REGISTRATION RIGHTS AGREEMENT
Exhibit
99.4
This
Registration Rights Agreement (this "Agreement") is dated as of June
20,
2006, between Monarch Pointe Fund, Ltd. ("Monarch"), Mercator Momentum Fund,
L.P. ("MMF"), Mercator Momentum Fund III, L.P. ("MMF III") and M.A.G. Capital,
LLC ("MAG" and, together with Monarch, MMF and MMF III, referred to individually
as a "Holder" and collectively as the "Holders"), and AHPC Holdings, Inc.,
a
Maryland corporation (the "Company").
WHEREAS,
on the date hereof, the Holders have purchased from the Company, for aggregate
consideration of $3,000,000, 30,000 shares of the Company's Series B Convertible
Preferred Stock (the "Series B Stock"), and have the right to cause such Series
B Stock to be converted into shares of the Company's common stock, par value
$0.01 (the "Common Stock"), pursuant to the conversion formula set forth in
the
Articles Supplementary of Series B Convertible Preferred Stock as filed with
the
Maryland State Department of Assessments and Taxation on June 20, 2006 (the
"Articles Supplementary");
WHEREAS,
on the date hereof, the Holders have acquired warrants (the "Warrants") from
the
Company, pursuant to which the Holders have the right to purchase in the
aggregate up to 1,950,000 shares of Common Stock; and
WHEREAS,
the Company desires to grant to the Holders the registration rights set forth
herein with respect to the shares of Common Stock issuable upon the conversion
of the Series B Stock and the exercise of the Warrants.
NOW,
THEREFORE, the parties hereto mutually agree as follows:
1.
Registrable
Securities.
As used
herein the terms "Registrable Security" means each of the shares of Common
Stock
issued (i) upon the conversion of the Series B Stock (the "Conversion Shares")
and (ii) upon exercise of the Warrants (the "Warrant Shares"), provided,
however, that with respect to any particular Registrable Security, such security
shall cease to be a Registrable Security as of the date of determination that
(a) it has been effectively registered under the Securities Act of 1933, as
amended (the "Securities Act"), and disposed of pursuant thereto, or
(b) registration under the Securities Act is no longer required for the
immediate public distribution of such security (whether pursuant to Rule 144
of
the Securities Act or otherwise). The term "Registrable Securities" means any
and/or all of the securities falling within the foregoing definition of a
"Registrable Security." In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure affecting
the Common Stock, such adjustment shall be made in the definition of
"Registrable Security" as is appropriate in order to prevent any dilution or
enlargement of the rights granted pursuant to this Section 1.
2.
Registration.
(a)
The
Company shall prepare or file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC") no later
than September 13, 2006, in order to register the resale of the Registrable
Securities under the Securities Act. The Company shall use its best efforts
to
cause the Registration Statement to become effective no later than ninety (90)
days after the filing. Once effective, the Company shall use its commercially
reasonable efforts to maintain the effectiveness of the Registration Statement
until the earliest of the following dates (the "Expiration Date") (i) the
date that all of the Registrable Securities have been sold, or (ii) the
date that the Company receives an opinion of counsel to the Company that all
of
the Registrable Securities may be freely traded without registration under
the
Securities Act, under Rule 144 promulgated under the Securities Act or
otherwise.
(b)
The
Company
will initially include in the Registration Statement as Registrable Securities
(i) two million (2,000,000)
shares
of Common Stock issuable upon conversion of the Series B Stock and (ii) the
maximum numbers of shares of Common Stock issuable upon exercise of the
Warrants.
3.
Covenants
of the Company with Respect to Registration.
The
Company covenants and agrees as follows:
(a)
If
any
stop order shall be issued by the SEC in connection with the Registration
Statement, the Company shall use commercially reasonable efforts to obtain
promptly the removal of such order. Following the effective date of the
Registration Statement, the Company shall, upon the request of any Holder,
forthwith supply such reasonable number of copies of the Registration Statement,
preliminary prospectus and prospectus meeting the requirements of the Securities
Act, and any other documents necessary or incidental to the public offering
of
the Registrable Securities, as shall be reasonably requested by any Holder
to
permit such Holder to make a public distribution of such Holder's Registrable
Securities. The obligations of the Company hereunder with respect to any
Holder's Registrable Securities are subject to such Holder's furnishing to
the
Company such appropriate information concerning such Holder, such Holder's
Registrable Securities and the terms of such Holder's offering of such
Registrable Securities as the Company may reasonably request in writing.
(b)
The
Company shall pay all costs, fees and expenses in connection with the
Registration Statement filed pursuant to Section 2 hereof including,
without limitation, the Company's legal and accounting fees, printing expenses,
and blue sky fees and expenses; provided, however, that each Holder shall be
solely responsible for the fees of any counsel retained by such Holder in
connection with such registration and any transfer taxes or underwriting
discounts, commissions or fees applicable to the Registrable Securities sold
by
such Holder pursuant thereto.
(c)
The
Company will take all actions which may be required to qualify or register
the
Registrable Securities included in the Registration Statement for the offer
and
sale under the securities or blue sky laws of such states as are reasonably
requested by each Holder of such securities, provided that the Company shall
not
be obligated to execute or file any general consent to service of process or
to
qualify as a foreign corporation to do business under the laws of any such
jurisdiction.
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4.
Additional
Terms.
(a)
The
Company shall indemnify and hold harmless the Holders and each underwriter,
within the meaning of the Securities Act, who may purchase from or sell for
any
Holder, any Registrable Securities, from and against any and all losses, claims,
damages and liabilities caused by any untrue statement of a material fact
contained in the Registration Statement, any other registration statement filed
by the Company under the Securities Act with respect to the registration of
the
Registrable Securities, any post-effective amendment to such registration
statements, or any prospectus included therein or caused by any omission to
state therein a material fact required to be stated therein or necessary to
make
the statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission
based
upon information furnished or required to be furnished in writing to the Company
by the Holders or underwriter expressly for use therein, which indemnification
shall include each person, if any, who controls any Holder or underwriter within
the meaning of the Securities Act and each officer, director, employee and
agent
of each Holder and underwriter; provided, however, that the indemnification
in
this Section 4(a) with respect to any prospectus shall not inure to the
benefit of any Holder or underwriter (or to the benefit of any person
controlling any Holder or underwriter) on account of any such loss, claim,
damage or liability arising from the sale of Registrable Securities by such
Holder or underwriter, if a copy of a subsequent prospectus correcting the
untrue statement or omission in such earlier prospectus was provided to such
Holder or underwriter by the Company prior to the subject sale and the
subsequent prospectus was not delivered or sent by such Holder or underwriter
to
the purchaser prior to such sale and provided further, that the Company shall
not be obligated to so indemnify any Holder or any such underwriter or other
person referred to above unless such Holder or underwriter or other person,
as
the case may be, shall at the same time indemnify the Company, its directors,
each officer signing the Registration Statement and each person, if any, who
controls the Company within the meaning of the Securities Act, from and against
any and all losses, claims, damages and liabilities caused by any untrue
statement of a material fact contained in the Registration Statement, any
registration statement or any prospectus required to be filed or furnished
by
reason of this Agreement or caused by any omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or omission based upon information furnished
in
writing to the Company by such Holder or underwriter expressly for use therein.
(b)
The
Holders shall jointly and severally indemnify and hold harmless the Company,
from and against any and all losses, claims, damages and liabilities caused
by
any untrue statement of a material fact contained in the Registration Statement,
any registration statement or any prospectus required to be filed or furnished
by reason of this Agreement or caused by any omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, insofar as such losses, claims, damages or liabilities
are caused by any material untrue statement or material omission based upon
information furnished in writing to the Company by the Holders expressly for
use
therein.
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(c)
If
for
any reason the indemnification provided for in the preceding section is held
by
a court of competent jurisdiction to be unavailable to an indemnified party
with
respect to any loss, claim, damage, liability or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by the indemnified
party as a result of such loss, claim, damage or liability in such proportion
as
is appropriate to reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations.
(d)
Promptly
after receipt by an indemnified party under this Section 4 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 4, 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,
to assume the defense thereof with counsel mutually satisfactory to the parties;
provided,
however,
that an
indemnified party shall have the right to retain its own 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 conflict of 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 shall relieve
such indemnifying party of liability to the indemnified party under this
Section 4 only to the extent the indemnifying party is prejudiced as a
result thereof.
(e)
Neither
the filing of a Registration Statement by the Company pursuant to this Agreement
nor the making of any request for prospectuses by any Holder shall impose upon
any Holder any obligation to sell such Holder's Registrable
Securities.
(f)
Each
Holder, upon receipt of notice from the Company that an event has occurred
which
requires a post-effective Amendment to the Registration Statement or a
supplement to the prospectus included therein, shall promptly discontinue the
sale of Registrable Securities until such Holder receives a copy of a
supplemented or amended prospectus from the Company, which the Company shall
provide as soon as practicable after such notice.
(g)
If
the
Company fails to keep the Registration Statement referred to above continuously
effective during the requisite period, then the Company shall, promptly upon
the
request of any Holder, update the Registration Statement or file a new
registration statement covering the Registrable Securities remaining unsold,
subject to the terms and provisions hereof, so that the registration of such
unsold Registered Securities is maintained for a number of days beyond the
Expiration Date equal to the number of days that such Holder is unable to sell
pursuant to Section 4(f) above.
(h)
Each
Holder agrees to provide the Company with any information or undertakings
reasonably requested by the Company in order for the Company to include any
appropriate information concerning such Holder in the Registration Statement
or
in order to promote compliance by the Company or such Holder with the Securities
Act.
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(i)
Each
Holder, by its acceptance of the Registrable Securities, agrees to cooperate
with the Company as reasonably requested by the Company in connection with
the
preparation and filing of a Registration Statement hereunder.
(j)
Each
Holder, on behalf of itself, its affiliates, its successors and assigns and
any
other direct or indirect transferee holding any of the Warrants, the Series
B
Stock or the Registrable Securities, hereby covenants and agrees not to,
directly or indirectly, offer to "short sell", contract to "short sell" or
otherwise "short sell" or encourage others to "short sell" any securities of
the
Company, including, without limitation, shares of Common Stock that will be
received as a result of the conversion of the Series B Stock or the exercise
of
the Warrants. For purposes of this Agreement, "short selling" shall include
any
sale, any trade in any option or other derivative security, any hedging
transaction relating to the securities of the Company or any transaction
intended to affect the price of the Company's common stock.
(k)
If
requested in writing by the Company and the managing underwriter of an
underwritten registered public offering by the Company of its Common Stock,
the
Holders shall agree not to sell or otherwise transfer or dispose of any Common
Stock of the Company held by such Holders (other than those included in the
registration statement) for a period not to exceed 180 days following the
effective date of a registration statement of the Company filed under the
Securities Act, provided that all officers and directors of the Company enter
into similar agreements identical in terms to that of the Holders.
5.
Governing
Law.
The
Registrable Securities will be, if and when issued, delivered in
California.
This
Agreement shall be deemed to have been made and delivered in the State of
California
and
shall be governed as to validity, interpretation, construction, effect and
in
all other respects by the internal substantive laws of the State of California,
without
giving effect to the choice of law rules thereof.
6.
Amendment.
This
Agreement may only be amended by a written instrument executed by the Company
and the Holders.
7.
Entire
Agreement.
This
Agreement constitutes the entire agreement of the parties hereto with respect
to
the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
8.
Execution
in Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
document.
9.
Notices.
All
communications hereunder shall be in writing and shall be hand delivered, mailed
by first-class mail, couriered by next-day air courier or by facsimile at the
addresses set forth below.
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If
to the
Holders,
M.A.G.
Capital, LLC
Monarch
Pointe Fund, Ltd.
Mercator
Momentum Fund, L.P.
Mercator
Momentum Fund III, L.P.
000 Xxxxx
Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx,
XX 00000
Attention:
Xxxxx Xxxxxxxxx
With
a
copy to
Xxxxxxxx
Xxxxxx Xxxxxxx & Hampton LLP
000
Xxxxx
Xxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxxxxx, XX 00000-0000
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
Attention:
Xxxxx
X.
Xxxxx
If
to the
Company,
AHPC
Holdings, Inc.
00
Xxxxxxxxxxxxx Xxxxxxxxx, Xxxx X
Xxxxxxxx
Xxxxxxx, XX 00000
Telephone
No.: ________________
Facsimile
No.: _________________
Attention:
Xxxx Xxxxxx
All
such
notices and communications shall be deemed to have been duly given: (i) when
delivered by hand, if personally delivered; (ii) five business days after being
deposited in the mail, postage prepaid, if mailed certified mail, return receipt
requested; (iii) one business day after being timely delivered to a next-day
air
courier guaranteeing overnight delivery; (iv) the date of transmission if sent
via facsimile to the facsimile number as set forth in this Section or the
signature page hereof prior to 6:00 p.m. on a business day, or (v) the business
day following the date of transmission if sent via facsimile at a facsimile
number set forth in this Section or on the signature page hereof after 6:00
p.m.
or on a date that is not a business day. Change of a party's address or
facsimile number may be designated hereunder by giving notice to all of the
other parties hereto in accordance with this Section.
10.
Binding
Effect; Benefits.
Any
Holder may assign its rights hereunder. This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns. Nothing herein
contained, express or implied, is intended to confer upon any person other
than
the parties hereto and their respective heirs, legal representatives and
successors, any rights or remedies under or by reason of this Agreement.
11.
Headings.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any
of
the terms or provisions of this Agreement.
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12.
Severability.
Any
provision of this Agreement which is held by a court of competent jurisdiction
to be prohibited or unenforceable in any jurisdiction(s) shall be, as to such
jurisdiction(s), ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
13.
Jurisdiction.
Each
of
the parties irrevocably agrees that any and all suits or proceedings based
on or
arising under this Agreement may be brought only in and shall be resolved in
the
federal or state courts located in the City of Los Angeles, California
and
consents to the jurisdiction of such courts for such purpose. Each of the
parties irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding in any such court. Each of the parties
further agrees that service of process upon such party mailed by first class
mail to the address set forth in Section 9 shall be deemed in every respect
effective service of process upon such party in any such suit or proceeding.
Nothing herein shall affect the right of either party
to serve
process in any other manner permitted by law. Each of the parties agrees that
a
final non-appealable judgment in any such suit or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on such judgment or
in
any
other lawful manner.
14.
Attorneys'
Fees and Disbursements.
If any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party or parties shall be entitled to receive
from the other party or parties reasonable attorneys’ fees and disbursements in
addition to any other relief to which the prevailing party or parties may be
entitled.
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IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto as of the date first above written.
|
By:
/s/ Xxxx
Xxxxxx
Name:
Xxxx Xxxxxx
Its: Chief
Executive Officer
HOLDERS:
MONARCH
POINTE FUND, LTD.
By:
M.A.G. CAPITAL, LLC
Its:
General Partner
By:
/s/ Xxxxx
Xxxxxxxxx
Name:
Xxxxx Xxxxxxxxx
Its:
Portfolio Manager
MERCATOR
MOMENTUM FUND, L.P.
By:
M.A.G. CAPITAL, LLC
Its:
General Partner
By:
/s/ Xxxxx
Xxxxxxxxx
Name:
Xxxxx Xxxxxxxxx
Its:
Portfolio Manager
MERCATOR
MOMENTUM FUND III, L.P.
By:
M.A.G. CAPITAL, LLC
Its:
General Partner
By:
/s/ Xxxxx
Xxxxxxxxx
Name:
Xxxxx Xxxxxxxxx
Its:
Portfolio Manager
|
8
|
M.A.G.
CAPITAL, LLC
By:
/s/ Xxxxx
Xxxxxxxxx
Name:
Xxxxx Xxxxxxxxx
Its:
Portfolio Manager
|
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