Exhibit 10.5
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE
STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
INTEGRATED BIOPHARMA, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.: _______
Number of Shares: _________
Date of Issuance: December 22, 2004 ("Issuance Date")
Integrated BioPharma, Inc., a Delaware corporation (the "Company"), hereby
certifies that, for Ten United States Dollars ($10) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Griffin Securities, Inc., the registered holder hereof or its permitted assigns
(the "Holder"), is entitled, subject to the terms set forth below, to purchase
from the Company, at the Exercise Price (as defined below) then in effect, upon
surrender of this Warrant to Purchase Common Stock (including all Warrants to
Purchase Common Stock issued in exchange, transfer or replacement hereof, the
"Warrant"), at any time or times on or after the date hereof, but not after
11:59 P.M., New York Time, on the Expiration Date (as defined below),
___________ thousand (_______) fully paid nonassessable shares of Common Stock
(as defined below) (the "Warrant Shares"). Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth in Section
15.
1. EXERCISE OF WARRANT.
(a) Mechanics of Exercise. Subject to the terms and conditions
hereof, this Warrant may be exercised by the Holder commencing
on the date hereof and continuing until the Expiration Date,
in whole or in part, by (i) delivery of a written notice, in
the form attached hereto as Exhibit A (the "Exercise Notice"),
of the Holder's election to exercise this Warrant and (ii)
payment to the Company of an amount equal to the applicable
Exercise Price multiplied by the number of Warrant Shares as
to which this Warrant is being exercised (the "Aggregate
Exercise Price") in cash or by wire transfer of immediately
available funds. The Holder shall not be required to deliver
the original Warrant in order to effect an exercise hereunder.
Execution and delivery of the Exercise Notice with respect to
less than all of the Warrant Shares shall have the same effect
as cancellation of the original Warrant and issuance of a new
Warrant evidencing the right to purchase the remaining number
of Warrant Shares. Promptly following the date on which the
Company has received each of the Exercise Notice and the
Aggregate Exercise Price (the "Exercise Delivery Documents"),
the Company shall transmit by facsimile an acknowledgment of
confirmation of receipt of the Exercise Delivery Documents to
the Holder and the Company's transfer agent (the "Transfer
Agent"). On or before the fourth Business Day following the
date on which the Company has received all of the Exercise
Delivery Documents (the "Share Delivery Date"), the Company
shall (X) provided that the Transfer Agent is participating in
The Depository Trust Company ("DTC") Fast Automated Securities
Transfer Program and that the Common Stock is eligible, upon
the request of the Holder, credit such aggregate number of
shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder's or its designee's
balance account with DTC through its Deposit Withdrawal Agent
Commission system, or (Y) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer
Program, issue and dispatch by overnight courier to the
address as specified in the Exercise Notice, a certificate,
registered in the name of the Holder or its designee, for the
number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise. Upon delivery of the
Exercise Notice and Aggregate Exercise Price referred to in
clause (ii) above, the Holder shall be deemed for all
corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the
certificates evidencing such Warrant Shares. If this Warrant
is submitted in connection with any exercise pursuant to this
Section 1(a) and the number of Warrant Shares represented by
this Warrant submitted for exercise is greater than the number
of Warrant Shares being acquired upon an exercise, then the
Company shall as soon as practicable following any exercise
and at its own expense, issue a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the
number of Warrant Shares purchasable immediately prior to such
exercise under this Warrant, less the number of Warrant Shares
with respect to which this Warrant is exercised. No fractional
shares of Common Stock are to be issued upon the exercise of
this Warrant, but rather the number of shares of Common Stock
to be issued shall be rounded up to the nearest whole number.
The Company shall pay any and all taxes, including without
limitation, all documentary stamp, transfer or similar taxes,
or other incidental expense that may be payable with respect
to the issuance and delivery of Warrant Shares upon exercise
of this Warrant.
(b) Exercise Price. For purposes of this Warrant, "Exercise Price"
means $14.00, subject to adjustment as provided herein.
(c) Company's Failure to Timely Deliver Securities. (i) In
addition to any other rights available to a Holder, if the
Company fails to deliver or cause to be delivered to the
Holder a certificate representing Warrant Shares by the
Business Day after the date on which delivery of such
certificate is required by this Warrant, and if on or after
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such Business Day the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares
that the Holder anticipated receiving from the Company (a
"Buy-In"), then the Company shall, within three Business Days
after the Holder's request and in the Holder's discretion,
either (i) pay cash to the Holder in an amount equal to the
Holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so
purchased (the "Buy-In Price"), at which point the Company's
obligation to deliver such certificate (and to issue such
Common Stock) shall terminate, or (ii) promptly honor its
obligation to deliver to the Holder a certificate or
certificates representing such Common Stock and pay cash to
the Holder in an amount equal to the excess (if any) of the
Buy-In Price over the product of (A) such number of shares of
Common Stock, times (B) the Closing Price on the Exercise
Date.
(ii) If the provisions of clause (i) above shall not apply, if
the Company shall fail for any reason or for no reason to
issue to the Holder within five Business Days of the Exercise
Date, a certificate for the number of shares of Common Stock
to which the Holder is entitled or to credit the
Holder's balance account with DTC for such number of shares
of Common Stock to which the Holder is entitled upon the
Holder's exercise of this Warrant, the Company shall pay
as additional damages in cash to such Holder on each day
after such tenth Business Day that the issuance of
such Common Stock is not timely effected an amount equal to
1.0% of the product of (A) the sum of the number of shares of
Common Stock not issued to the Holder on a timely basis and
to which the Holder is entitled and (B) the Closing Sale
Price of the Common Stock on the trading day immediately
preceding the last possible date which the Company could
have issued such Common Stock to the Holder without violating
Section 1(a).
(iii) If within fifteen (15) Business Days of the Exercise Date,
the Company fails to deliver a new Warrant to the Holder for
the number of shares of Common Stock to which such Holder
is entitled, the Company shall pay as additional damages
in cash to such Holder on the day after such fifteenth
Business Day that such delivery of such new Warrant is not
timely effected an amount equal to 1.0% of the product of
(A) the number of shares of Common Stock represented by the
portion of this Warrant which is not being exercised and
(B) the Closing Sale Price of the Common Stock on the trading
day immediately preceding the last possible date which the
Company could have issued such Warrant to the holder without
violating Section 1(a).
(d) Disputes. In the case of a dispute as to the determination of
the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall promptly issue to the Holder
the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 12.
(e) Exercise at the Company's Election. The Company shall have the
right, in its sole discretion, to require that all, but not
less than all, of the outstanding Warrants be exercised (the
"Company's Exercise Election") at the applicable Exercise
Price; provided that the Conditions to Exercise at the
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Company's Election (as set forth below) are satisfied as of
the Company's Election Exercise Date or waived by the holders
of the Warrants then outstanding; provided, however, that the
Company may not deliver and effect more than one Company's
Exercise Election Notice hereunder. The Company shall exercise
its right to Company's Exercise Election by providing each
holder of Warrants written notice ("Company's Exercise
Election Notice") by facsimile and overnight courier. The date
on which each of such holders of the Warrants actually
receives the Company's Exercise Election Notice is referred to
herein as the "Company's Exercise Election Notice Date." The
Company's Exercise Election Notice shall indicate the date
selected by the Company for exercise (the "Company's Election
Exercise Date"), which date shall be not less than 20 Business
Days or more than 60 Business Days after the Company's
Exercise Election Notice Date. Subject to the satisfaction of
all the conditions of this Section 1(e), on the Company's
Election Exercise Date each holder of Warrants to be exercised
will be deemed to have submitted an Exercise Notice in
accordance with Section 1(a) for all of such holder's Warrants
(subject to this Section 1(e)). "Conditions to Exercise At The
Company's Election" means the following conditions: (i)
satisfaction of the Equity Conditions (as defined in the
Company's Certificate of Designations, Preferences and Rights
of Series B Redeemable Convertible Preferred Stock (the
"Certificate of Designations")) with the term Company's
Conversion Election Notice being replaced for purposes hereof
by Company's Exercise; Company's Election Conversion Date
being replaced for purposes hereof by Company's Election
Exercise Date; and Company's Conversion Election Notice Date
being replaced for purposes hereof with Company's Exercise
Election Notice Date; and (ii) the Weighted Average Price of
the Common Stock for each of the twenty (20) consecutive
trading days immediately prior to the date of the Company's
Exercise Election Notice is at or above $20.00 (subject to
adjustment for stock splits, stock dividends,
recapitalizations, combinations, reverse stock splits or other
similar events). Notwithstanding the above, any holder of
Warrants may exercise such Warrants into Common Stock pursuant
to Section 1(a) on or prior to the date immediately preceding
the Company's Election Exercise Date.
2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The
Exercise Price and the number of Warrant Shares shall be
adjusted from time to time as follows:
(a) Adjustment upon Issuance of Common Stock. If and whenever on
or after the date of issuance of this Warrant, the Company
issues or sells, or in accordance with this Section 2(a) is
deemed to have issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock
owned or held by or for the account of the Company, but
excluding Excluded Securities, as defined in the Certificate
of Designations) for a consideration per share (the "New
Issuance Price") less than a price equal to the Exercise Price
in effect (the "Applicable Price") immediately prior to such
issue or sale or deemed issuance or sale (the foregoing a
"Dilutive Issuance"), then immediately after such Dilutive
Issuance, the Exercise Price then in effect shall be reduced
to an amount equal to the product of (x) the Exercise Price in
effect immediately prior to such Dilutive Issuance and (y) the
quotient of (1) the sum of (I) the product of the Applicable
Price and the number of shares of Common Stock Deemed
Outstanding immediately prior to such Dilutive Issuance and
(II) the consideration, if any, received by the Company upon
such Dilutive Issuance, divided by (2) the product of (I) the
Applicable Price multiplied by (II) the number of shares of
Common Stock Deemed Outstanding immediately after such
Dilutive Issuance. Upon each such adjustment of the Exercise
Price hereunder, the number of Warrant Shares shall be
adjusted to the number of shares of Common Stock determined by
multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of Warrant Shares acquirable
upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise
Price resulting from such adjustment. For purposes of
determining the adjusted Exercise Price under this Section
2(a), the following shall be applicable:
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(i) Issuance of Options. If the Company in any manner grants any
Options (not including Excluded Securities) and the lowest
price per share for which one share of Common Stock is
issuable upon the exercise of any such Option or upon
conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option is less
than the Applicable Price, then such share of Common Stock
shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the granting or
sale of such Option for such price per share. For purposes
of this Section 2(a)(i), the "lowest price per share for
which one share of Common Stock is issuable upon exercise of
such Options or upon conversion, exercise or exchange of
such Convertible Securities" shall be equal to the sum of
the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of
Common Stock upon the granting or sale of the Option, upon
exercise of the Option and upon conversion, exercise or
exchange of any Convertible Security issuable upon
exercise of such Option. No further adjustment of the
Exercise Price or number of Warrant Shares shall be made
upon the actual issuance of such Common Stock or of such
Convertible Securities upon the exercise of such Options
or upon the actual issuance of such Common Stock upon
conversion, exercise or exchange of such Convertible
Securities.
(ii) Issuance of Convertible Securities. If the Company in any
manner issues or sells any Convertible Securities (not
including Excluded Securities) and the lowest price per
share for which one share of Common Stock is issuable upon
the conversion, exercise or exchange thereof is less
than the Applicable Price, then such share of Common Stock
shall be deemed to be outstanding and to have been issued a
nd sold by the Company at the time of the issuance or sale
of such Convertible Securities for such price per share.
For the purposes of this Section 2(a)(ii), the "lowest
price per share for which one share of Common Stock
is issuable upon the conversion, exercise or exchange"
shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the
Company with respect to one share of Common Stock upon
the issuance or sale of the Convertible Security and
upon conversion, exercise or exchange of such Convertible
Security. No further adjustment of the Exercise Price
or number of Warrant Shares shall be made upon the actual
issuance of such Common Stock upon conversion, exercise or
exchange of such Convertible Securities, and if any such
issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustment of this Warrant
has been or is to be made pursuant to other provisions of
this Section 2(a), no further adjustment of the Exercise
Price or number of Warrant Shares shall be made by reason of
such issue or sale.
(iii) Change in Option Price or Rate of Conversion. If the purchase
price provided for in any Options (not including Excluded
Securities), the additional consideration, if any, payable
upon the issue, conversion, exercise or exchange of any
Convertible Securities (not including Excluded Securities), or
the rate at which any Convertible Securities (not including
Excluded Securities) are convertible into or exercisable or
exchangeable for Common Stock increases or decreases at any
time, the Exercise Price and the number of Warrant Shares in
effect at the time of such increase or decrease shall be
adjusted to the Exercise Price and the number of Warrant
Shares which would have been in effect at such time had such
Options or Convertible Securities provided for such increased
or decreased purchase price, additional consideration or
increased or decreased conversion rate, as the case may be, at
the time initially granted, issued or sold. For purposes of
this Section 2(a)(iii), if the terms of any Option or
Convertible Security that was outstanding as of the date of
issuance of this Warrant are increased or decreased in the
manner described in the immediately preceding sentence, then
such Option or Convertible Security and the Common Stock
deemed issuable upon exercise, conversion or exchange thereof
shall be deemed to have been issued as of the date of such
increase or decrease. No adjustment pursuant to this Section
2(a) shall be made if such adjustment would result in an
increase of the Exercise Price then in effect or a decrease in
the number of Warrant Shares.
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(iv) Calculation of Consideration Received. If any Option is issued
in connection with the issue or sale of other securities of
the Company, together comprising one integrated transaction in
which no specific consideration is allocated to such Options
by the parties thereto, the Options will be deemed to have
been issued for a consideration of $0.01. If any Common Stock,
Options or Convertible Securities are issued or sold or deemed
to have been issued or sold for cash, the consideration
received therefor will be deemed to be the net amount received
by the Company therefor. If any Common Stock, Options or
Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by
the Company will be the fair value of such consideration,
except where such consideration consists of securities, in
which case the amount of consideration received by the Company
will be the Closing Sale Price of such security on the date of
receipt. If any Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving
entity in connection with any merger in which the Company is
the surviving entity, the amount of consideration therefor
will be deemed to be the fair value of such portion of the net
assets and business of the non-surviving entity as is
attributable to such Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any
consideration other than cash or securities will be determined
in good faith by the Company.
(v) Record Date. If the Company takes a record of the holders of
Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in Common Stock,
Options or in Convertible Securities or (B) to subscribe for
or purchase Common Stock, Options or Convertible Securities,
then such record date will 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.
(b) Adjustment upon Subdivision or Combination of Common Stock. If
the Company at any time after the Issuance Date subdivides (by
any stock split, stock dividend, recapitalization or
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otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision will be
proportionately reduced and the number of Warrant Shares will
be proportionately increased. If the Company at any time on or
after the Issuance Date combines (by combination, reverse
stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number
of Warrant Shares will be proportionately decreased. Any
adjustment under this Section 2(b) shall become effective at
the close of business on the date the subdivision or
combination becomes effective.
(c) Other Events. If any event occurs of the type contemplated by
the provisions of this Section 2 but not expressly provided
for by such provisions (including, without limitation, the
granting of stock appreciation rights, phantom stock rights or
other rights with equity features), then the Company's Board
of Directors will make an appropriate adjustment in the
Exercise Price and the number of Warrant Shares so as to
protect the rights of the Holder; provided that no such
adjustment pursuant to this Section 2(c) will increase the
Exercise Price or decrease the number of Warrant Shares as
otherwise determined pursuant to this Section 2.
3. [Intentionally omitted]
4. ORGANIC CHANGE. Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or
substantially all of the Company's assets to another Person or
other transaction, in each case which is effected in such a
way that holders of Common Stock are entitled to receive
securities or assets with respect to or in exchange for Common
Stock is referred to herein as an "Organic Change." Prior to
the consummation of any (i) sale of all or substantially all
of the Company's assets to an acquiring Person or (ii) other
Organic Change following which the Company is not a surviving
entity, the Company will secure from the Person purchasing
such assets or the Person issuing the securities or providing
the assets in such Organic Change (in each case, the
"Acquiring Entity") a written agreement to deliver to the
Holder in exchange for this Warrant, a security of the
Acquiring Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant
and reasonably satisfactory to the Holder (including, an
adjusted exercise price equal to the value for the Common
Stock reflected by the terms of such consolidation, merger or
sale, and exercisable for a corresponding number of shares of
Common Stock acquirable and receivable upon exercise of this
Warrant (without regard to any limitations on the exercise of
this Warrant), if the value so reflected is less than the
Exercise Price in effect immediately prior to such
consolidation, merger or sale). In the event that an Acquiring
Entity is directly or indirectly controlled by a company or
entity whose common stock or similar equity interest is
listed, designated or quoted on a securities exchange or
trading market, the Holder may elect to treat such Person as
the Acquiring Entity for purposes of this Section 4(b). Prior
to the consummation of any other Organic Change, the Company
shall be required to make appropriate provision to insure that
the Holder thereafter will have the right to acquire and
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receive in lieu of or in addition to (as the case may be) the
shares of Common Stock immediately theretofore acquirable and
receivable upon the exercise of this Warrant (without regard
to any limitations on the exercise of this Warrant), such
shares of stock, securities or assets that would have been
issued or payable in such Organic Change with respect to or in
exchange for the number of shares of Common Stock which would
have been acquirable and receivable upon the exercise of this
Warrant as of the date of such Organic Change (without regard
to any limitations on the exercise of this Warrant).
5. NONCIRCUMVENTION. The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of
this Warrant, and will at all times in good faith carry out
all the provisions of this Warrant and take all action as may
be required to protect the rights of the Holder. Without
limiting the generality of the foregoing, the Company (i) will
not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the
Exercise Price then in effect, (ii) will take all such actions
as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, and
(iii) will, so long as this Warrant is outstanding, take all
action necessary to reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose
of effecting the exercise of this Warrant, 100% of the number
of shares of Common Stock as shall from time to time be
necessary to effect the exercise of the Warrant then
outstanding.
6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, the Holder, solely in such
Person's capacity as a holder, of this Warrant shall not be
entitled to vote or receive dividends or be deemed the holder
of shares of the Company for any purpose, nor shall anything
contained in this Warrant be construed to confer upon the
Holder, solely in such Person's capacity as a holder of this
Warrant, any of the rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate
action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends
or subscription rights, or otherwise, prior to the issuance to
the Holder of the Warrant Shares which such Person is then
entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed
as imposing any liabilities on such Holder to purchase any
securities (upon exercise of this Warrant or otherwise) or as
a stockholder of the Company, whether such liabilities are
asserted by the Company or by creditors of the Company.
Notwithstanding this Section 6, the Company will provide the
Holder with copies of the same notices and other information
given to the stockholders of the Company generally,
contemporaneously with the giving thereof to the stockholders.
7. REISSUANCE OF WARRANTS.
(a) Transfer of Warrant. The Holder may transfer this Warrant and
the rights hereunder only in accordance with applicable
securities laws. If this Warrant is to be transferred, the
Holder shall surrender this Warrant to the Company, whereupon
the Company will forthwith issue and deliver upon the order of
the Holder a new Warrant (in accordance with Section 7(d)),
registered as the Holder may request, representing the right
to purchase the number of Warrant Shares being transferred by
the Holder and, if less then the total number of Warrant
Shares then underlying this Warrant is being transferred, a
new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant
Shares not being transferred.
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(b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company
of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant, and,
in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in
customary form, in the case of mutilation, upon surrender and
cancellation of this Warrant, the Company shall execute and
deliver to the Holder a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the Warrant
Shares then underlying this Warrant.
(c) Warrant Exchangeable for Multiple Warrants. This Warrant is
exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Warrant or Warrants
(in accordance with Section 7(d)) representing in the
aggregate the right to purchase the number of Warrant Shares
then underlying this Warrant, and each such new Warrant will
represent the right to purchase such portion of such Warrant
Shares as is designated by the Holder at the time of such
surrender; provided, however, that no Warrants for fractional
shares of Common Stock shall be given.
(d) Issuance of New Warrants. Whenever the Company is required to
issue a new Warrant pursuant to the terms of this Warrant,
such new Warrant (i) shall be of like tenor with this Warrant,
(ii) shall represent, as indicated on the face of such new
Warrant, the right to purchase the Warrant Shares then
underlying this Warrant (or in the case of a new Warrant being
issued pursuant to Section 7(a) or Section 7(c), the Warrant
Shares designated by the Holder which, when added to the
number of shares of Common Stock underlying the other new
Warrants issued in connection with such issuance, does not
exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on
the face of such new Warrant which is the same as the Issuance
Date, and (iv) shall have the same rights and conditions as
this Warrant.
8. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be
deemed to have been duly made when delivered by registered or
certified mail, return receipt requested, or by overnight mail
(a) If to the registered Holder, to the address of such Holder
as shown on the books of the Company, and (b) If to the
Company, to its principal offices at 225 Long Avenue,
Hillside, New Jersey 07205 and by facsimile to (973) 926-1735,
Attn: Eric Friedman, Chief Financial Officer, with a copy by
facsimile to Greenberg Traurig, LLP, facsimile (212) 805-5552,
Attn: Andrew H. Abramowitz, Esq., or to such other address as
the Company may designate by notice to the Holder.
9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the
provisions of this Warrant may be amended and the Company may
take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company has
obtained the written consent of the Holder.
10. GOVERNING LAW. This Warrant shall be construed and enforced in
accordance with, and all questions concerning the
construction, validity, interpretation and performance of this
Warrant shall be governed by, the internal laws of the State
of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New
York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the
State of New York.
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11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be
jointly drafted by the Company and all the Purchasers and
shall not be construed against any person as the drafter
hereof. The headings of this Warrant are for convenience of
reference and shall not form part of, or affect the
interpretation of, this Warrant.
12. DISPUTE RESOLUTION. (a) In the case of a dispute as to the
arithmetic calculation of the Exercise Price or the arithmetic
calculation of the Warrant Shares, the Company shall submit
the disputed arithmetic calculations via facsimile as soon as
practicable following of receipt of the Exercise Notice giving
rise to such dispute, as the case may be, to the Holder. The
Holder and the Company shall determine the correct arithmetic
calculation after such disputed arithmetic calculation is
transmitted to such holder. If the Holder and the Company are
unable to agree upon correct arithmetic calculation of the
Exercise Price or the Warrant Shares, then the Company shall
submit via facsimile the disputed calculation to an
independent, reputable nationally recognized accounting firm
selected jointly by the Company and the Holder. The Company
shall cause the accounting firm to perform the calculation and
notify the Company and the Holder of the results no later than
ten Business Days from the time it receives the disputed
determinations or calculations. Such accounting firm's
determination shall be binding upon all parties absent
manifest error.
(b) In the case of a dispute as to the determination of fair
market value of a security to determine the Exercise Price,
the Company shall submit the disputed determination via
facsimile as soon as practicable following receipt of the
Exercise Notice giving rise to such dispute, as the case may
be, to the Holder. If the Holder and the Company are unable to
agree upon such determination or calculation of the Exercise
Price or the Warrant Shares after such disputed determination
is submitted to the Holder, then the Company shall, submit via
facsimile the disputed determination of the Exercise Price to
an independent, reputable investment bank selected jointly by
the Company and the Holder. The Company shall cause the
investment bank or the accountant, as the case may be, to
perform the determinations and notify the Company and the
Holder of the results no later than ten Business Days from the
time it receives the disputed determinations or calculations.
Such investment bank's determination shall be binding upon all
parties absent demonstrable error.
(c) The fees and expenses associated with the determinations made
by such investment bank or accountant shall be paid by the
Company.
13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
The remedies provided in this Warrant shall be cumulative and
in addition to all other remedies available under this Warrant
or the Letter Agreement dated April 28, 2004 by and between
the Company, the Holder and Beaufort International Associates
Limited (the "Letter Agreement"), at law or in equity
(including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right
of the Holder right to pursue actual damages for any failure
by the Company to comply with the terms of this Warrant. The
Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that
the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach
or threatened breach, the Holder shall be entitled, in
addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing
economic loss and without any bond or other security being
required.
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14. TRANSFER. This Warrant may be offered for sale, sold,
transferred or assigned without the consent of the Company,
subject to applicable securities laws.
15. CERTAIN DEFINITIONS. For purposes of this Warrant, the
following terms shall have the following meanings:
(a) "Bloomberg" means Bloomberg Financial Markets.
(b) "Business Day" means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York
are authorized or required by law to remain closed.
(c) "Closing Bid Price" and "Closing Sale Price" means, for any
security as of any date, the last closing bid price and last
closing trade price, respectively, for such security on the
Principal Market (as defined in the Securities Purchase
Agreement), as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does
not designate the closing bid price or the closing trade
price, as the case may be, then the last bid price or last
trade price, respectively, of such security prior to 4:00:00
p.m., New York Time, as reported by Bloomberg, or, if the
Principal Market is not the principal securities exchange or
trading market for such security, the last closing bid price
or last trade price, respectively, of such security on the
principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if
the foregoing do not apply, the last closing bid price or last
trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid
price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the
ask prices, respectively, of any market makers for such
security as reported in the "pink sheets" by Pink Sheets LLC
(formerly the National Quotation Bureau, Inc.). If the Closing
Bid Price or the Closing Sale Price cannot be calculated for a
security on a particular date on any of the foregoing bases,
the Closing Bid Price or the Closing Sale Price, as the case
may be, of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder. If
the Company and the Holder are unable to agree upon the fair
market value of such security, then such dispute shall be
resolved pursuant to Section 12. All such determinations to be
appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during the
applicable calculation period.
(d) "Common Stock" means (i) the Company's common stock, par value
$.002 per share, and (ii) any capital stock into which such
Common Stock shall have been changed or any capital stock
resulting from a reclassification of such Common Stock.
(e) "Common Stock Deemed Outstanding" means, at any given time,
the number of shares of Common Stock actually outstanding at
such time, plus the number of shares of Common Stock deemed to
be outstanding pursuant to Sections 2(a)(i)(A) and 2(a)(i)(B)
hereof regardless of whether the Options or Convertible
Securities are actually exercisable at such time, but
excluding any shares of Common Stock owned or held by or for
the account of the Company or issuable upon conversion of the
Preferred Shares.
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(f) "Convertible Securities" means any stock or securities (other
than Options) directly or indirectly convertible into or
exercisable or exchangeable for Common Stock.
(g) "Expiration Date" means the date five years after the Issuance
Date or, if such date falls on a day other than a Business Day
or on which trading does not take place on the Principal
Market (a "Holiday"), the next date that is not a Holiday.
(h) "Options" means any rights, warrants or options to subscribe
for or purchase Common Stock or Convertible Securities.
(i) "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity and a government
or any department or agency thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase
Common Stock to be duly executed as of the Issuance Date set out above.
INTEGRATED BIOPHARMA, INC.
By:
-----------------------------------
Name:
Title:
Exhibit A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
INTEGRATED BIOPHARMA, INC.
The undersigned holder hereby exercises the right to purchase
________________ of the shares of Common Stock ("Warrant Shares") of Integrated
BioPharma, Inc., a Delaware corporation (the "Company"), evidenced by the
attached Warrant to Purchase Common Stock (the "Warrant"). Capitalized terms
used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.
1. Payment of Exercise Price. The holder shall pay the Aggregate
Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.
2. Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.
Date: _____________ __, ______
Name of Registered Holder
By:
- -----------------------------------
Name:
Title: