-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KCCC5HC5dcJ/Ng+ke/aGSZl+4TbOMyGTSAiETuoxtkwjkqdfEMoggJeDFgXoya7o YVqOBW/KV8kSXEyFLtl9gA== 0000892569-97-002966.txt : 19971104 0000892569-97-002966.hdr.sgml : 19971104 ACCESSION NUMBER: 0000892569-97-002966 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19971103 SROS: NASD GROUP MEMBERS: BUSCH TIMOTHY R GROUP MEMBERS: LENAWEE TRUST SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ADVANCED MATERIALS GROUP INC CENTRAL INDEX KEY: 0000806514 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS FOAM PRODUCTS [3086] IRS NUMBER: 330215295 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-39148 FILM NUMBER: 97706346 BUSINESS ADDRESS: STREET 1: 20211 SOUTH SUSANA RD CITY: RANCHO DOMINQUEZ STATE: CA ZIP: 90221 BUSINESS PHONE: 3105495444 MAIL ADDRESS: STREET 1: 20211 SOUTH SUSANA RD CITY: RANCHO DOMINGUEZ STATE: CA ZIP: 90221 FORMER COMPANY: FORMER CONFORMED NAME: FAR WEST VENTURES INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BUSCH TIMOTHY R CENTRAL INDEX KEY: 0001045617 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O THE BUSCH FIRM STREET 2: 2532 DUPOND DRIVE CITY: IRVINE STATE: CA ZIP: 92612 BUSINESS PHONE: 7144747368 MAIL ADDRESS: STREET 1: C/O THE BUSCH FIRM STREET 2: 2532 DUPONT DRIVE CITY: IRVINE STATE: CA ZIP: 92612 SC 13D 1 SCHEDULE 13D FOR TIMOTHY R. BUSCH 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )* ADVANCED MATERIALS GROUP, INC. - -------------------------------------------------------------------------------- (NAME OF ISSUER) COMMON STOCK - -------------------------------------------------------------------------------- (TITLE OF CLASS OF SECURITIES) COMMISSION FILE NO. 0-16401 - -------------------------------------------------------------------------------- (CUSIP NUMBER) TIMOTHY R. BUSCH, c/o THE BUSCH FIRM, 2532 DUPONT DRIVE IRVINE, CALIFORNIA 92612 - (714) 474-7368 - -------------------------------------------------------------------------------- (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS) OCTOBER 21, 1997 - -------------------------------------------------------------------------------- (DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1: and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 SCHEDULE 13D CUSIP No. Com. File No. 0-16401 PAGE 2 OF 13 PAGES - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Lenawee Trust, a Trust -- Tax I.D. No. 33-613657 Timothy R. Busch, an individual -- SSN ###-##-#### - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Pf and WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Lenawee Trust is a trust organized under and pursuant to the laws of the United States. Timothy R. Busch, who is acknowledged to be the ultimate beneficiary of the trust, resides in the State of California and is a citizen of the U.S. - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER Lenawee Trust - 873-795 stock options: Timothy R. Busch - 20,000 (date of earliest exercise 3/15/98) NUMBER OF ---------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY None OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING Lenawee Trust -- 873,795 stock options: PERSON Timothy R. Busch -- 20,000 (date of earliest exercise WITH 3/15/98) ---------------------------------------------------------- 10 SHARED DISPOSITIVE POWER None - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Lenawee Trust - 873,795 stock options: Timothy R. Busch - 20,000 (date of earliest exercise 3/15/98) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Lenawee Trust - 7.99% Timothy R. Busch -- -0- - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* Lenawee Trust -- CO Timothy R. Busch -- IN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 3 ITEM 1. SECURITY AND ISSUER This Schedule 13D relates to shares of common stock ("Shares") of Advanced Materials Group, Inc., a Nevada corporation ("AMG"), with its executive offices located at 20211 South Susana Road, Rancho Dominguez, California, 90221. Shares of AMG are traded over-the-counter and quoted on the NASDAQ Smallcap Market under the trading symbol of ADMG. ITEM 2. IDENTITY AND BACKGROUND This Schedule 13D is an amended filing and is filed by Gregory A. Busch and David L. Keligian, as Trustees of the Lenawee Trust, under Declaration of Trust dated December 30, 1992 ("Lenawee"), and Timothy R. Busch, an individual ("Mr. Busch"). It is acknowledged that Mr. Busch is the ultimate beneficiary of Lenawee and, therefore, it is acknowledged that Mr. Busch is an affiliate of Lenawee, and, therefore, Lenawee and Mr. Busch are acknowledged to be a "group" concerning the acquisition and holding of Shares, although no formal arrangement, agreement or understanding has been entered into between Mr. Busch and Lenawee (nor any of the other individuals or entities identified herein) concerning the Shares, other than certain understandings or arrangements, as disclosed herein, for the purpose of effectuating the acquisition and registration of the Shares and warrants that are the subject of this Schedule 13D. The purpose of this amended filing is to: a) Update and amend the earlier filing by the parties herein, dated August 17, 1997 (the "August Filing"), to reflect the final designation of the purchasers of the Company's Shares pursuant to a stock acquisition agreement (the "Acquisition Agreement") by and between Trilon Dominion Partners, LLC ("Trilon") and Timothy R. Busch, as Trustee of the Timothy R. Busch Living Trust under Declaration of Trust dated September 8, 1983 (the "Trust") that was disclosed in the August Filing; 1 4 b) Disclose Mr. Busch's subsequent acquisition of a certain AMG stock option (the "Stock Option"), pursuant AMG's 1997 Stock Option Plan (the "Stock Option Plan") pursuant to an agreement between Mr. Bush and AMG that was effective on September 15, 1997. Mr. Busch received the Stock Option pursuant to the Stock Option Plan, in which he became eligible to participate upon his appointment as a director of the Company in September, 1997. c) Disclose that the designated purchasers, pursuant to the Acquisition Agreement, have subsequently entered into a Registration Rights Agreement (the "Registration Agreement") with the Company, whereby the Company agreed to use reasonable best efforts to register the Shares (and Shares issuable upon exercise of the Warrants acquired by such purchasers pursuant to the Acquisition Agreement) with the SEC, and keep such registration effective for a period of two years. A. AMENDMENT TO AUGUST FILING The Acquisition Agreement, as disclosed in the August Filing, was expected to involve the purchase and sale of 1,600,807 Shares, together with Warrants which, if exercised, would represent an additional 965,000 Shares. As further disclosed, the Acquisition Agreement provided that the Trust had the right to designate which parties would be the ultimate purchasers of the shares. Such parties included Lenawee, Dito Caree, LP, a Nevada limited partnership ("Dito Caree"), and certain entities or individuals that are members of, consultants to, or associated with either The Busch Firm (the law firm owned by Mr. Busch) or other entities affiliated with Mr. Busch. Total cash consideration for all parties for the foregoing Shares and Warrants totaled $2,921,162 (allocable $2,801,412 for the Shares and $119,750 for the Warrants. As anticipated and disclosed in the August Filing, the parties anticipated that Lenawee would acquire 453,807 Shares, as well as Warrants representing the rights to acquire an additional 416,867 Shares. 2 5 The balance of the Shares and Warrants were designated by the Trust to be acquired by Dito Caree and the aforementioned employees and persons or entities associated with either The Busch Firm or other entities affiliated with Mr. Busch. Subsequent to the August Filing, the parties elected to change the number of Shares allocated among the purchasers designated by the Trust as follows: Lenawee actually has acquired 453,807 Shares, as well as Warrants granting it the future rights to purchase 419,988 additional Shares, for a total cash consideration of $875,383. Dito Caree has acquired 900,000 Shares, together with Warrants granting it the rights to acquire an additional 430,096 Shares. The balance of the Shares and Warrants were purchased by the aforementioned employees of, consultants to, and persons or entities associated with either The Busch Firm or other entities affiliated with Mr. Busch. Although a party to the Acquisition Agreement, the Trust has acquired no Shares, or any interest in the Shares or Warrants and has acted solely as an interim party to designate the rights to the Shares and Warrants to those entities and individuals identified herein. B. STOCK OPTION PLAN In September, 1997, the Board of Directors of the Company elected to fill a vacancy by appointing Mr. Busch as a director. As a consequence of this appointment, Mr. Busch became eligible to participate in the Company's Stock Option Plan. Accordingly, effective September 15, 1997, AMG granted a Stock Option to Mr. Busch which carries the future right to purchase 20,000 Shares at an option exercise price of $3.44 per Share. This Stock Option may be exercised at any time between March 15, 1998, through the expiration date of September 14, 2002. C. REGISTRATION RIGHTS AGREEMENT As contemplated by the Acquisition Agreement, the Trust, on behalf of the parties to the Acquisition Agreement, entered into the Registration Agreement with the Company. Pursuant to the Registration Agreement, the Company agreed to use reasonable best efforts to register 3 6 with the SEC, and keep such registration effective for a period of two years, with respect to the Shares (including Shares issuable upon exercise of the Warrants) acquired by the designated purchasers under the Acquisition Agreement. This Registration Agreement superceded earlier registration rights agreements of the Company with Trilon and its predecessor-in-interest covering certain of the same Shares which had also provided for demand and other registration rights in favor of such holders. In the Registration Agreement, the purchasers agreed to reimburse the Company for certain of its registration expenses up to a maximum amount of $15,000. Prior to the transactions disclosed herein, to the filing persons' knowledge, none of the reporting parties had owned any Shares. However, upon acquisition of the Shares, the total holdings of Shares (inclusive of the Warrants, which represent the right to acquire an additional 419,988 additional Shares) by Lenawee and Mr. Busch (who is acknowledged to be the beneficial owner of the Shares owned by Lenawee) exceeds 5% of the issued and outstanding Shares of AMG. This Schedule 13D is being filed by the following individuals and entities: a) Timothy R. Busch, an individual. His business address is 2532 Dupont Drive, Irvine, California 92612. Mr. Busch is an attorney at law and certified public accountant within the State of California and other jurisdictions and is a principal of The Busch Firm, which firm maintains offices at 2532 Dupont Drive, Irvine, California 92612. Mr. Busch was appointed to the Board of Directors of the Company in September, 1997. Although Mr. Busch does not have the present intent to acquire additional AMG Shares (other than additional stock options, if any, that the Company might grant him pursuant to his participation in any AMG stock option plan) he is deemed to be the ultimate beneficiary and controlling person of Lenawee. b) Lenawee is a trust as to which the Trustees are Gregory A. Busch and David L. Keligian, both of whom maintain offices at 2532 Dupont Drive, Irvine, California 92612. The ultimate beneficiary of Lenawee is acknowledged to be Mr. Busch, a filing person herein. 4 7 It is acknowledged that Lenawee is an entity or organization ultimately controlled by Mr. Busch and that entity is, therefore, deemed and acknowledged to be an entity which is a member of a "group" with Mr. Busch. Except as disclosed herein, despite the acknowledgment of the existence of a "group" between Mr. Busch and Lenawee, there exists no agreements or understandings, either in writing or orally, between Mr. Busch and Lenawee concerning their Shares, nor the holding voting, or acquisition or disposition of any Shares of AMG. Over the past five years, none of the filing persons, or any of the entities identified hereinabove, nor any Trustee of the Trust identified herein, have (1) been convicted in a criminal proceeding, or (2) been a party to a civil proceeding of a judicial or administrative body which resulted in a judgment, decree or final order enjoining future violations of or prohibitions or mandating activity subject to federal or state securities laws or finding any violations with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The transaction giving rise to this Schedule 13D filing involves the execution and consummation of an Acquisition Agreement with Trilon to purchase and acquire a total of 1,600,807 Shares along with Warrants which, if exercised, would give the holders thereof the right to acquire an additional 965,000 Shares upon the close of a purchase transaction memorialized in an agreement dated the 13th day of August, 1997. Upon the close of that transaction, Lenawee acquired a total of 453,807 Shares, and Warrants granting the future right to acquire an additional 419,988 Shares for a total consideration of $875,383. Dito Caree acquired 900,000 Shares together with Warrants granting the future right to acquire an additional 430,096 Shares. Various individuals or entities who are members or employees of, consultants to, or otherwise associated with either The Busch Firm (Mr. Busch's law firm) or other entities affiliated with Mr. Busch acquired the balance of the Shares and Warrants. Each Share of common stock acquired in connection with the Acquisition Agreement with Trilon was acquired at a purchase price (attributable both to the Shares and the additional Warrants) of 5 8 approximately $1.75 per share. Total cash consideration for all parties for the foregoing Shares and Warrants totalled $2,921,162 (allocable $2,801,412 for the Shares and $119,750 for the Warrants). Transactional expenses, including legal fees and other expenses incurred to document and complete the transaction and transfer of Shares from Trilon under the terms of the Acquisition Agreement, are expected to approximate $120,000. Additionally, as disclosed in Item 2, pursuant to the Registration Agreement, the parties thereto agreed to reimburse the Company for certain of its registration expenses up to a maximum amount of $15,000. All funds used that Lenawee used to acquire its Shares consisted of working capital of Lenawee or personal funds of Mr. Busch. In addition to Lenawee, other individuals or entities that participated in the private purchase transaction under the Acquisition Agreement with Trilon includes Dito-Caree which acquired 900,000 Shares and Warrants representing the future right to acquire an additional 430,096 Shares. That partnership maintains offices at 3753 Howard Hughes Parkway, Suite 200, Las Vegas, Nevada 89109, and the general partner of that limited partnership is Gamebusters, Inc., a Nevada corporation. The ultimate controlling person of the general partner is Richard H. Pickup. Although the filing persons herein disavow any group affiliation or relationship between the filing persons and Dito-Caree or Mr. Pickup (who the filing persons herein believe have filed separate 13D filings), it is acknowledged that The Busch Firm and Timothy R. Busch have provided legal services upon various matters for Dito-Caree and Mr. Pickup. Additionally, David B. Hehn, who is an employee of The Busch Firm, and who acquired Shares and Warrants pursuant to the Acquisition Agreement as disclosed below, is president of Gamebusters, Inc. Members, employees or consultants to either The Busch Firm, or other entities affiliated with Mr. Busch, have acquired the balance of additional Shares or Warrants acquired under the terms of the Acquisition Agreement. Those individuals are David B. Hehn, David Keligian, George Mulcaire, Jim Scheinkman, Karen Busch, Four JM LLC (which entity has, as its ultimate member beneficiaries, John F. Moody, Joseph W. Moody, Jeffrey Moody and Jane Fowler), Clay Stevens, Steven Howard, Doug Stevens, Rudolph Fuchs, John Savage, Sherrie Schaeffer, Dennis W. Harwood, Rick Weiner, and Gregory A. Busch. Gregory A. Busch and Karen Busch are the brother and sister, respectively, of Timothy R. Busch. 6 9 Each of the filing persons herein, Lenawee and Mr. Busch, specifically disaffirm the existence of any group relationship, contracts, or agreements by and between Lenawee or any of the individuals named in the preceding paragraph who shall be acquiring Shares, other than such agreements disclosed herein relating to the Acquisition Agreement, the Registration Agreement, as well as standard compliance policies and rules governing employees of, consultants to, or parties otherwise affiliated with, Timothy R. Busch, The Busch Firm, and other entities affiliated with Mr. Busch that exist to further compliance with applicable securities laws and regulations. No agreements are known to exist between the parties with respect to Item 4, A-J hereof. Further, each of those individuals and entities identified has acquired Shares directly from Trilon and no loans or contributions of funds as between any of the individuals identified as participating in the transaction and the filing persons shall exist, and no agreements or understandings are executed or entered into by and between Lenawee or Mr. Busch and any of the individuals identified above, specific to AMG or this transaction, other than as disclosed herein. Each of the filing persons herein further specifically disaffirms the existence of any "group" for filing purposes under Section 13(d) of the Act existing as of the date of acquiring the Shares from Trilon (other than that disclosed herein between Mr. Busch and Lenawee). Any other entity or individual identified herein is not acknowledged to be a member of any group with Lenawee or Mr. Busch. ITEM 4. PURPOSE OF TRANSACTION Each of the filing persons has purchased the Shares in AMG for investment purposes only and no agreement, formal or informal, written or oral, has been entered into by and between any of the filing persons concerning the formation of any group nor taking any form of group action, other than certain actions to facilitate the Acquisition Agreement as disclosed herein, and the Registration Agreement disclosed herein. No agreements are known to exist between the parties with respect to Item 4, A-J hereof. Certain representatives of Lenawee and Mr. Busch have made inquiries of certain management personnel of AMG concerning business operations of AMG, however, no form of proposal, understanding 7 10 or any other form of arrangements have been made, proposed or discussed during those conversations. Additionally, as disclosed herein, Mr. Busch was appointed as a director of AMG in September, 1997. This appointment was not a requirement of the Acquisition Agreement. None of the filing persons have entered into any commitment, understanding, or binding obligation with one or more of the filing persons or any third persons concerning the acquisition and disposition of Shares other than the Registration Agreement, and other ancillary arrangements disclosed herein the purposes of which was to effectuate the Acquisition Agreement. None of the filing persons, including Timothy R. Busch, has any present plans in connection with any of the foregoing actions (other than the possibility of future grants of stock options by AMG to Mr. Busch, pursuant to any AMG stock option plan), nor any of those actions specified hereinbelow; however none of the foregoing or following actions by any of the filing persons can be ruled out in the future for either the short or long term. None of the filing persons has any present plans or proposals which may relate to or result in: a) The acquisition or disposition by any person of any additional securities of the issuer or disposition of securities of the issuer. b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the issuer or any of its subsidiaries. c) The sale or transfer of a material amount of assets of the issuer or any of its subsidiaries. d) A change in the present board of directors or management of the issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies upon the board (except to vote for directors as specified above). e) Any material change in the present capitalization or dividend policy of the issuer. 8 11 f) Any material change in the issuer's business or corporate structure. g) Changes in the issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the issuer by any person. h) Causing a class of securities of the issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association. i) Causing a class of equity securities of the issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or j) Any action similar to any of those enumerated above. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER At the date of this filing each of the filing persons owns the following Shares: a) Timothy R. Busch, an individual, owns the Stock Option granted to Mr. Busch pursuant to the Stock Option Plan, as disclosed herein. This Stock Option represents the future right to purchase 20,000 Shares of AMG common stock, and, if exercised, would represent approximately 0.19% ownership of AMG common stock, based on a total of 10,500,619 presently outstanding Shares, as reflected on AMG's most recent filings with the Securities and Exchange Commission plus the Shares underlying the Stock Option. b) The Lenawee Trust owns 453,807 Shares, plus rights to Warrants representing a right to acquire an additional 419,988 Shares. Total consideration paid by Lenawee to acquire these Shares (and Warrants) totaled $875,383. Lenawee's holdings of 453,807 Shares, and Warrants granting it the further right to purchase an additional 419,988 9 12 Shares, represents approximately 7.99% of all outstanding Shares, plus Shares subject to such Warrants. c) The combined Shares and Warrants held by Mr. Busch and Lenawee, at the date of this filing, represents approximately 8.17% of all outstanding Shares. This ownership percentage, includes the Shares Stock Option, (which represents the future right to purchase 20,000 Shares) which is not exercisable prior to March 15, 1998 and Shares subject to such Warrants. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER No other contract, arrangement, understanding or relationship exists with respect to the securities of AMG between any of the entities or persons disclosed herein or Timothy R. Busch. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 4.1 Registration Rights Agreement Dated: October 23, 1997 LENAWEE TRUST, UNDER DECLARATION OF TRUST DATED 12/30/92 By: /s/ GREGORY A. BUSCH ----------------------------------- Gregory A. Busch Trustee By: /s/ DAVID L. KELIGIAN ----------------------------------- David L. Keligian Trustee /s/ TIMOTHY R. BUSCH ----------------------------------- TIMOTHY R. BUSCH An Individual 10 EX-4.1 2 REGISTRATION RIGHTS AGREEMENT 1 EXHIBIT 4.1 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT ("Registration Rights Agreement") is made and entered into as of the 15th day of September, 1997, by and between ADVANCED MATERIALS GROUP, INC., a Nevada corporation ("Company"); and TIMOTHY R. BUSCH, Trustee of the TIMOTHY R. BUSCH LIVING TRUST DATED SEPTEMBER 7, 1983 ("Busch") on behalf of the Investors. 1.0 RECITALS. 1.1 Busch and Trilon have entered into the Purchase Agreement, pursuant to which Trilon, as the current holder of the Stock and the Warrants, has agreed to sell, and Busch, on behalf of the Investors, has agreed to purchase, the Stock and Warrants. 1.2 Under the terms of the Warrants and the Credit Agreement, Trilon has been afforded multiple demand registration rights to cause a portion of the Stock and a portion of the Common Stock of the Company issuable upon exercise of the Warrants to be registered with the Commission and to participate in registered offerings by the Company. 1.3 Busch, on behalf of the Investors, has requested that the Company agree to register all of the Stock and all of the Common Stock of the Company issuable upon exercise of the Warrants pursuant to a single registration and, in exchange therefor, is willing to relinquish all of its registration rights under the terms of the Warrants and the Credit Agreement and is willing to bear more of the expense incurred in connection with such registration than is currently provided in the Warrants and in the Credit Agreement. 1.4 The Company, acting by its Board of Directors, believes it is in the Company's best interest to consolidate the Company's registration obligations into a single agreement to provide for single registration in accordance with the terms and conditions of this Registration Rights Agreement. NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements contained herein, the Parties, intending to be legally bound, agree as follows: -1- 2 2.0 DEFINITIONS. 2.1 "1933 Act" shall mean the Securities Act of 1933, or any successor federal statute, and the rules and regulations of the Commission (or of any other federal agency then administering the 1933 Act) promulgated thereunder, all as the same shall be in effect at the time. 2.2 "1934 Act" shall mean the Securities Exchange Act of 1934, or any successor federal statute, and the rules and regulations of the Commission (or of any other federal agency then administering the 1934 Act) promulgated thereunder, all as the same shall be in effect at the time. 2.3 "Affiliate" shall mean any Person (whether directly or indirectly or through one (1) or more intermediaries) who controls, is controlled by, or is under common control with another Person. In the case of a partnership, the general partner(s) thereof shall be deemed to control the partnership. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the Person in question. 2.4 "Applicable Period" shall have the meaning set forth in Section 3.1(a) hereof. 2.5 "Busch" shall mean Timothy R. Busch, Trustee of the Timothy R. Busch Living Trust Dated September 7, 1983. 2.6 "Commission" shall mean the Securities and Exchange Commission. 2.7 "Common Stock" shall mean the Company's common stock, $.001 par value per share, as authorized on the date of this Agreement, and (b) any stock or securities into which such common stock referenced in clause (a) above may be changed, reclassified or converted. 2.8 "Company" shall mean Advanced Materials Group, Inc., a Nevada corporation, and any successor in interest to the Company by virtue of merger, consolidation, reorganization, asset purchase or otherwise. 2.9 "Credit Agreement" shall mean that certain Credit Agreement dated September 21, 1994, by and between the Company and Dominion, as amended by an Amendment to Credit Agreement, dated July 13, 1995, and an -2- 3 Amendment No. 2 to Credit Agreement, dated December 22, 1995, by and between the Company and Dominion or Trilon. 2.5 "Dominion" shall mean Dominion Capital, Inc., a Virginia corporation. 2.10 "Investor Representative" shall mean Timothy R. Busch, an individual, or such other Person which may be designated from time to time by a Majority in Interest of Investors. 2.11 "Investors" shall mean the Persons designated by Busch to be members of the "Buyer" under the Purchase Agreement who will receive either, directly or indirectly, a portion of the Stock or Warrants pursuant to the Transaction, and their permitted successors and assigns. "Investor" shall mean one of the foregoing Persons. 2.12 "Majority in Interest of Investors" shall mean the written approval or consent of at least seventy-five percent (75%) of the holders of then outstanding Registrable Securities (and treating for such purpose as outstanding all shares of Common Stock or other securities which are issuable upon exercise of the Warrants). 2.13 "Parties" shall mean the Company and the Investors. "Party" shall mean one of the foregoing Persons. 2.14 "Person" shall mean any natural person and any corporation, partnership, trust, limited liability company or other legal entity. 2.15 "Purchase Agreement" shall mean that letter agreement dated August 13, 1997, between Trilon and Busch, pursuant to which Trilon has agreed to sell, and Busch, on behalf of the Investors, has agreed to purchase, the Stock and the Warrants. 2.16 "Registrable Securities" shall mean (a) the Stock to be sold to the Investors pursuant to the Purchase Agreement, (b) the Common Stock issued or issuable upon exercise of the Warrants to be sold to the Investors pursuant to the Purchase Agreement and (c) all Common Stock or other securities of the Company which are issued or issuable in respect of the Common Stock or Warrants by way of, or as a result of, any stock dividend, stock split, distribution, stock issuance, recapitalization, merger, consolidation, reorganization or otherwise. -3- 4 2.17 "Registration Rights Agreement" shall mean this Registration Rights Agreement between the Parties. 2.18 "Registration Statement" shall mean a registration statement on Form S-3 or other form mutually acceptable to the Company and a Majority in Interest of Investors filed by the Company with the Commission for a public offering and sale of equity securities of the Company, as amended by any supplement or amendment to such registration statement or document or any prospectus contained therein. 2.19 "Stock" shall mean One Million Six Hundred Thousand Eight Hundred Seven (1,600,807) shares of Common Stock of the Company, to be purchased by the Investors from Trilon. 2.20 "Transaction" shall mean the sale of the Stock and Warrants to the Investors by Trilon. 2.21 "Trilon" shall mean Trilon Dominion Partners, LLC, a Delaware limited liability company. 2.22 "Warrants" shall mean the Warrants, dated March 25, 1994, September 21, 1994, December 22, 1995 and December 22, 1995 issued by the Company to Trilon or to Trilon's predecessor in interest, Dominion, granting to the holder thereof the right to purchase an aggregate of Nine Hundred Sixty-Five Thousand (965,000) shares of Common Stock of the Company. For identification purposes, certain of the principal terms of such Warrants are described as follows:
Date of No. of Shares Exercise Price Expiration Date Warrant 9/21/94 35,000 $0.90 per share 9/30/99 3/25/94 840,000 $2.98 per share 3/24/99 12/22/95 60,000 $0.75 per share 12/22/2000 12/22/95 30,000 $0.75 per share 12/22/2000
-4- 5 3.0 REGISTRATION OF COMPANY STOCK. 3.1 Registration Obligation. As soon as practicable after the date hereof (and in no event later than October 15, 1997), the Company shall prepare and file a Registration Statement under the 1933 Act, covering the registration of all of the Registrable Securities . In connection with the Registration Statement, the Company shall, as expeditiously as reasonably possible: (a) use its reasonable best efforts to cause such Registration Statement to become effective with the Commission and keep such Registration Statement effective for two (2) years following the effective date of registration with the Commission (the "Applicable Period"); (b) use its reasonable best efforts to prepare and file with the Commission such amendments and supplements to such Registration Statement and prospectus contained therein as may be necessary (A) to comply with the provisions of the 1933 Act and (B) to keep such Registration Statement current and effective; (c) furnish to the Investor Representative copies of all documents proposed to be filed to permit the reasonable and timely review of statements contained in such documents pertaining to the Investors (which copies in all events shall be furnished to the Investor Representative (by personal delivery or overnight courier service) at least five (5) business days prior to the filing thereof) and thereafter furnish to the Investor Representative such numbers of copies of such Registration Statement, each amendment and supplement thereto, such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the 1933 Act, and such other documents as the Investor Representative may reasonably request in order to facilitate the disposition of the Registrable Securities; (d) in states for which appropriate exemptions are not available, use its reasonable best efforts to register and qualify (or satisfy an available exemption therefrom), and maintain for the Applicable Period such registration and qualification, the Registrable Securities covered by the Registration Statement under such other securities or "blue sky" laws of California and Nevada, and such jurisdictions as shall be reasonably appropriate for the distribution of the Registrable Securities or as shall be reasonably requested by the Investor Representative, provided that the Company shall not be required to become subject to taxation, to qualify to do business or to file a general consent to service of process in any such states or jurisdictions in which it is not already so subject or -5- 6 qualified and provided, further, that if the registration or qualification in any jurisdiction (other than California or Nevada) necessitates the issuance of a permit by the applicable securities agency, the Investors shall bear all cost and expense of the registration or qualification in such jurisdiction; (e) use its reasonable best efforts (i) to maintain the authorization for quotation of the Registrable Securities covered by such Registration Statement on the National Association of Securities Dealers Automated Quotation System and (ii) to cause all Registrable Securities to be listed on each securities exchange on which shares of Common Stock of the Company are then listed or proposed to be listed; (f) notify the Investor Representative, promptly after it shall receive notice thereof, of the date and time which the Registration Statement and each post-effective amendment thereto has become effective or a supplement to any prospectus forming a part of such Registration Statement has been filed; (g) notify the Investor Representative promptly of any request by the Commission or any state securities commission or agency for the amending or supplementing of the Registration Statement or prospectus or for additional information; (h) prepare and promptly file with the Commission, and promptly notify the Investor Representative of the filing of, such amendments to the Registration Statement or prospectus as may be necessary to correct any statements or omissions if, at the time when a prospectus relating to such securities is required to be delivered under the 1933 Act, any event has occurred as the result of which any such prospectus or any other prospectus as then in effect would include an 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 not misleading; and (i) in the event the Investors or the underwriters for the Investors are required to deliver a prospectus at a time when the prospectus in circulation is not in compliance with the 1933 Act or the rules and regulations of the Commission, promptly prepare upon request such amendments or supplements to such Registration Statement and such prospectus as may be necessary in order for such prospectus to comply with the requirements of the 1933 Act and such rules and regulations. -6- 7 3.2 Furnish Information; Assumption of Agreement; Reliance. (a) It is a condition precedent to the obligations of the Company to take any actions pursuant to Section 3.1 hereof with respect to the Registrable Securities of any Investor that (i) prior to or promptly following the closing of the Transaction, the Investor Representative or other Person notifies the Company of the names and addresses of each of the Investors holding Registrable Securities, (ii) each such Investor shall furnish to the Company such information regarding such Person, the Registrable Securities held by such Person and the intended method of distribution of such securities as shall be required to effect the registration of such Investor's Registrable Securities and as may be required by law or by the Commission from time to time to keep such registration current, and (iii) each such Investor shall covenant that such Investor shall comply with relevant provisions of Regulation M promulgated by the Commission. (b) In connection with the consummation of the Closing, Busch shall cause each Investor receiving Registrable Securities and rights under this Registration Rights Agreement to agree in writing to assume all liabilities and obligations imposed under this Registration Rights Agreement upon such Investor and to be subject to the terms, conditions and limitations of this Registration Rights Agreement. Upon the execution of such an instrument by the Investors, Busch shall be fully discharged from, and shall bear no responsibility for, any obligations, liabilities, actions or inactions of or by any Investor in connection with or arising out of this Registration Rights Agreement, other than Busch. (c) The Company shall be entitled to conclusively rely upon any information, documents or statements provided by any Investor in accordance with this Section or by the Investor Representative, including but not limited to, notification to the Company by such Investor Representative of the approval of any action or inaction by a Majority in Interest of Investors. 3.3 Expenses of Registration. (a) Except as provided below, all expenses incurred by or on behalf of the Company in connection with registrations, filings or qualifications pursuant to Section 3.1 hereof, including, without limitation, all registration filing and qualification fees, the fees and expenses incurred in connection with the authorization for quotation of the Registered Securities with the National Association of Securities Dealers Automated Quotation System, printers' and accounting fees and the fees and disbursements of counsel for the Company shall be borne by the Company. -7- 8 (b) Notwithstanding the foregoing, in no event shall the Company be obligated to bear underwriting, brokerage or related fees, discounts or commissions or fees or expenses of counsel of the Investors, and, further, the Investors shall reimburse the Company for the reasonable out-of-pocket expenditures of the Company for legal, accounting or printing costs which are solely attributable to the need to revise the present existing draft registration statement prepared by the Company on Form S-3 listing the holder of the Registrable Securities as Trilon to the extent necessary to reflect the Transaction (such reimbursement not to exceed in the aggregate the sum of Fifteen Thousand Dollars ($15,000.00)). (c) Furthermore, to the extent that any transfer of registration rights of an Investor pursuant to Section 3.4 hereof necessitates a requirement imposed by the 1933 Act or other applicable law for the Company to make a post-effective amendment to any then effective Registration Statement, the transferring Investor shall reimburse the Company for all reasonable expenses incurred by the Company in connection with the preparation and filing of such post-effective amendment. Notwithstanding the foregoing, to the extent that under the 1933 Act or applicable law, revisions to any existing prospectus or Registration Statement can be accomplished through provision of a supplement to an existing prospectus, the Company shall amend such prospectus pursuant to a supplement (rather than by a formal post-effective amendment to the Registration Statement) and shall bear all costs associated therewith. 3.4 Transfer of Registration Rights. The registration rights of each Investor under Section 3.1 may be transferred to either (a) any other Investor or an Affiliate of any Investor or (b) any transferee (or transferees who are Affiliates of each other) who acquire(s) at least twenty percent (20%) of the then outstanding shares of Registrable Securities (treating as outstanding for such purchase all Common Stock which is then issuable upon exercise of the Warrants); provided, however, that the Company is given written notice by the transferring Investor at the time of such transfer stating the name and address of the transferee(s) and identifying the securities with respect to which the rights under this Section are being assigned. 3.5 Indemnification. In the event any shares of Registrable Securities are included in a Registration Statement pursuant to Section 3.1: (a) to the extent permitted by law, the Company will indemnify and hold harmless each holder of Registrable Securities requesting or joining in a registration, any underwriter (as defined in the 1933 Act) for it and -8- 9 each Person, if any, who controls such holder or underwriter within the meaning of the 1933 Act, against any losses, claims, damages, liabilities or actions, joint or several, to which they or it may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based on any untrue or alleged untrue statement of any material fact contained in such Registration Statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, 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 or arise out of any violation or alleged violation by the Company of any rule or regulation promulgated under the 1933 Act applicable to the Company or relating to action or inaction required of the Company in connection with any such registration; and will reimburse each such holder, such underwriter or controlling person for any legal or other expenses reasonably incurred by them or it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 3.5(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld) nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in connection with such Registration Statement, preliminary prospectus, final prospectus, or amendments or supplements thereto, in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such holder, underwriter or controlling person; (b) to the extent permitted by law, each Investor, severally and not jointly, requesting or joining in a registration will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the Registration Statement, each Person, if any, who controls the Company within the meaning of the 1933 Act and each agent and any underwriter for the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities or actions to which the Company or any such director, officer, controlling person, agent or underwriter may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in such Registration Statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, or arise out of or are based upon the omission or alleged omission to state -9- 10 therein a material fact required to be stated therein or necessary to make the statements herein not misleading,in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in such Registration Statement, preliminary or final prospectus, or amendments or supplements thereto, in reliance upon and in conformity with written information furnished by such Investor expressly for use in connection with such registration; and each such Investor will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, agent or underwriter in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 3.5(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of such Investor (which consent shall not be unreasonably withheld) and that the maximum amount of liability of such Investor under this Section 3.5(b) shall be limited to an amount equal to the net proceeds paid to such Investor of the Registrable Securities so sold in any registration pursuant to this Registration Rights Agreement; and (c) promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section, notify the indemnifying party in writing 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 the defense thereof with counsel mutually satisfactory to the Parties. The failure to notify an indemnifying party promptly of the commencement of any such action, if prejudicial to his ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section, but the omission so to notify the indemnifying party will not relieve him of any liability that he may have to any indemnified party otherwise than under this Section. 4.0 RULE 144 The Company covenants that it will at all times use its reasonable best efforts to timely file any reports required to be filed by it under the 1933 Act and the 1934 Act and that it will take such other actions as may be necessary or any Investor may reasonably request to enable the Investors to sell the Registrable Securities without registration under applicable exemptions provided for under the 1933 Act, including, without limitation, Commission Rule 144. The Company shall forthwith upon request by any Investor furnish such -10- 11 Investor (A) a written statement by the Company that it has complied with the reporting requirements required under Rule 144(c), (B) a copy of the most recent annual or quarterly report of the Company, and (C) such other reports and documents filed by the Company with the Commission as any Investor may reasonably request in availing himself of an exemption for the sale of the Registrable Securities without registration under the 1933 Act. 5.0 ENTIRE AGREEMENT. 5.1 SOLE AGREEMENT. This Registration Rights Agreement (including any attachments and exhibits hereto) contains the Parties' sole and entire agreement regarding the subject matter hereof, and supersedes any other agreements between the Parties or their predecessors in interest pertaining to registration of the Registrable Securities (including but not limited to Section 11 of the Credit Agreement and Section 10 of the Warrants dated December 22, 1995). Notwithstanding the foregoing, this Registration Rights Agreement shall not in any manner affect or impair indemnification or other rights and obligations of either the Company or Trilon or Dominion with respect to the prior registration of any Common Stock or securities of the Company. Except as to Section 10 of the above-referenced Warrants or any comparable registration rights provisions of the other Warrants, the Warrants remain in full force and effect, enforceable in accordance with their respective terms. 5.2 NO OTHER REPRESENTATIONS. The Parties acknowledge and agree that no Party has made any representations (a) concerning the subject matter hereof, or (b) inducing the other Party to execute and deliver this Registration Rights Agreement, except those representations specifically referenced herein. The Parties have relied on their own judgment in entering into this Registration Rights Agreement. 5.3 NO RELIANCE. The Parties further acknowledge that any statements or representations that may have been made by either of them to the other are void and of no effect. No Party has relied on any such statements or representations in dealing with the other(s). 6.0 NO MODIFICATIONS OR WAIVERS 6.1 MUST BE WRITTEN. (a) Except with respect to the rights and obligations set forth in Section 3.5 hereof, waivers or modifications of this Registration Rights Agreement, or of any covenant, condition, limitation or term -11- 12 contained herein, are valid only if in writing that is separately signed or initialed by the Company and at least a Majority in Interest of Investors. (b) Modifications or waivers of Section 3.5 of this Registration Rights Agreement are valid only if in writing that is separately signed or initialed by the Company and each Investor affected thereby. 6.2 NO USE AS EVIDENCE. One or more waivers or modifications of any covenant, term or condition in this Registration Rights Agreement by any Party shall not be construed by any other Party as a waiver or modification applicable to any subsequent breach of the same covenant, term or condition. Evidence of any such waiver or modification may not be offered or received in evidence in any proceeding, arbitration, or litigation between the Parties arising out of or affecting this Registration Rights Agreement, or a Party's rights or obligations under it. This limitation does not apply if the waiver or modification is in writing and duly executed as provided above. 7.0 JOINT PREPARATION. The Parties to this Registration Rights Agreement have been represented by competent counsel. This Registration Rights Agreement is therefore deemed to have been jointly prepared by the Parties, and any uncertainty or ambiguity existing in it shall not be interpreted against any Party under the presumptions of California Civil Code Section 1654, but rather shall be interpreted according to the rules generally governing the interpretation of contracts. 8.0 COOPERATION AND FURTHER ACTIONS. The Parties agree to use reasonable best efforts to perform any and all acts and to execute and deliver any and all documents necessary or convenient to carry out the terms of this Registration Rights Agreement. 9.0 PROFESSIONAL FEES. If a lawsuit, arbitration, or other proceedings are instituted by any Party to enforce any of the terms or conditions of this Registration Rights Agreement against any other Party hereto, the prevailing Party in such litigation, arbitration, or proceedings shall be entitled, as an additional item of damages, to such reasonable attorneys' and other professional fees (including but not limited to expert witness fees), court costs, arbitrators' fees, arbitration administrative fees, travel expenses, and other out-of-pocket expenses or costs of such other proceedings as may be fixed by any court of competent jurisdiction, arbitrator, or other judicial or quasi-judicial body having jurisdiction thereof, whether or not such litigation or proceedings proceed to a final judgment or award. For the purposes of this Section 10.0, any Party receiving an arbitration -12- 13 award or a judgment for damages or other amounts shall be deemed to be the prevailing Party, regardless of amount of the damage awarded or whether the award or judgment was based upon all or some of such Party's claims or causes of action. 10.0 COUNTERPARTS. This Registration Rights Agreement may be executed in several counterparts, each of which so executed shall be deemed to be an original, but such counterparts shall together constitute and be one and the same instrument. 11.0 SEVERABILITY. If any part, clause, or condition of this Registration Rights Agreement is held to be partially or wholly invalid, unenforceable, or inoperative for any reason whatsoever, such shall not affect any other provision or portion hereof, which shall continue to be effective as though such invalid, inoperative, or unenforceable part, clause or condition had not been made. 12.0 SPECIFIC ENFORCEMENT. All of the Parties hereto acknowledge that the Parties will be irreparably damaged in the event that this Registration Rights Agreement is not specifically enforced. Upon a breach or threatened breach of the terms, covenants and conditions of this Registration Rights Agreement by any of the Parties hereto, the other Parties shall, in addition to all other remedies, be entitled to a temporary or permanent injunction, without showing any actual damage, or a decree of specific performance, in accordance with the provisions hereof. 13.0 BINDING UPON SUCCESSORS. This Registration Rights Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, legal representatives, successors and assigns. 14.0 GOVERNING LAW AND VENUE. All questions concerning this Registration Rights Agreement, its construction, and the rights and liabilities of the Parties hereto shall be interpreted and enforced in accordance with the laws of the State of California as applied to contracts which are executed and performed entirely within the state. For purposes of this Registration Rights Agreement, sole and proper venue with respect to any action or proceeding relating to any dispute among or between the Parties shall be the County of Orange, State of California. -13- 14 15.0 INTERPRETATION. 15.1 SECTION HEADINGS. The section headings of this Registration Rights Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions. 15.2 CAPITALIZED TERMS. Except as otherwise expressly provided herein, all capitalized terms defined in this Registration Rights Agreement shall have the meaning ascribed to them herein. 15.3 GENDER AND NUMBER. Whenever required by the context, the singular shall include the plural, the plural shall include the singular, and the masculine gender shall include the neuter and feminine genders and vice versa. 16.0 NOTICE. For purposes hereof, delivery of written notice shall be complete upon personal delivery, or upon mailing if mailed with proper postage paid by United States registered or certified mail, addressed to the Party at the address set forth below, or to such other mailing address as the Parties hereto may designate by written notice given in accordance with this Section 16.0. Notice may also be given upon receipt of electronic facsimile, provided that any facsimile notice shall only be deemed received if (a) the transmission thereof is confirmed, and (b) facsimile notice is followed by written notice, made either by (i) personal delivery thereof, or (ii) via deposit in certified mail return receipt requested, postage prepaid, within three (3) business days following the facsimile notice. Notices shall be addressed to the Parties as follows: Company: Advanced Materials Group, Inc. 20211 S. Susana Road Rancho Dominguez, CA 90221 Attn: Chief Financial Officer Tel. No. (310) 537-5444 Fax No. (310) 763-6869 With required copy to Attorney for the Company: Day Campbell & McGill 3070 Bristol, Suite 650 Costa Mesa, CA 92626 Attn: Leonard J. McGill, Esq. Tel. No. (714) 429-2900 Fax No. (714) 429-2901 -14- 15 To the Investor Representative or one or more Investor(s): The Busch Firm 2532 Dupont Drive Irvine, California 92612 Attn: Timothy R. Busch, Esq. Tel. No. (714) 474-7368 Fax No. (714) 474-7732 With required copy to: Richard Pickup Wedbush Morgan Securities 610 Newport Center Drive, 13th Floor Newport Beach, California 92660 Tel. No. (714) 759-1311 Fax No. (714) 759-9539 Any Party may change the address to which to send notices by notifying the other Party of such change of address in writing in accordance with this Section 16.0. 17.0 TIME OF ESSENCE. The Parties acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof. Failure to timely perform any of the terms, conditions, obligations or provisions hereof by any Party shall constitute a material breach of this Registration Rights Agreement by the Party so failing to perform. 18.0 RELATIONSHIP CREATED. Nothing contained herein or in any schedule, attachment, or exhibit hereto shall create any partnership, joint venture or other agreement between the Parties hereto. 19.0 THIRD PARTY BENEFICIARIES. Except as expressly provided for in this Registration Rights Agreement, no term or provision of this Registration Rights Agreement is intended to be, or shall be, for the benefit of any person, firm, organization or corporation not a Party hereto, and no such other person, firm, organization or corporation shall have any right or cause of action hereunder. -15- 16 IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement as of the date first written above, at Irvine, California. ADVANCED MATERIALS GROUP, INC., a Nevada corporation By: [SIG] ------------------------------- Its: "COMPANY" TIMOTHY R. BUSCH LIVING TRUST DATED SEPTEMBER 7, 1983 By: /s/ TIMOTHY R. BUSCH ------------------------------- TIMOTHY R. BUSCH Its: Trustee "BUSCH" -16- -----END PRIVACY-ENHANCED MESSAGE-----