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EXHIBIT 10.9
THIS AMENDED AND REPLACEMENT WARRANT AND THE SECURITIES ISSUABLE UPON THE
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SUCH ACT.
No. W -1 AMENDED AND
REPLACEMENT WARRANT
TO PURCHASE COMMON STOCK
ISSUED: August 27, 2001
Void After: May 7, 2007
NATURE'S SUNSHINE PRODUCTS, INC.
This Amended and Replacement Warrant ("Warrant) is issued to Cetalon
Corporation or its registered assigns ("Holder") by Nature's Sunshine Products,
Inc., a Utah corporation (the "Company"), as of August 27, 2001 (the "Warrant
Issue Date") to amend and replace that certain warrant issued to Holder on May
8, 2001 ("Previous Warrant"). The Previous Warrant is being returned by Holder
and replaced by this Warrant to purchase a reduced number of shares in
consideration of amounts advanced to Holder pursuant to the terms of that
certain Convertible Promissory Note issued by Holder to the Company (the "Note")
as of an even date herewith. This Warrant, like the Previous Warrant, is issued
in connection with the strategic relationship established between Holder and the
Company through the execution of a certain Exclusive Manufacturing Agreement by
and between Holder and Innovative Botanical Solutions, Inc., an affiliate of the
Company dated as of May 8, 2001 (the "Manufacturing Agreement"). The Company
instructs Holder to return the original Previous Warrant to the Company marked
"Cancelled" in exchange for the issuance of this Warrant and the Note.
1. PURCHASE OF SHARES. Subject to the terms and conditions hereinafter set
forth and set forth in the Purchase Agreement, the Holder is entitled, upon
surrender of this Warrant at the principal office of the Company (or at such
other place as the Company shall notify the holder hereof in writing), to
purchase from the Company up to 649,884 fully paid and nonassessable shares of
Common Stock of the Company, as more fully described below. The shares of Common
Stock issuable pursuant to this Section 1 (the "Shares") shall also be subject
to adjustment pursuant to Section 7 hereof.
2. EXERCISE PRICE. The purchase price for the Shares shall be $11.125 per
share. Such price shall be subject to adjustment pursuant to Section 7 hereof
(such price, as adjusted from time to time, is herein referred to as the
"Exercise Price").
3. EXERCISE PERIOD. Each year beginning on May 8, 2003, twenty-five percent
(25%) of the Shares ("Annual Percentage") shall become exercisable; provided,
however, that if the Holder has not met a Minimum Requirement set forth on
Exhibit C to the Manufacturing Agreement then no Shares will become exercisable
under this Warrant and the Annual Percentage for the year that such minimum
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requirement was not met shall permanently lapse. This Warrant shall remain so
exercisable until the earlier of (i) 5:00 p.m. on May 3, 2007, or (ii) the
termination of the Manufacturing Agreement for any reason or no reason;
provided, however, that in the event of (a) the closing of the Company's sale or
transfer of all or substantially all of its assets, or (b) the closing of the
acquisition of the Company by another entity by means of merger, consolidation
or other transaction or series of related transactions, resulting in the
exchange of the outstanding shares of the Company's capital stock such that the
stockholders of the Company prior to such transaction own, directly or
indirectly, less than 50% of the voting power of the surviving entity, this
Warrant shall, on the date of such event, no longer be exercisable and become
null and void. In the event of a proposed transaction of the kind described
above, the Company shall notify the holder of the Warrant at least fifteen (15)
days prior to the consummation of such event or transaction.
4. METHOD OF EXERCISE. While this Warrant remains outstanding and exercisable
in accordance with Section 3 above, the Holder may exercise, in whole or in
part, the purchase rights evidenced hereby. Such exercise shall be effected by:
(a) the surrender of the Warrant, together with a duly executed copy of
the form of Notice of Election attached hereto, to the Secretary of the Company
at its principal offices; and
(b) the payment to the Company of an amount equal to the aggregate
Exercise Price for the number of Shares being purchased.
5. CERTIFICATES FOR SHARES. Upon the exercise of the purchase rights evidenced
by this Warrant, one or more certificates for the number of Shares so purchased
shall be issued as soon as practicable thereafter (with appropriate restrictive
legends, if applicable), and in any event within thirty (30) days of the
delivery of the subscription notice.
6. ISSUANCE OF SHARES. The Company covenants that the Shares, when issued
pursuant to the exercise of this Warrant, will be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens, and charges with respect
to the issuance thereof.
7. RESTRICTIONS ON TRANSFER. The Shares shall initially be subject to a
transfer restriction (the "Transfer Restriction"). Except as provided in this
Section 7, the undersigned shall not transfer, assign, encumber or otherwise
dispose of any of the Shares, except that Holder may transfer the Shares to an
individual or entity controlling, controlled by or under the common control with
Holder. The Transfer Restriction shall lapse on the fifth anniversary of the
date of this Agreement.
8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number of and kind
of securities purchasable upon exercise of this Warrant and the Exercise Price
shall be subject to adjustment from time to time as follows:
(a) SUBDIVISIONS, COMBINATIONS AND OTHER ISSUANCES. If the Company
shall at any time prior to the expiration of this Warrant subdivide its Common
Stock, by split-up or otherwise, or combine its Common Stock, or issue
additional shares of its Common Stock as a dividend with respect to any shares
of its Common Stock, the number of Shares issuable on the exercise of this
Warrant shall forthwith be proportionately increased in the case of a
subdivision or stock dividend, or proportionately decreased in the case of a
combination. Appropriate adjustments shall also be made to the purchase price
payable per share, but the aggregate purchase price payable for the total number
of Shares purchasable under this Warrant (as adjusted) shall remain the same.
Any adjustment under this Section 8(a) shall become effective at the close of
business on the date the subdivision or combination becomes effective, or as of
the record date of such dividend, or in the event that no record date is fixed,
upon the making of such dividend.
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(b) RECLASSIFICATION, REORGANIZATION AND CONSOLIDATION. In case of any
reclassification, capital reorganization, or change in the Common Stock of the
Company (other than as a result of a subdivision, combination, or stock dividend
provided for in Section 8(a) above), then, as a condition of such
reclassification, reorganization, or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the Holder, so that the Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a total price equal
to that payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a holder of the same number of
shares of Common Stock as were purchasable by the Holder immediately prior to
such reclassification, reorganization, or change. In any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
so that the provisions hereof shall thereafter be applicable with respect to any
shares of stock or other securities and property deliverable upon exercise
hereof, and appropriate adjustments shall be made to the purchase price per
share payable hereunder, provided the aggregate purchase price shall remain the
same.
(c) NOTICE OF ADJUSTMENT. When any adjustment is required to be made in
the number or kind of shares purchasable upon exercise of the Warrant, or in the
Warrant Price, the Company shall promptly notify the holder of such event and of
the number of shares of Common Stock or other securities or property thereafter
purchasable upon exercise of this Warrant.
9. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant, but in lieu
of such fractional shares the Company shall make a cash payment therefor on the
basis of the Exercise Price then in effect.
10. NO STOCKHOLDER RIGHTS. Prior to exercise of this Warrant, the Holder shall
not be entitled to any rights of a stockholder with respect to the Shares,
including (without limitation) the right to vote such Shares, receive dividends
or other distributions thereon, exercise preemptive rights or be notified of
stockholder meetings, and such holder shall not be entitled to any notice or
other communication concerning the business or affairs of the Company. However,
nothing in this Section 9 shall limit the right of the Holder to be provided the
Notices required under this Warrant or the Purchase Agreement.
11. TRANSFERS OF WARRANT. Subject to compliance with applicable federal and
state securities laws, this Warrant and all rights hereunder are transferable in
whole or in part by the Holder to any person or entity upon written notice to
the Company. The transfer shall be recorded on the books of the Company upon the
surrender of this Warrant, properly endorsed, to the Company at its principal
offices, and the payment to the Company of all transfer taxes and other
governmental charges imposed on such transfer. In the event of a partial
transfer, the Company shall issue to the holders one or more appropriate new
warrants.
12. SUCCESSORS AND ASSIGNS. The terms and provisions of this Warrant and the
Purchase Agreement shall inure to the benefit of, and be binding upon, the
Company and the Holders hereof and their respective successors and assigns.
13. AMENDMENTS AND WAIVERS. Any term of this Warrant may be amended and the
observance of any term of this Warrant may be waived (either generally or in a
particular instance and either retroactively or prospectively), with the written
consent of the Company and the Holder.
14. INVESTMENT INTENT. By accepting this Warrant, the Holder represents that
it is acquiring this Warrant for investment and not with a view to, or for sale
in connection with, any distribution thereof.
15. NOTICES. All notices required under this Warrant and shall be deemed to
have been given or made for all purposes (i) upon personal delivery, (ii) upon
confirmation receipt that the communication was successfully sent to the
applicable number if sent by facsimile; (iii) one day after being sent, when
sent by
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professional overnight courier service, or (iv) five days after posting when
sent by registered or certified mail. Notices to the Company shall be sent to
the principal office of the Company (or at such other place as the Company shall
notify the Holder hereof in writing). Notices to the Holder shall be sent to the
address of the Holder on the books of the Company (or at such other place as the
Holder shall notify the Company hereof in writing).
16. ATTORNEYS' FEES. If any action of law or equity is necessary to enforce or
interpret the terms of this Warrant, the prevailing party shall be entitled to
its reasonable attorneys' fees, costs and disbursements in addition to any other
relief to which it may be entitled.
17. CAPTIONS. The section and subsection headings of this Warrant are inserted
for convenience only and shall not constitute a part of this Warrant in
construing or interpreting any provision hereof.
18. GOVERNING LAW. This Warrant shall be governed by the laws of the State of
Utah as applied to agreements among residents made and to be performed entirely
within the State of Utah.
IN WITNESS WHEREOF, caused this Warrant to be executed by an officer thereunto
duly authorized.
________________________________
By: ____________________________
Name and Title
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NOTICE OF EXERCISE
To: [CORPORATION NAME]
The undersigned hereby elects to purchase _______________ shares of Common
Stock of Nature's Sunshine Products, Inc. pursuant to the terms of the attached
Warrant and payment of the Exercise Price per share required under such Warrant
accompanies this notice.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.
WARRANTHOLDER:
_______________________________
By: ___________________________
[NAME]
Address: _______________________________
_______________________________
Date: ____________________________________
Name in which shares should be registered:
__________________________________________
