THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE, MORTGAGED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
(A) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS, OR (B) AN EXEMPTION
THEREFROM AND, IF REQUESTED BY THE COMPANY, THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT THE TRANSFER IS EXEMPT FROM THE REGISTRATION
PROVISIONS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS.
WARRANT TO PURCHASE SECURITIES
OF
GALAXY NUTRITIONAL FOODS, INC.
Void after June 1, 2009
This Warrant is issued to SOUTHTRUST BANK, N.A., or its
registered assigns (the "Holder") by GALAXY NUTRITIONAL FOODS, INC., a
Delaware corporation (the "Company"), on May 29, 2003 (the "Warrant Issue
Date").
1. Number of Shares Subject to Warrant. Subject to the terms and
conditions hereinafter set forth, the Holder is entitled, upon surrender of
this Warrant at the principal office of the Company, to purchase from the
Company, at a price equal to the Exercise Price (as defined in Section 2
below), shares of the Warrant Stock.
For purposes of this Warrant:
(A) "Common Stock" shall mean the Company's common stock,
$0.01 par value.
(B) "Warrant Stock" shall mean 100,000 shares of the
Company's Common Stock, subject to adjustment as described in Section 7
below.
(C) "Shares" shall mean fully paid and non-assessable
shares of Common Stock.
2. Exercise Price. The per share purchase price for the Shares shall be
$1.97 (the "Exercise Price"). The Exercise Price shall be subject to
adjustment pursuant to Section 7 hereof.
3. Exercise Period. Except as otherwise provided for herein, this
Warrant shall be exercisable, in whole or in part, at any time and from
time to time. On the Expiration Date, all Warrants evidenced hereby shall
thereafter be void and of no further force and effect. Whether or not
surrendered to the Company by the Holder, this Warrant shall be deemed
canceled upon the expiration hereof.
4. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 3 hereof, the purchase rights hereby
represented may be exercised in whole or in part, at the election of the
Holder, by the tender of the Notice of Exercise in substantially the form
attached hereto as Exhibit A and the surrender of this Warrant at the
principal office of the Company and by the payment to the Company in cash,
by check, cancellation of indebtedness or other form of payment acceptable
to the Company, of an amount equal to the then applicable Exercise Price
multiplied by the number of Shares then 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, as applicable).
6. Issuance of Shares. The Company hereby covenants that it will duly
and validly reserve shares of Common Stock for issuance upon exercise of
this Warrant. 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. The Shares issued hereunder shall have
the same rights and obligations pertaining to the other shares of Common
Stock issued previously by the Company.
7. 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 exercise or expiration of this Warrant subdivide
its Common Stock, by split-up or otherwise, or combine its Common Stock, or
issue additional Common Stock as a dividend with respect to any 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 Exercise
Price, provided that the aggregate Exercise Price payable hereunder for the
total number of Shares purchasable under this Warrant (as adjusted) shall
remain the same. Any adjustment under this Section 7(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.
(b) Reclassification, Reorganization and Consolidation. In the event of
any corporate reclassification, capital reorganization, consolidation, spin-
off or change in the Common Stock of the Company (other than as a result of
a subdivision, combination, or dividend provided for in Section 7(a)
above), then, as a condition of such event, 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/or other securities and property
receivable in connection with such event by a holder of the same number of
shares for which this Warrant could have been exercised immediately prior
to such event. 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 Exercise Price, provided that
the aggregate exercise price payable hereunder for the total number of
Shares purchasable under this Warrant (as adjusted) shall remain the same.
(c) Adjustment to Number of Shares. Upon each adjustment of the Exercise
Price, the number of Shares issuable upon exercise of the Warrant shall be
increased to equal the quotient obtained by dividing (x) the product
resulting from multiplying (i) the number of Shares issuable upon exercise
of the Warrant, and (ii) the Exercise Price, in each case as in effect
immediately before such adjustment by (y) the adjusted Exercise Price.
(d) Notice of Adjustment. When any adjustment is required to be made to
the Exercise Price or in the number or kind of Shares purchasable upon
exercise of the Warrant, the Company shall promptly notify the Holder of
such event and of the adjusted Exercise Price or number of Shares or other
securities or property thereafter purchasable upon exercise of this
Warrant.
8. Assumption of Warrant. If at any time, while this Warrant, or any
portion thereof, is outstanding and unexpired there shall be an acquisition
of the Company by another entity by means of a merger, reorganization or
consolidation of the Company or any other transaction in which the owners
of the Company's outstanding voting power immediately prior to such
transaction own, directly or indirectly, less than 51% of the voting power
of the resulting or surviving entity immediately upon completion of such
transaction, then, as a part of such acquisition, lawful provision shall be
made so that the Holder shall thereafter be entitled to receive upon
exercise of this Warrant, during the period specified herein and upon
payment of the aggregate Exercise Price then in effect, the number of
shares of stock or other securities or property of the successor
corporation resulting from such acquisition which a holder of the Shares
deliverable upon exercise of this Warrant would have been entitled to
receive in such acquisition if this Warrant had been exercised immediately
before such acquisition.
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 any fractional Share the Company shall make a cash
payment therefor on the basis of the closing sale price of the Common Stock
on the AMEX Stock Exchange (or any successor exchange or quotation system
on which the Common Stock is listed or quoted) on the date of exercise.
10. No Shareholder Rights. Prior to exercise of this Warrant, the Holder
shall not be entitled to any rights of a shareholder 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 shareholder 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 10 shall limit
the right of the Holder to be provided the notices required under this
Warrant.
11. Compliance With Securities Act; Transferability of Warrant or Shares.
(a) Compliance With Securities Act. The Holder, by acceptance hereof,
agrees that this Warrant, and the Shares issuable upon exercise of this
Warrant, are being acquired for investment and that such Holder will not
offer, sell or otherwise dispose of this Warrant, or any Shares issuable
upon exercise of this Warrant, except under circumstances which will not
result in a violation of the Securities Act, or any applicable state
securities laws. This Warrant and all Shares issued upon exercise of this
Warrant (unless registered under the Securities Act and any applicable
state securities laws) shall be stamped or imprinted with a legend in
substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE
STATE SECURITIES LAW AND MAY NOT BE SOLD, OFFERED FOR SALE,
MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR AN
EXEMPTION THEREFROM, AND, IF REQUESTED BY THE COMPANY, THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY TO THAT EFFECT. THIS WARRANT HAS BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE."
(b) Transferability. 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 for
transfer by delivery of an Assignment Form in substantially the form
attached hereto as Exhibit B, to the Company at the address set forth in
Section 15 hereof, 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. Restricted Securities. The Holder understands that this Warrant and
the Shares issuable upon exercise of this Warrant, will not be registered
at the time of their issuance under the Securities Act. The Holder
represents that it is experienced in evaluating companies such as the
Company, has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of its
investment, and has the ability to suffer the total loss of the investment.
The Holder further represents that it has had the opportunity to ask
questions of and receive answers from the Company concerning the terms and
conditions of this Warrant, the business of the Company, and to obtain
additional information to such Xxxxxx's satisfaction. The Holder further
represents that it is an "accredited investor" within the meaning of
Regulation D under the Securities Act, as presently in effect. The Holder
further represents that this Warrant is being acquired for the account of
the Holder for investment only and not with a view to, or with any
intention of, a distribution or resale thereof, in whole or in part, or the
grant of any participation therein.
13. Successors and Assigns. The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the
Holders hereof and their respective successors and assigns.
14. 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.
15. Notices. All notices required under this Warrant 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 professional overnight courier service, or (iv) three business
days after posting when sent by registered or certified mail. Notices to
the Company shall be sent to the address of the Company set forth below (or
at such other place as the Company shall notify the Holder hereof in
writing) and notices to the Holder shall be sent to the address of the
Holder set forth below (or at such other place as the Holder shall notify
the Company hereof in writing):
To the Company: GALAXY NUTRITIONAL FOODS, INC.
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
Attn: Xx. Xxxxxxxxxxx X. Xxx
With a copy to: Xxxxx & Xxxxxxxxx LLP
000 X. Xxxxxx Xxxxxx
XxxXxxxx Xxxxxx, Xxxxx 0000
Telecopier: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
To the Holder as provided on the signature page of this Warrant.
16. 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.
17. Governing Law. This Warrant shall be governed by the laws of the
State of Florida, without regard to the choice or conflict of laws
principles thereof.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned have caused this Warrant to
be duly executed as of the date first set forth above.
COMPANY
GALAXY NUTRITIONAL FOODS, INC.
By: ________________________
Name: Xxxxxxxxxxx X. New
Title: Chief Executive Officer
HOLDER
SouthTrust Bank, N. A.
By: _______________________________
___________________________________________
Holder's address for its principal place of
business is as follows:
___________________________________________
Holder's address for notice purposes (if
different than above):
EXHIBIT A
NOTICE OF EXERCISE
To: GALAXY NUTRITIONAL FOODS, INC.
The undersigned hereby elects to [check applicable
subsection]:
(a) Purchase Shares (as defined in the
attached Warrant) of GALAXY NUTRITIONAL FOODS, INC.,
pursuant to the terms of the attached Warrant and
payment of the Exercise Price per Share required under
such Warrant accompanies this notice;
OR
(b) Exercise the attached Warrant or portion
thereof for all of ___________ Shares under the Warrant
pursuant to the net exercise provisions of Section 4 of
such Warrant.
The Holder represents that it is experienced in evaluating
companies such as the Company, has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits
and risks of its investment, and has the ability to suffer the total loss
of the investment. The Holder further represents that it has had the
opportunity to ask questions of and receive answers from the Company
concerning the terms and conditions of this Warrant, the business of the
Company, and to obtain additional information to such Xxxxxx's
satisfaction. The Holder further represents that it is an "accredited
investor" within the meaning of Regulation D under the Securities Act, as
presently in effect. 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.
Date:_______________________ WARRANTHOLDER:
By: ______________________
Name: ____________________
Address: _________________
Name in which shares should be registered:
EXHIBIT B
ASSIGNMENT FORM
TO: GALAXY NUTRITIONAL FOODS, INC.
The undersigned hereby assigns and transfers unto
_____________________________ of
______________________________________________ (Please typewrite or print
in block letters) the right to purchase ____________ Shares (as defined in
the Warrant) of GALAXY NUTRITIONAL FOODS, INC. subject to the Warrant,
dated as of _____________________________, by and between GALAXY
NUTRITIONAL FOODS, INC. and the undersigned (the "Warrant").
This assignment complies with the provisions of Section 11 of the Warrant
and is accompanied by funds sufficient to pay all applicable transfer
taxes.
In addition, the undersigned and/or its assignee will provide such evidence
as is reasonably requested by, GALAXY NUTRITIONAL FOODS INC., to evidence
compliance with applicable securities laws as contemplated by Sections 11
and 12 of the Warrant.
Date:__________________ By:
___________________________________________
(Print Name of Signatory)
___________________________________________
(Title of Signatory)
