EXHIBIT 4.17
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of ______________, 2005, by and between American Technologies Group,
Inc., a Nevada corporation (the "Company"), and Gryphon Master Fund, L.P. (the
"Purchaser").
This Agreement is made pursuant to the Security Agreement, dated as of the
date hereof, by and among the Purchaser, the Company and various subsidiaries of
the Company (as amended, modified or supplemented from time to time, the
"Security Agreement"), and pursuant to the Note, the Options and the Warrants
referred to therein.
The Company and the Purchaser hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Security Agreement shall have the meanings given such
terms in the Security Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"Commission" means the Securities and Exchange Commission.
"Common Stock" means shares of the Company's common stock, par value
$0.001 per share.
"Effectiveness Date" means, (i) with respect to the initial Registration
Statement required to be filed hereunder, a date no later than one hundred and
twenty (120) days following the date hereof and (ii) with respect to each
additional Registration Statement required to be filed hereunder, a date no
later than thirty (30) days following the applicable Filing Date.
"Effectiveness Period" has the meaning set forth in Section 2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any successor statute.
"Filing Date" means with respect to (1) the Loan evidenced by the Note
made on the initial funding date, the date which is forty-five (45) days after
the date hereof, (2) the shares of Common Stock issued to the Purchaser upon
exercise of an Option, the date which is forty-five (45) days after the issuance
of each such Option, (3) the shares of Common Stock issuable to the Purchaser
upon exercise of a Warrant, the date which is forty-five (45) days after the
issuance of such Warrant, and (4) the shares of Common Stock issuable to the
Holder as a result of adjustments to the Fixed Conversion Price made pursuant to
Section 3.6 of the Note, Section 4 of the Warrant, Section 4 of the Option or
otherwise, in each case forty-five (45) days after the occurrence of such event
or the date of the adjustment of the Fixed Conversion Price.
"Holder" or "Holders" means the Purchaser or any of its affiliates or
transferees to the extent any of them hold Registrable Securities, other then
those purchasing Registrable Securities in a market transaction.
"Indemnified Party" has the meaning set forth in Section 5(c).
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"Indemnifying Party" has the meaning set forth in Section 5(c).
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"Registrable Securities" means the shares of Common Stock issuable upon the
conversion of the Note or upon exercise of the Options and the Warrants.
"Registration Statement" means each registration statement required to be
filed hereunder, including the Prospectus therein, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor statute.
"Security Agreement" has the meaning given to such term in the Preamble
hereto.
"Trading Market" means any of the NASD OTC Bulletin Board, NASDAQ SmallCap
Market, the Nasdaq National Market, the American Stock Exchange or the New York
Stock Exchange.
"Warrants" means the Common Stock purchase warrants issued pursuant to the
Security Agreement.
2. Registration.
(a) On or prior to each Filing Date, the Company shall prepare and file
with the Commission a Registration Statement covering the Registrable Securities
for a selling stockholder resale offering to be made on a continuous basis
pursuant to Rule 415. Each Registration Statement shall be on Form S-3 (except
if the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on another
appropriate form in accordance herewith). The Company shall cause each
Registration Statement to become effective and remain effective as provided
herein. The Company shall use its reasonable commercial efforts to cause each
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no later than
the Effectiveness Date. The Company shall use its reasonable commercial efforts
to keep each Registration Statement continuously effective under the Securities
Act until the date which is the earlier date of when (i) all Registrable
Securities covered by such Registration Statement have been sold or (ii) all
Registrable Securities covered by such Registration Statement may be sold
immediately without registration under the Securities Act and without volume
restrictions pursuant to Rule 144(k), as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company's transfer agent and the affected Holders (each, an
"Effectiveness Period").
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If: (i) any Registration Statement is not filed on or prior to the
applicable Filing Date for such Registration Statement; (ii) a Registration
Statement filed hereunder is not declared effective by the Commission by the
applicable Effectiveness Date; (iii) after a Registration Statement is filed
with and declared effective by the Commission, a Discontinuation Event (as
hereafter defined) shall occur and be continuing, or such Registration Statement
ceases to be effective (by suspension or otherwise) as to all Registrable
Securities to which it is required to relate at any time prior to the expiration
of the Effectiveness Period applicable to such Registration Statement (without
being succeeded immediately by an additional Registration Statement filed and
declared effective), for a period of time which shall exceed 30 days in the
aggregate per year or more than 20 consecutive calendar days (defined as a
period of 365 days commencing on the date such Registration Statement is
declared effective); or (iv) the Common Stock is not listed or quoted, or is
suspended from trading on any Trading Market for a period of three (3)
consecutive Trading Days (provided the Company shall not have been able to cure
such trading suspension within 30 days of the notice thereof or list the Common
Stock on another Trading Market); (any such failure or breach being referred to
as an "Event," and for purposes of clause (i) or (ii) the date on which such
Event occurs, or for purposes of clause (iii) the date which such 30 day or 20
consecutive day period (as the case may be) is exceeded, or for purposes of
clause (iv) the date on which such three (3) Trading Day period is exceeded,
being referred to as "Event Date"), then as partial relief for the damages to
the Purchaser by reason of the occurrence of any such Event (which remedy shall
not be exclusive of any other remedies available at law or in equity), the
Company shall pay to the Purchaser, as liquidated damages and not as a penalty,
for each day that an Event has occurred and is continuing, an amount in cash
equal to one-thirtieth ((1)/30th) of the product of (A) the original principal
amount of each applicable Minimum Borrowing Note multiplied by (B) the
Applicable Percentage (as hereafter defined). For purposes hereof, the term
"Applicable Percentage" means (i) for the first thirty (30) day period following
the occurrence and during the continuance of such Event, one percent (1%), (ii)
for the second thirty (30) day period following the occurrence and during the
continuance of such Event, one and one-half percent (1.5%) and (iii) thereafter,
two percent (2%). In the event the Company fails to make any payments pursuant
to this Section 2(b) in a timely manner, such payments shall bear interest at
the rate of 1.5% per month (prorated for partial months) until paid in full.
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(b) Within three business days of the Effectiveness Date, the Company
shall cause its counsel to issue a blanket opinion in the form attached hereto
as Exhibit A, to the transfer agent stating that the shares are subject to an
effective registration statement and can be reissued free of restrictive legend
upon notice of a sale by the Purchaser and confirmation by the Purchaser that it
has complied with the prospectus delivery requirements, provided that the
Company has not advised the transfer agent orally or in writing that the opinion
has been withdrawn. Copies of the blanket opinion required by this Section 2(c)
shall be delivered to the Purchaser within the time frame set forth above.
3. Registration Procedures. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities, respond as promptly as possible to any
comments received from the Commission, and use its best efforts to cause such
Registration Statement to become and remain effective for the Effectiveness
Period with respect thereto, and promptly provide to the Purchaser copies of all
filings and Commission letters of comment relating thereto;
(b) prepare and file with the Commission such amendments and supplements
to such Registration Statement and the Prospectus used in connection therewith
as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
Registration Statement and to keep such Registration Statement effective until
the expiration of the Effectiveness Period applicable to such Registration
Statement;
(c) furnish to the Purchaser such number of copies of the Registration
Statement and the Prospectus included therein (including each preliminary
Prospectus) as the Purchaser reasonably may request to facilitate the public
sale or disposition of the Registrable Securities covered by such Registration
Statement;
(d) use its commercially reasonable efforts to register or qualify the
Purchaser's Registrable Securities covered by such Registration Statement under
the securities or "blue sky" laws of such jurisdictions within the United States
as the Purchaser may reasonably request, provided, however, that the Company
shall not for any such purpose be required to qualify generally to transact
business as a foreign corporation in any jurisdiction where it is not so
qualified or to consent to general service of process in any such jurisdiction;
(e) list the Registrable Securities covered by such Registration Statement
with any securities exchange on which the Common Stock of the Company is then
listed;
(f) immediately notify the Purchaser at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the Prospectus contained in such 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
not misleading in light of the circumstances then existing; and
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(g) make available for inspection by the Purchaser and any attorney,
accountant or other agent retained by the Purchaser, all publicly available,
non-confidential financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all publicly available, non-confidential information
reasonably requested by the attorney, accountant or agent of the Purchaser.
4. Registration Expenses. All expenses relating to the Company's
compliance with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders (not to exceed $7,500) are called "Registration
Expenses". All selling commissions applicable to the sale of Registrable
Securities, including any fees and disbursements of any special counsel to the
Holders beyond those included in Registration Expenses, are called "Selling
Expenses." The Company shall only be responsible for all Registration Expenses.
5. Indemnification.
(a) In the event of a registration of any Registrable Securities under the
Securities Act pursuant to this Agreement, the Company will indemnify and hold
harmless each Holder, and its officers, directors and each other person, if any,
who controls such Holder within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such Holder,
or such persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement under
which such Registrable Securities were registered under the Securities Act
pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon 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, and will reimburse such Holder, and each such person for any
reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by or on
behalf of the Purchaser or any such person in writing specifically for use in
any such document.
(b) In the event of a registration of the Registrable Securities under the
Securities Act pursuant to this Agreement, the Purchaser will indemnify and hold
harmless the Company, and its officers, directors and each other person, if any,
who controls the Company within the meaning of the Securities Act, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or such persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact which was furnished in writing by the Purchaser
to the Company expressly for use in (and such information is contained in) the
Registration Statement under which such Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary Prospectus
or final Prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon 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, and will reimburse the Company and each such
person for any reasonable legal or other expenses incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action, provided, however, that the Purchaser will be liable in any such case if
and only to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission so made in conformity with information furnished in writing
to the Company by or on behalf of the Purchaser specifically for use in any such
document. Notwithstanding the provisions of this paragraph, the Purchaser shall
not be required to indemnify any person or entity in excess of the amount of the
aggregate net proceeds received by the Purchaser in respect of Registrable
Securities in connection with any such registration under the Securities Act.
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(c) Promptly after receipt by a party entitled to claim indemnification
hereunder (an "Indemnified Party") of notice of the commencement of any action,
such Indemnified Party shall, if a claim for indemnification in respect thereof
is to be made against a party hereto obligated to indemnify such Indemnified
Party (an "Indemnifying Party"), notify the Indemnifying Party in writing
thereof, but the omission so to notify the Indemnifying Party shall not relieve
it from any liability which it may have to such Indemnified Party other than
under this Section 5(c) and shall only relieve it from any liability which it
may have to such Indemnified Party under this Section 5(c) if and to the extent
the Indemnifying Party is prejudiced by such omission. In case any such action
shall be brought against any Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such Indemnified
Party, and, after notice from the Indemnifying Party to such Indemnified Party
of its election so to assume and undertake the defense thereof, the Indemnifying
Party shall not be liable to such Indemnified Party under this Section 5(c) for
any legal expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof; if the Indemnified Party retains its own counsel, then
the Indemnified Party shall pay all fees, costs and expenses of such counsel,
provided, however, that, if the defendants in any such action include both the
Indemnified Party and the Indemnifying Party and the Indemnified Party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the Indemnifying
Party or if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, the Indemnified Party
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the Indemnifying Party as incurred.
(d) In order to provide for just and equitable contribution in the event
of joint liability under the Securities Act in any case in which either (i) the
Purchaser, or any officer, director or controlling person of the Purchaser,
makes a claim for indemnification pursuant to this Section 5 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 5 provides for indemnification in
such case, or (ii) contribution under the Securities Act may be required on the
part of the Purchaser or such officer, director or controlling person of the
Purchaser in circumstances for which indemnification is provided under this
Section 5; then, and in each such case, the Company and the Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that the
Purchaser is responsible only for the portion represented by the percentage that
the public offering price of its securities offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, provided, however, that, in any such case, (A) the
Purchaser will not be required to contribute any amount in excess of the public
offering price of all such securities offered by it pursuant to such
Registration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
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6. Representations and Warranties.
(a) The Common Stock is registered pursuant to Section 12(b) or 12(g) of
the Exchange Act and, except with respect to certain matters which the Company
has disclosed to the Purchaser on Schedule 12(u) to the Security Agreement by
and between the Company and Gryphon Master Fund L.P. (attached hereto to
Schedule 7(b)), the Company has timely filed all proxy statements, reports,
schedules, forms, statements and other documents required to be filed by it
under the Exchange Act. The Company has filed (i) its Annual Report on Form 10-K
for the fiscal year ended December 31, 2004 and (ii) its Quarterly Report on
Form 10-Q (collectively, the "SEC Reports"). Each SEC Report was, at the time of
its filing, in substantial compliance with the requirements of its respective
form and none of the SEC Reports, nor the financial statements (and the notes
thereto) included in the SEC Reports, as of their respective filing dates,
contained any untrue statement of a material fact or omitted 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. The
financial statements of the Company included in the SEC Reports comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed) and fairly present in all material respects the financial
condition, the results of operations and the cash flows of the Company and its
subsidiaries, on a consolidated basis, as of, and for, the periods presented in
each such SEC Report.
(b) The Common Stock is listed for trading on the Over the Counter
Bulletin Board and satisfies all requirements for the continuation of such
listing. The Company has not received any notice that its Common Stock will be
delisted from the Over the Counter Bulletin Board or that the Common Stock does
not meet all requirements for the continuation of such listing.
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(c) Neither the Company, nor any of its affiliates, nor any person acting
on its or their behalf, has directly or indirectly made any offers or sales of
any security or solicited any offers to buy any security under circumstances
that would cause the offering of the Securities pursuant to the Security
Agreement to be integrated with prior offerings by the Company for purposes of
the Securities Act which would prevent the Company from selling the Common Stock
pursuant to Rule 506 under the Securities Act, or any applicable
exchange-related stockholder approval provisions, nor will the Company or any of
its affiliates or subsidiaries take any action or steps that would cause the
offering of the Common Stock to be integrated with other offerings (other than
such concurrent offering to the Purchaser).
(d) The Options, Warrants, the Note and the shares of Common Stock which
the Purchaser may acquire pursuant to the Options, Warrants and the Note are all
restricted securities under the Securities Act as of the date of this Agreement.
The Company will not issue any stop transfer order or other order impeding the
sale and delivery of any of the Registrable Securities at such time as such
Registrable Securities are registered for public sale or an exemption from
registration is available, except as required by federal or state securities
laws.
(e) The Company understands the nature of the Registrable Securities
issuable upon the conversion of the Note and the exercise of the Warrants and
Options and recognizes that the issuance of such Registrable Securities may have
a potential dilutive effect. The Company specifically acknowledges that its
obligation to issue the Registrable Securities is binding upon the Company and
enforceable regardless of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.
(f) Except for agreements made in the ordinary course of business, there
is no agreement that has not been filed with the Commission as an exhibit to a
registration statement or to a form required to be filed by the Company under
the Exchange Act, the breach of which could reasonably be expected to have a
material and adverse effect on the Company and its subsidiaries, or would
prohibit or otherwise interfere with the ability of the Company to enter into
and perform any of its obligations under this Agreement in any material respect.
(g) The Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock for the full conversion of each Note
and exercise of the Warrants.
7. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder, of
any of their respective obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement.
(b) No Piggyback on Registrations. Except as and to the extent set forth
on Schedule 7(b) hereto, neither the Company nor any of its security holders
(other than the Holders in such capacity pursuant hereto) may include securities
of the Company in any Registration Statement other than the Registrable
Securities, and the Company shall not after the date hereof enter into any
agreement providing any such right for inclusion of shares in the Registration
Statement to any of its security holders. Except as and to the extent specified
in Schedule 7(b) hereto, the Company has not previously entered into any
agreement granting any registration rights with respect to any of its securities
to any Person that have not been fully satisfied.
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(c) Compliance. Each Holder covenants and agrees that it will comply with
the prospectus delivery requirements of the Securities Act as applicable to it
in connection with sales of Registrable Securities pursuant to any Registration
Statement.
(d) Discontinued Disposition. Each Holder agrees by its acquisition of
such Registrable Securities that, upon receipt of a notice from the Company of
the occurrence of a Discontinuation Event (as defined below), such Holder will
forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph. For purposes of this Section 7(d), a "Discontinuation Event" shall
mean (i) when the Commission notifies the Company whether there will be a
"review" of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); (ii) any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by the
Commission of any stop order suspending the effectiveness of such Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and/or (v) the occurrence of any event or passage of time that makes
the financial statements included in such Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(e) Piggy-Back Registrations. If at any time during any Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Securities required to be covered during such Effectiveness Period
and the Company shall determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen (15) days after receipt of such notice, any
such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered, to the extent the Company may do so without
violating registration rights of others which exist as of the date of this
Agreement, subject to customary underwriter cutbacks applicable to all holders
of registration rights and subject to obtaining any required consent of any
selling stockholder(s) to such inclusion under such registration statement.
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(f) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Holders of the then outstanding Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of certain Holders and that
does not directly or indirectly affect the rights of other Holders may be given
by Holders of at least a majority of the Registrable Securities to which such
waiver or consent relates; provided, however, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.
(g) Notices. Any notice or request hereunder may be given to the Company
or the Purchaser at the respective addresses set forth below or as may hereafter
be specified in a notice designated as a change of address under this Section
7(g). Any notice or request hereunder shall be given by registered or certified
mail, return receipt requested, hand delivery, overnight mail, Federal Express
or other national overnight next day carrier (collectively, "Courier") or
telecopy (confirmed by mail). Notices and requests shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party to
whom it is addressed, in the case of those by mail or overnight mail, deemed to
have been given three (3) business days after the date when deposited in the
mail or with the overnight mail carrier, in the case of a Courier, the next
business day following timely delivery of the package with the Courier, and, in
the case of a telecopy, when confirmed. The address for such notices and
communications shall be as follows:
If to Company: American Technologies Group, Inc.
X.X. Xxx 00
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
with a copy to _____________________________
_____________________________
_____________________________
If to a Purchaser: To the address set forth under such
Purchaser name on the signature
pages hereto.
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If to any other Person who is
then the registered Holder: To the address of such Holder as it
appears in the stock transfer books
of the Company
or such other address as may be designated in writing hereafter in accordance
with this Section 7(g) by such Person.
(h) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
and shall inure to the benefit of each Holder. The Company may not assign its
rights or obligations hereunder without the prior written consent of each
Holder. Each Holder may assign their respective rights hereunder in the manner
and to the Persons as permitted under the Notes and the Securities Purchase
Agreement with the prior written consent of the Company, which consent shall not
be unreasonably withheld.
(i) Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) Governing Law, Jurisdiction and Waiver of Jury Trial. This Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of New York applicable to contracts made and performed in such State,
without regard to principles of conflicts of law. The Company hereby consents
and agrees that the state or federal courts located in the County of New York,
State of New York shall have exclusion jurisdiction to hear and determine any
Proceeding between the Company, on the one hand, and the Purchaser, on the other
hand, pertaining to this Agreement or to any matter arising out of or related to
this Agreement; provided, that the Purchaser and the Company acknowledge that
any appeals from those courts may have to be heard by a court located outside of
the County of New York, State of New York, and further provided, that nothing in
this Agreement shall be deemed or operate to preclude the Purchaser from
bringing a Proceeding in any other jurisdiction to collect the obligations, to
realize on the Collateral or any other security for the obligations, or to
enforce a judgment or other court order in favor of the Purchaser. The Company
expressly submits and consents in advance to such jurisdiction in any Proceeding
commenced in any such court, and the Company hereby waives any objection which
it may have based upon lack of personal jurisdiction, improper venue or forum
non conveniens. The Company hereby waives personal service of the summons,
complaint and other process issued in any such Proceeding and agrees that
service of such summons, complaint and other process may be made by registered
or certified mail addressed to the Company at the address set forth in Section
7(g) and that service so made shall be deemed completed upon the earlier of the
Company's actual receipt thereof or three (3) days after deposit in the U.S.
mails, proper postage prepaid. The parties hereto desire that their disputes be
resolved by a judge applying such applicable laws. Therefore, to achieve the
best combination of the benefits of the judicial system and of arbitration, the
parties hereto waive all rights to trial by jury in any Proceeding brought to
resolve any dispute, whether arising in contract, tort, or otherwise between the
Purchaser and/or the Company arising out of, connected with, related or
incidental to the relationship established between then in connection with this
Agreement. If either party hereto shall commence a Proceeding to enforce any
provisions of this Agreement, the Security Agreement or any other Ancillary
Agreement, then the prevailing party in such Proceeding shall be reimbursed by
the other party for its reasonable attorneys' fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such Proceeding.
11
(k) Cumulative Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
[Balance of page intentionally left blank; signature page follows]
12
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
AMERICAN TECHNOLOGIES GROUP, INC.
By:_____________________________
Name:___________________________
Title:____________________________
GRYPHON MASTER FUND, L.P.
By:______________________________
Name:____________________________
Title:_____________________________
Address for Notices:
13
EXHIBIT A
____________, 200___
[Continental Stock Transfer
& Trust Company
Two Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx]
Re: Registration Statement on Form [S-3]
Ladies and Gentlemen:
As counsel to American Technologies Group, Inc., a Nevada corporation (the
"Company"), we have been requested to render our opinion to you in connection
with the resale by the individuals or entitles listed on Schedule A attached
hereto (the "Selling Stockholders"), of an aggregate of __________ shares (the
"Shares") of the Company's Common Stock.
A Registration Statement on Form [S-3] under the Securities Act of 1933,
as amended (the "Act"), with respect to the resale of the Shares was declared
effective by the Securities and Exchange Commission on [date]. Enclosed is the
Prospectus dated [date]. We understand that the Shares are to be offered and
sold in the manner described in the Prospectus.
Based upon the foregoing, upon request by the Selling Stockholders at any
time while the registration statement remains effective, it is our opinion that
the Shares have been registered for resale under the Act and new certificates
evidencing the Shares upon their transfer or re-registration by the Selling
Stockholders may be issued without restrictive legend. We will advise you if the
registration statement is not available or effective at any point in the future.
Very truly yours,
[Company counsel]
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Schedule A
Shares
Selling Stockholder R/N/O Being Offered
Schedule 7(b)
Piggyback on Registrations
REGISTRATION RIGHTS GRANTED TO LAURUS MASTER FUND LTD PURSUANT TO THE ATTACHED
AGREEMENTS
