for Venture Capital Stage, Inc. and Intermediaries, Inc., two privately held
companies that specialize in bridge funding and mergers and acquisitions.
Significant Consultant
Leonard Bielory, M.D., has served as the Company's Scientific Director
since June, 1996. Dr. Bielory is presently the Director of the Division of
Allergy, Immunology and Rheumatology and is the Director of the Division of
Asthma and Allergy at the New Jersey Medical School where he is also an
Associate Professor of Medicine, Pediatrics and Ophthalmology. Dr. Bielory
serves as the Chairman of the Board and President of the University Physician
Associates - the New Jersey Medical School Faculty Practice. Dr. Bielory
currently serves as a consultant on allergy and immunology to Newark Beth Israel
Hospital, Newark, NJ, and to Saint Barnabas Medical Center, Livingston, NJ.
ITEM 6. EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning the
compensation paid or accrued for each of the Company's last three fiscal years
to the Company's chief executive officer. Except as set forth below, the Company
has not paid compensation to any other executive officer or employee in excess
of $100,000 on an annual basis.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION STOCK AWARDS
-------------- ----------------------
RESTRICTED
STOCK
NAME AND SALARY AWARDS OPTIONS
PRINCIPAL POSITION YEAR ($) ($) (#)
------------------ ---- --- --- ---
<S> <C> <C> <C> <C>
David Lieberman ................ 1998 85,000(1) 50,000(2) 0
Chief Executive Officer, 1997 135,000(3) -- 0
and President 1996 67,500(1) -- 1,200,000(4)
C.J. Lieberman(5) .............. 1996 114,000(6) 300,000(7)
</TABLE>
<PAGE> 10
(1) Such salaries were never paid by the Company
(2) In lieu of $50,000 of the $135,000 of salary owed pursuant to his
employment agreement, David Lieberman received 800,000 shares of the
Company's common stock valued at $.0625 per share.
(3) Of the $135,000 owed to Mr. David Lieberman, $55,000 was paid.
(4) Such option was granted for a period of five years at an exercise price of
$.05 per share. Such number of shares and exercise price is after giving
effect to the one hundred percent stock dividend paid by the Company on
November 25, 1996.
(5) C.J. Lieberman served as the Company's President until his resignation in
June, 1996.
(6) Of the $114,000 owed to C.J. Lieberman, $89,522 was paid and the remainder
of $24,478 is still owed to him.
(7) Such option was granted for a period of five years at an exercise price of
$.05 per share. Such number of shares and exercise price is after giving
effect to the one hundred percent stock dividend paid by the Company on
November 25, 1996.
Employment Agreements.
The Company had entered into an employment agreement with Mr. David
Lieberman expiring on June 30, 1999, and on June 10, 1999, the Company entered
into a new employment agreement that superseded the previous agreement to
provide for the continued employment of Mr. David Lieberman as the Company's
President. The employment agreement provides for employment on a full-time basis
and contains a provision that Mr. David Lieberman will not compete or engage in
a business competitive with the current or anticipated business of the Company
until the expiration of his agreement in June 2002. Pursuant to the June 10,
1999, agreement, the Company pays Mr. David Lieberman a base salary of $135,000
per annum and has granted him a five year option to purchase 750,000 shares of
the Company's Common Stock at an exercise price of $.01 per share.
Director's Compensation.
Mr. David Lieberman receives no additional compensation for services
rendered as a director.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except as set forth below, during the past two fiscal years, there have
been no transactions between the Company and any officer, director, nominee for
election as director, or any shareholder owning greater than five percent (5%)
of the Company's issued and outstanding shares, nor any member of the above
referenced individual's immediate family.
<PAGE> 11
The Company had entered into a three year consulting agreement with Mr.
C.J. Lieberman, David Lieberman's brother, to provide consulting services to the
Company with regard to the acquisition of new pharmaceutical products and in the
areas of developing, manufacturing and marketing pharmaceutical products. For
services rendered by C.J. Lieberman for the combined fiscal years 1997 and 1998,
the Company paid to C.J Lieberman $125,431 and issued common stock valued at
$100,403 in lieu of consulting fees owed to him. As an inducement for C.J.
Lieberman to serve as the Company's consultant, the Company granted him a five
year option to purchase 300,000 shares of the Company's Common Stock at an
exercise price of $.05 per share, as adjusted for the one hundred percent stock
dividend paid by the Company on November 25, 1996. On June 10, 1999, the Company
entered into a new consulting agreement with C.J. Lieberman that superseded his
previous agreement which was scheduled to expire on December 31, 1999, for his
continued consulting services. Pursuant to such agreement, the Company pays C.J.
Lieberman a consulting fee of $9,000 per month and has granted him a five year
option to purchase 750,000 shares of the Company's Common Stock, at an exercise
price of $.02 per share.
On July 16, 1999, the Company entered into a Technology Purchase Agreement
with Mr. C.J. Lieberman whereby the Company acquired exclusive rights and
interests to a thirteen step process which utilizes virtually the whole of the
nutrients found in plants to manufacture herbal dietary supplements. The
purchase price for the process was 18,000,000 shares of the Company's common
stock. The agreement is conditioned on the stockholders of the Company voting to
increase the number of shares it is authorized to issue to 250,000,000 shares.
In addition, the Company agreed to pay to Mr. C.J. Lieberman a royalty payment
of $.01 per bottle with respect to each product manufactured using the Process,
one percent of the Company's suggested retail price of each product manufactured
using the Process and ten percent of the Company's net profits from the sale of
products manufactured using the Process (net profits to be determined by the
Company's independent public accountants using generally accepted accounting
principles). In the event that the Company enters into an agreement with a third
party for the sale of products manufactured with the Process, which agreement
unconditionally provides for payment to the Company of not less than
$20,000,000, upon receipt by the Company of such $20,000,000 from such third
party, the Company shall issue to Mr. C.J. Lieberman 5,000,000 shares for each
$20,000,000 paid to the Company, up to a maximum of 25,000,000 shares of its
Common Stock.
ITEM 8. DESCRIPTION OF SECURITIES
Common Stock.
The Company is authorized to issue 120,000,000 shares of its Common Stock,
par value $.0007 per share, of which 108,521,781 shares are outstanding as of
July 19, 1999. The holders of Common Stock are entitled to one vote for each
share held of record on all matters to be voted on by stockholders. The
stockholders do not have any preemptive rights or conversion rights. On November
25, 1996, the Company paid a one hundred percent stock dividend.
<PAGE> 12
The Company is also authorized to issue 5,000,000 shares of preferred
stock, par value $.0007. The Company has not issued and has no current plans to
issue any preferred stock. The preferences for the preferred stock, when and if
any are issued, are to be determined by the Company's Board of Directors. The
availability of such preference shares with preferences to be established by the
Company's Board of Directors, would have the effect of discouraging any persons
or other companies from seeking to acquire shares of the Company's Common Stock
at prices greater than the prices at which the Company's Common Stock is trading
in the public securities markets.
The Transfer Agent for the Company's Common Stock is Continental Stock
Transfer & Trust Company, Two Broadway, New York, New York 10004.
A Delaware statute prevents an "interested stockholder" (defined generally
as a person owning more than 15% or more of a corporation's voting stock) from
engaging in a "business combination" with the Delaware corporation for three
years following the date the person became an interested stockholder unless,
generally speaking, the transaction is approved by the Company's Board of
Directors and the vote of two thirds of the outstanding shares not owned by such
interested stockholder. This statute could have the effect of discouraging,
delaying or preventing hostile takeovers, including those that might result in
the payment of a premium over market price or changes in control or management
of the Company.
<PAGE> 13
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
a. Market Information.
The Company's common stock is listed on the Over The Counter Bulletin
Board ("OTCBB"), under the symbol "APPI". The following table sets forth the
high and low bid prices of the Company's Common Stock for each of the following
quarters:
<TABLE>
<CAPTION>
1997 HIGH LOW
- - ---- ---- ---
<S> <C> <C>
First quarter.................................. $0.27 $0.17
Second quarter................................. $0.24 $0.14
Third quarter.................................. $0.16 $0.0625
Fourth quarter................................. $0.09 $0.06
1998
- - ----
First quarter.................................. $0.15 $0.0625
Second quarter................................. $0.125 $0.0625
Third quarter.................................. $0.07 $0.03
Fourth quarter................................. $0.0625 $0.02
1999
- - ----
First quarter.................................. $.125 $.025
Second quarter................................. $.10 $.025
July 1 to July 19.............................. $.05 $.03
</TABLE>
Such over-the-counter market quotations reflect the interdealer prices,
without retail mark-up, mark-down or commission, and may not represent actual
transactions.
b. Holders
As of July 19, 1999, there were 206 records holders of the Company's
Common Stock. To the best knowledge of the Company, such figure does not take
into account those stockholders whose certificates are held in the name of
broker-dealers or other nominees. The Company believes that there are
approximately 2,450 beneficial owners of its Common Stock, most of whose shares
are held in street name.
<PAGE> 14
c. Dividends
For the last two fiscal years, the Company has not declared or paid cash
dividends or made distributions on its Common Stock, and the Company does not
anticipate that it will pay cash dividends or make distributions of its Common
Stock in the foreseeable future. There are no restrictions that would limit the
Company's ability to pay dividends on its Common Stock. However, the Company
intends to retain earnings, if any, for use in its business to finance the
operation and expansion of its business.
ITEM 2. LEGAL PROCEEDINGS
There are presently no material pending legal proceedings to which the
Company is a party or to which any of its property is subject and, to the best
of the Company's knowledge, no such actions against the Company are contemplated
or threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
During the Company's two most recent fiscal years there have been no
changes in or disagreements with accountants on accounting and financial
disclosure.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
Within the past three years, the Company has issued the following shares
of its Common Stock, par value $.0007 (the "Shares"), for cash or services
rendered to the Company and has granted the following options to purchase its
Common Stock for services rendered to the Company, absent registration under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to the
exemptions provided by Rule 504 of Regulation D, and where specifically
indicated, pursuant to the exemption provided in Section 4(2) of the Securities
Act for transactions by an issuer not involving a public offering.
In July 1996, the Company granted to its President, David Lieberman, an
option to purchase 1,200,000 Shares at an exercise price of $.05 (five cents)
per share, for services rendered by him and as required pursuant to his
employment agreement. (Such number of shares and exercise price is after giving
effect to the one hundred percent stock dividend paid by the Company on November
25, 1996.)
<PAGE> 15
In September, 1996, the Company granted one individual, pursuant to a
consulting agreement and for services rendered, an option to purchase 300,000
Shares at an exercise price of $.05 (five cents) per share. (Such number of
shares and exercise price is after giving effect to the one hundred percent
stock dividend paid by the Company on November 25, 1996.)
In November, 1996, the Company issued 892,380 Shares to eight individuals
in full repayment of an aggregate of $196,800 loaned by them to the Company.
In January, 1997, the Company issued 1,080,991 Shares to five persons in
full repayment of an aggregate of $146,680 loaned by them to the Company. The
Company also issued 50,000 Shares, valued at $.10 (ten cents) per share, to two
individuals as compensation for public relations services rendered to the
Company.
In February, 1997, the Company issued 35,000 Shares, valued at $.14
(fourteen cents) per share, to a consultant to the Company pursuant to his
consulting agreement as compensation for services rendered to the Company.
In March, 1997, the Company issued 659,649 Shares to four persons in full
repayment of an aggregate of $125,000 loaned by them to the Company.
In May, 1997, the Company issued 3,738,387 Shares to thirteen persons in
full repayment of an aggregate of $445,000 loaned by them to the Company. The
Company also issued 100,000 Shares, valued at $.10 (ten cents) per share, to one
company as compensation for public relations services rendered to the Company.
The Company issued 55,000 Shares, valued at $.10 (ten cents) per share, to one
individual for services rendered to the Company pursuant to his consulting
agreement.
In July, 1997, the Company issued 474,881 Shares to two persons in full
repayment of an aggregate of $55,000 loaned by them to the Company.
In November, 1997, the Company issued 665,025 Shares to two persons in
full repayment of an aggregate of $35,000 loaned by them to the Company.
In December, 1997, the Company issued 1,000,000 Shares, valued at $.07
(seven cents) per share, to one person in full repayment of a $70,000 loan to
the Company. The Company issued 250,000 Shares, valued at $.0625 per share, to
two consultants for services rendered to the Company pursuant to consulting
agreements.
In February of 1998, the Company issued 200,000 Shares, valued at $.05
(five cents) per share, to one individual as compensation for marketing and
financial consulting services rendered to the Company pursuant to a consulting
agreement and issued 600,000 Shares, valued at $.10 (ten cents) per share, to
one individual purchaser for a cash payment of $60,000.
<PAGE> 16
In March 1998, the Company issued 909,741 Shares to two persons in full
repayment of an aggregate of $47,500 loaned by them to the Company and issued
100,000 Shares, valued at $.05 (five cents) per share, to one company as
compensation for advertising services rendered to the Company.
In May, 1998, the Company issued 211,765 Shares, valued at $.09 (nine
cents) per share, to two persons in full repayment of an aggregate of $18,000
loaned by them to the Company. The Company issued 250,000 Shares, valued at $.05
(five cents) per share, to Dr. Leonard Bielory for services rendered to the
Company, 600,000 Shares, valued at $.05 (five cents) per share, to Samuel
Berkowitz for services rendered to the Company, and 800,000 Shares, valued at
$.05 (five cents) per share, to David Lieberman, for services rendered to the
Company, pursuant to their respective employment and consulting agreements. The
Company issued 800,000 Shares, valued at $.05 (five cents) per share, to one
individual as compensation for services rendered to the Company pursuant to a
consulting agreement.
In June, 1998, the Company issued 240,000 Shares to one person in full
repayment of a $15,000 loan to the Company.
In July, 1998, the Company issued 200,000 Shares, valued at $.05 (five
cents) per share, to two persons as compensation for consulting services
rendered to the Company.
In November, 1998, the Company issued 400,000 Shares to one person in full
repayment of an $8,000 loan to the Company and issued 150,000 Shares to one
person in full repayment of a $3,000 loan to the Company. The Company issued
725,792 Shares, valued at $.01 (one cent) per share, to one individual as
compensation for consulting services rendered to the Company.
In December, 1998, the Company issued 2,500,000 Shares, valued at $.01
(one cent), to Sam Berkowitz, as compensation for services rendered to the
Company and in lieu of salary owed to him pursuant to his employment agreement.
The Company also issued 2,500,000 Shares, valued at $.01 (one cent) per share,
to one person as compensation for services rendered to the Company.
In January, 1999, the Company sold 3,000,000 Shares to one individual
purchaser for a cash payment of $80,000. The Company issued 200,000 Shares to
one individual in full repayment of a $2,000 loan to the Company and issued
360,000 Shares to one individual in full repayment of a $9,000 loan to the
Company. The Company issued 5,500,000 Shares, valued at $.01 (one cent) per
share, to two persons as compensation for services rendered to the Company
pursuant to a consulting agreement. The Company issued 17,000,000 Shares, valued
at $.01 (one cent) per share, to its President, David Lieberman, in lieu of
salary owed to him pursuant to his employment agreement and issued 160,000
Shares, valued at $.01 (one cent) per share, to Barry Clare, in lieu of salary
owed to him pursuant to his employment agreement.
<PAGE> 17
In February, 1999, the Company issued 240,000 Shares, valued at $.01 (one
cent) per share, to Sam Berkowitz, and issued 360,000 Shares, valued at $.01
(one cent) per share, to Barry Clare, as compensation for services rendered to
the Company in lieu of salary owed to them pursuant to their employment
agreements. The Company also issued 150,000 Shares, valued at $.01 (one cent)
per share, to one individual as compensation for services rendered to the
Company pursuant to a consulting agreement. The Company issued 360,000 Shares in
full repayment of a $3,600 loan to the Company. The Company issued 166,300
Shares to a printing company as full payment of an outstanding balance of $8,215
for printing services rendered to the Company.
In March, 1999, the Company issued 200,000 Shares, valued at $.01 (one
cent), as full repayment of a $2,000 loan to the Company. The Company issued
108,350 Shares to a printing company as full payment of an outstanding balance
of $5,417.50 for printing services rendered to the Company. The Company issued
2,000,000 Shares, valued at $.01 (one cent), to two persons as compensation for
consulting services rendered to the Company. The Company issued 240,000 Shares,
valued at $.01 (one cent) per share, to Sam Berkowitz, and issued 240,000
Shares, valued at $.01 (one cent) per share, to Barry Clare, as compensation for
services rendered to the Company pursuant to their employment agreements.
In April, 1999, the Company sold 21,818,181 Shares to three purchasers for
a cash payment of $300,000. The Company also issued 120,000 restricted shares of
its Common Stock, at a value of $.05 per share, to one individual as
compensation for consulting services rendered to the Company. Such shares were
issued absent registration pursuant to the exemption in Section 4(2) of the
Securities Act for transactions by an issuer not involving a public offering.
The Company also issued 410,000 restricted shares, at a value of $.0365 per
share, to one individual as payment for legal services rendered to the Company.
Such shares were issued absent registration pursuant to the exemption in Section
4(2) of the Securities Act.
In June, 1999, the Company entered into an out of court settlement for the
issuance of 1,500,000 Shares. The Company also granted to three of its employees
pursuant to their employment agreements and to a consultant pursuant to his
consulting agreement options to purchase an aggregate of 3,250,000 Shares at
exercise prices ranging from $.01 (one cent) to $.02 (two cents) per share.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Bylaws of the Company provide for indemnification of its directors,
officers and employees as follows: On the terms, to the extent, and subject to
the conditions prescribed by statute and by rule and regulations, not
inconsistent with statute, imposed by the Board in its discretion in general or
particular cases or classes of cases, the Company shall indemnify any person who
was or is a party, or is threatened to be made a party, to any threatened,
<PAGE> 18
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
enterprise, against expenses including attorney's fees, judgements, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, or any appeal therein. The Company may
pay, in advance of the final disposition of the action, suit or proceeding,
expenses incurred by the person which may be indemnifiable as provided herein.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
<PAGE> 19
PART F/S
INDEPENDENT AUDITOR'S REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
OF ADVANCED PLANT PHARMACEUTICALS, INC.
We have audited the accompanying balance sheets of Advanced Plant
Pharmaceuticals, Inc. as of December 31, 1998, and the related statements of
income, stockholders' equity and cash flows for each of the two years 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 audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all respects, the financial position of Advanced Plant Pharmaceuticals, Inc. as
of December 31, 1998, and the results of their operations and their
cash flows for each of the two years then ended, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in Note 9 to the
financial statements, the Company has suffered recurring losses from operations
and has negative working capital that raises substantial doubt about the ability
to continue as a going concern. Management's plans in regards to these matters
are also described in Note 9. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
New York, New York
July 16, 1999
<PAGE> 20
ADVANCED PLANT PHARMACEUTICALS, INC.
Balance Sheet
As of March 31, 1998 and 1999
(Unaudited)
<TABLE>
<CAPTION>
1998 1999
---- ----
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ (3,476) $ 6,036
Prepaid expenses and other current assets 19,938 --
------------ -----------
Total current assets 16,462 6,036
Other assets 10,490 9,700
----------- -----------
$ 26,952 $ 15,736
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 151,669 $ 149,288
Accrued expenses payable 708,468 561,585
Loans payable 34,428 86,877
Due to distributor 103,500 103,500
----------- -----------
Total current liabilities 998,065 901,250
----------- -----------
Shareholders' Equity:
Common stock, $.0007 par value, 120,000,000 shares authorized;
45,446,221 and 84,651,325 shares issued at March 31, 1998 and
1999 respectively 31,812 59,256
Capital in excess of par value 2,893,982 3,533,117
Accumulated deficit (3,896,727) (4,432,707)
Treasury shares at cost (180) (180)
Stock subscriptions receivable -- (45,000)
----------- -----------
Total shareholders' equity (971,113) (885,514)
----------- -----------
$ 26,952 $ 15,736
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 21
ADVANCED PLANT PHARMACEUTICALS, INC.
Statement of Operations
For the Three Months Ended March 31, 1998 and 1999
(Unaudited)
<TABLE>
<CAPTION>
1998 1999
---- ----
<S> <C> <C>
Net Sales $ -- $ 2,585
Cost of goods sold -- 5,774
--------- ---------
Gross profit -- (3,189)
--------- ---------
Operating expenses:
Research and development 306 1,000
General and administrative 190,309 100,845
--------- ---------
Total operating expenses 190,615 101,845
--------- ---------
Operating loss (190,615) (105,034)
Other expense (income) -- --
--------- ---------
Loss before provision for income taxes (190,615) (105,034)
Provision for income taxes -- --
--------- ---------
Net loss $(190,615) $(105,034)
========= =========
Loss per common share $ -- $ --
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 22
ADVANCED PLANT PHARMACEUTICALS, INC.
Statement of Cash Flows
For the Three Months ended March 31, 1998 and 1999
(Unaudited)
<TABLE>
<CAPTION>
1998 1999
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net Loss from operations $(190,615) $(105,034)
Adjustments to reconcile net loss from operations to net cash used
by operating activities:
Amortization expense 159 159
Services paid with common stock 37,500 268,133
Decrease in prepaid expenses 909 12,153
Decrease in accounts payable (6,789) (5,000)
Increase(decrease) in accrued expenses 66,532 (245,570)
Change in certain other assets and liabilities (4,304) --
--------- ---------
Net cash used by operations (96,608) (75,159)
--------- ---------
Cash Flows from Investing Activities: -- --
--------- ---------
Cash Flows from Financing Activities:
Proceeds from short-term loans payable 1,150 23,697
Payments on short-term loans payable (12,716) --
Net proceeds from issuance of common stock 24,364 53,300
Stock subscriptions collected 77,650 --
--------- ---------
Net cash provided by financing activities 90,448 76,997
--------- ---------
Net increase in Cash and cash equivalents (6,160) 1,838
Cash and cash equivalents at beginning of year 2,684 4,198
--------- ---------
Cash and cash equivalents at end of year $ (3,476) $ 6,036
========= =========
Supplemental Cash Flow Information:
Cash Paid During the Period for:
Interest $ -- $ --
========= =========
Income Taxes $ -- $ --
========= =========
Information about Noncash Activities:
Common stock issued to satisfy loans payable $ 32,500 $ --
========= =========
Common stock issued for services $ 37,500 $ 268,133
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 23
ADVANCED PLANT PHARMACEUTICALS, INC.
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Capital
Number of in excess of Accumulated Treasury
Shares Par Value Par Value Deficit Stock
------ --------- --------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 43,935,918 $ 30,755 $ 2,868,855 $(3,706,112) $(180)
Issuance of common stock 1,649,185 1,154 94,364
Collected stock subscriptions
Cancelled stock subscriptions (138,882) (97) (69,237)
Net loss for period (190,615)
------------------------------ ----------- ----------- -----
Balance at March 31, 1998 45,446,221 $ 31,812 $ 2,893,982 $(3,896,727) $(180)
============================== =========== =========== =====
</TABLE>
<TABLE>
<CAPTION>
Stock
Subscriptions
Receivable Total
---------- -----
<S> <C> <C>
Balance at December 31, 1997 $(146,984) $(953,666)
Issuance of common stock 95,518
Collected stock subscriptions 77,650 77,650
Cancelled stock subscriptions 69,334 --
Net loss for period (190,615)
--------- ----------
Balance at March 31, 1998 $ -- $(971,113)
========= ==========
</TABLE>
<TABLE>
<CAPTION>
Common Stock Capital
Number of in excess of Accumulated Treasury
Shares Par Value Par Value Deficit Stock
------ --------- --------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1998 54,646,675 $ 38,253 $ 3,187,687 $(4,327,673) $ (180)
Issuance of common stock 30,004,650 21,003 345,430
Net loss for period (105,034)
------------------------------- ----------- ----------- ------
Balance at March 31, 1999 84,651,325 $ 59,256 $ 3,533,117 $(4,432,707) $ (180)
=============================== =========== =========== ======
</TABLE>
<TABLE>
<CAPTION>
Stock
Subscriptions
Receivable Total
---------- -----
<S> <C> <C>
Balance at December 31, 1998 $ $(1,101,913)
Issuance of common stock (45,000) 321,433
Net loss for period (105,034)
--------- -----------
Balance at March 31, 1999 $ (45,000) $ (885,514)
========= ===========
</TABLE>
<PAGE> 24
ADVANCED PLANT PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998 AND 1999
(UNAUDITED)
1. GENERAL:
The accompanying unaudited financial statements of Advanced Plant
Pharmaceuticals, Inc. ("APPI" or the "Company") as of March 31, 1998 and
1999, and for the quarters then ended, reflect all material adjustments
consisting of only normal recurring adjustments which, in the opinion of
management, are necessary for a fair presentation of results for the
interim periods. Certain information and footnote disclosures required
under generally accepted accounting principles have been condensed or
omitted pursuant to the rules and regulations of the Securities and
Exchange Commission, although the Company believes that the disclosures are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the audited financial
statements for the year ended December 31, 1998.
The results of operations for the quarters ended March 31, 1998 and 1999
are not necessarily indicative of the results to be expected for the entire
year or any other period.
<PAGE> 25
ADVANCED PLANT PHARMACEUTICALS, INC.
Balance Sheet
As of December 31, 1997 and 1998
<TABLE>
<CAPTION>
1998
----
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,198
Prepaid expenses and other current assets 12,153
-----------
Total current assets 16,351
Other assets 9,858
-----------
$ 26,209
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 154,288
Accrued expenses payable 807,155
Loans payable 63,179
Due to distributor 103,500
-----------
Total current liabilities 1,128,122
-----------
Shareholders' Equity:
Common stock, $.0007 par value, 120,000,000 shares authorized;
54,646,675 shares issued and outstanding 38,253
Capital in excess of par value 3,187,687
Accumulated deficit (4,327,673)
Treasury shares at cost (180)
Stock subscriptions receivable -----------
Total shareholders' equity (1,101,913)
-----------
$ 26,209
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 26
ADVANCED PLANT PHARMACEUTICALS, INC.
Statement of Operations
For the Years Ended December 31, 1997 and 1998
<TABLE>
<CAPTION>
1997 1998
---- ----
<S> <C> <C>
Net Sales $ -- $ 157
Cost of goods sold -- 834
--------- ---------
Gross profit -- (677)
--------- ---------
Operating expenses:
Research and development 141,190 24,428
General and administrative 743,947 521,456
--------- ---------
Total operating expenses 885,137 545,884
--------- ---------
Operating loss (885,137) (546,561)
Other expense (income) -- 75,000
--------- ---------
Loss before provision for income taxes (885,137) (621,561)
Provision for income taxes -- --
--------- ---------
Net loss $(885,137) $(621,561)
========= =========
Loss per common share $ (0.02) $ (0.01)
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 27
ADVANCED PLANT PHARMACEUTICALS, INC.
Statement of Shareholders' Equity (Deficit)
For the Years ended December 31, 1997 and 1998
<TABLE>
<CAPTION>
Common Stock Capital
Number of in excess of Accumulated Treasury
Shares Par Value Par Value Deficit Stock
------ --------- --------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996 27,479,515 $ 19,236 $2,066,526 $(2,820,975) $(5,355)
Issuance of common stock 16,456,403 11,519 807,504
Treasury shares reissued (5,175) 5,175
Net loss for period (885,137)
------------------------ ----------- ------------ --------
Balance at December 31, 1997 43,935,918 30,755 2,868,855 (3,706,112) (180)
Issuance of common stock 10,849,639 7,595 388,069
Collected stock subscriptions
Cancelled stock subscriptions (138,882) (97) (69,237)
Net loss for period (621,561)
------------------------ ----------- ------------ --------
Balance at December 31, 1998 54,646,675 $ 38,253 $3,187,687 $(4,327,673) $ (180)
======================== =========== ============ ========
</TABLE>
<TABLE>
<CAPTION>
Stock
Subscriptions
Receivable Total
---------- -----
<S> <C> <C>
Balance at December 31, 1996 $ (93,334) $ (833,902)
Issuance of common stock (53,650) 765,373
Treasury shares reissued --
Net loss for period -- (885,137)
---------- ------------
Balance at December 31, 1997 (146,984) (953,666)
Issuance of common stock 395,664
Collected stock subscriptions 77,650 77,650
Cancelled stock subscriptions 69,334 --
Net loss for period -- (621,561)
---------- ------------
Balance at December 31, 1998 $ -- $(1,101,913)
========== ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 28
ADVANCED PLANT PHARMACEUTICALS, INC.
Statement of Cash Flows
For the Years ended December 31, 1997 and 1998
<TABLE>
<CAPTION>
1997 1998
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net Loss from operations $(885,137) $(621,561)
Adjustments to reconcile net loss from operations to net cash used
by operating activities:
Amortization expense -- 635
Services paid with common stock 113,350 214,716
Decrease in prepaid expenses 84,414 8,694
Increase (decrease) in accounts payable 1,976 (4,170)
Increase in accrued expenses 54,318 165,219
Change in certain other assets and liabilities 2,674 (4,148)
--------- ---------
Net cash used by operations (628,405) (240,615)
--------- ---------
Cash Flows from Investing Activities:
Cost of patent applications (6,345) --
--------- ---------
Net cash used by investing activities (6,345) --
--------- ---------
Cash Flows from Financing Activities:
Proceeds from short-term loans payable 53,303 21,130
Payments on short-term loans payable (69,000) (5,099)
Net proceeds from issuance of common stock 652,023 148,448
Stock subscriptions collected -- 77,650
--------- ---------
Net cash provided by financing activities 636,326 242,129
--------- ---------
Net increase in Cash and cash equivalents 1,576 1,514
Cash and cash equivalents at beginning of year 1,108 2,684
--------- ---------
Cash and cash equivalents at end of year $ 2,684 $ 4,198
========= =========
Supplemental Cash Flow Information:
Cash Paid During the Period for:
Interest $ -- $ --
========= =========
Income Taxes $ -- $ --
========= =========
Information about Noncash Activities:
Common stock issued to satisfy loans payable $ -- $ 32,500
========= =========
Common stock issued for services $ 113,350 $ 214,716
========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 29
ADVANCED PLANT PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Nature of Operations:
Advanced Plant Pharmaceuticals, Inc. ("the Company" or "APPI") focuses on
the research and development of plant based dietary supplements. The
Company has a process, which utilizes whole plants to manufacture all
natural dietary supplements and intends to use this process to manufacture
products that it hopes to distribute worldwide through various sales
distribution contracts.
The Company expects, in the near term, to finance these efforts through the
sale of its common stock until such time as operations achieve a positive
cash flow. There is no guarantee that the Company will accomplish this
goal. See footnote 9, "Financial Results and Liquidity."
Cash Equivalents:
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
Other Assets:
Other assets consist of patents and a security deposit.
Patents are amortized on a straight-line method over their economic lives
and are reviewed for impairment whenever the facts and circumstances
indicate that the carrying amount may not be recoverable.
Research & Development Costs:
Research and development costs are expensed as incurred.
Income Taxes:
The Company incurred significant losses as a development stage company. The
Company has elected not to record any tax benefits relating to potential
net operating loss carryforwards due to the uncertainty of realizing those
benefits.
The Company intends to follow Statement of Financial Accounting Standards
No. 109 (SFAS 109), "Accounting for Income Taxes" when either operations
achieve profitability or the realization of net operating loss benefits can
more readily be measured, whichever comes first.
<PAGE> 30
ADVANCED PLANT PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1998
Earnings per Share:
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share" discusses the computation and presentation of earnings per share
("EPS"). Basic EPS, as defined by SFAS No. 128, is computed by dividing
income available to common shareholders by the weighted-average number of
common shares outstanding for the reporting period, ignoring any potential
effects of dilution. Diluted EPS reflects the potential dilution that would
occur if securities, or other contracts to issue common stock, were
exercised or converted into common stock that then shared in the earnings
of the entity.
There were 1,900,000 common stock options outstanding as of December 31,
1997 and 1998. As a result of the losses reported in the periods presented
these options, if exercised, would be antidilutive. Accordingly, only Basic
EPS is presented in these financial statements. The weighted-average number
of shares used in the computation of per share data was 36,103,252 in 1997
and 47,986,030 in 1998.
Stock-Based Compensation:
APPI has satisfied various loans, trade payables, employee back-wages and
other liabilities through the issue of its common stock. The Company
accounts for such stock-based compensation using the fair-value method as
prescribed by SFAS No. 123, "Accounting for Stock-Based Compensation." The
Company has also issued stock options to key employees. As permissible
under SFAS No. 123, the Company accounts for stock options using the
intrinsic value method as prescribed under Accounting Principles Board
Opinion No. 25. All disclosures required by SFAS No. 123 are presented in
footnote 5 "Stock Options."
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. These estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent liabilities and the
reported amounts of revenues and expenses. Actual results could differ from
these estimates.
2. RELATED-PARTIES TRANSACTIONS:
During 1997, the Company issued 8 million shares of its common stock to
C.J. Lieberman. Mr. Lieberman is a shareholder of the Company, its former
President and the brother of the current President. These shares
represented the final two payments of an asset purchase agreement between
Mr. Lieberman and the Company which transferred the exclusive ownership of
four plant based dietary supplements, including all intellectual property
relating to these dietary supplements,
<PAGE> 31
ADVANCED PLANT PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1998
2. RELATED PARTIES TRANSACTIONS (CONTINUED):
to the Company. The total purchase price was for 12 million shares of APPI
common stock. The total fair market value of these shares was approximately
2.2 million dollars. The first 4 million shares were delivered in 1996 and
included in research and development at $2,800 representing the par value
of the 4 million shares. $5,600, representing the par value of the 8
million shares issued in 1997, is included in research & development
expense for that year. The aggregate amount charged to research and
development relating to this agreement was $8,600. As of July 2, 1999, the
Company has not developed any marketable products relating to two out of
four of these property rights.
Upon his resignation as President in 1996, the Company retained C.J.
Lieberman as a consultant. His consultant's agreement, which was for the
period July 30, 1996 to December 31, 1999, includes annual compensation of
$114,000, reimbursement of all direct expenses incurred while providing
services to the Company and options for the purchase of 600,000 shares of
the Company's common stock. On June 10, 1999, the Company entered into a
new consulting agreement with C.J. Lieberman that superseded his previous
agreement. The new agreement provides for monthly consulting fees of $9,000
and a five year option to purchase 750,000 shares of the Company's common
stock at an exercise price of $.02 per share. The consulting agreement
period is through June 10, 2002.
Due to the absence of revenues, cash flow has been unpredictable and often
non-existent. As a result, C.J. Lieberman frequently lent the Company funds
or directly paid expenses on behalf of the Company. These transactions were
accounted for in a loan account. When funds were available, Mr. Lieberman
would take advances against this loan account. As of December 31, 1997 and
1998, the loan account had a net balance due to the Company of $20,347 and
$12,153 respectively. These balances are included in "Prepaid expenses and
other current assets". The Company has offsetting balances owed to Mr.
Lieberman of $412,000 at December 31, 1997 and $425,597 at December 31,
1998. These balances represent unpaid salary during his term as President
as well as unpaid consulting fees and are included in "Accrued expenses
payable."
The Company's current President, David Lieberman, has also lent the Company
funds, or paid expenses on behalf of the Company. The balance owed to David
Lieberman relating to these transactions was $9,382 and $4,783 at December
31, 1997 and 1998 respectively and is included in "Loans payable" on the
balance sheet. Additionally, the Company owed the President unpaid salary
of $147,500 at December 31, 1997 and $232,500 at December 31, 1998. These
balances are included in "Accrued expenses payable".
3. SUBSEQUENT EVENTS:
During the three months ended March 31, 1999, the Company issued 30,004,650
shares of its common stock to satisfy various liabilities of the Company as
follows:
<PAGE> 32
ADVANCED PLANT PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1998
3. SUBSEQUENT EVENTS (CONTINUED):
The Company issued 6,200,000 shares of its common stock, fair value of
$62,000, as partial payment of accrued consulting fees payable to C.J.
Lieberman from prior years for his services as a consultant to the Company.
The Company issued 17,000,000 shares of its common stock, fair value of
$170,000, as partial payment of accrued salary payable to David Lieberman
for past services as President and issued 960,000 shares, fair value of
$9,600, as payment of first quarter wages to two employees. The Company
also issued 1,724,650 shares, fair value of $28,233, as payment of first
quarter expenses relating to printing, advertising and consulting services
and issued 4,120,000 shares, fair value of $51,600, as payment for various
loans.
During April 1999, the Company issued 21,818,181 shares of its common stock
to three private investors for $300,000. After deducting commissions and
escrow fees of $34,000, the net cash proceeds from this private placement
were $266,000. The Company also issued 530,000 shares of restricted stock
for various consulting and legal services with a fair value of $20,965.
During June 1999, the Company entered into an out-of-court settlement for a
$75,000 claim against the Company. The claim represented lost profits
incurred by an investor due to an unusual delay by the company in issuing
common stock purchased by that investor. The settlement called for the
issuance of 1.5 million shares of the Company's common stock. This
contingency is included in "accrued expenses payable" and "other expense"
in the 1998 financial statements.
On June 10, 1999, the Company entered into new employment and consulting
agreements with its three employees and consultant that supersede the
previous agreements that were due to expire in 1999. Based upon the new
agreements the Company is committed to wages, salaries and consulting fees
of approximately $358,000 in 1999, $393,000 annually through 2001 and
approximately $175,000 in 2002. The contracts also include grants for five
year stock options to purchase 2,250,000 shares of common stock at a
weighted average exercise price of $.017 per share. The Company also agreed
to cancel a prior stock option agreement, that granted 400,000 options to
an employee in 1997, and replace it with a new option agreement. Pursuant
to the new option agreement, the Company replaced the 400,000 cancelled
options with 1,000,000 options to purchase common stock at $.05 per share.
On July 16, 1999, the Company entered into a Technology Purchase Agreement
with C.J. Lieberman whereby the Company acquired exclusive rights and
interest to a thirteen step process which utilizes virtually the whole of
the nutrients found in plants to manufacture herbal dietary supplements.
The purchase price for the process, 18,000,000 shares of the Company's
common stock is conditioned on the occurrence that the stockholders of the
Company vote in favor of increasing the number of shares it is authorized
to issue to 250,000,000 shares. In addition, the Company agrees to pay to
C.J. Lieberman a royalty payment of $.01 per bottle with respect to each
product manufactured with the process, 1% (one percent) of the Company's
suggested retail price of each product manufactured with the process and
10% (ten percent) of the Company's net profits from the sale of products
manufactured with the process. In the event that the Company enters into an
agreement with a third party for the sale of products manufactured with the
process, which agreement unconditionally provides for payment to the
Company of not less than $20,000,000, upon receipt by the Company of such
$20,000,000 from such third party, the Company shall issue to C.J.
Lieberman five million shares for each $20,000,000 paid to the Company, not
to exceed twenty five million shares.
<PAGE> 33
ADVANCED PLANT PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1998
4. CAPITAL STOCK:
The Company is authorized to issue 120 million shares of it common stock,
par value $.0007 per share. The holders of common stock are entitled to one
vote for each share held on all matters to be voted on by stockholders.
The Company is also authorized to issue 5 million shares of preferred
stock, par value $.0007 per share. There is currently no preferred stock
outstanding and the company has no current plans to issue preferred stock.
5. STOCK OPTIONS:
Pursuant to an employment contract between the Company and its President,
David Lieberman, the Company granted 1,200,000 options to purchase common
stock to Mr. Lieberman in 1996. The Company also granted 300,000 options to
C.J. Lieberman during 1996 as required by his consulting agreement with the
Company. All options granted have an exercise price of $.05 per share. (The
number of options granted and the exercise price have been adjusted for a
2:1 stock split which occurred on November 25, 1996.)
During 1997, the Company granted 400,000 options to purchase common stock
to an employee. These options had an exercise price of $.25 per share and a
fair value of $.15 per share. No options were exercised or forfeited in
1997. The fair value of options granted in 1997 was estimated using the
Black-Scholes option pricing model with the following assumptions:
risk-free interest rate of 6.0%, expected option life of 29 months,
expected dividend yield of zero, and expected volatility of 100.52%.
There were no options granted, exercised or forfeited during 1998.
As of December 31, 1998, there were 1,900,000 common stock options
outstanding with a weighted-average remaining life of 3.0 years and a
weighted average exercise price of $.09 per share. Of those options,
1,400,000 were exercisable at December 31, 1998.
The Company has elected not to record compensation expense for any
outstanding options, as their intrinsic value is considered immaterial. Had
compensation expense been recognized using the fair value method prescribed
in SFAS No. 123, the Company's net loss would have increased by $84,831 in
1997 and $25,265 in 1998. Net loss per share would have increased by $.002
in 1997. The effect on net loss per share in 1998 was negligible.
6. COMMITMENTS AND CONTINGENCIES:
The Company has employment agreements with three employees and consulting
contracts with key consultants to the Company. At December 31, 1998, the
Company was committed under these agreements to salaries and consulting
fees of $210,100. The Company prior to their 1999 expiration dates renewed
these contracts. See footnote 3 "Subsequent Events."
<PAGE> 34
ADVANCED PLANT PHARMACEUTICALS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1998
6. COMMITMENTS AND CONTINGENCIES(CONTINUED):
The Company leases its office space at 75 Maiden Lane, New York, NY. The
current lease term expires on April 30, 1999. The minimum rental commitment
remaining under this lease was $7,416 at December 31, 1998. The Company
renewed this lease for another six-month term expiring October 1999.
7. LOANS PAYABLE:
Loans Payable consists of unsecured, non-interest bearing short-term loans
typically of less than three months duration. The loan agreements provide
the Company with the option of repaying the loans with either cash or free
trading shares of the Company's common stock.
8. DUE TO DISTRIBUTOR:
In 1995, the Company entered into a distribution agreement with a foreign
distributor in anticipation of bringing a product to market. The agreement
required an advance payment for product by the distributor. The Company was
unable to produce the anticipated product and in 1997 entered into a
settlement agreement with the distributor calling for eighteen monthly
installment payments of $5,750 and 60,000 shares of the Company's common
stock to be issued to the distributor. As of July 16, 1999, the Company has
neither issued the common stock nor made any of the installment payments as
required by the settlement agreement. The Company has elected not to accrue
any liability for the 60,000 shares of common stock, which had a fair
market value of approximately $1,200 at December 31, 1998.
9. FINANCIAL RESULTS AND LIQUIDITY:
Since its inception, the Company has had significant operating losses and
working capital deficits. The Company's continued existence has been
dependant on cash proceeds received from the sale of its common stock and
the willingness of vendors to accept stock in lieu of cash payments for
their services.
The Company is in the process of negotiating several distribution
agreements for its new products. Additionally, the Company received
$266,000 net proceeds ($300,000 gross less commissions and escrow fees of
$34,000) from the sale of its common stock in April 1999. There is no
guarantee that the cash generated from new products alone will occur prior
to the depletion of existing cash balances, or that the generated cash
receipts will be sufficient to fund operations. There also is no assurance
that the Company will continue to be able to finance operations through the
sale of its common stock or the exchange of stock for services.
Employees have also accepted deferrals of wage payments.
The Company hopes to reverse this trend by generating cash inflows through
the sale of new products that they have developed. To accomplish this
objective, the Company will require working capital to satisfy current
operating expenses, and to produce inventory, during the interim period
preceding such time as the revenue cycle begins generating cash.
Additionally, as the Company "ramps up" for manufacturing and distribution
activities, operating expenses and cash requirements can be expected to
increase.
<PAGE> 35
PART III
ITEM 1. INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
- - -------------- -----------
<S> <C>
2.1........... Certificate of Incorporation of the Company filed May 21, 1986
2.2........... Certificate for Renewal and Revival of Charter filed April 8,
1994
2.3........... Certificate of Amendment of Certificate of Incorporation filed
August 18, 1994
2.4........... Certificate of Amendment of Certificate of Incorporation filed
November 15, 1994
2.5........... Certificate for Renewal and Revival of Charter filed November
6, 1996
2.6........... Certificate of Amendment of Certificate of Incorporation filed
November 15, 1996
2.7........... Certificate of Amendment of Certificate of Incorporation filed
December 1, 1998
2.8........... Certificate of Correction of Certificate of Amendment of
Certificate of Incorporation filed December 28, 1998
2.9........... By-laws of the Company
6.1........... Employment Agreement between the Company and David
Lieberman dated June 10, 1999
6.2........... Stock Option Agreement between the Company and David
Lieberman dated June 10, 1999
6.3........... Employment Agreement between the Company and Barry Clare
dated June 10, 1999
6.4........... Stock Option Agreement between the Company and Barry Clare
dated June 10, 1999
6.5........... Distribution Agreement between the Company and Ambar
Pharmacies and Health, Inc. dated June 28, 1999
6.6........... Distribution Agreement between the Company and Manayer
Najd Trading & Medical Supplies Co. dated July 1, 1999
6.7........... Distribution Agreement between the Company and Manayer
Egypt Trading & Medical Supplies Co. dated July 1, 1999
6.8........... Technology Purchase Agreement between the Company and C.J.
Lieberman dated July 16, 1999
</TABLE>
<PAGE> 36
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.
ADVANCED PLANT PHARMACEUTICALS, INC.
Date: July 20, 1999 By: /S/ DAVID LIEBERMAN
-------------------------
David Lieberman
President and Sole Member
of the Board of Directors
<PAGE> 1
EXHIBIT 2.1
CERTIFICATE OF INCORPORATION
OF
VENTRA MANAGEMENT, INC.
FIRST: The name of the corporation is Ventra Management, Inc.
SECOND: Its principal place of business in the State of Delaware is to
be located at 725 Market Street, City of Wilmington, County of New Castle, State
of Delaware. The registered ant in charge thereof is The Company Corporation at
the some address as above.
THIRD: The nature of the business and the objects and purposes proposed
to be transacted, promoted and carried on, are to do any and all things herein
mentioned as fully and to the same extent as natural persons might or could to,
and in any part of the world, viz:
"The purpose of the corporation is to engage in any lawful act or
activity for which corporation may be organized under the General
Corporation Law of Delaware."
FOURTH: The total number of shares which the corporation is authorized
to issue is one hundred million (100,000,000) shares, with a par value of one
hundredth of one cent ($.0001), all of which are of the same class and all of
which are designated as common shares.
FIFTH: The name and mailing address of the incorporator is as follows:
Marsha Mills, 725 Market Street, Wilmington, DE 19801
SIXTH: The powers of the incorporator are to terminate upon filing of
the certificate of incorporation, and the name and mailing address of the
persons who will serve as directors until the first annual meeting of
stockholders or until successors are elected am qualify is as follows:
Simone T. Palazzolo, 515 Madison Avenue, 15th Floor, New York NY 10022
SEVENTH: The Directors shall have the power to make and to alter or
amend the By-Laws; to fix the amount to be reserved as working capital and to
authorize and cause to be executed mortgages and liens without limit as to the
amount upon the property and franchise of the Corporation
With the consent in writing and pursuant to a vote of the holders of a
majority of the capital stock Issued and outstanding, the Directors shall have
the authority to dispose, in any
<PAGE> 2
manner, of the whole property of this Corporation.
The by-laws shall determine whether and to what extent the accounts and
books of this Corporation, or any of them shall be open to the inspection of the
stockholders; and no stockholder shall have any right of inspecting any account,
or book, or document of the Corporation, except as conferred by the laws or
by-laws or by resolution of the stockholders.
The stockholders and directors shall have power to bold their meetings
and keep books and records outside of the State of Delaware, at such places as
may be from time to time designated by the by-laws or by resolution of the
stockholders or directors, except as otherwise required by the laws of Delaware
It is the intention that the objects, purposes and powers specified in
the Third paragraph hereof shall, except where otherwise cited In said
paragraph, be nowise limited or restricted by reference to or inference from the
terms of any other clause or paragraph in this certificate of incorporation, but
that the objects, purposes and powers specified in the Third paragraph and in
each of the clauses or paragraphs of this charter shall be regarded as
independent objects, purposes and powers.
I, THE UNDERSIGNED, for the purpose of forming a Corporation under the
laws of the State of Delaware do make, file and record this Certificate and do
certify that the facts herein are true; and that I have accordingly hereunto set
my Name
STATE OF DELAWARE
COUNTY OF New Castle
/s/ Marsha Mills
------------------------------
<PAGE> 1
EXHIBIT 2.2
CERTIFICATE
FOR RENEWAL AND REVIVAL OF CHARTER
VENTRA MANAGEMENT, INC., a corporation organized under the laws of
Delaware, the charter of which was voided for non-payment of taxes, now desires
to procure a restoration, renewal and revival of its charter, and hereby
certifies as follows:
1. The name of this corporation is VENTRA MANAGEMENT, INC.
2. Its registered office in the State of Delaware is located at 15 West
Loockerman Street, City of Dover, Zip Code 19901, County of Kent. The name and
address of its registered agent is Agents for Delaware Corporations, Inc.
3. The date of filing of the original Certificate of Incorporation in
Delaware was May 21, 1986.
4. The date when restoration, renewal and revival of the charter of
this company is to commence is the 1st day of March, 1989, same being prior to
the date of the expiration of the charter. This renewal and revival of the
charter of this corporation is to be perpetual.
5. This corporation was duly organized and carried on the business
authorized by its charter until the 28th day of February, A.D. 1989, at which
time its charter became inoperative and void for non-payment of taxes and this
certificate for renewal and revival is filed by authority of the duly elected
directors of the corporation, in accordance with the laws of the State of
Delaware.
IN TESTIMONY WHEREOF, and in compliance with the provisions of Section
312 of the General Corporation Law of the State of Delaware, as amended,
providing for the renewal, extension and restoration of Charters.
Myron A. Baker, the last and acting President, and Myron A. Baker, the last and
acting Secretary of VENTRA MANAGEMENT, INC., have set their hands to this
certificate this 15th day of March, 1994.
Attest: /s/ Myron A. Baker
----------------------------------------
Last and Acting President
/s/ Myron A. Baker
----------------------------------------
Last and Acting Secretary
<PAGE> 1
EXHIBIT 2.3
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
VENTRA MANAGEMENT, INC., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware DOES HEREBY
CERTIFY:
FIRST: That at a meeting of the Board of Directors of VENTRA MANAGEMENT, INC.
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered FIRST so that, as
amended, said Article shall be and read as follows: THE NAME OF THE
CORPORATION SHALL BE ADVANCED PLANT PHARMACEUTICALS, INC.
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: That the capital of said corporation shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, said NAME CHANGE has caused this certificate to be
signed by Myron A. Baker, its President and Myron A. Baker, its Secretary this
20th day of July, 1994.
By: /s/ Myron A. Baker
--------------------
President
/s/ Myron A. Baker
--------------------
Secretary
<PAGE> 1
EXHIBIT 2.4
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
A corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That a meeting of the Board of Directors of ADVANCED PLANT
PHARMACEUTICALS, INC. resolutions were duly adopted setting forth a proposed
amendment of the Certificate of Incorporation of said corporation, declaring
said amendment to be advisable and calling a meeting of the stockholders of said
corporation for consideration thereof. The resolution setting forth the proposed
amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered 4th Article so that, as
amended, said Article shall be and read as follows: "Increase the authorized
shares from 50,000,000 to 120,000,000."
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of said corporation was duly
called and held upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said corporation shall not be reduced under
or by reason of said amendment.
IN WITNESS WHEREOF, said ADVANCED PLANT PHARMACEUTICALS, INC.
has caused this certificate to be signed by DAVID LIEBERMAN, an
Authorized Officer, this 10th day of November, 1998.
By: /s/ David Lieberman
------------------------------------
David Lieberman, President
<PAGE> 1
EXHIBIT 2.5
CERTIFICATE
FOR RENEWAL AND REVIVAL OF CHARTER
OF
ADVANCED PLANT PHARMACEUTICALS INC.
ADVANCED PLANT PHARMACEUTICALS INC., a corporation organized under the laws of
the State of Delaware, the Certificate of Incorporation of which was filed in
the Office of the secretary of State on the 21 day of May A.D. 1986, the charter
of which was voided for nonpayment of taxes, now desires to procure a
restoration, renewal and revival of its charter, and hereby certifies as
follows:
1. The name of this corporation is:
ADVANCED PLANT PHARMACEUTICALS INC
2. Its registered office in the State of Delaware in located at 1013 Centre
Road, in the City of Wilmington, County of New Castle and its registered agent
is CORPORATION SERVICE COMPANY.
3. The date when the restoration, renewal, and revival of the charter of this
company is to commence is the twenty-ninth day of February, A.D., 1996, same
being prior to the date of the expiration of the charter. This renewal and
revival of the charter of this corporation is to be perpetual.
4. This corporation was duly organized and carried on the business authorized by
its charter until the first day of March, A.D. 1996, at which time Its charter
became inoperative and void for non-payment of taxes and this certificate for
renewal and revival is filed by authority of the duly elected directors of the
corporation in accordance with the laws of the State of Delaware.
<PAGE> 2
IN TESTIMONY WHEREOF, and in compliance with the provisions of Section
312 of the General Corporation Law of the State of Delaware, as amended,
ADVANCED PLANT PHARMACEUTICALS INC. has caused this Certificate to be signed by
this FIRST day of March A.D. 1996.
/s/ Samuel Berkowitz
--------------------
Authorized Officer
SECRETARY
<PAGE> 1
EXHIBIT 2.6
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ADVANCED PLANT PHARMACEUTICALS, INC.
ADVANCED PLANT PHARMACEUTICALS, INC., a corporation organized and
existing under by virtue of the General Corporation Law of the State of Delaware
(the "Corporation"), does hereby certify:
FIRST: That the board of directors of the Corporation, by resolutions
duly adopted, declared it to be advisable that the Certificate of Incorporation
of the Corporation be amended in order to reflect a reverse stock split of the
Corporation's outstanding common stock, par value $.0001 per share (the "Common
Stock") on a one-for-seven basis and that, in connection therewith, the par
value per share of the Common Stock be increased to $.0007 per share and the
number of authorized shares of Common Stock be reduced to fourteen million two
hundred eighty-five thousand seven hundred fourteen (14,285,714) shares, and
that Article Fourth of the Certificate of Incorporation be deleted and the
following substituted in lieu thereof:
"Fourth: The total number of shares which the Corporation is
authorized to issue is fourteen million two hundred eighty-five
thousand seven hundred fourteen (14,285,714) shares, with a par value
of seven hundredths of one cent ($.0007), all of which are of the same
class and all of which are designated as common shares. The Common
Stock of the Corporation will be reverse split on a one-for-seven basis
so that each share of Common Stock issued and outstanding as of
November 15, 1994 (the "Declaration Date") shall automatically be
converted into and reconstituted as one-seventh of a share of Common
Stock (the "Reverse Split.") No fractional shares will be issued by the
Corporation as a result of the Reverse Split. In lieu thereof each
Stockholder whose shares of common Stock are not evenly divisible by
seven will receive one additional share of Common Stock for the
fractional share that such Stockholder would otherwise be entitled to
as a result of the Reverse Split."
SECOND: That such amendment has been duly adopted by the
stockholders of the Corporation in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware by
the written consent of a majority of stockholders in accordance with
Section 228 of the General Corporation Law of the State of Delaware.
Written notice to the remaining stockholders is being provided in
<PAGE> 2
accordance with Section 228.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be signed by C.J. Lieberman, its President, and attested
by Robert Silverman, its Secretary, this 15th day of November, 1999.
ADVANCED PLANT PHARMACEUTICALS, INC.
By: /s/ CJ Lieberman
---------------------------------
C.J. Lieberman, President
Attest:
/s/ Robert Silverman
- - ---------------------------
Robert Silverman, Secretary
<PAGE> 1
EXHIBIT 2.7
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
FIRST: That at a meeting of the Board of Directors of ADVANCED PLANT
PHARMACEUTICALS, INC., resolutions were duly adopted setting
forth a proposed amendment of the Certificate of Incorporation
of said corporation, declaring said amendment to be advisable
and calling a meeting of the stockholders of said corporation
for consideration thereof. The resolution setting forth the
proposed amendment as follows:
"RESOLVED, that the Certificate of Incorporation of this
corporation be amended by changing the Article thereof
numbered "4th" so that, as amended, said Article shall be and
read as follows:
"Increase the authorized common shares from 50,000,000 to
120,000,000, par value $.0007 per share, and keep the same
5,000,000 Preferred Shares, par value $.0007.
SECOND: That thereafter, pursuant to resolution of the Board of
Directors, a special meeting of the stockholders of said
corporation was duly called and held, upon notice in
accordance with Section 222 of the General Corporation Law of
the State of Delaware at which meeting the necessary number of
shares as required by statute were voted in favor of the
amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of
the State of Delaware.
FOURTH: That the capital of said corporation shall not be reduced
under or by reason of said amendment.
IN WITNESS WHEREOF, said ADVANCED PLANT PHARMACEUTICALS, INC. has
caused this certificate to be signed by DAVID LIEBERMAN, an authorized officer
this 1st day of December, A.D. 1998.
By: /s/ David Lieberman
------------------------------
Name: David Lieberman
<PAGE> 1
EXHIBIT 2.8
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
ADVANCED PLANT PHARMACEUTICALS, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation")
is Advanced Plant Pharmaceuticals, Inc.
2. The Certificate of Amendment of the Certificate of Incorporation of
the corporation, which was filed by the Secretary of State of Delaware on
December 1, 1998, is hereby corrected.
3. The defect to be corrected in said instrument is as follows:
FIRST: That at a meeting of the Board of Directors of Advanced
Plant Pharmaceuticals, Inc., resolutions were duly adopted setting
forth a proposed amendment of the Certificate of Incorporation of said
corporation, declaring said amendment to be advisable and calling a
meeting of the stockholders of said corporation for consideration
thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the Certificate of Incorporation of the
corporation be amended by changing the Article thereof numbered "4th
Article" so that, as amended, said Article shall be and read as
follows: "Increase the authorized common shares, par value $.0007 per
share, from 50,000,000 to 120,000,000 and keep the same 5,000,000
preferred shares par value $.0007."
SECOND: That thereafter, pursuant to resolution of its Board
of Directors, a special meeting of the stockholders of said corporation
was duly called and held upon notice in accordance with Section 222 of
the General Corporation Law of the State of Delaware at which meeting
the necessary number of shares as required by statute were voted in
favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with
the provisions of section 242 of the General Corporation Law of the
State of Delaware.
<PAGE> 2
4. The portion of the instrument in corrected form is as follows:
FIRST: That at a meeting of the Board of Directors of Advanced
Plant Pharmaceuticals, Inc., resolutions were duly adopted setting
forth a proposed amendment of the Certificate of Incorporation of said
corporation, declaring said amendment to be advisable and submitting
such proposed amendment to the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed
amendment is as follows:
RESOLVED: That the Certificate of Incorporation of this
corporation be amended by changing the Article thereof numbered Fourth
Article so that as amended, said Article shall be and read as follows:
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is 120,000,000 shares of
Common Stock, par value $.0007 per share, and 5,000,000 shares of
preferred stock par value $.0007. The preferred stock may be issued
from time to time in one or more series. The Board of Directors of the
corporation is hereby expressly authorized to provide, by resolution or
resolutions duly adopted by it prior to issuance, for the creation of
each such series and to fix the designations and the powers,
preferences, rights, qualifications, limitations and restrictions
relating to the shares of each such series. The authority of the Board
of Directors with respect to each series of preferred stock shall
include, but not be limited to, determining the following:
(a) the designation of such series, the number of shares to
constitute such series and the stated value thereof if different from
the par value thereof;
(b) whether the shares of such series shall have voting
rights, in addition to any voting rights provided by law, and, if so.
the terms of such voting rights, which may be general or limited;
(c) the dividends, if any, payable on such series, whether any
such dividends shall be cumulative, and if so, from what dates, the
conditions and dates upon which such dividends shall be payable, and
the preference or relation which such dividends shall bear to the
dividends payable on any shares of stock or any other class or any
other series of preferred stock;
(d) whether the shares of such series shall be subject to
redemption by the corporation, and if so, the times, prices and other
conditions of such redemption;
(e) the amount or amounts payable upon shares of such series
upon, and the rights of the holders of such series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any
distribution of the assets of the corporation;
<PAGE> 3
(f) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and
manner in which any such retirement or sinking fund shall be applied to
the purchase or redemption of the shares of such series for retirement
or other corporate purposes and the terms and provisions relating to
the operation thereof;
(g) whether the shares of such series shall be convertible
into, or exchangeable for, shares of stock of any other class or any
other series of preferred stock or any other securities and, if so, the
price or prices or the rate or rates of conversion or exchange and the
method, if any, of adjusting the same, and any other terms and
conditions of conversion or exchange.
(h) the limitations and restrictions, if any, to be effective
while any shares of such series are outstanding upon the payment of
dividends or the making of other distributions on, and upon the
purchase, redemption or other acquisition by the corporation of, the
common stock or shares of stock of any other class or any other series
of preferred stock;
(i) the conditions or restrictions, if any, upon the creation
of indebtedness of the corporation or upon the issue of any additional
stock, including additional shares of such series or of any other
series of preferred stock or of any other class; and
(j) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations
and restrictions thereof.
The powers, preferences and relative, participating optional
and other special rights of each series of preferred stock, and the
qualifications, limitations or restrictions thereof, if any, may differ
from those of any and all other series at any time outstanding. All
shares of any one series of preferred stock shall be identical in all
respects with all other shares of such series, except that shares of
any one series issued at different times may differ as to the dates
from which dividends thereof shall be cumulative.
SECOND: That thereafter, pursuant to resolution of its Board
of Directors and in accordance with Section 228 of the General
Corporation Law of the State of Delaware, the holders of a majority of
the outstanding shares of common stock of the corporation, by written
consent, adopted the foregoing amendment.
THIRD: That said amendment was duly adopted in accordance with
the provisions of Sections 228 and 242 of the General Corporation Law
of the State of Delaware.
Dated: December 10, 1998
/s/ David Lieberman
-------------------
David Lieberman, President
<PAGE> 1
EXHIBIT 2.9
ADVANCED PLANT PHARMACEUTICALS, INC.
Incorporated under the Laws of the
State of Delaware
------------------------
BY-LAWS
------------------------
As Adopted November, 1994
<PAGE> 2
<TABLE>
<CAPTION>
Table of Contents
Meetings of Stockholders
<S> <C>
1. Place of meetings........................................................................................1
2. Annual meeting...........................................................................................1
3. Special meetings.........................................................................................1
4. Notice of meetings and waiver............................................................................1
5. List of stockholders.....................................................................................2
6. Quorum and manner of acting..............................................................................2
7. Record date .............................................................................................3
8. Order of business, voting and proxies ...................................................................3
9. Inspectors of election...................................................................................4
Board of Directors
10. Powers, qualifications, number, term and election........................................................4
11. Compensation.............................................................................................4
12. Place of meetings........................................................................................5
13. First meeting after annual meeting.......................................................................5
14. Regular meetings.........................................................................................5
15. Special meetings, notice and waiver......................................................................5
16. Quorum, adjournment and manner of acting.................................................................6
17. Removal..................................................................................................6
18. Vacancies................................................................................................6
19. Reliance on reports......................................................................................6
20. Committees...............................................................................................6
Officers
21. Number and qualifications................................................................................7
22. Election and term of office..............................................................................7
23. Subordinate officers, etc................................................................................7
24. Removal..................................................................................................7
25. Vacancies................................................................................................8
26. Chairman of the Board....................................................................................8
27. President................................................................................................8
28. Vice Presidents..........................................................................................8
29. Treasurer................................................................................................8
30. Secretary................................................................................................8
31. Salaries.................................................................................................9
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Resignations
<S> <C>
32. Resignations ............................................................................................9
Contracts and Bank Accounts
33. Execution of contracts...................................................................................9
34. Checks, drafts, etc.....................................................................................10
35. Deposits ...............................................................................................10
Stocks and Dividends
36. Stock certificate.......................................................................................10
37. Lost certificates.......................................................................................10
38. Transfers...............................................................................................10
39. Dividends...............................................................................................11
Offices, Books, Etc.
40. Offices.................................................................................................11
41. Books and records.......................................................................................11
42. Seal ...................................................................................................12
43. Fiscal year.............................................................................................12
44. Indemnity...............................................................................................12
Amendments to By-laws
45. Amendments..............................................................................................12
</TABLE>
<PAGE> 4
BY-LAWS
OF
Advanced Plant Pharmaceuticals, Inc.
Meetings of Stockholders
1. Place of Meetings. All meetings of stockholders of Advanced Plant
Pharmaceuticals, Inc. (hereinafter called the Corporation) may be held at the
registered office of the Corporation, or at such other place within or without
the State of Delaware as shall be specified in the notice of such meeting given
as hereinafter provided.
2. Annual Meeting. An annual meeting of the stockholders of the Corporation for
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held at such date or time as may be
fixed by the Board of Directors but, if no such date and time is fixed by the
Board, the annual meeting of stockholders shall be held on the 2nd Tuesday, of
May each year unless such date is a legal holiday and, if a legal holiday, then
on the next succeeding business day, at such place and hour as shall be
designated in the notice thereof.
3. Special Meetings. Special meetings may be called by the Board of Directors of
the Corporation (hereinafter called the "Board"), or by the President of the
Corporation, or by the Chairman of the Board should one: be appointed as
provided in these By-laws.
4. Notice of meetings and waiver. Whenever stockholders of the Corporation are
required or permitted to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. The written notice of any meeting shall be given
not less than ten nor more than sixty days before the date of the meeting to
each stockholder entitled to vote at such meeting. If mailed, notice is given
when deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the Corporation. A
written waiver of notice signed by the person entitled to notice, whether before
or after the time stated therein, shall be deemed equivalent to notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in any written waiver of notice.
When a meeting is adjourned to another time or place, notice need not
be given of the adjourned meeting, unless these By-laws otherwise require, if
the time and place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting the
1
<PAGE> 5
Corporation may transact any business which might have been transacted at the
original meeting. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting.
5. List of stockholders. It shall be the duty of the Secretary of the
Corporation to prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the-,
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
6. Quorum and manner of acting. A majority of the shares of stock entitled to
vote, represented at any meeting of the stockholders, either in person or by
proxy, shall constitute a quorum for the purpose of such meeting, provided that
when a specified item of business is required to be voted on by a class or
series of stock, voting as a class or series, the holders of a majority of the
shares of such class or series shall constitute a quorum for the transaction of
such specified item of business. Unless otherwise provided by statute or in the
Certificate of Incorporation of the Corporation, each stockholder shall be
entitled to one vote for each share of the Corporation's Common Stock held by
such stockholder. Except as otherwise provided by statute or in the Certificate
of Incorporation, any action of the stockholders shall be decided by a majority
of the votes cast by the holders of the outstanding shares of the Corporation's
Common Stock present in person or represented by proxy and entitled to vote
thereon at a meeting duly called and held.
Any action required to be taken or which may be taken at any annual or
special meeting of the stockholders may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
Each stockholder entitled to vote at a meeting of stockholders, or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for him by proxy, but no such proxy
shall be voted or acted upon after three years from its date, unless the proxy
provides for a longer period.
2
<PAGE> 6
7. Record date. In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board may fix, in advance, a record date, which shall
not be more than sixty nor less than ten days before the date of such meeting
nor more than sixty days prior to any other action. If no record date is fixed:
(i) the record date for determining stockholders entitled to notice of or to
vote at a meeting of stockholders shall be at the close of business on the day
next preceding the day on which notice is given, or if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held; (h) the record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the Board is necessary, shall be the day on which the first written consent
is expressed; and (iii) the record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the Board
adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting.
8. Order of business, voting and proxies. The order of business at all meetings
of the stockholders shall be as determined by the chairman of the meeting. All
elections of directors shall be by written ballot. Except in the case of a vote
for the election of directors, unless demanded by a stockholder present in
person or represented by proxy at any meeting of the stockholders and entitled
to vote or so directed by the chairman of the meeting, the vote on any question
need not be by ballot. Upon a demand by any such stockholder for a vote by
ballot on any question or at the direction of the chairman of the meeting that a
vote by ballot be taken on any question, the vote shall be so taken. On a vote
by ballot, each ballot shall be signed by the stockholder voting, or in his name
by his proxy, if there be a proxy, and it shall, show the number of shares voted
by him. Except as otherwise required by statute or by these By-laws, all voting
may be viva voce.
9. Inspectors of election. At each meeting of the stockholders the chairman of
the meeting may, and at the request of a stockholder present in person or
represented by proxy and entitled to vote at the meeting shall, appoint two
inspectors of election to art at the meeting. No director or candidate for the
office of director shall be appointed such an inspector. Inspectors of election
need not be stockholders. Each inspector of election so appointed, before
entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspection at the meeting with strict
impartiality and according to the best of his ability. Such inspectors of
election shall determine the number of shares of stock outstanding and the
voting power of each, the number of shares of stock represented at the meeting,
the existence of a quorum, and the validity and effect of proxies, and shall
receive votes, ballots or consents, hear and determine all challenges and
questions
3
<PAGE> 7
arising in connection with the right to vote, count and tabulate all votes,
ballots or consents, determine the result, and do such acts as are proper to
conduct the election or vote, with fairness to all stockholders. On request of
the chairman of the meeting or any stockholder entitled to vote at the meeting,
the inspectors shall make a report in writing of any challenge, request or
matter determined by them and shall execute a certificate of any fact found by
them.
Board of Directors
10. Powers, qualifications, number, term and election. The business and affairs
of the Corporation shall be managed by or under the direction of the Board. The
Board may exercise all the authority and powers of the Corporation and do all
lawful acts and things which are not by statute or the Certificate of
Incorporation, of the Corporation or these By-laws directed or required to be
exercised or done by the stockholders. If any such provision is made in the
Certificate of Incorporation, the powers and duties conferred or imposed upon
the Board shall be exercised or performed to such extent and by such person or
persons as shall be provided in the Certificate of Incorporation, Each director
shall be at least twenty-one years of age. A director need not be a resident of
the State of Delaware or a stockholder. The Board shall consist of one or more
members elected at the last annual meeting of stockholders. The number of
directors, if more than one, may be decreased at any time by the stockholders to
any number not less than one director or increased at any time by the
stockholders or the Board. The term of office of each director shall be from the
time of his election and qualification until his successor shall have been duly
elected at the next annual meeting of the stockholders and shall have qualified,
or until his earlier death, or resignation or removal as provided in these
By-laws. At all elections of directors by the stockholders, the persons
receiving a plurality of the votes cast shall be the directors.
11. Compensation. Directors as such shall not receive any compensation for their
services, although the Board shall have the authority to fix by resolution the
compensation of directors. Expenses, if any, of attendance at any meeting may be
allowed each director. Nothing contained in these By-laws shall be construed to
preclude a director from serving the Corporation in any other capacity as an
officer, employee, agent or otherwise and receiving compensation therefor.
12. Place of meetings. The Board may hold its meetings at the place or places
within or without the State of Delaware as it may from time to time by
resolution determine or as shall be specified or fixed in the respective notices
or waivers of notice thereof.
13. First Meeting after annual meeting. The Board shall meet for the purpose of
organization, election of officers, appointment of committees, if any, and the
transaction of other business as soon as practicable after each annual meeting
of the stockholders.
14. Regular meetings. Each regular meeting of the Board shall be held at the
time and place specified in a resolution adopted by the Board then in effect,
or, if there is not any
4
<PAGE> 8
such resolution then in effect, as specified in a notice of the meeting, given
as provided in these By-laws for notices of special meetings of the Board, or as
specified in a waiver of notice thereof signed by all the directors of the
Corporation then in office. If at the time any regular meeting of the Board is
to be held, the time and place of holding regular meetings of the Board shall
have been fixed by resolution of the Board then in effect, notice of the regular
meeting need not be given except as may otherwise be provided by statute.
15. Special meetings, notice and waiver. Special meetings of the Board shall be
held whenever called by the President or the Secretary of the Corporation, or by
the Chairman of the Board, should one be appointed as provided in these By-Laws.
Except as otherwise provided by statute, a notice of each special meeting, which
shall state the time and place of the meeting, shall be mailed to each director
addressed to him at his residence or usual place of business at least five days
before the day on which the meeting is to be held, or shall be sent addressed to
him at his usual place of business by telegraph or delivered personally or by
telephone not later than two days before the day on which the meeting is to be
held. If mailed, notice is given when deposited in the United States mail,
postage prepaid, directed to the director at his residence address or the
address of his usual place of business. A written waiver of notice of a Board
meeting, signed by the director, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a director at a
Board meeting shall constitute a waiver of notice of such meeting, except when
the director attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the Board need be
specified in any written waiver of notice. Any meeting of the Board shall be a
legal meeting without any notice having been given if all the directors of the
Corporation then in office shall have waived notice or shall have attended the
meeting without any director having protested, prior thereto or at its
commencement, the lack of notice.
16. Quorum, adjournment and manner of acting. At each meeting of the Board, the
presence of a majority of the total number of directors then in office shall
constitute a quorum and sufficient for the transaction of business. Any vote of
a majority of the directors present at a meeting at which there is a quorum
present at the time of the vote shall be the act of the Board, except as may be
otherwise specifically provided by statute or in the Certificate of
Incorporation of the Corporation or these By-laws. Any meeting of the Board may
be adjourned by a majority vote of the directors present at the meeting. In the
absence of a quorum at any meeting, a majority of the directors present may
adjourn the meeting to another time and place until a quorum is present. Notice
of any adjourned meeting need not be given. The directors shall act only as a
Board and the individual directors shall have no power as such. Any action
required or permitted to be taken at any meeting of the Board may be taken
without a meeting if all members of the Board consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board.
Members of the Board may participate in a meeting of the Board by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting
5
<PAGE> 9
can hear each other, and participation in a meeting pursuant to this By-law
provision shall constitute presence in person at such meeting.
17. Removal. Any director or the entire Board of the Corporation may be removed
from office at any time with or without cause by the holders of a majority of
the outstanding shares of the Corporation's capital stock then entitled to vote
at an election of directors.
18. Vacancies. The vacancy in the Board caused by a removal as provided in these
By-laws may be filled by the stockholders at the meeting at which the director
is removed. Vacancies due to death, resignation, removal (when not otherwise
filled by the stockholders at the meeting at which the director was removed),
and newly created directorships resulting from any increase in the authorized
number of directors may be filled by a majority of the directors then in office,
although less than a quorum, or by a sole remaining director.
19. Reliance on reports. A member of the Board shall, in the performance of his
duties, be fully protected in relying in good faith upon the books of account or
reports made to the Corporation by any of its officers, or by an independent
certified public accountant, or by an appraiser selected with reasonable care by
the Board, or in relying in good faith upon other records of the Corporation.
20. Committees. The Board may, by resolution passed by a majority of the whole
Board, designate one or more committees, each committee to consist of one or
more of the directors of the Corporation. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board to
act at the meeting in the place of any such absent or disqualified member. Any
such committee, to the extent provided in the resolution of the Board, shall
have and may exercise all the powers and authority of the Board in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority to amend the Certificate of
Incorporation, adopt an agreement of merger or consolidation, recommend to the
stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, recommend to the stockholders a dissolution
of the Corporation or a revocation of a dissolution, amend the By-laws of the
Corporation, declare a dividend, or authorize the issuance of stock.
Officers
21. Number and qualifications. The officers of the Corporation shall be the
President, Secretary, and Treasurer. The Board may also appoint, in accordance
with the provisions of these By-laws, a Chairman of the Board (who shall be a
member of the Board), one or more Vice Presidents, one or more of whom may be
designated an Executive Vice President or a
6
<PAGE> 10
Senior Vice President, a Chief Financial Officer, and subordinate officers,
agents and employees, with such duties as the Board shall determine or as
otherwise provided in these By-laws. Any number of offices may be held by the
same person.
22. Election and term of office. The officers of the Corporation shall be
elected from time to time by the Board, each to hold office until the meeting of
the Board after the next annual meeting of the stockholders and his successor
shall have been duly elected and shall have qualified, or until his earlier
death, or resignation, or removal as provided in these By-laws.
23. Subordinate officers. etc. The Board may from time to time appoint such
subordinate officers, agents or employees as the Board may consider to be
necessary or advisable, including one or more Assistant Treasurers and one or
more Assistant Secretaries, each of whom shall hold office for the period, have
the authority, and perform the duties provided in these By-laws or as the Board
may from time to time determine.
24. Removal. Any officer, agent or employee of the Corporation may be removed at
any time with or without cause by vote of a majority of the entire Board.
25. Vacancies. In case the office of the Chairman of the Board, the President,
any Vice President, Secretary, Treasurer, or of a subordinate officer, agent or
employee of the Corporation becomes vacant due to death, resignation, removal,
or a newly created office, the directors then in office, although less than a
quorum of the Board, by a majority vote, may elect or appoint a successor to
fill the vacancy, to hold office for the unexpired term.
26. Chairman of the Board. The Chairman of the Board, if one is appointed and if
present, shall preside at all meetings of stockholders and of the Board. He
shall perform such other duties as may from time to time be assigned to him by
these By-laws or by the Board.
27. President. The President shall be the chief executive officer of the
Corporation and shall have general supervision over the business of the
Corporation, subject to the control of the Board. The President shall preside at
each meeting of the stockholders of the Corporation and of the Board, unless
these duties shall have been assigned to a Chairman of the Board. The President
shall see that all orders and resolutions of the Board are carried into effect.
He may sign, with the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, certificates for shares of the capital stock of the
Corporation; and he may sign, execute and deliver in the name of the Corporation
all deeds, mortgages, bonds, contracts or other instruments authorized by the
Board, except in cases where the signing, execution or delivery of the
instrument shall be expressly delegated by the Board or by these By-laws to some
other officer or agent of the Corporation or shall be required by statute
otherwise to be signed, executed and delivered, and he may affix the seal of the
Corporation to any instrument which requires a seal. In general the President
shall perform all duties incident to the office of president and other duties
assigned to him from time to time by these By-laws or by the Board.
7
<PAGE> 11
28. Vice Presidents. Each Vice President shall perform the duties assigned to
him from time to time by the Board or the President. Any Vice President may
sign, with the-Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary, certificates for shares of the capital stock of the
Corporation.
29. Treasurer. The Treasurer shall have charge and custody of, and be
responsible for, all the funds and securities of the Corporation, shall keep
full and accurate accounts of receipts and disbursements in books belonging to
the Corporation, and shall deposit all moneys and other valuable effects in the
name of and to the credit of the Corporation in the banks or other depositories
designated by the Board. The Treasurer shall disburse the funds of the
Corporation as ordered by the Board, taking proper vouchers for disbursements,
and shall render to the President, and to the directors at the meetings of the
Board, a statement of all his transactions as Treasurer and an account of the
financial condition of the Corporation. In general, the Treasurer shall perform
all the duties incident to the office of treasurer and other duties assigned to
him from time to time by the Board or the President. He may sign, with the
President or a Vice President, certificates for shares of the capital stock of
the Corporation.
30. Secretary. The Secretary Shall act as secretary of, and record the
proceedings of, meetings of the Board and of the stockholders in a book to be
kept for that purpose. He shall cause to be given notice of meetings of the
stockholders and directors; he shall be custodian of the seal of the Corporation
and shall affix the seal, or cause it to be affixed, to certificates. for shares
of the capital stock of the Corporation and to documents the execution of which
on behalf of the Corporation under its seal shall have been specifically or
generally authorized by the Board; and he shall have charge of the record of
stockholders and also of the other books, records and papers of the Corporation
which relate to its organization as a corporation and shall see that the
reports, statements and other documents required by statute are properly kept or
filed. In general the Secretary shall perform all the duties incident to the
office of secretary and other duties assigned to him from time to time by the
Board or the President. He may sign, with the President or a Vice President,
certificates for shares of the capital stock of the Corporation.
31. Salaries. Salaries of officers of the Corporation, if any, shall be fixed
from time to time by, or with the authority of, the Board. An officer shall not
be prevented from receiving a salary by reason of the fact that he is also a
member of the Board; but an officer who is also a member of the Board shall have
no vote in the determination of the amount of the salary that shall be paid to
him.
Resignations
32. Resignations. Any director, officer, or any subordinate officer, agent or
employee of the Corporation appointed by the Board, may resign his office at any
time by giving written notice of his resignation to the President or the
Secretary. Any such resignation shall take
8
<PAGE> 12
effect at the time specified therein or, if no time is specified, at the time of
its receipt by the Corporation, and acceptance shall not be necessary to make
the resignation effective.
Contracts and Bank Accounts
33. Execution of contracts. Except as these By-laws may otherwise provide, the
Board may authorize any officer, subordinate officer, agent or employee, in the
name of and on behalf of the Corporation, to enter into any contract or execute
and deliver any instrument; the authority may be general or confined to specific
instances. Unless so authorized by the Board or expressly authorized by these
By-laws, no officer, subordinate officer, agent or employee shall have any power
or authority to bind the Corporation by any contract or engagement or to pledge
its credit or render it pecuniarily liable for any purpose or to any amount.
34. Checks, drafts, etc. All checks, drafts and other orders for the payment of
moneys out of the funds of the Corporation and all notes or other evidences of
indebtedness of the Corporation shall be signed on behalf of the Corporation in
the manner authorized from time to time by the Board.
35. Deposits. All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation in the banks, trust
companies, or other depositories selected by the Board or by an officer,
subordinate officer, agent or employee of the Corporation to whom such authority
may from time to time be delegated by the Board. Any officer, subordinate
officer, agent or employee of the Corporation to whom authority to make such a
deposit may be delegated by the Board may endorse, assign and deliver checks,
drafts and other orders for the payment of moneys which are payable to the order
of the Corporation.
Stock and Dividends
36. Stock certificate. Every holder of stock in the Corporation shall be
entitled to have a certificate signed by, or in the name of the Corporation by
the Chairman of the Board, or the President or a Vice President, and by the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the Corporation Any of or all the signatures on the certificate may be a
facsimile, In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer, transfer agent, or registrar at the date of issue. Certificates
for shares of capital stock of the Corporation shall be in the form approved by
the Board, be issued and signed as provided in these By-laws, and sealed with
the seal of the Corporation. The seal may be a facsimile.
37. Lost certificates. The Corporation may issue a new certificate of stock, in
the place of any certificate theretofore issued by it, alleged to have been
lost, stolen or destroyed, and the
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<PAGE> 13
Corporation may require the owner of the lost, stolen or destroyed certificate,
or his legal representative, to give the Corporation a bond sufficient to
indemnify it against any claim that may be made against it on account of the
alleged loss, theft or destruction. of any such certificate or the issuance of
such new certificate.
38. Transfers. Transfers of stock shall be made on the stock ledger of the
Corporation only upon authorization by the registered holder of the shares in
person or by his duly authorized attorney or legal representative, upon
surrender and cancellation of the certificates duly endorsed or accompanied by
duly executed stock powers for a like number of shares and upon payment of all
taxes thereon. The person in whose name stock shall stand on the stock ledger of
the Corporation shall be deemed the owner thereof for all purposes as regards
the Corporation, and the stock ledger shall be the only evidence as to who are
the stockholders entitled to examine the stock ledger, the list of stockholders
entitled to vote at a meeting, or the books of the Corporation, or to vote in
person or by proxy at any meeting of stockholders. The Board may make additional
rules and regulations and take any action it considers to be expedient, not
inconsistent with the Certificate of Incorporation of the Corporation or these
By-laws, concerning the issue, transfer and registration of stock certificates
of the Corporation or the issue of certificates in lieu of certificates claimed
to have been lost, stolen or destroyed.
39. Dividends. Subject to the provisions of the Certificate of Incorporation of
the Corporation and to the extent permitted by statute, the Board may declare
dividends on the shares of the Corporation's capital stock at the times and in
the amounts as, in its opinion, the condition of the business of the Corporation
renders advisable. Before payment of any dividend or making any distribution of
the Corporation's property to stockholders, the Board may set aside out of the
surplus or net profits of the Corporation any sum or sums which the Board from
time to time, in its absolute discretion, considers to be proper as a reserve
fund to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for other purposes considered by
the Board to be in the best interests of the Corporation.
If the dividend is to be paid in shares of the Corporation's
theretofore unissued capital stock, the Board shall, by resolution, direct that
there be transferred from surplus to the capital account in respect of such
shares an amount which is not less than the aggregate par value of par value
shares being declared as a dividend and, in the case of shares without par value
being declared as a dividend, such amount as shall be determined by the Board.
No transfer from surplus to capital shall be necessary if shares are being
distributed by the Corporation pursuant to a split-up or division of its stock
rather than as payment of a dividend declared payable in stock of the
Corporation.
Offices, Books, Etc.
40. Offices. The registered office of the Corporation shall be at 725 Market
Street, Wilmington, Delaware or as may otherwise be provided from time to time
in the Certificate
10
<PAGE> 14
of Incorporation. The Board may from time to time and at any time establish
other offices and branches of the Corporation's business at whatever place or
places seem to it expedient.
41. Books and records. There shall be kept correct and complete books and
records of account of all the business and transactions of the Corporation.
There shall also be kept by the Corporation a record which shall contain the
names and addresses of all stockholders of the Corporation, the number of shares
held by each, and the date when each became the owner of record.
42. Seal. The seal of the Corporation shall be circular in form and contain the
name of the Corporation and the words "Incorporated Delaware".
43. Fiscal year. The fiscal year of the Corporation shall be fixed from time to
time by resolution of the Board.
44. Indemnity. On the terms, to the extent, and subject to the conditions
prescribed by statute and by rule and regulations, not inconsistent with
statute, imposed by the Board in its discretion in general or particular cases
or classes of cases, the Corporation shall indemnify any person who was or is a
party, or is threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of the other enterprise,
against expenses including attorneys' fees, judgments, faces and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, or any appeal therein. The Corporation may pay, in
advance of the final disposition of the action, suit or proceeding, expenses
incurred by the person which may be indemnifiable as provided herein.
Amendments to By-laws
45. Amendments. These By-laws may be amended or repealed, or new By-laws may be
adopted, by a majority vote of the whole Board, provided that the proposed
action in respect thereof shall be stated in the notice of the meeting, subject
to the power of the holders of a majority of the outstanding shares of stock of
the Corporation entitled to vote in respect thereof, by their vote given at an
annual or special meeting or taken by consent in writing as provided in these
By-laws, to amend or repeal any By-law made by the Board.
* * *
11
<PAGE> 1
EXHIBIT 6.1
EMPLOYMENT AGREEMENT
AGREEMENT dated as of June 10, 1999 between DAVID LIEBERMAN, residing
at 37 Harotem Street, Ashdod, Israel ("Executive") and ADVANCED PLANT
PHARMACEUTICALS, INC., a Delaware corporation, having its principal office at 75
Maiden Lane, New York, New York 10038 (the "Corporation").
RECITALS
The parties hereto desire to provide for the Executive's continued
employment by the Corporation in accordance with the terms and provisions set
forth below:
NOW, THEREFORE, the parties agree as follows:
1. Employment, Duties and Acceptance
1.1 This Agreement shall replace that certain Employment
Agreement dated July 1, 1996, by and between the Corporation and the Executive
(the "1996 Agreement") which 1996 Agreement shall no longer be in effect as of
the date hereof. The Corporation will continue to employ the Executive, and the
Executive will work for the Corporation as its President for a term commencing
on the date hereof and terminating on June 10, 2002, unless sooner terminated in
accordance with Section three of this Agreement. Such period, together with the
period of any extension or renewal period of such employment, is herein referred
to as the "Employment Period".
1.2 During the Employment period, the Executive shall serve as
the President of the Corporation and perform such duties as shall, from time to
time, be reasonably assigned to the Executive by the Board of Directors of the
Corporation consistent with his position and abilities. As President of the
Corporation, Executive's primary responsibilities will include general
management of the Corporation's affairs and its day to day operations.
1.3 Executive accepts such employment and agrees to devote
such time and attention as is necessary to the performance of his duties
hereunder, which may include overseas and domestic travel which travel will be
only as is reasonably required.
1.4 Corporation may, with the Executive's consent in writing,
designate him as an officer and/or as a director of the Corporation or any other
division or affiliate.
<PAGE> 2
2. Compensation.
2.1 As full compensation during the term of this Agreement for
all Executive's services to be rendered hereunder, including, without
limitation, any services rendered for the Corporation or any affiliate,
Corporation agrees to pay, or cause to be paid to Executive, in the manner
hereinafter provided, an amount equal to $135,000 per annum (hereinafter "Base
Salary"), to be paid in monthly installments.
2.2 In its sole discretion, the Board of Directors of the
Corporation may consider and award Executive a bonus at any time during the term
of this Agreement, such bonus to be additional consideration and apart-from the
Base Salary.
2.3 Executive shall be entitled to such medical and other
benefits as are customarily afforded to all Executives of the Corporation.
2.4 Executive shall be entitled to four weeks vacation per
calendar year. Such vacation will be taken subject to the needs of the
Corporation and in not greater than 10 business day segments.
2.5 For the purposes of this Article 2, any period less than a
full fiscal year shall be prorated for the portion thereof which shall be
applicable.
2.6 Corporation will pay or reimburse Executive for all
transportation, hotel or apartment rent and other living expenses reasonably
incurred by Executive on business trips required for the performance of his
duties hereunder, including, without limitation, regular trips between Israel
and the United States. Corporation will also pay and reimburse Executive for the
cost of telephones (hand wire and portable), fax equipment, photocopying,
secretarial and other usual and customary office services, equipment and
supplies as are necessary for the provision of services to be rendered under
this Agreement.
2.7 As additional compensation, Executive will be granted
under separate agreement, an option to purchase 750,000 shares of common stock
of the Corporation at an exercise price of $.01 (one cent) per share (the
"Option"), such right to vest as follows:
<TABLE>
<CAPTION>
Number of Shares Date After Which Shares Can Be Purchased
- - ---------------- ----------------------------------------
<S> <C>
750,000 June 10, 1999
</TABLE>
This Option shall not be exercisable after 5:00 p.m. E.S.T. on June 10,
2004.
2
<PAGE> 3
3. Term and Termination.
3.1 The term of this Agreement shall commence on June 10, 1999
and shall continue until June 10, 2002 ("Expiration Date"), unless sooner
terminated as herein provided.
3.2 If Executive shall die during the term of this Agreement,
this Agreement shall thereupon terminate, except that the Corporation shall pay
to the legal representative of Executive's estate all monies due hereunder up to
the date of his death, and the Corporation shall pay the equivalent of 12 months
Base Salary to Executive's estate in a single payment due three months after the
death of the Executive
3.3 Corporation, by notice to Executive, may terminate
Executive's employment services under this Agreement for any reason, effective
at the time specified in the notice. Upon such termination, Corporation will pay
Executive, in single payment on such termination date, an amount equivalent to
three years Base Salary.
3.4 Corporation, by notice to Executive, may terminate
Executive's employment services under this Agreement if Executive shall become
disabled, or shall fail because of illness or incapacity, to render, for 6
successive months or for shorter periods aggregating 6 months or more in any one
year, services of the character contemplated by this Agreement. Notwithstanding
such termination, Corporation shall pay to Executive all monies due hereunder up
to the date of such notice, and the Corporation shall pay the equivalent of 12
months Base Salary to Executive in a single payment due three months after the
date of termination due to disability.
3.5 Corporation, by notice to Executive, may terminate
Executive's employment services under this Agreement for any other reason,
effective at the time specified in the notice. Upon such termination,
Corporation will pay Executive, in single payment on such termination date, an
amount equivalent to the lesser of nine months Base Salary or the amount of Base
Salary to be paid during the remaining term of this Agreement.
3.6 Executive may terminate his employment services with the
Corporation at any time during the term of this Agreement. Upon such
termination, the Corporation shall pay to Executive all monies due hereunder up
to the date of such notice.
4. Protection of Confidential Information: Non-Competition.
4.1 Executive acknowledges that:
3
<PAGE> 4
(a) As a result of his employment by the Corporation,
Executive has obtained and will obtain secret and confidential information
concerning the business of Corporation and its affiliates, including, without
limitation, the identity of customers and sources of supply, their needs and
requirements, the nature and extent of contracts with them, and related cost,
price and sales information.
(b) Corporation and its affiliates will suffer
substantial damage which will be difficult to compute if, during the period of
his employment with Corporation or thereafter, Executive should enter a
competitive business or should divulge secret and confidential information
relating to the business of the Corporation heretofore or hereafter acquired by
him in the course of his employment with the Corporation or any affiliate.
The provisions of this Agreement are reasonable and
necessary for the protection of the business of Corporation and its affiliates.
4.2 Executive agrees that he will not at any time, either
during the term of this Agreement or thereafter, divulge to any person, firm or
corporation any information obtained or learned by him during the course of his
employment with Corporation or any of its affiliates, or prior to the
commencement thereof in the course of his employment with the Corporation, with
regard to the operational, financial, business or other affairs of the
Corporation or its affiliates, their officers and directors, including, without
limitation, trade "know how," secrets, customer lists, sources of supply,
pricing policies, operational methods or technical processes, except (i) in the
course of performing his duties hereunder, (ii) with Corporation's express
written consent; (iii) to the extent that any such information is in the public
domain other than as a result of Executive's breach of any of his obligations
hereunder; or (iv) where required to be disclosed by court order, subpoena or
other government process. In the event that Executive shall be required to make
disclosure pursuant to the provisions of clause (iv) of the preceding sentence,
Executive promptly, but in no event more than 48 hours after learning of such
subpoena, court order, or other government process, shall notify, by personal
delivery or by cablegram, confirmed by mail, Corporation and, at Corporation's
expense, Executive shall: (a) take all reasonably necessary steps requested by
Corporation to defend against the enforcement of such subpoena, court order or
other government process, and (b) permit Corporation to intervene and
participate with counsel of its choice in any proceeding relating to the
enforcement thereof.
4.3 Upon termination of his employment with Corporation, or at
any time the Corporation may so request, Executive will promptly deliver to
Corporation all memoranda, notes, records, reports, manuals, drawings,
blueprints and other documents (and all copies thereof relating to the business
of Corporation and its affiliates and all property associated therewith, which
he may then possess or have under his control.
4.4 During the term of his employment with the Corporation or
any of its affiliates and for a period of two years thereafter, Executive shall
not, without the prior written permission of Corporation, in the United States,
its territories and possessions,
4
<PAGE> 5
directly or indirectly, (i) enter into the employ of or render any services to
any person, firm or corporation engaged in any Competitive Business (as defined
in Section 6.2); (ii) engage in any Competitive Business for his own account;
(iii) become associated with or interested in any Competitive Business as an
individual, partner, shareholder, creditor, director, officer, principal, agent,
Executive, trustee, consultant, advisor or in any other relationship or
capacity; (iv) employ or retain, or have or cause any other person or entity to
employ or retain, any person who was employed or retained by Corporation or any
of its affiliates while the Executive was employed by Corporation; or (v)
solicit, interfere with, or endeavor to entice away from Corporation or any of
its affiliates any of its or their customers or sources of supply. However,
nothing in this Agreement shall preclude Executive from investing his personal
assets in the securities of any corporation or other business entity which is
engaged in a Competitive Business if such securities are traded on a national
stock exchange or in the over-the-counter market and if such investment does not
result in his beneficially owning, at any time, more than 1% of the publicly
traded equity securities of such competitor.
4.5 If Executive commits a breach, or threatens to commit a
breach, of any of the provisions of Sections 4.2 or 4.4, Corporation shall have
the right and remedy:
(a) to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed by Executive that the services being rendered hereunder
to Corporation are of a special, unique and extraordinary character and that any
such breach or threatened breach will cause irreparable injury to Corporation
and that money damages will not provide an adequate remedy to Corporation; and
(b) to require Executive to account for and pay over
to Corporation all compensation, profits, monies, accruals, increments or other
benefits (collectively "Benefits") derived or received by Executive as the
result of any transactions constituting a breach of any of the provisions of
Sections 4.2 or 4.4, and Executive hereby agrees to account for and pay over
such Benefits to Corporation.
Each of the rights and remedies enumerated in this Section 4.5
shall be independent of the other, and shall be severally enforceable, and such
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Corporation under law or equity.
4.6 If Executive shall violate any covenant contained in
Section 4.4, the duration of such covenant so violated shall be automatically
extended for a period of 2 years from the date on which Executive permanently
ceases such violation or for a period of 2 years from the date of the entry by a
court of competent jurisdiction of a final order or judgment enforcing such
covenant, whichever period is later.
4.7 If any provision of Sections 4.2 or 4.4 is held to be
unenforceable because of the scope, duration or area of its applicability, the
tribunal making such
5
<PAGE> 6
determination shall have the power to modify such scope, duration, or area, or
all of them, and such provision or provisions shall then be applicable in such
modified form.
5. Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement, the making, interpretation or the breach thereof,
other than a claim solely for injunctive relief for any alleged breach of the
provisions of Section 4.2 or 4.4, as to which the parties shall have the right
to apply for specific performance to any court having equity jurisdiction, shall
be submitted to arbitration in New York City before a panel of three arbitrators
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof and any party to the
arbitration may, if he or it so elects, institute proceedings in any court
having jurisdiction for the specific performance of any such award. The powers
of the arbitrators shall include, but not be limited to, the awarding of
injunctive relief. The arbitrators shall include in any award in the prevailing
party's favor the amount of his or its reasonable attorneys' fees and expenses
and all other reasonable costs and expenses of the arbitration. In the event
that the arbitrators do not rule in favor of the prevailing party in respect of
all the claims alleged by such party, the arbitrators shall include in any award
in favor of the prevailing party the amount of his or its reasonable attorneys'
fees and other expenses and such other reasonable costs and expenses of the
arbitration as they deem just and equitable under the circumstances. Except as
provided above, each party shall bear his or its own attorneys' fees and
expenses and the parties shall bear equally all other costs and expenses of the
arbitration.
6. Definitions. As used in this Agreement:
6.1 "Affiliate" shall mean a corporation and any other entity
that, directly or indirectly, is controlled by, controlling, or under common
control with the Corporation.
6.2 "Competitive Business" shall mean any business engaged in
the medical pharmacology business.
7. Miscellaneous Provisions.
7.1 All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when given by telex, telegram or mailgram, or
when mailed first class postage prepaid, by registered or certified mail, return
receipt requested, addressed to the party to receive the same at his or its
address above set forth, or such other address as the party to receive the same
shall have specified by written notice given in the manner provided for in this
Section 7.1. All notices shall be deemed to have been given as of the date of
personal delivery, transmittal or mailing thereof.
7.2 This Agreement sets forth the entire agreement of the
parties and is intended to supersede all prior negotiations, understandings and
agreements. No provisions of
6
<PAGE> 7
this Agreement may be waived or changed except by a writing by the party against
whom such waiver of change is sought to be enforced. The failure of any party to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce such provision.
7.3 All questions with respect to the construction of this
Agreement, and the rights and obligations of the parties hereunder, shall be
determined in accordance with the law of the State of New York.
7.4 The article headings are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope
or intent of any provision of this Agreement.
7.5 This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the Corporation. This Agreement shall
not be assignable by Executive and shall inure to the benefit of and be binding
upon Executive and his legal representatives.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
/S/ DAVID LIEBERMAN
-----------------------------------
DAVID LIEBERMAN
ADVANCED PLANT PHARMACEUTICALS, INC.
By: /S/ DAVID LIEBERMAN
---------------------------
Name: David Lieberman
Title: President
7
<PAGE> 1
EXHIBIT 6.2
STOCK OPTION AGREEMENT, made as of the 10th day
of June, 1999, by and between ADVANCED PLANT
PHARMACEUTICALS, INC., a Delaware corporation
(the "Company") having its principal place of
business at 75 Maiden Lane, New York, NY 10038,
and DAVID LIEBERMAN ("Optionee") residing at 37
Harotem Street, Ashdod, Israel 77572.
WHEREAS, on June 3, 1999 ("Grant Date"), the Board of Directors
authorized the grant to the Optionee of an option ("Option") to purchase an
aggregate of 750,000 shares of the authorized but unissued common stock of the
Company, $.0007 par value ("Common Stock"), conditioned upon the Optionee's
acceptance thereof upon the terms and conditions set forth in this Agreement;
and
WHEREAS, the Company and Optionee acknowledge that this agreement is
separate and apart from the options granted to Optionee on July 1, 1996 to
purchase 1,200,000 shares of Common Stock (as adjusted for a one-for-one share
dividend payment); and
WHEREAS, the Optionee desires to acquire the Option on the terms and
conditions set forth in this Agreement;
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants the Optionee the Option to
purchase all or any part of an aggregate of 750,000 shares of Common Stock
("Option Shares") on the terms and conditions set forth herein. The Option
represented hereby is not intended to be an Option which qualifies as an
"Incentive Stock Option" under Section 422 of the Internal Revenue Code of 1986,
as amended ("Code").
2. Exercise Price. The exercise price ("Exercise Price") of the Option shall be
$.01 (one cent) per share, subject to adjustment as hereinafter provided.
3. Exercisability.
3.1 This Option shall be exercisable by the Optionee in accordance with
the following number of shares of Common Stock commencing on the following
dates:
<TABLE>
<CAPTION>
Number of Shares Date After Which Shares Can Be Purchased
---------------- ----------------------------------------
<S> <C>
750,000 June 10, 1999
</TABLE>
3.2 Expiration of Option. This Option shall not be exercisable after
5:00 p.m. E.S.T. on June 10, 2004.
4. Effect of Termination of Employment.
4.1. Termination Due to Death. If Optionee's employment by the Company
terminates by reason of death, the Option may be exercised by the legal
representative of the estate or by the legatee of the Optionee under the will of
the Optionee, for a period of three years from the date of such death or until
the expiration of the Exercise Period, whichever is shorter.
4.2. Termination Due to Disability. If Optionee's employment by the
Company terminates by reason of Disability, the Option may be exercised by the
Optionee for a period of three years from the date of such termination or until
the
<PAGE> 2
expiration of the Exercise Period, whichever period is shorter.
4.3. Other Termination. If Optionee's employment is terminated by the
Company or Optionee for any reason other than death or disability, the Option
may be exercised for a period of three years from termination of employment or
until the expiration of the Exercise Period, whichever is shorter.
5. Withholding Tax. Not later than the date as of which an amount first must be
included in the gross income of the Optionee for Federal income tax purposes
with respect to the Option, the Optionee shall pay to the Company, or make
arrangements satisfactory to the Board of Directors regarding the payment of,
any Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company pursuant to this Agreement shall be conditioned upon such payment or
arrangements with the Company and the Company shall, to the extent permitted by
law, have the right to deduct any Withholding Taxes from any payment of any kind
otherwise due to the Optionee from the Company.
6. Adjustments. In the event of any change in the number of outstanding shares
of Common Stock of the Company occurring as the result of a stock split, reverse
stock split or stock dividend on the Common Stock, after the Grant Date, the
Company shall proportionately adjust the number of Option Shares and the
Exercise Price of the Option. Any right to acquire a fractional Option Share
resulting from adjustments will be rounded to the nearest whole Option Share. If
the Company shall be the surviving corporation in any merger, combination or
consolidation, this Option shall pertain and apply to the Option Shares to which
the Optionee is entitled hereunder, without adjustment for issuance by the
Company of any securities. In the event of a change in the par value of the
shares of Common Stock which are subject to this Option, this Option will be
deemed to pertain to the shares resulting from any such change. To the extent
that the foregoing adjustments relate to Common Stock, the adjustments will be
made by the Board of Directors whose determination will be final, binding and
conclusive.
7. Method of Exercise.
7.1 Notice to the Company. The Option may be exercised in whole or in
part by written notice in the form attached hereto as Exhibit A directed to the
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
7.2 Delivery of Option Shares. The Company shall deliver a certificate
for the Option Shares to the Optionee as soon as practicable after payment
thereof.
7.3 Cash Payment. The Optionee shall make cash payments by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; the Company shall not be required to deliver certificates for
Option Shares until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof. Once payment has been received,
the Corporation will promptly deliver the certificates for the Option Shares to
Optionee.
7.4 Cashless Payment. The Board of Directors, in its sole discretion, may
allow Optionee to use Common Stock of the Company owned by him to make any
required payments by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at its fair market value as determined by the Board of Directors in good
faith. Notwithstanding the foregoing, the Company shall have the right to reject
payment in the form of Common Stock if in the opinion of counsel for the
Company, (i) it could result in an event of "recapture" under Section 16(b) of
the Securities Exchange Act of 1934; (ii) such shares of Common Stock may not be
sold or transferred to the Company; or (iii) such transfer could create legal
difficulties for the Company.
8. Nonassignability. The Option shall not be assignable or transferable, except
by will or by the laws of descent and
<PAGE> 3
distribution in the event of the death of the Optionee. No transfer of the
Option by the Optionee by will or by the laws of descent and distribution shall
be effective to bind the Company unless the Company shall have been furnished
with written notice thereof and a copy of the will and/or such other evidence as
the Company may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions of the
Option.
9.Company Representations: The Company hereby represents and warrants to the
Optionee that:
9.1 the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the transactions
contemplated hereunder; and
9.2 the Option Shares, when issued and delivered by the Company to the
Optionee in accordance with the terms and conditions hereof, will be duly and
validly issued and fully paid and non-assessable.
10. Optionee Representations. The Optionee hereby represents and warrants to the
Company that:
10.1 he is acquiring the Option and shall acquire the Option Shares for
his own account and not with a view towards the distribution thereof;
10.2 he understands that he must bear the economic risk of the investment
in the Option Shares, which cannot be sold by him unless they are registered
under the Securities Act of 1933 ("1933 Act") or an exemption therefrom is
available thereunder and that the Company is under no obligation to register the
Option Shares for sale under the 1933 Act;
10.3 in his position with the Company, he has had both the opportunity to
ask questions and receive answers from the officers and directors of the Company
and all persons acting on its behalf concerning the terms and conditions of the
offer made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information;
10.4 he is aware that the Company shall place stop transfer orders with
its transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
10.5. the certificates evidencing the Option Shares shall bear the
following legends:
"The shares represented by this certificate have been acquired for investment
and have not been registered under the Securities Act of 1933. The shares may
not be sold, transferred, or offered for sale except pursuant to an effective
registration statement as to the securities under said 1933 Act and any
applicable state securities law or any opinion of counsel reasonable
satisfactory to APPI, that such registration is not required."
"The shares represented by this certificate have been acquired pursuant to a
Stock Option Agreement, dated as of June 10, 1999, a copy of which is on file
with the Company, and may not be transferred, pledged or disposed of except in
accordance with the terms and conditions thereof."
11. Restriction on Transfer of Option Shares.
11. 1. Anything in this Agreement to the contrary notwithstanding,
Optionee hereby agrees that he shall not sell, transfer by any means or
otherwise dispose of the Option Shares acquired by him without registration
under the 1933 Act, or in the event that they are not so registered, unless (i)
an exemption from the 1933 Act registration requirements is available
thereunder, and (ii) the Optionee has furnished the Company with notice of such
proposed transfer and the Company's legal counsel, in its reasonable opinion,
shall deem such proposed transfer to be so exempt.
11.2. Anything in this Agreement to the contrary notwithstanding,
Optionee hereby agrees that he shall not sell,
<PAGE> 4
transfer by any means or otherwise dispose of the Option Shares acquired by him
(i) prior to six months after the Grant Date and (ii) except in accordance with
Company's policy, if any, regarding the sale and disposition of securities owned
by Optionee and/or directors of the Company.
12. Miscellaneous.
12.1. Notice. Any notice hereunder shall be delivered by hand or
registered or certified mail, return receipt requested, to a party at it address
set forth above with a copy to Feder, Kaszovitz, Isaacson, Weber, Skala & Bass
LLP, 750 Lexington Avenue, New York, NY 10022-1200, subject to the right of
either party to designate at any time hereafter, in writing, some other address.
12.2. Conflicts with Code. In the event of a conflict between the
provisions of the Code, the provisions of the Code shall in all respects be
controlling.
12.3. Optionee and Stockholder Rights. The Optionee shall not have any of
the rights of a stockholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option. Nothing contained in this
Agreement shall be deemed to confer upon Optionee any right to continued
employment with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate Optionee in accordance with
the provisions regarding such termination set forth in Optionee's written
employment agreement with the Company, or if there exists no such agreement, to
terminate Optionee at will.
12.4. Waiver. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
12.5. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Optionee and the Company.
12.6. Binding Effect; Successors. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.
12.7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
12.8. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day
and year first above written.
ADVANCED PLANT PHARMACEUTICALS, INC.
Address: 75 Maiden Lane
New York, New York 10038
BY:
/s/ David Lieberman
---------------------------
David Lieberman, President
AGREED AND ACCEPTED
BY:
Optionee: /s/ David Lieberman
-----------------------------
Name: David Lieberman
Address: 37 Harotem Street
Ashdod, Israel 77572
<PAGE> 6
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
To be executed by the Optionee to exercise the rights to purchase Common Stock
evidenced by the Option within
Advanced Plant Pharmaceuticals, Inc.
75 Maiden Lane
New York, New York 10038
In accordance with my Stock Option Agreement dated as of June 10, 1999 with
Advanced Plant Pharmaceuticals, Inc. (the "Company"), I hereby irrevocably elect
to exercise the right to purchase ______________ shares of the Company's common
stock, par value $.0007 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable box[es]):
[ ] a [personal check] [certified check] [bank check] payable to the order of
"Advanced Plant Pharmaceuticals, Inc." in the sum of $____________.
[ ] confirmation of wire transfer in the amount of $__________.
[ ] with the consent of the Company, a certificate for shares of the Company's
Common Stock, free and clear of any encumbrances, duly endorsed, having a fair
market value.
I hereby represent and warrant to, and agree with, the Company that:
- - - I have acquired the Option and shall acquire the Option Shares for my own
account, for investment, and not with a view towards the distribution thereof;
- - - I understand that I must bear the economic risk of the investment in the
Option Shares, which cannot be sold by me unless they are registered under the
Securities Act of 1933 ("1933 Act") or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
- - - I agree that I will not sell, transfer by any means or otherwise dispose of
the Option Shares acquired by me hereby except in accordance with Company's
policy, if any, regarding the sale and disposition of securities owned by
Optionee.
Kindly forward to me a certificate for such shares to be issued in the
name of the undersigned and be delivered to the undersigned at the address
stated below, and, if such number of shares shall not be all of the shares
purchasable hereunder, that a new Option of like tenor for the balance of the
remaining shares purchasable hereunder be delivered to the undersigned at the
address stated below:
Dated: _______________
Signed: __________________________
Address: __________________________
<PAGE> 1
EXHIBIT 6.3
EMPLOYMENT AGREEMENT
AGREEMENT dated as of June 10, 1999 between BARRY CLARE residing at 27
Curtis Place, Lynbrook, NY, 11563, ("Employee") and ADVANCED PLANT
PHARMACEUTICALS, INC., a Delaware corporation, having its principal office at 75
Maiden Lane, New York, New York 10038 (the "Corporation").
RECITALS
WHEREAS, the Corporation wishes to employ and Employee wishes to accept
employment by the Corporation on the terms set forth herein.
IT IS AGREED:
1. Employment, Duties and Acceptance
1.1 Corporation hereby employs Employee as its Chief Operating
Officer, with primary responsibility for the Corporation's day to day general
business activities with the requisite authority to do so subject to the
direction of the Board of Directors of the Corporation.
1.2 Corporation may assign to Employee such other Employee and
administrative duties for Corporation or any affiliate (as defined in Section
6.1) as may be determined by the Board of Directors of Corporation provided such
duties are normal business duties and do not conflict with Employee's primary
responsibility.
1.3 Employee accepts such employment and agrees to devote such
time and attention as is necessary to the performance of his duties hereunder,
which may include overseas and domestic travel which travel will be only as is
reasonably required.
1.4 Employee's duties hereunder will be generally performed at
the Corporation's offices in the New York metropolitan area.
2. Compensation.
2.1 As full compensation during the term of this Agreement for
all Employee's services to be rendered hereunder, including, without limitation,
any services rendered for the Corporation or any affiliate, Corporation agrees
to pay, or cause to be paid, to Employee, in the manner hereinafter provided, an
amount equal to $75,000 per annum (hereinafter "Base Salary"), to be paid in
monthly installments.
<PAGE> 2
2.2 In its sole discretion, the Board of Directors of the
Corporation may consider and award employee a bonus at any time during the term
of this Agreement, such bonus to be additional consideration and apart-from the
Base Salary.
2.3 Employee shall be entitled to such medical and other
benefits as are customarily afforded to all Employees of the Corporation.
2.4 Employee shall be entitled to twenty-one business days
vacation per calendar year. Such vacation will be taken subject to the needs of
the Corporation.
2.5 For the purposes of this Article 2, any period less than a
full fiscal year shall be prorated for the portion thereof which shall be
applicable.
2.6 Corporation will pay or reimburse Employee for all
transportation, hotel or apartment rent and other living expenses reasonably
incurred by Employee on business trips required for the performance of his
duties hereunder.
2.7 As additional compensation, Employee will be granted under
separate agreement, an option to purchase 750,000 shares of common stock of the
Corporation at an exercise price of $.02 (two cents) per share (the "Option"),
such right to vest as follows:
<TABLE>
<CAPTION>
Number of Shares Date After Which Shares Can Be Purchased
- - ---------------- ----------------------------------------
<S> <C>
750,000 June 10, 1999
</TABLE>
This Option shall not be exercisable after 5:00 p.m. E.S.T. on June 10,
2004.
3. Term and Termination.
3.1 The term of this Agreement shall commence on June 10, 1999
and shall continue until June 10, 2002 ("Expiration Date"), unless sooner
terminated as herein provided.
3.2 If Employee shall die during the term of this Agreement,
this Agreement shall thereupon terminate, except that the Corporation shall pay
to the legal representative of Employee's estate all monies due hereunder up to
the date of his death.
3.3 Corporation, by notice to Employee, may terminate
Employee's employment services under this Agreement for proper cause. As used
herein, "proper cause" shall mean that Employee has:
2
<PAGE> 3
(a) willfully and materially refused or failed to
carry out specific directions of the Board of Directors that were lawful and/or
ethical, or willfully refused or failed to perform a material part of his duties
hereunder;
(b) committed a material breach of any of the
provisions of Article 4 of this Agreement;
(c) knowingly acted fraudulently or dishonestly in
his relations with Corporation or any of its affiliates;
(d) committed larceny, embezzlement, conversion or
any act involving the misappropriation of funds in the course of his employment;
or
(e) been convicted of any crime involving an act of
moral turpitude.
3.4 Corporation, by notice to Employee, may terminate
Employee's employment services under this Agreement if Employee shall become
disabled, or shall fail because of illness or incapacity, to render, for 6
successive months or for shorter periods aggregating 6 months or more in any one
year, services of the character contemplated by this Agreement. Notwithstanding
such termination, Corporation shall pay to Employee all monies due hereunder up
to the date of such notice.
3.5 Corporation, by notice to Employee, may terminate
Employee's employment services under this Agreement for any other reason,
effective at the time specified in the notice. Upon such termination,
Corporation will pay Employee, in single payment on such termination date, an
amount equivalent to the lesser of nine months Base Salary or the amount of Base
Salary to be paid during the remaining term of this Agreement.
4. Protection of Confidential Information: Non-Competition.
4.1 Employee acknowledges that:
(a) As a result of his employment by the Corporation,
Employee has obtained and will obtain secret and confidential information
concerning the business of Corporation and its affiliates, including, without
limitation, the identity of customers and sources of supply, their needs and
requirements, the nature and extent of contracts with them, and related cost,
price and sales information.
(b) Corporation and its affiliates will suffer
substantial damage which will be difficult to compute if, during the period of
his employment with Corporation or thereafter, Employee should enter a
competitive business or should divulge secret and confidential information
relating to the business of the Corporation heretofore or hereafter acquired by
him in the course of his employment with the Corporation or any affiliate.
3
<PAGE> 4
The provisions of this Agreement are reasonable and
necessary for the protection of the business of Corporation and its affiliates.
4.2 Employee agrees that he will not at any time, either
during the term of this Agreement or thereafter, divulge to any person, firm or
corporation any information obtained or learned by him during the course of his
employment with Corporation or any of its affiliates, or prior to the
commencement thereof in the course of his employment with the Corporation, with
regard to the operational, financial, business or other affairs of the
Corporation or its affiliates, their officers and directors, including, without
limitation, trade "know how," secrets, customer lists, sources of supply,
pricing policies, operational methods or technical processes, except (i) in the
course of performing his duties hereunder, (ii) with Corporation's express
written consent; (iii) to the extent that any such information is in the public
domain other than as a result of Employee's breach of any of his obligations
hereunder; or (iv) where required to be disclosed by court order, subpoena or
other government process. In the event that Employee shall be required to make
disclosure pursuant to the provisions of clause (iv) of the preceding sentence,
Employee promptly, but in no event more than 48 hours after learning of such
subpoena, court order, or other government process, shall notify, by personal
delivery or by cablegram, confirmed by mail, Corporation and, at Corporation's
expense, Employee shall: (a) take all reasonably necessary steps requested by
Corporation to defend against the enforcement of such subpoena, court order or
other government process, and (b) permit Corporation to intervene and
participate with counsel of its choice in any proceeding relating to the
enforcement thereof.
4.3 Upon termination of his employment with Corporation, or at
any time the Corporation may so request, Employee will promptly deliver to
Corporation all memoranda, notes, records, reports, manuals, drawings,
blueprints and other documents (and all copies thereof relating to the business
of Corporation and its affiliates and all property associated therewith, which
he may then possess or have under his control.
4.4 During the term of his employment with the Corporation or
any of its affiliates and for a period of two years thereafter, Employee shall
not, without the prior written permission of Corporation, in the United States,
its territories and possessions, directly or indirectly, (i) enter into the
employ of or render any services to any person, firm or corporation engaged in
any Competitive Business (as defined in Section 6.2); (ii) engage in any
Competitive Business for his own account; (iii) become associated with or
interested in any Competitive Business as an individual, partner, shareholder,
creditor, director, officer, principal, agent, employee, trustee, consultant,
advisor or in any other relationship or capacity; (iv) employ or retain, or have
or cause any other person or entity to employ or retain, any person who was
employed or retained by Corporation or any of its affiliates while the Employee
was employed by Corporation; or (v) solicit, interfere with, or endeavor to
entice away from Corporation or any of its affiliates any of its or their
customers or sources of supply. However, nothing in this Agreement shall
preclude Employee from investing his personal assets in the securities of any
corporation or other business entity which is engaged in a Competitive Business
if such securities are traded on a national stock exchange or in the
4
<PAGE> 5
over-the-counter market and if such investment does not result in his
beneficially owning, at any time, more than 1% of the publicly traded equity
securities of such competitor.
4.5 If Employee commits a breach, or threatens to commit a
breach, of any of the provisions of Sections 4.2 or 4.4, Corporation shall have
the right and remedy:
(a) to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed by Employee that the services being rendered hereunder
to Corporation are of a special, unique and extraordinary character and that any
such breach or threatened breach will cause irreparable injury to Corporation
and that money damages will not provide an adequate remedy to Corporation; and
(b) to require Employee to account for and pay over
to Corporation all compensation, profits, monies, accruals, increments or other
benefits (collectively "Benefits") derived or received by Employee as the result
of any transactions constituting a breach of any of the provisions of Sections
4.2 or 4.4, and Employee hereby agrees to account for and pay over such Benefits
to Corporation.
Each of the rights and remedies enumerated in this Section 4.5
shall be independent of the other, and shall be severally enforceable, and such
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Corporation under law or equity.
4.6 If Employee shall violate any covenant contained in
Section 4.4, the duration of such covenant so violated shall be automatically
extended for a period of 2 years from the date on which Employee permanently
ceases such violation or for a period of 2 years from the date of the entry by a
court of competent jurisdiction of a final order or judgment enforcing such
covenant, whichever period is later.
4.7 If any provision of Sections 4.2 or 4.4 is held to be
unenforceable because of the scope, duration or area of its applicability, the
tribunal making such determination shall have the power to modify such scope,
duration, or area, or all of them, and such provision or provisions shall then
be applicable in such modified form.
5. Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement, the making, interpretation or the breach thereof,
other than a claim solely for injunctive relief for any alleged breach of the
provisions of Section 4.2 or 4.4, as to which the parties shall have the right
to apply for specific performance to any court having equity jurisdiction, shall
be submitted to arbitration in New York City before a panel of three arbitrators
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof and any party to the
arbitration may, if he or it so elects, institute proceedings in any court
having jurisdiction for the specific performance of any such
5
<PAGE> 6
award. The powers of the arbitrators shall include, but not be limited to, the
awarding of injunctive relief. The arbitrators shall include in any award in the
prevailing party's favor the amount of his or its reasonable attorneys' fees and
expenses and all other reasonable costs and expenses of the arbitration. In the
event that the arbitrators do not rule in favor of the prevailing party in
respect of all the claims alleged by such party, the arbitrators shall include
in any award in favor of the prevailing party the amount of his or its
reasonable attorneys' fees and other expenses and such other reasonable costs
and expenses of the arbitration as they deem just and equitable under the
circumstances. Except as provided above, each party shall bear his or its own
attorneys' fees and expenses and the parties shall bear equally all other costs
and expenses of the arbitration.
6. Definitions. As used in this Agreement:
6.1 "Affiliate" shall mean a corporation and any other entity
that, directly or indirectly, is controlled by, controlling, or under common
control with the Corporation.
6.2 "Competitive Business" shall mean any business engaged in
the medical pharmacology business.
7. Miscellaneous Provisions.
7.1 All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when given by telex, telegram or mailgram, or
when mailed first class postage prepaid, by registered or certified mail, return
receipt requested, addressed to the party to receive the same at his or its
address above set forth, or such other address as the party to receive the same
shall have specified by written notice given in the manner provided for in this
Section 7.1. All notices shall be deemed to have been given as of the date of
personal delivery, transmittal or mailing thereof.
7.2 This Agreement sets forth the entire agreement of the
parties and is intended to supersede all prior negotiations, understandings and
agreements. No provisions of this Agreement may be waived or changed except by a
writing by the party against whom such waiver of change is sought to be
enforced. The failure of any party to require performance of any provision
hereof shall in no manner affect the right at a later time to enforce such
provision.
7.3 All questions with respect to the construction of this
Agreement, and the rights and obligations of the parties hereunder, shall be
determined in accordance with the law of the State of New York.
7.4 The article headings are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope
or intent of any provision of this Agreement.
6
<PAGE> 7
7.5 This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the Corporation. This Agreement shall
not be assignable by Employee and shall inure to the benefit of and be binding
upon Employee and his legal representatives.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
/s/ Barry Clare
------------------------------------
BARRY CLARE
ADVANCED PLANT PHARMACEUTICALS, INC.
By: /s/ David Lieberman
------------------------------
Name: David Lieberman
Title: President
7
<PAGE> 1
Exhibit 6.4
STOCK OPTION AGREEMENT, made as of the 10th day
of June, 1999, by and between ADVANCED PLANT
PHARMACEUTICALS, INC., a Delaware corporation
(the "Company") having its principal place of
business at 75 Maiden Lane, New York, NY 10038,
and BARRY CLARE ("Optionee") residing
at 27 Curtis Place, Lynbrook, NY 11563.
WHEREAS, on June 3, 1999 ("Grant Date"), the Board of Directors
authorized the grant to the Optionee of an option ("Option") to purchase an
aggregate of 750,000 shares of the authorized but unissued common stock of the
Company, $.0007 par value ("Common Stock"), conditioned upon the Optionee's
acceptance thereof upon the terms and conditions set forth in this Agreement;
and
WHEREAS, the Optionee desires to acquire the Option on the terms and
conditions set forth in this Agreement;
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants the Optionee the Option to
purchase all or any part of an aggregate of 750,000 shares of Common Stock
("Option Shares") on the terms and conditions set forth herein. The Option
represented hereby is not intended to be an Option which qualifies as an
"Incentive Stock Option" under Section 422 of the Internal Revenue Code of 1986,
as amended ("Code").
2.Exercise Price. The exercise price ("Exercise Price") of the Option shall be
$.02 (two cents) per share, subject to adjustment as hereinafter provided.
3. Exercisability.
3.1 This Option shall be exercisable by the Optionee in accordance with
the following number of shares of Common Stock commencing on the following
dates:
<TABLE>
<CAPTION>
Number of Shares Date After Which Shares Can Be Purchased
---------------- ----------------------------------------
<S> <C>
750,000 June 10, 1999
</TABLE>
3.2 Expiration of Option. This Option shall not be exercisable after 5:00
p.m. E.S.T. on June 10, 2004.
4. Effect of Termination of Employment.
4.1. Termination Due to Death. If Optionee's employment by the Company
terminates by reason of death, the Option may be exercised by the legal
representative of the estate or by the legatee of the Optionee under the will of
the Optionee, for a period of three years from the date of such death or until
the expiration of the Exercise Period, whichever is shorter.
4.2. Termination Due to Disability. If Optionee's employment by the
Company terminates by reason of Disability, the Option may be exercised by the
Optionee for a period of three years from the date of such termination or until
the expiration of the Exercise Period, whichever period is shorter.
4.3. Other Termination. If Optionee's employment is terminated by the
Company or Optionee for any reason other than death or disability, the Option
may be exercised for a period of three years from termination of employment or
until
<PAGE> 2
the expiration of the Exercise Period, whichever is shorter.
5. Withholding Tax. Not later than the date as of which an amount first must be
included in the gross income of the Optionee for Federal income tax purposes
with respect to the Option, the Optionee shall pay to the Company, or make
arrangements satisfactory to the Board of Directors regarding the payment of,
any Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company pursuant to this Agreement shall be conditioned upon such payment or
arrangements with the Company and the Company shall, to the extent permitted by
law, have the right to deduct any Withholding Taxes from any payment of any kind
otherwise due to the Optionee from the Company.
6. Adjustments. In the event of any change in the number of outstanding shares
of Common Stock of the Company occurring as the result of a stock split, reverse
stock split or stock dividend on the Common Stock, after the Grant Date, the
Company shall proportionately adjust the number of Option Shares and the
Exercise Price of the Option. Any right to acquire a fractional Option Share
resulting from adjustments will be rounded to the nearest whole Option Share. If
the Company shall be the surviving corporation in any merger, combination or
consolidation, this Option shall pertain and apply to the Option Shares to which
the Optionee is entitled hereunder, without adjustment for issuance by the
Company of any securities. In the event of a change in the par value of the
shares of Common Stock which are subject to this Option, this Option will be
deemed to pertain to the shares resulting from any such change. To the extent
that the foregoing adjustments relate to Common Stock, the adjustments will be
made by the Board of Directors whose determination will be final, binding and
conclusive.
7. Method of Exercise.
7.1 Notice to the Company. The Option may be exercised in whole or in
part by written notice in the form attached hereto as Exhibit A directed to the
Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
7.2 Delivery of Option Shares. The Company shall deliver a certificate
for the Option Shares to the Optionee as soon as practicable after payment
thereof.
7.3 Cash Payment. The Optionee shall make cash payments by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; the Company shall not be required to deliver certificates for
Option Shares until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof. Once payment has been received,
the Corporation will promptly deliver the certificates for the Option Shares to
Optionee.
7.4 Cashless Payment. The Board of Directors, in its sole discretion, may
allow Optionee to use Common Stock of the Company owned by him to make any
required payments by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at its fair market value as determined by the Board of Directors in good
faith. Notwithstanding the foregoing, the Company shall have the right to reject
payment in the form of Common Stock if in the opinion of counsel for the
Company, (i) it could result in an event of "recapture" under Section 16(b) of
the Securities Exchange Act of 1934; (ii) such shares of Common Stock may not be
sold or transferred to the Company; or (iii) such transfer could create legal
difficulties for the Company.
8. Nonassignability. The Option shall not be assignable or transferable, except
by will or by the laws of descent and distribution in the event of the death of
the Optionee. No transfer of the Option by the Optionee by will or by the laws
of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
will and/or such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions of
<PAGE> 3
the Option.
9. Company Representations: The Company hereby represents and warrants to the
Optionee that:
9.1 the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the transactions
contemplated hereunder; and
9.2 the Option Shares, when issued and delivered by the Company to the
Optionee in accordance with the terms and conditions hereof, will be duly and
validly issued and fully paid and non-assessable.
10. Optionee Representations. The Optionee hereby represents and warrants to the
Company that:
10.1 he is acquiring the Option and shall acquire the Option Shares for
his own account and not with a view towards the distribution thereof;
10.2 he understands that he must bear the economic risk of the investment
in the Option Shares, which cannot be sold by him unless they are registered
under the Securities Act of 1933 ("1933 Act") or an exemption therefrom is
available thereunder and that the Company is under no obligation to register the
Option Shares for sale under the 1933 Act;
10.3 in his position with the Company, he has had both the opportunity to
ask questions and receive answers from the officers and directors of the Company
and all persons acting on its behalf concerning the terms and conditions of the
offer made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information;
10.4 he is aware that the Company shall place stop transfer orders with
its transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;
and
10.5. the certificates evidencing the Option Shares shall bear the
following legends:
"The shares represented by this certificate have been acquired for investment
and have not been registered under the Securities Act of 1933. The shares may
not be sold, transferred, or offered for sale except pursuant to an effective
registration statement as to the securities under said 1933 Act and any
applicable state securities law or any opinion of counsel reasonable
satisfactory to APPI, that such registration is not required."
"The shares represented by this certificate have been acquired pursuant to a
Stock Option Agreement, dated as of June 10, 1999, a copy of which is on file
with the Company, and may not be transferred, pledged or disposed of except in
accordance with the terms and conditions thereof."
11. Restriction on Transfer of Option Shares.
11.1. Anything in this Agreement to the contrary notwithstanding,
Optionee hereby agrees that he shall not sell, transfer by any means or
otherwise dispose of the Option Shares acquired by him without registration
under the 1933 Act, or in the event that they are not so registered, unless (i)
an exemption from the 1933 Act registration requirements is available
thereunder, and (ii) the Optionee has furnished the Company with notice of such
proposed transfer and the Company's legal counsel, in its reasonable opinion,
shall deem such proposed transfer to be so exempt.
11.2. Anything in this Agreement to the contrary notwithstanding,
Optionee hereby agrees that he shall not sell, transfer by any means or
otherwise dispose of the Option Shares acquired by him (i) prior to six months
after the Grant Date and (ii) except in accordance with Company's policy, if
any, regarding the sale and disposition of securities owned by Optionee and/or
directors of the Company.
<PAGE> 4
12. Miscellaneous.
12.1. Notice. Any notice hereunder shall be delivered by hand or
registered or certified mail, return receipt requested, to a party at it address
set forth above with a copy to Feder, Kaszovitz, Isaacson, Weber, Skala & Bass
LLP, 750 Lexington Avenue, New York, NY 10022-1200, subject to the right of
either party to designate at any time hereafter, in writing, some other address.
12.2. Conflicts with Code. In the event of a conflict between the
provisions of the Code, the provisions of the Code shall in all respects be
controlling.
12.3. Optionee and Stockholder Rights. The Optionee shall not have any of
the rights of a stockholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option. Nothing contained in this
Agreement shall be deemed to confer upon Optionee any right to continued
employment with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate Optionee in accordance with
the provisions regarding such termination set forth in Optionee's written
employment agreement with the Company, or if there exists no such agreement, to
terminate Optionee at will.
12.4. Waiver. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
12.5. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Optionee and the Company.
12.6. Binding Effect; Successors. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.
12.7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
12.8. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day
and year first above written.
ADVANCED PLANT PHARMACEUTICALS, INC.
Address: 75 Maiden Lane
New York, New York 10038
BY:
/s/ David Lieberman
--------------------------
David Lieberman, President
AGREED AND ACCEPTED
BY:
Optionee: /s/ Barry Clare
-----------------------------
Name: BARRY CLARE
Address:
<PAGE> 6
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
To be executed by the Optionee to exercise the rights to purchase Common Stock
evidenced by the Option within
Advanced Plant Pharmaceuticals, Inc.
75 Maiden Lane
New York, New York 10038
In accordance with my Stock Option Agreement dated as of June 10, 1999 with
Advanced Plant Pharmaceuticals, Inc. (the "Company"), I hereby irrevocably elect
to exercise the right to purchase ______________ shares of the Company's common
stock, par value $.0007 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable box[es]):
[ ] a [personal check] [certified check] [bank check] payable to the order of
"Advanced Plant Pharmaceuticals, Inc." in the sum of $____________.
[ ] confirmation of wire transfer in the amount of $__________.
[ ] with the consent of the Company, a certificate for shares of the Company's
Common Stock, free and clear of any encumbrances, duly endorsed, having a fair
market value.
I hereby represent and warrant to, and agree with, the Company that:
- - - I have acquired the Option and shall acquire the Option Shares for my own
account, for investment, and not with a view towards the distribution thereof;
- - - I understand that I must bear the economic risk of the investment in the
Option Shares, which cannot be sold by me unless they are registered under the
Securities Act of 1933 ("1933 Act") or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
- - - I agree that I will not sell, transfer by any means or otherwise dispose of
the Option Shares acquired by me hereby except in accordance with Company's
policy, if any, regarding the sale and disposition of securities owned by
Optionee.
Kindly forward to me a certificate for such shares to be issued in the
name of the undersigned and be delivered to the undersigned at the address
stated below, and, if such number of shares shall not be all of the shares
purchasable hereunder, that a new Option of like tenor for the balance of the
remaining shares purchasable hereunder be delivered to the undersigned at the
address stated below:
Dated: _______________
Signed: __________________________
Address: __________________________
<PAGE> 1
EXHIBIT 6.5
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT ("Agreement") is made and entered into
this 28th day of the month of June, 1999 by and between Advanced Plant
Pharmaceuticals, Inc. ("APPI") a Delaware corporation, having a principal
office at, 75 Maiden Lane, New York, New York 10038, and Ambar Pharmacies
and Health, Inc., an Israeli corporation, having its principal offices at
30 Aba Hilel Street, Ramat-Gan, Israel, 52532 ("Ambar").
WITNESSETH
WHEREAS, APPI manufactures and produces certain pharmaceutical
"Products" (as listed in Exhibit A attached hereto and as may be amended from
time to time) and would like Ambar to distribute such Products in Israel
(hereinafter referred to as the "Territory") and Ambar is willing to become a
distributor of such Products, all on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. TERM. This Agreement will remain in effect from the date
hereof until December 31, 2000, unless terminated sooner as hereinafter
provided.
2. APPOINTMENT. APPI hereby appoints Ambar during the Term of
this Agreement, and Ambar hereby accepts such appointment, as APPI's
exclusive distributor of the Products in the Territory.
3. SALE AND PURCHASE OF PRODUCTS.
a. From the date hereof through December 31, 1999
(the "Initial Purchase Period"), APPI will sell to Ambar, and Ambar will
purchase from APPI the following:
not less than 2,000 units of Lo-Chol 60/1000 ("Lo-Chol 60") at a purchase
price of $5.23 per unit and 1,000 units of ACA 70/1000 ("ACA") at a
purchase price of $17.83 for an aggregate purchase price of $28,290 (the
"Initial Period Minimum Purchase Price").
b. The Initial Period Minimum Purchase Price is to
be paid, in U.S dollars, as follows: ten percent (10%) of the Initial Period
Minimum Purchase Price, $2,829 is to be wired to APPI's designated bank account
or shall be paid by Ambar using its business credit card within twenty (20)
business days of the signing of this Agreement. The remaining ninety percent
(90%) of the Initial Period Minimum Purchase Price is to be wired to APPI's
designated bank account at the time Ambar places an order for the Products or
Ambar may, at the time Ambar places an order for the Products, provide evidence
of approval of payment using its business credit card or a letter of credit
acceptable to APPI such that payment will be made to APPI no later than sixty
(60) days from when APPI makes the Products available to Ambar for pick-up. (For
example, after Ambar pays 10% of the Initial Period Minimum
<PAGE> 2
Purchase Price, $2,829, then a subsequent order by Ambar for $5,000 worth of
Products would only require Ambar to pay the remaining 90% percent of the
purchase price, $4,500.)
c. From January 1, 2000 through December 31, 2000
(the "Second Purchase Period"), APPI will sell to Ambar, and Ambar will purchase
from APPI, Lo-Chol 60 at a purchase price of $5.23 per unit and/or ACA at a
purchase price of $17.83 per unit, which the total cost of such Products shall
not be less than an aggregate purchase price of $60,000 (the "Second Period
Minimum Purchase Price").
d. The Second Period Minimum Purchase Price is to be
paid, in US dollars, as follows: ten percent (10%) of the Second Period Minimum
Purchase Price, $6,000, is to be wired to APPI's designated bank account or
shall be paid by Ambar using a letter of credit acceptable to APPI or its
business credit card on January 15, 2000. The remaining ninety percent (90%) of
the Second Period Minimum Purchase Price is to be wired to APPI's designated
bank account at the time Ambar places an order for the Products or Ambar may, at
the time Ambar places an order for the Products, provide evidence of approval of
payment using its business credit card or a letter of credit acceptable to APPI
such that payment will be made to APPI no later than sixty (60) days from when
APPI makes the Products available to Ambar for pick-up.
e. Payments for Products ordered by Ambar, other
than the minimum purchases as outlined in subsections (b) and (d) of this
Section, is to be wired to APPI's designated bank account at the time Ambar
places an order for the Products or Ambar may, at the time Ambar places an order
for the Products, provide evidence of approval of payment using its business
credit card or a letter of credit acceptable to APPI such that payment will be
made to APPI no later than sixty (60) days from when APPI makes the Products
available to Ambar for pick-up.
f. APPI, at its expense, will make available the
Products ordered by Ambar, within thirty (30) days after Ambar requests such
Products. APPI will make the Products available by giving notice to Ambar, in
accordance with Section 15 of this Agreement, that such ordered units are
available for pick up by Ambar at APPI's principal office located at 75 Maiden
Lane, New York, NY 10038. After such notice is given to Ambar and such ordered
Products are made available at APPI's principal office, title to and all risk of
loss of and damage to the Products will pass to Ambar.
4. EXCLUSIVITY; SALES BY DISTRIBUTOR.
a. While this Agreement is in effect, APPI hereby grants to
Ambar the exclusive rights to sell the Products in the agreed Territory . While
this Agreement remains in effect, APPI will not, directly or indirectly, sell
the Products within the Territory and will not permit anyone else, either
directly or indirectly, to sell or otherwise exploit the Products within the
Territory.
b. Ambar may sell the Products in such manner and on such terms
as approved by APPI. Ambar will comply with all applicable laws, rules and
regulations in selling and in otherwise dealing with the Products.
1
<PAGE> 3
c. Should APPI, in its sole discretion, decide to market and
sell the Products in any or all of the "Extended Territories" (defined below),
APPI acknowledges that it shall provide Ambar with a right of first refusal to
act as an exclusive distributor for the Products in those areas subject to
agreed upon terms by both parties. The Extended Territories shall include any
one or all of the following areas: Turkey, Jordan, Holland and Denmark. APPI
agrees that upon a decision by its Board of Directors to market and sell the
Products in the Extended Territories, APPI will provide Notice to Ambar (as
provided in Section 15 of this Agreement) of such decision, upon which Ambar
shall have fifteen business days to exercise its right of first refusal by
notifying the Company.
d. Neither Ambar, nor its officers, employees or agents will be
deemed to be the agents, employees, partners, co-venturers or representatives,
legal or otherwise, of APPI for any purpose whatsoever.
5. ADVERTISING. On the last day of the Initial Purchase Period,
December 31, 1999, APPI will provide a rebate to Ambar in the amount of five
percent of the gross purchase price of the products ordered by Ambar during such
period, so long as such rebate is understood by Ambar to be used solely for
marketing and advertising of the Products in the agreed upon Territory. Evidence
that such rebate was used by Ambar solely for marketing and advertising of the
Products in the agreed upon Territory shall be provided to APPI and if such
evidence is not provided, Ambar agrees to return said rebate to APPI.
APPI acknowledges that during the Term of this Agreement Ambar may
suggest and recommend to APPI marketing and promotional strategies to help Ambar
sell the Products in the stated Territory. APPI, after review and approval of
such marketing and promotional strategies and at APPI's sole discretion, will
match, dollar for dollar in U.S. currency, those funds which Ambar is willing to
contribute towards such marketing and promotional strategies with the
understanding and acknowledgment by Ambar that APPI will not contribute in
excess of ten thousand dollars ($10,000) throughout the Term of this Agreement.
Should APPI review and approve such marketing expenses, APPI will notify Ambar
of such approval, Ambar will notify APPI regarding the dollar amount that Ambar
expects to contribute, APPI within fifteen business days will then match such
stated amount by sending a check or wire transfer to Ambar, and Ambar will then
provide to APPI evidence that such funds were expended on the agreed upon
marketing and promotional items.
6. CONFIDENTIALITY. Ambar hereby acknowledges and agrees that as per
the Confidentiality Agreement signed between Ambar and APPI, dated April 8, 1999
(a copy of which is annexed hereto), all Confidential Information is and shall
remain the exclusive property of APPI.
7. RIGHT TO RENEW. The Term of this Agreement may be renewed by
written agreement of APPI and Ambar. Nothing contained herein shall be deemed to
create any express or implied obligation on the part of either party to renew or
extend this Agreement; however, the undersigned parties agree, in six months
from the date hereof, to evaluate the success of this Agreement and may
negotiate, in good faith, a potential five year extension of this Agreement with
terms to be agreed upon. Each party in its sole discretion shall have the right
to determine, for any reason whatsoever, not to renew, continue or extend this
Agreement.
8. PATENTS AND TRADEMARKS. Ambar acknowledges and agrees that APPI is
the sole and exclusive owner of all right, title and interest in and to the
products Lo-Chol and ACA and that Ambar will not claim
2
<PAGE> 4
or assert any rights or interests in the trademarks or patents of such names
and/or Products. Nothing contained in this Agreement shall operate as or be
construed as an assignment, grant or other transfer of any kind of any of APPI's
right, title, or interest in or to any of the trademarks or patent rights of
Lo-Chol and ACA.
9. INDEMNITY. Ambar agrees to indemnify and hold harmless APPI and its
Affiliates and any director, officer, stockholder, employee or agent of any of
them from and against any and all claims, losses, liabilities, damages, costs,
and expenses (including, but not limited to, attorneys', expert witness and
accounting fees and expenses) which may be sustained and arise out of Ambar's
activities, or those of its employees or agents, including without limitation,
any misrepresentations or misleading statements in respect of the Products or
any violation by Ambar of any of the provisions of this Agreement.
10. EXPENSES. All expenses and costs incurred by Ambar in the
performance of its obligations under this Agreement shall be the sole
responsibility of Ambar and shall not be advanced or reimbursed by APPI other
than those outlined in Section 5 of this Agreement.
11. ASSIGNABILITY. Ambar may not assign, transfer or delegate this
Agreement or any of its rights or obligations under this Agreement without the
prior written consent of APPI, and any attempted assignment, transfer or
delegation without such consent shall be deemed null and void and of no effect.
12. TERMINATION. This agreement may be terminated by either party in
case of a breach of any of the material terms of this agreement by giving ninety
(90) days prior written notice to the other party. If this Agreement is
terminated by Ambar, Ambar acknowledges to fulfill payment to APPI for both of
the minimum purchase requirements as outlined in Section 3 above. If Ambar fails
to meet the stated minimum purchase requirements or fails to make timely
payments in accordance with this Agreement then APPI shall treat such action as
a material default and may terminate this Agreement and/ or seek liquidated
damages from Ambar.
13. GOVERNING LAW. The validity, interpretation and performance of this
Agreement and any dispute connected herewith shall be governed and construed in
accordance with the laws of the Sate of New York without reference to its
conflict of law principles.
14. ENTIRE AGREEMENT. This Agreement, constitutes the entire agreement
between APPI and Ambar. This Agreement supersedes any prior or existing
contracts and arrangements by and between APPI and Ambar for the distribution of
the Products in the Territory.
15. NOTICE. Any notice required hereunder shall be made in writing by
hand-delivery, telefax, telex, courier, registered air mail, electronic mail, or
by any other means of delivery which enables the sending party to verily receipt
thereof Such notice shall be deemed given (a) at the actual time of receipt in
the case of hand-delivery or transmission by telefax, (b) Upon receipt of tile
addressee's answer back on the sender's machine in case of transmission by
telex, and (c) three (3) business days after sending in case of notice by
courier, cable or registered air mail. Any notices shall be sent to the
following addresses:
3
<PAGE> 5
If to APPI: If to Ambar:
Advanced Pharmaceuticals, Inc. Ambar Pharmacies & Health, Inc.
Attention: Sam Berkowitz Ambar Abraham
75 Maiden Lane 30 Aba Hilel Street
New York, NY 10038 Ramat-Gan, Israel 53532
Either party may change the address to which notices are to he sent to it by
giving notice of such change of address to the other party in the manner herein
provided for giving notice.
16. COUNTERPARTS. This Agreement may he executed in any number of
separate counterparts, each of which shall be deemed to be original but which
together shall constitute one in the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written by their respective authorized officials.
AMBAR PHARMACIES AND HEALTH, INC. ADVANCED PLANT
PHARMACEUTICALS, INC.
BY: /s/ Ambar Abraham By: /s/ David Lieberman
--------------------- ----------------------
Name: Ambar Abraham Name: David Lieberman
Title: General Manager Title: President
4
<PAGE> 6
EXHIBIT A
- - - Lo-Chol 60/1000
- - - ACA 70/1000
5
<PAGE> 1
EXHIBIT 6.6
EXCLUSIVE DISTRIBUTION AGREEMENT
THIS EXCLUSIVE DISTRIBUTION AGREEMENT ("Agreement") is made and entered
into this 1st day of the month of July, 1999 by and between Advanced Plant
Pharmaceuticals, Inc. ("APPI") a Delaware corporation, having its principal
office at, 75 Maiden Lane, New York, New York 10038, and Manayer Najd Trading &
Medical Supplies Co. ("MNM") a Saudi Arabian corporation, having its principal
office in Riyadh, Kingdom of Saudi Arabia.
WITNESSETH
WHEREAS, APPI manufactures and produces certain pharmaceutical products
(the "Products" as listed in Exhibit A attached hereto and as may be amended
from time to time) and would like MNM to distribute such Products in Saudi
Arabia (hereinafter referred to as the "Territory") and MNM is willing to become
a distributor of such Products, all on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. TERM. This Agreement will remain in effect as of the date hereof for a period
of five (5) years until June 30, 2004, unless this Agreement is terminated
sooner as hereafter provided.
2. APPOINTMENT. APPI hereby appoints MNM during the term of this Agreement, and
MNM hereby accepts such appointment, as APPI's exclusive distributor of the
Products in the Territory.
3. SALE AND PURCHASE OF PRODUCTS. APPI hereby agrees to provide those documents
requested by MNM needed for MNM to obtain a Registration Certificate from the
appropriate authorities in Saudi Arabia which Registration Certificate is needed
for MNM to sell the Products in the Territory. MNM agrees to make a good faith
effort to obtain such Registration Certificate as soon as possible from the date
hereof.
From the date MNM receives the Registration Certificate from the
appropriate authorities in Saudi Arabia, MNM agrees to purchase from APPI at
least the Minimum Purchase Quantity of the registered Products as such minimums
are defined in Exhibit B attached hereto.
Sales of Products: (as listed in Exhibit B attached hereto)
Products Purchase Prices: (as listed in Exhibit C attached hereto)
<PAGE> 2
Payments for Products ordered by MNM shall be made as listed in Exhibit
D attached hereto.
APPI, at its expense, will make available the Products ordered by MNM,
within thirty (30) days after MNM requests such Products. APPI will make the
Products available by giving notice to MNM, in accordance with Section 15 of
this Agreement, that such ordered Products are available for pick up by MNM at
John F. Kennedy International Airport ("JFK") located at Jamaica N.Y. 11430, at
a pickup area to be agreed upon by the undersigned parties. After such notice is
given to MNM, and such Products are made available to MNM at JFK, title to and
all risk of loss of and damage to the Products will pass to MNM. (FOB, free on
board - JFK)
4. EXCLUSIVITY; SALES BY DISTRIBUTOR.
While this Agreement is in effect, APPI hereby grants to MNM the
exclusive right to sell the Products in the agreed Territory. While this
Agreement remains in effect, APPI will not, directly or indirectly, sell the
Products within the Territory and will not permit anyone else, either directly
or indirectly, to sell the Products within the Territory.
MNM may sell the Products in such manner, on such terms, and at such
prices as approved by APPI. MNM will comply with all applicable laws, rules and
regulations in selling and in otherwise dealing with the Products.
Neither MNM, nor its officers, employees or agents will be deemed to be
the agents, employees, partners, co-venturers or representatives, legal or
otherwise, of APPI for any purpose whatsoever.
Products not covered by this Agreement: APPI hereby grants to MNM the
right of "First Refusal" of its Products for sales in the Territory. APPI agrees
to inform MNM, in writing about any new products that APPI, intends to sell.
Should MNM choose to exercise its right of First Refusal, MNM must inform APPI
in writing within thirty (30) days. After this period, APPI will warn MNM in a
written notice that within thirty (30) days MNM will lose the exclusive
distribution rights of the new products without giving any further written
notice. If MNM does not respond accordingly, does not wish to distribute the new
products, or if MNM & APPI are unable to come to an agreement on terms &
conditions, then APPI has the right to distribute its new products through other
means.
5. ADVERTISING. APPI acknowledges that during the term of this Agreement MNM may
suggest and recommend to APPI marketing and promotional strategies to help MNM
sell the Products in the stated Territory. APPI, after review and approval of
such marketing and promotional strategies and at APPI's sole discretion, will
match, dollar for dollar in U.S. currency, those funds which MNM is willing to
contribute towards such marketing and promotional strategies with the
understanding and acknowledgment by MNM that APPI will not contribute in excess
of ten thousand U.S. dollars ($10,000) per each calendar year,
2
<PAGE> 3
throughout the Term of this Agreement. Should APPI review and approve such
marketing expenses, APPI will notify MNM of such approval, MNM will notify APPI
regarding the dollar amount that MNM expects to contribute, APPI within fifteen
business days will then match such stated amount by sending a check or wire
transfer to MNM, and MNM will then provide to APPI evidence that such funds were
expended on the agreed upon marketing and promotional items.
6. CONFIDENTIALITY. MNM hereby acknowledges and agrees that a Confidentiality
Agreement will be signed between MNM and APPI prior to the signing of this
agreement (a copy of which will be annexed hereto). All Confidential Information
is and shall remain the exclusive property of APPI.
7. RIGHT TO RENEW. The terms of this Agreement shall be automatically renewed
for similar periods (five years each time) unless one of the parties notifies
the other in accordance with Section 15 of this Agreement of its intention not
to renew the Agreement, at least six months prior to the date of expiration.
This notice shall not cause forfeiture of the rights of either of the two
parties hereto vis a vis each other. Each party in its sole discretion shall
have the right to determine, for any reason whatsoever, not to renew, continue
or extend this Agreement.
8. PATENTS AND TRADEMARKS. MNM acknowledges and agrees that APPI is the sole and
exclusive owner of all right, title and interest in and to the products Lo-Chol
and ACA, and that MNM will not claim or assert any rights or interests in the
trademarks or patents of such names and/or products. Nothing contained in this
Agreement shall operate as or be construed as an assignment, grant or other
transfer of any kind of any of APPI's right, title, or interest in or to any of
the trademarks or patent rights of Lo-Chol and ACA.
9. INDEMNITY. MNM agrees to indemnify and hold harmless APPI and its Affiliates
and any director, officer, stockholder, employee or agent of any of them from
and against any and all claims, losses, liabilities, damages, costs, and
expenses (including, but not limited to, attorney, expert witness and accounting
fees and expenses) which may be sustained and arise out of MNM's activities, or
those of its employees or agents, including without limitation, any
misrepresentations or misleading statements in respect of the Products or any
violation by MNM of any of the provisions of this Agreement.
10. EXPENSES. All expenses and costs incurred by MNM in the performance of its
obligations under this Agreement shall be the sole responsibility of MNM and
shall not be advanced or reimbursed by APPI other than those outlined in Section
5 of this Agreement.
11. ASSIGNABILITY. MNM may not assign, transfer or delegate this Agreement or
any of its rights or obligations under this Agreement without the prior written
consent of APPI, and any attempted assignment, transfer or delegation without
such consent shall be deemed null and void and of no effect.
3
<PAGE> 4
12. TERMINATION. In case of breach of any of the terms of this Agreement, this
agreement may be terminated by either party at any time, by giving ninety (90)
days prior written notice to the other party. If the party that receives notice
of termination fails to respond to the other party notification within ninety
(90) days, the Agreement shall then be terminated. After MNM meets the First
Year stated minimum purchase requirements, if MNM fails to meet the stated
minimum purchase requirements for two (2) successive years or fails to make
timely payments in accordance with this Agreement, then APPI shall treat such
action as a material default and may terminate this Agreement and/or seek
liquidated damages from MNM.
13. GOVERNING LAW. The validity, interpretation and performance of this
Agreement and any dispute connected herewith shall be governed and construed in
accordance with the International laws, without reference to its conflict of law
principles. Any disputes arising in regard to the provisions of this Agreement
shall be settled amicably through mutual consultation between the two parties.
Any disputes not settled through mutual consultation as stipulated in the
proceeding sentence shall be finally settled by the arbitration court of the
International Chamber of commerce in Paris.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
APPI and MNM. This Agreement supersedes any prior or existing contracts and
arrangements by and between APPI and MNM for the distribution of the Products in
the Territory.
15. NOTICE. Any notice required hereunder shall be made in writing by
hand-delivery, telefax, telex, courier, registered air mail, electronic mail, or
by any other means of delivery which enables the sending party to verify receipt
thereof. Such notice shall be deemed given (a) at the actual time of receipt in
the case of hand-delivery or transmission by telefax, (b) Upon receipt of the
addressee's answer back on the sender's machine in case of transmission by
telex, and (c) three (3) business days after sending in case of notice by
courier, cable or registered air mail. Any notices shall be sent to the
following addresses:
If to APPI: If to MNM:
Advanced Pharmaceuticals, Inc. Manayer Najd Trading & Medical Supplies Co.
Attention: Sam Berkowitz Attention: Mohamed Abd Al-Raheem
75 Maiden Lane P.O. Box 15 Riyadh 11371
New York, NY 10038 Kingdom of Saudi Arabia
Either party may change the address to which notices are to he sent to it by
giving notice of such change of address to the other party in the manner herein
provided for giving notice.
16. COUNTERPARTS. This Agreement may be executed in any number of separate
counterparts, each of which shall be deemed to be original but which together
shall constitute one in the same instrument.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written by their respective authorized officials.
MANAYER NAJD TRADING & MEDICAL ADVANCED PLANT PHARMACEUTICALS, INC.
SUPPLIES CO.
By: /s/ Mohamed Abd Al-Raheem Yassin By: /s/ David Lieberman
-------------------------------- --------------------------------
Name: Mohamed Abd Al-Raheem YASSIN Name: David Lieberman
Title, General Manager Title, President
5
<PAGE> 6
EXHIBIT A
As referred to in the EXCLUSIVE DISTRIBUTION AGREEMENT between "APPI" and "MNM",
dated July 1, 1999 the Products are as follows:
<TABLE>
<CAPTION>
CAPSULES
PRODUCT DESCRIPTION FORM CONCENTRATE PER BOTTLE
<S> <C> <C> <C> <C>
Lo-Chol 60 Cholesterol lowering agent Caplet 1000mg. 60
Lo-Chol 120 Cholesterol lowering agent Caplet 1000mg. 120
ACA 500mg. Immune system builder Caplet 500mg. 70
ACA 1000mg. Immune system builder Caplet 1000mg. 70
</TABLE>
The foregoing list may be amended from time to time upon mutual agreement by the
undersigned parties.
Agreed & signed on July 1, 1999
MANAYER NAJD TRADING & MEDICAL ADVANCED PLANT PHARMACEUTICALS, INC.
SUPPLIES CO.
By: /s/ Mohamed Abd Al-Raheem Yassin By: /s/ David Lieberman
-------------------------------- -------------------------------
Name: Mohamed Abd Al-Raheem YASSIN Name: David Lieberman
Title, General Manager Title, President
6
<PAGE> 7
EXHIBIT B
"Minimum Purchase Quantity"
As referred to in the EXCLUSIVE DISTRIBUTION AGREEMENT between "APPI" and "MNM",
dated July 1, 1999, the Minimum Purchase Quantity, shall be as follows:
During the "First Year" as defined below, APPI agrees to sell to MNM, and MNM
agrees to purchase from APPI not less than:
"Lo-Chol 60" (Lo-Chol 1000mg. 60 Caplets): not less than 15,000 bottles "Units".
"Lo-Chol 120" (Lo-Chol 1000mg. 120 Caplets): not less than 7,500 bottles
"Units".
ACA 500 mg. 70 Caplets: not less than 12,000 bottles "Units".
ACA 1000 mg. 70 Caplets: not less than 6,000 bottles "Units".
During the "Second Year" as defined below, APPI agrees to sell to MNM, and MNM
agrees to purchase from APPI not less than:
1. "Lo-Chol 60" (Lo-Chol 1000mg. 60 Caplets): not less than 18,000 bottles
"Units".
2. "Lo-Chol 120" (Lo-Chol 1000mg. 120 Caplets): not less than 9,000 bottles
"Units".
3. ACA 500 mg. 70 Caplets: not less than 14,500 bottles "Units".
4. ACA 1000 mg. 70 Caplets: not less than 7,500 bottles "Units".
During each of the "Third Year", "Fourth Year" and "Fifth Year" as defined
below, APPI agrees to sell to MNM, and MNM agrees to purchase from APPI not less
than:
"Lo-Chol 60" (Lo-Chol 1000mg. 60 Caplets): not less than 21,500 bottles "Units".
"Lo-Chol 120" (Lo-Chol 1000mg. 120 Caplets): not less than 11,000 bottles
"Units".
ACA 500 mg. 70 Caplets: not less than 17,500 bottles "Units".
ACA 1000 mg. 70 Caplets: not less than 9,000 bottles "Units".
"First Year" (Year 1) for any Product: starts from the date MNM receives a
Registration Certificate from the appropriate authorities in Saudi Arabia, for a
period of twelve (12) calendar months (the "First Year").
"Second Year" (Year 2) for any Product: the period over twelve (12) calendar
months from the last day of the "First Year" (the "Second Year").
"Third Year" (Year 3) for any Product: the period over twelve (12) calendar
months from the last day of the "Second Year" (the "Third Year").
"Fourth Year" (Year 4) for any Product: the period over twelve (12) calendar
months from the last day of the "Third Year" (the "Fourth Year").
"Fifth Year" (Year 5) for any Product: the period over twelve (12) calendar
months from the last day of the "Fourth Year" (the "Fifth Year").
7
<PAGE> 8
The Products to be purchased by MNM as described above, as well as those
Products to be purchased by MNM above and beyond such minimums, shall be priced
in accordance with the foregoing and Exhibit C entitled "Product Purchase
Prices".
Agreed & signed on July 1, 1999
MANAYER NAJD TRADING & MEDICAL ADVANCED PLANT PHARMACEUTICALS, INC.
SUPPLIES CO.
By: /s/ Mohamed Abd Al-Raheem Yassin By: /s/ David Lieberman
-------------------------------- ------------------------------
Name: Mohamed Abd Al-Raheem YASSIN Name: David Lieberman
Title, General Manager Title, President
8
<PAGE> 9
EXHIBIT C
"Product Purchase Prices"
As referred to in the EXCLUSIVE DISTRIBUTION AGREEMENT between "APPI" and "MNM",
dated July 1, 1999, the purchase price of the Products to be paid by MNM to APPI
are as follows:
FOB (Free On Board - JFK airport) prices (in USD $ = United States Dollars)
<TABLE>
<CAPTION>
PRODUCT SUGGESTED RETAIL PRICE WHOLESALE COST MNM PURCHASE PRICE
<S> <C> <C> <C>
Lo-Chol 1000mg.
60 Caplet 14.95 9.95 5.97
Lo-Chol 1000mg.
120 Caplet 27.95 17.95 10.77
ACA 500mg.
70 Caplet 26.00 18.00 10.80
ACA 1000mg.
70 Caplet 50.95 34.95 20.97
</TABLE>
Agreed & signed on July 1st, 1999
MANAYER NAJD TRADING & MEDICAL ADVANCED PLANT PHARMACEUTICALS, INC.
SUPPLIES CO.
By: /s/ Mohamed Abd Al-Raheem Yassin By: /s/ David Lieberman
-------------------------------- ---------------------------
Name: Mohamed Abd Al-Raheem YASSIN Name: David Lieberman
Title, General Manager Title, President
9
<PAGE> 10
EXHIBIT D
As referred to in the EXCLUSIVE DISTRIBUTION AGREEMENT between "APPI" and "MNM",
dated July 1, 1999, the method of payment from MNM to APPI shall be as follows:
"MNM" undertakes to pay for orders within a period not exceeding ninety (90)
days from the date APPI makes such ordered Products available to MNM for pickup
at JFK. MNM undertakes to pay APPI by a confirmed irrevocable Letter of Credit
(L/C) to be drawn on any bank in the Kingdom of Saudi Arabia that is acceptable
to APPI and payable in the United States of America.
Agreed & signed on July 1, 1999
MANAYER NAJD TRADING & MEDICAL ADVANCED PLANT PHARMACEUTICALS, INC.
SUPPLIES CO.
By: /s/ Mohamed Abd Al-Raheem Yassin By: /s/ David Lieberman
-------------------------------- -----------------------------
Name: Mohamed Abd Al-Raheem YASSIN Name: David Lieberman
Title, General Manager Title, President
10
<PAGE> 1
EXHIBIT 6.7
EXCLUSIVE DISTRIBUTION AGREEMENT
THIS EXCLUSIVE DISTRIBUTION AGREEMENT ("Agreement") is made and entered
into this 1st day of the month of July, 1999 by and between Advanced Plant
Pharmaceuticals, Inc. ("APPI") a Delaware corporation, having its principal
office at, 75 Maiden Lane, New York, New York 10038, and Manayer Egypt Trading &
Medical Supplies Co. ("MEM") an Egyptian corporation, having its principal
office in Alexandria, Arab Republic of Egypt.
WITNESSETH
WHEREAS, APPI manufactures and produces certain pharmaceutical products
(the "Products" as listed in Exhibit A attached hereto and as may be amended
from time to time) and would like MEM to distribute such Products in Egypt
(hereinafter referred to as the "Territory") and MEM is willing to become a
distributor of such Products, all on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. TERM. This Agreement will remain in effect as of the date hereof for a period
of five (5) years until June 30, 2004, unless this Agreement is terminated
sooner as hereafter provided.
2. APPOINTMENT. APPI hereby appoints MEM during the term of this Agreement, and
MEM hereby accepts such appointment, as APPI's exclusive distributor of the
Products in the Territory.
3. SALE AND PURCHASE OF PRODUCTS.
APPI hereby agrees to provide those documents requested by MEM needed
for MEM to obtain a Registration Certificate from the appropriate authorities in
Egypt which Registration Certificate is needed for MEM to sell the Products in
the Territory. MEM agrees to make a good faith effort to obtain such
Registration Certificate as soon as possible from the date hereof.
From the date MEM receives the Registration Certificate from the
appropriate authorities in Egypt, MEM agrees to purchase from APPI at least the
Minimum Purchase Quantity of the registered Products as such minimums are
defined in Exhibit B attached hereto.
Sales of Products: (as listed in Exhibit B attached hereto)
<PAGE> 2
Products Purchase Prices: (as listed in Exhibit C attached hereto)
Payments for Products ordered by MEM shall be made as listed in Exhibit
D attached hereto.
APPI, at its expense, will make available the Products ordered by MEM,
within thirty (30) days after MEM requests such Products. APPI will make the
Products available by giving notice to MEM, in accordance with Section 15 of
this Agreement, that such ordered Products are available for pick up by MEM at
John F. Kennedy International Airport ("JFK") located at Jamaica N.Y. 11430, at
a pickup area to be agreed upon by the undersigned parties. After such notice is
given to MEM, and such Products are made available to MEM at JFK, title to and
all risk of loss of and damage to the Products will pass to MEM. (FOB, free on
board - JFK)
4. EXCLUSIVITY; SALES BY DISTRIBUTOR.
While this Agreement is in effect, APPI hereby grants to MEM the
exclusive right to sell the Products in the agreed Territory. While this
Agreement remains in effect, APPI will not, directly or indirectly, sell the
Products within the Territory and will not permit anyone else, either directly
or indirectly, to sell the Products within the Territory.
MEM may sell the Products in such manner, on such terms, and at such
prices as approved by APPI. MEM will comply with all applicable laws, rules and
regulations in selling and in otherwise dealing with the Products.
Neither MEM, nor its officers, employees or agents will be deemed to be
the agents, employees, partners, co-venturers or representatives, legal or
otherwise, of APPI for any purpose whatsoever.
Products not covered by this Agreement: APPI hereby grants to MEM the
right of "First Refusal" of its Products for sales in the Territory. APPI agrees
to inform MEM, in writing about any new products that APPI, intends to sell.
Should MEM choose to exercise its right of First Refusal, MEM must inform APPI
in writing within thirty (30) days. After this period, APPI will warn MEM in a
written notice that within thirty (30) days MEM will lose the exclusive
distribution rights of the new products without giving any further written
notice. If MEM does not respond accordingly, does not wish to distribute the new
products, or if MEM & APPI are unable to come to an agreement on terms &
conditions, then APPI has the right to distribute its new products through other
means.
5. ADVERTISING. APPI acknowledges that during the term of this Agreement MEM may
suggest and recommend to APPI marketing and promotional strategies to help MEM
sell the Products in the stated Territory. APPI, after review and approval of
such marketing and promotional strategies and at APPI's sole discretion, will
match, dollar for dollar in U.S. currency, those funds which MEM is willing to
contribute towards such marketing and
2
<PAGE> 3
promotional strategies with the understanding and acknowledgment by MEM that
APPI will not contribute in excess of ten thousand U.S. dollars ($10,000) per
each calendar year, throughout the Term of this Agreement. Should APPI review
and approve such marketing expenses, APPI will notify MEM of such approval, MEM
will notify APPI regarding the dollar amount that MEM expects to contribute,
APPI within fifteen business days will then match such stated amount by sending
a check or wire transfer to MEM, and MEM will then provide to APPI evidence that
such funds were expended on the agreed upon marketing and promotional items.
6. CONFIDENTIALITY. MEM hereby acknowledges and agrees that a Confidentiality
Agreement will be signed between MEM and APPI prior to the signing of this
agreement (a copy of which will be annexed hereto). All Confidential Information
is and shall remain the exclusive property of APPI.
7. RIGHT TO RENEW. The terms of this Agreement shall be automatically renewed
for similar periods (five years each time) unless one of the parties notifies
the other in accordance with Section 15 of this Agreement of its intention not
to renew the Agreement, at least six months prior to the date of expiration.
This notice shall not cause forfeiture of the rights of either of the two
parties hereto vis a vis each other. Each party in its sole discretion shall
have the right to determine, for any reason whatsoever, not to renew, continue
or extend this Agreement.
8. PATENTS AND TRADEMARKS. MEM acknowledges and agrees that APPI is the sole and
exclusive owner of all right, title and interest in and to the products Lo-Chol
and ACA, and that MEM will not claim or assert any rights or interests in the
trademarks or patents of such names and/or products. Nothing contained in this
Agreement shall operate as or be construed as an assignment, grant or other
transfer of any kind of any of APPI's right, title, or interest in or to any of
the trademarks or patent rights of Lo-Chol and ACA.
9. INDEMNITY. MEM agrees to indemnify and hold harmless APPI and its Affiliates
and any director, officer, stockholder, employee or agent of any of them from
and against any and all claims, losses, liabilities, damages, costs, and
expenses (including, but not limited to, attorney, expert witness and accounting
fees and expenses) which may be sustained and arise out of MEM's activities, or
those of its employees or agents, including without limitation, any
misrepresentations or misleading statements in respect of the Products or any
violation by MEM of any of the provisions of this Agreement.
10. EXPENSES. All expenses and costs incurred by MEM in the performance of its
obligations under this Agreement shall be the sole responsibility of MEM and
shall not be advanced or reimbursed by APPI other than those outlined in Section
5 of this Agreement.
11. ASSIGNABILITY. MEM may not assign, transfer or delegate this Agreement or
any of its rights or obligations under this Agreement without the prior written
consent of APPI, and any
3
<PAGE> 4
attempted assignment, transfer or delegation without such consent shall be
deemed null and void and of no effect.
12. TERMINATION. In case of breach of any of the terms of this Agreement, this
agreement may be terminated by either party at any time, by giving ninety (90)
days prior written notice to the other party. If the party that receives notice
of termination fails to respond to the other party notification within ninety
(90) days, the Agreement shall then be terminated. After MEM meets the First
Year stated minimum purchase requirements, if MEM fails to meet the stated
minimum purchase requirements for two (2) successive years or fails to make
timely payments in accordance with this Agreement, then APPI shall treat such
action as a material default and may terminate this Agreement and/or seek
liquidated damages from MEM.
13. GOVERNING LAW. The validity, interpretation and performance of this
Agreement and any dispute connected herewith shall be governed and construed in
accordance with the International laws, without reference to its conflict of law
principles. Any disputes arising in regard to the provisions of this Agreement
shall be settled amicably through mutual consultation between the two parties.
Any disputes not settled through mutual consultation as stipulated in the
proceeding sentence shall be finally settled by the arbitration court of the
International Chamber of commerce in Paris.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
APPI and MEM. This Agreement supersedes any prior or existing contracts and
arrangements by and between APPI and MEM for the distribution of the Products in
the Territory.
15. NOTICE. Any notice required hereunder shall be made in writing by
hand-delivery, telefax, telex, courier, registered air mail, electronic mail, or
by any other means of delivery which enables the sending party to verify receipt
thereof. Such notice shall be deemed given (a) at the actual time of receipt in
the case of hand-delivery or transmission by telefax, (b) Upon receipt of the
addressee's answer back on the sender's machine in case of transmission by
telex, and (c) three (3) business days after sending in case of notice by
courier, cable or registered air mail. Any notices shall be sent to the
following addresses:
If to APPI: If to MEM:
Advanced Pharmaceuticals, Inc. Manayer Egypt Trading & Medical Supplies Co.
Attention: Sam Berkowitz Attention: Mohamed Abd Al-Raheem YASSIN
75 Maiden Lane P.O. Box 1048 Alexandria 21111
New York, NY 10038 Arab Republic of Egypt
Either party may change the address to which notices are to he sent to
it by giving notice of such change of address to the other party in the manner
herein provided for giving notice.
4
<PAGE> 5
16. COUNTERPARTS. This Agreement may be executed in any number of separate
counterparts, each of which shall be deemed to be original but which together
shall constitute one in the same instrument.
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE
EXECUTED AS OF THE DAY AND YEAR FIRST ABOVE WRITTEN BY THEIR RESPECTIVE
AUTHORIZED OFFICIALS.
MANAYER EGYPT TRADING & MEDICAL ADVANCED PLANT PHARMACEUTICALS, INC.
SUPPLIES CO.
By: /s/ Mohamed Abd Al-Raheem Yassin By: /s/ David Lieberman
---------------------------------- -------------------------
Name: Mohamed Abd Al-Raheem Yassin Name: David Lieberman
Title: General Manager Title: President
5
<PAGE> 6
EXHIBIT A
As referred to in the EXCLUSIVE DISTRIBUTION AGREEMENT between "APPI" and "MEM",
dated July 1, 1999 the Products are as follows:
<TABLE>
<CAPTION>
CAPSULES
PRODUCT DESCRIPTION FORM CONCENTRATE PER BOTTLE
<S> <C> <C> <C> <C>
Lo-Chol 60 Cholesterol lowering agent Caplet 1000mg. 60
Lo-Chol 120 Cholesterol lowering agent Caplet 1000mg. 120
ACA 500mg. Immune system builder Caplet 500mg. 70
ACA 1000mg. Immune system builder Caplet 1000mg. 70
</TABLE>
The foregoing list may be amended from time to time upon mutual agreement by the
undersigned parties.
Agreed & signed on July 1, 1999
MANAYER EGYPT TRADING & MEDICAL ADVANCED PLANT PHARMACEUTICALS, INC.
SUPPLIES CO.
By: /s/ Mohamed Abd Al-Raheem Yassin By: /s/ David Lieberman
-------------------------------- -----------------------------
Name: Mohamed Abd Al-Raheem YASSIN Name: David Lieberman
Title, General Manager Title, President
6
<PAGE> 7
EXHIBIT B
"Minimum Purchase Quantity"
As referred to in the EXCLUSIVE DISTRIBUTION AGREEMENT between "APPI" and "MEM",
dated July 1, 1999, the Minimum Purchase Quantity, shall be as follows:
During the "First Year" as defined below, APPI agrees to sell to MEM, and MEM
agrees to purchase from APPI not less than:
1. "Lo-Chol 60" (Lo-Chol 1000mg. 60 Caplets): not less than 10,000 bottles
"Units".
2. "Lo-Chol 120" (Lo-Chol 1000mg. 120 Caplets): not less than 5,000 bottles
"Units".
3. ACA 500 mg. 70 Caplets: not less than 8,000 bottles "Units".
4. ACA 1000 mg. 70 Caplets: not less than 4,000 bottles "Units".
During the "Second Year" as defined below, APPI agrees to sell to MEM, and MEM
agrees to purchase from APPI not less than:
1. "Lo-Chol 60" (Lo-Chol 1000mg. 60 Caplets): not less than 12,000 bottles
"Units".
2. "Lo-Chol 120" (Lo-Chol 1000mg. 120 Caplets): not less than 6,000 bottles
"Units".
3. ACA 500 mg. 70 Caplets: not less than 9,500 bottles "Units".
4. ACA 1000 mg. 70 Caplets: not less than 5,000 bottles "Units".
During each of the "Third Year", "Fourth Year" and "Fifth Year" as defined
below, APPI agrees to sell to MEM, and MEM agrees to purchase from APPI not less
than:
1. "Lo-Chol 60" (Lo Chol 1000mg. 60 Caplets): not less than 14,500 bottles
"Units".
2. "Lo-Chol 120" (Lo-Chol 1000mg. 120 Caplets): not less than 7,000 bottles
"Units".
3. ACA 500 mg. 70 Caplets: not less than 11,500 bottles "Units".
4. ACA 1000 mg. 70 Caplets: not less than 6,000 bottles "Units".
"First Year" (Year 1) for any Product: starts from the date MEM receives a
Registration Certificate from the appropriate authorities in Egypt, for a period
of twelve (12) calendar months (the "First Year").
"Second Year" (Year 2) for any Product: the period over twelve (12) calendar
months from the last day of the "First Year" (the "Second Year").
"Third Year" (Year 3) for any Product: the period over twelve (12) calendar
months from the last day of the "Second Year" (the "Third Year").
"Fourth Year" (Year 4) for any Product: the period over twelve (12) calendar
months from the last day of the "Third Year" (the "Fourth Year").
"Fifth Year" (Year 5) for any Product: the period over twelve (12) calendar
months from the last day of the "Fourth Year" (the "Fifth Year").
7
<PAGE> 8
The Products to be purchased by MEM as described above, as well as those
Products to be purchased by MEM above and beyond such minimums, shall be priced
in accordance with the foregoing and Exhibit C entitled "Product Purchase
Prices".
Agreed & signed on July 1, 1999
MANAYER EGYPT TRADING & MEDICAL ADVANCED PLANT PHARMACEUTICALS, INC.
SUPPLIES CO.
By: /s/ Mohamed Abd Al-Raheem Yassin By: /s/ David Lieberman
-------------------------------- ----------------------------
Name: Mohamed Abd Al-Raheem YASSIN Name: David Lieberman
Title, General Manager Title, President
8
<PAGE> 9
EXHIBIT C
"Product Purchase Prices"
As referred to in the EXCLUSIVE DISTRIBUTION AGREEMENT between "APPI" and "MEM",
dated July 1, 1999, the purchase price of the Products to be paid by MEM to APPI
are as follows:
FOB (Free On Board - JFK airport) prices (in USD $ = United States Dollars)
<TABLE>
<CAPTION>
PRODUCT SUGGESTED RETAIL PRICE WHOLESALE COST MEM PURCHASE PRICE
<S> <C> <C> <C>
Lo-Chol 1000mg. 14.95 9.95 5.97
60 Caplet
Lo-Chol 1000mg. 27.95 17.95 10.77
120 Caplet
ACA 500mg. 26.00 18.00 10.80
70 Caplet
ACA 1000mg. 50.95 34.95 20.97
70 Caplet
</TABLE>
Agreed & signed on July 1st, 1999
MANAYER EGYPT TRADING & MEDICAL ADVANCED PLANT PHARMACEUTICALS, INC.
SUPPLIES CO.
By: /s/ Mohamed Abd Al-Raheem Yassin By: /s/ David Lieberman
-------------------------------- --------------------------------
Name: Mohamed Abd Al-Raheem YASSIN Name: David Lieberman
Title, General Manager Title, President
9
<PAGE> 10
EXHIBIT D
As referred to in the EXCLUSIVE DISTRIBUTION AGREEMENT between "APPI" and "MEM",
dated July 1, 1999, the method of payment from MEM to APPI shall be as follows:
"MEM" undertakes to pay for orders within a period not exceeding ninety (90)
days from the date APPI makes such ordered Products available to MEM for pickup
at JFK. MEM undertakes to pay APPI by a confirmed irrevocable Letter of Credit
(L/C) to be drawn on any bank in Egypt that is acceptable to APPI and payable in
the United States of America.
Agreed & signed on July 1, 1999
MANAYER EGYPT TRADING & MEDICAL ADVANCED PLANT PHARMACEUTICALS, INC.
SUPPLIES CO.
By: /s/ Mohamed Abd Al-Raheem Yassin By: /s/ David Lieberman
-------------------------------- ----------------------------------
Name: Mohamed Abd Al-Raheem YASSIN Name: David Lieberman
Title, General Manager Title, President
10
<PAGE> 1
EXHIBIT 6.8
TECHNOLOGY PURCHASE AGREEMENT dated as of July 16, 1999, by
and between ADVANCED PLANT PHARMACEUTICALS, INC., a Delaware
corporation (the "Purchaser") having its principal office at
75 Maiden Lane, New York, NY 10038, and C.J. LIEBERMAN
("Seller"), who resides at Shauldon No.39, Jerusalem, Israel.
WITNESSETH
WHEREAS, the Purchaser is engaged in the business of developing,
testing and selling plant based pharmaceuticals (the "Business"), and is
desirous of purchasing certain technology which pertains to the Business of the
Purchaser;
WHEREAS, the Seller has developed a concept of standardizing whole
plant pharmaceutical grade products and has developed a technological process by
which to utilize virtually the whole of the nutrients found in plants in the
production of dietary supplements (the "Process" which term is meant to include
the underlying concept of standardizing whole plant pharmaceutical grade
products);
WHEREAS, Seller represents that he is the sole owner of all rights and
interests to the Process;
WHEREAS, the Purchaser is desirous of purchasing such Process from
Seller so that Purchaser have the exclusive right to use such Process for the
development, manufacture, distribution and sale of plant based dietary
supplements;
WHEREAS, Seller is willing to sell, transfer and assign all of his
right, title and interest in and to such Process to the Purchaser in accordance
with the terms and provisions set forth below;
NOW, THEREFORE, in consideration of the foregoing premises, and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the undersigned parties hereby agree as follows:
1. PURCHASE AND SALE OF PROCESS TECHNOLOGY.
1.1 Subject to the provisions of this Agreement, the Seller hereby
sells, conveys, transfers, assigns and delivers to the Purchaser, by appropriate
instruments in the forms annexed hereto, and Purchaser purchases and accepts,
for the consideration hereinafter defined, the Process as described in Schedule
A (as attached hereto), specifically including, but without limitation, all
rights owned, held or enjoyed by the Seller relating to or connected with the
<PAGE> 2
research and development of the Process including all related documentation,
studies and tests, formulations, recipes, manufacturing procedures, extraction
methodologies and trade secrets.
1.2 Purchase Price
The purchase price that Purchaser shall pay to Seller for the
purchase of the Process shall be the following:
(A) 18,000,000 shares of the Purchaser's common stock, par value $.0007 (the
"Purchase Price" or the "Shares"). Seller hereby acknowledges and understands
that such 18,000,000 Shares and any additional Shares issuable pursuant to
paragraph 1.2(D) below, shall be issued by the Purchaser to Seller conditioned
on the occurrence of the following event:
that the stockholders of the Purchaser (the "Stockholders") vote in
favor of increasing the number of shares that the Purchaser is
authorized to issue from 120,000,000 to a number equivalent to or
greater than 250,000,000 shares. The Purchaser hereby agrees to put
forward a proposal to its Stockholders to increase the number of shares
it is authorized to issue from 120,000,000 to 250,000,000 prior to the
latter of September 30, 1999 or if and when the Company's Form 10-SB is
declared effective by the Securities and Exchange Commission. Seller
acknowledges and understands that the Purchaser cannot give any
assurances that its Stockholders will vote in favor of such proposal.
If such increase in the shares that the Purchaser is authorized to
issue is approved by the majority of the Stockholders, the Purchaser
shall issue the Shares representing the Purchase Price to the Seller
within fifteen business days from the time that the Certificate of
Amendment to the Purchaser's Certificate of Incorporation is effective
and if after Stockholder approval, such shares are not issued to Seller
in accordance with this section, then ownership of the Process shall
return to CJ Lieberman or his designee; and
(B) Purchaser shall pay to the Seller in U.S. Dollars a royalty payment of $.01
(one cent) per bottle with respect to each product manufactured with the Process
and an additional one percent (1%) of the Company's suggested retail price of
each product sold that was manufactured with the Process. Such payments shall be
made to the Seller within thirty (30) days after the end of each calendar
quarter for products manufactured and for products sold which were manufactured
using the Process made during such Calendar Quarter; and
(C) Purchaser shall pay to the Seller ten percent (10%) of the Purchaser's net
profits that Purchaser retains from sale of products manufactured with the
Process. The amount of the Purchaser's "net profits" from such sales shall be
determined by the Company's then independent public accountants regularly
retained using generally accepted accounting principles; and
(D) (i) In the event that the Purchaser enters into any agreement
with a third party for sale of products manufactured using the
Process, which agreement unconditionally provides for payment
to the Purchaser of not less than $20,000,000, upon receipt by
the Purchaser of such $20,000,000 from such third party, the
Purchaser shall issue to the Seller 5,000,000 Shares for each
twenty million dollars required to be paid to the Purchaser
under the terms of such agreement or agreements.
<PAGE> 3
(ii) the Purchaser shall issue to the Seller 5,000,000 Shares for
every $20,000,000 of gross proceeds received by the Purchaser,
other than proceeds from sales made pursuant to agreements
covered in 1.2(D)(i) immediately above pursuant to which
Shares are issued to the Seller from the sale of products
manufactured using the Process.
Provided, however, that the maximum number of Shares the Purchaser shall be
required to issue to the Seller pursuant to the provisions of clauses 1.2(D)(i)
and (ii) shall be twenty five million Shares.
(1.3) The certificates evidencing the Shares to be issued paid
by the Purchaser to Seller, which constitute the Purchase Price, shall be
endorsed with the following restrictive legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TOWARD DISTRIBUTION OR
RESALE. THESE SHARES MAY NOT BE MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED ABSENT REGISTRATION OF SUCH SHARES UNDER THE ACT, OR AN OPINION OF
COUNSEL FOR THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER THIS ACT OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
(1.4) Purchaser agrees that at no time prior March 15, 2000,
will the Purchaser's Board of Directors propose an increase in the number of
Shares the Purchaser is authorized to issue in excess of 250,000,000 shares and
further agrees not to propose a stock split, a reverse stock split of greater
than five to one or a stock dividend.
2. Representations and Warranties of Seller.
Seller hereby makes the following representations and warranties to Purchaser in
order to induce the Purchaser to enter in to this Agreement:
(a) Authority. The Seller has full power and authority to execute,
deliver and perform this Agreement and to carry out the transactions
contemplated thereby and hereby.
(b) Governmental Filings. The Seller is not required to submit any
notice, report or other filing to any governmental or regulatory agency, nor is
any notice or report required to be obtained by the Purchaser in connection with
the execution or delivery of this Agreement, or the consummation of the
transactions contemplated thereby and hereby.
(c) Title and Related Matters. The Seller, who asserts that he has
created the Process, has good and marketable title to the Process free and clear
of all liens, pledges, charges and encumbrances, liabilities or any other
adverse claims of every kind or character, and Purchaser shall acquire good and
valid title to the Process, free and clear of all liens, pledges, charges
<PAGE> 4
security interests, restrictions, licenses, encumbrances, liabilities or any
other adverse claim of any kind or character.
(d) Infringement. To the best of the Seller's knowledge, no persons
other than the Purchaser has heretofore utilized the Process. To the best of the
Seller's knowledge, the Process will not infringe or violate any valid patent,
trademark, trade name or copyright of others and the Seller has not received any
notice, claim or protest respecting any such violation or infringement.
(e) Broker. No agent, broker or other person acting pursuant to
authority of Seller is entitled to any commission or finder's fee in connection
with the transactions contemplated by this Agreement.
(g) Accuracy of Information. No representation, statement or
information made or furnished by Seller to Purchaser, in this Agreement, and the
schedules hereto and the documents set forth contain, or shall contain, any
untrue statement of fact or omits or shall omit any fact necessary to make the
information contained in such representation, or information not misleading,
and, there are no obligations, contingent or otherwise, of the Seller that are
not shown on any such schedule.
(h) Claims. No claim has been asserted by any person other than Seller
and purchaser with regard to the Process or the rights to the use thereof.
(i) Use. The Seller will not, without the Purchaser's written consent,
hereafter use the Process or permit any persons other than Purchaser and the
Purchaser's designees and assigns, to use the Process.
(j) Governmental Approvals. The Seller has taken all necessary actions
to provide that in the developing, testing and manufacturing of the Process ,
the Seller is and shall continue to be in compliance in all material respects
with all United States and foreign, state, county, local or other governmental
statutes and ordinances, and with all rules and regulations of all United States
and foreign, state, county, local and other governmental agencies and bodies,
applicable to him, and to the Process.
(k) Investment Representations.
(i) The Seller will acquire the Shares for the Seller's own
account, for investment purposes only, and not with a view to the sale or other
distribution thereof, in whole or in part, in violation of the Act, the General
Rules and Regulations ("Rules and Regulations") of the Securities and Exchange
Commission ("Commission") promulgated thereunder, or any other applicable
securities laws.
(ii) The Seller is familiar with and has received
documentation concerning the business and financial condition of the Purchaser
and Seller has had the opportunity to obtain answers to any questions concerning
the Purchaser's business, financial and other affairs. The
<PAGE> 5
Seller fully understands that any payment hereunder in Shares is conditional
upon approval by the Stockholders of an increase in the number of shares the
Purchaser is authorized to issue. Moreover Seller understands that such Shares
given to him as the Purchase Price are also subject to the conditions set forth
in Section 1.2 above, present an exceptional risk, and the Shares may decline in
value such that Seller may lose the entire current value of the Shares.
(iii) The Seller has been advised that the Shares have not
been registered under the Securities Act and that the Shares issued and
delivered in reliance on an exemption from the registration requirements of the
Securities Act, Section 4(2) thereof as a transaction by an issuer not involving
a public offering. The Seller has also been advised that it may not make any
disposition of the Shares unless (a) the Shares are registered under the
Securities Act, or (b) the sale, transfer or other disposition is made in
conformity with the provisions of Rule 144 of the Rules and Regulations, or (c)
prior thereto (1) notice of the proposed disposition is given to the Purchaser
with a detailed statement of the circumstances surrounding the proposed
disposition and (2) the Purchaser shall have received the opinion of counsel for
the Purchaser at the expense of Seller to the effect (x) that the proposed
disposition will not be in contravention of any of the provisions of the
Securities Act or of the Rules and Regulations thereunder, or (y) that
appropriate action necessary for compliance with the Securities Act and the
Rules and Regulations thereunder has been taken.
(iv) The Seller understands that the Purchaser is under no
obligation to register the Shares under the Securities Act, or to take any other
action in order to make compliance with an exemption from the registration
provisions of the Securities Act in connection with any sale of the Shares by
the Seller.
(v) The Seller has been advised that the Shares constitute
"restricted securities," as that term is defined in Rule 144 of the Rules and
Regulations.
(vi) The Seller understands that there will be placed upon the
certificates representing the Shares, and upon any certificates issued in
substitution therefor, an appropriate stop transfer legend regarding the
restrictions on the transfer of the Shares under the Securities Act.
(l) Absence of Litigation. Seller is not aware and has not received
notice of any threatened, pending or commenced litigation, arbitration or
administrative hearing or investigation, or other action seeking to prevent, or
having a potential detrimental effect upon Purchaser in connection with the
Process or the consummation of the transactions contemplated by this Agreement.
(m) Insolvency Proceedings. No insolvency proceedings, including
bankruptcy, receivership, reorganization, composition or arrangement with
creditors, are pending or threatened against Seller.
(n) Schedule Being True and Correct. The schedules and exhibits to this
Agreement are true and correct in all respects.
<PAGE> 6
(o) Conflicts. The execution, delivery and performance of this
Agreement, shall not conflict with or result in the breach or violation of any
of the Seller's contracts, agreements, commitments, licenses, permits,
authorizations or concession to which he is a party or by which he is bound, or
any statute, rule, regulation, ordinance, code, order, judgment, writ,
injunction, decree or award of any court or administrative governmental body, or
constitute an event which with notice, lapse of time, or both, would result in
any such breach, or violation and which would have a material adverse effect on
the Seller.
3.2 Representations and Warranties of Purchaser.
Purchaser makes the following representations and warranties as of the date
hereof:
(a) Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
(b) Authority. Except of Stockholder authorization to increase the
number of shares of its common stock, the Purchaser has (a) full power and has
taken all corporate action necessary to execute, deliver and perform this
Agreement, as amended and partially restated and to carry out the transaction
contemplated hereby and (b) has full power to execute, deliver and perform the
obligations of Purchaser under this Agreement and has been duly and effectively
authorized by Purchaser's Board of Directors and no further corporate authority
therefor or approval thereof is required by law.
(c) Conflicts. The execution, delivery and performance of this
Agreement shall not conflict with or result in the breach or violation of any of
the Purchaser's contracts, agreements, commitments, licenses, permits,
authorizations or concession to which it is a party or by which it is bound, or
any statute, rule, regulation, ordinance, code, order, judgment, writ,
injunction, decree or award of any court or administrative governmental body, or
constitute an event which with notice, lapse of time, or both, would result in
any such breach, or violation and which would have a material adverse effect on
the Purchaser.
(d) Brokers. No agent, broker or other person acting pursuant to
authority of Purchaser is entitled to any commission or finder's fee in
connection with the transactions contemplated hereby.
(e) Governmental Filings. Except for filing with the Commission
required by the Nasdaq Stock Market, Purchaser is not required to submit any
notice, report or other filing to any governmental or regulatory agency, nor is
any notice of any report required to be obtained by Purchaser in connection with
the execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby.
4. Indemnification Rights.
(a) Seller hereby agrees to indemnify and hold harmless Purchaser and
its respective officers, directors, shareholders, employees, agents, and
attorneys against any and all losses,
<PAGE> 7
claims, demands, liabilities, and expenses (including reasonable legal or other
expenses, including reasonable attorneys' fees) incurred by each such person in
connection with defending or investigating any such claims or liabilities,
whether or not resulting in any liability to such person, to which any such
indemnified party may become subject under an intellectual property theory,
under any other statutes, at common law or otherwise, insofar as such losses,
claims, demands, liabilities and expenses (i) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact made by Seller
and contained in this Agreement or the schedules and documents attached hereto,
or (ii) arise out of or are based upon any breach by Seller of any
representation, warranty, or agreement made by Seller contained herein in this
Agreement.
(b) In order for any person to make a claim for indemnification under
this Section 4 ("Indemnitee"), the Indemnitee shall notify Seller as the
indemnifying party ("Indemnitor") of the claim in writing promptly after
discovering the claim or receiving written notice of a claim against if (if by a
third party), describing the claim, the amount thereof (if known), and the basis
thereof. The Indemnitor shall be entitled to participate in the defense of such
action at its expense, and at its option (subject to the limitations set forth
below) shall be entitled to assume control of such defense with reputable
counsel; provided, that prior to Indemnitor assuming control of such defense it
or they shall first verify to the Indemnitee in writing that such Indemnitor
shall be fully responsible for such claim and that it will provide the full
indemnification required hereunder to Indemnitee with respect to such claim,
including payment thereof and performance thereunder; and provided further,
that:
(i) The Indemnitee shall be entitled to participate in the
defense of such claim and to employ counsel of its choice for such purpose, the
fees and expenses of such separate counsel which shall be borne by Indemnitee.
Notwithstanding the foregoing, the fees and expenses of such separate counsel
incurred prior to the date the Indemnitor's counsel effectively assumes control
of such defense shall be borne by the Indemnitor; and
(ii) The Indemnitee shall be entitled to assume control of
such defense and the Indemnitor shall nevertheless bear the fees and expenses of
counsel retained by the Indemnitee for such purposes if, upon petition by
Indemnitee, the appropriate court rules that the Indemnitor failed or is failing
to vigorously prosecute or defend such claim; and
(iii) The Indemnitor shall not be entitled to control the
defense of any claim to the extent that the claim seeks an injunction or
equitable relief against Indemnitee which, if successful, could materially
interfere with the business of the Indemnitee. If the Indemnitor, with the
consent of the Indemnitee, shall control the defense of any such claim, the
Indemnitor shall obtain the prior written consent of the Indemnitee (which shall
not be unreasonably withheld) before entering into any settlement of a claim or
ceasing to defend such claim, if pursuant to or as a result of such settlement
or cessation, injunction or other equitable relief will be imposed against the
Indemnitee. If Indemnitee withholds consent, Indemnitee shall be responsible for
any losses above the losses that would have been incurred as a result of such
settlement.
<PAGE> 8
5.1 Survival of Representations, Warranties and Covenants. All representations
and warranties contained herein or appended hereto shall be valid and
enforceable and shall survive the consummation of the transaction contemplated
hereby, irrespective of any investigation made by or on behalf of either party
for a period of five (5) years following the date of this Agreement. All
covenants and other agreements contained herein shall be valid and enforceable
for a period of six (6) years following the date hereof.
5.2 Notices. All notices which are permitted or required under this Agreement
shall be in writing and delivered personally or by certified mail, postage
prepaid, addressed as follows, or to such other person or address as may be
designated by written notice by one party to the other parties:
If to Purchaser: Advanced Plant Pharmaceuticals, Inc.
Attention: Samuel Berkowitz
75 Maiden Lane
New York, New York 10038
With a copy to: Feder, Kaszovitz, Isaacson, Weber, Skala & Bass LLP
Attention: Seth A. Farbman, Esq.
750 Lexington Avenue
New York, New York 10022
If to Seller: Mr. C.J. Liebermann
Shauldon No. 39
Jerusalem, Israel
Notices shall be deemed delivered when delivered personally or when
mailed by prepaid certified or registered mail with return receipt requested, or
air courier which provides for evidence of delivery.
The addresses set forth above shall be conclusive for all purposes
unless and until written notice, in the manner for notice provided in this
section 6.2, of a change of address shall be sent to the parties herein.
5.3 Severability. Any provision of this Agreement which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provision hereof.
5.4 Schedules. It is acknowledged and agreed that all exhibits and schedules are
an integral part hereof and are incorporated, in total, by reference fully as a
part of this Agreement.
5.5 Amendment. This Agreement may not be modified, amended or terminated except
by written agreement subscribed by both parties hereto.
5.6 Waiver. No waiver of any breach or default hereunder shall be considered
valid unless
<PAGE> 9
in writing and signed by the party giving such waiver, and no such waiver shall
be deemed a waiver of any subsequent breach or default of the same or similar
nature.
5.7 Headings. The paragraph headings contained herein are for the purpose of
convenience only and are not intended to define or limit the contents of said
paragraphs.
5.8 Counterparts. This Agreement may be executed in one or more counterparts,
all of which taken together shall be deemed one original.
5.9 Governing Law. This Agreement will be deemed to have been made and delivered
in the State of New York and its validity, interpretation, and construction, as
well as the remedies for its enforcement or breach are to be applied pursuant
to, and in accordance with, the laws of the State of New York for contracts made
and to be performed in that State.
5.10 Jurisdiction and Venue. The Purchaser and Seller each hereby (i) agrees
that any legal suit, action or proceeding arising out of or relating to this
Agreement prior to its amendment and as amended and partially restated shall be
instituted exclusively in New York State Supreme Court, County of New York, or
in the United States District Court for the Southern District of New York, (ii)
waives any objection to the venue of any such suit, action or proceeding and the
right to assert that such forum is not a convenient forum, and (iii) irrevocably
consents to the jurisdiction of the New York State Supreme Court, County of New
York, and the United States District Court for the Southern District of New York
in any such suit, action or proceeding, and the Purchaser and Seller each
further agrees to accept and acknowledge service or any and all process which
may be served in any such suit, action or proceeding in New York State Supreme
Court, County of New York or in the United States District Court for the
Southern District of New York and agrees that service of process upon it mailed
by certified mail to its address shall be deemed in every respect effective
service of process upon it in any suit, action or proceeding.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
ADVANCED PLANT PHARMACEUTICALS, INC.
(Purchaser)
By:
/s/ David Lieberman
-----------------------------
David Lieberman, President
ACCEPTED AND AGREED:
(Seller)
By:
/s/ CJ Lieberman
- - -----------------------------
C.J. LIEBERMAN, an individual
<PAGE> 10
SCHEDULE A
The Process being sold by Seller and purchased by Purchaser shall be that
thirteen step process which utilizes whole plants for the production of dietary
supplements. Seller claims that the Process will (i) preserve, in the dietary
supplements produced with such Process, virtually the whole of the natural
ingredients found in the plant and (ii) will result in all of the dietary
supplements produced with such Process having near identical ingredient
formulations. Such Process was described in writing by Seller to Dr. Leonard
Bielory, the Scientific Directory of Advanced Plant Pharmaceuticals, Inc. and a
copy of the procedures for application of the Process has been delivered to the
Company.
<PAGE> 11
SCHEDULE B
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS:
The undersigned, C.J. LIEBERMAN ("Seller"), in consideration of certain payments
and other good and valuable consideration paid to Seller by ADVANCED PLANT
PHARMACEUTICALS, INC. ("Assignee"), the receipt and sufficiency of which is
hereby acknowledged, pursuant to the terms of that certain Technology Purchase
Agreement, dated as of July 16, 1999 ("Technology Purchase Agreement"), by and
between Seller and Assignee, the closing of the transaction contemplated thereby
held on the date hereof, hereby assigns, grants, conveys, sells, transfers and
delivers to Assignee all of his respective rights, title and interest in and to
the Process (as such term is defined in the Technology Purchase Agreement and as
identified and described more particularly on Schedule A thereto), including,
without limitation:
(i) all rights owned, held or enjoyed by the Seller relating to or
connected with the research, development and application of the Process by the
Seller in the United States and worldwide. Such rights shall include, but not be
limited to, the complete underlying dossier and supporting documentation,
studies and tests, formulations, extraction methodologies and technical
processes; (ii) copies of all books and records of the Seller relating to
studies, trade secrets, technical information, development of the Process; (iii)
any and all other property rights of the Seller, of any kind, character and
description, whether tangible or intangible, which are appurtenant to the
ownership of, including but not limited to all information and records acquired
for, used in, or in any way related to the developing, testing and manufacturing
of by the Seller.
To have and to hold the same unto Assignee and its assigns forever.
The Technology Purchase Agreement and all of the terms, conditions,
representations, warranties and covenants therein and the schedules and exhibits
thereto, are incorporated into this General Assignment by reference as if same
were set forth herein.
Any provision of this assignment which may be unenforceable or invalid under any
law shall be ineffective to the extent of such unenforceability or invalidity
without affecting the enforceability or validity of any other provision hereof.
IN WITNESS WHEREOF, Seller has caused these presents to be signed in
his name on this 16th day of July, 1999.
/s/ CJ Lieberman
----------------
C.J. LIEBERMAN
