<PAGE>
As filed with the Securities and Exchange Commission
on July 1, 1996
Registration No. __________
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT
ON
FORM S-3
UNDER
THE SECURITIES ACT OF 1933
MEHL/BIOPHILE INTERNATIONAL CORPORATION
(Exact name of issuer as specified in its charter)
Delaware 2844 22-2408186
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
Thomas L. Mehl, Sr.
MEHL/Biophile International Corporation
4020 Newberry Road
Gainesville, Florida 32607
(352) 373-2565
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Alan J. Bernstein
Marks & Murase L.L.P.
399 Park Avenue
New York, New York 10020
(212) 318-7700
Approximate date of commencement of proposed sale to public:
As soon as practicable after this Registration Statement becomes effective. [x]
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
<PAGE>
shall thereafter becomes effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a),
may determine.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
If this Form is filed to registered additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
______________________________________________________________________________
Proposed
maximum Proposed
Title of each class of offering maximum Amount of
securities to Amount to price per aggregate Registration
be registered be registered unit (1) offering price (1) fee
_______________________________________________________________________________
Common Stock, $.01 par 3,000,000(2) $4.375 $13,125,000 $4,525.86
_______________________________________________________________________________
(1) Pursuant to Rule 457(c), the offering price and amount of registration fee
have been calculated based upon the last sale price of the Registrant's Common
Stock as reported on the Nasdaq Small Cap Market on June 27, 1996.
(2) There are being registered hereunder the number of shares of Common Stock
required at the conversion price for conversion of the 5% Cumulative
Convertible Preferred Stock, Series C of the Registrant as of June 27, 1996
together with such additional indeterminate number of shares of Common Stock as
may become issuable upon conversion by reason of adjustments in the conversion
price caused by stock splits, stock dividends and similar transactions.
<PAGE>
SELVAC CORPORATION
Cross-Reference Sheet Pursuant to Rule 404(a)
and Item 501(b) of Regulation S-K
Form S-3 Item Number and Caption Caption in Prospectus
1. Forepart of the Registration Statement Cover Page
and Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Cover Inside Front and Outside Back
Pages of Prospectus Cover Pages of Prospectus;
Available Information
3. Summary Information, Risk Factors The Company; Risk Factors
and Ratio of Earnings to Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Cover Page, Plan of
Distribution
9. Description of Securities to be Not Applicable
Registered
10. Interests of Named Experts and Legal Matters, Experts
Counsel
11. Material Changes Recent Developments
12. Incorporation of Certain Information Incorporation of Certain
by Reference Information by Reference
13. Disclosure of Commission Position on Not Applicable
Indemnification
<PAGE>
Subject to Completion, Dated July 1, 1996
PROSPECTUS
MEHL/BIOPHILE INTERNATIONAL CORPORATION
_______________
3,000,000 SHARES
COMMON STOCK (par value of $.01 per share)
_________
Issuable on Conversion of 5% Cumulative Convertible
Preferred Stock, Series C
The 2,500,000 shares (the "Shares") of Common Stock, par value $.01 per share
(the "Common Stock"), of MEHL/Biophile International Corporation (the
"Company"), offered by this Prospectus are issuable upon the conversion of
shares of the Company's Cumulative Convertible Preferred Stock, Series C, par
value $10 per share ("Series C Preferred Stock") issued by the Company on May
15, 1996 and may be sold from time to time by the persons named herein as
selling stockholders (the "Selling Stockholders"). The Company will not
receive any proceeds from the sale of the Common Stock offered hereby.
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS."
Sales may be made from time to time in the over-the-counter market at prices
prevailing at the time of sale, or in private transactions at negotiated
prices, and any commissions paid or discounts given will be those customary in
the type of transaction involved. See "Plan of Distribution."
Any brokers and dealers through whom sales of the Common Stock are made may be
deemed "underwriters" within the meaning of the Securities Act of 1933 with
respect to the Common Stock, and any profits realized or commissions received
may be deemed underwriting compensation.
Expenses of this offering (other than brokerage commissions) are payable by the
Company and estimated not to exceed $30,000.00.
The closing bid price of the Common Stock quoted on the Nasdaq Small Cap Market
under the symbol MEHL on June 27, 1996 was $4.375.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY MISREPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is _________, 1996.
<PAGE>
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION 3
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 3
THE COMPANY 5
RISK FACTORS 5
RECENT DEVELOPMENTS 8
PLAN OF DISTRIBUTION 10
SELLING STOCKHOLDERS 11
LEGAL MATTERS 12
EXPERTS 12
____________________
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION
TO ANY PERSON TO WHOM SUCH OFFER WOULD BE UNLAWFUL OR AN OFFERING OF ANY
SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER AT ANY
TIME SHALL IMPLY THAT THE INFORMATION PROVIDED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
<PAGE>
AVAILABLE INFORMATION
This Prospectus does not contain all of the information set forth in the
Registration Statement of which this Prospectus is a part and which is filed
with the Securities and Exchange Commission (the "Commission"). The Company is
subject to the informational requirements of the Securities Exchange Act of
1934 (the "Exchange Act") and, in accordance therewith, files reports, proxy
statements and other information with the Commission. For further information
with respect to the Company, reference is made to such Registration Statement
and the exhibits thereto, and to such reports, proxy statements and other
information filed with the Commission. Such Registration Statement, reports,
proxy statements and other information can be inspected and copied at the
public reference facilities of the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at Room 1400, 75 Park Place, New York, New York 10007
and Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended May
31, 1995.
2. The Company's Quarterly Reports on Form 10-QSB for the three month periods
ended August 31, 1995, November 30, 1995 and February 29, 1996.
3. The Company's definitive proxy statement filed pursuant to Section 14 of
the Exchange Act in connection with the June 4, 1996 special meeting of
shareholders and any definitive proxy statements or information statements so
filed in connection with any subsequent meetings of shareholders.
4. The Company's Current Report on Form 8-K filed on June 19, 1996.
All documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Shares shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed
<PAGE>
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Copies of any and all documents that have been incorporated by reference
herein, other than exhibits to such documents, may be obtained upon request
without charge from the Company's Corporate Secretary, MEHL/Biophile
International Corporation, 4020 Newberry Road, Gainesville, Florida 32607,
telephone number (352) 373-2565.
<PAGE>
THE COMPANY
The Company was organized under the laws of Delaware on June 28, 1982. In
connection with the recent merger of its wholly-owned subsidiary with Classy
Lady by Mehl of Puerto Rico, Inc., the Company changed its name from "Selvac
Corporation" to "MEHL/Biophile International Corporation". See "Recent
Developments." The Company has its principal executive office at 4020 Newberry
Road, Gainesville, Florida 32607. The telephone number is (352) 373-2565.
RISK FACTORS
IN EVALUATING AN INVESTMENT IN THE COMPANY, PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER THE FOLLOWING CONSIDERATIONS IN ADDITION TO THE OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS.
UNCERTAIN IMPACT OF PROPOSED MERGER AND CHANGE IN CONTROL. On June 4, 1996,
the Company completed a merger transaction whereby Classy Lady by Mehl of
Puerto Rico, Inc. ("Classy Lady") has been merged with and into a wholly-owned
subsidiary of the Company in exchange for an aggregate of 25 million shares of
Common Stock. See "Recent Developments - Merger with Classy Lady." Pursuant
to such merger, the Company obtained exclusive patents rights to certain
multiple hair removal and laser hair removal technologies. There can be no
assurance that the hair removal technologies, for which Classy Lady has certain
patent rights can be commercially developed, marketed and sold profitably or
that the business combination will otherwise have a positive effect on the
financial condition and business prospects of the Company. In addition, the
merger transaction with Classy Lady has resulted in a majority of the Company's
Common Stock being owned by the former shareholders of Classy Lady, resulting
in a change of control of the Company. The Company is unable to predict the
impact of such a change in control on the business prospects and financial
condition of the Company.
UNCERTAIN IMPACT OF SLS ACQUISITION. On June 4, 1996, the Company completed
the acquisition of an 81% interest in SLS (Wales) Limited ("SLS"), a privately-
held company in Wales engaged in the development, manufacturing and marketing
of lasers. See "Recent Developments - Acquisition of SLS." Although the
Company believes that SLS has very valuable patent and technology rights and
has a number of projects under development which can be commercially exploited,
to date SLS has not generated substantial income and has operated at a loss.
There can be no assurance that SLS will be able to develop, market and sell its
products profitably.
FUTURE NEED FOR CAPITAL. Although the Company has recently completed a $10
million private placement offering (see "Recent Developments - Issuance of
Series C Preferred Stock"), management of the Company anticipates that
commercial exploitation of Classy Lady's and SLS' patent rights will require
substantial additional capital. There can be no assurance that additional
<PAGE>
capital requirements will be available on acceptable terms or at all. Future
financings could have dilutive effect on the Company's shareholders.
DEPENDENCE ON KEY PERSONNEL. The Company's success is dependent on certain key
management personnel. Competition for qualified employees is intense, and the
loss of such key personnel, or the inability to attract and retain the
additional highly skilled employees required for the Company's activities,
could adversely affect its business.
DEPENDENCE ON FDA PRE-MARKET CLEARANCE. The Company's laser hair removal
technologies to which Classy Lady holds an exclusive license and which are held
by SLS will require 510(k) pre-market clearance from the U.S. Food and Drug
Administration ("FDA") prior to the manufacture or sale in the United States.
Although the Company believes that the laser hair removal technology is
substantially equivalent to laser technology which has received pre-market
clearance from the FDA, there can be no assurance that the Company's laser
technology will receive FDA clearance on a timely basis or at all. Failure to
obtain such clearance would adversely affect the Company's business and its
financial prospects.
UNCERTAIN MARKET ACCEPTANCE OF LASER HAIR REMOVAL. Historically, hair removal
technologies have utilized electric current, radio frequency, depilatory cremes
and other methods. There can be no assurance that consumers of hair removal
products will accept the use of lasers for hair removal.
RISK OF COMPETITION WITH COMPETITORS HAVING SUBSTANTIALLY GREATER RESOURCES.
There are several companies that offer the hair removal products sold and
anticipated to be sold by the Company and its subsidiaries which compete with
the Company. Many of such other companies have established markets, product
history, and substantially larger sales and service organizations and financial
strength than the Company. There can be no assurance that the Company will be
able to compete successfully with such other companies.
RISK OF PRODUCT LIABILITY. The Company may be subject to claims for personal
injuries or other damages resulting from its products or services. There can
be no assurance that the Company's product liability insurance will be
sufficient to protect the Company against liability that could have a material
adverse effect on the Company.
UNCERTAINTY OF PROTECTION OF PATENTS AND PROPRIETARY INFORMATION. There can be
no assurance that the patents owned or licensed by the Company and its
subsidiaries will not be challenged. The issuance of a patent to the Company
or a licensor is not conclusive as to validity or as to the enforceable scope
of claims therein. The validity and enforceability of a patent can be
challenged by litigation after its issuance; and, if the outcome of such
litigation is adverse to the owner of the patent, the owner's rights could be
diminished or withdrawn. The patent laws of other countries may differ from
those of the United States. There can be no assurances that any patents will
<PAGE>
provide substantial protection or be of commercial benefit to the Company. The
absence of patents and patent applications for the Company's hair removal
technology may adversely affect the Company's prospects.
The technologies used by the Company could be subject to claims of infringement
of patents or proprietary technology of others. The cost of enforcing the
Company's patent rights in lawsuits that the Company may bring against
infringers or defending itself against infringement charges by other patent
holders may be high and could interfere with the Company's operations.
Trade secrets and confidential know-how may be important to the Company's
scientific and commercial success. Although the Company seeks to protect its
proprietary information through confidentiality agreements and appropriate
contractual provisions, there can be no assurance that others will not develop
independently the same or similar information or gain access to proprietary
information of the Company.
CONTROL BY PRINCIPAL SHAREHOLDERS; NO CUMULATIVE VOTING. There is no
cumulative voting for the election of directors of the Company. Accordingly,
the beneficial owners of a majority of the Company's outstanding Common Stock
voting in an election of directors, may elect all directors nominated for
election, if they choose to do so, and the owners of the remaining shares will
not be able to elect any directors. Thomas L. Mehl, Sr., Nardo Zaias and
Pichit Suvanprakorn beneficially own approximately a total of 56.2% of the
voting rights of the Company and accordingly have effective voting control of
any matter voted on by the Company's shareholders.
PRIOR DEPENDENCE ON SINGLE PRODUCT; DECLINING SALES. Virtually all of the
Company's revenues in prior periods have been derived from the sale of its
Finally Free hair removal product. For the years ended May 31, 1994 and 1995,
sales of Finally Free represented 99.1% and 99.7% of the Company's net sales,
respectively. Revenues derived from the sale of Finally Free products have
been declining from $3,823,000 in the 1993 fiscal year, to $2,897,000 in the
1994 fiscal year to $2,733,000 in the 1995 fiscal year. Although the Company
plans to develop, market and sell other products, there can be no assurance
that other products will be successfully developed and sold and contribute to
the Company's revenues and profits or that sales of the Finally Free product
will not continue to decline.
DEPENDENCE ON PRINCIPAL CUSTOMERS. For the years ending May 31, 1995, 1994 and
1993, sales to the Company's principal customer, Ikeda Corporation ("Ikeda")
represented 76%, 68% and 36% of the Company's total sales, respectively and
sales to Impromedia S.L., ("Impromedia") the Company's next biggest customer
represented 10%, 25% and 0% of the Company's total sales, respectively. The
Company expects to develop a substantial customer base for the Classy Lady and
SLS hair removal technologies, but until such revenues commence, the loss or
reduction of sales to Ikeda, and to a lesser extent, Impromedia, would have a
material adverse effect on the financial condition of the Company.
<PAGE>
NO DIVIDENDS ON COMMON STOCK. The Company anticipates that for the foreseeable
future, all earnings, if any, will be retained for the operation and expansion
of the Company's business, and it will not pay cash dividends.
RECENT DEVELOPMENTS
MERGER WITH CLASSY LADY
On June 4, 1996, Classy Lady by Mehl of Puerto Rico, Inc., a privately-held
Puerto Rico company ("Classy Lady"), merged with and into a wholly-owned
subsidiary of the Company (the "Merger"). In consideration for the Merger, the
Company issued an aggregate of 25,000,000 shares of Common Stock, $.01 par
value per share, to the shareholders of Classy Lady. As a result of the
Merger, the former Classy Lady shareholders own, in the aggregate approximately
62% of the outstanding Common Stock of the Company, thereby resulting in a
change of control of the Company.
The following three principal shareholders of Classy Lady received an aggregate
of 22,669,000 shares of Common Stock upon completion of the Merger,
representing approximately 56.2% of the total outstanding number of shares of
the Company: Thomas L. Mehl, Sr., and Anne Marie Mehl (9,197,000 shares or
22.8%); Dr. Nardo Zaias (9,197,000 shares or 22.8%); and Pichit Suvanprakorn
(4,275,000 shares or 10.6%).
In exchange for the issuance of the shares of the Company issued pursuant to
the Merger, the Company obtained all of the stock of Classy Lady, which owns
the exclusive licensing rights granted to Classy Lady by Thomas L. Mehl, Sr.
for a multiple hair removal technology and by Dr. Nardo Zaias for a laser hair
removal technology.
The Merger was completed in accordance with the terms of the Second Amended and
Restated Agreement and Plan of Merger dated as of June 4, 1996 (the "Merger
Agreement"). Pursuant to the Merger Agreement, (i) the name of the Company was
changed to Mehl/Biophile International Corporation, (ii) Thomas L. Mehl, Sr.
("Mehl"), a principal shareholder of Classy Lady, was elected as Chairman of
the Board of Directors, President and Chief Executive Officer of the Company;
and (iii) the Board of Directors of the Company was expanded to seven members,
five of whom were designated by Mehl.
The Merger as originally negotiated between the parties provided for the
issuance of 15 million shares of Common Stock of the Company at the Closing of
the Merger and up to an additional 10 million shares upon the completion of
certain designated milestones. Based on (i) the joint venture agreement
entered into by Classy Lady with Laser Industries Ltd., the formation of a
joint venture thereunder and the contribution thereto of a promissory note by
Laser Industries Ltd., (ii) the acquisition of SLS described below and (iii)
the completion of the $10,000,000 private placement described below, the Board
<PAGE>
of Directors of the Company determined that all of the designated milestones
had been met as of the closing of the Merger and the Company issued all 25
million shares of stock to the Classy Lady stockholders at the closing of the
Merger.
<PAGE>
ACQUISITION OF SLS
On June 4, 1996, the Company completed the purchase of capital stock
representing in the aggregate of 81% interest in SLS (Wales) Limited, a
privately held Welsh company ("SLS") engaged in developing, manufacturing and
selling lasers primarily in the field of hair removal. The consideration for
the acquisition of the SLS shares consisted of a cash payment approximately
$1.9 million and the assumption of certain liabilities and obligations of SLS
and the issuance of 25,044 shares of the Company's Common Stock. The portion
of the consideration comprised of cash funds paid by the Company was derived
from a private placement offering of $3,000,000 of 8% Convertible Debentures
completed in April 1996. The consideration paid was based upon arms-length
negotiations between the Company and the holders of the SLS shares.
SLS holds patents pending, invented by Marc Clement, Ph.D., which are
compatible with the Zaias patent exclusively licensed to the Company in the
field of laser depilation. At its research and manufacturing facility in
Wales, SLS has been developing and clinically evaluating laser depilation
technology since 1993 and presently manufactures and markets its Chromos 694
ruby laser depilation system. SLS has received European Union (EU) regulatory
approval for the manufacture and sale of the Chromos 694 depilation laser in
Europe. SLS also provides a mobile laser depilation service in the United
Kingdom which allows the Chromos 694 system to be brought directly to hair
removal clinics and doctor's offices.
The Company intends to continue the use of the assets of SLS acquired for the
development, manufacture and sale of laser systems. Together with SLS, the
Company is currently negotiating additional joint ventures for the Chromos 694
depilation laser system in New Zealand, Australia, South Africa, Switzerland,
Denmark, Germany, France, Spain, United Kingdom, Austria, Bulgaria, Sweden,
Holland, Italy, Israel, Egypt, the United Arab Emirates, Thailand, Taiwan,
Korea, Japan and Hong Kong. The Company also intends to continue offering a
range of laser based technologies already established by SLS, including skin
resurfacing, wrinkle removal and the treatment of vascular lesions. The SLS
Chromos 595 vascular lesion system, which has an installed base in over 60
locations worldwide, also has EU regulatory approval for manufacture and sale
in Europe.
Prior to the acquisition, there was no material relationship between the
Company and SLS. Marc Clement, a shareholder and executive of SLS, was elected
as a director of the Company following closing of the acquisition.
ISSUANCE OF SERIES C PREFERRED STOCK
On May 15, 1996, the Company completed a private placement offering exempt
under Regulation D promulgated under the Securities Act of 1933 of 10,000
shares of 5% Cumulative Convertible Preferred Stock, Series C, par value $10
<PAGE>
per share (the "Series C Preferred Stock"), for an aggregate purchase price of
$10,000,000. Holders of the Series C Preferred Stock are entitled to receive
dividends payable at the annual rate of 5% per annum.
The Series C Preferred Stock is convertible into Common Stock of the Company at
the lesser of (i) 80% of the average market price on the five trading days
prior to conversion and (ii) $7.50, but in no event shall be below $3.00. The
Company agreed to file a registration statement covering the public sale of the
shares of Common Stock receivable upon conversion of the Series C Preferred
Stock on or before June 30, 1996. The Series C Preferred Stock may not be
converted until the earlier of (i) the 90th day following issuance and (ii) the
date on which the aforementioned registration statement is declared effective
by the Securities and Exchange Commission; provided, however, that no holder is
entitled to convert Series C Preferred Stock into Common Stock, if after such
conversion, the number of shares of Common Stock beneficially owned by such
holder would exceed 4.9% of the issued and outstanding Common Stock of the
Company.
The rate of conversion of the Series C Preferred Stock into Common Stock is
subject to adjustment if the registration statement described above is not
declared effective by the SEC within 90 days after issuance, or if a stop order
has been issued regarding such registration statement has been issued or if the
Company's Common Stock is not listed for quotation on the Nasdaq Small Cap
Market. In connection with the sale and issuance of the Series C Preferred
Stock, the Company and the holders thereof agreed to certain reciprocal
indemnification against certain liabilities, including liabilities under the
Securities Act of 1933.
PLAN OF DISTRIBUTION
This Prospectus relates to the sale by the Selling Stockholders of the Shares.
The Shares may be sold from time to time, in whole or in part, by the Selling
Stockholders, or their pledges, donees, transferees, or other successors in
interest, in the over-the-counter market at then prevailing market prices or in
privately negotiated transactions. Although the Company ultimately expects
that all Shares may be sold, the actual number of Shares that will be sold
cannot be determined.
In offering the Shares, the Selling Stockholders and any selling broker or
dealer may be deemed to be statutory "underwriters" within the meaning of
Section 2(11) of the Securities Act in connection with such sales.
The Company has advised the Selling Stockholders that they, because they may be
deemed to be statutory underwriters, will be subject to the Prospectus delivery
requirements under the Securities Act. The Company has also advised the
Selling Stockholders that in the event of a "distribution" of their shares,
such Selling Stockholders, any selling broker or dealer and any "affiliated
purchasers" may be subject to Rule 10b-6 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), until its participation in that
<PAGE>
distribution is completed. A "distribution" is defined in Rule 10b-6(c)(5) as
an offering of securities "that is distinguished from ordinary trading
transactions by the magnitude of the offering and the presence of special
selling efforts and selling methods." The Company has also advised the Selling
Stockholders that Rule 10b-7 under the Exchange Act prohibits any "stabilizing
bid" or "stabilizing purchase" for the purpose of pegging, fixing or
stabilizing the price of Common Stock in connection with this offering.
The Company will pay all the expenses, estimated to be $20,000 in connection
with this offering, other than underwriting commissions and discounts, and also
agreed to pay expenses of up to $10,000 for counsel fees and expenses of the
Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth the number of shares of Common Stock of the
Company beneficially owned by the Selling Stockholders on June 27, 1996, (which
number represents the number of shares of Common Stock issuable upon the
Conversion of Preferred Stock as of such date), the number of Shares covered by
this Prospectus and the amount retained by the Selling Stockholders after the
offering. All shares set forth as owned on the date hereof are beneficially
owned and the sole voting and investment power is held by the person named.
Number of
Number of Shares Shares
Beneficially Covered by Number of
Name Owned on this Shares to be
June 27, 1996(1) Prospectus(1) Retained
GFL Performance Fund Ltd. 2,341,920 3,000,000 0
(1) As described above under "Recent Developments - Issuance of Series C
Preferred Stock," the number of shares receivable upon conversion of the 10,000
shares of the Series C Preferred Stock held by the Selling Stockholder cannot
be fixed until actual conversion, since the conversion rate fluctuates based on
the average market price of the Common Stock on the five trading days
prior to conversion. If converted on June 27, 1996, the number of shares of
Common Stock receivable would be 2,341,920. This Prospectus covers additional
shares of Common Stock to cover the possibility of additional shares being
<PAGE>
issuable upon conversion of the Series C Preferred Stock due to changes in the
market price of the Common Stock.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Marks & Murase L.L.P., 399 Park Avenue, New York, New York 10022.
EXPERTS
The financial statements of the Company for the years ending May 31, 1995 and
1994 appearing in this Prospectus and Registration Statement have been audited
by Bond, Andiola & Company, as set forth in their respective reports thereon
appearing elsewhere herein and in the Registration Statement, and are included
in reliance upon such reports given upon the authority of such firm as experts
in accounting and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Registration Fee $ 4,526.86
Legal Fees and Expenses* $10,000
Accountants' Fees* $ 3,000
Selling Stockholder Expenses $10,000
Miscellaneous $ 2,473.14
Total Expenses $30,000.00
* Estimated.
______________
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity if the director acted in good
faith, and if the director reasonably believed, in the case of conduct in the
director's official capacity with the Corporation, that the conduct was in the
best interests of the Corporation; in all other cases, that the conduct was at
least not opposed to the best interests of the Corporation; that the conduct
was in the best interests of the interests of the Corporation; and in any
criminal proceeding, had no reason to believe the conduct was unlawful.
The Company's Certificate of Incorporation provides that:
No director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a Director,
except for liability (i) for any breach of the Director's duty of loyalty to
the Corporation or its Stockholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of the
law; (iii) for the payment of unlawful dividends or unlawful stock repurchases
or redemptions under Section 174 of the Delaware General Corporation Law; or
(iv) for any transactions from which the Director derived an improper/personal
benefit.
Section VI of the By-laws of the Company contain the following provisions:
<PAGE>
SECTION 1. General. The Corporation shall indemnify any person who is or was
a party to or is threatened to be made a party to any threatened, pending, or
contemplated action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including reasonable attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding, to the extent, and subject to
the conditions prescribed by statute and by such rules and regulations, not
inconsistent with statute, as the Board of Directors may in its discretion
impose in general or particular cases or classes of cases.
SECTION 2. Rights Not Exclusive. The indemnification provided by this Article
VI shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any law, by-law, 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 such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 3. Insurance. The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted by him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article VI.
Item 16. Exhibits.
3 Certificate of Incorporation of the Corporation and all Amendments.
(Incorporated by reference to registration number 2-86149)
3(b) By-laws of the Corporation. (Incorporated by reference to registration
number 2-86149)
5 Opinion of Marks & Murase L.L.P.
<PAGE>
10.1 Securities Purchase Agreement dated as of May 15, 1996 by and between the
Registrant and GFL Performance Fund Ltd.
10.2 Registration Rights Agreement dated as of May 15, 1996 by and between the
Registrant and GFL Performance Fund Ltd.
24(a) Consent of Bond, Andiola & Company
24(b) Consent of Marks & Murase (the consent of counsel is contained
in their opinion)
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
<PAGE>
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendments thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York on June __, 1996.
MEHL/BIOPHILE INTERNATIONAL CORPORATION
(Registrant)
By: S/ Thomas L. Mehl, Sr.
Thomas L. Mehl, Sr., Chairman of
the Board, President
and Chief Executive Officer
The undersigned hereby appoint Thomas L. Mehl, Sr. and Allan Borkowski and
any of them as the proxy, agent and attorney-in-fact to execute and sign any
and all amendments to this registration statement in the capacities set forth
after their respective names below.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Signature and Title Date
S/ Thomas L. Mehl, Sr. June 27, 1996
Thomas L. Mehl, Sr.
Chairman of the Board,
President and Chief Executive
Officer
S/ AnnMarie Mehl June 27, 1996
AnnMarie Mehl
Director
S/ Nardo Zaias June 27, 1996
Nardo Zaias
Director
<PAGE>
______________________________ June __, 1996
Pichit Suvanprakorn
Director
S/ Allan Borkowski July 1, 1996
Allan Borkowski
Vice Chairman of the Board and
Principal Financial and Accounting Officer
S/ Mark Clement June 30, 1996
Mark Clement
Director
S/ Tom Clements June 28, 1996
Tom Clements
Director
S/ Carlos Nieves June 30, 1996
Carlos Nieves
Director
S/ Paul W. Hartloff, Jr. July 1, 1996
Paul W. Hartloff, Jr.
Director
<PAGE>
Exhibit 5
July 1, 1996
MEHL/Biophile International Corporation
4020 Newberry Road
Gainesville, Florida 32607
Dear Sirs:
We have acted as counsel to MEHL/Biophile International Corporation (the
"Company") in connection with the Registration Statement of Form S-3 (the
"Registration Statement") being filed with the Securities and Exchange
Commission on July 1, 1996 covering up to 3,000,000 shares of the Company's
Common Stock (the "Shares") issuable upon the conversion of 10,000 shares of 5%
Cumulative Convertible Preferred Stock, Series C (the "Preferred Shares").
We are of the opinion that upon the issuance of the Shares in accordance with
the terms of conversion of the Preferred Shares, the Shares will when sold be
legally issued, fully paid and non-assessable.
We hereby consent to the inclusion of our name under the caption "Experts" in
the Prospectus which is included in the Registration Statement.
Very truly yours
Marks & Murase L.L.P.
<PAGE>
Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of May 15, 1996 by
and among Selvac Corporation, a Delaware corporation, with headquarters
located at 221 Boston Post Road, Marlboro, MA 01752 (the "Company"), and the
undersigned (the "Buyer").
WHEREAS:
A. The Company and the Buyer are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Rule 506
under Regulation D ("Regulation D") as promulgated by the United States
Securities and Exchange Commission (the "SEC") under the Securities Act of
1933, as amended (the "1933 Act");
B. The Buyer wishes to purchase, in the amounts and upon the terms and
conditions stated in this Agreement, shares of the Company's 5% Cumulative
Convertible Preferred Stock, Series C, $10 par value per share (the "Preferred
Shares"), which shall be convertible into shares of the Company's Common Stock
(the "Common Stock"), $.01 par value, (as converted, the "Conversion Shares"),
and pursuant to which certain shares of Common Stock may be issued to the
Buyer in accordance with Section 2(c) of the Certificate of Designation
therefor (the "Damage Shares"); and
C. Contemporaneously with the execution and delivery of this Agreement, (i)
the parties hereto are executing and delivering a Registration Rights
Agreement (the "Registration Rights Agreement") pursuant to which the Company
has agreed to provide certain registration rights under the 1933 Act and the
rules and regulations promulgated thereunder, and applicable state securities
laws, and (ii) the parties hereto and certain persons named therein are
executing and delivering a side letter agreement (the "Side Letter Agreement")
pursuant to which the Company and the certain persons named therein have
agreed to cause the Company's Certificate of Incorporation to be amended;
NOW THEREFORE, the Company and the Buyer hereby agrees as follows:
1. PURCHASE AND SALE OF PREFERRED SHARES.
a. Purchase of Preferred Shares. The Company shall issue and sell to the
Buyer and the Buyer shall purchase 10,000 Preferred Shares which shall be
convertible into Conversion Shares in accordance with the terms of the
Certificate of Designations, Preferences and Rights of 5% Cumulative
Convertible Preferred Stock, Series C in the form attached hereto as Exhibit A
(the "Certificate of Designation"). The per share purchase price of the
Preferred Shares shall be One Thousand Dollars ($1,000).
c. Form of Payment. The Buyer shall pay the purchase price for the
Preferred Shares (the "Purchase Price") by wire transfer of immediately
<PAGE>
available United States Dollars to the Company on the Closing Date (as defined
below). The Company shall promptly deliver a stock certificate, duly executed
on behalf of the Company, representing the Preferred Shares (the "Stock
Certificate") to the Buyer.
d. Closing Date. The date and time of the issuance and sale of the
Preferred Shares shall be 5:00 p.m. Eastern Standard Time on May 15, 1996 (the
"Closing Date").
2. BUYER'S REPRESENTATIONS AND WARRANTIES
The Buyer represents and warrants to the Company that:
a. Investment Purpose. The Buyer is purchasing the Preferred Shares for
its own account for investment only and not with a view towards, or for resale
in connection with, the public sale or distribution thereof except pursuant to
sales registered under the 1933 Act.
b. Accredited Investor Status. The Buyer is an "accredited investor" as
that term is defined in Rule 501(a)(3) of Regulation D.
c. Reliance on Exemptions. The Buyer understands that the Preferred Shares
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws
and that the Company is relying upon the truth and accuracy of, and the
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Preferred Shares.
d. Information. The Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Preferred Shares
which have been requested by the Buyer. The Buyer and its advisors, if any,
have been afforded the opportunity to ask questions of the Company and have
received complete and satisfactory answers to any such inquiries. The Buyer
understands that its investment in the Preferred Shares involves a high degree
of risk. The Buyer has sought such accounting, legal and tax advice as it has
considered necessary to an informed investment decision with respect to its
acquisition of the Preferred Shares.
e. Governmental Review. The Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Preferred Shares or
the fairness or suitability of the investment in the Preferred Shares, nor
have such authorities passed upon or endorsed the merits of the offering of
the Preferred Shares.
f. Transfer or Resale. The Buyer understands that (i) except as provided
in the Registration Rights Agreement, the Preferred Shares, the Conversion
<PAGE>
Shares, and the Damage Shares have not been and are not being registered under
the 1933 Act or any state securities laws, and may not be transferred unless
(a) subsequently registered thereunder, or (b) the Buyer shall have delivered
to the Company an opinion of counsel, reasonably satisfactory in form, scope
and substance to the Company, to the effect that the securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration; (ii) any sale of such securities made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with the terms
of said Rule and further, if said Rule is not applicable, any resale of such
securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined
in the 1933 Act) may require compliance with some other exemption under the
1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither
the Company nor any other person is under any obligation to register such
securities (other than pursuant to the Registration Rights Agreement) under
the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.
g. Legends. The Buyer understands that the Preferred Shares and, until
such time as the Conversion Shares and the Damage Shares (collectively, the
"Registrable Securities") have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates
representing the Registrable Securities shall bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR APPLICABLE
STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE
REASONABLY ACCEPTABLE TO THE BORROWER THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT. ANY SUCH SALE, ASSIGNMENT OR TRANSFER MUST ALSO COMPLY
WITH APPLICABLE STATE SECURITIES LAWS.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Preferred Shares or any
Registrable Securities upon which it is stamped, if, unless otherwise required
by state securities laws, (a) the sale of such Preferred Shares or Registrable
Securities is registered under the 1933 Act, or (b) in connection with a sale
transaction, such holder provides the Company with an opinion of counsel, in
form, substance and scope reasonably acceptable to the Company, to the effect
that a public sale or transfer of the Debenture or such Registrable Securities
<PAGE>
may be made without registration under the 1933 Act, or (c) such holder
provides the Company with reasonable assurances that the Preferred Shares or
such Registrable Securities can be sold pursuant to Rule 144 under the 1933
Act (or a successor rule thereto) without any restriction as to the number of
securities acquired as of a particular date that can then be immediately sold.
h. Authorization; Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable in accordance with its terms,
subject as to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium, and other similar laws affecting the
enforcement of creditors' rights generally.
i. Residency. The Buyer is a resident of that country specified in its
address on the signature page hereof.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Buyer that:
a. Organization and Qualification. The Company and its subsidiaries are
corporations duly organized and existing in good standing under the laws of
the jurisdiction in which they are incorporated, except, in the case of any
such subsidiaries, as would not have a Material Adverse Effect (as defined
below), and have the requisite corporate power to own their properties and to
carry on their business as now being conducted. Each of the Company and its
subsidiaries is duly qualified as a foreign corporation to do business and is
in good standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary and where the failure so to
qualify would have a Material Adverse Effect. "Material Adverse Effect" means
any material adverse effect on the operations, properties or financial
condition of the Company and its subsidiaries taken as a whole.
b. Authorization; Enforcement. (i) The Company has the requisite corporate
power and authority to enter into and perform this Agreement and the
Registration Rights Agreement, and to issue the Preferred Shares and the
Registrable Securities in accordance with the terms hereof and thereof, (ii)
the execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby have been duly
authorized by the Company's Board of Directors and no further consent or
authorization of the Company, its Board of Directors, or its stockholders is
required, (iii) this Agreement and the Registration Rights Agreement have been
duly executed and delivered by the Company, and (iv) this Agreement and the
Registration Rights Agreement constitute the valid and binding obligations of
the Company enforceable against the Company in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of creditors' rights and remedies
or by other equitable principles of general application.
<PAGE>
c. Capitalization. As of April 17, 1996, the authorized capital stock of
the Company consists of (i) 20,000,000 shares of Common Stock of which
14,497,423 shares were issued and outstanding, and (ii) 200,000 shares of
serial preferred stock, $10 par value per share ("Preferred Stock") of which
16,000 shares were issued and outstanding as 12% Cumulative Convertible
Preferred Stock, Series A, and 10,500 shares were issued and outstanding as
12% Cumulative Convertible Preferred Stock, Series 1985. All of such
outstanding shares have been validly issued and are fully paid and
nonassessable. No shares of Common Stock or Preferred Stock are subject to
preemptive rights or any other similar rights of the stockholders of the
Company. Except as disclosed in Schedule 3(c), as of the effective date of
this Agreement, (i) there are no outstanding options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into, any shares of capital stock of the
Company or any of its subsidiaries, or arrangements by which the Company or
any of its subsidiaries is or may become bound to issue additional shares of
capital stock of the Company or any of its subsidiaries, (ii) there are no
outstanding debt securities, and (iii) there are no agreements or arrangements
under which the Company or any of its subsidiaries is obligated to register
the sale of any of its or their securities under the 1933 Act (except the
Registration Rights Agreement). The Company has furnished to the Buyer true
and correct copies of the Company's Articles of Incorporation, as amended, as
in effect on the date hereof ("Articles of Incorporation") and the Company's
Bylaws, as in effect on the date hereof (the "Bylaws"). The Company shall
provide the Buyer with a written update of this representation signed by the
Company's Chief Executive or Chief Financial Officer on behalf of the Company
as of the Closing Date.
d. Issuance of Securities. The Registrable Securities and Preferred Shares
are duly authorized and, upon issuance in accordance with the terms hereof and
thereof, shall be validly issued, fully paid and non-assessable, and free from
all taxes, liens and charges with respect to the issue thereof.
e. No Conflicts. The execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby will not (i) result in a violation of the Articles of
Incorporation or Bylaws or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company
or any of its subsidiaries is a party, or result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries is bound or affected (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect). The
business of the Company and its subsidiaries is not being conducted, and shall
not be conducted through the Registration Period (as defined herein), in
violation of any law, ordinance, regulation of any governmental entity, except
for possible violations which either singly or in the aggregate do not have a
Material Adverse Effect. Except as required under the 1933 Act and any
applicable state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with,
<PAGE>
any court or governmental agency in order for it to execute, deliver or
perform any of its obligations under this Agreement in accordance with the
terms hereof.
f. SEC Documents, Financial Statements. Since May 31, 1992, the Company
has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "1934 Act") (all of
the foregoing filed prior to the date hereof and all exhibits included therein
and financial statements and schedules thereto and documents (other than
exhibits) incorporated by reference therein, being hereinafter referred to
herein as the "SEC Documents"). As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the 1934
Act and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents (as amended) contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have
been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates
thereof and the results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other information provided by or on behalf of the Company to
the Buyer and referred to in Section 2(d) of this Agreement contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading.
g. Absence of Certain Changes. Since February 29, 1996 there has been no
material adverse change and no material adverse development in the business,
properties, operations, financial condition, results of operations or
prospects of the Company.
h. Absence of Litigation. Except as set forth in its Form 10-Q for the
quarter ended February 29, 1996, there is no action, suit, proceeding, inquiry
or investigation before or by any court, public board or body pending or, to
the knowledge of the Company, threatened against or affecting the Company,
wherein an unfavorable decision, ruling or finding would have a Material
Adverse Effect or which would adversely affect the validity or enforceability
of, or the authority or ability of the Company to perform its obligations
under, this Agreement or any of the documents contemplated herein.
4. COVENANTS.
a. Best Efforts. The parties shall use their best efforts timely to
satisfy each of the conditions described in Section 6 and 7 of this Agreement.
<PAGE>
b. Form D. The Company agrees to file a Form D with respect to the
Preferred Shares as required under Regulation D and to provide a copy thereof
to the Buyer promptly after such filing.
c. Reporting Status. Until the earlier of (i) the date as of which the
Investors (as that term is defined in the Registration Rights Agreement) may
sell all of the Registrable Securities without restriction pursuant to Rule
144(k) promulgated under the 1933 Act (or successor thereto), or (ii) the date
on which (A) the Investors have sold all the Registrable Securities and (B)
none of the Preferred Shares is outstanding (the "Registration Period"), the
Company shall file all reports required to be filed with the SEC pursuant to
the 1934 Act, and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination.
d. Use of Proceeds. The Company will use the proceeds from the sale of the
Preferred Shares for the Company's internal working capital purposes and shall
not, directly or indirectly, use such proceeds for any loan to or investment
in any other corporation, partnership, enterprise or other person except as
the Company's board of directors deems necessary in order to develop and
commercialize the Company's technology.
e. Financial Information. The Company agrees to send the following reports
to the Buyer during the Registration Period: (i) within five (5) days after
the filing thereof with the SEC, a copy of its Annual Report on Form 10-K, its
Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; and (ii)
within one day after release thereof, copies of all press releases issued by
the Company or any of its subsidiaries.
f. Reservation of Shares. The Company shall at times have authorized, and
reserved for the purpose of issuance, a sufficient number of shares of Common
Stock to provide for the issuance of the Conversion Shares and the Damage
Shares.
g. Listing. The Company shall promptly secure the listing of the
Registrable Securities upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance) and shall maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all shares of
Registrable Securities from time to time issuable under the terms of this
Agreement and the Registration Rights Agreement.
h. Expenses. The Company shall pay all of Buyer's expenses incurred in
connection with the negotiation, preparation, execution, delivery and
performance of this Agreement and the Registration Rights Agreement
(including, without limitation, attorneys' fees) up to an aggregate amount of
Ten Thousand Dollars ($10,000).
5. TRANSFER AGENT INSTRUCTIONS.
<PAGE>
The Company shall instruct its transfer agent to issue certificates,
registered in the name of the Buyer or its nominee, for the Conversion Shares
and Damage Shares in such amounts as specified from time to time by the Buyer
to the Company. Prior to registration of the Registrable Securities pursuant
to an effective registration statement, all such certificates shall bear the
restrictive legend specified in Section 2(g) of this Agreement. The Company
shall provide instructions and opinions of counsel to its transfer agent in
accordance with Section 3(p) of the Registration Rights Agreement. The
Company warrants that no instruction other than such instructions referred to
in this Section 5, and stop transfer instructions to give effect to Section
2(f) hereof, in the case of the Registrable Securities, prior to registration
of the Registrable Securities under the 1933 Act, will be given by the Company
to its transfer agent and that the Preferred Shares and the Registrable
Securities shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the
Registration Rights Agreement. Nothing in this Section shall affect in any
way the Buyer's obligations and agreement to comply with all applicable
securities laws upon resale of the Registrable Securities. If the Buyer
provides the Company with an opinion of counsel, reasonably satisfactory in
form, scope and substance to the Company, that registration of a resale by the
Buyer of any of the Preferred Shares or the Registrable Securities is not
required under the 1933 Act, the Company shall permit the transfer, and
promptly instruct its transfer agent to issue one or more certificates in such
name and in such denominations as specified by the Buyer.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to sell the Preferred Shares is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for the Company's
sole benefit and may be waived by the Company at any time in its sole
discretion:
a. The parties shall have executed this Agreement and the Registration
Rights Agreement, and delivered the same to each other.
b. The Certificate of Designation shall have been accepted for filing with
the Secretary of State of Delaware.
c. The Buyer shall have delivered the Purchase Price to the Company by wire
transfer of immediately available funds pursuant to the wiring instructions
provided by the Company.
d. The representations and warranties of each Buyer shall be true and
correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Buyer at or prior to the Closing Date.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
<PAGE>
The obligation of the Buyer to purchase the Preferred Shares is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Buyer's sole benefit
and may be waived by the Buyer at any time in its sole discretion:
a. The parties shall have executed this Agreement and the Registration
Rights Agreement, and delivered the same to each other.
b. The Certificate of Designation shall have been accepted for filing with
the Secretary of State of Delaware, and a copy thereof certified by such
Secretary of State shall have been delivered to the Buyer.
c. Until the Closing Date, the Common Stock shall be authorized for
quotation on the Small Cap Market of the National Association of Securities
Dealers Automated Quotation ("NASDAQ") System ("NASDAQ SmallCap") and trading
in the Common Stock on NASDAQ SmallCap shall not have been suspended by the
SEC or NASDAQ.
d. The representations and warranties of the Company shall be true and
correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to the Closing Date.
The Buyer shall have received a certificate, executed by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the foregoing effect
and as to such other matters as may be reasonably requested by the Buyer.
e. The Buyer shall have received the opinion of the Company's counsel dated
as of the Closing Date, in form, scope and substance reasonably satisfactory
to the Buyer and in substantially the same form as Exhibit B.
f. The Buyer shall have received the officer's certificate described in
Section 3(c) above, dated as of the Closing Date.
g. The Company shall have executed and delivered the Stock Certificate to
the Buyer.
h. The Company shall have caused the Side Letter Agreement to be executed
and delivered to the Buyer.
8. GOVERNING LAW; MISCELLANEOUS.
<PAGE>
a. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware without regard to the
principles of conflict of laws.
b. Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. In the event any signature page is delivered by
facsimile transmission, the party using such means of delivery shall cause
four (4) additional original executed signature pages to be physically
delivered to the other party within five (5) days of the execution and
delivery hereof.
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement
or the validity or enforceability of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set
forth herein or therein, neither the Company nor any Buyer makes any
representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than
by an instrument in writing signed by the party to be charged with
enforcement.
f. Notices. Any notices required or permitted to be given under the terms
of this Agreement shall be sent by mail or delivered personally or by courier
and shall be effective five days after being placed in the mail, if mailed,
certified or registered, return receipt requested, or upon receipt, if
delivered personally or by courier or by telefacsimile, in each case addressed
to a party. The addresses for such communications shall be:
If to the Company:
1 Horizon Road
Fort Lee, NJ 07024
Telephone: (201) 886-1667
Telecopy: (201) 886-8821
Attention: Allan Borkowski
With copy to:
Marks & Murase, L.L.P.
399 Park Avenue
New York, NY 10022
<PAGE>
Telephone: (212) 318-7721
Telecopy: (212) 752-5378
Attention: Alan J. Bernstein, Esq.
If to the Buyer, at the addresses on the signature page.
With copy to:
Genesee Advisers
11921 Freedom Drive, Suite 550
Reston, VA 22090
Telephone: (703) 904-4349
Telecopy: (703) 834-6627
Attention: Neil T. Chau
And:
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, PA 19102
Telephone: (215) 568-6060
Telecopy: (215) 568-6603
Attention: Stephen T. Burdumy, Esq.
Each party shall provide notice to the other party of any change in address.
g. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and assigns. Neither the
Company nor the Buyer shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other (which consent may be
withheld for any reason in the sole discretion of the party from whom consent
is sought). Notwithstanding the foregoing, a Buyer may assign its rights
hereunder to any of its "affiliates," as that term is defined under the 1934
Act, without the consent of the Company, provided, however, that any such
assignment shall not release such Buyer of its obligations hereunder unless
such obligations are assumed by such affiliate and the Company has consented
to such assignment and assumption.
h. Third Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns,
and is not for the benefit of, nor may any provision hereof be enforced by,
any other person.
i. Survival. The representations and warranties of the Company and the
Buyer contained in Sections 2 and 3 and the agreements and covenants set forth
in Sections 4, 5, 8(g), 8(h), 8(k) and 8(l), and this subsection shall survive
the closing. Each party which constitutes the Buyer shall be responsible only
for its own representations, warranties, agreements and covenants hereunder.
<PAGE>
k. Publicity. The Company and the Buyer shall have the right to approve
before issuance any press releases or any other public statements with respect
to the transactions contemplated hereby; provided, however, that the Company
shall be entitled, without the prior approval of the Buyer, to make any press
release with respect to such transactions as is required by applicable law and
regulations (although the Buyer shall be consulted by the Company in
connection with any such press release prior to its release and shall be
provided with a copy thereof).
l. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
m. Termination. In the event that the closing shall not have occurred on
or before five (5) days from the date hereof, this Agreement shall terminate
at the close of business on such date.
<PAGE>
IN WITNESS WHEREOF, the Buyer and the Company have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.
SELVAC CORPORATION
By: __________________________________________________
Name: ________________________________________________
Its: _________________________________________________
GFL PERFORMANCE FUND LTD.
By: __________________________________________________
Name: ________________________________________________
Its: _________________________________________________
Address:
Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
<PAGE>
Exhibit A
to
Securities Purchase
Agreement
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF 5% CUMULATIVE CONVERTIBLE
PREFERRED STOCK, SERIES C
OF
SELVAC CORPORATION
Selvac Corporation (the "Company"), a corporation organized and existing under
the General Corporation Law of the State of Delaware, does hereby certify
that, pursuant to authority conferred upon the Board of Directors of the
Company by the Certificate of Incorporation, as amended, of the Company, and
pursuant to Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Company at a meeting duly held on May
___, 1996, adopted resolutions providing for the designations, preferences and
relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, of ten thousand (10,000) shares of 5%
Cumulative Convertible Preferred Stock, Series C, of the Company, as follows:
RESOLVED, that the Company is authorized to issue 10,000 shares of 5%
Cumulative Convertible Preferred Stock, Series C, $10 par value (the
"Preferred Shares"), which shall have the following powers, designations,
preferences and other special rights:
(1) Dividends. The holders of the Preferred Shares shall be entitled to a
cash dividend of five percent (5%) per annum of the Stated Value (as defined
below), on a cumulative basis with quarterly compounding (prorated for any
portion of the applicable period during which the Preferred Shares are
outstanding). Dividends shall accrue from the date of issuance of the
Preferred Shares and shall be payable quarterly commencing August 31, 1996,
<PAGE>
through and including the date on which the Preferred Shares are no longer
outstanding.
(2) Conversion of Preferred Shares. The holders of the Preferred Shares
shall have the right, at their option, to convert the Preferred Shares into
shares of Common Stock on the following terms and conditions:
(b) Conversion Right. Each Preferred Share shall be convertible, at any
time after the earlier of (i) the ninetieth (90th) day following the date of
issuance or (ii) the date the Registration Statement (the "Registration
Statement"), which the Company is required to file pursuant to Section 2(a) of
the Registration Rights Agreement of even date herewith by and among the
Company and the investor named therein (the "Registration Rights Agreement"),
is declared effective (the "Effective Date") by the U.S. Securities and
Exchange Commission (the "SEC"), into fully paid and nonassessable shares
(calculated to the nearest whole share) of Common Stock, at the conversion
price (the "Conversion Price") in effect at the time of conversion determined
as hereinafter provided; provided, however, that in no event shall any holder
be entitled to convert Preferred Shares if, after giving effect to such
conversion, the number of shares of Common Stock beneficially owned by such
holder and all other holders whose holdings would be aggregated with such
holder for purposes of calculating beneficial ownership in accordance with
Sections 13(d) and 16 of the Securities Exchange Act of 1934, as amended, and
the regulations thereunder ("Sections 13(d) and 16"), including, without
limitation, any person serving as an adviser to any holder (collectively, the
"Related Persons"), would exceed four and nine-tenths percent (4.9%) of the
outstanding shares of Common Stock (calculated in accordance with Sections
13(d) and 16). Each Preferred Share shall have a value of One Thousand
Dollars ($1,000) (the "Stated Value") for the purpose of such conversion and
the number of shares of Common Stock issuable upon conversion of each of the
Preferred Shares shall be determined by dividing the Stated Value thereof by
the Conversion Price then in effect. Every reference herein to the Common
Stock of the Company (unless a different intention is expressed) shall be to
the shares of the Common Stock of the Company, $.01 par value, as such stock
exists immediately after the issuance of the Preferred Shares provided for
hereunder, or to stock into which such Common Stock may be changed from time
to time thereafter.
(c) Conversion Price. The Conversion Price shall be the lesser of (i)
eighty percent (80%) (the "Conversion Percentage") of the Average Market Price
(as defined below) for the Common Stock for the five (5) consecutive trading
days ending one trading day prior to the date of the Conversion Notice (as
defined below), subject to adjustment as provided herein, or (ii) $7.50 (the
<PAGE>
"Fixed Conversion Price"); provided, however, that in no event shall the
Conversion Price be less than $3.00 (the "Floor Price").
(c) Adjustment to Conversion Percentage. If the Effective Date has not
occurred within ninety (90) days after the date of issuance of the Preferred
Shares, or if, after the Registration Statement has been declared effective by
the SEC, sales cannot be made pursuant to the Registration Statement by reason
of stop order, the Company's failure to update the Registration Statement in
accordance with the rules and regulations of the SEC or otherwise, or if the
Common Stock is not listed or included for quotation on the National Market of
the National Association of Securities Dealers Automated Quotation System
("NASDAQ-NM"), the New York Stock Exchange (the "NYSE"), the American Stock
Exchange (the "AMEX"), or the NASDAQ SmallCap Market ("NASDAQ SmallCap") then,
as partial relief for the damages to the holder by reason of any such delay in
or reduction of its ability to sell the underlying shares of Common Stock
(which remedy shall not be exclusive of any other remedies available at law or
in equity), the Conversion Percentage shall be reduced by a number of
percentage points equal to the Discount Amount (as hereinafter defined)
multiplied by the sum of: (i) the number of months (prorated for partial
months) after the end of such 90 day period and prior to the date the
Registration Statement is declared effective by the SEC; (ii) the number of
months (prorated for partial months) that sales cannot be made pursuant to the
Registration Statement (by reason of stop order, the Company's failure to
update the Registration or otherwise) after the Registration Statement has
been declared effective; and (iii) the number of months (prorated for partial
months) that the Common Stock is not listed or included for quotation on the
NASDAQ-NM, NYSE, AMEX, or NASDAQ SmallCap after the Registration Statement has
been declared effective. The "Discount Amount" for the first month during
which adjustment is required pursuant to this Section shall be one and one-
half (1 1/2); for the second month, two (2); and for the third month and each
month thereafter, three (3). (For example, if the Registration Statement
becomes effective one and one-half (1 1/2) months after the end of such 90 day
period, the Conversion Percentage would be 77.5% until any subsequent
adjustment; if thereafter sales could not be made pursuant to the Registration
Statement for a period of two (2) additional months, the Conversion Percentage
would then be 72%.) If the holder converts Preferred Shares into Common Stock
and an adjustment to the Conversion Percentage is required subsequent to such
conversion, but prior to the sale of such Common Stock by such holder, the
Company shall pay to such holder, within five (5) days after receipt of a
<PAGE>
notice of the sale of such Common Stock from such holder, an amount equal to
the Average Market Price of the Common Stock obtained upon conversion of such
Preferred Shares for the five (5) trading days ending one (1) trading day
prior to the date of conversion multiplied by a fraction, the numerator of
which shall be the applicable Discount Amount and the denominator of which
shall be one hundred (100), multiplied by the number of months (prorated for
partial months) for which an adjustment was required. Such amount may be paid
at the Company's option in cash or Common Stock ("Damage Shares") whose value
is based on the Average Market Price of the Common Stock for the period of
five (5) consecutive trading days ending on the date of the sale of such
Common Stock; provided, however, that any amounts due as to that period during
which the shares are not traded or included for quotation on the NASDAQ-NM,
NYSE, AMEX or NASDAQ SmallCap shall be paid in cash only; provided, further,
however, that in no event shall shares be issued hereunder if, after giving
effect to such issuance, the number of shares of Common Stock beneficially
owned by such holder and all Related Persons would exceed four and nine tenths
percent (4.9%) of the outstanding shares of Common Stock (calculated in
accordance with Sections 13(d) and 16); cash shall be paid in lieu of any
shares which cannot be issued pursuant to this second proviso. (For example,
if the Conversion Percentage was 77.5% at the time of conversion of $1,000,000
in Stated Value of Preferred Shares (such that the Preferred Shares were
converted into Common Stock having an Average Market Price for the applicable
period in aggregate of $1,290,322.50) and subsequent to conversion there was a
further two (2) month delay in the Registration Statement's being declared
effective, and such Common Stock was sold at the end of such two (2) month
period, the Company would pay to the holder $70,967.74 in cash or Damage
Shares.)
"Average Market Price" of any security for any period shall be computed as the
arithmetic average of the closing bid prices for such security for each
trading day in such period on the NASDAQ SmallCap, or, if the NASDAQ SmallCap
is not the principal trading market for such security, on the principal
trading market for such security, or, if market value cannot be calculated for
such period on any of the foregoing bases, the average fair market value
during such period as reasonably determined in good faith by the Board of
Directors of the Company (all as appropriately adjusted for any stock
dividend, stock split, or other similar transaction during such period or
between the end of such period and the date of conversion or dividend payment,
as applicable).
(d) Conversion Notice. On presentation and surrender to the Company (or
at any office or agency maintained for the transfer of the Preferred Shares)
<PAGE>
of the certificates of Preferred Shares so to be converted, duly endorsed in
blank for transfer or accompanied by proper instruments of assignment or
transfer in blank (a "Conversion Notice"), the holder of such Preferred Shares
shall be entitled, subject to the limitations herein contained, to receive in
exchange therefor a certificate or certificates for fully paid and
nonassessable shares, which certificates shall be delivered by the second
trading day after the date of delivery of the Conversion Notice, and cash for
fractional shares, of Common Stock on the foregoing basis. The Preferred
Shares shall be deemed to have been converted, and the person converting the
same to have become the holder of record of Common Stock, for all purposes as
of the date of delivery of the Conversion Notice.
(e) Major Transactions. If the Company shall consolidate with or merge
into any corporation or reclassify its outstanding shares of Common Stock
(other than by way of subdivision or reduction of such shares) (each a "Major
Transaction"), then each Preferred Share shall thereafter be convertible into
the number of shares of stock or securities (the "Resulting Securities") or
property of the Company, or of the entity resulting from such consolidation or
merger, to which a holder of the number of shares of Common Stock delivered
upon conversion of such Preferred Share would have been entitled upon such
Major Transaction had the holder of such Preferred Share exercised its right
of conversion and had such Common Stock been issued and outstanding and had
such holder been the holder of record of such Common Stock at the time of such
Major Transaction, and the Company shall make lawful provision therefor as a
part of such consolidation, merger or reclassification; provided, however,
that the Company shall give the holders of the Preferred Shares written notice
of any Major Transaction promptly upon the execution of any agreement whether
or not binding in connection therewith (including without limitation a letter
of intent or agreement in principle) and in no event shall a Major Transaction
be consummated prior to forty-five (45) days after such notice.
(f) Fractional Shares. The Company shall not issue any fraction of a
share of Common Stock upon any conversion, but shall pay in cash therefor at
the Conversion Price then in effect multiplied by such fraction.
(g) Reservation of Shares. The Company shall, so long as any of the
Preferred Shares are outstanding, reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of effecting the
conversion of the Preferred Shares, such number of shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all of the
<PAGE>
Preferred Shares then outstanding.
(h) Taxes. The Company shall pay any and all taxes which may be imposed
upon it with respect to the issuance and delivery of Common Stock upon the
conversion of the Preferred Shares as herein provided. The Company shall not
be required in any event to pay any transfer or other taxes by reason of the
issuance of such Common Stock in names other than those in which the Preferred
Shares surrendered for conversion are registered on the Company's records, and
no such conversion or issuance of Common Stock shall be made unless and until
the person requesting such issuance has paid to the Company the amount of any
such tax, or has established to the satisfaction of the Company and its
transfer agent, if any, that such tax has been paid.
(3) Voting Rights. Holders of Preferred Shares shall have no voting
rights, except as required by law and by Section 6 hereof.
(4) Redemption. The Company waives all redemption rights with respect to
the Preferred Shares.
(5) Preferred Rank. All shares of Common Stock shall be of junior rank to
all Preferred Shares in respect to the preferences as to distributions and
payments upon the liquidation, dissolution or winding up of the Company. The
rights of the shares of Common Stock shall be subject to the preferences and
relative rights of the Preferred Shares.
(6) Vote to Change the Terms of Preferred Shares. The affirmative vote at
a meeting duly called for such purpose or the written consent without a
meeting of the holders of not less than two-thirds (2/3) of the then
outstanding Preferred Shares shall be required to amend, alter, change or
repeal any of the powers, designations, preferences and rights of the
Preferred Shares.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this certificate to be signed by
______________, its President, and _____________, its Secretary, this ____ day
of May 1996.
SELVAC CORPORATION
By:____________________________
President
Attest:_________________________
Secretary
<PAGE>
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of May 15, 1996 by
and among Selvac Corporation, a Delaware corporation, with headquarters
located at 220 Boston Post Road, Marlboro, MA 01752 (the "Company"), and the
undersigned (the "Buyer").
WHEREAS:
A. In connection with the Securities Purchase Agreement by and among the
parties of even date herewith (the "Securities Purchase Agreement"), the
Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue and sell to the Buyer shares of the
Company's 5% Cumulative Convertible Preferred Stock, Series C, $10 par value
per share (the "Preferred Shares"), which will be convertible into shares of
the Company's common stock (the "Common Stock"), par value $.01 per share, (as
converted, the "Conversion Shares"), and pursuant to which certain shares of
Common Stock may be issued to the Buyer in accordance with the Certificate of
Designation therefor (the "Damage Shares"); and
B. To induce the Buyer to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"),
and applicable state securities laws;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Buyer hereby
agree as follows:
1. DEFINITIONS.
a. As used in this Agreement, the following terms shall have the following
meanings:
(I) "Investor" means the Buyer and any transferee or assignee thereof who
agrees to become bound by the provisions of this Agreement in accordance with
Section 9 hereof.
(ii) "register," "registered," and "registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or
any successor rule providing for offering securities on a continuous basis
("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").
<PAGE>
(iii) "Registrable Securities" means the Conversion Shares and the Damage
Shares.
(iv) "Registration Statement" means a registration statement of the
Company under the 1933 Act.
b. Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement.
2. REGISTRATION.
a. Mandatory Registration. The Company shall prepare, and, on or before
June 30, 1996, file with the SEC a Registration Statement on Form S-3 (or, if
such form is unavailable for such a registration, on such other form as is
available for such a registration) covering the resale of the Registrable
Securities, which Registration Statement shall state that, in accordance with
Rule 416 promulgated under the 1933 Act, such Registration Statement also
covers such indeterminate number of additional shares of Common Stock as may
become issuable upon conversion of the Preferred Shares to prevent dilution
resulting from stock splits, stock dividends or similar transactions. The
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided to and
approved by the Buyer and its counsel prior to its filing or other submission,
such approval not to be unreasonably withheld.
b. Eligibility for Form S-3. The Company represents and warrants that it
meets the requirements for the use of Form S-3 for registration of the sale by
the Buyer and any other Investor of the Registrable Securities and the Company
shall file all reports required to be filed by the Company with the SEC in a
timely manner so as to maintain such eligibility for the use of Form S-3. In
the event that Form S-3 is not available for sale by the Investors of the
Registrable Securities, the Company shall register the sale on another
appropriate form.
3. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the Company
shall have the following obligations:
a. The Company shall prepare promptly, and file with the SEC not later than
June 30, 1996, a Registration Statement with respect to the number of
Registrable Securities provided in Section 2(a), and thereafter to use its
best efforts to cause such Registration Statement relating to the Registrable
Securities to become effective as soon as possible after such filing, and keep
the Registration Statement effective pursuant to Rule 415 at all times until
the earlier of (i) the date as of which the Investors may sell all of the
Registrable Securities without restriction pursuant to Rule 144(k) promulgated
under the 1933 Act (or successor thereto), or (ii) the date on which (A) the
Investors have sold all the Registrable Securities and (B) none of the
Preferred Shares is outstanding (the "Registration Period"), which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
<PAGE>
material fact or omit to state a material fact required to be stated therein,
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading. The Investors shall give notice to the
Company when they have sold all of the Registrable Securities.
b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the Registration
Statement as may be necessary to keep the Registration Statement effective at
all times during the Registration Period, and, during such period, comply with
the provisions of the 1933 Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement.
c. The Company shall furnish to each Investor whose Registrable Securities
are included in the Registration Statement and its legal counsel (i) promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by the Company, one copy of the Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each
amendment or supplement thereto, and (ii) such number of copies of a
prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor.
d. The Company shall furnish to the counsel of each Investor each letter
written by or on behalf of the Company to the SEC or the staff of the SEC, and
each item of correspondence from the SEC or the staff of the SEC, in each case
relating to the Registration Statement (other than any portion of any thereof
which contains information for which the Company has sought confidential
treatment).
e. The Company shall use reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statement under such other
securities or "blue sky" laws of such jurisdictions in the United States as
the Investors who hold a majority in interest of the Registrable Securities
being offered reasonably request, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications
in effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto to (a)
qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(e), (b) subject itself to general
taxation in any such jurisdiction, (c) file a general consent to service of
process in any such jurisdiction, (d) provide any undertakings that cause more
than nominal expense or burden to the Company, or (e) make any change in its
charter or bylaws, which in each case the Board of Directors of the Company
determines to be contrary to the best interests of the Company and its
stockholders.
<PAGE>
f. As promptly as practicable after becoming aware of such event, the
Company shall notify each Investor of the happening of any event, of which the
Company has knowledge, as a result of which the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and use its best
efforts promptly to prepare a supplement or amendment to the Registration
Statement to correct such untrue statement or omission, and deliver such
number of copies of such supplement or amendment to each Investor as such
Investor may reasonably request.
g. The Company shall use its best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration Statement,
and, if such an order is issued, to obtain the withdrawal of such order at the
earliest possible moment and to notify each Investor who holds Registrable
Securities being sold (or, in the event of an underwritten offering, the
managing underwriters) of the issuance of such order and the resolution
thereof.
h. The Company shall make available for inspection by (i) any Investor and
(ii) one firm of attorneys and one firm of accountants or other agents
retained by the Investors (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and properties
of the Company (collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector to enable each Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request
for purposes of such due diligence; provided, however, that each Inspector
shall hold in confidence and shall not make any disclosure (except to an
Investor) of any Record or other information which the Company determines in
good faith to be confidential, and of which determination the Inspectors are
so notified, unless (a) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (b) the
release of such Records is ordered pursuant to a subpoena or other final, non-
appealable order from a court or government body of competent jurisdiction, or
(c) the information in such Records has been made generally available to the
public other than by disclosure in violation of this or any other agreement.
The Company shall not be required to disclose any confidential information in
such Records to any Inspector until and unless such Inspector shall have
entered into confidentiality agreements (in form and substance satisfactory to
the Company) with the Company with respect thereto, substantially in the form
of this Section. Each Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential.
i. The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
<PAGE>
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to
the public other than by disclosure in violation of this or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, such information.
j. The Company shall use its best efforts to (i) secure the inclusion for
quotation on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") SmallCap Market of all Registrable Securities
covered by the Registration Statement and, without limiting the generality of
the foregoing, to arrange for at least two market makers to register with the
National Association of Securities Dealers, Inc. ("NASD") as such with respect
to such Registrable Securities, or (ii) cause all such Registrable Securities
to be listed on a national securities exchange and on each additional national
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (iii) secure
designation and quotation of such Registrable Securities on the National
Market of NASDAQ.
k. The Company shall provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities, and shall provide CUSIP numbers
for the Registrable Securities, not later than the effective date of the
Registration Statement.
l. The Company shall cooperate with the Investors who hold Registrable
Securities being offered to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the Registrable
Securities to be offered pursuant to the Registration Statement and enable
such certificates to be in such denominations or amounts as the Investors may
reasonably request and registered in such names as the Investors may request.
Not later than the date on which any Registration Statement registering the
resale of Registrable Securities is declared effective, the Company shall
deliver to its transfer agent instructions, accompanied by any reasonably
required opinion of counsel, that permit sales of unlegended securities in a
timely fashion that complies with then mandated securities settlement
procedures for regular way market transactions.
m. The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investors of Registrable Securities
pursuant to the Registration Statement.
4. OBLIGATIONS OF THE INVESTORS.
In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
<PAGE>
a. It shall be a condition precedent to the obligations of the Company to
complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect
the registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may reasonably
request. At least five (5) days prior to the first anticipated filing date of
the Registration Statement, the Company shall notify each Investor of the
information the Company requires from each such Investor if such Investor
elects to have any of such Investor's Registrable Securities included in the
Registration Statement.
b. Each Investor by such Investor's acceptance of the Registrable
Securities agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder.
c. Each Investor agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(f) or 3(g),
such Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(f) or 3(g) and, if so directed by
the Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
5. EXPENSES OF REGISTRATION.
All reasonable expenses incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation,
all registration, listing and qualifications fees, printers and accounting
fees, and fees and disbursements of counsel for the Company and fees and
disbursements of counsel for the Investors shall be borne by the Company,
subject, with respect to expenses incurred by the Investors, to the limit
stated in Section 4(h) of the Securities Purchase Agreement.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
a. To the extent permitted by law, the Company will indemnify, hold
harmless and defend (i) each Investor who holds such Registrable Securities,
and (ii) the directors, officers and each person who controls any Investor
within the meaning of the 1933 Act or the Securities Exchange Act of 1934, as
amended (the "1934 Act"), if any (each, an "Indemnified Person"), against any
losses, claims, damages, liabilities or expenses (joint or several)
(collectively, "Claims") to which any of them may become subject insofar as
<PAGE>
such Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in a Registration Statement or the
omission or alleged omission to state a material fact therein required to be
stated or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading, or
(iii) any violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any other law, including, without limitation, any state securities
law, or any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement (the matters in
the foregoing clauses (i) through (iii) being, collectively, "Violations").
Subject to the restrictions set forth in Section 6(c) with respect to the
number of legal counsel, the Company shall reimburse the Investors and each
such controlling person, promptly as such expenses are incurred and are due
and payable, for any legal fees or other reasonable expenses incurred by them
in connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a): (i) shall not apply to a Claim arising out of
or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by any Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto, if such
prospectus was timely made available by the Company pursuant to Section 3(c)
hereof; (ii) with respect to any preliminary prospectus, shall not inure to
the benefit of any such person from whom the person asserting any such Claim
purchased the Registrable Securities that are the subject thereof (or to the
benefit of any person controlling such person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was
corrected in the prospectus, as then amended or supplemented, if such
prospectus was timely made available by the Company pursuant to Section 3(c)
hereof; (iii) shall not be available to the extent such Claim is based on a
failure of the Investor to deliver or to cause to be delivered the prospectus
made available by the Company; and (iv) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Registrable Securities by the Investors pursuant
to Section 9.
b. In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to indemnify, hold harmless and
defend, to the same extent and in the same manner set forth in Section 6(a),
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act (collectively, an
"Indemnified Party"), against any Claim to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim
arises out of or is based upon any Violation, in each case to the extent (and
only to the extent) that such violation occurs in reliance upon and in
<PAGE>
conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement or to the
extent such Claim is based upon any violation or alleged violation by the
Investor of the 1933 Act, 1934 Act or any other law; and such Investor will
reimburse any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6(b) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of such Investor, which consent shall not be
unreasonably withheld; provided, further, however, that the Investor shall be
liable under this Section 6(b) for only that amount of a Claim as does not
exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall survive
the transfer of the Registrable Securities by the Investors pursuant to
Section 9. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified Party
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented.
c. Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action (including
any governmental action), such Indemnified Person or Indemnified Party shall,
if a Claim in respect thereof is to made against any indemnifying party under
this Section 6, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party
and the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that an Indemnified Person or Indemnified Party shall have
the right to retain its own counsel with the fees and expenses to be paid by
the indemnifying party, if, in the reasonable opinion of counsel retained by
the indemnifying party, the representation by such counsel of the Indemnified
Person or Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such Indemnified Person
or Indemnified Party and any other party represented by such counsel in such
proceeding. The Company shall pay reasonable fees for only one separate legal
counsel for the Investors, and such legal counsel shall be selected by the
Investors holding a majority in interest of the Registrable Securities
included in the Registration Statement to which the Claim relates; provided,
that legal fees of such firm shall be reasonable. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of
any liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is prejudiced in
its ability to defend such action. The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
7. CONTRIBUTION.
<PAGE>
To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under
Section 6 to the fullest extent permitted by law; provided, however, that (i)
no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any seller of Registrable Securities who was
not guilty of such fraudulent misrepresentation, and (iii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount
of proceeds received by such seller from the sale of such Registrable
Securities.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees
to:
a. make and keep public information available, as those terms are
understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 Act and the 1934 Act so long as the
Company remains subject to such requirements (it being understood that nothing
herein shall limit the Company's obligations under Section 4(c) of the
Securities Purchase Agreement) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and
c. furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the 1933 Act and
the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested to permit the
investors to sell such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights to have the Company register Registrable Securities pursuant to
this Agreement shall be automatically assignable by the Buyer to any
transferee which is an "affiliate" of the Buyer, as that term is defined under
the 1934 Act, of all or any portion of Registrable Securities if: (i) the
Buyer agrees in writing with the transferee or assignee to assign such rights,
and a copy of such agreement is furnished to the Company within a reasonable
time after such assignment, (ii) the Company is, within a reasonable time
after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned,
(iii) immediately following such transfer or assignment the further
<PAGE>
disposition of such securities by the transferee or assignee is restricted
under the 1933 Act and applicable state securities laws, (iv) at or before the
time the Company receives the written notice contemplated by clause (ii) of
this sentence the transferee or assignee agrees in writing with the Company to
be bound by all of the provisions contained herein, (v) such transfer shall
have been made in accordance with the applicable requirements of the
Securities Purchase Agreement, (vi) such transferee shall be an "accredited
investor" as that term defined in Rule 501 of Regulation D promulgated under
the 1933 Act; and (vi) in the event the assignment occurs subsequent to the
date of effectiveness of the Registration Statement required to be filed
pursuant to Section 2(a), the transferee agrees to pay its all reasonable
expenses of amending or supplementing such Registration Statement to reflect
such assignment.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and Investors
who hold a majority in interest of the Registrable Securities. Any amendment
or waiver effected in accordance with this Section 10 shall be binding upon
each Investor and the Company.
11. MISCELLANEOUS.
a. A person or entity is deemed to be a holder of Registrable Securities
whenever such person or entity owns of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two
or more persons or entities with respect to the same Registrable Securities,
the Company shall act upon the basis of instructions, notice or election
received from the registered owner of such Registrable Securities.
b. Any notices required or permitted to be given under the terms of this
Agreement shall be sent by registered or certified mail, return receipt
requested, or delivered personally or by courier and shall be effective five
days after being placed in the mail, if mailed, or upon receipt, if delivered
personally or by courier or telefacsimile, in each case addressed to a party.
The addresses for such communications shall be:
If to the Company:
1 Horizon Road
Fort Lee, NJ 07024
Telephone: (201) 886-1667
Telecopy: (201) 886-8821
Attention: Allan Borkowski
With copy to:
Marks & Murase, L.L.P.
<PAGE>
399 Park Avenue
New York, NY 10022
Telephone: (212) 318-7721
Telecopy: (212) 752-5378
Attention: Alan J. Bernstein, Esq.
If to the Buyer, at the addresses on the signature page.
With copy to:
Genesee Advisers
11921 Freedom Drive, Suite 550
Reston, VA 22090
Telephone: (703) 904-4349
Telecopy: (703) 834-6627
Attention: Neil T. Chau
And:
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, PA 19102
Telephone: (215) 568-6060
Telecopy: (215) 568-6603
Attention: Stephen T. Burdumy, Esq.
Each party shall provide notice to the other party of any change in address.
c. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
d. This Agreement shall be enforced, governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements
made and to be performed entirely within such State. In the event that any
provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove
invalid or unenforceable under any law shall not affect the validity or
enforceability of any other provision hereof.
e. This Agreement and the Securities Purchase Agreement constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
This Agreement and the Securities Purchase Agreement supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
<PAGE>
f. Subject to the requirements of Section 9 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.
g. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in two or more identical counterparts,
each of which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this
Agreement.
I. Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions
contemplated hereby.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be duly executed as of day and year first above written.
SELVAC CORPORATION
By:_____________________________________________________________
Name:___________________________________________________________
Its:____________________________________________________________
GFL PERFORMANCE FUND LTD.
By:_____________________________________________________________
Name:___________________________________________________________
Its:____________________________________________________________
Address:
Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
<PAGE>
Exhibit 24(a)
We consent to the incorporation in this Registration Statement of Form S-3,
filed under the Securities Act of 1933, and Prospectus of Mehl/Biophile
International Corporation relating to the registration of 3,000,000 shares of
common stock, of our report dated July 13, 1995 on the financial statements of
Selvac Corporation, by reference to the Annual Report of Form 10-KSB for the
year ended May 31, 1995 and to the use of our name, and the statements with
respect to us, under the heading "Experts" in the Prospectus.
BOND, ANDIOLA & COMPANY
Raritan, NJ
June 28, 1996
