Exhibit 10.1

 

ARCADIA BIOSCIENCES, INC.

 

 

July 6, 2020

 

Holder of Common Stock Purchase Warrants

 

Re:Inducement Offer to Exercise Common Stock Purchase Warrants

 

Dear Holder:

 

Arcadia Biosciences, Inc. (the “Company”) is pleased to offer to you the
opportunity to exercise all of the Common Stock Purchase Warrants issued to you
on March 22, 2018 (the “Existing Warrants”), as set forth on the signature page
hereto and currently held by you (the “Holder”).  The shares underlying the
Existing Warrants (the “Warrant Shares”) have been registered pursuant to the
resale registration statement on Form S-3 (File No. 333-224061) (the
“Registration Statement”).  The Registration Statement is currently effective
and, upon exercise of the Existing Warrants pursuant to this letter agreement,
will be effective for the resale of the Warrant Shares. Capitalized terms not
otherwise defined herein shall have the meanings set forth in the applicable
Existing Warrants.

 

In consideration for exercising in full all of the Existing Warrants held by you
and set forth on the signature page hereto (the “Warrant Exercise”) at a reduced
exercise price per Warrant Share of $3.975, the Company hereby offers to issue
you or your designee:

 

a new unregistered Common Stock Purchase Warrant (“New Warrant”) pursuant to
Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”), to
purchase up to a number of shares (the “New Warrant Shares”) of Common Stock
equal to 100% of the number of Warrant Shares issued pursuant to the Warrant
Exercise hereunder, which New Warrant shall be substantially in the form as
reflected in Exhibit A hereto, will be exercisable immediately, and have a term
of exercise of five and one-half (5.5) years, and an exercise price per share
equal to $3.85.

 

The original New Warrant certificate(s) will be delivered within two (2) Trading
Days following the date hereof.  Notwithstanding anything herein to the
contrary, in the event the Warrant Exercise would otherwise cause the Holder to
exceed the beneficial ownership limitations (“Beneficial Ownership Limitation”)
set forth in Section 2(e) of the Existing Warrants (or, if applicable and at the
Holder’s election, 9.99%), the Company shall only issue such number of Warrant
Shares to the Holder that would not cause the Holder to exceed the maximum
number of Warrant Shares permitted thereunder, as directed by the Holder, with
the balance to be held in abeyance until notice from the Holder that the balance
(or portion thereof) may be issued in compliance with such limitations, which
abeyance shall be evidenced through the Existing Warrants which shall be deemed
prepaid thereafter (including the payment in full of the exercise price), and
exercised pursuant to a Notice of Exercise in the Existing Warrant (provided no
additional exercise price shall be due and payable).

 

Expressly subject to the paragraph immediately following this paragraph below,
Holder may accept this offer by signing this letter below, with such acceptance
constituting Holder's exercise in full of the Existing Warrants for an aggregate
exercise price set forth on the Holder’s signature page hereto (the “Warrants
Exercise Price”) on or before 7:00 a.m., Eastern Time, on July 6, 2020 (the
“Execution Time”).

 

Additionally, the Company agrees to the representations, warranties and
covenants set forth on Annex A attached hereto.  Holder represents and warrants
that, as of the date hereof it is, and on each date on which it exercises any
New Warrants it will be, an “accredited investor” as defined in Rule 501 of the

 

--------------------------------------------------------------------------------

 

Securities Act, and agrees that the New Warrants will contain restrictive
legends when issued, and neither the New Warrants nor the shares of Common Stock
issuable upon exercise of the New Warrants will be registered under the
Securities Act, except as provided in Annex A attached hereto.  Also, Holder is
acquiring the New Warrants as principal for its own account and has no direct or
indirect arrangement or understandings with any other persons to distribute or
regarding the distribution of the New Warrants (this representation is not
limiting Holder’s right to sell the New Warrant Shares pursuant to an effective
registration statement under the Securities Act or otherwise in compliance with
applicable federal and state securities laws).

 

The Holder understands that the New Warrants and the shares of Common Stock
underlying New Warrants are not, and may never be, registered under the
Securities Act, or the securities laws of any state and, accordingly, each
certificate, if any, representing such securities shall bear a legend
substantially similar to the following:

 

“THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.”

 

Certificates evidencing shares of Common Stock underlying the New Warrants shall
not contain any legend (including the legend set forth above), (i) while a
registration statement covering the resale of such Common Stock is effective
under the Securities Act, (ii) following any sale of such Common Stock pursuant
to Rule 144 under the Securities Act, (iii) if such Common Stock is eligible for
sale under Rule 144, without the requirement for the Company to be in compliance
with the current public information required under Rule 144 as to such Common
Stock and without volume or manner-of-sale restrictions, (iv) if such Common
Stock may be sold under Rule 144 and the Company is then in compliance with the
current public information required under Rule 144 as to such Common Stock, or
(v) if such legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued by
the staff of the Commission and the earliest of clauses (i) through (v), the
“Delegend Date”)). The Company shall cause its counsel to issue a legal opinion
to the transfer agent promptly after the Delegend Date if required by the
Company and/or the transfer agent to effect the removal of the legend hereunder,
which opinion shall be in form and substance reasonably acceptable to the
Holder. If such Common Stock may be sold under Rule 144 without the requirement
for the Company to be in compliance with the current public information required
under Rule 144 or if such legend is not otherwise required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission) then such Common Stock
shall be issued free of all legends. The Company agrees that following the
Delegend Date or at such time as such legend is no longer required under this
Section, it will, no later than two (2) Trading Days following the delivery by
the Holder to the Company or the transfer agent of a certificate representing
the Common Stock underlying the New Warrants issued with a restrictive legend
(such second (2nd) Trading Day, the “Legend Removal Date”), deliver or cause to
be delivered to the Holder a certificate representing such shares that is free
from all restrictive and other legends or, at the request of the Holder shall
credit the account of the Holder’s prime broker with the Depository Trust
Company System as directed by the Holder.  

 

 

--------------------------------------------------------------------------------

 

In addition to the Holder’s other available remedies, the Company shall pay to a
Holder, in cash, (i) as partial liquidated damages and not as a penalty, for
each $1,000 of New Warrant Shares (based on the VWAP of the Common Stock on the
date such New Warrant Shares are submitted to the Transfer Agent) delivered for
removal of the restrictive legend, $10 per Trading Day (increasing to $20 per
Trading Day five (5) Trading Days after such damages have begun to accrue) for
each Trading Day after the Legend Removal Date until such certificate is
delivered without a legend and (ii) if the Company fails to (a) issue and
deliver (or cause to be delivered) to the Holder by the Legend Removal Date a
certificate representing the New Warrant Shares so delivered to the Company by
the Holder that is free from all restrictive and other legends and (b) if after
the Legend Removal Date the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of all or any portion of the number of shares of Common Stock, or a sale
of a number of shares of Common Stock equal to all or any portion of the number
of shares of Common Stock that the Holder anticipated receiving from the Company
without any restrictive legend, then, an amount equal to the excess of the
Holder’s total purchase price (including brokerage commissions and other
out-of-pocket expenses, if any) for the shares of Common Stock so purchased
(including brokerage commissions and other out-of-pocket expenses, if any) (the
“Buy-In Price”) over the product of (A) such number of New Warrant Shares that
the Company was required to deliver to the Holder by the Legend Removal Date and
for which the Holder was required to purchase shares to timely satisfy delivery
requirements, multiplied by (B) the weighted average price at which the Holder
sold that number of shares of Common Stock.  

 

From the date hereof until twenty-five (25) days after the Closing Date (the
“Lock-Up Period”), neither the Company nor any Subsidiary shall (A) issue, enter
into any agreement to issue or announce the issuance or proposed issuance of any
Common Stock or Common Stock Equivalents or (B) file any registration statement
or any amendment or supplement to any existing registration statement (other
than the resale registration statement referred to herein, the Company’s resale
registration statement on Form S-3 (File No. 333-239641), or prospectus
supplements to the Registration Statement to reflect the transactions
contemplated hereby), other than (i) the offer and issuance of New Warrants to
Other Holders (defined below), (ii) with respect to an Exempt Issuances (as
defined in the securities purchase agreement pursuant to which the Existing
Warrants were issued) or (iii) the issuance of unregistered Common Stock or
Common Stock Equivalents to consultants, provided that the aggregate amount of
such issuances to consultants does not exceed 250,000 shares of Common Stock;
provided, however, that the Lock-Up Period shall expire if on any day following
the fifteenth (15th) day of the Closing Date, the closing price of the share of
Common Stock of the Company on the Nasdaq Capital Market is at or above $4.25.  

 

If this offer is accepted and the transaction documents are executed by the
Execution Time, then on or before 9:00 a.m., Eastern Time, on the Trading Day
hereof, the Company shall file a Current Report on Form 8-K with the Commission
disclosing all material terms of the transactions contemplated hereunder. From
and after the issuance of such Current Report on Form 8-K, the Company
represents to you that it shall have publicly disclosed all material, non-public
information delivered to you by the Company, or any of its respective officers,
directors, employees or agents in connection with the transactions contemplated
hereunder.  In addition, effective upon the issuance of such Current Report on
Form 8-K, the Company acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the
Company, any of its Subsidiaries or any of their respective officers, directors,
agents, employees or Affiliates on the one hand, and you and your Affiliates on
the other hand, shall terminate.  The Company represents, warrants and covenants
that, upon acceptance of this offer, the shares underlying the Existing Warrants
shall be issued free of any legends or restrictions on resale by Holder.

 

No later than the second (2nd) Trading Day following the date hereof, the
closing shall occur at such location as the parties shall mutually
agree.  Unless otherwise directed by the H.C. Wainwright & Co., LLC (the
“Placement Agent”), settlement of the shares of Common Stock underlying the
Existing

 

--------------------------------------------------------------------------------

 

Warrants shall occur via “Delivery Versus Payment” (“DVP”) (i.e., on the Closing
Date, the Company shall issue the shares of Common Stock representing the
Warrant Shares registered in the Holders’ names and addresses and released by
the Transfer Agent directly to the account(s) at the Placement Agent identified
by each Holder; upon receipt of such shares of Common Stock, the Placement Agent
shall promptly electronically deliver such shares of Common Stock to the
applicable Holder, and payment therefor shall be made by the Placement Agent (or
its clearing firm) by wire transfer to the Company). The date of the closing of
the exercise of the Existing Warrants shall be referred to as the “Closing
Date”.

 

The Company acknowledges and agrees that the obligations of the Holders under
this letter agreement are several and not joint with the obligations of any
other holder or holders of Warrants to Purchase Common Stock of the Company that
were issued by the Company on March 22, 2018 pursuant to a Securities Purchase
Agreement dated March 19, 2018 (each, an “Other Holder”) under any other
agreement related to the exercise of such warrants (“Other Warrant Exercise
Agreement”), and the Holder shall not be responsible in any way for the
performance of the obligations of any Other Holder or under any such Other
Warrant Exercise Agreement.  Nothing contained in this letter agreement, and no
action taken by the Holders pursuant hereto, shall be deemed to constitute the
Holder and the Other Holders as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Holder and the
Other Holders are in any way acting in concert or as a group with respect to
such obligations or the transactions contemplated by this letter agreement and
the Company acknowledges that the Holder and the Other Holders are not acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this letter agreement or any Other Warrant Exercise
Agreement.  The Company and the Holder confirm that the Holder has independently
participated in the negotiation of the transactions contemplated hereby with the
advice of its own counsel and advisors.  The Holder shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this letter agreement, and it shall not be necessary for
any Other Holder to be joined as an additional party in any proceeding for such
purpose.

 

The Company hereby represents and warrants as of the date hereof and covenants
and agrees from and after the date hereof until the earlier of (i) the date no
Existing Warrants remain outstanding and (ii) the date sixty (60) days after the
date hereof (such earlier date, the “End Date”), that none of the terms offered
to any Other Holder with respect to any Other Warrant Exercise Agreement (or any
amendment, modification or waiver thereof), is or will be more favorable to such
Other Holder than those of the Holder and this letter agreement.  If, and
whenever on or after the date hereof until the End Date, the Company enters into
an Other Warrant Exercise Agreement, then (i) the Company shall provide notice
thereof to the Holder promptly following the occurrence thereof and (ii) the
terms and conditions of this letter agreement shall be, without any further
action by the Holder or the Company, automatically amended and modified in an
economically and legally equivalent manner such that the Holder shall receive
the benefit of the more favorable terms and/or conditions (as the case may be)
set forth in such Other Warrant Exercise Agreement (including the issuance of
additional Warrant Shares), provided that upon written notice to the Company at
any time the Holder may elect not to accept the benefit of any such amended or
modified term or condition, in which event the term or condition contained in
this letter agreement shall apply to the Holder as it was in effect immediately
prior to such amendment or modification as if such amendment or modification
never occurred with respect to the Holder.  The provisions of this paragraph
shall apply similarly and equally to each Other Warrant Exercise Agreement.

 

 

 

***************

 

 

--------------------------------------------------------------------------------

 

 

 

Sincerely yours,

 

ARCADIA BIOSCIENCES, INC.

 

 

By: _______________________

Name:  

Title:

 

--------------------------------------------------------------------------------

 

 

Accepted and Agreed to:

 

Name of Holder: ________________________________________________________

Signature of Authorized Signatory of Holder: _________________________________

Name of Authorized Signatory: _______________________________________________

Title of Authorized Signatory: ________________________________________________

Existing Warrants: _______________

 

Aggregate Warrant Exercise Price: _____________

 

New Warrants: (100% of total Existing Warrants being exercised): ___________

 

Beneficial Ownership Blocker: ☐ 4.99% or ☐ 9.99%

 

DTC Instructions:

 

 

--------------------------------------------------------------------------------

 

Annex A

 

Representations, Warranties and Covenants of the Company.  The Company hereby
makes the following representations and warranties to the Holder:

 

a)

SEC Reports.  The Company has filed all reports, schedules, forms, statements
and other documents required to be filed by the Company under the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required by
law or regulation to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein “SEC
Reports”).  As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Exchange Act and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The Company has never been an issuer
subject to Rule 144(i) under the Securities Act.

 

b)

Authorization; Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
letter agreement and otherwise to carry out its obligations hereunder and
thereunder.  The execution and delivery of this letter agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, its board of directors or its
stockholders in connection therewith.  This letter agreement has been duly
executed by the Company and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

c)

No Conflicts.  The execution, delivery and performance of this letter agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not: (i) conflict with or violate any
provision of the Company’s certificate or articles of incorporation, bylaws or
other organizational or charter documents; or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any  liens, claims, security
interests, other encumbrances or defects upon any of the properties or assets of
the Company in connection with, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any material agreement, credit facility, debt or other material
instrument (evidencing Company debt or otherwise) or other material
understanding to which such Company is a party or by which any property or asset
of the Company is bound or affected; or (iii) conflict with or result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company is bound or affected, except, in the
case of each of clauses (ii) and (iii), such as could not have or reasonably be
expected to result in a material adverse effect upon the business, prospects,
properties, operations, condition (financial or otherwise) or results of
operations of the Company, taken as a whole, or in its ability to perform its
obligations under this letter agreement.

 

d)

Registration Obligations.  The Company shall prepare and file with the
Commission a registration statement relating to the resale of the shares of
Common Stock underlying the New Warrants by the

 

--------------------------------------------------------------------------------

 

holders of the New Warrants under the Securities Act and use commercially
reasonable best efforts to cause such registration statement to be declared
effective by the Commission as soon as practical following the date hereof.

 

e)

Nasdaq Corporate Governance.  The transactions contemplated under this letter
agreement comply with all the rules and regulations of the Nasdaq Capital
Market.