FORM OF SUBSCRIPTION AGREEMENT
Exhibit 10.1
FORM OF SUBSCRIPTION AGREEMENT
October __, 2010
Gentlemen:
The undersigned (the “Investor”) hereby confirms its agreement with Arcadia Resources,
Inc., a Nevada corporation (the “Company”), as follows:
1. This Subscription Agreement, including the Terms and Conditions for Purchase of Common
Stock attached hereto as Annex I (collectively, this “Agreement”) is made as of the date
set forth below between the Company and the Investor.
2. The Company has authorized the sale and issuance to certain investors of up to an aggregate
of [$5.0 million] in shares subject to adjustment by the Company’s Board of Directors or a
committee thereof, of its common stock, par value $0.001 per share (the “Common Stock”),
for a purchase price of $0._____ [representing the market price after the close of trading on
Thursday, October 28, 2010 based upon the five consecutive previous trading days as mutually agreed
upon between the Company and the Placement Agent] (the
“Purchase Price”).
3. The offering and sale of the Common Stock (the “Offering”) are being made pursuant
to (a) an effective Registration Statement on Form S-3, No. 333-168084 (the “Registration
Statement”) filed by the Company with the Securities and Exchange Commission (the
“Commission”), including the Prospectus contained therein (the “Base Prospectus”),
(b) if applicable, certain “free writing prospectuses” (as that term is defined in Rule 405 under
the Securities Act of 1933, as amended (the “Act”)), that have been or will be filed, if
required, with the Commission and delivered to the Investor on or prior to the date hereof (the
“Issuer Free Writing Prospectus”), containing certain supplemental information regarding
the terms of the Offering and the Company and (c) a final Prospectus Supplement (the
“Prospectus Supplement” and, together with the Base Prospectus, the “Prospectus”)
containing only certain supplemental information regarding the terms of the Offering that will be
filed with the Commission and delivered to the Investor prior to the Closing.
4. The Company and the Investor agree that the Investor will purchase from the Company and the
Company will issue and sell to the Investor shares of the Common Stock set forth below for the
aggregate purchase price set forth below. The Common Stock shall be purchased pursuant to the
Terms and Conditions for Purchase of Common Stock attached hereto as Annex I and incorporated
herein by this reference as if fully set forth herein. The Investor acknowledges that the Offering
is not being underwritten by Wilmington Capital Securities, LLC (the “Placement Agent”) and
that there is no minimum offering amount.
5. The settlement of the Common Stock purchased by the Investor shall be effected by crediting
the account of the Investor’s prime broker (as specified by such Investor on Exhibit A annexed
hereto) with the Depository Trust Company (“DTC”) through its Deposit/Withdrawal At
Custodian (“DWAC”) system, whereby Investor’s prime broker shall initiate a DWAC
transaction on the Closing Date using its DTC participant identification number, and the shares of
Common Stock shall be released
by Computershare Trust Company, N.A., the Company’s transfer agent (the “Transfer
Agent”), to the account designated by such broker at the Company’s direction. NO LATER THAN
TWO (2) BUSINESS DAYS AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY AND
COMPLIANCE BY THE COMPANY WITH ALL CONDITIONS PRECEDENT TO CLOSING, INCLUDING, WITHOUT LIMITATION,
RECEIPT OF APPROVAL BY THE NYSE AMEX EXCHANGE, THE INVESTOR SHALL:
| (I) | REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE
AGGREGATE PURCHASE PRICE FOR THE SHARES OF COMMON STOCK BEING PURCHASED BY THE
INVESTOR TO THE FOLLOWING ACCOUNT:
|
| (II) | DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE
CREDITED WITH THE SHARES OF COMMON STOCK ARE MAINTAINED TO SET UP A DWAC
INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE
SHARES OF COMMON STOCK. |
IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM THE PROPER
ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DWAC IN A TIMELY
MANNER. IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE SHARES OF COMMON
STOCK OR DOES NOT MAKE PROPER ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES OF COMMON
STOCK MAY NOT BE DELIVERED AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE
CLOSING ALTOGETHER.
6. The Investor represents that, except as set forth below, (a) it has had no position, office
or other material relationship within the past three (3) years with the Company or persons known to
it to be affiliates of the Company, (b) it is not a member of the Financial Industry Regulatory
Authority, Inc. or an Associated Person (as such term is defined under the NASD Membership and
Registration Rules Section 1011) as of the Closing, and (c) neither the Investor nor any group of
Investors (as identified in a public filing made with the Commission) of which the Investor is a
part in connection with the Offering of the Common Stock, acquired, or obtained the right to
acquire, 20% or more of the Common Stock (or securities convertible into or exercisable for Common
Stock) or the voting power of the Company on a post-transaction
basis. Exceptions:
(If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)
7. The Investor represents that it has received (or otherwise had made available to it by the
filing by the Company of an electronic version thereof with the Commission) the Base Prospectus,
dated July 29, 2010, which is a part of the Company’s Registration Statement and the documents
incorporated by reference therein and any free writing prospectus (collectively, the
“Disclosure Package”), prior to or in connection with the receipt of this Agreement. The
Investor acknowledges that, prior to the delivery of this Agreement to the Company, the Investor
will receive certain additional information regarding the Offering, including pricing information
(the “Offering Information”). Such information may be provided to the Investor by any
means permitted under the Act, including the Prospectus Supplement, a free writing prospectus and
oral communications.
8. No offer by the Investor to buy the Common Stock will be accepted and no part of the
Purchase Price will be delivered to the Company until the Investor has received the Offering
Information and the Company has accepted such offer by countersigning a copy of this Agreement, and
any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any
time prior to the Company (or the Placement Agent on behalf of the Company) sending (orally, in
writing or by electronic mail) notice of its acceptance of such offer. An indication of interest
will involve no obligation or commitment of any kind until the Investor has been delivered the
Offering Information and this Agreement is accepted and countersigned by or on behalf of the
Company.
9. The Company acknowledges that the only material, non-public information relating to the
Company it has provided to the Investor in connection with the Offering prior to the date hereof is
the existence of the Offering.
Number
of Shares of Common Stock:
Purchase Price Per Share: $
Aggregate Purchase Price: $
Please confirm that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose.
| INVESTOR | ||||||
| By: | ||||||
| Print Name: | ||||||
| Title: | ||||||
| Address: | ||||||
Agreed and Accepted
as of the date first above written:
as of the date first above written:
| ARCADIA RESOURCES, INC. | ||||
By: |
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| Title: | ||||
ANNEX I
Terms and Conditions for Purchase of Common Stock
1. Authorization and Sale of Common Stock. Subject to the terms and conditions of this
Agreement, the Company has authorized the sale of the Common Stock.
2. Agreement to Sell and Purchase of Common Stock; Placement Agent.
2.1. At the Closing (as defined in Section 3.1), the Company will sell to the
Investor, and the Investor will purchase from the Company, upon the terms and conditions set forth
herein, the number of shares of Common Stock set forth on the last page of the Agreement to which
these Terms and Conditions for Purchase of Common Stock are attached as Annex I (the “Signature
Page”) for the aggregate purchase price therefor set forth on the Signature Page.
2.2. The Company anticipates that other investors (the “Other Investors” will
participate in the Offering, and expects to complete sales of shares of Common Stock to them. The
Company agrees that such Other Investors will execute substantially the same form of Subscription
Agreement as this Agreement. The Investor and the Other Investors are hereinafter sometimes
collectively referred to as the “Investors,” and this Agreement and the Subscription
Agreements executed by the Other Investors are hereinafter sometimes collectively referred to as
the “Agreements.”
2.3. Investor acknowledges that the Company has agreed to pay the Placement Agent a fee of not
more than seven (7.0%) (the “Placement Fee”) in respect to the sale of Shares to the
Investor.
2.4. The Company has entered into a Placement Agent Agreement, dated October
_____, 2010 (the
“Placement Agreement”), with the Placement Agent that contains certain representations,
warranties, covenants and agreements of the Company that may be relied upon by the Investor, which
shall be a third party beneficiary thereof.
3. Closing and Delivery of the Shares of Common Stock and Funds.
3.1. Closing. The completion of the purchase and sale of the Common Stock (the
“Closing”) shall occur at a place and time (the “Closing Date”) to be specified by
the Company and the Placement Agent of which the Investors will be notified in advance by the
Placement Agent, in accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of
1934, as amended (the “Exchange Act”). At the Closing, (a) the Company shall cause the
Transfer Agent to deliver to the Investor the number of shares of Common Stock set forth on the
Signature Page registered in the name of the Investor or, if so indicated on the Investor
Questionnaire attached hereto as Exhibit A, in the name of a nominee designated by the Investor and
(b) the aggregate purchase price for the Common Stock being purchased by the Investor will be
delivered by or on behalf of the Investor to the Company.
3.2. Conditions to the Obligations of the Parties.
(a) Conditions to the Company’s Obligations. The Company’s obligation to issue and sell the
Common Stock to the Investor shall be subject to: (i) the receipt by the Company of the purchase
price for the shares of Common Stock being purchased hereunder as set forth on the Signature Page
and (ii) the accuracy of the representations and warranties made by the Investor and the
fulfillment of those undertakings of the Investor to be fulfilled prior to the Closing Date.
(b) Conditions to the Investor’s Obligations. The Investor’s obligation to purchase the
shares of Common Stock will be subject to (i) the representations and warranties made by the
Company in the Agreements and the Placement Agreement, which shall be true and correct as of the
date hereof and as of the Closing Date and the Company shall have fulfilled those undertakings of
the Company required to be fulfilled prior to the Closing Date, including without limitation, those
contained in the Placement Agreement, and (ii) that the Placement Agent shall not have: (A)
terminated the Placement Agreement pursuant to the terms thereof or (B) determined that the
conditions to the closing in the Placement Agreement have not been satisfied. The Investor’s
obligations are expressly not conditioned on the purchase by any or all of the Other Investors of
the shares of Common Stock that they have agreed to purchase from the Company. The Investor
understands and agrees that, in the event that the Placement Agent in its sole discretion
determines that the conditions to closing in the Placement Agreement have not been satisfied or if
the Placement Agreement may be terminated for any other reason permitted by such Agreement, then
the Placement Agent may, but shall not be obligated to, terminate such Agreement, which shall have
the effect of terminating this Subscription Agreement pursuant to Section 14 below. The
Placement Agent shall not have the authority to amend or modify the Company’s representations and
warranties set forth in Section 3 of the Placement Agreement or the closing conditions contained in
Section 7 of the Placement Agreement in a manner adverse to the Investor or waive any provisions or
conditions contained therein without the consent of the Investor.
3.3. Delivery of Funds via DWAC. The shares of Common Stock purchased by such
Investor shall be settled through DTC’s Deposit/Withdrawal at Custodian (“DWAC”) delivery
system, on the Closing Date. The Investor shall remit by wire transfer the amount of funds equal
to the aggregate purchase price for the shares of Common Stock being purchased by the Investor to
the following account designated by the Company:
3.4. Delivery of Shares of Common Stock via DWAC. No later than three (3) business
days after the (a) execution of this Agreement, and (b) delivery of proper DWAC account information
by the Investor to the Company and compliance by the Company with all conditions precedent to
Closing, including, without limitation, receipt of approval by the NYSE AMEX Exchange, the Investor
shall direct the broker-dealer at which the account or accounts to be credited with the shares of
Common Stock being purchased by such Investor are maintained, which broker/dealer shall be a DTC
participant, to set up a DWAC instructing Computershare Trust Company, N.A., the Company’s
“Transfer Agent”, to credit such account or accounts with the shares of Common Stock. Such
DWAC instruction shall indicate the settlement date for the deposit of the shares of Common Stock,
which date shall be provided to the Investor by the Placement Agent. Simultaneously with the
delivery to the Company of the funds held pursuant to Section 3.3 above, the Company shall
direct the Transfer Agent to credit the Investor’s account or accounts with the shares of Common
Stock pursuant to the information contained in the DWAC. The cost of original issue tax stamps and
other transfer taxes, if any, in connection with the issuance and delivery of the shares of Common
Stock by the Company to the respective Purchasers shall be borne by the Company.
4. Representations, Warranties and Covenants of the Investor.
The Investor acknowledges, represents and warrants to, and agrees with the Company and the
Placement Agent (as to itself), that:
4.1. The Investor (a) is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in shares presenting an investment
decision like that involved in the purchase of the Common Stock, including investments in
securities issued by the
Company and investments in comparable companies, (b) has answered all questions on the
Signature Page and the Investor Questionnaire and the answers thereto are true and correct as of
the date hereof and will be true and correct as of the Closing Date and (c) in connection with its
decision to purchase the number of shares of Common Stock set forth on the Signature Page, has
received and is relying only upon the Disclosure Package and the documents incorporated by
reference therein and the Offering Information.
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4.2. (a) No action has been or will be taken in any jurisdiction outside the United States by
the Company or the Placement Agent that would permit an offering of the Common Stock, or possession
or distribution of offering materials in connection with the issue of the shares of Common Stock in
any jurisdiction outside the United States where action for that purpose is required, (b) if the
Investor is outside the United States, it will comply with all applicable laws and regulations in
each foreign jurisdiction in which it purchases, offers, sells or delivers shares of Common Stock
or has in its possession or distributes any offering material, in all cases at its own expense and
(c) the Placement Agent is not authorized to make and have not made any representation, disclosure
or use of any information in connection with the issue, placement, purchase and sale of the Common
Stock, except as set forth or incorporated by reference in the Base Prospectus, the Prospectus
Supplement or any free writing prospectus.
4.3. (a) The Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement, and (b) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or at
law) and except as to the enforceability of any rights to indemnification or contribution that may
be violative of the public policy underlying any law, rule or regulation (including any federal or
state securities law, rule or regulation).
4.4. The Investor understands that nothing in this Agreement, the Prospectus, the Disclosure
Package, the Offering Information or any other materials presented to the Investor in connection
with the purchase and sale of the Common Stock constitutes legal, tax or investment advice. The
Investor has consulted such legal, tax and investment advisors and made such investigation as it,
in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the
Common Stock.
4.5. Since the date on which the Placement Agent first contacted the Investor about the
Offering, the Investor has not disclosed any information regarding the Offering to any third
parties (other than its legal, accounting and other advisors) and has not engaged in any purchases
or sales involving the securities of the Company (including, without limitation, any Short Sales
involving the Company’s securities). The Investor covenants that it will not engage in any
purchases or sales in the securities of the Company (including Short Sales) prior to the time that
the transactions contemplated by this Agreement are publicly disclosed. The Investor agrees that
it will not use any of the shares of Common Stock acquired pursuant to this Agreement to cover any
short position in the Common Stock if doing so would be in violation of applicable securities laws.
For purposes hereof, “Short Sales” include, without limitation, all “short sales” as defined in
Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against the box,
and all types of direct and indirect stock pledges, forward sales contracts, options, puts, calls,
short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act)
and similar arrangements (including on a total return basis), and sales and other transactions
through non-U.S. broker dealers or foreign regulated brokers.
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5. Survival of Representations, Warranties and Covenants; Third Party Beneficiary.
Notwithstanding any investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company and the Investor
herein will survive the execution of this Agreement, the delivery to the Investor of the shares of
Common Stock being purchased and the payment therefor. The Placement Agent shall be a third party
beneficiary with respect to the representations, warranties and covenants of the Investor in
Section 4 hereof.
6. Notices. All notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by International Federal Express or
facsimile, and (c) will be deemed given (i) if delivered by first-class registered or certified
mail domestic, three (3) business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one (1) business day after so mailed, (iii) if delivered by International
Federal Express, two (2) business days after so mailed and (iv) if delivered by facsimile, upon
electronic confirmation of receipt and will be delivered and addressed as follows:
| (a) | if to the Company, to: |
||
Arcadia Resources, Inc. 0000 Xxxxxxxx Xxx Xxxx Xxxxx Xxxxxxxxxxxx, Xxxxxxx 00000 Attention: Xxxxx Xxxxxx Facsimile: (000) 000-0000 |
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with copies to: |
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Ice Xxxxxx LLP Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxxxxxx, Xxxxxxx 00000 Attention: Xxxxxxx X. Xxxxxxx, Esq. Facsimile: (000) 000-0000 |
(b) if to the Investor, at its address on the Signature Page hereto, or at such other address
or addresses as may have been furnished to the Company in writing.
7. Changes. This Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.
8. Headings. The headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this Agreement.
9. Severability. In case any provision contained in this Agreement should be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein will not in any way be affected or impaired thereby.
10. Governing Law. This Agreement will be governed by, and construed in accordance with, the
internal laws of the State of New York, without giving effect to the principles of conflicts of law
that would require the application of the laws of any other jurisdiction.
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11. Counterparts. This Agreement may be executed in two or more counterparts, each of which
will constitute an original, but all of which, when taken together, will constitute but one
instrument, and will become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties. The Company and the Investor acknowledge and agree that
the Company shall deliver its counterpart to the Investor along with the Prospectus Supplement (or
the filing by the Company of an electronic version thereof with the Commission).
12. Confirmation of Sale. The Investor acknowledges and agrees that such Investor’s receipt
of the Company’s signed counterpart to this Agreement, together with the Prospectus Supplement (or
the filing by the Company of an electronic version thereof with the Commission), shall constitute
written confirmation of the Company’s sale of the Common Stock to such Investor.
13. Press Release. The Company and the Investor agree that the Company shall, prior to the
opening of the financial markets in New York City on the business day immediately after the date
hereof, (a) issue a press release announcing the Offering and disclosing all material information
regarding the Offering and (b) file a Current Report on Form 8-K with the Securities and Exchange
Commission including a form of this Agreement as an exhibit thereto. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of the Investor or any affiliate or
investment adviser of the Investor, or include the name of the Investor or any affiliate or
investment adviser of any Investor in any press release or filing with the Securities and Exchange
Commission or any regulatory agency or trading market, without the prior written consent of such
Investor, except (i) as required by federal securities law and (ii) to the extent such disclosure
is required by law or trading market regulations, in which case the Company shall provide the
Investor with prior written notice of such disclosure permitted under this sub-clause (ii). From
and after the issuance of the press release described above, the Investor shall not be in
possession of any material, non public information received from the Company, any subsidiary of the
Company or any of their respective officers, directors or employees.
14. Termination. In the event that the Placement Agreement is terminated by the Placement
Agent pursuant to the terms thereof, this Agreement shall terminate without any further action on
the part of the parties hereto. The Investor shall have the right to terminate this agreement if
the Closing has not occurred on or before November 15, 2010.
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EXHIBIT A
Investor Questionnaire
Pursuant to Section 3 of Annex I to the Agreement, please provide us with the following
information:
1.
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The exact name that your shares of Common Stock are to be registered in. You may use a nominee name if appropriate: | |||||
2.
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The relationship between the Investor and the registered holder listed in response to item 1 above: | |||||
3.
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The mailing address of the registered holder listed in response to item 1 above: | |||||
4.
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The Social Security Number or Tax Identification Number of the registered holder listed in the response to item 1 above: | |||||
5.
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Name and Contact Information of DTC Participant (broker-dealer at which the account or accounts to be credited with the shares of Common Stock are maintained) (i.e. telephone number or email address): | |||||
6.
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DTC Participant Number: | |||||
7.
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Name of Account at DTC Participant being credited with the shares of Common Stock: | |||||
8.
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Account Number at DTC Participant being credited with the shares of Common Stock: | |||||
