MINUTES OF SPECIAL MEETING OF
THE BOARD OF DIRECTORS OF
SANGUINE CORPORATION
A special meeting of the Board of Directors of Sanguine
Corporation was called and held by telephone conference call pursuant to the
attached Call and Waiver of Notice originating from the offices of Sanguine
Corporation on the 11th day of March, 2002, at the hour of 11:35 o'clock a.m.
Present at the offices of Sanguine Corporation were Thomas C.
Drees, Ph.D., MBA; Anthony G. Hargreaves; and Edward L. Kunkel, Esq. Present
in the office of Leonard W. Burningham, Esq. were Mr. Burningham and David E.
Nelson. Dr. Drees was designated Chairman of the meeting and Mr. Hargreaves
was designated as the Secretary of the meeting.
All of the directors of the Company had executed and delivered to
the Company the attached Call and Waiver of Notice with respect to the
meeting, all directors were present at the meeting and the meeting was called
to order by the Chairman.
Mr. Nelson indicated that he intended to abstain on the action to
be taken at the meeting, which involved the consideration and approval of the
Ascendiant-Asia, LLC ("Ascendiant") Exclusive License Agreement regarding
PHER-02 in certain areas of Asia, including the People's Republic of China,
Thailand, Laos, Cambodia, Vietnam, Singapore, Malaysia, Indonesia, North
Korea, Burma, Mongolia and Taiwan; the warrants that had been granted to
Messrs. Walker, Bergendahl and Wilhite; and the funding documents regarding
First York Partners, Inc. ("First York Partners"), as described below:
(a) 5% Convertible Note for the sum of $25,000 convertible at the
lesser of (i) $.08; or (ii) sixty-six and two-thirds percent (66-
2/3%) of the average of the closing bid prices as reported by the
NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National
Market System, American Stock Exchange, New York Stock Exchange or
"Pink Sheets" (whichever of the foregoing is at the time the
principal trading exchange or market for the common stock, the
"Principal Market"), or if not then trading on a Principal Market,
such other principal market or exchange where the common stock is
listed or traded for the five trading days immediately preceding
but not including a conversion date.
(b) The Common Stock Purchase Warrant for the right to purchase
5,937,500 shares of common stock of the Company exercisable at a
purchase price of $.08, provided, however, the purchase price
shall be adjusted to be sixty-six and two-thirds percent (66-2/3%)
of the average of the closing bid prices for the Common Stock as
reported for the Principal Market (as defined in Section 10(d) of
this Warrant) for the five trading days preceding but not
including the effective date of the registration statement
referred to in Section 10.1(iv) of the Subscription Agreement.
Except in connection with other adjustments set forth in this
Warrant the Purchase Price will not be adjusted below $.08.
(c) The related Subscription Agreement regarding the 5% convertible
note and the Common Stock Purchase Warrant.
(d) The related Fund Escrow Agreement respecting the disbursement of
the proceeds of the 5% convertible note and related matters.
(e) $3,750 5% convertible note to Barbara R. Mittman for legal
services rendered regarding all of the foregoing on behalf of
First York Partners convertible at the lesser of (i) $.08; or (ii)
sixty-six and two-thirds percent (66-2/3%) of the average of the
closing bid prices as reported by the NASD OTC Bulletin Board,
NASDAQ SmallCap Market, NASDAQ National Market System, American
Stock Exchange, New York Stock Exchange or "Pink Sheets"
(whichever of the foregoing is at the time the principal trading
exchange or market for the common stock, the "Principal Market"),
or if not then trading on a Principal Market, such other principal
market or exchange where the common stock is listed or traded for
the five trading days immediately preceding but not including a
conversion date.
and the Engagement Letter and warrants for Leonard W. Burningham, Esq.
Mr. Nelson and Mr. Burningham both stated that they were not
interested in blocking any of the foregoing but wanted to assist the Company
in any manner that they could. Each was concerned that there were no "calls"
on the warrants for Messrs. Walker, Bergendahl and Wilhite, while there were
"calls" for the warrants that may be granted under the First York Partners
funding proposal. They also expressed their concerns that there was no
guarantee of any funding under the First York Partners funding proposal
because the $25,000 being invested on the convertible note were to be used for
expenses, and none of the warrants had to be exercised, even if they were
called; First York Partners could just let them lapse. This, taken with the
fact that there were no "calls" on the warrants of Messrs. Walker, Bergendahl
and Wilhite, meant that this entire process may result in no funding
whatsoever.
Dr. Drees and Mr. Hargreaves represented that they had faith in
the persons affiliated with Ascendiant, including Messrs. Walker, Bergendahl
and Wilhite, to complete the funding, and that they were certain they would
agree to couple the First York Partners funding, or some other funding, with
the granting of the Exclusive License Agreement and their warrants, and that
they would agree to some form of a "call."
With that in mind, and at the expression of Dr. Drees and Mr.
Hargreaves that the Company was in need of funds and had no other avenues from
which required funding could be obtained, it was proposed that resolutions to
adopt the Exclusive License Agreement, the warrants for Messrs Walker,
Bergendahl and Wilhite, the First York Partners funding proposal and the
Engagement Letter and warrants to Mr. Burningham should be proposed, and that
all directors, with the exception of David E. Nelson, who would abstain, would
adopt, ratify and approve those resolutions.
There being no further discussion, Mr. Burningham indicated that
he would propose the resolutions, as outlined in drafts of Consents he had
previously forwarded to the Board of Directors, which were as follows:
RESOLVED, that the Company enter into an Exclusive License
Agreement (the "Exclusive License Agreement") with
Ascendiant-Asia, LLC, a Nevada limited liability corporation
("Ascendiant-Asia"), a copy of which is attached hereto as Exhibit
A, and whereby Sanguine will grant to Ascendiant-Asia an exclusive
license to PHER-02, the licensed products, the licensed process
and all proprietary, formula, developmental, technological,
intellectual property and patent rights, and all other
applications of the above in Asia, including the People's Republic
of China, Thailand, Laos, Cambodia, Vietnam, Singapore, Malaysia,
Indonesia, North Korea, Burma, Mongolia and Taiwan;
FURTHER, RESOLVED, that the Company hereby adopts, ratifies and
approves the Exclusive License Agreement;
FURTHER, RESOLVED, that the Company is authorized to issue to
Richard H. Walker, Mark Bergendahl and Bradley J. Wilhite three
warrants to acquire 1,000,000 shares each of common stock of
Sanguine at an exercise price of $0.15 per share, such warrants to
expire on February 21, 2005, in the forms attached hereto as
Exhibits B, C and D, reserving sufficient shares from the
authorized capital of the Company for exercise of the warrants
until expiration on February 21, 2005, and approving the
"registration rights" contained in the warrants;
FURTHER, RESOLVED, that the warrants to be issued to Messrs.
Walker, Bergedahl and Wilhite are approved subject to amendment to
the warrants to provide for a "call" at any time the common stock
of the Company trades on the OTC Bulletin Board or any other
national medium on which such shares are regularly traded at a
price of no less than $1 for ten consecutive trading days, and the
completion of the First York Partners or some other acceptable
funding proposal referred by Ascendiant Capital Group, Inc.
("Ascendiant Capital");
FURTHER, RESOLVED, that the shares underlying such warrants be
fully paid and non-assessable, on exercise and payment in
accordance with the warrants;
FURTHER, RESOLVED, that the officers and directors of the Company
are hereby authorized to enter into and to sign on behalf of the
Company the First York Partners Subscription Agreement regarding a
5% Convertible Note convertible into shares of the Company's
$0.001 par value common stock and the related Common Stock
Purchase Warrants; the related Convertible Note; the related
Common Stock Purchase Warrant, the related Funds Escrow Agreement,
and the related Mittman convertible note, copies of which are
attached hereto and made a part hereof;
FURTHER, RESOLVED, that the Company will reserve pro rata on
behalf of each holder of a Note or Warrants, a number of common
shares equal to not less than the amount of shares necessary to
allow each such holder to be able to convert all such outstanding
Notes, at the then applicable price, and one share of common stock
for each common share issuable upon exercise of the Warrants;
FURTHER, RESOLVED, that the Company authorizes every action to be
taken for and on behalf of the Company by any of its officers as
outlined in any of the foregoing documents, without qualification,
including the filing of any Registration Statement with the
Securities and Exchange Commission;
FURTHER, RESOLVED, that all securities, when issued pursuant to
any of the foregoing documents, shall be validly issued and will
be fully paid and non-assessable, on receipt of the consideration
stated in such documents;
FURTHER, RESOLVED, that the Company hereby adopts, ratifies and
approves the Engagement Letter to engage Leonard W. Burningham,
Esq., a copy of which is attached hereto and made a part hereof;
FURTHER, RESOLVED, that the Company is authorized to issue to
Leonard W. Burningham, Esq. a warrant to acquire 500,000 shares of
common stock of the Company at an exercise price of 50% of the bid
price for the five trading days prior to the date of exercise at
the end of any monthly billing cycle or $0.08 (Eight Cents) per
share, whichever is lower, payable in cash or services, such
warrant to expire on March 11, 2005, in the form attached hereto
as Exhibits E, reserving sufficient shares from the authorized
capital of the Company for exercise of the warrant until
expiration on March 11, 2005, and approving the "registration
rights" contained in the warrants;
FURTHER, RESOLVED, that the shares underlying such warrants shall
be fully paid and non-assessable on receipt of cash or services
valued at the exercise price of these warrants; and
FURTHER, RESOLVED, that all of the foregoing issuances shall be
excepted from the Nevada Control Share Acquisitions Act.
There being no further business to come before the meeting, and a
motion that the meeting be adjourned having been duly made, seconded and
unanimously carried, the meeting was adjourned.
/s/Thomas C. Drees
___________________________________
Thomas C. Drees, Ph,.D., MBA, Chairman
/s/Anthony G. Hargreaves
___________________________________
Anthony G. Hargreaves, Secretary