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