EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") dated as of December 13,
2006 is by and among United American Healthcare Corporation, a Michigan
corporation (the "Company"), and the "Investors" named in that certain Purchase
Agreement by and among the Company and the Investors (the "Purchase Agreement").
The parties hereby agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate" means, with respect to any person, any other person which
directly or indirectly controls, is controlled by, or is under common control
with, such person.
"Business Day" means a day, other than a Saturday or Sunday, on which banks
in New York City are open for the general transaction of business.
"Common Stock" means the Company's common shares, no par value, and any
securities into which such shares may hereafter be reclassified.
"Effective Date" means the date that the Registration Statement is first
declared effective by the SEC.
"Investors" means the Investors identified in the Purchase Agreement and
any Affiliate or permitted transferee (under Section 7(c) hereof) of any
Investor who is a subsequent holder of any Warrants or Registrable Securities.
"Prospectus" means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.
"Register," "registered" and "registration" refer to a registration made by
preparing and filing a Registration Statement or similar document in compliance
with the 1933 Act (as defined below), and the declaration or ordering of
effectiveness of such Registration Statement or document.
"Registrable Securities" shall mean the Shares and the shares of Common
Stock issuable (i) upon the exercise of the Warrants, if any, and (ii) any other
securities issued or issuable with respect to or in exchange for Registrable
Securities; provided, that a security shall cease to be a Registrable Security
upon (A) sale pursuant to a Registration Statement or Rule 144 under the 1933
Act ("Rule 144"), or (B) such security becoming eligible for sale by the
applicable Investor pursuant to Rule 144(k) under the 1933 Act ("Rule 144(k)")
(the period from the date hereof until an occurrence described in clause (A) or
(B), the "Registration Period").
"Registration Statement" means any registration statement of the Company
filed under the 1933 Act that covers the resale of any of the Registrable
Securities pursuant to the provisions of this Agreement, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits to such registration statement and all material incorporated by
reference in such registration statement.
"Required Investors" means the Investors holding at least 2/3 of the
Registrable Securities.
"SEC" means the U.S. Securities and Exchange Commission.
"Shares" means the shares of Common Stock issued pursuant to the Purchase
Agreement.
"1933 Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"Trading Day" means a day on which the Common Stock is traded on a Trading
Market.
"Trading Market" means the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the Nasdaq
Capital Market, the American Stock Exchange, the New York Stock Exchange, the
Nasdaq Global Market or the OTC Bulletin Board.
"Warrants" means the warrants to purchase shares of Common Stock issued to
the Investors pursuant to the Purchase Agreement, the form of which is attached
to the Purchase Agreement as Exhibit A.
"Warrant Shares" means the shares of Common Stock issuable upon the
exercise of the Warrants.
2. Registration.
(a) Registration Statement. Within thirty (30) days after the closing
of the purchase and sale of the securities contemplated by the Purchase
Agreement ("Closing"), the Company shall file a registration statement on Form
S-3 covering the resale of all Registrable Securities (a "Shelf Registration
Statement"). The last day of such 30-day period is called the "Filing Deadline
Date" below.
(b) Expenses. The Company will pay all of its expenses associated with
the Shelf Registration Statement, including filing and printing fees, Company
counsel and accounting fees and expenses, and costs associated with clearing the
Registrable Securities for sale under applicable state securities laws and
listing fees, but excluding fees and expenses of counsel to the Investors,
discounts, commissions, fees of underwriters, selling brokers, dealer managers
or similar securities industry professionals with respect to the Registrable
Securities being sold.
(c) Effectiveness. (i) The Company shall use its best efforts to cause
the Shelf Registration Statement to be declared effective within ninety (90)
days (one hundred twenty (120) days if reviewed) after the Closing. The last day
of such 90-day (or 120-day, as the
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case may be) period is called the "Effectiveness Deadline Date" below. The
Company shall notify the Investors by facsimile or e-mail as promptly as
practicable after any Registration Statement or post-effective amendment is
declared effective and shall provide the Investors with copies of any related
Prospectus to be used in connection with the sale or other disposition of the
securities covered thereby (the initial date of effectiveness being referred to
herein as the "Effective Date").
(ii) Notwithstanding anything to the contrary herein, at any time
after the Effective Date, the Company may delay the disclosure of material,
non-public information concerning the Company the disclosure of which at the
time is not, in the good faith opinion of the Board of Directors of the Company,
in the best interest of the Company (a "GRACE PERIOD"); provided, that the
Company shall promptly (i) notify the Investors in writing of the existence of
material, non-public information giving rise to a Grace Period (provided that in
each notice the Company will not disclose the content of such material,
non-public information to the Investors) and the date on which the Grace Period
will begin, and (ii) notify the Investors in writing of the date on which the
Grace Period ends; and, provided further, that no Grace Period shall exceed
twenty (20) consecutive days and during any three hundred sixty-five (365) day
period such Grace Periods shall not exceed an aggregate of sixty (60) days and
the first day of any Grace Period must be at least five (5) Trading Days after
the last day of any prior Grace Period (each, an "Allowable Grace Period"). For
purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the Investors receive the notice referred to
in clause (i) and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) and the date referred to in such
notice. The provisions of Section 2(d) hereof shall not be applicable during the
period of any Allowable Grace Period. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended shares of
Common Stock to a transferee of an Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which an Investor has entered into a contract for
sale, and delivered a copy of the prospectus included as part of the applicable
Registration Statement (unless an exemption from such prospectus delivery
requirement exists), prior to the Investor's receipt of the notice of a Grace
Period and for which the Investor has not yet settled.
(d) Registration and Related Defaults. Should an Event (as defined
below) occur, then as partial relief for the damages suffered therefrom by the
Investors (which remedy shall not be exclusive of any other remedies available
under this Agreement, at law or in equity), the Company shall pay an aggregate
amount to the Investors collectively, as liquidated damages and not as a
penalty, calculated at the rate of 1.0% of the aggregate purchase price paid by
the Investors for the Securities (the "Base Amount"), per month (prorated for
partial months) and not to exceed an aggregate amount equal to 7.0% of the Base
Amount to all Investors collectively for that Event, payable to the respective
Investors in accordance with their respective portions of such aggregate
purchase price; and for any day in any such month, such payment shall be made no
later than the first Business Day of the calendar month next succeeding the
month in which such day occurs. The payments to which the Investor shall be
entitled pursuant to this Section 2(d) are referred to herein as "Event
Payments". In the event the Company fails to make Event Payments in a timely
manner, such Event Payments shall bear interest at the rate of 1.5% per month
until paid in full. For such purposes, each of the following shall constitute an
"Event":
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(i) the Registration Statement is not filed on or prior to the
Filing Deadline Date;
(ii) the Registration Statement is not declared effective on or
prior to the Effectiveness Deadline Date;
(iii) after the Effective Date, other than during an Allowable
Grace Period, the Investor is not permitted to sell Registrable Securities under
the Registration Statement (or a subsequent Registration Statement filed in
replacement thereof) for any reason (other than the fault of such Investor) for
five or more Trading Days (whether or not consecutive);
(iv) the Common Stock is not listed or quoted, or is suspended
from trading, on Nasdaq or the principal stock exchange on which the Common
Stock is then listed (the "Principal Market") for a period of three Trading Days
(which need not be consecutive Trading Days) during the Registration Period; or
(v) the Company fails to have available a sufficient number of
authorized but unissued and otherwise unreserved shares of Common Stock
available to issue Warrant Shares upon any exercise of the Warrants.
3. Company Obligations. The Company will use commercially reasonable
efforts to effect the registration of the Registrable Securities in accordance
with the terms hereof, and pursuant thereto the Company will, as expeditiously
as possible:
(a) use commercially reasonable efforts to cause such Registration
Statement to become effective and to remain continuously effective (subject to
the terms hereof) for a period that will terminate upon the earlier of (i) the
date on which all Registrable Securities covered by such Registration Statement,
as amended from time to time, have been sold, and (ii) two (2) years after the
date of this Agreement;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement and the Prospectus as may be necessary
to keep the Registration Statement effective for the period specified in Section
3(a) hereof and to comply with the provisions of the 1933 Act and the 1934 Act
with respect to the distribution of all of the Registrable Securities covered
thereby;
(c) furnish to the Investors (i) promptly after the same is prepared
and publicly distributed, filed with the SEC, or received by the Company one (1)
copy of any Registration Statement and any amendment thereto, each preliminary
prospectus and Prospectus and each amendment or supplement thereto, and (ii)
such number of copies of a Prospectus, including a preliminary prospectus, and
all amendments and supplements thereto and such other documents as each Investor
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor that are covered by the related Registration
Statement;
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(d) use commercially reasonable efforts to (i) prevent the issuance of
any stop order or other suspension of effectiveness and, (ii) if such order is
issued, obtain the withdrawal of any such order as soon as practicable;
(e) use commercially reasonable efforts to cause all Registrable
Securities covered by a Registration Statement to be listed on each securities
exchange, interdealer quotation system or other market on which similar
securities issued by the Company are then listed;
(f) immediately notify the Investors, at any time when a Prospectus
relating to Registrable Securities is required to be delivered under the 1933
Act, upon discovery that, or upon the happening of any event as a result of
which, the Prospectus included in a Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, and at the request
of any Investor, promptly prepare and furnish to such Investor a reasonable
number of copies of a supplement to or an amendment of such Prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus shall not include 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 in light of the circumstances then
existing; and
(g) with a view to making available to the Investors the benefits of
Rule 144 (or its successor rule) and any other rule or regulation of the SEC
that may at any time permit the Investors to sell shares of Common Stock to the
public without registration, from and after the Reporting Date the Company
covenants and agrees to: (i) make and keep public information available, as
those terms are understood and defined in Rule 144, until the earlier of (A) six
months after such date as all of the Registrable Securities may be resold
pursuant to Rule 144(k) or any other rule of similar effect or (B) such date as
all of the Registrable Securities shall have been resold; (ii) file with the SEC
in a timely manner all reports and other documents required of the Company under
the 1934 Act; and (iii) furnish to each Investor upon request, as long as such
Investor owns any Registrable Securities, (A) a written statement by the Company
that it has complied with the reporting requirements of the 1934 Act, (B) a copy
of the Company's most recent Annual Report on Form 10-K or Quarterly Report on
Form 10-Q, and (C) such other information as may be reasonably requested in
order to avail such Investor of any rule or regulation of the SEC that permits
the selling of any such Registrable Securities without registration.
4. Due Diligence Review; Information. The Company shall make available,
during normal business hours, for inspection and review by the Investors,
advisors to and representatives of the Investors (who may or may not be
affiliated with the Investors and who are reasonably acceptable to the Company),
all financial and other records, all SEC Filings (as defined in the Purchase
Agreement) and other filings with the SEC, and all other corporate documents and
properties of the Company as may be reasonably necessary for the purpose of such
review, and cause the Company's officers, directors and employees, within a
reasonable time period, to supply all such information reasonably requested by
the Investors or any such representative, advisor or underwriter in connection
with such Registration Statement (including, without limitation, in response to
all questions and other inquiries reasonably made or submitted
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by any of them), prior to and from time to time after the filing and
effectiveness of the Registration Statement until two (2) years after the date
of this Agreement for the sole purpose of enabling the Investors and such
representatives, advisors and underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of such Registration Statement.
The Company shall not disclose material nonpublic information to the
Investors, or to advisors to or representatives of the Investors, unless prior
to disclosure of such information the Company identifies such information as
being material nonpublic information and provides the Investors, such advisors
and representatives with the opportunity to accept or refuse to accept such
material nonpublic information for review and any Investor wishing to obtain
such information enters into an appropriate confidentiality agreement with the
Company with respect thereto.
5. Obligations of the Investors.
(a) Each Investor shall furnish in writing 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 any Registration Statement, the Company
shall notify each Investor of the information the Company requires from such
Investor if such Investor elects to have any of the Registrable Securities held
by it included in the Registration Statement. An Investor shall provide such
information to the Company at least two (2) Business Days prior to the first
anticipated filing date of such Registration Statement if such Investor elects
to have any of the Registrable Securities held by it included in the
Registration Statement.
(b) Each Investor, by its acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of a Registration Statement
hereunder, unless such Investor has notified the Company in writing of its
election to exclude all of its Registrable Securities from such Registration
Statement.
(c) Each Investor agrees that, upon receipt of any notice from the
Company of either (i) the commencement of an Allowable Grace Period pursuant to
Section 2(c)(ii) hereof or (ii) the happening of an event pursuant to Section
3(h) hereof, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities, until the Investor's receipt advice from the Company
that a copy of the supplemented or amended prospectus has been filed with the
SEC and declared effective.
6. Indemnification.
(a) Indemnification by the Company. The Company will indemnify and
hold harmless each Investor and its officers, directors, members, employees and
agents, successors and assigns, and each other person, if any, who controls such
Investor within the meaning of the 1933 Act, against any losses, claims, damages
or liabilities, joint or several, to
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which they may become subject under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon: (i) any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto; (ii) any blue sky application or other document executed by the Company
specifically for that purpose or based upon written information furnished by the
Company filed in any state or other jurisdiction in order to qualify any or all
of the Registrable Securities under the securities laws thereof (any such
application, document or information herein called a "Blue Sky Application");
(iii) the omission or alleged omission to state therein 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; or (iv) any
violation by the Company or its agents of any rule or regulation promulgated
under the 1933 Act applicable to the Company or its agents and relating to
action or inaction required of the Company in connection with such registration
(except to the extent arising from a breach by such Investor of the terms
hereof) and will reimburse such Investor, and each such officer, director or
member and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon (1) an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by such Investor or any such controlling
person in writing specifically for use in such Registration Statement or
Prospectus, or (2) an Investor's failure to deliver the then-current Prospectus
if such delivery is required by applicable law.
(b) Indemnification by the Investors. In connection with any
registration pursuant to the terms of this Agreement, each Investor will furnish
to the Company in writing such information as the Company reasonably requests
concerning the holders of Registrable Securities or the proposed manner of
distribution for use in connection with any Registration Statement or Prospectus
and agrees, severally but not jointly, to indemnify and hold harmless, to the
fullest extent permitted by law, the Company, its directors, officers,
employees, shareholders, agents, successors and assigns, and each person who
controls the Company (within the meaning of the 0000 Xxx) against any losses,
claims, damages, liabilities and expense (including reasonable attorney fees)
resulting from (i) any untrue statement of a material fact or any omission of a
material fact required to be stated in the Registration Statement or Prospectus
or preliminary prospectus or amendment or supplement thereto or necessary to
make the statements therein not misleading, to the extent, but only to the
extent that such untrue statement or omission is contained in any information
furnished in writing by such Investor to the Company specifically for inclusion
in such Registration Statement or Prospectus or amendment or supplement thereto,
(ii) a breach by such Investor of the terms hereof, or (iii) the failure by such
Investor to deliver the then-current Prospectus if such delivery is required by
applicable law. In no event shall the liability of an Investor be greater in
amount than the dollar amount of the proceeds (net of the amount of any damages
such holder has otherwise been required to pay by reason of such untrue
statement or omission) received by such Investor upon the sale of the
Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation.
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(c) Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided, that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed to pay such fees or expenses, or (b) the indemnifying party shall
have failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists
between such person and the indemnifying party with respect to such claims (in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall adversely affect the indemnifying party in the
defense of any such claim or litigation. It is understood that the indemnifying
party shall not, in connection with any proceeding in the same jurisdiction, be
liable for fees or expenses of more than one separate firm of attorneys at any
time for all such indemnified parties. No indemnifying party will, except with
the consent of the indemnified party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation.
(d) Contribution. If for any reason the indemnification provided for
in the preceding paragraphs (a) and (b) is unavailable to an indemnified party
or insufficient to hold it harmless, other than as expressly specified therein,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations. No person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the 1933 Act shall be entitled to
contribution from any person not guilty of such fraudulent misrepresentation. In
no event shall the contribution obligation of a holder of Registrable Securities
be greater in amount than the dollar amount of the proceeds (net of the amount
of any damages such holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission) received by
it upon the sale of the Registrable Securities giving rise to such contribution
obligation.
7. Miscellaneous.
(a) Amendments and Waivers. This Agreement may be amended only by a
writing signed by the Company and the Required Investors. The Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company shall have obtained the written consent to
such amendment, action or omission to act, of the Required Investors.
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(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made as set forth in Section 10.4 of the Purchase
Agreement.
(c) Assignments and Transfers by Investors. The provisions of this
Agreement shall be binding upon and inure to the benefit of the Investors and
their respective permitted successors and assigns. An Investor may transfer or
assign, in whole or from time to time in part, to one or more persons its rights
hereunder in connection with the transfer of Registrable Securities by such
Investor to such person, provided that such Investor complies with all laws
applicable thereto and provides written notice of assignment to the Company
promptly after such assignment is effected.
(d) Assignments and Transfers by the Company. This Agreement may not
be assigned by the Company (whether by operation of law or otherwise) without
the prior written consent of the Required Investors, provided, however, that the
Company may assign its rights and delegate its duties hereunder to any surviving
or successor corporation in connection with a merger or consolidation of the
Company with another corporation, or a sale, transfer or other disposition of
all or substantially all of the Company's assets to another corporation, without
the prior written consent of the Required Investors, after notice duly given by
the Company to each Investor.
(e) Benefits of the Agreement. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective permitted successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
(f) Counterparts; Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed by manual signature transmitted via facsimile, which shall be deemed
an original.
(g) Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(h) Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provisions hereof prohibited or
unenforceable in any respect.
(i) Further Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required
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to carry out the transactions contemplated hereby and to evidence the
fulfillment of the agreements herein contained.
(j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
(k) Governing Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York without regard to
the choice of law principles thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement or caused
their duly authorized officers to execute this Agreement as of the date first
above written.
THE COMPANY: UNITED AMERICAN HEALTHCARE CORPORATION
By:
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Xxxxxxx X. Xxxxxx
Chairman, President and Chief
Executive Officer
INVESTOR:
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By:
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Name:
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Title:
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INVESTOR:
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By:
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Name:
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Title:
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