Exhibit 5
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AGREEMENT
by and between
NUTRAMAX PRODUCTS, INC.
AND
CAPE XXX INVESTORS, L.L.C.
DATED AS OF
OCTOBER 14, 1997
AGREEMENT, dated as of October 14, 1997 (the
"Agreement"), by and between NutraMax Products, Inc., a Delaware
corporation ("the Company"), and Cape Xxx Investors L.L.C., a
Delaware limited liability company (the "Stockholder").
WHEREAS, the Stockholder purchased from the Company
846,154 shares (the "Shares") of Common Stock, par value $0.001
per share, of the Company ("Common Stock") pursuant to a Stock
Purchase Agreement dated as of August 12, 1997, as amended prior
to the date hereof (the "Stock Purchase Agreement");
WHEREAS, in accordance with the Stock Purchase
Agreement, the Stockholder transferred an aggregate of 36,000
Shares to 12 members (the "Investing Advisors") of the Advisory
Board of Chilmark Fund II, L.P. (the "Fund"); and
WHEREAS, the Company and the Stockholder desire to
effect a series of transactions including an offer by the Company
to repurchase a number of shares to be determined, up to 450,000
shares, of the issued and outstanding Common Stock pursuant to a
tender offer as further described herein (the "Tender Offer") and
the purchase by the Stockholder of additional shares of Common
Stock (the "Stock Purchase"), the proceeds from which shall be
used to fund, in part, the consideration paid in the Tender Offer
by the Company;
NOW, THEREFORE, in consideration of the foregoing, and
of the mutual covenants and agreements set forth herein, the
parties hereby agree as follows:
ARTICLE I
WARRANTS
Section 1.1. Grant of Warrants. Simultaneously with
the execution hereof, but subject to Section 7.1 hereof, the
Company is granting and issuing to the Stockholder and to each
Investing Advisor a warrant to purchase additional shares of
Common Stock in the form of Exhibit A attached hereto and on the
terms and subject to the conditions set forth therein (each, a
"Warrant" and, collectively, the "Warrants"). The Warrants
provide, in the aggregate, for the purchase of up to 225,000
shares of Common Stock, exercisable beginning one year from the
date hereof and ending six years from the date hereof at a price
to be established one year from the date hereof and equal to the
amount that is $2.25 per share less than the Average Stock Price
(as defined in the Warrants) at such time.
ARTICLE II
TENDER OFFER AND STOCK PURCHASE
Section 2.1. Tender Offer. (a) Subject to the
provisions of this Agreement, as promptly as practicable, the
Company shall commence the Tender Offer, which shall be an issuer
tender offer to purchase a number of shares, up to 450,000
shares, of Common Stock to be determined by the Company with the
prior consent of the Stockholder (the "Offer Number") at a price
per share not in excess of a per share price, and not less than a
per share price, determined by the Company with the prior consent
of the Stockholder (the price range from such maximum to minimum
price being referred to herein as the "Per Share Price Range"),
net to the seller in
cash. Pursuant to the Tender Offer, the Company will determine
the single per share price, within the Per Share Price Range, net
to the seller in cash (such price being referred to as the "Per
Share Purchase Price"), that it will pay for shares properly
tendered pursuant to the Tender Offer, taking into account the
number of shares so tendered and the prices specified by the
tendering stockholders. The Company will select the lowest Per
Share Purchase Price that will allow it to buy the Offer Number
of shares of Common Stock (or such lesser number of shares as are
properly tendered and not withdrawn at prices within the Per
Share Price Range) (such number of shares being the "Purchased
Number"). All shares of Common Stock properly tendered at prices
at or below the Per Share Purchase Price and not withdrawn will
be purchased at the Per Share Purchase Price, subject to the
terms and conditions of the Tender Offer.
(b) On the date required under applicable rules, the
Company shall file with the Securities and Exchange Commission
(the "Commission") an Issuer Tender Offer Statement on Schedule
13E-4 (together with all amendments and supplements thereto, the
"Tender Offer Statement") with respect to the Tender Offer. The
Tender Offer Statement shall contain the Offer to Purchase and
such other information and exhibits as are required by law. The
Tender Offer Statement will not include an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. The Company agrees promptly to correct any
information in the Tender Offer Statement that shall be or shall
have become false or misleading in any material respect and the
Company further agrees to take all steps necessary to cause the
Tender Offer Statement as so corrected to be filed with the
Commission and disseminated to the stockholders of the Company as
and to the extent required by applicable federal securities laws.
(c) Subject to the terms and conditions thereof, the
Tender Offer shall expire at midnight Eastern time on the date
that is 20 business days from the date the Tender Offer is first
published, sent or given to holders of Common Stock; provided,
however, that the Company may extend the Tender Offer (i) if, at
the previously scheduled expiration date of the Tender Offer, any
of the conditions to the Company's obligation to accept for
payment, and pay for, shares of Common Stock shall not have been
satisfied or waived, until such time as such conditions are
satisfied or waived, (ii) for any period required by any rule,
regulation, interpretation or position of the Commission or the
staff thereof applicable to the Tender Offer and (iii) for any
reason on one or more occasions for an aggregate period of not
more than 5 business days beyond the latest expiration date that
would otherwise be permitted under clause (i) or (ii) of this
sentence.
(d) The obligation of the Company to accept for
payment, and pay for, shares of Common Stock properly tendered
and not withdrawn prior to the expiration of the Tender Offer
shall be subject to the satisfaction or waiver at or prior to the
expiration of the Tender Offer of such conditions as the Company,
in its discretion (except as set forth below), after consultation
with the Stockholder, shall have specified in the Offer to
Purchase to be distributed in connection with the Tender Offer.
Notwithstanding the foregoing, the Tender Offer shall not be
subject to a condition that any minimum number of shares of
Common Stock be tendered, but shall be subject to the following
conditions: (i) that there shall not have occurred or been
threatened any change in the condition (financial or otherwise),
business, operations, properties, assets,
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liabilities, income or prospects of the Company and its
subsidiaries, taken as a whole, which is or may be material and
adverse to the Company and its subsidiaries, taken as a whole (a
"Material Adverse Change") and (ii) the Stockholder shall not
have, prior to the expiration date, terminated its obligations
under Section 2.2 hereof, in accordance with the terms hereof, as
a result of a Material Adverse Change.
(e) The Stockholder will not tender any Shares to the
Company pursuant to the Tender Offer.
Section 2.2. The Stock Purchase. (a) Subject to the
terms and conditions hereof, promptly after the Company gives
notice to the Depositary (as defined in the Offer to Purchase) of
its acceptance of shares for payment pursuant to the Tender
Offer, the Stockholder shall purchase from the Company, and the
Company shall issue, sell and deliver to the Stockholder, a
number of shares of Common Stock equal to 78% of the first
$5,000,000 worth of shares purchased pursuant to the Tender Offer
plus 100% of all additional shares purchased pursuant to the
Tender Offer (i.e., the sum of (i) .78 multiplied by the quotient
obtained by dividing $5,000,000 by the Per Share Purchase Price
plus (ii) the result obtained by subtracting the (x) quotient
obtained by dividing $5,000,000 by the Per Share Purchase Price
from (y) the Purchased Number). All shares purchased by the
Stockholder hereunder shall be at a purchase price per share
equal to the Per Share Purchase Price. The shares purchased and
sold hereunder shall be validly issued, fully paid and
non-assessable, and shall be free and clear of any liens,
security interests, pledges, voting agreements, claims, options
and encumbrances of every kind, character and description
whatsoever ("Encumbrances"), except as contemplated by this
Agreement and the Stock Purchase Agreement, as amended hereby. A
number of additional shares of Common Stock, equal to the
difference obtained by subtracting the number of shares purchased
by the Stockholder hereunder from the Purchased Number, will be
purchased by two other purchasers (the "Other Purchasers")
pursuant to separate purchase agreements dated the date hereof.
(b) The Stockholder shall be entitled, on written
notice given to the Company, to terminate its obligations to
purchase shares of Common Stock hereunder if, at any time prior
to the expiration date of the Tender Offer, a Material Adverse
Change shall have occurred. In the event of any such termination,
the Stockholder's obligations under this Section 2.2 shall
immediately terminate and be of no further force or effect, but
all the other provisions of this Agreement shall survive any such
termination and remain in full force and effect.
ARTICLE III
AMENDMENTS TO STOCK PURCHASE AGREEMENT
Section 3.1. Standstill Provisions. Section 5.6 (b) of
the Stock Purchase Agreement is hereby amended by deleting the
exception at the end of the first sentence thereof and inserting
in its stead the following: "except that the Stockholders and
their Affiliates may purchase shares of Common Stock (x) pursuant
to Section 2.2 of the Agreement between the Company and
Purchaser, dated as of October 14, 1997 (the "October
Agreement"), (y) upon exercise of some or all of the warrants
granted pursuant to the October Agreement (the "Warrants") and
(z) from time to time, in the open market or in privately
negotiated transactions,
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up to an aggregate number of shares of Common Stock which, when
added to the shares of Common Stock then owned by the
Stockholders and their Affiliates, would result in the
Stockholders and their Affiliates owning no more than the highest
percentage of voting securities of the Company held by the
Stockholders and their Affiliates immediately following (i) the
Closing, (ii) the purchase of shares of Common Stock pursuant to
the October Agreement and (iii) the exercise of Warrants granted
pursuant to the October Agreement, respectively."
Section 3.2. Registration Rights. (a) Section 6.1 of
the Stock Purchase Agreement is hereby amended by deleting the
word "Shares" in the second line thereof and inserting in its
stead "shares of Common Stock or Warrants" and by deleting the
definition of "Purchaser's Stock" at the end of Section 6.1 and
inserting in its stead the following: "'Purchaser's Stock' means
any Warrants or shares of Common Stock acquired by the Purchaser
hereunder or in accordance with the provisions of Section 5.6(b)
hereof for which the Purchaser requests registration pursuant to
Section 6.1 or 6.2 hereof."
(b) Section 6.2 of the Stock Purchase Agreement is
hereby amended by deleting the words "two (2)" from the clause
(a) of the third sentence thereof and inserting in their stead
"three (3)."
(c) Section 6.5 of the Stock Purchase Agreement is
hereby amended by deleting the words "first registration" from
the second and tenth lines thereof and inserting in their stead,
in each case, "first two registrations" and by deleting the words
"second registration" from the eleventh line thereof and
inserting in their stead "third registration."
Section 3.3. Except as expressly provided herein, the
Stock Purchase Agreement shall remain in full force and effect.
ARTICLE IV
COVENANTS OF THE PARTIES
Section 4.1. Information from the Stockholder. The
Stockholder shall promptly provide the Company with any
information concerning the Stockholder requested by the Company
and required to be included in the Tender Offer Statement.
Section 4.2. Cooperation; Further Action. In the event
that any action is necessary or desirable to carry out the
purposes of this Agreement, each party shall take, and shall
cause its directors, officers, employees, representatives and
agents, as the case may be, to take, all such necessary actions
including the execution and delivery of such further instruments
and documents as may reasonably be requested by any party for
such purposes or otherwise to complete or perfect the
transactions contemplated hereby.
Section 4.3. Release. Subject to Section 7.1 hereof, to
the fullest extent permitted by applicable law, each of the
Stockholder and Chilmark Fund II, L.P. hereby irrevocably and
unconditionally releases and discharges the Company, and its
employees, directors, officers and agents, from any and all
liability which such person or entity ever had or now has to the
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Stockholder, under the Stock Purchase Agreement or otherwise,
arising out of, based upon or relating to the Company's business
during the period from May through September 1997.
Section 4.4. Monthly Information. The Company will
prepare and deliver to the members of the Board of Directors of
the Company, as soon as practicable after the end of each month,
financial information with respect to the results of operations
of the Company during the preceding month, including a statement
of consolidated net income for the month then ended, a
consolidated balance sheet of the Company as of the end of such
monthly period, and a detailed consolidating profit and loss
statement for each of the Company's operating divisions. The
Company will also deliver to the members of the Board of
Directors of the Company, promptly after providing such materials
each month to the lenders under the Company's credit facility, a
copy of the certificate and related financial information that is
provided to such lenders.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to the
Company as follows:
Section 5.1. Due Organization, etc. The Stockholder is
a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Delaware.
Section 5.2. Authorization; Execution and Delivery of
Agreement. The Stockholder has all requisite power and authority
to execute this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by
all necessary action on the part of the Stockholder. This
Agreement has been duly executed and delivered by the Stockholder
and this Agreement constitutes the legal, valid, binding and
enforceable obligation of the Stockholder, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating
to creditors' rights and principles of equity.
Section 5.3. No Conflict; No Consent. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not, and will not, conflict
with, or result in any violation of or default under, or permit
the acceleration of any obligation under, or the creation or
imposition of any Encumbrance on any of the properties or assets
of the Stockholder under (i) any provision of the certificate of
organization and limited liability company agreement or similar
constituent documents of the Stockholder, (ii) any indenture,
lease, mortgage, deed of trust, loan agreement or other agreement
or instrument, or any permit, license, registration, membership,
authorization or qualification from any Authority (as defined in
the Stock Purchase Agreement), of the Stockholder or (iii) any
judgment, order, decree, statute, law, ordinance, rule or
regulation of any Authority to which the Stockholder is a party
or by which it is bound, other than, in the case of clause (ii)
above, where such conflict, violation, default, acceleration or
Encumbrance would not, individually or in the aggregate, have
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a material adverse effect on the condition (financial or
otherwise), business, operations, properties, assets or
liabilities of the Stockholder. Other than as a result of the
reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), no consent, approval, order or
authorization of, or registration, declaration, filing or notice
to, any Authority is required to be made or obtained by the
Stockholder in order to execute or deliver this Agreement or to
consummate the transactions contemplated hereby.
Section 5.4. Investment Purposes. (a) The Stockholder,
by reason of its business and financial experience, has such
knowledge, sophistication and experience in business and
financial matters as to be capable of evaluating the merits and
risks of its investment in the shares of Common Stock, and is
purchasing the shares hereunder for its own account, for
investment only and not with a view to, or any present intention
of, effecting a distribution of such securities or any part
thereof. The Stockholder acknowledges that the shares to be
purchased hereunder have not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or the securities
laws of any state or other jurisdiction and cannot be disposed of
unless they are subsequently registered under the Securities Act
and any applicable state laws or exemption from such registration
is available.
(b) The Stockholder is an "accredited investor" as
that term is defined in Rule 501 promulgated under the Securities
Act.
(c) The Stockholder has had the opportunity to ask
questions and to receive answers concerning the financial
condition, operations and prospects of the Company and the terms
and conditions of the Stockholder's investment, as well as the
opportunity to obtain any additional information necessary to
verify the accuracy of information furnished in connection
therewith that the Company possesses or can acquire without
unreasonable effort or expense.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the
Stockholder as follows:
Section 6.1. Due Organization, etc. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.
Section 6.2. Authorization; Execution and Delivery of
Agreement. (a) The Company has full corporate power and authority
to execute this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Company for all
purposes, including Section 203 of the Delaware General
Corporation Law. This Agreement has been duly executed and
delivered by the Company and this Agreement constitutes the
legal, valid, binding and enforceable obligation of the Company,
subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and principles of
equity.
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(b) The shares of Common Stock issuable upon
consummation of the Stock Purchase and upon exercise of the
Warrants have been duly authorized by all necessary corporate
action on the part of the Company, and, when issued and delivered
by the Company pursuant to this Agreement or the Warrants against
payment of the consideration therefor set forth herein or
therein, the shares of Common Stock so issued will be validly
issued, fully paid and non-assessable and the Stockholder will
acquire valid and marketable title to such shares, free and clear
of any Encumbrances except as contemplated by this Agreement and
the Stock Purchase Agreement, as amended hereby.
Section 6.3. No Conflict; No Consent. Subject to the
receipt of a waiver from the lenders under the Company's credit
facility, which waiver the Company has been orally advised will
be forthcoming promptly, the execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby do not, and will not, conflict with, or result in any
violation of or default under, or permit the acceleration of any
obligation under, or the creation or imposition of any
Encumbrance on any of the properties or assets of the Company or
any subsidiary of the Company under (i) any provision of the
certificate of incorporation or by-laws or similar constituent
documents of the Company or any subsidiary of the Company, (ii)
any indenture, lease, mortgage, deed of trust, loan agreement or
other agreement or instrument, or any permit, license,
registration, membership, authorization or qualification from any
Authority, of the Company or any subsidiary of the Company or
(iii) any judgment, order, decree, statute, law, ordinance, rule
or regulation of any Authority to which the Company or any of its
subsidiaries is a party or by which any of them is bound, other
than, in the case of clause (ii) above, where such conflict,
violation, default, acceleration or Encumbrance would not,
individually or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), business, operations,
properties, assets or liabilities of the Company and its
subsidiaries, taken as a whole. Other than as a result of the
reporting requirements of the Exchange Act, no consent, approval,
order or authorization of, or registration, declaration, filing
or notice to, any Authority is required to be made or obtained by
the Company or any subsidiary of the Company in order to execute
or deliver this Agreement or to consummate the transactions
contemplated hereby.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. Condition to Agreement. The agreements,
covenants, grants and releases contained herein are subject, in
their entirety, to the receipt of the requisite consent or waiver
of the lenders referred to in Section 6.3 hereof.
Section 7.2. Amendment and Modification. This Agreement
may be amended, modified or supplemented only by written
agreement of all parties.
Section 7.3. Notices. Any notice, request, instruction
or other document to be given hereunder by a party hereto shall
be in writing and shall be deemed to have been given, (i) when
received if given in person, or (ii) on the date of transmission
if sent by nationally
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recognized overnight courier, certified or registered
mail, return receipt requested or (iii) three days after being
deposited in the U.S. mail, postage prepaid:
(a) if to the Purchaser, addressed as follows:
Cape Xxx Investors, L.L.C.
x/x Xxxxxxxx Xxxx XX, X.X.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
with a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
(b) if to the Company, addressed as follows:
NutraMax Products, Inc.
0 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Vice President and
Chief Financial Officer
with a copy to:
Xxxxxx X. Xxxxxxx, Xx., Esq.
0000 Xxxx Xxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000-0000
and
Xxxxxxx, Procter & Xxxx, LLP
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx III, Esq.
Section 7.4. Entire Agreement. This Agreement and the
Stock Purchase Agreement, as amended hereby, constitute the
entire agreement, and supersede all of the prior agreements and
undertakings, both written and oral, between or among the
parties, or any of them, with respect to the subject matter
hereof.
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Section 7.5. Counterparts. This Agreement may be
executed in two or more counterparts which together shall
constitute a single agreement.
Section 7.6. Parties in Interest; Assignment. This
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted
assigns, and except for Sections 1.1 and 4.3 hereof, no provision
of this Agreement, express or implied, is intended to or shall
confer upon any other person or entity any right, benefit or
remedy of any nature whatsoever under or by reason of this
Agreement. This Agreement is not assignable except by consent of
each of the parties hereto or operation of law; provided that any
assignment under the Stock Purchase Agreement in accordance with
the terms thereof shall include the effect of any amendment to
the Stock Purchase Agreement effected hereby.
Section 7.7. Governing Law. This Agreement and the
rights and obligations of the parties created hereby shall be
governed by the internal laws of the State of Delaware without
regard to the conflict of law rules thereof.
Section 7.8. Captions. All section titles or captions
contained in this Agreement are for convenience only, shall not
be deemed a part of this Agreement and shall not affect the
meaning or interpretation of this Agreement. All references
herein to Sections shall be deemed references to such parts of
this Agreement, unless the context shall otherwise require.
Section 7.9. Equitable Relief. Each party acknowledges
that, in the event of any breach of this Agreement by a party,
the other party would be irreparably and immediately harmed and
could not be made whole by monetary damages. It is accordingly
agreed that, in the event of any breach or threatened breach of
the provisions of this Agreement by such party, the other party,
in addition to any other remedy to which it may be entitled,
shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to compel
specific performance of this Agreement. Any requirements for the
securing or posting of any bond with respect to such remedy are
hereby waived by each of the parties hereto.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have duly
executed and delivered this Agreement as of the date first
written above.
NUTRAMAX PRODUCTS, INC.
By:
--------------------
Name:
Title:
CAPE XXX INVESTORS, L.L.C.
By: Chilmark Fund II, L.P.,
its Managing Member
By: Chilmark II, L.L.C.,
its General Partner
By:
------------------
Name:
Title:
SOLELY FOR PURPOSES OF
SECTION 4.3:
CHILMARK FUND II, L.P.
By: Chilmark II, L.L.C.
its General Partner
By:
-----------------
Name:
Title:
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Exhibit A
WARRANT CERTIFICATE
October 14, 1997
ARTICLE I
GRANT OF WARRANTS
NutraMax Products, Inc., a Delaware corporation (the
"Company"), hereby grants to ________________________ (the
"Holder") __________ warrants (the "Warrants") to purchase shares
of the Company's common stock, par value $.001 per share (the
"Common Stock"). Each Warrant entitles the Holder, during the
Exercise Period (as defined in Section 2.2 hereof), to purchase
one share of Common Stock at a price equal to the Exercise Price
per share (as defined in Section 2.1 hereof).
ARTICLE II
EXERCISE OF WARRANTS; EXERCISE PRICE
Section 2.1 Exercise Price. Upon exercise of any Warrants,
the Holder shall pay an exercise price per Warrant (the "Exercise
Price") equal to the difference obtained by subtracting (i) $2.25
from (ii) the Average Stock Price (as defined below) on the date
of the first anniversary of this Certificate (the "Strike Price
Date"). Notwithstanding the foregoing, in the event the Company
shall enter into a Transaction (as defined in Section 3.5(a))
prior to the Strike Price Date, (a) the Exercise Price shall
equal the difference obtained by subtracting (i) $2.25 from (ii)
the Average Stock Price on the date of the first public
announcement of the Transaction (the "Transaction Strike Price
Date"), and (b) the Company shall notify the Holder of the
Exercise Price at least ten (10) business days prior to the
effective date of such Transaction. The "Average Stock Price" on
any date shall mean the average of the mean of the high and low
prices for a share of Common Stock reported on the principal
market or exchange on which the Common Stock is traded for the
twenty (20) consecutive trading days preceding such date.
Section 2.2 Right to Exercise the Warrants. The Warrants
may be exercised, in whole or in part, at any time and from time
to time during the period commencing on the Strike Price Date and
expiring on the fifth anniversary of the Strike Price Date (the
"Exercise Period"). Notwithstanding the foregoing, in the event
the Company shall enter into a Transaction prior to the Strike
Price Date, each Warrant shall become immediately exercisable on
the Transaction Strike Price Date and each Warrant shall remain
exercisable for a period of five years thereafter unless earlier
terminated pursuant Section 3.5(a)(ii).
Section 2.3 Procedure for Exercising the Warrants. The
Holder may exercise the Warrants by executing the Form of
Election attached hereto as Exhibit A and delivering it to the
Company and tendering the requisite aggregate Exercise Price for
the number of shares of Common Stock subject to such exercise to
the Company on any business day during normal business hours (the
date of receipt of such Form of Election and aggregate Exercise
Price by the
Company is hereinafter referred to as an "Exercise Date"). The
Holder shall not be obligated to pay a stamp tax or similar
issuance tax or charge.
Section 2.4 Issuance of Shares of Common Stock. As soon as
practicable after any Exercise Date the Company shall (provided
that it has received the Form of Election duly executed,
accompanied by payment of the Exercise Price pursuant to Section
2.1 hereof for each of the shares of Common Stock to be
purchased) promptly cause certificates for the number of shares
of Common Stock to be issued on such Exercise Date to be
delivered to or upon the order of the Holder, registered in such
name as may be designated by the Holder; provided that if the
Common Stock is to be registered in the name of any entity or
person other than the Holder, the Company may require evidence of
compliance by the Holder with all applicable securities laws.
Section 2.5 Partial Exercise. If the Holder shall exercise
this Warrant Certificate for less than all of the Warrants
represented hereby, the Company shall issue to the Holder, within
ten (10) business days of the Exercise Date, a new warrant
certificate of like kind and tenor to this Warrant Certificate
evidencing the right to exercise the remaining outstanding
Warrants. Each Warrant exercised pursuant to Section 2.2 and
Section 2.3 shall be canceled.
ARTICLE III
RESERVATION AND AVAILABILITY OF COMMON STOCK; ADJUSTMENTS
Section 3.1 Reservation of Common Stock. The Company
covenants and agrees that it will cause to be kept available out
of its authorized and unissued Common Stock, or its authorized
and issued Common Stock held in its treasury, the number of
shares of Common Stock that will be sufficient to permit the
exercise in full of each of the Warrants outstanding under this
Warrant Certificate.
Section 3.2 Common Stock to be Duly Authorized and Issued,
Fully Paid and Non-assessable. The Company covenants and agrees
that it will take all such action as may be necessary to ensure
that all shares of Common Stock delivered upon exercise of any
Warrants shall, at the time of delivery of the certificates for
such shares, be duly and validly authorized and issued and fully
paid and non-assessable shares and free from all taxes, liens,
charges, encumbrances and restrictions, except as set forth
herein or in that certain Stock Purchase Agreement, dated as of
August 12, 1997, as amended (the "Stock Purchase Agreement"),
between the Company and Cape Xxx Investors, L.L.C.
Section 3.3 Common Stock Record Date. Each person or entity
in whose name any certificate for shares of Common Stock is
issued upon the exercise of any Warrants shall for all purposes
be deemed to have become the holder of record of the shares of
Common Stock represented thereby on, and such certificate shall
be dated, the Exercise Date. Prior to the exercise of such
Warrants, the Holder shall not be entitled to any rights of a
stockholder of the Company with respect to the shares of Common
Stock for which such Warrants shall be exercisable, including,
without limitation, the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights and
shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
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Section 3.4 Adjustment for Common Stock Dividends, Subdivisions
and Combinations. In case the Company shall, at any time or from
time to time, (i) pay a dividend in Common Stock, or make a
distribution in Common Stock, (ii) subdivide its outstanding
Common Stock into a greater number of shares, or (iii) combine
its outstanding Common Stock into a smaller number of shares
(including a recapitalization in connection with a consolidation
or merger in which the Company is the continuing corporation),
then (a) the Exercise Price determined in accordance with Section
2.1 shall be adjusted by multiplying such Exercise Price by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately before such event and the
denominator of which is the number of shares of Common Stock
outstanding immediately after such event and (b) the number of
Warrants outstanding pursuant to this Warrant Certificate
immediately before such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the Exercise
Price immediately before such event and the denominator of which
is the Exercise Price immediately after such event.
Section 3.5 Consolidation or Merger; Rights and Other Distributions.
(a) If at any time after the date of this Certificate, the
Company shall consolidate with, merge with or into, or sell
substantially all of its assets or property to, another
corporation (a "Transaction"), then the Company or the entity
assuming the obligations of the Company, may, in its sole
discretion, either (i) cause effective provision to be made so
that each Warrant shall, effective as of the effective date of
such event, be exercisable or exchangeable for the kind and
number of shares of stock, other securities, cash or other
property to which a holder of the number of shares of Common
Stock deliverable upon exercise or exchange of such Warrant would
have been entitled upon such event, or (ii) in the event that the
only consideration to be received in the Transaction is cash,
upon 20 days written notice by the Company to the Holder, provide
that all unexercised Warrants will terminate immediately prior to
the consummation of the Transaction unless exercised by the
Holder prior to the effective date of the Transaction;
(b) If at any time after the date of this Warrant
Certificate, the Company shall effect any rights offering or pay
any dividend (other than dividends paid in shares of Common Stock
for which an adjustment is made pursuant to Section 3.4 hereof or
regular cash dividends payable out of earnings or surplus and
made in the ordinary course of business) to its stockholders,
then in each such case the Company shall cause effective
provision to be made so that each Warrant shall, effective as of
the effective date of such event, be exercisable for the kind and
number of shares of stock, other securities, cash or other
property to which a holder of the number of shares of Common
Stock deliverable upon exercise of such Warrant would have been
entitled upon such event and any such provision shall include
adjustments in respect of such stock, securities, cash or other
property that shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Warrant Certificate with
respect to such Warrant; and
(c) Notwithstanding the foregoing, in the event that the
Company shall distribute "poison pill" rights pursuant to a
"poison pill" shareholder rights plan (the "Rights"), the Company
shall, in lieu of making any adjustment pursuant to clauses (a)
or (b) of this Section 3.5, make proper provision so that the
Holder upon exercise of a Warrant after the record date for such
distribution and prior to the expiration or redemption of the
Rights shall be entitled to receive upon such
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exercise, in addition to the Common Stock issuable upon such
exercise, a number of Rights to be determined as follows: (i) if
such exercise occurs on or prior to the date for the distribution
to the holders of Rights of separate certificates evidencing such
Rights (the "Distribution Date"), the same number of Rights to
which a holder of a number of shares of Common Stock equal to the
number of shares of Common Stock issuable upon such exercise is
entitled at the time of such exercise in accordance with the
terms and provisions of and applicable to the Rights; and (ii) if
such exercise occurs after the Distribution Date, the same number
of Rights to which a holder of the number of shares of Common
Stock into which the Warrant so exercised was exercisable
immediately prior to the Distribution Date would have been
entitled on the Distribution Date in accordance with the terms
and provisions of and applicable to the Rights.
Section 3.6 Notice; Calculations; Etc. Whenever any
adjustments are made as provided in Sections 3.4 or Section 3.5,
the Company shall provide to the Holder a statement, signed by an
authorized officer, describing in detail the facts requiring such
adjustment and setting forth a calculation of the Exercise Price
and the number of shares of Common Stock or other stock,
securities, cash or other property applicable to each Warrant
after giving effect to such adjustment. All calculations under
this Section 3.6 shall be made to the nearest one hundredth of a
cent or to the nearest one-tenth of a share, as the case may be.
ARTICLE IV
HOLDER REPRESENTATIONS, WARRANTIES AND COVENANTS
By its receipt and acceptance of this Warrant Certificate,
the Holder represents and warrants to and covenants with, the
Company, as follows:
Section 4.1 Representations. The Holder, by reason of its
business and financial experience, has such knowledge,
sophistication and experience in business and financial matters
as to be capable of evaluating the merits and risks of its
investment in the Warrants and the shares of Common Stock
issuable upon the exercise thereof, and is purchasing the
Warrants and the shares of Common stock issuable upon the
exercise thereof to be purchased hereunder have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state or other
jurisdiction and cannot be disposed of unless they are
subsequently registered under the Securities Act and any
applicable state laws or exemption from such registration is
available. The Holder is an "accredited investor" as that term is
defined in Rule 501 promulgated under the Securities Act. The
Holder has had the opportunity to ask questions and to receive
answers concerning the financial condition, operation and
prospects of the Company and the terms and conditions of the
Holder's investment, as well as the opportunity to obtain any
additional information necessary to certify the accuracy of
information furnished in connection therewith that the Company
possesses or can acquire without unreasonable effort or expense.
Section 4.2 Restrictions on Transferability. The Warrants
and the shares of Common Stock received upon exercise thereof
shall be subject to the restrictions contained in the Stock
Purchase Agreement. The Warrants and the shares of Common Stock
received upon exercise of
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the Warrants shall be entitled to the benefits of the
registration rights contained in the Stock Purchase Agreement.
Section 4.3 Restrictive Legend. Each certificate
representing shares of the Common Stock issuable upon exercise of
the Warrants, or any other securities issued in respect of the
Common Stock issued upon exercise of the Warrants, upon any stock
split, stock dividend, recapitalization, merger, consolidation or
similar event, shall be stamped or otherwise imprinted with a
legend in substantially the following form (in addition to any
legend required under applicable state securities laws):
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO
(1) A REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT OR (2) AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SUCH SECURITIES.
THE SECURITIES REPRESENTED HEREBY ARE ALSO SUBJECT TO
THE PROVISIONS OF (i) AN AGREEMENT, DATED AS OF
OCTOBER 14, 1997, BY AND BETWEEN NUTRAMAX PRODUCTS,
INC. AND CAPE XXX INVESTORS, L.L.C., AND (ii) A
CERTAIN STOCK PURCHASE AGREEMENT, DATED AS OF AUGUST
12, 1997, AS AMENDED, BY AND BETWEEN NUTRAMAX
PRODUCTS, INC. AND CAPE XXX INVESTORS, L.L.C.,
INCLUDING CERTAIN RESTRICTIONS ON TRANSFER SET FORTH
THEREIN. COPIES OF SUCH AGREEMENTS ARE AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICE OF NUTRAMAX
PRODUCTS, INC. AND WILL BE FURNISHED UPON WRITTEN
REQUEST AND WITHOUT CHARGE."
ARTICLE V
MISCELLANEOUS
Section 5.1 Company Covenant. The Company covenants not to
purchase any shares of its Common Stock during the twenty (20)
trading days preceding the Strike Price Date or the Transaction
Strike Price Date, as the case may be.
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Section 5.2 Notices. Notices or demands relating to
this Warrant Certificate shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed as follows,
or telexed, telecopied, or delivered by nationally-recognized
overnight or other courier:
If to the Holder: ________________________
________________________
________________________
________________________
________________________
copy to: Xxxxxxx X. Xxxxx, Esq.
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Company: NutraMax Products, Inc.
0 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
copy to: Xxxxxx X. Xxxxxxx III, Esq.
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Section 5.3 Successors. All the covenants and provisions of
this Warrant Certificate by or for the benefit of the Company or
the Holder shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 5.4 DELAWARE CONTRACT. THIS CERTIFICATE AND THE
WARRANTS, AND ALL QUESTIONS RELATING TO THE INTERPRETATION,
CONSTRUCTION AND ENFORCEABILITY OF THIS CERTIFICATE AND THE
WARRANTS, SHALL BE GOVERNED IN ALL RESPECTS BY THE SUBSTANTIVE
LAWS OF THE STATE OF DELAWARE.
Section 5.5 Amendments and Waivers. Except as otherwise
provided herein, the provisions of this Certificate may not be
amended, modified or supplemented, other than by a written
instrument executed by the Company and the Holder.
Section 5.6 Severability. In the event that any one or more
of the provisions contained herein, or the application thereof in
any circumstances, is held invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and
of the remaining provisions contained herein shall not be in any
way impaired thereby, it being intended that all of the rights
and privileges of the Holder shall be enforceable to the fullest
extent permitted by law.
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Section 5.7 Fractional Shares. No fractional shares of Common
Stock shall be issued in connection with the exercise of any
Warrants hereunder, but in lieu of such fractional shares the
Company shall make a cash payment therefor upon the basis of the
Average Stock Price as of the Exercise Date.
Section 5.8 Replacement Certificate. On receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant Certificate and, in the
case of loss, theft or destruction, on delivery of an indemnity
agreement or bond reasonably satisfactory in form and amount to
the Company or, in the case of mutilation, on surrender and
cancellation of this Warrant Certificate, the Company, at its
expense, will execute and deliver, in lieu of this Warrant
Certificate, a new warrant certificate of like tenor.
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IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed and delivered, all as of the date
and year first above written.
NUTRAMAX PRODUCTS, INC.
By:______________________________
Name:
Title:
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EXHIBIT A
FORM OF ELECTION TO PURCHASE
(To be executed if Holder desires to exercise the Warrants)
NUTRAMAX PRODUCTS, INC.:
The undersigned hereby irrevocably elects to exercise
_______ Warrants represented by the Warrant Certificate to
purchase _______ shares of Common Stock issuable upon the
exercise of such Warrants and requests that certificates for such
shares be issued in the name of:
---------------------------------------
(Please print name and address)
---------------------------------------
Please insert federal tax identification number or other identifying
number ________________.
Dated: ________________
By:________________________________
Name:
Title:
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