EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of the 24th day of December, 2003 by and among World Health
Alternatives, Inc., a corporation organized and existing under the laws of the
State of Florida ("WHAI" or the "COMPANY"), and certain investors, (hereinafter
referred to collectively as "INVESTOR" or "INVESTORS") as listed on Attachment A
herein (each agreement with an Investor being deemed a separate and independent
agreement between the Company and such Investor). Unless defined otherwise,
capitalized terms herein shall have the identical meaning as in the Stock
Purchase Agreement.
PRELIMINARY STATEMENT
WHEREAS, pursuant to the Stock Purchase Agreement, of even date
herewith, (the "STOCK PURCHASE AGREEMENT") by and among WHAI and the Investors,
as part of the consideration, Investors shall receive Shares of WHAI; and
WHEREAS, the ability of the Investors to sell their shares of Common
Stock is subject to certain restrictions under the 1933 Act; and
WHEREAS, as a condition to the Stock Purchase Agreement, WHAI has
agreed to provide the Investors with a mechanism that will permit such
Investors, subject to the hold-back agreements set forth in Section 5.2 below,
to sell their shares of Common Stock in the future.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements, and subject to the terms and conditions herein
contained, the parties hereto hereby agree as follows:
ARTICLE I
INCORPORATION BY REFERENCE, SUPERSEDER
1.1 Incorporation by Reference. The foregoing recitals, Schedule A and the
Exhibits attached hereto and referred to herein, are hereby acknowledged to be
true and accurate, and are incorporated herein by this reference.
1.2 Superseder. This Agreement, to the extent that it is inconsistent with
any other instrument or understanding among the parties governing the affairs of
the Company, shall supersede such instrument or understanding to the fullest
extent permitted by law. A copy of this Agreement shall be filed at the
Company's principal office.
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 1 OF 18
ARTICLE II
DEMAND REGISTRATION RIGHTS
2.1 "REGISTRABLE SECURITIES" means and includes the Shares of WHAI issued
to the Holders pursuant to the Stock Purchase Agreement. As to any particular
Registrable Securities, such securities will cease to be Registrable Securities
when (a) they have been effectively registered under the 1933 Act and disposed
of in accordance with the registration statement covering them; or (b) they have
been otherwise transferred and new certificates for them not bearing a
restrictive legend have been issued by WHAI and WHAI shall not have "stop
transfer" instructions against them. "SECURITIES" shall mean, collectively, the
shares of Common Stock of the Company being issued pursuant to the Stock
Purchase Agreement and those shares of Common Stock issuable to the Holder upon
exercise of the warrants being issued pursuant to the Stock Purchase Agreement.
"HOLDER" or "HOLDERS" shall mean any holder of Registrable Securities subject to
this Agreement. "PERSON" means an individual, partnership, firm, limited
liability company, trust, joint venture, association, corporation, or any other
legal entity. "WARRANTS" means the First Warrants, the Second Warrants and the
Third Warrants (each as defined in the Stock Purchase Agreement) exercisable for
5,333,300 shares of the Common Stock of the Company (the "WARRANT SHARES").
2.2 REGISTRATION OF REGISTRABLE SECURITIES. The Company shall prepare and
file a registration statement (the "REGISTRATION STATEMENT") covering the resale
by the Holders of the Registrable Securities (the "SHELF REGISTRATION"). The
Company shall use its commercially reasonable efforts to cause the Registration
Statement to be declared effective by the SEC by July 24, 2004 (the seven month
anniversary of the Closing Date of the Stock Purchase Agreement)(the "REQUIRED
EFFECTIVENESS DATE"). Nothing contained herein shall be deemed to limit the
number of Registrable Securities to be registered by the Company hereunder. As a
result, should the Registration Statement not relate to the maximum number of
Registrable Securities acquired by (or potentially acquirable by) the Holders of
the Registrable Securities, the Company shall be required to promptly file a
separate registration statement (utilizing Rule 462 promulgated under the
Exchange Act, where applicable) relating to such Registrable Securities which
then remain unregistered. The provisions of this Agreement shall relate to any
such separate registration statement as if it were an amendment to the
Registration Statement.
2.3 DEMAND REGISTRATION. At any time after the Required Effectiveness Date
until the date upon which the Warrants have been exercised with respect to not
less than 80% of the Warrant Shares, Holders of a majority of the Registrable
Securities at the time of election pursuant to this Section 2.3 may request the
registration for resale, once and only once, under the 1933 Act of all or part
of the Registrable Securities then outstanding (the "DEMAND REGISTRATION") by
providing written notice thereof (which notice shall specify the Registrable
Securities intended to be disposed of by such Holders of Registrable Securities
and the intended method of disposition thereof)("DEMAND REGISTRATION
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 2 OF 18
REQUEST") to the Company. Subject to the conditions of Section 3, the Company
(i) shall use its commercially reasonable efforts to file such registration
statement under the 1933 Act as promptly as practicable after the date any such
request is received by the Company and (ii) cause such registration statement to
be declared effective; except that the Company shall have the right to postpone
or defer the registration thereof for a period of not more than 20 consecutive
Trading Days or an aggregate of 40 Trading Days during the year such request for
registration has been made. The Company shall notify the Holders promptly when
any such registration statement has been declared effective. This provision
shall expire at such time as more than a majority of the Registrable Securities
as of the date of the Stock Purchase Agreement have been registered or sold.
2.4 REGISTRATION STATEMENT FORM. Registrations under Section 2.2 and
Section 2.3 shall be on Form SB-2 or such other appropriate registration form of
the SEC as shall permit the disposition of such Registrable Securities in
accordance with the intended method or methods of disposition specified in the
Registration Statement; provided, however, such intended method of disposition
shall not include an underwritten offering of the Registrable Securities.
2.5 EXPENSES. The Company will pay all Registration expenses in connection
with any registration required by under Sections 2.2 and Section 2.3 herein;
except that the Holders of Registrable Securities shall pay all selling
commissions and stock transfer taxes applicable to the sale of each Holder's
Registrable Securities and any fees and disbursements of counsel to such Holders
of Registrable Securities
2.6 EFFECTIVE REGISTRATION STATEMENT. A registration requested pursuant to
Sections 2.2 and Section 2.3 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective within
the time period specified herein, provided that a registration which does not
become effective after the Company filed a registration statement with respect
thereto solely by reason of the refusal to proceed of any Holder of Registrable
Securities (other than a refusal to proceed based upon the advice of counsel in
the form of a letter signed by such counsel and provided to the Company relating
to a disclosure matter unrelated to such Holder) shall be deemed to have been
effected by the Company unless the Holders of the Registrable Securities shall
have elected to pay all Registration Expenses in connection with such
registration, (ii) if, with respect to the Shelf Registration, after the
Registration Statement has become effective at any time until the Effectiveness
Termination Date (A) such registration becomes subject to any stop order,
injunction or other order or extraordinary requirement of the SEC or other
governmental agency or court for any reason or (B) such registration ceases to
be effective for more than the allowable Company Black-Out Periods (as defined
herein) or Holder Black-Out Periods (as defined herein) or (iii) if, with
respect to the Demand Registration, after the registration statement has become
effective at any time until the Demand Effectiveness Termination Date (A) such
registration becomes subject to any stop order, injunction or other order or
extraordinary requirement of the SEC or other governmental agency or court for
any reason or (B) such registration ceases to be effective for more than the
allowable Company Black-Out Periods or Holder Black-
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 3 OF 18
Out Periods.
2.7 PLAN OF DISTRIBUTION. The Company hereby agrees that the Registration
Statement shall include a plan of distribution section reasonably acceptable to
the Holder; provided, however, such plan of distribution section shall be
modified by the Company so as to not provide for the disposition of the
Registrable Securities on the basis of an underwritten offering.
2.8 LIQUIDATED DAMAGES. If, after the Required Effectiveness Date until the
Effectiveness Termination Date, in the event the Company does not register the
Registrable Securities pursuant to the requirements of Section 2.2 herein, or if
the Registration Statement filed pursuant to Section 2.2 herein is not declared
effective, or if the Registrable Securities are registered pursuant to an
effective Registration Statement filed pursuant to Section 2.2 herein and such
Registration Statement or other Registration Statement including the Registrable
Securities is not effective in the period from the Required Effectiveness Date
hereof through the Effectiveness Termination Date, the Company shall, for each
such day, pay the Purchaser, as liquidated damages and not as a penalty, an
amount equal to three percent (3%) of the Purchase Price per month, payable
monthly; and for any such day, such payment shall be made no later than the
fifth business day of the calendar month next succeeding the month in which such
day occurs.
The parties agree that the only damages payable for a violation of the terms of
this Agreement with respect to which liquidated damages are expressly provided
shall be such liquidated damages. Nothing shall preclude the Purchaser from
pursuing or obtaining specific performance or other equitable relief with
respect to this Agreement.
The parties hereto agree that the liquidated damages provided for in this
Section 2.8 constitute a reasonable estimate of the damages that may be incurred
by the Purchaser by reason of the failure of the Registration Statement to be
filed or declared effective in accordance with the provisions hereof.
The obligation of the Company terminates when the Holders of shares of
Registrable Securities no longer hold more than twenty percent (20%) of their
shares of Registrable Securities.
2.9 EFFECTIVENESS TERMINATION DATE; DEMAND EFFECTIVENESS TERMINATION DATE.
For purposes of this Agreement, (a) "EFFECTIVENESS TERMINATION DATE" means the
earlier of (i) the date that is the second anniversary of the Closing Date, or
(ii) such date as all such Registrable Securities have been sold and (b) "DEMAND
EFFECTIVENESS TERMINATION DATE" means the earlier of (i) the date that is the
second anniversary of the date upon which the Demand Registration Notice has
been delivered to the Company or (ii) such date as all such Registrable
Securities have been sold.
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 4 OF 18
ARTICLE III
INCIDENTAL REGISTRATION RIGHTS
3.1 RIGHT TO INCLUDE ("PIGGY-BACK") REGISTRABLE SECURITIES. Provided that
the Registrable Securities have not been previously registered, if at any time
after the date hereof but before the second anniversary of the date hereof, the
Company shall determine to register any of its securities under the 1933 Act
(other than by a registration in connection with an acquisition in a manner
which would not permit registration of Registrable Securities for sale to the
public, on Form S-8, or any successor form thereto, on Form S-4, or any
successor form thereto and other than pursuant to Section 2), on an underwritten
basis (either best efforts or firm-commitment), then, the Company will each such
time give prompt written notice to all Holders of Registrable Securities of its
intention to do so and of such Holders of Registrable Securities' rights under
this Section 3.1. Upon the written request of any such individual Holders of
Registrable Securities made within ten (10) days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such Holders of Registrable Securities and the intended method of
disposition thereof), the Company will, subject to the terms of this Agreement,
use its commercially reasonable efforts to effect the registration under the
1933 Act of the Registrable Securities, to the extent requisite to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
such Registrable Securities so to be registered, by inclusion of such
Registrable Securities in the registration statement which covers the securities
which the Company proposes to register, provided that if, at any time after
written notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason either not to register
or to delay registration of such securities, the Company may, at its election,
give written notice of such determination to each Holder of Registrable
Securities and, thereupon, (i) in the case of a determination not to register,
shall be relieved of this obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith), without prejudice, however, to
the rights of any Holder of Registrable Securities entitled to do so to request
that such registration be effected as a registration under Section 2, and (ii)
in the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. No registration effected under this Section
3.1 shall relieve the Company of its obligation to effect any registration upon
request under Section 2. The Company will pay all Registration Expenses in
connection with each registration of Registrable Securities requested pursuant
to this Section 3.1. The right provided the Holders of the Registrable
Securities pursuant to this Section shall be exercisable at their sole
discretion.
3.2 PRIORITY IN INCIDENTAL REGISTRATIONS. If the managing underwriter of
the underwritten offering contemplated by this Section 3 shall inform the
Company and Holders of the Registrable Securities requesting such registration,
by letter, of its belief
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 5 OF 18
that the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering, then the Company will
include in such registration, to the extent of the number which the Company is
so advised can be sold in such offering, (i) first securities proposed by the
Company to be sold for its own account, and (ii) second Registrable Securities
and securities of other selling security holders requested to be included in
such registration pro rata on the basis of the number of shares of such
securities so proposed to be sold and so requested to be included; provided,
however, the Holders of Registrable Securities shall have pro rata rights of
registration with all shares sought to be included by officers and directors of
the Company as well as holders of ten percent (10%) or more of the Company's
Common Stock.
ARTICLE IV
REGISTRATION PROCEDURES
4.1 REGISTRATION PROCEDURES.
(a) If and whenever the Company is required to effect the
registration of any Registrable Securities under the 1933 Act as provided in
Section 2.2 and, as applicable, 2.3, the Company shall, as expeditiously as
possible:
(i) prepare and file with the SEC the Registration
Statement, or amendments thereto, to effect such registration (including such
audited financial statements as may be required by the 1933 Act or the rules and
regulations promulgated thereunder) and thereafter use its commercially
reasonable efforts to cause such registration statement to be declared effective
by the SEC, as soon as practicable, but with respect to a registration pursuant
to Section 2.2 in no event later than the Required Effectiveness Date; provided,
however, that before filing such registration statement or any amendments
thereto, the Company will furnish to the counsel selected by the Holders of
Registrable Securities which are to be included in such registration, copies of
all such documents proposed to be filed;
(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 necessary to keep such registration statement effective and
to comply with the provisions of the 1933 Act (subject to the right of the
Company to suspend the effectiveness thereof for not more than 20 consecutive
Trading Days or an aggregate of 40 Trading Days during each year (each a
"COMPANY BLACK-OUT PERIOD") or for a period of not more than 20 consecutive
Trading Days if relating to any event involving the Company which has or will
occur at the request of one or more Holder(s) (each a "HOLDER BLACK-OUT
PERIOD"));
(iii) furnish to each Holder of Registrable Securities
covered by such
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 6 OF 18
registration statement such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained in
such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under the 1933
Act, in conformity with the requirements of the 1933 Act, and such other
documents, as such Holder of Registrable Securities and underwriter, if any, may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such Holder of Registrable Securities;
(iv) use its commercially reasonable efforts to register
or qualify all Registrable Securities and other securities covered by such
registration statement under such other securities laws or blue sky laws as any
Holder of Registrable Securities thereof shall reasonably request, to keep such
registrations or qualifications in effect for so long as such registration
statement remains in effect, and take any other action which may be reasonably
necessary to enable such Holder of Registrable Securities to consummate the
disposition in such jurisdictions of the securities owned by such Holder of
Registrable Securities, except that the Company shall not for any such purpose
be required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this subdivision
(iv) be obligated to be so qualified or to consent to general service of process
in any such jurisdiction;
(v) use its commercially reasonable efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the Holder of Registrable Securities thereof to consummate
the disposition of such Registrable Securities, subject to the Company's rights
relating to the Company Black-Out Periods and/or Holder Black-Out Period;, and
(vi) notify the Investor and its counsel promptly and
confirm such advice in writing promptly after the Company has knowledge thereof:
(A) when the Registration Statement, the
prospectus or any prospectus supplement related thereto or post-effective
amendment to the Registration Statement has been filed, and, with respect to the
Registration Statement or any post-effective amendment thereto, when the same
has become effective;
(B) of any request by the SEC for amendments or
supplements to the Registration Statement or the prospectus or for additional
information;
(C) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings by any Person for that purpose; and
(D) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 7 OF 18
securities or blue sky laws of any jurisdiction or the initiation or threat of
any proceeding for such purpose;
(vii) notify each Holder of Registrable Securities covered
by such registration statement, as soon as practicable after the Company becomes
aware at any time when a prospectus relating thereto is required to be delivered
under the 1933 Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material facts required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and at
the request of any such Holder of Registrable Securities promptly prepare and
furnish to such Holder of Registrable Securities a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include 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 in the light of the circumstances then
existing;
(viii) use its commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the Registration
Statement at the earliest possible moment;
(ix) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC;
(x) enter into such agreements and take such other
actions as the Holders of Registrable Securities shall reasonably request in
writing (at the expense of the requesting or benefiting such Holders of
Registrable Securities) in order to expedite or facilitate the disposition of
such Registrable Securities; and
(xi) use its commercially reasonable efforts to list all
Registrable Securities covered by such registration statement on any securities
exchange on which any of the Registrable Securities are then listed.
(b) The obligations of the Company in Section 4.1(a) shall expire
(x) with respect to any registration effected pursuant to Section 2.2, on the
earlier of the Effectiveness Termination Date and such time as all of the
securities which are the subject of such registration statement cease to be
Registrable Securities or (y) with respect to any registration effected pursuant
to Section 2.3, on the earlier of the Demand Effectiveness Termination Date and
such time as all of the securities which are the subject of such registration
statement cease to be Registrable Securities.
(c) The Company may require each Holder of Registrable Securities
as to which any registration is being effected to furnish the Company such
information regarding such Holder of Registrable Securities and the distribution
of such securities as the
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 8 OF 18
Company may from time to time reasonably request in writing.
4.2 The Company will not file any registration statement pursuant to
Section 2.2 or Section 2.3, or amendment thereto or any prospectus or any
supplement thereto to which the Holders shall reasonably object, provided that
the Company may file such documents in a form required by law or upon the advice
of its counsel.
4.3 The Company represents and warrants to each Holder of Registrable
Securities that it has obtained all necessary waivers, consents and
authorizations necessary to execute this Agreement and consummate the
transactions contemplated hereby other than such waivers, consents and/or
authorizations specifically contemplated by the Stock Purchase Agreement.
4.4 Each Holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the occurrence of any event of the kind described in
subdivision (vii) of Section 4.1, such Holder will forthwith discontinue such
Holder of Registrable Securities' disposition of Registrable Securities pursuant
to the Registration Statement relating to such Registrable Securities until such
Holder of Registrable Securities' receipt of the copies of the supplemented or
amended prospectus contemplated by subdivision (viii) of Section 4.1 and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in such Holder's possession
of the prospectus relating to such Registrable Securities current at the time of
receipt of such notice.
4.5 As a condition precedent to the obligations of the Company to include
any Registrable Securities of any Holder in any registration statement
hereunder, such Holder shall furnish to the Company all such information and
materials regarding such Holder and the distribution proposed by such Holder as
the Company may reasonably request in writing in connection with any
registration hereunder. Each Holder will promptly notify the Company in writing
of any changes in the information set forth in the registration statement after
it is prepared regarding such Holder or its plan of distribution to the extent
required by law.
ARTICLE V
UNDERWRITTEN OFFERINGS
5.1 INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any time proposes
to register any of its securities under the 1933 Act as contemplated by Section
3.1 and such securities are to be distributed by or through one or more
underwriters, the Company will, if requested by any Holder of Registrable
Securities as provided in Section 3.1 and subject to the provisions of Section
3.2, use its commercially reasonable efforts to arrange for such underwriters to
include all the Registrable Securities to be offered and sold by such Holder
among the securities to be distributed by such underwriters.
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 9 OF 18
5.2 HOLDBACK AGREEMENTS. Subject to such other reasonable requirements as
may be imposed by the underwriter as a condition of inclusion of the Registrable
Securities in the registration statement, the Holder of Registrable Securities
agrees by acquisition of Registrable Securities, if so required by the managing
underwriter, not to sell, make any short sale of, loan, grant any option for the
purchase of, effect any public sale or distribution of or otherwise dispose of,
except as part of such underwritten registration, any equity securities of the
Company, during such reasonable period of time requested by the underwriter;
provided however, (i) the offering is intended to raise a minimum of three
million dollars ($3,000,000) on behalf of the Company and (ii) such period shall
not exceed the 90 day period commencing with the completion of a underwritten
offering. The Company agrees and acknowledges that during any holdback period,
the Holder of Registrable Securities may sell, in holdback period, Registrable
Securities in the amount of up to one percent per week of the shares of Common
Stock held by the Holder of Registrable Securities as long as this Agreement
remains effective.
5.3 PARTICIPATION IN UNDERWRITTEN OFFERINGS. No Holder of Registrable
Securities may participate in any underwritten offering under Section 3.1 unless
such Holder of Registrable Securities (i) agrees to participate in such
underwriting arrangements approved, subject to the terms and conditions hereof,
by the Holders of a majority of Registrable Securities to be included in such
underwritten offering; (ii) enters into an underwriting agreement acceptable to
the Company and (iii) completes and executes all questionnaires, indemnities,
underwriting agreements and other documents (other than powers of attorney)
required under the terms of such underwriting arrangements. Notwithstanding the
foregoing, no underwriting agreement (or other agreement in connection with such
offering) shall require any Holder of Registrable Securities to make a
representation or warranty to or agreements with the Company or the underwriters
other than representations and warranties contained in a writing furnished by
such Holder of Registrable Securities expressly for use in the related
registration statement or representations, warranties or agreements regarding
such Holder of Registrable Securities, such Holder's Registrable Securities and
such Holder's intended method of distribution and any other representation
required by law.
5.4 PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the 1933 Act
pursuant to this Agreement, the Company will give the Holders of Registrable
Securities registered under such registration statement, and their respective
counsel and accountants, the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
SEC, and each amendment thereof or supplement thereto, and will give each of
them such access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
reasonable opinion of such Holders' and such underwriters' respective counsel,
to conduct a reasonable investigation within the meaning of the 1933 Act.
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 10 OF 18
ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION BY THE COMPANY. In the event of any registration of any
securities of the Company under the 1933 Act, the Company will, and hereby does
agree to indemnify and hold harmless the Holder of any Registrable Securities
covered by such registration statement, its directors and officers, each other
Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such Holder or any such
underwriter within the meaning of the 1933 Act against any losses, claims,
damages or liabilities, joint or several, to which such Holder or any such
director or officer or underwriter or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the 1933 Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse such Holder
and each such director, officer, underwriter and controlling person for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding, provided that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, liability, (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Holder or
underwriter stating that it is for use in the preparation thereof and, provided
further that the Company shall not be liable to any Person who participates as
an underwriter in the offering or sale of Registrable Securities or to any other
Person, if any, who controls such underwriter within the meaning of the 1933
Act, in any such case to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of such
Person's failure to send or give a copy of the final prospectus, as the same may
be then supplemented or amended, within the time required by the 1933 Act to the
Person asserting the existence of an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus or an amendment or
supplement thereto. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Holder or any such
director, officer, underwriter or controlling person and shall survive the
transfer
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 11 OF 18
of such securities by such Holder.
6.2 INDEMNIFICATION BY THE HOLDERS. In the event of any registration of any
securities of the Company under the 1933 Act, each Holder will, and hereby does
agree to indemnify and hold harmless the Company, its directors and officers,
each other Person who participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who controls the Company or any
such underwriter within the meaning of the 1933 Act against any losses, claims,
damages or liabilities, joint or several, to which the Company or any such
director or officer or underwriter or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the 1933 Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and each Holder will reimburse the Company
and each such director, officer, underwriter and controlling person for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such Holder of
Registrable Securities specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Any such indemnity
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Company or any such director, officer or controlling person
and shall survive the transfer of such securities by such Holder.
6.3 NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in Sections 6.1 and Section 6.2, such indemnified party will, if
claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action, provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under Sections 6.1 and Section
6.2, except to the extent that the indemnifying party is actually prejudiced by
such failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that the indemnifying party
may wish, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 12 OF 18
in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability, or a covenant not to xxx, in respect to such claim or litigation.
No indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.
6.4 OTHER INDEMNIFICATION. Indemnification similar to that specified in
Sections 6.1 and Section 6.2 (with appropriate modifications) shall be given by
the Company and each Holder of Registrable Securities (but only if and to the
extent required pursuant to the terms herein) with respect to any required
registration or other qualification of securities under any Federal or state law
or regulation of any governmental authority, other than the 1933 Act.
6.5 INDEMNIFICATION PAYMENTS. The indemnification required by Sections 6.1
and Section 6.2 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
expense, loss, damage or liability is incurred.
6.6 CONTRIBUTION. If the indemnification provided for in Sections 6.1 and
Section 6.2 is unavailable to an indemnified party in respect of any expense,
loss, claim, damage or liability referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such expense,
loss, claim, damage or liability (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Holder of Registrable Securities or underwriter, as the case may be, on the
other from the distribution of the Registrable Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Holder of Registrable Securities or underwriter, as the
case may be, on the other in connection with the statements or omissions which
resulted in such expense, loss, damage or liability, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Holder of Registrable Securities or underwriter, as the
case may be, on the other in connection with the distribution of the Registrable
Securities shall be deemed to be in the same proportion as the total net
proceeds received by the Company from the initial sale of the Registrable
Securities by the Company to the purchasers bear to the gain, if any, realized
by all selling Holders participating in such offering or the underwriting
discounts and commissions received by the underwriter, as the case may be. The
relative fault of the Company on the one hand and of the Holder of Registrable
Securities or underwriter, as the case may be, on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission to state a material fact relates to
information supplied by the
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 13 OF 18
Company, by the Holder of Registrable Securities or by the underwriter and the
parties' relative intent, knowledge, access to information supplied by the
Company, by the Holder of Registrable Securities or by the underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, provided that the foregoing
contribution agreement shall not inure to the benefit of any indemnified party
if indemnification would be unavailable to such indemnified party by reason of
the provisions contained herein, and in no event shall the obligation of any
indemnifying party to contribute under this Section 6.6 exceed the amount that
such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for hereunder had been available
under the circumstances.
The Company and the Holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this Section 6.6
were determined by pro rata allocation (even if the Holders of Registrable
Securities and any underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth herein, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6.6, no Holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such Holder, the net
proceeds received by such Holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such Holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
ARTICLE VII
RULE 144
7.1 RULE 144. The Company shall timely file the reports required to be
filed by it under the 1933 Act and the 1934 Act (including but not limited to
the reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 adopted by the SEC under the 0000 Xxx) and the
rules and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, will, upon the request of any Holder of
Registrable Securities, make publicly available other information) and will take
such further action as any Holder of Registrable Securities
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 14 OF 18
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the 1933
Act within the limitation of the exemptions provided by (a) Rule 144 under the
1933 Act, as such Rule may be amended from time to time, or (b) any similar rule
or regulation hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with the requirements of this Section
7.1. The rights and obligations contained in this Section 7.1 shall expire upon
the Effectiveness Termination Date.
ARTICLE VIII
MISCELLANEOUS
8.1 AMENDMENTS AND WAIVERS. This Agreement may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the Holder or
Holders of the sum of the 51% or more of the shares of (i) Registrable
Securities issued at such time, plus (ii) Registrable Securities issuable upon
exercise or conversion of the Securities then constituting derivative securities
(if such Securities were not fully exchanged or converted in full as of the date
such consent if sought). Each Holder of any Registrable Securities at the time
or thereafter outstanding shall be bound by any consent authorized by this
Section 8.1, whether or not such Registrable Securities shall have been marked
to indicate such consent.
8.2 NOMINEES FOR BENEFICIAL OWNERS. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the Holder of such
Registrable Securities for purposes of any request or other action by any Holder
or Holders of Registrable Securities pursuant to this Agreement or any
determination of any number of percentage of shares of Registrable Securities
held by a Holder or Holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership or such Registrable Securities.
8.3 NOTICES. Except as otherwise provided in this Agreement, all notices,
requests and other communications to any Person provided for hereunder shall be
in writing and shall be given to such Person (a) in the case of a party hereto
other than the Company, addressed to such party in the manner set forth in the
Stock Purchase Agreement or at such other address as such party shall have
furnished to the Company in writing, or (b) in the case of any other Holder of
Registrable Securities, at the address that such Holder shall have furnished to
the Company in writing, or, until any such other Holder so furnishes to the
Company an address, then to and at the address of the last Holder of such
Registrable Securities who has furnished an address to the Company, or (c) in
the case of
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 15 OF 18
the Company, at the address set forth on the signature page hereto, to the
attention of its President, or at such other address, or to the attention of
such other officer, as the Company shall have furnished to each Holder of
Registrable Securities at the time outstanding. Each such notice, request or
other communication shall be effective (i) if given by mail, 72 hours after such
communication is deposited in the mail with first class postage prepaid,
addressed as aforesaid or (ii) if given by any other means (including, without
limitation, by fax or air courier), when delivered at the address specified
above, provided that any such notice, request or communication shall not be
effective until received.
8.4 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto. In addition, and whether or
not any express assignment shall have been made, the provisions of this
Agreement which are for the benefit of the parties hereto other than the Company
shall also be for the benefit of and enforceable by any subsequent Holder of any
Registrable Securities.
8.5 DESCRIPTIVE HEADINGS. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.
8.6 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Pennsylvania, without giving
effect to applicable principles of conflicts of law.
8.7 JURISDICTION. This Agreement shall be exclusively governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania. If
any action is brought among the parties with respect to this Agreement or
otherwise, by way of a claim or counterclaim, the parties agree that in any such
action, and on all issues, the parties irrevocably waive their right to a trial
by jury. Exclusive jurisdiction and venue for any such action shall be the
Courts of the Commonwealth of Pennsylvania. In the event suit or action is
brought by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
8.8 ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the Company and each other party hereto relating to the
subject matter hereof and supercedes all prior agreements and understandings
relating to such subject matter.
8.9 SEVERABILITY. If any provision of this Agreement, or the application of
such provisions to any Person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
8.10 BINDING EFFECT. All the terms and provisions of this Agreement whether
so
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 16 OF 18
expressed or not, shall be binding upon, inure to the benefit of, and be
enforceable by the parties and their respective administrators, executors, legal
representatives, heirs, successors and assignees.
8.11 PREPARATION OF AGREEMENT. This Agreement shall not be construed more
strongly against any party regardless of who is responsible for its preparation.
The parties acknowledge each contributed and is equally responsible for its
preparation.
8.12 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty, covenant or agreement herein, nor
shall nay single or partial exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
8.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement. A facsimile transmission
of this signed Agreement shall be legal and binding on all parties hereto.
[SIGNATURES ON FOLLOWING PAGE]
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 17 OF 18
IN WITNESS WHEREOF, the Investors and the Company have as of the date
below.
WHAI
WORLD HEALTH ALTERNATIVES, INC. DATE: December 24, 2004
/s/ Xxxxxxx X. XxXxxxxx
------------------------
By: Xxxxxxx X. XxXxxxxx
Title: President
INVESTORS
/s/ Xxxxxxx Xxxxxx /s/ Xxxxxxx Xxxxxxxx
------------------ --------------------
Print Name: Xxxxxxx Xxxxxx Print Name: Xxxxxxx Xxxxxxxx
Entity (if appropriate): Entity(if appropriate: Insiders Trend Fund LP
Northern Valley Partners, LLC Title (if appropriate): General Partner
Title (if appropriate):
President
/s/ Xxxxx Xxxxx /s/ Xxxxxx Xxxxx and Xxxxxx Xxxxx
---------------- ---------------------------------
Print Name: Xxxxx Xxxxx Print Name: Xxxxxx Xxxxx and Xxxxxx Xxxxx
Entity (if appropriate): Entity(if appropriate):
Guerrilla Partners L.P. Title (if appropriate):
Title (if appropriate):
Managing Director
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxxx Xxxxxx
-------------------- -----------------
Print Name: Xxxxxxx X. Xxxxx Print Name: Xxxxxx Xxxxxx
Entity (if appropriate): Entity(if appropriate): Xxxxxx Partners, LP
Title: (if appropriate): Title (if appropriate):
REGISTRATION RIGHTS AGREEMENT BETWEEN
WORLD HEALTH ALTERNATIVES, INC. AND CERTAIN INVESTORS
PAGE 18 OF 18
