EXHIBIT B
1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement"), is made and entered
into as of the 23rd day of April, 2001, by and among AMERICAN MILLENNIUM
CORPORATION, INC., a New Mexico corporation (the "Company"), and Options
Unlimited (the "Purchaser").
Background
In connection with the consummation of the transaction contemplated by
that Series 1 Convertible Note Purchase Agreement (the "Purchase Agreement") of
even date herewith by and among the Company and the Purchaser, the Company has
agreed, upon the terms and subject to the conditions of the Purchase Agreement,
to issue and sell to the Purchaser from time to time up to $300,000 principal
amount of Series 1 Convertible Notes which are convertible into Common Stock of
the Company (the "Purchaser Convertible Notes") together with Common Stock
Purchase Warrants (the "Purchaser Warrants"). The Purchaser Convertible Notes
and the Purchaser Warrants are hereinafter collectively referred to as the
"Purchaser Securities"). The Common Stock issuable upon conversion of the
Purchaser Convertible Notes is hereinafter referred to as the "Purchaser Common
Shares". The Common Stock issuable upon exercise of the Purchaser Warrants is
hereinafter referred to as the "Purchaser Warrant Shares". To induce Purchaser
to execute and deliver the Purchase Agreement, the Company has agreed to file a
SB-2 Registration Statement and have it declared Effective by the SEC no later
than May 31, 2001 (the "Effective Deadline"), covering the Purchaser Common
Shares and the Purchaser Warrant Shares under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the "1933 Act"), and applicable state securities laws.
Agreement
For and 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 Purchaser
hereby agree as follows:
Section 1. Definitions. As used in this Agreement, the following capitalized
terms are used with the meanings there after ascribed:
(a) ______ "Investor" means the Purchaser and any transferee or
assignee thereof to whom the Purchaser assigns its rights under this
Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9.
(b) ______ "Person" means a corporation, a limited liability company,
an association, a partnership, an organization, a business, an individual,
a governmental or political subdivision thereof, or a governmental agency.
(c) ______ "Register," ___ "registered," and "registration" refer to a
registration ___ effected by preparing and filing one or more Registration
Statements in compliance with the 1933 Act and pursuant to Rule 415 under
the 1933 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(s) by the United States
Securities and Exchange Commission (the "SEC").
(d) ______ "Registrable Securities" means the Purchaser Common Shares,
the Purchaser Warrant Shares and any shares of capital stock issued or
issuable with respect to the Purchaser Common Shares or Purchaser Warrant
Shares as a result of any stock split, stock dividend, recapitalization,
exchange, or similar event.
(e) "Registration Statement" means a registration statement of the
Company filed under the 1933 Act.
(f) ______ "Effective Deadline" means May 31, 2001 (such date), that
the Company will (use best efforts to) have had an SB-2 Registration
Statement declared Effective by the SEC on or before May 31, 2001. (g)
"Effective Date" means the day that the SB-2 Registration Statement is
declared Effective by the SEC.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Purchase Agreement.
Section 2. registration.
(a) ______ Mandatory Registration Rights. The Company shall prepare
and file with the SEC a Registration Statement or Registration Statements
(as is necessary) on Form S-3 or, if such form is unavailable for such a
registration, on such other form as is available for such a registration,
subject to the consent of each Purchaser and the provisions of Section
2(e), which consent will not be withheld, covering the resale the
Registrable Securities, or shall include such Registrable Securities in an
open Registration Statement of the Company. The Registration Statement(s)
shall state that, in accordance with Rule 416 promulgated under the 1933
Act, such Registration Statement(s) also covers such indeterminate number
of additional shares of Common Stock as may become issuable upon conversion
of the Purchased Convertible Notes or the exercise of the Purchaser
Warrants to prevent dilution resulting from stock splits, stock dividends,
or similar transactions. Such Registration Statement shall initially
register for resale at least 100% of the Purchaser Common Shares and the
Purchaser Warrant Shares, subject to adjustment as provided in Section 3(b)
hereof, and such registered shares of Common Stock shall be allocated among
the Investors pro rata based on the total number of Registrable Securities
issued or issuable as of each date that a Registration Statement, as
amended, relating to the resale of the Registrable Securities is declared
effective by the SEC. The Company shall (use best efforts to) have the
Registration Statement declared effective by the SEC by the Effective
Deadline. The Company shall permit the registration statement to become
effective within five (5) business days after receipt of a "no review"
notice from the SEC. Such Registration Statement shall be kept current and
effective for a period of twelve (12) months from the Effective Date.
(b) ______ Underwritten Offering. If any offering pursuant to a
Registration Statement pursuant to Section 2(a) involves an underwritten
offering, the Purchaser shall have the right to select one legal counsel
and an investment banker or bankers and manager or managers to administer
their interest in the offering, which investment banker or bankers or
manager or managers shall be reasonably satisfactory to the Company.
(c) ______ Piggy-Back Registrations. If at any time prior to the
expiration of the Registration Period (as hereinafter defined) the Company
proposes to file with the SEC a Registration Statement relating to an
offering for its own account or the account of others under the 1933 Act of
any of its securities (other than on Form S-4 or Form S-8 or their then
equivalents relating to 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) the Company
shall promptly send to each Investor who is entitled to registration rights
under this Section 2(c) written notice of the Company's intention to file a
Registration Statement and of such Investor's rights under this Section
2(c) and, if within twenty (20) days after receipt of such notice, such
Investor shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Registrable Securities such
Investor requests to be registered, subject to the priorities set forth in
Section 2(d) below. No right to registration of Registrable Securities
under this Section 2(c) shall be construed to limit any registration
required under Section 2(a) hereof. The obligations of the Company under
this Section 2(c) may be waived by Investors holding a majority of the
Registrable Securities. If an offering in connection with which an Investor
is entitled to registration under this Section 2(c) is an underwritten
offering, then each Investor whose Registrable Securities are included in
such Registration Statement shall, unless otherwise agreed by the Company,
offer and sell such Registrable Securities in an underwritten offering
using the same underwriter or underwriters and, subject to the provisions
of this Agreement, on the same terms and conditions as other shares of
Common Stock included in such underwritten offering.
(d) ______ Priority in Piggy-Back Registration Rights in connection
with Registrations for Company Account. If the registration referred to in
Section 2(c) is to be an underwritten public offering for the account of
the Company and the managing underwriter(s) advise the Company in writing,
that in their reasonable good faith opinion, marketing or other factors
dictate that a limitation on the number of shares of Common Stock which may
be included in the Registration Statement is necessary to facilitate and
not adversely affect the proposed offering, then the Company shall include
in such registration: (i) first, all securities the Company proposes to
sell for its own account, (ii) second, 100% of the shares of common stock
and the shares of common stock underlying the warrants of the Purchasers,
(iii) third, up to the full number of securities proposed to be registered
for the account of the holders of securities entitled to inclusion of their
securities in the Registration Statement by reason of demand registration
rights, and (iv) fourth, the securities requested to be registered by the
Investors and other holders of securities entitled to participate in the
registration, drawn from them pro rata based on the number each has
requested to be included in such registration. It is further agreed that
any and all shares in the "Green Shoe" shall first be obligated to the
Purchasers.
(e) ______ Eligibility for Form S-3. The Company represents, warrants
and covenants that it has filed and shall file all reports required to be
filed by the Company with the SEC in a timely manner so as to obtain and
maintain such eligibility for the use of Form S-3. In the event that Form
S-3 is not available for sale by the Investors of the Registrable
Securities, then (i) the Company, with the consent of each Investor
pursuant to Section 2(a), shall register the sale of the Registrable
Securities on another appropriate form, such as Form SB-2 and (ii) the
Company shall undertake to register the Registrable Securities on Form S-3
as soon as such form is available. If the Registration Statement is
declared Effective by the SEC, and such Registration Statement becomes
Stale or can no longer be used by the Purchasers, the Company will be held
liable to the Purchasers for Specific Performance.
Section 3. ________ Related Obligations. Whenever an Investor has requested that
any Registrable Securities be registered pursuant to Section 2(c) hereof, or at
such time as the Company is obligated to file a Registration Statement with the
SEC pursuant to Section 2(a) hereof, the Company will effect the registration of
the Registrable Securities in accordance with the intended method of disposition
thereof and, pursuant thereto, the Company shall have the following obligations:
(a) ______ The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the Registrable Securities for the
registration of Registrable Securities pursuant to Section 2(a) and use its
best efforts to cause such Registration Statement(s) relating to
Registrable Securities to become effective as soon as possible after such
filing and in any event by the Effective Deadline, and keep the
Registration Statement(s) effective pursuant to Rule 415 at all times until
the later of (i) the date as of which the Investors may sell all of the
Registrable Securities without restriction pursuant to Rule 144(k)
promulgated under the 1933 Act (or successor thereto) or (ii) the date on
which (A) the Investors shall have sold all the Registrable Securities and
(B) none of the Purchased Common Shares are outstanding, which Registration
Statement(s) (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.
(b) ______ The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement(s) and the prospectus(s) used in connection with the
Registration Statement(s), which prospectus(s) are to be filed pursuant to
Rule 424 promulgated under the 1933 Act, as may be necessary to keep the
Registration Statement(s) effective at all times during the Effective Date
period, and, during such period, comply with the provisions of the 1933 Act
with respect to the disposition of all Registrable Securities of the
Company covered by the Registration Statement(s) until such time as all of
such Registrable Securities shall 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(s). In the event the number of shares
available under a Registration Statement filed pursuant to this Agreement
is insufficient to cover all of the Registrable Securities, the Company
shall amend the Registration Statement, or file a new Registration
Statement (on the short form available therefor, if applicable), or both,
so as to cover all of the Registrable Securities, in each case, as soon as
practicable, but in any event within fifteen (15) days after the necessity
therefor arises. The Company shall cause such amendment and/or new
Registration Statement to become effective as soon as practicable following
the filing thereof. For purposes of the foregoing provision, the number of
shares available under a Registration Statement shall be deemed
"insufficient to cover all of the Registrable Securities" if at any time
the number of Registrable Securities issued or issuable upon sale and
delivery of the Purchased Common Shares and exercise of the Purchaser
Warrants is greater than the quotient determined by dividing (i) the number
of shares of Common Stock available for resale under such Registration
Statement by (ii) 1.0. For purposes of the calculation set forth in the
foregoing sentence, any restrictions on the exercise of the Purchaser
Warrants shall be disregarded and such calculation shall assume that the
Purchaser Warrants are exercised at the then current exercise price.
(c) ______ The Company shall furnish to each Investor whose
Registrable Securities are included in the Registration Statement(s) and
its legal counsel, without charge, (i) promptly after the same is prepared
and filed with the SEC at least one copy of the Registration Statement and
any amendment thereto, including financial statements and schedules, all
documents incorporated therein by reference, and all exhibits, the
prospectus (es) included in such Registration Statement(s) (including each
preliminary prospectus) and all correspondence by or on behalf of the
Company to the SEC or the staff of the SEC and all correspondence from the
SEC or the staff of the SEC to the Company or its representatives, related
to such Registration Statement(s), (ii) upon the effectiveness of any
Registration Statement, ten (10) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such
other number of copies as such Investor may reasonably request), and (iii)
such other documents, including any preliminary prospectus, as such
Investor may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such Investor.
(d) ______ The Company shall (i) register and qualify the Registrable
Securities covered by the Registration Statement(s) under such other
securities or "blue sky" laws of such jurisdictions in the United States as
any Investor reasonably requests, (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 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) hereof, (B) subject itself to general taxation in any such
jurisdiction, or (C) file a general consent to service of process in any
such jurisdiction. The Company shall promptly notify each Investor who
holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the
securities or "blue sky" laws of any jurisdiction in the United States or
its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.
(e) ______ In the event Investors who hold a majority of the
Registrable Securities being offered in the offering select underwriters
for the offering, the Company shall enter into and perform its obligations
under an underwriting agreement, in usual and customary form, including,
without limitation, customary indemnification and contribution obligations,
with the underwriters of such offering.
(f) ______ Immediately after becoming aware of such event, the Company
shall notify each Investor in writing of the happening of any event, of
which the Company has knowledge, as a result of which, the prospectus
included in a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omission 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
promptly prepare a supplement or amendment to the Registration Statement to
correct such untrue statement or omission, and deliver ten (10) copies of
such supplement or amendment to each Investor (or such other number of
copies as such Investor may reasonably request). The Company shall also
promptly notify each Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when
a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to each
Investor by facsimile on the same day of such effectiveness and by
overnight mail), (ii) of any request by the SEC for amendments or
supplements to a Registration Statement or related prospectus or related
information, and (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
(g) ______ The Company shall prevent the issuance of any stop order or
other suspension of effectiveness of a Registration Statement, or the
suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension immediately, and to
notify each Investor who holds Registrable Securities being sold (and, in
the event of an underwritten offering, the managing underwriters) of the
issuance of such order and the resolution thereof, or its receipt of actual
notice of the initiation, or threatened initiation of any proceeding for
such purpose.
(h) ______ The Company shall permit each Investor a single firm of
counsel or such other counsel as thereafter designated as selling
stockholders' counsel by the Investors who hold a majority of the
Registrable Securities being sold, to review and comment upon the
Registration Statement(s) and all amendments and supplements thereto at
least seven (7) days prior to their filing with the SEC, and not file any
document in a form to which such counsel reasonably objects. The Company
shall not submit a request for acceleration of the effectiveness of a
Registration Statement(s) or any amendment or supplement thereto without
the prior approval of such counsel, which consent shall not be unreasonably
withheld.
(i) ______ At the request of the Investors who hold a majority of the
Registrable Securities being sold, the Company shall furnish, on the date
that Registrable Securities are delivered to an underwriter, if any, for
sale in connection with the Registration Statement (i) if required by an
underwriter, a letter, dated such date, from the Company's independent
certified public accountants in form and substance as is customarily given
by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters, and (ii) an
opinion, dated as of such date, of counsel representing the Company for
purposes of such Registration Statement, in form, scope, and substance as
is customarily given in an underwritten public offering, addressed to the
underwriters and the Investors.
(j) ______ The Company shall make available for inspection by (i) any
Investor, (ii) any underwriter participating in any disposition pursuant to
a Registration Statement, (iii) one firm of attorneys and one firm of
accountants or other agents retained by the Investors, and (iv) one firm of
attorneys retained by all such underwriters (collectively, the
"Inspectors") all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the
"Records"), as shall be reasonably deemed necessary by each Inspector to
enable each Inspector to exercise its due diligence responsibility, and
cause the Company's officers, directors, and employees to supply all
information which any Inspector may reasonably request for purposes of such
due diligence provided however, that each Inspector shall hold in strict
confidence and shall not make any disclosure (except to an Investor) or use
of any Record or other information which the Company determines in good
faith to be confidential, and of which determination the Inspectors are so
notified, unless (A) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in any Registration Statement or is
otherwise required under the 1933 Act, (B) the release of such Records is
ordered pursuant to a final, non-appealable subpoena or order from a court
or government body of competent jurisdiction, or (C) the information in
such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement. Each Investor
agrees that it shall, upon learning that disclosure of such Records is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential.
(k) ______ The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company
unless (i) disclosure of such information is necessary to comply with
federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other final, non-appealable order from a court or
governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it shall,
upon learning that disclosure of such information concerning an Investor is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to such Investor and allow
such Investor, at the Investor's expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, such
information.
(l) ______ The Company shall either (i) cause all the Registrable ___
Securities covered by a Registration Statement to be listed on each
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, (ii) to secure designation and quotation of all the Registrable
Securities covered by the Registration Statement on the Nasdaq Small Cap
Market, (iii) if, despite the Company's best efforts to satisfy the
preceding clause (i) or (ii), the Company is unsuccessful in satisfying the
preceding clause (i) or (ii) to secure the inclusion for quotation on the
Nasdaq Small Cap Market for such Registrable Securities or, (iv) if,
despite the Company's best efforts to satisfy the preceding clause (iii),
the Company is unsuccessful in satisfying the preceding clause (iii), to
secure the inclusion for quotation on the over-the-counter market for such
Registrable Securities, and, without limiting the generality of the
foregoing, in the case of clause (iii) or (iv), 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.
The Company shall pay all fees and expenses in connection with satisfying
its obligation under this Section 3(1).
(m) ______ The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, any managing underwriter or
underwriters, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration Statement
and enable such certificates to be in such denominations or amounts, as the
case may be, as the managing underwriter or underwriters, if any, or, if
there is no managing underwriter or underwriters, the Investors may request
and registered in such names as the managing underwriter or underwriters,
if any, or the Investors may request. Not later than the date on which any
Registration Statement registering the resale of Registrable Securities is
declared effective, the Company shall deliver to its transfer agent
instructions, accompanied by any reasonably required opinion of counsel,
that permit sales of unlegended securities in a timely fashion that
complies with then mandated securities settlement procedures for regular
way market transactions.
(n) ______ The Company shall take all other actions necessary to
expedite and facilitate disposition by the Investors of Registrable
Securities pursuant to a Registration Statement.
(o) ______ The Company shall provide a transfer agent and registrar of
all such Registrable Securities not later than the effective date of such
Registration Statement.
(p) ______ If requested by the managing underwriters or an Investor,
the Company shall immediately incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters and
the Investors agree should be included therein relating to the sale and
distribution of Registrable Securities, ___ including, without limitation,
___ information with respect to the number of Registrable Securities being
sold to such underwriters, the purchase price being paid therefor by such
underwriters, and with respect to any other terms of the underwritten (or
best efforts underwritten) offering of the Registrable Securities to be
sold in such offering; make all required filings of such prospectus
supplement or post-effective amendment as soon as notified of the matters
to be incorporated in such prospectus supplement or post-effective ___
amendment; and supplement or make amendments to any Registration Statement
if requested by a shareholder or any underwriter of such Registrable
Securities.
(q) ______ The Company shall cause the Registrable Securities covered
by the applicable Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary to
consummate the disposition of such Registrable Securities.
(r) ______ The Company shall otherwise comply with all applicable
rules and regulations of the SEC in connection with any registration
hereunder.
Section 4. Obligations of the Investors.
(a) ______ At least seven (7) days prior to the first anticipated
filing date of the Registration Statement, the Company shall notify each
Investor in writing of the information the Company requires from each such
Investor if such Investor elects to have any of such Investor's Registrable
Securities included in the Registration Statement. 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.
(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(s) 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.
(c) ______ In the event Investors holding a majority of the
Registrable Securities being registered determine to engage the services of
an underwriter, each Investor agrees to enter into and perform such
Investor's obligations under an underwriting agreement, in usual and
customary form, including, without limitation, customary indemnification
and contribution obligations, with the managing underwriter of such
offering and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of the Registrable Securities,
unless such Investor notifies the Company in writing of such Investor's
election to exclude all of such Investor's Registrable Securities from the
Registration Statement(s).
(d) ______ 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(g) or the first sentence of 3(f), such Investor will immediately
discontinue disposition of Registrable Securities pursuant to the
Registration Statement(s) covering such Registrable Securities until such
Investor's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(g) or the first sentence of 3(f) and, if so
directed by the Company, such Investor shall deliver to the Company (at the
expense of the Company) or destroy all copies in such Investor's
possession, of the prospectus covering such Registrable Securities current
at the time of receipt of such notice. If the Registration Statement become
Stale, the Company will be liable to the Purchasers for Specific
Performance.
(e) ______ No Investor may participate in any underwritten
registration hereunder unless such Investor (i) agrees to sell such
Investor's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Investors entitled hereunder to approve such
arrangements, (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, and other documents
reasonably required under the terms of such underwriting arrangements
approved by the Investors entitled hereunder to approve such arrangements.
Section 5. ________ expenses of ___ registration. ___ All expenses, ___ other
than ___ underwriting ___ discounts and commissions, incurred in connection with
registrations, filings, or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and printing fees, accounting fees, and fees and disbursements of
counsel for the Company and the Purchasers shall be borne by the Company.
Section 6. Indemnification. In the event any Registrable Securities are included
in a Registration Statement under this Agreement:
(a) ______ To the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless, and defend each Investor who
holds such Registrable Securities, the directors, officers, partners,
employees, agents, and each Person, if any, who controls any Investor
within the meaning of the 1933 Act or the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and any underwriter (as defined in the ▇▇▇▇
▇▇▇) for the Investors, and the directors and officers of, and each Person,
if any, who controls, any such underwriter within the meaning of the 1933
Act or the 1934 Act (each, an "Indemnified Person"), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
attorneys' fees, amounts paid in settlement or expenses, joint or several,
(collectively, "Claims") incurred in investigating, ___ preparing, or
defending any action, claim, suit, inquiry, ___ proceeding, investigation,
or appeal taken from the foregoing by or before any court or governmental,
administrative, or other regulatory agency, body or the SEC, whether
pending or threatened, whether or not an indemnified party is or may be a
party thereto ("Indemnified Damages"), to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material
fact in a Registration Statement or any post-effective amendment thereto or
in any filing made in connection with the qualification of the offering
under the securities or other "blue sky" laws of any jurisdiction in which
Registrable Securities are offered ("Blue Sky Filing"), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which the statements therein were made, 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 1933 Act, the 1934 Act, any other law, including, without limitation,
any state securities law, or any rule or regulation thereunder relating to
the offer or sale of the Registrable Securities pursuant to a Registration
Statement (the matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations"). Subject to the restrictions set forth in
Section 6(d) with respect to the number of legal counsel, the Company shall
reimburse the Investors and each such underwriter or controlling person,
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): (i) shall not 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 any Indemnified Person or
underwriter for such 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(c); (ii) with respect to any
preliminary prospectus, shall not 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 mission 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(c), and the Indemnified
Person was promptly advised in writing not to use the incorrect prospectus
prior to the use giving rise to a violation and such Indemnified Person,
notwithstanding such advice, used (iii) shall not be available to the
extent such Claim is based on a failure of the Investor to deliver or to
cause to be delivered the prospectus made available by the Company, and
(iv) shall not 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. 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) _____ The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers, and similar securities
industry professionals participating in any distribution, to the same
extent as provided above, with respect to information such persons so
furnished in writing expressly for inclusion in the Registration Statement.
(c) ______ Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding)
involving a Claim 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. The Company shall pay reasonable fees for only one separate
legal counsel for the Investors, and 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 Indemnified Party or Indemnified Person shall cooperate fully
with the indemnifying party in connection with any negotiation or defense
of any such action or claim by the indemnifying party and shall furnish to
the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or
claim. The indemnifying party shall keep the Indemnified Party or
Indemnified Person fully apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim
or proceeding effected without its written consent, provided however, that
the indemnifying party shall not unreasonably withhold, delay or condition
its consent. No indemnifying party shall, without the consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment
or enter into any settlement or other compromise which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party or Indemnified Person of a release from all
liability in respect to such claim or litigation. Following ___
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person
with respect to all third parties, firms, or corporations relating to the
matter for which indemnification has been made. 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.
(d) ______ 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 and when bills are received or Indemnified
Damages are incurred.
(e) ______ The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified
Party or Indemnified Person against the indemnifying party or others, and
(ii) any liabilities the indemnifying party may be subject to pursuant to
the law.
Section 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: (i) 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; (ii) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any seller of
Registrable Securities who was not guilty of fraudulent misrepresentation, and
(iii) 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.
Section 8. ________ reports under the 1934 act. With a view to making available
to the Investors the benefits of Rule 144 promulgated under the 1933 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 all reports and other documents required
of the Company under the 1933 Act and the 1934 Act so long as the Company
remains subject to such requirements (it being understood that nothing
herein shall limit the Company's obligations under Section 4.3 of the
Purchase Agreement) and the filing of such reports and other documents is
required for the applicable provisions of Rule 144; and
(c) ______ furnish to each Investor so long as such Investor owns
Registrable Securities, promptly (i) a written statement by the Company
that it has complied with the reporting requirements of Rule 144, the 1933
Act, and the 1934 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.
Section 9. ________ assignment of registration rights. The rights to have the
Company register Registrable Securities pursuant to this Agreement shall be
automatically assignable by the Investors to any transferee of all or any
portion of Registrable Securities if: (i) 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; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (A) the name and address of such transferee or
assignee, and (B) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities laws;
(iv) at or before the time the Company receives the written notice contemplated
by clause (ii) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein; (v) such
transfer shall have been made in accordance with the applicable requirements of
the Purchase Agreement; (vi) such transferee shall be an "accredited investor"
as that term is defined in Rule 501 of Regulation D promulgated under the 1933
Act; and (vii) in the event the assignment occurs subsequent to the date of
effectiveness of the Registration Statement required to be filed pursuant to
Section 2(a), the transferee agrees to pay all reasonable expenses of amending
or supplementing such Registration Statement to reflect such assignment.
Section 10. _______ amendment of registration rights. Provisions 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 two-thirds of the Registrable Securities. Any amendment or waiver effected
in accordance with this Section 10 shall be binding upon each Investor and the
Company.
Section 11. Penalty for Failure to Register the Conversion Shares and Warrant
Shares.
(a) In the event the Company fails to timely Effect a Registration
Statement on or prior to the Effective Deadline, and have the Registration
declared effective by the SEC by the Effective Deadline, Purchaser shall be
entitled to additional shares of restricted common stock of the Company
amounting to ten percent (10%) of the total number of shares to which the
Purchaser Convertible Notes and Purchaser Warrants may be converted (the
"Penalty Shares"), and an additional to ten percent (10%) of the total
number of shares to which the Purchaser Convertible Notes and Purchaser
Warrants may be converted (the "Penalty Shares"), each and every thirty
days (30) thereafter of the Purchaser Convertible Notes, Purchaser
Warrants, and Penalty Shares already received, that may be converted
thereafter until all such shares have been fully registered by the Company.
Simultaneously with the execution and delivery of this Agreement, the
Company shall deposit with the Company's counsel in connection with the
purchase of the Purchaser Securities, specific transfer agent instructions
and the Corporate Resolutions authorizing and instructing the immediate
issuance of the Penalty Shares. In the event the Company fails to achieve
registration of the Purchaser Securities by the Effective Deadline, the
Company's counsel shall immediately release and forward the escrowed
transfer agent instructions and authorizing Corporate Resolution of
American Millennium to the transfer agent for the issuance of the Penalty
Shares to Purchaser. The purpose of the escrow of the transfer agent
instructions and Corporate Resolutions authorizing the Penalty Shares is to
secure the commitment of the Company under this Registration Rights
Agreement to cause a Registration Statement covering the Purchaser
Securities by the Effective Deadline.
(b) ______ . It is acknowledged by the Purchaser that the Penalty
Shares will be "restricted securities" as such term is defined in Section
1(a) of Rule 144 promulgated by the Securities and Exchange Commission and
it is agreed that they will have the same status as the Purchaser
Securities. The Company agrees that in the event that such shares are
distributed to the Purchaser, they shall be registered pursuant to this
Registration Rights Agreement in accordance with all of its provisions
(assuming that the Effective Deadline has not been met). They shall be
treated for all purposes as Conversion Shares and Warrant Shares and shall
be owned free and clear by the Purchasers to whom they are issued.
Section 12. _______ Cashless Exercise. The Company will have the all
shares of common stock underlying the warrants registered under the
Securities Act of 1933, as amended. The warrant holder, whether the
undersigned or otherwise, in lieu of any cash payment required hereunder,
shall have the right to exercise the warrants in whole or in part by
surrendering the warrants in exchange for the number of shares of the
Company's common stock equal to (x) the number of shares as to which the
warrants are being exercised multiplied by (y) a fraction, the numerator of
which is the Market Price (as defined below) of the common stock less the
exercise price of the warrants being exercised, and the denominator of
which is such Market Price. The term "Market Price" means the closing ask
price per share of the common stock on the principal stock exchange or
market on which the common stock is then quoted or traded on the day
preceding the date on which written notice of election to exercise the
warrants has been given to the Company (a "cashless exercise"). If the
warrant holder opts for a cashless exercise of the warrants, no other
consideration shall be paid to the Company, other than surrendering the
warrant itself, nor will there be paid any commission or other remuneration
to any other person or entity by the warrant holder. In the event that the
warrant holder is not permitted to "tack" the holding period of the
warrants to the holding period of the common stock received upon the
cashless exercise for purposes of satisfaction of the holding period
requirements of Rules 144(d)(3)(ii) and 144(k) under the Securities Act of
1933, as amended, for whatever reason and there is no presently filed
registration statement effective as to the shares received or to be
received through the cashless exercise of this Warrant, the Company shall,
upon receipt of the written request of the warrant holder, immediately file
a registration statement with the U.S. Securities and Exchange Commission
with respect to all of the shares underlying this warrants.
Section 13. 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) ______ Any notices consents, waivers, or other communications
required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile, provided a
copy is mailed by U.S. certified mail, return receipt requested; (iii)
three (3) days after being sent by U.S. certified mall, return receipt
requested, or (iv) one (1) day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
American Millennium Corporation, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and
Chief Executive Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Purchaser, to its address and facsimile number on the Schedule of
Purchasers, with copies to such Purchaser's counsel as set forth on the Schedule
of Purchasers. Each party shall provide five (5) days prior written notice to
the other party of any change in address or facsimile number.
(c) ______ Failure of any party to exercise any right or remedy under
this Agreement or otherwise, delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) ______ This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Louisiana. If any provision of
this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or
the validity or enforceability of any provision of this Agreement in any
other jurisdiction.
(e) ______ This Agreement and the Purchase Agreement constitute the
entire agreement among the parties hereto with respect to the subject
matter hereof and thereof. There are no restrictions, promises, warranties,
or undertakings, other than those set forth or referred to herein and
therein. 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, this Agreement
shall inure to the benefit and of and be binding upon the permitted
successors and assigns of each of the parties hereto.
(g) ______ The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) ______ This Agreement may be executed in two or more identical
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 facsimile
transmission of a copy of this Agreement bearing the signature of the party
so delivering this Agreement.
(i) ______ Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments, and documents, as the
other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
company signature page
to
registration rights agreement
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY:
AMERICAN MILLENNIUM CORPORATION, INC.
By:
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and
Chief Executive Officer
[Purchasers Signature on Following Pages]
purchaser signature page
to
registration rights agreement
Purchase agreement
PURCHASER
Options Unlimited
By:
---------------------------------------
===================================== =========================================
Purchaser Name Options Unlimited
("Purchaser")
Address and Alpha & Omega Law ▇▇▇▇▇▇▇▇
Facsimile Number
Atlantis Building, Shallow Draught
Bridgetown, Barbados
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Securities Purchased Convertible Note
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Purchase Price $300,000
===================================== =========================================
