REGISTRATION RIGHTS AGREEMENT
DATED AS OF OCTOBER 11, 2002
BETWEEN
AMERICAN MILLENNIUM CORPORATION, INC.
AND
LISEN LLC
(Purchaser of Series A Preferred Stock)
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is entered into
as of this 11th day of October, 2002, between American Millennium Corporation,
Inc., a New Mexico corporation (the "Company"), and LISEN LLC (the "Purchaser").
WHEREAS, the Purchaser intends to purchase shares of Preferred Stock,
par value $0.001, of the Company pursuant to the terms and conditions of a
Preferred Stock Purchase Agreement dated as of October 11, 2002 (the "Purchase
Agreement"); and
WHEREAS, the Purchase Agreement requires that the Company enter into
this Agreement with the Purchaser;
NOW, THEREFORE, in consideration of the foregoing, the parties to this
Agreement hereby agree as follows:
1. DEMAND REGISTRATION. If, (i) at any time after October 11, 2005, or
(ii) prior to October 11, 2005 in the event of a CHANGE OF CONTROL or INSOLVENCY
PROCEEDINGS as those terms are defined in the Purchase Agreement, the Purchaser
shall request the Company in writing to register under the Securities Act of
1933, as amended (the "SECURITIES ACT"), any shares of the Common Stock, par
value $0.001, of the Company (the "COMMON STOCK") issuable upon conversion of
the Series A Non-Voting Convertible Preferred Stock, par value $0.001 (the
"PREFERRED STOCK") and, if required by the Securities and Exchange Commission
(the "SEC"), the shares of Preferred Stock owned by the Purchaser (the shares of
Common Stock and, if applicable, Preferred Stock subject to such request being
herein referred to as the "SUBJECT STOCK"), the Company shall use its reasonable
best efforts to cause the shares of Subject Stock specified in such request to
be registered as soon as reasonably practicable so as to permit the sale
thereof, and in connection therewith shall prepare and file a Form S-3
registration statement or such other form as is then available (or any successor
form of registration statement to such Form S-3 or other available registration
statement) with the SEC under the Securities Act to effect such registration;
PROVIDED, HOWEVER, that each such request shall (i) specify the number of shares
of Subject Stock intended to be offered and sold, (ii) express the present
intention of the Purchaser to offer or cause the offering of such shares of
Subject Stock for distribution, (iii) describe the nature or method of the
proposed offer and sale thereof, and (iv) contain the undertaking of the
Purchaser to provide all such information and materials and take all such action
as may be required in order to permit the Company to comply with all applicable
requirements of the SEC and to obtain any desired acceleration of the effective
date of such registration statement. The Purchaser shall not be entitled to
request more than one demand registration statement under this Agreement in any
twelve-month period, and the Purchaser shall not be entitled to more than a
total of two requests for demand registration statements pursuant to this
Agreement.
2. OBLIGATIONS OF THE COMPANY.
(a) Whenever the Company is required by the provisions of this
Agreement to use its reasonable best efforts to effect the registration
of any Common Stock under the Securities Act, the Company shall (i)
prepare and, as soon as reasonably possible, file with the SEC a
registration statement with respect to the shares of Subject Stock, and
shall use its reasonable best efforts to cause such registration
statement to become effective and to remain effective until the earlier
of the sale of the shares of Subject Stock so registered or ninety (90)
days subsequent to the effective date of such registration; (ii)
prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith
as may be reasonably necessary to make and to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all securities
proposed to be registered pursuant to such registration statement until
the earlier of the sale of the shares of Subject Stock so registered or
90 days subsequent to the effective date of such registration
statement; and (iii) take all such other action either necessary or
desirable to permit the shares of Subject Stock held by the Purchaser
to be registered and disposed of in accordance with the method of
disposition described herein.
(b) Notwithstanding the foregoing, if the Company shall
furnish to the Purchaser a certificate signed by its Chairman, Chief
Executive Officer or Chief Financial Officer stating that (i) filing a
registration statement or maintaining effectiveness of a current
registration statement would have a material adverse effect on the
Company or its stockholders in relation to any material financing,
acquisition or other corporate transaction, and the Company has
determined in good faith that such disclosure is not in the best
interests of the Company and its shareholders, or (ii) the Company has
determined in good faith that the filing or maintaining effectiveness
of a current registration statement would require disclosure of
material information the Company has a valid business purpose of
retaining as confidential, the Company shall be entitled to postpone
filing or suspend the use by the Purchaser of the registration
statement, as the case may be, for a reasonable period of time, but not
in excess of an aggregate of ninety (90) calendar days in any three
hundred and sixty (360) day period. If the Company furnishes a notice
under this paragraph, the Company shall extend the period during which
such registration statement shall be maintained effective as provided
in Section 2(a) hereof by the number of days during the period from and
including the date of the giving of notice under this paragraph to the
date when sales under the registration statement may recommence.
(c) In connection with any registration statement, the
following provisions shall apply:
(1) The Company shall furnish to the Purchaser, prior
to the filing thereof with the SEC, a copy of any registration
statement, and each amendment thereof and each amendment or
supplement, if any, to the prospectus included therein and
shall use its reasonable best efforts to reflect in each such
document, when so filed with the SEC, such comments as the
Purchaser and its counsel reasonably may propose.
(2) The Company shall take such action as may be
necessary so that (i) any registration statement and any
amendment thereto and any prospectus forming part thereof and
any amendment or supplement thereto (and each report or other
document incorporated therein by reference) complies in all
material respects with the Securities Act and the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") and the
respective rules and regulations thereunder, (ii) any
registration statement and any amendment thereto does not,
when it becomes effective, contain an 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 not
misleading and (iii) any prospectus forming part of any
registration statement, and any amendment or supplement to
such prospectus, does not include an untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(3) (A) The Company shall advise the Purchaser and,
if requested by the Purchaser, confirm such advice in writing:
(i) when a registration statement
and any amendment thereto has been filed
with the SEC and when the registration
statement or any post-effective amendment
thereto has become effective; and
(ii) of any request by the SEC for
amendments or supplements to the
registration statement or the prospectus
included therein or for additional
information.
(iii) the issuance by the SEC of any
stop order suspending effectiveness of the
registration statement 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 of the
securities included therein for sale in any
jurisdiction or the initiation of any
proceeding for such purpose; and
(v) the happening of any event that
requires the making of any changes in the
registration statement or the prospectus.
(4) The Company shall use its reasonable best efforts
to prevent the issuance, and if issued to obtain the
withdrawal, of any order suspending the effectiveness of the
registration statement relating to the Subject Stock at the
earliest possible time.
(5) The Company shall furnish to Purchaser with
respect to the registration statement relating to the Subject
Stock, without charge, at least one copy of such registration
statement and any post-effective amendment thereto, including
financial statements and schedules, and all reports, other
documents and exhibits (including those incorporated by
reference).
(6) The Company shall furnish to the Purchaser such
number of copies of any prospectus (including any preliminary
prospectus and any amended or supplemented prospectus)
relating to the Subject Stock, in conformity with the
requirements of the Securities Act, as the Purchaser may
reasonably request in order to effect the offering and sale of
the shares of Subject Stock to be offered and sold, but only
while the Company shall be required under the provisions
hereof to cause the registration statement to remain current,
and the Company consents (except during the continuance of any
event described in Sections 2(b) or 2(c)(3)(B)(iii)) to the
use of the Prospectus or any amendment or supplement thereto
by the Purchaser in connection with the offering and sale of
the Subject Stock covered by the Prospectus or any amendment
or supplement thereto.
(7) Prior to any offering of Subject Stock pursuant
to any registration statement, the Company shall use its
reasonable best efforts to register or qualify the shares of
Subject Stock covered by such registration statement under the
securities or blue sky laws of such states as the Purchaser
shall reasonably request, maintain any such registration or
qualification current until the earlier of the sale of the
shares of Subject Stock so registered or 90 days subsequent to
the effective date of the registration statement, and do any
and all other acts and things either reasonably necessary or
advisable to enable the Purchaser to consummate the public
sale or other disposition of the shares of Subject Stock in
jurisdictions where the Purchaser desires to effect such sales
or other disposition; provided, however, that the Company
shall not be required to take any action that would subject it
to the general jurisdiction of the courts of any jurisdiction
in which it is not so subject or to qualify as a foreign
corporation in any jurisdiction where the Company is not so
qualified.
(8) In connection with any offering of shares of
Subject Stock registered pursuant to this Agreement, the
Company shall (i) furnish the Purchaser, at the Company's
expense, on a timely basis with certificates free of any
restrictive legends representing ownership of the shares of
Subject Stock being sold in such denominations and registered
in such names as the Purchaser shall request and (ii) instruct
the transfer agent and registrar of the Subject Stock to
release any stop transfer orders with respect to the shares of
Subject Stock being sold.
(9) Upon the occurrence of any event that requires
the making of any changes in the registration statement or the
prospectus, the Company shall promptly prepare a
post-effective amendment to any registration statement or an
amendment or supplement to the related prospectus or file any
other required document so that, as thereafter delivered to
purchasers of the Subject Stock included therein, the
prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. If the Company notifies
Purchaser of the occurrence of any such event, Purchaser shall
suspend the use of the prospectus until the requisite changes
to the prospectus have been made.
(10) The Company shall make generally available to
its security holders or otherwise provide in accordance with
Section 11(a) of the Securities Act as soon as practicable
after the effective date of the applicable registration
statement, an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act.
(11) The Company shall, if requested, promptly
include or incorporate in a prospectus supplement or
post-effective amendment to a registration statement, such
information as the Purchaser reasonably requests to be
included therein and to which the Company does not reasonably
object and shall make all required filings of such prospectus
supplement or post-effective amendment as soon as practicable
after they are notified of the matters to be included or
incorporated in such prospectus supplement or post-effective
amendment.
(12) The Company will use its best efforts to cause
the Subject Stock to be admitted for quotation on the National
Quotation Bureau, Inc., or the OTC Bulletin Board, or the
Nasdaq National Market or other stock exchange or trading
system on which the Common Stock primarily trades on or prior
to the effective date of any registration statement hereunder.
(d) With a view to making available the benefits of certain
rules and regulations of the SEC that may at any time permit the sale
of the Subject Stock to the public without registration, the Company
agrees to:
(e) Make and keep public information available, as those terms
are understood and defined in Rule 144 (or any successor provision)
under the Securities Act, at all times;
(f) During the term of this Agreement, to furnish to the
Purchaser upon request (i) a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, (ii) a copy of
the most recent annual or quarterly report of the Company, and (iii)
such other reports and documents of the Company as the Purchaser may
reasonably request in availing itself of any rule or regulation of the
SEC allowing the Purchaser to sell any such securities without
registration.
3. EXPENSES. The Company shall pay all fees and expenses incurred in
connection with the performance of its obligations under Sections 1 and 2
hereof, including, without limitation, all SEC and blue sky registration and
filing fees, printing expenses, transfer agents' and registrars' fees, and the
reasonable fees and disbursements of the Company's outside counsel and
independent accountants incurred in connection with the preparation, filing and
amendment of any registration statement authorized by this Agreement (but
excluding underwriters' and brokers' discounts and commissions).
4. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. In the case of any
offering registered pursuant to this Agreement, the Company agrees to
indemnify and hold the Purchaser and each person who controls any of
the foregoing within the meaning of Section 15 of the Securities Act
harmless against any and all losses, claims, damages or liabilities to
which they or any of them may become subject under the Securities Act
or any other statute or common law or otherwise, and to reimburse them,
from time to time upon request, for any legal or other expenses
incurred by them in connection with investigating any claims and
defending any actions, insofar as any such losses, claims, damages,
liabilities or actions shall arise out of or shall be based upon (i)
any untrue statement of a material fact contained in the registration
statement (or any amendment thereto) relating to the sale of such
shares of Subject Stock, including all documents incorporated therein
by reference, or the omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or (ii) any untrue statement of a material fact contained
in any preliminary prospectus (as amended or supplemented by a filing
with the SEC), if used prior to the effective date of such registration
statement or contained in the prospectus (as amended or supplemented if
the Company shall have filed with the SEC any amendment thereof or
supplement thereto), if used within the period during which the Company
shall be required to keep the registration statement to which such
prospectus relates current pursuant to the terms of this Agreement, or
the omission to state therein (if so used) a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; PROVIDED, HOWEVER, that the
indemnification agreement contained in this Section 4(a) shall not
apply to such losses, claims, damages, liabilities or actions which
shall arise from the sale of shares of Subject Stock to any person if
such losses, claims, damages, liabilities or actions shall arise out of
or shall be based upon any such untrue statement or any such omission,
if such statement or omission shall have been (i) made in reliance upon
and in conformity with information furnished in writing to the Company
by the Purchaser or any such underwriter specifically for use in
connection with the preparation of the registration statement or any
preliminary prospectus or prospectus contained in the registration
statement or any such amendment thereof or supplement thereto, or (ii)
made in any preliminary prospectus, and the prospectus contained in the
registration statement as declared effective or in the form filed by
the Company with the SEC pursuant to Rule 424 under the Securities Act
shall have corrected such statement or omission and a copy of such
prospectus shall not have been sent or given to such person at or prior
to the confirmation of such sale to him.
(b) INDEMNIFICATION BY THE PURCHASER. In the case of each
offering registered pursuant to this Agreement, the Purchaser agrees,
in the same manner and to the same extent as set forth in Section 4(a)
of this Agreement to indemnify and hold harmless the Company and each
person, if any, who controls the Company within the meaning of Section
15 of the Securities Act, its directors and those officers of the
Company who shall have signed any such registration statement with
respect to any statement in or omission from such registration
statement or any preliminary prospectus (as amended or as supplemented,
if amended or supplemented as aforesaid) or prospectus contained in
such registration statement (as amended or as supplemented, if amended
or supplemented as aforesaid), if such statement or omission shall have
been made in reliance upon and in conformity with information furnished
in writing to the Company by the Purchaser specifically for use in
connection with the preparation of such registration statement or any
preliminary prospectus or prospectus contained in such registration
statement or any such amendment thereof or supplement thereto.
(c) NOTICE OF CLAIMS. Each party indemnified under Section
4(a) or Section 4(b) of this Agreement shall, promptly after receipt of
notice of the commencement of any action against such indemnified party
in respect of which indemnity may be sought, notify the indemnifying
party in writing of the commencement thereof, enclosing a copy of all
papers served on such indemnified party. The omission of any
indemnified party so to notify an indemnifying party of any such action
shall not relieve the indemnifying party from any liability in respect
of such action which it may have to such indemnified party on account
of the indemnity agreement contained in Section 4(a) or Section 4(b) of
this Agreement, unless the indemnifying party was prejudiced by such
omission, and in no event shall relieve the indemnifying party from any
other liability which it may have to such indemnified party. In case
any such action shall be brought against any indemnified party and it
shall notify an indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party; PROVIDED, that if any
indemnified party or parties reasonably determine that there may be
legal defenses available to such indemnified party that are different
from or in addition to those available to such indemnifying party or
that representation of such indemnifying party and any indemnified
party by the same counsel would present a conflict of interest, then
such indemnifying party shall not be entitled to assume such defense.
If an indemnifying party is not entitled to assume the defense of such
action as a result of the proviso to the preceding sentence, counsel
for such indemnifying party shall be entitled to conduct the defense of
such indemnifying party and counsel for the indemnified party shall be
entitled to conduct the defense of such indemnified party or parties.
If an indemnifying party assumes the defense of an action in accordance
with and as permitted by the provisions of this paragraph, such
indemnifying party shall not be liable to such indemnified party under
Section 4(a) or Section 4(b) of this Agreement for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
In no event shall the indemnifying party be liable for the fees and
expenses of more than one counsel (in addition to local counsel)
separate from its own counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provided for in this Section 4 is
for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company and
Purchaser shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said
indemnity incurred by the Company and Purchaser, as incurred; PROVIDED
that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person that was not guilty of such fraudulent
misrepresentation. As between the Company, on the one hand, and
Purchaser, on the other hand, such parties shall contribute to such
aggregate losses, liabilities, claims, damages and expenses of the
nature contemplated by such indemnity agreement in such proportion as
shall be appropriate to reflect the relative fault of the Company, on
the one hand, and the Purchaser, on the other hand, with respect to the
statements or omissions which resulted in such loss, liability, claim,
damage or expense, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault of the Company,
on the one hand, and of the Purchaser, on the other hand, shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company, on the one hand, or by or on behalf of the Purchaser, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 4 were to be
determined by pro rata allocation or by any other method of allocation
that does not take into account the relevant equitable considerations.
For purposes of this Section 4(d), each person who controls the Company
or the Purchaser within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as Purchaser or the Company,
as the case may be. No party shall be liable for contribution with
respect to any action, suit, proceeding or claim settled without its
written consent.
(e) The obligations of the Company and Purchaser under this
Section 4 shall survive the completion of any offering of Subject Stock
in a registration statement.
5. NOTICES. Any notice or other communication given under this
Agreement shall be sufficient if in writing and sent by registered or certified
mail, return receipt requested, postage prepaid, to a party at its address set
forth below (or at such other address as shall be designated for such purpose by
such party in a written notice to the other party hereto):
To the Company: To the Purchaser:
0000 Xxxxx Xxxxxx LISEN LLC
Suite 100 PO Box 1037
Golden, CO 80401 Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
All such notices and communications shall be effective when received by the
addressee.
6. GOVERNING LAW. This Agreement shall be governed in all respects by
the internal laws of the State of California as applied to contracts entered
into solely between residents of, and to be performed entirely within, such
state, and without reference to principles of conflicts of laws or choice of
laws.
7. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subject matter hereof and supersedes all prior agreements and understandings
among the parties relating to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.
9. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restriction of this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
10. TERMINATION OF COMPANY OBLIGATION. All registration rights provided
hereunder shall terminate upon the earlier to occur of (a) the fifth anniversary
of the date of this Agreement or (b) such time as, in the written opinion of
counsel to the Company, the Purchaser is able to sell all of its Common Stock
without registration under the Securities Act or any successor provision thereto
during any single three-month period.
11. NO TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The registration
rights set forth in this Agreement shall not be transferable or assignable by
the Purchaser, except to (i) any person or group approved in writing by the
Company or (ii) to a corporation of which the Purchaser owns not less than 50%
of the voting power entitled to be cast in the election of directors; or (iii)
any person to whom Purchaser has satisfied the requirements of Section 8.1
(Right of First Refusal) of the Purchase Agreement and the Company has waived or
failed to exercise its purchase rights; provided, however, that each transferee
agrees in writing to be subject to all the terms and conditions of this
Agreement and the Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
AMERICAN MILLENNIUM LISEN LLC
CORPORATION, INC.
By: /s/ Xxxxxxx X. Xxxxxx By:_/s/ Xxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxx
Title: President & CEO
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
