EXHIBIT 10.72
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made as of the date set
forth below between Arcadia Resources, Inc., a Nevada corporation (the
"COMPANY"), and ________________________________________ (the "INVESTOR"), in
conjunction with a Securities Purchase Agreement dated as of the date hereof.
Capitalized terms used and not defined herein shall have the respective meanings
ascribed to them in the Securities Purchase Agreement.
RECITALS
WHEREAS, the Company has sold to up to shares (the "SHARES") of its common
stock, $0.001 par value per share, (the "COMMON STOCK"), to the Investor in a
private placement (the "OFFERING"); and
WHEREAS, pursuant to the terms of the Offering, the Investor has received a
warrant (the "WARRANT") to purchase shares of Common Stock (the "WARRANT
SHARES").
WHEREAS, the execution and delivery of this Agreement by the Company is a
condition to the completion of the Offering.
NOW, THEREFORE, the parties hereto agree as follows:
1. REGISTRATION PROCEDURES AND EXPENSES. The Company shall:
(A) subject to receipt of necessary information from the
Investors, prepare and file with the Securities and Exchange Commission ("SEC"),
within sixty (60) Calendar Days after the Closing Date (the "REQUIRED FILING
DATE"), a Registration Statement on Form S-3 or such other form as is available
to the Company to enable the resale by the Investors from time to time of (i)
the Shares, (ii) the Warrant, and (iii) the Warrant Shares (collectively, the
"REGISTRABLE SECURITIES");
(B) use its best efforts, subject to receipt of necessary
information from the Investors, to cause the Registration Statement to become
effective no later than one hundred twenty (120) Calendar Days after the
Registration Statement was filed with the SEC (the "REQUIRED EFFECTIVE DATE").
If the Registration Statement has not been filed on or before the Required
Filing Date, or has not been declared effective by the SEC on or before the
Required Effective Date because of the Company's breach of this provision, or
does not remain effective (any such failure being referred to as an "Event"),
then the Investor shall be entitled to receive from the Company, as payment in
full satisfaction for such Event, warrants to purchase an aggregate number of
shares of Common Stock equal to 1% of the number of Shares upon the same terms
as the Warrants (i) at the time of such Event, and (ii) upon each monthly
anniversary of such Event until the Event is cured, up to a maximum aggregate
amount of 10% of the Shares (the "LATE REGISTRATION WARRANTS"). In the event of
changes in the outstanding Common Stock of the Company by reason of a stock
dividend, stock split, reverse stock split, reorganization, recapitalization,
merger, consolidation, liquidation, separation, combination or exchange of
stock, change in the Company's business structure or sale or transfer of all or
any part of the Company's business or assets (referred to as a "Capital
Adjustment"), the number of Late Registration Warrants shall be adjusted
consistent with such Capital Adjustment;
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(C) use its commercially reasonable best efforts to prepare and
file with the SEC such amendments and supplements to the Registration Statement
and the Prospectus as may be necessary to keep the Registration Statement
current and effective for a period ending on the earlier of (i) the date on
which the Investor may sell Registrable Securities pursuant to paragraph (k) of
Rule 144 under the Securities Act or any successor rule ("RULE 144") or (ii)
such time as all Registrable Securities purchased by such Investor in this
Offering have been sold pursuant to a registration statement or Rule 144, and to
notify each Investor promptly upon the Registration Statement and each
post-effective amendment thereto, being declared effective by the SEC;
(D) furnish to the Investor such number of copies (in paper or
electronic version) of the Registration Statement and the Prospectus (including
supplemental prospectuses), as the Investor may reasonably request, in order to
facilitate the public sale or other disposition of all or any of the Registrable
Securities by the Investor.
It shall be a condition precedent to the obligations of the Company to take
any action pursuant to this Section 1 that the Investor shall furnish to the
Company, within two (2) business days of the Company's written request, such
information and representations regarding the Investor, the Registrable
Securities to be sold by Investor, and the intended method of disposition of
such securities as shall be required to effect the registration of the
Registrable Securities and/or sale under Rule 144. The Company understands that
the Investor disclaims being an underwriter, but acknowledges that a
determination by the SEC that the Investor is deemed an underwriter shall not
relieve the Company of any obligations it has hereunder.
2. TRANSFER OF SECURITIES AFTER REGISTRATION; SUSPENSION.
(A) The Investor agrees that it will not effect any disposition
or other transfer of the Securities or its right to purchase the Securities that
would constitute a sale within the meaning of the Securities Act other than
transactions exempt from the registration requirements of the Securities Act, as
contemplated in the Registration Statement and as described below, and that it
will promptly notify the Company of any material changes in the information set
forth in the Registration Statement regarding the Investor or its plan of
distribution.
(B) Except in the event that paragraph (c) below applies, the
Company shall: (i) if deemed necessary by the Company, prepare and file from
time to time with the SEC a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or a supplement or amendment
to any document incorporated therein by reference or file any other required
document so that such Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
so that, as thereafter delivered to purchasers of the Registrable Securities
being sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (ii) provide the Investor with either
copies of any documents filed pursuant to Section 2(b)(i) or access to such
documents electronically; and (iii) upon request, inform each Investor who so
requests that the Company has complied with its obligations in Section 2(b)(i)
(or that, if the Company has filed a post-effective amendment to the
Registration Statement which has not yet been declared effective, the Company
will notify the Investor to that effect, will use its best efforts to secure the
effectiveness of such post-effective amendment as promptly as possible and will
promptly notify the Investor pursuant to Section 2(b)(i) hereof when the
amendment has become effective).
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(C) Subject to paragraph (d) below, in the event: (i) of any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or related Prospectus or for
additional information; (ii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose; (iii) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose; or (iv) of any event or circumstance which
necessitates the making of any material changes in the Registration Statement or
Prospectus, or any document incorporated or deemed to be incorporated therein by
reference, so that, in the case of the Registration Statement, it will 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, and that in the case of the Prospectus, it will 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, in the light of
the circumstances under which they were made, not misleading; then the Company
shall promptly deliver a certificate in writing or electronically to the
Investor (the "SUSPENSION NOTICE") to the effect of the foregoing and, upon
receipt of such Suspension Notice, the Investor will refrain from selling any
Registrable Securities pursuant to the Registration Statement (a "SUSPENSION")
until the Investor is advised in writing by the Company that the current
Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in any such Prospectus. In the event of any Suspension, the Company will use its
reasonable best efforts to cause the use of the Prospectus so suspended to be
resumed as soon as reasonably practicable after delivery of a Suspension Notice
to the Investor. As its sole remedy for any breach of this Agreement, including
this Section 2(c), the Investor shall be entitled to specific performance. The
Investor covenants that from the date hereof it will maintain in confidence the
receipt and content of any Suspension Notice provided in accordance with this
paragraph (c) in accordance with and subject to Section 4.6 of Annex I to the
Securities Purchase Agreement.
(D) If a Suspension is not then in effect, the Investor may sell
Registrable Securities under the Registration Statement, provided that it
complies with any applicable prospectus delivery requirements. Upon receipt of a
request therefor, the Company will provide an adequate number of current
Prospectuses to the Investor and to any other parties requiring such
Prospectuses.
(E) In the event of a sale of Shares or Warrant Shares by the
Investor, unless such requirement is waived by the Company in writing, the
Investor must also deliver to the Company's transfer agent, with a copy to the
Company, such documentation reasonably requested by the transfer agent
including, without limitation, a Certificate of Subsequent Sale substantially in
the form attached hereto as Exhibit A, so that the Shares or Warrant Shares may
be properly transferred.
(F) The Company agrees that it shall, immediately prior to the
Registration Statement being declared effective, deliver to its transfer agent
an opinion letter of counsel, opining that at any time the Registration
Statement is effective, the transfer agent shall issue, in connection with the
sale of the Shares or Warrant Shares, certificates representing such Shares
without restrictive legend, provided the Shares are to be sold pursuant to the
Prospectus contained in the Registration Statement and the transfer agent
receives all of the documentation required by the transfer agent including the
Certificate of Subsequent Sale in the form attached hereto as Exhibit "A."
The Company shall cause its transfer agent to issue a certificate without any
restrictive legend to a purchaser of any Shares or Warrant Shares from the
Investor at Investor's expense and upon request of Investor, if (a) the sale of
such Shares is registered under the Registration Statement (including
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registration pursuant to Rule 415 under the Securities Act) and the Investor has
delivered a Certificate of Subsequent Sale to the Transfer Agent; (b) the holder
has provided the Company with an opinion of counsel, in form, substance and
scope reasonably acceptable to the Company, to the effect that a public sale or
transfer of such Shares may be made without registration under the Securities
Act; or (c) such Shares are sold in compliance with Rule 144 under the
Securities Act. In addition, the Company shall, at the Investor's expense and
upon request of the Investor, remove the restrictive legend from any Shares or
Warrant Shares held by the Investor following the expiration of the holding
period required by Rule 144(k) under the Securities Act (or any successor rule).
3. INDEMNIFICATION. For the purpose of this Section 3:
(A) the term "SELLING SHAREHOLDER" shall mean the Investor and
each person, if any, who controls the Investor within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act;
(B) the term "REGISTRATION STATEMENT" shall mean the final
Prospectus, supplement or amendment thereto (or deemed to be a part thereof)
referred to in Section 1; and
(C) the term "UNTRUE STATEMENT" shall mean any material untrue
statement, or any material omission of a statement of a material fact required
to be made in the Registration Statement or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
materially misleading.
(D) (i) The Company agrees to indemnify and hold harmless each
Selling Shareholder from and against any losses, or damages to which such
Selling Shareholder may incur (under the Securities Act or otherwise) insofar as
such losses or damages arise out of (i) any untrue statement of a material fact
contained in the Registration Statement, or (ii) any inaccuracy in the
representations of the Company contained in this Agreement. The Company will
reimburse such Selling Shareholder for any reasonable legal expense incurred or
any out of pocket expenses reasonably incurred in defending any such claim or
action; provided, however, that the Company shall not be liable in any such case
to the extent that such loss or damage arises out of, or is based upon, an
untrue statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Shareholder for use in preparation of the Registration Statement,
or any inaccuracy in representations made by such Selling Shareholder in the
Investor Questionnaire or the failure of such Selling Shareholder to comply with
its covenants and agreements contained in Sections in this Agreement or
contained in the Securities Purchase Agreement or any statement or omission in
any Prospectus that is corrected in any subsequent Prospectus that was delivered
to the Selling Shareholder prior to the pertinent sale or sales by the Selling
Shareholder. The obligation to indemnify shall be limited to the net amount of
the proceeds received by the Company from the Investor as a result of the
Offering.
(II) The Investor agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
losses or damage to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such loss or damage (or actions or proceedings in respect thereof)
arise out of, or are based upon, (i) any failure to comply with the covenants
and agreements contained in this Agreement or of the Securities Purchase
Agreement or (ii) any untrue statement of a material fact contained in the
Registration Statement if, and only if, such untrue statement was made in
reliance upon and in conformity with written information furnished by or on
behalf of the Investor specifically for use in preparation of the Registration
Statement.
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The Investor will reimburse the Company (or such officer, director or
controlling person), as the case may be, for any reasonable legal expense or
other actual accountable out-of-pocket expenses reasonably incurred in defending
any such claim, action or proceeding. The obligation to indemnify shall be
limited to the net amount of the proceeds received by the Investor from the sale
of the Registrable Securities pursuant to the Registration Statement.
(III) Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which indemnity
is to be sought against an indemnifying person pursuant to this Section 3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party under this Section 3 (except to the extent that such
omission materially and adversely affects the indemnifying party's ability to
defend such action) or from any liability otherwise than under this Section 3.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, shall be entitled to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to
assume the defense thereof (unless it has failed to assume the defense thereof
and appoint counsel reasonably satisfactory to the indemnified party), such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; provided, however, that if there exists or shall exist a
conflict of interest that would make it inappropriate, in the reasonable opinion
of counsel to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
the expense of such indemnifying person; provided, however, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel (together with appropriate local counsel) for all indemnified parties.
In no event shall any indemnifying person be liable in respect of any amounts
paid in settlement of any action unless the indemnifying person shall have
approved the terms of such settlement; provided that such consent shall not be
unreasonably withheld. No indemnifying person shall, without the prior written
consent of the indemnified person, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified person is or could
reasonably have been a party and indemnification could have been sought
hereunder by such indemnified person, unless such settlement includes an
unconditional release of such indemnified person from all liability on claims
that are the subject matter of such proceeding.
(IV) If the indemnification provided for in this Section 3
is unavailable to or insufficient to hold harmless an indemnified party under
paragraphs 3(d)(i) or 3(d)(ii) above in respect of any loss or damage (or
actions or proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such loss or damage (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Investor on the other in connection with the
statements or omissions or other matters which resulted in such loss or damage
(or actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, in the case of an untrue statement, whether the untrue statement
relates to information supplied by the Company on the one hand or the Investor
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement. The Company and the
Investor agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation (even if the
Investors were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
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indemnified party as a result of the loss or damage (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
reasonable legal fees incurred by such indemnified party in connection with
defending any such action or claim. Notwithstanding the provisions of this
subsection (d), the Investor shall not be required to contribute any amount in
excess of the amount by which the gross amount received by the Investor from the
sale of the Registrable Securities to which such loss relates exceeds the amount
of any damages which the Investor has otherwise been required to pay by reason
of such untrue statement. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Investors' obligations in this subsection to contribute
are several in proportion to their sales of Registrable Securities to which such
loss relates and not joint.
(E) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 3, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 3 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement as required by the Securities Act and the Exchange Act.
4. TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions precedent
imposed by Section 4 of the Securities Purchase Agreement or this Agreement upon
the transferability of the Securities shall cease and terminate as to any
particular number of the Securities when such Securities shall have been
effectively registered under the Securities Act and sold or otherwise disposed
of in accordance with the intended method of disposition set forth in the
Registration Statement covering such Securities or at such time as an opinion of
counsel satisfactory to the Company shall have been rendered to the effect that
such conditions are not necessary in order to comply with the Securities Act.
5. INFORMATION AVAILABLE. So long as the Registration Statement is
effective covering the resale of Securities owned by the Investor, the Company
will furnish (or, to the extent such information is available electronically
through the Company's filings with the SEC, the Company will make available) to
the Investor, upon the reasonable request of the Investor:
(A) as soon as practicable after it is available, one copy of (i)
its Annual Report to Shareholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting principles
by a national firm of certified public accountants) and (ii) if not included in
substance in the Annual Report to Shareholders, its Annual Report on Form 10-K
(the foregoing, in each case, excluding exhibits); and,
(B) an adequate number of copies of the Prospectuses to supply to
any other party requiring such Prospectuses either in printed or electronic
form.
6. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing, shall be delivered (A) if within the United
States, by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if from
outside the United States, by International Federal Express (or comparable
service) or facsimile, and shall be deemed given (i) if delivered by first-class
registered or certified mail domestic, upon the Business Day received, (ii) if
delivered by nationally recognized overnight carrier, one (1) Business Day after
timely delivery to such carrier, (iii) if delivered by International Federal
Express (or comparable service), two (2) Business Days after timely delivery to
such carrier, (iv) if delivered by facsimile, upon electric confirmation of
receipt and shall be addressed as follows, or to such other address or addresses
as may have been furnished in writing by a party to another party pursuant to
this paragraph:
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(A) if to the Company, to:
Arcadia Resources, Inc.
000 0xx Xxxxxx Xxxxx, Xxxxx 0
Xxxxxx, XX 00000
Attention: Chairman and CEO
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxx, Xxxxxxx and Xxxxx, PLC
Attention: Xxxxxxx Xxxxxx
000 Xxxxxxxx Xxx., Xxxxx 0000
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(B) if to the Investor, at its address on the signature page to
the Securities Purchase Agreement.
7. AMENDMENTS; WAIVER. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Investor. Any
waiver of a provision of this Agreement must be in writing and executed by the
party against whom enforcement of such waiver is sought.
8. HEADINGS. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
9. ENTIRE AGREEMENT; SEVERABILITY. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter hereof
and supersedes all prior and contemporaneous agreements, negotiations and
understandings between the parties, both oral and written relating to the
subject matter hereof. If any provision contained in this Agreement is
determined to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
10. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Michigan, without giving
effect to the principles of conflicts of law. Any dispute, controversy or claim
arising out of or relating to this Agreement, whether arising in contract, tort
or otherwise shall be resolved in accordance with the rules of the American
Arbitration Association, except for any equitable or injunctive relief sought
under this Agreement. The arbitration shall be held at a location within Oakland
County, Michigan. The Parties agree that any arbitration award rendered on any
claim submitted to arbitration shall be final and binding upon the Parties and
not subject to appeal and that judgment may be entered upon any arbitration
award by any circuit court located in Michigan.
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
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Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.
Dated as of: May __, 2007
[INVESTOR NAME]
By:
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Name:
----------------------------------
Title:
---------------------------------
Address:
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AGREED AND ACCEPTED:
Arcadia Resources, Inc.
By:
---------------------------------
Name: Xxxx X. Xxxxxxx, XX
Title: Chairman, President and CEO
[REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE]
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EXHIBIT A
ARCADIA RESOURCES, INC.
CERTIFICATE OF SUBSEQUENT SALE
National City Bank
_____________________
_____________________
RE: Sale of Shares of Common Stock of Arcadia Resources, Inc. (the
"Company") pursuant to the Company's Prospectus dated _______________,
20__ (the "Prospectus")
Dear Sir/Madam:
The undersigned hereby certifies, in connection with the sale of shares of
Common Stock of the Company included in the table of Selling Shareholders in the
Prospectus, that the undersigned has sold the Shares pursuant to the Prospectus
and in a manner described under the caption "Plan of Distribution" in the
Prospectus and that such sale complies with all applicable securities laws,
including, without limitation, the Prospectus delivery requirements of the
Securities Act of 1933, as amended.
Selling Shareholder (the beneficial owner): _______________________________
Record Holder (e.g., if held in name of nominee): _________________________
Restricted Stock Certificate No.(s): ______________________________________
Number of Shares Sold: ____________________________________________________
Date of Sale: _____________________________________________________________
In the event that you receive a stock certificate(s) representing more
shares of Common Stock than have been sold by the undersigned, then you should
return to the undersigned a newly issued certificate for such excess shares in
the name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you
should place a stop transfer on your records with regard to such certificate.
Dated: Very truly yours,
---------------------
By:
------------------------------------
Print Name:
----------------------------
Title:
---------------------------------
A-1
