REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of May
7, 2004, by and between Critical Home Care, Inc., a Nevada corporation (the
"Company"), and Xxxx X. Xxxxxxx, XX and Xxxxxxxx X. Xxxxxxx (individually a
"Shareholder" and collectively the "Shareholders").
WHEREAS, the Company, the Shareholders and certain others entered into
an Agreement and Plan of Merger dated May 7, 2004, to be effective May 10, 2004,
(the "Merger Agreement"), providing for certain transactions which when
consummated, will result in the issuance by the Company to the Shareholders, of
certain of the Company's issued and outstanding, voting, $.001 par value, common
stock as follows:
Xxxx X. Xxxxxxx, XX 12,780,000 Shares
Xxxxxxxx X. Xxxxxxx 8,520,000 Shares
Xxxx X. Xxxxxxx, XX 600,000 Warrant Shares
Xxxxxxxx X. Xxxxxxx 400,000 Warrant Shares
(collectively, the "Shares"). The Shares will be evidenced by certificates
and/or other instruments to be prepared after the date of this Agreement. The
Shareholders may further identify the Shares covered by this Agreement by
delivering a writing to the Company, identifying the Shares by certificate
number.
WHEREAS, pursuant to Article 2.4(e) of the Merger Agreement, the
Company is obligated to cause the Shares to be registered for resale with the
United States Securities and Exchange Commission (the "SEC"), in accordance with
the Securities Act of 1933 (the "Act") and any and all applicable states, in
accordance with the securities laws of such states (the "Blue Sky Laws").
WHEREAS, the parties desire to enter into this Agreement to provide for
the registration of the Shares.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements and covenants herein contained, the parties hereto agree as follows:
1. Registration. The Company shall register with the SEC the
Shares for public sale by the Shareholders, in their discretion, either in the
public market or in negotiated transactions from time to time under the Act and
any applicable Blue Sky Laws (the "Registration"). The Registration (and
registration statement) shall be made effective on or before November 7, 2004
and shall thereafter, be made and kept continuously effective for so long as the
Shareholders shall hold any of the Shares.
2. Registration Procedures. The Shareholders shall furnish to the
Company such information regarding them, the Shares held by them, the intended
method of their disposition of the Shares, and such information as the Company
shall reasonably request and as shall be legally required, in connection with
the Registration of the Shares.
The Company shall:
(a) prepare and file with the SEC, a registration statement on
the appropriate form prescribed by the SEC and cause such registration
statement to become effective on or before November 7, 2004. The
Registration (including any amendments or supplements thereto and
prospectuses contained therein) 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, in light
of the circumstances in which they were made, not misleading;
(b) prepare and file with the SEC, such amendments,
post-effective amendments and supplements to such registration
statement and any documents required to be incorporated by reference
therein as may be necessary to keep the registration statement
effective until the distribution of Shares shall have been completed;
cause the prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Act (or any successor rule); and comply with the provisions
of the Act applicable to it with respect to the disposition of the
Shares covered by such registration statement during the applicable
period in accordance with the intended methods of disposition of the
Shares being sold by the Shareholders, set forth in such registration
statement or supplement to the prospectus. In the case of amendments
and supplements to the Registration that are required to be filed
pursuant to this Agreement (including pursuant to this Section 3(b)) by
reason of the Company filing a report on Form 10-KSB, Form 10-QSB or
Form 8-K or any analogous report under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Company shall file such
amendments or supplements with the SEC on the same day or as soon as
practicably thereafter on which the Exchange Act report is filed that
created the requirement for the Company to amend or supplement the
Registration;
(c) furnish to each Shareholder at least one (1) conformed
copy of the registration statement and any post-effective amendment
thereto, upon request, and such number of copies of the prospectus
(including each preliminary prospectus) and any amendments or
supplements thereto, and any exhibits or documents incorporated by
reference therein as the Shareholders or underwriter or underwriters,
if any, may reasonably request in order to facilitate the disposition
of the Shares being sold by the Shareholders;
(d) on or prior to the date on which the registration
statement is declared effective, to register or qualify, and to
cooperate with the Shareholders, the underwriter or underwriters, if
any, and their counsel in connection with the registration or
qualification of the Shares covered by the registration statement for
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offer and sale under the Act or Blue Sky Laws of each state and other
jurisdiction of the United States as the Shareholders or underwriter or
underwriters, if any, may request (considering the nature or size of
the offering and the expense and time involved in such qualification or
registration), and to do any and all other acts or things which may be
necessary or advisable to enable the disposition in all such
jurisdictions of the Shares covered by the applicable registration
statement;
(e) cause the Shares covered by the registration statement to
be registered with or approved by such other governmental agencies or
authorities within the United States, including, without limitation,
any filing required to be made by the underwriter or underwriters, if
any, with a stock market, exchange or quotation service (such as New
York Stock Exchange, American Stock Exchange, NASDAQ, OTCBB or Pink
Sheets Service), as may be necessary to enable the seller or sellers
thereof or the underwriter or underwriters, if any, to consummate the
disposition of the Shares;
(f) prior to the effective date of a registration statement
covering the Shares (i) cooperate with the holders of the Shares to
provide certificates for the Shares in a form eligible for deposit with
The Depository Trust Company and (ii) provide a CUSIP number for the
Shares to be offered;
(g) provide a transfer agent and registrar for all such Shares
not later than the effective date of the first registration statement
relating to the Shares and co-operate to make certificates promptly
available;
(h) list or have included for trading the Shares on any stock
exchange or interdealer quotation system upon which other securities of
the Company of the same class are listed or included for trading; and
(i) enter into customary underwriting and other agreements and
obtain cold comfort letters and/or legal opinion letters in customary
form as may be requested by any underwriter or the Shareholders.
(j) notify each seller of such Shares, at any time when a
prospectus relating thereto is required to be delivered under the Act,
of the happening of any event as a result of which the prospectus
included in such registration statement contains an untrue statement of
a material fact or omits any fact necessary to make the statements
therein not misleading, and, at the request of any such seller, the
Company shall promptly prepare a supplement or amendment to such
prospectus and/or registration statement so that, as thereafter
delivered to the purchasers of such Shares, such prospectus shall not
contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(k) make available for inspection by any seller of Shares, any
underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent
retained by any such seller
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or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply
all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration
statement;
(l) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the
effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder;
(m) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or
suspending the qualification of any securities included in such
registration statement for sale in any jurisdiction, the Company shall
notify the Shareholders thereof and use its best efforts promptly to
obtain the withdrawal of such order;
(n) The Company shall hold in confidence and not make any
disclosure of information concerning a Shareholder 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 the Registration, (iii) the release of such information is
ordered pursuant to a subpoena or other final, non-appealable 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 Agreement or any other
agreement. The Company agrees that it shall, upon learning that
disclosure of such information concerning a Shareholder is sought in or
by a court or governmental body of competent jurisdiction or through
other means, give prompt written notice to such Shareholder and allow
such Shareholder, at the Shareholder's expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective
order for, such information; and
(o) use its best efforts to cause its management to
participate fully in the sale process, including, without limitation,
the preparation of the registration statement and the preparation and
presentation of any "road shows," whether domestic or international.
3. Registration Expenses. The Company shall bear and pay all
expenses in connection with the Registration, including, without limitation, the
expenses of preparing any registration statement; SEC and state "blue sky"
filing, registration and qualification fees and expenses; fees and expenses
associated with filings required to be made with the NASD; fees and expenses of
counsel for the Company, independent public accountants
(including, without limitation, the cost of providing any legal opinions or
"cold comfort" letters); underwriters and other persons retained by the Company,
fees and expenses and disbursements of counsel for the Shareholders.
4. Indemnification.
(a) To the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless and defend each Shareholder
who holds such Shares, against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, attorneys'
fees, amounts paid in settlement or expenses, joint or several
(collectively, "Losses"), incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation
or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency or body or the
SEC, whether pending or threatened, whether or not an indemnified party
is or may be a party thereto to which any of them may become subject
insofar as such Losses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any
untrue statement or alleged untrue statement of a material fact in the
Registration or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the
securities or other "blue sky" laws of any jurisdiction in which Shares
are offered, or the omission or alleged omission to state a material
fact required to be stated therein 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, 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, (iii) any violation or alleged violation by the Company of
the 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 Shares pursuant to the
Registration or (iv) any material violation of this Agreement. The
indemnification provided for under this Agreement shall remain in full
force and effect regardless of any investigation made by or on behalf
of the indemnified party or any officer, director or controlling person
of such indemnified party and shall survive the transfer of Shares.
This indemnification shall also be given by the Company with respect to
any required registration or other qualification of Shares under any
federal or state law or regulation of any governmental authority other
than the Act. The indemnification required by this Section 4 shall be
made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or Losses
are incurred. The provisions of this Section 4 shall be in addition to
any other rights to indemnification or contribution which a Shareholder
may have pursuant to law, equity, contract or otherwise.
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(b) If the indemnity and reimbursement obligation provided for
in any paragraph of this Section 4 is unavailable or insufficient to
hold harmless a Shareholder in respect of any Losses (or actions or
proceedings in respect thereof) referred to therein, then the Company
shall contribute to the amount paid or payable by the Shareholder as a
result of such Losses (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Shareholder on the other hand in
connection with statements or omissions which resulted in such Losses,
as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Shareholder and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The parties
hereto agree that it would not be just and equitable if contributions
pursuant to this paragraph were to be determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the first sentence of this
paragraph. The amount paid by a Shareholder as a result of the Losses
referred to in the first sentence of this paragraph shall be deemed to
include any legal and other expenses reasonably incurred by such
Shareholder in connection with investigation or defending any Loss
which is the subject of this paragraph. No Shareholder guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from the Company if the
Company was not guilty of such fraudulent misrepresentation.
5. Miscellaneous.
(a) Mutual Rights of the Shareholders. Each, every and all of
the rights provided in this Agreement to the Shareholders and further,
each, every and all of the obligations of the Company, shall be
extended to each Shareholder individually or the Shareholders
collectively, as the Shareholders may elect.
(b) No Inconsistent Agreements. The Company shall not
hereafter enter into any agreement with respect to its securities that
is inconsistent with or violates the rights granted to the
Shareholders.
(c) Adjustments Affecting Shares. The Company shall not take
any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of
the Shareholders to include the Shares in a registration undertaken
pursuant to this Agreement or which would materially and adversely
affect the marketability of the Shares in any such registration
(including, without limitation, effecting a stock split or a
combination of shares).
(d) Remedies. Any Shareholder having rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically to recover damages caused by reason of any breach of any
provision of this Agreement and
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to exercise all other rights granted by law. Remedies available
specifically hereunder are cumulative with each other and with all
other remedies available at law and not specifically precluded hereby.
The parties hereto agree and acknowledge that money damages may not be
an adequate remedy for any breach of the provisions of this Agreement
and that any party may in its sole discretion apply to any court of law
or equity of competent jurisdiction (without posting any bond or other
security) for specific performance and for other injunctive relief in
order to enforce or prevent violation of the provisions of this
Agreement.
(e) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only
upon the prior written consent of the Company and the Shareholders.
(f) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of
the parties hereto whether so expressed or not, including, without
limitation, any corporation or other entity into which the Company may
be merged or converted. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are
for the benefit of the Shareholders are also for the benefit of, and
enforceable by, any subsequent holder of the Shareholders.
(g) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is
held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of this Agreement.
(h) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not
contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same
Agreement.
(i) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a
part of this Agreement.
(j) Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this
Agreement shall be in writing and shall be deemed to have been given
when delivered personally to the recipient, sent to the recipient by
reputable overnight courier service (charges prepaid), or sent via
facsimile to the recipient accompanied by a certified registered
mailing. Such notices, demands and other communications shall be sent
to such party's address as set forth on the signature pages below or
otherwise as set forth in the Company's records.
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(k) GOVERNING LAW, JURY TRIAL AND JURISDICTION. ALL ISSUES AND
QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF MICHIGAN, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF MICHIGAN
OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF MICHIGAN. THE PARTIES
HERETO SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF
MICHIGAN.
(l) No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement.
In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the
parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.
(m) Transfer. Prior to transferring any Shares to any person,
the Shareholder transferring such Shares will cause the prospective
transferee to execute and deliver to the Company (for itself and as the
agent of the other members), a counterpart to this Agreement pursuant
to which the prospective transferee agrees to be bound by this
Agreement to the same extent as the person transferring such Shares
with respect to the Shares so transferred.
(n) Entire Agreement. Except as otherwise expressly set forth
herein, this Agreement and the other agreements referred to herein
embodies the complete agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or
among the parties, written or oral, which may have related to the
subject matter hereof in any way.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
CRITICAL HOME CARE, INC.
a Nevada corporation
By:
--------------------------------
Its: President
-------------------------------
SHAREHOLDERS
-------------------------------------
Xxxx X. Xxxxxxx, XX, Individually
-------------------------------------
Xxxxxxxx X. Xxxxxxx, Individually
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