Exhibit 10.5

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of October 2, 2015,
by and among AAC Holdings, Inc., a Nevada corporation (the “Company”), and those
lenders set forth on Schedule 1 to the Facility Agreement (as defined below)
(each individually, a “Lender” and together, the “Lenders”).

WHEREAS:

A. In connection with the Facility Agreement by and among the parties hereto of
even date herewith (the “Facility Agreement”), the Company has agreed, upon the
terms and subject to the conditions contained therein, to issue and sell to the
Lenders Convertible Notes and Incremental Conversion Notes (as defined below) in
the amount described in the Facility Agreement, where each of the Convertible
Notes and Incremental Conversion Notes, as the case may be, is convertible into
shares of the Company’s common stock, $0.001 par value per share (the “Common
Stock”), upon the terms and conditions and subject to the limitations and
conditions set forth in the Convertible Notes and Incremental Conversion Notes,
all subject to the terms and conditions of the Facility Agreement; and

B. To induce the Lenders to execute and deliver the Facility Agreement, the
Company has agreed to provide certain registration rights under the Securities
Act of 1933, as amended, and the rules and regulations thereunder, or any
similar successor statute (collectively, the “Securities Act”), and applicable
state securities laws.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Lenders hereby
agree as follows:

1. DEFINITIONS.

a. As used in this Agreement, the following terms shall have the following
meanings:

(i) “Additional Filing Deadline” means, with respect to any Registration
Statements that may be required pursuant to Section 2(a)(ii), (a) within three
(3) business days of the first date or time that such Registrable Securities may
then be included in a Registration Statement if such Registration Statement is
required because the SEC shall have notified the Company in writing that certain
Registrable Securities were not eligible for inclusion on a previously filed
Registration Statement, or (b) if such additional Registration Statement is
required for a reason other than as described in (a) above, the tenth (10th) day
following the date on which the Company first knows, or reasonably should have
known, that such additional Registration Statement is required.

(ii) “Additional Registration Deadline” means, with respect to any additional
Registration Statement(s) that may be required to be filed pursuant to
Section 2(a)(ii), the forty-fifth (45th ) day following (a) the first date or
time that such Registrable Securities may then be included in a Registration
Statement if such Registration Statement is required because the SEC shall have
notified the Company in writing that certain Registrable Securities were not
eligible for inclusion on a previously filed Registration Statement, or (b) if
such additional Registration Statement is required for a reason other than as
described in (a) above, the forty-fifth (45th) day following the date on which
the Company first knows, or reasonably should have known, that such additional
Registration Statement(s) is required.

(iii) “Buyer” means any Lender and any transferee or permitted assignee who
agrees to become bound by the provisions of this Agreement in accordance with
Section 10 hereof.

(iv) “Convertible Notes” means the Subordinated Convertible Notes issued by the
Company pursuant to the Facility Agreement evidencing the Initial Loans (as
defined in the Facility Agreement).

(v) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, and any successor statute.

(vi) “Filing Deadline,” shall mean the forty-fifth (45th) calendar day following
the date of issuance of the Convertible Notes and the Incremental Conversion
Notes, as the case may be, in the case of the Registration Statements required
to be filed under Section 2(a)(i), and, in the case of Section 2(a)(ii) shall
mean the Additional Filing Deadline.

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(vii) “Incremental Conversion Notes” means Incremental Convertible Notes, if
any, issued by the Company evidencing the Incremental Loans (as defined in the
Facility Agreement).

(viii) “Person” means and includes any natural person, partnership, joint
venture, corporation, trust, limited liability company, limited company, joint
stock company, unincorporated organization, government entity or any political
subdivision or agency thereof, or any other entity.

(ix) “Register,” “Registered,” and “Registration” refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule providing for offering securities on a continuous
basis, and the declaration or ordering of effectiveness of such Registration
Statement by the United States Securities and Exchange Commission (the “SEC”).

(x) “Registrable Securities,” for a given Registration, means (a) any shares of
Common Stock (the “Conversion Shares”) issued or issuable upon conversion of or
otherwise pursuant to the Convertible Notes and the Incremental Conversion Notes
(without giving effect to any limitations on conversion set forth in the
Convertible Notes or the Incremental Conversion Notes), (b) any shares of
capital stock issued or issuable as a dividend on or in exchange for or
otherwise with respect to any of the foregoing, (c) any additional shares of
Common Stock issuable in connection with any anti-dilution provisions in the
Convertible Notes or the Incremental Conversion Notes and (d) any securities
issued or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing.

(xi) “Registration Deadline” shall mean (i) forty-five (45) days after the
applicable Filing Deadline in the case of a Registration Statement required
under Section 2(a)(i), and (ii) the Additional Registration Deadline in the case
of a Registration Statement required under Section 2(a)(ii).

(xii) “Registration Statement(s)” means a registration statement(s) of the
Company under the Securities Act required to be filed hereunder.

2. REGISTRATION.

a. MANDATORY REGISTRATION. (i) Following each date on which Convertible Notes or
Incremental Convertible Notes are issued pursuant to the Facility Agreement
(each an “Issuance Date”), the Company shall prepare, and on or prior to the
applicable Filing Deadline (as defined above) file with the SEC a Registration
Statement (the “Mandatory Registration Statement”) on Form S-3 (or, if Form S-3
is not then available, on such form of Registration Statement as is then
available to effect a registration of the Registrable Securities) covering the
resale of the Registrable Securities issued on the applicable Issuance Date
which Registration Statement, to the extent allowable under the Securities Act
and the rules and regulations promulgated thereunder (including Rule 416), shall
state that such Registration Statement also covers such indeterminate number of
additional shares of Common Stock as may become issuable upon conversion of or
otherwise pursuant to the Convertible Notes or the Incremental Conversion Notes,
as the case may be, to prevent dilution resulting from stock splits, stock
dividends, stock issuances or similar transactions. The number of shares of
Common Stock initially included in such Registration Statement shall be no less
than the aggregate number of Conversion Shares that are then issuable upon
conversion of or otherwise pursuant to the Convertible Notes or the Incremental
Conversion Notes, without regard to any limitation on the Buyers’ ability to
convert the Convertible Notes or the Incremental Conversion Notes. The
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided to (and
subject to the approval of, which shall not be unreasonably withheld or delayed)
the Buyers and their counsel prior to its filing or other submission.

(ii) If for any reason the SEC does not permit all of the Registrable Securities
to be included in a Registration Statement filed pursuant to Section 2(a)(i)
above, or for any other reason any Registrable Securities are not then included
in a Registration Statement filed under this Agreement, then the Company shall
prepare, and, as soon as practicable but in no event later than the Additional
Filing Deadline, file with the SEC an additional Registration Statement covering
the resale of all Registrable Securities not already covered by an existing and
effective Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415.

 

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b. PIGGY-BACK REGISTRATIONS. If at any time prior to the expiration of the
Registration Period (as hereinafter defined) the Company shall determine to file
with the SEC a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its
securities (other than debt securities or securities being registered on Form
S-4 or Form S-8 or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans), the Company shall send to each Buyer written notice of such
determination and, if within fifteen (15) days after the effective date of such
notice, the Buyer shall so request in writing, the Company shall include in such
Registration Statement all or any part of such Buyer’s Registrable Securities
that it requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company, the managing
underwriter(s) thereof shall impose a limitation on the number of Registrable
Securities which may be included in the Registration Statement because, in such
underwriter(s)’ judgment, marketing or other factors dictate such limitation is
necessary to facilitate public distribution, then the Company shall be obligated
to include in such Registration Statement only such limited portion of the
Registrable Securities with respect to which the Buyer has requested inclusion
hereunder as the underwriter shall permit;

PROVIDED, HOWEVER, that the Company shall not exclude any Registrable Securities
unless the Company excludes all outstanding securities offered to be sold by
stockholders of the Company in such Registration Statement on a pro rata basis
with the Registrable Securities; and

PROVIDED, FURTHER, HOWEVER, no right to registration of Registrable Securities
under this Section 2(b) shall be construed to limit any registration required
under Section 2(a) hereof. If an offering in connection with which a Buyer is
entitled to registration under this Section 2(b) is an underwritten offering,
then such Buyer shall, unless otherwise agreed by the Company, offer and sell
such Registrable Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement, on
the same terms and conditions as other shares of Common Stock included in such
underwritten offering. Notwithstanding anything to the contrary set forth
herein, the registration rights of the Buyer pursuant to this Section 2(b) shall
only be available in the event the Company fails to timely file, obtain
effectiveness or maintain effectiveness of any Registration Statement to be
filed pursuant to Section 2(a) in accordance with the terms of this Agreement.

3. OBLIGATIONS OF THE COMPANY. In connection with the registration of the
Registrable Securities, the Company shall have the following obligations:

a. The Company shall use its commercially reasonable efforts to prepare
promptly, and shall use best efforts to file with the SEC by the applicable
Filing Deadline, a Registration Statement with respect to the number of
Registrable Securities provided in Section 2(a), and thereafter use its
commercially reasonable efforts to cause each Registration Statement relating to
Registrable Securities to become effective as soon as possible after such
filing, but in any event shall use its commercially reasonable efforts to cause
each such Registration Statement relating to Registrable Securities to become
effective no later than the Registration Deadline, and shall use its
commercially reasonable efforts to keep the Registration Statement current and
effective pursuant to Rule 415 at all times until such date as is the earlier of
(i) the date on which all of the Registrable Securities for such Registration
Statement have been sold and (ii) the date on which all of the Registrable
Securities for such Registration Statement (in the reasonable opinion of counsel
to the Buyers) may be immediately sold to the public without registration or
restriction (including without limitation as to volume by each holder thereof)
under the Securities Act (the “Registration Period”), which Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein), except for information provided by a Buyer or any transferee
of a Buyer pursuant to Section 4(a), shall not contain any 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.

b. The Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to each Registration Statement and
the prospectus used in connection with each Registration Statement as may be
necessary to keep each Registration Statement current and effective at all times
during the Registration Period, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by each Registration Statement
until such time as all of such

 

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Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in each
Registration Statement. In the event that on any Trading Day (as defined below)
(the “Registration Trigger Date”) the number of shares available under the
Registration Statements filed pursuant to this Agreement is insufficient to
cover all of the Registrable Securities issued or issuable upon conversion of
the Convertible Notes, the Incremental Conversion Notes or otherwise pursuant to
the Convertible Notes or the Incremental Conversion Notes, including, without
limitation, any additional shares of Common Stock issued in connection with any
anti-dilution provisions contained in the Convertible Notes or the Incremental
Conversion Notes, without giving effect to any limitations on the Buyers’
ability to convert the Convertible Notes or the Incremental Conversion Notes,
the Company shall amend the Registration Statements, or file a new Registration
Statement (on the short form available therefore, if applicable), or both, so as
to cover the total number of Registrable Securities so issued or issuable
(without giving effect to any limitations on conversion contained in the
Convertible Notes or the Incremental Conversion Notes) as of the Registration
Trigger Date as soon as practicable, but in any event within twenty (20) days
after the Registration Trigger Date (based on the Conversion Price (as defined
in the Convertible Notes or the Incremental Conversion Notes) of the Convertible
Notes or the Incremental Conversion Notes, as the case may be, and other
relevant factors on which the Company reasonably elects to rely). The Company
shall use its commercially reasonable efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof, but in any event the Company shall use its commercially
reasonable efforts to cause such amendment and/or new Registration Statement to
become effective within sixty (60) days of the Registration Trigger Date or as
promptly as practicable in the event the Company is required to increase its
authorized shares. “Trading Day” shall mean any day on which the shares of
Common Stock are traded for any period on the New York Stock Exchange or on the
principal securities exchange or other securities market on which the Common
Stock is then being traded.

c. The Company shall furnish to each Buyer and its legal counsel (i) promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by the Company, one copy of each Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto, and, in the case of a Registration Statement referred to
in Section 2(a), each letter written by or on behalf of the Company to the SEC
or the staff of the SEC, and each item of correspondence from the SEC or the
staff of the SEC, in each case relating to such Registration Statement (other
than any portion of any thereof which contains information for which the Company
has sought confidential treatment), and (ii) such number of copies of a
prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as a Buyer may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by
such Buyer. The Company will promptly notify the Buyers by facsimile or
electronic mail of the effectiveness of each Registration Statement or any
post-effective amendment. The Company will promptly respond to any and all
comments received from the SEC, with a view towards causing each Registration
Statement or any amendment thereto to be declared effective by the SEC as soon
as practicable and shall file an acceleration request as soon as practicable,
but no later than three (3) business days, following the resolution or clearance
of all SEC comments or, if applicable, following notification by the SEC that
any such Registration Statement or any amendment thereto will not be subject to
review.

d. The Company shall use its commercially reasonable efforts to (i) register and
qualify, in any jurisdiction where registration and/or qualification is
required, the Registrable Securities covered by the Registration Statements
under such other securities or “blue sky” laws of such jurisdictions in the
United States as the Buyers shall reasonably request, (ii) prepare and file in
those jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and
(iv) take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions.

e. As promptly as practicable after becoming aware of such event, the Company
shall notify each Buyer of the happening of any event, of which the Company has
knowledge, as a result of which the prospectus included in any Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and use its commercially reasonable
efforts promptly to prepare a supplement or amendment to any Registration
Statement to correct such untrue statement or omission, and deliver such number
of copies of such supplement or amendment to each Buyer as such Buyer may
reasonably request.

 

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f. The Company shall use its commercially reasonable efforts to prevent the
issuance of any stop order or other suspension of effectiveness of any
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify each
Buyer who holds Registrable Securities being sold (or, in the event of an
underwritten offering, the managing underwriters) of the issuance of such order
and the resolution thereof.

g. The Company shall permit a single firm of counsel designated by the Buyers to
review such Registration Statement and all amendments and supplements thereto
(as well as all requests for acceleration or effectiveness thereof), at Buyers’
own cost, a reasonable period of time prior to their filing with the SEC (not
less than five (5) business days but not more than eight (8) business days) and
not file any documents in a form to which such counsel reasonably objects and
will not request acceleration of such Registration Statement without prior
notice to such counsel.

h. The Company shall hold in confidence and not make any disclosure of
information concerning a Buyer provided to the Company unless (i) disclosure of
such information is necessary to comply with federal or state securities laws,
(ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement between the Company and a Buyer. The
Company agrees that it shall, upon learning that disclosure of such information
concerning such Buyer is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the Buyer
prior to making such disclosure, and allow such Buyer, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.

i. The Company shall use its commercially reasonable efforts to cause all the
Registrable Securities covered by each Registration Statement to be listed on
each securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange.

j. The Company shall provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the initial Registration Statement.

k. In the event that transfers of Registrable Securities in connection with an
underwriting are not being made through The Depositary Trust Company’s Fast
Automated Securities Transfer Program, the Company shall cooperate with each
Buyer who holds Registrable Securities being offered and the managing
underwriter or underwriters with respect to an applicable Registration
Statement, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to such Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Buyer may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Buyer may request, and, within three (3) business
days after a Registration Statement which includes Registrable Securities is
ordered effective by the SEC, the Company shall deliver, and shall cause legal
counsel selected by the Company to deliver, to the transfer agent for the
Registrable Securities (with copies to each Buyer) an appropriate instruction
and an opinion of such counsel in the form required by the transfer agent in
order to issue the Registrable Securities free of restrictive legends.

l. At the reasonable request of a Buyer, the Company shall prepare and file with
the SEC such amendments (including post-effective amendments) and supplements to
a Registration Statement and any prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.

m. The Company shall not, and shall not agree to, allow the holders of any
securities of the Company to include any of their securities in any Registration
Statement under Section 2(a) hereof or any amendment or supplement thereto under
Section 3(b) hereof without the consent of the Buyers. In addition, the Company
shall not offer any securities for its own account or the account of others in
any Registration Statement under Section 2(a) hereof or any amendment or
supplement thereto under Section 3(b) hereof without the consent of the Buyers.

 

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n. The Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Buyers of Registrable Securities pursuant to a
Registration Statement.

o. The Company shall comply with all applicable laws related to a Registration
Statement and offering and sale of securities and all applicable rules and
regulations of governmental authorities in connection therewith (including,
without limitation, the Securities Act and the Exchange Act and the rules and
regulations promulgated by the SEC).

p. If required by the Financial Industry Regulatory Authority, Inc. Corporate
Financing Department, the Company shall promptly effect a filing with FINRA
pursuant to FINRA Rule 5110 with respect to the public offering contemplated by
resales of securities under the Registration Statement (an “Issuer Filing”), and
pay the filing fee required by such Issuer Filing. The Company shall use
commercially reasonable efforts to pursue the Issuer Filing until FINRA issues a
letter confirming that it does not object to the terms of the offering
contemplated by the Registration Statement.

4. OBLIGATIONS OF THE BUYER. In connection with the registration of the
Registrable Securities, each Buyer shall have the following obligations:

a. It shall be a condition precedent to the obligations of the Company to
complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a Buyer that such Buyer shall furnish to the Company
such information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the
Company may reasonably request. At least five (5) business days prior to the
first anticipated filing date of a Registration Statement, the Company shall
notify each Buyer of the information the Company requires from such Buyer. Any
such information shall not contain any 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. Any Filing Deadline or Additional
Filing Deadline under this Agreement shall be extended for such period of time
as Buyer fails to provide the information required by this Section 4(a).

b. Each Buyer, by such Buyer’s 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, unless such Buyer has notified the Company in writing of the Buyer’s
election to exclude all of the Buyer’s Registrable Securities from such
Registration Statement.

c. In the event of an underwritten offering pursuant to Section 2(b) in which
any Registrable Securities are to be included, the Buyer agrees to enter into
and perform the Buyer’s obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution obligations, with the managing underwriter of such offering and
take such other actions as are reasonably required in order to expedite or
facilitate the disposition of the Registrable Securities, unless the Buyer has
notified the Company in writing of the Buyer’s election to exclude all of the
Buyer’s Registrable Securities from such Registration Statement.

d. Each Buyer agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(e) or 3(f), the Buyer
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until the
Buyer’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(e) or 3(f) and, if so directed by the Company, the
Buyer shall deliver to the Company (at the expense of the Company) or destroy
(and deliver to the Company a certificate of destruction) all copies in the
Buyer’s possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.

5. REGISTRATION FAILURE. In the event of a Registration Failure (as defined in
the Convertible Notes or the Incremental Conversion Notes), the Buyers shall be
entitled to the payments provided in the Convertible Notes and the Incremental
Conversion Notes, and such other rights as they may have under the Facility
Agreement, the Convertible Notes, the Incremental Conversion Notes and
hereunder.

6. EXPENSES OF REGISTRATION. All reasonable expenses, other than underwriting
discounts and

 

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commissions and expenses of Buyer’s counsel and other advisors, incurred in
connection with registrations, filings or qualifications pursuant to Sections 2
and 3, including, without limitation, all registration, listing and
qualification fees, printers and accounting fees, and the fees and disbursements
of counsel for the Company shall be borne by the Company.

7. INDEMNIFICATION. In the event any Registrable Securities are included in a
Registration Statement under this Agreement:

a. The Company will indemnify, hold harmless and defend (i) each Buyer, (ii) the
directors, officers, partners, managers, members, employees, agents and each
Person who controls any Buyer within the meaning of the Securities Act or the
Exchange Act, if any, (iii) any underwriter (as defined in the Securities Act)
for each Buyer in connection with an underwritten offering pursuant to
Section 2(b) hereof, and (iv) the directors, officers, partners, employees and
each Person who controls any such underwriter within the meaning of the
Securities Act or the Exchange Act, if any (each, an “Indemnified Person”),
against any joint or several losses, claims, damages, liabilities or expenses
(collectively, together with actions, proceedings or inquiries by any regulatory
or self-regulatory organization, whether commenced or threatened, in respect
thereof, “Claims”) to which any of them may become subject insofar as such
Claims arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or the omission
or alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading; or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities (the matters in the foregoing clauses (i) through (iii) being,
collectively, “Violations”). The Company shall reimburse the Indemnified Person,
promptly as such expenses are incurred and are due and payable, for any
reasonable legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 7(a) shall not apply to a Claim arising out of or
based upon a Violation to the extent that such Violation occurs in reliance upon
and in conformity with information furnished in writing to the Company by any
Indemnified Person for use in connection with the preparation of such
Registration Statement or any such amendment thereof or supplement thereto.
Notwithstanding anything herein to the contrary, the indemnity agreement
contained in this Section 7(a) shall not apply to amounts paid in settlement of
any Indemnity Claim if such settlement is effected without the prior written
consent of the Company which consent shall not be unreasonably withheld or
delayed. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall survive
the transfer of the Registrable Securities by the Buyer pursuant to Section 10.

b. Promptly after receipt by an Indemnified Person under this Section 7 of
notice of the commencement of any action (including any governmental action),
such Indemnified Person shall, if a Claim in respect thereof is to be made
against the Company under this Section 7, deliver to the Company a written
notice of the commencement thereof, and the Company shall have the right to
participate in, and, to the extent the Company so desires, to assume control of
the defense thereof with counsel mutually satisfactory to the Company and the
Indemnified Person, as the case may be.

PROVIDED, HOWEVER, that an Indemnified Person shall have the right to retain its
own counsel with the reasonable fees and expenses to be paid by the Company, if,
in the reasonable opinion of counsel for the Buyer, the representation by such
counsel of the Indemnified Person and the Company would be inappropriate due to
actual or potential differing interests between such Indemnified Person and any
other party represented by such counsel in such proceeding. The Company shall
pay for only one separate legal counsel for the Indemnified Persons, and such
legal counsel shall be selected by Buyers. The failure to deliver written notice
to the Company within a reasonable time of the commencement of any such action
shall not relieve the Company of any liability to the Indemnified Person under
this Section 7, except to the extent that the Company is actually prejudiced in
its ability to defend such action. The indemnification required by this
Section 7 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.

 

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c. Each Buyer will indemnify, hold harmless and defend (i) the Company, and
(ii) the directors, officers, partners, managers, members, employees, or agents
of the Company, if any (each, a “Company Indemnified Person”), against any joint
or several losses, claims, damages, liabilities or expenses (collectively,
together with actions, proceedings or inquiries by any regulatory or
self-regulatory organization, whether commenced or threatened, in respect
thereof, “Indemnity Claims”) to which any of them may become subject insofar as
such Indemnity Claims arise out of or are based upon any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities, which occurs due to the inclusion by the Company in a Registration
Statement of false or misleading information about a Buyer, where such
information was furnished in writing to the Company by such Buyer for the
purpose of inclusion in such Registration Statement. Notwithstanding anything
herein to the contrary, the indemnity agreement contained in this Section 7(c)
shall not apply to amounts paid in settlement of any Indemnity Claim if such
settlement is effected without the prior written consent of the Buyers which
consent shall not be unreasonably withheld or delayed; and provided, further,
however, that a Buyer shall be liable under this Section 7(c) for only that
amount of an Indemnity Claim as does not exceed the net amount of proceeds
received by such Buyer as a result of the sale of Registrable Securities
pursuant to such Registration Statement.

d. Promptly after receipt by a Company Indemnified Person under this Section 7
of notice of the commencement of any action (including any governmental action),
such Company Indemnified Person shall, if an Indemnity Claim in respect thereof
is to be made against a Buyer under this Section 7, deliver to such Buyer a
written notice of the commencement thereof, and such Buyer shall have the right
to participate in, and, to the extent such Buyer so desires, to assume control
of the defense thereof with counsel mutually satisfactory to such Buyer and the
Company Indemnified Person, as the case may be. The failure to deliver written
notice to the Buyer within a reasonable time of the commencement of any such
action shall not relieve the Buyer of any liability to the Company Indemnified
Person under this Section 7, except to the extent that the Buyer is actually
prejudiced in its ability to defend such action.

8. CONTRIBUTION. To the extent any indemnification by the Company is prohibited
or limited by law, the Company agrees to make the maximum contribution with
respect to any amounts for which it would otherwise be liable under Section 7 to
the fullest extent permitted by law, based upon a comparative fault standard.

9. REPORTS UNDER THE 1934 ACT. With a view to making available to the Buyers the
benefits of Rule 144 promulgated under the Securities Act or any other similar
rule or regulation of the SEC that may at any time permit the Buyers to sell
securities of the Company to the public without registration the Company agrees
to use its commercially reasonable efforts to:

a. make and keep public information available, as those terms are understood and
defined in Rule 144;

b. file with the SEC in a timely manner all reports and other documents required
of the Company under the Securities Act and the Exchange Act so long as the
Company remains subject to such requirements and the filing of such reports and
other documents is required for the applicable provisions of Rule 144; and

c. so long as the Buyers own Registrable Securities, promptly upon request,
furnish to the Buyers (i) a written statement by the Company that it has
complied with the reporting requirements of the Securities Act and the Exchange
Act as required for applicable provisions of Rule 144, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company and (iii) such other information as may be
reasonably requested to permit the Buyers to sell such securities pursuant to
Rule 144 without registration.

10. ASSIGNMENT OF REGISTRATION RIGHTS. Subject to the terms and conditions of
the Facility Agreement, the rights under this Agreement shall be automatically
assignable by each Buyer to any transferee of all or any portion of the
Registrable Securities if: (i) the Buyer agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such assignment, (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written

 

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notice of (a) the name and address of such transferee or assignee, and (b) the
securities with respect to which such registration rights are being transferred
or assigned, and (iii) at or before the time the Company receives the written
notice contemplated by clause (ii) of this sentence, the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions
contained herein. In the event that a Buyer transfers all or any portion of its
Registrable Securities pursuant to this Section, the Company shall have at least
ten (10) days to file any amendments or supplements necessary to keep a
Registration Statement current and effective pursuant to Rule 415, and the
commencement date of any Event of Default (as defined in the Convertible Notes
or the Incremental Conversion Notes) under the Convertible Notes or the
Incremental Conversion Notes caused thereby will be extended by ten (10) days.

11. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with
written consent of the Company and the holders of a majority in interest of
then-outstanding Registrable Securities. Any amendment or waiver effected in
accordance with this Section 11 shall be binding upon each of the Buyers and the
Company.

12. MISCELLANEOUS.

a. A Person is deemed to be a holder of Registrable Securities whenever such
Person owns of record or beneficially through a “street name” holder such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more Persons with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

b. Any notices required or permitted to be given under the terms hereof shall be
sent by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight delivery service) or
by facsimile or electronic mail and shall be effective five days after being
placed in the mail, if mailed by regular United States mail, or upon receipt, if
delivered personally or by courier (including a recognized overnight delivery
service) or by facsimile or electronic mail, in each case addressed to a party.
The addresses for such communications shall be:

If to the Company:

AAC Holdings, Inc.

115 East Park Drive, Second Floor

Brentwood, Tennessee 37027

Fax: (615) 691-7131

Email: ksphillips@contactaac.com

Attn: Kathryn Sevier Phillips, General Counsel

With copy to:

Bass, Berry & Sims PLC

150 Third Avenue South Suite 2800

Nashville, Tennessee 37201

Fax: (615) 742-2709

Email: Hlamar@bassberry.com

Attn: Howard H. Lamar III

If to a Buyer:

c/o Deerfield Mgmt, L.P.

780 Third Avenue, 37th Floor

New York, New York 10017

Fax: (646) 536-5662

Email:

Attn: David J. Clark

 

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With a copy to:

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, New York 10022

Fax: (212) 940-8776

Email:

Attn: Mark I. Fisher, Esq.

 Elliot Press, Esq.

Each party shall provide notice to the other party of any change in address.

c. Failure of any party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.

d. Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law. The parties hereby waive all rights to a trial by jury.
If either party shall commence an action or proceeding to enforce any provision
of this Agreement, then the prevailing party in such action or proceeding shall
be reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.

e. This Agreement, the Convertible Notes, the Incremental Conversion Notes and
the Facility Agreement (including all schedules and exhibits thereto) constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. This
Agreement, the Convertible Notes, the Incremental Conversion Notes and the
Facility Agreement supersede all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof and thereof.

f. Subject to the requirements of Section 10 hereof, this Agreement shall inure
to the benefit of and be binding upon the successors and permitted assigns of
each of the parties hereto, and the provisions of Sections 7 and 8 hereof shall
inure to the benefit of, and be enforceable by, each Indemnified Person and
Company Indemnified Person (as applicable).

g. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

h. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same
agreement. This Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile or other electronic transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.

 

10

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i. Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

j. The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Buyers by vitiating the intent and purpose of
the transactions contemplated hereby. Accordingly, the Company acknowledges that
the remedy at law for breach of its obligations hereunder will be inadequate and
agrees, in the event of a breach or threatened breach by the Company of any of
the provisions hereunder, that the Buyers shall be entitled, in addition to all
other available remedies in law or in equity, to an injunction or injunctions to
prevent or cure breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof, without the necessity of showing
economic loss and without any bond or other security being required.

k. The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.

l. In the event that any provision of this Agreement is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.

m. In the event a Buyer shall sell or otherwise transfer any of such holder’s
Registrable Securities, each transferee shall be allocated a pro rata portion of
the number of Registrable Securities included in a Registration Statement for
such transferor.

n. There shall be no oral modifications or amendments to this Agreement. This
Agreement may be modified or amended only in writing.

[Remainder of page left intentionally blank]

[Signature page follows]

 

11

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IN WITNESS WHEREOF, the undersigned Buyers and the Company have caused this
Registration Rights Agreement to be duly executed as of the date first written
above.

 

COMPANY:       BUYERS: AAC HOLDINGS LIMITED       DEERFIELD PRIVATE DESIGN FUND
III, L.P.          By:    Deerfield Mgmt III, L.P., General Partner By:   

/s/ Michael T. Cartwright

      By:    J.E. Flynn Capital III, LLC, General Partner Name:    Michael T.
Cartwright          Title:    Chairman and Chief Executive Officer            
      By:   

/s/ Jonathan Isler

         Name:    Jonathan Isler          Title:    Authorized Signatory      
   DEERFIELD INTERNATIONAL MASTER FUND, L.P.          By:    Deerfield Mgmt,
L.P., General Partner          By:    J.E. Flynn Capital, LLC, General Partner
         By:   

/s/ Jonathan Isler

         Name:    Jonathan Isler          Title:    Authorized Signatory      
   DEERFIELD PARTNERS, L.P.          By:    Deerfield Mgmt, L.P., General
Partner          By:    J.E. Flynn Capital, LLC, General Partner          By:   

/s/ Jonathan Isler

         Name:    Jonathan Isler          Title:    Authorized Signatory

 

[Signature Page to Registration Rights Agreement]