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As filed with the Securities and Exchange Commission on May 22, 1997
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________________
CASMYN CORP.
(Exact name of Registrant as specified in its charter)
Colorado 84-0987840
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1335 Greg Street
Unit #104
Sparks, Nevada 89431
(702) 331-5524
(Address, including Zip Code, and Telephone Number, Including
Area Code of Registrant's Principal Executive Offices)
_________________________
Amyn Dahya
President
1335 Greg Street
Unit # 104
Sparks, Nevada 89431
(702) 331-5524
(Name, Address, including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
_________________________
Copy to:
David L. Ficksman, Esq.
Loeb & Loeb LLP
1000 Wilshire Boulevard, Suite 1800
Los Angeles, California 90017
(213) 688-3698
_________________________
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this registration statement becomes effective.
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 register 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. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
_________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1)(2) PER SHARE(3) OFFERING PRICE(3) FEE
<S> <C> <C> <C> <C>
Common Stock, $.04 par
value per share 6,510,304 $6.75 $43,944,552 $15,153
==========================================================================================================
</TABLE>
(1) Includes the registration for resale of the following: (i) all shares of
Common Stock issuable upon conversion of 834,667 shares of the Registrant's
8% Convertible Preferred Stock issued in a private placement in April,
1997; (ii) all shares of Common Stock issuable upon conversion of 110,000
shares of the Registrant's 8% Convertible Preferred Stock issuable upon the
exercise of warrants issued in connection with the foregoing private
placement; (iii) all shares of Common Stock issuable upon conversion of
shares of Registrant's 8% Convertible Preferred Stock issuable as dividends
in respect of shares of the Registrant's 8% Convertible Preferred Stock;
(iv) 870,571 shares of Common Stock originally issued in other private
placements; and (v) 1,339,189 shares of Common Stock (subject to
adjustment) issuable upon exercise of options and warrants issued in other
private placements. Estimated solely for purposes of calculating the
registration fee in connection with this Registration Statement; assumes
that all shares of the Registrant's 8% Convertible Preferred Stock are
converted into shares of Common Stock based on a market price of $6.75 per
share of Common Stock (the last reported sales price reported by NASDAQ on
May 20, 1997). In addition to the estimated number of shares set forth in
the table, the amount to be registered includes a presently indeterminate
number of shares issuable upon conversion of or otherwise in respect of
Registrant's 8% Convertible Preferred Stock.
(2) In the event of a stock split, stock dividend or similar transaction
involving the Common Stock of the Registrant, in order to prevent dilution,
the number of shares of Common Stock registered hereby shall be
automatically increased to cover the additional shares of Common Stock in
accordance with Rule 416 under the Securities Act of 1933, as amended.
(3) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) using the average of the high and low sale
prices reported on the Nasdaq SmallCap Market for the Registrant's Common
Stock on May 20, 1997.
_________________________
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 SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion Dated May 22, 1997
PROSPECTUS
CASMYN CORP.
6,510,304 SHARES OF COMMON STOCK*
All of the shares ("Shares") of Common Stock, par value $.04 per share
("Common Stock") of Casmyn Corp., a Colorado corporation ("Casmyn" or the
"Company"), are being offered by certain securityholders of the Company (the
"Selling Shareholders"). The Company will not receive any of the proceeds from
the sale of the Shares offered hereby. All expenses of this offering will be
paid for by the Company except for commissions, fees and discounts of any
underwriters, brokers, dealers or agents retained by the Selling Shareholders.
See "Selling Shareholders" and "Plan of Distribution" for information relating
to the Selling Shareholders and this offering. The Common Stock Company is
traded on the NASDAQ SmallCap Market under the symbol "CMYN." On May 20, 1997,
the last reported sale price of the Common Stock, as reported on the NASDAQ
SmallCap Market, was $6.75 per share.
*The Shares offered hereby for resale are: (i) 870,571 shares of
Common Stock that were issued in private placements in 1996; (ii) 1,339,189
shares (subject to adjustment) of Common Stock issuable upon exercise of options
and warrants issued in private placements; (iii) all such currently
indeterminate number of shares of Common Stock issuable upon conversion of
834,667 shares of the Company's 8% Convertible Preferred Stock, par value $.10
and liquidation preference $25 per share (the "Convertible Preferred Stock")
issued in a private placement in April 1997; (iv) all such currently
indeterminable number of shares of Common Stock issuable upon conversion of
110,000 shares of the Convertible Preferred Stock issuable upon the exercise of
warrants (the "Convertible Preferred Stock Warrants") issued in connection with
the April private placement; and (v) all such currently indeterminate number of
shares of Common Stock issuable upon conversion of the Convertible Preferred
Stock issuable as dividends in respect of the Convertible Preferred Stock and
the Convertible Preferred Stock Warrants. The number of shares of Common Stock
issuable in connection with the transactions referred to in (iii), (iv) and (v)
above and offered for resale hereby is an estimate based upon the market price
of the Common Stock set forth above, is subject to adjustment and could be
materially less or more than such estimated amount depending upon factors which
cannot be predicted by the Company at this time, including, among others, the
future market price of the Common Stock and the decision by the holders of the
Convertible Preferred Stock as to when to convert such shares. If, however,
such market price of the Common Stock were used to determine the number of
shares issuable as of the first dates on which all the Convertible Preferred
Stock may be converted, the Company would be obligated to issue a total of
approximately 4,300,544 shares of Common Stock if all shares of Convertible
Preferred Stock outstanding or issuable upon
<PAGE>
the exercise of Convertible Preferred Stock Warrants were converted on such
dates. This presentation is not intended to constitute a prediction as to the
future market price of the Common Stock or as to when holders will elect to
convert shares of Convertible Preferred Stock into shares of Common Stock. See
"Risk Factors - Effect of Conversion of Convertible Preferred Stock, Potential
Common Stock Adjustment" and "Description of Capital Stock."
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.
THESE SECURITIES SHOULD BE PURCHASED ONLY BY THOSE PERSONS WHO CAN AFFORD A LOSS
OF THEIR ENTIRE INVESTMENT. (SEE "RISK FACTORS" ON PAGE 3)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
____________________________
The date of this Prospectus is ____________, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"). In accordance with the
Exchange Act, the Company files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). The reports,
proxy statements and other information can be inspected and copied at the public
reference facilities that the Commission maintains at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
located at 7 World Trade Center, 13th Floor, New York, New York 10048, and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of these
materials can be obtained at prescribed rates from the Public Reference Section
of the Commission at the principal offices of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. These reports, proxy statements and other
information may also be obtained from the Web site that the Commission maintains
at http:\\www.sec.gov.
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933 (the "Securities
Act"). This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement.
____________________________
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K/A for the year ended
September 30, 1996; and
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended December 31, 1996 and March 31, 1997.
All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing such documents.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of any such
person, a copy of
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<PAGE>
any or all of the documents that are incorporated by reference, other than
exhibits to such documents not specifically incorporated by reference. Requests
for such copies should be directed to Mr. Dennis Welling, Casmyn Corp., 1800-
1500 West Georgia Street, Vancouver, British Columbia V6G 2Z8.
Any statement contained in a document 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 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.
RISK FACTORS
IN EVALUATING AN INVESTMENT IN SHARES OF COMMON STOCK OF THE COMPANY,
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY, AMONG OTHER THINGS, THE
FOLLOWING RISK FACTORS.
LIMITED OPERATING HISTORY UNDER CURRENT MANAGEMENT
The Company has only been operating under its current management since
March 1994. Since that time, it has engaged in limited business operations and
is still in the process of acquiring and developing mineral properties and
technologies for its business, and it has been operating with losses. There is
no assurance that the Company will be able to generate the revenues necessary to
be profitable or that it will be successful if forced to seek additional funds
for further development of its current mining properties and technologies.
RELIANCE ON OUTSIDE FINANCING
The Company's management believes that in the long term it will be
able to generate revenues sufficient to fund its operations and continue with
its proposed business plans. However, to complete current projects under
development and should the Company expand its operations and/or make
acquisitions that would require substantial sums of money, it will have to seek
additional debt or equity financing. Since inception, the Company's operations
have been financed in substantial part through private sales of the Company's
securities and private loans. There can be no assurance that such financing
would be available on terms acceptable to the Company, as and when needed. The
ability of the Company to obtain financing will depend on, among other factors,
political stability in those countries in which the Company does business, the
price (and trends of prices) of minerals and the market perception of mining
stocks.
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RELIANCE UPON OFFICERS AND DIRECTORS
The Company is wholly dependent, at present, upon the personal efforts
and abilities of its officers and directors. The loss of one or more of its
officers or directors could have a material adverse effect on the Company's
operating results. While the Company will solicit business through its officers
and directors, there can be no assurance as to the volume of business, if any,
which the Company may obtain, or that its operations will prove to be as
profitable as presently anticipated.
CONFLICTS OF INTEREST
The Company has in the past obtained and anticipates obtaining certain
of its services and has shared and anticipates sharing management and facilities
from companies of which certain of its officers, directors and principal
shareholders are officers, directors and/or principal shareholders. All such
services and facilities will be obtained by the Company at terms which the
Company believes are competitive in the marketplace and at least as favorable to
the Company as would be obtained by a third party. The Company has also
advanced, and anticipates that it will continue to advance over the near term,
funds to Vector Environmental Technologies, Inc. ("VETI") in which the Company
owns 31.2% of the outstanding equity. As of May 15, 1997, VETI was indebted to
the Company in the approximate amount of $3,200,000.
UNPROFITABILITY
Despite the business experience of the officers, directors and
principal shareholders of the Company, the Company has been operating at a loss
and has not been profitable since 1994, when Mr. Amyn Dahya, the Company's
President, acquired majority ownership. There can be no assurance the Company
will be profitable in the future, or that such profitability, if attained, will
be sufficient to permit the Company to be successful in the future or to expand
or continue to operate.
COMPETITION
Competition includes large established mining companies having
substantial capabilities and greater financial and technical resources than the
Company. Therefore, the Company may be unable to acquire future potential
mining properties on terms it considers acceptable. The Company also competes
with other mining companies in the recruitment and retention of qualified
employees. The Company's smaller size and broad strategic objectives, however,
may provide the Company with increased flexibility and certain strategic
advantages over its competitors in developing countries. Most mining companies
in Zimbabwe are small owner operated mines with limited capital and expertise.
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<PAGE>
GOVERNMENTAL APPROVAL/REGULATIONS
The mining operations of the Company, through its wholly-owned
subsidiaries Casmyn Mining Corporation and Casmyn Mining Zimbabwe [Private]
Limited, are conducted primarily through its offices located in South Africa and
Zimbabwe. Casmyn Mining Corporation is qualified to do business in South Africa
which include permits to allow the Company to conduct exploration activities on
optioned properties and, as such, is subject to the laws of that country.
Casmyn Mining Zimbabwe [Private] Ltd. received approval from the Zimbabwe
Investment Centre to carry out exploration and mining activities and from the
Zimbabwe Reserve Bank to purchase 100% of the shares of a group of five (5)
private mining companies in Zimbabwe (See "The Company").
COMPLIANCE WITH ENVIRONMENTAL LAWS
The mining operations of the Company in South Africa are directed at
determining the presence of economically viable mineral deposits on properties
under option. It is the Company's intention, once such mineral deposits are
discovered, to identify a joint venture partner to develop and operate the
mining properties. Under the South Africa Minerals Act, 1991, the Company and/or
its joint venture partner are responsible for development of an environmental
impact assessment and an environmental management program for the proposed
mining venture which must be approved prior to the start of exploration and/or
mining operations. On January 31, 1996, the Company acquired various gold mining
properties and processing facilities in Zimbabwe and has begun mining and
processing gold at those facilities. The Company believes that it is in
compliance with the environmental laws of Zimbabwe.
RISK OF DEVELOPMENT, CONSTRUCTION AND MINING OPERATIONS
In connection with the development of a mineral resource property, the
ability to meet cost estimates and construction and production time estimates
cannot be assured. Technical considerations, delay in obtaining governmental
approvals, inability to obtain financing or other factors could cause delays in
developing mineral resource properties. Additionally, the business of mineral
mining is subject to a variety of risks and hazards, including environmental
hazards, industrial accidents, flooding and the discharge of toxic chemicals.
The Company has obtained insurance in amounts it considers to be adequate to
protect itself against certain of these risks of mining and processing.
However, the Company may become subject to liability for certain hazards for
which it cannot obtain insurance or which it may elect not to obtain insurance
against because of premium cost or other reasons.
EXPLORATION PROGRAMS
A major part of the Company's business is the exploration of its
existing properties and the evaluation and pursuit of potential new prospects at
the exploration stage.
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Substantial expenditures may be incurred in an attempt to establish the economic
feasibility of mining operations by identifying mineral deposits and
establishing reserves through drilling and other techniques, designing
facilities and planning mining operations. The economic feasibility of a project
depends on numerous factors, including the cost of mining and production
facilities required to extract the desired minerals, the total mineral deposits
that can be mined using a given facility and the market price of the minerals at
the time of sale. There is no assurance that existing or future exploration
programs or acquisitions will result in the identification of deposits that can
be mined profitably. The Company generally acquires the rights to explore for
mineral resources on various parcels of land through option agreements
negotiated with the property owner. The agreements generally have a term of one
year with the right to extend on a year to year basis. The Company is in the
process of determining the potential for economically viable mineral resources
on properties under option and will either renew or cancel options based upon
this determination.
MARKET FACTORS AND VOLATILITY
Active international markets have historically existed for gold.
There has been an active market for diamonds, copper, cobalt and uranium which
are of a commodity nature. As such, the Company anticipates no barriers to the
sale of these minerals. Prices of certain minerals have fluctuated widely,
particularly in recent years, and are affected by numerous factors beyond the
control of the Company. Future mineral prices cannot be accurately predicted.
A significant decline in the price of gold being produced or expected to be
produced by the Company could have a material adverse effect on the Company.
However, the Company will attempt to reduce its exposure to losses from such
price decreases through hedging.
NO CASH DIVIDENDS
The Company has never paid and has no present plans to pay any cash
dividends on its common stock. The Company currently intends to retain its
earnings to finance the growth and development of its business.
CERTAIN TAX CONSIDERATIONS
The Company is predominantly invested in foreign subsidiaries. Those
subsidiaries are subjected to tax imposed on them in the foreign jurisdictions
in which they operate and in which they are organized. Further, their income is
subject to US federal and state income taxes when distributed, deemed
distributed or otherwise attributed to, the Company, which is a US corporation.
Complex US tax rules apply for purposes of determining the calculation of those
US taxes, the availability of a credit for any foreign taxes imposed on the
foreign subsidiaries or the Company and the timing of the imposition of US tax.
7
<PAGE>
Normally, all foreign income earned by a US multinational eventually
will be subject to US tax. Income earned by a foreign branch of a US company is
taxable currently in the United States, and income earned by a foreign
subsidiary could be subject to US tax either in the year distributed to the US
as a dividend or in the year earned by means of Subpart F, foreign personal
holding company or other federal tax rules requiring current recognition of
certain income earned by foreign subsidiaries.
Income earned in foreign countries often is subject to foreign income
taxes. In order to relieve double taxation, the US federal tax law generally
allows US corporations a credit against their US tax liability in the year the
foreign earnings become subject to US tax in the amount of the foreign taxes
paid on those earnings. The credit is limited, however, under complex limitation
rules, to, in general, the US (pre-credit) tax imposed on the US corporation's
foreign source income. Further, complex rules exist for allocating and
apportioning interest, research and development expenses and certain other
expense deductions between US and foreign sources. Limiting provisions of the
source rules decrease the amount of foreign source income many US multinationals
can generate. Reduced foreign source income results in a smaller foreign tax
credit limitation, as the limitation is based on the ratio of foreign source net
income to total net income.
These rules can prevent US multinationals from crediting all of the
foreign taxes they pay. To the extent that foreign taxes are not creditable,
foreign source income bears a tax burden higher than the US tax rate.
GENERAL POLITICAL RISKS
The Company is actively engaged in exploration and production
activities in Zimbabwe, Zambia and South Africa. These countries may be subject
to a substantially greater degree of social, political and economic instability
than is the case in the United States and Western European countries. Such
instability may result from, among other things, the following: (i) popular
unrest associated with demands for improved political, economic and social
conditions; and (ii) ethnic, religious and racial disaffection. Such social,
political and economic instability could significantly disrupt the Company's
business. In addition, there may be the possibility of nationalization, asset
expropriations or future confiscatory levels of taxation affecting the Company.
In the event of nationalization, expropriation or other confiscation, the
Company may not be fairly compensated for its loss and could lose its entire
investment in the country involved.
The economies of individual countries in which the Company does
business may differ favorably or unfavorably and significantly from the U.S.
economy in such respects as the rate of growth of GDP or gross national product,
rate of inflation, currency depreciation, capital reinvestment, resource self-
sufficiency, structural unemployment and balance of payments position.
8
<PAGE>
Governments in certain foreign countries in which the Company does
business participate to a significant degree, through ownership interests or
regulation, in their respective economies. Action by these governments could
have a significant adverse effect on the Company's business.
The value of the assets of the Company as measured in dollars also may
be affected favorably or unfavorably by fluctuations in currency rates and
exchange control regulations. Some of the currencies of countries in which the
Company does business have experienced devaluations relative to the dollar, and
major adjustments have been made periodically in certain of such currencies.
Also, certain of these countries face serious exchange constraints. Further, the
Company may incur costs in connection with conversions between various
currencies. Foreign exchange dealers realize a profit based on the difference
between the prices at which they are buying and selling various currencies.
Thus, a dealer normally will offer to sell a foreign currency to the Company at
one rate, while offering a lesser rate of exchange should the Company desire
immediately to resell that currency to the dealer. The Company conducts its
foreign currency exchange transactions either on a spot (i.e., cash) basis at
the spot rate prevailing in the foreign currency exchange market, or through
entering into forward, futures or options contracts to purchase or sell foreign
currencies or through entering into currency swap transactions. If the foreign
currency hedging engaged in by the Company does not protect the Company against
adverse changes in exchange rates, the Company's net assets (including accrued
income and realized capital gains) and distributions would be affected by
fluctuations in the value of the local currency. The Company does not currently
have any foreign exchange hedge contracts in place.
DILUTIVE EFFECT OF OPTIONS AND WARRANTS; SHARES AVAILABLE FOR FUTURE SALE.
As of May 20, 1997, the Company had granted options to purchase an
aggregate of approximately 2,133,000 shares, and warrants to purchase an
aggregate of approximately 1,239,000 shares, of Common Stock at exercise prices
ranging from approximately $8.00 per share to $13.00 per share. In the event
that all such options and warrants are exercised for cash, the aggregate
proceeds to the Company would be approximately $27,409,000. To the extent that
the stock options and warrants are exercised, material dilution of the ownership
interest of the Company's present shareholders will occur. The Company also
expects that in the ordinary course of its business it will issue additional
warrants and grant additional stock options including, but not limited to,
options granted pursuant to its Employee and Director's Stock Option Plans.
Investors should note that the recent trading prices of the Common Stock
significantly exceeds the Company's book value per share for financial
accounting purposes. In addition, this prospectus covers the resale of an
estimated 6,510,304 shares of Common Stock pertaining to presently restricted
shares and shares of Common Stock issuable upon the exercise of presently
outstanding warrants and the conversion of the Convertible Preferred Stock
(subject to the assumptions set forth on the cover page of this Prospectus
related to future market prices of the Common Stock and conversion elections
made by holders of the Convertible Preferred Stock). During the
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effectiveness of this registration statement, such shares will be eligible for
resale in the public market without restriction under the Securities Act. Sales
of substantial amounts of Common Stock by shareholders, or the perception that
such sales could occur, could adversely affect the market price for the Common
Stock. See "-- Effect of Conversion of Convertible Preferred Stock; Potential
Common Stock Adjustment," "Description of Capital Stock" and "Shares Available
for Future Sale."
EFFECT OF CONVERSION OF CONVERTIBLE PREFERRED STOCK; POTENTIAL COMMON STOCK
ADJUSTMENT.
The Company's Convertible Preferred Stock entitles the holders thereof
to convert such shares into shares of Common Stock. The exact number of shares
of Common Stock issuable upon conversion of all of the Convertible Preferred
Stock and offered hereby cannot currently be estimated but, the amount of such
issuances of Common Stock will vary inversely with the market price of the
Common Stock. The holders of Common Stock will be materially diluted by
conversion of the Convertible Preferred Stock which dilution will depend on,
among other things, the future market price of the Common Stock and the
decisions by holders of shares of Convertible Preferred Stock as to when to
convert such shares which will affect, among other things, the number of shares
of Convertible Preferred Stock issuable as dividends (and ultimately the number
of shares of Common Stock). On May 20, 1997, the last reported sales price of
the Common Stock on the NASDAQ SmallCap Market was $6.75 per share. If such
market price were used to determine the number of shares of Common Stock
issuable as of the first date on which all of the outstanding shares of
Convertible Preferred Stock may be converted, the Company would issue a total of
approximately 4,300,544 shares of Common Stock if all such shares, including
shares of Convertible Preferred Sock issuable upon the exercise of the
outstanding Convertible Preferred Stock Warrants were converted at such time. To
the extent the market price per share of the Common Stock is lower or higher
than $6.75 as of any date on which outstanding shares of Convertible Preferred
Stock are converted, the Company would issue more or less shares of Common Stock
than reflected in such estimate, and such difference could be material. The
number of shares of Common Stock issuable upon conversion of the Convertible
Preferred Stock will increase as the market price of the Common Stock decreases
(and decrease as such market price increases). The number of shares of Common
Stock may also increase should holders of Convertible Preferred Stock continue
to hold such shares, thereby causing the discount to market price applicable
upon conversion of such shares to increase and the number of shares of
Convertible Preferred Stock issued as dividends to increase. The holders of the
outstanding shares of Convertible Preferred Stock also possess certain
registration rights, including the right to include all of the shares of Common
Stock that such holders may desire to sell in certain underwritten public
offerings by the Company. The terms of the Convertible Preferred Stock do not
provide for any limit on the number of shares of Common Stock which the Company
may be required to issue in respect thereof. Stock market volatility, whether
related to the stock market generally or the Company specifically, and if
coincident in time with conversions of Convertible Preferred Stock, will
10
<PAGE>
impact directly the number of shares of Common Stock issuable upon conversion
thereof. Additionally, if the Company issues Common Stock or securities
convertible into or exercisable for Common Stock or other convertible securities
at an effective price per share which is lower than the conversion price of the
shares of Convertible Preferred Stock at that time, the Company is required to
issue upon conversion of the shares of Convertible Preferred Stock an additional
number of shares of Common Stock necessary to reduce the effective conversion
price to such lower issue price (subject to certain exceptions pertaining to
shareholder approved option plans).
RESTRICTIONS ON TRANSFER.
Following conversion of the Convertible Preferred Stock into shares of
Common Stock, the holders of such shares of Common Stock will be limited on
resales of such shares to the greatest of: (i) 10% of the average daily trading
volume of the Common Stock for the five trading days preceding any such sale
date; (ii) 25,000 shares; and (iii) 10% of the trading volume for the Common
Stock on the date of any such sale. Such limitations on transfer would limit
the ability of an investor to sell shares of Common Stock received upon
conversion of the Convertible Preferred Stock in excess of such levels in one
transaction and delay the time over which an investor could sell their entire
holdings of such shares of Common Stock. See "Description of Capital Stock --
Preferred Stock."
POSSIBLE ISSUANCE OF ADDITIONAL SHARES OF PREFERRED STOCK WITHOUT SHAREHOLDER
APPROVAL.
The Company's Articles of Incorporation authorizes the issuance of
"blank check" Preferred Stock with such designations, rights and preferences as
may be determined from time-to-time by the Company's Board of Directors.
Accordingly, the Board is empowered, without approval by holders of the Common
Stock, to issue additional shares of Preferred Stock with dividend,
liquidations, redemption, conversion, voting or other rights which could
adversely affect the voting power or other rights of the holders of the Common
Stock. It was pursuant to this authority that the shares of the Convertible
Preferred Stock were issued. In the event of issuance, Preferred Stock could be
used, under certain circumstances, as a method of discouraging, delaying or
preventing a change in control of the Company. The Company may issue additional
shares of Preferred Stock in the future to raise capital. See "Description of
Capital Stock."
THE COMPANY
The business activities of the Company center around mineral resource
development. The primary focus to date has been the acquisition and exploration
of mineral resource properties in Zimbabwe, Zambia and South Africa. The
Company has acquired certain mineral properties in South Africa, a prospecting
license in Zambia and is presently
11
<PAGE>
conducting mining operations on its Zimbabwe mining properties. In addition, the
Company has positioned itself in the environmental industry through an equity
investment in VETI. VETI is currently focused primarily on the development,
manufacture, sales and management of water treatment equipment and facilities,
principally in Vietnam and North America.
On January 31, 1996, the Company acquired 100% of the shares of a
group of five (5) private mining companies (the "Acquired Companies") controlled
by the Muir Family in Zimbabwe: E.W.B. Properties (Private) Limited:
Matabeleland Minerals (Private) Limited, Greenhorn Mines (Private) Limited,
Morven Mining (Private) Limited, Motapa Minerals (Private) Limited and Turk
Mines (Private) Limited. The Acquired Companies own mining claims controlling
gold and silver mineral rights on properties that lie within the Bubi Greenstone
Belt, which is one of the largest greenstone formations in Zimbabwe and include
numerous shafts, mining equipment and mineral processing mills with a total
capacity of 1,000 tonnes per day. Also, on January 31, 1996, the Company
purchased the assets of the Dawn Mine property in Zimbabwe. The group of mines
making up the Dawn Mine property had produced over 340,000 ounces of gold at an
average grade of 0.48 ounces of gold per tonne. The Dawn Mine is located in
close proximity to the Turk mine and mill and will be operated under a mine plan
which includes the Turk mine and other mining properties in the area owned by
the Company. Through the acquisition of the Acquired Companies, the Company owns
a 100% interest in 18 past producing gold mines that have produced in excess of
1,000,000 ounces of gold since mining commenced in the early 1900's. The Company
believes that, through the modernization of the physical plant and
implementation of advanced mining technologies, significant increases in gold
recovery can be realized. In addition, the Company is expanding its gold
reserves through the application of advanced exploration techniques. Independent
consultants have calculated that the Company has in excess of 1,020,000 ounces
of proven and probable gold reserves for the mines owned by the Company. As of
May 15, 1997, the Company was operating three (the Turk, Dawn and Lonely mines)
of the 18 mines acquired.
RECENT DEVELOPMENTS
On April 14, 1997, the Company completed a private placement offering
of 834,667 shares of the Company's newly established Convertible Preferred Stock
and received aggregate net proceeds therefrom of approximately $16,700,000
(after cash fees to the placement agent and the Company's financial advisor and
estimated transaction expenses but without giving effect to the conversion of
approximately $2,087,000 principal amount of Convertible Debentures into
Convertible Preferred Stock). The Convertible Preferred Stock has a liquidation
preference of $25.00 per share, is non-voting and is entitled to quarterly
dividends of 8% per annum, first payable on July 31, 1997, which dividends are
to be paid in additional shares of Convertible Preferred Stock, valued at $25.00
per share. Commencing on the 91st day after the date of issuance (or on such
earlier date as the registration statement in connection with the Convertible
Preferred Stock is declared effective by the Commission),
12
<PAGE>
10% (or such larger percentage as is determined by the Company, in its sole
discretion) of the shares of the Convertible Preferred Stock held by each holder
will become convertible, and thereafter on the successive monthly anniversaries
an equal number of shares of Convertible Preferred Stock held by such holder
will become convertible (on a cumulative basis). The Convertible Preferred
Stock will be convertible at a discount to the Common Stock ranging from 8.5% to
39%, depending upon the date on which such shares are converted. Accordingly,
the exact number of shares of Common Stock issuable upon conversion of the
Convertible Preferred Stock cannot be determined and will depend upon, among
other things, the future market price of the Common Stock at the date of
conversion and the decisions by holders of shares of Convertible Preferred Stock
as to when to convert such shares. The placement agent in the private placement
transaction was issued five-year warrants to purchase 110,000 shares of
Convertible Preferred Stock at $25.00 per share and received 7.5% of the gross
proceeds from the issuance and sale of the Convertible Preferred Stock as cash
consideration for such services. See "Risk Factors -- Effect of Conversion of
Convertible Preferred Stock; Potential Common Stock Adjustment" and "Description
of Capital Stock."
In connection with the private placement of the Convertible Preferred
Stock, the holder of the Company's $5,000,000 Convertible Debentures converted
$2,086,675 principal amount of such Debentures into 83,467 shares of the
Convertible Preferred Stock and the remaining $2,913,325 principal amount into
594,856 shares of the Company's Common Stock.
SHARES AVAILABLE FOR FUTURE SALE
In general, Rule 144 under the Securities Act, as recently amended by
the Commission ("Rule 144"), provides that a person who is an affiliate of the
Company or who has beneficially owned shares that were issued and sold in
reliance upon exemptions from registration under the Securities Act ("Restricted
Shares") for at least one year is entitled to sell within any three-month period
a number of shares that does not exceed the greater of one percent (1%) of the
then outstanding shares of Common Stock or the average weekly trading volume.
Sales under Rule 144 are also subject to certain manner-of-sale provisions,
notice requirements and the availability of current public information about the
Company. However, a person who is not deemed to have been an "affiliate" of the
Company at any time during the three months preceding a sale, and who has
beneficially owned Restricted Shares for at least two years, is entitled to sell
such shares under Rule 144(k) without regard to volume limitations, manner-of-
sale provisions, notice requirements or the availability of current public
information about the Company.
Of the approximately 21,113,000 shares of Common Stock estimated to be
outstanding (on a fully diluted basis including shares issuable upon the
exercise of outstanding warrants and options) upon completion of this offering
(subject to the assumptions set forth or referred to on the cover page of this
Prospectus related to future market prices of the
13
<PAGE>
Common Stock and conversion elections made by holders of the Convertible
Preferred Stock), approximately 14,941,135 shares (including for this purpose an
estimated 4,300,544 shares of Common Stock issuable upon conversion of the
Convertible Preferred Stock and Convertible Preferred Stock Warrants) will have
been registered under Securities Act and/or otherwise freely tradeable, and
approximately 2,204,444 shares are saleable subject to compliance with the
requirements of Rule 144. Approximately 596,132 shares of Common Stock will be
tradeable subject to the holding period restrictions under, and compliance with
the other requirements of, Rule 144 discussed above. Additionally, 1,339,189
shares of Common Stock issuable upon the exercise of presently outstanding
options and warrants are being registered herewith.
Each of Amyn Dahya, the Company's Chief Executive Officer and
President, and Dahya Holdings, Inc., a corporation in which Mr. Dahya is an
officer, a director and minority shareholder, has agreed for the 13-month period
following the issuance of the Convertible Preferred Stock not to sell, and not
to permit any of their affiliates to sell, more than 25,000 shares of Common
Stock without the prior consent of the placement agent of the Convertible
Preferred Stock.
No predictions can be made as to the effect that sales of Common Stock
under Rule 144, pursuant to a registration statement or otherwise, or the
availability of shares of Common Stock for sale, will have on the market price
prevailing from time to time. Nevertheless, sales of substantial amounts of
Common Stock in the public market, or the perception that such sales could
occur, could adversely affect prevailing market prices and could impair the
Company's future ability to raise capital through an offering of its equity
securities. Further, certain of the share amounts set forth above under the
caption "Shares Available for Future Sale" are estimates only based on recent
market prices, are subject to adjustment, and could be materially less or more
than such estimated amounts depending upon factors which cannot be predicted at
this time, including, among others, the future market price per share of the
Common Stock and conversion elections made by holders of the Convertible
Preferred Stock. See "Risk Factors -- Dilutive Effect of Options and Warrants;
Shares Available for Future Sale," and "-- Effect of Conversion of Convertible
Preferred Stock; Potential Common Stock Adjustment."
SELLING SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of the Common Shares to be offered hereby as of May 20,
1997, and as adjusted to reflect the sale of the Shares offered hereby, by the
Selling Shareholders. The information in the table concerning the Selling
Shareholders who may offer Common Shares hereunder from time to
14
<PAGE>
time is based on information provided to the Company by such securityholders,
except for the assumed conversion ratio of shares of the Convertible Preferred
Stock into Common Stock, which is based solely on the assumption discussed or
referenced in footnote (1) to the table. Information concerning such Selling
Shareholders may change from time to time and any changes of which the Company
is advised will be set forth in a Prospectus Supplement to the extent required.
See "Plan of Distribution."
15
<PAGE>
<TABLE>
<CAPTION>
COMMON SHARES COMMON SHARES
BENEFICIALLY COMMON SHARES TO BENEFICIALLY
OWNED PRIOR TO BE SOLD IN THE OWNED AFTER
THE OFFERING(1) OFFERING(1) THE OFFERING
NAME OF SELLING
SHAREHOLDER NUMBER PERCENT NUMBER PERCENT
--------------- ------ ------- ------ ------
<S> <C> <C> <C> <C> <C>
IBK Capital Corp.(2) 25,000 * 25,000 -0- *
Maple Leaf Trust(2)(3) 75,000 * 75,000 -0- *
Credit Suisse Asset 60,000 * 60,000 -0- *
Management(2)(4)
NCL Investments 75,000 * 75,000 -0- *
Limited(2)(3)
La Compagnie 22,500 * 22,500 -0- *
Financiere(2)(5)
Nordic Resources, Corp.(2) 25,000 * 25,000 -0- *
Roth Investor Relations, 10,000 * 10,000 -0- *
Inc.(2)
Bismillah Children's 1,807,750 14.1% 200,000 1,607,750 12.5%
Foundation(2)
Marshall Auerback(6) 25,000 * 25,000 -0- *
Douglass Hughes(6) 3,500 * 3,500 -0- *
Tanguy de la 15,000 * 15,000 -0- *
Rochebrochard(2)
La Compagnie Financiere 5,000 * 5,000 -0- *
Edmond de Rothschild
Banque(2)
Equitable Life Assurance 150,000 1.2% 150,000 -0- *
Society(2)
Cedef Finance(2) 5,000 * 5,000 -0- *
Lion Mining(2) 15,000 * 15,000 -0- *
GFM International 20,000 * 20,000 -0- *
Investors(2)
The Prudential Insurance 15,000 * 15,000 -0- *
Co. of America(2)
Executronics Ltd. (2) 5,000 * 5,000 -0- *
Invesco(2) 10,000 * 10,000 -0- *
Mercury Asset 50,000 * 50,000 -0- *
Management(2)
Woodbridge Capital(2) 5,000 * 5,000 -0- *
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
COMMON SHARES COMMON SHARES
BENEFICIALLY COMMON SHARES TO BENEFICIALLY
OWNED PRIOR TO BE SOLD IN THE OWNED AFTER
THE OFFERING(1) OFFERING(1) THE OFFERING
NAME OF SELLING
SHAREHOLDER NUMBER PERCENT NUMBER PERCENT
--------------- ------ ------- ------ ------
<S> <C> <C> <C> <C> <C>
Princeton Research(7) 80,000 * 80,000 -0- *
Art Beroff(8) 75,000 * 75,000 -0- *
Rickel & Associates, Inc.(9) 150,000 1.2% 150,000 -0- *
Pondel Parsons & 20,000 * 20,000 -0- *
Wilkinson(10)
Deere Park Capital 182,098 1.4% 182,098 -0- *
Management
Grove Limited Partnership 13,657 * 13,657 -0- *
JMG Capital Partners 45,524 * 45,524 -0- *
Merced Partners Limited 91,049 * 91,049 -0- *
Partnership
Lakeshore International Ltd. 227,622 1.7% 227,622 -0- *
CC Investments 182,098 1.4% 182,098 -0- *
Global Bermuda Limited 227,622 1.7% 227,622 -0- *
Partnership
Elliott Associates, L.P. 546,293 4.1% 546,293 -0- *
SIL Nominees 182,098 1.4% 182,098 -0- *
Edmond O'Donnell 18,210 * 18,210 -0- *
Linda Cappello(11) 243,556 1.9% 243,556 -0- *
Gerard K. Cappello(12) 163,888 1.3% 163,888 -0- *
Lawrence K. 143,402 1.1% 143,402 -0- *
Fleischman(13)
Orvalor(14) 1,461,342 10.6% 618,367 842,975 6.6%
Sogelux Gold Mine(15) 187,000 1.5% 150,000 37,000 *
Orgef(16) 980,265 7.4% 336,735 643,530 5.0%
Naturagef(17) 393,137 3.0% 298,637 94,500 *
MF Commodity(18) 45,000 * 45,000 -0- *
Karpnale Investment Pte. 91,049 * 91,049 -0- *
Ltd.
ProFutures Special Equities 127,468 1.0% 127,468 -0- *
Fund
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
COMMON SHARES COMMON SHARES
BENEFICIALLY COMMON SHARES TO BENEFICIALLY
OWNED PRIOR TO BE SOLD IN THE OWNED AFTER
THE OFFERING(1) OFFERING(1) THE OFFERING
NAME OF SELLING
SHAREHOLDER NUMBER PERCENT NUMBER PERCENT
--------------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Crisostomo B. Garcia 54,629 * 54,629 -0- *
Trustee
Theodore Meisel 18,210 * 18,210 -0- *
Strome Offshore Limited 355,091 2.7% 355,091 -0- *
Strome Susskind Hedgecap 200,307 1.5% 200,307 -0- *
Fund
Strome Partners L.P. 191,203 1.5% 191,203 -0- *
Strome Susskind Hedgecap 45,524 * 45,524 -0- *
Fund
The Cheryl K. Strome 45,524 * 45,524 -0- *
Living Trust
Strome Family Foundation 36,420 * 36,420 -0- *
Strome Global Income 18,210 * 18,210 -0- *
Fund
Mark Strome 18,210 * 18,210 -0- *
Fortune Fund Ltd. 91,049 * 91,049 -0- *
RGC International 273,147 2.1% 273,147 -0- *
Investors, LDC
Trust Co. of America FBO 87,407 * 87,407 -0- *
Perspective Advisory
Company
Total 6,510,304
=========
</TABLE>
- ----------
*Represents less than 1% of the outstanding Common Stock.
(1) Except as specifically indicated in the footnotes, such beneficial
ownership represents an estimate of the number of shares of Common Stock
issuable upon the conversion of shares of the Convertible Preferred Stock
beneficially owned by such person (either directly or through the exercise
of the Convertible Preferred Stock Warrants), assuming the last reported
sales price of $6.75 per share of Common Stock on May 20, 1997 was used to
determine the number of shares of Common Stock issuable as of the first
dates on which the Convertible Preferred Stock may be converted and that
all
18
<PAGE>
dividends on shares of the Convertible Preferred Stock are paid in
additional shares of Convertible Preferred Stock. The actual number of
Shares offered hereby is subject to adjustment and could be materially less
or more than the estimated amount indicated depending upon factors which
cannot be predicted by the Company at this time, including, among others,
application of the conversion provisions based on market prices prevailing
at the actual date of conversion and the number of shares of Convertible
Preferred Stock (and ultimately the number of shares of Common Stock)
issuable as dividends on the Convertible Preferred Stock. This presentation
is not intended to constitute a prediction as to the future market price of
the common Stock or as to when holders will elect to convert shares of
Convertible Preferred Stock into shares of Common Stock. The shares of
Convertible Preferred Stock (other than the shares of Convertible Preferred
Stock issued as dividends) and the Convertible Preferred Stock Warrants
were issued in the April Private Placement. See "Risk Factors--Effect of
Conversion of Convertible Preferred Stock" and "Description of Capital
Stock."
(2) Represents beneficial ownership of shares of Common Stock issued in, or
issuable pursuant to the exercise of warrants issued in, other private
placements.
(3) Includes 25,000 shares issuable upon exercise of presently exercisable
warrants.
(4) Includes 20,000 shares issuable upon exercise of presently exercisable
warrants.
(5) Includes 7,500 shares issuable upon exercise of presently exercisable
warrants.
(6) Represents shares issued upon the exercise of common stock options not
previously registered.
(7) Represents 80,000 shares issuable upon exercise of presently exercisable
options.
(8) Represents shares issuable upon exercise of 20,000 currently exercisable
options and 55,000 options which vest in the future.
(9) Represents shares issuable upon exercise of 50,000 currently exercisable
warrants and 100,000 warrants which vest in the future.
(10) Represents shares issuable upon exercise of 5,000 currently exercisable
options and 15,000 options which vest in the future.
(11) Includes 225,346 shares issuable upon the conversion of 49,500 placement
agent warrants.
19
<PAGE>
(12) Includes 150,231 shares issuable upon the conversion of 33,000 placement
agent warrants.
(13) Includes 125,192 shares issuable upon the conversion of 27,500 placement
agent warrants.
(14) Common Shares owned beneficially before the offering consist of:
<TABLE>
<S> <C>
Shares issued in private placements 447,090
Shares issued in lieu of interest 14,384
Shares issuable upon exercise of presently exercisable warrants 220,000
Shares issuable upon conversion of convertible debenture 475,885
Shares issuable upon conversion of convertible debenture preferred stock 303,983
---------
Total 1,461,342
=========
Common shares to be sold in the offering:
Shares issued in private placements 80,000
Shares issued in lieu of interest 14,384
Shares issuable upon exercise of presently exercisable warrants 220,000
Shares issuable upon conversion of convertible preferred stock 303,983
---------
Total 618,367
=========
(15) Common shares owned beneficially before the offering consist of:
Shares issued in private placements 137,000
Shares issuable upon exercise of presently exercisable warrants 50,000
-------
Total 187,000
=======
Common shares to be sold in the offering:
Shares issued in private placements 100,000
Shares issuable upon exercise of presently exercisable warrants 50,000
-------
Total 150,000
=======
(16) Common shares owned beneficially before the offering consist of:
Shares issued in private placements 524,559
Shares issued in lieu of interest 3,596
Shares issuable upon exercise of presently exercisable warrants 257,143
Shares issuable upon conversion of convertible debenture 118,971
Shares issuable upon conversion of convertible preferred stock 75,996
-------
Total 980,265
=======
</TABLE>
20
<PAGE>
<TABLE>
<S> <C>
Common shares to be sold in the offering:
Shares issued in lieu of interest 3,596
Shares issuable upon exercise of presently exercisable warrants 257,143
Shares issuable upon conversion of convertible preferred stock 75,996
-------
Total 336,735
=======
(17) Common shares owned beneficially before the offering consist of:
Shares issued in private placements 293,591
Shares issuable upon exercise of presently exercisable warrants 99,546
-------
Total 393,137
=======
Common shares to be sold in the offering:
Shares issued in private placements 199,091
Shares issuable upon exercise of presently exercisable warrants 99,546
-------
Total 298,637
=======
(18) Common shares owned beneficially before the offering consist of:
Shares issued in private placements 30,000
Shares issuable upon exercise of presently exercisable warrants 15,000
------
Total 45,000
======
Common shares owned beneficially before the offering consist of:
Shares issued in private placements 30,000
Shares issued in lieu of interest 15,000
------
Total 45,000
======
</TABLE>
21
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The Company's Articles of Incorporation, as amended, authorizes the
issuance of shares of capital stock, of which 300,000,000 shares are designated
as Common Stock, par value $0.04 per share, and 20,000,000 shares are designated
as Preferred Stock, par value $0.10 per shares, of which 2,500,000 have been
designated as shares of First Convertible Preferred Stock. On April 14, 1997,
834,667 shares of Convertible Preferred Stock were issued in a Private
Placement.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share of
Common Stock on all matters submitted to a vote of shareholders. There are no
cumulative voting rights. The rights, privileges and preferences of the holders
of Common Stock are subject to the rights of the holders of the Convertible
Preferred Stock and of any shares of Preferred Stock that may be designated and
issued by the Company in the future. Subject to the restrictions contained in
Preferred Stock issued by the Company, holders of Common Stock are entitled to
received dividends when and if declared by the Board of Directors out of legally
available funds. Upon any liquidation, dissolution or winding up of the Company,
subject to the rights of holders of shares of Preferred Stock, holders of Common
Stock are entitled to share pro rata in any distribution to the shareholders.
Holders of Common Stock do not have preemptive or other subscription rights.
There are no redemption or sinking fund provisions applicable to the Common
Stock.
PREFERRED STOCK
The Company's Board of Directors, without the approval of the holders
of the Common Stock, is authorized to designate for issuance up to 20,000,000
shares of Preferred Stock, in such series and with such rights, privileges and
preferences as the Board of Directors may from time to time determine. As of
the date of this Prospectus, 2,500,000 of such shares have been designated as
First Series Preferred Stock, 834,667 of which are issued and outstanding as of
the date of this Prospectus and 110,000 of which are subject to Convertible
Preferred Stock Warrants, none of which had been exercised as of the date of
this Prospectus.
CONVERTIBLE PREFERRED STOCK
Each share of Convertible Preferred Stock is entitled to receive
dividends, payable commencing July 31, 1997 and thereafter quarterly on
September 30, December 31, March 31 and June 30 of each year, when and as
declared by the Company's Board of Directors, at the rate of 8% per annum in
preference to any payment made on any shares of Common Stock or any other class
or series of capital stock of the Company ranking junior to the Convertible
Preferred Stock. Any dividend payable after the date of issuance of the
22
<PAGE>
Convertible Preferred Stock shall be paid, in additional shares of Convertible
Preferred Stock valued at $25.00 per share. Each share of Convertible Preferred
Stock is also entitled to a liquidation preference ("Liquidation Preference") of
$25.00 per share, plus any accrued but unpaid dividends, in preference to any
other class or series of capital stock of the Company, other than the
Convertible Preferred Stock and any other class or series of capital stock which
is entitled to priority over the Convertible Preferred Stock. A consolidation of
merger of the Company with or into any other corporation, or sale of all or
substantially all of the assets of the Company, will, at the option of the
holders of the Convertible Preferred Stock, be deemed a liquidation if the
shares of stock of the Company (along with all derivative securities)
outstanding immediately prior to such transaction represent immediately after
such transaction less than a majority of the voting power of the surviving
corporation (or the acquiror of the Company's assets in the case of a sale of
assets). If the option is exercised, the holders of the Convertible Preferred
Stock will be entitled to receive, in cash, immediately upon the occurrence of
such transaction, an amount per share equal to the liquidation preference
divided by the difference between 100% and the Applicable Percentage (as defined
below).
At any time, the Company may require a portion of the shares of the
Convertible Preferred to be converted into Common Stock ("Required Conversion")
upon notice (the "Notice"), provided that not more than one Notice may be given
in any period of thirty days. A Notice may not be given unless (A) the low
trading price of Common Stock on each of the ten trading days preceding the
Notice date has been equal to or greater than $14.00 per share (subject to
adjustment for stock split, stock dividends and like capital adjustments), and
(B) the shares of Common Stock issuable upon conversion are registered under the
Securities Act, such stock is listed and traded on NASDAQ or on a national
securities exchange, and there is available for delivery upon resale of such
shares a prospectus meeting the requirements of the Securities Act. The number
of Convertible Preferred Shares which the Company may require to be converted
may not exceed the quotient obtained by dividing the average dollar volume for
the twenty trading days immediately prior to the date of Notice by 25. The
conversion price upon Required Conversion is 61% of the lowest trading price
during the Look Back Period (as defined below) in effect as of the date of the
Notice, but not more than the Conversion Cap (as defined below) if the
Conversion Cap has then been determined.
Except as otherwise provided by applicable law, holders of shares of
Convertible Preferred Stock have no voting rights.
Commencing the earlier of (i) 91 days after the date of issuance and
(ii) the date that a registration statement registering the shares of Common
Stock issuable upon conversion of the Convertible Preferred Stock (including
such shares issuable upon exercise of the Convertible Preferred Stock Warrants)
is declared effective by the Securities and Exchange Commission, 10% (or such
larger percentage as is determined by the Company in its sole discretion) of the
number of shares of Convertible Preferred Stock held of record by each holder on
such day will become convertible into shares of Common Stock, and thereafter
23
<PAGE>
on the successive monthly anniversaries of such day an equal number of such
shares of Convertible Preferred stock will become convertible (on a cumulative
basis). The number of shares of Common Stock issuable upon conversion of shares
of Convertible Preferred Stock will equal the Liquidation Preference of the
shares being converted divided by the then-effective conversion price applicable
to the Common Stock (the "Conversion Price"). Notwithstanding the foregoing, all
the Convertible Preferred Shares will be fully convertible upon the happening of
certain events and conditions, including a change of control transaction; the
filing of bankruptcy; the failure of the Company to timely file its Form 10-K or
Form 10-Q; the failure or unwillingness of the Company's independent auditors to
express a customary opinion on the Company's financial statements within 90 days
after the end of the Company's fiscal year or shall express a "going concern"
qualification; the Common Stock shall cease to be listed on either NASDAQ or
National Securities Exchange; or there shall occur a material breach by the
Company of any of its obligations under the Preferred Stock Investment
Agreements pursuant to which the Convertible Preferred Stock was originally
issued.
The Conversion Price as of any Conversion Date will be the lowest
trading price of the Common Stock for the consecutive trading days in the
Lookback Period, reduced by the Applicable Percentage. The "Lookback Period"
represents the number of consecutive trading days changing from 15 days through
the last day of the third month after the date of issuance of the Convertible
Preferred Stock to 60 days following the last day of the seventeenth month after
the date of issuance. The "Applicable Percentage" is dependent upon the amount
of time which has passed from original issuance to the date of measurement,
being 8.5% through the fourth month and from the fifth month through the end of
the eighteenth month being 9.5%, 11%, 12%, 13.5%, 15%, 16.5%, 18%, 19.5%, 22%,
24.5%, 28.5%, 32.5%, 36.5% and 39%, respectively. At any date more than eighteen
months after the date of issuance, the Conversion Price will be the lesser of
(a) 61% of the average closing price of the Common Stock for all the trading
days during the 18th month (the "Conversion Cap") or (b) 61% of the Conversion
Price determined as aforesaid. The Conversion Price is at all times also subject
to adjustment for customary anti-dilution events such as stock splits, stock
dividends and reorganizations. Additionally, if the Company issues Common Stock
or securities convertible into or exercisable for Common Stock or other
convertible securities at an effective price per share which is lower than the
conversion price of the shares of Convertible Preferred Stock at that time, the
Company is required to issue upon conversion of the shares of Convertible
Preferred Stock an additional number of shares of Common Stock necessary to
reduce the effective conversion price to such lower issue price (subject to
certain exceptions pertaining to shareholder approved option plans).
Notwithstanding the foregoing, no holder of Convertible Preferred Stock will be
entitled to convert any share of Convertible Preferred Stock into shares of
Common Stock if, following such conversion, the holder and its affiliates
(within the meaning of the Securities Exchange Act of 1934) will be beneficial
owners (as defined in Rule 13d-3 thereunder) of 10% or more of the outstanding
shares of Common Stock.
24
<PAGE>
Notwithstanding the foregoing, if and so long as Depressed Price
Condition (as hereinafter defined) exists, (i) the number of consecutive trading
days in the Lookback Period will be three days, (ii) the conversion price will
be the average of the low trading prices for the consecutive trading days in the
Lookback Period reduced by the Applicable Percentage and (iii) the Company may
at its option, exercised by written notice (the "Cash Conversion Notice") given
to the holders of the Convertible Preferred Stock five days prior to the
effective date specified in such Notice (the "Effective Date") require that any
shares of Convertible Preferred Stock converted on the Effective Date, or
thereafter while such Cash Conversion Notice remains in effect, will receive in
lieu of Common Stock cash in an amount per share equal to the Liquidation
Preference divided by the difference between 100% and the Applicable Percentage
in effect on the Conversion Date (the "Cash Conversion Price"). The Cash
Conversion Notice may specify a price range within which such Notice shall be
effective. The upper limit of the range so specified may not exceed $6.00. The
Cash Conversion Notice will cease to be effective (i) if the Depressed Price
Condition ceases to exist, (ii) 30 days after its Effective Date, or (iii) if
the Company fails to make payment of the Cash Conversion Price to any holder
entitled thereto. A "Depressed Price Condition" shall be deemed to exist on any
date if during the twenty consecutive trading days immediately prior to such
date the average closing price of the Common Stock is less than $6 per share
(adjusted for stock splits, stock dividends and like capital adjustments).
In addition, following conversion of the Convertible Preferred Stock
into shares of Common Stock, the holders of such shares of Common Stock will be
limited on resales of such shares to the greatest of: (i) 10% of the average
daily trading volume of the Common Stock for the five trading days preceding any
such sale date; (ii) 25,000 shares; and (iii) 10% of the trading volume for the
Common Stock on the date of any such sale.
The exact number of shares issuable upon conversion of all of the
Convertible Preferred Stock and offered hereby cannot currently be estimated
but, generally, such issuances of Common Stock will vary inversely with the
market price of the Common Stock. The holders of Common Stock ownership interest
will be materially diluted by conversion of the Convertible Preferred Stock,
which dilution will depend on, among other things, the future market price of
the Common Stock and the conversion elections made by holders of the Convertible
Preferred Stock. Investors should review carefully the material under "Risk
Factors -- Effect of Conversion of Convertible Preferred Stock; Potential Common
Stock Adjustment" as well as the other information contained or incorporated by
reference in this Prospectus.
GENERAL
Under applicable Colorado law and the Company's Articles of
Incorporation, the Company's Board of Directors has the authority, without
further action by the shareholders, to issue additional shares of preferred
stock in one or more series and to fix the rights, preferences, privileges and
restrictions granted to or imposed upon any series of
25
<PAGE>
unissued preferred stock and to fix the number of shares constituting any series
and the designation of such series, without any further vote or action by the
shareholders. Issuance of additional shares of preferred stock may adversely
affect the rights, privileges and preferences afforded the holders of Common
Stock, including a decrease in the amount available for distribution to holders
of the Common Stock in the event of a liquidation or payment of preferred
dividends. The issuance of additional shares of preferred stock, and shares of
Common Stock into which such preferred stock may be converted, may, among other
things, have the effect of delaying, deferring or preventing a change in control
of the Company, discouraging tender offers for the Company and inhibiting
certain equity issuances until substantially all such shares are converted or
redeemed. The Company currently has no plans to designate and/or issue any
additional shares of preferred stock, except those issuable pursuant to the
Convertible Preferred Stock Warrants.
COLORADO LAW AND LIMITATIONS ON CHANGES IN CONTROL
Under Section 7-106-205 of the Colorado Business Corporation Act (the
"Act"), a corporation may create and issue rights, options, warrants or
convertible securities entitling the holders thereof to purchase, receive or
acquire shares of the corporation or assets or debts or other obligations of the
corporation (collectively, "Rights"). The Board of Directors is authorized to
determine the terms upon which the Rights are issued, their form and content,
and the consideration, if any, for which shares, assets, or debts or other
obligations of the corporation are to be issued pursuant to the Rights. In the
absence of fraud in the transaction, the judgment of the Board of Directors as
to adequacy of consideration received for such Rights is conclusive. The terms
determined by the Board of Directors under this Section for Rights issued to any
shareholders, by way of distribution or otherwise, may, without limitation: (a)
preclude or limit any significant shareholder from exercising, converting,
transferring or receiving Rights; (b) impose conditions upon the exercise,
conversion, transfer or receipt of Rights by any significant shareholder that
differ from those imposed on other holders of the same class of Rights; or (c)
provide that, upon exercise or conversion, any significant shareholder shall be
entitled to receive securities, obligations, or assets, the terms and nature of
which may differ from the securities, obligations, or assets to be received by
the other holders of the same class of Rights. The Section defines "significant
shareholder" as any person owning, or offering to acquire, directly or
indirectly, a number or percentage, as specified by the Board of Directors, of
the outstanding voting shares of the corporation, or any transferee of such
person.
The Company's bylaws require advance notice of any action (including
nomination of directors) to be proposed at any annual or special meeting of
shareholders and set forth other specific procedures that a shareholder must
follow to properly bring any business in front of such a meeting. In addition,
the bylaws provide that a special meeting of the Company's shareholders may only
be called by the Chairman of the Board, the President, a Vice President of the
Company or by shareholders representing 10% of the outstanding shares entitled
to vote at the meeting. A director may be removed from office at any time,
26
<PAGE>
with or without cause by shareholders, but only by the affirmative vote of the
holders of at least a majority of the shares then entitled to vote at an
election of directors. Any amendment of the bylaws may be made by the Board of
Directors. Amendments to the Articles requires the affirmative vote of the
shareholders.
These bylaw provisions, the provisions authorizing the Board of
Directors to issue preferred stock without shareholder approval and the
provisions of Section 7-106-205 of the Act could have the effect of delaying,
deferring or preventing a change in control of the Company or the removal of
existing management.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
The Company's Articles of Incorporation provides that the Board of
Directors shall have the power to:
(a) Indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action (other than an
action by or in the right of the Company) by reason of fact that he is or was a
director, officer, employee or agent of the Company or is or was serving at the
request of Company as a director, officer, employee or agent of another entity
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action if he acted in good
faith and in a manner he reasonably believed to be in the best interests of the
Company and, with respect to any criminal action or proceedings, had no
reasonable cause to believe his conduct was unlawful.
(b) Indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that he is or was a director, officer, employee or agent of the Company or is or
was serving at the request of the Company as a director, officer, employee or
agent of the Company against expenses actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in the best interests of
the Company, but not indemnification shall be made in respect of any claim if
such individual has been adjudged to be liable for negligence or misconduct in
the performance of his duty to the Company except and only to the extent that
the court in which such action or suit was brought determines upon application
that, despite the adjudication of liability, but in view of all circumstances of
the case, such person is fairly and reasonably entitled to indemnification for
such expenses which such court deems proper.
(c) Indemnify a director, officer, employee or agent of the Company to
the extent such person has been successful on the merits in the defense of any
action, suit or proceeding referred to in subparagraph (a) or subparagraph (b)
above or in defense of any
27
<PAGE>
claim, issue or matter therein, against expenses actually and reasonably
incurred by him in connection therewith.
(d) Authorize indemnification under Subparagraphs (a) or (b) above
(unless ordered by a court) in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct such set
forth in subparagraphs (a) or (b).
(e) Authorize payment of expenses incurred in defending a civil or
criminal action, suit or proceeding advance of the final disposition of such
action, suit or proceeding as authorized in subparagraph (d) above, upon receipt
of an undertaking by or on behalf of the director, officer, employee or agent to
repay such amount unless it is ultimately determined that he is entitled to be
indemnified by the Company as authorized above.
(f) Purchase or maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of Company or who is or was serving
at the request of the Company as a director, officer, employee or agent of
another entity against any liability asserted against him or incurred by him in
any such capacity or arising out of the status of such.
The foregoing indemnification is not deemed to be exclusive of any
other rights to which those indemnified may be entitled.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock and the
Convertible Preferred Stock is American Securities Transfer, Denver, Colorado.
PLAN OF DISTRIBUTION
The Selling Shareholders have advised the Company that the sale or
distribution of the Common Stock may be effected directly to purchasers by the
Selling Shareholders or by pledgees, donees, transferees or other successors in
interest, as principals or through one or more underwriters, brokers, dealers or
agents from time to time in one or more transactions (which may involve crosses
or block transactions) (i) on any stock exchange, in the Nasdaq SmallCap Market,
or in the over the counter market, (ii) in transactions otherwise than on any
stock exchange or in the over-the-counter market, or (iii) through the writing
of option (whether such options are listed on an options exchange or otherwise)
on, or settlement of short sales of, the Common Stock. The shares may also be
sold pursuant to Rule 144. Any of such transactions may be effected at a market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at varying prices determined at the time of sale or at negotiated
or fixed prices, in each case as
28
<PAGE>
determined by the Selling Shareholder or by agreement between the Selling
Shareholder and underwriters, brokers, dealers or agents, or purchasers. If the
Selling Shareholders effect such transactions by selling Common Stock to or
through underwriters, brokers, dealers or agent, such underwriters, brokers,
dealers or agents may receive compensation in the form of discounts, concessions
or commissions from the Selling Shareholders or commissions from purchaser of
Common Stock for whom they may act as agent (which discounts, concessions or
commissions as to particular underwriters, brokers, dealers or agents may be in
excess of those customary in the types of transactions involved). The Selling
Shareholders and any brokers, dealers or agents that participate in the
distribution of the Common Stock may be deemed to be underwriters, and any
profit on the sale of Common Stock by them and any discounts, concessions or
commissions received by any such underwriters, brokers, dealers or agents may be
deemed to be underwriting discounts and commissions under the Securities Act.
Under the securities laws of certain states, the Common Stock, may be
sold in such states only through registered or licensed brokers or dealers. In
addition, in certain states the Common Stock may not be sold unless the Common
Stock has been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.
The Company will pay all the expenses incident to the registration,
offering and sale of the Common Stock to the public hereunder other than
commissions, fees and discounts of underwriters, brokers, dealers and agents.
The Company has agreed to indemnify the Selling Shareholders and their
controlling persons against certain liabilities, including liabilities under the
Securities Act. The Company estimates that the expenses of the offering to be
borne by it will be approximately $70,000. The Company will not receive any
proceeds from the sale of any of the Common Stock by the Selling Shareholders.
Cappello & Laffer Capital Corp. acted as placement agent in connection
with the placement of the Convertible Preferred Stock which has been or will be
converted into the Common Stock offered hereby, and said firm received a fee and
warrants from the Company in connection therewith. Griffin Capital acted as the
Company's financial advisor and received a fee for its services.
The Company has informed the Selling Shareholders that the anti-
manipulation provisions of Regulation M under the Exchange Act may apply to
purchases and sales of Common Stock by the Selling Shareholders, and that there
are restrictions on market-making activities by persons engaged in the
distribution of the Common Stock. The Company has also advised the Selling
Shareholders that if a particular offer of Common Stock is to be made on terms
constituting a material change from the information set forth above with respect
to the Plan of Distribution, then to the extent required, a Prospectus
Supplement must be distributed setting forth such terms and related information
as required.
29
<PAGE>
USE OF PROCEEDS
This Prospectus relates to Shares of Common Stock that may be offered
and sold from time to time by the Selling Shareholders. See "Plan of
Distribution." There will be no proceeds to the Company from previously
completed private placements of common stock and from the conversion of the
Convertible Preferred Stock. The Company would receive $13,615,722 in proceeds
(net of approximately $70,000 which is the estimated cost of this offering) from
the exercise of warrants issued in other private placements and the Convertible
Preferred Stock Warrants. Such proceeds are expected to be used for mineral
property development, general corporate purposes, advances and/or investment in
VETI and purchase of the Company's Common Stock.
FORWARD LOOKING STATEMENTS
Statements contained in this Prospectus (including certain of the
documents incorporated by reference herein) that are not based on historical
facts are forward-looking statements subject to uncertainties and risks
including, but not limited to, product demand and acceptance, economic
conditions, government intervention, the impact of competition and pricing,
results of financing efforts, and other risks described in this Prospectus
(including certain of the documents incorporated by reference herein).
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon
for the Company by Loeb & Loeb LLP, 1000 Wilshire Boulevard, Suite 1800, Los
Angeles, California 90017.
EXPERTS
The consolidated financial statements of the Company and Vector
Environmental Technologies, Inc. incorporated in this prospectus by reference
from the Company's Annual Report on Form 10-K/A for the year ended September 30,
1996 have been audited by Deloitte & Touche LLP, independent auditors, as stated
in their reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
30
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SHARES BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON
MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
________________________________
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information........................................................ 3
Incorporation of Certain Information by Reference............................ 3
Risk Factors................................................................. 4
The Company.................................................................. 11
Recent Developments.......................................................... 12
Shares Available for Future Sale............................................. 13
Selling Shareholders......................................................... 14
Description of Capital Stock................................................. 22
Plan of Distribution......................................................... 28
Use of Proceeds.............................................................. 30
Forward Looking Statements................................................... 30
Legal Matters................................................................ 30
Experts...................................................................... 30
</TABLE>
6,510,304 SHARES
CASMYN CORP.
COMMON STOCK
_______________________
PROSPECTUS
_______________________
, 1997
----------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the registrant in connection with
the registration, issuance and distribution of the Common Stock offered hereby
are as follows:
<TABLE>
<S> <C>
SEC Registration Fee.................................. $15,153
Legal Fees and Expenses............................... 35,000
Accounting Fees and Expenses.......................... 10,000
"Blue Sky" Fees and Expenses (including legal fees)... 5,000
Miscellaneous Expenses................................ 5,000
Total $70,153
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to the By-Laws of the corporation, the Company has agreed to
indemnify an officer or director who is made a party to any proceeding,
including a lawsuit, because of his/her position, if he/she acted in good faith
and in a manner he/she reasonably believed to be in the best interest of the
corporation and, in certain cases, may advance expenses incurred in defending
any such proceeding. To the extent that the officer or director is successful on
the merits in any such proceeding as to which such person is to be indemnified,
the Company must indemnify him/her against all expenses incurred, including
attorney's fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the proceeding, and
if the officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by Colorado
law.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to officers, directors or
persons controlling the Company, pursuant to the foregoing provisions, the
Company has been informed that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in said
Act and is, therefore, unenforceable.
II-1
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
+4.1 Form of Certificate for 8% Convertible Preferred Stock
+4.2 Articles of Amendment to the Articles of Incorporation of the
Company
+4.3 Form of Preferred Stock Investment Agreement dated April 11, 1997
+4.4 Form of Stock Purchase Warrant
+5.1 Opinion of Loeb & Loeb LLP
+23.1 Consent of Deloitte & Touche LLP
+23.2 Consent of Loeb & Loeb LLP (included in Exhibit 5.1)
</TABLE>
_____________
+Filed herewith
ITEM 17. UNDERTAKINGS
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; and
(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.
II-2
<PAGE>
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if 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 at that time shall be deemed to be the initial bona
fide offering thereof.
(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.
(4) 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 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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 Securities Act of 1933 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 proceedings) 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
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Sparks,
State of Nevada, on the 22nd day of May, 1997.
CASMYN CORP.
By /s/ Amyn S. Dahya
---------------------
Amyn S. Dahya
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ Amyn S. Dahya President, Chief Executive May 22, 1997
- --------------------------- Officer and Director
Amyn S. Dahya
/s/ Douglas C. Washburn Vice President, Secretary, May 22, 1997
- --------------------------- Treasurer
Douglas C. Washburn (Principal Financial Officer)
/s/ Hanif S. Dahya Director May 22, 1997
- -------------------------
Hanif S. Dahya
/s/ Sandro Kunzle Director May 22, 1997
- -------------------------
Sandro Kunzle
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Dennis E. Welling Controller (Principal May 22, 1997
- ------------------------- Accounting Officer)
Dennis E. Welling
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit No. Description of Exhibit Page No.
- ----------- ---------------------- --------
<C> <S> <C>
+4.1 Form of Certificate for 8% Convertible Preferred Stock
+4.2 Articles of Amendment to the Articles of Incorporation
of the Company
+4.3 Form of Preferred Stock Investment Agreement
dated April 11, 1997
+4.4 Form of Stock Purchase Warrant
+5.1 Opinion of Loeb & Loeb LLP
+23.1 Consent of Deloitte & Touche LLP
+23.2 Consent of Loeb & Loeb LLP (included in Exhibit 5.1)
</TABLE>
<PAGE>
EXHIBIT 4.1
PREFERRED STOCK PREFERRED STOCK
CASMYN CORP.
FIRST CONVERTIBLE PREFERRED STOCK
2,500,000 AUTHORIZED SHARES PAR VALUE $.10
NUMBER SHARES
_______________ _______________
INCORPORATED UNDER THE LAWS
OF THE STATE OF COLORADO CUSIP 147619 20 9
SEE REVERSE
FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT
Is The Registered Holder of
fully paid and non-assessable shares of the First Convertible
Preferred Stock, par value of $.10 per share of
CASMYN CORP.
transferable only on the books of the Corporation by the holder hereof, in
person or by duly authorized attorney, upon surrender of this Certificate
properly endorsed or accompanied by a proper assignment. This Certificate
and the shares represented hereby are issued and shall be subject to all
the provisions of the Articles of Incorporation and the Bylaws of the
Corporation, and all amendments thereto, copies of which are on file at the
principal office of the Corporation and the Transfer Agent, to all of which
the holder of this Certificate by acceptance hereof assents. This
Certificate is not valid until countersigned by the Transfer Agent.
IN WITNESS WHEREOF, the Corporation has caused the facsimile
signatures of its duly authorized officers and its facsimile seal to be
hereunto affixed.
Dated:
_____________________________ ___________________________
ASSISTANT SECRETARY PRESIDENT
CASMYN CORP.
CORPORATE
SEAL
COLORADO
<PAGE>
EXHIBIT 4.2
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
CASMYN CORP.,
(A COLORADO CORPORATION)
Pursuant to the provisions of Section 7-106-102(4) of the Colorado
Corporation Code, Casmyn Corp., a Colorado corporation (the "Corporation")
executes the following Articles of Amendment to its Articles of Incorporation.
FIRST: The name of the corporation is: CASMYN CORP.
SECOND: The following resolution, establishing and designating a
series of shares and fixing and determining the relative rights and preferences
thereof was duly adopted by the Board of Directors of the Corporation on March
5, 1997 pursuant to authority vested in it by the Articles of Incorporation:
RESOLVED that there shall be a series of shares of the Preferred
Stock of the Corporation designated "First Convertible Preferred Stock";
that the number of shares of such series shall be 2,500,000 and that the
rights and preferences of such series (the "First Preferred") and the
limitations or restrictions thereon, shall be as follows:
1. Dividends.
---------
(a) The holders of the First Preferred shall be entitled to
receive out of any assets legally available therefor cumulative dividends
at the rate of $2.00 per share per annum, payable commencing July 31, 1997
and thereafter quarterly on September 30, December 31, March 31 and June 30
of each year, when and as declared by the Board of Directors, in preference
and priority to any payment of any dividend on the Common Stock or any
other class or series of stock of the Corporation ranking junior to the
First Preferred. Such dividends shall accrue on any given share from the
day of original issuance of such share and shall accrue from day to day
whether or not earned or declared. If at any time dividends on the
outstanding First Preferred at the rate set forth above shall not have been
paid or declared and set apart for payment with respect to all preceding
periods, the amount of the deficiency shall be fully paid or declared and
set apart for payment, but without interest, before any distribution,
whether by way of dividend or otherwise, shall be declared or paid upon or
set apart for the shares of any other class or series of stock of the
Corporation except a class or series which is entitled to priority over the
First Preferred.
<PAGE>
(b) Dividends shall be paid in shares of First Preferred valued
at $25 per share.
(c) If on any dividend payment date the shares of Common Stock
issuable upon conversion of the First Preferred are not registered under
the Securities Act of 1933 or if there is not then available for delivery
upon resale of such shares of Common Stock a prospectus meeting the
requirements of said Act and the rules thereunder, then the shares of First
Preferred issued in payment of such dividend shall be valued at $15 per
share.
2. Liquidation Preference.
----------------------
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, either voluntary or involuntary, the holders of the First
Preferred shall be entitled to receive, prior and in preference to any
distribution of any assets of the Corporation to the holders of the Common
Stock or any other class or series of shares except any class or series
which is entitled to priority over the First Preferred, the amount of $25
per share plus any accrued but unpaid dividends plus any amounts accrued
but unpaid under Section 1.4(b)(iv) of the Preferred Stock Investment
Agreement under which shares of the First Preferred were originally issued
(the "Liquidation Preference").
(b) A consolidation or merger of the Corporation with or into any
other corporation or corporations, or a sale of all or substantially all of
the assets of the Corporation, shall, at the option of the holders of the
First Preferred, be deemed a liquidation, dissolution or winding up within
the meaning of this Section 2 if the shares of stock of the Corporation
(along with all derivative securities) outstanding immediately prior to
such transaction represent immediately after such transaction less than a
majority of the voting power of the surviving corporation (or of the
acquirer of the Corporation's assets in the case of a sale of assets). Such
option may be exercised by the vote or written consent of holders of a
majority of the First Preferred at any time within thirty calendar days
after written notice of the essential terms of such transaction shall have
been given to the holders of the First Preferred in the manner provided by
law for the giving of notice of meetings of shareholders. Such notice shall
be given by the Corporation immediately following determination of such
essential terms. If such option is exercised, the holders of the First
Preferred shall be entitled to receive, in cash, immediately upon the
occurrence of such transaction, an amount per share equal to the
Liquidation Preference divided by the difference between 100% and the
Applicable Percentage determined pursuant to Section 4(e)(iii) hereof.
2
<PAGE>
3. Mandatory Conversion.
--------------------
(a) At any time, the Corporation may require a portion of the
shares of First Preferred to be converted into Common Stock (a "Required
Conversion") by giving notice ("Notice of Required Conversion") to the
holders of the First Preferred specifying the number of shares to be
converted, the proportion of each holder's shares to be converted, and the
Conversion Price. Any such Notice shall specify the date when it is given
(the "Notice Date") and shall be mailed, first class postage prepaid, by
the Corporation to each holder of record of the First Preferred at the
address last shown on the records of the Corporation for such holder, and
shall be transmitted by telecopy (facsimile) transmission to any holder who
has given notice to the Corporation of such holder's telecopy address, not
later than the Notice Date.
(i) Not more than one Notice of Required Conversion may be
given in any period of 30 days.
(ii) A Notice of Required Conversion may not be given unless
(A) the low trading price of the Common Stock on each of the ten trading
days preceding the date ("Notice Date") on which such Notice is given has
been equal to or greater than $14 per share (subject to adjustment for
stock splits, stock dividends and like capital adjustments), and (B) the
shares of Common Stock issuable upon conversion of the First Preferred are
registered under the Securities Act of 1933, such stock is listed and
traded on NASDAQ or on a national securities exchange, and there is
available for delivery upon resale of such shares of Common Stock a
prospectus meeting the requirements of said Act and the rules thereunder.
(iii) The number of First Preferred shares which the
Corporation may require to be converted by any Notice of Required
Conversion shall not exceed the quotient obtained by dividing the average
Dollar Volume (as herein defined) for the twenty trading days immediately
prior to the Notice Date by twenty-five (25). "Dollar Volume" means the low
trading price on a trading day multiplied by the trading volume for such
day as reported by the principal market on which the Common Stock is
traded. If trading volume is not reported for the Common Stock, then the
Corporation may not require conversion under this subsection (a).
(iv) The Conversion Price upon Required Conversion shall be
61% of the lowest trading price during the Lookback Period in effect as of
the Notice Date, but not more than the Conversion Cap, if the Conversion
Cap has then been determined. The terms "Low Trading Price," "Trading Day,"
"Lookback Period," and "Conversion Cap" have the meanings given them in
Section 4(e) hereof.
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(v) On or after the Notice Date each holder of First
Preferred shall surrender to the Corporation the certificate or
certificates representing the specified proportion of the total number of
First Preferred shares held by such holder, duly endorsed, at the place
designated by the Corporation in the Notice of Required Conversion, and the
Corporation shall deliver to such holder within three trading days
thereafter the certificates representing the Common Stock to which such
holder is entitled upon conversion, together with a new First Preferred
certificate representing the portion of the First Preferred not converted.
The Required Conversion shall be deemed to have become effective on the
second business day after the Notice of Required Conversion is given by the
Corporation. In addition to mailing the Notice of Required Conversion, the
Corporation shall transmit such Notice by telecopy (facsimile) transmission
to any holder who has given notice to the Corporation of such holder's
telecopy address.
(b) On the fifth anniversary of the date of issuance, all then
outstanding shares of First Preferred shall be automatically converted into
Common Stock at the Conversion Price on such anniversary date and otherwise
pursuant to the applicable provisions set forth in Section 4(d) and (e)
hereof.
4. Conversion. The holders of the First Preferred shall have
----------
optional conversion rights as follows:
(a) Accrual of Conversion Rights. Commencing 91 days after the
----------------------------
date of issuance, or (if earlier) the date that a Registration Statement
covering the underlying shares of Common Stock has been declared effective
by the Securities and Exchange Commission, 10% (or such larger percentage
as is determined by the Corporation in its sole discretion) of the number
of First Preferred shares held of record by each holder ("Original Holder")
on such 91st day shall become convertible, and thereafter on the successive
monthly anniversaries of such 91st day an equal number of the First
Preferred shares held by the Original Holder or his successors shall become
convertible (on a cumulative basis). Monthly anniversaries shall be
determined on the basis of calendar days and months. In the case of
transfers of shares by an Original Holder the Corporation shall make such
notations on its stock ownership records and on the certificates for shares
issued upon transfer so as to reflect the portion (if any) of the
transferred shares which have become convertible pursuant to this
provision, or the Corporation may at its election issue certificates
representing the First Preferred shares in such form, or with such
annotations, as to reflect the time or times at which the shares
represented by such certificates will become convertible.
(b) Removal of Limitations. The limitations set forth in Section
----------------------
4(a) hereof, with respect to the percentage of First Preferred shares which
may be converted during certain time periods, shall terminate and all the
First Preferred
4
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shares shall thereafter be fully convertible if any of the following events
or conditions shall occur or exist: (i) an event described in Section 2(b)
shall occur, whether or not the holders of First Preferred deem such event
to be a liquidation; (ii) proceedings for relief under any bankruptcy or
similar law for the relief of debtors are instituted by or against the
Corporation or any of its significant subsidiaries and, if instituted
against the Corporation or such subsidiary, are consented to or not
dismissed within 30 days; (iii) the Corporation shall fail to make timely
filing of any required report on Form 10K or Form 10Q under the Securities
Exchange Act of 1934; (iv) the independent auditors of the Corporation
shall fail or be unwilling to express within 90 days after the end of the
Corporation's fiscal year a customary opinion on the financial statements
of the Corporation, or shall express such opinion subject to a "going
concern" qualification; (v) the Common Stock of the Corporation shall cease
to be listed on either the NASDAQ Small-Cap Market, the NASDAQ National
Market, or a national securities exchange; or (iv) there shall be a
material breach by the Corporation of any of its obligations hereunder or
under the Preferred Stock Investment Agreements pursuant to which the First
Preferred was originally issued.
(c) Right to Convert. At and after the time it has become
----------------
convertible, each share of First Preferred shall be convertible, at the
option of the holder thereof, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing (i) the
liquidation preference of the First Preferred share determined pursuant to
Section 2 hereof on the date the notice of conversion is given, by (ii) the
Conversion Price determined as hereinafter provided in effect on said date,
provided however, that a share of First Preferred shall not be converted
into Common Stock if following such conversion the holder thereof together
with affiliates of such holder would be the beneficial owners (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934) of 10% or more of
the Common Stock of the Corporation.
(d) Mechanics of Conversion. To convert shares of First
-----------------------
Preferred into shares of Common Stock, the holder shall give written notice
to the Corporation (which notice may be given by facsimile transmission)
that such holder elects to convert the same and shall state therein the
number of shares to be converted and the name or names in which such holder
wishes the certificate or certificates for shares of Common Stock to be
issued. Promptly thereafter the holder shall surrender the certificate or
certificates representing the shares to be converted, duly endorsed, at the
office of the Corporation or of any transfer agent for such shares, or at
such other place designated by the Corporation. The Corporation shall,
immediately upon receipt of such notice, issue and deliver to or upon the
order of such holder, against delivery of the certificates representing the
shares which have been converted, a certificate or certificates for the
number of shares of Common Stock to which such holder shall be entitled,
and a certificate representing the shares of First Preferred not so
converted, if any. The Corporation shall effect such issuance immediately
and
5
<PAGE>
shall transmit the certificates by messenger or overnight delivery service
to reach the address designated by such holder within three trading days
after the receipt of such notice. Notice of conversion may be given by a
holder at any time of day up to 5:00 pm Los Angeles time, and such
conversion shall be deemed to have been made immediately prior to the close
of business on the date such notice of conversion is given (the "Conversion
Date"). The person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such shares of Common Stock at the close of
business on the Conversion Date.
(e) Determination of Conversion Price.
---------------------------------
(i) Subject to the provisions of subsection (f) of this
Section, on any Conversion Date, the Conversion Price shall be the lowest
trading price of the Common Stock for the consecutive trading days in the
Lookback Period (as defined below) ending with the trading day prior to the
Conversion Date, reduced by the Applicable Percentage (as defined below) in
effect on the Conversion Date.
(ii) For Conversion Dates falling within the monthly periods
specified below, the number of consecutive trading days in the Lookback
Period shall be as follows:
15 days through the last day of the 3rd month after the date of
issuance.
18 days through the last day of the 4th month after the date of
issuance.
21 days through the last day of the 5th month after the date of
issuance.
24 days through the last day of the 6th month after the date of
issuance.
27 days through the last day of the 7th month after the date of
issuance.
30 days through the last day of the 8th month after the date of
issuance.
33 days through the last day of the 9th month after the date of
issuance.
36 days through the last day of the 10th month after the date of
issuance.
39 days through the last day of the 11th month after the date of
issuance.
42 days through the last day of the 12th month after the date of
issuance.
45 days through the last day of the 13th month after the date of
issuance.
48 days through the last day of the 14th month after the date of
issuance.
51 days through the last day of the 15th month after the date of
issuance.
54 days through the last day of the 16th month after the date of
issuance.
57 days through the last day of the 17th month after the date of
issuance.
60 days thereafter.
(iii) The Applicable Percentage shall be as follows:
8.5% through the last day of the 4th month after the date of
issuance.
9.5% Starting on the 1st day of the 5th month after the date of
issuance.
11% Starting on the 1st day of the 6th month after the date of
issuance.
12% Starting on the 1st day of the 7th month after the date of
issuance.
13.5% Starting on the 1st day of the 8th month after the date of
issuance.
15% Starting on the 1st day of the 9th month after the date of
issuance.
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<PAGE>
16.5% Starting on the 1st day of the 10th month after the date of
issuance.
18% Starting on the 1st day of the 11th month after the date of
issuance.
19.5% Starting on the 1st day of the 12th month after the date of
issuance.
22% Starting on the 1st day of the 13th month after the date of
issuance.
24.5% Starting on the 1st day of the 14th month after the date
of issuance.
28.5% Starting on the 1st day of the 15th month after the date
of issuance.
32.5% Starting on the 1st day of the 16th month after the date
of issuance.
36.5% Starting on the 1st day of the 17th month after the date
of issuance.
39% Starting on the 1st day of the 18th month after the date of
issuance.
For purposes of this resolution, the term "months" means calendar months,
and when months are measured after the date of issuance, each such month
shall end on a monthly anniversary of the date of issuance. For
example, if the date of issuance were January 10, 1997, the fifth month
after the date of issuance would end on and would include June 10, 1997,
the sixth month after the date of issuance would commence on June 11, 1997
and end on July 10, 1997, and the twelfth month after the date of issuance
would commence on December 11, 1997 and would end on January 10, 1998.
(iv) At any date more than 18 months after the date of
issuance, the Conversion Price shall be the lesser of (x) 61% of the
average closing price of the Common Stock for all the trading days during
such 18th month (the "Conversion Cap"), or (y) the Conversion Price
determined pursuant to subsections (i), (ii) and (iii) above.
(v) The terms "low trading price" and "last sale price" of
the Common Stock on any day shall mean, respectively, (A) the lowest
reported sale price and the last reported sale price of the Common Stock on
the principal stock exchange on which the Common Stock is listed, or (B) if
the Common Stock is not listed on a stock exchange, the lowest reported
sale price and the last reported sale price of the Common Stock on the
principal automated securities price quotation system on which sale prices
of the Common Stock are reported, or (C) if the Common Stock is not listed
on a stock exchange and sale prices of the Common Stock are not reported on
an automated quotation system, the lowest bid price and the last bid price
for the Common Stock as reported by National Quotation Bureau Incorporated.
If none of the foregoing provisions are applicable, the "low trading price"
and "last sale price" of the Common Stock on a day will be the fair market
value of the Common Stock on that day as determined by a member firm of the
New York Stock Exchange, Inc., selected by the Board of Directors of the
Corporation. The term "trading day" means (x) if the Common Stock is listed
on at least one stock exchange, a day on which there is trading on the
principal stock exchange on which the Common Stock is listed, (y) if the
Common Stock is not listed on a stock exchange but sale prices of the
Common Stock are reported on an automated quotation system, a day on which
trading is reported on the principal automated
7
<PAGE>
quotation system on which sales of the Common Stock are reported, or (z) if
the foregoing provisions are inapplicable, a day on which quotations are
reported by National Quotation Bureau Incorporated. The "closing price" of
the Common Stock on any day means the "last sale price" as defined above.
(vi) In the event that during any period of consecutive
trading days provided for above, the Corporation shall declare or pay any
dividend on the Common Stock payable in Common Stock or in rights to
acquire Common Stock, or shall effect a stock split or reverse stock split,
or a combination, consolidation or reclassification of the Common Stock,
then the Conversion Price and (if such event occurs during the 18th month
after the date of issuance) the Conversion Cap shall be proportionately
decreased or increased, as appropriate, to give effect to such event, and
like adjustment shall be made in the $14 price specified in Section
3(a)(ii) and in the $6 price specified in Section 4(f). If such an event
occurs more than 18 months after the date of issuance, the Conversion Cap
shall be proportionately decreased or increased to give effect to such
event.
(f) Depressed Price Condition. A "Depressed Price Condition"
-------------------------
shall be deemed to exist on any date if during the period of twenty
consecutive trading days immediately prior to such date the average closing
price of the Common Stock shall have been less than $6 per share (subject
to adjustment for stock splits, stock dividends and like capital
adjustments). If and so long as a Depressed Price Condition exists, (i) the
number of consecutive trading days in the Lookback Period shall be three
days, (ii) the Conversion Price shall be the average of the low trading
prices for the consecutive trading days in the Lookback Period reduced by
the Applicable Percentage, and (iii) the Corporation may at its option,
exercised by written notice ("Cash Conversion Notice") given to the holders
of the First Preferred five days prior to the effective date specified in
such Notice (the "Effective Date") require that any First Preferred shares
converted on the Effective Date, or thereafter while such Cash Conversion
Notice remains in effect, shall receive in lieu of Common Stock cash in an
amount per share equal to the Liquidation Preference divided by the
difference between 100% and the Applicable Percentage in effect on the
Conversion Date (the "Cash Conversion Price"). A Cash Conversion Notice may
not be given and shall not be effective on any date unless the Depressed
Price Condition exists on such date. The Cash Conversion Notice may (but
need not) specify a price range within which such Notice shall be
effective. If a price range is so specified, then the Cash Conversion
Notice shall be effective on any date only if the average of the low
trading prices for the three consecutive trading days prior to such date
falls within the specified range. The upper limit of the range so specified
shall not exceed $6. If notice of conversion shall be given by a holder of
First Preferred shares on a date that a Cash Conversion Notice is in
effect, the Corporation shall within one business day following surrender
of the share certificate as provided in Section 4(d) hereof make payment of
the Cash Conversion Price to such holder by
8
<PAGE>
wire transfer of immediately available funds in U.S. dollars pursuant to
such wire transfer instructions as may have been given by such holder, or
otherwise by mailing by certified mail a bank cashiers' or certified check
for the Cash Conversion Price to the record address of such holder. A Cash
Conversion Notice shall cease to be effective (i) if the Depressed Price
Condition ceases to exist, (ii) 30 days after its Effective Date, or (iii)
if the Corporation fails to make payment of the Cash Conversion Price to
any holder entitled thereto in the manner and within the time specified in
the foregoing sentence, time being of the essence. If a Cash Conversion
Notice ceases to be effective pursuant to clause (iii) of the foregoing
sentence, it shall not thereafter be effective as to any holder and no Cash
Conversion Notice may thereafter be given by the Corporation. The number of
shares that a holder is entitled to convert, determined pursuant to
subsections (a) and (b) of this Section 4, shall not be affected by the
giving or effectiveness of a Cash Conversion Notice. Any Cash Conversion
Notice shall be mailed by first class mail to each holder of First
Preferred at its address appearing on the books of the Corporation, shall
be transmitted by telecopy or facsimile transmission to any holder which
has supplied a telecopy or facsimile address to the Corporation, and unless
receipted for by telecopy or facsimile, shall be transmitted by courier
service for delivery on the first business day following the date such
notice is given.
(g) Distributions. In the event the Corporation shall at any
-------------
time or from time to time make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Corporation or any of its
subsidiaries or other property, other than cash dividends from earnings or
dividends of additional shares of Common Stock, then in each such event
provision shall be made so that the holders of First Preferred shall
receive, upon the conversion thereof, the securities or other property
which they would have received had they been the owners on the date of such
event of the number of shares of Common Stock issuable to them upon
conversion.
(h) Certificates as to Adjustments. Upon the occurrence of any
------------------------------
adjustment or readjustment of the Conversion Price or the Conversion Cap
pursuant to this Section 4, or any adjustment of the prices specified in
Sections 3(a)(ii) or 4(f), the Corporation at its expense shall promptly
compute such adjustment or readjustment in accordance with the terms hereof
and cause independent public accountants selected by the Corporation to
verify such computation and prepare and furnish to each holder of First
Preferred a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is
based. The Corporation shall, upon the written request at any time of any
holder of First Preferred, furnish or cause to be furnished to such holder
a like certificate prepared by the Corporation setting forth (i) such
adjustments and readjustments, and (ii) the number of other securities and
the amount, if any, of other
9
<PAGE>
property which at the time would be received upon the conversion of First
Preferred with respect to each share of Common Stock received upon such
conversion.
(i) Notice of Record Date. In the event of any taking by the
---------------------
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any security
or right convertible into or entitling the holder thereof to receive
additional shares of Common Stock, or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the Corporation
shall mail to each holder of First Preferred at least 10 days prior to the
date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution,
security or right and the amount and character of such dividend,
distribution, security or right.
(j) Issue Taxes. The Corporation shall pay any and all issue and
-----------
other taxes, excluding any income, franchise or similar taxes, that may be
payable in respect of any issue or delivery of shares of Common Stock on
conversion of shares of First Preferred pursuant hereto; provided, however,
that the Corporation shall not be obligated to pay any transfer taxes
resulting from any transfer requested by any holder in connection with any
such conversion.
(k) Reservation of Stock Issuable Upon Conversion. The
---------------------------------------------
Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the First Preferred, such number
of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the First Preferred, and
if at any time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then outstanding
shares of the First Preferred, the Corporation will take such corporate
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose, including, without limitation,
engaging in best efforts to obtain the requisite shareholder approval.
(l) Fractional Shares. No fractional shares shall be issued
-----------------
upon the conversion of any share or shares of First Preferred. All shares
of Common Stock (including fractions thereof) issuable upon conversion of
more than one share of First Preferred by a holder thereof shall be
aggregated for purposes of determining whether the conversion would result
in the issuance of any fractional share. If, after the aforementioned
aggregation, the conversion would result in the issuance of a fraction of a
share of Common Stock, the Corporation shall, in lieu of issuing any
fractional share, pay the holder otherwise entitled to such fraction a sum
in cash equal to the
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<PAGE>
fair market value of such fraction on the date of conversion (as determined
in good faith by the Board of Directors of the Corporation).
(m) Notices. Any notice required by the provisions of this
-------
Section to be given to the holders of shares of First Preferred shall be
deemed given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at its address appearing on the books of
the Corporation.
(n) Reorganization or Merger. In case of any reorganization or
------------------------
any reclassification of the capital stock of the Corporation or any
consolidation or merger of the Corporation with or into any other
corporation or corporations or a sale of all or substantially all of the
assets of the Corporation to any other person, and the holders of First
Preferred do not elect to treat such transaction as a liquidation,
dissolution or winding up as provided in Section 2, then, as part of such
reorganization, consolidation, merger or sale, provision shall be made so
that each share of First Preferred shall thereafter be convertible into the
number of shares of stock or other securities or property (including cash)
to which a holder of the number of shares of Common Stock deliverable upon
conversion of such share of First Preferred would have been entitled upon
the record date of (or date of, if no record date is fixed) such event and,
in any case, appropriate adjustment (as determined by the Board of
Directors) shall be made in the application of the provisions herein set
forth with respect to the rights and interests thereafter of the holders of
the First Preferred, to the end that the provisions set forth herein shall
thereafter be applicable, as nearly as equivalent as is practicable, in
relation to any shares of stock or the securities or property (including
cash) thereafter deliverable upon the conversion of the shares of First
Preferred.
5. Other Provisions. For all purposes of this Resolution, the term
-----------------
"date of issuance" or "closing" shall mean the day on which shares of the
First Preferred are first issued by the Corporation, and the terms "trading
price", "low trading price", "closing price", "last trade price", and
"trading days" shall have the meanings given them in Section 4(e) hereof.
Any provision herein which conflicts with or violates any applicable usury
law shall be deemed modified to the extent necessary to avoid such conflict
or violation.
6. Restrictions and Limitations. The Corporation shall not
----------------------------
undertake the following actions without the consent of the holders of a
majority of the First Preferred: (i) modify its Certificate of
Incorporation or Bylaws so as to amend or change any of the rights,
preferences, or privileges of the First Preferred, (ii) authorize or issue
any other equity security senior to the First Preferred, or (iii) purchase
or otherwise acquire for value any Common Stock or other equity security of
the Corporation either junior or senior to or on a parity with the First
Preferred while there exists any arrearage in the payment of cumulative
dividends hereunder.
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7. Voting Rights. Except as provided herein or as provided for by
--------------
law, the First Preferred shall have no voting rights.
8. Attorneys' Fees. Any holder of First Preferred shall be
---------------
entitled to recover from the Corporation the reasonable attorneys' fees and
expenses incurred by such holder in connection with enforcement by such
holder of any obligation of the Corporation hereunder.
12
<PAGE>
THIRD: The resolution was adopted in accordance with applicable law
and the applicable provisions in the Corporation's charter documents pursuant to
a Written Consent of the Board of Directors of Casmyn Corp. on March 5, 1997.
FOURTH: The Articles of Incorporation of the Corporation is amended
so that the designation and number of shares of each class and series acted upon
in the resolution, and the relative rights, preferences and limitations of each
such class and series are as stated in the resolution.
Dated: April 8, 1997 CASMYN CORP.,
a Colorado corporation
By:/s/ Amyn Dahya
---------------------------------------
Amyn Dahya, Its President
By:/s/ Dennis Welling
---------------------------------------
Dennis Welling, Its Assistant Secretary
<PAGE>
EXHIBIT 4.3
PREFERRED STOCK INVESTMENT AGREEMENT
AGREEMENT dated as of April 11, 1997 between Casmyn Corp. (the
"Company") and the investor whose name is set forth at the foot of this
Agreement (the "Investor").
The parties hereto agree as follows:
ARTICLE I
Purchase and Sale of Preferred Stock
------------------------------------
Section 1.1 Purchase and Sale of Preferred Stock. Upon the following
------------------------------------
terms and conditions, the Company shall issue and sell to the Investor shares of
the Company's First Convertible Preferred Stock (the "Shares") having the
rights, designations and preferences set forth in Schedule I hereto, and the
Investor shall purchase from the Company the number of Shares designated on the
signature page hereof.
Section 1.2 Purchase Price. The purchase price for the Shares (the
--------------
"Purchase Price") shall be $25 per share.
Section 1.3 The Closing.
-----------
(a) The closing of the purchase and sale of the Shares (the
"Closing"), shall take place at the offices of the Company, at 10:00 a.m., local
time on the later of the following: (i) the date on which the last to be
fulfilled or waived of the conditions set forth in Article IV hereof and
applicable to the Closing shall be fulfilled or waived in accordance herewith,
or (ii) such other time and place and/or on such other date as the Investor and
the Company may agree. The date on which the Closing occurs is referred to
herein as the "Closing Date."
(b) On the Closing Date, the Company shall deliver to the
Investor certificates representing the number of Shares being purchased by the
Investor, registered in the name of the Investor, or deposit such Shares into
accounts designated by the Investor, and the Investor shall deliver to the
Company the Purchase Price for such Shares by cashier's check or wire transfer
in immediately available funds to such account as shall be designated in writing
by the Company. In addition, each party shall deliver all documents, instruments
and writings required to be delivered by such party pursuant to this Agreement
at or prior to the Closing.
<PAGE>
Section 1.4 Covenant to Register.
--------------------
(a) For purposes of this Section, the following definitions
shall apply:
(i) The terms "register," "registered," and
"registration" refer to a registration under the Securities Act of 1933, as
amended (the "Act"), effected by preparing and filing a registration statement
in compliance with the Act, and the declaration or ordering of effectiveness of
such registration statement, document or amendment thereto.
(ii) The term "Registrable Securities" means the stock
issued or issuable upon conversion of the Shares, or otherwise issued or
issuable pursuant to this Agreement or the provisions of Schedule I hereto, and
any securities of the Company or securities of any successor corporation issued
as, or issuable upon the conversion or exercise of any warrant, right or other
security that is issued as a dividend or other distribution with respect to, or
in exchange for or in replacement of the Shares, which (i) have not been resold
pursuant to an effective registration statement or pursuant to Rule 144 under
the Act and (ii) may not be resold pursuant to Rule 144(k) under the Act. For
purposes of this Agreement, securities will be considered ineligible for resale
pursuant to Rule 144(k) under the Act unless the Company's transfer agent has
accepted an instruction from the Company specifying that such securities are
eligible for sale pursuant to Rule 144(k).
(iii) The term "holder of Registrable Securities"
includes any person who holds Shares which are convertible into Registrable
Securities.
(b) (i) The Company shall, as expeditiously as possible
following the Closing, file a registration statement on Form S-3, or if Form S-3
is not then available, another appropriate form, covering all the Registrable
Securities and sales thereof under Rule 415, and shall use its best efforts to
cause such registration statement to become effective by the 90th calendar day
after the Closing Date (the "Initial Registration"). In the event such
registration is not so declared effective or does not include all Registrable
Securities, a holder of Registrable Securities shall have the right to require
by notice in writing that the Company register all or any part of the
Registrable Securities held by such holder (a "Demand Registration") and the
Company shall thereupon effect such registration in accordance herewith (which
may include adding such shares to an existing shelf registration). The parties
agree that if the holder of Registrable Securities demands registration of less
than all of the Registrable Securities, the Company, at its option, may
nevertheless file a registration statement covering all of the Registrable
Securities. If such registration statement is declared effective with respect to
all Registrable Securities, then so long as the Company is in compliance with
its obligations under Subsection (d)(i) through (v) hereof, the demand
registration rights granted pursuant to this Subsection (b) (i) shall not be
applicable. If such registration statement is not
2
<PAGE>
declared effective with respect to all Registrable Securities, or if the Company
is not in compliance with said obligations, the demand registration rights
described herein shall remain in effect. The Company shall provide holders of
Registrable Securities reasonable opportunity to review any such registration
statement or amendment or supplement thereto prior to the filing thereof. If
the Registrable Securities are registered initially on a form other than Form S-
3, the Company shall register the Registrable Securities on Form S-3 as soon as
use of such form is permissible.
(ii) The Company shall not be obligated to effect Demand
Registration under Subsection (b)(i) if all of the Registrable Securities held
by the holder of Registrable Securities which are demanded to be covered by the
Demand Registration are, at the time of such demand, included in an effective
registration statement and the Company is in compliance with its obligations
under Subsection (d) (i) through (v) hereof.
(iii) The Company may suspend the effectiveness of any
such registration effected pursuant to this Subsection (b) in the event, and for
such period of time as, such a suspension is required by the rules and
regulations of the Securities and Exchange Commission ("SEC"), and may suspend
use of the prospectus included in the Registration Statement if such prospectus
ceases to meet the requirements of Section 10 of the Act. The Company will
immediately advise the holders of the registered securities of any such
suspension, and will use its best efforts to cause such suspension to terminate
at the earliest possible date.
(iv) If the registration statement covering all
Registrable Securities is not effective by the 90th calendar day after the
Closing Date, then the Company shall pay the Investor in cash an amount equal to
3% of the total Purchase Price of the Shares purchased by the Investor for each
30 day period thereafter until such registration statement is effective (pro-
rata as to a period of less than 30 days); provided, however, that such payment,
with respect to the first 60 days (but not thereafter), may be made in Shares
valued at the Purchase Price. An amount equal to 3% of the total Purchase Price
of Shares and any Registrable Securities then held by Investor shall also be
paid to the Investor in cash during any period in excess of 30 days that (i) the
effectiveness of the Registration Statement or use of the prospectus is
suspended as set forth in Section 1.4 (b)(iii) or the prospectus is otherwise
unavailable for use by sellers of Registrable Securities, or if the Registrable
Securities are not listed and traded on NASDAQ or on a national securities
exchange. Any payment hereunder shall be made not later than five business days
after the end of the 30-day period with respect to which such payment is due and
if not so paid the Shares shall be redeemable at the option of the holder
thereof at their liquidation preference divided by 100% less the Applicable
Percentage set forth in Schedule I hereto. The "Purchase Price" of Registrable
Securities shall be (i) in the case of Registrable Securities derived from
conversion or substitution of Shares, the Purchase Price of such Shares, and
(ii) in the case of Registrable Securities
3
<PAGE>
derived from dividend payments, the original dollar amount of such dividends.
This subsection is in addition to the provisions of Section 7.2(a) hereof.
(c) If the Company proposes to register (including for
this purpose a registration effected by the Company for shareholders other than
the Investor) any of its stock or other securities under the Act in connection
with a public offering of such securities (other than a registration on Form S-
4, Form S-8 or other limited purpose form) and all Registrable Securities have
not theretofore been included in a registration statement under Subsection (b)
which remains effective, the Company shall, at such time, promptly give all
holders of Registrable Securities written notice of such registration. Upon the
written request of any holder of Registrable Securities given within twenty (20)
days after receipt of such notice by the holder of Registrable Securities, the
Company shall use its list efforts to cause to be registered under the Act all
Registrable Securities that such holder of Registrable Securities requests to be
registered. However, the Company shall have no obligation under this Subsection
(c) to the extent that, with respect to a public offering registration, the
managing underwriter of such public offering reasonably notifies such holder(s)
in writing of its determination that the Registrable Securities or a portion
thereof should be excluded therefrom.
(d) Whenever required under this Section to effect the
registration of any Registrable Securities, including, without limitation, the
Initial Registration, the Company shall, as expeditiously as reasonably
possible:
(i) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration to become effective as provided in Section 1.4(b)(i),
and keep such registration statement effective for so long as any holder of
Registrable Securities desires to dispose of the securities covered by such
registration statement, or, if earlier, until such Registrable Securities may be
sold under Rule 144(k) (provided that the Company's transfer agent has accepted
an instruction from the Company to such effect).
(ii) Prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Act with respect to the disposition of all securities
covered by such registration statement and notify the holders of the filing and
effectiveness of such Registration Statement and any amendments or supplements.
(iii) Furnish to each holder of Registrable
Securities such numbers of copies of a current prospectus conforming with the
requirements of the Act, copies of the registration statement, any amendment or
supplement thereto and any documents incorporated by reference therein and such
other documents as such holder of
4
<PAGE>
Registrable Securities may reasonably require in order to facilitate the
disposition of Registrable Securities owned by such holder of Registrable
Securities.
(iv) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
"Blue Sky" laws of such jurisdictions as shall be reasonably requested by a
holder of Registrable Securities and keep such registration or qualification
effective as long as required to permit sale of Registrable Securities
thereunder, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
(v) Notify each holder of Registrable Securities
immediately of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and use its best efforts to promptly
update and/or correct such prospectus.
(vi) Furnish, at the request of any holder of
Registrable Securities, (1) an opinion of counsel of the Company, dated the
effective date of the registration statement, in form and substance reasonably
satisfactory to the holder and its counsel and covering, without limitation,
such matters as the due authorization and issuance of the securities being
registered and compliance with securities laws by the Company in connection with
the authorization, issuance and registration thereof and (2) a letter or letters
of the Company's independent public accountants in form and substance reasonably
satisfactory to the holder and its counsel.
(vii) Use its best efforts to list the Registrable
Securities covered by such registration statement with any national market or
securities exchange on which the Common Stock is then listed, and make generally
------
available on a timely basis such statements of earnings as are required to
comply with Section lla of the Act.
(viii) Make available for inspection by the holder of
Registrable Securities, upon request, all SEC Documents (as defined below) filed
subsequent to the Closing and require the Company's officers, directors and
employees to supply all information reasonably requested by any holder of
Registrable Securities in connection with such registration statement.
(e) Each holder of Registrable Securities will furnish to
the Company in connection with any registration under this Section such
information regarding itself, the Registrable Securities and other securities of
the Company held by it, and the intended method of disposition of such
securities as shall be reasonably required to effect the registration of the
Registrable Securities held by such holder of
5
<PAGE>
Registrable Securities. The Investor shall provide such data as of closing.
The intended method of disposition (Plan of Distribution) of such securities as
so provided by Investor shall be included without alteration in the Registration
Statement covering the Registrable Securities and shall not be changed without
written consent of the Investor.
(f) (i) The Company shall indemnify, defend and hold
harmless each holder of Registrable Securities which are included in a
registration statement pursuant to the provisions of Subsections (b) or (c)
(each, a "Selling Shareholder") and each of its officers, directors, employees,
agents, partners or controlling persons (within the meaning of the Act) (each,
an "indemnified party") from and against, and shall reimburse such indemnified
party with respect to, any and all claims, suits, demands, causes of action,
losses, damages, liabilities, costs or expenses ("Liabilities") to which such
indemnified party may become subject under the Act or otherwise, arising from or
relating to (A) any untrue statement or alleged untrue statement of any material
fact contained in such registration statement, any prospectus contained therein
or any amendment or supplement thereto, or (B) the omission or alleged omission
to state therein 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; provided, however, that the Company shall not be liable in
--------
any such case to the extent that any such Liability arises out of or is based
upon an untrue statement or omission so made in strict conformity with
information furnished by such indemnified party in writing specifically for use
in the registration statement; provided further, that the Company shall not be
-------- -------
liable in any such case to the extent that any such Liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if (i) a Selling Shareholder
under an obligation to send or deliver a copy of the prospectus with or prior to
the delivery of written confirmation of the sale of Registrable Securities to
the person asserting such Liability who purchased such Registrable Securities
which are the subject thereof from such Selling Shareholder failed to do so and
(ii) the prospectus would have completely corrected such untrue statement or
omission; and provided further, that the Company shall not be liable in any such
-------- -------
case to the extent that any Liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission in the
prospectus, if such untrue statement or alleged untrue statement, omission or
alleged omission is completely corrected in an amendment or supplement to the
prospectus and if, having previously been furnished by or on behalf of the
Company with copies of the prospectuses so amended or supplemented and having
been obligated to deliver such prospectuses, the Selling Shareholder thereafter
failed to deliver such prospectus as so amended or supplemented, prior to or
concurrently with the sale of Registrable Securities to the person asserting
such Liability who purchased such Registrable Securities which are the subject
thereof from such Selling Shareholder.
(ii) In the event of any registration under the Act
of Registrable Securities pursuant to Subsections (b) or (c), each holder of
such Registrable
6
<PAGE>
Securities hereby severally agrees to indemnify, defend and hold harmless the
Company, and its officers, directors, employees, agents, partners, or
controlling persons (within the meaning of the Act) (each, an "indemnified
party") from and against, and shall reimburse such indemnified party with
respect to, any and all Liabilities to which such indemnified party may become
subject under the Act or otherwise, arising from or relating to (A) any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment or
supplement thereto, or (B) the omission or alleged omission to state therein 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;
provided, that such holders will be liable in any such case to the extent, and
- --------
only to the extent, that any such Liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, prospectus or amendment or supplement
thereto in reliance upon and in strict conformity with written information
furnished in an instrument duly executed by such holder specifically for use in
the registration statement.
(iii) Promptly after receipt by any indemnified party
of notice of the commencement of any action, or after actual knowledge of any
claim, such indemnified party shall, if a claim in respect thereof is to be made
against another party (the "indemnifying party") hereunder, notify such party in
writing thereof, but the omission so to notify shall not relieve the
indemnifying party from any Liability which it may have to the indemnified party
other than under this section and shall only relieve it from any liability which
it may have to the indemnified party under this section if and to the extent it
is actually prejudiced by such omission. In case any such action shall be
brought against any indemnified party and such indemnified party shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to the
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to the indemnified party
under this section for any legal expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, provided,
--------
however, that if the defendants in any such action include both the indemnifying
party and such indemnified party and the indemnified party shall have
reasonably concluded that there may be reasonable defenses available to it which
are different from or additional to those available to the indemnifying party or
if the interests of the indemnified party reasonably may be deemed to conflict
with the interests of the indemnifying party, the indemnified party shall have
the right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the reasonable
expenses and fees of such separate counsel and other reasonable expenses related
to such participation to be reimbursed by the indemnifying party as incurred.
In clarification of the foregoing,
7
<PAGE>
if the Company is the indemnifying party it shall pay the reasonable expenses
and fees of one separate counsel whose selection is approved by the largest
group of similarly situated indemnified parties as measured by the aggregate par
value of such Registrable Securities owned by such group. Any indemnified party
who chooses not to be represented by the foregoing separate counsel shall be
entitled, at its own expense to be represented by counsel of its own selection.
An indemnifying party shall not be bound by or have liability in respect of any
settlement entered into without its consent.
(g) (i) With respect to the inclusion of Registrable
Securities in a registration statement pursuant to Subsections (b) or (c), all
fees, costs and expenses of and incidental to such registration, inclusion and
public offering shall be borne by the Company; provided, however, that any
Selling Shareholders participating in such registration shall bear their pro-
rata share of the underwriting discounts and commissions, if any, incurred by
them in connection with such registration.
(ii) The fees, costs and expenses of registration to
be borne by the Company as provided in this Subsection (g) shall include,
without limitation, all registration, filing and NASD fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, and all legal
fees and disbursements and other expenses of complying with state securities or
Blue Sky laws of any jurisdiction or jurisdictions in which securities to be
offered are to be registered and qualified. Subject to appropriate agreements as
to confidentiality, the Company shall make available to counsel for the holders
of Registrable Securities its documents and personnel for due diligence
purposes, and shall pay the reasonable fees and disbursements of one law firm
(but not more than one) acting as counsel for a majority of such holders. Except
as otherwise provided herein, fees and disbursements of counsel and accountants
for the Selling Shareholders shall be borne by the respective Selling
Shareholders.
(h) The rights to cause the Company to register all or
any portion of Registrable Securities pursuant to this Section may be assigned
by Investor to a transferee or assignee of 20% or more, in the aggregate, of its
Shares or the Registrable Securities derived from such Shares. Any transferee
asserting registration rights hereunder shall be bound by the applicable
provisions of this Agreement.
(i) From and after the date of this Agreement, the
Company shall not agree to allow the holders of any securities of the Company to
include any of their securities in any registration statement filed by the
Company pursuant to Subsection (b) unless such inclusion will not reduce the
amount of the Registrable Securities included therein.
8
<PAGE>
ARTICLE II
Representations and Warranties
------------------------------
Section 2.1 Representations and Warranties of the Company. The
---------------------------------------------
Company hereby makes the following representations and warranties to the
Investor:
(a) Organization and Qualification. The Company is a corporation duly
------------------------------
incorporated and existing in good standing under the laws of Colorado and has
the requisite corporate power to own its properties and to carry on its business
as now being conducted. The Company does not have any direct or indirect
subsidiaries except as listed in Exhibit A hereto or in the SEC Documents (as
hereinafter defined). The Company and each such subsidiary, if any, 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 or property
owned by it makes such qualification necessary other than those in which the
failure so to qualify would not have a Material Adverse Effect. "Material
Adverse Effect" means any adverse effect on the business, operations,
properties, prospects, or financial condition of the entity with respect to
which such term is used and which is material to such entity and other entities
controlling or controlled by such entity taken as a whole, or any adverse effect
on the Company's performance of its obligations under this Agreement or any
other agreement or document contemplated hereby.
(b) Authorization: Enforcement. (i) The Company has the requisite
--------------------------
corporate power and authority to enter into and perform this Agreement and to
issue the Shares in accordance with the terms hereof, (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 all necessary
corporate action, and no further consent or authorization of the Company or its
Board of Directors or stockholders is required, (iii) this Agreement has been
duly executed and delivered by the Company, and (iv) this Agreement constitutes
a valid and binding obligation of the Company enforceable against the Company in
accordance with its 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.
The Company's executive officers and directors have studied and fully understand
the nature of the securities being sold hereunder, and recognize that they have
a potential dilutive effect.
(c) Capitalization. The authorized capital stock of the Company
--------------
consists of 300,000,000 shares of Common Stock and 20,000,000 shares of
preferred stock; there are 12,752,633 shares of Common Stock issued and
outstanding; and, upon issuance of the Shares in accordance with the terms
hereof and pursuant to similar
9
<PAGE>
agreements of like tenor, there will be 12,752,033 shares of Common Stock and
approximately 800,000 shares of preferred stock issued and outstanding. All of
the outstanding shares of the Company's Common Stock have been validly issued
and are fully paid and nonassessable. Except as set forth in Exhibit A hereto
and as described in the SEC Documents, no shares of Common Stock are entitled to
preemptive rights or registration rights and 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 contracts, commitments, understandings, or
arrangements by which the Company is or may become bound to issue additional
shares of capital stock of the Company or options, warrants, scrip, rights to
subscribe to, or commitments to purchase or acquire, any shares, or securities
or rights convertible into shares, of capital stock of the Company. The Company
has furnished or made available to the Investor true and correct copies of the
Company's Articles of Incorporation as in effect on the date hereof (the
"Charter"), and the Company's By-Laws, as in effect on the date hereof (the "By-
Laws").
(d) Issuance of Shares. The issuance of the Shares has been duly
------------------
authorized and, when paid for or issued in accordance with the terms hereof, the
Shares shall be validly issued, fully paid and non-assessable and entitled to
the rights and preferences set forth in Schedule I hereto. The Common Stock
issuable upon conversion of the Shares will be duly authorized and reserved for
issuance and, upon conversion in accordance with the Certificate of Designation
to be filed by the Company to establish the rights and preferences of the
Shares, will be validly issued, fully paid and non-assessable and not subject to
any preemptive rights or adverse claims, and the holders shall be entitled to
all rights and preferences accorded to a holder of Common Stock.
(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 do not and will not (i) result in a violation of the
Company's Charter or By-Laws 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 federal,
state, local or foreign 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); provided that, for purposes of such representation as to
Federal, state, local or foreign law, rule or regulation, no representation is
made herein with respect to any of the same applicable solely to the Investor
and not to the Company. The business of the Company is not being conducted in
violation of any law, ordinance or regulations of any governmental entity,
10
<PAGE>
except for violations which either singly or in the aggregate do not and will
not have a Material Adverse Effect. The Company is not required under Federal,
state or local law, rule or regulation in the United States to obtain any
consent, authorization or order of, or make any filing (other than the filing of
a Certificate setting forth the terms of the Shares with the Colorado Secretary
of State) or registration with, any court or governmental agency in order for it
to execute, deliver or perform any of its obligations under this Agreement or
issue and sell the Shares in accordance with the terms hereof (other than any
SEC, NASD or state securities filings which may be required to be made by the
Company and any registration statement which may be filed pursuant hereto);
provided that, for purposes of the representation made in this sentence, the
Company is assuming and relying upon the accuracy of the relevant
representations and agreements of the Investor herein.
(f) SEC Documents, Financial Statements. The Common Stock of the
-----------------------------------
Company is registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and 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 Exchange Act, including
material filed pursuant to Section 13(a) or 15(d), in addition to one or more
registration statements and amendments thereto heretofore filed by the Company
with the SEC (all of the foregoing including filings incorporated by reference
therein being referred to herein as the "SEC Documents"). The Company has
delivered or made available to the Investor true and complete copies of the
quarterly and annual (including, without limitation, proxy information and
solicitation materials) SEC Documents filed with the SEC since December 31,
1995. The Company has not provided to the Investor any information which,
according to applicable law, rule or regulation, should have been disclosed
publicly by the Company but which has not been so disclosed, other than with
respect to the transactions contemplated by this Agreement. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder except as set forth on Exhibit A and other federal, state
and local laws, rules and regulations applicable to such SEC Documents, and none
of the SEC Documents 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. The financial statements of the Company
included in the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis 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 not include 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
11
<PAGE>
thereof and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
(g) No Material Adverse Change. Since the date through which the most
--------------------------
recent quarterly report of the Company on Form 10-Q has been prepared and filed
with the SEC, a copy of which is included in the SEC Documents, no event which
would have a Material Adverse Effect has occurred or exists with respect to the
Company or its subsidiaries, except as otherwise disclosed or reflected in other
SEC Documents prepared through or as of a date subsequent thereto, and the
Company has not received any communication from the SEC or the NASD regarding
any possible de-listing of the Company's Common Stock.
(h) No Undisclosed Liabilities or Litigation. The Company and its
----------------------------------------
subsidiaries have no liabilities or obligations not disclosed in the SEC
Documents, other than those incurred in the ordinary course of the Company's or
its subsidiaries' respective businesses which, individually or in the aggregate,
do not or would not have a Material Adverse Effect on the Company or its
subsidiaries. All material litigation to which the Company or its subsidiaries
are parties is disclosed in the SEC documents or in Exhibit A hereto.
(i) No Undisclosed Events or Circumstances. No event or circumstance
--------------------------------------
has occurred or exists with respect to the Company or its subsidiaries or their
respective businesses, properties, prospects, operations or financial condition,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.
(j) No General Solicitation. Neither the Company, nor any of its
-----------------------
affiliates, or, to its knowledge, any person acting on its or their behalf
(including Cappello Capital Corp. (the "Placement Agent")), has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Act) in connection with the offer or sale of the Shares.
(k) No Integrated Offering. Neither the Company, nor any of its
----------------------
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration of the
Shares under the Act.
(l) Standoff Commitments. The Company has received binding Assurances
--------------------
from Amyn Dahya and Dahya Holdings, Inc. that neither of them or their
affiliates will sell more than 25,000 shares of Common Stock during the thirteen
months following the Closing Date without the approval of the Placement Agent.
12
<PAGE>
(m) Approval Commitments. The Company has received binding assurance
--------------------
from its executive officers and directors and all stockholders who own more than
5% of the outstanding stock of the Company, to the effect that such persons will
vote all their shares in favor of such approval of the transactions contemplated
hereby as may be necessary to comply with any rule or regulation of the NASD or
any other regulatory agency.
Section 2.2 Representations and Warranties of the Investor. The
----------------------------------------------
Investor hereby makes the following representations and warranties to the
Company:
(a) Authorization, Enforcement. (i) Such Investor has the requisite
--------------------------
power and authority to enter into and perform this Agreement and to purchase the
Shares being sold hereunder, (ii) the execution and delivery of this Agreement
by the Investor and the consummation by it of the transactions contemplated
hereby have been duly authorized by all necessary corporate or partnership
action, and (iii) this Agreement constitutes a valid and binding obligation of
the Investor enforceable against the Investor in accordance with its 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.
(b) No Conflicts. The execution, delivery and performance of this
------------
Agreement and the consummation by the Investor of the transactions contemplated
hereby do not and will not (i) result in a violation of the Investor's charter
documents or By-Laws or (ii) conflict with any agreement, indenture or
instrument to which Investor is a party, or (iii) result in a violation of any
law, rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to Investor. The business of the Investor is not
being conducted in violation of any law or regulation of any governmental
entity, except for possible violations which either singly or in the aggregate
do not and will not have a Material Adverse Effect. The Investor is not
required to obtain any consent or authorization of any governmental agency in
order for it to perform its obligations under this Agreement. The data to be
provided by the Investor in connection with registering the Registrable
Securities under the Act will be true and correct in all material respects.
(c) Investment Representation. The Investor is purchasing the Shares
-------------------------
for its own account for investment and not with a view to distribution otherwise
than in compliance with the Act. Investor has no present intention to sell the
Shares and Investor has no present arrangement (whether or not legally binding)
to sell the Shares to or through any person or entity; provided, however, that
by making the representations herein, the Investor does not agree to hold the
Shares for any minimum or other specific term and reserves the right to dispose
of the Shares at any time in accordance with Federal and state securities laws
applicable to such disposition.
13
<PAGE>
(d) Accredited Investor. The Investor is an accredited investor as
-------------------
defined in Rule 501 promulgated under the Act. The Investor has such knowledge
and experience in financial and business matters in general, and investments in
particular, so that the Investor is able to evaluate the merits and risks of an
investment in the Shares and to protect its own interests in connection with
such investment. In addition (but without limiting the effect of the Company's
representations and warranties contained herein), the Investor has received such
information as it considers necessary or appropriate for deciding whether to
purchase the Shares pursuant hereto. The Investor acknowledges that no
representation or warranty is made by the Placement Agent or any persons
representing the Placement Agent with respect to the Company or sale of the
Shares.
(e) Rule 144. The Investor understands that there is no public
--------
trading market for the Shares, that none is expected to develop, and that the
Shares must be held indefinitely unless such Shares or securities into which the
Shares are converted are registered under the Act or an exemption from
registration is available. The Investor has been advised or is aware of the
provisions of Rule 144 promulgated under the Act.
ARTICLE III
Covenants
---------
Section 3.1 Securities Compliance.
---------------------
(a) The Company shall notify the SEC and NASD, in accordance with
their requirements, of the transactions contemplated by this Agreement, and
shall take all other necessary action and proceedings as may be required and
permitted by applicable law, rule and regulation, for the legal and valid
issuance of the Shares and Common Stock issuable upon conversion thereof to the
Investor or subsequent holder.
(b) The Investor understands that the Shares are being offered and
sold in reliance on a transactional exemption from the registration requirements
of Federal and state securities laws and that the Company is relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order to
determine the applicability of such exemptions and the suitability of the
Investor to acquire the Shares.
Section 3.2 Registration and Listing. Until three (3) years after
------------------------
all Shares have been converted into Common Stock, the Company will cause its
Common Stock (or other securities into which the Shares are convertible) to
continue to be registered under Sections 12(b) or 12(g) of the Exchange Act,
will comply in all respects with its reporting and filing obligations under said
act, will comply with all requirements
14
<PAGE>
related to any registration statement filed pursuant to this Agreement and will
not take any action or file any document (whether or not permitted by the Act or
the Exchange Act or the rules thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing obligations
under said Acts, except as permitted herein. Until three (3) years after all
Shares have been converted into Common Stock the Company will take all action
within its power to continue the listing or trading of its Common Stock on any
stock exchange on which such stock is traded and on the Nasdaq National Market
or the Nasdaq Small Cap Market and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
the NASD and Nasdaq.
Section 3.3 Stockholder Approval. The Company will use its best
--------------------
efforts to promptly notice and hold a stockholders meeting if, as and when
necessary to obtain any stockholder approvals required by the Company (including
those required by all applicable agreements between the Company and the NASD or
Nasdaq) to allow for issuance of Common Stock upon conversion of the Shares.
Section 3.4 Sale Restrictions. Following conversion of the Shares
-----------------
into Common Stock of the Company, Investor will not on any trading day offer or
sell publicly on NASDAQ or on the principal exchange on which the Common Stock
is traded, on a net basis more than the following number of such shares of
Common Stock: the greatest of (i) 10% of the average daily trading volume of the
Common Stock for the five trading days preceding such sale as reported by NASDAQ
or by such principal exchange, (ii) 25,000 shares, and (iii) 10% of the trading
volume for the Common Stock on such day.
Section 3.5 Conversion Rights. Investor shall not be entitled to
-----------------
convert any Share into Common Stock of the Company if following conversion of
such Share the Investor and its affiliates (within the meaning of the Exchange
Act) shall be the beneficial owners (as defined in Rule 13d-3 under the Exchange
Act) of 10% or more of the Common Stock of the Company, or if a lesser
percentage is set forth after the name of the Investor on the signature page
hereof, such lesser percentage. The provisions of this Section cannot be
amended.
Section 3.6 Short Sale Restrictions. Investor agrees not to sell
-----------------------
Common Stock of the Company "short" except for (i) sales of shares issuable to
Investor upon conversion, made within 72 hours prior to the time notice of
conversion is given, (ii) sales against shares of Common Stock owned the day the
short position is established, or (iii) more than 12 months after the Closing,
sales against shares issuable upon conversion of the Shares whether or not
notice of conversion has been given. This Section shall not apply to sales in
which Investor has no beneficial interest made on behalf of third-party clients
who are not holders of Shares.
15
<PAGE>
Section 3.7 Notice of Conversion Car. No later than the 15 days
------------------------
after the end of the 18th month after the Closing Date, the Company will deliver
notice to the Investor specifying the amount of the Conversion Cap (as defined
in Schedule I hereto) and the calculation thereof.
Section 3.8 Most Favored Nation Clause. If the Company issues Common
--------------------------
Stock or securities convertible into or exercisable for Common Stock or other
convertible securities at a time when any of the Shares remain outstanding, at
an effective price per share of Common Stock which is lower than the conversion
price of the shares at that time, then the Company shall issue upon conversion
of the Shares an additional number of shares of Common Stock necessary to reduce
the effective conversion price to such lower issue price. This Section shall
not be applicable to issuances of Common Stock, or options granted at market
price, pursuant to any shareholder approved option plan covering not more than
8% of the Company's outstanding stock.
ARTICLE IV
Conditions
----------
Section 4.1 Conditions Precedent to the Obligation of the Company to
--------------------------------------------------------
Sell the Shares. The obligation hereunder of the Company to issue and/or sell
- ---------------
the Shares to the Investor is subject to the satisfaction, at or before the
Closing, of each of the conditions set forth below. These conditions are for
the Company's sole benefit and may be waived by the Company at any time in its
sole discretion.
(a) Accuracy of the Investor's Representations and Warranties. The
---------------------------------------------------------
representations and warranties of the Investor shall be true and correct in all
material respects.
(b) Performance by the Investor. The Investor shall have performed
---------------------------
all agreements and satisfied all conditions required to be performed or
satisfied by the Investor at or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
-------------
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
Section 4.2 Conditions Precedent to the Obligation of the Investor to
---------------------------------------------------------
Purchase the Shares. The obligation hereunder of the Investor to acquire and
- -------------------
pay for the Shares is subject to the satisfaction, at or before the Closing, of
each of the conditions set
16
<PAGE>
forth below. These conditions are for the Investor's sole benefit and may be
waived by the Investor at any time in its sole discretion.
(a) Accuracy of the Company's Representations and Warranties. 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
particular date).
(b) Performance by the Company. The Company shall have performed all
--------------------------
agreements and satisfied all conditions required to be performed or satisfied by
the Company at or prior to the Closing.
(c) Nasdaq. The Company's Common Stock shall have been listed and
------
admitted to trading on the Nasdaq National Market or the Nasdaq Small Cap
Market. Thereafter, and prior to the Closing Date, trading in the Company's
Common Stock shall not have been suspended by the SEC or Nasdaq and trading in
securities generally as reported by Nasdaq shall not have been suspended or
limited or minimum prices shall not have been established on securities whose
trades are reported by Nasdaq.
(d) No Injunction. No statute, rule, regulation, executive order,
-------------
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(e) Opinion of Counsel, Etc. At the Closing the Investor shall have
------------------------
received an opinion of counsel to the Company in the form attached hereto and
such other certificates and documents as the Investor or its counsel shall
reasonably require incident to the Closing.
ARTICLE V
Legend on Stock
---------------
Each certificate representing the Shares and, if appropriate,
securities issued upon conversion thereof, shall be stamped or otherwise
imprinted with a legend substantially in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED
FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SAID ACT AND ANY APPLICABLE STATE SECURITIES
17
<PAGE>
LAW OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
The Company agrees to reissue certificates representing the Shares or,
if applicable, the securities issued upon conversion thereof without the legend
set forth above at such time as (i) the holder thereof is permitted to dispose
of such Shares (or securities issued upon conversion thereof) pursuant to Rule
144 under the Act, (ii) the securities are sold to a purchaser or purchasers who
(in the opinion of counsel to such purchasers, in form and substance reasonably
satisfactory to the Company and its counsel) are able to dispose of such shares
publicly without registration under the Act, or (iii) such securities are
included in an effective registration statement under the Act.
ARTICLE VII
Termination
-----------
Section 6.1 Termination by Mutual Consent. This Agreement may be
-----------------------------
terminated at any time prior to the Closing by the mutual written consent of the
Company and the Investor.
Section 6.2 Other Termination. This Agreement may be terminated by
-----------------
action of the Board of Directors or other governing body of the Investor or the
Company at any time if the Closing shall not have been consummated by the fifth
business day following the date of this Agreement.
Section 6.3 Automatic Termination. This Agreement shall
---------------------
automatically terminate without any further action of either party hereto if the
Closing shall not have occurred by the tenth business day following the date of
this Agreement.
ARTICLE VII
Miscellaneous
-------------
Section 7.1 Fees and Expenses. Except as otherwise set forth in
-----------------
Section 1.4 hereof, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement, provided that the Company shall pay, at the
Closing, all due diligence fees and attorneys' fees and expenses incurred by the
Investor and the Placement Agent, up to the maximums stated in the final letter
agreement dated December 18, 1996 as amended February 20, 1997 between the
Company and Cappello & Laffer Capital Corp., in connection with the
18
<PAGE>
preparation, negotiation, execution and delivery of this Agreement and the
transactions contemplated hereunder. The Company shall compensate the Placement
Agent and shall indemnify it as set forth in said letter agreement. The Company
shall pay all stamp and other taxes and duties levied in connection with the
issuance of the Shares pursuant hereto. The Placement Agent's compensation
includes a cash payment in an amount equal to 7.5% of the Purchase Price of
Shares sold by the Company, and the issuance of warrants to the Placement Agent
to purchase that number of Shares equal to 10.625% of the number of Shares sold.
Section 7.2 Specific Enforcement, Consent to Jurisdiction.
---------------------------------------------
(a) The Company and the Investor acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which either of them may be entitled by
law or equity.
(b) Each of the Company and the Investor (i) hereby irrevocably
submits to the jurisdiction of the United States District Court and other courts
of the United States sitting in California for the purposes of any suit, action
or proceeding arising out of or relating to this Agreement and (ii) hereby
waives, and agrees not to assert in any such suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of such court, that
the suit, action or proceeding is brought in an inconvenient forum or that the
venue of the suit, action or proceeding is improper. Each of the Company and
the Investor consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in this
paragraph shall affect or limit any right to serve process in any other manner
permitted by law.
Section 7.3 Entire Agreement: Amendment. This Agreement contains the
---------------------------
entire understanding of the parties with respect to the matters covered hereby
and, except as specifically set forth herein, neither the Company nor the
Investor 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 a written instrument signed by the party against whom
enforcement of any such amendment or waiver is sought.
Section 7.4 Notices. Any notice or other communication required or
-------
permitted to be given hereunder shall be in writing and shall be effective (a)
upon hand delivery or delivery by telex (with correct answer back received),
telecopy or facsimile
19
<PAGE>
at the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received) or (b) on the
second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such communications
shall be:
to the Company: Casmyn Corp.
Amyn Dahya, Chairman and
President
1800-1500 W. Georgia St.
Vancouver, British Columbia
Canada V6G 2Z6
Fax: (604) 601-5220
with a copy to: Al-Kamin Haji
Managing Director-Finance
1800-1500 W. Georgia St.
Vancouver, British Columbia
Canada V6G 2Z6
Fax: (604) 601-5220
to the Investor: At the address set forth at the foot of this Agreement,
with copies to Investor's counsel as set forth at the foot
of this Agreement or as specified in writing by Investor
with a copy to: Gerard K. Cappello
Cappello & Laffer Capital Corp.
1299 Ocean Avenue, Suite 306
Santa Monica, California 90401
Fax: (310) 393-4838
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other party
hereto.
Section 7.5 Waivers. No waiver by either party of any default with
-------
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
20
<PAGE>
Section 7.6 Headings. The headings herein are for convenience only,
--------
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
Section 7.7 Successors and Assigns. Except as otherwise provided
----------------------
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their successors and assigns. The parties hereto may amend this
Agreement without notice to or the consent of any third party.
Section 7.8 No 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.
Section 7.9 Governing Law. This Agreement shall be governed by and
-------------
construed and enforced in accordance with the internal laws of California
without regard to such state's principles of conflict of laws.
Section 7.10 Survival. The representations and warranties of the
--------
Company and the Investor contained in Article II and the agreements and
covenants set forth in Articles I, III, V and VII shall survive the Closing.
Section 7.11 Execution. This Agreement may be executed in two or
---------
more 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, it being understood that both parties need not
sign the same counterpart. In the event any signature is delivered by facsimile
transmission, the party using such means of delivery shall cause the manually
executed signature page(s) to be physically delivered to the other party within
five days of the execution hereof.
Section 7.12 Equal Treatment of Shareholders. The Company will deal
-------------------------------
on an equal basis, ratably, with all holders of the Shares and will not provide
any economic benefit or opportunity to any holder of Shares unless such benefit
or opportunity is made available on equal terms to all holders of Shares.
Section 7.13 Publicity. The Company agrees that it will not
---------
disclose, and will not include in any public announcement, the name of the
Investor without its consent
21
<PAGE>
unless and until such disclosure is required by law or applicable regulation,
and then only to the extent of such requirement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the date hereof.
CASMYN CORP.
By: ______________________________
Name: Amyn Dahya
Its: Chairman and President
Number of Shares THE INVESTOR
________________ By: ______________________________
Name:
Its:
Dollar Amount at Investor's address:
$25 per share
$_______________ Percentage limitation, if desired ____
Name and address of Investor's counsel:
22
<PAGE>
EXHIBIT 4.4
STOCK PURCHASE WARRANT
WARRANT TO PURCHASE _____ SHARES
of
FLOATING RESET CONVERTIBLE PREFERRED STOCK
No. PW-1 EXPIRES AT 5:00 P.M., PACIFIC TIME, ON APRIL 14, 2002
CASMYN CORP.
This certified that ______________________________, the registered
holder hereof or assigns (the "Warrantholder") is entitled to purchase from
Casmyn Corp., a Colorado corporation (the "Company"), at any time before the
expiration time and date shown above (the "Expiration Time") at the purchase
price per share of $25 (the "Warrant Price"), the number of shares shown above
of the Floating Reset Convertible Preferred Stock ("First Preferred Stock") of
the Company. The number and class of shares purchasable upon exercise of this
Warrant and the Warrant Price per share shall be subject to adjustment from time
to time as set forth below.
SECTION 1. TRANSFERABILITY AND FORM OF WARRANT.
1.1 REGISTRATION. This warrant shall be numbered and shall be
------------
registered on the books of the Company.
1.2 TRANSFER. This Warrant shall be transferable on the books of the
--------
Company only upon delivery thereof duly endorsed by the Warrantholder or duly
authorized attorney or representative, accompanied by proper evidence of
succession, assignment or authority to transfer. Upon any registration of
transfer, the Company shall execute and deliver a new Warrant to the person
entitled thereto. This Warrant may be divided or combined, upon request to the
Company by the Warrantholder, into a certificate or certificates representing
the right to purchase the same aggregate number of shares. Unless the context
indicates otherwise, the term "Warrantholder" shall include any transferee or
transferees of a Warrant and the term "Warrant" shall include any and all
warrants issued upon division, exchange, substitution or transfer of this
Warrant.
1.3 FORM OF WARRANT. The Warrant shall be executed on behalf of the
---------------
Company by its President, Vice President or other authorized officer, and shall
be dated as of the date of signature thereof by the Company either upon initial
issuance or upon division, exchange, substitution or transfer. A Warrant bearing
the signature of an individual who was at any time the proper officer of the
Company shall bind the Company, notwithstanding that such individual shall have
ceased to hold such office
<PAGE>
prior to the delivery of such Warrant. The form of election to exercise this
Warrant and the form of assignment of this Warrant shall be substantially as
attached hereto.
SECTION 2. PAYMENT OF TAXES.
The Company will pay all documentary stamp taxes, if any, attributable
to the initial issuance of shares to the Warrantholder; provided, however, that
-------- -------
the Company shall not be required to pay any tax or taxes which may be payable
in respect of any secondary transfer of the Warrant or the shares.
SECTION 3. MUTILATED OR MISSING WARRANTS.
In case this Warrant shall be mutilated, lost, stolen or destroyed,
the Company shall, at the request of the Warrantholder, issue and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant, or
in lieu of and in substitution for the lost, stolen or destroyed Warrant, a new
Warrant of like tenor, but only upon receipt of evidence satisfactory to the
Company of such loss, theft or destruction of such Warrant. The applicant shall
also comply with such reasonable regulations and pay such other reasonable
administrative charges as the Company may prescribe.
SECTION 4. RESERVATION OF SHARES.
There has been reserved, and the Company shall at all times keep
reserved so long as this Warrant remains outstanding, out of its authorized
shares of capital stock, such number and class of shares as shall be subject to
purchase under this Warrant. Such reserved shares shall be used solely for
issuances upon exercise of this Warrant. Shares of any class issued upon
exercise of this Warrant shall have all the rights and privileges of other
shares of the same class, whenever issued, subject to the adjustment provisions
set forth below.
SECTION 5. EXERCISE OF WARRANT.
5.1 EXERCISE BY CASH PAYMENT. The Holder of this Warrant shall have
------------------------
the right at any time and from time to time to exercise this Warrant in full or
in part by surrender of this Warrant to the Company accompanied by payment to
the Company in cash or by certified or cashier's check or by wire transfer of
funds of the aggregate Warrant Price for the number of shares in respect of
which this Warrant is then exercised.
5.2 CASHLESS EXERCISE. This Warrant may be exercised in full or in
-----------------
part by surrender of this Warrant to the Company accompanied by written notice
substantially in the form attached hereto of the holder's election to effect
cashless
2
<PAGE>
exercise ("Cashless Exercise"). Upon Cashless Exercise, the holder shall be
entitled to receive, in respect of each share for which this Warrant is then
exercised, that number of shares of First Preferred Stock (or such other class
of shares as may then be issuable upon exercise hereof) which, valued at Current
Value, have a value equal to the Current Value of each share as to which this
Warrant is then being exercised less the Warrant Price payable for such share.
Current Value of a share as to which this Warrant is being exercised shall be
the total Current Market Value of the number of shares of Common Stock of the
Company issuable upon conversion of such share at the Conversion Price in effect
on the date of such Cashless Exercise. Current Market Value of the Common Stock
shall be as defined in Section 7.
5.3 DELIVERY OF CERTIFICATES. Upon exercise of this Warrant the
------------------------
Company shall issue and cause to be delivered with all reasonable dispatch to or
upon the written order of the Warrantholder and in such name or names as the
Warrantholder may designate, a certificate or certificates for the number of
full shares issuable upon such exercise together with cash, as provided in
Section 7 hereof, in respect of any fractional shares. The Company shall effect
such issuance immediately and shall transmit the certificates by messenger or
overnight delivery service to reach the address designated by the Warrantholder
within two business days after receipt of the Warrant Price or, in the case of
the cashless exercise, after receipt of the Warrant. Such certificate or
certificates shall be deemed to have been issued and any person so designated to
be named therein shall be deemed to have become a holder of record of such
shares as of the date of surrender of the Warrant and payment of the Warrant
Price, as aforesaid, notwithstanding that the certificates representing such
shares shall not actually have been delivered or that the stock transfer books
of the Company shall then be closed. In the event of partial exercise a new
Warrant evidencing the remaining portion of this Warrant will be issued by the
Company.
5.4 SIMULTANEOUS CONVERSION. The Warrantholder may elect to convert
-----------------------
the convertible securities issuable upon exercise of this Warrant simultaneously
with the exercise of this Warrant and may give written notice of such election
substantially in the form attached hereto. Upon such election the Company need
not issue certificates representing the convertible securities issuable upon
exercise of this Warrant, but shall issue and deliver as provided in the
foregoing Section certificates representing the securities to which the holder
is entitled upon such conversion.
SECTION 6. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES.
6.1 ADJUSTMENTS. The number and kind of securities purchasable upon
-----------
the exercise of the Warrants and the Warrant Price shall be subject to
adjustment from time to time upon the happening of certain events, as follows:
3
<PAGE>
(a) If the shares purchasable upon exercise of the Warrants are
subdivided, combined or reclassified, or if other shares of the kind so
purchasable are issued in respect thereof as a dividend thereon (excluding
dividends required by the charter provisions government such shares), the
number and class of shares purchasable upon exercise of the Warrants
immediately prior thereto shall be adjusted so that the Warrantholder shall
be entitled to receive the kind and number of shares or other securities of
the Company which it would have owned or would have been entitled to
receive after the happening of any of the events described above, had the
Warrants been exercised immediately prior to the happening of such event or
any record date with respect thereto. Any adjustment made pursuant to this
paragraph (a) shall become effective immediately after the effective date
of such event retroactive to the record date, if any, for such event.
(b) If the shares purchasable upon exercise of the Warrants
becomes entitled to receive a distribution of evidences of indebtedness or
assets (excluding dividends required by the charter provisions governing
such shares) or rights, options, warrants or convertible securities
containing the right to subscribe for or purchase securities or assets of
the Company, then, in each case, the number of shares thereafter
purchasable upon the exercise of the Warrants shall be determined by
multiplying the number of shares theretofore purchasable upon exercise of
the Warrants by a fraction, of which the numerator shall be the then
Current Value on the date of such distribution, and of which the
denominator shall be such Current Value on such date minus the then fair
value of the portion of the assets or evidence of indebtedness so
distributed or of such subscription rights, options or warrants applicable
to one share. Such adjustment shall be made whenever any such distribution
is made and shall become effective on the date of distribution retroactive
to the record date for the determination of shareholders entitled to
receive such distribution. Current Value shall have the meaning set forth
in Section 5.2.
(c) No adjustment in the number of shares purchasable hereunder
shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the number of shares then
purchasable upon the exercise of a Warrant; provided, however, that any
-------- -------
adjustments which by reason of this paragraph (c) are not required to be
made immediately shall be carried forward and taken into account in any
subsequent adjustment.
(d) Whenever the Warrant Price or the number or class of shares
purchasable upon the exercise of a Warrant is adjusted as herein provided,
a corresponding adjustment in the number of shares so purchasable or the
Warrant Price, as the case may be, shall be made so that the aggregate
Warrant Price payable upon full exercise of this Warrant shall remain the
same.
4
<PAGE>
If such adjustment results in more than one class of security being
purchasable upon exercise of this Warrant, the adjusted Warrant Price shall
be allocated to such securities on the basis of their respective fair
market values.
(e) Whenever the number or class of shares purchasable upon the
exercise of a Warrant or the Warrant Price is adjusted as herein provided,
the Company shall cause to be promptly mailed to the Warrantholder by first
class mail, postage prepaid, notice of such adjustment or adjustments and a
certificate of a firm of independent public accountants selected by the
Board of Directors of the Company (who may be the regular accountants
employed by the Company) setting forth the number and class of shares
purchasable upon the exercise of a Warrant and the Warrant Price after such
adjustment, together with a brief statement of the facts requiring such
adjustment and the computation by which such adjustment was made.
(f) The term "Common Stock" shall mean (i) the class of stock
designated as the Common Stock of the Company at the issue date of this
Warrant or (ii) any other class of stock resulting from successive changes
or reclassifications of such Common Stock, and the term "First Preferred
Stock" shall mean (x) the class or series of stock which is initially
purchasable upon exercise hereof, or (y) any other class or series of stock
resulting from successive reclassifications or changes of such First
Preferred Stock. In the event that at any time, as a result of an
adjustment made pursuant to this Section, the Warrantholder shall become
entitled to purchase any securities of the Company other than shares of
First Preferred Stock, thereafter the number of such other securities so
purchasable upon exercise of the Warrant and the Warrant Price of such
securities shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect
to the shares contained in this Section.
6.2 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Subsection
---------------------------
6.1, no adjustment in respect of any dividends shall be made during the term of
the Warrant or upon the exercise of the Warrant.
6.3 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
------------------------------------------------------
CONSOLIDATION, ETC. In case of any reclassification of the securities of the
- ------------------
Company or any consolidation of the Company with or merger of the Company into
another corporation or in case of any sale or conveyance to another corporation
of the property, assets or business of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall provide by agreement that the
Warrantholder shall have the right thereafter upon payment of the Warrant Price
in effect immediately prior to such action to purchase upon exercise of the
Warrant the kind and amount of shares and other securities and
5
<PAGE>
property which he would have owned or have been entitled to receive after the
happening of such reclassification, consolidation, merger, sale or conveyance
had the Warrant been exercised immediately prior to such action. Such agreement
shall provided for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section. The provisions of
this subsection shall similarly apply to successive reclassifications,
consolidations, mergers, sales or conveyances.
6.4 STATEMENT ON WARRANT CERTIFICATES. Irrespective of any
---------------------------------
adjustments in the Warrant Price of the number of securities purchasable upon
the exercise of the Warrant, the Warrant certificate or certificates theretofore
or thereafter issued may continue to express the same price and number of
securities as are stated in the similar Warrant certificates initially issued.
SECTION 7. FRACTIONAL INTERESTS; CURRENT MARKET PRICE; CLOSING BED
PRICE.
The Company shall not be required to issue fractional shares on the
exercise of the Warrant. If any fraction of a share would, except for the
provisions of this Section, be issuable on the exercise of the Warrant (or
specified portion thereof), the Company shall pay an amount in cash equal to the
then Current Value (as defined in Section 5.2) multiplied by such fraction. The
term "Current Market Price" of the Common Stock shall mean (i) if the Common
Stock is traded in the over-the-counter market or on the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ"), the average per
share closing bid prices of the Common Stock on the 20 consecutive trading days
immediately preceding the date in question, as reported by NASDAQ or an
equivalent generally accepted reported service, or (ii) if the Common Stock is
traded on a national securities exchange, the average for the 20 consecutive
trading days immediately preceding the date in question of the daily per share
closing bid prices of the Common stock on the principal stock exchange on which
it is listed, or (iii) if the Common Stock is not so listed or traded, the fair
market value of the Common Stock as determined in good faith by the board of
directors of the Company. The term "closing bid price" shall mean the last bid
price on the day in question as reported by NASDAQ or an equivalent generally
accepted reporting service or (as the case may be) as reported by the principal
stock exchange on which the Common Stock is listed, or if not so reported, as
reasonably determined in good faith by the Board of Directors of the Company.
SECTION 8. NO RIGHTS AS SHAREHOLDER; NOTICES TO WARRANTHOLDER.
Nothing contained herein shall be construed as conferring upon the
Warrantholder any rights whatsoever as a shareholder of the Company, including
the right to vote, to receive dividends, to consent or to receive notices as a
shareholder in
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respect of any meeting of shareholders for the election of directors of the
Company or any other matter. If, however, at any time prior to the expiration
of the Warrant and prior to its exercise, any of the following events shall
occur:
(a) any action which would require an adjustment pursuant to Section
6.1 or 6.3; or
(b) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger or sale of its property,
assets and business, as an entirety) shall be proposed;
then in any one or more of said events, the Company shall give notice in writing
of such event to the Warrantholder at least 20 days prior to the date fixed as a
record date or the date of closing the transfer books or other applicable date
with respect thereto. Such notice shall specify such record date or the date of
closing the transfer books, as the case may be.
Any notice to the Warrantholder shall be given at the address of the
Warrantholder appearing on the books of the Company, and if the Warrantholder
has specified a telecopier address, by facsimile transmission to such address.
SECTION 9. REGISTRATION AND INDEMNIFICATION.
The holder of this Warrant and the holder of shares of First Preferred
Stock issued upon exercise of this Warrant shall have the same rights and
obligations with respect to registration under the Securities Act of 1933, and
with respect to indemnification in connection with any such registration, as if
such holder were one of the Investors under the Preferred Stock Investment
Agreements entered into between the Company and the original purchasers of the
First Preferred Stock of the Company, excluding, however, the provisions of the
first sentence of Section 1.4(b)(iv) of said Agreements. Such rights and
obligations shall continue until one year after the expiration or earlier
exercise of this Warrant.
SECTION 10. EXPIRATION OF WARRANT.
10.1 If not theretofore exercised, this Warrant shall terminate at
5:00 p.m. Pacific time on the date shown in the caption hereof.
SECTION 11. SUCCESSORS.
All the covenants, and provisions of this Agreement by or for the
benefit of the Company or the Warrantholder shall bind and inure to the benefit
of their respective successors and assigns hereunder.
7
<PAGE>
SECTION 12. MERGER OR CONSOLIDATION OF THE COMPANY.
The Company will not merge or consolidate with or into any other
corporation or sell all or substantially all of this property to another
corporation, unless the provisions of Section 6.3 are complied with.
SECTION 13. APPLICABLE LAW.
This Agreement shall be deemed to be a contract made under the laws of
the State of Colorado and for all purposes shall be construed with the laws of
said State.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by a duly authorized officer of the Company.
Casmyn Corp.
By:____________________________
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PURCHASE FORM
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant in respect of ________________ of the
shares provided for therein, and requests that certificates be issued in the
name of:
- --------------------------------------------------------------------------------
(Please Print Name, Address and Taxpayer Identification Number)
________________________________________________________________________________
and, if said number of shares shall not be all the shares purchasable hereunder,
that a new Warrant certificate for the balance of the shares purchasable under
the within Warrant be registered in the name of the undersigned Warrantholder or
his Assignee as below indicated and delivered to the address stated below.
The undersigned:
[_] elections to pay the full Warrant Price in cash or by certified or
cashier's check or wire funds transfer
[_] elects "cashless exercise" pursuant to Section 5.2 of the Warrant
[_] "Current Value" for purposes of Cashless Exercise is: $_________
Number of shares issuable on Cashless Exercise is: __________ shares
[_] elects simultaneous conversion pursuant to Section 5.4 of the Warrant
Dated: __________________ ___________________________________
Signature of Warrantholder
The above signature must correspond with the name appearing upon the face of
this Warrant in every particular, without alteration or enlargement or any
change whatever.
Name of Assignee, if any: ____________________________________
(Please Print)
_________________________________________________
(Please print Name, Address and Taxpayer
Identification Number)
_________________________________________________
9
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Signature Guaranteed: Signature guarantee is required if certificates are to be
registered in the name of any person other than the name
written upon the face of the Warrant. Signature must be
guaranteed by a commercial bank or trust company or a
member firm of the New York Stock Exchange.
10
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ASSIGNMENT
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto___________________________________________________________________________
(Name and Address of Assignee Must Be Printed or Typewritten)
_______________________________________________________________________________
_______________________________________________________________________________
(Taxpayer Identification Number of Assignee)
the within Warrant, hereby irrevocably constituting and appointing _____________
Attorney to transfer said Warrant on the books of the Company, with full power
of substitution in the premises.
Dated: _____________, 19__ ___________________________________
Signature of Registered Holder
Signature Guaranteed: The above signature must correspond with the name
appearing upon the face of this Warrant in every
particular, without alteration or enlargement or any
change whatever, and must be guaranteed by a commercial
bank or trust company or a member firm of the New York
Stock Exchange.
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Exhibit 5.1
[LETTERHEAD OF LOEB & LOEB LLP]
WRITER'S DIRECT DIAL NUMBER
213-688-3698
May 21, 1997
Board of Directors
Casmyn Corp.
1500 West Georgia Street, 18th Floor
Vancouver, B.C. V6G 2Z6
Re: Registration Statement on Form S-3
----------------------------------
Gentlemen:
We have acted as counsel to Casmyn Corp., Inc., a Colorado corporation
("Company"), in connection with the preparation and filing with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), of the Company's registration statement on Form S-3
(together with all amendments, the "Registration Statement"). The Registration
Statement relates to the registration under the Act of 6,388,281 shares of the
Company's common stock ("Common Stock").
In rendering this opinion, we have reviewed the Registration
Statement, as well as a copy of the Company's Articles of Incorporation and
Bylaws, each as amended to date. We have also reviewed such documents and such
statutes, rules and judicial precedents as we have deemed necessary for the
opinions expressed herein.
In rendering this opinion, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of documents
submitted to us as originals, the conformity to original documents of documents
submitted to us as certified or photostatic copies, and the authenticity of
originals of such photostatic copies.
Based upon and in reliance upon the foregoing, and subject to the
qualifications and limitations herein set forth, we are of the opinion that the
shares of Common Stock have
<PAGE>
Board of Directors
Casmyn Corp.
May 21, 1997
Page 2
been duly and validly authorized and, when sold, will be legally issued, fully
paid and nonassessable.
This opinion is limited to the corporate law of Colorado, and we
express no opinion with respect to the laws of any other jurisdiction.
We consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement.
This opinion may not be used, circulated, quoted or otherwise referred
to for any purpose without our prior written consent and may not be relied upon
by any person or entity other than the Company and its successors and assigns.
This opinion is based upon our knowledge of law and facts as of its date. We
assume no duty to communicate to you with respect to any matter which comes to
our attention hereafter.
Sincerely,
LOEB & LOEB LLP
By /s/ David L. Ficksman
----------------------
A Partner of the Firm
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Casmyn Corp. on Form S-3 of our reports on the consolidated financial statements
of Casmyn Corp. and Vector Environmental Technologies, Inc. dated December 21,
1996, appearing in the Annual Report on Form 10-K/A of Casmyn Corp. for the year
ended September 30, 1996 and to the reference to us under the heading "Experts"
in the Prospectus, which is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Reno, Nevada
May 22, 1997
Exhibit 23.1
