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To: Labrador who wrote (3757)	9/15/1999 6:46:00 PM
From: Labrador	Respond to of 4122

This was in the May S filed with the SEC. Has anyone voted yet? I presume that they just let it lapse without a vote. I wonder if a vote was not really required since between the Grables and Schwatz, they control the vote? AGREEMENT --------- In June 1998, the Company and Mr. Grable, entered into the Patent Licensing Agreement. Pursuant to the terms of the Patent Licensing Agreement, the Company was granted the exclusive right to modify, customize, maintain, incorporate, manufacture, sell, and otherwise utilize and practice the Patent, all improvements thereto and all technology related to the process, throughout the world. This license shall apply to any extension or re-issue of the Patent. The term of the license is for the life of the Patent (17 years) and any renewal thereof, subject to termination, under certain conditions. As consideration for the License, on June 5, 1998, the Company issued to Mr. Grable 3,500,000 shares of common stock and is required to issue and additional 3,500,000 shares in June 1999. The market price of the Shares at the time of issuance was $.54 per Share. In addition, the Company has agreed to pay to Mr. Grable, a royalty based upon the net selling price (the dollar amount earned from the sale by the Company, both international and domestic, before taxes minus the cost of the goods sold and commissions or discounts paid), of all products and goods in which the Patent is used, before taxes and after deducting the direct cost of the product and commissions or discounts paid (the "Royalty"). During the second year of the Agreement there is a minimum cash royalty provision of $250,000 payable at the end of the second year. The Board of Directors did not submit the matter for a shareholder's vote prior to the execution of the Patent License Agreement or the issuance of the shares, since shareholder approval was not required by the Florida Business Corporation Act. Pursuant to the Patent License Agreement, the Company is required to have the Patent License Agreement ratified by its Shareholders at its next special or annual meeting of Shareholders in order for the Licensing Royalties set forth above, to take the place of the Development Royalties set forth in the Amendment to Mr. Grable's Employment Agreement, and for such Amendment to become void and have no effect. The ratification by the shareholders was requested by Mr. Grable, based upon advice from his counsel. If shareholder ratification is not obtained, the Company would contractually be required to pay Development Royalties until July 4, 1999 (the expiration date of Mr. Grable's Employment Agreement) in addition to the Patent License Royalties. If ratification is received, in the event that litigation is instituted with regard to the validity of the Patent License Agreement, the Company or Mr. Grable could and may assert as a defense that shareholders approved the Patent License. All shareholders will be entitled to vote on the ratification. The Patent Licensing Agreement also contains anti-dilution protection upon the occurrence of any stock dividend, stock split, combination or exchange of shares, reclassification or re-capitalization of the Company's common stock, reorganization of the Company, consolidation with or merger into or sale or conveyance of all or substantially all of the Company's assets to another corporation or any other similar event which serves to decrease the number of Shares issued pursuant to the Patent Licensing Agreement. See "Risk Factors-Possible Conflict of Interest" and "Certain Transactions". The Patent has generated no revenues to date. The Company had anticipated generating revenues in the 4th fiscal quarter beginning April 1999. However, due to the developmental and clinical investigational trial delays, it is unlikely that these projections will be met.