Confidential information indicated by X's has been omitted and filed separately
with the Securities and Exchange Commission.
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID LAWS.
STOCK PURCHASE WARRANT
To Subscribe for and Purchase Common Stock of
IVC INDUSTRIES, INC.
THIS CERTIFIES that, for value received, XXXXXXXXX, a New Jersey
corporation ("XXXXXXXXX"), or its transferee(s) (XXXXXXXXX or any such
transferee being a "Holder"), is entitled to subscribe for and purchase from IVC
INDUSTRIES, INC., a Delaware corporation (hereinafter called the "Corporation"),
at the price of $2.00 per share (such price, as from time to time to be adjusted
as hereinafter provided, being the "Warrant Exercise Price"), at any such time
on or prior to the latest date determined under the following paragraph, the
number of shares (the "Shares") of Common Stock (as defined below) determined
according to Section 1 below (subject to adjustment as hereinafter provided), of
fully paid and nonassessable shares of Common Stock, $.01 par value, of the
Corporation (the "Common Stock"), subject, however, to the provisions and upon
the terms and conditions hereinafter set forth. This Warrant is issued in
conjunction with the Designated Party Term Guaranty being executed concurrently
herewith by XXXXXXXXX (the "Designated Party Term Guaranty"). This Warrant and
any warrant or warrants subsequently issued upon exchange or transfer hereof are
hereinafter collectively called the "Warrant" or "Warrants".
Holder may not exercise this Warrant prior to October 31, 2000, but may
exercise it, in whole or in part, at any time on such date or thereafter until
October 31, 2002 or any such later date as the Term Note or Loan, as defined in
the Term Loan Agreement dated as of May 1, 1998 among the Corporation, The Chase
Manhattan Bank, as Agent, and the Banks party thereto (the "Term Loan
Agreement") shall be paid in full and no longer outstanding, and the Designated
Party Term Guaranty shall have terminated without having been drawn upon, after
which this Warrant shall expire.
Section 1. Number of Shares. If the Term Note or Loan shall be outstanding
and not paid in full, the number of Shares which the Holder hereof shall be
entitled to purchase at the Warrant Exercise Price at any time shall be
determined by first comparing the XXXXXXXXXXXXXXXXXXXXXXXXXXX during each
Measuring Period against the relevant Benchmark (as such latter terms are
defined in the following two sentences). The term "XXXXXXXXXXXXXXXXXXXXXXXXXXX"
for a Measuring Period means the dollar amount of XXXXXXXXX actually made by the
Corporation, Hall Laboratories, Ltd. and International Vitamin Overseas Sales
Corp. from XXXXXXXXX and/or its affiliates during such Measuring Period of XXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXX whatsoever
("XXXXXXX"). For purposes of this Section 1, the term "Measuring Period" means
one of the successive twelve-month periods of time with the first twelve month
period ending October 31, 1998, and each of the twelve month periods ending each
successive April 30 and October 31 as long as this Warrant is in force; and the
term "Benchmark" for each such Measuring Period means $24,000,000.
Then, in any case under this Section 1 where the dollar amount of
XXXXXXXXXXXXXXXXXXXXXXXXXXX in such Measuring Period is less than the Benchmark,
the Holder shall be entitled to purchase that number of Shares equal to the
dollar amount of the shortfall divided by the Warrant Exercise Price. See
Example A on Exhibit A hereto.
In any case under this Section 1, beginning with the Measuring Period
ending October 31, 1998, where the XXXXXXXXXXXXXXXXXXXXXXXXXXX for a given
Measuring Period exceeds the Benchmark, then the number of Shares which the
Holder shall otherwise be entitled to purchase under this Section 1 will be
reduced by a number of Shares ("Overage Shares") equal to (i) if the Holder is
then entitled to purchase any Shares under this Section 1, the excess, or (ii)
if the Holder is then not entitled to purchase any Shares under this Section 1,
fifty percent of the excess, of XXXXXXXXXXXXXXXXXXXXXXXXXXX over the Benchmark
for such Measuring Period, divided by the Warrant Exercise Price. See Examples B
and C on Exhibit A.
The number of Shares at any time subject to this Warrant, as determined in
accordance with this Section 1, shall be vested at the end of each respective
Measuring Period, and shall be subject to increase by any number of Shares so
determined at the end of the next succeeding Measuring Period, and subject to
reduction by any number of Overage Shares for any prior Measuring Period in
accordance with the preceding paragraph, which new number shall then be vested
in turn; and so on.
If the Term Note and Loan shall be paid in full and no longer outstanding
at any time prior to the expiration of this Warrant, the Holder shall continue
to be entitled to purchase the number of Shares as determined according to the
above paragraphs, but such number will be subject to reduction for any Overage
Shares arising under the second preceding paragraph in any Measuring Periods
occurring after such payment in full (but never less than zero); but if the
Designated Party Term Guaranty has not been drawn upon and has been terminated
in all respects, then the number of Shares vested and exercisable hereunder
shall be reduced to zero and this Warrant shall expire.
Notwithstanding any other provisions of this Warrant, if the Designated
Party Term Guaranty is drawn down in whole or in part at any time, then the
Holder shall be entitled, in addition to the Shares which it is otherwise
entitled to purchase under this Section 1, to receive at its option one Share
for each $1.00 of the amount drawn down upon the Designated Party Term Guaranty,
all of which shares shall be vested and exercisable at the time of such
drawdown.
Section 2. Exercise of Warrant.
(a) Method of Exercise. The rights represented by this Warrant may
be exercised by the Holder hereof, in whole at any time or from time to
time in part, but not
as to a fractional share of Common Stock, by the surrender of this Warrant
(properly endorsed) at the office of the Corporation at 000 Xxxxx Xxxxx
Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (or at such other agency or office of the
Corporation in the United States as it may designate by notice in writing
to the Holder hereof at the address of such Holder appearing on the books
of the Corporation), and by payment to the Corporation of the Warrant
Exercise Price in the manner described in paragraph (b) below, for each
share being purchased.
(b) The Holder may make payment in respect of the exercise of this
Warrant as follows:
(i) Cash Exercise. By payment to the Corporation of the
Warrant Exercise Price in cash or by certified or official bank
check, for each share being purchased:
(ii) Notes Exercise. By surrender to the Corporation of any
promissory notes or other obligations issued by the Corporation,
with all such notes or other obligations of the Corporation so
surrendered being credited against the Warrant Exercise Price in an
amount equal to the principal amount thereof plus the amount of any
accrued and unpaid interest thereon to the date of such surrender;
(iii)Combined Payment Method. By satisfaction of the Warrant
Exercise Price for each share being acquired in any combination of
the methods described in clauses (i) or (ii) above.
(c) Delivery of Certificates. Etc. In the event of any exercise of
the rights represented by this Warrant, a certificate or certificates for
the shares of Common Stock so purchased, registered in the name of the
Holder, shall be delivered to the Holder hereof within a reasonable time,
not exceeding ten days, after the rights represented by this Warrant shall
have been so exercised; and, unless this Warrant has expired, a new
Warrant representing the number of shares (except a remaining fractional
share), if any, with respect to which this Warrant shall not then have
been exercised shall also be issued to the Holder hereof within such time.
The person in whose name any certificate for shares of Common Stock is
issued upon exercise of this Warrant shall for all purposes be deemed to
have become the Holder of record of such shares on the date on which the
Warrant was surrendered and payment of the Warrant Exercise Price and any
applicable taxes was made, except that, if the date of such surrender and
payment is a date on which the stock transfer books of the Corporation are
closed, such person shall be deemed to have become the Holder of such
shares at the close of business on the next succeeding date on which the
stock transfer books are open.
Section 3. Adjustment of Number of Shares. Upon each adjustment of the
Warrant Exercise Price as provided in Section 4, the Holder of this Warrant
shall thereafter be entitled to purchase, at the Warrant Exercise Price
resulting from such adjustment, the number of shares (calculated to the nearest
tenth of a share) obtained by multiplying the Warrant Exercise Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto
immediately prior to such adjustment and dividing the product thereof by the
Warrant Exercise Price resulting from such adjustment.
Section 4. Adjustment of Price Upon Issuance of Common Stock. The Warrant
Exercise Price shall be subject to adjustment from time to time as follows:
(a) If the Corporation shall issue, after the date hereof, any
Additional Stock (as hereinafter defined) without consideration or for a
consideration per share less than the Warrant Exercise Price in effect
immediately prior to the issuance of such Additional Stock, the Warrant
Exercise Price in effect immediately prior to each such issuance shall
forthwith be reduced to an amount equal to such lower purchase price for
such Additional Stock (or in the case of options and similar securities,
the consideration received for the option and to be received upon exercise
of such option), or, if for no consideration, $.01.
(b) "Additional Stock" as used herein shall mean any shares of
Common Stock issued (or deemed to have been issued) or rights, warrants,
options or other exchangeable securities convertible into Common Stock
(including shares of Common Stock held in the Corporation's treasury) by
the Corporation after the date hereof; provided, that, the term
"Additional Stock" shall not include any Common Stock, or any rights,
warrants, options or other exchangeable securities convertible into Common
Stock, presently existing or hereafter issued or deemed issued under the
Corporation's existing stock option and employee benefit programs.
(c) Except to the limited extent provided for in paragraph (h), no
adjustment of the Warrant Exercise Price pursuant to this Section 4 shall
have the effect of increasing the Warrant Exercise Price above the Warrant
Exercise Price in effect immediately prior to such adjustment.
(d) No adjustment in the Warrant Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least
one cent ($.0l) in the Warrant Exercise Price; provided, however, that any
adjustments which by reason of this paragraph (d) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment required to be made hereunder. All calculations under this
paragraph (d) shall be made to the nearest one cent ($.01). In the case of
the issuance of Common Stock for cash, the consideration shall be deemed
to be the amount of cash paid therefor before deducting any reasonable
discounts, commissions or other expenses allowed, paid or incurred by the
Corporation for any underwriting or otherwise in connection with the
issuance and sale thereof.
(e) In the case of the issuance of Common Stock for a consideration
in whole or in part other than cash, the consideration other than cash
shall be deemed to be the fair value thereof as determined in good faith
by the Board of Directors.
(f) In the case of the issuance (whether before, on or after the
date hereof) of options to purchase or rights to subscribe for Common
Stock, securities by their terms convertible into or exchangeable for
Common Stock or options to purchase or rights to
subscribe for such convertible or exchangeable securities, the following
provisions shall apply for all purposes of this Section 4:
(i) The aggregate maximum number of shares of Common Stock
deliverable upon exercise (assuming the satisfaction of any
conditions to exercisability including, without limitation, the
passage of time, but without taking into account potential
antidilution adjustments) of such options to purchase or rights to
subscribe for Common Stock shall be deemed to have been issued at
the time such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided in
paragraph (e) and this paragraph (f)), if any, received by the
Corporation upon the issuance of such options or rights plus the
minimum exercise price provided in such options or rights (without
taking into account potential antidilution adjustments) for the
Common Stock covered thereby.
(ii) The aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange (assuming the
satisfaction of any conditions to convertibility or exchangeability
including, without limitation, the passage of time, but without
taking into account potential antidilution adjustments) for any such
convertible or exchangeable securities or upon the exercise of
options to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange
thereof, shall be deemed to have been issued at the time such
securities were issued or such options or rights were issued and for
a consideration equal to the consideration, if any, received by the
Corporation for any such securities and related options or rights
(excluding any cash received on account of accrued interest or
accrued dividends), plus the minimum additional consideration, if
any, to be received by the Corporation (without taking into account
potential antidilution adjustments) upon the conversion or exchange
of such securities or the exercise of any related options or rights
(the consideration in each case to be determined in the manner
provided in paragraph (e) and this paragraph (f)).
(iii) In the event of any change in the number of shares of
Common Stock deliverable or in the consideration payable to the
Corporation upon exercise of such options or rights or upon
conversion of or in exchange for such convertible or exchangeable
securities, the Warrant Exercise Price, to the extent in any way
affected by or computed using such options, rights or securities,
shall be recomputed to reflect such change, but no further
adjustment shall be made for the actual issuance of Common Stock or
any payment of such consideration upon the exercise of any such
options or rights or the conversion or exchange of such securities.
(iv) Upon the expiration of any such options or rights, the
termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or
exchangeable securities, the Warrant Exercise Price, to the extent
in any way affected by or computed using such options, rights or
securities or options or rights related to such securities, shall be
recomputed to reflect the issuance of only the number of shares of
Common Stock (and convertible or exchangeable securities which
remain in effect) actually issued upon the exercise of such options
or rights, upon the conversion or exchange of such securities or
upon the exercise of the options or rights related to such
securities.
(v) The number of shares of Common Stock deemed issued and the
consideration deemed paid therefor pursuant to subparagraphs (i) and
(ii) shall be appropriately adjusted to reflect any change,
termination or expiration of the type described in either
subparagraph (iii) or (iv).
(g) In the event the Corporation should at any time or from time to
time after the date hereof fix a record date for the effectuation of a
split or subdivision of the outstanding shares of Common Stock or the
determination of Holders of Common Stock entitled to receive a dividend or
distribution payable in additional shares of Common Stock or Common Stock
equivalents without payment of by any such Holder for the additional
shares of Common Stock or the Common Stock equivalents (including the
additional shares of Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the
Warrant Exercise Price shall be appropriately decreased so that the number
of shares of Common Stock issuable upon exercise of the Warrants shall be
increased in proportion to such increase in the aggregate of shares of
Common Stock outstanding and those issuable with respect to such Common
Stock equivalents.
(h) If the number of shares of Common Stock outstanding at any time
after the date hereof is decreased by a combination of the outstanding
shares of Common Stock, then, following the record date of such
combination, the Warrant Exercise Price shall be appropriately increased
so that the number of shares of Common Stock issuable upon exercise of the
Warrants shall be decreased in proportion to such decrease in outstanding
shares.
(i) In case the Corporation shall take a record of the Holders of
its Common Stock for the purpose of entitling them (i) to receive a
dividend or other distribution payable in Common Stock, options or
convertible securities convertible or exchangeable into Common Stock, or
(ii) to subscribe for or purchase Common Stock, options or securities
convertible or exchangeable into Common Stock, then such record date shall
be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be,
provided that such shares of Common Stock, options or securities
convertible or exchangeable into Common Stock shall in fact have been
issued or sold.
(j) If at any time or from time to time there shall be a
recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere
in this Section 4), provision shall be made so that the
Holders of the Warrants shall thereafter be entitled to receive upon the
basis and the terms and conditions specified herein and in lieu of the
shares of Common Stock immediately theretofore receivable upon exercise of
such Warrants the number of shares of stock or other securities or
property of the Corporation or otherwise, to which a Holder of Common
Stock deliverable upon conversion would have been entitled on such
recapitalization. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Section 4 with respect to the
rights of the Holders of the Warrants after the recapitalization to the
end that the provisions of this Section 4 (including adjustment of the
Warrant Exercise Price then in effect and the number of shares issuable
upon exercise of the Warrants) shall be applicable after that event as
nearly equivalent as may be practicable.
(k) The Corporation will not, by amendment of its Certificate of
Incorporation or through any reorganization, recapitalization, exchange or
conversion of Common Stock or other securities, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action dilute the voting power or rights to which the
Holder is or would be entitled under this Warrant or any Shares which it
may be entitled to purchase hereunder, or avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but will at all times in good faith assist
in the carrying out of all the provisions of this Section 4 and in the
taking of all such action as may be necessary or appropriate in order to
protect the exercise rights of the Holders of the Warrants against
impairment.
(l) If any capital reorganization or reclassification of the capital
stock of the Corporation, or consolidation or merger of the Corporation
with and into another corporation, or the sale of all or substantially all
of its assets to another corporation, shall be effected while this Warrant
is outstanding in such a manner that Holders of shares of Common Stock
shall be entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, as a condition of such
reorganization or reclassification, consolidation, merger or sale, lawful
and adequate provision shall be made whereby each Holder shall thereafter
have the right to receive upon the basis and upon the terms and conditions
specified herein and in lieu of the shares of Common Stock immediately
theretofore receivable upon exercise of such Warrant, such shares of
stock, securities or assets as may be issued or payable with respect to or
in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such Common Stock immediately theretofore so
receivable had such reorganization or reclassification, consolidation,
merger or sale not taken place, and in such case appropriate provision
shall be made with respect to the rights and interests of the Holders of
the Warrants to the end that the provisions hereof (including, without
limitation, provisions for adjustment of the Warrant Exercise Price and of
the number of shares of Common Stock issuable upon thereof) shall
thereafter be applicable, as nearly as may be possible, in relation to any
shares of stock, securities or assets thereafter deliverable upon the
exercise of the Warrants. The Corporation shall not effect any such
consolidation, merger or sale unless prior thereto or simultaneously
therewith the survivor or successor corporation (if other than the
Corporation) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument
executed and
mailed or delivered to each Holder of Warrants, the obligation to deliver
to such Holder of Warrants such shares of stock, securities or assets as,
in accordance with the foregoing provisions, such Holder of Warrants may
be entitled to receive, and containing the express assumption of such
successor corporation of the due and punctual performance and observance
of every provision of the Warrants to be performed and observed by the
Corporation and of all liabilities and obligations of the Corporation
hereunder with respect to the Warrants.
(m) Upon the occurrence of each adjustment or readjustment of the
Warrant Exercise Price pursuant to this Section 4, the Corporation, at its
expense, shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to each Holder of
Warrants a statement, setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is
based. The Corporation shall, upon the written request at any time of any
Holder of Warrants, furnish or cause to be furnished to such Holder a like
certificate setting forth (i) such adjustment and readjustment, (ii) the
Warrant Exercise Price at the time in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property which at
the time would be received upon the exercise of such Warrants.
(n) The Corporation will at all times reserve and keep available out
of its authorized Common Stock or its treasury shares, solely for the
purpose of issue upon the exercise of this Warrant as herein provided,
such number of shares of Common stock as shall then be issuable upon the
exercise of this Warrant. The Corporation covenants that all shares of
Common Stock which shall be so issued shall be duly and validly issued and
fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof, and, without limiting the generality of
the foregoing, the Corporation covenants that it will from time to time
take all such action as may be requisite to assure that the par value per
share of the Common Stock is at all times equal to or less than the
effective Warrant Exercise Price. The Corporation will take all such
action as may be necessary to assure that all such shares of Common Stock
may be so issued without violation of any applicable law or regulation, or
of any requirements of any national securities exchange upon which the
Common Stock of the Corporation may be listed. The Corporation will not
take any action which results in any adjustment of the Warrant Exercise
Price if the total number of shares of Common Stock issued and issuable
after such action upon exercise of the Warrants would exceed the total
number of shares of Common Stock then authorized by the Corporation's
Certificate of Incorporation. The Corporation has not granted and will not
grant any right of first refusal with respect to shares issuable upon
exercise of this Warrant, and there are no preemptive rights associated
with such shares.
(o) The issuance of certificates for shares of Common Stock upon
exercise of the Warrants shall be made without charge to the Holders of
such Warrants for any issuance tax in respect thereof provided that the
Corporation shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of any Holder of the Warrants.
(p) The Corporation will at no time close its transfer books against
the transfer of the shares of Common Stock issued or issuable upon the
exercise of this Warrant in any manner which interferes with the timely
exercise of this Warrant.
(q) As used herein the term "Common Stock" shall mean and include
the Common Stock, $.01 par value, of the Corporation as presently
authorized _____________________, and also any capital stock of any class
of the Corporation hereinafter authorized which shall not be limited to a
fixed sum or percentage in respect of the rights of the Holders thereof to
participate in dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, and any other common stock or such capital stock arising from
any reorganization, reclassification, exchange, consideration or merger,
in order to maintain the voting and other rights of Holders relative to
all other common or capital stock of the Corporation or any successor. As
of the date hereof, 17,127,392 shares of Common Stock are outstanding, all
of which have been duly authorized and validly issued and are fully paid
and nonassessable. Except as set forth on Schedule I hereto, there are no
rights, warrants, options or other exchangeable securities convertible
into Common Stock (including shares of Common Stock held in the
Corporation's treasury).
Section 5. Notices of Record Dates. In the event of
(1) any taking by the Corporation of a record of the Holders of any
class of securities for the purpose of determining the Holders thereof who
are entitled to receive any dividend or other distribution, or any right
to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
or
(2) any capital reorganization of the corporation, any
reclassification or recapitalization of the capital stock of the
Corporation or any transfer of all or substantially all the assets of the
Corporation to or consolidation or merger of the Corporation with or into
any other corporation, or
(3) any voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation,
then and in each such event the Corporation will give notice to the Holder of
this Warrant specifying (i) the date on which any such record is to be taken for
the purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right, and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the Holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 30 days and not more than 90
days prior to the date therein specified.
Section 6. Registration Rights. The rights of the Holder hereof with
respect to the registration under the Securities Act of the shares of Common
stock issuable upon the exercise of this Warrant are set forth in the
Registration Rights Agreement, dated as of May 1, 1998, between the Corporation
and XXXXXXXXX.
Section 7. No Stockholder Rights or Liabilities. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights as a stockholder
of the Corporation. No provision hereof, in the absence of affirmative action by
the Holder hereof to purchase shares of Common Stock, and no mere enumeration
herein of the rights or privileges of the Holder hereof, shall give rise to any
liability of such Holder for the Warrant Exercise Price or as a stockholder of
the Corporation, whether such liability is asserted by the Corporation or by
creditors of the Corporation.
Section 8. Investment Representation and Legend. The Holder, by acceptance
of the Warrant, represents and warrants to the Corporation that it is acquiring
the Warrant and the shares of Common Stock (or other securities) issuable upon
the exercise hereof for investment purposes only and not with a view towards the
resale or other distribution thereof and agrees that the Corporation may affix
upon this Warrant the following legend:
"Neither this Warrant nor the shares issuable upon the exercise of
this Warrant have been registered under the Securities Act of 1933, as
amended, or any applicable state securities laws and may not be sold or
transferred in the absence of registration or an exemption therefrom under
said laws."
The Holder, by acceptance of this Warrant, further agrees that the Corporation
may affix the following legend to certificates for shares of Common Stock issued
upon exercise of this Warrant:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS THEY HAVE BEEN REGISTERED UNDER SAID LAWS OR UNLESS IN THE OPINION
OF COUNSEL SATISFACTORY TO THE CORPORATION AN EXEMPTION FROM REGISTRATION
IS AVAILABLE."
Section 9. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is lost, stolen, mutilated or destroyed, the Corporation may, on such terms as
to indemnity or otherwise as it may in its discretion reasonably impose (which
shall, in the case of a mutilated Warrant, include the surrender thereof), issue
a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Corporation, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 10. Notices. All notices, requests and other communications
required or permitted to be given or delivered hereunder shall be in writing,
and shall be delivered, or shall be sent by certified or registered mail,
postage prepaid and addressed, if to the Holder to such Holder at the address
shown on such Holder's Warrant or Warrant Shares or at such other address as
shall have been furnished to the Corporation by notice from such Holder. All
notices, requests and other communications required or permitted to be given or
delivered hereunder shall be in writing, and shall be delivered, or shall be
sent by certified or registered mail, postage prepaid and addressed to the
Corporation at such address as shall have been furnished to the Holder by notice
from the Corporation.
Section 11. Transfers. XXXXXXXXX or any transferee or Holder of this
Warrant may freely transfer its interests in all or any part of this Warrant at
any time, but prior to the date three years from the date of this Warrant, no
transfers of this Warrant may be made except if the transferee is an affiliate
of the transferor, or if the Corporation shall otherwise consent.
IN WITNESS WHEREOF, IVC INDUSTRIES, INC. has executed this Warrant on and
as of the day and year first above written.
Dated: As of May 1, 1998 IVC INDUSTRIES, INC.
By: /s/ X. Xxxx Xxxxxxxxxx
Name:
Title:
SUBSCRIPTION AGREEMENT
To:
Dated:
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to subscribe for and purchase [_____] shares of Common
Stock covered by such Warrant, and makes payment herewith in full therefor at
the price per share provided by such Warrant [specify method of payment as
provided in the Warrant].
Signature
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Address
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EXHIBIT A
Example A: At October 31, 1998
Actual XXXXXXXXX Prior Twelve Months: $20 million
Less Base Period XXXXXXXXXXXXXXXXXXXX: $24 million
Shortfall $4 million
Warrant Allows the Purchase of 2,000,000 Shares at $2.00
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Example B: At April 30, 1999
Actual XXXXXXXXX Prior Twelve Months: $25 million
Less Base Period XXXXXXXXXXXXXXXXXXXX: $24 million
Overage $1 million
Overage Shares equal 500,000 shares (at $2.00)
Thus, starting with the Example A balance, the new Warrant balance equals
1,500,000 Shares as of April 30, 1999
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Example C: At October 31, 1999
Actual XXXXXXXXX Prior Twelve Months: $28 million
Less Base Period XXXXXXXXXXXXXXXXXXXX: $24 million
Period Overage $4 million
Of Period Overage, $3,000,000, or 1,500,000 Shares (at $2.00), is applied to
Warrant balance, bringing the cumulative Warrant balance to zero.
Therefore, Period Overage $4 million
Less Period Overage applied $3 million
Surplus $1 million
Surplus Carried Forward to the next period: 50% of $1 million or
$0.5 million
Overage Shares of 250,000 Shares (at $2.00) are carried forward to next period.
