Document:

rkda-ex101_6.htm

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.Exhibit

EXHIBIT 10.1
AMENDMENT TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (this “Amendment”) is made as of July 8, 2020, by and among State Auto Financial Corporation, an Ohio corporation (“State Auto Financial”), State Auto Property and Casualty Insurance Company, an Iowa-domiciled insurance company (“State Auto P&C”), State Automobile Mutual Insurance Company, an Ohio-domiciled mutual insurance company (“State Auto Mutual”), and Michael E. LaRocco (“Executive”).  State Auto Financial, State Auto P&C, State Auto Mutual and each of their respective subsidiaries and affiliates, present and future, are hereinafter collectively referred to as “State Auto.”
Background Information
WHEREAS, Executive has been serving as the Chief Executive Officer and President of State Auto pursuant to the terms of an employment agreement, dated November 28, 2017, between the parties (the “Agreement”); and
WHEREAS, pursuant to Article X, Section (A) of the Agreement, the parties may amend or modify any of the provisions of the Agreement by a written instrument executed by both parties; and
WHEREAS, State Auto desires to continue to employ Executive as the Chief Executive Officer and President of State Auto for an additional twelve (12) month period following the end of the existing term under the Agreement, and Executive desires to accept such continued employment pursuant to the terms of the Agreement, as amended by this Amendment; and
WHEREAS, the parties intend that, effective as of the date of this Amendment, the provisions of this Amendment shall replace and supersede the specific provisions of the Agreement, as provided herein, but, with respect to all other provisions not herein amended, the provisions of the Agreement shall remain in full force and effect and shall continue to govern the relationship between the parties with respect to the Executive’s employment with State Auto.  
Statement of Agreement
NOW, THEREFORE, in consideration of such employment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree to amend the Agreement as follows:
		
	1.
	Article III, Section (B) of the Agreement shall be deleted in its entirety and the following shall be substituted therefore :

“(B)    Term.  
The term of this Agreement shall be for a period commencing on January 1, 2018 (the “Commencement Date”), and ending on December 31, 2022, unless terminated at an earlier date pursuant to an event described in Article V of this Agreement (the “Employment Term”). ” 

		
	2.
	Article IV of the Agreement shall be amended by adding a new Section (G) at the end thereof to read as follows 

“(G)    Special Equity Award.
For calendar year 2020, in addition to any other compensation or benefits, State Auto will provide Executive with a special equity award in the form of deferred stock units (“DSU’s”), with a fair market value equal to Five Hundred Thousand Dollars ($500,000) on the date of their grant.  The terms and conditions applicable to the DSU’s will be determined by the State Auto Financial Compensation Committee at the time of their grant.  Further, upon termination of Executive’s employment pursuant to any section of Article V, notwithstanding any provision contained in this Agreement to the contrary, the treatment of the DSU’s will be governed by the terms of the applicable award agreement.”

		
	3.
	This Amendment may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have signed this Amendment, which is effective as of the date first above written.
	
		
	 
	

State Auto Financial Corporation

By: /s/ Robert E. Baker
Robert E. Baker, Chair of the State Auto      Financial Corporation
Compensation Committee

	 
	

State Auto Property and Casualty
Insurance Company

By: /s/ Robert E. Baker
Robert E. Baker, Chair of the State Auto Financial Corporation
Compensation Committee

	 
	

State Automobile Mutual Insurance
Company

By: /s/ Robert E. Baker
Robert E. Baker, Chair of the State
Automobile Mutual Insurance Company
Compensation Committee

	 
	

Executive

By:/s/ Michael E. LaRocco
Michael E. LaRocco

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