Pledge Agreement
Exhibit 2.4
This Pledge Agreement is entered into as of April 23, 2010, by and between
Arcadia Resources, Inc., a Nevada corporation (“Pledgor”), and H. D. Xxxxx Wholesale
Drug Co., a Delaware corporation (“Pledgee”).
Recitals
Whereas, Pledgor owns all the issued and outstanding ownership interests in
PrairieStone Pharmacy, LLC, a Delaware limited liability company (“Company”).
Whereas, Pledgee and the Company have entered into a certain Line of Credit and
Security Agreement dated as of even date herewith (as the same is modified, amended or restated,
the “Credit Agreement”), pursuant to which Pledgee has agreed to provide to the Company a line of
credit facility (the “Credit Loan”) in the aggregate principal amount not to exceed Five Million
Dollars ($5,000,000), subject to the terms and conditions set forth in the Credit Agreement.
Whereas, in connection with the Credit Agreement, Pledgor agreed to provide a full
guaranty of the Company’s obligations under the Credit Agreement and the Primary Vendor Agreement
between the Company and Pledgee, dated as of even date herewith (the “Guaranty”).
Whereas, as security for the performance of Pledgor’s obligations under the Guaranty,
the Pledgor is required to pledge to Pledgee all of such Pledgor’s right, title and interest in the
Pledged Units (as defined below) pursuant to this Agreement.
Agreements
The parties agree as follows:
Article 1. Defined Terms.
Terms that are used herein as capitalized defined terms but that are not defined herein shall
have the meanings ascribed to them in the Guaranty. Other terms used herein as defined terms, and
their respective meanings, are as follows:
“UCC” means the Uniform Commercial Code from time to time in effect in the State of Indiana.
“Collateral” means the Pledged Units and all Proceeds thereof.
“Event of Default” means any breach of or default under the Guaranty.
“Obligations” means all sums owed by Pledgor to Pledgee and all other obligations under or
pursuant to the Guaranty.
“Pledge Agreement” means this Pledge Agreement, as amended, supplemented, or otherwise
modified from time to time.
“Pledged Units” means all Pledgor’s membership units of and interest in the Company, together
with all certificates, options, or rights of any nature whatsoever that may be issued or granted by
the Company to Pledgor in respect of the Pledged Units while this Pledge Agreement is in effect.
“Proceeds” means all “proceeds” as such term is defined in the UCC and, in any event, shall
include, without limitation, all distributions or other income from, with respect to or on account
of, the Pledged Units.
Article 2. Pledge; Grant of Security Interest.
Pledgor hereby pledges and delivers to Pledgee all of Pledgor’s right, title and interest in
and to the Pledged Units and hereby grants to Pledgee a first priority security interest in the
Collateral, as collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration, or otherwise) of the Obligations. Pledgor agrees
that Pledgee is authorized to file a UCC financing statement in the name of Pledgor to perfect
Pledgee’s security interest in the Collateral.
Article 3. Control Agreements.
This Pledge Agreement constitutes an instruction to the Company to xxxx its books and records
to reflect the lien of Pledgee granted pursuant to this Pledge Agreement, and Pledgor will execute
and deliver any other instruction to the Company to register the pledge and security interest of
the Pledgee which the Pledgee may reasonably request. Pledgor will take any actions necessary to
cause the Company to enable Pledgee to have and retain Control (as defined in the UCC) over such
Pledged Units, including without limitation, the execution and delivery of a Control Agreement in
form acceptable to the Pledgee. The Pledgor will execute and deliver to the Pledgee any instrument
of assignment and any financing statement, instruction or other instrument reasonably deemed
necessary by the Pledgee to further evidence or perfect the Pledgee’s security interest.
Article 4. Representations and Warranties.
Section 4.1 Pledgor represents and warrants that:
(a) Pledgor is the record and beneficial owner of the Pledged Units, free of any and
all claims, liens or options in favor of, or claims of, any other Person, except the
security interest created by this Pledge Agreement and the security interest of XXXX Master
Fund, Ltd., Vicis Capital Master Fund and LSP Partners, LP, each of which have been
subordinated to Pledge pursuant to a Waiver, Consent and Subordination from such person;
(b) there are no certificates representing the Pledged Units;
(c) Pledgor’s State of Incorporation is in the State of Nevada; and
(d) Pledgor has the full right, power and authority to deliver, pledge, assign and
transfer the Pledged Units as provided herein.
Article 5. Covenants.
Section 5.1 Pledgor covenants and agrees with Pledgee that, from and after the date of this
Pledge Agreement and until the Obligations are paid in full:
(a) If Pledgor shall, as a result of its ownership of the Pledged Units, become
entitled to receive or shall receive any additional percentage or units of ownership
interest in the Company or any option or other rights or interest in the Company whether in
addition to, in substitution of, as a conversion of, or in exchange for any of the Pledged
Units, or otherwise in respect thereof, Pledgor shall accept it as Pledgee’s agent, hold it
in
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trust for Pledgee and deliver it forthwith to Pledgee in the exact form received, duly
endorsed by Pledgor to Pledgee, if required, to be held by Pledgee hereunder as additional
collateral security for the Obligations. Any sums paid upon or in respect of the Pledged
Units upon the liquidation or dissolution of the Company shall be paid over to Pledgee to be
held by it hereunder as additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Pledged Units or any property
shall be distributed upon or with respect to the Pledged Units pursuant to the
recapitalization or reclassification of the capital of the Company or pursuant to the
reorganization thereof, the property so distributed shall be delivered to Pledgee to be held
by it, subject to the terms hereof, as additional collateral security for the Obligations.
If any sums of money or property so paid or distributed in respect of the Pledged Units
shall be received by Pledgor, Pledgor shall, until such money or property is paid or
delivered to Pledgee, hold such money or property in trust for Pledgee, segregated from
other funds of Pledgor, as additional collateral security for the Obligations.
(b) Without the prior written consent of Pledgee, Pledgor will not (i) vote to enable,
or take any other action to permit, the Company to issue any membership or units of
ownership interest of any nature or to issue any other instrument or right convertible into
or granting the right to purchase or exchange for any percentages or units of ownership
interest of the Company, or (ii) sell, assign, transfer, exchange, or otherwise dispose of,
or grant any option with respect to, the Collateral, or (iii) create, incur, or permit to
exist any claim, lien or option in favor of, or any claim of any Person with respect to, any
of the Collateral, or any interest therein, except for the security interest granted by this
Pledge Agreement. Pledgor will defend the right, title, and interest of Pledgee in and to
the Collateral held by Pledgor against the claims and demands of all Persons whomsoever.
(c) At any time and from time to time, upon the written request of Pledgee, and at the
sole expense of Pledgor, Pledgor will promptly and duly execute and deliver such further
instruments and documents and take such further actions as Pledgee may reasonably request
for the purposes of obtaining or preserving the full benefits of this Pledge Agreement and
of the rights and powers herein granted, including to further perfect Pledgee’s security
interest in the Pledged Units. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory note, other instrument or chattel
paper, such note, instrument or chattel paper shall be immediately delivered to Pledgee,
duly endorsed in a manner satisfactory to Pledgee, to be held as Collateral pursuant to this
Pledge Agreement.
(d) Pledgor agrees to pay, and to save Pledgee harmless from, any and all liabilities
with respect to, or resulting from any delay in paying, any and all stamp, excise, sales, or
other taxes that may be payable or determined to be payable with respect to any of the
Collateral or in connection with any of the transactions contemplated by this Pledge
Agreement.
Article 6. Voting Rights; Distributions.
Unless an Event of Default shall have occurred and be continuing and Pledgee shall have given
written notice to Pledgor and the Company of Pledgee’s intent to exercise its rights pursuant to
Article 7, Pledgor shall be permitted to exercise all voting, membership and other
ownership rights with respect to the Pledged Units. For so long as the Guaranty is
outstanding, Pledgee shall not receive or accept any dividends or distributions from the Company.
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Article 7. Rights of Pledgee.
If an Event of Default shall occur and be continuing and Pledgee shall have given 10 days
prior written notice to Pledgor and the Company of its intent to exercise its rights under this
Article 7: (i) Pledgee shall have the right to receive any and all cash or other distributions paid
in respect of the Pledged Units and to make application thereof to the Obligations in such order as
it may determine, and (ii) all Pledged Units of Pledgor shall upon written demand by Pledgee be
registered in the name of Pledgee or its nominee, and Pledgee or its nominee may thereafter
exercise (A) all voting and other rights pertaining to the Pledged Units at any meeting of members
of the Company or otherwise and (B) any and all rights of conversion, exchange, subscription and
any other rights, privileges, or options pertaining to such Pledged Units as if it were the
absolute owner thereof (including, without limitation, the right to exchange at its discretion any
and all of the Pledged Units upon the merger, consolidation, reorganization, recapitalization, or
other fundamental change in the organizational structure of the Company or upon the exercise by
Pledgor or Pledgee of any right, privilege, or option pertaining to such Pledged Units, and in
connection therewith, the right to deposit and deliver any and all of the Pledged Units with any
committee, depository, transfer agent, registrar, or other designated agency upon such terms and
conditions as it may determine), all without liability except to account for property actually
received by it, but Pledgee shall have no duty to exercise any such right, privilege, or option and
shall not be responsible for any failure to do so or delay in so doing. Pledgee shall not be liable
for any failure to demand, collect, or realize upon all or any part of the Collateral or for any
delay in doing so, nor shall it be under any obligation to sell or otherwise dispose of any
Collateral upon the request of either Pledgor or any other firm or person or to take any other
action whatsoever with regard to the Collateral or any part thereof.
Article 8. Remedies.
If an Event of Default shall occur and be continuing, Pledgee may exercise, in addition to all
other rights and remedies granted in this Pledge Agreement and in any other instrument or agreement
securing, evidencing, or relating to the Obligations, all rights and remedies of a secured party
under the UCC or otherwise available at law or in equity. Without limiting the generality of the
foregoing, Pledgee, without demand of performance or other demand, presentment, protest,
advertisement, or notice of any kind (except any notice required by law referred to below) to or
upon Pledgor or any other firm or person (all and each of which demands, defenses, advertisements,
and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate,
and realize upon the Collateral, or any part thereof, and/or may forthwith sell, assign, give
option or options to purchase or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale
or sales, in the over-the-counter market, at any exchange, broker’s board or office of Pledgee or
elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any credit risk. Pledgee
shall have the right upon any such public sale or sales, and to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in Pledgor, which right or equity is hereby waived or
released. Pledgee shall apply any Proceeds from time to time held by it and
the net proceeds of any such collection, recovery, receipt, appropriation, realization, or
sale, after
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deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of Pledgee hereunder, including, without limitation, reasonable attorneys’
fees and disbursements, to the payment in whole or in part of the Obligations, in such order as
Pledgee may elect, and only after such application and after the payment by Pledgee of any other
amount required by any provision of law, including, without limitation, Section 9.1-615 of the UCC,
need Pledgee account for the surplus, if any, to Pledgor. To the extent permitted by applicable
law, Pledgor waives all claims, damages, and demands it may acquire against Pledgee arising out of
the exercise by Pledgee of any of its rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least ten (10) days before such sale or other disposition.
Article 9. Limitation on Duties Regarding Collateral.
Pledgee’s sole duty with respect to the custody, safekeeping, and physical preservation of the
Collateral in its possession, under Section 9.1-207 of the UCC or otherwise, shall be to deal with
it in the same manner as Pledgee deals with similar securities and property for its own account.
Neither Pledgee nor any of its directors, officers, employees, or agents shall be liable for
failure to demand, collect, or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of
Pledgor or otherwise.
Article 10. General Provisions.
Section 10.1 Powers Coupled with an Interest. All authorizations and agencies herein
contained with respect to the Collateral are irrevocable and are powers coupled with an interest.
Section 10.2 Termination. Upon complete and irrevocable satisfaction of the Obligations, the
Pledged Units and instruments of assignment delivered to Pledgee shall be redelivered to Pledgor
and this Pledge Agreement shall terminate.
Section 10.3 Severability. Any provision of this Pledge Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.4 Section Headings. The section headings used in this Pledge Agreement are for
convenience of reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
Section 10.5 No Waiver; Cumulative Remedies. Pledgee shall not by any act (except by a
written instrument pursuant to Section 10.6 hereof), delay, indulgence, omission, or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any Event of Default
or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay
in exercising, on the part of Pledgee, any right, power, or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power, or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other right, power, or
privilege. A waiver by Pledgee of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy that Pledgee would otherwise
have on any further occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.
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Section 10.6 Waivers and Amendments. None of the terms or provisions of this Pledge Agreement
may be waived, amended, supplemented, or otherwise modified except by a written instrument executed
by Pledgor and Pledgee; provided that any provision of this Pledge Agreement may be waived by
Pledgee in a letter or agreement executed by Pledgee or by facsimile transmission from and signed
by Pledgee.
Section 10.7 Successors and Assigns. This Pledge Agreement shall be binding upon the
successors and assigns of Pledgor and shall inure to the benefit of Pledgee and its successors and
assigns.
Section 10.8 Governing Law and Venue. This Agreement and the rights and obligations of the
parties thereunder and hereunder shall be governed by, and construed and interpreted in accordance
with the laws of the State of Indiana, notwithstanding the fact that Indiana conflict of law rules
might otherwise require the substantive rules of law of another jurisdiction to apply. Pledgor and
Pledgee hereby consent to the jurisdiction of any state court located within Xxxxxx County, Indiana
and any federal court located in the Northern District of Indiana and waive personal service of any
and all process made upon Pledgor. All service of process may be made by messenger, certified mail,
return receipt requested or by registered mail directed to Pledgor at the addresses indicated aside
its signature to this Agreement, and Pledgor otherwise waives any objection which Borrower may have
to any proceeding commenced in a state court located within Cass County, Indiana or any federal
court located in the Northern Districted of Indiana, based upon improper venue or forum non
conveniens. Nothing contained in this Section shall affect the right of Pledgee to serve legal
process in any other manner permitted by law or to bring any action or proceeding against Pledgor
or its assets in the courts of any other jurisdiction.
Section 10.9 Waiver of Jury Trial. Pledgor and Pledgee, After Consulting Or Having Had
The Opportunity To Consult With Counsel, Knowingly, Voluntarily, Intentionally, Irrevocably And
Unconditionally Waive Any Right Either Of Them May Have To A Trial By Jury In Any Litigation Based
Upon Or Arising Out Of This Agreement Or the Guaranty Or Any Of The Transactions Contemplated By
This Pledge Agreement Or Any Course Of Conduct, Dealing, Statements (Whether Oral Or Written), Or
Actions Of Either Of Them. Neither Pledgor nor Pledgee Shall Seek To Consolidate, By Counterclaim
Or Otherwise, Any Action In Which A Jury Trial Has Been Waived With Any Other Action In Which A
Jury Trial Cannot Be Or Has Not Been Waived. These Provisions Shall Not Be Deemed To Have Been
Modified In Any Respect Or Relinquished By Either pledgor or pledgee Except By A Written Instrument
Executed By Each Of Them.
[Signature Page Follows.]
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In Witness Whereof, the undersigned Pledgor has caused this Pledge Agreement to be
duly executed and delivered as of the day and year first above written.
| “Pledgor” Arcadia Resources, Inc. |
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| By: | /s/ Xxxxxx Xxxxxxxxxx | |||
| Printed: | Xxxxxx Xxxxxxxxxx | |||
| Its: | CEO & President | |||
Acknowledgement
STATE OF INDIANA
|
) | |||||
| ) | SS: | |||||
COUNTY OF XXXXXX
|
) |
Before me, a Notary Public in and for said County and State, personally Xxxxxx Xxxxxxxxxx, the
CEO & President of Arcadia Resources, Inc., who acknowledged execution of the foregoing instrument
and who, having been duly sworn, stated that the representations therein contained are true.
Witness my hand and Notarial Seal this 23rd day of April, 2010.
| May 17, 2005 | /s/ Xxxxxxxx Kahe Xxxxxx | |||
| My Commission Expires: | (Signature) Notary Public Residing in | |||
| Xxxxxxxx County, Indiana | ||||
| Xxxxxxxx Kahe Xxxxxx | ||||
| (Printed Name) | ||||
Accepted, this 23 day of April, 2010.
| “Pledgee” H. D. Xxxxx Wholesale Drug Co. |
||||
| By: | /s/ Xxxxx Xxxx Xxxxx | |||
| Printed: | Xxxxx Xxxx Xxxxx | |||
| Its: | Chairman & CEO | |||
Consent and Acknowledgement
PrairieStone Pharmacy, LLC, a Delaware limited liability company (the “Company”),
being the issuer of the units referenced in the above Pledge Agreement (the “Pledge”), hereby
consents to the Pledge and acknowledges that it has registered the Pledge in favor of the Pledgee
on its books and records.
| “Company” Prairiestone Pharmacy, LLC |
||||
| By: | /s/ Xxxxxx Xxxxxxxxxx | |||
| Printed: | Xxxxxx Xxxxxxxxxx | |||
| Its: | CEO & President | |||
