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