WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK OF NATURE VISION, INCWarrant Agreement |
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Exhibit 10.2
WARRANT FOR THE PURCHASE OF
SHARES OF COMMON STOCK OF
NATURE VISION, INC.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR APPLICABLE STATE SECURITIES LAW. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF THE SECURITIES WILL BE MADE BY THE COMPANY OR ITS TRANSFER AGENT, IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
For value received, Nature Vision, Inc., a Minnesota corporation (the “ Company ”), hereby grants to Jeffrey P. Zernov , or his successors or assigns (the “ Lender ”) the right (the “ Warrant ”) to subscribe for and purchase from the Company, 50,555 of the fully paid and nonassessable shares of common stock of the Company (the “ Warrant Shares ”). The Exercise Price will initially be $.90, which is the closing price on the date of issuance of this Warrant, subject to adjustment as described herein. For purposes of this Agreement, the “ Exercise Price ” means the amount payable for exercise of the Warrant for the total number of Warrant Shares being exercised hereunder at the warrant exercise price stated in the preceding sentence. The Warrant may be exercised by the Lender at any time or from time to time from and after October 28, 2008, and on or prior to October 27, 2010.
The Warrant is subject to the following provisions, terms and conditions:
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1. |
Exercise . |
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1.1 |
Procedure . The rights represented by the Warrant may be exercised by the holder hereof, in whole or in part, by written notice of exercise delivered to the Company at least twenty (20) days prior to the intended date of exercise and by the surrender of the Warrant (properly endorsed if required) at the principal office of the Company and upon payment to the Company by cash, certified check or bank draft of the purchase price for the Warrant Shares being so purchased. The Warrant Shares so purchased will be deemed to be issued as of the close of business on the date on which the Warrant has been exercised by payment to the Company of the Exercise Price. |
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1.2 |
Cashless Exercise . In lieu of exercising the Warrant as described above, the registered holder may elect to receive Warrant Shares equal to the value (as determined below) of the Warrant (or the portion thereof being canceled) by surrender of the Warrant at the principal office of the Company, together with notice of such election (which notice will include the number of Warrant Shares being exercised hereunder), in which event the Company will issue to the registered holder a certificate representing that number of Warrant Shares equal to the quotient of the following: (a) the fair market value of the Warrant Shares being exercised (the “ Exercised Units ”) on the date of such payment or receipt by the Company of such notice (unless such notice specifies a later date, in which case it will be such specified date) (the “ Exercise Date ”) which fair market value will be determined by subtracting (A) the aggregate Exercise Price of the Exercised Units immediately prior to the exercise of the Warrant from (B) the aggregate fair market value of the Exercised Units on the Exercise Date; divided by (b) the fair market value of one Warrant Unit as of the Exercise Date. No fractional Warrant Shares will be issuable upon exercise of the Warrant, and if the number of Warrant Shares to be issued determined in accordance with the foregoing formula is other than a whole number, the Company will pay to the registered holder an amount in cash equal to the fair market value of the resulting fractional share on the Exercise Date. |
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1.3 |
Certificates . Certificates will be issued representing the applicable Warrant Shares as soon as practicable following the Exercise Date. Unless the Warrant has expired, following any exercise of the Warrant a new warrant representing the number of Warrant Shares, if any, with respect to which the Warrant has not been exercised will also be delivered to the holder hereof. No fractional Warrant Shares will be issued upon the exercise of the Warrant. |
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1.4 |
Valuation . For purposes of this Section 1, the “ fair market value ” of the Warrant Shares will be the average of the closing prices quoted on the NASDAQ system (or similar system) over the ten day period ending three days before the day the current fair market value of the securities is being determined. However, if at any time the Warrant Shares are not listed on any securities exchange or the over-the-counter market, the current fair market value of Warrant Shares will be as determined in good faith by the Company’s Board of Directors (the “ Board ”), unless the Company will become subject to a merger, acquisition or other consolidation pursuant to which the Company is not the surviving party, in which case the fair market value of Warrant Shares will be deemed to be the value received by the holders of the Company’s common stock. If the Lender and the Company disagree as to the Board’s determination of fair market value, the fair market value will be determined by arbitration under the rules of the American Arbitration Association, at the Lender’s expense. |
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Company Covenants . The Company covenants and agrees that all Warrant Shares that may be issued upon the exercise of the rights represented by the Warrant will, upon issuance, be duly authorized and issued, fully paid and nonassessable shares of common stock in the Company. The Company |
