EXHIBIT 10.71
SECURITIES PURCHASE AGREEMENT
The undersigned investor (the "INVESTOR") hereby confirms Investor's agreement
with Arcadia Resources, Inc. ("Arcadia" or the "Company") as follows:
1. This Securities Purchase 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 of ________________ shares
(the "SHARES") of the common stock of the Company, $0.001 par value per share
(the "COMMON STOCK"), to the Investor in a private placement (the "OFFERING").
3. 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 at a purchase price of $1.19 per Share, for an
aggregate purchase price of $________________________ (the "PURCHASE PRICE"),
subject to the Terms and Conditions for Purchase of Shares attached hereto as
Annex I and incorporated herein by reference as if fully set forth herein.
Unless otherwise requested by the Investor in Exhibit "A", certificates
representing the Shares purchased by the Investor will be registered in the
Investor's name and address as set forth below.
4. The Investor shall receive a warrant (the "WARRANT") to purchase ____________
shares of Common Stock (the "WARRANT SHARES") exercisable for seven (7) years
from the Closing Date (as defined herein) at a price of $1.75 per share. The
Warrant shall be in the form attached as Exhibit "C" hereto.
5. 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 its affiliates, (b) neither it, nor any group of which it is
a member or to which it is related, beneficially owns (including the right to
acquire or vote) any securities of the Company, (c) neither it, nor any group of
which it is a member or to which it is related, acquired, directly or
indirectly, any securities of the Company in a certain private placement
transaction that closed on December 28, 2006, and (d) it has no direct or
indirect affiliation or association with any National Association of Securities
Dealers, Inc. ("NASD") member. Exceptions:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(If no exceptions, write "none." If left blank, response will be deemed to be
"none.")
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:
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Title:
---------------------------------
Address:
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AGREED AND ACCEPTED:
Arcadia Resources, Inc.
By:
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Name: Xxxx X. Xxxxxxx, XX
Title: Chairman, President and CEO
[SECURITIES PURCHASE AGREEMENT SIGNATURE PAGE]
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ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SHARES
1. AGREEMENT TO SELL AND PURCHASE THE SHARES; SUBSCRIPTION DATE.
1.1 PURCHASE AND SALE. At the Closing (as defined in Section 2), the
Company will sell to the Investor, and the Investor will purchase from the
Company, upon the terms and subject to the conditions set forth herein, and at
the Purchase Price, the number of Shares and the Warrant (collectively, with the
Warrant Shares, the "SECURITIES") described in paragraphs 3 and 4 of the
Securities Purchase Agreement attached hereto (collectively with this Annex I
and the other exhibits attached hereto, this "AGREEMENT"). The Registration
Rights Agreement and the Securities Purchase Agreement executed by the Investor
are sometimes collectively referred to herein as the "AGREEMENTS." The Investor
must execute and deliver the Securities Purchase Agreement and the Registration
Rights Agreement and must complete the Stock Certificate Questionnaire (in the
form attached as Exhibit "A" hereto) and the Investor Questionnaire (in the form
attached as Exhibit "B" hereto) in order to purchase the Securities.
1.2 PLACEMENT AGENT FEE. The Investor acknowledges that the Company
intends to pay to Sandgrain Securities, Inc. (in its capacity as placement agent
for the Shares, the "PLACEMENT AGENT") a fee in respect of the sale of the
Shares and the Warrant to the Investor from the proceeds of the Offering.
2. DELIVERY OF THE SHARES AT CLOSING. The completion of the purchase and
sale of the Shares (the "CLOSING") shall occur on a date specified by the
Company and the Placement Agent that is anticipated to be May __, 2007 (the
"CLOSING DATE"), but which date shall not be later than May __, 2007 (the
"OUTSIDE DATE"), and of which the Investor will be notified in advance by the
Placement Agent. At the Closing or upon AMEX listing approval of the Shares,
whichever is later, the Company shall deliver to the Investor (i) one or more
stock certificates representing the number of Shares set forth in paragraph 3 of
the Stock Purchase Agreement, and (ii) a Warrant pursuant to which such Investor
shall have the right to acquire the number of Warrant Shares set forth in
paragraph 4 of the Securities Purchase Agreement, each such certificate to be
registered in the name of the Investor or, if so indicated on the Stock
Certificate Questionnaire, in the name of a nominee designated by the Investor,
together with the Warrant. In exchange for the delivery of the subscription
agreements, the Investor shall deliver at Closing the Purchase Price directly to
the Company by wire transfer of immediately available funds pursuant to written
instructions.
The Company's obligation to issue and sell the Shares and Warrant to the
Investor shall be subject to the following conditions, any one or more of which
may be waived in writing by the Company: (a) prior receipt by the Company of an
executed copy of this Securities Purchase Agreement; (b) the accuracy of the
representations and warranties made by the Investor in this Agreement and the
fulfillment of the obligations of the Investor to be fulfilled by it under this
Agreement on or prior to the Closing; (c) the Company is satisfied that the
issuance of the Securities will not be in violation of applicable AMEX listing
qualification rules; and (d) the absence of any order, writ, injunction,
judgment or decree that questions the validity of the Agreements or the right of
the Company or the Investor to enter into such Agreements or to consummate the
transactions contemplated hereby and thereby.
The Investor's obligation to purchase the Shares and Warrant shall be
subject to the following conditions, any one or more of which may be waived in
writing by the Investor: (a) the accuracy of the representations and warranties
made by the Company in this Agreement on the Closing Date; (b) the execution and
delivery by the Company of the Registration Rights Agreement; and (c) the
absence of any order, writ, injunction, judgment or decree that questions the
validity of the Agreements or the right of the
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Company or the Investor to enter into such Agreements or to consummate the
transactions contemplated hereby and thereby.
In the event that the Closing does not occur on or before the Outside Date
as a result of the Company's failure to satisfy any of the conditions set forth
above (and such condition has not been waived by the Investor), the Company
shall return any and all funds paid hereunder to the Investor no later than one
Business Day following the Outside Date and the Investors shall have no further
obligations hereunder. For purposes of this Agreement, "BUSINESS DAY" shall mean
any day other than a Saturday, Sunday or other day on which the American Stock
Exchange is permitted or required by law to close.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. Except as
otherwise described in the Company's Annual Report on Form 10-K for the year
ended March 31, 2006 (and any amendments thereto filed at least one (1) Business
Day prior to the Closing Date), the Company's S-1 Registration Statement
effective July 18, 2006, the Company's most recent Quarterly Report on Form 10-Q
for the quarter ended December 31, 2006, the Company's Proxy Statement for its
2006 Annual Meeting of Shareholders, and any of the Company's Current Reports on
Form 8-K filed since March 31, 2006 (and any amendments thereto filed at least
one (1) Business Days prior to the Closing Date), together with all other
documents filed by the Company with the U.S. Securities and Exchange Commission
(all collectively, the "SEC REPORTS"), or as otherwise known or available to the
Investor, the Company hereby represents and warrants to, and covenants with, the
Investor as of the date hereof and the Closing Date, as follows:
3.1 ORGANIZATION. The Company is duly incorporated and validly
existing in good standing under the laws of the State of Nevada. The Company has
full power and authority to own, operate and occupy its properties and to
conduct its business as presently conducted and is registered or qualified to do
business and in good standing in each jurisdiction in which it owns property or
transacts business and where the failure to be so qualified would have a
material adverse effect upon the Company and its subsidiaries as a whole or the
business, financial condition, properties, operations or assets of the Company
and its subsidiaries as a whole or the Company's ability to perform its
obligations under the Agreements in all material respects ("MATERIAL ADVERSE
EFFECT"), and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
3.2 DUE AUTHORIZATION. The Agreements have been validly executed and
delivered by the Company and constitute legal, valid and binding agreements of
the Company enforceable against the Company in accordance with their terms,
except to the extent (i) rights to indemnity and contribution may be limited by
state or federal securities laws or the public policy underlying such laws, (ii)
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and (iii) such enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3.3 NO CONFLICT OR DEFAULT. The execution and delivery of the
Agreements, the issuance and sale of the Shares to be sold by the Company under
the Agreements, the fulfillment of the terms of the Agreements and the
consummation of the transactions contemplated thereby will not: (A) result in a
conflict with or constitute a material violation of, or material default (with
the passage of time or otherwise) under, (i) any bond, debenture, note, loan
agreement or other evidence of indebtedness, or any material lease, or contract
to which the Company is a party or by which the Company or their respective
properties are bound, (ii) the Certificate of Incorporation, by-laws or other
organizational documents of the Company, as amended, or (iii) any law,
administrative regulation, or existing order of
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any court or governmental agency, or other authority binding upon the Company or
the Company's respective properties; or, (B) result in the creation or
imposition of any lien, encumbrance, claim, or security interest upon any of the
material assets of the Company or an acceleration of indebtedness pursuant to
any obligation, agreement or condition contained in any material bond,
debenture, note or any other evidence of indebtedness or any material indenture,
mortgage, deed of trust or any other agreement or instrument to which the
Company is a party or by which it is bound or to which any of the property or
assets of the Company is subject, that would have a Material Adverse Effect.
Except for AMEX listing approval of the Shares, no consent, approval,
authorization or other order of, or registration, qualification or filing with,
any regulatory body, administrative agency, or other governmental body is
required for the execution and delivery of the Agreements by the Company and the
valid issuance or sale of the Shares by the Company pursuant to the Agreements,
other than such as have been made or obtained, and except for any filings
required to be made under federal or state securities laws.
3.4 CAPITALIZATION. The outstanding capital stock of the Company is as
described in the Company's Quarterly Report on Form 10-Q for the three month
period ending December 31, 2006. Except as described in the SEC Reports, since
December 31, 2006, the Company has not issued any capital stock, other than
pursuant to the purchase of shares under the Company's employee stock option
plan, the exercise of outstanding warrants or stock options, or pursuant to
other agreements. The Shares, the Warrant and the Warrant Shares to be sold
pursuant to the Agreements have been duly authorized, and when issued and paid
for in accordance with the terms of the Agreements, will be duly and validly
issued, fully paid and nonassessable, subject to no lien, claim or encumbrance
(except for any such lien, claim or encumbrance created, directly or indirectly,
by the Investor). The outstanding shares of capital stock of the Company have
been duly and validly issued, are fully paid and nonassessable, and have been
issued in compliance with the registration requirements of federal and state
securities laws. Except as otherwise stated in the SEC Reports, the Company owns
one hundred percent of all of the outstanding capital stock of each of its
subsidiaries, free and clear of all liens, claims and encumbrances, except for
Care Clinic, Inc. as to which the Company owns 85% of the outstanding capital
stock. There are not (i) any outstanding preemptive rights except as described
in the SEC Reports, or (ii) any rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, any unissued shares of capital
stock or other equity interest in the Company not disclosed in the SEC Reports,
or (iii) any contract or agreement to which the Company is a party that would
provide for the issuance or sale of any capital stock of the Company, any such
convertible or exchangeable securities or any such rights, warrants or options
not disclosed in the SEC Reports. There are no shareholders agreements, voting
agreements or other similar agreements with respect to the Common Stock to which
the Company is a party, other than as described in SEC Reports.
3.5 LEGAL PROCEEDINGS. There is no material legal or governmental
proceeding pending, or to the actual knowledge of the Company, threatened, to
which the Company is a party or of which the business or property of the Company
is subject that is required to be disclosed and that is not so disclosed in the
SEC Reports. Other than the information disclosed in the SEC Reports, the
Company is not subject to any injunction, judgment, decree or order of any
court, regulatory body, administrative agency or other government body.
3.6 NO VIOLATIONS. The Company is not in violation of its Certificate
of Incorporation, bylaws or other organizational documents, as amended, that is
reasonably likely to have a Material Adverse Effect. The Company is not in
violation of any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority applicable to the
Company, which violation, individually or in the aggregate, is reasonably likely
to have a Material Adverse Effect. The Company is not in default (and there
exists no condition which, with the passage of time or otherwise, would
constitute a default) in the performance of any bond, debenture, note or any
other evidence of indebtedness or any indenture, mortgage, deed of trust or any
other material agreement
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or instrument to which the Company is a party or by which the Company is bound,
which such default is reasonably likely to have a Material Adverse Effect upon
the Company.
3.7 GOVERNMENTAL PERMITS, ETC. The Company has all necessary
franchises, licenses, certificates and other authorizations from any foreign,
federal, state or local government or governmental agency, department or body
that are currently necessary for the operation of the business of the Company as
currently conducted, except where the failure to currently possess such
franchises, licenses, certificates and other authorizations is not reasonably
likely to have a Material Adverse Effect.
3.8 INTELLECTUAL PROPERTY.
(A) Except for matters which are not reasonably likely to have a
Material Adverse Effect, (i) each of the Company has ownership of, or a license
or other legal right to use, all patents, copyrights, trade secrets, trademarks,
customer lists, designs, manufacturing or other processes, computer software,
systems, data compilation, research results or other proprietary rights used in
the business of the Company (collectively, "INTELLECTUAL PROPERTY") and (ii) all
of the Intellectual Property owned by the Company consisting of patents,
registered trademarks and registered copyrights have been duly registered in,
filed in or issued by the United States Patent and Trademark Office, the United
States Register of Copyrights or the corresponding offices of other
jurisdictions and have been maintained and renewed in accordance with all
applicable provisions of law and administrative regulations in the United States
and/or such other jurisdictions.
(B) Except for matters which are not reasonably likely to have a
Material Adverse Effect, all material licenses or other material agreements
under which (i) the Company employs rights in Intellectual Property, or (ii) the
Company has granted rights to others in Intellectual Property owned or licensed
by the Company are in full force and effect, and there is no default by the
Company with respect thereto.
(C) The Company believes that it has taken all steps reasonably
required in accordance with sound business practice and business judgment to
establish and preserve the ownership of the Company's material Intellectual
Property.
(D) Except for matters which are not reasonably likely to have a
Material Adverse Effect, to the actual knowledge of the Company, (i) the present
business, activities and products of the Company do not infringe any
intellectual property of any other person; (ii) neither the Company is making
unauthorized use of any confidential information or trade secrets of any person;
and (iii) the activities of any of the employees of the Company, acting on
behalf of the Company, do not materially violate any agreements or arrangements
related to confidential information or trade secrets of third parties.
(E) Except for matters which are not reasonably likely to have a
Material Adverse Effect, and except as disclosed in the SEC Reports, no
proceedings are pending, or to the knowledge of the Company, threatened, which
challenge the rights of the Company to the use the Company's Intellectual
Property.
3.9 FINANCIAL STATEMENTS. The financial statements of the Company and
the related notes contained in the SEC Reports present fairly in all material
respects the financial position of the Company as of the dates therein
indicated, and the results of its operations, cash flows and the changes in
shareholders' equity for the periods therein specified, subject, in the case of
unaudited financial statements for interim periods, to normal year-end audit
adjustments. Such financial statements (including the related notes) have been
prepared in accordance with generally accepted accounting
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principles applied on a consistent basis at the times and throughout the periods
therein specified, except that unaudited financial statements may not contain
all footnotes required by generally accepted accounting principles.
3.10 NO MATERIAL ADVERSE CHANGE. Except as disclosed in the SEC
Reports or in any press releases issued by the Company at least one (1) Business
Day prior to the Closing Date, there has not been (i) an event, circumstance or
change that has had or is reasonably likely to have a Material Adverse Effect
upon the Company, (ii) any obligation incurred by the Company that is material
to the Company, (iii) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company, or (iv) any loss or damage (whether or
not insured) to the physical property of the Company which has had a Material
Adverse Effect.
3.11 AMEX COMPLIANCE. The Company's Common Stock is registered
pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), and is listed on the American Stock Exchange ("AMEX"), and
the Company has taken no action intended to, or which to its actual knowledge
could have the effect of, terminating the registration of the Common Stock under
the Exchange Act or delisting the Common Stock from AMEX. The Company shall
comply with all requirements with respect to the issuance of the Shares and
Warrant Shares, and the listing thereof on AMEX. No later than one (1) business
day after the Closing Date, the Company shall file with AMEX an application to
list the Shares and the Warrant Shares on AMEX.
3.12 REPORTING STATUS. The Company has timely made all filings
required under the Exchange Act during the twelve (12) months preceding the date
of this Agreement, and all of those documents complied in all material respects
with the SEC's requirements as of their respective filing dates, and the
information contained therein as of the respective dates thereof did 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. The Company is
currently eligible to register the resale of the Securities by the Investor
pursuant to a registration statement on Form S-3 under the Securities Act or on
such other form as may be available to the Company (the "REGISTRATION
STATEMENT").
3.13 CONTRACTS. Except for matters which are not reasonably likely to
have a Material Adverse Effect and those contracts that are substantially or
fully performed or expired by their terms, the contracts listed as exhibits to
or described in the SEC Reports that are material to the Company and all
amendments thereto, are in full force and effect on the date hereof, and neither
the Company nor, to the Company's actual knowledge, any other party to such
contracts is in material breach of or default under any of such contracts.
3.14 TAXES. Except for tax matters which are not reasonably likely to
have a Material Adverse Effect, each of the Company and each of its Subsidiaries
has filed all necessary federal, state and foreign income and franchise tax
returns and has paid or accrued all taxes shown as due thereon.
3.15 TRANSFER TAXES. On the Closing Date, all stock transfer or other
taxes (other than income taxes) which are required to be paid in connection with
the sale and transfer of the Shares hereunder will be, or will have been, fully
paid or provided for by the Company and the Company will have complied with all
laws imposing such taxes.
3.16 INVESTMENT COMPANY. The Company is not an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended, and will not be deemed an "investment company" as a result of the
transactions contemplated by this Agreement.
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3.17 INSURANCE. The Company maintains insurance of the types and in
the amounts that the Company reasonably believes is adequate for its businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against by similarly situated
companies, all of which insurance is in full force and effect.
3.18 BOOKS AND RECORDS. The books, records and accounts of the Company
accurately and fairly reflect, in reasonable detail, the transactions in, and
dispositions of, the assets of, and the operations of, the Company.
3.19 SECURITIES LAW REPRESENTATION PRIVATE PLACEMENT. Assuming the
accuracy of the representations of the Investor, no consent, authorization,
approval, permit or order of or filing with any governmental or regulatory
authority is required under current laws and regulations in connection with the
execution and delivery of this Agreement or the offer, issuance, sale or
delivery of the Shares, the Warrant and the Warrant Shares, other than the
qualification thereof, if required, under applicable AMEX rules and state
securities law, which qualification has been or will be effected as a condition
of these sales and the filing of a Form D with the Securities and Exchange
Commission (the "SEC") in connection with the transaction contemplated by this
Agreement. Under the circumstances contemplated by this Agreement, the offer,
issuance, sale and delivery of the Shares will not, under current laws and
regulations, require compliance with the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act").
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR.
4.1 INVESTOR KNOWLEDGE AND STATUS. The Investor represents and
warrants to, and covenants with, the Company that: (i) the Investor is an
"accredited investor" as defined in Regulation D under the Securities Act, is
knowledgeable, sophisticated and experienced in making, and is qualified to make
decisions with respect to, investments in securities presenting an investment
decision similar to that involved in the purchase of the Securities, and has
requested, received, reviewed and considered all information it deemed relevant
in making an informed decision to purchase the Securities; (ii) the Investor
understands that the Securities are "restricted securities" and have not been
registered under the Securities Act and is acquiring the number of Securities
set forth in paragraph 3 of the Securities Purchase Agreement in the ordinary
course of its business and for its own account for investment only, has no
present intention of distributing any of such Securities and has no arrangement
or understanding with any other persons regarding the distribution of such
Securities (this representation and warranty not limiting the Investor's right
to sell Securities pursuant to a Registration Statement filed under the
Registration Rights Agreement or otherwise, or other than with respect to any
claim arising out of a breach of this representation and warranty, the
Investor's right to indemnification under Section 3 of the Registration Rights
Agreement); (iii) the Investor will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Securities except in
compliance with the Securities Act, applicable state securities laws and the
respective rules and regulations promulgated thereunder; (iv) the Investor has
answered all questions in paragraph 4 of the Securities Purchase Agreement and
the Investor Questionnaire attached hereto as Exhibit B for use in preparation
of the Registration Statement and the answers thereto are true and correct as of
the date hereof and will be true and correct as of the Closing Date; (v) the
Investor will notify the Company promptly of any change in any of such
information until such time as the Investor has sold all of its Securities or
until the Company is no longer required to keep the Registration Statement
effective; and (vi) the Investor has, in connection with its decision to
purchase the number of Securities set forth in paragraph 3 of the Securities
Purchase Agreement, relied upon the representations and warranties of the
Company contained herein and the information contained in the SEC Reports. The
Investor understands that the issuance of the Securities to the Investor has not
been registered under the Securities Act, or
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registered or qualified under any state securities law, in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things, the
representations made by the Investor in this Agreement. No person (including
without limitation the Placement Agent) is authorized by the Company to provide
any representation that is inconsistent with or in addition to those contained
herein or in the SEC Reports, and the Investor acknowledges that it has not
received or relied on any such representations.
4.2 TRANSFER OF SECURITIES. The Investor agrees that it will not make
any sale, transfer or other disposition of the Securities (a "DISPOSITION")
other than Dispositions that are made pursuant to the Registration Statement in
compliance with any applicable prospectus delivery requirements or that are
exempt from registration under the Securities Act. Investor has not taken and
will not take any action designed to or that might reasonably be expected to
cause or result in manipulation of the price of the Common Stock to facilitate
the subscription to, or the sale or resale of the Securities.
4.3 POWER AND AUTHORITY. The Investor represents and warrants to the
Company that (i) 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 (ii) this Agreement constitutes a valid and
binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except to the extent (i) rights to indemnity and
contribution may be limited by state or federal securities laws or the public
policy underlying such laws, (ii) such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally and (iii) such
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
4.4 NO SHORT POSITION. During the last thirty (30) days prior to the
date hereof, Investor nor any affiliate of Investor, foreign or domestic, has,
directly or indirectly, effected or agreed to effect any "short sale" (as
defined in Rule 200 under Regulation SHO), whether or not against the box,
established any "put equivalent position" (as defined in Rule 16a-1(h) under the
0000 Xxx) with respect to the Company's common stock, borrowed or pre-borrowed
any shares of the Company's common stock, or granted any other right (including,
without limitation, any put or call option) with respect to the Company's common
stock or with respect to any security that includes, relates to or derived any
significant part of its value from the Company's common stock or otherwise
sought to hedge its position in the Shares, Warrants and Warrant Shares (each, a
"Prohibited Transaction"). Prior to the earliest to occur of (i) the termination
of the Offering, (ii) the date the Registration Statement (defined below) is
declared effective by the Securities and Exchange Commission (the "SEC") or
(iii) the Required Effective Date defined in the Registration Rights Agreement,
Investor shall not, and shall cause its affiliates not to, engage, directly or
indirectly, in (a) a Prohibited Transaction nor (b) any sale, assignment,
pledge, hypothecation, put, call, or other transfer of any of the Shares, or
Warrants or other securities of the Company acquired hereunder.
4.5 NO INVESTMENT, TAX OR LEGAL ADVICE. The Investor understands that
nothing in the SEC Reports, this Agreement, or any other materials presented to
the Investor in connection with the purchase and sale of the Securities
constitutes legal, tax or investment advice. The Investor has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of Securities.
4.6 CONFIDENTIAL INFORMATION. The Investor covenants that from the
date hereof it will maintain in confidence all material non-public information
regarding the Company received by the Investor from the Company, including the
receipt and content of any Suspension Notice (as defined in the Registration
Rights Agreement) until such information (a) becomes generally publicly
available other
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than through a violation of this provision by the Investor or its agents or (b)
is required to be disclosed in legal proceedings (such as by deposition,
interrogatory, request for documents, subpoena, civil investigation demand,
filing with any governmental authority or similar process); provided, however,
that before making any disclosure in reliance on this Section 4.6, the Investor
will give the Company at least fifteen (15) days prior written notice (or such
shorter period as required by law) specifying the circumstances giving rise
thereto and will furnish only that portion of the non-public information which
is legally required and will exercise its commercially reasonable efforts to
ensure that confidential treatment will be accorded any non-public information
so furnished.
4.7 ADDITIONAL ACKNOWLEDGEMENT. Investor has thoroughly reviewed the
SEC Reports, together with such additional information concerning the Company
known to or available to Investor, prior to making this investment. Investor has
been granted a reasonable time prior to the date hereof during which Investor
have had the opportunity to obtain such additional information as Investor deems
necessary to permit Investor to make an informed decision with respect to the
purchase of the Common Stock. After examination of the SEC Reports and other
information available, Investor is fully aware of the business prospects,
financial condition, risks associated with investment and the operating history
relating to the Company, and therefore in subscribing for the purchase of the
Securities, Investor is not relying upon any information other than information
contained in the SEC Reports or available to Investor. Investor acknowledges
that it has independently evaluated the merits of the transactions contemplated
by this Agreement, that it has independently determined to enter into the
transactions contemplated hereby. Investor acknowledges that the issuance of the
Shares is contingent on AMEX listing approval.
4.8 ACKNOWLEDGMENTS REGARDING PLACEMENT AGENT. The Investor
acknowledges that the Placement Agent has acted solely as placement agent for
the Company in connection with the Offering of the Securities by the Company,
and that the Placement Agent has made no representation or warranty whatsoever
with respect to the accuracy or completeness of information, data or other
related disclosure material that has been provided to the Investor. The Investor
further acknowledges that in making its decision to enter into this Agreement
and purchase the Securities, it has relied on its own examination of the Company
and the terms of, and consequences of holding, the Securities. The Investor
further acknowledges that the provisions of this Section 4.7 are for the benefit
of, and may be enforced by, the Placement Agent.
4.9 NO GENERAL SOLICITATION. Investor is not purchasing the Securities
as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.
4.10 RELIANCE ON EXEMPTIONS. Investor acknowledges that the Securities
are being offered and sold to it by the Company in reliance on specific
exemptions from the registration requirements of the Securities Act of 1933, as
amended, and applicable state securities laws and that the Company is relying on
the truth and accuracy of, and Investor's compliance with, the representations,
covenants, warranties, agreements, acknowledgments and understandings of
Investor set forth herein in order to determine the availability of such
exemptions and the eligibility of Investor to acquire the Securities.
4.11 OTHER. Purchaser agrees to the imprinting, subject to the terms
of this Agreement, of a legend on each certificate evidencing the Securities in
substantially the following form:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE LAW.
THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT
I-8
AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933
AND APPLICABLE STATE LAW OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Shares upon which it is
stamped or issue to such holder by electronic delivery at the applicable balance
account at DTC, if (i) such Shares are sold or transferred pursuant to an
effective Registration Statement or Rule 144 (assuming the transferor is not an
Affiliate of the Company), or (ii) such Shares are eligible for sale under Rule
144(k). Any fees associated with the removal of such legend, including the
Company's reasonable processing fee and any expenses incurred by Investor to
acquire an opinion of counsel, shall be borne by the Investor. If, following the
Effective Date, a legend is no longer required hereunder for certain Shares, the
Company will no later than three (3) Trading Days following the delivery by
Investor to the Company or the Transfer Agent (with notice to the Company) of a
legended certificate representing such Shares (endorsed or with stock powers
attached, signatures guaranteed, and otherwise in form necessary to affect the
reissuance and/or transfer and an opinion of counsel), deliver or cause to be
delivered to such Purchaser a certificate representing such Shares that is free
from all restrictive and other legends.
5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. 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 shall survive the execution of this Agreement, the
delivery to the Investor of the Securities being purchased and the payment
therefor, and a party's reliance on such representations and warranties shall
not be affected by any investigation made by such party or any information
developed thereby.
6. REGISTRATION OF SHARES; PUBLIC STATEMENTS.
6.1 In connection with the purchase and sale of the Shares by the
Investor contemplated hereby, the Company has entered into a Registration Rights
Agreement with the Investor providing for the filing by the Company of a
Registration Statement on Form S-3 or such other form available to the Company
to enable the resale of the Shares, the Warrants, and the Warrant Shares by the
Investors from time to time.
6.2 The Company agrees to disclose on a Current Report on Form 8-K the
existence of the Offering and the material terms, thereof, including pricing,
within four (4) Business Days after the Closing.
7. 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:
I-9
(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 X. Xxxxxx, Esq.
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.
8. 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.
9. 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.
10. 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.
11. 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.
12. 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.
I-10
EXHIBIT A
STOCK CERTIFICATE QUESTIONNAIRE
Please provide us with the following information:
1. The exact name in which your Securities
are to be registered (this is the name
that will appear on your stock
certificate(s)). You may use a nominee
name if appropriate: _____________________
2. If a nominee name is listed in response
to item 1 above, the relationship
between the Investor and such nominee: _____________________
3. The mailing address of the registered
holder listed in response to item 1
above: _____________________
4. The Social Security Number or Tax
Identification Number of the registered
holder listed in the response to item 1
above: _____________________
A-1
EXHIBIT B
INVESTOR QUESTIONNAIRE
To: Arcadia Resources, Inc.
The undersigned hereby acknowledges the following:
This Investor Questionnaire ("QUESTIONNAIRE") must be completed by the
Investor in connection with the offer and sale of the shares of the common
stock, par value $0.001 per share (the "SHARES"), of Arcadia Resources, Inc.
(the "COMPANY"). The Shares are being offered and sold by the Company without
registration under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), and the securities laws of certain states, in reliance on the exemptions
contained in Section 4 of the Securities Act and on Regulation D promulgated
thereunder and in reliance on similar exemptions under applicable state laws.
The Company must determine that the Investor meets certain suitability
requirements before offering or selling Shares to the Investor. The purpose of
this Questionnaire is to assure the Company that the Investor will meet the
applicable suitability requirements. The information supplied by the undersigned
will be used in determining whether the undersigned meets such criteria, and
reliance upon the private offering exemption from registration is based in part
on the information herein supplied.
This Questionnaire does not constitute an offer to sell or a solicitation
of an offer to buy any security. The undersigned's answers will be kept strictly
confidential. However, by signing this Questionnaire the undersigned will be
authorizing the Company to provide a completed copy of this Questionnaire to
such parties as the Company deems appropriate in order to ensure that the offer
and sale of the Shares will not result in a violation of the Securities Act or
the securities laws of any state and that the undersigned otherwise satisfies
the suitability standards applicable to purchasers of the Shares. The Investors
must answer all applicable questions and complete, date and sign this
Questionnaire. The undersigned shall print or type its responses and attach
additional sheets of paper if necessary to complete its answers to any item.
A. BACKGROUND INFORMATION
Name: __________________________________________________________________________
Business Address: ______________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Telephone Number: (______)______________________________________________________
Residence Address: _____________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Telephone Number: (______)______________________________________________________
If an individual:
Age: ______ Citizenship: __________ Where registered to vote: ______________
B-1
If a corporation, partnership, limited liability company, trust or other entity:
Type of entity: ________________________________________________________________
State of formation: ______________ Date of formation: _____________________
Social Security or Taxpayer Identification No. _________________________________
Send all correspondence to (check one): ______ Residence Address ______
Business Address
B. STATUS AS ACCREDITED INVESTOR
The undersigned is an "accredited investor" as such term is defined in
Regulation D under the Securities Act, because at the time of the sale of the
Shares the undersigned falls within one or more of the following categories
(Please initial one or more, as applicable):
_____ (1) a bank as defined in Section 3(a)(2) of the Securities Act, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section 2(a)(48) of
that act; a Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of such act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with the investment decisions made
solely by persons that are accredited investors;(1)
_____ (2) a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
_____ (3) an organization described in Section 501(c)(3) of the Internal Revenue
Code of 1986, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the Shares
offered, with total assets in excess of $5,000,000;
_____ (4) a natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of such person's purchase of the Shares
exceeds $1,000,000;
_____ (5) a natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
----------
(1) As used in this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose
of subsection (4), the principal residence of the investor must be valued
at cost, including cost of improvements, or at recently appraised value by
a professional appraiser. In determining income, the investor should add to
the investor's adjusted gross income any amounts attributable to tax exempt
income received, losses claimed as a limited partner in any limited
partnership, deductions claimed for depreciation, contributions to an XXX
or XXXXX retirement plan, alimony payments, and any amount by which income
from long-term capital gains has been reduced in arriving at adjusted gross
income.
B-2
_____ (6) a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Shares offered, whose purchase is directed by
a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D; and
_____ (7) an entity in which all of the equity owners are accredited investors
(as defined above).
C. REPRESENTATIONS
The undersigned hereby represents and warrants to the Company as follows:
1. Any purchase of the Shares would be solely for the account of the
undersigned and not for the account of any other person or with a view to any
resale, fractionalization, division, or distribution thereof.
2. The information contained herein is complete and accurate and may be
relied upon by the Company, and the undersigned will notify the Company
immediately of any material change in any of such information occurring prior to
the closing, if any, with respect to the purchase of Shares by the undersigned
or any co-purchaser.
3. The undersigned acknowledges that there may occasionally be times when
the Company, based on the advice of its counsel, determines that it must suspend
the use of the Prospectus forming a part of the Registration Statement (as such
terms are defined in the Stock Purchase Agreement to which this Questionnaire is
attached) until such time as an amendment to the Registration Statement has been
filed by the Company and declared effective by the Securities and Exchange
Commission or until the Company has amended or supplemented such Prospectus. The
undersigned is aware that, in such event, the Shares will not be subject to
ready liquidation, and that any Shares purchased by the undersigned would have
to be held during such suspension. The overall commitment of the undersigned to
investments which are not readily marketable is not excessive in view of the
undersigned's net worth and financial circumstances, and any purchase of the
Shares will not cause such commitment to become excessive. The undersigned is
able to bear the economic risk of an investment in the Shares.
4. The following is a list of all states and other jurisdictions in which
blue sky or similar clearance will be required in connection with the
undersigned's purchase of the Shares:
___________________________________________
___________________________________________
___________________________________________
The undersigned agrees to notify the Company in writing of any additional states
or other jurisdictions in which blue sky or similar clearance will be required
in connection with the undersigned's purchase of the Shares.
B-3
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire on
________________, 20__, and declares under oath that it is truthful and correct.
Print Name
By:
------------------------------------
Signature
Title:
---------------------------------
(required for any purchaser that is a
corporation, partnership, trust or other
entity)
X-0
XXXXXXX X
XXXX XX XXXXXX XXXXX XXXXXXXX XXXXXXX
