REGISTRATION RIGHTS AGREEMENT
Exhibit
99.7
THIS
REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of the 21st day
of
September, 2005, by and between AHPC HOLDINGS, INC., a Maryland corporation
(the
"Company"), and each of the investors listed on Schedule
A
hereto
(collectively, the "Investors" and each an "Investor"), each of whom is a holder
of warrants to purchase the Company's common stock, whether Class A, Class
B or
Placement Agent Warrants (collectively, the "Warrants").
WHEREAS,
the Company and the holders of the Warrants are parties to various certain
subscription agreements, relating to the purchase of certain secured notes
and
the Warrants (the "Subscription Agreements");
WHEREAS,
the Subscription Agreements entitle the Investors to exercise the Warrants
to
purchase shares into the Company's common stock (the "Common Stock") at any
time
following the closing of the purchase and sale of the secured notes and
Warrants;
WHEREAS,
as a partial inducement to the Investors to purchase the secured notes and
Warrants, the Investors and the Company hereby agree that this Agreement shall
govern the rights of the Investors with respect to the registration of shares
of
Common Stock issuable to the Investors upon the exercise of the Warrants into
Common Stock.
NOW,
THEREFORE, the parties hereby agree as follows:
1. Registration
Rights.
The
Company covenants and agrees as follows:
1.1 Definitions.
For
purposes of this Section 1:
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(a)
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The
term "Act" means the Securities Act of 1933, as amended.
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(b) The
term
"Holder" means any person owning or having the right to acquire Registrable
Securities or any assignee thereof in accordance with Section 1.8
hereof.
(c) The
term
"1934 Act" means the Securities Exchange Act of 1934, as amended.
(d) The
terms
"register," "registered," and "registration" refer to a registration effected
by
preparing and filings a registration statement or similar document in compliance
with the Act, and the declaration or ordering of effectiveness of such
registration statement or document.
(e) The
term
"Registrable Securities" means:
(i) the
Common Stock issuable or issued upon exercise of the Class A or Class B
Warrants;
(ii) the
Common Stock issuable or issued to LaSalle St. Securities, LLC ("LaSalle")
in
connection with its services as a placement agent for the secured notes and
Warrants upon exercise of warrants issued for such services (the "Placement
Agent Warrants"); and
(iii) any
Common Stock issued as (or issuable upon the exercise of any warrant, right
or
other security that is issued) a dividend or other distribution with respect
to,
or in exchange for, or in replacement of, the shares referenced in Section
1.1(f)(i) and (ii)
above,
excluding in all cases, however, any Registrable Securities sold by a person
in
a transaction in which his rights under this Section 1 are not assigned.
(f) Except
as
provided in Section
1.1(f)
above,
the number of shares of "Registrable Securities" outstanding shall be determined
by the number of shares of Common Stock outstanding that are, and the number
of
shares of Common Stock issuable pursuant to then-exercisable or convertible
securities that are, Registrable Securities.
(g) The
term
"SEC" shall mean the Securities and Exchange Commission.
1.2 Registration
of the Preferred Shares.
If at
any time within one year of the issuance of the Warrants the Company shall
file
a registration statement with the SEC, the Company agrees to register for resale
all Registrable Securities and use commercially reasonable efforts to have
the
SEC declare such registration statement effective and to effect any related
qualification or compliance with respect to the Registrable Securities as soon
as possible.
1.3 Demand
Registration Rights.
In the
event that the Company does not file a registration statement with the SEC
in
the one year period following the issuance of the Warrants, the Holders (both
exercised and unexercised) shall have the right to a single collective demand
for registration (the "Demand Request"). Such Demand Request shall be presented
to the Company in writing and must consist of the assent of 51% or more of
the
total Common Stock issuable upon exercise of the Warrants and the Placement
Agent Warrants. If the Demand Request is made by the Holders, the Company shall,
no later than sixty (60) days following receipt of the written Demand Request,
the Company shall file a registration statement with the SEC relating to the
resale of the Registrable Securities and use commercially reasonable efforts
to
have the SEC declare such registration statement effective and to effect any
related qualification or compliance with respect to the Registrable Securities
as soon as possible, but in no event later than 180 days from the filing of
the
registration statement.
1.4 Obligations
of the Company.
Whenever required under this Section
1
to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) In
connection with the registration statement filed pursuant to Section
1.2 or 1.3,
the
Company will keep such registration effective until the earlier of:
(i) three
(3)
years from the effective date of the filing of such registration statement;
2
(ii) the
date
on which all of the Holders have completed the distribution described in such
registration statement; or
(iii) when
all
Holders will be eligible to dispose of their remaining eligible securities
over
a period of no greater than two calendar quarters pursuant to Rule 144.
(b) In
connection with the registration statement filed pursuant to Section
1.2 or 1.3,
the
Company will 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 comply with the provisions of the Securities Act with
respect to the disposition of the Registrable Securities.
(c) In
connection with the registration statement filed pursuant to Section
1.2 or 1.3,
the
Company shall furnish to the Holders such number of prospectuses related thereto
as the Holders shall reasonably request.
(d) If,
after
the registration statement described in Section
1.2 or 1.3 becomes
effective, the Company advises the Holders that:
(i) the
Company considers it appropriate for the registration statement to be amended,
the Holders shall suspend any further sales of Registrable Securities until
the
Company advises the Holders that the registration statement has been amended;
or
(ii) the
Company is no longer eligible to continue the registration of the Registrable
Securities on Form S-3 or such other form as the Registrable Securities shall
have been registered, then the Holders agree to suspend sales of their
Registrable Securities (except to the extent otherwise legally permitted) until
the Company shall have effected new registration of their Registrable Securities
in accordance with Form SB-2, Form S-1 or as otherwise permitted by applicable
law.
(e) The
Company shall pay all costs, fees and expenses in connection with the
registration statement filed pursuant to Section
1.2 or 1.3
(excluding fees and expenses of the Holders' counsel and underwriting discounts
or selling commissions and transfer, income and other taxes applicable to the
Registrable Securities), including, without limitation, the Company's legal
and
accounting fees, printing expenses and blue sky fees and expenses.
(f) The
Company will take all necessary action which may be required in qualifying
or
registering the Registrable Securities included in a registration statement
described in Section
1.2 or 1.3
for
offering and sale under the securities or blue sky laws of such states as may
be
reasonably requested by the Holders.
(g) Notwithstanding
the foregoing provisions of this Section
1.4,
no
registration rights shall be extended pursuant to this Section
1
with
respect to any Registrable Securities:
3
(i) which
have been sold pursuant to and in accordance with an effective registration
statement;
(ii) sold
in
accordance with Rule 144 under the Act; or
(iii) sold
in a
private transaction in which the Holder's rights hereunder are not assigned.
1.5 Information
from Holders.
It
shall be a condition precedent to the obligations of the Company to take any
action pursuant to this Section
1
with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
1.6 Delay
of Registration.
No
Holder shall have any right to obtain or seek an injunction restraining or
otherwise delaying any such registration as the result of any controversy that
might arise with respect to the interpretation or implementation of this
Section
1.
1.7 Indemnification.
(a) To
the
extent permitted by law, the Company will indemnify and hold harmless each
Holder, the partners or officers, directors and stockholders of each Holder,
legal counsel and accountants for each Holder, any underwriter (as defined
in
the Act) for such Holder and each person, if any, who controls such Holder
or
underwriter within the meaning of the Act or the 1934 Act, against any losses,
claims, damages or liabilities (joint or several) to which they may become
subject under the Act, the 1934 Act or any state securities laws, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation") by the Company:
(i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto;
(ii) 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
(iii) any
violation or alleged violation by the Company of the Act, the 1934 Act, any
state securities laws or any rule or regulation promulgated under the Act,
the
1934 Act or any state securities laws;
and
the
Company will reimburse each such Holder, underwriter or controlling person
for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section
1.7(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 a Violation
that
occurs 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; provided further, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Holder or underwriter, or any person controlling such
Holder or underwriter, from whom the person asserting any such losses, claims,
damages or liabilities purchased shares in the offering, if a copy of the
prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf
of
such Holder or underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the shares
to
such person, and if the prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability.
4
(b) To
the
extent permitted by law, each selling Holder will indemnify and hold harmless
the Company, each of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls the Company within
the
meaning of the Act, legal counsel and accountants for the Company, any
underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, against
any
losses, claims, damages or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, the 1934 Act or any state
securities laws, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs
in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will reimburse any person intended to be indemnified pursuant to this
Section 1.7(b),
for any
legal or other expenses reasonably incurred by such person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 1.7(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 the
Holder (which consent shall not be unreasonably withheld), provided that in
no
event shall any indemnity under this Section 1.7(b)
exceed
the gross proceeds from the offering received by such Holder.
(c) Promptly
after receipt by an indemnified party under this Section 1.7
of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1.7,
deliver
to the indemnifying party a written notice of the commencement thereof and
the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel reasonably
satisfactory to each party; provided, however, that an indemnified party
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by
such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve
such
indemnifying party of any liability to the indemnified party under this
Section 1.7,
but the
omission so to deliver written notice to the indemnifying party will not relieve
it of any liability that it may have to any indemnified party otherwise than
under this Section
1.7.
After
notice from an indemnifying party to such indemnified party of its election
to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party pursuant to the provisions of this Section
1.7
for any
legal or other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation, unless:
(i) the
indemnified party shall have employed counsel in accordance with the first
sentence of this Section
1.7(c);
5
(ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after the notice of the commencement of the action; or
(iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying
party.
(d) If
the
indemnification provided for in this Section
1.7
is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other
in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission; provided, however, that in no event shall any
contribution by any Holder hereunder exceed the net proceeds from the offering
received by such Holder.
(e) The
obligations of the Company and Holders under this Section 1.7
shall
survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1,
and
otherwise.
1.8 Assignment
of Registration Rights.
The
rights to cause the Company to register Registrable Securities pursuant to
this
Section
1
may be
assigned (with all related obligations) by a Holder of such securities to a
transferee or assignee of the Registrable Securities which:
(a) is
a
subsidiary, parent, general partner, limited partner, retired partner, member
or
retired member of such Holder; or
(b) is
such
Holder's family member or trust for the benefit of such Holder, provided:
(i) the
Company is, within ten (10) days after such transfer, furnished with written
notice of the name and address of such transferee or assignee and the securities
with respect to which such registration rights are being assigned; and
(ii) such
transferee or assignee agrees in writing to be bound by and subject to the
terms
and conditions of this Agreement.
6
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2.
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Miscellaneous.
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2.1 Successors
and Assigns.
Except
as otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties (including transferees of any shares of Registrable
Securities). Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
2.2 Governing
Law.
This
Agreement shall be governed by and construed under the laws of the State of
Illinois as applied to agreements between Maryland residents entered into and
to
be performed entirely within Illinois. Any dispute with respect to the subject
matter of this Agreement shall be determined by arbitration in Xxxx County,
Illinois, in accordance with the rules of the American Arbitration Association
("AAA") and determined by an AAA arbitrator selected in accordance with the
AAA
rules, with each party to bear his, her or its respective costs and fees in
such
proceeding with the complainant, on the one hand, and defendant(s), on the
other
hand, to bear equally the cost of the AAA arbitrator.
2.3 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
2.4 Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this Agreement.
2.5 Notices.
Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given upon personal delivery
to the party to be notified or upon delivery by confirmed facsimile
transmission, nationally recognized overnight courier service, or upon deposit
with the United States Post Office, by registered or certified mail, postage
prepaid and addressed to the party to be notified at the address indicated
for
such party on the signature page hereof, or at such other address as such party
may designate by ten (10) days advance written notice to the other parties.
2.6 Entire
Agreement; Amendments and Waivers.
This
Agreement (including the Exhibits hereto, if any) constitutes the full and
entire understanding and agreement among the parties with regard to the subjects
hereof and thereof. Any term of this Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the holders of a majority of the Registrable
Securities then outstanding, which amendment shall be binding on all Holders.
2.7 Severability.
If one
or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
7
2.8 Aggregation
of Stock.
All
shares of Registrable Securities held or acquired by affiliated entities or
persons shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement on the date first above written.
AGREED
TO: COMPANY:
LASALLE
ST. SECURITIES, L.L.C. AHPC
HOLDINGS, INC.
By:
Xxxxxxx
Xxxxx
By:
Its:
Director
of Corporate Finance
Xxxx
Xxxxxx, Chief Executive Officer
INVESTORS:
By:
XXXX
XXXXXX, on behalf of each Investor
named
on
Exhibit
A
attached, pursuant
to power of
attorney contained in the
Investor's Subscription
Agreement
8
SCHDULE
A
SCHEDULE
OF INVESTORS
|
Name
of Investor
|
Address
|
|
Xxxxxx
Xxxxx
|
00
X. Xxxx, #0000, Xxxxxxx, XX 00000
|
|
Xxxxxx
and Xxx Xxxxxxxx Xxxxxxx
|
000
000xx,
Xxxxx Xxxxx, XX 00000
|
|
Xxxxxxx
and Xxxxxxxx Xxxxxxx
|
0
Xxxxxx Xxxx, X. Xxxxxxxxxx, XX 00000
|
|
Xxxxx
X. Xxxxxx Revocable Living Trust
|
0000
Xxxxxx Xxxxx Xx., Xxxxxxxx, XX 00000
|
|
Xxxx
Xxxxxxxx
|
0
X. XxXxxxx Xx., Xxx. 0000, Xxxxxxx, XX 00000
|
|
Xxxxxxx
and Xxxxxxxx Xxxxxxxx
|
0000
Xxxxxxxx Xx., Xxxxxxxxxx, XX 00000
|
|
Xxxxxxx
and Xxx Xxxxxxxx
|
00
Xxxxxxxxx Xx., Xxxxxxxxx, XX 00000
|
|
Xxxxxxx
and Xxx Xxxxxxxxxxx
|
00000
X. Xxxx Xxxx Xx., Xxxxxxxxxx, XX
00000
|
A-1
