COMMON STOCK PURCHASE WARRANT To Purchase up to 500,000 Shares of the Common Stock of ARCADIA RESOURCES, INC.
Exhibit 2.6
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
LAW. THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT 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.
Warrant No. 100
COMMON STOCK PURCHASE WARRANT
To Purchase up to 500,000 Shares of the Common Stock of
THIS IS TO CERTIFY THAT H. D. Xxxxx Wholesale Drug Co., or registered assigns (the “Holder”),
is entitled, during the Exercise Period (as hereinafter defined), to purchase from Arcadia
Resources, Inc., a Nevada corporation (the “Company”), the Warrant Stock (as hereinafter defined),
in whole or in part, at a purchase price of the lower of (i) $0.40 per share or (ii) the prior ten
day closing average for the ten business days prior to and including the Vesting Date, all on and
subject to the terms and conditions hereinafter set forth.
1. Definitions. As used in this Warrant, the following terms have the respective
meanings set forth below:
“Affiliate” means any person or entity that, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control with a person or
entity, as such terms are used in and construed under Rule 144 under the Securities Act. With
respect to a Holder of Warrants, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Holder will be deemed to be an Affiliate
of such Holder.
“Appraised Value” means, in respect of any share of Common Stock on any date herein
specified, the fair saleable value of such share of Common Stock (determined without giving effect
to the discount for (i) a minority interest or (ii) any lack of liquidity of the Common Stock or to
the fact that the Company may have no class of equity registered under the Exchange Act) as of the
last day of the most recent fiscal month ending prior to such date specified, based on the value of
the Company on a fully-diluted basis, as determined by a nationally recognized investment banking
firm selected by the Company’s Board of Directors and having no prior relationship with the
Company.
“Borrowing Base” has the meaning set forth in the Credit Agreement.
Page 1
“Business Day” means any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of Indiana generally are
authorized or required by law or other government actions to close.
“Change of Control” means the (i) acquisition by an individual or legal entity or
group (as set forth in Section 13(d) of the Exchange Act) of more than one-half of the voting
rights or equity interests in the Company; or (ii) sale, conveyance, or other disposition of all or
substantially all of the assets, property or business of the Company or the merger into or
consolidation with any other corporation (other than a wholly owned subsidiary corporation) or
effectuation of any transaction or series of related transactions where holders of the Company’s
voting securities prior to such transaction or series of transactions fail to continue to hold at
least 50% of the voting power of the Company (or, if other than the Company, the successor or
acquiring entity) immediately following such transaction.
“Commission” means the Securities and Exchange Commission or any other federal agency
then administering the Securities Act and other federal securities laws.
“Common Stock” means (except where the context otherwise indicates) the Common Stock,
$0.001 par value per share, of the Company as constituted on the Grant Date, and any capital stock
into which such Common Stock may thereafter be changed or converted, and shall also include (i)
capital stock of the Company of any other class (regardless of how denominated) issued to the
holders of shares of Common Stock upon any reclassification thereof which is also not preferred as
to dividends or assets on liquidation over any other class of stock of the Company and which is not
subject to redemption and (ii) shares of common stock of any successor or acquiring corporation
received by or distributed to the holders of Common Stock of the Company in the circumstances
contemplated by Section 4.
“Credit Agreement” means the Line of Credit and Security Agreement dated April 23,
2010 between PrairieStone and the Holder, as amended.
“Credit Loan” has the meaning ascribed to such term in the Credit Agreement.
“Current Market Price” means, in respect of any share of Common Stock on any date
herein specified,
(1) if there shall not then be a public market for the Common Stock, the higher of
(a) the book value per share of Common Stock at such date, and
(b) the Appraised Value per share of Common Stock at such date,
or
(2) if there shall then be a public market for the Common Stock, the average of the daily
market prices for the ten (10) consecutive trading days immediately before such date. The daily
market price for each such trading day shall be (i) the closing bid price on such day on the NYSE
Amex or principal stock exchange (including Nasdaq) on which such Common Stock is then listed or
admitted to trading, or quoted, as applicable, (ii) if no sale takes place on such day
Page 2
on the NYSE Amex or any such exchange, the last reported closing bid price on such day as
officially quoted on the NYSE Amex or any such exchange (including Nasdaq), (iii) if the Common
Stock is not then listed or admitted to trading on the NYSE Amex or any stock exchange, the last
reported closing bid price on such day in the over-the-counter market, as furnished by the FINRA or
the National Quotation Bureau, Inc., (iv) if neither such corporation at the time is engaged in the
business of reporting such prices, as furnished by any similar firm then engaged in such business,
or (v) if there is no such firm, as furnished by any member of the FINRA selected mutually by the
holder of this Warrant and the Company or, if they cannot agree upon such selection, as selected by
two such members of the FINRA, one of which shall be selected by holder of this Warrant and one of
which shall be selected by the Company.
“Current Warrant Price” means, in respect of a share of Common Stock at any date
herein specified, the price at which a share of Common Stock may be purchased pursuant to this
Warrant on such date. Unless and until the Current Warrant Price is adjusted pursuant to the terms
herein, the initial Current Warrant Price shall be the lower of (i) $0.40 per share or (ii) the
prior ten day closing average for the ten business days prior to and including the Vesting Date,
per share of Common Stock.
“Event of Default” has the meaning ascribed to such term in the Credit Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all as the same shall
be in effect from time to time.
“Exercise Period” means the period during which this Warrant is exercisable pursuant
to Section 2.1.
“Expiration Date” means the date which is five (5) years after the Vesting Date,
subject to modification as provided herein.
“FINRA” means the Financial Industry Regulatory Authority, or any successor
corporation thereto.
“Other Property” has the meaning set forth in Section 4.
“Person” means any individual, sole proprietorship, partnership, joint venture, trust,
incorporated organization, association, corporation, limited liability company, institution, public
benefit corporation, entity or government (whether federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division, agency, body or department
thereof).
“PrairieStone” means PrairieStone Pharmacy, LLC, a Delaware limited liability company.
“Securities Act” means the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
Page 3
“Trading Day” means any day on which the primary market on which shares of Common
Stock are listed is open for trading.
“Transfer” means any disposition of any Warrant or Warrant Stock or of any interest in
either thereof, which would constitute a sale thereof within the meaning of the Securities Act.
“Vesting Date” means March 31, 2011; provided, however, that (a) if an Event of
Default occurs and the obligations set forth in the Credit Agreement become due and payable prior
to March 31, 2011, the Holder may, in its sole discretion, accelerate the Vesting Date to the date
of the Event of Default; and (b) if the Expiration Date is accelerated pursuant to Section 10 prior
to March 31, 2011, the Vesting Date shall be the date notice is provided to the Holder pursuant to
Section 10 and, notwithstanding anything contained herein to the contrary, the number of shares of
Warrant Stock shall equal 500,000.
“Warrants” means this Warrant and all warrants issued upon transfer, division or
combination of, or in substitution for, any thereof. All Warrants shall at all times be identical
as to terms and conditions and date, except as to the number of shares of Common Stock for which
they may be exercised.
“Warrant Price” means an amount equal to (i) the number of shares of Common Stock
being purchased upon exercise of this Warrant pursuant to Section 2.1, multiplied by (ii) the
Current Warrant Price.
“Warrant Stock” means up to the number of shares of Common Stock to be purchased upon
the exercise hereof determined as follows: If on the Vesting Date the Borrowing Base on the
Vesting Date is less than the outstanding balance on the Credit Loan (which includes principal and
all unpaid interest plus amounts due under the H. D. Xxxxx Primary Vendor Agreement between
PrairieStone and Holder dated of even date herewith), then the number shall be determined in
accordance with the following table, subject to adjustment as provided herein:
| Borrowing Base Divided by the | ||||
| Outstanding Balance on the Credit Loan | ||||
| (expressed as a percentage) | Number of Shares of Warrant Stock | |||
85% or less |
500,000 shares | |||
85% - 89.9% |
400,000 shares | |||
90% - 94.9% |
300,000 shares | |||
95% - 97.49% |
200,000 shares | |||
97.5% - 99.99% |
100,000 shares | |||
2. Exercise of Warrant.
2.1 Manner of Exercise. From and after the Vesting Date, and until 5:00 P.M.,
New York time, on the Expiration Date (the “Exercise Period”), the Holder may exercise this
Warrant, on any Business Day, for all or any part of the number of shares of Warrant Stock
purchasable hereunder, subject to the terms and conditions of this Warrant.
Page 4
In order to exercise this Warrant, in whole or in part, the Holder shall deliver to the
Company at its principal office or at the office or agency designated by the Company as
provided herein, (i) a written notice of Holder’s election to exercise this Warrant, which
notice shall specify the number of shares of Warrant Stock to be purchased, (ii) payment of
the Warrant Price as provided herein, and (iii) this Warrant. Such notice shall be
irrevocable and substantially in the form of the subscription form appearing at the end of
this Warrant as Exhibit A, duly executed by the Holder or its agent or attorney. Upon
receipt thereof, the Company shall, as promptly as reasonably practicable, execute or cause
to be executed and deliver or cause to be delivered to the Holder a certificate or
certificates representing the aggregate number of full shares of Warrant Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as hereinafter
provided. The stock certificate or certificates so delivered shall be, to the extent
possible, in such denomination or denominations as the Holder shall reasonably request in
the notice and shall be registered in the name of the Holder or if permitted pursuant to the
terms of this Warrant such other name as shall be designated in the notice. This Warrant
shall be deemed to have been exercised and such certificate or certificates shall be deemed
to have been issued, and the Holder or any other Person so designated to be named therein
shall be deemed to have become a Holder of record of such shares for all purposes, as of the
date when the notice, together with the payment of the Warrant Price and this Warrant, is
received by the Company as described above. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or certificates
representing Warrant Stock, deliver to the Holder a new Warrant evidencing the rights of the
Holder to purchase the unpurchased shares of Common Stock called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant, or at the request of
the Holder, appropriate notation may be made on this Warrant and the same returned to the
Holder.
Payment of the Warrant Price may be made at the option of the Holder by: (i) certified
or official bank check payable to the order of the Company, (ii) wire transfer of
immediately available funds to the account of the Company, or (iii) the surrender and
cancellation of a portion of shares of Common Stock then held by the Holder or issuable upon
such exercise of this Warrant, which shall be valued and credited toward the total Warrant
Price due the Company for the exercise of the Warrant based upon the Current Market Price of
the Common Stock. All shares of Common Stock issuable upon the exercise of this Warrant
pursuant to the terms hereof shall be validly issued and, upon payment of the Warrant Price,
shall be fully paid and nonassessable, free from all taxes, liens and charges, and not
subject to any preemptive rights. The Company shall take all such actions as may be
necessary to assure that all such shares of Warrant Stock may be so issued without violation
of any applicable law or governmental regulation or any requirements of any domestic
securities exchange upon which such shares of Common Stock may be listed.
2.2 Fractional Shares. The Company shall not be required to issue a fractional
share of Common Stock upon exercise of any Warrant. As to any fraction of a share which the
Holder of one or more Warrants, the rights under which are exercised in the same transaction,
would otherwise be entitled to purchase upon such exercise, the Company
shall pay an amount in cash equal to the Current Market Price per share of Common Stock
on the date of exercise multiplied by such fraction.
Page 5
2.3 Further Assurances.
(a) The Company shall assist and cooperate with any Holder required to make any
governmental filings or obtain any governmental approvals prior to or in connection
with any exercise of this Warrant (including, without limitation, making any filings
required to be made by the Company).
(b) Notwithstanding any other provision hereof, if an exercise of any portion
of this Warrant is to be made in connection with a registered public offering or the
sale of the Company, the exercise of any portion of this Warrant may, at the
election of the holder hereof, be conditioned upon the consummation of the public
offering or sale of the Company in which case such exercise shall not be deemed to
be effective until the consummation of such transaction.
2.4 Satisfaction of Credit Agreement Obligations. In the event all of
PrairieStone’s Obligations (as defined in the Credit Agreement) are satisfied and paid in
full prior to the Vesting Date, this Warrant shall terminate as of such date and shall not be
exercisable for any Warrant Stock.
3. Transfer, Division and Combination.
3.1 Transfer. The Warrants and the Warrant Stock shall be freely transferable,
subject to compliance with this Section 3.1 and all applicable laws, including, but not
limited to the Securities Act. If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, this Warrant shall not be registered for resale under the
Securities Act, the Company may require, as a condition of allowing such transfer (i) that
the Holder or transferee of this Warrant, at the cost of Holder or transferee, furnish to the
Company a written opinion of counsel that is reasonably acceptable to the Company to the
effect that such transfer may be made without registration under the Securities Act and any
applicable state law, (ii) that the Holder or transferee execute and deliver to the Company
an investment representation letter in form and substance acceptable to the Company and
substantially in the form attached as Exhibit C hereto and (iii) that the transferee
be an “accredited investor” as defined in Rule 501(a) promulgated under the Securities Act.
Transfer of this Warrant and all rights hereunder, in whole or in part, in accordance with
the foregoing provisions, shall be registered on the books of the Company to be maintained
for such purpose, upon surrender of this Warrant at the principal office of the Company or
the office or agency designated by the Company as provided herein, together with a written
assignment of this Warrant substantially in the form of Exhibit B hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any transfer
taxes payable upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled.
Page 6
Following a transfer that complies with the requirements of this Section 3.1, the
Warrant may be exercised by a new Holder for the purchase of shares of Common Stock
regardless of whether the Company issued or registered a new Warrant on the books of the
Company. In connection with any transfer of this Warrant or the resale of the Warrant Stock
pursuant to Rule 144 or other than pursuant to an effective registration statement, the
Holder or transferee shall compensate the Company for its reasonable expenses incurred in
connection with effectuating such transfer or resale.
3.2 Certificates for Warrant Stock. The Company shall facilitate the timely
preparation and delivery of certificates representing the Warrant Stock to be sold pursuant
to an effective Registration Statement, which certificates shall be free of all restrictive
legends, and to enable such Warrant Stock to be in such denominations and registered in such
names as the Holder may request at least five (5) business days prior to any sale of the
Warrant Stock.
3.3 Division and Combination; Expenses; Books. This Warrant may be divided or
combined with other Warrants upon presentation hereof at the aforesaid office or agency of
the Company, together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 3.1 as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such notice. The Company
shall prepare, issue and deliver at Holder’s expense the new Warrant or Warrants under this
Section 3. The Company agrees to maintain, at its aforesaid office or agency, books for the
registration and the registration of transfer of the Warrants.
4. Adjustments. The number of shares of Common Stock for which this Warrant is
exercisable, and the price at which such shares may be purchased upon exercise of this Warrant,
shall be subject to adjustment from time to time as set forth in this Section 4.
4.1 Stock Dividends, Subdivisions and Combinations. If at any time while this
Warrant is outstanding the Company shall:
(i) declare a dividend or make a distribution on its outstanding shares of
Common Stock in shares of Common Stock;
(ii) subdivide its outstanding shares of Common Stock into a larger number of
shares of Common Stock; or
(iii) combine its outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then:
(1) the number of shares of Common Stock acquirable upon exercise of this Warrant immediately
after the occurrence of any such event shall be adjusted to equal the number of shares of Common
Stock which a record holder of the same number of shares of Common Stock that would have been
acquirable under this Warrant immediately prior to the record date for such dividend or
distribution or the effective date of such subdivision or combination would own or
be entitled to receive after such record date or the effective date of such subdivision or
combination, as applicable, and
Page 7
(2) the Current Warrant Price shall be adjusted to equal:
(A) the Current Warrant Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision or combination,
multiplied by the number of shares of Common Stock into which this Warrant is exercisable
immediately prior to the adjustment, divided by
(B) the number of shares of Common Stock into which this Warrant is exercisable
immediately after such adjustment.
Any adjustment made pursuant to clause (i) of this paragraph shall become effective
immediately after the record date for the determination of stockholders entitled to receive such
dividend or distribution, and any adjustment pursuant to clauses (ii) or (iii) of this paragraph
shall become effective immediately after the effective date of such subdivision or combination.
4.2 Other Provisions Applicable to Adjustments. The following provisions shall
be applicable to the making of adjustments of the number of shares of Common Stock into which
this Warrant is exercisable and the Current Warrant Price provided for in Section 4:
(a) When Adjustments to Be Made. The adjustments required by Section 4
shall be made whenever and as often as any specified event requiring an adjustment
shall occur, except that any that would otherwise be required may be postponed
(except in the case of a subdivision or combination of shares of the Common Stock,
as provided for in Section 4.1) up to, but not beyond the date of exercise if such
adjustment either by itself or with other adjustments not previously made adds or
subtracts less than 1% of the shares of Common Stock into which this Warrant is
exercisable immediately prior to the making of such adjustment. Any adjustment
representing a change of less than such minimum amount (except as aforesaid) which
is postponed shall be carried forward and made as soon as such adjustment, together
with other adjustments required by this Section 4 and not previously made, would
result in a minimum adjustment or on the date of exercise. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at the close of
business on the date of its occurrence.
(b) Fractional Interests. In computing adjustments under this Section
4, fractional interests in Common Stock shall be taken into account to the nearest
1/100th of a share.
(c) When Adjustment Not Required. If the Company undertakes a
transaction contemplated under this Section 4 and as a result takes a record of the
holders of its Common Stock for the purpose of entitling them to receive a dividend
or distribution or subscription or purchase rights or other benefits contemplated
under this Section 4 and shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights or other benefits contemplated under
this Section 4, then thereafter no adjustment shall be required by reason of
the taking of such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
Page 8
4.3 Reorganization, Reclassification, Merger, Consolidation or Disposition of
Assets.
(a) If there shall occur a Change of Control and, pursuant to the terms of such
Change of Control, shares of common stock of the successor or acquiring corporation,
or any cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights) in addition
to or in lieu of common stock of the successor or acquiring corporation (“Other
Property”), are to be received by or distributed to the holders of Common Stock of
the Company, then the Holder of this Warrant shall have the right thereafter for the
Balance of the Exercise Period to receive, upon the exercise of the Warrant, the
number of shares of common stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and the Other Property receivable upon
or as a result of such Change of Control by a holder of the number of shares of
Common Stock into which this Warrant is exercisable immediately prior to such event.
(b) In case of any such Change of Control described above, the resulting,
successor or acquiring entity (if not the Company) and, if an entity different from
the successor or acquiring entity, the entity whose capital stock or assets the
holders of the Common Stock are entitled to receive as a result of such Change of
Control, shall assume by written instrument all of the obligations of this Warrant
subject to such modifications as may be deemed appropriate (as determined by
resolution of the Board of Directors of the Company and the consent of the Holder,
which shall not be unreasonably withheld) in order to provide for adjustments of
shares of the Common Stock into which this Warrant is exercisable which shall be as
nearly equivalent as practicable to the adjustments provided for in Section. The
foregoing provisions of this Section shall similarly apply to successive Change of
Control transactions.
4.4 Stock Transfer Taxes. The issue of stock certificates upon exercise of this
Warrant shall be made without charge to the holder for any tax in respect of such issue. The
Company shall not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares in any name other than that of the
holder of this Warrant, and the Company shall not be required to issue or deliver any such
stock certificate unless and until the person or persons requesting the issue thereof shall
have paid to the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.
5. No Rights as Stockholder. This Warrant does not entitle the Holder to any voting or
other rights as a stockholder of the Company prior to exercise and payment for the Warrant Price in
accordance with the terms hereof.
Page 9
6. Reservation and Authorization of Common Stock. From and after the Grant Date, the
Company shall at all times reserve and keep available for issue upon the exercise of Warrants such
number of its authorized but unissued shares of Common Stock as will be sufficient to permit the
exercise in full of all outstanding warrants (including this Warrant).
7. Taking of Record; Stock and Warrant Transfer Books. In the case of all dividends or
other distributions by the Company to the holders of its Common Stock with respect to which any
provision of Section 4 refers to the taking of a record of such holders, the Company will in each
such case take such a record and will take such record as of the close of business on a Business
Day. The Company will not at any time, except upon dissolution, liquidation or winding up of the
Company, close its stock transfer books or Warrant transfer books so as to result in preventing or
delaying the exercise or transfer of any Warrant.
8. Loss or Mutilation. Upon receipt by the Company from the Holder of evidence
reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of
this Warrant and indemnity or security reasonably satisfactory to it and reimbursement to the
Company of all reasonable expenses incidental thereto and in case of mutilation upon surrender and
cancellation hereof, the Company, at Holder’s cost, will execute and deliver in lieu hereof a new
Warrant of like tenor to the Holder; provided, however, that in the case of mutilation, no
indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for
cancellation.
9. Office of the Company. As long as any of the Warrants remain outstanding, the
Company shall maintain an office or agency (which may be the principal executive offices of the
Company) where the Warrants may be presented for exercise, registration of transfer, division or
combination as provided in this Warrant.
10. Acceleration of Expiration Date at Company’s Election. Subject to the conditions
of this Section 10, the Company may, at the option of the Board of Directors of the
Company, accelerate the Expiration Date of this Warrant in connection with the consummation of a
Change of Control transaction by giving the Holder or transferee at least twenty one (21) days
written notice prior to the anticipated date of consummation of the applicable Change of Control
transaction (the “Accelerated Expiration Date”). As of the Accelerated Expiration Date, all
rights and obligations of the Company under this Warrant shall become null and void to the extent
that the Holder or transferee shall not have exercised this Warrant as of or prior to the
Accelerated Expiration Date. The Company may not accelerate the Expiration Date, however, unless
(a) the Current Market Price is at least 150% of the Current Warrant price in each of the twenty
trading days immediately preceding the date notice of acceleration is given and (b) at least five
of such twenty trading days occurred subsequent to the public announcement of the Change In
Control.
11. Notices of Certain Events.
The Company will give written notice to the Holder of this Warrant at least twenty (20) days
prior to the date on which the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the Common Stock, (B) with respect to any pro rata subscription offer
to holders of Common Stock or (C) for determining rights to vote with respect to any Change in
Control, dissolution or liquidation, provided that such information shall be
made known to the public prior to or in conjunction with such notice being provided to such
holder, or the Holder shall agree to maintain such information in confidence.
Page 10
12. Registration of Warrant and Warrant Stock.
12.1 Agreement to Register on Shelf Registration Statement.
(a) Within 30 days after the Vesting Date, the Company shall, at its sole cost
and expense, amend or supplement any existing S-3 shelf registration statement on
file with the Securities and Exchange Commission (the “SEC”) (or file a new S-3
registration statement) under the Securities Act (each a “Shelf Registration
Statement”) to include this Warrant and the Warrant Stock. The Company shall use its
reasonable best efforts to keep any such Shelf Registration Statement relating to
the Warrant and the Warrant Stock continuously effective (and shall file subsequent
registration statements if necessary) in order to permit the unrestricted and
immediate sale of the Warrant and the Warrant Stock by the Holder and to permit the
prospectus included therein (as supplemented) to be lawfully delivered by the Holder
of the relevant Warrant and/or Warrant Stock until the Warrant and/or the Warrant
Stock covered by such Shelf Registration Statement (i) have been sold pursuant
thereto, or (ii) in the event Holder is deemed an affiliate of the Company, are no
longer restricted securities (as defined in Rule 144 under the Securities Act, or
any successor rule thereof). Notwithstanding the foregoing, the Company shall not be
obligated to continue the registration of the Warrant after the date the Warrant is
no longer exercisable. The Company shall be deemed not to have used its reasonable
best efforts to keep each Shelf Registration Statement effective during the
requisite period if it voluntarily takes any action that would result in the Holder
of the Warrant and/or the Warrant Stock covered thereby not being able to offer and
sell such securities during that period on an unrestricted basis, unless such action
is required by law or order of the SEC.
(b) The Company shall cause each Shelf Registration Statement and the related
prospectus and any amendments or supplements thereto, as of the effective date of
such Shelf Registration Statement, amendment or supplement, (i) to comply in all
material respects with the applicable requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission, and (ii) not to
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(c) Notwithstanding the foregoing, at any time, the Company may delay the
filing of any Shelf Registration Statement or any prospectus supplement or delay or
suspend the effectiveness thereof, for a reasonable period of time, but not in
excess of 60 consecutive days with no more than three such delays in filing or
delays or suspension of effectiveness during any calendar year (each, a “Shelf
Suspension Period”), if the Board of Directors of the Company determines
Page 11
reasonably and in good faith that the filing of any such Shelf Registration
Statement or prospectus supplement or the continuing effectiveness thereof would
require the disclosure of non-public, material information that, in the reasonable
judgment of the Board of Directors of the Company, would be materially detrimental
to the Company if so disclosed or would otherwise materially and adversely affect a
financing, acquisition, disposition, merger or other material transaction.
(d) In no event will the registered holder of the Warrant and/or Warrant Stock
be entitled to receive a net-cash settlement or other consideration in lieu of
physical settlement in shares of Common Stock if the Common Stock underlying the
Warrants is not covered by an effective Registration Statement.
13. Miscellaneous.
13.1 Nonwaiver. No course of dealing or any delay or failure to exercise any
right or obligation hereunder on the part of the Holder or the Company shall operate as a
waiver of such right or obligation, unless the same shall be in writing signed by the Holder
or the Company.
13.2 Notice Generally. All notices, consents, waivers, and other communications
under this Warrant must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt), provided that a copy is mailed by registered mail, return
receipt requested, (c) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), or (d) two (2) business days following the
deposit of same in the U.S. mail, in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a party may
designate by notice to the other parties):
| Company: | Arcadia Resources, Inc. | |||
| Attn: President & CEO | ||||
| 0000 Xxxxxxxxx Xxx, Xxx. 000 | ||||
| Xxxxxxxxxxxx, XX 00000 | ||||
| Fax No. (000) 000-0000 | ||||
| With a copy to: | Arcadia Resources, Inc. | |||
| Attn: General Counsel | ||||
| 0000 Xxxxxxxxx Xxx, Xxx. 000 | ||||
| Xxxxxxxxxxxx, XX 00000 | ||||
| Fax No. (000) 000-0000 | ||||
| Holder: | H. D. Xxxxx Wholesale Drug Co. | |||
| Attn: CEO | ||||
| 0000 Xxxx Xxxxxx | ||||
| Xxxxxxxxxxx, XX 00000 | ||||
| Fax No. (000) 000-0000 |
Page 12
| With a copy to: | Xxxxxx & Xxxxxxxxx LLP | |||
| Attn: Xxxxxxx X. Xxxxxx, Esq. | ||||
| 00 Xxxxx Xxxxxxxx Xxxxxx | ||||
| Xxxxxxxxxxxx, XX 00000-0000 | ||||
| Fax No. (000) 000-0000 |
13.3 Successors and Assigns. Subject to compliance with the provisions of
Section 3.1, this Warrant and the rights evidenced hereby shall inure to the benefit of and
be binding upon the successors of the Company and the successors and assigns of the Holder.
The provisions of this Warrant are intended to be for the benefit of all Holders from time to
time of this Warrant, and shall be enforceable by any such Holder.
13.4 Amendment. This Warrant may be modified or amended or the provisions of
this Warrant waived with the written consent of both the Company and the Holder.
13.5 Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be modified to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Warrant.
13.6 Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.
13.7 Governing Law. This Warrant and the transactions contemplated hereby shall
be deemed to be consummated in the State of Indiana and shall be governed by and interpreted
in accordance with the local laws of the State of Indiana without regard to the provisions
thereof relating to conflicts of laws. 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 Xxxxxx County, Indiana. 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 Indiana.
13.8 Entire Agreement. This Warrant constitutes the entire agreement between
the Company and Holder with respect to the subject matter hereof and supersedes any and all
other prior or contemporaneous agreements, either oral or written, between the Company and
Holder with respect to the subject matter hereof. Headings herein are for convenience only
and shall not be deemed to limit or affect any of the provisions hereof.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
Page 13
IN WITNESS WHEREOF, Arcadia Resources, Inc. has caused this Warrant to be executed by its duly
authorized officer and attested by its Secretary or other designated officer.
Dated: April 23, 2010
| ARCADIA RESOURCES, INC. |
||||
| By: | /s/ Xxxxxx Xxxxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxxxx | |||
| Title: | President and CEO | |||
| Attested by: ARCADIA RESOURCES, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Vice President | |||
Page 14
