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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date earliest event reported) October 18, 1996
MASTER GLAZIER'S KARATE INTERNATIONAL, Inc.
(exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-23236-NY 22-3234110
(Commission File Number) (IRS Employer
Identification Number)
570 North Broad Street, Suite 16, Elizabeth, NJ 07029
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:(908) 354-2349
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On October 18, 1996, Master Glazier's Karate International, Inc. (the
"Registrant") entered into convertible preferred stock subscription agreements
(the "Agreements") with each of Mark Glazier (the Registrant's President and
Chairman of the Board), Fair Lane, LLC., Cristine Cowan, Euro Translation Group
and CRC Partners, Ltd. (collectively, the "Subscribers") pursuant to which the
Subscribers purchased an aggregate of 750,000 shares of the Registrant's Series
A Preferred Stock (the "Preferred Stock") for $1.20 per share. The shares of
Preferred Stock may be converted at any time after April 18, 1997 into twenty
(20) shares of the Registrant's Common Stock so long as the Company has amended
its Certificate of Incorporation to authorize a sufficient number of shares of
Common Stock. Each holder of Preferred Stock shall have the rights and
privileges of preferred stockholders of the Registrant having ten (10) votes
per share on matters presented to the shareholders for a vote. The offer and
sale of the Preferred Stock was made in reliance upon the provisions of Section
4(2) under the Securities Act of 1933, and Regulation D promulgated thereunder.
Item 7. Financial Statements and Exhibits
c) Exhibits
Exhibit
No. Document
(a) Certificate of Designation establishing a series of
shares of Series A Preferred Stock of Master Glazier's
Karate International, Inc.
(b) Form of Convertible Preferred Stock Subscription
Agreement
(c) Press release by Master Glazier's Karate International,
Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly authorized and caused the undersigned to sign
this Report on the Registrant's behalf.
Master Glazier's Karate International, Inc.
By: /s/ Mark Glazier
----------------------------
Mark Glazier
President
Dated: November 11, 1996
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EXHIBIT A
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CERTIFICATE OF DESIGNATION
ESTABLISHING A SERIES OF SHARES OF
SERIES A PREFERRED STOCK
OF
MASTER GLAZIER'S KARATE INTERNATIONAL, INC.
To the Secretary of State of the State of Delaware:
MASTER GLAZIER'S KARATE INTERNATIONAL, INC. (the "Company"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware, does hereby certify that: pursuant to
the provisions of Section 151(g) of the General Corporation Law of the State of
Delaware, the following resolution establishing and designating a series of
shares of preferred stock and fixing and determining the relative rights and
preferences thereof was duly adopted by the Board of Directors of the Company
as of September 19, 1996:
RESOLVED, that pursuant to the authority expressly granted to
and vested in the Board of Directors of this Company in accordance
with the provisions of its Certificate of Incorporation as
amended, a series of preferred stock, $1.20 par value per share,
of the Company be established and given the distinctive
designation of "Series A Preferred Stock" (the "Series A Preferred
Stock"). The number of shares of the Series A Preferred Stock
authorized to be issued by the Company shall be 750,000 shares.
The rights, preferences, privileges and restrictions granted to
and imposed upon the Series A Preferred Stock are as set forth on
the attached Exhibit A.
IN WITNESS WHEREOF, MASTER GLAZIER'S KARATE INTERNATIONAL,
INC., has caused this Certificate to be signed by its President and attested by
its Secretary, this 19th day of September 1996.
MASTER GLAZIER'S KARATE
INTERNATIONAL, INC.
By:_______________________
Name: Mark Glazier
Title: President
ATTEST:
- -----------------------
Name:
Title:
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EXHIBIT A
Terms and Provisions
of
Convertible Preferred Stock ($1.20 par value)
of
MASTER GLAZIER'S KARATE INTERNATIONAL, INC.
I. Definitions. Except as otherwise specified herein, terms
defined herein shall have the meanings assigned to them in the
Convertible Preferred Stock Subscription Agreement of even date
herewith (the "Agreement").
II. Conversion of Stock. Subject to the provisions hereof, the shares
of Stock may be converted, in whole or in part, but not as to a fractional
share, at any time or from time to time on or after six (6) months after the
date of issuance by presentations and surrender hereto to the Issuer at its
principal address as set forth in the Agreement, with the appropriate
conversion form annexed to any certificate representing the Stock duly executed
with signature guaranteed for the number of shares of Common Stock specified in
such form. If the Stock should be converted in part only, the Issuer shall,
upon surrender of the certificate evidencing the Stock, issue and deliver a new
certificate evidencing the balance of the Stock. The Issuer shall maintain at
its principal place of business a register for the registration or transfer of
the Stock.
III. Reservation of Shares; Preservation of Rights of Holders. Subject
to stockholder approval of an amendment to the Company's Certificate of
Incorporation to authorize a sufficient number of shares of Common Stock to
permit conversion of the Stock, there shall be reserved for issuance or
delivery upon conversion of the Stock, such number of shares of Common Stock as
shall be required for issuance or delivery on conversion of all the Stock on
the basis of shares of 20 shares of Common Stock for each share of Stock. The
Issuer further agrees (i) that it will not, by amendment to its Certificate of
Incorporation or through reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act, avoid or seek to avoid the
observation or performance of any of the covenants, stipulations or conditions
to be observed or performed hereunder by the Issuer; (ii) promptly to take all
action as may from time to time be required in order to permit the holder to
convert his Stock and the Issuer duly and effectively to issue shares of its
Common Stock or other securities as provided herein upon the conversion thereof,
and (iii) promptly to take all action required or provided herein to protect the
rights of the holder granted hereunder against dilution.
IV. Rights of Holders. Each holder of Stock shall have the rights and
privileges of a preferred shareholder of the Issuer having ten votes per share
of Stock on matters presented to shareholders for a vote (and shall be entitled
to vote thereon
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together with the holders of Common Stock), but shall have no rights or
privileges with respect to any shares of Common Stock unless and until upon
conversion certificates representing such shares of Common Stock shall have been
issued and delivered thereto. The foregoing shall be modified if and only if
modification thereof is required to maintain the listing of the Company's Common
Stock on the NASDAQ Stock Market under order or written instructions therefor
issued by said NASDAQ Stock Market.
V. Adjustments in Conversion Rate. The Conversion Rate shall
be subject to adjustment from time to time as provided in this
Section V.
(a) If the Issuer is recapitalized through the subdivision or
combination of its outstanding shares of Common Stock into a larger or
smaller number of shares, the number of shares of Common Stock for
which the Stock may be exercised shall be increased or reduced, as of
the record date for such recapitalization, in the same proportion as
the increase or decrease in the outstanding shares of Common Stock,
and the Conversion Rate shall be adjusted so that the aggregate number
of shares of Common Stock issuable upon conversion immediately after
the record date for such recapitalization shall equal the aggregate
percentage of the total such shares would have represented if
converted immediately before such record date.
(b) If the Issuer declares a dividend on Common Stock, or
makes a distribution to holders of Common Stock, and such dividend or
distribution is payable or made on Common Stock or securities
convertible into or exchangeable for Common Stock, or rights to
purchase Common Stock or securities convertible into or exchangeable
for Common Stock, the number of shares of Common Stock for which the
Stock may be converted shall be increased, as of the record date for
determining which holders of Common Stock shall be entitled to receive
such dividend or distribution, in proportion to the increase in the
number of outstanding shares (and shares of Common Stock issuable upon
conversion of all such securities convertible into Common Stock) of
Common Stock as a result of such dividend or distribution, and the
Conversion Rate shall be adjusted so that the aggregate number of
shares of Common Stock issuable upon conversion immediately after the
record date for such dividend or distribution shall equal the aggregate
percentage the total shares would have represented immediately before
such record date.
(c) If the Issuer declares a dividend on Common Stock (other
than a dividend covered by subsection (b) above), or distributes to
holders of its Common Stock, other than as part of its dissolution or
liquidation or the winding up of its affairs, any shares of its
capital stock, any evidence of indebtedness or any cash or other of
its assets (other than
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Common Stock or securities convertible into or exchangeable for Common
Stock), the holders of the Stock shall receive notice of such event as
set forth in Section VII below.
(d) In case of any consolidation of the Issuer with, or
merger of the Issuer into, any other corporation (other than a
consolidation or merger in which the Issuer is the continuing
corporation and in which no change occurs in its outstanding Common
Stock), or in case of any sale or transfer of all or substantially all
of the assets of the Issuer, or in the case of any statutory exchange
of securities with another corporation (including any exchange
effected in connection with a merger of a third corporation into the
Issuer, except where the Issuer is the surviving entity and no change
occurs in its outstanding Common Stock), the corporation formed by
such consolidation or the corporation resulting from such merger or
the corporation which shall have acquired such assets or securities of
the Issuer, as the case may be, shall execute and deliver to the
holders of the Stock simultaneously therewith a new certificate,
satisfactory in form and substance to the holders, together with such
other documents as the holders may reasonably request, entitling the
holders thereof to receive upon conversion of such certificates the
kind and amount of shares of stock and other securities and property
receivable upon such consolidation, merger, sale, transfer, or exchange
of securities, or upon the dissolution following such sale or other
transfer, by a holder of the number of shares of Common Stock
receivable upon exercise of the Stock immediately prior to such
consolidation, merger, sale, transfer, or exchange. Such new
certificate(s) shall contain the same basic other terms and conditions
as herein and shall provide for adjustments which, for events
subsequent to the effective date of such written instruments, shall be
as nearly equivalent as may be practicable to the adjustments provided
for in this Section V. The above provisions of this paragraph (d) shall
similarly apply to successive consolidations, mergers, exchanges, sales
or other transfers covered hereby.
(e) If the Issuer shall, at any time before the conversion of
the all the Stock, dissolve, liquidate or wind up its affairs, the
holders of the Stock shall have a preference in liquidation to receive
the full par value of the Stock before the distribution of any amount
of assets as are issued, distributed or paid with respect to any such
shares of Common Stock of the Issuer. If any such dissolution,
liquidation or winding up results in any cash distribution, in excess
of the par value of the Stock, the holders of the Stock may, at their
options, convert the Stock and thereupon receive such excess amounts
together with all other holders of Common Stock. For purposes of this
paragraph, the sale of all or substantially all of the assets of the
Issuer and distribution
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of the proceeds thereof to the Issuer's shareholders shall be deemed a
liquidation.
(f) If an event occurs which is similar in nature to the
events described in this Section V, but is not expressly covered
hereby, the Board of Directors of the Issuer shall make or arrange for
an equitable adjustment to the number of shares of Common Stock
issuable upon conversion of the Stock.
(g) The term "Common Stock" shall mean the Common Stock,
$.0001 par value, of the Issuer as the same exists at the Closing Date
or as such stock may be constituted from time to time, except that for
the purpose of this Section V, the term "Common Stock" shall include
any stock of a class of the Issuer which has no preference in respect
of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Issuer and
which is not subject to redemption by the Issuer.
(h) The Issuer shall retain a firm of independent public
accountants of recognized standing (who may be any such firm regularly
employed by the Issuer) to make any computation required under this
Section V, and a certificate signed by such firm shall be conclusive
evidence of the correctness of any computation made under this Section
V.
(i) Whenever the number of shares issuable upon conversion of
the Stock shall be adjusted as required by the provisions of this
Section V, the Issuer forthwith shall file in the custody of its
secretary or an assistant secretary, at its principal office, and
furnish to each holder of Stock a certificate prepared in accordance
with paragraph (h) above, showing the adjusted number of shares of
Common Stock issuable upon conversion and setting forth in reasonable
detail the circumstances requiring the adjustments.
(j) If an adjustment is made under this Section V and the
event to which the adjustment relates does not occur, then any
adjustments in accordance with this Section V shall be readjusted to
the number of shares of Common Stock issuable upon conversion which
would be in effect had the earlier adjustment not been made.
VI. Taxes on Issue or Transfer of Common Stock. The Issuer shall pay
any and all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock or other securities
on conversion. The Issuer shall not be required to pay any tax which may be
payable in respect of any transfers involved in the issue or delivery of shares
or the conversion of Stock in a name other than that of a holder and the person
requesting such transfer, issue or delivery shall be responsible for the
payment of any such tax (and the
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Issuer shall not be required to issue or deliver said shares until such
tax has been paid or provided for).
VII. Notice of Adjustment. So long as any of the Stock shall
be outstanding, (a) if the Issuer shall propose to pay any
dividends or make any distribution upon the Common Stock, or (b) if
the Issuer shall offer generally to the holders of Common Stock the
right to subscribe to or purchase any shares of any class of Common Stock or
securities convertible into Common Stock or any other similar rights, or (c) if
there shall be any proposed capital reorganization of the Issuer in which the
Issuer is not the surviving entity, recapitalization of the capital of the
Issuer, consolidation or merger of the Issuer with or into another corporation,
sale, lease or other transfer of all or substantially all of the property and
assets of the Issuer, or voluntary or involuntary dissolution, liquidation or
winding up of the Issuer, or (d) if the Issuer shall give to its stockholders
any notice, report or other communication respecting any significant or special
action or event, then in such event, the Issuer shall give the holders of
Stock, at least ten days prior to the relevant date described below (or such
shorter period as is reasonably possible if ten days is not reasonably
possible), a notice containing a description of the proposed action or event
and stating the date or expected date on which a record of the Issuer's
stockholders is to be taken for any of the foregoing purposes, and the date or
expected date on which any such dividend, distribution, subscription,
reclassification, reorganization, consolidation, combination, merger,
conveyance, sale, lease or transfer, dissolution, liquidation or winding up is
to take place and the date or expected date, if any is to be fixed, as of which
the holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable upon such
event.
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EXHIBIT B
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THE PREFERRED STOCK OFFERED HEREBY AND THE SHARES OF COMMON STOCK OF MASTER
GLAZIER'S KARATE INTERNATIONAL, INC. TO BE ISSUED UPON ANY CONVERSION OF THE
PREFERRED STOCK HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED OR SOLD
UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.
CONVERTIBLE PREFERRED STOCK SUBSCRIPTION AGREEMENT
This Convertible Preferred Stock Subscription Agreement (the
"Agreement") is executed by Mark Glazier, Fair Lane, LLC, Cristine Cowan, Euro
Translation Group and CRC Partners, Ltd. (the "Subscribers") in connection with
the offer and the subscription of the undersigned to purchase at par an
aggregate of 750,000 shares of Convertible Preferred Stock, par value $1.20 per
share (the "Stock") issued by Master Glazier's Karate International, Inc., a
Delaware corporation (the "Company"). The terms and provisions of the Stock are
attached hereto as Exhibit A. This Agreement and the offer and sale of the
Stock contemplated hereby are being made in reliance upon the provisions of
Regulation D ("Regulation D") under the Securities Act. The Subscribers, in
order to induce the Company to enter into the transaction contemplated hereby
and acknowledging that the Company will rely thereon, represent, warrant and
agree as follows:
1. Subscription; Purchase Price. The Subscribers hereby purchase and
subscribe for the Stock for an aggregate price of $900,000. The closing of the
transactions contemplated hereby shall take place on October 18, 1996. The date
on which the closing occurs is hereby referred to as the "Closing Date." At the
closing of the transactions hereunder (the "Closing") payment shall be made by
wire transfer or certified check against delivery of the Stock to Biltmore
Securities, Inc., as agent and custodian for the Subscribers.
2. Subscriber Representations. Each Subscriber hereby
represents, warrants, covenants and agrees as follows:
(a) Accredited Investor Status. Each Subscriber represents
and warrants to the Company that (i) Subscriber is an "accredited
investor" as that term is defined in Rule 501 of Regulation D; and
(ii) the true and correct principal address, telephone number and
social security number of the Subscriber is set forth on Exhibit B
attached hereto. The Subscriber acknowledges that all offering
documents received by the Subscriber with respect to the offering of
the Stock include statements to the effect that the Stock have not
been registered under the Securities Act and may not be offered or
sold unless said securities are registered under the Securities Act or
an exemption from the registration requirements of the Securities Act
is available. The
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Subscriber has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of, and
protecting his interests in connection with, an investment in the
Stock. The Subscriber is acquiring the Stock for his own account for
investment, and not for the benefit or account of any other person,
without the present intent to distribute such securities. The
Subscriber is fully aware of the risks involved in purchasing the
Stock, and understands and acknowledges that the Stock offered hereby
represents a speculative investment. Each Subscriber is financially
able to hold the Stock for an indefinite period. The net worth of each
Subscriber (or each of its members) is equal to or greater than
$1,000,000.
(b) Independent Investigation. Each Subscriber in electing to
subscribe for the Stock hereunder has relied solely upon the
representations and warranties of the Company set forth in this
Agreement, on the reports filed by the Company with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act'), and on independent
investigation made by him or his representatives, if any, and
Subscriber has been given no oral or written representations or
assurance from the Company or any representative of the Company other
than as set forth in this Agreement or in a document executed by a
duly authorized representative of the Company. The Subscriber is not
relying on the Company with respect to the tax or other economic
considerations of any investment in the Stock and the Subscriber has
relied on the advice of, or consulted with, only his own advisors.
(c) No Government Recommendation or Approval.
Subscriber understands that no United States federal or state
agency, or similar agency has passed on or made any
recommendation or endorsement of the Company, this transaction
or the purchase of the Stock.
3. Company Representations. The Company hereby represents,
warrants, covenants and agrees as follows:
(a) Due Organization Reporting Company Status. The Company is
a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is duly qualified as a
foreign corporation in all jurisdictions in which the failure to so
qualify would have a material adverse effect on the Company and its
subsidiaries, if any, taken as a whole. The Company has registered its
Common Stock pursuant to Section 12 of the Exchange Act and the Common
Stock is listed and trades on the NASDAQ SmallCap Stock Market. The
Company has filed all material required to be filed pursuant to all
reporting obligations under either Section 13(a) or 15(d) of the
Exchange Act for a period of at
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least twelve (12) months immediately preceding the offer or sale of
the Stock (or for such shorter period that the Company has been
required to file such material).
(b) Concerning the Stock. The issuance, sale and delivery of
the Stock is within the Company's corporate powers and have been duly
authorized by all required corporation action on the part of the
Company. The shares of Common Stock issuable upon conversion of the
Stock purchased under this Agreement, upon shareholder approval will
be duly and validly reserved for issuance and, upon issuance in
accordance with the terms of the Stock, shall be duly and validly
issued, fully paid and nonassessable.
(c) Subscription Agreement. This Agreement has been duly
authorized, validly executed and delivered on behalf of the Company
and is a valid and binding agreement enforceable against the Company
in accordance with its terms, subject to general principles of equity
and to bankruptcy or other laws affecting the enforcement of
creditors' rights generally.
(d) Non-Contravention. The execution and delivery of this
Agreement and the consummation of the issuance of the Stock and the
transactions contemplated by this Agreement do not and will not
conflict with or result in a breach by the Company of any of the terms
or provisions of, or result in the creation or imposition of any lien
or charge upon the assets of the Company pursuant to the certificate
of incorporation or by-laws of the Company, or any material indenture,
mortgage, deed of trust, or other material agreement or instrument to
which the Company is a party or by which it or any of its properties
or assets are bound, or any existing applicable law, rule or
regulation of the United States or of any state thereof or any
applicable decree, judgment or order of any Federal or state court,
Federal or state regulatory body, administrative agency or other
United States governmental body having jurisdiction over the Company
or any of its properties or assets.
(e) Litigation. There is no action, suit or proceeding before
or by any court or governmental agency or body, domestic or foreign,
or exchange or market where the securities of the Company are listed
for trading, now pending or, to the knowledge of the Company,
threatened, against or affecting the Company, or any of its
properties, which could result in any material adverse change in the
condition (financial or otherwise) or in the earnings, business
affairs or business prospects of the Company, or which could
materially and adversely affect the properties or assets thereof.
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(f) No Default. The Company is not in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any material indenture, mortgage,
deed of trust or other material instrument or agreement to which it is
a party or by which it or its property is bound.
(g) SEC Filings. None of the Company's filings with the SEC
since October 15, 1993, contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company
has since October 15, 1993, filed all requisite forms, reports and
exhibits thereto with the SEC.
(h) Full Disclosure. There is no fact known to the Company
(other than general economic conditions known to the public generally)
that has not been disclosed in writing to the Subscribers that (i)
could reasonably be expected to have a material adverse effect on the
condition (financial or otherwise) and the earnings, business affairs,
business prospects, properties or assets of the Company or (ii) could
reasonably be expected to materially and adversely affect the ability
of the Company to perform its obligations pursuant to this Agreement.
4. Covenants of the Company. The Company covenants and
agrees with the Subscribers that:
(a) For so long as the Stock held by the Subscribers remains
outstanding, it will use its best efforts to maintain the listing of
its Common Stock, including Common Stock issuable upon conversion of
the Stock on the NASDAQ Stock Market;
(b) It will forthwith take appropriate action as may be
required under applicable corporate or securities laws or regulations
to secure the affirmative vote of the requisite number of shares of
capital stock to implement the transactions hereunder, including but
not limited to appropriate amendment of the Company's Certificate of
Incorporation;
(c) For so long as the Stock held by the Subscribers remains
outstanding, it will permit each Subscriber to exercise his right to
convert the Stock, in whole or in part, by facsimile transmission an
executed and completed Notice of Conversion to the Company and
delivering the original Notice of Conversion and the subject Stock to
the Company by express courier. Each date on which a Notice of
Conversion is sent by facsimile to and received by the Company in
accordance with
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the provisions hereof shall be deemed a "Conversion Date." The Company
will transmit the certificates representing shares of Common Stock
issuable upon conversion of the Stock (together with certificates
representing the Stock not so converted), if necessary, to the subject
Subscriber via express courier, by electronic transfer or otherwise,
within five (5) business days after the Conversion Date if the Company
has received the original Notice of Conversion and Stock being so
converted by such date. In addition to any other remedies which may be
available to the Subscribers, in the event that the Company fails for
any reason to effect delivery of such shares of Common Stock within
such five (5) business day period, the subject Subscriber will be
entitled to revoke the relevant Notice of Conversion by delivering a
notice to such effect to the Company whereupon the Company and the
Subscriber shall each be restored to their respective positions
immediately prior to delivery of such Notice of Conversion; and
(d) If after ninety days following the Closing Date the
Company's Common Stock, including Common Stock issuable upon
conversion of the Stock, is not then listed for trading on the NASDAQ
Stock Market without qualification, then the Purchase Price paid under
Paragraph 1 above forthwith shall be returned to the Subscribers
without interest or deduction.
5. Reliance on Representations. Each Subscriber understands that (i)
the offer and sale of the Stock is not being registered under the Securities
Act or any State or foreign securities law, (ii) the Company and each
Subscriber are relying on the rules governing offers and sales made pursuant to
Regulation D and (iii) the Company is relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and understandings
of the Subscribers set forth herein in order to determine the applicability of
Regulation D and the suitability of the Subscriber to acquire the Stock. Each
Subscriber has full power and authority to execute and deliver the Agreement
and to perform his obligations hereunder and this Agreement is a legally
binding obligation of each Subscriber in accordance with its terms. Except as
set forth in Paragraph 8 hereof, each Subscriber understands that the Company
is under no obligation to register the Stock or the shares of Common Stock
issuable upon conversion of the Stock on his behalf, or to assist him in
complying with any exemption from registration under the Securities Act or
under the securities laws of any state of the United States or under any
foreign jurisdiction.
6. Resales. Each Subscriber acknowledges and agrees that
the Stock or the shares of Common Stock issuable upon conversion of
the Stock may only be resold (a) in compliance with Regulation D;
(b) under a Registration Statement under the Securities Act; or (c)
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in accordance with an exemption from registration under the Securities Act
other than Regulation D.
7. Indemnification. Each of the Company and each Subscriber agrees to
indemnify the other and hold the other harmless from and against any and all
losses, damages, liabilities, costs, expenses (including reasonable attorneys'
fees) and costs of investigation which the other may sustain or incur in
connection with the breach by the indemnifying party of any representation,
warranty or covenant made by it in this Agreement.
8. Registration. After the expiration of thirty days following the
Closing, the Company shall be required, at the request of any Subscriber and at
the Company's expense, to use its best efforts to effect the registration of
such shares of Common Stock as so registered under the Securities Act, and
relevant Blue Sky laws as promptly as is practicable. The Company and the
subject Subscriber shall cooperate in good faith in connection with the
furnishing of information required for such registration and the taking of such
other actions as may be legally or commercially necessary in order to effect
such registration. The subject Subscriber shall furnish such information as the
Company may reasonably request for inclusion in the registration statement
relating to the shares of Common Stock issuable upon conversion of the Stock.
The Company shall file a registration statement within thirty (30) days after
receipt of the Subscriber's written demand therefor and shall use its best
efforts to cause such registration statement to become effective within sixty
(60) days thereafter. Such best efforts shall include, but shall not be limited
to, responding to all comments received from the staff of the SEC and promptly
preparing and filing amendments to such registration statement which are
responsive to the comments received from the staff of the SEC within thirty
(30) days. Once declared effective by the SEC, the Company shall cause such
registration statement to remain effective until the earlier of (i) the sale by
the relevant Subscriber of all shares of Common Stock so registered or (ii) 180
days after the effective date of such registration statement. The Company shall
bear all registration expenses including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses, reasonable fees and disbursements of one
counsel for all the selling holders of Common Stock, and accounting fees and
expenses incurred in connection with any registration, qualification or
compliance of the Common Stock pursuant to this Agreement.
9. Notices. Any notice to be given or to be served upon any
party to this Agreement in connection with this Agreement must be
in writing and will be deemed to have been given and received upon
confirmed receipt, if sent by facsimile, or two (2) days after it
has been submitted for delivery by Federal Express or any
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equivalent carrier, charges prepaid and addressed to the following addresses
with a confirmation of delivery:
If to the Company, to:
Master Glazier's Karate International, Inc.
Piscataway Center
377 Hoes Lane
Piscataway, New Jersey 08854
Attention: Mark Glazier
Phone No.: 908-354-2349
Fax No.: 908-981-8982
If to the Subscribers, to:
Mark Glazier
Fair Lane, LLC
Cristine Cowan
Euro Translation Group
CRC Partners, Ltd.
c/o Biltmore Securities, Inc.
6700 North Andrews Avenue
Suite 500
Fort Lauderdale, Florida 33309
Attention: Elliot Loewenstern
Phone No.: 954-351-4200
Fax No.: 954-351-4205
Any party may, at any time by giving notice to the other party, designate any
other address in substitution of an address established pursuant to the
foregoing to which such notice will be given.
10. Multiple Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original but all of
which will constitute one and the same instrument. However, in enforcing any
party's rights under this Agreement it will be necessary to produce only one
copy of this Agreement signed by the party to be charged.
11. Certain Agreements. The Company represents, warrants and covenants
that, except in accordance with this Paragraph 11, during the one year
following the Closing of this transaction, neither the Company, nor any
affiliate of the Company, nor any person acting on behalf of the Company shall
agree to enter, enter into, or consummate any subsequent securities offering
other than an offering registered under the Securities Act ("Future Offering").
In the event a Future Offering is entered into by the Company prior to the one
year anniversary of the Closing Date hereof, the Company shall give written
notice of such transaction to the Subscribers and shall place restrictions upon
the transfer, exercisability or convertibility, as the case may be, of the
securities issued in the
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Future Offering such that any future subscriber shall not have unrestricted,
freely tradeable common stock of the Company prior to such time as the Stock is
one hundred percent (100%) converted. The Company shall not engage in any
Regulation D transactions from the period commencing with Closing Date and
terminating on December 31, 1997, without first offering the Subscribers the
opportunity (which shall remain open for a period of five business days from
the date the Subscribers receive notice thereof) to purchase up to all of such
additional Regulation D securities (in the discretion of the Subscribers) on
the terms and provisions which the Company proposes to offer such additional
Regulation D securities to such third parties. The Company further covenants
and agrees to provide the Subscribers with prompt notice (in any event not
later than two business day after the fact) of the date of closing and the
substantive terms and provisions of any subsequent Regulation D transaction
with any third party which was the subject of the right of first offer
described in this Section 11.
12. Fees and Expenses. Each of the Subscribers and the
Company agrees to pay his or its own expenses incident to the
performance of its obligations hereunder including, but not limited
to, the fees and disbursements of such party's legal counsel.
13. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, their respective successors and
assigns, and no other person shall have any right or obligation hereunder. This
Agreement shall not be assignable by any party without the prior written
consent of the other, and any assignment in violation hereof shall be void.
14. Entire Agreement. This Agreement delivered hereunder constitutes
the entire agreement of the parties with respect to the subject matter hereof
and supersedes all prior oral or written proposals or agreements related
thereto. This Agreement may not be amended or any provision hereof waived, in
whole or in part, except by a written amendment signed by all of the parties
hereto.
15. Governing Law. This Agreement will be construed and enforced in
accordance with and governed by the laws of the State of Florida, without
reference to principles of conflicts of law. Each party hereby agrees that if
another party to this Agreement obtains a judgment against it in such a
proceeding, the party which obtained such judgment may enforce same by summary
judgment in the courts of any county having jurisdiction over the party against
whom such judgment was obtained, and each party hereby waives any defenses
available to it under local law and agrees to the enforcement of such a
judgment. Each party to this Agreement irrevocably consents to the service of
process in any such proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to such party at its address set forth
herein. Nothing herein shall affect the right of any party to serve process in
any other manner permitted by law.
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16. Severability. In the case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby;
provided that no such severability shall be effective if it materially changes
the economic benefit of this Agreement to any party.
The undersigned acknowledges that this Agreement shall not be
effective unless and until accepted by the Company as indicated below.
Dated as of this _____ day of October, 1996.
- ------------------------------- -------------------------------
Cristine Cowan Mark Glazier
EURO TRANSLATION GROUP FAIR LANE, LLC
By:____________________________ By:____________________________
Elliot Loewenstern, Manager
CRC PARTNERS, LTD.
By:____________________________
______________, Manager
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE ___ DAY OF
OCTOBER, 1996.
MASTER GLAZIER'S KARATE
INTERNATIONAL, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
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EXHIBIT C
<PAGE>
FOR IMMEDIATE RELEASE
For Further Information Contact:
Mark Glazier
President
(908) 981-0077
Piscataway, NJ -- Master Glazier's Karate International, Inc.
(NASDAQ-KICK) announced today that the Company had engaged in a $900,000
private placement of its securities. The offering consists of 750,000 shares of
the Company's convertible preferred stock, convertible in six (6) months into
15,000,000 shares of the Company's common stock subject to shareholder
approval.
The Company's President, Mark Glazier, stated that the offering
provided funds which would be used by the Company in connection with potential
acquisitions. "I'm confident in the Company's future and see this as an
opportunity to expand our horizons." As part of the private placement, Mr.
Glazier increased his existing stake in the Company by purchasing 400,000
shares of the Company's Preferred Stock.
The Company also announced that it would endeavor to sell several of
its existing karate schools. "Our goal is to streamline this Company and obtain
a dynamic merger partner for the future," stated Mark Glazier.
Master Glazier's Karate International, Inc. operates several state-of-
the-art martial arts training centers in New York , New Jersey and
Pennsylvania. The Company conducts programs where students can develop
discipline and self confidence while learning a unique combination of martial
art techniques from experienced martial art professionals in a clean, modern
and attractive setting.
