EXHIBIT 10.16
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of June 28, 2006, by and between AMS Health Sciences, Inc., an Oklahoma
corporation (the "Company"), and Laurus Master Fund, Ltd. (the "Purchaser").
This Agreement is made pursuant to the Securities Purchase Agreement, dated
as of the date hereof, by and between the Purchaser and the Company (as amended,
modified or supplemented from time to time, the "Securities Purchase
Agreement"), and pursuant to the Note 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 Securities Purchase Agreement shall have the meanings
given such terms in the Securities Purchase 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
$0.0001 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 eighty (180) 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 (i) the Registration Statement
required to be filed hereunder in respect of the shares of Common Stock issuable
upon conversion of the Note, a date no later than sixty (60) days following the
date hereof, (ii) the shares of Common Stock issuable upon exercise of any
Warrant, the date which is thirty (30) days after the date of the issuance of
such Warrant, and (iii) the shares of Common Stock issuable to the Holder as a
result of adjustments to the Fixed Conversion Price or Exercise Price, as the
case may be, made pursuant to the Note or the Warrant or otherwise, thirty (30)
days after the occurrence such event or the date of the adjustment of the Fixed
Conversion Price or Exercise Price, as the case may be.
"Holder" or "Holders" means the Purchaser or any of its affiliates or
transferees to the extent any of them hold Registrable Securities, other than
those purchasing Registrable Securities in a market transaction.
"Indemnified Party" has the meaning set forth in Section 5(c).
"Indemnifying Party" has the meaning set forth in Section 5(c).
"Note" has the meaning set forth in the Securities Purchase Agreement.
"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 the 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 Rules 430A, 430B or 430C 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 the 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 issued upon
the conversion of the Note and issuable upon exercise of 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.
"Securities Purchase Agreement" has the meaning given to such term in
the Preamble hereto.
"Trading Market" means any of the NASD Over The Counter Bulletin
Board, NASDAQ Capital Market, the NASDAQ National Markets System, the American
Stock Exchange or the New York Stock Exchange.
"Warrants" means the Common Stock purchase warrants issued in
connection with the Securities Purchase Agreement, whether on the date hereof or
thereafter.
2. Registration.
(a) On or prior to the 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. The 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 best 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 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, 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
(the "Effectiveness Period").
(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(b) 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 the 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 the 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 the
Registration Statement;
(d) use its best 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
(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, 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 the Purchaser, and its officers, directors and each other
person, if any, who controls the Purchaser within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which the Purchaser, 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 the Purchaser, 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.
(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.
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 4.21 to the Securities
Purchase Agreement, 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-KSB for its fiscal year ended December 31, 2005 and (ii)
its Quarterly Report on Form 10-QSB for the fiscal quarter ended March 31,
2006 (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) Except otherwise set forth in the Company's SEC reports and on
Schedule 6(b), the Common Stock is listed for trading on the American Stock
Exchange and satisfies all requirements for the continuation of such
listing, and the Company shall do all things necessary for the continuation
of such listing. Except as set forth on Schedule 6(b), the Company has not
received any notice that its Common Stock will be delisted from the
American Stock Exchange (except for prior notices which have been fully
remedied) or that the Common Stock dos not meet all requirements for the
continuation of such listing.
(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 Securities Purchase 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 Securities to
be integrated with other offerings.
(d) The Warrants, the Note and the shares of Common Stock which the
Purchaser may acquire pursuant to the 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 Warrant
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 the
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
specified in 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 or entity that have not been
fully satisfied.
(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 the 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 Agreement, 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 after the date hereof
there is not an effective Registration Statement covering all of the
Registrable Securities required to be covered hereunder 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 or exchange offer, 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.
(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 the Company: AMS Health Sciences, Inc.
000 XX00xx
Xxxxxxxx Xxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
McAfee & Xxxx
00xx Xxxxx, 0 Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxxxxxx
Facsimile: (000) 000-0000
If to a Purchaser: To the address set forth under such Purchaser
name on the signature pages hereto.
If to any other Person To the address of such Holder as it appears in
who is then the the stock transfer books of the Company
registered Holder:
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 and entities as permitted under
the Note and the Securities Purchase Agreement.
(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 Securities
Purchase Agreement or any other Related 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.
(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]
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
AMS HEALTH SCIENCES, INC. LAURUS MASTER FUND, LTD.
By: /s/Xxxxx X. Xxxxxxx By: /s/Xxxxx Grin
Name: Xxxxx x. Xxxxxxx Name: Xxxxx Grin
Title: Chairman, President & CEO Title: Director
Address for Notices:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Grin
Facsimile: 000-000-0000
EXHIBIT A
June __, 2006]
UMB Bank, n.a.
Securities Transfer Division
000 Xxxxx Xxxx. 0xx Xxxxx
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxxxx
Re: AMS Health Sciences, Inc.Registration Statement on Form S-3
Ladies and Gentlemen:
As counsel to AMS Health Sciences, Inc., an Oklahoma 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,
Xxxxx Xxxxxxxxxxx, Esq.
Schedule A to Exhibit A
Shares
Selling Stockholder Being Offered
------------------- -------------
Laurus Master Fund, Ltd.
Ascendiant Securities, LLC
Ascendiant Capital Group, LLC 250,000
Schedule 6(b)
The Company received a letter from the American Stock Exchange ("AMEX") on
January 12, 2006 giving the Company notice that it did not currently meet the
AMEX's continued listing standards as set forth in Part 10 of the AMEX Company
Guide (the "Company Guide"). Specifically, the Company is not in compliance with
Section 1003(a)(ii) of the Company Guide, which provides that AMEX will consider
suspending or delisting securities of a company that has shareholders' equity of
less than $4,000,000 and has losses from continuing operations and/or net losses
in three out of its four most recent fiscal years. The Company's shareholders'
equity as reported on its Form 10-KSB for the year ended December 31, 2005 was
$2,519,389 and the Company recorded net losses for the 2005, 2004 and 2003
fiscal years.
The Company was required to submit a plan to AMEX to regain compliance with
AMEX's continued listing standards (the "Plan"), which it did on February 13,
2006.
On March 31, 2006, the Company received a letter from the AMEX notifying the
Company that the AMEX has determined that the Company has made a reasonable
demonstration of its ability to regain compliance with AMEX's continued listing
standards by the end of the Plan period, which the AMEX set at July 12, 2007.
During the Plan period, the AMEX will continue the listing of the Company. The
Company is required to provide the AMEX with updates in conjunction with the
Plan as appropriate, but in any event, no later than at each quarter, with the
Company's filing of its Forms 10-QSB with the Securities and Exchange
Commission. Additionally, the AMEX staff will review the Company's operations
periodically for compliance with the Plan. If the Company is not making progress
consistent with the Plan, the AMEX staff will review the circumstances and may
immediately commence delisting proceedings, if necessary.
At the end of the Plan period, July 12, 2007, the Company must be in compliance
with all of the AMEX continued listing standards or the AMEX staff will most
likely initiate delisting proceedings against the Company.
Schedule 7(b)
Pursuant to the terms of the Company's Engagement Agreement with Ascendiant
Securities, LLC dated March 15, 2006, the Company will issue warrants, the
shares equal to 8% of the securities issuable in connection with this financing
transaction. The shares underlying the warrants and 250,000 shares of restricted
shares due to Ascendiant upon the completion of this transaction contain
piggyback registration rights.
