As filed with the Securities and Exchange Commission July 23,
1996.
File No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AFGL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 75-2134871
(State or other jurisdiction (I.R.S.
Employer
of incorporation or organization)
Identification No.)
850 Third Avenue, 11th Floor
New York, NY 10022
(212) 508-3560
(Address and telephone number of registrant's principal offices)
Barry S. Roseman, Chief Operating Officer
AFGL International, Inc.
850 Third Avenue, 11th Floor
New York, NY 10022
(212) 508-3560
(Name, address and telephone number of agent for service)
Copies to:
Mark E. Lehman, Esq.
Lehman, Jensen & Donahue, L.C.
8 East Broadway, Suite 620
Salt Lake City, UT 84111
(801) 532-7858
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes
effective.
If the only securities being registered on this Form are being
offered pursuant to a dividend reinvestment plan, please check
the following box. [ ]
If any of the securities being registered on the Form are to be
offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than the 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
Title of Amount to Proposed Proposed Amount of
each be maximum maximum registratio
class of Registered offering aggregate n fee
securities price offering
to be per share price(2)
registered (2)
Common 3,364,711(1 $3.37566 $11,355,899 $3,915.83
Stock ) .63
(1) The shares registered are issuable on conversion or exercise
of outstanding securities. The number of shares so issuable will
vary based on the market price of the Company's Common Stock.
Additional shares are being registered to take into account
variations in the number of shares issuable. The amount
registered also includes an indeterminate number of shares of
common stock that may be issuable by reason of stock splits,
stock dividends, or similar transactions in accordance with Rule
416 under the Securities Act of 1933.
(2) Estimated solely for purposes of determining the
registration fee. Based upon the average of the high and low
sales prices of the Company's Common Stock as reported in the
NASDAQ SmallCap Market for July 17, 1996, pursuant to Rule
457(c).
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:
JULY 23, 1996
PROSPECTUS
3,364,711 Shares
AFGL INTERNATIONAL, INC.
Common Stock
(Par value $.01 per share)
This Prospectus relates to 3,364,711 shares of Common Stock,
$.01 par value per share (hereinafter referred to as "Shares" or
"Common Stock"), of AFGL International, Inc. (the "Company").
Included in the Shares are (i) approximately 2,000,000 Shares
issuable on conversion of the Company's Series D Convertible
Preferred Stock, (ii) approximately 160,000 Shares issuable at
the election of the Company in payment of accrued dividends on
conversion of the Series D Convertible Preferred Stock, (iii)
approximately 500,000 Shares issuable on exercise of warrants the
Company is obligated to issue on conversion of the Company's
Series D Convertible Preferred Stock (the "Series D Warrants"),
(iv) 129,711 Shares issuable on exercise of warrants issued by
the Company in 1993 (the "1993 Warrants"), and (v) 575,000 Shares
issuable on exercise of warrants (the "Series E Warrants") issued
by the Company to purchase shares of Series E Convertible
Preferred Stock, each share of which is convertible into one
share of Common Stock.
All of the Shares offered hereunder will be acquired by
certain stockholders (the "Selling Stockholders") of the Company
as described herein. The Company will not receive any of the
proceeds from the sale of the Shares by the Selling Stockholders
but has agreed to bear certain expenses of registration of the
Shares. See "Selling Stockholders" and "Plan of Distribution."
The Shares may be re-offered by the Selling Stockholders in
transactions for their own account (which may include block
transaction) in the over-the-counter market, negotiated
transactions, or in a combination of such methods of sale, at
fixed prices which may be changed, at market prices prevailing at
the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Stockholders may
effect such transactions by selling Shares directly to purchasers
or to or through underwriters, agents or broker-dealers, and such
underwriters, agents or broker-dealers may receive compensation
in the form of discounts, concessions or commissions from the
Selling Stockholders or the purchasers of Shares for whom such
underwriters, agents or broker-dealers may act as agent or to
whom they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary
commissions). The Shares may be offered from time to time
following the date of this Prospectus, subject to the right of
the Company to suspend (and later resume) the distribution of
Shares hereunder as required by law or upon the advice of counsel
(regarding violations of law or regulations). See "Selling
Stockholders."
The Selling Stockholders, any agents or brokers executing
sales orders on behalf of Selling Stockholders, and dealers to
whom the Shares may be sold, may, under certain circumstances, be
considered "underwriters" within the meaning of Section 2(11) of
the Securities Act of 1933, as amended (the "Securities Act"),
and any commissions received by them and any profit on the resale
of the Shares may be deemed to be underwriting commissions or
discounts under the Securities Act. See "Plan of Distribution"
herein for indemnification arrangements among the Company and the
Selling Stockholders.
The Company's Common Stock is traded in the over-the-counter
market and price quotations are listed in the NASDAQ SmallCap
Market under the symbol AFGL. On July 17, 1996, the last
reported sale price of the Common Stock, as reported in the
NASDAQ SmallCap Market, was $3.375 per share.
Investors should carefully consider the material risks set
forth under the caption "Risk Factors."
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 ___________________, 1996
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements
and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, and at the following Regional Offices of the Commission:
Northeast Regional Office, Suite 1300, Seven World Trade Center,
New York, New York 10048; and Midwest Regional Office, Suite
1400, 500 W. Madison Street, Chicago Illinois 60661-2511. Copies
of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, upon payment of prescribed rates.
The Company has filed with the Commission a Registration
Statement on Form S-3 (together with any amendments and exhibits
thereto, the "Registration Statement") under the Securities Act,
with respect to the Shares offered hereby. This Prospectus
constitutes a part of the Registration Statement. This
Prospectus omits certain of the information contained in the
Registration Statement, and reference is hereby made to the
Registration Statement and to the exhibits relating thereto for
further information with respect to the Company and the Shares.
Any statements contained herein concerning the provisions of any
document are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this
Prospectus the following documents heretofore filed by the
Company with the Commission pursuant to the Exchange Act:
1. The Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1995;
2. The Company's Quarterly Report on Form 10-QSB for the
fiscal quarter ended March 31, 1996 (and Amendment No. 1
thereto);
3. The Company's Current Report on Form 8-K dated May 31,
1996 (and Amendment No. 1 thereto); and
4. The description of the Company's Common Stock contained
in its registration statement on Form 8-A filed under the
Exchange Act, including any amendment or report filed for the
purpose of updating such description.
All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date hereof and prior to the termination of the offering made
hereby shall be deemed to be incorporated herein by reference and
to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or
deemed to be incorporated herein by reference shall be deemed to
be modified or superseded for purposes hereof to the extent that
a statement contained herein or in any other subsequently filed
document which also is, or is deemed to be, incorporated herein
by reference modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed to
constitute a part hereof, except as so modified or superseded.
The Company hereby undertakes to provide without charge to
each person to whom a copy of this Prospectus has been delivered,
upon the written or oral request of any such person, a copy of
any or all of the documents referred to above which have been or
may be incorporated by reference in this Prospectus. Requests
for such copies should be directed to Julie Risi, Investor
Relations, AFGL International, Inc., 850 Third Avenue, 11th
Floor, New York, NY 10022, telephone number: 212-508-3560.
THE COMPANY
AFGL International, Inc. ("the Company"), is a provider of
human resource management and strategic advisory services in the
United States and overseas. The Company provides these services
through its wholly-owned subsidiaries, Headway Corporate Staffing
Services, Inc. ("Headway"), Whitney Partners, Inc. ("Whitney"),
and Furash & Company, Inc. ("Furash"). Headway was formed in
1996 to acquire Irene Cohen Temps, Inc., Corporate Staffing
Alternatives, Inc., Certified Technical Staffing, Inc., and the
operating assets of Irene Cohen Personnel, Inc. (collectively the
"IC Group"), which was completed in May 1996. Whitney conducts
operations in Europe through its wholly-owned subsidiary, The
Whitney Group (Europe) Limited, based in London, which also
operates through an office in Hong Kong. Whitney also maintains
an office in Japan. Hereinafter, the term "Company" shall refer
collectively to AFGL International, Inc., Headway (including its
subsidiaries), Whitney, and Furash, unless the context otherwise
indicates.
The human resource management services of the Company
provide businesses with staffing solutions and alternatives to
the complexities and high costs related to employment and human
resources. The Company offers a broad range of employment-related
services consisting of human resource administration (including
temporary and permanent placement services), executive search
services, employment regulatory compliance management, workers'
compensation coverage, health care, and other employee benefits.
The Company believes its services assist businesses in: (i)
locating and employing persons who will contribute to the owners'
business; (ii) meeting temporary staffing needs as they arise in
the business; (iii) managing escalating costs associated with
workers' compensation, health insurance coverage, workplace
safety programs, and employee-related litigation; (iv) providing
1099 consultants with competitive health care and related
benefits that are more characteristic of large employers; and (v)
reducing the time and effort required of business management to
deal with the increasingly complex legal and regulatory
environment affecting employment
The Company has traditionally focused its services, and
marketing effort for such services, on the financial services
industry consisting of investment banking firms, broker-dealers,
banks, and similar finance institutions. The Company intends to
continue to focus on this industry in the foreseeable future.
The acquisition of the IC Group by Headway in 1996 will enable
the Company to further develop this core business. The long term
plan of the Company is to expand its services to the financial
services industry throughout the United States.
The Company's May 1996 acquisition of the IC Group was a
major step in establishing the Company as a full-service staffing
company serving the financial services industry, and marked the
Company's entrance into the temporary staffing industry. Based
on a market study obtained by the Company, the temporary staffing
industry is experiencing growth in revenues and earnings. Gross
revenues in the industry grew from $20 billion in 1991 to $40
billion in 1995, representing a compounded annual growth rate of
approximately 19%. It is estimated that this industry will grow
at an annual average rate of approximately 11% through the year
2000. This growth is attributable to a trend among employers to
control costs by reducing the number of employees and relying on
human resource management firms to provide temporary workers and
consultants as needed to satisfy staffing requirements as they
fluctuate between the peaks and valleys of the business cycle.
The temporary placement, permanent placement, and employee
management services of Headway are provided primarily to clients
in New York City and surrounding areas. Whitney focuses on
placement services for middle and upper sales and management
level positions in the finance industry, and provides this
service in the United States, Japan, Europe, and Hong Kong.
Management and strategic advisory services are offered by
the Company in the United States through Furash, which is based
in Washington, D.C. These services are provided by Furash
primarily to banks, thrifts, and holding companies ranging in
size from $1 billion to $100 billion in assets; mortgage banks;
investment and brokerage firms; law firms with financial services
clients; private investors; insurance companies; regulatory
agencies; trade associations representing the industry; new
groups entering the industry; and international firms. The
Company advises its clients on all aspects of the financial
services industry, including client operations, new products and
services, marketing of products and services, cost containment
strategies, mergers and acquisitions, turnaround of troubled
institutions, technology and information planning, and regulatory
developments and trends.
The principal offices of the Company are located at 850
Third Avenue, New York, New York, 10022, where its telephone
number is (212) 508-3560.
RISK FACTORS
Government Regulations
The Company's operations are affected by numerous federal,
state and local laws relating to labor, tax, insurance and
employment matters. By entering into an employment relationship
with employees who work at client company locations ("worksite
employees"), the Company assumes certain obligations and
responsibilities of an employer under these laws, which are
subject to varying interpretations. Uncertainties arising under
the Internal Revenue Code of 1986, as amended (the "Code")
include, but are not limited to, the qualified tax status and
favorable tax status of certain benefit plans provided by the
Company and other alternative employers and the status of 1099
worksite employees provided on a temporary basis. The
unfavorable resolution of these unsettled issues could have a
material adverse effect on the Company's results of operations
and financial condition.
The Internal Revenue Service ("IRS") is conducting a Market
Segment Study of the professional employer organization industry,
focusing on selected members of that industry (not including the
Company), in order to examine the relationships among provider
organizations, worksite employees, and owners of client
companies. The Company is unable to predict the timing or nature
of the findings of the Market Segment Study or the ultimate
outcome of such conclusions or findings, but the result could
impose restrictions or new regulations on the business of the
Company, adversely affect the current favored tax status of
Company employee plans, or disallow the current withholding and
reporting practices of the Company, any one or more of which
could adversely affect the business of the Company.
Expansion into Additional States
The Company operates primarily in New York. Future growth
of Company operations depends, in part, on its ability to offer
its services to prospective clients in additional states. In
order to operate effectively in a new state, the Company must
obtain all necessary regulatory approvals, achieve acceptance in
the local market, adapt its procedures to that state's regulatory
requirements and local market conditions, and enhance internal
controls that enable it to conduct operations in several
locations. The length of time required to obtain regulatory
approval to begin operations will vary from state to state, and
there can be no assurance that the Company will be able to
satisfy licensing requirements or other applicable regulations of
any particular state in which it is not currently operating, that
it will be able to provide the full range of services currently
offered in New York, or that it will be able to operate
profitably within the regulatory environment of any state in
which it does obtain regulatory approval. The absence of
required licenses would require the Company to restrict the
services it offers.
Geographic Market Concentration
The Company's New York operations currently account for a
majority of its revenues. Accordingly, while a primary aspect of
the Company's growth strategy involves expansion outside of New
York for the foreseeable future, a significant portion of the
Company's revenues will be subject to economic factors specific
to New York. In addition, while the Company believes that its
market expansion plans will eventually lessen or eliminate this
risk in addition to generating revenue growth, there can be no
assurance that the Company will be able to duplicate in other
markets the revenue growth and operating results experienced in
its New York market.
Effect of Financial Industry Conditions
The Company offers its services primarily to the financial
services industry. During periods of poor performance by the
economy and capital markets, members of the financial services
industry generally do not develop and market new financial
products, do not expand existing services and operations, and do
not employ new personnel or require the services of temporary
employees. Accordingly, during these periods of poor performance
the demand for the Company's services may decrease, which would
adversely affect its operations. Since the Company intends to
continue its emphasis on the financial services industry, it
should be expected that the Company's results of operations for
any given year will depend, to a certain extent, on the
performance of the financial services industry.
Dependence Upon Employees
The Company is dependent to a substantial extent upon the
continuing efforts and abilities of certain employees. The
Company has negotiated long-term employment agreements with
certain employees, but not with all employees who make
significant contributions to the Company. The Company possesses
key-man life insurance policies on the lives of certain
employees. The loss of services of certain employees, including
those with employment agreements, could have a material adverse
effect upon the Company's financial condition and results of
operations, notwithstanding any cash benefits the Company may
receive from key-man life insurance.
Financial Condition of Clients
The Company is obligated to pay the wages and salaries of
its worksite employees regardless of whether its clients pay on a
timely basis or at all. To the extent that any client
experiences financial difficulty, or is otherwise unable to meet
its obligations as they become due, the Company's financial
condition and results of operations could be materially adversely
affected.
Failure to Manage Growth
The Company intends to pursue internal growth and an
acquisition strategy. This growth may place a significant strain
on the Company's management, financial, operating, and technical
resources. The Company has limited acquisition experience in the
human resource management industry, and there can be no assurance
that suitable acquisition candidates can be found, that the
Company will have or be able to obtain the necessary financing to
consummate acquisitions, that acquisitions can be consummated on
favorable terms, or that any acquired companies can be
successfully integrated into the Company's operations. There can
be no assurance that management skills and systems currently in
place will be adequate to implement the Company's strategy, and
the failure to manage growth effectively or to implement its
strategy could have a material adverse effect on the Company's
results of operations and financial condition.
Liabilities for Client and Employee Actions
A number of legal issues remain uncertain with respect to
the co-employment arrangements among temporary placement
businesses, their clients and worksite employees, including
questions concerning the ultimate liability for violations of
employment and discrimination laws. The Company's standard client
service agreements establish a contractual division of
responsibilities for various human resource matters, including
compliance with and liability under various governmental
regulations. Nevertheless, the Company may be subject to
liability for violations of these or other laws despite these
contractual provisions, even if it does not participate in such
violations. Although such client service agreements generally
provide that the client is to indemnify the Company for any
liability attributable to the client's failure to comply with its
contractual obligations and the requirements imposed by law, the
Company may not be able to collect on such a contractual
indemnification claim and thus may be responsible for satisfying
such liabilities. In addition, worksite employees may be deemed
to be agents of the Company, subjecting the Company to liability
for the actions of such worksite employees.
Competition and New Market Entrants
The human resource management industry is highly fragmented,
with a very large number of companies providing similar
employment services. The Company encounters competition from
other employer organizations and from single-service and "fee for
service" companies such as payroll processing firms, insurance
companies and human resource consultants. In addition, the
Company may encounter substantial competition from new market
entrants. Some of the Company's current and future competitors
may be significantly larger, have greater name recognition and
have greater financial marketing and other resources than the
Company. There can be no assurance that the Company will be able
to compete effectively against such competitors in the future.
SELLING STOCKHOLDERS
The following table provides the names and the number of
Shares owned by each Selling Stockholder. Since the Selling
Stockholders may sell all, some or none of the Shares that may be
offered hereby, no estimate can be made of the aggregate number
of Shares that will actually be offered hereby or that will be
owned by each Selling Stockholder upon completion of the offering
to which this Prospectus relates.
The Shares offered by the Prospectus may be offered from
time to time by the Selling Stockholders named below:
Selling Stockholder Shares Percent Shares that
Beneficially of May Be
Owned Prior to Class Offered
the
Offering
Wood Gundy London 383,000 7.1 383,000
Ltd.
The Tail Wind Fund 723,000 12.6 383,000
Ltd.
Hull Overseas Ltd. 191,500 3.7 191,500
Leibel Stern 159,584 3.1 159,594
Jules Nordlicht 319,167 6.0 319,167
A. Zyskind 734,048 2.8 1734,048
Halifax Fund, L.P. 383,000 7.1 383,000
Internationale 575,000 10.3 575,000
Nederlanden
(U.S.) Capital
Corporation
Ehud D. Laska 84,856 1.7 64,856
Richard S. Frary 32,428 0.6 32,428
Joel A. Mael 31,177 0.6 31,177
Karen J. Furst 1,250 Nil 1,250
On June 14, 1996, the Company completed a private placement
of Series D Convertible Preferred Stock. The Company sold 80
shares of Series D Convertible Preferred Stock for $4,000,000.
Each of the Selling Stockholders listed above, except INCC, Ehud
D. Laska, Richard S. Frary, Joel A. Mael, and Karen J. Furst,
were purchasers in the private placement. The face value for
each share of Series D Convertible Preferred Stock ($50,000), is
convertible to Common Stock of the Company at the lesser of
$5.210625 or 80% of the market price for the Company's Common
Stock on the date of conversion. Dividends are payable on the
Series D Convertible Preferred Stock at the rate of 8% per annum.
In the event of conversion, the Company may, at its election,
issue Common Stock in payment of the dividend. On conversion,
the holders of the Series D Convertible Preferred Stock are
entitled to receive a warrant to purchase one share of Common
Stock for every four shares of Common Stock issued on conversion
exercisable on or before May 1, 1999, at an exercise price of
$4.25 per share. The amounts reflected in the foregoing table
for the Shares owned by the Selling Stockholders who are holders
of Series D Convertible Preferred Stock assume that all such
preferred stock is converted four months following issuance at an
estimated price of $2.00 per Share. Based on this assumption, a
total of 2,053,335 Shares would be issued to Selling Stockholders
on conversion of the Series D Convertible Preferred Stock
(including Shares issued in payment of dividends), and warrants
to purchase an additional 500,000 Shares would be issued to such
Selling Stockholders.
In connection with the placement of Series D Convertible
Preferred Stock, the Company entered into a registration rights
agreement in which it agreed to use its best efforts to file a
registration statement on Form S-3 covering the shares of Common
Stock issuable on conversion of the Series D Convertible
Preferred Stock. If such registration statement is not declared
effective within a period of 100 days following May 31, 1996,
then the Company is obligated to pay the purchasers in the
offering a fee at the expiration of the 100-day period and at the
expiration of each 30-day period thereafter until the
registration statement is effective. The initial fee is equal to
one and one-half percent of the purchase price for the Series D
Convertible Preferred Stock, which increases in each subsequent
30-day period one-quarter of one percent month to a maximum of
two percent of the purchase price. The Tail Wind Fund Ltd.,
received a consulting fee in connection with the private
placement consisting of $200,000 in cash and warrants to purchase
120,000 shares of the Company's Common Stock exercisable over a
period of five years commencing September 1, 1996, at a price of
$4.25 per share. The Tail Wind Fund Ltd., holds an additional
warrant to purchase 120,000 shares of the Company's Common Stock
exercisable over a period of five years commencing June 1, 1996,
at a price of $4.25 per share.
On May 31, 1996, the Company entered into a Credit Agreement
with Internationale Nederlanden (U.S.) Capital Corporation
("INCC"). Under the Credit Agreement, INCC made a term loan of
$9,000,000 to the Company, and established a $6,000,000 revolving
credit facility for the Company. In connection with this
financing arrangement, the Company granted to INCC the Series E
Warrant to purchase 575,000 shares of Series E Convertible
Preferred Stock of the Company at an exercise price of $0.02 per
share. The Series E Convertible Preferred Stock is convertible
at the election of the holder to Common Stock of the Company at
the rate of one share for one share, subject to adjustment based
on anti-dilution provisions. The Company also entered into a
Registration Rights Agreement with INCC pertaining to the Common
Stock of the Company issuable on conversion of the Series E
Convertible Preferred Stock. Under the terms of the Registration
Rights Agreement, the Company is required to file and keep
effective a shelf registration covering the Common Stock issuable
to INCC. In the Registration Rights Agreement, INCC agrees not
to make any private or public sale of the Common Stock prior to
May 31, 1997.
In July of 1993, the Company entered into a consulting
agreement with an investment banking and consulting firm. As
partial consideration under the agreement, the Company issued to
the consulting firm warrants to purchase 129,711 shares of the
Company's Common Stock at an exercise price of $1.25 per share
(the "1993 Warrants"). The 1993 Warrants were subsequently
transferred to affiliates of the consulting firm; Ehud D. Laska,
Richard S. Frary, Joel A. Mael, and Karen J. Furst. Mr. Laska
was subsequently elected a director of the Company. In addition,
Mr. Laska currently serves as the chairman of the board of a
member firm of the National Association of Securities Dealers,
Inc. ("NASD"). Messrs. Frary and Mael own stock in a general
partner of an NASD member firm.
For consulting services rendered in connection with the
Company's debt and equity financings in 1996, the Company paid to
a corporation owned by Mr. Laska and his associate, in equal
shares, a total of $582,500 in cash. In addition, the Company
granted to Mr. Laska and his associate warrants to purchase
240,000 shares of Common Stock exercisable over a period of four
years commencing May 31, 1997, at an exercise price of $4.25 per
share.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling
Stockholders in transactions for their own account (which may
include block transactions) in the over-the-counter market,
negotiated transactions, or in a combination of such methods of
sale, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions by selling Shares
directly to purchasers or to or through underwriters, agents or
broker-dealers, and such underwriters, agents or broker-dealers
my receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders or the purchasers of
Shares for whom such underwriters, agents or broker-dealers may
act as agent or to whom they sell as principal, or both (which
compensation as to a particular broker-dealer might be in excess
of customary commissions). The Selling Stockholders, any agents
or brokers executing sales orders on behalf of Selling
Stockholders, and dealers to whom the Shares may be sold, may,
under certain circumstances, be considered "underwriters" within
the meaning of the Securities Act, and any commissions received
by such underwriters, agents or broker-dealers and any profit on
the resale of the Shares may be deemed to be underwriting
commissions or discounts under the Securities Act.
The Shares may be offered from time to time following the
date of this Prospectus, subject to the right of the Company to
suspend (and later resume) the distribution of Shares hereunder
as required by law or upon the advice of counsel (regarding
violations of law or regulations). At the time a particular
offer is made, a Prospectus supplement, if required, will be
distributed that sets forth the name or names of underwriters,
agents or broker-dealers; the number of Shares involved; any
commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable; and other facts material to
the transaction. As of the date of this Prospectus, there are no
selling arrangements between the Selling Stockholders and any
underwriter, broker or dealer.
As required by the Registration Rights Agreement with the
holders of the Series D Convertible Preferred Stock, the
Registration Rights Agreement with the holder of the Series E
Warrant and the terms of the 1993 Warrants, the Company has filed
the Registration Statement, of which this Prospectus forms a
part, with respect to the sale of the Shares. The Company will
not receive any of the proceeds from the sale of the Shares. The
Company will bear the costs of registering the Shares under the
Securities Act, including the registration fee under the
Securities Act, legal and accounting fees (including legal fees
for counsel to the Selling Stockholders) and any printing
expenses. The Selling Stockholders will bear all other expenses
in connection with this offering, including selling commissions
and brokerage fees.
Pursuant to the terms of their respective agreements, the
Company and the Selling Stockholders have agreed to indemnify
each other and certain other related parties for certain
liabilities in connection with the registration of the Shares,
including liabilities under the Securities Act. The Selling
Stockholders and the Company may agree to indemnify any broker-
dealer or agent that participates in transactions involving the
Shares against certain liabilities, including liabilities under
the Securities Act.
LEGAL OPINION AND EXPERTS
The validity of the issuance of the Shares offered hereby is
being passed upon for the Company by Lehman, Jensen & Donahue,
L.C., counsel to the Company.
The financial statements of AFGL International, Inc., and
subsidiaries as of December 31, 1995, and for each of the fiscal
years in the two-year period ended December 31, 1995,
incorporated in this Prospectus by reference to the Company's
Annual Report on Form 10-KSB for the fiscal year ended December
31, 1995, have been so included in reliance on the report of
Moore Stephens, P.C. (formerly Mortenson and Associates, P.C.),
independent accountants, given on the authority of said firm as
experts in auditing and accounting. In such financial statements,
Moore Stephens, P.C., has relied on the report dated April 12,
1996, of Letchfords, Chartered Accountants, with respect to the
financial statements of Whitney Group (Europe) Limited, given on
the authority of said firm as experts in auditing and accounting.
The combined financial statements of Irene Cohen Temps,
Inc., and Certified Technical Staffing, Inc., at December 31,
1995 and 1994 and for each of the two years in the period ended
December 31, 1995, and the combined financial statements of Irene
Cohen Personnel, Inc., and Corporate Staffing Alternatives, Inc.,
at December 31, 1995 and 1994 and for each of the two years in
the period ended December 31, 1995, incorporated by reference in
this Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their
reports thereon, also incorporated herein by reference, in
reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.
<PAGE>
[Outside Back Cover]
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY SELLING STOCKHOLDER. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
SINCE THE DATES AS OF WHICH INFORMATION IS SET FORTH HEREIN.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER IN SUCH JURISDICTION.
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THE COMPANY
RISK FACTORS
SELLING STOCKHOLDERS
PLAN OF DISTRIBUTION
LEGAL OPINION AND EXPERTS
3,364,711 SHARES
AFGL INTERNATIONAL, INC.
COMMON STOCK ($.01 Par Value)
PROSPECTUS
____________________, 1996
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC Registration Fee $
3,915.83
NASD Registration Fee
1,635.59
Blue Sky Registration Fees
10,000.00
Legal Fees
70,000.00
Auditors' Fees
50,000.00
Printing and Engraving Expenses
10,000.00
Miscellaneous
10,000.00
Total
$155,551.42
All of the above items are estimated except the SEC and NASD
Registration Fees.
Item 15. Indemnification of Directors and Officers.
Section 78.751 of the Nevada Revised Statutes provides in
relevant part as follows:
--------------------
(1) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative except an action by or
in the right of the corporation, by reason of the fact that he is
or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other
enterprise, against expenses, including attorneys' fees,
judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit,
or proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or on a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and that, with respect to
any criminal action or proceeding, he had reasonable cause to
believe that his conduct was unlawful.
(2) A corporation may 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
corporation 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 corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other
enterprise against expenses, including amounts paid in settlement
and attorneys' fees 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 or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue, or matter
as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which
such action or suit was brought shall determine on application
that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall
deem proper.
(3) To the extent that a director, officer, employee, or
agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred
to in subsections 1 and 2, or in defense of any claim, issue, or
matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
--------------------
The Company's articles of incorporation provide that the
Company may indemnify to the full extent of its power to do so
under Nevada law, all directors, officers, employees, and/or
agents of the Company for liabilities and expenses reasonably
incurred in connection with any action, suit, or proceeding to
which such person may be a party by reason of such person's
position with the Company. Consequently, the Company intends to
indemnify its officers, directors, employees, and agents to the
full extent permitted by the statute noted above.
As permitted by Chapter 78 of the Nevada Revised Statutes,
the Company's articles of incorporation contain the following
provision:
--------------------
A director or officer of the corporation shall have no
personal liability to the corporation or its stockholders for
damages for breach of fiduciary duty as a director or officer,
except for damages for breach of fiduciary duty resulting from
(a) acts or omissions which involve intentional misconduct,
fraud, or a knowing violation of law, or (b) the payment of
dividends in violation of section 78.300 of the Nevada Revised
Statutes as it may from time to time be amended or any successive
provision thereto.
--------------------
The Company intends to limit the liability of its officers
and directors to the full extent set forth in the foregoing
provision in its articles of incorporation.
Insofar as indemnification by the Company for liabilities
arising under the Securities Act may be permitted to officers and
directors of the Company the Company is aware that in the opinion
of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Company of expenses incurred or paid by an officer or
director in the successful defense of any action, suit, or
proceeding) is asserted by such officer or director in connection
with the securities being registered hereby, the Company 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 of whether such indemnification by it
is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue. (See
"ITEM 17. UNDERTAKINGS.")
Item 16. Exhibits.
Exhibit SEC Ref. Title of Document Location
No. No.
1 (3)(i) Articles of Incorporation, This
as amended Filing
2 (3)(ii) By-Laws, as amended This
Filing
3 (4) Series A Convertible Preferred This
Stock Designation Filing
4 (4) Series B Convertible Preferred This
Stock Designation Filing
5 (4) Series B Convertible Preferred This
Stock Designation Filing
(Correction)
6 (4) Form of Stock Purchase This
Agreement Filing
with purchasers of Series D
Convertible Preferred Stock
(2)
7 (4) Form of Registration Rights This
Agreement with purchasers of Filing
Series D Convertible
Preferred
Stock (2)
8 (4) Form of Warrant to be issued to This
purchasers of Series D Filing
Convertible Preferred Stock
(3)
9 (4) Warrant of Ehud D. Laska This
dated December 23, 1993 Filing
10 (4) Warrant of Ehud D. Laska This
dated November 10, 1994 Filing
11 (4) Warrant of Richard S. Frary This
dated December 23, 1993 Filing
12 (4) Warrant of Richard S. Frary This
dated November 10, 1994 Filing
13 (4) Warrant of Joel A. Mael This
dated December 23, 1993 Filing
14 (4) Warrant of Joel A. Mael This
dated November 10, 1994 Filing
15 (4) Warrant of Karen J. Furst This
dated December 23, 1993 Filing
16 (5) Opinion of Lehman, Jensen & This
Donahue, L.C. Filing
17 (23) Consent of Lehman, Jensen & This
Donahue, L.C. Filing
18 (23) Consent of More Stephens P.C. This
(formerly Mortenson and Filing
Associates, P.C.)
19 (23) Consent of Ernst & Young LLP This
Filing
20 (23) Consent of Letchfords, This
Chartered Filing
Accountants
21 (24) Power of Attorney (4) This
Filing
22 (99) Warrant of Ehud D. Laska This
dated July 22, 1996 Filing
23 (99) Warrant of Ziad K. Abdelnour This
dated July 22, 1996 Filing
24 (99) Warrant of The Tail Wind Fund This
Ltd. Filing
dated April 8, 1996
25 (99) Warrant of The Tail Wind Fund This
Ltd. Filing
dated July 19, 1996
26 (2) Stock Purchase Agreement dated Fm8-K
April 10, 1996 (1) Ex#1
27 (2) Asset Purchase Agreement dated Fm8-K
May 31, 1996 (1) Ex#2
28 (4) Series C 8% Convertible Fm8-K
Preferred Ex#3
Stock Designation (1)
29 (4) Series D 8% Convertible Fm8-K
Preferred Ex#4
Stock Designation (1)
30 (4) Series E Convertible Preferred Fm8-K
Stock Designation (1) Ex#5
31 (4) Credit Agreement dated Fm8-K
May 31, 1996 (1) Ex#6
32 (4) Revolving Note dated May 31, Fm8-K
1996 Ex#7
33 (4) Term Note dated May 31, 1996 Fm8-K
Ex#8
34 (4) Security Agreement dated Fm8-K
May 31, 1996 Ex#9
35 (4) Warrant Agreement dated Fm8-K
May 31, 1996 Ex#10
36 (4) Registration Rights Agreement Fm8-K
dated May 31, 1996 Ex#11
(1) Each of these exhibits are included in the Company's current
report on Form 8-K, dated May 31, 1996, and filed with the
Commission on June 14, 1996, and are incorporated herein by this
reference. The reference under the column "Location" is to the
exhibit number in the report on Form 8-K.
(2) These exhibits are the forms of the agreements entered into
between the Company and purchasers of the Company's Series D
Convertible Preferred Stock, all of whom are Selling
Stockholders.
(3) This is the form of warrant to be issued to Selling
Stockholders who are holders of Series D Convertible Preferred
Stock on conversion of the Series D Convertible Preferred Stock.
(4) The power of attorney is located under Part II of this
registration statement under the caption "Signatures", below.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement: (i) to include any prospectus required by Section
10(a)(3) of the Securities Act; (ii) to reflect in the prospectus
any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
the Registration Statement; (iii) to include any material
information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any
material change to such information in the Registration
Statement; provided, however, that paragraphs 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 Exchange Act that are incorporated by reference
herein.
(2) That, for purposes of determining any liability
under the Securities Act, 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.
(b) The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act, each filing of the Registrant's Annual Report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be
deemed to be a new Registration Statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act 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 and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the city of New York, state of New York on July 19, 1996.
AFGL INTERNATIONAL, INC.
By: Gary S Goldstein
(Signature)
President
Power of Attorney
Each person whose signature appears below hereby constitutes
and appoints Gary S. Goldstein, and Barry S. Roseman, and each of
them, his true and lawful attorneys-in-fact and agents, for him
and in his name, place and stead, in any and all capacities, to
sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities indicated on July 19, 1996.
Signature Title
Gary S Goldstein (Signature) Principal Executive
Officer, and
Director
Barry S Roseman (Signature) Principal Financial
and
Accounting Officer,
and
Director
G. Chris Andersen (Signature) Director
Edward E. Furash (Signature) Director
Ehud D. Laska (Signature) Director
Richard Salomon (Signature) Director
Exhibit No. 1/ AFGL International, Inc./ Form S-3
21st CENTURY HOLDINGS, INC.
CERTIFICATE OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
(Under Section 73.385 of the General Corporation Law)
THE UNDERSIGNED, being the President and Secretary of 21st
Century Holdings, Inc., a Nevada corporation (the "Corporation"),
do hereby certify that:
1. The name of the Corporation is 21st Century Holdings,
Inc.
2. Article I of the Articles of Incorporation, setting
forth the name of the Corporation, is hereby amended to read in
its entirety as follows:
"ARTICLE I
NAME
The name of the Corporation shall be:
AFGL International, Inc."
3. This Amendment of the Certificate of Incorporation of
the Corporation has been duly adopted by the unanimous consent of
the directors of the Corporation and the consent of the holders
of a majority of the voting power of the outstanding capital
stock of the Corporation.
IN WITNESS WHEREOF, the undersigned have executed this
Certificate of Amendment as of the 24th day of August, 1993.
By: /s/
Gary Goldstein
President
By: /s/
Barry S. Roseman
Secretary
ACKNOWLEDGMENT:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 24th day of August, 1993, before me personally came
Gary Goldstein, to me known and known to me to be the individual
described in and who executed the foregoing instrument, and he
duly acknowledged to me that he executed the same:
Notary Public
ACKNOWLEDGMENT:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 24th day of August, 1993, before me personally came
Barry Roseman, to me known and known to me to be the individual
described in and who executed the foregoing instrument, and he
duly acknowledged to me that he executed the same:
Notary Public
CERTIFICATE OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
PHOENIX CAPITAL CORPORATION
(Changed herein to "21st CENTURY HOLDINGS, INC.")
The following certificate of amendment to the articles of
incorporation of the above-named corporation is adopted pursuant
to the provisions of Section 78.385 and 78.390 of the Nevada
Revised Statutes. We the undersigned as president and secretary
of Phoenix Capital Corporation, do hereby certify:
1. That the board of directors of said corporation duly
adopted on February 21, 1990, in accordance with Section 78.315
of the Nevada Revised Statutes, resolutions to amend the articles
of the incorporation as follows:
(a) ARTICLE I shall be amended to read as follows:
ARTICLE I
NAME
The name of the Corporation shall be:
21st Century Holdings, Inc.
(b) The Corporation shall amend its articles of
incorporation to add a new subsection (c)(iv) of Article V, as
follows:
(iv) The Corporation hereby expressly elects not to be
governed by the provisions of Sections 78.378 to 78.3793 of the
Nevada Revised Statutes, including any amended or successor
provision thereto, which provisions shall not apply to the
Corporation.
(c) The Corporation shall amend its articles of
incorporation to add a new Article VIII, as follows:
ARTICLE VIII
LIMITATION ON LIABILITY
A director or officer of the Corporation shall have no
personal liability to the Corporation or its stockholders for
damages for breach of fiduciary duty as a director or officer,
except for damages for breach of fiduciary duty resulting from
(a) acts or omissions which involve intentional misconduct,
fraud, or a knowing violation of law, or (b) the payment of
dividends in violation of Section 78.300 of the Nevada Revised
Statutes as it may from time to time be amended or any successor
provision thereto.
2. That the foregoing amendments to the articles of
incorporation were duly adopted by a majority consent of the
shareholders of the Corporation dated February 21, 1990, pursuant
to Section 78.320 of the Nevada Revised Statutes; as of February
21, 1990, the date of the majority consent, the number of shares
of the Corporation issued and outstanding and entitled to vote on
the foregoing amendments to the articles of incorporation was
325,000,000; and the holders of 234,301,374 shares, or in excess
of a majority of the outstanding common stock, executed the
majority consent for adoption of the foregoing amendments.
PHOENIX CAPITAL CORPORATION
Dated: February 27, 1990 By: /s/
Robert A. Drazen,
President
Dated: February 28, 1990 By: /s/
Mark E. Lehman, Secretary
STATE OF FLORIDA )
: ss.
COUNTY OF )
On this 27th day of February, 1990, before me, a notary
public, personally appeared Robert A. Drazen, being by me first
duly sworn, who acknowledged to me that he is the person who
executed the foregoing certificate of amendment to the articles
of incorporation of Phoenix Capital Corporation as its president;
and to the best of his knowledge, information and belief, the
statements made in the certificate of amendment are true.
Notary Public
STATE OF UTAH )
: ss.
COUNTY OF )
On this 28th day of February, 1990, before me, a notary
public, personally appeared Mark E. Lehman, being by me first
duly sworn, who acknowledged to me that he is the person who
executed the foregoing certificate of amendment to the articles
of incorporation of Phoenix Capital Corporation as its secretary;
and to the best of his knowledge, information and belief, the
statements made in the certificate of amendment are true.
Notary Public
CERTIFICATE OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
PHOENIX CAPITAL CORPORATION
The following Certificate of Amendment to the articles of
incorporation of the above-name corporation is adopted pursuant
to the provisions of NRS 78.385 and 78.390:
ARTICLE IV
AUTHORIZED SHARES
The Corporation is authorized to issue a total of
200,000,000 shares consisting of 5,000,000 shares of preferred
stock having a par value of $O.001 per share and 195,000,000
shares of common stock having a par value of $O.001 per share.
is hereby amended by striking Article IV in its entirety and
inserting in lieu thereof:
ARTICLE IV
AUTHORIZED SHARES
The Corporation is authorized to issue a total of
800,000,000 shares consisting of 5,000,000 shares of preferred
stock having a par value of $O.001 per share and 795,000,000
shares of common stock having a par value of $O.001 per share
ARTICLE V
CLASSES OF STOCK
Except as otherwise required by law, each stockholder shall
be entitled to one vote for each share of common stock held by
such stockholder on all matters submitted to a vote of the
stockholders. Subject to the preferences, powers and rights of
shares of preferred stock as designated in the resolution or
resolutions of the board of directors authorizing the issuance of
such preferred stock, as set forth below, the stockholders of the
common stock shall be entitled, on a pro rata basis, to receive
all remaining assets of the Corporation, tangible or intangible,
in the event of liquidation or dissolution, or winding up of the
Corporation. A consolidation, merger, or reorganization of the
Corporation with or into any other corporation, or a sale of all
or substantially all of the assets of the Corporation shall not
be deemed to be a liquidation or dissolution of the Corporation
unless so designated by the board of directors.
The board of directors is hereby vested with the authority
to issue shares of preferred stock, from time to time in one or
more series, as may be determined in the resolution or
resolutions of the board of directors authorizing such issuance.
Each series shall be distinctly designated and shares of any one
series shall be alike in every particular, except that there may
be different dates from which dividends thereon, if any, shall be
cumulative, if such dividends are made cumulative. The powers,
preferences and relative participating, optional and other rights
of each series, and the qualifications, limitations or
restrictions thereon may differ from those of any and all other
series and shall be fixed by the board of directors in the
resolution or resolutions authorizing the issuance of any series.
Without limiting the generality of the foregoing, the board of
directors shall have the authority to establish;
(a) The distinctive designation of and the number of shares
of preferred stock which shall constitute each series, which
number may be increased (except as otherwise fixed by the board
of directors) or decreased (but not below the number of shares
thereof outstanding) from time to time by action of the board of
directors;
(b) The voting powers of such series, either full, limited
or without voting rights;
(c) The rate and times at which dividends on shares of the
series shall be paid; the extent of preferences or relation, if
any, of such dividends to the dividends payable on any other
class or classes of the Corporation, or any other series of
preferred stock, and whether such dividends shall be cumulative
or non-cumulative;
(d) The right, if any, of the holders of the shares of the
same series to convert the same into, or exchange the same for,
any other class or classes of stock of the Corporation, or of any
other series of preferred stock, and the terms and conditions of
such conversion or exchange;
(e) Whether shares of the series shall be subject to
redemption, and the redemption price or prices, including,
without limitation, a redemption price or prices payable in
shares of Common Stock, and the time and times at which, and the
terms and conditions upon which, shares or the series may be
redeemed;
(f) The rights, if any, of the holders of the shares of the
series upon voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding up of the Corporation; and
(g) The terms of any sinking fund or redemption or purchase
account with respect to such.
is hereby amended by striking Article V in its entirety and
inserting in lieu thereof:
ARTICLE V
CLASSES OF STOCK
Except as otherwise required by law, each stockholder shall
be entitled to one vote for each share of common stock held by
such stockholder on all matters submitted to a vote of the
stockholders. Subject to the preferences, powers and rights of
shares of preferred stock as designated in the resolution or
resolutions of the board of directors authorizing the issuance of
such preferred stock, as set forth below, the stockholders of the
common stock shall be entitled, on a pro rata basis, to receive
all remaining assets of the Corporation, tangible or intangible,
in the event of liquidation or dissolution, or winding up of the
Corporation. A consolidation, merger, or reorganization of the
Corporation with or into any other corporation, or a sale of all
or substantially all of the assets of the Corporation shall not
be deemed to be a liquidation or dissolution of the Corporation
unless so designated by the board of directors.
The board of directors is hereby vested with the authority
to issue shares of preferred stock, from time to time in one or
more series, as may be determined in the resolution or
resolutions of the board of directors authorizing such issuance.
Each series shall be distinctly designated and shares of any one
series shall be alike in every particular, except that there may
be different dates from which dividends thereon, if any, shall be
cumulative, if such dividends are made cumulative. The powers,
preferences and relative participating, optional and other rights
of each series, and the qualifications, limitations or
restrictions thereon may differ from those of any and all other
series and shall be fixed by the board of directors in the
resolution or resolutions authorizing the issuance of any series.
Without limiting the generality of the foregoing, the board of
directors shall have the authority to establish;
(a) Preferred Stock. Shares of Preferred Stock may be
issued from time to time in one or more series as may from time
to time be determined by the board of directors. Each series
shall be distinctly designated. All shares of any one series of
the Preferred Stock shall be alike in every particular, except
that there may be different dates from which dividends thereon,
if any, shall be cumulative, if made cumulative. The powers,
preferences, participating, optional, and other rights of each
such series and qualifications, limitations, or restrictions
thereof, if any, may differ from those of any and all other
series at any time outstanding. Except as hereinafter provided,
the board of directors of this Corporation is hereby expressly
granted authority to fix by resolution or resolutions adopted
prior to the issuance of any shares of each particular series of
Preferred Stock, the designation, powers, preferences, and
relative participating, optional, and other rights and the
qualifications, limitations, and restrictions thereof, if any, of
such series, including, without limiting the generality of the
foregoing, the following:
(i) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute, each series,
which number may be increased (except as otherwise fixed by the
board of directors) or decreased (but not below the number of
shares thereof outstanding) from time to time by action of the
board of directors;
(ii) The rate and times at which, and the terms and
conditions on which, dividends, if any, on shares of the series
shall be paid; the extent of preferences or relation, if any, of
such dividends to the dividends payable on any other class or
classes of stock of this Corporation or on any series of
Preferred Stock and whether such dividends shall be cumulative or
noncumulative;
(iii) The right, if any, of the holders of shares of the
same series to convert the same into, or exchange the same for,
any other class or classes of stock of this Corporation and the
terms and conditions of such conversion or exchange;
(iv) Whether shares of the series shall be subject to
redemption and the redemption price or prices, including, without
limitation, a redemption price or prices payable in shares of
Common Stock, cash, or other property and the time or times at
which, and the terms and conditions on which, shares of the
series may be redeemed;
(v) The rights, if any, of the holders of shares of the
series on voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution, or
winding up of this Corporation;
(vi) The terms of any sinking fund or redemption or
purchase account, if any, to be provided for shares of the
series; and
(vii) The voting powers, if any, of the holders of shares
of the series which may, without limiting the generality of the
foregoing, include (A) the right to more or less than one vote
per share on any or all matters voted on by the shareholders and
(B) the right to vote as a series by itself or together with
other series of Preferred Stock or together with all series of
Preferred Stock as a class, on such matters, under such
circumstances, and on such conditions as the board of directors
may fix, including, without limitation, the right, voting as a
series by itself or together with other series of Preferred Stock
or together with all series of Preferred Stock as a class, to
elect one or more directors of this Corporation in the event
there shall have been a default in the payment of dividends on
any one or more series of Preferred Stock or under such other
circumstances and upon such conditions as the board of directors
may determine.
(b) Common Stock. The Common Stock shall have the
following powers, rights, qualifications, limitations, and
restrictions:
(i) After the requirements with respect to preferential
dividends of Preferred Stock, if any, shall have been met and
after this Corporation shall comply with all the requirements, if
any, with respect to the setting aside of funds as sinking funds
or redemption or purchase accounts and subject further to any
other conditions which may be required by the General Corporation
Law of Delaware, then, but not otherwise, the holders of Common
Stock shall be entitled to receive such dividends, if any, as may
be declared from time to time by the board of directors without
distinction as to series;
(ii) After distribution in full of any preferential amount
to be distributed to the holders of Preferred Stock, if any, in
the event of a voluntary or involuntary liquidation, distribution
or sale of assets, dissolution, or winding up of this
Corporation, the holders of the Common Stock shall be entitled to
receive all the remaining assets of this Corporation, tangible
and intangible, of whatever kind available for distribution to
stockholders, ratably in proportion to the number of shares of
the Common Stock held by each without distinction as to series;
and
(iii) Except as may otherwise be required by law or this
Certificate of Incorporation, in all matters as to which the vote
or consent of stockholders of the Corporation shall be required
or be taken, including, any vote to amend this Certificate of
Incorporation, to increase or decrease the par value of any class
of stock, effect a stock split or combination of shares, or alter
or change the powers, preferences, or special rights of any class
or series of stock, the holders of the Common Stock shall have
one vote per share of Common Stock on all such matters and shall
not have the right to cumulate their votes for any purpose.
(c) Other Provisions.
(i) The board of directors of the Corporation shall have
authority to authorize the issuance, from time to time without
any vote or other action by the stockholders, of any or all
shares of the Corporation of any class at any time authorized,
and any securities convertible into or exchangeable for such
shares, in each case to such persons and for such consideration
and on such terms as the board of directors from time to time in
its discretion lawfully may determine; provided, however, that
the consideration for the issuance of shares of stock of the
Corporation having par value shall not be less than such par
value. Shares so issued, for which the full consideration
determined by the board of directors has been paid to the
Corporation, shall be fully paid stock and the holders of such
stock shall not be liable for any further call or assessments
thereon.
(ii) Unless otherwise provided in the resolution of the
board of directors providing for the issue of any series of
Preferred Stock, no holder of shares of any class of the
Corporation or of any security of obligation convertible into, or
of any warrant, option or right to purchase, subscribe for or
otherwise acquire, shares of any class of the Corporation,
whether now or hereafter authorized, shall, as such holder, have
any preemptive right whatsoever to purchase, subscribe for, or
otherwise acquire shares of any class of the Corporation, whether
now or hereafter authorized.
(iii) Anything herein contained to the contrary
notwithstanding, any and all right, title, interest, and claim in
and to any dividends declared or other distributions made by the
Corporation, whether in cash, stock, or otherwise, which are
unclaimed by the stockholder entitled thereto for a period of six
years after the close of business on the payment date, shall be
and be deemed to be extinguished and abandoned; and such
unclaimed dividends or other distributions in the possession of
the Corporation, its transfer agents, or other agents or
depositories, shall at such time become the absolute property of
the Corporation, free and clear of any and all claims of any
person whatsoever.
Except as otherwise required by law, each stockholder shall
be entitled to one vote for each share of common stock held by
such stockholder on all matters submitted to a vote of the
stockholders.
The foregoing amendment to the articles of incorporation was
adopted by the shareholders of the Corporation on October 31,
1986, pursuant to NRS 78.320. The number of shares issued and
outstanding and entitled to vote on the above date was
15,000,000. The number of shares voted in favor of the amendment
to Article IV and Article V was 15,000,000 and the number voted
against the amendment was none.
DATED this 31st day of October, 1986.
PHOENIX CAPITAL CORPORATION
By: /s/
Dave N. Hardin, President
By: /s/
Judy M. Brooks, Secretary
State of Texas )
County of Tarrany)
On this day of October, 1986, before me, a notary
public personally appeared Dave N. Hardin and Judy M. Brooks,
being by me first duly sworn, who acknowledged to me that they
are the persons who executed the foregoing Certificate of
Amendment to the Articles of Incorporation of Phoenix Capital
Corporation; and to the best of their knowledge, information and
belief, the statements made in the Certificate of Amendment are
true.
Notary Public
ARTICLES OF INCORPORATION
OF
PHOENIX CAPITAL CORPORATION
The undersigned incorporators being natural persons more
than eighteen years of age acting as all of the incorporators of
the above-named corporation (hereinafter referred to as the
"Corporation") hereby adopts the following articles of
incorporation for the Corporation.
ARTICLE I
NAME
The name of the corporation shall be:
Phoenix Capital Corporation
ARTICLE II
PERIOD OF DURATION
The Corporation shall continue in existence perpetually
unless sooner dissolved according to law.
ARTICLE III
PURPOSES AND POWERS
The purpose or purposes for which the Corporation is
organized is to seek, investigate, acquire interests in, and
dispose of business opportunities, ventures, enterprises, or
assets; to own and operate any enterprise whatsoever, to acquire,
hold, and dispose of real or personal property of any kind or
nature, tangible or intangible; and to do any and every act or
thing proper or necessary, and incidental to the general the
purpose of the Corporation permissible under the laws of the
state or Nevada.
The Corporation is organized for the further purpose of
conducting any lawful business for which a corporation may be
organized under the laws of Nevada.
ARTICLE IV
AUTHORIZED SHARES
The Corporation is authorized to issue a total of
200,000,000 shares consisting of 5,000,000 shares of preferred
stock having a par value of $0.001 per share and 195,000,000
shares of common stock having a par value of $0.001 per share.
ARTICLE V
CLASSES OF STOCK
Except as otherwise required by law, each stockholder shall
be entitled to one vote for each share of common stock held by
such stockholder on all matters submitted to a vote of the
stockholders. Subject to the preferences, powers and rights of
shares of preferred stock as designated in the resolution or
resolutions of the board of directors authorizing the issuance of
such preferred stock, as set forth below, the stockholders of the
Common Stock shall be entitled, on a pro rata basis, to receive
all remaining assets of the Corporation, tangible or intangible,
in the event of liquidation or dissolution, or winding up of the
Corporation. A consolidation, merger, or reorganization of the
Corporation with or into any other corporation, or a sale of all
or substantially all of the assets of the Corporation shall not
be deemed to be a liquidation or dissolution of the Corporation
unless so designated by the board of directors.
The board of directors is hereby vested with the authority
to issue shares of preferred stock, from time to time in one or
more series, as may be determined in the resolution or
resolutions of the board of directors authorizing such issuance.
Each series shall be distinctly designated and shares of any one
series shall be alike in every particular, except that there may
be different dates from which dividends thereon, if any, shall be
cumulative, if such dividends are made cumulative. The powers,
preferences and relative participating, optional and other rights
of each series, and the qualifications, limitations or
restrictions thereon may differ from those of any and all other
series and shall be fixed by the board of directors in the
resolution or resolutions authorizing the issuance of any series.
Without limiting the generality of the foregoing, the board of
directors shall have the authority to establish;
(a) The distinctive designation of and the number of shares
of preferred stock which shall constitute each series, which
number may be increased (except as otherwise fixed by the board
of directors) or decreased (but not below the number of shares
thereof outstanding) from time to time by action of the board of
directors;
(b) The voting powers of such series, either full, limited,
or without voting rights;
(c) The rate and times at which dividends on shares of the
series shall be paid; the extent of preferences or relation, if
any, of such dividends to the dividends payable on any other
class or classes of the Corporation, or any other series of
preferred stock, and whether such dividends shall be cumulative
or non-cumulative;
(d) The right, if any, of the holders of the shares of the
same series to convert the same into, or exchange the same for,
any other class or classes of stock of the Corporation, or of any
other series of preferred stock, and the terms and conditions of
such conversion or exchange;
(e) Whether shares of the series shall be subject to
redemption, and the redemption price or prices, including,
without limitation, a redemption price or prices payable in
shares of Common Stock, and the time and times at which, and the
terms and conditions upon which, shares of the series may be
redeemed;
(f) The rights, if any, of the holders of the shares of the
series upon voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding up of the Corporation; and
(g) The terms of any sinking fund or redemption or purchase
account with respect to such.
ARTICLE VI
ASSESSMENT
Upon the issuance of the stock of the Corporation for cash
or other consideration deemed adequate by the board of directors
and permissible under the provisions of the Nevada Revised
Statutes in an amount at least equal to the stated par value of
the shares, such shares shall be fully paid and shall be
nonassessable to pay the debts of the Corporation.
ARTICLE VII
PRE-EMPTIVE RIGHTS
Stockholders of the Corporation shall not have pre-emptive
rights to subscribe for or to acquire additional shares of the
Corporation, whether such shares be hereby or hereafter
authorized.
Except as otherwise required by law, stockholders shall not
have the right to cumulate their votes for the election of
directors or for any other purpose.
ARTICLE IX
OFFICERS AND DIRECTORS CONTRACTS
No contract or other transaction between the Corporation and
any other firm or corporation shall be affected by the fact that
a director or officer of the Corporation has an interest in, or
is a director or officer of such firm or other corporation. Any
officer or director, individually or with others, may be a party
to, or may have an interest in, any transaction of the
Corporation or any transaction in which the Corporation is a
party or has an interest. Each person who is now or may become
an officer or director of the corporation is hereby relieved from
liability that he might otherwise incur in the event such officer
or director contracts with the Corporation individually or in
behalf of another corporation or entity in which he may have an
interest; provided that such officer or director acts in good
faith.
ARTICLE X
INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
The Corporation may indemnify each director, officer,
employee, or agent of the Corporation and their respective heirs,
administrators, and executors, against all liabilities and
expenses reasonably incurred in connection with any action, suit,
or proceeding to which he may be made a party by reason of his
being or having been a director, officer, employee, or agent of
the Corporation, to the full extent permitted by the laws of the
state of Nevada now existing or as such laws may hereafter be
amended.
ARTICLE XI
REGISTERED OFFICE AND REGISTERED AGENT
The address of the Corporation's principal office in the
state of Nevada is One East First Street, Reno, Washoe County,
Nevada 89501. The name and address of its initial resident agent
is The Corporation Trust Company of Nevada. Either the
registered office or the resident agent may be changed in the
manner provided by law.
ARTICLE XII
DIRECTORS
The Corporation need not have more directors than the number
of stockholders who own an equity interest in the Corporation.
At such time as the Corporation has three or more stockholders,
it shall have not less than three nor more than nine directors as
determined, from time to time by the board or directors. The
permissible number of directors may be increased or decreased
from time to time by the board of directors in accordance with
Section 78.330 of the Nevada Revised statutes or any amendment or
successor statute. The original board of directors shall consist
or three persons. The name and address of each person who is to
serve as director until the first annual meeting of stockholders
and until his or her successor is elected and shall qualify is as
follows:
NAME ADDRESS
Dave N. Hardin 4101 Green Oaks Blvd. West, Ste 135
Arlington, TX 76016
Frank W. Cole 14114 Dallas Parkway, #400
Dallas, TX 74240
Judy M. Brooks 6421 Camp Bowie, #300
Fort Worth, TX 76116
ARTICLE XIII
INCORPORATORS
The name and mailing address of the each of the
incorporators signing these articles of incorporation is as
follows:
Dave N. Hardin 4101 Green Oaks Blvd. West, Ste 135
Arlington, TX 76016
Frank W. Cole 14114 Dallas Parkway, #400
Dallas, TX 74240
Judy M. Brooks 6421 Camp Bowie, #300
Fort Worth, TX 76116
We, the undersigned, being all of the incorporators of the
Corporation, herein before named, do make and file these articles
of incorporation, hereby declaring that the facts herein are
true.
DATED this 29th day of August, 1986.
By: /s/
Dave N. Hardin
By: /s/
Frank W. Cole
By: /s/
Judy M. Brooks
State of Texas )
County of Dallas )
On this 29th day of August, 1986 before me, a notary public,
personally appeared Dave N. Hardin, Frank W. Cole, and Judy M.
Brooks, who upon being first duly sworn, acknowledged to me that
they executed the foregoing articles of incorporation.
Notary Public
Exhibit No. 2/ AFGL International, Inc./ Form S-3
BYLAWS
OF
AFGL INTERNATIONAL, INC.
ARTICLE I
OFFICES
Section 1.01. Registered Office. The registered office
shall be in the city of Reno, county of Washoe, state of Nevada.
Section 1.02. Locations of Offices. The corporation may
also have offices at such other places both within and without
the state of Nevada as the board of directors may from time to
time determine or the business of the corporation may require.
ARTICLE II
STOCKHOLDERS
Section 2.01. Annual Meeting. The annual meeting of the
stockholders shall be held on the second Tuesday of the third
month following the anniversary of incorporation or at such other
time designated by the board of directors and as is provided for
in the notice of the meeting; provided, that whenever such date
falls on a legal holiday, the meeting shall be held on the next
succeeding business day, beginning with the year following the
filing of the articles of incorporation, for the purpose of
electing directors and for the transaction of such other business
as may come before the meeting. If the election of directors
shall not be held on the day designated herein for the annual
meeting of the stockholders, or at any adjournment thereof, the
board of directors shall cause the election to be held at a
special meeting of the stockholders as soon thereafter as may be
convenient.
Section 2.02. Special Meetings. Special meetings of the
stockholders may be called at any time by the chairman of the
board, the president, or by the board of directors, or in their
absence or disability, by any vice president.
Section 2.03. Place of Meetings. The board of directors
may designate any place, either within or without the state of
incorporation, as the place of meeting for any annual meeting or
for any special meeting called by the board of directors. A
waiver of notice signed by all stockholders entitled to vote at a
meeting may designate any place, either within or without the
state of incorporation, as the place for the holding of such
meeting. If no designation is made, the place of meeting shall
be at the principal office of the corporation.
Section 2.04. Notice of Meetings. The secretary or
assistant secretary, if any, shall cause notice of the time,
place and purpose or purposes of all meetings of the stockholders
(whether annual or special), to be mailed at least ten (but not
more than 60) days prior to the meeting, to each stockholder of
record entitled to vote.
Section 2.05. Waiver of Notice. Any stockholder may waive
notice of any meeting of stockholders (however called or noticed,
whether or not called or noticed and whether before, during, or
after the meeting), signing a written waiver of notice or a
consent to the holding of such meeting, or an approval of the
minutes thereof. Attendance at a meeting, in person or by proxy,
shall constitute waiver of all defects of notice regardless of
whether waiver, consent, or approval is signed or any objections
are made, unless attendance is solely for the purpose of
objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or
convened. All such waivers, consents, or approvals shall be made
a part of the minutes of the meeting.
Section 2.06. Fixing Record Date. For the purpose of
determining stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or to express
consent to corporate action in writing without a meeting, or
stockholder entitled to receive payment of any dividend or other
distribution or allotment of any rights or entitled to exercise
any rights in respect to any change, conversion, or exchange of
stock, or for the purpose of any other lawful action, the board
of directors may fix in advance a date as the record date for any
such determination of stockholders, such date in any case to be
not more than 60 days and, in case of a meeting of stockholders,
not less than 10 days prior to the date on which the particular
action requiring such determination of stockholders is to be
taken. If no record date is fixed for the determination of
stockholders entitled to notice of or to vote at a meeting, the
day preceding the date on which notice of the meeting is mailed
shall be the record date. For any other purpose, the record date
shall be the close of business on the date on which the
resolution of the board of directors pertaining thereto is
adopted. When a determination of stockholders entitled to vote
at any meeting of stockholders has been made as provided in this
section, such determination shall apply to any adjournment
thereof. Failure to comply with this section shall not affect
the validity of any action taken at a meeting of stockholders.
Section 2.07. Voting Lists. The officers of the
corporation shall cause to be prepared from the stock ledger at
least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at such meeting or any
adjournment thereof, arranged in alphabetical order, and showing
the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by
any stockholder who is present. The original stock ledger shall
be the only evidence as to who are the stockholders entitled to
examine the stock ledger, the list required by this section, or
the books of the corporation, or to vote in person or by proxy at
any meeting of stockholders.
Section 2.08. Quorum. Stock representing one-third of the
voting power of all outstanding stock of the corporation entitled
to vote, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the
transaction of business, except as otherwise provided by statute
or by the certificate of incorporation. If, however, such quorum
shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn
the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall
be present or represented any business may be transacted which
might have been transacted at the meeting as originally notified.
If the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting,
a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 2.09. Vote Required. Except as provided in section
3.01 of these bylaws regarding election of directors, when a
quorum is present at any meeting, the vote of the holders of
stock having a majority of the voting power present in person or
represented by proxy shall decide any question brought before
such meeting, unless the question is one on which by express
provision of the statutes of the state of Nevada or of the
articles of incorporation a different vote is required, in which
case such express provision shall govern and control the decision
of such question.
Section 2.10. Voting of Stock. Unless otherwise provided
in the articles of incorporation, each stockholder shall at every
meeting of the stockholders be entitled to one vote in person or
by proxy for each share of the capital stock having voting power
held by such stockholder, subject to the modification of such
voting rights of any class or classes of the corporation's
capital stock by the articles of incorporation.
Section 2.11. Proxies. At each meeting of the
stockholders, each stockholder entitled to vote shall be entitled
to vote in person or by proxy; provided, however, that the right
to vote by proxy shall exist only in case the instrument
authorizing such proxy to act shall have been executed in writing
by the registered holder or holders of such stock, as the case
may be, as shown on the stock ledger of the corporation or by his
attorney thereunto duly authorized in writing. Such instrument
authorizing a proxy to act shall be delivered at the beginning of
such meeting to the secretary of the corporation or to such other
officer or person who may, in the absence of the secretary, be
acting as secretary of the meeting. In the event that any such
instrument shall designate two or more persons to act as proxy, a
majority of such persons present at the meeting, or if only one
be present, that one shall (unless the instrument shall otherwise
provide) have all of the powers conferred by the instrument on
all persons so designated. Persons holding stock in a fiduciary
capacity shall be entitled to vote the stock so held and the
persons whose shares are pledged shall be entitled to vote,
unless the transfer by the pledgor in the books and records of
the corporation shall have expressly empowered the pledgee to
vote thereon, in which case the pledgee, or his proxy, may
represent such stock and vote thereon. No proxy shall be voted
or acted on after three years from its date, unless the proxy
provides for a longer period.
Section 2.12. Written Consent to Action by Stockholders.
Unless otherwise provided in the articles of incorporation, any
action required to be taken at any annual or special meeting of
stockholders of the corporation, or any action which may be taken
at any annual or special meeting of such stockholders, may be
taken without a meeting, without prior notice, and without a
vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
ARTICLE III
DIRECTORS
Section 3.01. Number, Term, and Qualifications. The number
of directors which shall constitute the whole board shall be not
less than three nor more than nine. Within the limits above
specified, the number of directors shall be determined by
resolution of the board of directors or by the stockholders at
the annual meeting of the stockholders or a special meeting
called for such purpose, except as provided in section 3.02 of
this article, and each director elected shall hold office until
his successor is elected and qualified. The election of each
director at an annual or special stockholders' meeting shall be
by a plurality of the votes cast for the nominees to each
directorship voted on separately. Directors need not be
residents of the state of incorporation or stockholders of the
corporation. Anything else in this Section 3.01 to the contrary
notwithstanding, two directors shall be designated by Foote, Cone
& Belding Communications, Inc. ("FCB").
Section 3.02. Vacancies and New Created Directorships.
Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a
quorum, or by a sole remaining director, and the directors so
chosen shall hold office until the next annual election and until
their successors are duly elected and shall qualify. If there
are no directors in office, then an election of directors may be
held in the manner provided by statute.
Section 3.03. General Powers. The business of the
corporation shall be managed under the direction of its board of
directors which may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute or
by the articles of incorporation or by these bylaws directed or
required to be exercised or done by the stockholders.
Section 3.04. Regular Meetings. A regular meeting of the
board of directors shall be held without other notice than this
bylaw immediately following and at the same place as the annual
meeting of stockholders. The board of directors may provide by
resolution the time and place, either within or without the state
of incorporation, for the holding of additional regular meetings
without other notice than such resolution.
Section 3.05. Special Meetings. Special meetings of the
board of directors may be called by or at the request of the
president, vice president, or any two directors. The person or
persons authorized to call special meetings of the board of
directors may fix any place, either within or without the state
of incorporation, as the place for holding any special meeting of
the board of directors called by them.
Section 3.06. Meetings by Telephone Conference Call.
Members of the board of the board of directors may participate in
a meeting of the board of directors or a committee of the board
of directors by means of conference telephone or similar
communication equipment by means of which all persons
participating in the meeting can hear each other, and
participation in a meeting pursuant to this section shall
constitute presence in person at such meeting.
Section 3.07. Notice. Notice of any special meeting shall
be given at least five days prior thereto by written notice
delivered personally or mailed to each director at his regular
business address or residence, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the
United States mail so addressed, with postage thereon prepaid.
If notice be given by telegram, such notice shall be deemed to be
delivered when the telegram is delivered to the telegraph
company. Any director may waive notice of any meeting.
Attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except where a director attends a
meeting solely for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully
called or convened.
Section 3.08. Quorum. A majority of the number of
directors shall constitute a quorum for the transaction of
business at any meeting of the board of directors, but if less
than a majority is present at a meeting, a majority of the
directors present may adjourn the meeting from time to time
without further notice.
Section 3.09. Manner of Acting. The act of a majority of
the directors present at a meeting at which a quorum is present
shall be the act of the board of directors, and individual
directors shall have no power as such.
Section 3.10. Compensation. By resolution of the board of
directors, the directors may be paid their expenses, if any, of
attendance at each meeting of the board of directors, and may be
paid a fixed sum for attendance at each meeting of the board of
directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
Section 3.11. Presumption of Assent. A director of the
corporation who is present at a meeting of the board of directors
at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his dissent
shall be entered in the minutes of the meeting, unless he shall
file his written dissent to such action with the person acting as
the secretary of the meeting before the adjournment thereof, or
shall forward such dissent by registered or certified mail to the
secretary of the corporation immediately after the adjournment of
the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
Section 3.12. Resignations. A director may resign at any
time by delivering a written resignation to either the president,
a vice president, the secretary, or assistant secretary, if any.
The resignation shall become effective on its acceptance by the
board of directors; provided, that if the board has not acted
thereon within ten days from the date presented, the resignation
shall be deemed accepted.
Section 3.13. Written Consent to Action by Directors. Any
action required to be taken at a meeting of the directors of the
corporation or any other action which may be taken at a meeting
of the directors or of a committee, may be taken without a
meeting, if a consent in writing, setting forth the action so
taken, shall be signed by all of the directors, or all of the
members of the committee, as the case may be. Such consent shall
have the same legal effect as a unanimous vote of all the
directors or members of the committee.
Section 3.14. Removal. At a meeting expressly called for
that purpose, one or more directors may be removed by a vote of a
majority of the shares of outstanding stock of the corporation
entitled to vote at an election of directors.
ARTICLE IV
OFFICERS
Section 4.01. Number and Qualifications. The officers of
the corporation shall be a president, a secretary and a
treasurer. Any two or more offices may be held by the same
person. Such officers shall be elected from time to time by the
board of directors, each to hold office until the meeting of the
board following the next annual meeting of the stockholders, or
until his successor shall have been duly elected and shall have
qualified, or until his death, or until he shall have resigned or
until he shall have been removed, as hereinafter provided in
these bylaws. The board of directors may from time to time
appoint such other officers (including a chairman of the board
and one or more vice presidents, assistant treasurers and
assistant secretaries) and such agents as it may deem necessary
or desirable for the business of the corporation. The board of
directors may from time to time authorize any principal officer
or committee to appoint, and to prescribe the authority and
duties of, any such subordinate officers or agents. Each of such
other officers and agents shall have such authority, perform such
duties, and hold office for such period, as are provided in these
bylaws or as may be prescribed by the board of directors or by
the principal officer or committee appointing such officer or
agent.
Section 4.02. Election, Term of Office, and Qualifications.
The officers shall be chosen by the board of directors annually
at its annual meeting. In the event of failure to choose
officers at an annual meeting of the board of directors, officers
may be chosen at any regular or special meeting of the board of
directors. Each such officer (whether chosen at an annual
meeting of the board of directors to fill a vacancy or otherwise)
shall hold his office until the next ensuing annual meeting of
the board of directors and until his successor shall have been
chosen and qualified, or until his death or until his resignation
or removal in the manner provided in these bylaws. Any one
person may hold any two or more of such offices. No person
holding two or more offices shall act in or execute any
instrument in the capacity of more than one office. The chairman
of the board, if any, shall be and remain director of the
corporation during the term of his office. No other officer need
be a director.
Section 4.03. Subordinate Officers, Etc. The board of
directors from time to time may appoint such other officers or
agents as it may deem advisable, each of whom shall have such
title, hold office for such period, have such authority, and
perform such duties as the board of directors from time to time
may determine. The board of directors from time to time may
delegate to any officer or agent the power to appoint any such
subordinate officer or agents and to prescribe their respective
titles, terms of office, authorities, and duties. Subordinate
officers need not be stockholders or directors.
Section 4.04. Resignations. Any officer may resign at any
time by delivering a written resignation to the board of
directors, the president, or the secretary. Unless otherwise
specified therein, such resignation shall take effect on
delivery.
Section 4.05. Removal. Any officer may be removed from
office at any special meeting of the board of directors called
for that purpose or at a regular meeting, by the vote of a
majority of the directors, with or without cause. Any officer or
agent appointed in accordance with the provisions of section 4.03
hereof may also be removed, either with or without cause, by any
officer on whom such power of removal shall have been conferred
by the board of directors.
Section 4.06. Vacancies and Newly Created Offices. If any
vacancy shall occur in any office by reason of death,
resignation, removal, disqualification, or any other cause, or if
a new office shall be created, then such vacancies or newly
created offices may be filled by the board of directors at any
regular or special meeting.
Section 4.07. The Chairman of the Board. The chairman of
the board, if there be such an officer, shall have the following
powers and duties:
(a) He shall preside at all stockholders' meetings;
(b) He shall preside at all meetings of the board of
directors; and
(c) He shall be a member of the executive committee, if
any.
Section 4.08. The President. The president shall have the
following powers and duties:
(a) If no general manager has been appointed, he shall be
the chief executive officer of the corporation and, subject to
the direction of the board of directors, shall have general
charge of the business, affairs, and property of the corporation
and general supervision over its officers, employees, and agents;
(b) If no chairman of the board has been chosen, or if such
officer is absent or disabled, he shall preside at meetings of
the stockholders and board of directors;
(c) He shall be a member of the executive committee, if
any;
(d) He shall be empowered to sign certificates representing
stock of the corporation, the issuance of which shall have been
authorized by the board of directors; and
(e) He shall have all power and perform all duties normally
incident to the office of a president of a corporation and shall
exercise such other powers and perform such other duties as from
time to time may be assigned to him by the board of directors.
Section 4.09. The Vice Presidents. The board of directors
may, from time to time, designate and elect one or more vice
presidents, one of whom may be designated to serve as executive
vice president. Each vice president shall have such powers and
perform such duties as from time to time may be assigned to him
by the board of directors or the president. At the request or in
the absence or disability of the president, the executive vice
president or, in the absence or disability of the executive vice
president, the vice president designated by the board of
directors or (in the absence of such designation by the board of
directors) by the president, as senior vice president, may
perform all the duties of the president, and when so acting,
shall have all the powers of and be subject to all the
restrictions on, the president.
Section 4.10. The Secretary. The secretary shall have the
following powers and duties:
(a) He shall keep or cause to be kept a record of all of
the proceedings of the meetings of the stockholders and of the
board of directors in books provided for that purpose;
(b) He shall cause all notices to be duly given in
accordance with the provisions of these bylaws and as required by
statute;
(c) He shall be the custodian of the records and of the
seal of the corporation, and shall cause such seal (or a
facsimile thereof) to be affixed to all certificates representing
stock of the corporation prior to the issuance thereof and to all
instruments, the execution of which on behalf of the corporation
under its seal shall have been duly authorized in accordance with
these bylaws, and when so affixed, he may attest the same;
(d) He shall see that the books, reports, statements,
certificates, and other documents and records required by statute
are properly kept and filed;
(e) He shall have charge of the stock ledger and books of
the corporation and cause such books to be kept in such manner as
to show at any time the amount of the stock of the corporation of
each class issued and outstanding, the manner in which and the
time when such stock was paid for, the names alphabetically
arranged and the addresses of the holders of record thereof, the
amount of stock held by each holder and time when each became
such holder of record; and he shall exhibit at all reasonable
times to any director, on application, the original or duplicate
stock ledger. He shall cause the stock ledger referred to in
section 6.04 hereof to be kept and exhibited at the principal
office of the corporation, or at such other place as the board of
directors shall determine, in the manner and for the purpose
provided in such section;
(f) He shall be empowered to sign certificates representing
stock of the corporation, the issuance of which shall have been
authorized by the board of directors; and
(g) He shall perform in general all duties incident to the
office of secretary and such other duties as are given to him by
these bylaws or as from time to time may be assigned to him by
the board of directors or the president.
Section 4.11. The Treasurer. The treasurer shall have the
following powers and duties:
(a) He shall have charge and supervision over and be
responsible for the monies, securities, receipts, and
disbursements of the corporation;
(b) He shall cause the monies and other valuable effects of
the corporation to be deposited in the name and to the credit of
the corporation in such banks or trust companies or with such
banks or other depositories as shall be selected in accordance
with section 5.03 hereof;
(c) He shall cause the monies of the corporation to be
disbursed by checks or drafts (signed as provided in section 5.04
hereof) drawn on the authorized depositories of the corporation,
and cause to be taken and preserved property vouchers for all
monies disbursed;
(d) He shall render to the board of directors or the
president, whenever requested, a statement of the financial
condition of the corporation and of all of his transactions as
treasurer, and render a full financial report at the annual
meeting of the stockholders, if called on to do so;
(e) He shall cause to be kept correct books of account of
all the business and transactions of the corporation and exhibit
such books to any directors on request during business hours;
(f) He shall be empowered from time to time to require from
all officers or agents of the corporation reports or statements
giving such information as he may desire with respect to any and
all financial transactions of the corporation; and
(g) He shall perform in general all duties incident to the
office of treasurer and such other duties as are given to him by
these bylaws or as from time to time may be assigned to him by
the board of directors or the president.
Section 4.12. General Manager. The board of directors may
employ and appoint a general manager who may appoint a general
manager may, or may not, be one of the officers or directors of
the corporation. The general manager, if any, shall have the
following powers and duties:
(a) He shall be the chief executive officer of the
corporation and, subject to the directions of the board of
directors, shall have general charge of the business affairs and
property of the corporation and general supervision over its
officers, employees, and agents;
(b) He shall have the exclusive management of the business
of the corporation and of all of its dealings, but at all times
subject to the control of the board of directors;
(c) Subject to the approval of the board of directors or
the executive committee, if any, he shall employ all employees of
the corporation, or delegate such employment to subordinate
officers, or such division chiefs, and shall have authority to
discharge any person so employed; and
(d) He shall make a report to the president and directors
quarterly, or more often if required to do so, setting forth the
result of the operations under his charge, together with
suggestions looking to the improvement and betterment of the
condition of the corporation, and shall perform such other duties
as the board of directors shall require.
Section 4.13. Salaries. The salaries or other compensation
of the officers of the corporation shall be fixed from time to
time by the board of directors, except that the board of
directors may delegate to any person or group of persons the
power to fix the salaries or other compensation of any
subordinate officers or agents appointed in accordance with the
provisions of section 4.03 hereof. No officer shall be prevented
from receiving any such salary or compensation by reason of the
fact that he is also a director of the corporation.
Section 4.14. Surety Bonds. In case the board of directors
shall so require, any officer or agent of the corporation shall
execute to the corporation a bond in such sums and with such
surety or sureties as the board of directors may direct,
conditioned on the faithful performance of his duties to the
corporation, including responsibility for negligence and for the
accounting of all property, monies, or securities of the
corporation which may come into his hands.
ARTICLE V
EXECUTION OF INSTRUMENTS, BORROWING OF MONEY,
AND DEPOSIT OF CORPORATE FUNDS
Section 5.01. Execution of Instruments. Subject to any
limitation contained in the articles of incorporation or these
bylaws, the president or any vice president or the general
manager, if any, may, in the name and on behalf of the
corporation, execute and deliver any contract or other instrument
authorized in writing by the board of directors. The board of
directors may, subject to any limitation contained in the
articles of incorporation or in these bylaws, authorize in
writing any officer or agent to execute and deliver any contract
or other instrument in the name and on behalf of the corporation;
any such authorization may be general or confined to specific
instances.
Section 5.02. Loans. No loan or advance shall be
contracted on behalf of the corporation, no negotiable paper or
other evidence of its obligation under any loan or advance shall
be issued in its name, and no property of the corporation shall
be mortgaged, pledged, hypothecated, transferred, or conveyed as
security for the payment of any loan, advance, indebtedness, or
liability of the corporation, unless and except as authorized by
the board of directors. Any such authorization may be general or
confined to specific instances.
Section 5.03. Deposits. All monies of the corporation not
otherwise employed shall be deposited from time to time to its
credit in such banks or trust companies or with such bankers or
other depositories as the board of directors may select, or as
from time to time may be selected by any officer or agent
authorized to do so by the board of directors.
Section 5.04. Checks, Drafts, Etc. All notes, drafts,
acceptances, checks, endorsements, and, subject to the provisions
of these bylaws, evidences of indebtedness of the corporation
shall be signed by such officer or officers or such agent or
agents of the corporation and in such manner as the board of
directors from time to time may determine. Endorsements for
deposit to the credit of the corporation in any of its duly
authorized depositories shall be in such manner as the board of
directors from time to time may determine.
Section 5.05. Banks and Debentures. Every bond or
debenture issued by the corporation shall be evidenced by an
appropriate instrument which shall be signed by the president or
a vice president and by the secretary and sealed with the seal of
the corporation. The seal may be a facsimile, engraved or
printed. Where such bond or debenture is authenticated with the
manual signature of an authorized officer of the corporation or
other trustee designated by the indenture of trust or other
agreement under which such security is issued, the signature of
any of the corporation's officers named thereon may be a
facsimile. In case any officer who signed, or whose facsimile
signature has been used on any such bond or debenture, shall
cease to be an officer of the corporation for any reason before
the same has been delivered by the corporation, such bond or
debenture may nevertheless be adopted by the corporation and
issued and delivered as though the person who signed it or whose
facsimile signature has been used thereon had not ceased to be
such officer.
Section 5.06. Sale, Transfer, Etc. of Securities. Sales,
transfers, endorsements, and assignments of stocks, bonds, and
other securities owned by or standing in the name of the
corporation, and the execution and delivery on behalf of the
corporation of any and all instruments in writing incident to any
such sale, transfer, endorsement, or assignment, shall be
effected by the president, or by any vice president together with
the secretary, or by any officer or agent thereunto authorized by
the board of directors.
Section 5.07. Proxies. Proxies to vote with respect to
stock of other corporations owned by or standing in the name of
the corporation shall be executed and delivered on behalf of the
corporation by the president or any vice president and the
secretary or assistant secretary of the corporation, or by any
officer or agent thereunder authorized by the board of directors.
ARTICLE VI
CAPITAL SHARES
Section 6.01. Stock Certificates. Every holder of stock in
the corporation shall be entitled to have a certificate, signed
by the president or any vice president and the secretary or
assistant secretary, and sealed with the seal (which may be a
facsimile, engraved or printed) of the corporation, certifying
the number and kind, class or series of stock owned by him in the
corporation; provided, however, that where such a certificate is
countersigned by (a) a transfer agent or an assistant transfer
agent, or (b) registered by a registrar, the signature of any
such president, vice president, secretary, or assistant secretary
may be a facsimile. In case any officer who shall have signed,
or whose facsimile signature or signatures shall have been used
on any such certificate, shall cease to be such officer of the
corporation, for any reason, before the delivery of such
certificate by the corporation, such certificate may nevertheless
be adopted by the corporation and be issued and delivered as
though the person who signed it, or whose facsimile signature or
signatures shall have been used thereon, has not ceased to be
such officer. Certificates representing stock of the corporation
shall be in such form as provided by the statutes of the state of
incorporation. There shall be entered on the stock books of the
corporation at the time of issuance of each share, the number of
the certificate issued, the name and address of the person owning
the stock represented thereby, the number and kind, class or
series of such stock, and the date of issuance thereof. Every
certificate exchanged or returned to the corporation shall be
marked "canceled" with the date of cancellation.
Section 6.02. Transfer of Stock. Transfers of stock of the
corporation shall be made on the books of the corporation by the
holder of record thereof, or by his attorney thereunto duly
authorized by a power of attorney duly executed in writing and
filed with the secretary of the corporation or any of its
transfer agents, and on surrender of the certificate or
certificates, properly endorsed or accompanied by proper
instruments of transfer, representing such stock. Except as
provided by law, the corporation and transfer agents and
registrars, if any, shall be entitled to treat the holder of
record of any stock as the absolute owner thereof for all
purposes, and accordingly shall not be bound to recognize any
legal, equitable, or other claim to or interest in such stock on
the part of any other person whether or not it or they shall have
express or other notice thereof.
Section 6.03. Regulations. Subject to the provisions of
articles IV and V of the articles of incorporation the board of
directors may make such rules and regulations as they may deem
expedient concerning the issuance, transfer, redemption, and
registration of certificates for stock of the corporation.
Section 6.04. Maintenance of Stock Ledger at Principal
Place of Business. A stock ledger (or ledgers where more than
one kind, class, or series of stock is outstanding) shall be kept
at the principal place of business of the corporation, or at such
other place as the board of directors shall determine, containing
the names alphabetically arranged of original stockholders of the
corporation, their addresses, their interest, the amount paid on
their shares, and all transfers thereof and the number and class
of stock held by each. Such stock ledgers shall at all
reasonable hours be subject to inspection by persons entitled by
law to inspect the same.
Section 6.05. Transfer Agents and Registrars. The board of
directors may appoint one or more transfer agents and one or more
registrars with respect to the certificates representing stock of
the corporation, and may require all such certificates to bear
the signature of either or both. The board of directors may from
time to time define the duties of such transfer agents and
registrars. No certificate for stock shall be valid until
countersigned by a transfer agent, if at the date appearing
thereon the corporation had a transfer agent for such stock, and
until registered by a registrar, if at such date the corporation
had a registrar for such stock.
Section 6.06. Closing of Transfer Books and Fixing of
Record Date.
(a) The board of directors shall have power to close the
stock ledgers of the corporation for a period of not to exceed 60
days preceding the date of any meeting of stockholders, or the
date for payment of any dividend, or the date for the allotment
of rights or capital stock shall go into effect, or a date in
connection with obtaining the consent of stockholders for any
purpose.
(b) In lieu of closing the stock ledgers as aforesaid, the
board of directors may fix in advance a date, not exceeding 60
days preceding the date of any meeting of stockholders, or the
date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in
connection with obtaining any such consent, as a record date for
the determination of the stockholders entitled to a notice of,
and to vote at, any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any
such change, conversion or exchange of capital stock, or to give
such consent.
(c) If the stock ledgers shall be closed or a record date
set for the purpose of determining stockholders entitled to
notice of or to vote at a meeting of stockholders, such books
shall be closed for or such record date shall be at least ten
days immediately preceding such meeting.
Section 6.07. Lost or Destroyed Certificates. The
corporation may issue a new certificate for stock of the
corporation in place of any certificate theretofore issued by it,
alleged to have been lost or destroyed, and the board of
directors may, in their discretion, require the owner of the lost
or destroyed certificate or his legal representatives, to give
the corporation a bond in such form and amount as the board of
directors may direct, and with such surety or sureties as may be
satisfactory to the board, to indemnity the corporation and its
transfer agents and registrars, if any, against any claims that
may be made against it or any such transfer agent or registrar on
account of the issuance of such new certificate. A new
certificate may be issued without requiring any bond when, in the
judgment of the board of directors it is proper to do so.
ARTICLE VII
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 7.01. How Constituted. The board of directors may
designate an executive committee and such other committees as the
board of directors may deem appropriate, each of which committees
shall consist of one or more directors. Members of the executive
committee and of any such other committee shall be designated
annually at the annual meeting of the board of directors;
provided, however, that at any time the board of directors may
abolish or reconstitute the executive committee or any such other
committee. Each member of the executive committee and of any
such other committee shall hold office until his successor shall
have been designated or until his resignation or removal in the
manner provided in these bylaws.
Section 7.02. Powers. During the intervals between
meetings of the board of directors, the executive committee shall
have and may exercise all powers of the board of directors in the
management of the business and affairs of the corporation, except
for the power to fill vacancies in the board of directors or to
amend these bylaws, and except for such powers as by law may not
be delegated by the board of directors to an executive committee.
Section 7.03. Proceedings. The executive committee, and
such other committees as may be designated hereunder by the board
of directors, may fix its own presiding and recording officer or
officers, and may meet at such place or places, at such time or
times and on such notice (or without notice) as it shall
determine from time to time. It will keep a record of its
proceedings and shall report such proceedings to the board of
directors at the meeting of the board of directors next
following.
Section 7.04. Quorum and Manner of Acting. At all meetings
of the executive committee, and of such other committees as may
be designated hereunder by the board of directors, the presence
of members constituting a majority of the total authorized
membership of the committee shall be necessary and sufficient to
constitute a quorum for the transaction of business, and the act
of a majority of the members present at any meeting at which a
quorum is present shall be the act of such committee. The
members of the executive committee, and of such other committees
as may be designated hereunder by the board of directors, shall
act only as a committee and the individual members thereof shall
have no powers as such.
Section 7.05. Resignations. Any member of the executive
committee, and of such other committees as may be designated
hereunder by the board of directors, may resign at any time by
delivering a written resignation to either the president, the
secretary, or assistant secretary, or to the presiding officer of
the committee of which he is a member, if any shall have been
appointed and shall be in office. Unless otherwise specified
therein, such resignation shall take effect on delivery.
Section 7.06. Removal. The board of directors may at any
time remove any member of the executive committee or of any other
committee designated by it hereunder either for or without cause.
Section 7.07. Vacancies. If any vacancy shall occur in the
executive committee or of any other committee designated by the
board of directors hereunder, by reason of disqualification,
death, resignation, or removal, or otherwise, the remaining
members shall, until the filling of such vacancy, constitute the
then total authorized membership of the committee and continue to
act, unless such committee consisted of more than one member
prior to the vacancy or vacancies and is left with only one
member as a result thereof. Such vacancy may be filled at any
meeting of the board of directors.
Section 7.08. Compensation. The board of directors may
allow a fixed sum and expenses of attendance to any member of the
executive committee, or of any other committee designated by it
hereunder, who is not an active salaried employee of the
corporation for attendance at each meeting of the said committee.
Section 7.09. Finance Committee and Compensation Committee.
The board of directors shall appoint a Finance Committee and a
Compensation Committee. Each such committee shall include one of
the directors designated by FCB pursuant to Section 3.01 of these
Bylaws. All recommendations of each such committee to the board
of directors must be unanimous, including the affirmative vote of
the FCB representative on each such committee. In addition, each
of the corporate actions set forth on Exhibit I to these Bylaws
must be recommended by either the Finance Committee or the
Compensation Committee, as applicable, prior to its being
approved by the board of directors or otherwise taken.
ARTICLE VIII
INDEMNIFICATION
Section 8.01. Indemnification: Third Party Actions. The
corporation shall have the power to indemnify any person who was
or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceedings,
whether civil, criminal, administrative, or investigative (other
than an action by or in the right of the corporation), by reason
of the fact that he is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him in connection with any such action,
suit, or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and with respect to any
criminal action or proceeding, he had reasonable cause to believe
that his conduct was unlawful.
Section 8.02. Indemnification: Corporate Actions. The
corporation shall have the power to 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 corporation 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 corporation, or is or was serving at
the request of the corporation as a director, officer, employee,
or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys'
fees) 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 or not
opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue, or
matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his
duty to the corporation unless and only to the extent that the
court in which such action or suit was brought shall determine on
application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the court
deems proper.
Section 8.03. Determination. To the extent that a
director, officer, employee, or agent of the corporation has been
successful on the merits or otherwise in defense of any action,
suit, or proceeding referred to in sections 8.01 and 8.02 hereof,
or in defense of any claim, issue, or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith. Any
other indemnification under sections 8.01 or 8.02 hereof shall be
made by the corporation on a determination that indemnification
of the director, officer, employee, or agent is proper in the
circumstances because he has met the applicable standard or
conduct set forth in sections 8.01 or 8.02 hereof. Such
determination shall be made either (i) by the board of directors
by a majority vote of a quorum consisting of directors who were
not parties to such action, suit, or proceeding, or (ii) by
independent legal counsel in a written opinion, or (iii) by the
stockholders by a majority vote of a quorum of stockholders at
any meeting duly called for such purpose.
Section 8.04. General Indemnification. The indemnification
provided by this section shall not be deemed exclusive of any
other indemnification granted under any provision of any statute,
in the corporation's articles of incorporation, bylaws,
agreement, vote of stockholders or disinterested directors, or
otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer,
employee, or agent, and shall inure to the benefit of the heirs
and legal representatives of such a person.
Section 8.05. Advances. Expenses incurred in defending a
civil or criminal action, suit, or proceeding as contemplated in
this section may be paid by the corporation in advance of the
final disposition of such action, suit, or proceeding on a
majority vote of a quorum of the board of directors and on
receipt of an undertaking by or on behalf of the director,
officer, employee, or agent to repay such amount or amounts
unless it ultimately be determined that he is to be indemnified
by the corporation as authorized by this section.
Section 8.06. Scope of Indemnification. The
indemnification authorized by this section shall apply to all
present and future directors, officers, employees, and agents of
the corporation and shall continue as to such persons who cease
to be directors, officers, employees, or agents of the
corporation, and shall inure to the benefit of the heirs,
executors, and administrators of all such persons and shall be in
additional to all other indemnification permitted by law.
Section 8.07. Insurance. The corporation may purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee, or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against any liability
asserted against him and incurred by him in any such capacity or
arising out of his status as such, whether or not the corporation
would have the power to indemnify him against any such liability
under the laws of the state of incorporation, as the same may
hereafter be amended or modified.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
ARTICLE X
DIVIDENDS
The board of directors may from time to time declare, and
the corporation may pay, dividends on its outstanding stock in
the manner and on the terms and conditions provided by the
certificate of incorporation and by law.
ARTICLE XI
AMENDMENTS
All bylaws of the corporation, whether adopted by the board
of directors or the stockholders, shall be subject to amendment,
alteration, or repeal, and new bylaws may be made, except that no
bylaw adopted or amended by the stockholders shall be altered or
repealed by the board of directors.
EXHIBIT I
(Adopted by Resolution of the Board on August 11, 1993)
(A) Corporate actions which must be recommended by the Finance
Committee:
(1) the direct or indirect declaration or payment of any
dividends or the making of any distributions upon any equity
securities except with respect to the Convertible Preferred Stock
and except for dividends by AFGL or Whitney payable to Holdings
to be used by Holdings for (i) normal operating expenses of
Holdings, or (ii) redemption of, or dividends to be paid on, the
Convertible Preferred Stock;
(2) the direct or indirect redemption, purchase or other
acquisition of equity securities other than the Convertible
Preferred Stock, except as otherwise contemplated or permitted by
the Merger Agreement;
(3) the issuance (contingent or otherwise) of any notes or
debt securities containing equity features (including, without
limitation, any notes or debt securities convertible into or
exchangeable for equity securities, issued in connection with the
issuance of equity securities or containing profit participation
features) or any equity securities (or any securities convertible
into or exchangeable for any equity securities) except (i) the
Convertible Preferred Stock; (ii) as contemplated by the Merger
Agreement and (iii) the Tallwood Warrants and the securities
issuable upon exercise thereof;
(4) any transaction with any stockholders, officers,
directors, or their affiliates (other than as permitted pursuant
to the Merger Agreement in connection with the issuance of any
securities of the Companies, or which transaction, or series of
related transactions, involves cash or property valued at $1,000
or less in the aggregate);
(5) the incurrence of any debt, obligation or liability
(absolute, accrued, contingent or otherwise) except the Note,
media or production obligations incurred in the ordinary course
of business and renewals or extensions of obligations to
Amerifund or Merrill Lynch existing on the date hereof on
substantially similar terms and conditions;
(6) make, or make any commitment for, capital expenditures
in excess of $5,000 for any single expenditure or $30,000 in the
aggregate during any period of 12 consecutive months;
(7) the purchase of a business or all or any part of the
stock or assets of a business or the establishment of a joint
venture, partnership or affiliation with any other entity;
(8) the entering into of any lease of real property for any
purpose or any lease of personal property with annual lease
payments in excess of $10,000;
(9) the establishment of any employee benefit plan or
general welfare plan that covers any one or more of the
employees, directors or officers of any of the Companies, whether
active or retired, and whether or not such plan is subject to the
Employee Retirement Income Security Act of 1974, as amended; and
(10) the purchase of outside professional services in
excess of the following amounts: Freelancers -- $100,000 per year
in the aggregate; Accounting -- all amounts incurred through the
Effective Date, plus S75,000 per year; Legal -- all amounts
incurred through the Effective Date, plus $50,000 per year;
Search/employment agencies -- $25,000 per year.
(B) Corporate actions which must be recommended by the
Compensation Committee:
(1) hiring any officer, employee, agent or representative
who is subject to an employment agreement in excess of six (6)
months in duration or who is provided with benefits or severance
rights beyond ordinary policy; and
(2) increases in the annual compensation (including, but
not limited to, salary, bonuses and special remuneration) payable
to or to become payable to any officer or employee whose annual
compensation (including, but not limited to, salary, bonuses and
special remuneration) exceeds $150,000, except where such
increase is due solely to the operation of a bonus formula
existing at the date hereof or subsequently approved by the
Compensation Committee, in accordance with written agreements
previously delivered to FCB or approved by the Compensation
Committee.
The corporate actions contemplated by clauses (A)(3) and (A)(5)
above shall not require approval of the Finance Committee if the
proposed corporate action would result in all of the Convertible
Preferred Stock being redeemed and the entire principal balance,
plus accrued and unpaid interest, of the Note being paid in full.
EXHIBIT II
(Adopted by Resolution of the Board on October 25, 1991)
Neither the corporation nor its stockholders shall be
governed by Sections 78.411 to 78.444, inclusive, of the Nevada
Revised Statutes, or any successor provisions thereto.
Exhibit No. 3/ AFGL International, Inc./ Form S-3
SERIES A CONVERTIBLE PREFERRED STOCK
CERTIFICATE OF DESIGNATION
FOR
21st CENTURY HOLDINGS, INC.
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
21st CENTURY HOLDINGS
Pursuant to Section 78.195 of the
Nevada General Corporation Law
21st CENTURY HOLDINGS, INC., a corporation organized and
existing under the laws of the State of Nevada (the
"Corporation"), in accordance with Section 78.195 of the Nevada
Corporate Law, DOES HEREBY CERTIFY:
1. The Certificate of Incorporation of the Corporation,
as amended (the "Certificate of Incorporation"), fixes the total
number of shares of all classes of capital stock which the
Corporation shall have the authority to issue at Twenty-Five
Million (25,000,000) shares, of which Five Million (5,000,000)
shares shall be shares of Preferred Stock, par value $.001 per
share (herein referred to as "Preferred Stock"), and Twenty
Million (20,000,000) shares shall be shares of Common Stock, par
value $.01 per share (herein referred to as "Common Stock").
2. The Certificate of Incorporation expressly grants to
the Board of Directors of the Corporation authority to provide
for the issuance of said Preferred Stock in one or more series,
with such voting powers, full or limited but not to exceed one
vote per share, or without voting powers, and with such
designations, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the
resolution or revolutions providing for the issue thereof adopted
by the Board of Directors and as are not stated and expressed in
the Certificate of Incorporation.
3. Pursuant to authority conferred upon the Board of
Directors by the Certificate of Incorporation, the Board of
Directors, on Aug. 11, 1993, [by unanimous written consent], duly
authorized and adopted the following resolutions providing for an
issue of a series of its Preferred Stock to be designated "Series
A Convertible Preferred Stock."
"RESOLVED, that an issue of a series of Preferred Stock,
$.001 par value per share, of the Corporation (the Preferred
Stock of the Corporation being herein referred to as "Preferred
Stock", which term shall include any additional shares of
Preferred Stock of the same class hereafter authorized to be
issued by the Corporation), consisting of Ten Thousand (10,000)
shares is hereby provided for, and the voting power, designation,
preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or
restrictions thereof, of such series shall be as set forth below:
Designation: Number of Shares.
(a) The designation of such series of Preferred Stock shall
be "Series A Convertible Preferred Stock" (hereinafter referred
to as the "Convertible Preferred Stock") and the number of
authorized shares constituting the Convertible Preferred Stock is
Ten Thousand (10,000). The Convertible Preferred Stock shall be
deemed a separate class of Preferred Stock apart from any other
series of Preferred Stock.
Part 1. Dividends.
1A. Entitlement. The holders of Convertible Preferred
Stock shall be entitled to receive cumulative cash dividends when
and as declared by the Corporation's Board of Directors out of
funds available therefor under applicable law. Such dividends
shall be paid to the holders of record at the close of business
on the date specified by the Board of Directors at the time such
dividend is declared; provided, however, that such date shall not
be more than sixty (60) days nor less than ten (10) days prior to
each respective Dividend Payment Date (as defined below).
1B. Accrual Rate. Dividends on each share of Convertible
Preferred Stock shall accrue cumulatively on a daily basis at the
rate of 8.00% per annum of the Liquidation Value (as defined
below) thereof, but not including such portion of the Liquidation
Value, if any, which constitutes accrued and unpaid dividends,
from and including the date of issuance of such share to and
including the date on which the Redemption Price (as defined
below) of such share is paid or the date on which such share in
converted into Common Stock. Such dividends shall accrue whether
or not they have been declared and whether or not there are
profits, surplus or other funds of the Corporation legally
available for the payment of dividends. The date on which the
Corporation initially issues any share of the Convertible
Preferred Stock will be deemed to be its "date of issuance"
regardless of the number of times transfer of any such share is
made on the stock records maintained by or for the Corporation
and regardless of the number of certificates which may be issued
to evidence any such share.
1C. Dividend Payment Dates. Dividends on the Convertible
Preferred Stock shall be payable semi-annually on June 30 and
December 31 of each year (the "Dividend Payment Dates"). All
dividends which have accrued on each share of Convertible
Preferred Stock outstanding during the six-month period ending
upon each such Dividend Payment Date will be added to the
Liquidation Value of such share and will remain a part thereof
until such dividends are paid.
1D. Certain Restrictions. The Corporation shall not,
without the prior written consent of the holders of a majority of
Convertible Preferred Stock, (i) declare, order or pay any
dividend (other than dividends payable solely in shares of stock)
on any Junior Securities or (ii) redeem any shares of Junior
Securities, unless and until the Corporation shall have redeemed
all of the outstanding Convertible Preferred Stock in accordance
with Part 3 below.
1E. Distribution of Partial Dividend Payments; Fractional
Shares. If at any time the Corporation pays less than the total
amount of dividends then accrued with respect to the Convertible
Preferred Stock, such payment will be distributed ratably among
the holders of such Convertible Preferred Stock based upon the
aggregate accrued but unpaid dividends on such Convertible
Preferred Stock held by each holder. Each fractional share of
Convertible Preferred Stock outstanding, if any, shall be
entitled to a ratably proportionate amount of all dividends to
which each outstanding full share of such Convertible Preferred
Stock is entitled hereunder.
Part 2. Liquidation.
Upon any liquidation, dissolution or winding up of the
Corporation, the holders of Convertible Preferred Stock will be
entitled to be paid, before any distribution or payment is made
upon any Junior Securities, an amount in cash equal to the
aggregate Liquidation Value of all shares of Convertible
Preferred Stock outstanding, and the holders of Convertible
Preferred Stock will not be entitled to any further payment. If
upon any such liquidation, dissolution or winding up of the
Corporation, the Corporation's assets to be distributed among the
holders of Convertible Preferred stock are insufficient to permit
payment to such holders of the aggregate amount which they are
entitled to be paid, then the entire assets to be distributed
will be distributed ratably among such holders based upon the
aggregate Liquidation Value of the Convertible Preferred Stock
held by each such holder. The Corporation will mail written
notice of such liquidation, dissolution or winding up not less
than 30 days prior to the payment date stated therein, to each
record holder of Convertible Preferred Stock. Neither the
consolidation or merger of the Corporation into or with any other
corporation or corporations, nor the sale or transfer by the
Corporation of all or any part of its assets, nor the reduction
of the capital stock of the Corporation, will be deemed to be a
liquidation, dissolution or winding up of the Corporation within
the meaning of this Part 2.
Part 3. Redemptions.
3A. For each share of Convertible Preferred Stock which is
to be redeemed, the Corporation will be obligated on the
Redemption Date (as defined below) to pay to the holder thereof
(upon surrender by such holder at the Corporation's principal
office or to the corporation's transfer agent of the
certificate(s) representing such shares of Convertible Preferred
Stock) an amount in immediately available funds equal to the
Liquidation Value thereof. If the funds of the Corporation
legally available for redemption of Convertible Preferred Stock
on any Redemption Date are insufficient to redeem the total
number of shares of Convertible Preferred Stock to be redeemed on
such date, those funds which are legally available will be used
to redeem the maximum. possible number of shares of Convertible
Preferred Stock ratably among the holders of the Convertible
Preferred Stock to be redeemed based upon the Liquidation Value
of such Convertible Preferred Stock held by each such holder. At
any time thereafter when additional funds of the Corporation are
legally available for the redemption of convertible Preferred
Stock, such funds will immediately be used to redeem the balance
of the Convertible Preferred Stock which the Corporation has
become obligated to redeem on any Redemption Date but which it
has not redeemed.
3B. Notice of Redemption. The Corporation will mail
written notice of each redemption of Convertible Preferred Stock
to each record holder of Convertible Preferred Stock not more
than sixty (60) nor less then twenty (20) days prior to the date
on which such redemption in to be made. In case fewer than the
total number of shares of Convertible Preferred Stock represented
by any certificate are redeemed, a new certificate representing
the number of unredeemed shares of Convertible Preferred Stock
will be issued to the holder thereof without cost to such holder
within ten business days after surrender of the certificate
representing the redeemed Convertible Preferred Stock.
3C. Redemption Date. On the date on which the Liquidation
value of any Convertible Preferred Stock is paid all rights,
including, but not limited to any right of conversion, of the
holder of such Convertible Preferred Stock will cease, and such
Convertible Preferred Stock will not be deemed to be outstanding.
3D. Redeemed or Otherwise Acquired Shares. Any shares of
Convertible Preferred Stock which are redeemed or otherwise
acquired by the Corporation shall be canceled and may not be
reissued.
3E. Optional Redemption and Mandatory Conversion. The
Corporation may at any time redeem all or any portion of the
Convertible Preferred Stock at a price per share equal to the
Liquidation Value thereof, including any accrued and unpaid
dividends. In the event the Corporation elects to redeem
Convertible Preferred Stock under certain circumstances contained
herein, the holders of such Convertible Preferred Stock shall be
required to convert Convertible Preferred Stock into Common Stock
as provided in Part 6D below.
3F. Redemptions upon Certain Voluntary Corporate Actions.
Upon the occurrence of a (i) breach by the Corporation of the
Registration Agreement (as herein defined) (ii) breach by the
Corporation of Section 6.5 or Section 6.6 of the Debt
Restructuring Agreement (as herein defined), or (iii) Fundamental
Change, the Corporation shall redeem all of the outstanding
Convertible Preferred Stock at a price per share equal to the
Liquidation Value thereof including any accrued and unpaid
dividends to the Redemption Date. The term "Fundamental Change"
means (a) a sale or transfer of all or substantially all of the
assets of the Corporation on a consolidated basis in any
transaction or series of related transactions (other than sales
in the ordinary course of business) and (b) any merger or
consolidation to which the Corporation is a party, except for a
merger in which the Corporation is the surviving corporation and,
after giving effect to such merger, the holders of the
Corporation's outstanding capital stock (on a fully-diluted
basis) immediately prior to such merger will own the
Corporation's outstanding capital stock (on a fully-diluted
basis) having a majority of the ordinary voting power to elect
the Corporation's board of directors.
Part 4. Events of Noncompliance
4A. Definition. An Event of Noncompliance will be deemed
to have occurred if:
(i) the Corporation fails to make any redemption payment
with respect to the Convertible Preferred Stock which it is
obligated to make hereunder, whether or not such payment in
legally permissible;
(ii) the Corporation breaches or otherwise fails to perform
or observe any covenant or agreement set forth herein or an Event
of Default occurs under the Debt Restructuring Agreement; or
(iii) the Corporation fails to pay dividends to the holders
of Convertible Preferred Stock for two (2) consecutive Dividend
Payment Dates; or
(iv) any representation or warranty contained in the Debt
Restructuring Agreement, or any information contained in writing
furnished by the Corporation or any subsidiary of the Corporation
to any holder of Convertible Preferred Stock, is false or
misleading in any material respect on the date made or furnished;
or
(v) the Corporation makes an assignment for the benefit of
creditors or admits in writing its inability to pay its debts
generally as they become due; or an order, judgment or decree is
entered adjudicating the Corporation bankrupt or insolvent; or
any order for relief with respect to the Corporation is entered
under the Federal Bankruptcy Code; or the Corporation petitions
or applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Corporation or of any
substantial part of the assets of the Corporation, or commences
any proceeding relating to the, Corporation under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction or any such
petition or application is filed, or any such proceeding is
commenced, against the Corporation and either (a) the Corporation
by any act indicates its approval thereof, consent thereto or
acquiescence therein or (b) such petition, application or
proceeding is not dismissed within sixty (60) days.
4B. Consequences of Certain Events of Noncompliance.
(i) If an Event of Noncompliance has occurred and continued
for a period of 30 days, the holder or holders of a majority of
the Convertible Preferred Stock then outstanding may demand (by
written notice delivered to the Corporation) (a) immediate
acceleration of the right to convert the Convertible Preferred
Stock into shares of Common Stock under Part 6B below such that
100% of the Convertible Preferred Stock shall be vested in such
holder or holders and eligible for conversion into Common Stock
on the date of such written notice, which notice may include a
written notice of conversion of all or a portion of such shares
pursuant to Part 6A below. In the event that the holder or
holders of Convertible Preferred Shares thereafter convert(s)
shares of Convertible Preferred Stock into shares of Common
Stock, the Corporation shall also be required to issue to such
holder or holders that number of additional shares of Common
Stock into which the shares of Convertible Preferred Stock so
converted would have otherwise been convertible under Part 6C
below had such shares of Convertible Preferred Stock not been so
converted. The obligation of the Corporation under the preceding
sentence to issue additional shares shall rise at any time as
such shares of Convertible Preferred Stock would have been
convertible into additional shares of Common Stock, and at any
such time, the Corporation shall immediately deliver to such
holder or holders a new certificate for such additional shares of
Common Stock. The Corporation will convert all or any portion of
such holder or holders' Convertible Preferred Stock into Common
Stock in accordance with the conversion procedure set forth in
Part 6A below.
(ii) If an Event of Noncompliance has occurred and
continued for a period of 30 days, the holder or holders of a
majority of the Convertible Preferred Stock then outstanding (the
"Holder") may also demand that the Board of Directors be deemed
dissolved and all positions vacated. In this connection, the
Holder may schedule a meeting of all stockholders of the
Corporation upon at least twenty-four (24) hours advance notice
either in writing, telegram or by a telephonic communication to
all stockholders at which meeting a new Board of Directors shall
be elected. Notwithstanding anything to the contrary in the Debt
Restructuring Agreement, herein or in the Corporation's By-laws,
it is expressly agreed that the Holder acting in person or by
proxy may elect a majority of the members of the Board of
Directors. The remaining members of the Board of Directors may
be elected or designated by holders of a majority of the Common
Stock. Upon such election, the Board of Directors, by majority
vote, may conduct the business and affairs of the Corporation and
may also terminate the employment of any employee of the
Corporation or his or her official position with the Corporation,
or both, subject to any existing employment agreements. The
Holders' directors shall serve as directors until such time as
the Event of Noncompliance has been remedied or the Convertible
Preferred Stock converted entirely to Common Stock or redeemed in
full, at which time such directors shall resign.
(iii) If any Event of Noncompliance exists, each Holder
will also have any other rights which such holder may have been
afforded under any contract or agreement at any time and any
other rights which such Holder may have pursuant to applicable
law.
Part 5. Voting Rights. The voting powers of the holders of
Convertible Preferred Stock include:
(i) the right, as a class, to elect two (2) directors to
the Corporation's Board of Directors. At least one such director
elected by the holders of Convertible Preferred Stock shall be a
standing member of each committee of the Board of Directors of
the Corporation, unless the holders otherwise agree; and
(ii) the exclusive right, as a class, to approve any
enlargement of the Corporation's Board of Directors in excess of
nine (9) directors.
Except an otherwise provided herein and as otherwise
provided by law, the Convertible Preferred Stock will have no
other voting rights.
Part 6. Conversion Rights.
6A. Conversion Procedure. Subject to the provisions set
forth below, each share of Convertible Preferred Stock shall be
convertible at the option of the holder thereof, in the manner
hereinafter set forth, into that number of fully paid and
nonassessable shares of Common Stock determined as set forth
below. The number of shares of Common Stock into which each
share of Convertible Preferred Stock may be converted shall be
increased in certain instances as provided in Part 6C below or
decreased in certain circumstances as provided in Part 6 below.
Any holder of Convertible Preferred Stock desiring to
convert such shares into shares of Common Stock shall surrender
the certificate or certificates for the shares being converted,
duly endorsed or assigned to the Corporation or in blank, at the
principal office of the Corporation or at a bank or trust company
appointed by the Corporation for that purpose, accompanied by a
written notice of conversion specifying the number of shares of
Convertible Preferred Stock 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; in case such notice shall
specify a name or names other than that of such holder, such
notice shall be accompanied by payment of all transfer taxes
payable upon the issue of shares of Common Stock in such name or
names. After receipt of such notice of conversion, the
Corporation shall either:
(i) within sixty (60) days after receipt of such notice,
issue and deliver or cause to be issued and delivered to such
holder a certificate or certificates for shares of Common Stock
resulting from such conversion; or
(ii) within sixty (60) days after receipt of such notice,
redeem all or any portion of the Convertible Preferred Stock
specified in the aforementioned notice at an amount in
immediately available funds equal to the Liquidation Value
thereof, including any accrued and unpaid dividends.
In case less than all of the shares of Convertible Preferred
Stock represented by a certificate are to be converted by a
holder, upon such conversion the Corporation shall also deliver
or cause to be delivered to such holder a certificate or
certificates for the shares of Convertible Preferred Stock not so
converted.
6B. Basic Conversion Rights. The right to convert the
Convertible Preferred Stock into shares of Common Stock shall
vest over a four-year period in annual increments, as set forth
below:
Date Percentage of Cumulative Percentage
Convertible Preferred of
Stock Becoming Convertible Preferred
Eligible for Eligible for
Conversion on Such Conversion
Date on and after Such Date
1st Anniversary 30% 30%
of Effective
Date
2nd Anniversary 20% 50%
of Effective
Date
3rd Anniversary 25% 75%
of Effective
Date
4th Anniversary 25% 100%
of Effective
Date
Subject to Parts 6C and 6D below, each share of Convertible
Preferred Stock is convertible into 325 newly issued shares of
Common Stock of the Corporation. The Cumulative Percentage of
Convertible Preferred Stock Eligible for Conversion at any time
shall be reduced by the percentage of Convertible Preferred Stock
previously redeemed under Part 6D below. If shares of Cumulative
Preferred Stock are held by more than one holder, each such
holder shall be entitled to convert only the applicable
percentage of such shares held by such holder.
6C. Additional Conversion Rights. If the Corporation
receives $2,000,000 of proceeds from equity financing during the
twelve (12) month period ending on the first anniversary date of
the Effective Date, each share of Convertible Preferred Stock
will be convertible into an additional number of shares of Common
Stock equal in the aggregate to 40% of the Plan Stock issuable
from time to time under the Plans as described in Section 7.09 of
the Agreement and Plan of Merger, such conversion rights to be
allocated proportionately to each share of Convertible Preferred
Stock issued and outstanding upon the date shares of Plan Stock
become issuable. If the Corporation fails to raise $2,000,000
from equity financing within such period each share of
Convertible Preferred Stock shall be convertible into an
additional 300 shares of Common Stock pursuant to the Plans.
6D. Mandatory Conversion. In the event the Corporation
redeems shares of Convertible Preferred Stock in certain minimum
amounts described below on or prior to June 30, 1994, Convertible
Preferred Stock shall be automatically converted into Common
Stock at the Adjusted Conversion Rate (as hereinafter defined) as
follows: (i) if the Corporation redeems at least 2,000 shares of
Convertible Preferred Stock by December 31, 1993, one (1) share
of Convertible Preferred Stock will be converted into Common
Stock at the Adjusted Conversion Rate for each five (5) shares of
Convertible Preferred Stock so redeemed (up to a maximum of 6,000
shares so redeemed); (ii) if the Corporation redeems at least
2,000 shares of Convertible Preferred Stock by March 31, 1994,
one (1) share of Convertible Preferred Stock will be converted
into common Stock at the Adjusted Conversion Rate for each five
(5) shares of Convertible Preferred Stock so redeemed; and (iii)
if the Corporation redeems at least 4,000 shares of Convertible
Preferred Stock by June 30, 1994, one (1) share of Convertible
Preferred Stock will be converted into Common Stock at the
Adjusted Conversion Rate for each 5 shares of Convertible
Preferred Stock so redeemed (up to a maximum of 6,000 shares so
redeemed). Notwithstanding the foregoing, in no event shall more
than 1,200 shares of Convertible Preferred Stock be converted
into Common Stock at the Adjusted Conversion Rate. The Adjusted
Conversion Rate means 2.5 shares of Common Stock for each share
of Convertible Preferred Stock automatically converted under this
Part 6D. In the event the mandatory conversion set forth in this
Part 6D is effectuated, the holder or holders of the Convertible
Preferred Stock being converted shall promptly surrender the
certificate or certificates for the shares being converted. Upon
receipt of such certificate or certificates, the Corporation
shall promptly issue and deliver or cause to be issued and
delivered to such holder or holders a certificate or certificates
for shares of Common stock resulting from such conversion and, if
less than all of the shares of Convertible Preferred Stock
represented by a certificate are to be converted under this Part
6D, the Corporation shall also deliver or cause to be delivered
to such holder a certificate or certificates for the shares of
Convertible Preferred Stock not so converted.
6E. Fundamental Changes. In case the Corporation shall
effect any capital reorganization of the Common Stock or shall
consolidate, merge or engage in a statutory share exchange with
or into any other corporation (other than a consolidation, merger
or share exchange in which the Corporation is the surviving
corporation and each share of Common Stock outstanding
immediately prior to such consolidation or merger is to remain
outstanding immediately after such consolidation or merger) or
shall sell or transfer all or substantially all its assets to any
other corporation, lawful provision shall be made as a part of
the terms of such transaction whereby the holders of shares of
the Convertible Preferred Stock shall receive upon conversion
thereof, in lieu of each share of Common Stock which would have
been issuable upon conversion of such stock if converted
immediately prior to the consummation of such transaction, the
same kind and amount of stock (or other securities, cash or
property, if any) as may be issuable or distributable in
connection with such transaction with respect to each share of
Common Stock outstanding at the effective time of such
transaction.
6F. Conversion Date. Conversion shall be deemed to have
been made as of the date of surrender of certificates for the
shares of Convertible Preferred Stock to be converted, and the
giving of written notice, as prescribed in Part 6A, or as
otherwise prescribed by Part 4B(i) or Part 6D above, and the
person entitled to receive the Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder
of such Common Stock on such date. The Corporation shall not be
required to deliver certificates for shares of its Common Stock
while the stock transfer books for such stock or for the
Convertible Preferred Stock are duly closed for any purpose, but
certificates for shares of Common Stock shall be issued and
delivered as soon an practicable after the opening of such books.
6G. Converted Shares and Common Stock Held for Conversion.
Any shares of Convertible Preferred Stock which at any time have
been converted shall be canceled and may not be reissued. The
Corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, for the
purpose of issuance upon conversion of shores of Convertible
Preferred Stock, the full number of shares of Common Stock then
issuable or which may become issuable upon the conversion of all
shares of Convertible Preferred Stock then outstanding and shall
take all action necessary so that shares of Common Stock so
issued will be validly issued, fully paid and nonassessable.
6H. Taxes. The Corporation will pay any and all stamp or
similar taxes that may be payable in respect of the issuance or
delivery of shares of Common Stock on conversion of shares of
Convertible Preferred Stock. The Corporation shall not, however,
be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of shares of
Common Stock in a name other than that in which the shares of
Convertible Preferred Stock so converted were registered, and no
such issuance or delivery shall be made unless and until the
person requesting such issuance has paid to the Corporation the
amount of any such tax or has established to the satisfaction of
the Corporation that such tax has been paid.
Part 7. Definitions.
"Agreement and Plan of Merger" means that certain Agreement
and Plan of Merger, dated as of June 7, 1993, by and among the
Corporation, Whitney Partners, Inc. and AFGL International,
Inc., as such agreement was in effect at August 20, 1993.
"Business Day" shall mean a day other than a Saturday,
Sunday or other day on which commercial banks in New York, New
York or Chicago, Illinois are authorized or required by law to
close.
"Common Stock" means the Common Stock, $0.01 par value per
share, of the Corporation and any capital stock of any class of
the Corporation hereafter authorized which is not limited to a
fixed sum or percentage of par or stated value in respect to the
rights of the holders thereof to participate in dividends or in
the distribution of assets upon any liquidation, dissolution or
winding up of the Corporation.
"Debt Restructuring Agreement" means that certain Debt
Restructuring Agreement, dated as of Aug. 11, 1993, by and among
the Corporation, Whitney Partners, Inc., AFGL International, Inc.
and Foote, Cone & Belding Communications, Inc. as such agreement
may from time to time be amended in accordance with its terms.
"Effective Date" shall have the meaning set forth in Section
8.03 of the Agreement and Plan of Merger.
"Junior Securities" means any of the Corporation's equity
securities other than the Convertible Preferred Stock.
"Liquidation Value" of any Convertible Preferred Stock as of
any particular date will be equal to $250 per share plus all
unpaid cumulative dividends on the Convertible Preferred Stock.
"Person" means an individual, a partnership, a corporation,
an association, a joint stock company, a trust, a joint venture,
an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Plans" shall refer to one or more compensation plans or
arrangements adopted by the Corporation's Board of Directors
pursuant to Section 7.09 of the Agreement and Plan of Merger.
"Plan Stock" shall refer to the up to 5,000,000 shares of
the Corporation's Common Stock which may be issued to the
officers, directors and key employees of the Corporation, Whitney
Partners, Inc. and AFGL Inc. under one or more Plans adopted by
the Corporation's Board of Directors pursuant to Section 7.09 of
the Agreement and Plan of Merger.
"Registration Agreement" means that certain Registration
Agreement, dated as of August 24 1993, by and between the
Corporation and Foote, Cone & Belding Communications, Inc., as
such agreement may from time to time be amended in accordance
with its terms.
"Redemption Date" as to any Convertible Preferred Stock
means the date specified in the notice of any redemption at the
Corporation's option or the applicable date specified herein in
the case of any other redemption; provided that no such date will
be a Redemption Date unless the applicable Liquidation Value is
actually paid in full on such date, and, if not so paid in full,
the Redemption Date will be the date on which Such Liquidation
Value is fully paid.
Part 8. Amendment and Waiver. No amendment, modification or
waiver will be binding or effective with respect to any provision
hereof without the prior written consent of the holders of a
majority of. the Convertible Preferred Stock outstanding at the
time such action is taken; provided that no such action will
change the amount payable on redemption of the Convertible
Preferred Stock or the times at which redemption of the
Convertible Preferred Stock is to occur, or the percentage
required to approve such change, without the prior written
consent of the holders of at least two-thirds of the Convertible
Preferred Stock then outstanding; and, provided further, that no
change in the terms hereof may be accomplished by merger or
consolidation of the Corporation with another corporation unless
the Corporation has obtained the prior written consent of the
holders of the applicable percentage of the Convertible Preferred
Stock then outstanding.
Part 9. Notices. All notices or communications, unless
otherwise specified in these resolutions, shall be sufficiently
given if in writing and given in accordance with Section 8.1 of
the Debt Restructuring Agreement.
Part 10. Ranking. For purposes hereof, all Junior Securities
shall be deemed to rank junior to the Convertible Preferred Stock
as to dividends or distribution of assets upon liquidation,
dissolution or winding up.
Part 11. Captions. The captions and headings set forth in these
resolutions are for convenience of reference only and are not a
part of, nor shall they affect the interpretation or construction
of, these resolutions.
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be executed by Gary Goldstein, its President, and
attested to by Barry Roseman, its Secretary, this 19th day of
August, 1993.
21st Century Holdings, Inc.
By: /s/
Gary Goldstein
Its President
ATTEST
By: /s/
Barry Roseman
Its Secretary
ACKNOWLEDGMENT
STATE OF NEW YORK )
) ss
COUNTY OF NEW YORK )
I, Gary Goldstein, hereby certify that I am the duly elected
and qualified President of 21st Century Holdings, Inc., that the
foregoing instrument is the act and deed of the Corporation and
the facts stated therein are true.
By: /s/
Gary S. Goldstein,
President
Subscribed and sworn to before me the undersigned, a Notary
Public in and for said county and state.
Notary Public
Exhibit No. 4/ AFGL International, Inc./ Form S-3
SERIES B CONVERTIBLE PREFERRED STOCK
CERTIFICATE OF DESIGNATION
FOR
AFGL INTERNATIONAL, INC.
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
AFGL INTERNATIONAL, INC.
Pursuant to Section 78.195 of the
Nevada Revised Statues
AFGL INTERNATIONAL, INC. a corporation organized and
existing under the laws of the State of Nevada (the
"Corporation"), in accordance with Section 78.195 of the Nevada
Revised Statutes, DOES HEREBY CERTIFY:
1. The Certificate of Incorporation of the Corporation, as
amended (the "Certificate of Incorporation"), fixes the total
number of shares of all classes of capital stock which the
Corporation shall have the authority to issue at Twenty-Five
Million (25,000,000) shares, of which Five Million (5,000,000)
shares shall be shares of Preferred Stock, par value $.001 per
share (herein referred to as "Preferred Stock"), and Twenty
Million (20,000,000) shares shall be shares of Common Stock, par
value $.01 per share (herein referred to as "Common Stock").
2. The Certificate of Incorporation expressly grants to the
Board of Directors of the Corporation authority to provide for
the issuance of said Preferred Stock in one or more series, with
such voting powers, full or limited but not to exceed one vote
per share, or without voting powers, and with such designations,
preferences and relative, participating, optional or other
special rights and qualifications limitations or restrictions
thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board
of Directors and as are not stated and expressed in the
Certificate of Incorporation.
3. Pursuant to authority conferred upon the Board of
Directors by the Certificate of Incorporation, the Board of
Directors, on December 30, 1994, (by unanimous written consent),
duly authorized and adopted the following resolutions providing
for an issue of a series of its Preferred Stock to be designated
"Series B Convertible Preferred Stock."
"RESOLVED, that an issue of a series of Preferred Stock,
$.001 par value per share, of the Corporation (the Preferred
Stock of the Corporation being herein referred to as "Preferred
Stock", which term shall include any additional shares of
Preferred Stock of the same class hereafter authorized to be
issued by the Corporation), consisting of Sixty-Eight Hundred
Fifty-Eight (6,858) shares is hereby provided for, and the voting
power, designation, preferences and relative participating,
optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such series shall be as
set forth below:
Designation: Number of Shares.
(a) The designation of such series of Preferred Stock
(which includes all sub-series) shall be "Series B Convertible
Preferred Stock" (hereinafter referred to as the "Series B
Stock") and the number of authorized shares constituting the
Series B Stock is Six Thousand Eight Hundred Fifty-Eight (6,858).
Of the Series B Stock, Six Thousand Two Hundred Eighty-Six
(6,286) shares are designated as "Series B-1 Convertible
Preferred Stock" (hereinafter referred to as the "Series B-1
Stock"), Three Hundred Forty-Three (343) shares are designated as
"Series B-2 Convertible Preferred Stock" (hereinafter referred to
as the "Series B-2 Stock"), and Two Hundred Twenty-Nine (229)
shares are designated as "Series B-3 Convertible Preferred Stock"
(hereinafter referred to as the "Series B-3 Stock"). The Series
B Stock shall be deemed a separate class of Preferred Stock, and
each sub-series of the Series B Stock shall be apart from any
other series of Preferred Stock.
Part 1. Liquidation.
Upon any liquidation, dissolution, or winding up of the
Corporation, the holders of Series B Stock will be entitled to be
paid, after any distribution or payment is made upon any Series A
Stock and before any distribution or payment is made upon Junior
Securities, an amount in cash equal to the aggregate Liquidation
Value of all shares of Series B Stock outstanding, and the
holders of Series B Stock will not be entitled to any further
payment. If upon any such liquidation, dissolution, or winding
up of the Corporation, the Corporation's assets to be distributed
among the holders of Series B Stock are insufficient to permit
payment to such holders of the aggregate amount which they are
entitled to be paid, then the entire assets to be distributed
will be distributed ratably among such holders based upon the
aggregate Liquidation Value of the Series B Stock held by each
such holder. The Corporation will mail written notice of such
liquidation, dissolution, or winding up not less then 30 days
prior to the payment date stated therein, to each record holder
of Series B Stock. Neither the consolidation or merger of the
Corporation into or with any other corporation or corporations,
nor the sale or transfer by the Corporation of all or any part of
its assets, nor the reduction of the capital stock of the
Corporation, will be deemed to be liquidation, dissolution, or
winding up of the Corporation within the meaning of this Part 1.
Part 2. Conversion Rights.
2A. Conversion Procedure. Subject to the provisions set
forth below, each share of Series B Stock shall be convertible at
the option of the holder thereof, in the manner hereinafter set
forth, into that number of fully paid and nonassessable shares of
Common Stock determined as set forth below.
Any holder of Series B Stock desiring to convert such shares
into shares of Common Stock shall surrender the certificate or
certificates for the shares being converted, duly endorsed or
assigned to the Corporation or in blank, at the principal office
of the Corporation or at the bank or trust company appointed by
the Corporation for that purpose, accompanied by a written notice
of conversion specifying the number of shares of Series B Stock
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; in case such notice shall specify a name or names other
then that of such transfer taxes payable upon the issue of shares
of Common Stock in such name or names. After the receipt of such
notice of conversion, the Corporation shall, within thirty (30)
days after receipt of such notice, issue and deliver or cause to
be issued and delivered to such holder a certificate or
certificates for shares of Common Stock resulting from such
conversion. In case less than all of the shares of Series B
Stock represented by a certificate are to be converted by a
holder, upon such conversion the Corporation shall also deliver
or cause to be delivered to such holder a certificate or
certificates for the shares of Series B stock not so converted.
2B. Conversion of Series B-1 Stock. The right to convert
the Series B-1 Stock into shares of Common Stock shall vest
immediately on the date of issuance of the Series B Stock. Each
share of Series B Stock is convertible into One Hundred (100)
newly issued shares of Common Stock of the Corporation (the "B-1
Conversion Rate"). In the event the average of the closing bid
prices for the Common Stock of the Corporation during the period
of 20 consecutive business days prior to January 1, 1996, as
reported on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or a national stock
exchange, or, if the Common Stock is not reported on NASDAQ or a
national stock exchange, as reported on the "OTC Bulletin Board"
operated by the National Association of Securities Dealers, Inc.,
is less than $1.50 per share, the B-1 Conversion Rate for each
share of Series B-1 Stock shall automatically be increased on
January 1, 1996, by an amount equal to 100,000 divided by the
number of shares of Series B-1 Stock outstanding on January 1,
1996.
2C. Conversion of Series B-2. The right to convert the
Series B-2 Stock into shares of Common Stock shall vest
immediately on the date of issuance of the Series B-2. Each
share of Series B-2 Stock is convertible into One (1) newly
issued share of Common Stock of the Corporation (the "B-2
Conversion Rate"), which is subject to adjustment as provided on
this Part 2C.
(i) In the event the gross revenue of Furash & Company,
Inc. ("FCI"), the wholly-owned subsidiary of the Corporation
acquired under that certain Agreement and Plan of Exchange dated
December 23, 1994, to which the Corporation and FCI are parties
("Exchange Agreement"), for the calendar year ending December 31,
1995, equals or exceeds $4,000,000, as determined by the
Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-2 Conversion Rate
for each share of Series B-2 Stock shall automatically be
increased on April 30, 1996, by an amount equal to 8,572 divided
by the number of shares of Series B-2 Stock outstanding on April
30, 1996. In the event the gross revenue of FCI for the calendar
year ending December 31, 1995, exceeds $2,500,000 (but is less
than $4,000,000), as determined by the Corporation's independent
accountants in accordance with Generally Accepted Accounting
Principles, the B-2 Conversion Rate for each share of Series B-2
Stock shall automatically be increased on April 30, 1996, to an
amount determined by dividing 8,572 by the number of shares of
Series B-2 Stock outstanding on April 30, 1996, and multiplying
the result by a fraction, the numerator of which is the amount by
which gross revenues exceed $2,500,000 for the calendar year
ending December 31, 1995, and the denominator of which is
$1,500,000. In the event the gross revenue of FCI for the
calendar year ending December 31, 1995, does not exceed
$2,500,000, there will be no adjustment in the B-2 Conversion
Rate. For purposes of calculating gross revenue of FCI under
this designation, income derived from client referrals between
FCI and the Corporation (including its other subsidiaries and
divisions), shall be allocated between FCI and the Corporation on
the same basis as the Corporation allocates income derived from
referrals by and among its other subsidiaries and divisions.
(ii) In the event the gross revenue of FCI for the calendar
year ending December 31, 1996, equals or exceeds $4,000,000, as
determined by the Corporation's independent accountants in
accordance with Generally Accepted Accounting Principles, the B-2
Conversion Rate for each share of Series B-2 Stock shall
automatically be increased on April 30, 1997, by an amount equal
to 8,572 divided by the number of shares of Series B-2 Stock
outstanding on April 30, 1997. In the event the gross revenue of
FCI for the calendar year ending December 31, 1996, exceeds
$2,500,000 (but is less than $4,000,000), as determined by the
Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-2 Conversion Rate
for each share of Series B-2 Stock shall automatically be
increased on April 30, 1997, by an amount determined by dividing
8,572 by the number of shares of Series B-2 Stock outstanding on
April 30, 1997, and multiplying the result by a fraction, the
numerator of which is the amount by which gross revenues exceed
$2,500,000 for the calendar year ending December 31, 1996, and
the denominator of which is $1,500,000. In the event the gross
revenue of FCI for the calendar year ending December 31, 1996,
does not exceed $2,500,000, there will be no adjustment in the B-
2 Conversion Rate.
(iii) In the event the gross revenue of FCI for the
calendar year ending December 31, 1997, equals or exceeds
$4,000,000, as determined by the Corporation's independent
accountants in accordance with Generally Accepted Accounting
Principles, the B-2 Conversion Rate for each share of Series B-2
Stock shall automatically be increased on April 30, 1998, by an
amount equal to 8,572 divided by the number of shares of Series B
Stock outstanding on April 30, 1998. In the event the gross
revenue of FCI for the calendar year ending December 31, 1997,
exceeds $2,500,000 (but is less than $4,000,000), as determined
by the Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-2 Conversion Rate
for each share of Series B-2 Stock shall automatically be
increased on April 30, 1998, by an amount determined by dividing
8,572 by the number of shares of Series B-2 Stock outstanding on
April 30, 1998, and multiplying the result by a fraction, the
numerator of which is the amount by which gross revenues exceed
$2,500,000 for the calendar year ending December 31, 1997, and
the denominator of which is $1,500,000. In the event the gross
revenue of FCI for the calendar year ending December 31, 1997,
does not exceed $2,500,000, there will be no adjustment in the B-
2 Conversion Rate.
(iv) In the event the gross revenue of FCI for the calendar
year ending December 31, 1998, equals or exceeds $4,000,000, as
determined by the Corporation's independent accountants in
accordance with Generally Accepted Accounting Principles, the B-2
Conversion Rate for each share of Series B-2 Stock shall
automatically be increased on April 30, 1999, by an amount equal
to 8,572 divided by the number of shares of Series B-2 Stock
outstanding on April 30, 1999. In the event the gross revenue of
FCI for the calendar year ending December 31, 1998, exceeds
$2,500,000 (but is less than $4,000,000), as determined by the
Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-2 Conversion Rate
for each share of Series B-2 Stock shall automatically be
increased on April 30, 1999, by an amount determined by dividing
8,572 by the number of shares of Series B Stock outstanding on
April 30, 1999, and multiplying the result by a fraction, the
numerator of which is the amount by which gross revenues exceed
$2,500,000 for the calendar year ending December 31, 1998, and
the denominator of which is $1,500,000. In the event the gross
revenue of FCI for the calendar year ending December 31, 1998,
does not exceed $2,500,000, there will be no adjustment in the B-
2 Conversion Rate.
(v) In the event the employment of Edward E. Furash
("Furash") under that certain employment agreement between FCI
and Furash included as an exhibit to the Exchange Agreement (the
"Employment Agreement"), is terminated by FCI during the initial
four year term thereof ("Initial Term") for reasons other than
cause as defined in paragraph 14 of the Employment Agreement, or
is terminated during the Initial Term by either FCI or Furash
pursuant to paragraph 15 of the Employment Agreement, the B-2
Conversion Rate for each share of Series B-2 Stock shall
automatically be increased on the date of such termination by an
amount determined by multiplying 8,572 by the number of calendar
years remaining in the unexpired Initial Term of the Employment
Agreement after the date of termination (with each partial
calendar year in the unexpired Initial Term counted as one full
year), and dividing the product by the number of shares of Series
B-2 Stock outstanding on the date of termination.
2D. Conversion of Series B-3. The right to convert the
Series B-3 Stock into shares of Common Stock shall vest
immediately on the date of issuance of the Series B-3. Each
share of Series B-3 Stock is convertible into One (1) newly
issued share of Common Stock of the Corporation (the "B-3
Conversion Rate"), which is subject to adjustment as provided on
this Part 2C.
(i) In the event the gross revenue of FCI for the calendar
year ending December 31, 1995, equals or exceeds $4,000,000, as
determined by the Corporation's independent accountants in
accordance with Generally Accepted Accounting Principles, the B-3
Conversion Rate for each share of Series B-3 Stock shall
automatically be increased on April 30, 1996, by an amount equal
to 5,714 divided by the number of shares of Series B-3 Stock
outstanding on April 30, 1996. In the event the gross revenue of
FCI for the calendar year ending December 31, 1995, exceeds
$2,500,000 (but is less than $4,000,000), as determined by the
Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-3 Conversion Rate
for each share of Series B-3 Stock shall automatically be
increased on April 30, 1996, to an amount determined by dividing
5,714 by the number of shares of Series B-3 Stock outstanding on
April 30, 1996, and multiplying the result by a fraction, the
numerator of which is the amount by which gross revenues exceed
$2,500,000 for the calendar year ending December 31, 1995, and
the denominator of which is $1,500,000. In the event the gross
revenue of FCI for the calendar year ending December 31, 1995,
does not exceed $2,500,000, there will be no adjustment in the B-
3 Conversion Rate.
(ii) In the event the gross revenue of FCI for the calendar
year ending December 31, 1996, equals or exceeds $4,000,000, as
determined by the Corporation's independent accountants in
accordance with Generally Accepted Accounting Principles, the B-3
Conversion Rate for each share of Series B-3 Stock shall
automatically be increased on April 30, 1997, by an amount equal
to 5,714 divided by the number of shares of Series B-3 Stock
outstanding on April 30, 1997. In the event the gross revenue of
FCI for the calendar year ending December 31, 1996, exceeds
$2,500,000 (but is less than $4,000,000), as determined by the
Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-3 Conversion Rate
for each share of Series B-3 Stock shall automatically be
increased on April 30, 1997, by an amount determined by dividing
5,714 by the number of shares of Series B-3 Stock outstanding on
April 30, 1997, and multiplying the result by a fraction, the
numerator of which is the amount by which gross revenues exceed
$2,500,000 for the calendar year ending December 31, 1996, and
the denominator of which is $1,500,000. In the event the gross
revenue of FCI for the calendar year ending December 31, 1996,
does not exceed $2,500,000, there will be no adjustment in the B-
3 Conversion Rate.
(iii) In the event the gross revenue of FCI for the
calendar year ending December 31, 1997, equals or exceeds
$4,000,000, as determined by the Corporation's independent
accountants in accordance with Generally Accepted Accounting
Principles, the B-3 Conversion Rate for each share of Series B-3
Stock shall automatically be increased on April 30, 1998, by an
amount equal to 5,714 divided by the number of shares of Series B
Stock outstanding on April 30, 1998. In the event the gross
revenue of FCI for the calendar year ending December 31, 1997,
exceeds $2,500,000 (but is less than $4,000,000), as determined
by the Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-3 Conversion Rate
for each share of Series B-3 Stock shall automatically be
increased on April 30, 1998, by an amount determined by dividing
5,714 by the number of shares of Series B-3 Stock outstanding on
April 30, 1998, and multiplying the result by a fraction, the
numerator of which is the amount by which gross revenues exceed
$2,500,000 for the calendar year ending December 31, 1997, and
the denominator of which is $1,500,000. In the event the gross
revenue of FCI for the calendar year ending December 31, 1997,
does not exceed $2,500,000, there will be no adjustment in the B-
3 Conversion Rate.
(iv) In the event the gross revenue of FCI for the calendar
year ending December 31, 1998, equals or exceeds $4,000,000, as
determined by the Corporation's independent accountants in
accordance with Generally Accepted Accounting Principles, the B-3
Conversion Rate for each share of Series B-3 Stock shall
automatically be increased on April 30, 1999, by an amount equal
to 5,714 divided by the number of shares of Series B-3 Stock
outstanding on April 30, 1999. In the event the gross revenue of
FCI for the calendar year ending December 31, 1998, exceeds
$2,500,000 (but is less than $4,000,000), as determined by the
Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-3 Conversion Rate
for each share of Series B-3 Stock shall automatically be
increased on April 30, 1999, by an amount determined by dividing
5,714 by the number of shares of Series B Stock outstanding on
April 30, 1999, and multiplying the result by a fraction, the
numerator of which is the amount by which gross revenues exceed
$2,500,000 for the calendar year ending December 31, 1998, and
the denominator of which is $1,500,000. In the event the gross
revenue of FCI for the calendar year ending December 31, 1998,
does not exceed $2,500,000, there will be no adjustment in the B-
3 Conversion Rate.
(v) In the event the employment of Furash under the
Employment Agreement, is terminated by FCI during the initial
four year term thereof ("Initial Term") for reasons other than
cause as defined in paragraph 14 of the Employment Agreement, or
is terminated during the Initial Term by FCI pursuant to
paragraph 15 of the Employment Agreement, the B-3 Conversion Rate
for each share of Series B-3 Stock shall automatically be
increased on the date of such termination by an amount determined
by multiplying 5,714 by the number of calendar years remaining in
the unexpired Initial Term of the Employment Agreement after the
date of termination (with each partial calendar year in the
unexpired Initial Term counted as one full year), and dividing
the product by the number of shares of Series B-3 Stock
outstanding on the date of termination.
2E. Fundamental Changes. In case the Corporation shall
effect any stock split, reverse stock split, or capital
reorganization of the Common Stock, or shall consolidate, merge,
or engage in a statutory share exchange with or into any other
corporation (other than a consolidation, merger, or share
exchange in which the Corporation is the surviving corporation
and each share of Common Stock outstanding immediately prior to
such consolidation or merger is to remain outstanding immediately
after such consolidation or merger) or shall sell or transfer all
or substantially all its assets to any other corporation, lawful
provision shall be made as a part of the terms of such
transaction whereby the holders of shares of the Series B Stock
shall receive upon conversion thereof, in lieu of each share of
Common Stock which would have been issuable upon conversion of
such stock if converted immediately prior to the consummation of
such transaction, the same kind and amount of stock (or other
securities, cash, or property, if any) as may be issuable or
distributable in connection with such transaction with respect to
each share of Common Stock outstanding at the effective time of
such transaction.
2F. Conversion Date. Conversion shall be deemed to have
been made as of the date of surrender of certificates for the
shares of Series B Stock to be converted, and the giving of
written notice as prescribed in Part 2A, and the person entitled
to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder of such Common
Stock on such date. The Corporation shall not be required to
deliver certificates for shares of its Common Stock while the
stock transfer books for such stock or for the Series B Stock are
duly closed for any purpose, but certificates for shares of
Common Stock shall be issued and delivered as soon as practicable
after the opening of such books.
2G. Converted Shares and Common Stock Held for Conversion.
Any shares of Series B Stock which at any time have been
converted shall be canceled and may not be reissued. The
Corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, for the
purpose of issuance upon conversion of shares of Series B Stock
then outstanding and shall take all action necessary so that
shares of Common Stock so issued will be validly issued, fully
paid and nonassessable.
2H. Taxes. The Corporation will pay any and all stamp or
similar taxes that may be payable in respect of the issuance or
delivery of shares of Common Stock on conversion of shares of
Series B Stock. The Corporation shall not, however, be required
to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of shares of Convertible
Stock so converted were registered, and no such issuance or
delivery shall be made unless and until the person requesting
such issuance has paid to the Corporation the amount of any such
tax or has established to the satisfaction of the Corporation
that such tax has been paid.
Part 3. Dividends.
The holders of Series B Stock shall be entitled to
participate fully with the Common Stock in all dividends, whether
payable in cash, Common Stock, or other property of the
Corporation, when and as declared by the Corporation's Board of
Directors. The dividend payable on each share of Series B-1, B-
2, and B-3 Stock outstanding on the record date for determining
those persons entitled to receive a dividend on Common Stock (or
on the date the dividend is paid if no record date is set), shall
be equal to the product of the dividend per share of Common Stock
multiplied by the B-1, B-2, and B-3 Conversion Rates, as the case
may be, in effect on such record date (or on the date the
dividend is paid if no record date is set) after giving taking
into account all adjustments to such Conversion Rates required to
be made under Part 2, above, as of such record date (or on the
date the dividend is paid if no record date is set). No
dividends shall be paid on the Series B Stock unless all
dividends on the Corporation's Series A Convertible Preferred
Stock ("Series A Stock"), have been paid or reserved in
accordance with the terms of the Series A Stock.
Part 4. Voting Rights.
Each share of Series B Stock shall have that number of votes
equal to the number of shares of Common Stock issuable on
conversion of the Series B Stock as of the record date or any
such other date with respect to which a determination is made of
the Persons and number of shares entitled to be voted at any
meeting of the stockholders of the Corporation or sign a written
consent to action without a meeting, after giving taking into
account all adjustments to such Conversion Rates required to be
made under Part 2, above. The holders thereof shall have the
right to vote (but not as a separate class, except to the extent
required by law) on all matters subject to vote at any meeting of
the stockholders of the Corporation or submitted for stockholder
approval by written consent.
Part 5. Definitions.
"Business Day" shall mean a day other than a Saturday,
Sunday or other day on which commercial banks in New York, New
York or Chicago, Illinois are authorized by law to close.
"Common Stock" means the Common Stock, $0.01 par value per
share, of the Corporation and any capital stock of any class of
the Corporation hereafter authorized which is not limited to a
fixed sum or percentage of par or stated value in respect to the
rights of the holders thereof to participate in dividends or in
the distribution or assets upon any liquidation, dissolution, or
winding up of the Corporation.
"Junior Securities" means any of the Corporation's equity
securities other than the Series A Stock and Series B Stock.
"Liquidation Value" of any Series B Stock as of any
particular date will be equal to $350 per share.
"Person" means an individual, a partnership, a corporation,
an association, a joint stock company, a trust, a joint venture,
an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be executed by Gary S. Goldstein, its President,
and attested to by Barry S. Roseman, its Secretary, this day
of , .
AFGL INTERNATIONAL, INC.
By: /s/
Gary S. Goldstein,
President
ATTEST
By: /s/
Barry S. Roseman, Secretary
ACKNOWLEDGMENT
STATE OF NEW YORK )
) ss
COUNTY OF )
I, Gary S. Goldstein, hereby certify that I am the duly
elected and qualified President of AFGL INTERNATIONAL, INC., that
the foregoing instrument if the act and deed of the Corporation
and the fact stated therein are true.
By: /s/
Gary S. Goldstein,
President
Subscribed and sworn to before me the undersigned, a Notary
Public in and for said county and state.
Notary Public
Exhibit No. 5/ AFGL International, Inc./ Form S-3
SERIES B CONVERTIBLE PREFERRED STOCK
CERTIFICATE OF DESIGNATION
FOR
AFGL INTERNATIONAL, INC.
CORRECTION
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
AFGL INTERNATIONAL, INC.
Pursuant to Section 78.195 of the
Nevada Revised Statues
AFGL INTERNATIONAL, INC. a corporation organized and
existing under the laws of the State of Nevada (the
"Corporation"), in accordance with Section 78.195 of the Nevada
Revised Statutes, DOES HEREBY CERTIFY:
1. The Articles of Incorporation of the Corporation, as
amended (the "Articles of Incorporation"), fixes the total number
of shares of all classes of capital stock which the Corporation
shall have the authority to issue at Twenty-Five Million
(25,000,000) shares, of which Five Million (5,000,000) shares
shall be shares of Preferred Stock, par value $.001 per share
(herein referred to as "Preferred Stock"), and Twenty Million
(20,000,000) shares shall be shares of Common Stock, par value
$.01 per share (herein referred to as "Common Stock").
2. The Articles of Incorporation expressly grants to the
Board of Directors of the Corporation authority to provide for
the issuance of said Preferred Stock in one or more series, with
such voting powers, full or limited but not to exceed one vote
per share, or without voting powers, and with such designations,
preferences and relative, participating, optional or other
special rights and qualifications limitations or restrictions
thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board
of Directors and as are not stated and expressed in the Articles
of Incorporation.
3. Pursuant to authority conferred upon the Board of
Directors by the Articles of Incorporation, the Board of
Directors duly authorized and adopted resolutions providing for
an issue of a series of its Preferred Stock to be designated
"Series B Convertible Preferred Stock."
4. Pursuant to such authorization, the Corporation filed
with the Secretary of State of the state of Nevada on January 25,
1995, a Certificate of Designation for the Series B Convertible
Preferred Stock dated January 20, 1995 ("Designation").
5. The Corporation subsequently discovered that the
Designation contained typographical errors as follows:
(i) In the second and third lines of Part 2B appearing on
page 3 of the Designation, the reference to "Series B Stock"
should be "Series B-1 Stock";
(ii) In the sixth line of paragraph (iii), Part 2C,
appearing on page 5 of the Designation, the reference to "Series
B Stock" should be "Series B-2 Stock";
(iii) In the eleventh line of paragraph (iv), Part 2C,
appearing on page 5 of the Designation, the reference to "Series
B Stock" should be "Series B-2 Stock";
(iv) In the sixth line of paragraph (iii), Part 2D,
appearing on page 7 of the Designation, the reference to "Series
B Stock" should be "Series B-3 Stock"; and
(v) In the eleventh line of paragraph (iv), Part 2D,
appearing on page 7 of the Designation, the reference to "Series
B Stock" should be "Series B-3 Stock";
6. Pursuant to authority conferred upon the Board of
Directors by the Articles of Incorporation, the Board of
Directors duly authorized and adopted resolutions providing for
the correction of the Designation as follows:
(a) Part 2B of the Designation is hereby corrected to read
as follows:
2B. Conversion of Series B-1 Stock. The right to convert
the Series B-1 Stock into shares of Common Stock shall vest
immediately on the date of issuance of the Series B-1 Stock.
Each share of Series B-1 Stock is convertible into One Hundred
(100) newly issued shares of Common Stock of the Corporation (the
"B-1 Conversion Rate"). In the event the average of the closing
bid prices for the Common Stock of the Corporation during the
period of 20 consecutive business days prior to January 1, 1996,
as reported on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or a national stock
exchange, or, if the Common Stock is not reported on NASDAQ or a
national stock exchange, as reported on the "OTC Bulletin Board"
operated by the National Association of Securities Dealers, Inc.,
is less than $1.50 per share, the B-1 Conversion Rate for each
share of Series B-1 Stock shall automatically be increased on
January 1, 1996, by an amount equal to 100,000 divided by the
number of shares of Series B-1 Stock outstanding on January 1,
1996.
(b) Paragraphs (iii) and (iv) of Part 2C of the Designation
are hereby corrected to read as follows:
(iii) In the event the gross revenue of FCI for the
calendar year ending December 31, 1997, equals or exceeds
$4,000,000, as determined by the Corporation's independent
accountants in accordance with Generally Accepted Accounting
Principles, the B-2 Conversion Rate for each share of Series B-2
Stock shall automatically be increased on April 30, 1998, by an
amount equal to 8,572 divided by the number of shares of Series B-
2 Stock outstanding on April 30, 1998. In the event the gross
revenue of FCI for the calendar year ending December 31, 1997,
exceeds $2,500,000 (but is less than $4,000,000), as determined
by the Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-2 Conversion Rate
for each share of Series B-2 Stock shall automatically be
increased on April 30, 1998, by an amount determined by dividing
8,572 by the number of shares of Series B-2 Stock outstanding on
April 30, 1998, and multiplying the result by a fraction, the
numerator of which is the amount by which gross revenues exceed
$2,500,000 for the calendar year ending December 31, 1997, and
the denominator of which is $1,500,000. In the event the gross
revenue of FCI for the calendar year ending December 31, 1997,
does not exceed $2,500,000, there will be no adjustment in the B-
2 Conversion Rate.
(iv) In the event the gross revenue of FCI for the calendar
year ending December 31, 1998, equals or exceeds $4,000,000, as
determined by the Corporation's independent accountants in
accordance with Generally Accepted Accounting Principles, the B-2
Conversion Rate for each share of Series B-2 Stock shall
automatically be increased on April 30, 1999, by an amount equal
to 8,572 divided by the number of shares of Series B-2 Stock
outstanding on April 30, 1999. In the event the gross revenue of
FCI for the calendar year ending December 31, 1998, exceeds
$2,500,000 (but is less than $4,000,000), as determined by the
Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-2 Conversion Rate
for each share of Series B-2 Stock shall automatically be
increased on April 30, 1999, by an amount determined by dividing
8,572 by the number of shares of Series B-2 Stock outstanding on
April 30, 1999, and multiplying the result by a fraction, the
numerator of which is the amount by which gross revenues exceed
$2,500,000 for the calendar year ending December 31, 1998, and
the denominator of which is $1,500,000. In the event the gross
revenue of FCI for the calendar year ending December 31, 1998,
does not exceed $2,500,000, there will be no adjustment in the B-
2 Conversion Rate.
(c) Paragraphs (iii) and (iv) of Part 2D of the Designation
are hereby corrected to read as follows:
(iii) In the event the gross revenue of FCI for the
calendar year ending December 31, 1997, equals or exceeds
$4,000,000, as determined by the Corporation's independent
accountants in accordance with Generally Accepted Accounting
Principles, the B-3 Conversion Rate for each share of Series B-3
Stock shall automatically be increased on April 30, 1998, by an
amount equal to 5,714 divided by the number of shares of Series B-
3 Stock outstanding on April 30, 1998. In the event the gross
revenue of FCI for the calendar year ending December 31, 1997,
exceeds $2,500,000 (but is less than $4,000,000), as determined
by the Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-3 Conversion Rate
for each share of Series B-3 Stock shall automatically be
increased on April 30, 1998, by an amount determined by dividing
5,714 by the number of shares of Series B-3 Stock outstanding on
April 30, 1998, and multiplying the result by a fraction, the
numerator of which is the amount by which gross revenues exceed
$2,500,000 for the calendar year ending December 31, 1997, and
the denominator of which is $1,500,000. In the event the gross
revenue of FCI for the calendar year ending December 31, 1997,
does not exceed $2,500,000, there will be no adjustment in the B-
3 Conversion Rate.
(iv) In the event the gross revenue of FCI for the calendar
year ending December 31, 1998, equals or exceeds $4,000,000, as
determined by the Corporation's independent accountants in
accordance with Generally Accepted Accounting Principles, the B-3
Conversion Rate for each share of Series B-3 Stock shall
automatically be increased on April 30, 1999, by an amount equal
to 5,714 divided by the number of shares of Series B-3 Stock
outstanding on April 30, 1999. In the event the gross revenue of
FCI for the calendar year ending December 31, 1998, exceeds
$2,500,000 (but is less than $4,000,000), as determined by the
Corporation's independent accountants in accordance with
Generally Accepted Accounting Principles, the B-3 Conversion Rate
for each share of Series B-3 Stock shall automatically be
increased on April 30, 1999, by an amount determined by dividing
5,714 by the number of shares of Series B-3 Stock outstanding on
April 30, 1999, and multiplying the result by a fraction, the
numerator of which is the amount by which gross revenues exceed
$2,500,000 for the calendar year ending December 31, 1998, and
the denominator of which is $1,500,000. In the event the gross
revenue of FCI for the calendar year ending December 31, 1998,
does not exceed $2,500,000, there will be no adjustment in the B-
3 Conversion Rate.
7. Except as provided above, the Designation shall remain
unchanged by this certificate.
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be executed by Gary S. Goldstein, its President,
and attested to by Barry S. Roseman, its Secretary, this day
of , .
AFGL INTERNATIONAL, INC.
By /s/
Gary S. Goldstein,
President
ATTEST
By /s/
Barry S. Roseman, Secretary
ACKNOWLEDGMENT
STATE OF NEW YORK )
) ss
COUNTY OF )
I, Gary S. Goldstein, hereby certify that I am the duly
elected and qualified President of AFGL INTERNATIONAL, INC., that
the foregoing instrument is the act and deed of the Corporation
and the facts stated therein are true.
By: /s/
Gary S. Goldstein,
President
Subscribed and sworn to before me the undersigned, a Notary
Public in and for said county and state, this day of
, .
Notary Public
Exhibit No. 6/ AFGL International, Inc./ Form S-3
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of the date of
acceptance set forth below, is entered into by and between AFGL
INTERNATIONAL, INC., a Nevada corporation, with headquarters
located at 850 Third Avenue, New York, New York (the "Company"),
and the undersigned (the "Buyer").
WITNESSETH:
WHEREAS, the Company and the Buyer are executing and
delivering this Agreement in reliance upon the exemption from
securities registration afforded by Rule 506 under Regulation D
("Regulation D") as promulgated by the United States Securities
and Exchange Commission (the "SEC") under the Securities Act of
1933, as amended (the "1933 Act "); and
WHEREAS, the Buyer wishes to purchase, upon the terms and
subject to the conditions of this Agreement, 8% Series D
Convertible Preferred Stock (no par value) (the "Preferred
Stock") of the Company which will be convertible into shares of
Common Stock, $.0l par value (the "Common Stock"), of the Company
upon the terms and subject to the conditions of such Preferred
Stock, subject to acceptance of this Agreement by the Company;
NOW THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
a. Purchase. The undersigned hereby agrees to purchase
from the Company Preferred Stock of the Company, in the
liquidation preference set forth on the signature page of this
Agreement and having the terms and conditions and being in the
form attached hereto as Annex 1. The purchase price for the
Preferred Stock shall be as set forth on the signature page
hereto and shall be payable in United States Dollars.
b. Form of Payment. The Buyer shall pay the purchase price
for the Preferred Stock by delivering immediately available good
funds in United States Dollars to the escrow agent (the "Escrow
Agent") identified in the Joint Escrow Instructions attached
hereto as Annex II (the "Joint Escrow Instructions") as set forth
below. Promptly following payment by the Buyer to the Escrow
Agent of the purchase price of the Preferred Stock, the Company
shall deliver a Certificate for the Preferred Stock duly executed
on behalf of the Company, to the Escrow Agent. By signing this
Agreement, the Buyer and the Company each agrees to all of the
terms and conditions of, and becomes a party to, the Joint Escrow
Instructions, all of the provisions of which are incorporated
herein by this reference as if set forth in full.
c. Method of Payment. Payment into escrow of the purchase
price for the Preferred Stock shall be made by wire transfer of
funds to:
Bank of New York
350 Fifth Avenue
New York, New York 10001
ABA# 021000018
For credit to the account of Krieger & Prager,
Esqs.
Escrow Account No. 105-0036843
Not later than 1:00 p.m., New York time, on the date which is
three (3) New York Stock Exchange trading days after the Company
shall have accepted this Agreement and returned a signed
counterpart of this Agreement to the Escrow Agent by facsimile,
the Buyer shall deposit with the Escrow Agent the aggregate
purchase price for the Preferred Stock, in currently available
funds. Time is of the essence with respect to such payment, and
failure by the Buyer to make such payment, shall allow the
Company to cancel this Agreement.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
The Buyer represents and warrants to, and covenants and
agrees with, the Company as follows:
a. The Buyer is purchasing the Preferred Stock and would be
acquiring the shares of Common Stock issuable upon conversion of
the Preferred Stock for its own account for investment only and
not with a view towards the public sale or distribution thereof
and not with a view to or for sale in connection with any
distribution thereof;
b. The Buyer is (i) an "accredited investor" as that term
is defined in Rule 501 of the General Rules and Regulations under
the 1933 Act by reason of Rule 501(a)(3), and (ii) experienced in
making investments of the kind described in this Agreement, and
the related documents, (iii) able, by reason of the business and
financial experience of its officers and professional advisors
(who are not affiliated with or compensated in any way by the
Company or any of its affiliates or selling agents), to protect
its own interests in connection with the transactions described
in this Agreement, and the related documents, and (iv) able to
afford the entire loss of its investment in the Preferred Stock;
c. All subsequent offers and sales of the Preferred Stock
and the shares of Common Stock issuable upon conversion of, or in
lieu of payment of interest on, the Preferred Stock (the "Shares"
and, together with the Preferred Stock, the "Securities") by the
Buyer shall be made pursuant to registration of the Shares under
the 1933 Act or with respect to the Preferred Stock pursuant to
an exemption from registration;
d. The Buyer understands that the Preferred Stock is being
offered and sold, and the Shares are being offered, to it in
reliance on specific exemptions from the registration
requirements of United States federal and state securities laws
and that the Company is relying upon the truth and accuracy of,
and the Buyer's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Buyer set
forth herein in order to determine the availability of such
exemptions and the eligibility of the Buyer to acquire the
Preferred Stock and to receive an offer of the Shares;
e. The Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and
sale of the Preferred Stock and the offer of the Shares which
have been requested by the Buyer, including Exhibit A hereto.
The Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and have received
complete and satisfactory answers to any such inquiries. Without
limiting the generality of the foregoing, the Buyer has also had
the opportunity to obtain and to review the Company's (1) Annual
Report on Form 10-KSB for the fiscal year ended December 31,
1995, and (2) Quarterly Report on Form 10-QSB for the fiscal
quarter ended March 31, 1996.
f. The Buyer understands that its investment in the
Securities involves a high degree of risk;
g. The Buyer understands that no United States federal or
state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the
Securities; and
h. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable in accordance with its
terms, subject as to enforceability to general principles of
equity and to bankruptcy, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights
generally.
i. The Buyer is not purchasing the Preferred Stock for the
purpose of covering any short sales of the Common Stock made by
the Buyer with the Shares.
3. COMPANY REPRESENTATIONS, ETC.
The Company represents and warrants to the Buyer that:
a. Concerning the Shares. The Shares have been duly
authorized and, when issued upon conversion of the Preferred
Stock, will be duly and validly issued, fully paid and non-
assessable and will not subject the holder thereof to personal
liability by reason of being such holder. There are no
preemptive rights of any Stockholder of the Company, as such, to
acquire the Shares. The COMPANY has registered its common stock
pursuant to Section 12 of the Exchange Act and the common stock
trades on NASDAQ/Small Cap Market, and has received no notice,
either oral or written, with respect to discontinuance of its
continued eligibility for such listing.
b. Stock Purchase Agreement; Registration Rights Agreement
and Stock. This Agreement and the Registration Rights Agreement,
the form of which is attached hereto as Annex III (the
"Registration Rights Agreement"), have been duly and validly
authorized by the Company, this Agreement has been duly executed
and delivered by the Company and this Agreement is, and the
Registration Rights Agreement, when executed and delivered by the
Company, will be, valid and binding agreements of the Company
enforceable in accordance with their respective terms, subject as
to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium, and other similar laws
affecting the enforcement of creditors' rights generally; and the
Preferred Stock will be duly and validly authorized and, when
executed and delivered on behalf of the Company in accordance
with this Agreement, will be a valid and binding obligation of
the Company in accordance with its terms, subject to general
principles of equity and to bankruptcy, insolvency, moratorium,
or other similar laws affecting the enforcement of creditors'
rights generally.
c. Non-contravention. The execution and delivery of this
Agreement and the Registration Rights Agreement by the Company
and the consummation by the Company of the issuance of the
Securities and the other transactions contemplated by this
Agreement, the Registration Rights Agreement, and the Preferred
Stock do not and will not conflict with or result in a breach by
the Company of any of the terms or provisions of, or constitute a
default under, the certificate of incorporation or by-laws of the
Company, or any indenture, mortgage, deed of trust, or other
material agreement or instrument to which the Company is a party
or by which it or any of its properties or assets are bound, or
any material existing applicable law, rule, or regulation or any
applicable decree, judgment, or order of any court, United States
federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company or any of
its properties or assets.
d. Approvals. No authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory
organization, or stock exchange or market or the Stockholders of
the Company is required to be obtained by the Company for the
issuance and sale of the Securities to the Buyer as contemplated
by this Agreement.
e. Information Provided. The information provided by or on
behalf of the Company to the Buyer and referred to in Section
2(e) of this Agreement does not contain any untrue statement of a
material fact or omit to state any material fact necessary in
order to make
the statements therein, in the light of the circumstances under
which they are made, not misleading.
f. Absence of Certain Changes. Since December 31, 1995,
there has been no material adverse change and no material adverse
development in the business, properties, operations, financial
condition, outstanding securities, results of operations or
prospects of the Company, except as disclosed in the documents
referred to in Section 2(e) hereof.
g. Absence of Litigation. Except as disclosed in Exhibit A
hereto, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body
pending or, to the knowledge of the Company or any of its
subsidiaries, threatened against or affecting the Company or any
of its subsidiaries, wherein an unfavorable decision, ruling or
finding would have a material adverse effect on the properties,
business, condition (financial or other), results of operations
or prospects of the Company and its subsidiaries taken as a whole
or the transactions contemplated by this Agreement or any of the
documents contemplated hereby or which would adversely affect the
validity or enforceability of, or the authority or ability of the
Company to perform its obligations under, this Agreement or any
of such other documents.
h. Absence of Events of Default. No Event of Default, as
defined in any agreement to which the Company is a party, and no
event which, with the giving of notice or the passage of time or
both, would become an Event of Default (as so defined), has
occurred and is continuing.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a. Transfer Restrictions. The Buyer acknowledges that (1)
the Preferred Stock has not been and is not being registered
under the provisions of the 1933 Act and, except as provided in
the Registration Rights Agreement, the Shares have not been and
are not being registered under the 1933 Act, and may not be
transferred unless (A) subsequently registered thereunder or (B)
the Buyer shall have delivered to the Company an opinion of
counsel, reasonably satisfactory in form, scope and substance to
the Company, to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption
from such registration; (2) any sale of the Securities made in
reliance on Rule 144 promulgated under the 1933 Act may be made
only in accordance with the terms of said Rule and further, if
said Rule is not applicable, any resale of such Securities under
circumstances in which the seller, or the person through whom the
sale is made, may be deemed to be an underwriter, as that term is
used in the 1933 Act, may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; and (3) neither the Company nor any other person
is under any obligation to register the Securities (other than
pursuant to the Registration Rights Agreement) under the 1933 Act
or to comply with the terms and conditions of any exemption
thereunder.
b. Restrictive Legend. The Buyer acknowledges and agrees
that the Preferred Stock, and, until such time as the Shares have
been registered under the 1933 Act as contemplated by the
Registration Rights Agreement and sold in accordance with such
Registration Statement, the certificates for the Shares, may bear
a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the
certificates for the Shares):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
c. Registration Rights Agreement. The parties hereto agree
to enter into the Registration Rights Agreement, in the form
attached hereto as Annex III, on or before the Closing Date.
d. Filings. The Company undertakes and agrees to make all
necessary filings in connection with the sale of the Preferred
Stock as required by United States laws and regulations, or by
any domestic securities exchange or trading market, and to
provide a copy thereof to the Buyer promptly after such filing.
e. NASDAQ Notification; Reporting Status. The Company
shall timely file a "NASDAQ SmallCap Market Notification Form for
Listing of Additional Shares and Notification Pursuant to SEC
Rule lOb-17" with respect to the Shares with the National
Association of Securities Dealers, Inc. and shall provide
evidence of such filing to the Buyer. So long as the Buyer
beneficially owns any of the Securities, the Company shall file
all reports required to be filed with the SEC pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and the Company shall not terminate its status
as an issuer required to file reports under the 1934 Act even if
the 1934 Act or the rules and regulations thereunder would permit
such termination.
f. Use of Proceeds. The Company will use the proceeds from
the sale of the Preferred Stock (excluding amounts paid by the
Company for legal fees and finder's fees in connection with the
sale of the Preferred Stock) for the repayment of the Company's
debt and internal working capital purposes and shall not,
directly or indirectly, use such proceeds for any loan to or
investment in any other corporation, partnership enterprise or
other person.
5. TRANSFER AGENT INSTRUCTIONS.
Promptly following the delivery by the Buyer of the
aggregate purchase price for the Preferred Stock in accordance
with Section l(c) hereof, and prior to the Closing Date, the
Company will irrevocably instruct its transfer agent to issue
certificates for the Shares from time to time upon conversion of
the Preferred Stock in such amounts as specified from time to
time by the Company to the transfer agent, bearing the
restrictive legend specified in Section 4(b) of this Agreement
prior to registration of the Shares under the 1933 Act,
registered in the name of the Buyer or its nominee and in such
denominations to be specified by the Buyer in connection with
each conversion of the Preferred Stock. The Company warrants
that no instruction other than such instructions referred to in
this Section 5 and stop transfer instructions to give effect to
Section 4(a) hereof prior to registration of the Shares under the
1933 Act will be given by the Company to the transfer agent and
that the Shares shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in
this Agreement, the Registration Rights Agreement, and applicable
law. Nothing in this Section shall affect in any way the Buyer's
obligations and agreement to comply with all applicable
securities laws upon resale of the Securities. If the Buyer
provides the Company with an opinion of counsel reasonably
satisfactory to the Company that registration of a resale by the
Buyer of any of the Securities in accordance with clause (1)(B)
of Section 4(a) of this Agreement is not required under the 1933
Act, the Company shall (except as provided in clause (2) of
Section 4(a) of this Agreement) permit the transfer of the
Securities and, in the case of the Shares, promptly instruct the
Company's transfer agent to issue one or more share certificates
without legend in such name and in such denominations as
specified by the Buyer.
6. STOCK DELIVERY INSTRUCTIONS.
The Preferred Stock shall be delivered by the Company to the
Escrow Agent pursuant to Section l(b) hereof on a delivery
against payment basis at the closing.
7. CLOSING DATE.
The date and time of the issuance and sale of the Stock (the
"Closing Date") shall be not later than 12:00 Noon, New York time
on May 28, 1996, or such other mutually agreed to time, but not
later than June 3, 1996 unless waived by the Company. The
closing shall occur on the Closing Date at the offices of the
Escrow Agent.
8. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Buyer understands that the Company's obligation to sell
the Preferred Stock to the Buyer pursuant to this Agreement is
conditioned upon:
a. The receipt and acceptance by the Company of such
Agreement as evidenced by execution of such Agreement by the
Company for at least $3,000,000 in Preferred Stock (or such
lesser amount as the Company, in its sole discretion, shall
determine);
b. Delivery by the Buyer to the Escrow Agent of good funds
as payment in full of an amount equal to the purchase price for
the Preferred Stock in accordance with Section l(c) hereof; and
c. The accuracy on the Closing Date of the representations
and warranties of the Buyer contained in this Agreement as if
made on the Closing Date and the performance by the Buyer on or
before the Closing Date of all covenants and agreements of the
Buyer required to be performed on or before the Closing Date.
d. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby,
or requiring any consent or approval which shall not have been
obtained.
9. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligation to
purchase the Preferred Stock is conditioned upon:
a. Acceptance by Purchaser of an Agreement for the sale of
Preferred Stock, as indicated by execution of this Agreement;
b. Delivery by the Company to the Escrow Agent of the Stock
in accordance with this Agreement;
c. The accuracy on the Closing Date of the representations
and warranties of the Company contained in this Agreement as if
made on the Closing Date and the performance by the Company on or
before the Closing Date of all covenants and agreements of the
Company required to be performed on or before the Closing Date;
and
d. On the Closing Date, the Buyer having received an
opinion of counsel for the Company, dated the Closing Date, in
form, scope and substance reasonably satisfactory to the Buyer,
to the effect set forth in Annex IV attached hereto.
10. WARRANTS.
Upon conversion of the Preferred Stock under the terms and
conditions set forth in Annex 1, the Company agrees to deliver to
the shareholder a Warrant Certificate in the form annexed as
Annex V. Said Warrant Certificate shall entitle the holder
thereof to purchase, on or prior to 12:01 A.M., May 1, 1999, one
share of Common Stock for each four shares of Common Stock issued
upon conversion of the Preferred Stock at an exercise price equal
to the Market Price on Closing Date.
11. GOVERNING LAW: MISCELLANEOUS.
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York. A facsimile
transmission of this signed Agreement shall be legal and binding
on all parties hereto. This Agreement may be signed in one or
more counterparts, each of which shall be deemed an original.
The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this
Agreement. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction. This
Agreement may be amended only by an instrument in writing signed
by the party to be charged with enforcement. This Agreement
supersedes all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof. Any
notices required or permitted to be given under the terms of this
Agreement shall be sent by mail or delivered personally or by
courier and shall be effective five days after being placed in
the mail, if mailed, or upon receipt, if delivered personally or
by courier, in each case addressed to a party at such party's
address shown in the introductory paragraph or on the signature
page of this Agreement or such other address as a party shall
have provided by notice to the other party in accordance with
this provision.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the Buyer or one of its officers thereunto duly authorized as of
the date set forth below.
LIQUIDATION PREFERENCE OF PREFERRED STOCK: $
PURCHASE PRICE: $
NAME OF BUYER:
SIGNATURE:
By:
TITLE:
DATE:
ADDRESS:
This Agreement has been accepted as of the date set forth
below.
AFGL INTERNATIONAL, INC.
By:
Title:
Date:
Exhibit No. 7/ AFGL International, Inc./ Form S-3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of May 1996
(this "Agreement"), is made by and between AFGL INTERNATIONAL,
INC., a Nevada corporation (the "Company"), and the person named
on the signature page hereto (the "Initial Investor").
WITNESSETH:
WHEREAS, upon the terms and subject to the conditions of the
Stock Purchase Agreement, dated as of [date], between the Initial
Investor and the Company (the "Stock Purchase Agreement"), the
Company has agreed to issue and sell to the Initial Investor 8%
Series D Convertible Preferred Stock of the Company (the
"Preferred Stock") which will be convertible into shares of the
common stock, $.0l par value (the "Common Stock"), of the Company
(the "Conversion Shares") upon the terms and subject to the
conditions of such Preferred Stock and certain warrants to
purchase Common Stock (the "Warrants"); and
WHEREAS, to induce the Initial Investor to execute and
deliver the Stock Purchase Agreement, the Company has agreed to
provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the "Securities
Act"), and applicable state securities laws with respect to the
Conversion Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Initial Investor hereby agrees
as follows:
1. Definitions.
(a) As used in this Agreement, the following terms shall
have the following meanings:
(i) "Investor" means the Initial Investor and any
transferee or assignee who agrees to become bound by the
provisions of this Agreement in accordance with Section 9 hereof.
(ii) "Register," "Registered," and "Registration" refer to
a registration effected by preparing and filing a Registration
Statement or Statements in compliance with the Securities Act and
pursuant to Rule 415 under the Securities Act or any successor
rule providing for offering securities on a continuous basis
("Rule 415"), and the declaration or ordering of effectiveness of
such Registration Statement by the United States Securities and
Exchange Commission (the "SEC").
(iii) "Registrable Securities" means the Conversion Shares
and shares issuable upon exercise of the Warrants ("Warrant
Shares").
(iv) "Registration Statement" means a registration
statement of the Company under the Securities Act.
(b) As used in this Agreement, the term Investor includes
(i) each Investor (as defined above) and (ii) each person who is
a permitted transferee or assignee of the Registrable Securities
pursuant to Section 9 of this Agreement.
(c) Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Stock
Purchase Agreement.
2. Registration.
(a) Mandatory Registration. The Company shall prepare, and
as promptly as possible after the Closing Date (as that term is
defined in Section 7 of the Stock Purchase Agreement) file with
the SEC, either a Registration Statement on Form S-3 covering at
least an aggregate of 2,742,857 shares of Common Stock for the
Initial Investors and any other purchasers of the Preferred Stock
(pro rata) as Registrable Securities (or such lesser number as
may be required by the SEC, but in no event less than the number
of shares into which the Preferred Stock would be convertible at
the time of filing of the Form S-3 and the number of the Warrant
Shares), or an amendment to any pending Company Registration
Statement on Form S-3, and such Registration Statement or amended
Registration Statement shall state that, in accordance with Rule
416 under the Securities Act, it also covers such indeterminate
number of additional shares of Common Stock as may become
issuable upon conversion of the Preferred Stock and the number of
Warrant Shares to prevent dilution resulting from stock splits,
or stock dividends. If at any time the number of shares of
Common Stock into which the Preferred Stock may be converted and
the number of Warrant Shares exceeds 2,742,857 shares of Common
Stock, the Company shall, within ten (10) business days after
receipt of a written notice from any Investor, either (i) amend
the Registration Statement filed by the Company pursuant to the
preceding sentence, if such Registration Statement has not been
declared effective by the SEC at that time, to register all
shares of Common Stock into which the Preferred Stock may be
converted and the number of Warrant Shares, or (ii) if such
Registration Statement has been declared effective by the SEC at
that time, file with the SEC an additional Registration Statement
on Form S-3 to register the shares of Common Stock into which the
Preferred Stock may be converted and the number of Warrant Shares
that exceed the 2,742,857 shares of Common Stock already
registered.
(b) Underwritten Offering. If any offering pursuant to a
Registration Statement pursuant to Section 2(a) hereof involves
an underwritten offering, the Investors who hold a majority in
interest of the Registrable Securities subject to such
underwritten offering shall have the right to select one legal
counsel to represent their interests, and an investment banker or
bankers and manager or managers to administer the offering, which
investment banker or bankers or manager or managers shall be
reasonably satisfactory to the Company. The Investors who hold
the Registrable Securities to be included in such underwriting
shall pay all underwriting discounts and commissions and other
fees and expenses of such investment banker or bankers and
manager or managers so selected in accordance with this Section
2(b) (other than fees and expenses relating to registration of
Registrable Securities under federal or state securities laws,
which are payable by the Company pursuant to Section 5 hereof)
with respect to their Registrable Securities and the fees and
expenses of such legal counsel so selected by the Investors.
(c) Payments by the Company. If the Registration Statement
covering the Registrable Securities required to be filed by the
Company pursuant to Section 2(a) hereof is not effective within
one hundred (100) days after the Closing Date (the "Initial
Date"), then the Company will make payments to the Initial
Investor in such amounts and at such times as shall be determined
pursuant to this Section 2(c). The amount to be paid by the
Company to the Initial Investor shall be determined as of each
Computation Date, and such amount shall be equal to one and one-
half percent (1-1/2%) of the purchase price paid by the Initial
Investor for the Preferred Stock pursuant to the Stock Purchase
Agreement from the Initial Date to the first Computation Date,
increasing 1/4 of 1% of the purchase price for the next
Computation Date thereafter, and two (2%) percent of the purchase
price for each Computation Date thereafter, pro rata to the date
the Registration Statement is declared effective by the SEC (the
"Periodic Amount"); provided, however, that if the Registration
Statement is effective prior to sixty (60) days after the Initial
Date, the Company may elect in lieu of payment of any Periodic
Amount in cash to pay shares of Common Stock having an Aggregate
Market Value equal to the amount of the Periodic Amount, without
any restriction under the Securities Act or any state securities
or "blue sky" law, or the Company shall immediately thereafter
pay the Initial Investor in cash from time to time the amount
due. The full Periodic Amount shall be paid by the Company in
immediately available funds within three business days after each
Computation Date.
As used in this Section 2(c), the following terms shall have
the following meanings:
"Aggregate Market Value" of any shares of Common Stock as of
any Computation Date means the product obtained multiplying (a)
such number of shares of Common Stock times (b) the Average
Market Price of the Common Stock for the Measurement Period for
such Computation Date.
"Average Market Price" of any security for any period shall
be computed as the closing bid price of such security (or the
mean average of the high and low bid prices for such security on
any trading day for which no sales are reported) for each trading
day in such period on the principal trading market for such
security, as reported by such market.
"Computation Date" means the date which is one hundred
thirty (130) days after the Closing Date and, if the Registration
Statement required to be filed by the Company pursuant to Section
2(a) has not theretofore been declared effective by the SEC, each
date which is thirty (30) days after the previous Computation
Date until such Registration Statement is so declared effective.
"Measurement Period" means the period of ten consecutive
trading days for the Common Stock ending on (or, if such
Computation Date is not a trading day, on the last trading day
preceding) each Computation Date.
(d) Eligibility for Form S-3. The Company represents and
warrants that it meets all the requirements for the use of Form S-
3 for registration of the sale by the Initial Investor and any
Investor who purchases the Registrable Securities and the Company
shall file all reports required to be filed by the Company with
the SEC in a timely manner so as to maintain such eligibility for
the use of Form S-3.
3. Obligations of the Company. In connection with the
registration of the Registrable Securities, the Company shall do
each of the following.
(a) Prepare promptly, and file with the SEC as soon as
possible after the Closing Date, a Registration Statement with
respect to not less than the number of Registrable Securities
provided in Section 2(a), above, and thereafter use its best
efforts to cause each Registration Statement relating to
Registrable Securities to become effective as soon as possible
after such filing, and keep the Registration Statement effective
pursuant to Rule 415 at all times until the earliest (the
"Registration Period") of (i) the date that is three years after
the Closing Date (ii) the date when the Investors may sell all
Registrable Securities under Rule 144 or (iii) the date the
Investors no longer own any of the Registrable Securities, which
Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they
were made, not misleading; and
(b) Prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with
the Registration Statement as may be necessary to keep the
Registration effective at all times during the Registration
Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by the
Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set
forth in the Registration Statement;
(c) Furnish to each Investor whose Registrable Securities
are included in the Registration Statement and its legal counsel,
(i) promptly after the same is prepared and publicly distributed,
filed with the SEC, or received by the Company, one (1) copy of
the Registration Statement, each preliminary prospectus and
prospectus, and each amendment or supplement thereto, and (ii)
such number of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and such
other documents, as such Investor may reasonably request in order
to facilitate the disposition of the Registrable Securities owned
by such Investor;
(d) Use reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statement
under such other securities or blue sky laws of such
jurisdictions as the Investors who hold a majority in interest of
the Registrable Securities being offered reasonably request and
in which significant volumes of shares of Common Stock are
traded, (ii) prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements
to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof at all times during the
Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take
all other actions reasonably necessary or advisable to qualify
the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (A) qualify to
do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (B) subject itself
to general taxation in any such jurisdiction, (C) file a general
consent to service of process in any such jurisdiction, (D)
provide any undertakings that cause more than nominal expense or
burden to the Company or (E) make any change in its charter or by-
laws, which in each case the Board of Directors of the Company
determines to be contrary to the best interests of the Company
and its stockholders;
(e) As promptly as practicable after becoming aware of such
event, notify each Investor of the happening of any event of
which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and use
its best efforts promptly to prepare a supplement or amendment to
the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a
number of copies of such supplement or amendment to each Investor
as such Investor may reasonably request;
(f) As promptly as practicable after becoming aware of such
event, notify each Investor who holds Registrable Securities
being sold (or, in the event of an underwritten offering, the
managing underwriters) of the issuance by the SEC of any stop
order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time;
(g) Use its best efforts, if eligible, either to (i) cause
all the Registrable Securities covered by the Registration
Statement to be listed on a national securities exchange and on
each additional national securities exchange on which securities
of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is
then permitted under the rules of such exchange, or (ii) secure
designation of all the Registrable Securities covered by the
Registration Statement as a National Association of Securities
Dealers Automated Quotations System ("NASDAQ") "national market
system security" within the meaning of Rule 11Aa2-1 of the SEC
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the quotation of the Registrable Securities
on the NASDAQ/Small Cap Market; or if, despite the Company's best
efforts to satisfy the preceding clause (i) or (ii), the Company
is unsuccessful in doing so, to secure NASDAQ authorization and
quotation for such Registrable Securities and, without limiting
the generality of the foregoing, to arrange for at least two
market makers to register with the National Association of
Securities Dealers, Inc. ("NASD") as such with respect to such
Registrable Securities;
(h) Provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the
effective date of the Registration Statement;
(i) Cooperate with the Investors who hold Registrable
Securities being offered to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends)
representing Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates to be in such
denominations or amounts as the case may be, as the Investors may
reasonably request and registered in such names as the Investors
may request; and, within three (3) business days after a
Registration Statement which includes Registrable Securities is
ordered effective by the SEC, the Company shall deliver, and
shall cause legal counsel selected by the Company to deliver, to
the transfer agent for the Registrable Securities (with copies to
the Investors whose Registrable Securities are included in such
Registration Statement) an appropriate instruction and opinion of
such counsel; and
j. Take all other reasonable actions necessary to expedite
and facilitate disposition by the Investor of the Registrable
Securities pursuant to the Registration Statement.
4. Obligations of the Investors. In connection with the
registration of the Registrable Securities, the Investors shall
have the following obligations:
(a) It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the
Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of
the Registrable Securities held by it, as shall be reasonably
required to effect the registration of such Registrable
Securities and shall execute such documents in connection with
such registration as the Company may reasonably request. At
least five (5) days prior to the first anticipated filing date of
the Registration Statement, the Company shall notify each
Investor of the information the Company requires from each such
Investor (the "Requested Information") if such Investor elects to
have any of such Investor's Registrable Securities included in
the Registration Statement. If at least two (2) business days
prior to the filing date the Company has not received the
Requested Information from an Investor (a "Non-Responsive
Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive
Investor;
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as
reasonably requested by the Company in connection with the
preparation and filing of the Registration Statement hereunder,
unless such Investor has notified the Company in writing of such
Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind
described in Section 3(e) or 3(f), above, such Investor will
immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable
Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e)
or 3(f) and, if so directed by the Company, such Investor shall
deliver to the Company (at the expense of the Company) or destroy
(and deliver to the Company a certificate of destruction) all
copies in such Investor's possession, of the prospectus covering
such Registrable Securities current at the time of receipt of
such notice.
5. Expenses of Registration. All reasonable expenses,
other than underwriting discounts and commissions and other fees
and expenses of investment bankers and other than brokerage
commissions, incurred in connection with registrations, filings
or qualifications pursuant to Section 3, but including, without
limitation, all registration, listing, and qualifications fees,
printers and accounting fees, and the fees and disbursements of
counsel for the Company, shall be borne by the Company.
6. Indemnification. In the event any Registrable
Securities are included in a Registration Statement under this
Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Investor who holds such
Registrable Securities, the directors, if any, of such Investor,
the officers, if any, of such Investor, each person, if any, who
controls any Investor within the meaning of the Securities Act or
the Exchange Act (each, an "Indemnified Person"), against any
losses, claims, damages, liabilities or expenses joint or
several) incurred (collectively, "Claims") to which any of them
may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of
or are based upon any of the following statements, omissions or
violations in the Registration Statement, or any post-effective
amendment thereof, or any prospectus included therein: (i) any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any post-effective
amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in
the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement thereto with the SEC)
or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of
the circumstances under which the statements therein were made,
not misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities
Act, the Exchange Act or any state securities law (the matters in
the foregoing clauses (i) through (iii) being, collectively,
"Violations"). The Company shall reimburse the Investors,
promptly as such expenses are incurred and are due and payable,
for any legal fees or other reasonable expenses incurred by them
in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a) shall
not (I) apply to a Claim arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any
Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment
thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(b) hereof; (II)
with respect to any preliminary prospectus, inure to the benefit
of any such person from whom the person asserting any such Claim
purchased the Registrable Securities that are the subject thereof
(or to the benefit of any person controlling such person) if the
untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then
amended or supplemented, if such prospectus was timely made
available by the Company pursuant to Section 3(b) hereof; (III)
be available to the extent such Claim is based on a failure of
the Investor to deliver or cause to be delivered the prospectus
made available by the Company; or (IV) apply to amounts paid in
settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not
be unreasonably withheld. Each Investor will indemnify the
Company and its officers, directors and agents against any claims
arising out of or based upon a Violation which occurs in reliance
upon and in conformity with information furnished in writing to
the Company, by or on behalf of such Investor, expressly for use
in connection with the preparation of the Registration Statement,
subject to such limitations and conditions as are applicable to
the Indemnification provided by the Company to this Section 6.
Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9.
(b) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the
commencement of any action (including any governmental action),
such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party
under this Section 6, deliver to the indemnifying party a written
notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified
Party, as the case may be; provided, however, that an Indemnified
Person or Indemnified Party shall have the right to retain its
own counsel with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such
counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel
in such proceeding. In such event, the Company shall pay for
only one separate legal counsel for the Investors; such legal
counsel shall be selected by the Investors holding a majority in
interest of the Registrable Securities included in the
Registration Statement to which the Claim relates. The failure
to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in
its ability to defend such action. The indemnification required
by this Section 6 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense,
as such expense, loss, damage or liability is incurred and is due
and payable.
7. Contribution. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the
indemnifying party agrees to make the maximum contribution with
respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided,
however, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Section 6;
(b) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation; and (c) contribution by any seller of
Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such
Registrable Securities.
8. Reports under Exchange Act. With a view to making
available to the Investors the benefits of Rule 144 promulgated
under the Securities Act or any other similar rule or regulation
of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration
("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act
and the Exchange Act; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the
Company and (iii) such other information as may be reasonably
requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
9. Assignment of the Registration Rights. The rights to
have the Company register Registrable Securities pursuant to this
Agreement shall be automatically assigned by the Investors to any
transferee of all or any portion of such securities (or all or
any portion of any Preferred Stock of the Company which is
convertible into such securities) of Registrable Securities only
if: (a) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such
assignment, (b) the Company is, within a reasonable time after
such transfer or assignment, furnished with written notice of (i)
the name and address of such transferee or assignee and (ii) the
securities with respect to which such registration rights are
being transferred or assigned, (c) immediately following such
transfer or assignment the further disposition of such securities
by the transferee or assignee is restricted under the Securities
Act and applicable state securities laws, and (d) at or before
the time the Company received the written notice contemplated by
clause (b) of this sentence the transferee or assignee agrees in
writing with the Company to be bound by all of the provisions
contained herein. In the event of any delay in filing the
Registration Statement as a result of such assignment, the
Company shall not be liable for any damages arising from such
delay.
10. Amendment of Registration Rights. Any provision of
this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
the Company and Investors who hold a majority in interest of the
Registrable Securities. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each
Investor and the Company.
11. Miscellaneous.
(a) A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of
record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more
persons or entities with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such
Registrable Securities.
(b) Notices required or permitted to be given hereunder
shall be in writing and shall be deemed to be sufficiently given
when personally delivered (by hand, by courier, by telephone line
facsimile transmission, receipt confirmed, or other means) or
sent by certified mail, return receipt requested, properly
addressed and with proper postage pre-paid (i) if to the Company,
at AFGL International, Inc., 850 Third Avenue, 11th Floor, New
York, New York Attention: President or Vice Chairman, with a copy
to Lehman, Jensen & Donahue, L.C., 8 East Broadway, Suite 620,
Salt Lake City, Utah 84111, ATT: Mark Lehman, Esq., (ii) if to
the Initial Investor, at the address set forth under its name in
the Stock Purchase Agreement, with a copy to Samuel Krieger,
Esq., Krieger & Prager, 319 Fifth Avenue, Third Floor, New York,
New York 10016 and (iii) if to any other Investor, at such
address as such Investor shall have provided in writing to the
Company, or at such other address as each such party furnishes by
notice given in accordance with this Section 11(b), and shall be
effective, when personally delivered, upon receipt and, when so
sent by certified mail, four (4) calendar days after deposit with
the United states Postal Service.
(c) Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in
exercising such right or remedy, shall not operate as a waiver
thereof.
(d) This Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of California
applicable to agreements made and to be performed entirely within
such State. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under
any law shall not effect the validity or enforceability of any
other provision hereof.
(e) This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof.
There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context
may require.
(h) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the
meaning thereof.
(i) The Company acknowledges that any failure by the
Company to perform its obligations under Section 3(i), or any
delay in such performance could result in direct damages to the
Investors and the Company agrees that, in addition to any other
liability the Company may have by reason of any such failure or
delay, the Company shall be liable for all direct damages caused
by any such failure or delay, unless same is the result of force
majeure. Neither party shall be liable for consequential
damages.
(j) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all
of which shall constitute one and the same agreement. This
Agreement, once executed by a party, may be delivered to the
other party hereto by telephone line facsimile transmission of a
copy of this Agreement bearing the signature of the party so
delivering this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
AFGL INTERNATIONAL,
INC.
By:
Name:
Title:
By:
Name:
Title:
Exhibit No. 8/ AFGL International, Inc./ Form S-3
WARRANT TO
PURCHASE
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value Per Share
THIS WARRANT MAY NOT BE EXERCISED
UNTIL [date], AND WILL BE VOID
AFTER 12:00 MIDNIGHT ON [date]
This certifies that, for value received, [name], or
registered assigns ("holder"), is entitled, at any time on or
after [date], and at any time prior to 12:00 midnight Eastern
time on [date] (the "Expiration Date"), to purchase from AFGL
International, Inc., a Nevada corporation, hereinafter referred
to as the "Company," the number of shares shown above (the
"Warrant Shares") of common stock, par value $0.01, of the
Company (the "Common Stock") by surrendering this warrant with
the purchase form attached hereto, duly executed, at the
principal office of the Company in New York, New York, and by
paying in full and in lawful money of the United States of
America by cash or cashiers' check, the purchase price of the
Warrant Shares as to which this warrant is exercised, on all the
terms and conditions hereinafter set forth.
1. The purchase price at which the Warrant Shares are
purchasable (hereinafter referred to as the "Warrant Price") is
$4.25 per share.
2. On the exercise of all or any portion of this warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time, but in no event longer than five
business days after the warrants shall have been exercised as set
forth above. If this warrant shall be exercised in respect to
only a part of the Warrant Shares covered hereby, the holder
shall be entitled to receive a similar warrant of like tenor and
date covering the number of Warrant Shares with respect to which
this warrant shall not have been exercised.
3. This warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
4. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this warrant will, on issuance, be fully paid and nonassessable,
and free from all taxes, liens, pre-emptive rights, and charges
with respect to the issue thereof. The Company further covenants
and agrees that during the period within which the rights
represented by this warrant may be exercised, the Company will
have authorized and reserved a sufficient number of shares of
Common Stock to provide for the exercise of the rights
represented by this warrant.
5. The Warrant Price and number of Warrant Shares
purchasable pursuant to this warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price in effect immediately prior thereto shall be
adjusted so that the holder of the warrant thereafter surrendered
for exercise shall be entitled to receive, after the occurrence
of any of the events described, the number of Warrant Shares to
which the holder would have been entitled had such warrant been
exercised immediately prior to the occurrence of such event.
Such adjustment shall become effective immediately after the
opening of business on the day following the date on which such
subdivision, combination, or reclassification, as the case may
be, becomes effective.
(c) If any capital reorganization or reclassification of
the Company's Common Stock, or consolidation or merger of the
Company with another corporation or the sale of all or
substantially all of its assets to another corporation shall be
effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities, or assets with respect to
or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger, or sale,
lawful adequate provisions shall be made whereby the holder of
this warrant shall thereafter have the right to acquire and
receive on exercise hereof such shares of stock, securities, or
assets as would have been issuable or payable (as part of the
reorganization, reclassification, consolidation, merger, or sale)
with respect to or in exchange for such number of outstanding
shares of the Company's Common Stock as would have been received
on exercise of this warrant immediately before such
reorganization, reclassification, consolidation, merger, or sale.
In any such case, appropriate provision shall be made with
respect to the rights and interests of the holder of this warrant
to the end that the provisions hereof shall thereafter be
applicable in relation to any shares of stock, securities, or
assets thereafter deliverable on the exercise of this warrant.
In the event of a merger or consolidation of the Company with or
into another corporation or the sale of all or substantially all
of its assets as a result of which a number of shares of common
stock of the surviving or purchasing corporation greater or less
than the number of shares of Common Stock of the Company
outstanding immediately prior to such merger, consolidation, or
purchase are issuable to holders of Common Stock of the Company,
then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as through there was a subdivision or combination of the
outstanding shares of Common Stock of the Company. The Company
will not effect any such consolidation, merger, or sale unless
prior to the consummation thereof the successor corporation
resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument mailed
or delivered to the holder hereof at its last address appearing
on the books of the Company, the obligation to deliver to such
holder such shares of stock, securities, or assets as, in
accordance with the foregoing provisions, such holder may be
entitled to acquire on exercise of this warrant.
(d) No fraction of a share shall be issued on exercise,
but, in lieu thereof, the Company, notwithstanding any other
provision hereof, may pay therefor in cash at the fair value of
any such fractional share at the time of exercise.
(e) Neither the purchase or other acquisition by the
Company of any shares of Common Stock nor the sale or other
disposition by the Company of any shares of Common Stock shall
affect any adjustment of the Warrant Price or be taken into
account in computing any subsequent adjustment of the Warrant
Price.
6. This warrant and the shares issuable on exercise of this
warrant are restricted securities within the meaning of Rule 144
promulgated under the Securities Act of 1933, as amended, and all
certificates therefor shall contain a legend in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (the
"Securities Act"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER EXEMPTION OR SAFE HARBOR UNDER
THE SECURITIES ACT.
7. Subject to the restrictions set forth in paragraph 6
above, this warrant is transferable at the offices of the
Company. On such transfer, every holder hereof agrees that the
Company may deem and treat the registered holder of this warrant
as the true and lawful owner thereof for all purposes, and the
Company shall not be affected by any notice to the contrary.
8. The Warrant Shares (but not the warrants) are subject to
registration for resale under applicable federal and state
securities laws as provided in that certain Registration Rights
Agreement between the Company and holder dated May 31, 1996.
9. As used herein, the term "Common Stock" shall mean and
include the Company's Common Stock authorized on the date of the
original issue of this warrant, and shall also include any
capital stock of any class of the Company thereafter authorized
that shall not be limited to a fixed sum or percentage in respect
of the rights of the holders thereof to participate in dividends
and in the distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided,
that the Warrant Shares purchasable pursuant to this warrant
shall include only shares of the class designated in the
Company's articles of incorporation as Common Stock on the date
of the original issue of this warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
10. This agreement shall be construed under and be governed
by the laws of the state of Nevada, except for those laws
pertaining to choice of law matters.
11. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to holder, to:
If to the Company, to:
AFGL International, Inc.
Attn: Barry S. Roseman, Chief Operating Officer
850 Third Avenue, 11th Floor
New York, New York 10022
or such other address as shall be furnished in writing by any
party to the other, and any such notice or communication shall be
deemed to have been given as of the date so delivered or three
days after being so deposited in the mails.
DATED this
AFGL INTERNATIONAL, INC.
ATTEST:
By /s/
Secretary Gary S. Goldstein,
President
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock of AFGL International, Inc., and herewith makes
payment of [$] therefor, and requests that the certificate(s) for
such shares be delivered to [name], at [address], and if such
shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable
under the attached warrant be delivered to the undersigned.
DATED this
Signature
Transfer Form
FOR VALUE RECEIVED, [name], hereby sell, assign, and
transfer unto
[number] warrants to purchase Common Stock of AFGL International,
Inc., represented by the attached warrant, and do hereby
irrevocably constitute and appoint [name] to transfer the said
warrants on the books of AFGL International, Inc., with full
power of substitution in the premises.
Dated
Signature
In presence of:
Exhibit No. 9/ AFGL International, Inc./ Form S-3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
WARRANT TO
PURCHASE
12,500
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value per Share
THIS WARRANT MAY NOT BE EXERCISED
UNTIL AUGUST 23, 1994, AND WILL BE VOID
AFTER 12:00 MIDNIGHT ON AUGUST 23, 1998
This warrant (The "Warrant") certifies that, for value
received, Ehud D. Laska ("Laska"), or registered assigns, is
entitled, at any time on or after August 23, 1994, and at any
time prior to 12:00 Midnight Eastern time on August 23, 1998 (the
"Expiration Date"), to purchase from AFGL International, Inc., a
Nevada corporation (the "Company"), up to the number of shares
shown above (together with any other warrants originally issued
to Tallwood, as set forth below, the "Warrant Shares") of common
stock, par value $0.01, of the Company (the "Common Stock") by
surrendering this Warrant with the purchase form attached hereto,
duly executed, at the principal office of the Company in New
York, New York, and by paying in full and in lawful money of the
United States of America, by cash or cashiers' check, the
purchase price of the Warrant Shares as to which this Warrant is
exercised, on all the terms and conditions Hereinafter set forth.
This Warrant was originally issued to Tallwood Associates, Inc.
("Tallwood") pursuant to an agreement dated July 28, 1992, as
amended on February 16, 1993 (the "Agreement"), pertaining to the
Company's efforts to obtain financing.
1. The purchase price at which the Warrant Shares are
purchasable (the "Warrant Price") is $1.25 per share.
2. The holder of this Warrant is entitled to purchase
12,500 Warrant Shares for the $500,000.00 in equity funding
obtained from 21st Century Holdings, Inc. through the efforts of
Tallwood.
3. On the exercise of all or any portion of this Warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time after the Warrant shall have been
exercised as set forth above. If this Warrant shall be exercised
with respect to only a portion of the Warrant Shares covered
hereby, the holder shall be entitled to receive a similar Warrant
of like tenor and date covering the number of Warrant Shares with
respect to which this Warrant shall not have been exercised.
4. This Warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
5. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this Warrant will, on issuance, be fully paid and nonassessable,
and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that,
during the period within which the rights represented by this
Warrant may be exercised, the Company will have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant.
6. The Warrant Price and number of Warrant Shares
purchasable pursuant to this Warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price and the number of Warrant Shares in effect
immediately prior thereto shall be adjusted so that the holder of
this Warrant thereafter surrendered for exercise shall be
entitled to receive, after the occurrence of any of the events
described, the number of Warrant Shares to which the holder would
have been entitled had this Warrant been exercised immediately
prior to the occurrence of such event. Such adjustment shall
become effective immediately after the opening of business on the
day following the date on which such subdivision, combination, or
reclassification, as the case may be, becomes effective.
(c) If any capital reorganization or reclassification of
Common Stock, or consolidation or merger of the Company with
another corporation or the sale of all or substantially all of
its assets to another corporation shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock,
securities, or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful adequate
provisions shall be made whereby the holder of this Warrant shall
thereafter have the right to acquire and receive on exercise
hereof such shares of stock, securities, or assets as would have
been issuable or payable (as part of such reorganization,
reclassification, consolidation, merger or sale) with respect to
or in exchange for such number of outstanding shares of Common
Stock as would have been received on exercise of this Warrant
immediately before such reorganization, reclassification,
consolidation, merger or sale. In any such case, appropriate
provision shall be made with respect to the rights and interests
of the holder of this Warrant to the end that the provisions
hereof shall thereafter be applicable in relation to any shares
of stock, securities, or assets thereafter deliverable on the
exercise of this Warrant. In the event of a merger or
consolidation of the Company with or into another corporation or
the sale of all or substantially all of its assets as a result of
which a number of shares of common stock of the surviving or
purchasing corporation greater or less than the number of shares
of Common Stock outstanding immediately prior to such merger,
consolidation, or purchase are issuable to holders of Common
Stock, then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as though there were a subdivision or combination of the
outstanding shares of Common Stock. The Company will not effect
any such consolidation, merger, or sale unless prior to the
consummation thereof the successor corporation resulting from
such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument mailed or delivered to
the holder hereof at its last address appearing on the books of
the Company, the obligation to deliver to such holder such shares
of stock, securities, or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire on
exercise of this Warrant.
(d) No fraction of a share shall be issued on exercise
hereof, but, in lieu thereof, the Company, notwithstanding any
other provision hereof, may pay therefor in cash at the fair
value of any such fractional share at the time of exercise.
(e) Neither purchase or other acquisition by the Company of
any shares of Common Stock nor the sale or other disposition by
the Company of any shares of Common Stock shall effect any
adjustment of the Warrant Price or be taken into account in
computing any subsequent adjustment of the Warrant Price.
7. This Warrant shall not be transferable or assignable
except by will, trust, or the laws of descent. Subject to the
foregoing restrictions and the restrictions set forth in
paragraph 8 hereof, this Warrant is transferable at the offices
of the Company. Upon such transfer, each holder hereof agrees
that the Company may deem and treat the registered holder of this
Warrant as the true and lawful owner thereof for all purposes,
and the Company shall not be affected by any notice to the
contrary.
8. The shares issuable on exercise of this Warrant shall be
restricted securities within the meaning of Rule 144 promulgated
under the Securities Act, and all certificates for such shares
shall contain a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT."
9. The Company agrees to register or qualify the Warrant
Shares (but not this Warrant) for sale as follows:
(a) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company shall
receive a written request from the holders of this Warrant and
the Warrant Shares that the Company file a registration
statement, post-effective amendment, or other appropriate form
under the Securities Act covering the sale of Warrant Shares,
then the Company shall, within ten days after the receipt
thereof, give written notice of such request (a "Registration
Notice") to all holders of this Warrant and the Warrant Shares
and shall use its best efforts, subject to the limitations of
this paragraph, to effect, within a reasonable time, the required
filing under the Securities Act to permit sale of all Warrant
Shares within 120 days following the mailing of the Registration
Notice. If the holders this Warrant and the Warrant Shares
intend to distribute the Warrant Shares by means of an
underwriting, they shall so advise the Company as part of their
request, and the Company shall include such information in the
Registration Note. The underwriter shall be selected by the
Company and shall be reasonably acceptable to a majority in
interest of the holders of at least 50% of this Warrant and the
Warrant Shares (the "Majority Holders"). In such event, the
right of the holders of this Warrant and the Warrant Shares to
include the Warrant Shares in such registration shall be
conditioned upon all holders' participation in such underwriting
and the inclusion of all such holders' Warrant Shares in the
underwriting (unless otherwise mutually agreed by a majority in
interest of the Majority Holders and such holder), to the extent
provided herein. All holders of this Warrant and the Warrant
Shares shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision
of this paragraph, if the underwriter advises the Majority
Holders in writing that market factors reasonably require a
limitation of the number of shares to be underwritten, then the
Majority Holders shall so advise all holders of Warrant Shares
which would otherwise be underwritten pursuant hereto, and the
number of Warrant Shares that may be included in the underwriting
shall be prorated among all holders thereof, including the
Majority Holders. The Company is obligated to effect only one
such registration pursuant to this paragraph.
(b) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company
proposes to file a registration statement or notification under
the Securities Act for the primary or secondary sale of any debt
or equity security, it will give written notice at least 30 days
prior to the filing of such registration statement or
notification to the holders of this Warrant and the Warrant
Shares of its intention to do so. The Company agrees that, after
receiving written notice from the Majority Holders of their
desire to include their Warrant Shares in such proposed
registration statement or notification, the Company shall afford
the holders of this Warrant and the Warrant Shares the
opportunity to have their Warrant Shares included therein.
Notwithstanding the provisions of this paragraph 9(b), the
Company shall have the right, at any time after it shall have
given written notice pursuant to this paragraph (whether or not a
written request for inclusion of the Warrant Shares shall be
made) to elect not to file any such proposed registration
statement or notification or to withdraw the same after the
filing but prior to the effective date thereof. In no event
shall the Company be obligated to include the Warrant Shares in
any registration statement or notification under this paragraph
9(b) if, in the written opinion of the underwriter, the inclusion
of the Warrant Shares in such registration statement or
notification would be materially detrimental to the proposed
offering of debt or equity securities pursuant to which the
Company gave notice to the holders under this paragraph.
(c) In connection with the filing of a registration
statement, notification, or post-effective amendment under this
section, the Company covenants and agrees:
(i) to pay all expenses of such registration statement,
notification, or post-effective amendment, including, without
limitation, printing charges, legal fees and disbursements of
Counsel for the Company, blue sky expenses, accounting fees and
filing fees, but not including legal fees and disbursements of
counsel to the holders and any sales commissions on Warrant
Shares offered and sold;
(ii) to take all necessary action which may reasonably be
required in qualifying or registering the Warrant Shares included
in a registration statement, notification or post-effective
amendment for the offer and sale under the securities or blue sky
laws of such states as requested by the holders; provided that
the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such
jurisdiction; and
(iii) to utilize its best efforts to keep the same
effective for a period of not less than 90 nor more than 120
days.
(d) The holders of this Warrant and the Warrant Shares
shall cooperate with the Company and shall furnish such
information as the Company may request in connection with any
such registration statement, notification or post-effective
amendment hereunder, on which the Company shall be entitled to
rely, and such holders of this Warrant and the Warrant Shares
shall indemnify and hold harmless the Company (and all other
persons who may be subject to liability under the Securities Act
or otherwise) from and against any and all claims, actions,
suits, liabilities, losses, damages, and expenses of every nature
and character (including, but without limitation, all attorneys'
fees and amounts paid in settlement of any claim, action, or
suit) which arise or result directly or indirectly from any
untrue statement of a material fact furnished by such holder(s)
in connection with such registration or qualification, or from
the failure of such holder(s) to furnish material information in
connection with the facts required to be included in such
registration statement, notification or post-effective amendment
necessary to make the statements therein not misleading, or from
any sales or offers of the Warrant Shares so registered after 90
days from the effective date of such registration statement or
notification.
10. As used herein, the term "Common Stock" shall mean and
include the Common Stock authorized on the date of the original
issue of this Warrant, and shall also include any capital stock
of any class of the Company thereafter authorized that shall not
be limited to a fixed sum or percentage in respect of the rights
of the holders thereof to participate in dividends and in the
distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided
that the Warrant Shares purchasable pursuant to this Warrant
shall include only shares of the class designated in the
Company's Articles of Incorporation as Common Stock on the date
of the original issue of this Warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
11. This agreement shall be construed under and be governed
by the laws of the state of Nevada.
12. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to Laska, to:
Ehud D. Laska
465 Bedford Road
Chappaqua, New York 10514
If to the Company, to:
AFGL International, Inc.
850 Third Avenue, 11th Floor
New York, New York 10022
Attention: Barry S. Roseman
or such other address as shall be furnished in writing by an
party to the other, and any such notice or communication shall be
deemed to have been given as of the date delivered by hand or
three days after being so deposited in the mails.
Dated this 23rd day of December, 1993.
AFGL INTERNATIONAL, INC.
By: /s/
Gary S. Goldstein,
President
ATTEST:
By: /s/
Barry S. Roseman, Secretary
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock of AFGL International, Inc., and herewith makes
payment of [$] therefor, and requests that the certificate(s) for
such shares be delivered to [name], at [address], and if such
shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable
under the attached warrant be delivered to the undersigned.
DATED this
Signature
Exhibit No. 10/ AFGL International, Inc./ Form S-3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
WARRANT TO
PURCHASE
52,356
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value per Share
THIS WARRANT MAY NOT BE EXERCISED
UNTIL AUGUST 23, 1994, AND WILL BE VOID
AFTER 12:00 MIDNIGHT ON AUGUST 23, 1998
This warrant (The "Warrant") certifies that, for value
received, Ehud D. Laska ("Laska"), or registered assigns, is
entitled, at any time on or after August 23, 1994, and at any
time prior to 12:00 Midnight Eastern time on August 23, 1998 (the
"Expiration Date"), to purchase from AFGL International, Inc., a
Nevada corporation (the "Company"), up to the number of shares
shown above (together with any other warrants originally issued
to Tallwood, as set forth below, the "Warrant Shares") of common
stock, par value $0.01, of the Company (the "Common Stock") by
surrendering this Warrant with the purchase form attached hereto,
duly executed, at the principal office of the Company in New
York, New York, and by paying in full and in lawful money of the
United States of America, by cash or cashiers' check, the
purchase price of the Warrant Shares as to which this Warrant is
exercised, on all the terms and conditions Hereinafter set forth.
This Warrant was originally issued to Tallwood Associates, Inc.
("Tallwood") pursuant to an agreement dated July 28, 1992, as
amended on February 16, 1993 (the "Agreement"), pertaining to the
Company's efforts to obtain financing.
1. The purchase price at which the Warrant Shares are
purchasable (the "Warrant Price") is $1.25 per share; provided
that the holder may elect to receive, without the payment by the
holder of any additional consideration, shares equal to the value
of this Warrant or any portion hereof by the surrender of this
Warrant or such portion to the Company, with a net issue election
notice duly executed, at the office of the Company. Thereupon,
the Company shall issue to the holder such number of fully paid
and nonassessable shares of Common Stock as is computed using the
following formula:
Y (A-B)
________
A
where Y equals the number of shares covered by this Warrant in
respect of which the net issue election is made pursuant hereto;
A equals the fair market value of one share of Common Stock at
the time the net issue election is made pursuant hereto; and B
equals the Warrant Price.
2. The holder of this Warrant is entitled to purchase
52,356 Warrant Shares for the $2,765,000.00 in equity funding
obtained from 21st Century Holdings, Inc. through the efforts of
Tallwood.
3. On the exercise of all or any portion of this Warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time after the Warrant shall have been
exercised as set forth above. If this Warrant shall be exercised
with respect to only a portion of the Warrant Shares covered
hereby, the holder shall be entitled to receive a similar Warrant
of like tenor and date covering the number of Warrant Shares with
respect to which this Warrant shall not have been exercised.
4. This Warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
5. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this Warrant will, on issuance, be fully paid and nonassessable,
and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that,
during the period within which the rights represented by this
Warrant may be exercised, the Company will have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant.
6. The Warrant Price and number of Warrant Shares
purchasable pursuant to this Warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price and the number of Warrant Shares in effect
immediately prior thereto shall be adjusted so that the holder of
this Warrant thereafter surrendered for exercise shall be
entitled to receive, after the occurrence of any of the events
described, the number of Warrant Shares to which the holder would
have been entitled had this Warrant been exercised immediately
prior to the occurrence of such event. Such adjustment shall
become effective immediately after the opening of business on the
day following the date on which such subdivision, combination, or
reclassification, as the case may be, becomes effective.
(c) If any capital reorganization or reclassification of
Common Stock, or consolidation or merger of the Company with
another corporation or the sale of all or substantially all of
its assets to another corporation shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock,
securities, or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful adequate
provisions shall be made whereby the holder of this Warrant shall
thereafter have the right to acquire and receive on exercise
hereof such shares of stock, securities, or assets as would have
been issuable or payable (as part of such reorganization,
reclassification, consolidation, merger or sale) with respect to
or in exchange for such number of outstanding shares of Common
Stock as would have been received on exercise of this Warrant
immediately before such reorganization, reclassification,
consolidation, merger or sale. In any such case, appropriate
provision shall be made with respect to the rights and interests
of the holder of this Warrant to the end that the provisions
hereof shall thereafter be applicable in relation to any shares
of stock, securities, or assets thereafter deliverable on the
exercise of this Warrant. In the event of a merger or
consolidation of the Company with or into another corporation or
the sale of all or substantially all of its assets as a result of
which a number of shares of common stock of the surviving or
purchasing corporation greater or less than the number of shares
of Common Stock outstanding immediately prior to such merger,
consolidation, or purchase are issuable to holders of Common
Stock, then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as though there were a subdivision or combination of the
outstanding shares of Common Stock. The Company will not effect
any such consolidation, merger, or sale unless prior to the
consummation thereof the successor corporation resulting from
such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument mailed or delivered to
the holder hereof at its last address appearing on the books of
the Company, the obligation to deliver to such holder such shares
of stock, securities, or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire on
exercise of this Warrant.
(d) No fraction of a share shall be issued on exercise
hereof, but, in lieu thereof, the Company, notwithstanding any
other provision hereof, may pay therefor in cash at the fair
value of any such fractional share at the time of exercise.
(e) Neither purchase or other acquisition by the Company of
any shares of Common Stock nor the sale or other disposition by
the Company of any shares of Common Stock shall effect any
adjustment of the Warrant Price or be taken into account in
computing any subsequent adjustment of the Warrant Price.
7. This Warrant shall not be transferable or assignable
except by will, trust, or the laws of descent. Subject to the
foregoing restrictions and the restrictions set forth in
paragraph 8 hereof, this Warrant is transferable at the offices
of the Company. Upon such transfer, each holder hereof agrees
that the Company may deem and treat the registered holder of this
Warrant as the true and lawful owner thereof for all purposes,
and the Company shall not be affected by any notice to the
contrary.
8. The shares issuable on exercise of this Warrant shall be
restricted securities within the meaning of Rule 144 promulgated
under the Securities Act, and all certificates for such shares
shall contain a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT."
9. The Company agrees to register or qualify the Warrant
Shares (but not this Warrant) for sale as follows:
(a) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company shall
receive a written request from the holders of this Warrant and
the Warrant Shares that the Company file a registration
statement, post-effective amendment, or other appropriate form
under the Securities Act covering the sale of Warrant Shares,
then the Company shall, within ten days after the receipt
thereof, give written notice of such request (a "Registration
Notice") to all holders of this Warrant and the Warrant Shares
and shall use its best efforts, subject to the limitations of
this paragraph, to effect, within a reasonable time, the required
filing under the Securities Act to permit sale of all Warrant
Shares within 120 days following the mailing of the Registration
Notice. If the holders this Warrant and the Warrant Shares
intend to distribute the Warrant Shares by means of an
underwriting, they shall so advise the Company as part of their
request, and the Company shall include such information in the
Registration Note. The underwriter shall be selected by the
Company and shall be reasonably acceptable to a majority in
interest of the holders of at least 50% of this Warrant and the
Warrant Shares (the "Majority Holders"). In such event, the
right of the holders of this Warrant and the Warrant Shares to
include the Warrant Shares in such registration shall be
conditioned upon all holders' participation in such underwriting
and the inclusion of all such holders' Warrant Shares in the
underwriting (unless otherwise mutually agreed by a majority in
interest of the Majority Holders and such holder), to the extent
provided herein. All holders of this Warrant and the Warrant
Shares shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision
of this paragraph, if the underwriter advises the Majority
Holders in writing that market factors reasonably require a
limitation of the number of shares to be underwritten, then the
Majority Holders shall so advise all holders of Warrant Shares
which would otherwise be underwritten pursuant hereto, and the
number of Warrant Shares that may be included in the underwriting
shall be prorated among all holders thereof, including the
Majority Holders. The Company is obligated to effect only one
such registration pursuant to this paragraph.
(b) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company
proposes to file a registration statement or notification under
the Securities Act for the primary or secondary sale of any debt
or equity security, it will give written notice at least 30 days
prior to the filing of such registration statement or
notification to the holders of this Warrant and the Warrant
Shares of its intention to do so. The Company agrees that, after
receiving written notice from the Majority Holders of their
desire to include their Warrant Shares in such proposed
registration statement or notification, the Company shall afford
the holders of this Warrant and the Warrant Shares the
opportunity to have their Warrant Shares included therein.
Notwithstanding the provisions of this paragraph 9(b), the
Company shall have the right, at any time after it shall have
given written notice pursuant to this paragraph (whether or not a
written request for inclusion of the Warrant Shares shall be
made) to elect not to file any such proposed registration
statement or notification or to withdraw the same after the
filing but prior to the effective date thereof. In no event
shall the Company be obligated to include the Warrant Shares in
any registration statement or notification under this paragraph
9(b) if, in the written opinion of the underwriter, the inclusion
of the Warrant Shares in such registration statement or
notification would be materially detrimental to the proposed
offering of debt or equity securities pursuant to which the
Company gave notice to the holders under this paragraph.
(c) In connection with the filing of a registration
statement, notification, or post-effective amendment under this
section, the Company covenants and agrees:
(i) to pay all expenses of such registration statement,
notification, or post-effective amendment, including, without
limitation, printing charges, legal fees and disbursements of
Counsel for the Company, blue sky expenses, accounting fees and
filing fees, but not including legal fees and disbursements of
counsel to the holders and any sales commissions on Warrant
Shares offered and sold;
(ii) to take all necessary action which may reasonably be
required in qualifying or registering the Warrant Shares included
in a registration statement, notification or post-effective
amendment for the offer and sale under the securities or blue sky
laws of such states as requested by the holders; provided that
the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such
jurisdiction; and
(iii) to utilize its best efforts to keep the same
effective for a period of not less than 90 nor more than 120
days.
(d) The holders of this Warrant and the Warrant Shares
shall cooperate with the Company and shall furnish such
information as the Company may request in connection with any
such registration statement, notification or post-effective
amendment hereunder, on which the Company shall be entitled to
rely, and such holders of this Warrant and the Warrant Shares
shall indemnify and hold harmless the Company (and all other
persons who may be subject to liability under the Securities Act
or otherwise) from and against any and all claims, actions,
suits, liabilities, losses, damages, and expenses of every nature
and character (including, but without limitation, all attorneys'
fees and amounts paid in settlement of any claim, action, or
suit) which arise or result directly or indirectly from any
untrue statement of a material fact furnished by such holder(s)
in connection with such registration or qualification, or from
the failure of such holder(s) to furnish material information in
connection with the facts required to be included in such
registration statement, notification or post-effective amendment
necessary to make the statements therein not misleading, or from
any sales or offers of the Warrant Shares so registered after 90
days from the effective date of such registration statement or
notification.
10. As used herein, the term "Common Stock" shall mean and
include the Common Stock authorized on the date of the original
issue of this Warrant, and shall also include any capital stock
of any class of the Company thereafter authorized that shall not
be limited to a fixed sum or percentage in respect of the rights
of the holders thereof to participate in dividends and in the
distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided
that the Warrant Shares purchasable pursuant to this Warrant
shall include only shares of the class designated in the
Company's Articles of Incorporation as Common Stock on the date
of the original issue of this Warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
11. This agreement shall be construed under and be governed
by the laws of the state of Nevada.
12. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to Laska, to:
Ehud D. Laska
465 Bedford Road
Chappaqua, New York 10514
If to the Company, to:
AFGL International, Inc.
850 Third Avenue, 11th Floor
New York, New York 10022
Attention: Barry S. Roseman
or such other address as shall be furnished in writing by an
party to the other, and any such notice or communication shall be
deemed to have been given as of the date delivered by hand or
three days after being so deposited in the mails.
Dated this 10th day of November, 1994.
AFGL INTERNATIONAL, INC.
By: /s/
Gary S. Goldstein,
President
ATTEST:
By: /s/
Barry S. Roseman, Secretary
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock of AFGL International, Inc., and herewith makes
payment of [$] therefor, and requests that the certificate(s) for
such shares be delivered to [name], at [address], and if such
shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable
under the attached warrant be delivered to the undersigned.
DATED this
Signature
Exhibit No. 11/ AFGL International, Inc./ Form S-3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
WARRANT TO
PURCHASE
6,250
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value per Share
THIS WARRANT MAY NOT BE EXERCISED
UNTIL AUGUST 23, 1994, AND WILL BE VOID
AFTER 12:00 MIDNIGHT ON AUGUST 23, 1998
This warrant (The "Warrant") certifies that, for value
received, Richard S. Frary ("Frary"), or registered assigns, is
entitled, at any time on or after August 23, 1994, and at any
time prior to 12:00 Midnight Eastern time on August 23, 1998 (the
"Expiration Date"), to purchase from AFGL International, Inc., a
Nevada corporation (the "Company"), up to the number of shares
shown above (together with any other warrants originally issued
to Tallwood, as set forth below, the "Warrant Shares") of common
stock, par value $0.01, of the Company (the "Common Stock") by
surrendering this Warrant with the purchase form attached hereto,
duly executed, at the principal office of the Company in New
York, New York, and by paying in full and in lawful money of the
United States of America, by cash or cashiers' check, the
purchase price of the Warrant Shares as to which this Warrant is
exercised, on all the terms and conditions Hereinafter set forth.
This Warrant was originally issued to Tallwood Associates, Inc.
("Tallwood") pursuant to an agreement dated July 28, 1992, as
amended on February 16, 1993 (the "Agreement"), pertaining to the
Company's efforts to obtain financing.
1. The purchase price at which the Warrant Shares are
purchasable (the "Warrant Price") is $1.25 per share.
2. The holder of this Warrant is entitled to purchase 6,250
Warrant Shares for the $500,000.00 in equity funding obtained
from 21st Century Holdings, Inc. through the efforts of Tallwood.
3. On the exercise of all or any portion of this Warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time after the Warrant shall have been
exercised as set forth above. If this Warrant shall be exercised
with respect to only a portion of the Warrant Shares covered
hereby, the holder shall be entitled to receive a similar Warrant
of like tenor and date covering the number of Warrant Shares with
respect to which this Warrant shall not have been exercised.
4. This Warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
5. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this Warrant will, on issuance, be fully paid and nonassessable,
and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that,
during the period within which the rights represented by this
Warrant may be exercised, the Company will have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant.
6. The Warrant Price and number of Warrant Shares
purchasable pursuant to this Warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price and the number of Warrant Shares in effect
immediately prior thereto shall be adjusted so that the holder of
this Warrant thereafter surrendered for exercise shall be
entitled to receive, after the occurrence of any of the events
described, the number of Warrant Shares to which the holder would
have been entitled had this Warrant been exercised immediately
prior to the occurrence of such event. Such adjustment shall
become effective immediately after the opening of business on the
day following the date on which such subdivision, combination, or
reclassification, as the case may be, becomes effective.
(c) If any capital reorganization or reclassification of
Common Stock, or consolidation or merger of the Company with
another corporation or the sale of all or substantially all of
its assets to another corporation shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock,
securities, or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful adequate
provisions shall be made whereby the holder of this Warrant shall
thereafter have the right to acquire and receive on exercise
hereof such shares of stock, securities, or assets as would have
been issuable or payable (as part of such reorganization,
reclassification, consolidation, merger or sale) with respect to
or in exchange for such number of outstanding shares of Common
Stock as would have been received on exercise of this Warrant
immediately before such reorganization, reclassification,
consolidation, merger or sale. In any such case, appropriate
provision shall be made with respect to the rights and interests
of the holder of this Warrant to the end that the provisions
hereof shall thereafter be applicable in relation to any shares
of stock, securities, or assets thereafter deliverable on the
exercise of this Warrant. In the event of a merger or
consolidation of the Company with or into another corporation or
the sale of all or substantially all of its assets as a result of
which a number of shares of common stock of the surviving or
purchasing corporation greater or less than the number of shares
of Common Stock outstanding immediately prior to such merger,
consolidation, or purchase are issuable to holders of Common
Stock, then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as though there were a subdivision or combination of the
outstanding shares of Common Stock. The Company will not effect
any such consolidation, merger, or sale unless prior to the
consummation thereof the successor corporation resulting from
such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument mailed or delivered to
the holder hereof at its last address appearing on the books of
the Company, the obligation to deliver to such holder such shares
of stock, securities, or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire on
exercise of this Warrant.
(d) No fraction of a share shall be issued on exercise
hereof, but, in lieu thereof, the Company, notwithstanding any
other provision hereof, may pay therefor in cash at the fair
value of any such fractional share at the time of exercise.
(e) Neither purchase or other acquisition by the Company of
any shares of Common Stock nor the sale or other disposition by
the Company of any shares of Common Stock shall effect any
adjustment of the Warrant Price or be taken into account in
computing any subsequent adjustment of the Warrant Price.
7. This Warrant shall not be transferable or assignable
except by will, trust, or the laws of descent. Subject to the
foregoing restrictions and the restrictions set forth in
paragraph 8 hereof, this Warrant is transferable at the offices
of the Company. Upon such transfer, each holder hereof agrees
that the Company may deem and treat the registered holder of this
Warrant as the true and lawful owner thereof for all purposes,
and the Company shall not be affected by any notice to the
contrary.
8. The shares issuable on exercise of this Warrant shall be
restricted securities within the meaning of Rule 144 promulgated
under the Securities Act, and all certificates for such shares
shall contain a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT."
9. The Company agrees to register or qualify the Warrant
Shares (but not this Warrant) for sale as follows:
(a) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company shall
receive a written request from the holders of this Warrant and
the Warrant Shares that the Company file a registration
statement, post-effective amendment, or other appropriate form
under the Securities Act covering the sale of Warrant Shares,
then the Company shall, within ten days after the receipt
thereof, give written notice of such request (a "Registration
Notice") to all holders of this Warrant and the Warrant Shares
and shall use its best efforts, subject to the limitations of
this paragraph, to effect, within a reasonable time, the required
filing under the Securities Act to permit sale of all Warrant
Shares within 120 days following the mailing of the Registration
Notice. If the holders this Warrant and the Warrant Shares
intend to distribute the Warrant Shares by means of an
underwriting, they shall so advise the Company as part of their
request, and the Company shall include such information in the
Registration Note. The underwriter shall be selected by the
Company and shall be reasonably acceptable to a majority in
interest of the holders of at least 50% of this Warrant and the
Warrant Shares (the "Majority Holders"). In such event, the
right of the holders of this Warrant and the Warrant Shares to
include the Warrant Shares in such registration shall be
conditioned upon all holders' participation in such underwriting
and the inclusion of all such holders' Warrant Shares in the
underwriting (unless otherwise mutually agreed by a majority in
interest of the Majority Holders and such holder), to the extent
provided herein. All holders of this Warrant and the Warrant
Shares shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision
of this paragraph, if the underwriter advises the Majority
Holders in writing that market factors reasonably require a
limitation of the number of shares to be underwritten, then the
Majority Holders shall so advise all holders of Warrant Shares
which would otherwise be underwritten pursuant hereto, and the
number of Warrant Shares that may be included in the underwriting
shall be prorated among all holders thereof, including the
Majority Holders. The Company is obligated to effect only one
such registration pursuant to this paragraph.
(b) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company
proposes to file a registration statement or notification under
the Securities Act for the primary or secondary sale of any debt
or equity security, it will give written notice at least 30 days
prior to the filing of such registration statement or
notification to the holders of this Warrant and the Warrant
Shares of its intention to do so. The Company agrees that, after
receiving written notice from the Majority Holders of their
desire to include their Warrant Shares in such proposed
registration statement or notification, the Company shall afford
the holders of this Warrant and the Warrant Shares the
opportunity to have their Warrant Shares included therein.
Notwithstanding the provisions of this paragraph 9(b), the
Company shall have the right, at any time after it shall have
given written notice pursuant to this paragraph (whether or not a
written request for inclusion of the Warrant Shares shall be
made) to elect not to file any such proposed registration
statement or notification or to withdraw the same after the
filing but prior to the effective date thereof. In no event
shall the Company be obligated to include the Warrant Shares in
any registration statement or notification under this paragraph
9(b) if, in the written opinion of the underwriter, the inclusion
of the Warrant Shares in such registration statement or
notification would be materially detrimental to the proposed
offering of debt or equity securities pursuant to which the
Company gave notice to the holders under this paragraph.
(c) In connection with the filing of a registration
statement, notification, or post-effective amendment under this
section, the Company covenants and agrees:
(i) to pay all expenses of such registration statement,
notification, or post-effective amendment, including, without
limitation, printing charges, legal fees and disbursements of
Counsel for the Company, blue sky expenses, accounting fees and
filing fees, but not including legal fees and disbursements of
counsel to the holders and any sales commissions on Warrant
Shares offered and sold;
(ii) to take all necessary action which may reasonably be
required in qualifying or registering the Warrant Shares included
in a registration statement, notification or post-effective
amendment for the offer and sale under the securities or blue sky
laws of such states as requested by the holders; provided that
the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such
jurisdiction; and
(iii) to utilize its best efforts to keep the same
effective for a period of not less than 90 nor more than 120
days.
(d) The holders of this Warrant and the Warrant Shares
shall cooperate with the Company and shall furnish such
information as the Company may request in connection with any
such registration statement, notification or post-effective
amendment hereunder, on which the Company shall be entitled to
rely, and such holders of this Warrant and the Warrant Shares
shall indemnify and hold harmless the Company (and all other
persons who may be subject to liability under the Securities Act
or otherwise) from and against any and all claims, actions,
suits, liabilities, losses, damages, and expenses of every nature
and character (including, but without limitation, all attorneys'
fees and amounts paid in settlement of any claim, action, or
suit) which arise or result directly or indirectly from any
untrue statement of a material fact furnished by such holder(s)
in connection with such registration or qualification, or from
the failure of such holder(s) to furnish material information in
connection with the facts required to be included in such
registration statement, notification or post-effective amendment
necessary to make the statements therein not misleading, or from
any sales or offers of the Warrant Shares so registered after 90
days from the effective date of such registration statement or
notification.
10. As used herein, the term "Common Stock" shall mean and
include the Common Stock authorized on the date of the original
issue of this Warrant, and shall also include any capital stock
of any class of the Company thereafter authorized that shall not
be limited to a fixed sum or percentage in respect of the rights
of the holders thereof to participate in dividends and in the
distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided
that the Warrant Shares purchasable pursuant to this Warrant
shall include only shares of the class designated in the
Company's Articles of Incorporation as Common Stock on the date
of the original issue of this Warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
11. This agreement shall be construed under and be governed
by the laws of the state of Nevada.
12. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to Frary, to:
Richard S. Frary
Tallwood Associates, Inc.
1370 Avenue of the Americas
New York, New York 10019
If to the Company, to:
AFGL International, Inc.
850 Third Avenue, 11th Floor
New York, New York 10022
Attention: Barry S. Roseman
or such other address as shall be furnished in writing by an
party to the other, and any such notice or communication shall be
deemed to have been given as of the date delivered by hand or
three days after being so deposited in the mails.
Dated this 23rd day of December, 1993.
AFGL INTERNATIONAL, INC.
By: /s/
Gary S. Goldstein,
President
ATTEST:
By: /s/
Barry S. Roseman, Secretary
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock of AFGL International, Inc., and herewith makes
payment of [$] therefor, and requests that the certificate(s) for
such shares be delivered to [name], at [address], and if such
shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable
under the attached warrant be delivered to the undersigned.
DATED this
Signature
Exhibit No. 12/ AFGL International, Inc./ Form S-3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
WARRANT TO
PURCHASE
26,178
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value per Share
THIS WARRANT MAY NOT BE EXERCISED
UNTIL AUGUST 23, 1994, AND WILL BE VOID
AFTER 12:00 MIDNIGHT ON AUGUST 23, 1998
This warrant (The "Warrant") certifies that, for value
received, Richard S. Frary ("Frary"), or registered assigns, is
entitled, at any time on or after August 23, 1994, and at any
time prior to 12:00 Midnight Eastern time on August 23, 1998 (the
"Expiration Date"), to purchase from AFGL International, Inc., a
Nevada corporation (the "Company"), up to the number of shares
shown above (together with any other warrants originally issued
to Tallwood, as set forth below, the "Warrant Shares") of common
stock, par value $0.01, of the Company (the "Common Stock") by
surrendering this Warrant with the purchase form attached hereto,
duly executed, at the principal office of the Company in New
York, New York, and by paying in full and in lawful money of the
United States of America, by cash or cashiers' check, the
purchase price of the Warrant Shares as to which this Warrant is
exercised, on all the terms and conditions Hereinafter set forth.
This Warrant was originally issued to Tallwood Associates, Inc.
("Tallwood") pursuant to an agreement dated July 28, 1992, as
amended on February 16, 1993 (the "Agreement"), pertaining to the
Company's efforts to obtain financing.
1. The purchase price at which the Warrant Shares are
purchasable (the "Warrant Price") is $1.25 per share; provided
that the holder may elect to receive, without the payment by the
holder of any additional consideration, shares equal to the value
of this Warrant or any portion hereof by the surrender of this
Warrant or such portion to the Company, with a net issue election
notice duly executed, at the office of the Company. Thereupon,
the Company shall issue to the holder such number of fully paid
and nonassessable shares of Common Stock as is computed using the
following formula:
Y (A-B)
________
A
where Y equals the number of shares covered by this Warrant in
respect of which the net issue election is made pursuant hereto;
A equals the fair market value of one share of Common Stock at
the time the net issue election is made pursuant hereto; and B
equals the Warrant Price.
2. The holder of this Warrant is entitled to purchase
26,178 Warrant Shares for the $2,765,000.00 in equity funding
obtained from 21st Century Holdings, Inc. through the efforts of
Tallwood.
3. On the exercise of all or any portion of this Warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time after the Warrant shall have been
exercised as set forth above. If this Warrant shall be exercised
with respect to only a portion of the Warrant Shares covered
hereby, the holder shall be entitled to receive a similar Warrant
of like tenor and date covering the number of Warrant Shares with
respect to which this Warrant shall not have been exercised.
4. This Warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
5. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this Warrant will, on issuance, be fully paid and nonassesable,
and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that,
during the period within which the rights represented by this
Warrant may be exercised, the Company will have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant.
6. The Warrant Price and number of Warrant Shares
purchasable pursuant to this Warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price and the number of Warrant Shares in effect
immediately prior thereto shall be adjusted so that the holder of
this Warrant thereafter surrendered for exercise shall be
entitled to receive, after the occurrence of any of the events
described, the number of Warrant Shares to which the holder would
have been entitled had this Warrant been exercised immediately
prior to the occurrence of such event. Such adjustment shall
become effective immediately after the opening of business on the
day following the date on which such subdivision, combination, or
reclassification, as the case may be, becomes effective.
(c) If any capital reorganization or reclassification of
Common Stock, or consolidation or merger of the Company with
another corporation or the sale of all or substantially all of
its assets to another corporation shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock,
securities, or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful adequate
provisions shall be made whereby the holder of this Warrant shall
thereafter have the right to acquire and receive on exercise
hereof such shares of stock, securities, or assets as would have
been issuable or payable (as part of such reorganization,
reclassification, consolidation, merger or sale) with respect to
or in exchange for such number of outstanding shares of Common
Stock as would have been received on exercise of this Warrant
immediately before such reorganization, reclassification,
consolidation, merger or sale. In any such case, appropriate
provision shall be made with respect to the rights and interests
of the holder of this Warrant to the end that the provisions
hereof shall thereafter be applicable in relation to any shares
of stock, securities, or assets thereafter deliverable on the
exercise of this Warrant. In the event of a merger or
consolidation of the Company with or into another corporation or
the sale of all or substantially all of its assets as a result of
which a number of shares of common stock of the surviving or
purchasing corporation greater or less than the number of shares
of Common Stock outstanding immediately prior to such merger,
consolidation, or purchase are issuable to holders of Common
Stock, then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as though there were a subdivision or combination of the
outstanding shares of Common Stock. The Company will not effect
any such consolidation, merger, or sale unless prior to the
consummation thereof the successor corporation resulting from
such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument mailed or delivered to
the holder hereof at its last address appearing on the books of
the Company, the obligation to deliver to such holder such shares
of stock, securities, or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire on
exercise of this Warrant.
(d) No fraction of a share shall be issued on exercise
hereof, but, in lieu thereof, the Company, notwithstanding any
other provision hereof, may pay therefor in cash at the fair
value of any such fractional share at the time of exercise.
(e) Neither purchase or other acquisition by the Company of
any shares of Common Stock nor the sale or other disposition by
the Company of any shares of Common Stock shall effect any
adjustment of the Warrant Price or be taken into account in
computing any subsequent adjustment of the Warrant Price.
7. This Warrant shall not be transferable or assignable
except by will, trust, or the laws of descent. Subject to the
foregoing restrictions and the restrictions set forth in
paragraph 8 hereof, this Warrant is transferable at the offices
of the Company. Upon such transfer, each holder hereof agrees
that the Company may deem and treat the registered holder of this
Warrant as the true and lawful owner thereof for all purposes,
and the Company shall not be affected by any notice to the
contrary.
8. The shares issuable on exercise of this Warrant shall be
restricted securities within the meaning of Rule 144 promulgated
under the Securities Act, and all certificates for such shares
shall contain a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT."
9. The Company agrees to register or qualify the Warrant
Shares (but not this Warrant) for sale as follows:
(a) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company shall
receive a written request from the holders of this Warrant and
the Warrant Shares that the Company file a registration
statement, post-effective amendment, or other appropriate form
under the Securities Act covering the sale of Warrant Shares,
then the Company shall, within ten days after the receipt
thereof, give written notice of such request (a "Registration
Notice") to all holders of this Warrant and the Warrant Shares
and shall use its best efforts, subject to the limitations of
this paragraph, to effect, within a reasonable time, the required
filing under the Securities Act to permit sale of all Warrant
Shares within 120 days following the mailing of the Registration
Notice. If the holders this Warrant and the Warrant Shares
intend to distribute the Warrant Shares by means of an
underwriting, they shall so advise the Company as part of their
request, and the Company shall include such information in the
Registration Note. The underwriter shall be selected by the
Company and shall be reasonably acceptable to a majority in
interest of the holders of at least 50% of this Warrant and the
Warrant Shares (the "Majority Holders"). In such event, the
right of the holders of this Warrant and the Warrant Shares to
include the Warrant Shares in such registration shall be
conditioned upon all holders' participation in such underwriting
and the inclusion of all such holders' Warrant Shares in the
underwriting (unless otherwise mutually agreed by a majority in
interest of the Majority Holders and such holder), to the extent
provided herein. All holders of this Warrant and the Warrant
Shares shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision
of this paragraph, if the underwriter advises the Majority
Holders in writing that market factors reasonably require a
limitation of the number of shares to be underwritten, then the
Majority Holders shall so advise all holders of Warrant Shares
which would otherwise be underwritten pursuant hereto, and the
number of Warrant Shares that may be included in the underwriting
shall be prorated among all holders thereof, including the
Majority Holders. The Company is obligated to effect only one
such registration pursuant to this paragraph.
(b) If, at any time during the period in which the rights
represented by this Warrant are exercisable, the Company proposes
to file a registration statement or notification under the
Securities Act for the primary or secondary sale of any debt or
equity security, it will give written notice at least 30 days
prior to the filing of such registration statement or
notification to the holders of this Warrant and the Warrant
Shares of its intention to do so. The Company agrees that, after
receiving written notice from the Majority Holders of their
desire to include their Warrant Shares in such proposed
registration statement or notification, the Company shall afford
the holders of this Warrant and the Warrant Shares the
opportunity to have their Warrant Shares included therein.
Notwithstanding the provisions of this paragraph 9(b), the
Company shall have the right, at any time after it shall have
given written notice pursuant to this paragraph (whether or not a
written request for inclusion of the Warrant Shares shall be
made) to elect not to file any such proposed registration
statement or notification or to withdraw the same after the
filing but prior to the effective date thereof. In no event
shall the Company be obligated to include the Warrant Shares in
any registration statement or notification under this paragraph
9(b) if, in the written opinion of the underwriter, the inclusion
of the Warrant Shares in such registration statement or
notification would be materially detrimental to the proposed
offering of debt or equity securities pursuant to which the
Company gave notice to the holders under this paragraph.
(c) In connection with the filing of a registration
statement, notification, or post-effective amendment under this
section, the Company covenants and agrees:
(i) to pay all expenses of such registration statement,
notification, or post-effective amendment, including, without
limitation, printing charges, legal fees and disbursements of
Counsel for the Company, blue sky expenses, accounting fees and
filing fees, but not including legal fees and disbursements of
counsel to the holders and any sales commissions on Warrant
Shares offered and sold;
(ii) to take all necessary action which may reasonably be
required in qualifying or registering the Warrant Shares included
in a registration statement, notification or post-effective
amendment for the offer and sale under the securities or blue sky
laws of such states as requested by the holders; provided that
the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such
jurisdiction; and
(iii) to utilize its best efforts to keep the same
effective for a period of not less than 90 nor more than 120
days.
(d) The holders of this Warrant and the Warrant Shares
shall cooperate with the Company and shall furnish such
information as the Company may request in connection with any
such registration statement, notification or post-effective
amendment hereunder, on which the Company shall be entitled to
rely, and such holders of this Warrant and the Warrant Shares
shall indemnify and hold harmless the Company (and all other
persons who may be subject to liability under the Securities Act
or otherwise) from and against any and all claims, actions,
suits, liabilities, losses, damages, and expenses of every nature
and character (including, but without limitation, all attorneys'
fees and amounts paid in settlement of any claim, action, or
suit) which arise or result directly or indirectly from any
untrue statement of a material fact furnished by such holder(s)
in connection with such registration or qualification, or from
the failure of such holder(s) to furnish material information in
connection with the facts required to be included in such
registration statement, notification or post-effective amendment
necessary to make the statements therein not misleading, or from
any sales or offers of the Warrant Shares so registered after 90
days from the effective date of such registration statement or
notification.
10. As used herein, the term "Common Stock" shall mean and
include the Common Stock authorized on the date of the original
issue of this Warrant, and shall also include any capital stock
of any class of the Company thereafter authorized that shall not
be limited to a fixed sum or percentage in respect of the rights
of the holders thereof to participate in dividends and in the
distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided
that the Warrant Shares purchasable pursuant to this Warrant
shall include only shares of the class designated in the
Company's Articles of Incorporation as Common Stock on the date
of the original issue of this Warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
11. This agreement shall be construed under and be governed
by the laws of the state of Nevada.
12. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to Frary, to:
Richard S. Frary
Tallwood Associates, Inc.
1370 Avenue of the Americas
New York, New York 10019
If to the Company, to:
AFGL International, Inc.
850 Third Avenue, 11th Floor
New York, New York 10022
Attention: Barry S. Roseman
or such other address as shall be furnished in writing by an
party to the other, and any such notice or communication shall be
deemed to have been given as of the date delivered by hand or
three days after being so deposited in the mails.
Dated this 10th day of November, 1994.
AFGL INTERNATIONAL, INC.
By: /s/
Gary S. Goldstein,
President
ATTEST:
By: /s/
Barry S. Roseman, Secretary
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock of AFGL International, Inc., and herewith makes
payment of [$] therefor, and requests that the certificate(s) for
such shares be delivered to [name], at [address], and if such
shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable
under the attached warrant be delivered to the undersigned.
DATED this
Signature
Exhibit No. 13/ AFGL International, Inc./ Form S-3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
WARRANT TO
PURCHASE
5,000
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value per Share
THIS WARRANT MAY NOT BE EXERCISED
UNTIL AUGUST 23, 1994, AND WILL BE VOID
AFTER 12:00 MIDNIGHT ON AUGUST 23, 1998
This warrant (The "Warrant") certifies that, for value
received, Joel A. Mael ("Mael"), or registered assigns, is
entitled, at any time on or after August 23, 1994, and at any
time prior to 12:00 Midnight Eastern time on August 23, 1998 (the
"Expiration Date"), to purchase from AFGL International, Inc., a
Nevada corporation (the "Company"), up to the number of shares
shown above (together with any other warrants originally issued
to Tallwood, as set forth below, the "Warrant Shares") of common
stock, par value $0.01, of the Company (the "Common Stock") by
surrendering this Warrant with the purchase form attached hereto,
duly executed, at the principal office of the Company in New
York, New York, and by paying in full and in lawful money of the
United States of America, by cash or cashiers' check, the
purchase price of the Warrant Shares as to which this Warrant is
exercised, on all the terms and conditions Hereinafter set forth.
This Warrant was originally issued to Tallwood Associates, Inc.
("Tallwood") pursuant to an agreement dated July 28, 1992, as
amended on February 16, 1993 (the "Agreement"), pertaining to the
Company's efforts to obtain financing.
1. The purchase price at which the Warrant Shares are
purchasable (the "Warrant Price") is $1.25 per share.
2. The holder of this Warrant is entitled to purchase 5,000
Warrant Shares for the $500,000.00 in equity funding obtained
from 21st Century Holdings, Inc. through the efforts of Tallwood.
3. On the exercise of all or any portion of this Warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time after the Warrant shall have been
exercised as set forth above. If this Warrant shall be exercised
with respect to only a portion of the Warrant Shares covered
hereby, the holder shall be entitled to receive a similar Warrant
of like tenor and date covering the number of Warrant Shares with
respect to which this Warrant shall not have been exercised.
4. This Warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
5. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this Warrant will, on issuance, be fully paid and nonassessable,
and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that,
during the period within which the rights represented by this
Warrant may be exercised, the Company will have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant.
6. The Warrant Price and number of Warrant Shares
purchasable pursuant to this Warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price and the number of Warrant Shares in effect
immediately prior thereto shall be adjusted so that the holder of
this Warrant thereafter surrendered for exercise shall be
entitled to receive, after the occurrence of any of the events
described, the number of Warrant Shares to which the holder would
have been entitled had this Warrant been exercised immediately
prior to the occurrence of such event. Such adjustment shall
become effective immediately after the opening of business on the
day following the date on which such subdivision, combination, or
reclassification, as the case may be, becomes effective.
(c) If any capital reorganization or reclassification of
Common Stock, or consolidation or merger of the Company with
another corporation or the sale of all or substantially all of
its assets to another corporation shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock,
securities, or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful adequate
provisions shall be made whereby the holder of this Warrant shall
thereafter have the right to acquire and receive on exercise
hereof such shares of stock, securities, or assets as would have
been issuable or payable (as part of such reorganization,
reclassification, consolidation, merger or sale) with respect to
or in exchange for such number of outstanding shares of Common
Stock as would have been received on exercise of this Warrant
immediately before such reorganization, reclassification,
consolidation, merger or sale. In any such case, appropriate
provision shall be made with respect to the rights and interests
of the holder of this Warrant to the end that the provisions
hereof shall thereafter be applicable in relation to any shares
of stock, securities, or assets thereafter deliverable on the
exercise of this Warrant. In the event of a merger or
consolidation of the Company with or into another corporation or
the sale of all or substantially all of its assets as a result of
which a number of shares of common stock of the surviving or
purchasing corporation greater or less than the number of shares
of Common Stock outstanding immediately prior to such merger,
consolidation, or purchase are issuable to holders of Common
Stock, then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as though there were a subdivision or combination of the
outstanding shares of Common Stock. The Company will not effect
any such consolidation, merger, or sale unless prior to the
consummation thereof the successor corporation resulting from
such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument mailed or delivered to
the holder hereof at its last address appearing on the books of
the Company, the obligation to deliver to such holder such shares
of stock, securities, or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire on
exercise of this Warrant.
(d) No fraction of a share shall be issued on exercise
hereof, but, in lieu thereof, the Company, notwithstanding any
other provision hereof, may pay therefor in cash at the fair
value of any such fractional share at the time of exercise.
(e) Neither purchase or other acquisition by the Company of
any shares of Common Stock nor the sale or other disposition by
the Company of any shares of Common Stock shall effect any
adjustment of the Warrant Price or be taken into account in
computing any subsequent adjustment of the Warrant Price.
7. This Warrant shall not be transferable or assignable
except by will, trust, or the laws of descent. Subject to the
foregoing restrictions and the restrictions set forth in
paragraph 8 hereof, this Warrant is transferable at the offices
of the Company. Upon such transfer, each holder hereof agrees
that the Company may deem and treat the registered holder of this
Warrant as the true and lawful owner thereof for all purposes,
and the Company shall not be affected by any notice to the
contrary.
8. The shares issuable on exercise of this Warrant shall be
restricted securities within the meaning of Rule 144 promulgated
under the Securities Act, and all certificates for such shares
shall contain a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT."
9. The Company agrees to register or qualify the Warrant
Shares (but not this Warrant) for sale as follows:
(a) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company shall
receive a written request from the holders of this Warrant and
the Warrant Shares that the Company file a registration
statement, post-effective amendment, or other appropriate form
under the Securities Act covering the sale of Warrant Shares,
then the Company shall, within ten days after the receipt
thereof, give written notice of such request (a "Registration
Notice") to all holders of this Warrant and the Warrant Shares
and shall use its best efforts, subject to the limitations of
this paragraph, to effect, within a reasonable time, the required
filing under the Securities Act to permit sale of all Warrant
Shares within 120 days following the mailing of the Registration
Notice. If the holders this Warrant and the Warrant Shares
intend to distribute the Warrant Shares by means of an
underwriting, they shall so advise the Company as part of their
request, and the Company shall include such information in the
Registration Note. The underwriter shall be selected by the
Company and shall be reasonably acceptable to a majority in
interest of the holders of at least 50% of this Warrant and the
Warrant Shares (the "Majority Holders"). In such event, the
right of the holders of this Warrant and the Warrant Shares to
include the Warrant Shares in such registration shall be
conditioned upon all holders' participation in such underwriting
and the inclusion of all such holders' Warrant Shares in the
underwriting (unless otherwise mutually agreed by a majority in
interest of the Majority Holders and such holder), to the extent
provided herein. All holders of this Warrant and the Warrant
Shares shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision
of this paragraph, if the underwriter advises the Majority
Holders in writing that market factors reasonably require a
limitation of the number of shares to be underwritten, then the
Majority Holders shall so advise all holders of Warrant Shares
which would otherwise be underwritten pursuant hereto, and the
number of Warrant Shares that may be included in the underwriting
shall be prorated among all holders thereof, including the
Majority Holders. The Company is obligated to effect only one
such registration pursuant to this paragraph.
(b) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company
proposes to file a registration statement or notification under
the Securities Act for the primary or secondary sale of any debt
or equity security, it will give written notice at least 30 days
prior to the filing of such registration statement or
notification to the holders of this Warrant and the Warrant
Shares of its intention to do so. The Company agrees that, after
receiving written notice from the Majority Holders of their
desire to include their Warrant Shares in such proposed
registration statement or notification, the Company shall afford
the holders of this Warrant and the Warrant Shares the
opportunity to have their Warrant Shares included therein.
Notwithstanding the provisions of this paragraph 9(b), the
Company shall have the right, at any time after it shall have
given written notice pursuant to this paragraph (whether or not a
written request for inclusion of the Warrant Shares shall be
made) to elect not to file any such proposed registration
statement or notification or to withdraw the same after the
filing but prior to the effective date thereof. In no event
shall the Company be obligated to include the Warrant Shares in
any registration statement or notification under this paragraph
9(b) if, in the written opinion of the underwriter, the inclusion
of the Warrant Shares in such registration statement or
notification would be materially detrimental to the proposed
offering of debt or equity securities pursuant to which the
Company gave notice to the holders under this paragraph.
(c) In connection with the filing of a registration
statement, notification, or post-effective amendment under this
section, the Company covenants and agrees:
(i) to pay all expenses of such registration statement,
notification, or post-effective amendment, including, without
limitation, printing charges, legal fees and disbursements of
Counsel for the Company, blue sky expenses, accounting fees and
filing fees, but not including legal fees and disbursements of
counsel to the holders and any sales commissions on Warrant
Shares offered and sold;
(ii) to take all necessary action which may reasonably be
required in qualifying or registering the Warrant Shares included
in a registration statement, notification or post-effective
amendment for the offer and sale under the securities or blue sky
laws of such states as requested by the holders; provided that
the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such
jurisdiction; and
(iii) to utilize its best efforts to keep the same
effective for a period of not less than 90 nor more than 120
days.
(d) The holders of this Warrant and the Warrant Shares
shall cooperate with the Company and shall furnish such
information as the Company may request in connection with any
such registration statement, notification or post-effective
amendment hereunder, on which the Company shall be entitled to
rely, and such holders of this Warrant and the Warrant Shares
shall indemnify and hold harmless the Company (and all other
persons who may be subject to liability under the Securities Act
or otherwise) from and against any and all claims, actions,
suits, liabilities, losses, damages, and expenses of every nature
and character (including, but without limitation, all attorneys'
fees and amounts paid in settlement of any claim, action, or
suit) which arise or result directly or indirectly from any
untrue statement of a material fact furnished by such holder(s)
in connection with such registration or qualification, or from
the failure of such holder(s) to furnish material information in
connection with the facts required to be included in such
registration statement, notification or post-effective amendment
necessary to make the statements therein not misleading, or from
any sales or offers of the Warrant Shares so registered after 90
days from the effective date of such registration statement or
notification.
10. As used herein, the term "Common Stock" shall mean and
include the Common Stock authorized on the date of the original
issue of this Warrant, and shall also include any capital stock
of any class of the Company thereafter authorized that shall not
be limited to a fixed sum or percentage in respect of the rights
of the holders thereof to participate in dividends and in the
distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided
that the Warrant Shares purchasable pursuant to this Warrant
shall include only shares of the class designated in the
Company's Articles of Incorporation as Common Stock on the date
of the original issue of this Warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
11. This agreement shall be construed under and be governed
by the laws of the state of Nevada.
12. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to Mael, to:
Joel A. Mael
Tallwood Associates, Inc.
1370 Avenue of the Americas
New York, New York 10019
If to the Company, to:
AFGL International, Inc.
850 Third Avenue, 11th Floor
New York, New York 10022
Attention: Barry S. Roseman
or such other address as shall be furnished in writing by an
party to the other, and any such notice or communication shall be
deemed to have been given as of the date delivered by hand or
three days after being so deposited in the mails.
Dated this 23rd day of December, 1993.
AFGL INTERNATIONAL, INC.
By: /s/
Gary S. Goldstein,
President
ATTEST:
By: /s/
Barry S. Roseman, Secretary
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock of AFGL International, Inc., and herewith makes
payment of [$] therefor, and requests that the certificate(s) for
such shares be delivered to [name], at [address], and if such
shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable
under the attached warrant be delivered to the undersigned.
DATED this
Signature
Exhibit No. 14/ AFGL International, Inc./ Form S-3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
WARRANT TO
PURCHASE
26,177
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value per Share
THIS WARRANT MAY NOT BE EXERCISED
UNTIL AUGUST 23, 1994, AND WILL BE VOID
AFTER 12:00 MIDNIGHT ON AUGUST 23, 1998
This warrant (The "Warrant") certifies that, for value
received, Joel A. Mael ("Mael"), or registered assigns, is
entitled, at any time on or after August 23, 1994, and at any
time prior to 12:00 Midnight Eastern time on August 23, 1998 (the
"Expiration Date"), to purchase from AFGL International, Inc., a
Nevada corporation (the "Company"), up to the number of shares
shown above (together with any other warrants originally issued
to Tallwood, as set forth below, the "Warrant Shares") of common
stock, par value $0.01, of the Company (the "Common Stock") by
surrendering this Warrant with the purchase form attached hereto,
duly executed, at the principal office of the Company in New
York, New York, and by paying in full and in lawful money of the
United States of America, by cash or cashiers' check, the
purchase price of the Warrant Shares as to which this Warrant is
exercised, on all the terms and conditions Hereinafter set forth.
This Warrant was originally issued to Tallwood Associates, Inc.
("Tallwood") pursuant to an agreement dated July 28, 1992, as
amended on February 16, 1993 (the "Agreement"), pertaining to the
Company's efforts to obtain financing.
1. The purchase price at which the Warrant Shares are
purchasable (the "Warrant Price") is $1.25 per share; provided
that the holder may elect to receive, without the payment by the
holder of any additional consideration, shares equal to the value
of this Warrant or any portion hereof by the surrender of this
Warrant or such portion to the Company, with a net issue election
notice duly executed, at the office of the Company. Thereupon,
the Company shall issue to the holder such number of fully paid
and nonassessable shares of Common Stock as is computed using the
following formula:
Y (A-B)
________
A
where Y equals the number of shares covered by this Warrant in
respect of which the net issue election is made pursuant hereto;
A equals the fair market value of one share of Common Stock at
the time the net issue election is made pursuant hereto; and B
equals the Warrant Price.
2. The holder of this Warrant is entitled to purchase
26,177 Warrant Shares for the $2,765,000.00 in equity funding
obtained from 21st Century Holdings, Inc. through the efforts of
Tallwood.
3. On the exercise of all or any portion of this Warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time after the Warrant shall have been
exercised as set forth above. If this Warrant shall be exercised
with respect to only a portion of the Warrant Shares covered
hereby, the holder shall be entitled to receive a similar Warrant
of like tenor and date covering the number of Warrant Shares with
respect to which this Warrant shall not have been exercised.
4. This Warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
5. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this Warrant will, on issuance, be fully paid and nonassessable,
and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that,
during the period within which the rights represented by this
Warrant may be exercised, the Company will have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant.
6. The Warrant Price and number of Warrant Shares
purchasable pursuant to this Warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price and the number of Warrant Shares in effect
immediately prior thereto shall be adjusted so that the holder of
this Warrant thereafter surrendered for exercise shall be
entitled to receive, after the occurrence of any of the events
described, the number of Warrant Shares to which the holder would
have been entitled had this Warrant been exercised immediately
prior to the occurrence of such event. Such adjustment shall
become effective immediately after the opening of business on the
day following the date on which such subdivision, combination, or
reclassification, as the case may be, becomes effective.
(c) If any capital reorganization or reclassification of
Common Stock, or consolidation or merger of the Company with
another corporation or the sale of all or substantially all of
its assets to another corporation shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock,
securities, or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful adequate
provisions shall be made whereby the holder of this Warrant shall
thereafter have the right to acquire and receive on exercise
hereof such shares of stock, securities, or assets as would have
been issuable or payable (as part of such reorganization,
reclassification, consolidation, merger or sale) with respect to
or in exchange for such number of outstanding shares of Common
Stock as would have been received on exercise of this Warrant
immediately before such reorganization, reclassification,
consolidation, merger or sale. In any such case, appropriate
provision shall be made with respect to the rights and interests
of the holder of this Warrant to the end that the provisions
hereof shall thereafter be applicable in relation to any shares
of stock, securities, or assets thereafter deliverable on the
exercise of this Warrant. In the event of a merger or
consolidation of the Company with or into another corporation or
the sale of all or substantially all of its assets as a result of
which a number of shares of common stock of the surviving or
purchasing corporation greater or less than the number of shares
of Common Stock outstanding immediately prior to such merger,
consolidation, or purchase are issuable to holders of Common
Stock, then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as though there were a subdivision or combination of the
outstanding shares of Common Stock. The Company will not effect
any such consolidation, merger, or sale unless prior to the
consummation thereof the successor corporation resulting from
such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument mailed or delivered to
the holder hereof at its last address appearing on the books of
the Company, the obligation to deliver to such holder such shares
of stock, securities, or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire on
exercise of this Warrant.
(d) No fraction of a share shall be issued on exercise
hereof, but, in lieu thereof, the Company, notwithstanding any
other provision hereof, may pay therefor in cash at the fair
value of any such fractional share at the time of exercise.
(e) Neither purchase or other acquisition by the Company of
any shares of Common Stock nor the sale or other disposition by
the Company of any shares of Common Stock shall effect any
adjustment of the Warrant Price or be taken into account in
computing any subsequent adjustment of the Warrant Price.
7. This Warrant shall not be transferable or assignable
except by will, trust, or the laws of descent. Subject to the
foregoing restrictions and the restrictions set forth in
paragraph 8 hereof, this Warrant is transferable at the offices
of the Company. Upon such transfer, each holder hereof agrees
that the Company may deem and treat the registered holder of this
Warrant as the true and lawful owner thereof for all purposes,
and the Company shall not be affected by any notice to the
contrary.
8. The shares issuable on exercise of this Warrant shall be
restricted securities within the meaning of Rule 144 promulgated
under the Securities Act, and all certificates for such shares
shall contain a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT."
9. The Company agrees to register or qualify the Warrant
Shares (but not this Warrant) for sale as follows:
(a) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company shall
receive a written request from the holders of this Warrant and
the Warrant Shares that the Company file a registration
statement, post-effective amendment, or other appropriate form
under the Securities Act covering the sale of Warrant Shares,
then the Company shall, within ten days after the receipt
thereof, give written notice of such request (a "Registration
Notice") to all holders of this Warrant and the Warrant Shares
and shall use its best efforts, subject to the limitations of
this paragraph, to effect, within a reasonable time, the required
filing under the Securities Act to permit sale of all Warrant
Shares within 120 days following the mailing of the Registration
Notice. If the holders this Warrant and the Warrant Shares
intend to distribute the Warrant Shares by means of an
underwriting, they shall so advise the Company as part of their
request, and the Company shall include such information in the
Registration Note. The underwriter shall be selected by the
Company and shall be reasonably acceptable to a majority in
interest of the holders of at least 50% of this Warrant and the
Warrant Shares (the "Majority Holders"). In such event, the
right of the holders of this Warrant and the Warrant Shares to
include the Warrant Shares in such registration shall be
conditioned upon all holders' participation in such underwriting
and the inclusion of all such holders' Warrant Shares in the
underwriting (unless otherwise mutually agreed by a majority in
interest of the Majority Holders and such holder), to the extent
provided herein. All holders of this Warrant and the Warrant
Shares shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision
of this paragraph, if the underwriter advises the Majority
Holders in writing that market factors reasonably require a
limitation of the number of shares to be underwritten, then the
Majority Holders shall so advise all holders of Warrant Shares
which would otherwise be underwritten pursuant hereto, and the
number of Warrant Shares that may be included in the underwriting
shall be prorated among all holders thereof, including the
Majority Holders. The Company is obligated to effect only one
such registration pursuant to this paragraph.
(b) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company
proposes to file a registration statement or notification under
the Securities Act for the primary or secondary sale of any debt
or equity security, it will give written notice at least 30 days
prior to the filing of such registration statement or
notification to the holders of this Warrant and the Warrant
Shares of its intention to do so. The Company agrees that, after
receiving written notice from the Majority Holders of their
desire to include their Warrant Shares in such proposed
registration statement or notification, the Company shall afford
the holders of this Warrant and the Warrant Shares the
opportunity to have their Warrant Shares included therein.
Notwithstanding the provisions of this paragraph 9(b), the
Company shall have the right, at any time after it shall have
given written notice pursuant to this paragraph (whether or not a
written request for inclusion of the Warrant Shares shall be
made) to elect not to file any such proposed registration
statement or notification or to withdraw the same after the
filing but prior to the effective date thereof. In no event
shall the Company be obligated to include the Warrant Shares in
any registration statement or notification under this paragraph
9(b) if, in the written opinion of the underwriter, the inclusion
of the Warrant Shares in such registration statement or
notification would be materially detrimental to the proposed
offering of debt or equity securities pursuant to which the
Company gave notice to the holders under this paragraph.
(c) In connection with the filing of a registration
statement, notification, or post-effective amendment under this
section, the Company covenants and agrees:
(i) to pay all expenses of such registration statement,
notification, or post-effective amendment, including, without
limitation, printing charges, legal fees and disbursements of
Counsel for the Company, blue sky expenses, accounting fees and
filing fees, but not including legal fees and disbursements of
counsel to the holders and any sales commissions on Warrant
Shares offered and sold;
(ii) to take all necessary action which may reasonably be
required in qualifying or registering the Warrant Shares included
in a registration statement, notification or post-effective
amendment for the offer and sale under the securities or blue sky
laws of such states as requested by the holders; provided that
the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such
jurisdiction; and
(iii) to utilize its best efforts to keep the same
effective for a period of not less than 90 nor more than 120
days.
(d) The holders of this Warrant and the Warrant Shares
shall cooperate with the Company and shall furnish such
information as the Company may request in connection with any
such registration statement, notification or post-effective
amendment hereunder, on which the Company shall be entitled to
rely, and such holders of this Warrant and the Warrant Shares
shall indemnify and hold harmless the Company (and all other
persons who may be subject to liability under the Securities Act
or otherwise) from and against any and all claims, actions,
suits, liabilities, losses, damages, and expenses of every nature
and character (including, but without limitation, all attorneys'
fees and amounts paid in settlement of any claim, action, or
suit) which arise or result directly or indirectly from any
untrue statement of a material fact furnished by such holder(s)
in connection with such registration or qualification, or from
the failure of such holder(s) to furnish material information in
connection with the facts required to be included in such
registration statement, notification or post-effective amendment
necessary to make the statements therein not misleading, or from
any sales or offers of the Warrant Shares so registered after 90
days from the effective date of such registration statement or
notification.
10. As used herein, the term "Common Stock" shall mean and
include the Common Stock authorized on the date of the original
issue of this Warrant, and shall also include any capital stock
of any class of the Company thereafter authorized that shall not
be limited to a fixed sum or percentage in respect of the rights
of the holders thereof to participate in dividends and in the
distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided
that the Warrant Shares purchasable pursuant to this Warrant
shall include only shares of the class designated in the
Company's Articles of Incorporation as Common Stock on the date
of the original issue of this Warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
11. This agreement shall be construed under and be governed
by the laws of the state of Nevada.
12. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to Mael, to:
Joel A. Mael
Tallwood Associates, Inc.
1370 Avenue of the Americas
New York, New York 10019
If to the Company, to:
AFGL International, Inc.
850 Third Avenue, 11th Floor
New York, New York 10022
Attention: Barry S. Roseman
or such other address as shall be furnished in writing by an
party to the other, and any such notice or communication shall be
deemed to have been given as of the date delivered by hand or
three days after being so deposited in the mails.
Dated this 10th day of November, 1994.
AFGL INTERNATIONAL, INC.
By: /s/
Gary S. Goldstein,
President
ATTEST:
By: /s/
Barry S. Roseman, Secretary
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock of AFGL International, Inc., and herewith makes
payment of [$] therefor, and requests that the certificate(s) for
such shares be delivered to [name], at [address], and if such
shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable
under the attached warrant be delivered to the undersigned.
DATED this
Signature
Exhibit No. 15/ AFGL International, Inc./ Form S-3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
WARRANT TO
PURCHASE
1,250
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value per Share
THIS WARRANT MAY NOT BE EXERCISED
UNTIL AUGUST 23, 1994, AND WILL BE VOID
AFTER 12:00 MIDNIGHT ON AUGUST 23, 1998
This warrant (The "Warrant") certifies that, for value
received, Karen J. Furst ("Furst"), or registered assigns, is
entitled, at any time on or after August 23, 1994, and at any
time prior to 12:00 Midnight Eastern time on August 23, 1998 (the
"Expiration Date"), to purchase from AFGL International, Inc., a
Nevada corporation (the "Company"), up to the number of shares
shown above (together with any other warrants originally issued
to Tallwood, as set forth below, the "Warrant Shares") of common
stock, par value $0.01, of the Company (the "Common Stock") by
surrendering this Warrant with the purchase form attached hereto,
duly executed, at the principal office of the Company in New
York, New York, and by paying in full and in lawful money of the
United States of America, by cash or cashiers' check, the
purchase price of the Warrant Shares as to which this Warrant is
exercised, on all the terms and conditions Hereinafter set forth.
This Warrant was originally issued to Tallwood Associates, Inc.
("Tallwood") pursuant to an agreement dated July 28, 1992, as
amended on February 16, 1993 (the "Agreement"), pertaining to the
Company's efforts to obtain financing.
1. The purchase price at which the Warrant Shares are
purchasable (the "Warrant Price") is $1.25 per share.
2. The holder of this Warrant is entitled to purchase 1,250
Warrant Shares for the $500,000.00 in equity funding obtained
from 21st Century Holdings, Inc. through the efforts of Tallwood.
3. On the exercise of all or any portion of this Warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time after the Warrant shall have been
exercised as set forth above. If this Warrant shall be exercised
with respect to only a portion of the Warrant Shares covered
hereby, the holder shall be entitled to receive a similar Warrant
of like tenor and date covering the number of Warrant Shares with
respect to which this Warrant shall not have been exercised.
4. This Warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
5. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this Warrant will, on issuance, be fully paid and nonassessable,
and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that,
during the period within which the rights represented by this
Warrant may be exercised, the Company will have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant.
6. The Warrant Price and number of Warrant Shares
purchasable pursuant to this Warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price and the number of Warrant Shares in effect
immediately prior thereto shall be adjusted so that the holder of
this Warrant thereafter surrendered for exercise shall be
entitled to receive, after the occurrence of any of the events
described, the number of Warrant Shares to which the holder would
have been entitled had this Warrant been exercised immediately
prior to the occurrence of such event. Such adjustment shall
become effective immediately after the opening of business on the
day following the date on which such subdivision, combination, or
reclassification, as the case may be, becomes effective.
(c) If any capital reorganization or reclassification of
Common Stock, or consolidation or merger of the Company with
another corporation or the sale of all or substantially all of
its assets to another corporation shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock,
securities, or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful adequate
provisions shall be made whereby the holder of this Warrant shall
thereafter have the right to acquire and receive on exercise
hereof such shares of stock, securities, or assets as would have
been issuable or payable (as part of such reorganization,
reclassification, consolidation, merger or sale) with respect to
or in exchange for such number of outstanding shares of Common
Stock as would have been received on exercise of this Warrant
immediately before such reorganization, reclassification,
consolidation, merger or sale. In any such case, appropriate
provision shall be made with respect to the rights and interests
of the holder of this Warrant to the end that the provisions
hereof shall thereafter be applicable in relation to any shares
of stock, securities, or assets thereafter deliverable on the
exercise of this Warrant. In the event of a merger or
consolidation of the Company with or into another corporation or
the sale of all or substantially all of its assets as a result of
which a number of shares of common stock of the surviving or
purchasing corporation greater or less than the number of shares
of Common Stock outstanding immediately prior to such merger,
consolidation, or purchase are issuable to holders of Common
Stock, then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as though there were a subdivision or combination of the
outstanding shares of Common Stock. The Company will not effect
any such consolidation, merger, or sale unless prior to the
consummation thereof the successor corporation resulting from
such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument mailed or delivered to
the holder hereof at its last address appearing on the books of
the Company, the obligation to deliver to such holder such shares
of stock, securities, or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire on
exercise of this Warrant.
(d) No fraction of a share shall be issued on exercise
hereof, but, in lieu thereof, the Company, notwithstanding any
other provision hereof, may pay therefor in cash at the fair
value of any such fractional share at the time of exercise.
(e) Neither purchase or other acquisition by the Company of
any shares of Common Stock nor the sale or other disposition by
the Company of any shares of Common Stock shall effect any
adjustment of the Warrant Price or be taken into account in
computing any subsequent adjustment of the Warrant Price.
7. This Warrant shall not be transferable or assignable
except by will, trust, or the laws of descent. Subject to the
foregoing restrictions and the restrictions set forth in
paragraph 8 hereof, this Warrant is transferable at the offices
of the Company. Upon such transfer, each holder hereof agrees
that the Company may deem and treat the registered holder of this
Warrant as the true and lawful owner thereof for all purposes,
and the Company shall not be affected by any notice to the
contrary.
8. The shares issuable on exercise of this Warrant shall be
restricted securities within the meaning of Rule 144 promulgated
under the Securities Act, and all certificates for such shares
shall contain a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT."
9. The Company agrees to register or qualify the Warrant
Shares (but not this Warrant) for sale as follows:
(a) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company shall
receive a written request from the holders of this Warrant and
the Warrant Shares that the Company file a registration
statement, post-effective amendment, or other appropriate form
under the Securities Act covering the sale of Warrant Shares,
then the Company shall, within ten days after the receipt
thereof, give written notice of such request (a "Registration
Notice") to all holders of this Warrant and the Warrant Shares
and shall use its best efforts, subject to the limitations of
this paragraph, to effect, within a reasonable time, the required
filing under the Securities Act to permit sale of all Warrant
Shares within 120 days following the mailing of the Registration
Notice. If the holders this Warrant and the Warrant Shares
intend to distribute the Warrant Shares by means of an
underwriting, they shall so advise the Company as part of their
request, and the Company shall include such information in the
Registration Note. The underwriter shall be selected by the
Company and shall be reasonably acceptable to a majority in
interest of the holders of at least 50% of this Warrant and the
Warrant Shares (the "Majority Holders"). In such event, the
right of the holders of this Warrant and the Warrant Shares to
include the Warrant Shares in such registration shall be
conditioned upon all holders' participation in such underwriting
and the inclusion of all such holders' Warrant Shares in the
underwriting (unless otherwise mutually agreed by a majority in
interest of the Majority Holders and such holder), to the extent
provided herein. All holders of this Warrant and the Warrant
Shares shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision
of this paragraph, if the underwriter advises the Majority
Holders in writing that market factors reasonably require a
limitation of the number of shares to be underwritten, then the
Majority Holders shall so advise all holders of Warrant Shares
which would otherwise be underwritten pursuant hereto, and the
number of Warrant Shares that may be included in the underwriting
shall be prorated among all holders thereof, including the
Majority Holders. The Company is obligated to effect only one
such registration pursuant to this paragraph.
(b) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company
proposes to file a registration statement or notification under
the Securities Act for the primary or secondary sale of any debt
or equity security, it will give written notice at least 30 days
prior to the filing of such registration statement or
notification to the holders of this Warrant and the Warrant
Shares of its intention to do so. The Company agrees that, after
receiving written notice from the Majority Holders of their
desire to include their Warrant Shares in such proposed
registration statement or notification, the Company shall afford
the holders of this Warrant and the Warrant Shares the
opportunity to have their Warrant Shares included therein.
Notwithstanding the provisions of this paragraph 9(b), the
Company shall have the right, at any time after it shall have
given written notice pursuant to this paragraph (whether or not a
written request for inclusion of the Warrant Shares shall be
made) to elect not to file any such proposed registration
statement or notification or to withdraw the same after the
filing but prior to the effective date thereof. In no event
shall the Company be obligated to include the Warrant Shares in
any registration statement or notification under this paragraph
9(b) if, in the written opinion of the underwriter, the inclusion
of the Warrant Shares in such registration statement or
notification would be materially detrimental to the proposed
offering of debt or equity securities pursuant to which the
Company gave notice to the holders under this paragraph.
(c) In connection with the filing of a registration
statement, notification, or post-effective amendment under this
section, the Company covenants and agrees:
(i) to pay all expenses of such registration statement,
notification, or post-effective amendment, including, without
limitation, printing charges, legal fees and disbursements of
Counsel for the Company, blue sky expenses, accounting fees and
filing fees, but not including legal fees and disbursements of
counsel to the holders and any sales commissions on Warrant
Shares offered and sold;
(ii) to take all necessary action which may reasonably be
required in qualifying or registering the Warrant Shares included
in a registration statement, notification or post-effective
amendment for the offer and sale under the securities or blue sky
laws of such states as requested by the holders; provided that
the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such
jurisdiction; and
(iii) to utilize its best efforts to keep the same
effective for a period of not less than 90 nor more than 120
days.
(d) The holders of this Warrant and the Warrant Shares
shall cooperate with the Company and shall furnish such
information as the Company may request in connection with any
such registration statement, notification or post-effective
amendment hereunder, on which the Company shall be entitled to
rely, and such holders of this Warrant and the Warrant Shares
shall indemnify and hold harmless the Company (and all other
persons who may be subject to liability under the Securities Act
or otherwise) from and against any and all claims, actions,
suits, liabilities, losses, damages, and expenses of every nature
and character (including, but without limitation, all attorneys'
fees and amounts paid in settlement of any claim, action, or
suit) which arise or result directly or indirectly from any
untrue statement of a material fact furnished by such holder(s)
in connection with such registration or qualification, or from
the failure of such holder(s) to furnish material information in
connection with the facts required to be included in such
registration statement, notification or post-effective amendment
necessary to make the statements therein not misleading, or from
any sales or offers of the Warrant Shares so registered after 90
days from the effective date of such registration statement or
notification.
10. As used herein, the term "Common Stock" shall mean and
include the Common Stock authorized on the date of the original
issue of this Warrant, and shall also include any capital stock
of any class of the Company thereafter authorized that shall not
be limited to a fixed sum or percentage in respect of the rights
of the holders thereof to participate in dividends and in the
distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided
that the Warrant Shares purchasable pursuant to this Warrant
shall include only shares of the class designated in the
Company's Articles of Incorporation as Common Stock on the date
of the original issue of this Warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
11. This agreement shall be construed under and be governed
by the laws of the state of Nevada.
12. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to Furst, to:
Karen J. Furst
Tallwood Associates, Inc.
1370 Avenue of the Americas
New York, New York 10019
If to the Company, to:
AFGL International, Inc.
850 Third Avenue, 11th Floor
New York, New York 10022
Attention: Barry S. Roseman
or such other address as shall be furnished in writing by an
party to the other, and any such notice or communication shall be
deemed to have been given as of the date delivered by hand or
three days after being so deposited in the mails.
Dated this 23rd day of December, 1993.
AFGL INTERNATIONAL, INC.
By: /s/
Gary S. Goldstein,
President
ATTEST:
By: /s/
Barry S. Roseman, Secretary
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock of AFGL International, Inc., and herewith makes
payment of [$] therefor, and requests that the certificate(s) for
such shares be delivered to [name], at [address], and if such
shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable
under the attached warrant be delivered to the undersigned.
DATED this
Signature
Exhibit No. 16/ AFGL International, Inc./ Form S-3
July 22, 1996
The Board of Directors
AFGL International, Inc.
850 Third Avenue, 11th Floor
New York, New York 10022
Ladies and Gentlemen:
We have been retained by AFGL International, Inc. (the
"Company"), in connection with the Registration Statement on Form
S-3 filed by the Company with the Securities and Exchange
Commission (the "Registration Statement") relating to
approximately 3,364,711 shares of common stock, par value $0.01
per share ("Common Stock"). You have requested that we render an
opinion as to whether the Common Stock covered by the
Registration Statement will be validly issued, fully paid and non-
assessable, when issued in accordance with the terms of the
securities convertible into, or exerciseable for, the Common
stock. In connection with this engagement, we have examined the
following:
1. the articles of incorporation of the Company;
2. the Registration Statement;
3. the bylaws of the Company; and
4. minutes of meetings and unanimous consents of the board
of directors.
We have examined such other corporate records and documents
and have made such other examinations as we deemed relevant.
Based upon the above examination, we are of the opinion that
the shares of Common Stock proposed to be registered under the
Registration Statement are validly authorized and, when issued in
accordance with the terms of the securities convertible into, or
exerciseable for, the Common Stock, will be validly issued, fully
paid, and non-assessable.
We hereby consent to being named in the Prospectus included
in the Registration Statement as having rendered the foregoing
opinion and as having represented the Company in connection with
the Registration Statement.
Sincerely yours,
LEHMAN, JENSEN & DONAHUE,
L.C.
Exhibit No. 17/ AFGL International, Inc./ Form S-3
The consent of Lehman, Jensen & Donahue, L.C. required by Item
601(23) of Regulation S-B is contained in Exhibit 16 to the
Registration Statement on Form S-3, and is incorporated herein by
this reference.
Exhibit No. 18/ AFGL International, Inc./ Form S-3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the heading
"Experts" and to the incorporation by reference of our report
dated March 27, 1996 [except as to Note 18B for which the date is
April 10, 1996] in this Registration Statement [Form S-3] for
AFGL International, Inc.
MOORE STEPHENS, P.C.
[Formerly MORTENSON AND ASSOCIATES,
P.C.]
Certified Public
Accountants
Cranford, New Jersey
July 19, 1996
Exhibit No. 19/ AFGL International, Inc./ Form S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" in the Registration Statement (Form S-3) and related
Prospectus of AFGL INTERNATIONAL, INC. for the registration of
1,772,261 shares of its common stock and to the incorporation by
reference therein of our report dated May 31, 1996 with respect
to the combined financial statements of Irene Cohen Temps, Inc.
and Certified Technical Staffing, Inc. and our report dated June
3, 1996 with respect to the combined financial statements of
Irene Cohen Personnel, Inc. and Corporate Staffing Alternatives,
Inc., both included in AFGL INTERNATIONAL, INC.'s Form 8-K as
amended dated May 31, 1996, filed with the Securities and
Exchange Commission.
ERNST &
YOUNG LLP
New York, New York
July 19, 1996
Exhibit No. 20/ AFGL International, Inc./ Form S-3
July 16, 1996
AFGL INTERNATIONAL, INC.
Consent of Independent Chartered Accountants
We hereby consent to the use in the Registration Statement of our
report dated 12 April 1996, relating to the financial statements
(not presented separately in the Registration Statement) of
Whitney Group (Europe) Limited, and to the reference to our Firm
under the caption "Experts" in the Prospectus.
Yours faithfully
Letchfords
Exhibit No. 21/ AFGL International, Inc./ Form S-3
The power of attorney required by Item 601(24) of Regulation S-B
is contained under the caption "Signatures" in the Registration
Statement on Form S-3, and is incorporated herein by this
reference.
Exhibit No. 22/ AFGL International, Inc./ Form S-3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
WARRANT TO
PURCHASE
120,000
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value per Share
THIS WARRANT MAY NOT BE EXERCISED
UNTIL MAY 31, 1997, AND WILL BE VOID
AFTER 12:00 MIDNIGHT ON MAY 30, 2001
This warrant (The "Warrant") certifies that, for value
received, Ehud D. Laska ("Laska"), or registered assigns, is
entitled, at any time on or after May 31, 1997, and at any time
prior to 12:00 Midnight Eastern time on May 30, 2001 (the
"Expiration Date"), to purchase from AFGL International, Inc., a
Nevada corporation (the "Company"), up to the number of shares
shown above ("Warrant Shares") of common stock, par value $0.01,
of the Company (the "Common Stock") by surrendering this Warrant
with the purchase form attached hereto, duly executed, at the
principal office of the Company in New York, New York, and by
paying in full and in lawful money of the United States of
America, by cash or cashiers' check, the purchase price of the
Warrant Shares as to which this Warrant is exercised, on all the
terms and conditions Hereinafter set forth.
1. The purchase price at which the Warrant Shares are
purchasable (the "Warrant Price") is $4.25 per share; provided
that the holder may elect to receive, without the payment by the
holder of any additional consideration, shares equal to the value
of this Warrant or any portion hereof by the surrender of this
Warrant or such portion to the Company, with a net issue election
notice duly executed, at the office of the Company. Thereupon,
the Company shall issue to the holder such number of fully paid
and nonassessable shares of Common Stock as is computed using the
following formula:
Y (A-B)
_______
A
where Y equals the number of shares covered by this Warrant in
respect of which the net issue election is made pursuant hereto;
A equals the fair market value of one share of Common Stock at
the time the net issue election is made pursuant hereto; and B
equals the Warrant Price.
2. Laska is entitled to purchase 120,000 Warrant Shares for
the financing obtained for the Company through the efforts of
Laska.
3. On the exercise of all or any portion of this Warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time after the Warrant shall have been
exercised as set forth above. If this Warrant shall be exercised
with respect to only a portion of the Warrant Shares covered
hereby, the holder shall be entitled to receive a similar Warrant
of like tenor and date covering the number of Warrant Shares with
respect to which this Warrant shall not have been exercised.
4. This Warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
5. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this Warrant will, on issuance, be fully paid and nonassessable,
and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that,
during the period within which the rights represented by this
Warrant may be exercised, the Company will have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant.
6. The Warrant Price and number of Warrant Shares
purchasable pursuant to this Warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price and the number of Warrant Shares in effect
immediately prior thereto shall be adjusted so that the holder of
this Warrant thereafter surrendered for exercise shall be
entitled to receive, after the occurrence of any of the events
described, the number of Warrant Shares to which the holder would
have been entitled had this Warrant been exercised immediately
prior to the occurrence of such event. Such adjustment shall
become effective immediately after the opening of business on the
day following the date on which such subdivision, combination, or
reclassification, as the case may be, becomes effective.
(c) If any capital reorganization or reclassification of
Common Stock, or consolidation or merger of the Company with
another corporation or the sale of all or substantially all of
its assets to another corporation shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock,
securities, or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful adequate
provisions shall be made whereby the holder of this Warrant shall
thereafter have the right to acquire and receive on exercise
hereof such shares of stock, securities, or assets as would have
been issuable or payable (as part of such reorganization,
reclassification, consolidation, merger or sale) with respect to
or in exchange for such number of outstanding shares of Common
Stock as would have been received on exercise of this Warrant
immediately before such reorganization, reclassification,
consolidation, merger or sale. In any such case, appropriate
provision shall be made with respect to the rights and interests
of the holder of this Warrant to the end that the provisions
hereof shall thereafter be applicable in relation to any shares
of stock, securities, or assets thereafter deliverable on the
exercise of this Warrant. In the event of a merger or
consolidation of the Company with or into another corporation or
the sale of all or substantially all of its assets as a result of
which a number of shares of common stock of the surviving or
purchasing corporation greater or less than the number of shares
of Common Stock outstanding immediately prior to such merger,
consolidation, or purchase are issuable to holders of Common
Stock, then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as though there were a subdivision or combination of the
outstanding shares of Common Stock. The Company will not effect
any such consolidation, merger, or sale unless prior to the
consummation thereof the successor corporation resulting from
such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument mailed or delivered to
the holder hereof at its last address appearing on the books of
the Company, the obligation to deliver to such holder such shares
of stock, securities, or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire on
exercise of this Warrant.
(d) No fraction of a share shall be issued on exercise
hereof, but, in lieu thereof, the Company, notwithstanding any
other provision hereof, may pay therefor in cash at the fair
value of any such fractional share at the time of exercise.
(e) Neither purchase or other acquisition by the Company of
any shares of Common Stock nor the sale or other disposition by
the Company of any shares of Common Stock shall effect any
adjustment of the Warrant Price or be taken into account in
computing any subsequent adjustment of the Warrant Price.
7. This Warrant shall not be transferable or assignable
except by will, trust, or the laws of descent. Subject to the
foregoing restrictions and the restrictions set forth in
paragraph 8 hereof, this Warrant is transferable at the offices
of the Company. Upon such transfer, each holder hereof agrees
that the Company may deem and treat the registered holder of this
Warrant as the true and lawful owner thereof for all purposes,
and the Company shall not be affected by any notice to the
contrary.
8. The shares issuable on exercise of this Warrant shall be
restricted securities within the meaning of Rule 144 promulgated
under the Securities Act, and all certificates for such shares
shall contain a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT."
9. The Company agrees to register or qualify the Warrant
Shares (but not this Warrant) for resale as follows:
(a) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company shall
receive a written request from the holders of this Warrant and
the Warrant Shares that the Company file a registration
statement, post-effective amendment, or other appropriate form
under the Securities Act covering the sale of Warrant Shares,
then the Company shall, within ten days after the receipt
thereof, give written notice of such request (a "Registration
Notice") to all holders of this Warrant and the Warrant Shares
and shall use its best efforts, subject to the limitations of
this paragraph, to effect, within a reasonable time, the required
filing under the Securities Act to permit sale of all Warrant
Shares within 120 days following the mailing of the Registration
Notice. If the holders this Warrant and the Warrant Shares
intend to distribute the Warrant Shares by means of an
underwriting, they shall so advise the Company as part of their
request, and the Company shall include such information in the
Registration Note. The underwriter shall be selected by the
Company and shall be reasonably acceptable to a majority in
interest of the holders of at least 50% of this Warrant and the
Warrant Shares (the "Majority Holders"). In such event, the
right of the holders of this Warrant and the Warrant Shares to
include the Warrant Shares in such registration shall be
conditioned upon all holders' participation in such underwriting
and the inclusion of all such holders' Warrant Shares in the
underwriting (unless otherwise mutually agreed by a majority in
interest of the Majority Holders and such holder), to the extent
provided herein. All holders of this Warrant and the Warrant
Shares shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision
of this paragraph, if the underwriter advises the Majority
Holders in writing that market factors reasonably require a
limitation of the number of shares to be underwritten, then the
Majority Holders shall so advise all holders of Warrant Shares
which would otherwise be underwritten pursuant hereto, and the
number of Warrant Shares that may be included in the underwriting
shall be prorated among all holders thereof, including the
Majority Holders. The Company is obligated to effect only one
such registration pursuant to this paragraph.
(b) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company
proposes to file a registration statement or notification under
the Securities Act for the primary or secondary sale of any debt
or equity security, it will give written notice at least 30 days
prior to the filing of such registration statement or
notification to the holders of this Warrant and the Warrant
Shares of its intention to do so. The Company agrees that, after
receiving written notice from the Majority Holders of their
desire to include their Warrant Shares in such proposed
registration statement or notification, the Company shall afford
the holders of this Warrant and the Warrant Shares the
opportunity to have their Warrant Shares included therein.
Notwithstanding the provisions of this paragraph 9(b), the
Company shall have the right, at any time after it shall have
given written notice pursuant to this paragraph (whether or not a
written request for inclusion of the Warrant Shares shall be
made) to elect not to file any such proposed registration
statement or notification or to withdraw the same after the
filing but prior to the effective date thereof. In no event
shall the Company be obligated to include the Warrant Shares in
any registration statement or notification under this paragraph
9(b) if, in the written opinion of the underwriter, the inclusion
of the Warrant Shares in such registration statement or
notification would be materially detrimental to the proposed
offering of debt or equity securities pursuant to which the
Company gave notice to the holders under this paragraph.
(c) In connection with the filing of a registration
statement, notification, or post-effective amendment under this
section, the Company covenants and agrees:
(i) to pay all expenses of such registration statement,
notification, or post-effective amendment, including, without
limitation, printing charges, legal fees and disbursements of
Counsel for the Company, blue sky expenses, accounting fees and
filing fees, but not including legal fees and disbursements of
counsel to the holders and any sales commissions on Warrant
Shares offered and sold;
(ii) to take all necessary action which may reasonably
be required in qualifying or registering the Warrant Shares
included in a registration statement, notification or post-
effective amendment for the offer and sale under the securities
or blue sky laws of such states as requested by the holders;
provided that the Company shall not be obligated to execute or
file any general consent to service of process or to qualify as a
foreign corporation to do business under the laws of any such
jurisdiction; and
(iii) to utilize its best efforts to keep the same
effective for a period of not less than 90 nor more than 120
days.
(d) The holders of this Warrant and the Warrant Shares
shall cooperate with the Company and shall furnish such
information as the Company may request in connection with any
such registration statement, notification or post-effective
amendment hereunder, on which the Company shall be entitled to
rely, and such holders of this Warrant and the Warrant Shares
shall indemnify and hold harmless the Company (and all other
persons who may be subject to liability under the Securities Act
or otherwise) from and against any and all claims, actions,
suits, liabilities, losses, damages, and expenses of every nature
and character (including, but without limitation, all attorneys'
fees and amounts paid in settlement of any claim, action, or
suit) which arise or result directly or indirectly from any
untrue statement of a material fact furnished by such holder(s)
in connection with such registration or qualification, or from
the failure of such holder(s) to furnish material information in
connection with the facts required to be included in such
registration statement, notification or post-effective amendment
necessary to make the statements therein not misleading, or from
any sales or offers of the Warrant Shares so registered after 90
days from the effective date of such registration statement or
notification.
10. As used herein, the term "Common Stock" shall mean and
include the Common Stock authorized on the date of the original
issue of this Warrant, and shall also include any capital stock
of any class of the Company thereafter authorized that shall not
be limited to a fixed sum or percentage in respect of the rights
of the holders thereof to participate in dividends and in the
distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided
that the Warrant Shares purchasable pursuant to this Warrant
shall include only shares of the class designated in the
Company's Articles of Incorporation as Common Stock on the date
of the original issue of this Warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
11. This agreement shall be construed under and be governed
by the laws of the state of Nevada.
12. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to Laska, to:
Ehud D. Laska
666 Fifth Avenue, 23rd Floor
New York, New York 10103
If to the Company, to:
AFGL International, Inc.
850 Third Avenue, 11th Floor
New York, New York 10022
Attention: Barry S. Roseman
or such other address as shall be furnished in writing by an
party to the other, and any such notice or communication shall be
deemed to have been given as of the date delivered by hand or
three days after being so deposited in the mails.
Dated this
AFGL INTERNATIONAL, INC.
By: /s/
Barry S. Roseman
Chief Executive Officer
By: /s/
Ehud D. Laska
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock of AFGL International, Inc., and herewith makes
payment of [$] therefor, and requests that the certificate(s) for
such shares be delivered to [name], at [address], and if such
shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable
under the attached warrant be delivered to the undersigned.
DATED this
Signature
Exhibit No. 23/ AFGL International, Inc./ Form S-3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
WARRANT TO
PURCHASE
120,000
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value per Share
THIS WARRANT MAY NOT BE EXERCISED
UNTIL MAY 31, 1997, AND WILL BE VOID
AFTER 12:00 MIDNIGHT ON MAY 30, 2001
This warrant (The "Warrant") certifies that, for value
received, Ziad K. Abdelnour ("Abdelnour"), or registered assigns,
is entitled, at any time on or after May 31, 1997, and at any
time prior to 12:00 Midnight Eastern time on May 30, 2001 (the
"Expiration Date"), to purchase from AFGL International, Inc., a
Nevada corporation (the "Company"), up to the number of shares
shown above ("Warrant Shares") of common stock, par value $0.01,
of the Company (the "Common Stock") by surrendering this Warrant
with the purchase form attached hereto, duly executed, at the
principal office of the Company in New York, New York, and by
paying in full and in lawful money of the United States of
America, by cash or cashiers' check, the purchase price of the
Warrant Shares as to which this Warrant is exercised, on all the
terms and conditions Hereinafter set forth.
1. The purchase price at which the Warrant Shares are
purchasable (the "Warrant Price") is $4.25 per share; provided
that the holder may elect to receive, without the payment by the
holder of any additional consideration, shares equal to the value
of this Warrant or any portion hereof by the surrender of this
Warrant or such portion to the Company, with a net issue election
notice duly executed, at the office of the Company. Thereupon,
the Company shall issue to the holder such number of fully paid
and nonassessable shares of Common Stock as is computed using the
following formula:
Y (A-B)
_______
A
where Y equals the number of shares covered by this Warrant in
respect of which the net issue election is made pursuant hereto;
A equals the fair market value of one share of Common Stock at
the time the net issue election is made pursuant hereto; and B
equals the Warrant Price.
2. Abdelnour is entitled to purchase 120,000 Warrant Shares
for the financing obtained for the Company through the efforts of
Abdelnour.
3. On the exercise of all or any portion of this Warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time after the Warrant shall have been
exercised as set forth above. If this Warrant shall be exercised
with respect to only a portion of the Warrant Shares covered
hereby, the holder shall be entitled to receive a similar Warrant
of like tenor and date covering the number of Warrant Shares with
respect to which this Warrant shall not have been exercised.
4. This Warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
5. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this Warrant will, on issuance, be fully paid and nonassessable,
and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that,
during the period within which the rights represented by this
Warrant may be exercised, the Company will have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant.
6. The Warrant Price and number of Warrant Shares
purchasable pursuant to this Warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price and the number of Warrant Shares in effect
immediately prior thereto shall be adjusted so that the holder of
this Warrant thereafter surrendered for exercise shall be
entitled to receive, after the occurrence of any of the events
described, the number of Warrant Shares to which the holder would
have been entitled had this Warrant been exercised immediately
prior to the occurrence of such event. Such adjustment shall
become effective immediately after the opening of business on the
day following the date on which such subdivision, combination, or
reclassification, as the case may be, becomes effective.
(c) If any capital reorganization or reclassification of
Common Stock, or consolidation or merger of the Company with
another corporation or the sale of all or substantially all of
its assets to another corporation shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock,
securities, or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful adequate
provisions shall be made whereby the holder of this Warrant shall
thereafter have the right to acquire and receive on exercise
hereof such shares of stock, securities, or assets as would have
been issuable or payable (as part of such reorganization,
reclassification, consolidation, merger or sale) with respect to
or in exchange for such number of outstanding shares of Common
Stock as would have been received on exercise of this Warrant
immediately before such reorganization, reclassification,
consolidation, merger or sale. In any such case, appropriate
provision shall be made with respect to the rights and interests
of the holder of this Warrant to the end that the provisions
hereof shall thereafter be applicable in relation to any shares
of stock, securities, or assets thereafter deliverable on the
exercise of this Warrant. In the event of a merger or
consolidation of the Company with or into another corporation or
the sale of all or substantially all of its assets as a result of
which a number of shares of common stock of the surviving or
purchasing corporation greater or less than the number of shares
of Common Stock outstanding immediately prior to such merger,
consolidation, or purchase are issuable to holders of Common
Stock, then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as though there were a subdivision or combination of the
outstanding shares of Common Stock. The Company will not effect
any such consolidation, merger, or sale unless prior to the
consummation thereof the successor corporation resulting from
such consolidation or merger or the corporation purchasing such
assets shall assume, by written instrument mailed or delivered to
the holder hereof at its last address appearing on the books of
the Company, the obligation to deliver to such holder such shares
of stock, securities, or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire on
exercise of this Warrant.
(d) No fraction of a share shall be issued on exercise
hereof, but, in lieu thereof, the Company, notwithstanding any
other provision hereof, may pay therefor in cash at the fair
value of any such fractional share at the time of exercise.
(e) Neither purchase or other acquisition by the Company of
any shares of Common Stock nor the sale or other disposition by
the Company of any shares of Common Stock shall effect any
adjustment of the Warrant Price or be taken into account in
computing any subsequent adjustment of the Warrant Price.
7. This Warrant shall not be transferable or assignable
except by will, trust, or the laws of descent. Subject to the
foregoing restrictions and the restrictions set forth in
paragraph 8 hereof, this Warrant is transferable at the offices
of the Company. Upon such transfer, each holder hereof agrees
that the Company may deem and treat the registered holder of this
Warrant as the true and lawful owner thereof for all purposes,
and the Company shall not be affected by any notice to the
contrary.
8. The shares issuable on exercise of this Warrant shall be
restricted securities within the meaning of Rule 144 promulgated
under the Securities Act, and all certificates for such shares
shall contain a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT."
9. The Company agrees to register or qualify the Warrant
Shares (but not this Warrant) for resale as follows:
(a) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company shall
receive a written request from the holders of this Warrant and
the Warrant Shares that the Company file a registration
statement, post-effective amendment, or other appropriate form
under the Securities Act covering the sale of Warrant Shares,
then the Company shall, within ten days after the receipt
thereof, give written notice of such request (a "Registration
Notice") to all holders of this Warrant and the Warrant Shares
and shall use its best efforts, subject to the limitations of
this paragraph, to effect, within a reasonable time, the required
filing under the Securities Act to permit sale of all Warrant
Shares within 120 days following the mailing of the Registration
Notice. If the holders this Warrant and the Warrant Shares
intend to distribute the Warrant Shares by means of an
underwriting, they shall so advise the Company as part of their
request, and the Company shall include such information in the
Registration Note. The underwriter shall be selected by the
Company and shall be reasonably acceptable to a majority in
interest of the holders of at least 50% of this Warrant and the
Warrant Shares (the "Majority Holders"). In such event, the
right of the holders of this Warrant and the Warrant Shares to
include the Warrant Shares in such registration shall be
conditioned upon all holders' participation in such underwriting
and the inclusion of all such holders' Warrant Shares in the
underwriting (unless otherwise mutually agreed by a majority in
interest of the Majority Holders and such holder), to the extent
provided herein. All holders of this Warrant and the Warrant
Shares shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision
of this paragraph, if the underwriter advises the Majority
Holders in writing that market factors reasonably require a
limitation of the number of shares to be underwritten, then the
Majority Holders shall so advise all holders of Warrant Shares
which would otherwise be underwritten pursuant hereto, and the
number of Warrant Shares that may be included in the underwriting
shall be prorated among all holders thereof, including the
Majority Holders. The Company is obligated to effect only one
such registration pursuant to this paragraph.
(b) If, at any time during the period in which the rights
represented by this Warrant are exerciseable, the Company
proposes to file a registration statement or notification under
the Securities Act for the primary or secondary sale of any debt
or equity security, it will give written notice at least 30 days
prior to the filing of such registration statement or
notification to the holders of this Warrant and the Warrant
Shares of its intention to do so. The Company agrees that, after
receiving written notice from the Majority Holders of their
desire to include their Warrant Shares in such proposed
registration statement or notification, the Company shall afford
the holders of this Warrant and the Warrant Shares the
opportunity to have their Warrant Shares included therein.
Notwithstanding the provisions of this paragraph 9(b), the
Company shall have the right, at any time after it shall have
given written notice pursuant to this paragraph (whether or not a
written request for inclusion of the Warrant Shares shall be
made) to elect not to file any such proposed registration
statement or notification or to withdraw the same after the
filing but prior to the effective date thereof. In no event
shall the Company be obligated to include the Warrant Shares in
any registration statement or notification under this paragraph
9(b) if, in the written opinion of the underwriter, the inclusion
of the Warrant Shares in such registration statement or
notification would be materially detrimental to the proposed
offering of debt or equity securities pursuant to which the
Company gave notice to the holders under this paragraph.
(c) In connection with the filing of a registration
statement, notification, or post-effective amendment under this
section, the Company covenants and agrees:
(i) to pay all expenses of such registration statement,
notification, or post-effective amendment, including, without
limitation, printing charges, legal fees and disbursements of
Counsel for the Company, blue sky expenses, accounting fees and
filing fees, but not including legal fees and disbursements of
counsel to the holders and any sales commissions on Warrant
Shares offered and sold;
(ii) to take all necessary action which may reasonably be
required in qualifying or registering the Warrant Shares included
in a registration statement, notification or post-effective
amendment for the offer and sale under the securities or blue sky
laws of such states as requested by the holders; provided that
the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such
jurisdiction; and
(iii) to utilize its best efforts to keep the same
effective for a period of not less than 90 nor more than 120
days.
(d) The holders of this Warrant and the Warrant Shares
shall cooperate with the Company and shall furnish such
information as the Company may request in connection with any
such registration statement, notification or post-effective
amendment hereunder, on which the Company shall be entitled to
rely, and such holders of this Warrant and the Warrant Shares
shall indemnify and hold harmless the Company (and all other
persons who may be subject to liability under the Securities Act
or otherwise) from and against any and all claims, actions,
suits, liabilities, losses, damages, and expenses of every nature
and character (including, but without limitation, all attorneys'
fees and amounts paid in settlement of any claim, action, or
suit) which arise or result directly or indirectly from any
untrue statement of a material fact furnished by such holder(s)
in connection with such registration or qualification, or from
the failure of such holder(s) to furnish material information in
connection with the facts required to be included in such
registration statement, notification or post-effective amendment
necessary to make the statements therein not misleading, or from
any sales or offers of the Warrant Shares so registered after 90
days from the effective date of such registration statement or
notification.
10. As used herein, the term "Common Stock" shall mean and
include the Common Stock authorized on the date of the original
issue of this Warrant, and shall also include any capital stock
of any class of the Company thereafter authorized that shall not
be limited to a fixed sum or percentage in respect of the rights
of the holders thereof to participate in dividends and in the
distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided
that the Warrant Shares purchasable pursuant to this Warrant
shall include only shares of the class designated in the
Company's Articles of Incorporation as Common Stock on the date
of the original issue of this Warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
11. This agreement shall be construed under and be governed
by the laws of the state of Nevada.
12. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to Abdelnour, to:
Ziad K. Abdelnour
If to the Company, to:
AFGL International, Inc.
850 Third Avenue, 11th Floor
New York, New York 10022
Attention: Barry S. Roseman
or such other address as shall be furnished in writing by an
party to the other, and any such notice or communication shall be
deemed to have been given as of the date delivered by hand or
three days after being so deposited in the mails.
Dated this
AFGL INTERNATIONAL, INC.
By: /s/
Barry S. Roseman
Chief Executive Officer
/s/
Ziad K. Abdelnour
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock of AFGL International, Inc., and herewith makes
payment of [$] therefor, and requests that the certificate(s) for
such shares be delivered to [name], at [address], and if such
shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable
under the attached warrant be delivered to the undersigned.
DATED this
Signature
Exhibit No. 24/ AFGL International, Inc./ Form S-3
WARRANT TO
PURCHASE
120,000
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value Per Share
THIS WARRANT WILL BE VOID
AFTER 12:00 MIDNIGHT ON MAY 31, 2001
This certifies that, for value received, THE TAIL WIND FUND
LTD., or registered assigns, is entitled, at any time prior to
12:00 midnight Eastern time on May 31, 2001 (the "Expiration
Date"), to purchase from AFGL International, Inc., a Nevada
corporation, hereinafter referred to as the "Company," the number
of shares shown above (the "Warrant Shares") of common stock, par
value $0.01, of the Company (the "Common Stock") by surrendering
this warrant with the purchase form attached hereto, duly
executed, at the principal office of the Company in New York, New
York, and by paying in full and in lawful money of the United
States of America by cash or cashiers' check, the purchase price
of the Warrant Shares as to which this warrant is exercised, on
all the terms and conditions hereinafter set forth.
1. The purchase price at which the Warrant Shares are
purchasable (hereinafter referred to as the "Warrant Price") is
$4.25 per share.
2. On the exercise of all or any portion of this warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time, but in no event longer than ten days
after the warrants shall have been exercised as set forth above.
If this warrant shall be exercised in respect to only a part of
the Warrant Shares covered hereby, the holder shall be entitled
to receive a similar warrant of like tenor and date covering the
number of Warrant Shares with respect to which this warrant shall
not have been exercised.
3. This warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
4. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this warrant will, on issuance, be fully paid and nonassessable,
and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that
during the period within which the rights represented by this
warrant may be exercised, the Company will have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this warrant.
5. The Warrant Price and number of Warrant Shares
purchasable pursuant to this warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price in effect immediately prior thereto shall be
adjusted so that the holder of the warrant thereafter surrendered
for exercise shall be entitled to receive, after the occurrence
of any of the events described, the number of Warrant Shares to
which the holder would have been entitled had such warrant been
exercised immediately prior to the occurrence of such event.
Such adjustment shall become effective immediately after the
opening of business on the day following the date on which such
subdivision, combination, or reclassification, as the case may
be, becomes effective.
(c) If any capital reorganization or reclassification of
the Company's Common Stock, or consolidation or merger of the
Company with another corporation or the sale of all or
substantially all of its assets to another corporation shall be
effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities, or assets with respect to
or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger, or sale,
lawful adequate provisions shall be made whereby the holder of
this warrant shall thereafter have the right to acquire and
receive on exercise hereof such shares of stock, securities, or
assets as would have been issuable or payable (as part of the
reorganization, reclassification, consolidation, merger, or sale)
with respect to or in exchange for such number of outstanding
shares of the Company's Common Stock as would have been received
on exercise of this warrant immediately before such
reorganization, reclassification, consolidation, merger, or sale.
In any such case, appropriate provision shall be made with
respect to the rights and interests of the holder of this warrant
to the end that the provisions hereof shall thereafter be
applicable in relation to any shares of stock, securities, or
assets thereafter deliverable on the exercise of this warrant.
In the event of a merger or consolidation of the Company with or
into another corporation or the sale of all or substantially all
of its assets as a result of which a number of shares of common
stock of the surviving or purchasing corporation greater or less
than the number of shares of Common Stock of the Company
outstanding immediately prior to such merger, consolidation, or
purchase are issuable to holders of Common Stock of the Company,
then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as through there was a subdivision or combination of the
outstanding shares of Common Stock of the Company. The Company
will not effect any such consolidation, merger, or sale unless
prior to the consummation thereof the successor corporation
resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument mailed
or delivered to the holder hereof at its last address appearing
on the books of the Company, the obligation to deliver to such
holder such shares of stock, securities, or assets as, in
accordance with the foregoing provisions, such holder may be
entitled to acquire on exercise of this warrant.
(d) No fraction of a share shall be issued on exercise,
but, in lieu thereof, the Company, notwithstanding any other
provision hereof, may pay therefor in cash at the fair value of
any such fractional share at the time of exercise.
(e) Neither the purchase or other acquisition by the
Company of any shares of Common Stock nor the sale or other
disposition by the Company of any shares of Common Stock shall
affect any adjustment of the Warrant Price or be taken into
account in computing any subsequent adjustment of the Warrant
Price.
6. This warrant and the shares issuable on exercise of this
warrant (the "Warrant Shares"), are being sold in reliance on the
safe harbor from registration set forth in Regulation S
promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). Accordingly, The Tail Wind Fund Limited
("TWF") hereby represents, warrants, and agrees as follows.
(a) TWF is not a U.S. Person as that term is defined under
Regulation S promulgated under the Securities Act.
(b) TWF is outside of the United States as of the date of
the execution and delivery of this Agreement.
(c) TWF is purchasing this warrant for its own account and
not on behalf of or for the account of any U.S. Person, and TWF
is the sole beneficial owner of this warrant and has not
prearranged any sale with purchasers in the United States.
(d) TWF represents, warrants and covenants that all offers
and sales of this Warrant prior to the expiration of a period
commencing on the date hereof and ending forty days thereafter
shall only be made in compliance with the safe harbor contained
in Regulation S, pursuant to the registration provisions under
the Securities Act, or pursuant to an exemption from
registration, and all offers and sales after the expiration of
the forty-day period shall be made only pursuant to such safe
harbor or to such registration or to such exemption from
registration.
(e) During the forty-day period following the date hereof,
TWF represents, warrants, and covenants that neither TWF nor any
of its affiliates will, directly or indirectly, maintain any
short position in the securities of the Company.
7. Subject to the restrictions set forth in paragraph 6
above, this warrant is transferable at the offices of the
Company. On such transfer, every holder hereof agrees that the
Company may deem and treat the registered holder of this warrant
as the true and lawful owner thereof for all purposes, and the
Company shall not be affected by any notice to the contrary.
8. As used herein, the term "Common Stock" shall mean and
include the Company's Common Stock authorized on the date of the
original issue of this warrant, and shall also include any
capital stock of any class of the Company thereafter authorized
that shall not be limited to a fixed sum or percentage in respect
of the rights of the holders thereof to participate in dividends
and in the distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided,
that the Warrant Shares purchasable pursuant to this warrant
shall include only shares of the class designated in the
Company's articles of incorporation as Common Stock on the date
of the original issue of this warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
9. This agreement shall be construed under and be governed
by the laws of the state of Nevada.
10. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to The Tail Wind Fund, to:
The Tail Wind Fund Ltd.
c/o Mees Pierson Fund Services
18-20 North Quay
Douglas, Isle of Man IM1 4LE
with a copy to:
Samuel Krieger
Krieger & Prager
319 Fifth Avenue
New York, New York 10016
If to the Company, to:
AFGL International, Inc.
Attn: Barry S. Roseman, Chief Operating Officer
850 Third Avenue, 11th Floor
New York, New York 10022
or such other address as shall be furnished in writing by any
party to the other, and any such notice or communication shall be
deemed to have been given as of the date so delivered or three
days after being so deposited in the mails.
EFFECTIVE as of this 8th day of April, 1996.
AFGL INTERNATIONAL, INC.
By: /s/
Gary S. Goldstein,
President
THE TAIL WIND FUND LIMITED
By:
Duly Authorized Person
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock (the "Warrant Shares") of AFGL International, Inc.
("Company") and herewith makes payment of [$] therefor, and
requests that the certificate(s) for the Warrant Shares be
delivered to [name] at [address], and if such shall not be all of
the shares purchasable hereunder, that a new warrant of like
tenor for the balance of the shares purchasable under the
attached warrant be delivered to the undersigned. In connection
with such exercise, the undersigned represents, warrants, and
covenants as follows:
(a) The undersigned is not a U.S. Person as that term is
defined under Regulation S promulgated under the Securities Act.
(b) The undersigned is outside of the United States as of
the date of the execution and delivery of this exercise form.
(c) The undersigned is purchasing the Warrant Shares for
its own account and not on behalf of or for the account of any
U.S. Person, and the undersigned is the sole beneficial owner of
the Warrant Shares and has not prearranged any sale with
purchasers in the United States.
(d) The undersigned represents, warrants and covenants that
all offers and sales of the Warrant Shares shall only be made in
compliance with the safe harbor contained in Regulation S,
pursuant to the registration provisions under the Securities Act,
or pursuant to an exemption or safe harbor from registration.
(e) During the forty-day period following the date payment
of the purchase price for the Warrant Shares is made to the
Company, the undersigned represents, warrants, and covenants that
neither the undersigned nor any of its affiliates will, directly
or indirectly, maintain any short position in the securities of
the Company.
DATED this
Signature
Exhibit No. 25/ AFGL International, Inc./ Form S-3
WARRANT TO
PURCHASE
120,000
SHARES
AFGL INTERNATIONAL, INC.
(a Nevada corporation)
WARRANT FOR THE PURCHASE OF
Common Stock, $0.01 Par Value Per Share
THIS WARRANT MAY NOT BE EXERCISED
UNTIL SEPTEMBER 1, 1996, AND WILL BE VOID
AFTER 12:00 MIDNIGHT ON AUGUST 31, 2001
This certifies that, for value received, THE TAIL WIND FUND
LTD., or registered assigns, is entitled, at any time on or after
September 1, 1996, and at any time prior to 12:00 midnight
Eastern time on August 31, 2001 (the "Expiration Date"), to
purchase from AFGL International, Inc., a Nevada corporation,
hereinafter referred to as the "Company," the number of shares
shown above (the "Warrant Shares") of common stock, par value
$0.01, of the Company (the "Common Stock") by surrendering this
warrant with the purchase form attached hereto, duly executed, at
the principal office of the Company in New York, New York, and by
paying in full and in lawful money of the United States of
America by cash or cashiers' check, the purchase price of the
Warrant Shares as to which this warrant is exercised, on all the
terms and conditions hereinafter set forth.
1. The purchase price at which the Warrant Shares are
purchasable (hereinafter referred to as the "Warrant Price") is
$4.25 per share.
2. On the exercise of all or any portion of this warrant in
the manner provided above, the person exercising the same shall
be deemed to have become a holder of record of Common Stock (or
of the other securities or properties to which he or it is
entitled on such exercise) for all purposes, and certificates for
the securities so purchased shall be delivered to the purchaser
within a reasonable time, but in no event longer than ten days
after the warrants shall have been exercised as set forth above.
If this warrant shall be exercised in respect to only a part of
the Warrant Shares covered hereby, the holder shall be entitled
to receive a similar warrant of like tenor and date covering the
number of Warrant Shares with respect to which this warrant shall
not have been exercised.
3. This warrant is exchangeable, on the surrender hereof by
the holder at the office of the Company, for new warrants of like
tenor and date representing in the aggregate the right to
subscribe for and purchase the number of Warrant Shares which may
be subscribed for and purchased hereunder.
4. The Company covenants and agrees that the Warrant Shares
which may be issued on the exercise of the rights represented by
this warrant will, on issuance, be fully paid and nonassessable,
and free from all taxes, liens, and charges with respect to the
issue thereof. The Company further covenants and agrees that
during the period within which the rights represented by this
warrant may be exercised, the Company will have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this warrant.
5. The Warrant Price and number of Warrant Shares
purchasable pursuant to this warrant may be subject to adjustment
from time to time as follows:
(a) If the Company shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a
dividend in shares, the Warrant Price in effect immediately prior
to such record date shall be proportionately decreased, such
adjustment to become effective immediately after the opening of
business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares
of Common Stock into a greater number of shares, combine the
outstanding shares of Common Stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price in effect immediately prior thereto shall be
adjusted so that the holder of the warrant thereafter surrendered
for exercise shall be entitled to receive, after the occurrence
of any of the events described, the number of Warrant Shares to
which the holder would have been entitled had such warrant been
exercised immediately prior to the occurrence of such event.
Such adjustment shall become effective immediately after the
opening of business on the day following the date on which such
subdivision, combination, or reclassification, as the case may
be, becomes effective.
(c) If any capital reorganization or reclassification of
the Company's Common Stock, or consolidation or merger of the
Company with another corporation or the sale of all or
substantially all of its assets to another corporation shall be
effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities, or assets with respect to
or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger, or sale,
lawful adequate provisions shall be made whereby the holder of
this warrant shall thereafter have the right to acquire and
receive on exercise hereof such shares of stock, securities, or
assets as would have been issuable or payable (as part of the
reorganization, reclassification, consolidation, merger, or sale)
with respect to or in exchange for such number of outstanding
shares of the Company's Common Stock as would have been received
on exercise of this warrant immediately before such
reorganization, reclassification, consolidation, merger, or sale.
In any such case, appropriate provision shall be made with
respect to the rights and interests of the holder of this warrant
to the end that the provisions hereof shall thereafter be
applicable in relation to any shares of stock, securities, or
assets thereafter deliverable on the exercise of this warrant.
In the event of a merger or consolidation of the Company with or
into another corporation or the sale of all or substantially all
of its assets as a result of which a number of shares of common
stock of the surviving or purchasing corporation greater or less
than the number of shares of Common Stock of the Company
outstanding immediately prior to such merger, consolidation, or
purchase are issuable to holders of Common Stock of the Company,
then the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the same
manner as through there was a subdivision or combination of the
outstanding shares of Common Stock of the Company. The Company
will not effect any such consolidation, merger, or sale unless
prior to the consummation thereof the successor corporation
resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument mailed
or delivered to the holder hereof at its last address appearing
on the books of the Company, the obligation to deliver to such
holder such shares of stock, securities, or assets as, in
accordance with the foregoing provisions, such holder may be
entitled to acquire on exercise of this warrant.
(d) No fraction of a share shall be issued on exercise,
but, in lieu thereof, the Company, notwithstanding any other
provision hereof, may pay therefor in cash at the fair value of
any such fractional share at the time of exercise.
(e) Neither the purchase or other acquisition by the
Company of any shares of Common Stock nor the sale or other
disposition by the Company of any shares of Common Stock shall
affect any adjustment of the Warrant Price or be taken into
account in computing any subsequent adjustment of the Warrant
Price.
6. This warrant and the shares issuable on exercise of this
warrant are restricted securities within the meaning of Rule 144
promulgated under the Securities Act of 1933, as amended, and all
certificates therefor shall contain a legend in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (the
"Securities Act"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER EXEMPTION OR SAFE HARBOR UNDER
THE SECURITIES ACT.
7. Subject to the restrictions set forth in paragraph 6
above, this warrant is transferable at the offices of the
Company. On such transfer, every holder hereof agrees that the
Company may deem and treat the registered holder of this warrant
as the true and lawful owner thereof for all purposes, and the
Company shall not be affected by any notice to the contrary.
8. As used herein, the term "Common Stock" shall mean and
include the Company's Common Stock authorized on the date of the
original issue of this warrant, and shall also include any
capital stock of any class of the Company thereafter authorized
that shall not be limited to a fixed sum or percentage in respect
of the rights of the holders thereof to participate in dividends
and in the distribution of assets on the voluntary or involuntary
liquidation, dissolution, or winding up of the Company; provided,
that the Warrant Shares purchasable pursuant to this warrant
shall include only shares of the class designated in the
Company's articles of incorporation as Common Stock on the date
of the original issue of this warrant or, in the case of any
reorganization, reclassification, consolidation, merger, or sale
of assets of the character referred to in paragraph 5(c) hereof,
the stocks, securities, or assets provided for in such paragraph.
9. This agreement shall be construed under and be governed
by the laws of the state of Nevada.
10. Any notices required or permitted hereunder shall be
sufficiently given if delivered by hand or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to The Tail Wind Fund, to:
The Tail Wind Fund Ltd.
c/o EASI, 4th Floor
1 Regent Street
London SW1Y 4NS, England
If to the Company, to:
AFGL International, Inc.
Attn: Barry S. Roseman, Chief Operating Officer
850 Third Avenue, 11th Floor
New York, New York 10022
or such other address as shall be furnished in writing by any
party to the other, and any such notice or communication shall be
deemed to have been given as of the date so delivered or three
days after being so deposited in the mails.
DATED this 19th day of July, 1996.
AFGL INTERNATIONAL, INC.
By: /s/
Gary S. Goldstein,
President
THE TAIL WIND FUND LIMITED
By:
Duly Authorized Person
Form of Purchase
(to be signed only upon exercise of warrant)
TO: AFGL INTERNATIONAL, INC.
The undersigned, the owner of the attached warrant, hereby
irrevocable elects to exercise the purchase rights represented by
the warrant for, and to purchase thereunder, [number] shares of
common stock of AFGL International, Inc., and herewith makes
payment of [$] therefor, and requests that the certificate(s) for
such shares be delivered to [name], at [address], and if such
shall not be all of the shares purchasable hereunder, that a new
warrant of like tenor for the balance of the shares purchasable
under the attached warrant be delivered to the undersigned.
DATED this
Signature
Transfer Form
FOR VALUE RECEIVED,
[name] hereby sell, assign, and transfer unto
[name]
[name]
[name]
[number] warrants to purchase Common Stock of AFGL International,
Inc., represented by the attached warrant , and do hereby
irrevocably constitute and appoint: [name] to transfer the said
warrants on the books of AFGL International, Inc., with full
power of substitution in the premises.
Dated
Signature
In presence of
Signature
