SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
SKINVISIBLE, INC.
(Exact name of Company as specified in its charter)
NEVADA 88-0344219 NEVADA 88-0344219 |
(State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6320 South Sandhill Road, Suite 10, Las Vegas, Nevada 89120 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 702-433-7154 |
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
to be so registered on which each class is
to be registered
None None
|
Securities to be registered pursuant to Section 12(g) of the Act:
100,000,000 Shares of Common Stock
(Title of class)
TABLE OF CONTENTS
COVER PAGE 1
TABLE OF CONTENTS 2
PART I 3
DESCRIPTION OF BUSINESS 3
DESCRIPTION OF PROPERTY 9
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES 9
REMUNERATION OF DIRECTORS AND OFFICERS 11
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN
SECURITYHOLDERS 11
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN
TRANSACTIONS 12
SECURITIES BEING OFFERED 12
PART II 14
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS 14
LEGAL PROCEEDINGS 14
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 14
RECENT SALES OF UNREGISTERED SECURITIES 14
INDEMNIFICATION OF DIRECTORS AND OFFICERS 15
PART F/S 16
FINANCIAL STATEMENTS 16
PART III 16
INDEX TO EXHIBITS 16
SIGNATURES 17
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PART I
The issuer has elected to follow Form 10-SB, Disclosure Alternative 2.
Item 6. Description of Business
General
Skinvisible, Inc. (the "Company") is in the business of developing, manufacturing and selling anti-microbial skin protection products designed to control the effects of occupational hand disease, as well as prevent the cross contamination of pathogens. The Company has completed the development of its products and is commencing production and sales. The Company continues to research and develop potential additional products.
Corporate History and Subsidiaries
The Company is a Nevada corporation that was incorporated on March 6, 1998 under the name "Microbial Solutions, Inc.". On February 26, 1999, the Company filed an amendment to its articles of incorporation changing its corporate name to "Skinvisible, Inc."
The Company carries on its business through three wholly owned subsidiaries, as described below:
Name of Subsidiary Date of Jurisdiction of
Incorporation Incorporation
--------------------------------- ------------- --------------
|
Skinvisible Pharmaceuticals, Inc. June 30, 1995 Nevada
(formerly Manloe Labs Inc.)
Skinvisible International, Inc. February 22,1999 Nevada
Skinvisible Pharmaceuticals October 20, 1998 Canada
(Canada) Inc. (Federal)
The Company's primary business activities, including all research, development and manufacturing of its products, are carried on through Skinvisible Pharmaceuticals, Inc. ("SVP"). The name of this subsidiary company was changed from "Manloe Labs Inc." to "Skinvisible Pharmaceuticals, Inc." effective February 22, 1999.
Marketing of the Company's products is performed by Skinvisible International, Inc. ("SVI") in the United States and Skinvisible Pharmaceuticals (Canada) Inc. ("SPI Canada") in Canada.
Acquisition of Skinvisible Pharmaceuticals
The Company acquired SVP pursuant to a share purchase and sale agreement between the Company and Roger Hocking ("Hocking") (the "SVP Acquisition Agreement"). The Company acquired all of the issued and outstanding shares of SVP from Hocking in exchange for the payment to Hocking of $200,000 in cash and 275,000 restricted common shares of the Company. The closing of the acquisition of SVP was completed on March 31, 1998. Note that the terms of the SVP Acquisition Agreement can be found in the full agreement which is attached hereto as an exhibit.
Manufacturing and Marketing License Agreement
On March 19, 1998, SVP entered into a Manufacturing and Marketing License Agreement with Jazor Laboratory Group, Inc. ("Jazor") and Bruce Jezior ("Jezior") (the "Manufacturing Agreement") whereby Jazor granted to SVP the exclusive right and license to manufacture, distribute, market and sell the products developed by Jazor (the "License Rights"). The products included a proprietary polymer base developed by Jazor and known as "Jatex" (the "Polymer Base") and the Viro Shield and Work Gluv products developed by Jazor using the Polymer Base (together, the "Licensed Products"). The Licensed Products included any products superceding or replacing Viro Shield, Work Gluv or the Polymer Base, together with any modification to or products superceding Viro Shield, Work Gluv or the Polymer Base and any future products developed by Jazor using the Polymer Base. Pursuant to the Manufacturing Agreement, SVP agreed to pay to Jazor a license fee equal to $50,000 upon execution of the Agreement and a royalty fee equal to the greater of $6,000 per month or 1.5% of the net revenues realized by SVP from the sales of the Licensed Products (the "Royalty Fees").
The Manufacturing Agreement provided that upon aggregate Royalty Fees equal to $2,000,000 having been paid by SVP to Jazor, SVP would have no further obligations to make any additional payments on account of the Royalty fees and Jazor would deliver to SVP all confidential information, including formulae, technical data, engineering specifications, and trade secrets necessary to enable SVP to manufacture all products that are the subject of the Manufacturing Agreement independently of Jazor.
Note that the terms of the Manufacturing Agreement can be found in the full agreement which is attached hereto as an exhibit.
On February 2, 1999, SVP entered into an amendment to the Manufacturing Agreement with Jazor and Jezior whereby the Company issued 500,000 restricted common shares at a deemed price of $2.00 per share to Jezior in consideration for the release of the proprietary polymer process and technology information licensed to the Company. The proprietary polymer process and technology information has been released to the Company and the shares have been issued to Jezior. In consideration for the issuance of the 500,000 shares pursuant to the amendment to the Manufacturing Agreement, Jazor and Jezior also agreed to reduce the maximum amount of Royalty Fees payable by the Company from $2,000,000 to $1,000,000. As of April 5, 1999, the Company had paid a total of $72,000 on account of the Royalty Fees.
Note that the terms of the amendment to the Manufacturing Agreement can be found in the full agreement which is attached hereto as an exhibit.
History of Product Development
At the time of its acquisition by the Company, SVP manufactured and distributed two proprietary products. The products incorporated the proprietary polymer technology developed by Jazor and marketed under the name of Jatex. The products themselves were marketed under the names Viro Shield and Work Gluv and included the chemical Benzalkonium Chloride as the active ingredient. SVP manufactured and distributed Viro Shield and Work Gluv from 1997 to 1998. Sales of Viro Shield and Work Gluv were handled through dealers, with a focus on developing business with hospitals and emergency service providers particularly in Florida. SVP experienced limited sales of Viro Shield and Work Gluv due, at least in part, to a lack of research and development support materials for its products and a limited amount of sales and marketing literature.
At the time of the Company's acquisition of SVP, SVP had no research and development facilities and had completed only minimal documented research on its products. The Company recognized that the lack of documented research was an impediment to establishing the credibility necessary to achieve market acceptance and to making claims regarding the performance of the Company's products. The Company through SVP undertook to: (1) examine the claims made on the existing two product and the proprietary Jatex polymers; (2) research whether better products could be made utilizing the proprietary Jatex polymers; and (3) conduct all necessary research and development trials for such new products. The Company selected the active ingredient Triclosan as the basis for new product development and undertook ten months of clinical trials with six Federal Food and Drug Administration (FDA) approved laboratories to obtain reports on the polymer products incorporating Triclosan as the active ingredient. The Company completed these research and development efforts as of February 11, 1999.
Scientific Advisory Committee
The Company has formed a Scientific Advisory Committee to advise its Board of Directors on the research and development of new products and on the scientific issues regarding claims made by the Company regarding its products. The Company's Scientific Advisory Committee consists of Professor Christaan Barnard, MD, Dr. Mark Frobb, Dr. Jim Roszell, Ph.D., and Bruce Jezior. Dr. Barnard is a world renowned heart transplant specialist from South Africa who completed the world's first human heart transplant. Dr. Frobb is a medical doctor who practices medicine in the Province of British Columbia, Canada. Dr. Roszell is a chemist who works full time for the Company, and has experience in dealing with regulatory bodies such as the FDA. Bruce Jezior is the inventor of the proprietary Jatex polymers.
Skinvisible Products
The Company is marketing its polymer based skin protection products under the tradename "Skinvisible". The Company has developed and is marketing five separate formulations of the polymer based skin protection products. These formulas include a Medical Formula, a Food Service Formula, a Personal Formula, a Salon Formula and a Industrial Formula (the "Company's Products"). The Medical Formula, the Personal Formula and the Food Service Formula incorporate Triclosan as the active ingredient. The Salon Formula and the Industrial Formula incorporate Benzalkonium Chloride as the active ingredient.
Research and development clinical trials undertaken on the Company's Products using Triclosan as the active ingredient have shown that those products will last on the skin for up to 4 hours, protecting the skin against the absorption of chemicals and disinfectants.
Government Regulation
The Skinvisible Product line has been formulated under the over- the-counter monograph for antimicrobial skin lotions in the United States (the "Monograph"). No specific application or formulary approval procedure is necessary for marketing a product in the United States, provided the product fits under the formulary guidelines of the Monograph. The official procedure is to file with the FDA which then affixes an National Drug Code (NDC) number to the product. The NDC numbers applied to the Skinvisible Medical Formula and the Food Service Formula are NDC#62159-025 and NDC#62159-035 respectively. The NDC number for the Personal Formula is NDC#63034-065. Since the Company does not make any antimicrobial claims as to the Salon and Industrial Formulas, they are not required by the FDA to have an NDC number for these products.
In Canada, the Company's products are regulated by the Health Protection Branch (HPB) of the Canada Ministry of Health and Welfare. Under the Canadian regulatory scheme a company submits an application to the HPB who reviews the application and the product through a review panel and issues a Drug Identification Number (DIN) number upon approval. The HPB has assigned the following DIN to the Company: 02240020.
Marketing
The Company markets its product exclusively through a network
marketing program known as the "Net/Direct, Dual Compensation Plan"
(Net/Direct Plan) run by SVI in the United States and SPI(Canada)
in Canada. The Net/Direct Plan utilizes various incentives to
encourage independent businesses and individuals to sell and to buy
the Company's products and/or to make customer referrals. These
independent businesses and individuals earn commissions off their
own sales and the sales of others they bring into the marketing
program.
Competition
The current market for skin care products is highly competitive, and there are currently a number of products in the marketplace that make claims similar to those made by the Company and its subsidiaries. In some cases, these products are offered by companies with established distribution channels and greater financial resources than the Company, posing a strong competitive threat and creating a formidable barrier to entry by the Company into the market.
The Company has, thus, developed its competitive strategy based on its belief that none of these competitors can offer skin protection products with the same benefits as those of the Company. Specifically, the majority of competitive products are wax, petroleum or silicon based and thus wash off with soap and water while the Company's Jatex technology based products last for up to four hours without regard to washing.
Given the potential for skin protectants in the marketplace,
however, it is anticipated that other products may be developed in
the future by competitors with greater resources and established
distribution channels that may be able to meet or exceed this
benefit and negatively effect the Company's sales and market share.
Thus, it is part of the Company's plan of operation to obtain as
wide a market recognition as rapidly as possible based on its
current advantages to ensure on-going long-term success. Acceptance
within the medical/hospital environments as part of this plan, if
obtained, would supply support in this regard.
Twelve Month Plan of Operation
Over the next twelve months of operation the Company plans to primarily focus on its marketing efforts, encouraging and attracting independent sales representatives through its Net/Direct Plan and expanding its customer/user base. This will be done by attending trade shows and conducting meetings with network marketing groups, as well as closing sales with large corporate users. Specific attention will be given to sales in those industries where individuals are subject to frequent hand washing, such as the food service and heath care industries. In this way, the Company hopes to establish a strong product recognition and acceptance.
In addition, the Company plans to continue its research efforts with a focus of developing other skin protectant products using the proprietary Jatex polymers.
Distinctive Characteristics of the Business that may have a Material Impact on Future Financial Performance
A number of factors distinctive to the Company's business may have a material impact on future financial performance, including:
(1) Competition. As noted above, competition among skin care products is strong and presents a significant barrier to entry. In addition, it is a reasonable possibility that existing or new competitors could develop product lines that provide similar or greater levels of skin protection to that provided by the Company's Products. If these factors were to occur, they would have a significant negative impact on the future financial results of the Company.
(2) Marketing. The Company's marketing plan is completely dependent upon sales and referrals of outside independent contractors. A failure to attract a sufficient number of independent contractors or to keep them actively involved in selling the product would have a significant negative impact on the future financial results of the Company.
(3) Product. The Company's Products are new and to some extent unique in the skin care marketplace. Whenever such a new product is offered, there is a chance that it will not be accepted by a sufficient number of consumers to support and grow the business. Such lackluster consumer demand for the product may be the result of a perception that the product is not necessary, does not perform in a significant enough manner, or is inferior to other products, among other things. The failure to attract enough consumer demand will have a significant negative impact on the future financial results of the Company.
Employees
The Company has 2 employees, including its President and Secretary. SVP employs 14 individuals, including its President. By the end of 1999, SVP is expected to employ 30 individuals full time as follows:
Manufacturing 4 Distribution 5 R&D and Testing 3 Sales/Marketing 10 Administration 8 |
Any growth in the number of employees, however, will be largely dependent on the success of the Company's sales efforts.
None of the employees of the Company or its subsidiaries are subject to collective bargaining agreements, nor have they been on strike, or threatened to strike, within the past three years.
Research and Development Expenditures
During the past fiscal year, SVP spent approximately $384,550 on research and development activities for the Company. As the company was formed in 1998, there were no research and development expenditures from prior years.
Item 7. Description of Property
The Company's research and development, manufacturing and administration activities are carried on through SVP at leased premises located at 6320 South Sandhill Road, Suite 10, Las Vegas, Nevada 89120. The premises are comprised of a 6000 square feet mixed office and industrial facility, and are leased for a term of 4 years expiring on April 14, 2002. The Company does not lease or own any property, however, SVP owns a number of personal property items, including certain manufacturing equipment, computers and fax machines and office furniture and furnishings. SVP also leases a telephone system.
Item 8. Directors, Executive Officers and Significant Employees
The following information sets forth the names of the officers and directors of the Company and its subsidiaries, their present positions with the Company and its subsidiaries, and their biographical information.
Skinvisible, Inc. Name Office(s) Held Terry Howlett Director, President Howard Thompson Director, Secretary, Treasurer Jerry Hodge Director Lord Anthony St. John Director Jost Steinbruchel Director Skinvisible Pharmaceuticals, Inc. Name Office(s) Held Terry Howlett Director, President & Secretary Jerry Hodge Director Skinvisible International, Inc. Name Office(s) Held Terry Howlett President Jerry Hodge Director Roger Hocking Secretary, Treasurer |
Skinvisible Pharmaceuticals (Canada) Inc.
Name Office(s) Held Terry Howlett President Howard Thompson Director, Secretary, Treasurer |
Mr. Terry H. Howlett (Age 51), President & Director, Skinvisible, Inc. Mr. Howlett has a diversified background in market initialization and development, sales and venture capital financing for emerging growth companies. He has held senior management, marketing and sales positions with various companies, including the Canadian Federation of Independent Business, Family Life Insurance, and Avacare of Canada and founded Presley Laboratories, Inc. which marketed cosmetic and skin care products on a direct sales basis. For the ten years prior to becoming President of the Company, Mr. Howlett was the President and CEO of Voice-it Solutions, Inc., a publicly traded company on the Vancouver Stock exchange that made voice response software for order entry systems.
Mr. Howard Thomson (Age 51), Director, Treasurer and Secretary, Skinvisible, Inc. Mr. Thomson has recently retired after 17 years in senior management positions with the Bank of Montreal, including 5 years as Branch Manager, 4 years as Regional Marketing Manager and 5 years as Senior Private Banker. He previously resided in London, England and was employed by the National Westminster Bank for 13 years.
M. Jerry Hodge (Age 54), Director, Skinvisible, Inc. For over the past five years, Mr. Hodge has been the President & CEO of Hospitality Network, the largest provider of in-room video entertainment to the hotel/casino industry, and has professional management expertise in the areas of business development, finance, operations, and corporate strategic planning.
Roger J. Hocking (Age 45), Secretary & Treasurer, Skinvisible International, Inc. Mr. Hocking attended the University of California where he studied marketing and sales. He worked in the retail sales field for various companies, starting his first company, Applied Marketing in 1981, which sold waterbed conditioners (including chemical disinfectants) and accessories. He sold this business in 1991, thereafter focusing on sales of houseware products, and moving in 1992 to Las Vegas, Nevada. Mr. Hocking formed Manloe Laboratories Inc. (now Skinvisible Pharmaceuticals, Inc.) in March 1992 and was President of that company until its acquisition in 1998.
Lord Anthony St. John (Age 41), Director, Skinvisible, Inc. Lord Anthony St. John has been a member of the House of Lords in England since 1978. In 1998, he was appointed Extra Lord-in-Waiting to her Majesty the Queen. He has been a consultant to Merrill Lynch International since 1991 and serves as a Director on other publicly traded companies. Since graduating with a law degree in 1979 from Capetown, South Africa, Lord St. John has spent a number of years in the commercial field as auditor and legal counsel for international companies.
Jost Steinbruchel (Age 58), Director, Skinvisible, Inc. Since 1984, Mr. Steinbruchel has operated his own company in Geneva Switzerland specializing in financial engineering in international trade throughout a wide network of banking relations, principally in Europe, China, Australia and Africa. Previously, he spent 20 years of his professional career as an executive in international banking with Lloyds of London, Citicorp and Credit Suisse. Mr. Steinbruchel has a law degree from Sorboure, Paris.
Item 9. Remuneration of Directors and Officers
The following table sets forth certain information as to the Company's five highest paid executive officers and directors for the fiscal year which will end on December 31, 1999.
Summary Compensation Table
------------------------------------------------------------
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Name and principal position | Year | Salary
-------------------------------------------------------------
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Terry Howlett, Director, President | 1999 | $120,000
Howard Thompson, Director, Sec/Treas. | 1999 | $ 12,000
Jerry Hodge, Director | 1999 | $ 12,000
Jost Steinbruchel, Director | 1999 | $ 12,000
Anthony St. John, Director | 1999 | $ 12,000
Aggregate of three Highest Paid | |
Officers and Directors | | $144,000
-------------------------------------------------------------
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In addition, certain of the officers are provided an automobile allowance for use of their vehicles for Company business and have and/or will receive stock options to purchase shares of the Company. Cash compensation of $168,000, in the aggregate, will be paid to executive officers and directors for services in fiscal year 1999.
Item 10. Security Ownership of Management and Certain Security Holders
The following table sets forth, as of April 1, 1999, the beneficial ownership of the Company's Common Stock by each person known by the Company to beneficially own more than 10% of the Company's Common Stock outstanding as of such date and by the officers and directors of the Company individually and as a group. Except as otherwise indicated, all shares are owned directly.
Name and address Amount of Percent
Title of class of beneficial owner beneficial ownership of class
-------------- ------------------- -------------------- --------
Common Terry Howlett 1,000,000 9.80%
Director, President
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Common Howard Thomson 156,000 1.53% Director, Sec./Treas.
Common Anthony St. John 150,000 1.47%
Director
Common Jost Steinbrochel 550,000 5.39%
Director
Common Jerry Hodge 250,000* 2.45%
Director
Common All Officers and 2,106,000 20.65%
Directors as a
Group (5 persons)
|
* Includes shares owned by D. Hodge in the amount of 50,000 shares.
The following table shows the issued and outstanding stock options held by the officers and directors of the Company, and by each person known by the Company to beneficially own more than 10% of the Company's Common Stock as of April 1, 1999.
Name Exercise Price No. of Options Term of Option ------------- -------------- -------------- -------------- Terry Howlett $1.65 300,000 5 years Jerry Hodge $1.50 50,000 5 years Howard Thomson $1.50 50,000 5 years Anthony St. John $1.50 50,000 5 years |
Jost Steinbruchel $1.50 50,000 5 years
Item 11. Interest of Management and Others in Certain Transactions
Nil.
Item 12. Securities Being Offered
The securities being registered are the shares of the Company's common stock, par value $0.001 per share. Under the Company's Articles of Incorporation, the total number of shares of all classes of stock that the Company has authority to issue is 100,000,000 shares of common stock, par value $0.001 per share (the "Company Common Stock"). As of April 1, 1999 a total of 10,200,000 shares of the Company's Common Stock was issued and outstanding. All issued and outstanding shares of the Company's Common Stock are fully paid and non-assessable.
Common Stock
Holders of the Company's Common Stock are entitled to one vote for each share on all matters voted on by the shareholders. They do not have cumulative voting rights in the election of directors or for any other purpose. The first annual meeting of shareholders has not as yet been scheduled.
Moreover, holders of the Company Common Stock do not have pre- emptive rights, or any subscription, redemption or conversion privileges; but they are entitled to participate ratably in dividends as declared by the Board of Directors, and in the distribution of assets in the event of liquidation or dissolution of the Company.
Transfer Agent
The transfer agent for the Common Shares is National Stock Transfer, 3098 South Highland Drive, Suite 485, Salt Lake City, Utah 84106.
Share Purchase Warrants
The Company has not issued and does not have outstanding any warrants to purchase shares of the Company Common Stock.
Options
The Board of Directors and Shareholders of the Company have approved the Company's Incentive Stock Option Plan. The Company has granted options to purchase 300,000 shares of Company Common Stock to Mr. Terry Howlett, a director and president of the Company, exercisable at a price of $1.65 per share. The Company has granted additional options to purchase 544,500 shares of Company Common Stock to other officers, directors, employees and consultants of the Company exercisable at a price of $1.50 per share. The total of all such options accounts for 844,500 shares of the Company's stock.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and Other Stockholder Matters
The shares of the Company's common stock are traded on the OTC Bulletin Board under the symbol "SKVI". The first day in which the Company's shares traded was January 8, 1999. The high and the low bids for the Company's shares for each quarter of actual trading were:
Quarter High Low 1st Quarter 1999 $5.25 $1.50 2nd Quarter 1999 (to date) $5.25 $5.00 |
The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
As of April 20, 1999, there were approximately 49 registered shareholders in the Company. The Company has never issued any dividends, and there are no restrictions on the Company that limit its ability to pay dividends on its common stock or is likely to do so in the future.
Item 2. Legal Proceedings
There are no legal proceedings pending or threatened against the Corporation.
Item 3. Changes in and Disagreements with Accountants
The Company has had no changes in or disagreements with its accountants since its inception in March, 1998.
Item 4. Recent Sales of Unregistered Securities
The Company completed the issuance of 5,500,000 common shares to certain persons at a deemed price of $0.001 per share on March 20, 1998. These were the initial shares issued for acquisition of the business to Roger Hocking (275,000) and for services in the formation of the business to a number of others (5,500,000). These shares were marked as restricted.
The Company completed an offering of 2,000,000 common shares at a price of $0.15 per share on April 30, 1998. The offering was completed pursuant to Rule 504 of Regulation D of the Securities Act.
The Company completed an offering of 700,000 common shares at a price of $1.00 per share on May 29, 1998 pursuant to Rule 504 of Regulation D of the Securities Act. Commissions were paid on a portion of the sales in this offering.
The Company completed an offering of 1,500,000 common shares at a price of $1.00 per share on March 8, 1999 pursuant to Rule 506 of Regulation D of the Securities Act.
Item 5. Indemnification of Directors and Officers
The officers and directors of the Company are indemnified as provided under the Nevada Revised Statutes (the "NRS") and the Bylaws of the Company.
Under the NRS, director immunity from liability to a corporation or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a corporation's articles of incorporation (which is not the case with the Company's Articles of Incorporation). Excepted from that immunity are: (i) a willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director has a material conflict of interest; (ii) a violation of criminal law (unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful); (iii) a transaction from which the director derived an improper personal profit; and (iv) willful misconduct.
The By-laws of the Company provide that the Company will indemnify its directors and officers to the fullest extent not prohibited by the Nevada General Corporation Law; provided, however, that the Company may modify the extent of such indemnification by individual contracts with its directors and officers; and, provided, further, that the Company shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the corporation, (iii) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the corporation under the Nevada General Corporation Law or (iv) such indemnification is required to be made pursuant to the By-laws.
The By-laws of the Company provide that the Company will advance to 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 or officer, of the corporation, or is or was serving at the request of the corporation as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or officer in connection with such proceeding upon receipt of an undertaking by or on behalf of such person to repay said amounts if it should be determined ultimately that such person is not entitled to be indemnified under the By-laws of the Company or otherwise.
The By-laws of the Company provide that no advance shall be made by the Company to an officer of the Company (except by reason of the fact that such officer is or was a director of the Company in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision- making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Company.
PART F/S
FINANCIAL STATEMENTS
The Company's audited Financial Statements, as described below, are attached hereto.
1. Audited Financial Statements for the period ending December 31, 1998, including:
(a) Independent Auditors' Report;
(b) Consolidated Balance Sheet;
(c) Consolidated Statement of Operations and Accumulated Deficit;
(d) Consolidated Statement of Changes in Stockholders' Deficit;
(e) Consolidated Statement of Cash Flows;
(f) Notes to Consolidated Financial Statements;
(g) Supplemental Information.
2. Consent by Auditor to use of Audited Financial Statements
PART III
INDEX TO EXHIBITS
Exhibit 1: Articles of Incorporation
Exhibit 2: Amendments to Articles of Incorporation: 3-19-98 & 2-26-99
Exhibit 3: Bylaws
Exhibit 4: Manufacturing and Marketing License Agreement
Exhibit 5: Letter Agreement Modifying the Manufacturing and
Marketing License Agreement
Exhibit 6: Acquisition Agreement of Manloe Labs
Exhibit 7: Letter Agreement Amending the Agreement for
Acquisition of Manloe Labs
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SIGNATURES
The issuer has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas, State of Nevada, on this 26th day of April, 1999.
SKINVISIBLE, INC.
By: /s/ Terry Howlett
------------------------------------
TERRY HOWLETT
Director, President and
Chief Executive Officer
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SKINVISIBLE, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998
WITH
INDEPENDENT AUDITOR'S REPORT THEREON
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Independent Auditor's Report. . . . . . . . . . . . . . 1
Consolidated Financial Statements:
Consolidated Balance Sheet. . . . . . . . . . . . . . 2
Consolidated Statement of Operations
and Accumulated Deficit. . . . . . . . . . . . . . .3
Consolidated Statement of Changes in
Stockholders' Deficit . . . . . . . . . . . . . . . 4
Consolidated Statement of Cash Flows. . . . . . . . . 5
Notes to Consolidated Financial Statements. . . . . . 6-10
Supplemental Statements:
Consolidated Statement of Operating
Expenses. . . . . . . . . . . . . . . . . . . . . 12
Proforma Consolidated
Balance Sheet . . . . . . . . . . . . . . . . . .13
Proforma Consolidated
Statement of Operations and
Accumulated Deficit . . . . . . . . . . . . . . .14
Proforma Consolidated
Statement of Operating Expenses. . . . . . . . . .15
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Skinvisible, Inc.
We have audited the accompanying consolidated balance sheet of
Skinvisible, Inc., and subsidiary, a development stage company,
as of December 31, 1998 and the related consolidated statements
of operations and accumulated deficit, changes in stockholders'
deficit, and statement of cash flows for the year then ended.
These consolidated financial statements are the responsibility of
management. Our responsibility is to express an opinion on these
consolidated 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 consolidated 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 consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Skinvisible, Inc. and subsidiary as of December 31,
1998, and the results of their operations, changes in
stockholders' deficit and cash flows for the year ended December
31, 1998, in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
consolidated statement of operating expenses and proforma
consolidated balance sheet, statement of operations and
accumulated deficit, and statement of operating expenses are
presented for the purposes of additional analysis and are not a
required part of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
Sarna & Company
Westlake Village, California
March 10, 1999
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
ASSETS
Current Assets
Cash $ 110,776
Accounts Receivable 4,415
Inventory 47,530
Prepaid License Fee 50,000
Total Current Assets $ 212,721
Property and Equipment
Furniture and Equipment 85,894
Laboratory Build-Out 38,126
Total Property and Equipment 124,020
Less Accumulated Depreciation <8,858>
Net Property and Equipment 115,162
Other Asset - Exclusive Distribution Rights 200,000
TOTAL ASSETS $ 527,883
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts Payable
and Accrued Expenses $ 123,723
Loan Payable 725,000
Total Current Liabilities $ 848,723
Stockholders' Deficit
Common Stock, $0.001 par value
100,000,000 shares authorized,
8,200,000 shares issued 8,200
Additional paid in capital 936,400
Accumulated Deficit <1,265,440>
Total Stockholders' Deficit <320,840>
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 527,883
|
See Notes to Consolidated Financial Statements
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1998
Revenues $ 12,269
Cost of Sales
Beginning Inventory $ 0
Purchases 51,531
Total Available 51,531
Less: Ending Inventory <47,530>
Total Cost of Sales <4,001>
Gross Profit 8,268
Operating Expenses <1,273,708>
Loss Before Provision for
Income Taxes <1,265,440>
Provision for Income Taxes <0>
Net Loss <1,265,440>
Deficit, Beginning
of Period <0>
Accumulated Deficit, End of Period $<1,265,440>
Net Loss per Share $ <0.16>
Weighted Average Shares Outstanding $ 7,891,300
|
See Notes to Consolidated Financial Statements
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1998
Common Stock Additional Accumulated Total
Par Value $.001 Paid in Deficit Stock
holders'
Shares Amount Capital Equity
------- ------ ------- --------- --------
Inception ---- $ ---- $ ---- $ ---- $ ----
March 6, 1998
Common Stock Issued
Commencement of
Operations
March 6, 1998
5,500,000 5,500 (5,500) ---- ----
Common Stock Issued
First Offering
$0.15 per share
April 6, 1998
2,000,000 2,000 298,000 ---- 300,000
Common Stock Issued
Second Offering
$1.00 per share
April 30, 1998
700,000 700 636,800 ---- 637,500
Rebate of
Offering Fees ---- ---- 7,100 ---- 7,100
Net Loss
Period Ended
|
December 31, 1998 ---- ---- ---- (1,265,440)(1,265,440)
See Notes to Consolidated Financial Statements
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
Cash Flows from Operating Activities:
Net Loss $ <1,265,440>
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities
Depreciation 8,858
<Increase> Decrease in:
Accounts Receivable <4,415>
Inventory <47,530>
Prepaid Licensing Fee <50,000>
Other Asset <200,000>
Increase <Decrease> in:
Accounts Payable and
Accrued Expenses 123,723
Net Cash Used by Operating Activities <1,434,804>
Cash Flows from Investing Activities:
Purchases of Property and Equipment $ 124,020
Net Cash Used by Investing Activities <124,020>
Cash Flows from Financing Activities:
Loan Proceeds 725,000
Net Proceeds from the Issuance of
Common Stock 944,600
Net Cash Provided by Financing Activities 1,669,600
Net Increase in Cash 110,776
Cash at Beginning of Period 0
Cash at End of Period $ 110,776
|
See Notes to Consolidated Financial Statements
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Skinvisible, Inc. (formerly Microbial Solutions, Inc.) was incorporated on March 6, 1998 in the state of Nevada. Skinvisible, Inc. immediately acquired 100% ownership of Skinvisible Pharmaceutical, Inc. (formerly Manloe Labs, Inc.) also a Nevada corporation.
Skinvisible, Inc. and its subsidiary, (collectively referred to as the "Company" or "SKVI") develops and sells various licensed anti-bacterial and anti-viral protectants and formulations to numerous industries. The Company maintains manufacturing, executive and sales offices at Las Vegas, Nevada.
Basis of Presentation
The consolidated financial statements include the accounts of
Skinvisible, Inc. and it's subsidiary, Skinvisible
Pharmaceutical, Inc. All material intercompany balances have been
eliminated.
The Company reports revenue and expenses using the accrual method
of accounting for financial and tax reporting purposes. All
reported amounts are in US dollars.
Use of Estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.
Development Stage Company
SKVI meets the guidelines of SFAS No. 7 and as such is classified as a development stage company.
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Pro Forma Compensation Expense
SKVI accounts for costs of stock-based compensation in accordance with APB No. 25, "Accounting for Stock Based Compensation" instead of the fair value based method in SFAS No. 123. No stock options have been issued. Accordingly, no pro forma compensation expense is reported in these financial statements.
Inventories
Inventories are accounted for on an average cost basis. Inventory at any given time consists of raw materials and products and packaging held for resale.
Property and Equipment
Property and equipment are stated at historical cost.
Depreciation, Amortization and Capitalization
The Company records depreciation and amortization using both straight-line and declining balance methods over the estimated useful life of the assets (five to seven years).
Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation, is removed from the appropriate accounts and the resultant gain or loss is included in net income.
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Income Taxes
The company accounts for its income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". Under Statement 109, a liability method is used whereby deferred tax assets and liabilities are determined based on temporary differences between basis used for financial reporting and income tax reporting purposes. Income taxes are provided based on tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not, that the Company will not realize the tax assets through future operations.
Fair Value of Financial Instruments
Financial accounting Standards Statement No. 107, "Disclosures About Fair Value of Financial Instruments", requires the Company to disclose, when reasonably attainable, the fair market values of its assets and liabilities which are deemed to be financial instruments. The Company's financial instruments consist primarily of cash and certain investments.
Per Share Information
The Company computes per share information by dividing the net loss for the period presented by the weighted average number of shares outstanding during such period.
NOTE 2 - PROVISION FOR INCOME TAXES
The provision for income taxes for the year ended December 31, 1998 represents the minimum state income tax expense of the Company, which is not considered significant.
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANACIAL STATEMENTS (CONTINUED)
NOTE 3 - LOAN PAYABLE
This loan consists of monies advanced as a short term operating loan. This loan is unsecured and bears interest at the rate of 10% per annum. Interest will begin to accrue on January 1, 1999. This loan requires no minimum monthly payment.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
Operating Leases
The company leases 8556 square feet of manufacturing and office space under a noncancelable operating lease. This operating lease terminates on April 14, 2002. In connection with the lease arrangement, the Company is obligated to make rental payments of $6123 per month with annual increases of 3%. Future annual minimum rental commitments are as follows:
Year
1999 $ 75684
2000 $ 77952
2001 $ 80292
2002 $ 24122
Litigation
The Company is not presently involved in any litigation.
Licensing and Consulting Agreements
The Company has currently entered into, and will continue to enter into, product licensing and consulting agreements that the Company's board of directors determine will enhance the Company's ability to market innovative products in a competitive field.
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 5 - SUBSEQUENT EVENTS
Name Change
On February 26, 1999, the company completed the legal process of changing its name from Microbial Solutions, Inc. to Skinvisible, Inc. The subsidiary's name of Manloe Labs, Inc. was also changed on February 26, 1999 to Skinvisible Pharmaceutical, Inc.
These financial statements have been retitled accordingly.
On February 22, 1999, the company also formed a subsidiary titled Skinvisible International, Inc. to encompass Canadian and other international ventures.
Stock Offering
By resolution dated January 8, 1999, the Company's Board of Directors approved an offering of up to 1,500,000 shares of the Company's stock at $1.00 per share. The offering was complete and the company filed a Form D with the U.S. Securities and Exchange Commission on March 5, 1999.
SUPPLEMENTAL INFORMATION
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1998
Operating Expenses
Advertising $ 94,918
Bank Charges 1,217
Consulting - Sales 5,000
Consulting - Technical 17,000
Data Processing 1,434
Depreciation 8,858
Dues and Subscriptions 2,347
Equipment Rental 28,802
Expenses - Canadian Operations 16,778
Insurance - 21,330
Office Expenses 34,161
Outside Labor 696
Management Fees 209,000
Payroll Taxes 43,744
Postage and Freight Out 6,816
Printing 12,354
Professional Fees 74,913
Rent 45,305
Research and Development 384,550
Royalties 48,000
Security 1,653
Tax & License 6,611
Telephone 11,354
Trade Show Expenses 23,666
Utilities 2,527
Wages 170,674
-------
Total Operating Expenses $1,273,708
|
See Notes to Consolidated Financial Statements
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
PROFORMA
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
ASSETS
Adjustments
Skinvisible And
Skinvisible Pharm. Inc. Eliminations Consolidated
----------- ----------- ------------ ------------
Current Assets
Cash $ 55,861 $ 54,915 $ $ 110,776
Accounts Rec. -0- 4,415 4,415
Inventory -0- 47,530 47,530
Investment 25,000 -0- <25,000> -0-
Prepaid Lic. Fee -0- 50,000 50,000
------- ------- ----------- ----------
Total 80,861 156,860 <25,000> 212,721
Property and Equipment
Furniture and Eq. -0- 85,894 85,894
Lab Build - Out -0- 38,126 38,126
Less Acc. Dep. -0- <8,858> <8,858>
------- ------- ----------- ---------
Net Property
and Equipment -0- 115,162 115,162
Other Asset -
Exclusive Distribution
Rights -0- 200,000 200,000
Intercompany
Receivable 1,534,940 -0- <1,534,940> -0-
--------- ------- ----------- ---------
TOTAL ASSETS $1,615,801 $ 472,022 $<1,559,940> $ 527,883
========== ========= ============ ==========
|
LIABILITIES AND STOCKHOLDER'S DEFICIT
Adjustments
Skinvisible And
Skinvisible Pharm. Inc. Eliminations Consolidated
----------- ----------- ------------ ------------
Current Liabilities
Accts Payable &
Accrued Exp. $ 15,585 $ 108,138 $ $ 123,723
Loan Payable 725,000 -0- 725,000
--------- ------- ----------- ---------
Total Current
Liabilities 740,585 108,138 848,723
Intercompany
Payable -0- 1,534,940 <1,534,940> -0-
Stockholders' Deficit
Common Stock, $0.001
par value100,000,000
shares authorized,
8,200,000 shares
issued 8,200 25,000 <25,000> 8,200
Additional paid
in capital 936,400 -0- 936,400
Accumulated
deficit <69,384> <1,196,056> <1,265,440>
--------- ------- ----------- ---------
Total Stockholders'
|
See Notes to Consolidated Financial Statements
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
PROFORMA
CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1998
Adjustments
Skinvisible And
Skinvisible Pharm. Inc. Eliminations Consolidated
----------- ----------- ------------ ------------
Revenues $ -0- $ 12,269 $ 12,269
Cost of Sales
Beg. Inventory -0- -0- -0-
Purchases -0- -0- -0-
---------- --------- ------------
Total Available -0- 51,531 51,531
Less: Ending
Inventory -0- <47,530> <47,530>
---------- --------- ------------
Total Cost of Sales -0- <4,001> <4,001>
---------- --------- ------------
Gross Profit -0- 8,268 8,268
Operating
Expenses <69,384> <1,204,324> <1,273,708>
---------- --------- ------------
Loss Before
Provision for
Income Taxes <69,384> <1,196,056> <1,265,440>
Provision for
Income Taxes -0- -0- -0-
---------- --------- ------------
Net Loss <69,384> <1,196,056> <1,265,440>
Deficit,
Beginning of
Period -0- -0- -0-
|
See Notes to Consolidated Financial Statements
SKINVISIBLE, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
PROFORMA
CONSOLIDATED STATEMENT OF OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1998
Advertising $ $ 94,918 $ 94,918
Bank Charges 532 685 1,217
Consulting-Sales 5,000 5,000
Consulting-Technical 17,000 17,000
Data Processing 1,434 1,434
Depreciation 8,858 8,858
Dues and Sub. 2,347 2,347
Equipment Rental 28,802 28,802
Expenses --
Canadian Operations 16,778 16,778
Insurance 21,330 21,330
Office Exp. 16,925 17,236 34,161
Outside Labor 696 696
Management Fees 209,000 209,000
Payroll Taxes 43,744 43,744
Postage &
Freight Out 6,816 6,816
Printing 2,572 9,782 12,354
Professional
Fees 49,355 25,558 74,913
Rent 45,305 45,305
R&D 384,550 384,550
Royalties 48,000 48,000
Security 1,653 1,653
Tax and License 6,611 6,611
Telephone 11,354 11,354
Trade Show Expenses 23,666 23,666
Utilities 2,527 2,527
Wages 170,674 170,674
-------- ---------- ----------
Total
Operating
Expenses $ 69,384 $1,204,324 $1,273,708
======== ========= ==========
|
See Notes to Consolidated Financial Statements
CONSENT OF INDEPENDENT AUDITOR
We hereby consent to the inclusion of our audit report dated March 10, 1999, on the consolidated financial statements of Skinvisible, Inc. for the period ended December 31, 1998 in the Company's Form 10-SB. We also consent to the application of such report to the financial information in the Form 10-SB, when such financial information is read in conjunction with the financial statements referred to in our report.
Westlake Village, California /S/ Sarna & Company April 19, 1999 Certified Public Accountants |
Filed
In the Office of
The Secretary of ARTICLES OF INCORPORATION
State of the State
Of Nevada OF
Mar 05 1998
No C 4581-1998 MICROBIAL SOLUTIONS INC,
Dean Heller
Secretary of State
KNOW ALL MEN BY THESE PRESENTS: That the undersigned, pursuant to Chapter 78 of the Nevada Revised Statutes, has this day made and filed these Articles of Incorporation and DOES HEREBY CERTIFY:
1. Name. The name of the Corporation shall be:
MICROBIAL SOLUTIONS INC.
2. Principal Office. The principal office or place of Business for the corporation shall be located at 6121 Lakeside Drive, Suite 260, Reno, Nevada 89511-8527. The corporation may also maintain offices, transact corporate business, and hold meetings of directors and shareholders at other places in Nevada or outside the State. The name and address of its Resident Agent are Richard W. Harris, Esq., 6121 Lakeside Drive, Suite 260, Reno, Nevada 89511-8527.
3. Purpose. The nature of the business, objects, and purposes to be transacted, promoted, and carried out by the corporation shall be: To engage in any lawful activity within or without the State of Nevada.
4. Term. The corporation shall have perpetual existence.
5. Capitalization. The amount of the total authorized capital of the
corporation shall consist of TWENTY FIVE THOUSAND (25,000) shares having no par value. All of the shares shall be of one class, without series or other distinction, and shall be designated as "Common Stock."
6. Assessments. The capital stock, after the amount of the subscription price has been fully paid, shall not be subject to assessment for any purpose whatsoever.
7. Directors. The governing board of the corporation shall be styled "Directors", and the first Board shall be one (1) in number. The number of directors shall not be reduced to fewer than one, and may, at any time or times, be increased or decreased in such manner as provided in the By-Laws of the corporation.
The names and addresses of the first Board of Directors are as follows:
Name Address
Terry Howlett 1673 - 128th Street
Surrey, British Columbia
Canada V4A 3V2
|
8. Election of Directors. At all elections of directors of the corporation each stockholder possessing voting power is entitled to as many votes as equal the number of directors to be elected. He or she may cast all of such votes for a single director or may distribute them among the number to be voted upon or any two or more of them, as he or she may see fit.
9. Powers of Directors. In furtherance, and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized:
a. To make, alter, amend and rescind the By-Laws of the corporation.
b. To fix the amount to be reserved as working capital.
c. To fix the times for the declaration and payment of dividends.
d. To authorize and cause to be executed mortgages and liens upon the real and personal property of the corporation.
e. To sell, assign, transfer or otherwise dispose of the property of the corporation as an entirety with the consent in writing or pursuant to the affirmative vote of the holders of a majority of the stock issued and outstanding, at a stock-holders' meeting duly called for that purpose.
f. To sell, assign, transfer, lease and in any lawful manner dispose of such portions of said property as the Board of Directors shall deem advisable, and to use and apply the funds received in payment therefor to the surplus account for the benefit of the, corporation, or the payment of dividends, or otherwise; provided that a majority of the whole Board concur therein, and further provided that the capital stock shaft not be decreased except in accordance with the laws of Nevada.
g. By a resolution passed by a majority of the whole Board, under suitable provision of the By-Laws, to designate two or more of their numbers to constitute an executive committee, which committee shall have and exercise any and all of the powers of the Board of Directors which may be lawfully delegated in the management of the business and affairs of the corporation, and shall have the authority to cause die seal of the corporation to be affixed to all papers which may require it.
h. To determine from time to time whether (and if allowed, under what conditions and regulations) the accounts and books of the corporation (other than the books required by law to be kept at the principal office of the corporation in Nevada), or any of them shall be open to the inspection of the stockholders, and the stockholders' rights in this respect are and shall be restricted or limited accordingly.
10. Liability of Directors and Officers. An officer or director of the corporation shall have no personal liability to the corporation or its stockholders for damages for breach of fiduciary duty as an officer or director except for (a) acts or omissions which involve intentional misconduct, fraud, or a knowing violation of the law and (b) the payment of dividends in violation of N.R.S. 78-300.
11. Indemnification of Officers and Directors. Every person who was of is a party to, or is threatened to be made a party to, or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada from time to time against all expenses, liability and loss (including attorney's fees, judgment, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him or her in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. Such right of indemnification which such directors, officers, or representatives may have or hereafter acquire shall extend to all actions undertaken on behalf of the corporation; and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any By-Laws, agreement, vote of stockholders, provision of law or otherwise, as well as their rights under this Article.
Without limiting the application of the foregoing, the Board of Directors may adopt By-Laws from time to time with respect to indemnification to provide at all times the fullest indemnification permitted by the laws of the State of Nevada and way cause the corporation to purchase and maintain insurance on
behalf of any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprises against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the corporation would have the power to indemnify such person.
12. Amendment. The corporation reserves the right to amend, alter or repeal any provisions contained in these Articles of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.
13. Incorporator. The name and post office address of the person signing these Articles of Incorporation are as follows:
Richard W. Harris
6121 Lakeside Drive, Suite 260
Reno, Nevada 89511-8527
IN WITNESS WHEREOF, I have hereunto set my hand this 4th day of March, 1998, hereby declaring and certifying that the facts stated hereinabove are true and correct to the best of my knowledge.
/s/ Richard W. Harris
RICHARD W. HARRIS
|
CERTIFICATE OF ACCEPTANCE OF
APPOINIMENT BY RESIDENI AGENT
I, RICHARD W. HARRIS, hereby certify that on the 4th day of March, 1998, I accepted appointment as Resident Agent of Microbial Solutions Inc. in accordance with NRS 78.090. The principal office in the State is located at 6121 Lakeside Drive, Suite 260, Reno, Nevada 89511-8527, Washoe County, Nevada.
DATED this 4th day of March, 1998.
/s/ Richard W. Harris
RICHARD W. HARRIS
STATE OF NEVADA )
) ss.
COUNTY OF WASHOE )
|
On this 4th day of March, 1998, personally appeared before me, a Notary Public, RICHARD W. HARMS, personally known to me, who acknowledged to me that he executed the foregoing Articles of Incorporation.
/s/ Betty Carlson
NOTARY PUBLIC
Notarial Stamp
|
Filed
In the Office of
The Secretary of
State of the State
Of Nevada CERTIFICATE OF AMENDMENT OF
Mar 19 1998
No C 4581-98 ARTICLES OF INCORPORATION
Dean Heller (Before Payment of Capital or Issuance of Stock)
Secretary of State
RICHARD W. HARRIS certifies that:
1. He is the original incorporator of Microbial Solutions Inc., a Nevada corporation.
2. The original Articles were filed in the Office of the Secretary of State on March 5, 1998.
3. As of the date of this certificate, no stock of the corporation has been issued.
4. He hereby adopts the following amendment to the Articles of Incorporation of this corporation:
5. Capitalization. The amount of the total authorized capital of the corporation shall consist of ONE HUNDRED MILLION shares of common stock, having a par value of one-tenth of one cent ($ 0.001) each.
/s/ Richard W. Harris
RICHARD W. HARRIS
STATE OF NEVADA )
)ss
COUNTY OF WASHOE )
|
On the 19th day of March, 1998, personally appeared before me, a Notary Public within and for said county, personally appeared RICHARD W. HARRIS, who acknowledged that he executed the foregoing Certificate of Amendment, and to me known or proved to be the person described in and who executed the same.
/s/ Betty Carlson
NOTARY PUBLIC
Notarial Stamp
|
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
Filed C 4581-98
Mar 19 1998
In the Office of
Dean Heller
Secretary of State
We the undersigned President and Secretary of Microbial Solutions Inc., do certify:
That the Board of Directors of said corporation at a meeting duly convened, held on the 8th day of January, 1999, adopted a resolution to amend the original articles as follows:
Article I is hereby amended to read as follows:
The name of the corporation is Skinvisible, Inc.
The number of shares of the corporation outstanding and entitled to vote on an amendment to the Articles of Incorporation is 8,200,000 common shares. Said change and amendment has been consented to and approved by a majority vote of the stockholders holding at least a majority of each class of stock outstanding and entitled to vote thereon.
/s/ Terry Howlett
President*
/s/ H. Thomson
Secretary
STATE OF NEVADA )
)ss
COUNTY OF Clark )
|
On February 25, 1999, personally appeared before me, Terry Howlett, who acknowledged that they executed the above instrument.
Notary Stamp /s/ Ann Marie Gibson
Signature of Notary
|
*only the President's signature need be acknowledge.
BYLAWS
OF
MICROBIAL SOLUTIONS INC.
(A NEVADA CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the corporation in the State of Nevada shall be in the City of Reno, State of Nevada.
Section 2. Other Offices. The corporation shall also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors, and may also have offices at such other places, both within and without the State of Nevada as the Board of Directors may from time to time determine or the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The corporate seal shall consist of a die bearing the name of the corporation and the inscription, "Corporate Seal-Nevada." Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. Place of Meetings. Meetings of the stockholders
of the corporation shall be held at such place, either within or
without the State of Nevada, as may be designated from time to time
by the Board of Directors, or, if not so designated, then at the
office of the corporation required to be maintained pursuant to
Section 2 hereof.
Section 5. Annual Meeting.
(a) The annual meeting of the stockholders of the corporation, for the purpose of election of directors and for such other business as may lawfully come before it, shall be held on such date and at such time as may be designated from time to time by the Board of Directors.
(b) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be: (A) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (B) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (C) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder,
the stockholder must have given timely notice thereof
in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation not later than
the close of business on the sixtieth (60th) day nor earlier than
the close of business on the ninetieth (90th) day prior to the
first anniversary of the preceding year's annual meeting; provided,
however, that in the event that no annual meeting was held in the
previous year or the date of the annual meeting has been changed by
more than thirty (30) days from the date contemplated at the time
of the previous year's proxy statement, notice by the stockholder
to be timely must be so received not earlier than the close of
business on the ninetieth (90th) day prior to such annual meeting
and not later than the close of business on the later of the
sixtieth (60th) day prior to such annual meeting or, in the event
public announcement of the date of such annual meeting is first
made by the corporation fewer than seventy (70) days prior to the
date of such annual meeting, the close of business on the tenth
(10th) day following the day on which public announcement of the
date of such meeting is first made by the corporation. A
stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting:
(i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and address, as they
appear on the corporation's books, of the stockholder proposing
such business, (iii) the class and number of shares of the
corporation which are beneficially owned by the stockholder, (iv)
any material interest of the stockholder in such business and (v)
any other information that is required to be provided by the
stockholder pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), in his capacity
as a proponent to a stockholder proposal. Notwithstanding the
foregoing, in order to include information with respect to a
stockholder proposal in the proxy statement and form of proxy for
a stockholder's meeting, stockholders must provide notice as
required by the regulations promulgated under the 1934 Act.
Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at any annual meeting except in
accordance with the procedures set forth in this paragraph (b).
The chairman of the annual meeting shall, if the facts warrant,
determine and declare at the meeting that business was not properly
brought before the meeting and in accordance with the provisions of
this paragraph (b), and, if he should so determine, he shall so
declare at the meeting that any such business not properly brought
before the meeting shall not be transacted.
(c) Only persons who are confirmed in accordance with the procedures set forth in this paragraph (c) shall be eligible for election as directors. Nominations of persons for election to the Board of Directors of the corporation may be made at a meeting of stockholders by or at the direction of the Board of Directors or by any stockholder of the corporation entitled to vote in the election of directors at the meeting who complies with the notice procedures set forth in this paragraph (c). Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the corporation in accordance with the provisions of paragraph (b) of this Section 5. Such stockholder's notice shall set forth (i) as to each person, if any, whom the stockholder proposes to nominate for election or re-election as a director: (A) the name, age, business address and residence address of such person, (B) the principal occupation or employment of such person, (c) the class and number of shares of the corporation which are beneficially owned by such person, (D) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the stockholder, and (E) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A
under the 1934 Act (including without limitation such person's written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected); and (ii) as to such stockholder giving notice, the information required to be provided pursuant to paragraph (b) of this Section 5. At the request of the Board of Directors, any person nominated by a stockholder for election as a director shall furnish to the Secretary of the corporation that information required to be set forth in the stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the corporation unless nominated in accordance with the procedures set forth in this paragraph (c). The chairman of the meeting shall, if the facts warrant, determine and declare at the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws, and if he should so determine, he shall so declare at the meeting, and the defective nomination shall be disregarded.
(d) For purposes of this Section 5, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
Section 6. Special Meetings.
(a) Special meetings of the stockholders of the corporation may be called, for any purpose or purposes, by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, or (iii) the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption), and shall be held at such place, on such date, and at such time as the Board of Directors, shall determine.
(b) If a special meeting is called by any person or persons other than the Board of Directors, the request shall be in writing, specifying the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by telegraphic or other facsimile transmission to the Chairman of the Board of Directors, the Chief Executive Officer, or the Secretary of the corporation. No business may be transacted at such special meeting otherwise than specified in such notice. The Board of Directors shall determine the time and place of such special meeting, which shall be held not less than thirty-five (35) nor more than one hundred twenty (120) days after the date of the receipt of the request. Upon determination of the time and place of the meeting, the officer receiving the request shall cause notice to be given to the stockholders entitled to vote, in accordance with the provisions of Section 7 of these Bylaws. If the notice is not given within sixty (60) days after the receipt of the request, the person or persons requesting the meeting may set the time and place of the meeting and give the notice. Nothing contained in this paragraph (b) shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.
Section 7. Notice of Meetings. Except as otherwise provided by law or the Articles of Incorporation, written notice of each meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, such notice to specify the place, date and hour and purpose or purposes of the meeting. Notice of the time, place and purpose of any meeting of stockholders may be waived in writing, signed by the person entitled to notice thereof, either before or after such meeting, and will be
waived by any stockholder by his attendance thereat in person or by proxy, except when the stockholder 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. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.
Section 8. Quorum. At all meetings of stockholders, except
where otherwise provided by statute or by the Articles of
Incorporation, or by these Bylaws, the presence, in person or by
proxy duly authorized, of the holder or holders of not less than
one percent (1%) of the outstanding shares of stock entitled to
vote shall constitute a quorum for the transaction of business. In
the absence of a quorum, any meeting of stockholders may be
adjourned, from time to time, either by the chairman of the meeting
or by vote of the holders of a majority of the shares represented
thereat, but no other business shall be transacted at such meeting.
The stockholders present at a duly called or convened meeting, at
which a quorum is present, may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders
to leave less than a quorum. Except as otherwise provided by law,
the Articles of Incorporation or these Bylaws, all action taken by
the holders of a majority of the votes cast, excluding abstentions,
at any meeting at which a quorum is present shall be valid and
binding upon the corporation; provided, however, that directors
shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to
vote on the election of directors. Where a separate vote by a
class or classes or series is required, except where otherwise
provided by the statute or by the Articles of Incorporation or
these Bylaws, a majority of the outstanding shares of such class or
classes or series, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that
vote on that matter and, except where otherwise provided by the
statute or by the Articles of Incorporation or these Bylaws, the
affirmative vote of the majority (plurality, in the case of the
election of directors) of the votes cast, including abstentions, by
the holders of shares of such class or classes or series shall be
the act of such class or classes or series.
Section 9. Adjournment and Notice of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairman of the meeting or by the vote of a majority of the shares casting votes, excluding abstentions. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) 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.
Section 10. Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date, as provided in Section 12 of these Bylaws, shall be entitled to vote at any meeting of stockholders. Every person entitled to vote shall have the right to do so either in person or by an agent or agents authorized by a proxy granted in accordance with Nevada law. An agent so appointed need not be a stockholder. No proxy shall be voted after three (3) years from its date of creation unless the proxy provides for a longer period.
Section 11. Joint Owners of Stock. If shares or other
securities having voting power stand of record in the names of two
(2) or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, tenants by the entirety, or
otherwise, or if two (2) or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary is
given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to
voting shall have the following effect: (a) if only one (1) votes,
his act binds all; (b) if more than one (1) votes, the act of the
majority so voting binds all; (c) if more than one (1) votes, but
the vote is evenly split on any particular matter, each faction may
vote the securities in question proportionally, or may apply to the
Nevada Court of Chancery for relief as provided in the General
Corporation Law of Nevada, Section 217(b). If the instrument filed
with the Secretary shows that any such tenancy is held in unequal
interests, a majority or even-split for the purpose of subsection
(c) shall be a majority or even-split in interest.
Section 12. List of Stockholders. The Secretary shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, 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 (10) 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 specified, at the place where the meeting is to be held. The list shall be produced and kept at the time and place of meeting during the whole time thereof and may be inspected by any stockholder who is present.
Section 13. Action Without Meeting. No action shall be taken by the stockholders except at an annual or special meeting of stockholders called in accordance with these Bylaws, or by the written consent stockholders.
Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the President, or, if the President is absent, a chairman of the meeting chosen by a majority in interest of the stockholders entitled to vote, present in person or by proxy, shall act as chairman. The Secretary, or, in his absence, an Assistant Secretary directed to do so by the President, shall act as secretary of the meeting.
(b) The Board of Directors of the corporation shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the corporation and their duly authorized and constituted proxies and such other persons as the chairman shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof,
limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number and Qualification. The authorized
number of directors of the corporation shall be not less than one
(1) nor more than twelve (12) as fixed from time to time by
resolution of the Board of Directors; provided that no decrease in
the number of directors shall shorten the term of any incumbent
directors. Directors need not be stockholders unless so required
by the Articles of Incorporation. If for any cause, the directors
shall not have been elected at an annual meeting, they may be
elected as soon thereafter as convenient at a special meeting of
the stockholders called for that purpose in the manner provided in
these Bylaws.
Section 16. Powers. The powers of the corporation shall be exercised, its business conducted and its property controlled by the Board of Directors, except as may be otherwise provided by statute or by the Articles of Incorporation.
Section 17. Election and Term of Office of Directors. Members of the Board of Directors shall hold office for the terms specified in the Articles of Incorporation, as it may be amended from time to time, and until their successors have been elected as provided in the Articles of Incorporation.
Section 18. Vacancies. Unless otherwise provided in the Articles of Incorporation, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by stockholder vote, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director's successor shall have been elected and qualified. A vacancy in the Board of Directors shall be deemed to exist under this Bylaw in the case of the death, removal or resignation of any director.
Section 19. Resignation. Any director may resign at any time by delivering his written resignation to the Secretary, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure of the Board of Directors. If no such specification is made, it shall be deemed effective at the pleasure of the Board of Directors. When one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office for the unexpired portion of the term
of the director whose place shall be vacated and until his successor shall have been duly elected and qualified.
Section 20. Removal. Subject to the Articles of Incorporation, any director may be removed by:
(a) the affirmative vote of the holders of a majority of the outstanding shares of the Corporation then entitled to vote, with or without cause; or
(b) the affirmative and unanimous vote of a majority of the directors of the Corporation, with the exception of the vote of the directors to be removed, with or without cause.
Section 21. Meetings.
(a) Annual Meetings. The annual meeting of the Board of Directors shall be held immediately after the annual meeting of stockholders and at the place where such meeting is held. No notice of an annual meeting of the Board of Directors shall be necessary and such meeting shall be held for the purpose of electing officers and transacting such other business as may lawfully come before it.
(b) Regular Meetings. Except as hereinafter otherwise provided, regular meetings of the Board of Directors shall be held in the office of the corporation required to be maintained pursuant to Section 2 hereof. Unless otherwise restricted by the Articles of Incorporation, regular meetings of the Board of Directors may also be held at any place within or without the state of Nevada which has been designated by resolution of the Board of Directors or the written consent of all directors.
(c) Special Meetings. Unless otherwise restricted by the Articles of Incorporation, special meetings of the Board of Directors may be held at any time and place within or without the State of Nevada whenever called by the Chairman of the Board, the President or any two of the directors.
(d) Telephone Meetings. Any member of the Board of Directors, or of any committee thereof, may participate in a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
(e) Notice of Meetings. Notice of the time and place of all special meetings of the Board of Directors shall be orally or in writing, by telephone, facsimile, telegraph or telex, during normal business hours, at least twenty-four (24) hours before the date and time of the meeting, or sent in writing to each director by first class mail, charges prepaid, at least three (3) days before the date of the meeting. Notice of any meeting may be waived in writing at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the 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.
(f) Waiver of Notice. The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called or noticed, or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present shall sign a written waiver of notice. All such waivers shall be filed with the corporate records or made a part of the minutes of the meeting.
Section 22. Quorum and Voting.
(a) Unless the Articles of Incorporation requires a greater number and except with respect to indemnification questions arising under Section 43 hereof, for which a quorum shall be one-third of the exact number of directors fixed from time to time in accordance with the Articles of Incorporation, a quorum of the Board of Directors shall consist of a majority of the exact number of directors fixed from time to time by the Board of Directors in accordance with the Articles of Incorporation provided, however, at any meeting whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors, without notice other than by announcement at the meeting.
(b) At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Articles of Incorporation or these Bylaws.
Section 23. Action Without Meeting. Unless otherwise restricted by the Articles of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and such writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.
Section 24. Fees and Compensation. Directors shall be entitled to such compensation for their services as may be approved by the Board of Directors, including, if so approved, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board of Directors and at any meeting of a committee of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.
Section 25. Committees.
(a) Executive Committee. The Board of Directors may by resolution passed by a majority of the whole Board of Directors appoint an Executive Committee to consist of one (1) or more members of the Board of Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, including without limitation the power or authority to declare a dividend, to authorize the issuance of stock and to adopt a certificate of ownership and merger, 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 in reference to
amending the Articles of Incorporation (except that a committee
may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board
of Directors fix the designations and any of the preferences or
rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the
conversion into, or the exchange of such shares for, shares of any
other class or classes or any other series of the same or any other
class or classes of stock of the corporation or fix the number of
shares of any series of stock or authorize the increase or decrease
of the shares of any series), adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property
and assets, recommending to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or amending the
bylaws of the corporation.
(b) Other Committees. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, from time to time appoint such other committees as may be permitted by law. Such other committees appointed by the Board of Directors shall consist of one (1) or more members of the Board of Directors and shall have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event shall such committee have the powers denied to the Executive Committee in these Bylaws.
(c) Term. Each member of a committee of the Board of Directors shall serve a term on the committee coexistent with such member's term on the Board of Directors. The Board of Directors, subject to the provisions of subsections (a) or (b) of this Bylaw may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his death or voluntary resignation from the committee or from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors 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, and, in addition, in the absence or disqualification of any 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 of Directors to act at the meeting in the place of any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Section 25 shall be held at such times and places as are determined by the Board of Directors, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place which has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon written notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of written notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any special meeting of any committee may be waived in writing at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special 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. A majority of the authorized number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of such committee.
Section 26. Organization. At every meeting of the
directors, the Chairman of the Board of Directors, or, if a
Chairman has not been appointed or is absent, the President, or if
the President is absent, the most senior Vice President, or, in the
absence of any such officer, a chairman of the meeting chosen by a
majority of the directors present, shall preside over the meeting.
The Secretary, or in his absence, an Assistant Secretary directed
to do so by the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 27. Officers Designated. The officers of the corporation shall include, if and when designated by the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary, the Chief Financial Officer, the Treasurer, the Controller, all of whom shall be elected at the annual organizational meeting of the Board of Direction. The Board of Directors may also appoint one or more Assistant Secretaries, Assistant Treasurers, Assistant Controllers and such other officers and agents with such powers and duties as it shall deem necessary. The Board of Directors may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the corporation shall be fixed by or in the manner designated by the Board of Directors.
Section 28. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure of the Board of Directors and until their successors shall have been duly elected and qualified, unless sooner removed. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors.
(b) Duties of Chairman of the Board of Directors. The Chairman of the Board of Directors, when present, shall preside at all meetings of the stockholders and the Board of Directors. The Chairman of the Board of Directors shall perform other duties commonly incident to his office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time. If there is no President, then the Chairman of the Board of Directors shall also serve as the Chief Executive Officer of the corporation and shall have the powers and duties prescribed in paragraph (c) of this Section 28.
(c) Duties of President. The President shall preside at all meetings of the stockholders and at all meetings of the Board of Directors, unless the Chairman of the Board of Directors has been appointed and is present. Unless some other officer has been elected Chief Executive Officer of the corporation, the President shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The President shall perform other duties commonly incident to his office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time.
(d) Duties of Vice Presidents. The Vice Presidents may assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant. The Vice Presidents shall perform other duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all meetings of the stockholders and of the Board of Directors and shall record all acts and proceedings thereof in the minute book of the corporation. The Secretary shall give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary shall perform all other duties given him in these Bylaws and other duties commonly incident to his office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time. The President may direct any Assistant Secretary to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to his office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
(f) Duties of Chief Financial Officer. The Chief Financial Officer shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the President. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the corporation. The Chief Financial Officer shall perform other duties commonly incident to his office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time. The President may direct the Treasurer or any Assistant Treasurer, or the Controller or any Assistant Controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and each Controller and Assistant Controller shall perform other duties commonly incident to his office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
Section 29. Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.
Section 30. Resignations. Any officer may resign at any time by giving written notice to the Board of Directors or to the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the corporation under any contract with the resigning officer.
Section 31. Removal. Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a majority of the directors in office at the time, or by the unanimous written consent of the directors in office at the time, or by any committee or superior officers upon whom such power of removal may have been conferred by the Board of Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 32. Execution of Corporate Instrument. The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the corporation any corporate instrument or document, or to sign on behalf of the corporation the corporate name without limitation, or to enter into contracts on behalf of the corporation, except where otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the corporation.
Unless otherwise specifically determined by the Board of Directors or otherwise required by law, promissory notes, deeds of trust, mortgages and other evidences of indebtedness of the corporation, and other corporate instruments or documents requiring the corporate seal, and certificates of shares of stock owned by the corporation, shall be executed, signed or endorsed by
the Chairman of the Board of Directors, or the President or any Vice President, and by the Secretary or Treasurer or any Assistant Secretary or Assistant Treasurer. All other instruments and documents requiting the corporate signature, but not requiring the corporate seal, may be executed as aforesaid or in such other manner as may be directed by the Board of Directors.
All checks and drafts drawn on banks or other depositaries on funds to the credit of the corporation or in special accounts of the corporation shall be signed by such person .or persons as the Board of Directors shall authorize so to do.
Unless authorized or ratified by the Board of Directors or within the agency power of an officer, no 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 to render it liable for any purpose or for any amount.
Section 33. Voting of Securities Owned by the Corporation. All stock and other securities of other corporations owned or held by the corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairman of the Board of Directors, the Chief Executive Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 34. Form and Execution of Certificates.
Certificates for the shares of stock of the corporation shall be in
such form as is consistent with the Articles of Incorporation and
applicable law. 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 of Directors, or the
President or any Vice President and by the Treasurer or Assistant
Treasurer or the Secretary or Assistant Secretary, certifying the
number of shares owned by him in the corporation. Any or all of
the signatures on the certificate may be facsimiles. 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 with the same effect as if
he were such officer, transfer agent, or registrar at the date of
issue. Each certificate shall state upon the face or back thereof,
in full or in summary, all of the powers, designations,
preferences, and rights, and the limitations or restrictions of the
shares authorized to be issued or shall, except as otherwise
required by law, set forth on the face or back a statement that the
corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative,
participating, optional, or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Within a
reasonable time after the issuance or transfer of uncertificated
stock, the corporation shall send to the registered owner thereof
a written notice containing the information required to be set
forth or stated on certificates pursuant to this section or
otherwise required by law or with respect to this section a
statement that the corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences
and relative participating, optional or other special rights of
each class of stock or series thereof and the qualifications,
limitations or restrictions of such
preferences and/or rights. Except as otherwise expressly provided by law, the rights and obligations of the holders of certificates representing stock of the same class and series shall be identical.
Section 35. Lost Certificates. A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require or to give the corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen, or destroyed.
Section 36. Transfers.
(a) Transfers of record of shares of stock of the corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and upon the surrender of a properly endorsed certificate or certificates for a like number of shares.
(b) The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the General Corporation Law of Nevada.
Section 37. Fixing Record Dates.
(a) 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, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, 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. 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 of Directors may fix a new record date for the adjourned meeting.
(b) In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders 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 of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is filed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
Section 38. Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Nevada.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 39. Execution of Other Securities. All bonds, debentures and other corporate securities of the corporation, other than stock certificates (covered in Section 34), may be signed by the Chairman of the Board of Directors, the President or any Vice President, or such other person as may be authorized by the Board of Directors, and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary or an Assistant Secretary, or the Chief Financial Officer or Treasurer or an Assistant Treasurer; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the corporation or such other person as may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the corporation.
ARTICLE IX
DIVIDENDS
Section 40. Declaration of Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the Articles of Incorporation, if any, may be declared by the Board of Directors pursuant to law at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Articles of Incorporation.
Section 41. Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board of Directors shall think conducive to the interests
of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 42. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 43. Indemnification of Directors, Executive Officers, Other Officers, Employees and Other Agents.
(a) Directors Officers. The corporation shall indemnify its directors and officers to the fullest extent not prohibited by the Nevada General Corporation Law; provided, however, that the corporation may modify the extent of such indemnification by individual contracts with its directors and officers; and, provided, further, that the corporation shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the corporation, (iii) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under the Nevada General Corporation Law or (iv) such indemnification is required to be made under subsection (d).
(b) Employees and Other Agents. The corporation shall have power to indemnify its employees and other agents as set forth in the Nevada General Corporation Law.
(c) Expense. The corporation shall advance to 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 or officer, of the corporation, or is or was serving at the request of the corporation as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or officer in connection with such proceeding upon receipt of an undertaking by or on behalf of such person to repay said mounts if it should be determined ultimately that such person is not entitled to be indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined
pursuant to paragraph (e) of this Bylaw, no advance shall be made
by the corporation to an officer of the corporation (except by
reason of the fact that such officer is or was a director of the
corporation in which event this paragraph shall not apply) in any
action, suit or proceeding, whether civil, criminal, administrative
or investigative, if a determination is reasonably and promptly
made (i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or
(ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the corporation.
(d) Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and officers under this Bylaw shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the corporation and the director or officer. Any right to indemnification or advances granted by this Bylaw to a director or officer shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. The claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting his claim. In connection with any claim for indemnification, the corporation shall be entitled to raise as a defense to any such action that the claimant has not met the standard of conduct that make it permissible under the Nevada General Corporation Law for the corporation to indemnify the claimant for the amount claimed. In connection with any claim by an officer of the corporation (except in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such officer is or was a director of the corporation) for advances, the corporation shall be entitled to raise a defense as to any such action clear and convincing evidence that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed in the best interests of the corporation, or with respect to any criminal action or proceeding that such person acted without reasonable cause to believe that his conduct was lawful. Neither the failure of the corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the Nevada General Corporation Law, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by a director or officer to enforce a right to indemnification or to an advancement of expenses hereunder, the burden of proving that the director or officer is not entitled to be indemnified, or to such advancement of expenses, under this Article XI or otherwise shall be on the corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any person by this Bylaw shall not be exclusive of any other right which such person may have or hereafter acquire under any statute, provision of the Articles of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the Nevada General Corporation Law.
(f) Survival of Rights. The rights conferred on any person by this Bylaw shall continue as to a person who has ceased to be a director, officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(g) Insurance. To the fullest extent permitted by the Nevada General Corporation Law, the corporation, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Bylaw.
(h) Amendments. Any repeal or modification of this Bylaw shall only be prospective and shall not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the corporation.
(i) Saving Clause. If this Bylaw or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director and officer to the full extent not prohibited by any applicable portion of this Bylaw that shall not have been invalidated, or by any other applicable law.
(j) Certain Definitions. For the purposes of this Bylaw, the following definitions shall apply:
(i) The term "proceeding" shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.
(ii) The term "expenses" shall be broadly construed and shall include, without limitation, court costs, attorneys' fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.
(iii) The term the "corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent or another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Bylaw with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.
(iv) References to a "director," "executive officer," "officer," "employee," or "agent" of the corporation shall include, without limitation, situations where such person is serving at the request of the corporation as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.
(v) References to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this Bylaw.
ARTICLE XII
NOTICES
Section 44. Notices.
(a) Notice to Stockholders. Whenever, under any provisions of these Bylaws, notice is required to be given to any stockholder, it shall be given in writing, timely and duly deposited in the United States mail, postage prepaid, and addressed to his last known post office address as shown by the stock record of the corporation or its transfer agent.
(b) Notice to directors. Any notice required to be given to any director may be given by the method stated in subsection (a), or by facsimile, telex or telegram, except that such notice other than one which is delivered personally shall be sent to such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director.
(c) Affidavit of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the corporation or its transfer agent appointed with respect to the class of stock affected, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.
(d) Time Notices Deemed Given. All notices given by mail, as above provided, shall be deemed to have been given as at the time of mailing, and all notices given by facsimile, telex or telegram shall be deemed to have been given as of the sending time recorded at time of transmission.
(e) Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all directors, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.
(f) Failure to Receive Notice. The period or limitation of time within which any stockholder may exercise any option or right, or enjoy any privilege or benefit, or be required to act, or within which any director may exercise any power or right, or enjoy any privilege, pursuant to any notice sent him ill the manner above provided, shall not be affected or extended in any manner by the failure of such stockholder or such director to receive such notice.
(g) Notice to Person with Whom Communication Is Unlawful. Whenever notice is required to be given, under any provision of law or of the Articles of Incorporation or Bylaws of the
corporation, to any person with whom communication is unlawful, the giving of such notice to such person shall not be require and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the corporation is such as to require the filing of a certificate under any provision of the Nevada General Corporation Law, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
(h) Notice to Person with Undeliverable Address. Whenever notice is required to be given, under any provision of law or the Articles of Incorporation or Bylaws of the corporation, to any stockholder to whom (i) notice of two consecutive annual meetings, and all notices of meetings or of the taking of action by written consent without a meeting to such person during the period between such two consecutive annual meetings, or (ii) all, and at least two, payments (if sent by first class mail) of dividends or interest on securities during a twelve-month period, have been mailed addressed to such person at his address as shown on the records of the corporation and have been returned undeliverable, the giving of such notice to such person shall not be required. Any action or meeting which shall be taken or held without notice to such person shall have the same force and effect as if such notice had been duly given. If any such person shall deliver to the corporation a written notice setting forth his then current address, the requirement that notice be given to such person shall be reinstated. In the event that the action taken by the corporation is such as to require the filing of a certificate under any provision of the Nevada General Corporation Law, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to this paragraph.
ARTICLE XII
AMENDMENTS
Section 45. Amendments.
The Board of Directors shall also have the power to adopt, amend, or repeal Bylaws as set forth in the Articles of Incorporation.
ARTICLE XIV
LOANS TO OFFICERS
Section 46. Loans to Officers. The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiaries, including any officer or employee who is a Director of the corporation or its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the corporation. The loan, guarantee or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation.
Nothing in these Bylaws shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.
Declared as the By-Laws of Microbial Solutions Inc., as amended, as of the 28th day of May, 1998
Signature of Officer: /s/ Terry Howlett Name of Officer: Terry Howlett |
Position of Officer: President and Director
MANUFACTURING AND MARKETING LICENSE AGREEMENT
THIS AGREEMENT dated as of the 19th day of March, 1998.
BETWEEN:
JAZOR LABORATORY GROUP, INC.
Box 3569
Pompana Beach, Florida
33072
("Jazor")
OF THE FIRST PART
AND:
MANLOE LABS, INC., a
corporation incorporated pursuant to the laws of the
State of Nevada and having its place of business at
6320 S. Sandhill Road, Suite #10
Las Vegas Nevada
89120
("Manloe")
OF THE SECOND PART
AND:
BRUCE JEZIOR
Box 3569
Pompana Beach, Florida
33072
("Jezior")
OF THE THIRD PART
WHEREAS:
A. Jazor has developed proprietary polymer based products, including polymer based products with anti-bacterial and anti-viral properties marketed under the name "ViroShield" and "WorkGluv".
B. Jazor has agreed to grant to Manloe exclusive rights for the manufacture, marketing, distribution and sale of its products on the terms and conditions of this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants and agreements herein contained, and in consideration of the sum of $10.00 paid by each party to the other, the receipt and sufficiency of which is hereby acknowledged, the parties do hereby covenant and agree each with the other as follows:
1. Definitions
1.1 Where used herein, or in any schedules or amendments attached hereto, the following terms will have the following meanings:
(a) "Exclusive Territory" means the world;
(b) "Future Products" means any products developed by Jazor or Jezior which are not Products for the purposes of this Agreement;
(c) "Products" means the following products developed by Jazor:
(i) Viro-Shield and WorkGluv;
(ii) the Polymer Base;
(iii) all polymer based products developed by Jazor;
(iv) any products superceding or replacing ViroShield, WorkGluv or Jatex, including any modification to or products superceding any of ViroShield, WorkGluv or Jatex; and
(v) any other product developed by Jazor or acquired by Jazor using the same or substantially similar polymer base as the Polymer Base;
(d) "Net Revenues" means gross sales of the Products by Manloe, exclusive of sales taxes, less cost of goods sold of the Products, each as determined in accordance with generally accepted accounting principles;
(e) "Polymer Base" means the hydrophilic polymer base product known as "Jatex" necessary to manufacture the Products;
(f) "Trademarks" means all trade names, trade marks and other commercial symbols and related logos, including the trade names "ViroShield", "Jatex" and "WorkGluv", owned or used by Jazor in connection with the products;
2. Grant of Exclusive License and Distribution Rights
2.1 Subject to the provisions of this Agreement and for the term hereinafter specified, Jazor hereby grants to Manloe the exclusive right and license to manufacture, distribute, market and sell the Products (the "License Rights"). In addition and subject to the terms of this Agreement, Jazor agrees to assign to Manloe the Trademarks forthwith upon execution of this Agreement.
3. Term
3.1 The term of this Agreement shall be a non-expiring term commencing on the date of this Agreement, unless terminated sooner in accordance with the provisions of this Agreement.
4. License Fee and Royalty
4.1 Manloe will pay to Jazor a one-time license fee equal to $50,000 (the "License Fee") upon execution of this Agreement in consideration for the grant of the License Rights.
4.2 In addition to the License Fee, Manloe will pay to Jazor a royalty (the "Royalty") equal to the greater of:
(a) $6,000 per month; or
(b) 1.5% of Net Revenues realized by Manloe on sales of the Products,
subject to a cap on total Royalties paid of $2,000,000. Manloe will pay the Royalty to Jazor by payments of $6,000 per month, and by a payment on account of any Royalty in excess of $72,000 in each year (the "Royalty Differential") payable on an annual basis calculated within 60 days of each anniversary of the date of this Agreement. Upon aggregate Royalties equal to $2,000,000 having been paid by Manloe to Jazor, Manloe will have no further obligations to make any additional Royalty payments and Jazor will deliver to Manloe all confidential information, including formulae, technical data, engineering specifications, trade secrets necessary to enable Manloe to manufacture all products independently of Jazor. Manloe will have option to payout Royalty in advance to acquire this information.
4.3 The Royalty Differential will be payable on a yearly basis within 90 days of each anniversary of the date of this Agreement in respect of which the Royalty Differential is payable.
5. Exclusive Territory
5.1 During the term of this Agreement, Jazor will not without the written consent of Manloe:
(a) appoint, nor cause any corporation or entity
associated with Jazor, to appoint another
manufacturor, distributor or licensee for the
Products;
(b) undertake to market or sell the Products by itself,
directly or indirectly;
(c) sell the Products to any other party for re-sale or
distribution within the Exclusive Territory, directly
or indirectly;
(d) sell the rights to manufacture, distribute or sell
the Products within the Exclusive Territory to any
other party; or
(e) take any action which would have the effect of
frustrating the exclusiveness of the License Rights
granted by Jazor to Manloe.
6. Right of First Refusal
6.1 (a) Jazor and Jezior agree that Manloe shall have a right
of first refusal for the manufacture, marketing,
distribution and sale of any Future Product developed
by Jazor and/or Jezior as follows:
(i) Jazor and/or Jezior shall notify Manloe in
writing that a Future Product has been
developed and shall provide Manloe with
sufficient information, including technical and
financial information, on which to make a
decision on whether to manufacture, market,
distribute and sell the Future Product; and
(ii) Manloe acknowledges that Jazor and/or Jezior
is entitled to obtain the most favourable terms
with regard to manufacture, marketing,
distribution and sale of any Future Product and
that in order to do so Jazor and/or Jezior may
provide other interested persons and/or entities
with the same information set forth in 6.1 (d)(i)
and may seek bona fide offers for the Future
Product; and
(iii)in the event that Jazor and/or Jezior receives
any bona fide offers for the manufacture,
marketing, distribution and sale of any Future
Product and an offer is satisfactory to Jazor
and/or Jezior, Jazor and/or Jezior shall give
Manloe the privilege of manufacturing, marketing,
distribution and selling the Future Product on
the terms of the offer so made and shall provide
the terms of such offer to Manloe within ten days
of receipt thereof.
(iv) in the event that Jazor and/or Jezior has not
received other bona fide offers, Jazor and/or
Jezior may make a reasonable offer to Manloe for
the manufacture, marketing, distribution and
sale of any Future Product or Manloe can make a
reasonable offer to Jazor and/or Jezior.
|
5
(b) Manloe shall have 60 days from receipt of the notice
referred to in 6.1 (d) (i) to decide whether to
exercise its right of first refusal.
(c) in the event Manloe elects not to manufacture,
market, distribute and sell the Future Product, then
Jazor and/or Jezior shall be at liberty to do so with
any other person or entity it chooses on monetary
terms no less favourable than offered to Manloe.
(d) in the event Manloe elects to distribute the Future
Product, Jazor or Jezior, as applicable, will grant
to Manloe the exclusive License Rights for the Future
Product on substantially the same terms and
conditions as the License Rights for the Products as
granted to Manloe under this Agreement, with the
exception of those monetary terms and conditions with
respect to any license fee and royalty payments.
7. Purchase of Products
7.1 Jazor will supply Manloe with all Polymer Base
|
required for Manloe to manufacture the Products. All orders for the Polymer Base required by Manloe shall be placed by Manloe delivering written notice to Jazor of the type and quantity of Polymer Base ordered.
7.2 Each order for Polymer Base will be subject to the terms and conditions of this Agreement, including the representations and warranties of Jazor as set forth in this Agreement.
7.3 Jazor will deliver to Manloe all orders for Polymer Base placed by Manloe within 30 calendar days of the date Manloe delivers its order to Jazor. Manloe will provide additional and reasonable notice for any substantial increase in orders. Substantial increase is defined as any order that exceeds 25% of the average.
7.4 Jazor will sell the Polymer Base to Manloe on the following schedule of prices, with annual adjustment for to reflect the change in the cost to Jazor of manufacturing the Polymer Base (arms-length cases only):
Type Quantity of Polymer Base Price of Polymer Base
Jatex 80 100 lbs + $18.50
400 lbs + $17.50
800 lbs + $17.00
1200 lbs + $16.25
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6
Jatex 88 100 lbs + $19.00
400 lbs + $18.25
800 lbs + $17.50
1200 lbs + $16.75
8. Distribution of the Products
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8.1 Manloe will have complete discretion as to the manufacture, distribution, marketing and sale of the Products
8.2 To enable Manloe to manufacture, market, distribute and sell the Products, Jazor will:
(a) deliver to Manloe samples and technical information, at Jazor's expense, as reasonably required to market, distribute and sell the Products;
(b) take such reasonable measures as are required to maintain the proprietariness of the patents, the trademarks and all information and know-how relating to the Products, including maintaining in confidence all such information and know-how and including maintaining all patents and trademarks in respect of the Products in good standing;
(c) manufacture the Polymer Base at such volumes in order to enable Jazor to supply Manloe with the volumes of the Products ordered by Manloe;
(d) assist Manloe in enabling Manloe to conduct clinical trials to verify the effectiveness of the Products as claimed in the scientific literature delivered by Jazor to Manloe
9. Manufacturing
9.1 Jazor and Jezior will provide to Manloe all proprietary and technical information, including all formulas, manufacturing information and chemical and other engineering information and data, required in order to enable Manloe to manufacture the Products, exclusive of the proprietary information required to manufacture the Polymer Base. Jazor agrees to deliver into escrow copies of all required documentation and information necessary for Manloe to manufacture the Polymer Base (the "Escrowed Information"). The escrow arrangement will be governed by an Escrow Agreement to be entered into upon execution of this Agreement between the attorney for Jazor, who shall be a member in good standing of the Bar Association of the State of Florida, (the "Escrow Agent") and each of Jazor and Manloe. The Escrow Agent will act impartially with duties to each of Jazor and Manloe. Manloe will be entitled to delivery of the Escrowed Information upon the occurrence of any of the following events (each an "Escrow Release Event"):
(a) the material breach by Jazor of its obligations under this Agreement;
(b) upon the death of Bruce Jezior, irrespective of any breach by Jazor of its obligations under this Agreement; or
(c) the entitlement of Manloe to a release of the Escrowed Information pursuant to Section 4.2.
Manloe shall continue to pay Jazor the Royalty Fee, upon a release of the Escrowed Information, pursuant to paragraph (a) or (b) above, subject to the right of Manloe to off-set any damages against such payments on account of damages incurred by Manloe as a result of the breach by Jazor of its obligations under this Agreement.
Manloe will be entitled to have Dr. James A. Roszell, Ph.D. verify the validity of the escrowed information prior to or simultaneous with delivery into escrow. The delivery of all information pursuant to this Section 9. would be subject to the execution by Manloe or its agent of a confidentiality agreement on reasonable terms and conditions as required to ensure the proprietary nature and confidentiality of the information.
Upon the occurrence of an Escrow Release Event, Manloe will be entitled to deliver a notice to the Escrow Agent requesting a release of the Escrowed Information (an "Escrow Release Notice"). Upon receipt of an Escrow Release Notice, the Escrow Agent will forthwith deliver a copy of the Escrow Release Notice to Jazor. In the event that the Escrow Agent does not receive any notice form Jazor contesting the release of the Escrowed Information to Manloe (an "Objection Notice") within 7 days of delivery of the notice by the Escrow Agent, then the Escrow Agent will deliver the Escrowed Information to Manloe. In the event the Escrow Agent receives an Objection Notice from Jazor, the Escrow Agent will continue to hold the Escrowed Information until directed to release the Escrowed Information by:
(a) an order of a court of competent jurisdiction or the order of an arbitrator as contemplated by this Agreement; or
(b) the written agreement between Manloe and Jazor.
10. Representations and Warranties
10.1 Jazor represents and warrants to Manloe (a) through (p) set forth below. Jezior represents and warrants that to the best of his actual knowledge and belief that (a) through (f), (h) through (k) and (m) through (p) set forth below are true. Both acknowledge that Manloe is relying upon such covenants, representations and warranties in entering into this Agreement and in any contract of purchase and sale of the Products. Manloe will not have any claim against Jezior individually in the absence of fraud or intentional misrepresentation.
(a) Jazor has the right, power and authority to grant the License Rights to Manloe on the terms and conditions as set forth in this Agreement.
(b) Jazor is the owner of all rights and intellectual property rights required to enable Manloe to distribute, market and sell the Products and to assign the Trademarks to Manloe in the manner contemplated by this Agreement.
(c) the Products will have the effectiveness as claimed in the scientific and promotional literature respecting the Products which has been provided by Jazor to Manloe;
(d) ViroShield has been granted classification by the U.S. Federal Drug Administration as an over the counter product under classification number 1056112 under federal regulation code 21, CFR, Section 207.21(a);
(e) ViroShield meets OSHA bloodborne pathogens standard (CRB 1910-1030);
(f) ViroShield has been assigned NDC No. 62159-015-04, dated October 27, 1995;
(g) all Polymer Base products sold by Jazor to Manloe will be in good, usable and merchantable condition and fit for its intended purpose;
(h) The composition of the Products is proprietary to Jazor, is not information which is in the public domain and is information which has been kept and will be kept confidential at all times by Jazor;
(i) Jazor is the owner of all intellectual property relating to the Products, including the Trademarks, and the rights to be granted to Manloe under this Agreement are not subject to the approval of any party or any license or similar agreement in favour of Jazor;
(j) Jazor is not party to any court action and has not been threatened with any court action which could be material to this Agreement or which could affect the rights granted to Manloe in this Agreement;
(k) Jazor has taken all reasonable steps, including entering into confidentiality agreements, to maintain its ownership of the Products and to maintain the confidentiality of the composition of the Products;
(l) Jazor is the manufacturer of the Polymer Base and is capable of manufacturing and delivering the Polymer Base in sufficient volumes and quantities in order to satisfy the demands for the Products within the Exclusive Territory;
(m) The marketing, manufacture, distribution and sale of the Products by Manloe as contemplated by this Agreement will not breach any patents, trademarks or other intellectual property rights of any party.
(n) The entering into of this agreement and the consummation of the transactions contemplated hereby will not result in the violation of any of the terms and provisions of the constating documents or bylaws of Jazor or of any indenture, instrument or agreement, written or oral, to which Jazor may be a party.
(o) The entering into of this agreement and the consummation of the transactions contemplated hereby will not, to the best of the knowledge of Jazor, result in the violation of any law or regulation to which Jazor or Jazor's business may be subject;
(p) This agreement has been duly authorized, validly executed and delivered by Jazor.
11. Indemnification
11.1 Jazor will indemnify Manloe from and against any liability, cost, demands, claims, expenses or court judgments incurred or suffered by Manloe arising from any defect in any Polymer Base product or breach of any representation or warranty herein with respect to any Product purchased by Manloe from Jazor or any breach of any obligation by Jazor under this Agreement, provided that such indemnification is conditional upon Manloe having complied with its obligations under this Agreement with respect to the purchase and sale of the Polymer Base products in issue and Manloe not having taken any negligent or fraudulent action which has given rise to any liability cost or expense.
12. Right to Assign
12.1 Manloe will be entitled to assign all or any interest in the License Rights granted in this Agreement without the prior written consent of Jazor.
12.2 For the purposes of enabling Manloe to discharge its obligations under this Agreement, Manloe shall be entitled to appoint, by agreements in writing, dealers and retailers within the Exclusive Territory to ensure full and proper representation and sale of the Products throughout the Exclusive Territory.
13. Non-Disclosure
13.1 Manloe will not, either before or after the termination of this Agreement, disclose to any person or corporation any information of any kind or nature respecting Products or make known any trade secret of Jazor or the terms of this agreement, except as required to provide manufacture, distribute, market and sell the Products.
14. Legal Relationship
14.1 The legal relationship between Manloe and Jazor created by this Agreement shall be that of independent contractors. No relationship of principal and agent, partnership or joint venture is created between Manloe and Jazor. Jazor shall have not authority to bind or obligate Manloe to third parties in any manner whatsoever.
15. Termination
15.1 Jazor will have the right to terminate this Agreement and the rights granted hereunder upon giving written notice of such termination upon the happening of any of the following events:
(a) if Manloe shall breach any of the terms or conditions of this Agreement and such breach shall continue for a period of 45 days after written notice thereof has been given by Jazor to Manloe;
(b) if Manloe makes a general assignment for the benefit of its creditors or is the subject of an order of bankruptcy granted by a court of competent jurisdiction shall institute any proceeding under any statute or otherwise relating to insolvency or bankruptcy or if any such proceeding under any statute is instituted against Manloe;
(c) if a receiver, manager or any other person with like power shall be appointed to take charge of all of Manloe's undertaking business, property or assets.
15.2 In the event of termination, Jazor will retain all License Fees and Royalty Fees paid or payable to the date of termination, without prejudice to any rights of Manloe.
15.3 Manloe will have the right to terminate this Agreement upon delivery of 60 days written notice to Jazor.
16. Dispute Resolution.
Any dispute or claim arising hereunder shall be settled by arbitration. Any party may commence arbitration by sending a written notice of arbitration to the other party. The notice will state the dispute with particularity. The arbitration hearing shall be commenced thirty (30) days following the date of delivery of notice of arbitration by one party to the other, by the American Arbitration Association ("AAA") as arbitrator. The arbitration shall be conducted in Las Vegas, Nevada in accordance with the commercial arbitration rules promulgated by AAA, and each party shall retain the right to cross-examine the opposing party's witnesses, either through legal counsel, expert witnesses or both. The decision of the arbitrator shall be final, binding and conclusive on all parties (without any right of appeal therefrom) and shall not be subject to judicial review. As part of his decision, the arbitrator may allocate the cost of arbitration, including fees of attorneys and experts,
as he or she deems fair and equitable in light of all relevant circumstances. Judgment on the award rendered by the arbitrator may be entered in any court of competent jurisdiction.
17. General Provisions
17.1 Any notice to Jazor or Manloe provided for or permitted to be given hereunder may be given by registered mail, postage prepaid, or by personal delivery at the addresses set forth on the first page of this Agreement. Any notice so mailed shall be deemed, except during the currency of any postal disruption of which public notice has been given, to have been given or served the fifth day after it is deposited in any post office. Any party may change its address for service at any time by notice in writing to the other.
17.2 Time is of the essence of this Agreement.
17.3 This Agreement shall be binding on and, except as otherwise provided, shall enure to the benefit of legal successors or representatives of the parties, and to the permitted assigns of Jazor and Manloe.
17.4 If any provision of this Agreement is determined to be illegal, invalid or unenforceable, the provision shall be deemed to be severable from the remainder of this Agreement and shall not cause the illegality, invalidity or unenforceability of the remainder of this Agreement.
17.5 Manloe shall not be liable for any loss, damage, delay or failure to perform in whole or in part resulting from causes beyond Manloe's control, including, but not limited to, fires, strikes, insurrections, riots, embargoes, shortages in supplies, delays in transportation, or requirements or any governmental authority.
17.6 Jazor shall not be liable for any loss, damage, delay or failure to perform in whole or in part resulting from causes beyond Jazor's control, including, but not limited to, fires, strikes, insurrections, riots, embargoes, shortages in supplies, delays in transportation, or requirements or any governmental authority.
17.7 The failure of either party at any time to require the performance by the other party of any provision of this Agreement shall not affect in any way the right to require such performance at any later time nor shall the waiver by either party of a breach of any provision hereby be taken or held to be a waiver of such provision.
17.8 This Agreement may be executed in several counterparts, each of which is executed or any facsimiles thereof as executed is deemed an original and the counterpart together form a valid and binding agreement which may be sufficiently evidenced by any one such original counterpart.
17.9 This Agreement sets forth the entire contract between the parties concerning the subject matter thereof, and supersedes all prior and contemporaneous written or oral negotiations and agreements between them concerning the subject matter thereof. Except as provided for in this Agreement, any modification must be in writing and signed by both parties.
17.10 This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada and each party hereby attorns to such jurisdiction.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above written.
MANLOE LABS, INC.
by its authorized signatory:
Per: /s/ Roger Hocking Authorized Signatory |
JAZOR LABORATORY GROUP, INC.
by its authorized signatory:
Per: /s/ Bruce C. Jezior Authorized Signatory /s/ Bruce C. Jezior BRUCE JEZIOR in his personal capacity |
MANLOE LABORATORIES, INC.
February 2, 1999
BRUCE JEZIOR
- and to -
JAZOR LABORATORY GROUP, INC.
Box 3569,
Pompana Beach, Florida 33072
Dear Sirs:
We write to confirm our agreement to modify the Manufacturing Agreement on the terms and subject to the following conditions:
1. The Company will issue to Jezior 500,000 common shares at a deemed value of $2.00 US per share (the "Shares"). The certificates representing the Shares will be issued by the Company pursuant to an exemption provided by the United States Securities Act of 1933 (the "Act") and will be endorsed with the following legend:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT"), AND HAVE BEEN ISSUED IN RELIANCE
UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT. SUCH SECURITIES MAY
NOT BE REOFFERED FOR SALE OR RESOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE
REGISTERED UNDER THE APPLICABLE PROVISIONS OF
THE ACT OR ARE EXEMPT FROM SUCH REGISTRATION.
2. The issue of the Shares to Jezior will be deemed to be a payment of $1,000,000 by the Company to Jazor on account of the royalty payable by the Company to Jazor pursuant to the Manufacturing Agreement (the "Royalty").
3. In consideration for the issue of the Shares by the Company to
Jezior, Jazor and Jezior agree to deliver to the Company all
confidential information, including polymer manufacturing
process and technology information, formulae, technical data,
engineering specifications, ingredients, feed materials and
trade secrets, necessary to enable the Company to manufacture
all products which are the subject of the Manufacturing
Agreement independent of Jazor and Jezior, as contemplated by
Section 4.2 of the Manufacturing Agreement (the "Product
Manufacturing Information"). The Company, Jazor and Jezior
will jointly instruct Randall L. Leshin, Attorney, as escrow
agent pursuant to the escrow agreement executed pursuant to
the Manufacturing Agreement (the "Escrow Agreement"), to
release to the Company the "Escrowed Information" as defined
in the Manufacturing Agreement and the "Escrow Documents" as
defined in the Escrow Agreement and agreeing to terminate the
Escrow Agreement this release to the Company.
4. The Shares will be delivered by the Company concurrently with the delivery to the Company by Jazor, Jezior and the Escrow Agent of the information contemplated by Section 3.
5. Section 4.2 of the Manufacturing Agreement will be amended to reflect the above agreement and will read as follows:
"4.2 In addition to the License Fee, Manloe
will pay to Jazor a royalty (the
"Royalty") equal to the greater of:
(a) $6,000 per month; or
(b) 1.5% of Net Revenues realized by Manloe on sales of the Products,
subject to a cap on total Royalties
paid of $1,000,000. Manloe will pay
the Royalty to Jazor by payments of
$6,000 per month, and by a payment
on account of any Royalty in excess
of $72,000 in each year (the
"Royalty Differential") payable on
an annual basis calculated within 60
days of each anniversary of the date
of this Agreement."
6. Jazor and Jezior agree that a total of $48,000 has been advanced by the Company to Jazor to date on account of payment of the Royalty and that the balance to be paid by the Company to reach the Royalty cap of $1,000,000 remaining is $952,000.
7. The Manufacturing Agreement remains in full force and effect, without amendment, except as set forth in this letter.
If you are in agreement with the terms and conditions of this letter (the "Letter Agreement"), please execute a copy of this Letter Agreement where indicated below and return an executed copy to the Company. Upon receipt of a fully executed copy of this Letter Agreement, the Company will issue certificates representing the Shares concurrently with the delivery of the Product Manufacturing Information.
Yours truly,
MANLOE LABORATORIES, INC.
Per: /s/ Roger Hocking _______________________________ ROGER HOCKING, PRESIDENT |
Accepted and agreed as of this 19 day of February, 1999.
JAZOR LABORATORY GROUP, INC.
by its authorized signatory:
Per: /s/ Bruce C. Jezior _______________________________ Authorized Signatory /s/ Bruce C. Jezior BRUCE JEZIOR in his personal capacity |
MICROBIAL SOLUTIONS, INC.
A NEVADA CORPORATION
March 2, 1998
MR. ROGER HOCKING
- AND TO -
MANLOE LABS, INC.
6320 S. Sandhill Road, Suite #10
Las Vegas Nevada
89120
Dear Sirs:
Re: Agreement for the Acquisition by Microbial Solutions, Inc. (the "Company") of Manloe Labs, Inc. ("Manloe") from Roger Hocking ("Hocking")
We write to confirm the Company's agreement to proceed with the acquisition of a 100% equity interest in Manloe on the terms and subject to the conditions as set forth in this letter. If you are in agreement, we ask that each of Manloe and Hocking execute this letter agreement where indicated below and return it to us. This letter agreement will be a legally binding agreement of purchase and sale upon execution.
The Company agrees to acquire all of the issued and outstanding shares of Manloe (the "Shares") upon execution of this agreement by Manloe and Hocking on the following basis:
1. Interest Acquired
The Company agrees to purchase and Hocking agrees to sell the Shares on the terms and subject to the conditions of this letter agreement.
2. Jazor Labs
In addition to the conditions precedent set forth in Section 7 of this letter agreement, the agreement of the Company to purchase the Shares is subject to Manloe having entered into a manufacturing and
licensing agreement with Jazor Laboratory Group, Inc. of Pompona Beach, Florida ("Jazor") upon the terms and conditions attached hereto in Schedule A (the "Manufacturing and Marketing Agreement").
3. Closing Date
The closing date for the purchase and sale of the Shares will be the 31st day of March, 1998.
4. Payment of the Purchase Price
The Company will deliver the following consideration for the Shares on the Closing Date;
(a) payment of $200,000 by certified cheque, bank draft or wire transfer (the "Cash Portion of the Purchase Price");
(b) the issue of 250,000 common shares of the Company (the "Company Shares").
5. Representations and Warranties of Manloe and the Principal Shareholders
The Company's agreement would be based on the joint and several representations and warranties by Manloe and Hocking that:
(a) Manloe is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada;
(b) the authorized capital of Manloe consists of 25,000 common shares, all of which are issued and outstanding shares are in the name of Hocking;
(c) Manloe is the owner of all assets required for the conduct of Manloe's business (the "Business") as disclosed in the financial statements of Manloe for the period ending December 31, 1997 (the "Financial Statements"), a copy of which are attached to this letter as Schedule B - "Financial Statements". The liabilities of Manloe do not and will not on the Closing Date exceed $30,000;
(d) all assets of Manloe are owned by Manloe free and clear of all liens, charges and other financial encumbrances;
(e) Hocking is the owner of all of the issued and outstanding shares in the capital of Manloe, free and clear of all liens, charges, encumbrances and security interests;
(f) Manloe has no liability or indebtedness to Hocking;
(g) neither Hocking nor any other person has any option, warrant or other right to
acquire any shares of Manloe;
(h) the books and records of Manloe fairly and correctly set out and disclose in all material respects, in accordance with generally accepted accounting principles, the financial position of Manloe as at the date hereof, and all material financial transactions of Manloe relating to the Business have been accurately recorded in such books and records;
(i) the Financial Statements present fairly and correctly the assets, liabilities (whether accrued, absolute, contingent or otherwise) and the financial condition of Manloe as at the date thereof and there will not be, prior to the Closing Date, any increase in such liabilities other than in the ordinary course of business;
(j) the Business has been carried on in the ordinary and normal course by Manloe since the date of the Financial Statements;
(k) Manloe does not have any outstanding material agreements or contracts (including employment agreements) except agreements, contracts and commitments in the ordinary course of business.
(l) Manloe is not in material default or breach of any contracts, agreements, written or oral, indentures or other instruments to which it is a party and there exists no state of facts which after notice or lapse of time or both which would constitute such a default or breach;
(m) all contracts and agreements between Manloe and its customers, suppliers and financers are in good standing and Manloe is entitled to all benefits thereunder;
(n) there are no actions, suits or proceedings pending or threatened against or affecting Manloe or Hocking or affecting the Business, at law or in equity and neither Manloe or Hocking are aware of any existing ground on which any such action, suit or proceeding might be commenced with any reasonable likelihood of success.
(o) Manloe has the right to use all of the registered trade marks, trade names and patents, both domestic and foreign, in relation to the Business and the conduct of the Business does not infringe upon the patents, trade marks, trade names or copyrights, domestic or foreign, of any other person, firm or corporation;
(p) Manloe is the registered and beneficial owner of the trademark "Manloe" and has not received notice from any third party contesting the ownership by Manloe of this trademark or claiming that the use of the trademark "Manloe" in connection with the Business infringes on the rights of the third party;
6. Representations and Warranties of the Company
The Company represents and warrants to the Shareholders that:
(a) the Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada;
(b) this agreement has been duly authorized, validly executed and delivered by the Company.
7. Obligations Pending Closing of each Subscription
Manloe and Hocking agree that the Business will be operated in the ordinary course of business in accordance with past practices pending the Closing Date.
8. Conditions Precedent to Closing
The Company's obligation to complete the purchase of the Shares will be subject to each of the following conditions:
(a) all representations and warranties of Manloe and Hocking will be true and correct in all material respects on the Closing Date;
(b) there shall have been no material adverse change to the Business between the date of this agreement and the Closing Date;
(c) Manloe will have entered into the Manufacturing and Marketing Agreement with Jazor prior to or on the Closing Date; and
(d) Manloe will have delivered an opinion of its attorney as to each of the following matters:
(i) Manloe has been duly incorporated and organized and is validly subsisting under the laws of the State of Nevada, it has the corporate power to own or lease its properties and to carry on its business that is now being conducted by it and is in good standing with respect to all filings with the appropriate corporate authorities;
(ii) the issued and authorized capital of Manloe is as set out in this agreement and all issued shares have been validly issued as fully paid and non- assessable;
(iii) all necessary approvals and all necessary steps and corporate proceedings have been obtained or taken to permit the Shares to be duly and validly
registered in the name of the Company;
(iv) the execution of this agreement, the transfer of the Shares to Company and the appointment of the Company's nominees to the board of directors, have been duly and validly authorized by all required corporate proceedings of Manloe and its shareholders and directors.
(e) Hocking will have entered into a three year employment agreement with Manloe in the form of employment agreement attached hereto as Schedule C.
9. Closing Deliveries
On the Closing Date, Manloe and Hocking will deliver to the Company:
(a) the Shares in the name of the Company;
(b) the legal opinion of Manloe's attorney, as contemplated in Section 6.;
(c) the Employment Agreement, duly executed by Manloe and Hocking;
(d) the Manufacturing and Marketing Agreement, duly executed by Manloe and Jazor;
(e) evidence of all required director and shareholder approvals, as contemplated in Section 8.;
(f) a certificate of Hocking, both in his individual capacity and as an officer of Manloe, as to the truth and correctness of the representations and warranties of Manloe and Hocking as of the Closing Date;
(g) all other corporate resolutions, agreements, assignments, consents and documentation as deemed necessary by the Company's solicitors to give effect to the transactions contemplated by this agreement in accordance with accepted commercial practice.
(h) [DELETED]
(i) a copy of the escrow agreement executed between Jazor, Manloe and Jazor's attorney pursuant to the Manufacturing and Marketing Agreement;
(j) written confirmation from Dr. James A. Roszell confirming the delivery into escrow of the formulae for "JATEX" under the escrow agreement;
On the Closing Date, the Company would deliver to Manloe the Cash Portion of the Purchase Price
and share certificates representing the Company Shares.
10. Directors
On the Closing Date, two of the Company's nominees will be appointed to the board of directors of Manloe and the number of directors of Manloe increased to three. Hocking will remain a director of Manloe.
11. Confidentiality
We each agree to keep our discussions and this agreement confidential and if for any reason the purchase and sale is not completed, we each agree to keep confidential all information furnished to each other or obtained from each other in connection with this transaction, except where disclosure is required by law.
If you and Manloe are in agreement with the terms and conditions set forth in this letter, please have two copies of this letter signed and returned to the Company as early as possible.
Yours truly,
MICROBIAL SOLUTIONS, INC.
Per: /s/ Terry Howlett Authorized Signatory |
Accepted and agreed to this __ day of March, 1998.
MANLOE LABS, INC.
by its authorized signatory:
Per: /s/ Roger Hocking Roger Hocking, President /s/ Roger Hocking ROGER HOCKING in his personal capacity |
MICROBIAL SOLUTIONS, INC.
A NEVADA CORPORATION
March 31, 1998
MR. ROGER HOCKING
- AND TO -
MANLOE LABS, INC.
6320 S. Sandhill Road, Suite #10
Las Vegas Nevada 89120
Dear Sirs:
Re: Agreement for the Acquisition by Microbial Solutions, Inc. (the "Company") of Manloe Labs, Inc. ("Manloe") from Roger Hocking ("Hocking")
We write to confirm the Company's agreement to amend the consideration payable to Hocking pursuant to Section 4 of our letter agreement dated March 2, 1998 by increasing the number of shares of the Company to be issued on closing to Hocking to 275,000 common shares. The letter agreement dated March 2, 1998 will continue in full force and effect unamended except as to the amendment to the share consideration.
Yours truly,
MICROBIAL SOLUTIONS, INC.
Per: /s/ Terry Howlett Authorized Signatory |
Accepted and agreed to this 31st day of March, 1998.
MANLOE LABS, INC.
by its authorized signatory:
Per: /s/ Roger Hocking Roger Hocking, President /s/ Roger Hocking ROGER HOCKING in his personal capacity |