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: