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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported) December 9, 1997
MEHL/BIOPHILE INTERNATIONAL CORPORATION
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(Exact Name of Company as Specified in its Charter)
Delaware 0-11969 22-2408186
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification Number)
4127 27th Lane N.W., Gainesville, Florida 32606
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(Address of principal executive office) (Zip Code)
Company's telephone number, including area code (352) 373-2565
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 6. EXHIBITS.
Exhibit 3 Certificate of Designations, Preferences and Rights
of Convertible Preferred Stock, Series F.
Exhibit 10.1 Subscription Agreement, dated as of December 9, 1997
between the Company and J. Barrie Farrington.
Exhibit 10.2 Subscription Agreement dated as of December 11, 1997
between the Company and Pacific Advisors Ltd.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
Pursuant to Subscription Agreements dated as of December 9, 1997 and
December 11, 1997, MEHL/Biophile International Corporation (the "Company") sold
an aggregate of 1,500 shares (the "Shares") of Convertible Preferred Stock,
Series F ("Series F Preferred Stock") for aggregate consideration of $1,500,000.
The Shares were sold to two investors, Pacific Advisors Ltd. and J. Barrie
Farrington (the "Investors") for cash.
The Series F Preferred Stock does not pay a stated dividend but is
entitled to receive dividends along with the holders of Common Stock on an
as-if-converted basis. The Shares are convertible into Common Stock of the
Company, par value $.01 per share ("Common Stock"), at any time after 40 days
from the issuance of the Shares. The number of shares of Common Stock receivable
upon conversion will be based on dividing the stated value of the Shares by the
conversion price then in effect. The conversion price is 75% of the average
closing bid price on the five trading days prior to conversion. The conversion
price is subject to adjustment so that if, at the end of any month which ends
after the date which is 40 days after the original issuance date of the Shares,
the average closing bid price of the Common Stock on the five consecutive days
prior to the end of such month is less than $1.50, then, in each such case, the
percentage discount from market price shall be reduced by 2%.
The Company intends to use the proceeds of this offering for working
capital and general corporate purposes.
The Company entered into a Registration Rights Agreement with each
Investor to the effect that the Company would register for resale the sale of
the shares of Common Stock receivable upon conversion of the Shares in the event
that, prior to the conversion of the Shares, there becomes effective amendments
to Regulation S which would have the effect of delaying the resale of the
restricted securities in the United States following expirated of the restricted
period in effect prior to such amendment or if the Company refuses to issues
share of Common Stock to the Investor upon conversion of the Shares without a
restrictive legend.
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Each Investor granted the Company a right of first refusal pertaining
to the sale of shares of Common Stock received upon conversion of the Shares,
giving the Company the right to repurchase such shares at the price such shares
would otherwise be sold in the open market. The Company has the right to redeem
the Shares at any time until the 40th day after issuance for a cash payment of
125% of the stated value of the Shares being redeemed.
The Shares were sold in reliance on Regulation S promulgated under the
Securities Act of 1993 (the "Act"). In connection with the sale of the Shares,
the Company and the Investors made representations that (i) at all relevant
times, neither Investor was a "U.S. person", as that term is defined in
Regulation S; (ii) the offer and sale of the Shares occurred pursuant to
"Offshore Transactions" as that term is defined in Regulation S; (iii) neither
the Company nor the Investors engaged in any "Directed Selling Efforts" as that
term is defined in Regulation S; (iv) the Investors did not acquire any of the
Shares for the benefit of any U.S. person; (v) the Investors will not be "short"
in the Company's Common Stock during the restricted period; (vi) neither
Investor is an "affiliate" of the Company, as that term is defined under the Act
or in the rules and regulations promulgated by the Commission under the Act; and
(vii) the Company is a "reporting issuer" as that term is defined under
Regulation S.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
MEHL/BIOPHILE INTERNATIONAL CORPORATION
Registrant
Date: December 22, 1997 By: /s/ David Fowler
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Name: David Fowler
Title: Executive Vice President
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EXHIBIT INDEX
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EXHIBITS No. DESCRIPTION
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Exhibit 3 Certificate of Designations, Preferences and Rights
of Convertible Preferred Stock, Series F.
Exhibit 10.1 Subscription Agreement, dated as of December 9, 1997
between the Company and J. Barrie Farrington.
Exhibit 10.2 Subscription Agreement dated as of December 11, 1997
between the Company and Pacific Advisors Ltd.
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Exhibit 3
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF CONVERTIBLE
PREFERRED STOCK, SERIES F
OF
MEHL/BIOPHILE INTERNATIONAL CORPORATION
MEHL/Biophile International Corporation (the "CORPORATION"), 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 Corporation by the Certificate of
Incorporation, as amended, of the Corporation, and pursuant to Section 151 of
the General Corporation Law of the State of Delaware, the Board of Directors of
the Corporation as of December 2, 1997, adopted resolutions providing for the
designations, preferences and relative, participating, optional or other rights,
and the qualifications, limitations or restrictions thereof, of one thousand
five hundred (1,500) shares of Convertible Preferred Stock, Series F, of the
Corporation, as follows:
RESOLVED, that the Corporation is authorized to issue 1,500
shares of Convertible Preferred Stock, Series F, $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 participate in any dividends declared by
the Corporation pari passu with the holders of the Company's
Common Stock on an as-if-converted basis.
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:
a. Conversion Right. Each Preferred
Share shall be convertible at any time after 40
days after the original issuance of such Preferred
Shares
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by the Corporation into fully paid and nonassessable shares
(calculated to the nearest whole share) of Common Stock, at
the conversion price per share (the "CONVERSION PRICE"), as
defined in Section 2(b), below, in effect at the time of
conversion determined as hereinafter provided. 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
Corporation (unless a different intention is expressed) shall
be to the shares of the Common Stock of the Corporation, $.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.
b. Conversion Price. Subject to adjustment
pursuant to Sections 2(c) and 2(e), below, the Conversion
Price shall be seventy-five percent (75%) (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).
"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 Market, or, if the Nasdaq SmallCap
Market 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 Corporation (all as appropriately adjusted
for any stock dividend, stock split, or other similar
transaction during such period or between the end of such
period or between the end of such period and the date of
conversion or dividend payment, as applicable).
c. Adjustment to Conversion Percentage. If,
as of the end of any month which ends after the date which is
40 days after the original issuance of any Preferred Shares,
there remain outstanding any Preferred Shares and during such
month then ended the Average Market Price for the Common Stock
for the five consecutive trading days prior to the end of such
month is less than $1.50 (subject to adjustment in accordance
with the principles of Section 2(e) below), then, in each such
case, the Conversion Percentage then in effect shall be
reduced by 2%.
d. Conversion Notice. On presentation
and surrender to the Corporation (or at any office or agency
maintained for the transfer of the Preferred Shares) of the
certificates of Preferred Shares so to be converted, duly
endorsed in blank for transfer or accompanied by proper
instruments of
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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. (i) Adjustments for Dividends,
Subdivisions or Combinations. If the Corporation shall at any
time subdivide the outstanding shares of Common Stock or shall
issue a stock dividend on its outstanding shares of Common
Stock, the Conversion Price shall be appropriately decreased
so that the number of shares of Common Stock issuable upon
conversion of the Preferred Shares shall be increased by the
same percentage as the percentage increase in the number of
outstanding shares of Common Stock as a result of the
subdivision or stock dividend, effective at the close of
business on the date of such subdivision or stock dividend. If
the Corporation shall at any time combine the shares of
outstanding Common Stock, the Conversion Price shall be
appropriately increased so that the number of shares of Common
Stock issuable upon conversion of the Preferred Shares shall
be decreased by the same percentage as the percentage decrease
in the number of shares of outstanding Common Stock as a
result of the combination, effective at the close of business
on the date of such combination.
(ii) Adjustments for Reorganizations
and Reclassifications. In case, at any time after the date
hereof, of any capital reorganization (other than a merger or
other reorganization in which the Corporation is the
continuing entity and that does not result in any change in
the Common Stock) or any reclassification of the Common Stock
of the Corporation (other than as a result of a stock dividend
or subdivision, split or combination of shares), the Preferred
Shares shall thereafter be convertible into the number of
shares of stock or other securities or property to which a
holder of the number of shares of Common Stock of the
Corporation deliverable upon conversion of the Preferred
Shares immediately prior to such reorganization or
recapitalization would have been entitled upon such
reorganization or reclassification; and, in any such case,
appropriate adjustment (including, without limitation,
adjustment to the Conversion Price) shall be made in the
application of the provisions herein set forth with respect to
the rights and interests thereafter of the holders of
Preferred Shares, to the end that the provisions set forth
herein shall thereafter be applicable, as nearly as reasonably
may be, in relation to any share of stock or other property
thereafter deliverable upon the conversion.
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f. Fractional Shares. The Corporation
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 Corporation
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 Preferred Shares then
outstanding.
h. Taxes. The Corporation 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 Corporation 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 Corporation'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 Corporation the amount of any such tax, or has
established to the satisfaction of the Corporation 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 7 hereof.
4. Redemption. Subject to the following terms and
conditions, the Corporation, at its option, may redeem from
time to time all or any portion of the then outstanding
Preferred Shares:
a. The Corporation may, commencing on the
date of issuance of any Preferred Shares and ending on the
date which is 40 days after the date of such issuance, redeem
such Preferred Shares at the Redemption Price, as defined in
Section 4(b) below, payable in cash. With respect to any
redemption of such shares, the Corporation must give written
notice (the "REDEMPTION NOTICE") by certified mail (postage
prepaid, return receipt requested) or by overnight courier to
the holders of the Preferred Shares to be redeemed at least
two days prior to the scheduled date of redemption (the
"REDEMPTION DATE"). The Redemption Notice shall be addressed
to each such shareholder at the address of such holder
appearing on the books of the Corporation or given by such
holder to the Corporation for the purpose of notice. The
Redemption Notice shall state the Redemption Date, the
Redemption Price (as hereinafter defined), and the number of
Preferred Shares of such holders to be redeemed and shall call
upon such holder to surrender to the Corporation on the
Redemption Date at the place designated in the Redemption
Notice such holder's certificate or certificates representing
the shares to be redeemed. On or after the Redemption Date,
each
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holder of Preferred Shares called for redemption shall
surrender the certificate evidencing such Preferred Shares to
the Corporation (except that, if fewer Preferred Shares are
outstanding on the Redemption Date than were called for
redemption due to the Holder's conversion of some or all of
its outstanding Preferred Shares into Common Stock between the
date of the Redemption Notice and the Redemption Date, then
such number of Preferred Shares shall be reduced to the number
of such Preferred Shares which are still outstanding) at the
place designated in such notice and shall thereupon be
entitled to receive payment of the Redemption Price. If less
than all of the outstanding Preferred Shares are to be
redeemed for any reason, then the Corporation shall redeem a
pro rata portion from each holder of Preferred Shares
according to the respective number of Preferred Shares held by
such holder.
b. The Preferred Shares shall be redeemed at
a cash price (the "REDEMPTION PRICE") equal to the product of
(i) 1.25 multiplied by (ii) the Stated Value multiplied by
(iii) the number of Preferred Shares actually redeemed.
c. From and after the Redemption Date
(unless default shall be made by the Corporation in duly
paying the Redemption Price, in which case all the rights of
the holders of such shares shall continue) the holders of the
shares of the Preferred Shares called for redemption shall
cease to have any rights as shareholders of the Corporation
relating to such shares, except (i) the right to receive,
without interest other than as payable under Section 4(b),
above, the Redemption Price and (ii) if less than all of the
Preferred Shares represented by the certificate(s) surrendered
by the holder for redemption are actually redeemed, the right
to receive forthwith from the Corporation a new certificate
for the unredeemed shares, and the redeemed shares shall not
thereafter be transferred (except with the written consent of
the Corporation) on the books of the Corporation and shall not
be deemed outstanding for any purpose whatsoever. The
Preferred Shares not redeemed shall remain outstanding and
entitled to all the rights and preferences provided herein.
d. There shall be no redemption of any
Preferred Shares of the Corporation where such action would be
in violation of applicable law.
e. Upon any redemption of Preferred Shares
pursuant to this Section 4, the Preferred Shares which are so
redeemed shall not be reissued and, upon such redemption, the
number of authorized shares of the series to which the shares
of such Preferred Shares belonged shall be reduced by the
number of shares so redeemed.
5. Liquidation, Dissolution, Winding Up. In the event
of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the holders of the Preferred
Shares shall be entitled to receive in cash out of the assets
of the Corporation, whether from capital or from earnings
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available for distribution to its stockholders (the "PREFERRED
FUNDS"), before any amount shall be paid to the holders of the
Common Stock, an amount equal to the Stated Value per
Preferred Share plus any accrued and unpaid dividends,
provided that, if the Preferred Funds are insufficient to pay
the full amount due to the holders of Preferred Shares and
holders of shares of other classes or series of preferred
stock of the Corporation that are of equal rank with the
Preferred Shares as to payments of Preferred Funds (the "PARI
PASSU SHARES"), then each holder of Preferred Shares and Pari
Passu Shares shall receive a percentage of the Preferred Funds
equal to the full amount of Preferred Funds payable to such
holder as a percentage of the full amount of Preferred Funds
payable to all holders of Preferred Shares and Pari Passu
Shares. The purchase or redemption by the Corporation of stock
of any class, in any manner permitted by law, shall not, for
the purposes hereof, be regarded as a liquidation, dissolution
or winding up of the Corporation. Neither the consolidation
nor merger of the Corporation with or into any other
corporation or corporations, nor the sale or transfer by the
Corporation of less than substantially all of its assets,
shall, for the purposes hereof, be deemed to be a liquidation,
dissolution or winding up of the Corporation. No holder of
Preferred Shares shall be entitled to receive any amounts with
respect thereto upon any liquidation, dissolution or winding
up of the Corporation other than the amounts provided for
herein.
6. Preferred Rank. All shares of Common Stock and any
series of preferred stock as may be issued after the date
hereof by the Corporation shall be of junior rank to all
Preferred Shares in respect to the preferences as to payments
of dividends and/or other distributions, including, without
limitation, distributions and payments upon the liquidation,
dissolution or winding up of the Corporation. The rights of
the holders of shares of Common Stock shall be subject to the
preferences and relative rights of the Preferred Shares.
7. 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:
a. amend, alter, change or repeal any of
the powers, preferences, privileges or rights of the Preferred
Shares; or
b. create any new class or series of shares
having preferences prior to the Preferred Shares as to
dividends or assets; or
c. amend the provisions of this Section 7;
or
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d. alter or change any of the powers,
preferences, privileges or rights of the Common Stock.
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be signed by Thomas L. Mehl, Sr. its President, this 2nd day of
December 1997.
MEHL/BIOPHILE INTERNATIONAL
CORPORATION
By: /s/ Thomas L. Mehl, Sr.
President
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Exhibit 10.1
REGULATION S SECURITIES SUBSCRIPTION AGREEMENT
MEHL/BIOPHILE INTERNATIONAL CORPORATION
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
BECAUSE THEY ARE BELIEVED TO BE EXEMPT FROM REGISTRATION UNDER REGULATION S
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THIS
SUBSCRIPTION AGREEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION
OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL.
This Regulation S Securities Subscription Agreement (the "Agreement")
is executed by the undersigned (the "Subscriber") in connection with the offer
and the subscription of the undersigned to purchase an aggregate of 400 shares
(the "Securities") of Convertible Preferred Stock, Series F, par value $10 per
share of MEHL/Biophile International Corporation, a Delaware corporation (the
"Company"), Shares at a price of $400,000. The terms and provisions of the
Securities are set forth in the form of Certificate of Designation attached
hereto as Exhibit A. This Agreement and the offer and sale of the Securities
contemplated hereby are being made in reliance upon the provisions of Regulation
S ("Regulation S ") under the Securities Act of 1933, as amended (the "Act").
The Subscriber, in order to induce the Company to enter into the transaction
contemplated hereby and acknowledging that the Company will rely thereon
represents, warrants and agrees as follows:
1. Offer to Subscribe; Purchase Price. The Subscriber hereby
offers to purchase and subscribes for the Securities for an
aggregate price of $400,000. The closing of the transactions
contemplated hereby (the "Closing") shall be deemed to occur
when this Agreement has been executed by both Subscriber and
Company. Payment shall be made at the Closing by delivering
immediately available funds in United States dollars by wire
transfer for simultaneous closing by delivery of securities
versus payment. The Company agrees to deliver certificates
representing the Securities subscribed for at the Closing. The
date on which the Closing occurs is hereafter referred to as
the Closing Date.
2. Subscriber Representations; Access to Information; Independent
Investigation
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(a) Offshore Transaction. Subscriber represents and
warrants to the Company that (i) Subscriber is not a "U.S.
person" as that term is defined in Rule 902(o) of Regulation
S; (ii) the Subscriber is not, and on the Closing Date will
not be, an affiliate of the Company; (iii) at the execution of
this Subscription Agreement, Subscriber was outside the United
States and no offer to purchase the Securities was made in the
United States; (iv) the Subscriber agrees that all offers and
sales of the Securities prior to the expiration of a period
commencing on the Closing and ending forty (40) days
thereafter (the"Restricted Period") shall not be made to U.S.
persons or for the account or benefit of U.S. persons and
shall otherwise be made in compliance with the provisions of
Regulation S; (v) Subscriber is not a distributor or dealer;
(vi) the transactions contemplated hereby (a) have not been
and will not be pre-arranged by the Subscriber with a
purchaser located in the United States or a purchaser which is
a U.S. Person, and (b) are not and will not be part of a plan
or scheme by the Subscriber to evade the registration
provisions of the Act; (vii) the Subscriber shall take all
reasonable steps to ensure its compliance with Regulation S
and shall promptly send to each purchaser (x) who acts as a
distributor, underwriter, dealer or other person participating
pursuant to a contractual arrangement in the distribution of
the Securities or receiving a selling concession, fee or other
remuneration in respect of any of the Securities, or (y) who
purchases prior to the expiration of the Restricted Period, a
confirmation or other notice to the purchaser stating that the
purchaser is subject to the same restrictions on offers and
sales as the Subscriber pursuant to Section 903(c)(2)(iv) of
Regulation S; and (viii) none of the Subscriber, its
affiliates or persons acting on their behalf have conducted
and shall not conduct any "directed selling efforts" as that
term is defined in Rule 902(b) of Regulation S, nor has the
Subscriber, its affiliates or persons acting on their behalf
have conducted any general solicitation relating to the offer
and sale of any of the Securities in the United States or
elsewhere.
(b) Beneficial Owner. Subscriber is purchasing the
Securities for its own account or for the account of
beneficiaries for whom Subscriber has full investment
discretion with respect to the Securities and whom Subscriber
has full authority to bind, so that each such beneficiary is
bound hereby as if such beneficiary were a direct Subscriber
hereunder and all representations, warranties and agreements
herein were made directly by such beneficiary.
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(c) Directed Selling Efforts. Subscriber will not
engage in any activity for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the
market in the United States for any of the Securities sold
hereunder. To the best knowledge of the Subscriber, neither
the Company nor any person acting for the Company has
conducted any "directed selling efforts" as that term is
defined in Rule 902 of Regulation S.
(d) Short Position. Neither Subscriber nor any of its
affiliates will directly or indirectly maintain any short
position in any securities of the Company until after the end
of the Restricted Period.
(e) Independent Investigation. Subscriber in electing
to subscribe for the Securities hereunder, has relied solely
upon the representations and warranties of the Company set
forth in this Agreement and on independent investigation made
by it and its representatives, if any, and Subscriber has been
given no oral or written representations or assurance from the
Company or any representation of the Company other than as set
forth in this Agreement or in a document executed by a duly
authorized representative of the Company making reference to
this Agreement.
(f) No Government Recommendation or Approval.
Subscriber understands that no United States federal or state
agency, or similar agency of any other country, has passed
upon or made any recommendation or endorsement of the Company,
this transaction or the purchase of the Securities.
3. The Company Represents, Covenants and Warrants the following:
(a) Reporting Company Status. The Company is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly
qualified as a foreign corporation in all jurisdictions in
which the failure to so qualify would have a material adverse
effect on the Company and its subsidiaries taken as a whole.
The Company is a "Reporting Issuer" as defined by Rule 902 of
Regulation S. The Company has registered its Common Stock
pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the Common Stock is
listed and trades on the NASDAQ Small Cap Market. The Company
has filed all material required to be filed pursuant
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to all reporting obligations under either Section 13(a) or
15(d) of the Exchange Act for a period of at least twelve (12)
months immediately preceding the offer or sale of the
Securities (or for such shorter period that the Company has
been required to file such material).
(b) Concerning the Securities. The issuance, sale and
delivery of the Securities and the shares of Common Stock
issuable upon the conversion or exercise thereof are within
the Company's corporate powers and have been duly authorized
by all required corporate action on the part of the Company
and its stockholders and when such securities are issued, sold
and delivered in accordance with the terms hereof and the
Securities for the consideration expressed herein and in the
Securities, such securities will be duly and validly issued,
fully paid and nonassessable. There are no preemptive rights
of any shareholders of the Company.
(c) Offshore Transaction. The Company has not offered
or sold the Securities to any person in the United States, or,
to the best knowledge of the Company, any identifiable groups
of U.S. citizens abroad, or any U.S. person as that term is
defined in Regulation S. At the time the buy order for the
Securities was originated the Company and/or its agents
reasonably believed Subscriber was outside the United States
and was not a U.S. person.
(d) Prearranged Sale. The Company and/or its agents
believe that the transaction contemplated hereby has not been
pre-arranged with a buyer in the United States.
(e) No Directed Selling Efforts. The Company has not
conducted any "directed selling efforts" as that term is
defined in Rule 902 of Regulation S nor has Company conducted
any general solicitation relating to the offer and sale of the
Securities to persons resident within the United States or any
other U. S. person as that term is defined in Rule 902 of
Regulation S.
(f) Subscription Agreement. This Agreement has been
duly authorized, validly executed and delivered on behalf of
the Company and is a valid and binding agreement enforceable
against the Company in accordance with its terms, subject to
general principles of equity and to
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bankruptcy or other laws affecting the enforcement of
creditors' rights generally.
(g) Non-contravention. The execution and delivery of
this Agreement and the consummation of the issuance of the
Securities and the transactions contemplated by this Agreement
and the Securities do not and will not conflict with or result
in a breach by the Company of any of the terms or provisions
of, or constitute a default under, the articles of
incorporation or by-laws of the Company, or any indenture,
mortgage, deed of trust, or other material agreement or
instrument to which the Company is a party or by which it or
any of its properties or assets are bound, or any existing
applicable law, rule or regulation of the United States of any
State thereof or any applicable decree, judgment or order of
any Federal or State court, Federal or State regulatory body,
administrative agency or other United States governmental body
having jurisdiction over the Company or any of its properties
or assets.
(h) No Default. The Company is not in default in the
performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture,
mortgage, deed of trust or other material instrument or
agreement to which it is a party or by which it or its
property may be bound; and neither the execution, nor the
delivery by the Company, nor the performance by the Company of
its obligations under this Agreement or the Securities will
conflict with or result in the breach or violation of any of
the terms or provisions of, or constitute a default or result
in the creation or imposition of any lien or charge on any
assets or properties of the Company under, any material
indenture, mortgage, deed of trust or other material agreement
or instrument to which the Company is a party or by which it
is bound or any statute or the Certificate of Incorporation or
Bylaws of the Company, or any decree, judgment, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or its properties.
(i) SEC Filings. None of the Company's filings with
the Securities and Exchange Commission since January 1, 1995
contains any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statement therein in fight of the
circumstances under which they were made, not misleading. The
Company has since January 1, 1995 timely filed all requisite
forms,
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<PAGE> 6
reports and exhibits thereto with the Securities and Exchange
Commission and, as of the date hereof, there are no filings
due to be filed with the Securities and Exchange Commission
which have not been so filed.
4. Reliance on Representations. The Subscriber understands that
the offer and sale of the Securities are not being registered
under the Act. The Company and the Subscriber are relying on
the rules governing offers and sales made outside the United
States pursuant to Regulation S.
5. Covenants of the Company.
(a) The certificate representing the shares of Common
Stock into which the Securities are converted after the
Restricted Period shall not bear a legend. Upon conversion of
the Securities in accordance with their terms, the Company
will issue one or more certificates representing the
appropriate number of shares of Common Stock of the Company
issuable upon such conversion in the name of Subscriber
without a restrictive legend and in such denominations as may
be specified by Subscriber at the time of conversion. The
Company further agrees that no instructions other than these
instructions, and instructions for a "stop transfer" until the
end of the Restricted Period, have been or will be given to
the transfer agent and also agrees that the Common Stock shall
be freely transferable on the books and records of the Company
subject to compliance with Federal and State securities laws
and the terms of the Securities and this Agreement.
(b) The Company shall comply with all applicable
securities laws with respect to the sale of the Securities,
including but not limited to the filing of all reports
required to be filed in connection therewith with the
Securities and Exchange Commission or any stock exchange or
the Nasdaq SmallCap Market or any other regulatory authority
during the time the Securities are outstanding.
6. Right of First Refusal. The Subscriber hereby agrees that, in
the event the Subscriber bona fide intends to sell, assign,
transfer, pledge or hypothecate (any of which being a "sale")
any of the Securities or the shares of Common Stock, par value
$.01 per share, of the Company into which any Securities have
been converted, the Subscriber will first offer to sell such
shares (the "Offered Shares") to the Company on the identical
terms and conditions as those to be offered by the Subscriber.
This offer (the
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<PAGE> 7
"Offering Notice") shall be in writing and shall contain all
of the terms and conditions pertaining to the sale of the
Offered Shares, including, in any case other than an
open-market sale of the Offered Shares, the name and address
of the purchaser. In the case of an open-market sale of the
Common Stock received upon conversion of the Securities by the
Subscriber, the price per Offered Share shall be set at the
average closing bid price of the Company's Common Stock on the
five trading days preceding receipt by the Company of the
Offering Notice. The Offering Notice shall be deemed to be an
offer by the Subscriber to sell the Offered Shares, and the
Company for a period of two business days after receipt of the
Offering Notice shall have a right of first refusal to
purchase the Offered Shares at the price and upon the other
terms stated in the Offering Notice. All acceptances of
Offered Shares shall be effected by notice (an "Acceptance
Notice") given to the Subscriber. The closing of the sale of
the Offered Shares pursuant to the exercise of the first
refusal rights granted by this Section 6 shall occur within
five days after the date of the Acceptance Notice. Any Offered
Shares not purchased pursuant to the above right of first
refusal shall then offered pursuant to the identical terms and
conditions contained in the Offering Notice.
7. Amendment to Regulation S. The Subscriber agrees that,
notwithstanding any other provision of this Agreement, the
Securities, in the event that subsequent to the date of this
Agreement, there becomes effective amendments to or repeal of
Regulation S and such amendments or repeal are effective with
respect to the transactions contemplated hereby or to the
resale of the Common Stock received by the Subscriber upon the
conversion of the Securities, (i) the Company shall take all
actions which in the reasonable opinion of counsel of the
Company are necessary to cause the Company to comply with the
amended provisions of Regulation S, (ii) the Company shall not
be required to take any action pursuant to the terms of this
Agreement and the Securities which may be inconsistent with or
cause the Company to violate the provisions of Regulation S as
amended and (iii) the Company shall not be deemed to have
violated any of the terms or conditions of this Agreement or
the Securities and shall not be liable to the Subscriber for
any actions thereby taken by the Company to render the Company
in compliance with Regulation S, as amended. In furtherance of
and not in limitation of the foregoing, in the event that a
subsequent amendment of Regulation S results in a lengthening
of the restricted period beyond the 40 day period set forth in
Section 903(c)(2) of Regulation S, and
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<PAGE> 8
such amendment is applicable to the sale of the Securities or
the shares of Common Stock receivable upon conversion of the
Securities, the "Restricted Period" set forth in Section 2(a)
hereof shall be deemed to be increased accordingly.
8. Resales. Subscriber acknowledges and agrees that the
Securities may only be resold (a) in compliance with
Regulation S; (b) pursuant to a Registration Statement under
the Act; or (c) pursuant to an exemption from registration
under the Act other than Regulation S.
9. Confidentiality. Each of the Company and the Subscriber agrees
to keep confidential and not to disclose to or use for the
benefit of any third party the terms of this Agreement or any
other information which at any time is communicated by the
other party as being confidential without the prior written
approval of the other party; provided, however, that this
provision shall not apply to information which, at the time of
disclosure, is already part of the public domain (except by
breach of this Agreement) and information which is required to
be disclosed by law.
10. Indemnification. Each of the Company and the Subscriber agrees
to indemnify the other and to hold the other harmless from and
against any and all losses, damages, liabilities, costs and
expenses (including reasonable attorneys' fees) which the
other may sustain or incur in connection with the breach by
the indemnifying party of any representation, warranty or
covenant made by it in this Agreement.
11. Notices. Any notice to be given or to be served upon any party
to this Agreement in connection with this Agreement must be in
writing and will be deemed to have been given and received
upon confirmed receipt, if sent by facsimile, or two (2) days
after it has been submitted for delivery by Federal Express or
an equivalent carrier, charges prepaid and addressed to the
following addresses with a confirmation of delivery:
If to the Company, to:
MEHL/Biophile International Corporation
4127 N.W. 27th Lane
Gainesville, Florida 33066
Attention: David Fowler
-8-
<PAGE> 9
With a copy to:
Bingham Dana Murase
399 Park Avenue
New York, NY 10022
Attention: Alan J. Bernstein, Esq.
If to the Subscriber, to:
J. Barrie Farrington
c/o Sun International
P.O. Box N4777
Paradise Island
Nassau, Bahamas
With a copy to:
Atlas Pearlman Trop & Borkson
200 East Las Olas Boulevard
Fort Lauderdale, Florida 33301
Attention: James Schneider
Any party may, at any time by giving notice to the other
party, designate any other address in substitution of an
address established pursuant to the foregoing to which such
notice will be given.
12. Multiple Counterparts. This Agreement may be executed in
several counterparts, each of which will be deemed to be an
original but all of which will constitute one in the same
instrument. However, in enforcing any party's rights under
this Agreement it will be necessary to produce only one copy
of this Agreement signed by the party to be charged.
13. Governing Law. This Agreement will be construed and enforced
in accordance with and governed by the laws of the State of
Delaware, except for matters arising under the Act, without
reference to principles of conflicts of law. Each of the
parties consents to the jurisdiction of the federal courts
whose districts encompass any part of the State of Delaware or
the state courts of the State of Delaware in connection with
any dispute arising under this Agreement and hereby waives, to
the maximum extent
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<PAGE> 10
permitted by law, any objection, including any objection based
on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions. Each party hereby agrees
that if another party to this Agreement obtains a judgment
against it in such a proceeding, the party which obtained such
judgment may enforce same by summary judgment in the courts of
any country having jurisdiction over the party against whom
such judgment was obtained, and each party hereby waives any
defenses available to it under local law and agrees to the
enforcement of such a judgment. Each party to this Agreement
irrevocably consents to the service of process in any such
proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such party at its address
set forth herein. Nothing herein shall affect the right of any
party to serve process in any other manner permitted by law.
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<PAGE> 11
The undersigned acknowledges that this Agreement shall not be
effective unless and until accepted by the Company as indicated below.
Dated this 9th day of December, 1997.
/s/ J. Barrie Farrington
J. BARRIE FARRINGTON
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE 9th DAY OF
DECEMBER, 1997.
MEHL/BIOPHILE INTERNATIONAL
CORPORATION
By: /s/ David Fowler
David Fowler
Executive Vice President
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<PAGE> 1
Exhibit 10.2
REGULATION S SECURITIES SUBSCRIPTION AGREEMENT
MEHL/BIOPHILE INTERNATIONAL CORPORATION
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
BECAUSE THEY ARE BELIEVED TO BE EXEMPT FROM REGISTRATION UNDER REGULATION S
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THIS
SUBSCRIPTION AGREEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION
OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL.
This Regulation S Securities Subscription Agreement (the "Agreement")
is executed by the undersigned (the "Subscriber") in connection with the offer
and the subscription of the undersigned to purchase an aggregate of 1,100 shares
(the "Securities") of Convertible Preferred Stock, Series F, par value $10 per
share of MEHL/Biophile International Corporation, a Delaware corporation (the
"Company"), Shares at a price of $1,100,000 . The terms and provisions of the
Securities are set forth in the form of Certificate of Designation attached
hereto as Exhibit A. This Agreement and the offer and sale of the Securities
contemplated hereby are being made in reliance upon the provisions of Regulation
S ("Regulation S ") under the Securities Act of 1933, as amended (the "Act").
The Subscriber, in order to induce the Company to enter into the transaction
contemplated hereby and acknowledging that the Company will rely thereon
represents, warrants and agrees as follows:
1. Offer to Subscribe; Purchase Price. The Subscriber hereby
offers to purchase and subscribes for the Securities for an
aggregate price of $1,100,000. The closing of the transactions
contemplated hereby (the "Closing") shall be deemed to occur
when this Agreement has been executed by both Subscriber and
Company. Payment shall be made at the Closing by delivering
immediately available funds in United States dollars by wire
transfer for simultaneous closing by delivery of securities
versus payment. The Company agrees to deliver certificates
representing the Securities subscribed for at the Closing. The
date on which the Closing occurs is hereafter referred to as
the Closing Date.
2. Subscriber Representations; Access to Information; Independent
Investigation
<PAGE> 2
(a) Offshore Transaction. Subscriber represents and
warrants to the Company that (i) Subscriber is not a "U.S.
person" as that term is defined in Rule 902(o) of Regulation
S; (ii) the Subscriber is not, and on the Closing Date will
not be, an affiliate of the Company; (iii) at the execution of
this Subscription Agreement, Subscriber was outside the United
States and no offer to purchase the Securities was made in the
United States; (iv) the Subscriber agrees that all offers and
sales of the Securities prior to the expiration of a period
commencing on the Closing and ending forty (40) days
thereafter (the"Restricted Period") shall not be made to U.S.
persons or for the account or benefit of U.S. persons and
shall otherwise be made in compliance with the provisions of
Regulation S; (v) Subscriber is not a distributor or dealer;
(vi) the transactions contemplated hereby (a) have not been
and will not be pre-arranged by the Subscriber with a
purchaser located in the United States or a purchaser which is
a U.S. Person, and (b) are not and will not be part of a plan
or scheme by the Subscriber to evade the registration
provisions of the Act; (vii) the Subscriber shall take all
reasonable steps to ensure its compliance with Regulation S
and shall promptly send to each purchaser (x) who acts as a
distributor, underwriter, dealer or other person participating
pursuant to a contractual arrangement in the distribution of
the Securities or receiving a selling concession, fee or other
remuneration in respect of any of the Securities, or (y) who
purchases prior to the expiration of the Restricted Period, a
confirmation or other notice to the purchaser stating that the
purchaser is subject to the same restrictions on offers and
sales as the Subscriber pursuant to Section 903(c)(2)(iv) of
Regulation S; and (viii) none of the Subscriber, its
affiliates or persons acting on their behalf have conducted
and shall not conduct any "directed selling efforts" as that
term is defined in Rule 902(b) of Regulation S, nor has the
Subscriber, its affiliates or persons acting on their behalf
have conducted any general solicitation relating to the offer
and sale of any of the Securities in the United States or
elsewhere.
(b) Beneficial Owner. Subscriber is purchasing the
Securities for its own account or for the account of
beneficiaries for whom Subscriber has full investment
discretion with respect to the Securities and whom Subscriber
has full authority to bind, so that each such beneficiary is
bound hereby as if such beneficiary were a direct Subscriber
hereunder and all representations, warranties and agreements
herein were made directly by such beneficiary.
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<PAGE> 3
(c) Directed Selling Efforts. Subscriber will not
engage in any activity for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the
market in the United States for any of the Securities sold
hereunder. To the best knowledge of the Subscriber, neither
the Company nor any person acting for the Company has
conducted any "directed selling efforts" as that term is
defined in Rule 902 of Regulation S.
(d) Short Position. Neither Subscriber nor any of its
affiliates will directly or indirectly maintain any short
position in any securities of the Company until after the end
of the Restricted Period.
(e) Independent Investigation. Subscriber in electing
to subscribe for the Securities hereunder, has relied solely
upon the representations and warranties of the Company set
forth in this Agreement and on independent investigation made
by it and its representatives, if any, and Subscriber has been
given no oral or written representations or assurance from the
Company or any representation of the Company other than as set
forth in this Agreement or in a document executed by a duly
authorized representative of the Company making reference to
this Agreement.
(f) No Government Recommendation or Approval.
Subscriber understands that no United States federal or state
agency, or similar agency of any other country, has passed
upon or made any recommendation or endorsement of the Company,
this transaction or the purchase of the Securities.
3. The Company Represents, Covenants and Warrants the following:
(a) Reporting Company Status. The Company is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly
qualified as a foreign corporation in all jurisdictions in
which the failure to so qualify would have a material adverse
effect on the Company and its subsidiaries taken as a whole.
The Company is a "Reporting Issuer" as defined by Rule 902 of
Regulation S. The Company has registered its Common Stock
pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the Common Stock is
listed and trades on the NASDAQ Small Cap Market. The Company
has filed all material required to be filed pursuant
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<PAGE> 4
to all reporting obligations under either Section 13(a) or
15(d) of the Exchange Act for a period of at least twelve (12)
months immediately preceding the offer or sale of the
Securities (or for such shorter period that the Company has
been required to file such material).
(b) Concerning the Securities. The issuance, sale and
delivery of the Securities and the shares of Common Stock
issuable upon the conversion or exercise thereof are within
the Company's corporate powers and have been duly authorized
by all required corporate action on the part of the Company
and its stockholders and when such securities are issued, sold
and delivered in accordance with the terms hereof and the
Securities for the consideration expressed herein and in the
Securities, such securities will be duly and validly issued,
fully paid and nonassessable. There are no preemptive rights
of any shareholders of the Company.
(c) Offshore Transaction. The Company has not offered
or sold the Securities to any person in the United States, or,
to the best knowledge of the Company, any identifiable groups
of U.S. citizens abroad, or any U.S. person as that term is
defined in Regulation S. At the time the buy order for the
Securities was originated the Company and/or its agents
reasonably believed Subscriber was outside the United States
and was not a U.S. person.
(d) Prearranged Sale. The Company and/or its agents
believe that the transaction contemplated hereby has not been
pre-arranged with a buyer in the United States.
(e) No Directed Selling Efforts. The Company has not
conducted any "directed selling efforts" as that term is
defined in Rule 902 of Regulation S nor has Company conducted
any general solicitation relating to the offer and sale of the
Securities to persons resident within the United States or any
other U. S. person as that term is defined in Rule 902 of
Regulation S.
(f) Subscription Agreement. This Agreement has been
duly authorized, validly executed and delivered on behalf of
the Company and is a valid and binding agreement enforceable
against the Company in accordance with its terms, subject to
general principles of equity and to
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<PAGE> 5
bankruptcy or other laws affecting the enforcement of
creditors' rights generally.
(g) Non-contravention. The execution and delivery of
this Agreement and the consummation of the issuance of the
Securities and the transactions contemplated by this Agreement
and the Securities do not and will not conflict with or result
in a breach by the Company of any of the terms or provisions
of, or constitute a default under, the articles of
incorporation or by-laws of the Company, or any indenture,
mortgage, deed of trust, or other material agreement or
instrument to which the Company is a party or by which it or
any of its properties or assets are bound, or any existing
applicable law, rule or regulation of the United States of any
State thereof or any applicable decree, judgment or order of
any Federal or State court, Federal or State regulatory body,
administrative agency or other United States governmental body
having jurisdiction over the Company or any of its properties
or assets.
(h) No Default. The Company is not in default in the
performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture,
mortgage, deed of trust or other material instrument or
agreement to which it is a party or by which it or its
property may be bound; and neither the execution, nor the
delivery by the Company, nor the performance by the Company of
its obligations under this Agreement or the Securities will
conflict with or result in the breach or violation of any of
the terms or provisions of, or constitute a default or result
in the creation or imposition of any lien or charge on any
assets or properties of the Company under, any material
indenture, mortgage, deed of trust or other material agreement
or instrument to which the Company is a party or by which it
is bound or any statute or the Certificate of Incorporation or
Bylaws of the Company, or any decree, judgment, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or its properties.
(i) SEC Filings. None of the Company's filings with
the Securities and Exchange Commission since January 1, 1995
contains any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statement therein in fight of the
circumstances under which they were made, not misleading. The
Company has since January 1, 1995 timely filed all requisite
forms,
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<PAGE> 6
reports and exhibits thereto with the Securities and Exchange
Commission and, as of the date hereof, there are no filings
due to be filed with the Securities and Exchange Commission
which have not been so filed.
4. Reliance on Representations. The Subscriber understands that
the offer and sale of the Securities are not being registered
under the Act. The Company and the Subscriber are relying on
the rules governing offers and sales made outside the United
States pursuant to Regulation S.
5. Covenants of the Company.
(a) The certificate representing the shares of Common
Stock into which the Securities are converted after the
Restricted Period shall not bear a legend. Upon conversion of
the Securities in accordance with their terms, the Company
will issue one or more certificates representing the
appropriate number of shares of Common Stock of the Company
issuable upon such conversion in the name of Subscriber
without a restrictive legend and in such denominations as may
be specified by Subscriber at the time of conversion. The
Company further agrees that no instructions other than these
instructions, and instructions for a "stop transfer" until the
end of the Restricted Period, have been or will be given to
the transfer agent and also agrees that the Common Stock shall
be freely transferable on the books and records of the Company
subject to compliance with Federal and State securities laws
and the terms of the Securities and this Agreement.
(b) The Company shall comply with all applicable
securities laws with respect to the sale of the Securities,
including but not limited to the filing of all reports
required to be filed in connection therewith with the
Securities and Exchange Commission or any stock exchange or
the Nasdaq SmallCap Market or any other regulatory authority
during the time the Securities are outstanding.
6. Right of First Refusal. The Subscriber hereby agrees that, in
the event the Subscriber bona fide intends to sell, assign,
transfer, pledge or hypothecate (any of which being a "sale")
any of the Securities or the shares of Common Stock, par value
$.01 per share, of the Company into which any Securities have
been converted, the Subscriber will first offer to sell such
shares (the "Offered Shares") to the Company on the identical
terms and conditions as those to be offered by the Subscriber.
This offer (the
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<PAGE> 7
"Offering Notice") shall be in writing and shall contain all
of the terms and conditions pertaining to the sale of the
Offered Shares, including, in any case other than an
open-market sale of the Offered Shares, the name and address
of the purchaser. In the case of an open-market sale of the
Common Stock received upon conversion of the Securities by the
Subscriber, the price per Offered Share shall be set at the
average closing bid price of the Company's Common Stock on the
five trading days preceding receipt by the Company of the
Offering Notice. The Offering Notice shall be deemed to be an
offer by the Subscriber to sell the Offered Shares, and the
Company for a period of two business days after receipt of the
Offering Notice shall have a right of first refusal to
purchase the Offered Shares at the price and upon the other
terms stated in the Offering Notice. All acceptances of
Offered Shares shall be effected by notice (an "Acceptance
Notice") given to the Subscriber. The closing of the sale of
the Offered Shares pursuant to the exercise of the first
refusal rights granted by this Section 6 shall occur within
five days after the date of the Acceptance Notice. Any Offered
Shares not purchased pursuant to the above right of first
refusal shall then offered pursuant to the identical terms and
conditions contained in the Offering Notice.
7. Amendment to Regulation S. The Subscriber agrees that,
notwithstanding any other provision of this Agreement, the
Securities, in the event that subsequent to the date of this
Agreement, there becomes effective amendments to or repeal of
Regulation S and such amendments or repeal are effective with
respect to the transactions contemplated hereby or to the
resale of the Common Stock received by the Subscriber upon the
conversion of the Securities, (i) the Company shall take all
actions which in the reasonable opinion of counsel of the
Company are necessary to cause the Company to comply with the
amended provisions of Regulation S, (ii) the Company shall not
be required to take any action pursuant to the terms of this
Agreement and the Securities which may be inconsistent with or
cause the Company to violate the provisions of Regulation S as
amended and (iii) the Company shall not be deemed to have
violated any of the terms or conditions of this Agreement or
the Securities and shall not be liable to the Subscriber for
any actions thereby taken by the Company to render the Company
in compliance with Regulation S, as amended. In furtherance of
and not in limitation of the foregoing, in the event that a
subsequent amendment of Regulation S results in a lengthening
of the restricted period beyond the 40 day period set forth in
Section 903(c)(2) of Regulation S, and
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<PAGE> 8
such amendment is applicable to the sale of the Securities or
the shares of Common Stock receivable upon conversion of the
Securities, the "Restricted Period" set forth in Section 2(a)
hereof shall be deemed to be increased accordingly.
8. Resales. Subscriber acknowledges and agrees that the
Securities may only be resold (a) in compliance with
Regulation S; (b) pursuant to a Registration Statement under
the Act; or (c) pursuant to an exemption from registration
under the Act other than Regulation S.
9. Confidentiality. Each of the Company and the Subscriber agrees
to keep confidential and not to disclose to or use for the
benefit of any third party the terms of this Agreement or any
other information which at any time is communicated by the
other party as being confidential without the prior written
approval of the other party; provided, however, that this
provision shall not apply to information which, at the time of
disclosure, is already part of the public domain (except by
breach of this Agreement) and information which is required to
be disclosed by law.
10. Indemnification. Each of the Company and the Subscriber agrees
to indemnify the other and to hold the other harmless from and
against any and all losses, damages, liabilities, costs and
expenses (including reasonable attorneys' fees) which the
other may sustain or incur in connection with the breach by
the indemnifying party of any representation, warranty or
covenant made by it in this Agreement.
11. Notices. Any notice to be given or to be served upon any party
to this Agreement in connection with this Agreement must be in
writing and will be deemed to have been given and received
upon confirmed receipt, if sent by facsimile, or two (2) days
after it has been submitted for delivery by Federal Express or
an equivalent carrier, charges prepaid and addressed to the
following addresses with a confirmation of delivery:
If to the Company, to:
MEHL/Biophile International Corporation
4127 N.W. 27th Lane
Gainesville, Florida 33066
Attention: David Fowler
-8-
<PAGE> 9
With a copy to:
Bingham Dana Murase
399 Park Avenue
New York, NY 10022
Attention: Alan J. Bernstein, Esq.
If to the Subscriber, to:
Pacific Advisors Ltd.
P.O. Box N8174
Nassau, Bahamas
With a copy to:
Atlas Pearlman Trop & Borkson
200 East Las Olas Boulevard
Fort Lauderdale, Florida 33301
Attention: James Schneider
Any party may, at any time by giving notice to the other
party, designate any other address in substitution of an
address established pursuant to the foregoing to which such
notice will be given.
12. Multiple Counterparts. This Agreement may be executed in
several counterparts, each of which will be deemed to be an
original but all of which will constitute one in the same
instrument. However, in enforcing any party's rights under
this Agreement it will be necessary to produce only one copy
of this Agreement signed by the party to be charged.
13. Governing Law. This Agreement will be construed and enforced
in accordance with and governed by the laws of the State of
Delaware, except for matters arising under the Act, without
reference to principles of conflicts of law. Each of the
parties consents to the jurisdiction of the federal courts
whose districts encompass any part of the State of Delaware or
the state courts of the State of Delaware in connection with
any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens, to the bringing
of any such proceeding in such
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<PAGE> 10
jurisdictions. Each party hereby agrees that if another party
to this Agreement obtains a judgment against it in such a
proceeding, the party which obtained such judgment may enforce
same by summary judgment in the courts of any country having
jurisdiction over the party against whom such judgment was
obtained, and each party hereby waives any defenses available
to it under local law and agrees to the enforcement of such a
judgment. Each party to this Agreement irrevocably consents to
the service of process in any such proceeding by the mailing
of copies thereof by registered or certified mail, postage
prepaid, to such party at its address set forth herein.
Nothing herein shall affect the right of any party to serve
process in any other manner permitted by law.
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<PAGE> 11
The undersigned acknowledges that this Agreement shall not be
effective unless and until accepted by the Company as indicated below.
Dated this 11th day of December, 1997.
PACIFIC ADVISORS LTD.
By: /s/ Robert Zara
Name: Robert Zara
Title:Director/President
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE 11th DAY
OF DECEMBER, 1997.
MEHL/BIOPHILE INTERNATIONAL
CORPORATION
By: /s/ David Fowler
David Fowler
Executive Vice President
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