Exhibit 10.20
EXECUTION COPY
INTEGRATED BIOPHARMA, INC.
SUBSCRIPTION AGREEMENT
June 25, 2003
Integrated BioPharma, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. E. ▇▇▇▇▇▇ ▇▇▇, Chief Executive Officer
Dear Mr. E. ▇▇▇▇▇▇ ▇▇▇:
1. Subscription for Series A Preferred and Warrants. The undersigned
(the "Investor") hereby offers to purchase Series A Convertible Preferred Stock
(the "Series A Preferred") of the stock of Integrated BioPharma, Inc., a
Delaware corporation (the "Company") and warrants for the Company's common stock
(the "Warrants"), on the terms and conditions set forth herein. The Investor
understands that the Company will rely on the Investor's representations and
warranties herein in accepting or rejecting the Investor's subscription to
purchase the Series A Preferred and Warrants. This Subscription Agreement (this
"Agreement") is being submitted to the Company by the Investor prior to the
making of any offer to sell or the sale of any Series A Preferred or any
Warrants by the Company. This Agreement relates to an offering of Series A
Preferred and Warrants in the Company until terminated by the Company in its
sole discretion (the "Offering"). The Series A Preferred and Warrants will be
offered to accredited investors pursuant to one or more exemptions from
registration under Regulation D promulgated under the Securities Act of 1933, as
amended (the "Act").
THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY A SECURITY. The Investor is supplying the information set
forth herein to the Company, in order to induce the Company to make an offer to
sell and a sale of the Series A Preferred and Warrants to the Investor. Such
information will be relied on by the Company to determine if the Investor
satisfies the requirements for investing in the Offering. Such information will
be kept confidential by the Company, and the Company or any agent of the
Company, except with regard to the access requirements of governmental
authorities having jurisdiction and as otherwise provided in Section 5 below.
2. Offering. The Offering will be comprised of Series A Preferred Stock
of the Company in an amount up to $20,000,000 and Warrants. The Company can give
no assurances that it will be able to raise such amounts. A copy of the proposed
Certificate of Designation of the Series A Preferred Stock setting forth the
rights of such Series A Preferred is attached hereto as Exhibit A. The Company,
in its sole discretion, may terminate the Offering at any time for any reason.
With respect to the Offering, the Company intends to rely on the exemption from
registration under the Act pursuant to Rule 506 of Regulation D promulgated
thereunder, among any other available exemptions. During the Offering, the
purchase price per share of Series A Preferred will be $1,000 per share. The
exercise price per share of the Warrants will be $5.40 per share.
The Investor hereby subscribes for shares of Series A Preferred and
Warrants pursuant to this Agreement equal to the total purchase price as
indicated by the Investor on the signature page of this Agreement.
Simultaneously with this Agreement the Investor is delivering to the Company via
wire transfer of immediately available funds or via a check made payable to
"Integrated BioPharma, Inc." (or such other confirmation of good funds as
acceptable to the Company) in an amount equal to the total purchase price of the
Series A Preferred and Warrants being subscribed for herein.
3. Acceptance or Rejection. The acceptance of the Company, in its sole
and independent discretion, shall be required for the subscription set forth
herein or any other subscription in the Offering to be a binding obligation of
the Company. Consequently, the Company in its sole and independent discretion
may reject the subscription contained herein or any other subscription in the
Offering. Specifically, the Investor agrees that the Company (i) may in its sole
and independent discretion accept or reject any subscription in the Offering,
including without limitation, this Agreement, in whole or in part, and
regardless of reason, and (ii) shall have no obligation to accept subscriptions
in the order received. Any subscription that is rejected by the Company will be
marked "Void" and returned along with any unnegotiated check or the cash
proceeds from any negotiated check, without interest or other income, promptly
thereafter.
The Company's acceptance shall be deemed consummated upon the execution
of this Agreement by the Company's authorized representative(s) in the space
provided on the last page hereof, and the return of this Agreement, as fully
executed, or a copy thereof, to the Investor. A subscription shall be of no
force or effect unless accepted by the Company as described above. In the event
that a subscription is accepted in writing by the Company as described above,
and the Company has received good funds from the Investor, the Investor shall be
deemed a holder of Series A Preferred and Warrants of the Company.
4. Representations and Warranties. The Investor represents and warrants
as follows, with knowledge that the Company and its representatives will rely on
such representations and warranties in accepting or rejecting the subscription
for the Interest(s) contained herein:
(a) The Investor (i) has received and thoroughly read and
evaluated the accompanying Certificate of Designation ("Certificate") of the
Series A Preferred concerning the Company and the Offering. The Investor has
neither received nor relied upon any other offering literature or oral
communications.
(b) The Investor has such knowledge and experience in
financial matters and investments that the Investor is capable of evaluating the
merits and risks of the Investor's investment in the Company and the Offering.
(c) The Investor is acquiring the Series A Preferred and
Warrants for the Investor's own account for investment purposes only and not for
distribution or resale to others.
(d) The Investor's individual net worth as of the date hereof
exceeds $1,000,000;
(e) EXCEPT AS EXPRESSLY PROVIDED BELOW, THE INVESTOR WILL NOT
SELL, PLEDGE OR OTHERWISE TRANSFER ANY OF THE SERIES A PREFERRED OR WARRANTS, IN
WHOLE OR IN PART, ACQUIRED BY THE INVESTOR WITHOUT THE PRIOR WRITTEN CONSENT OF
THE COMPANY, UNLESS SUCH SERIES A PREFERRED OR WARRANTS ARE REGISTERED UNDER THE
ACT AND ALL APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS, OR UNLESS AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS
IS AVAILABLE. The Investor further understands that the Company has made no
representation that it will register the Series A Preferred or Warrants or make
available any exemption from registration requirements under the Act or
applicable state securities laws, and the Company has no obligation to do so.
Additionally, the Series A Preferred or Warrants may not be sold or disposed of
without the submission of a written legal opinion in form and substance
satisfactory to the Company and its counsel that such sale or disposition is
exempt from federal and state registration requirements.
(f) The Investor recognizes that an investment in the Company
involves substantial risk. The Investor has read the Certificate and understands
all of the risks related to the purchase of the Series A Preferred and the
Warrants. The Investor understands that investment in the Series A Preferred and
the Warrants is speculative and that the Investor could lose his entire
investment in the Series A Preferred or in the Warrants. The Investor represents
and warrants that he can sustain such an entire loss.
(g) The Investor's overall commitment to investments that are
not marketable is not disproportionate to the Investor's net worth, and the
Investor has no need for liquidity in the Investor's investment in the Company
in that the Investor has other sources of income or funds to provide for the
Investor's current needs and possible contingencies.
(h) The Investor's legal residence is as set forth on the
signature page hereto.
(i) The answers provided by the Investor herein, as well as
all other information that the Investor has provided to the Company, the Company
or its representative(s), either directly or indirectly, concerning the
Investor's financial position and knowledge of financial and business matters,
are correct and complete as of the date hereof and as of the date of delivery of
this Agreement to the Company.
5. Backup Withholding. The Investor certifies under penalties of
perjury that (i) the Investor's taxpayer identification number (social security
number for an individual Investor) as set forth on the signature page hereof is
correct; (ii) the Investor's home address (in the case of an individual) or
office address (in the case of an entity) as set forth on the signature page
hereof is correct; and (iii) the Investor is not subject to backup withholding
either because the Investor has not been notified by the Internal Revenue
Service ("IRS") that it is subject to backup withholding as a result of a
failure to report all interest or dividends, or because it has been notified by
the IRS that it is no longer subject to backup withholding.
If the Investor is subject to backup withholding, the Investor should cross
through clause (iii) and check the following box:
6. Governing Law. This Agreement shall be construed in accordance with,
and governed in all respects by the internal laws of the State of Delaware
without reference to its choice of law provisions.
7. Indemnification. The Investor hereby indemnifies and holds harmless
the Company and its representative(s) and each of their respective officers,
directors, owners and affiliates from and against any liabilities, damages, and
expenses, including reasonable attorneys' fees, arising out of or in connection
with any misrepresentation or breach of warranty made by the Investor herein.
8. Additional Information. The Investor agrees to furnish such
additional information as the Company or its representative(s) requests.
Further, the Investor authorizes the Company or any authorized
agent/representative of the Company to contact any banker, accountant, lawyer or
other person or entity to verify any of the information contained herein.
9. Arbitration. Any dispute, controversy, contest, claim or other
matter arising out of or in connection with this Agreement or the interpretation
or enforcement hereof shall be settled by binding arbitration held in Newark,
New Jersey in accordance with the NATIONAL ASSOCIATION OF SECURITIES DEALERS,
INC. (THE "nasd") RULES OF ARBITRATION, IF ALLOWED BY THE NASD, OR IF DISALLOWED
BY THE NASD, BY THE Commercial Arbitration Rules of the American Arbitration
Association (the "AAA Rules"). The arbitration shall be conducted by a single
arbitrator mutually chosen by the COMPANY and the Investor from among candidates
selected in accordance with the AAA Rules. The cost of such arbitration
(excluding expenses of legal counsel and witness fees) shall be borne by the
parties equally, and each party shall bear the expenses of its own legal counsel
and witnesses. Any final award or determination of the arbitrator shall be in
writing setting forth the factual and legal grounds for the award or
determination. Any award or determination rendered by such arbitrator shall be
enforceable in any court having jurisdiction over the parties. Each party shall
maintain the confidentiality of any such arbitration proceeding, except as may
be reasonably necessary to effectively represent itself in such arbitration
proceeding, to enforce the awards or determinations of the arbitrator, or as
otherwise required by law or judicial or administrative order or decree. The
foregoing shall not be interpreted as a waiver of any of the Investor's rights
under federal or applicable state securities laws.
10. Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes all prior and contemporaneous
understandings and agreements of the parties whether oral or written, regarding
the within contained subject matter. The provisions of this Agreement may not be
modified or waived except in writing and the representations, warranties and
covenants contained herein shall survive the closing of the purchase of the
Series A Preferred and the Warrants by the Investor and any investigation at any
time made by any person.
[THE NEXT PAGE IS THE SIGNATURE PAGE.]
SIGNATURE PAGE FOR INDIVIDUAL INVESTORS
If applicable, the Investor hereby authorizes its selling agent to
remit funds held in the Investor's account with the selling agent in an amount
equal to the purchase price of the Series A Preferred being purchased to the
Company prior to closing of the Offering.
IN WITNESS WHEREOF, the Investor has hereby executed this Agreement on
June 25, 2003. When signing as attorney, executor, administrator or guardian,
please give title as such.
▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Please Print Your Name Above Please Sign Your Name Above
--------------------
Please Print Your Address: Social Security Number
Total Number of Shares of Series A Preferred: 9,500 shares
Total Purchase Price for Series A Preferred: $9,500,000
Total Number of Warrants: 175,000
Total Purchase Price for the Warrants: [$______]
ACCEPTANCE BY
INTEGRATED BIOPHARMA, INC.
In reliance upon the foregoing Subscription Agreement, and the
representations, warranties and covenants contained therein, this Subscription
Agreement and the subscription therein are accepted on behalf of the Integrated
BioPharma, Inc. by its Chief Executive Officer.
INTEGRATED BIOPHARMA, INC.
a Delaware corporation
Date: June 25, 2003 By: /s/ E. ▇▇▇▇▇▇ ▇▇▇
Name: E. ▇▇▇▇▇▇ ▇▇▇
Title: Chief Executive Officer
Exhibit A. Certificate of Designation of the
Series A Convertible Preferred Stock
CERTIFICATE OF DESIGNATION OF SERIES
AND DETERMINATION OF RIGHTS AND
PREFERENCES OF SERIES A CONVERTIBLE
PREFERRED STOCK OF INTEGRATED BIOPHARMA, INC.
Integrated BioPharma, Inc., a Delaware corporation (the "Company"),
acting pursuant to ss. 151 of the General Corporation Law of Delaware, does
hereby submit the following Certificate of Designation of Series and
Determination of Rights and Preferences of its Convertible Preferred Stock,
Series A.
FIRST: The name of the Company is Integrated BioPharma, Inc.
SECOND: By unanimous consent of the Board of Directors of the Company
dated June 25, 2003, the following
resolutions were duly adopted:
WHEREAS the Restated Certificate of Incorporation of the Company (as
amended, the "Certificate of Incorporation") authorizes Preferred Stock
consisting of 1,000,000 shares, par value $0.002 per share, issuable from time
to time in one or more series; and
WHEREAS the Board of Directors of the Company is authorized, subject to
limitations prescribed by law and by the provisions of Article Fifth of the
Company's Certificate of Incorporation to establish and fix the number of shares
to be included in any series of Preferred Stock and the designation, rights,
preferences, powers, restrictions and limitations of the shares of such series;
and
WHEREAS it is the desire of the Board of Directors to establish and fix
the number of shares to be included in a new series of Preferred Stock and the
designation, rights, preferences and limitations of the shares of such new
series;
NOW, THEREFORE, BE IT RESOLVED that pursuant to Article Fifth of the
Certificate of Incorporation there is hereby established a new series of 20,000
shares of Series A Convertible Preferred Stock of the Company (the "Series A
Preferred Stock") to have the designation, rights, preferences, powers,
restrictions and limitations set forth in a supplement of Article Fifth as
follows:
1. Designation and Number of Shares. The series will be known as the
"Series A Preferred Stock" and will be a series consisting of 20,000 shares of
the authorized but unissued preferred stock of the Company.
2. Dividends. On each of July 1, 2004, July 1, 2005, and July 1, 2006,
the holders of the Series A Preferred Stock shall be entitled to receive, out of
funds legally available therefor, in preference to the payment of dividends to
any holders of Common Stock, a dividend, payable in cash or in kind at the
option of the Company, equal to $40 per share of Series A Preferred Stock, when
and as declared by the Board of Directors of the Company. After June 30, 2006,
dividends will no longer accrue.
3. Liquidation Preference.
(a) Preference. In the event of any liquidation, dissolution
or winding up of the Company, either voluntarily or involuntarily, the holders
of the Series A Preferred Stock shall be entitled to receive prior and in
preference to any distribution of any of the assets or surplus funds of the
Company to the holders of Common Stock of the Company, an amount equal to (A)
$1,000 per share of Series A Preferred Stock held by such holder, plus (B) a
further amount equal to any dividends declared or accrued but unpaid on such
shares. If, upon such liquidation, dissolution or winding up of the Company, the
assets of the Company available for distribution to the stockholders of the
Company are insufficient to provide for the payment of the full aforesaid
preferential amount, such assets as are so available shall be distributed among
the holders of the Series A Preferred Stock in proportion to the relative
aggregate liquidation preferences of the preferred stock so held. All amounts
per share set forth in this subparagraph 3(a) shall be appropriately adjusted
for any stock splits, stock combinations, stock dividends or similar
recapitalizations.
(b) Noncash Distributions. If any of the assets of the Company
are to be distributed other than in cash under this paragraph 3 or for any
purpose, then the Board of Directors of the Company shall promptly engage
independent competent appraisers to determine the value of the assets to be
distributed to the holders of preferred stock or Common Stock. The Company
shall, upon receipt of such appraiser's valuation, give prompt written notice to
each holder of shares of preferred stock or Common Stock of the appraiser's
valuation.
(c) Consolidation or Merger. A consolidation or merger of the
Company with or into any other corporation or corporations or a sale of all or
substantially all of the assets of the Company, shall be deemed to be a
liquidation, dissolution or winding up within the meaning of this paragraph 3.
The provisions of this subparagraph 3(c) shall not apply to any consolidation or
merger following which the holders of a majority or more of the capital stock of
the resulting or surviving entity, based on voting power in the election of
directors, are persons or entities who were stockholders of the Company
immediately prior to such consolidation or merger.
4. Voting Rights.
(a) General Voting Rights. The holder of each share of Series
A Preferred Stock shall be entitled to the number of votes equal to the number
of shares of Common Stock into which each share of Series A Preferred Stock
could be converted on the record date for the vote or written consent of
stockholders and, except as otherwise required by law, shall have voting rights
and powers equal to the voting rights and powers of the Common Stock. The holder
of each share of Series A Preferred Stock shall be entitled to notice of any
stockholders' meeting in accordance with the Bylaws of the Company and, except
as provided in paragraph 4(b) below with respect to the election of directors by
the separate class vote of the holders of Series A Preferred Stock, shall vote
with holders of the Common Stock upon all other matters submitted to a vote of
stockholders, except those matters required to be submitted to a class or series
vote pursuant to paragraph 6 or by law. Fractional votes shall not, however, be
permitted and any fractional voting rights resulting from the above formula
(after aggregating all shares of Common Stock into which shares of preferred
stock held by each holder could be converted) shall be rounded to the nearest
whole number (with one-half rounded upward to one).
(b) Voting for the Election of Directors. As long as at least
10,000 shares of Series A Preferred Stock remain outstanding, the holders of
such shares of Series A Preferred Stock (voting as a separate class) shall be
entitled to elect one (1) director of the Company at any election of directors.
5. Conversion. The Series A Preferred Stock shall be convertible into Common
Stock, as follows:
(a) Right to Convert. Each share of Series A Preferred Stock
shall be convertible, at the option of the holder thereof, at the office of
the Company at any time after the date of issuance of such share through June
30, 2006. Each share of Series A Preferred Stock shall be convertible into the
number of shares of Common Stock which results from dividing $1,000 by the
conversion price per share in effect at the time of conversion. The conversion
price per share of Series A Preferred Stock ("Conversion Price") shall be (x)
$8 through June 30, 2004, (y) $12 from July 1, 2004 through June 30, 2005, and
(z) $16 from and after July 1, 2005. The Conversion Price shall be subject to
adjustment as hereinafter provided.
(b) Automatic Conversion. Each share of Series A Preferred
Stock shall automatically be converted into shares of Common Stock at the then
effective Conversion Price immediately prior to the closing of (i) a public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering a firm commitment underwritten offering of
the Company's Common Stock with aggregate gross proceeds to the Company, at
the public offering price, of at least $5 million, and a price per share not
less than the then effective Conversion Price (a "Qualified Offering"); or
(ii) upon the affirmative vote of the holders of a majority of the outstanding
shares of Series A Preferred Stock to convert all of the outstanding shares of
Series A Preferred Stock into Common Stock of the Company. A Qualified
Offering and a shareholder vote described in subparagraph (ii) are hereinafter
referred to as "Automatic Conversion Events".
(c) Mechanics of Conversion. Before any holder of Series A
Preferred Stock shall be entitled to convert the same into shares of Common
Stock as provided in paragraph 5(a), such holder shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Company and shall give written notice to the Company at such office that he
elects to convert the same. The Company shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series A
Preferred Stock a certificate or certificates for the number of shares of
Common Stock to which such holder shall be entitled as aforesaid. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Series A Preferred
Stock to be converted, and the person or persons entitled to receive the
shares of Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock on
such date.
In the event of an Automatic Conversion Event pursuant to
paragraph 5(b), the outstanding shares of Series A Preferred Stock shall be
converted automatically without any further action by the holders of such shares
and whether or not the certificates representing such shares are surrendered to
the Company; provided, however, that the Company shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such automatic
conversion unless the certificates evidencing such shares of Series A Preferred
Stock are either delivered to the Company as provided above, or the holder
notifies the Company that such certificates have been lost, stolen or destroyed
and executes an agreement satisfactory to the Company to indemnify the Company
from any loss incurred by it in connection with such certificates. The Company
shall, as soon as practicable after such delivery, or such agreement and
indemnification in the case of a lost certificate, issue and deliver at such
office to such holder of Series A Preferred Stock, a certificate or certificates
for the number of shares of Common Stock to which such holder shall be entitled
as aforesaid and a check payable to the holder in the amount of any cash amounts
payable as the result of a conversion into fractional shares of Common Stock.
Such conversion shall be deemed to have been made immediately prior to and shall
be contingent upon the Automatic Conversion Event, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on such date.
(d) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the Series A Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the Company
shall pay cash equal to such fraction multiplied by the Conversion Price in
effect at the time of conversion.
(e) Adjustment of Conversion Price. The Conversion Price of
the Series A Preferred Stock shall be subject to adjustment from time to time as
follows:
(i) If the Company shall issue any Common Stock or
other securities of the Company convertible into or exchangeable for
Common Stock (other than "Excluded Stock," as defined below, or stock
dividends, subdivisions, split-ups, combinations or dividends, which
such events are covered by subparagraphs 5(e)(iii), (iv), and (v)), for
a consideration per share less than the Conversion Price for the Series
A Preferred Stock as in effect immediately prior to the issuance of
such Common Stock (or other securities convertible into or exchangeable
for Common Stock), then the Conversion Price for such series shall
forthwith be decreased immediately after such issuance to a price equal
to the quotient obtained by dividing:
(A) an amount equal to the sum of: (x) the
total number of shares of Common Stock outstanding (including any
shares of Common Stock deemed to have been issued pursuant to
subdivision (3) of this subparagraph (i)) immediately prior to such
issuance multiplied by the Conversion Price in effect immediately prior
to such issuance plus (y) the consideration received by the Company
upon such issuance, by
(B) the total number of shares of Common
Stock outstanding (including any shares of Common Stock deemed to have
been issued pursuant to subdivision (3) of this subparagraph (i))
immediately after the issuance of such Common Stock (or other
securities convertible into or exchangeable for Common Stock).
For purposes of making any such calculation pursuant to this
subparagraph (i), the shares of Common Stock issuable upon conversion
of the outstanding shares of Series A Preferred Stock, together with
any other shares of Common Stock deemed issued and outstanding pursuant
to subdivision (3) of this subparagraph (i), shall be deemed issued and
outstanding at all times. For the purposes of this subparagraph (i),
the following provisions shall also be applicable:
(1) In the case of the issuance of Common
Stock for cash, the consideration received therefor shall be
deemed to be the amount of cash paid therefor without
deducting any discounts or commissions paid or incurred by the
Company in connection with the issuance and sale thereof.
(2) In the case of the issuance of Common
Stock for a consideration in whole or in part other than cash,
the consideration other than cash shall be deemed to be the
fair value thereof as determined in good faith by the Board of
Directors of the Company.
(3) In the case of the issuance of (i)
options to purchase or rights to subscribe for Common Stock
(other than Excluded Stock), (ii) securities by their terms
convertible or exchangeable for Common Stock (other than
Excluded Stock), or (iii) options to purchase or rights to
subscribe for such convertible or exchangeable securities:
a. the aggregate maximum number of
shares of Common Stock deliverable upon exercise of such options to
purchase or rights to subscribe for Common Stock shall be deemed to be
issuable for a consideration equal to the consideration (determined in
the manner provided in subdivisions (1) and (2) above), if any,
received by the Company upon the issuance of such options or rights
plus the minimum purchase price provided in such options or rights for
the Common Stock covered thereby;
b. the aggregate maximum number of
shares of Common Stock deliverable upon conversion of or in exchange
for any such convertible or exchangeable securities, or upon the
exercise of options to purchase or rights to subscribe for such
convertible or exchangeable securities and subsequent conversion or
exchange thereof, shall be deemed to be issuable for a consideration
equal to the consideration received by the Company for any such
securities and related options or rights, plus the additional
consideration, if any, to be received by the Company upon the
conversion or exchange of such securities or the exercise of any
related options or rights (the consideration in each case to be
determined in the manner provided in subdivisions (1) and (2) above);
c. the aggregate maximum number of
shares of Common Stock deliverable upon exercise of such options or
rights or upon conversion of or in exchange for such convertible or
exchangeable securities upon the exercise of options to purchase or
rights to subscribe for such convertible or exchangeable securities and
subsequent conversion or exchange thereof, shall be deemed to have been
issued at the time such options or rights or securities were issued;
d. on any change in the number of
shares of Common Stock deliverable upon exercise of any such options or
rights or conversion of or exchange for such convertible or
exchangeable securities, or on any change in the minimum purchase price
of such options, rights or securities, other than a change resulting
from any antidilution provisions of such options, rights or securities,
the Conversion Price shall forthwith be readjusted to such Conversion
Price as would have obtained had the adjustment (and any subsequent
adjustments) made upon (x) the issuance of such options, rights or
securities not exercised, converted or exchanged prior to such change,
as the case may be, been made upon the basis of such change or (y) the
options or rights related to such securities not converted or exchanged
prior to such change, as the case may be, been made upon the basis of
such change; and
e. on the expiration of any such
options or rights, the termination of any such rights to convert or
exchange or the expiration of any options or rights related to such
convertible or exchangeable securities, the Conversion Price shall
forthwith be readjusted to such Conversion Price as would have obtained
had the adjustment (and any subsequent adjustments) made upon the
issuance of such options, rights, convertible or exchangeable
securities or options or rights related to such convertible or
exchangeable securities, as the case may be, been made upon the basis
of the issuance of only the number of shares of Common Stock actually
issued upon the exercise of such options or rights, upon the conversion
or exchange of such convertible or exchangeable securities or upon the
exercise of the options or rights related to such convertible or
exchangeable securities, as the case maybe.
(ii) "Excluded Stock" shall mean:
(A) the Series A Preferred Stock;
(B) all shares of Common Stock into which
shares of the Series A Preferred Stock are convertible;
(C) securities issued pursuant to the
acquisition of another business entity or business segment of any such
entity by the Company by merger, purchase of substantially all of the
assets or other reorganization whereby the Company will own more than
fifty percent (50%) of the voting power of such business entity or
business segment of any such entity;
(D) securities issued in connection with any
borrowing, direct or indirect, from financial institutions or other
persons by the Company, including any type of loan or payment evidenced
by any type of debt instrument;
(E) securities issued to employees,
consultants , officers, directors or other advisors of the Company
pursuant to any stock option, stock purchase or stock bonus plan,
agreement or arrangement approved by the Board of Directors of the
Company;
(F) securities issued in connection with
obtaining lease financing, whether issued to a lender, lessor, guarantor
or other person approved by the Board of Directors of the Company;
(G) securities issued to leasing companies,
landlords, lenders an other providers of goods and services to the
Company and approved by the Board of Directors of the Company;
(H) securities issued in a public offering
pursuant to a registration statement under the Securities Act of 1933,
as amended;
(I) securities issued in connection with
strategic transactions involving the Company and other entities,
including (1) joint ventures, manufacturing, marketing or distribution
arrangements, and (2) technology license, transfer or development
arrangements; provided that such strategic transactions and the issuance
of securities in connection therewith has been approved by the Board of
Directors of the Company; and
(J) any right, option or warrant to acquire
any security convertible into the securities described in subparagraphs
(A) through (I) above.
(iii) If the number of shares of Common Stock
outstanding at any time after the date hereof is increased by a stock
dividend payable in shares of Common Stock (other than dividends
payable pursuant to the Series A Preferred Stock) or by a subdivision
or split-up of shares of Common Stock, then, on the date such payment
is made or such change is effective, the Conversion Price shall be
appropriately decreased so that the number of shares of Common Stock
issuable on conversion of the Series A Preferred Stock shall be
increased in proportion to such increase of outstanding shares.
(iv) If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, then, on the
effective date of such combination, the Conversion Price shall be
appropriately increased so that the number of shares of Common Stock
issuable on conversion of the Series A Preferred Stock shall be
decreased in proportion to such decrease in outstanding shares.
(v) In case the Company shall declare a cash dividend
upon its Common Stock payable otherwise than out of retained earnings
or shall distribute to holders of its Common Stock shares of its
capital stock (other than Common Stock), stock or other securities of
other persons, evidences of indebtedness issued by the Company or other
persons, assets (excluding cash dividends) or options or rights
(excluding options to purchase and rights to subscribe for Common Stock
or other securities of the Company convertible into or exchangeable for
Common Stock), then, in such case, the holders of shares of Series A
Preferred Stock shall, concurrent with the distribution to holders of
Common Stock, receive a like distribution based upon the number of
shares of Common Stock into which such Series A Preferred Stock is then
convertible.
(vi) in case, at any time after the date hereof, of
any capital reorganization, or any reclassification of the stock of the
Company (other than a change in par value or as a result of a stock
dividend or subdivision, split-up or combination of shares), or the
consolidation or merger of the Company with or into another person
(other than a consolidation or merger in which the Company is the
continuing entity and which does not result in any change in the Common
Stock), or of the sale or other disposition of all or substantially all
of the properties and assets of the Company as an entirety to any other
person, the shares of Series A Preferred Stock shall, if such event is
not deemed a liquidation for purposes of subparagraph 2(c), after such
reorganization, reclassification, consolidation, merger, sale or other
disposition, be convertible into the kind and number of shares of stock
or other securities or property of the Company or of the entity
resulting from such consolidation or surviving such merger or to which
such properties and assets shall have been sold or otherwise disposed
to which such holder would have been entitled if immediately prior to
such reorganization, reclassification, consolidation, merger, sale or
other disposition he had converted his shares of Series A Preferred
Stock into Common Stock. The provisions of this subparagraph (vi) shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales or other dispositions.
(vii) All calculations under this paragraph 5 shall
be made to the nearest cent or to the nearest one hundredth (1/100) of
a share, as the case may be.
(f) Minimal Adjustments. No adjustment in a Conversion Price
need be made if such adjustment would result in a change in a Conversion Price
of less than $0.01. Any adjustment of less than $0.01 which is not made shall be
carried forward and shall be made at the time of and together with any
subsequent adjustment which, on a cumulative basis, amounts to an adjustment of
$0.01 or more in a Conversion Price.
(g) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of a Conversion Price pursuant to this paragraph 5,
the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Series A Preferred Stock a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, upon written request at any time of
any holder of Series A Preferred Stock, furnish or cause to be furnished to such
holder a like certificate setting forth (i) such adjustments and readjustments,
(ii) the Conversion Price at the time in effect for the Series A Preferred Stock
held, and (iii) the number of shares of Common Stock and the amount if any, of
other property which at the time would be received upon the conversion of the
Series A Preferred Stock.
(h) Notices of Record Date. In the event of any taking by the
Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend) or other distribution, the Company shall mail to each
holder of Series A Preferred Stock at least ten (10) days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend or distribution.
(i) Reservation of Stock Issuable Upon Conversion. The Company
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of the Series A Preferred Stock such number of its shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series A
Preferred Stock, the Company will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.
(j) Notices. Any notice required by the provisions of this
paragraph 5 to be given to the holder of shares of the Series A Preferred Stock
shall be deemed given if deposited in the United States mail, postage prepaid,
and addressed to each holder of record at his latest address appearing on the
books of the Company.
6. Protective Provisions.
(a) Approval of Preferred Stock. So long as any shares of the
Series A Preferred Stock shall be outstanding, the Company shall not, without
obtaining the affirmative vote (by vote or written consent, as provided by law)
of holders of at least a majority of the outstanding shares of Series A
Preferred Stock:
(i) alter or change the rights, preferences or
privileges of the Series A Preferred Stock; or
(ii) create (by reclassification or otherwise) any
new class or series of shares having rights preferences or privileges
senior to the Series A Preferred Stock; or
(iii) redeem or repurchase any shares of Common Stock
(other than pursuant to equity incentive agreements with service
providers giving the Company the right to repurchase shares upon the
termination of services); or
(iv) amend or waive any provision of the Company's
Certificate of Incorporation or Bylaws relative to the Series A
Preferred Stock.
[Remainder of page left blank intentionally]
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed by its President and attested to by its Secretary this 25th day of
June, 2003.
INTEGRATED BIOPHARMA, INC.
By: /s/ E. ▇▇▇▇▇▇ ▇▇▇
Name: E. ▇▇▇▇▇▇ ▇▇▇
Title: Chief Executive Officer
ATTEST:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary