EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement"), is made and entered into as of
the 18th day of April, 2001, by and among AMERICAN MILLENNIUM CORPORATION, INC.,
a New Mexico corporation (the "Company"), and Xxxxxx X. Xxxxxxxxx, Xx. (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 0000 Xxx) 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 0000 Xxx) 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 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.
0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
[Purchasers Signature on Following Pages]
purchaser signature page
to
registration rights agreement
Purchase agreement
PURCHASER
Xxxxxx X. Schoemenn, Sr.
By: /s/ Xxxxxx X. Schoemenn, Sr.
--------------------------------------
===================================== =========================================
Purchaser Name Xxxxxx X. Schoemenn, Sr.
("Purchaser")
Address and 0000 Xxxxx Xxxxx, Xxxxxxxx, XX 00000
Facsimile Number
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Securities Purchased Convertible Note
------------------------------------- -----------------------------------------
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Purchase Price $300,000
===================================== =========================================
