Exhibit 10.2

 

WARRANT FOR THE PURCHASE OF

SHARES OF COMMON STOCK OF

NATURE VISION, INC.

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, OR APPLICABLE STATE SECURITIES LAW. THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF THE
SECURITIES WILL BE MADE BY THE COMPANY OR ITS TRANSFER AGENT, IN THE ABSENCE OF
SUCH REGISTRATION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

For value received, Nature Vision, Inc., a Minnesota corporation (the
“Company”), hereby grants to Richard Kiphart, or his successors or assigns (the
“Lender”) the right (the “Warrant”) to subscribe for and purchase from the
Company, 100,000 of the fully paid and nonassessable shares of common stock of
the Company (the “Warrant Shares”). The Exercise Price will initially be $2.21,
which is the closing price on the date of issuance of this Warrant, subject to
adjustment as described herein. For purposes of this Agreement, the “Exercise
Price” means the amount payable for exercise of the Warrant for the total number
of Warrant Shares being exercised hereunder at the warrant exercise price stated
in the preceding sentence. The Warrant may be exercised by the Lender at any
time or from time to time from and after October 20, 2007, and on or prior to
October 19, 2009.

The Warrant is subject to the following provisions, terms and conditions:

1.

Exercise.

 

1.1

Procedure. The rights represented by the Warrant may be exercised by the holder
hereof, in whole or in part, by written notice of exercise delivered to the
Company at least twenty (20) days prior to the intended date of exercise and by
the surrender of the Warrant (properly endorsed if required) at the principal
office of the Company and upon payment to the Company by cash, certified check
or bank draft of the purchase price for the Warrant Shares being so purchased.
The Warrant Shares so purchased will be deemed to be issued as of the close of
business on the date on which the Warrant has been exercised by payment to the
Company of the Exercise Price.

 

1.2

Cashless Exercise. In lieu of exercising the Warrant as described above, the
registered holder may elect to receive Warrant Shares equal to the value (as
determined below) of the Warrant (or the portion thereof being canceled) by
surrender of the Warrant at the principal office of the Company, together with

 

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notice of such election (which notice will include the number of Warrant Shares
being exercised hereunder), in which event the Company will issue to the
registered holder a certificate representing that number of Warrant Shares equal
to the quotient of the following: (a) the fair market value of the Warrant
Shares being exercised (the “Exercised Units”) on the date of such payment or
receipt by the Company of such notice (unless such notice specifies a later
date, in which case it will be such specified date) (the “Exercise Date”) which
fair market value will be determined by subtracting (A) the aggregate Exercise
Price of the Exercised Units immediately prior to the exercise of the Warrant
from (B) the aggregate fair market value of the Exercised Units on the Exercise
Date; divided by (b) the fair market value of one Warrant Unit as of the
Exercise Date. No fractional Warrant Shares will be issuable upon exercise of
the Warrant, and if the number of Warrant Shares to be issued determined in
accordance with the foregoing formula is other than a whole number, the Company
will pay to the registered holder an amount in cash equal to the fair market
value of the resulting fractional share on the Exercise Date.

 

1.3

Certificates. Certificates will be issued representing the applicable Warrant
Shares as soon as practicable following the Exercise Date. Unless the Warrant
has expired, following any exercise of the Warrant a new warrant representing
the number of Warrant Shares, if any, with respect to which the Warrant has not
been exercised will also be delivered to the holder hereof. No fractional
Warrant Shares will be issued upon the exercise of the Warrant.

 

1.4

Valuation. For purposes of this Section 1, the “fair market value” of the
Warrant Shares will be the average of the closing prices quoted on the NASDAQ
system (or similar system) over the ten day period ending three days before the
day the current fair market value of the securities is being determined.
However, if at any time the Warrant Shares are not listed on any securities
exchange or the over-the-counter market, the current fair market value of
Warrant Shares will be as determined in good faith by the Company’s Board of
Directors (the “Board”), unless the Company will become subject to a merger,
acquisition or other consolidation pursuant to which the Company is not the
surviving party, in which case the fair market value of Warrant Shares will be
deemed to be the value received by the holders of the Company’s common stock. If
the Lender and the Company disagree as to the Board’s determination of fair
market value, the fair market value will be determined by arbitration under the
rules of the American Arbitration Association, at the Lender’s expense.

2.

Company Covenants. The Company covenants and agrees that all Warrant Shares that
may be issued upon the exercise of the rights represented by the Warrant will,
upon issuance, be duly authorized and issued, fully paid and nonassessable
shares of common stock in the Company. The Company further covenants and agrees
that during the period within which the rights represented by the Warrant may be
exercised, the Company will at all times have authorized, and reserved for the
purpose of issue or transfer upon exercise of the subscription rights evidenced
by the Warrant, a sufficient number of shares of common stock to provide for the
exercise of the rights represented by the Warrant.

 

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3.

Adjustment to Exercise Price. The Exercise Price will be subject to further
adjustment from time to time as hereinafter provided in this Section 3.

 

3.1

Stock Division or Combination. In case the Company will at any time divide the
outstanding common stock into a greater number of shares of common stock
(whether pursuant to a stock split, distribution or otherwise), and conversely,
in case the outstanding Warrant Shares to which the Warrant relates will be
combined into a smaller number of shares of common stock, the Exercise Price in
effect immediately prior to such division or combination will be proportionately
adjusted to reflect the reduction or increase in the value of each Warrant Unit
available for issuance under the Warrant.

 

3.2

Reorganization, Consolidation, Merger or Sale. If any capital reorganization or
reclassification of the shares of common stock of the Company, or consolidation
or merger of the Company with another entity, or the sale of all or
substantially all of its assets to another entity will be effected in such a way
that the holders of the Company’s Warrant Shares will be entitled to receive
securities or assets with respect to or in exchange for such Warrants, then, as
a condition of such reorganization, reclassification, consolidation, merger or
sale, the holder of the Warrant will have the right to purchase and receive upon
the basis and upon the terms and conditions specified in the Warrant and in lieu
of the Warrant Shares immediately theretofore purchasable and receivable upon
the exercise of the rights represented hereby, such securities or assets as
would have been issued or delivered to the holder of the Warrant if it had
exercised the Warrant and had received such Warrant Shares prior to such
reorganization, reclassification, consolidation, merger or sale. The Company
will not effect any such consolidation, merger or sale, unless prior to the
consummation thereof the successor entity (if other than the Company) resulting
from such consolidation or merger or the business entity purchasing such assets
will assume by written instrument executed and mailed to the registered holder
of the Warrant at the last address of such holder appearing on the books of the
Company the obligation to deliver to such holder such securities or assets as,
in accordance with the foregoing provisions, such holder may be entitled to
purchase.

 

3.3

Other Adjustments. If the Company takes any other action, or if any other event
occurs, which does not come within the scope of the provisions of Sections 3.1
or 3.2, but which should result in an adjustment in the Exercise Price and/or
the number of Warrant Shares subject to the Warrant in order to fairly protect
the purchase rights of the holder of the Warrant, the Company will make an
appropriate adjustment in such purchase rights.

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3.4

Calculation. Upon each adjustment of the Exercise Price, the holder of the
Warrant will thereafter be entitled to purchase, at the Exercise Price resulting
from such adjustment, the number of Warrant Shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares purchasable pursuant hereto immediately prior to such adjustment
and dividing the product thereof by the Exercise Price resulting from such
adjustment.

 

3.5

Notice of Adjustment. Upon any adjustment of the Exercise Price, the Company
will give written notice thereof, by first class mail, postage prepaid,
addressed to the registered holder of the Warrant at the address of such holder
as shown on the books of the Company, which notice will state the Exercise Price
resulting from such adjustment and the increase or decrease, if any, in the
number of Warrant Shares purchasable at such price upon the exercise of the
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.

4.

No Shareholder Rights Before Exercise. The Warrant by itself will not entitle
the holder hereof to any voting rights or other rights as a shareholder of the
Company.

5.

Limitations on Transfer. The holder of the Warrant, by acceptance hereof, agrees
to give written notice to the Company before transferring the Warrant or
transferring any Warrant Shares issuable or issued upon the exercise of the
Warrant of the holder’s intention to do so, describing briefly the manner of any
proposed transfer of the Warrant or such holder’s intention as to the Warrant
Shares issuable upon the exercise hereof or the intended disposition to be made
of the Warrant Shares upon such exercise. Promptly upon receiving such written
notice, the Company will present copies thereof to counsel for the Company. If,
in the opinion of such counsel, the proposed transfer of the Warrant or
disposition of the Warrant Shares may be effected without registration or
qualification (under any federal or state law), the Company, as promptly as
practicable, will notify such holder of such opinion, whereupon such holder will
be entitled to transfer the Warrant, or to exercise the Warrant in accordance
with its terms and dispose of the Warrant Shares received upon such exercise or
to dispose of Warrant Shares received upon the previous exercise of the Warrant,
all in accordance with the terms of the notice delivered by such holder to the
Company.

6.

Procedures for Transfer. Subject to the provisions of Section 5, the Warrant and
all rights hereunder are transferable, in whole or in part, at the principal
office of the Company by the holder hereof in person or by duly authorized
attorney, upon surrender of the Warrant properly endorsed to any person or
entity who represents in writing that he, she or it is acquiring the Warrant for
investment and without any view to the sale or other distribution thereof. Each
holder of the Warrant, by taking or holding the same, consents and agrees that
the bearer of the Warrant, when endorsed, may be treated by the Company and all
other persons dealing with the Warrant as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented by the
Warrant, or to the transfer hereof on the books of the Company, any notice to
the contrary notwithstanding; but until such transfer on such books, the Company
may treat the registered owner hereof as the owner for all purposes.

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7.

Amendment. The Warrant and the provisions hereof may not be amended, modified or
terminated, nor will any waiver of any provision hereof be effective, except by
an instrument in writing signed by the party against whom enforcement of any
amendment, modification, termination or waiver is sought.

The Company has caused the Warrant to be signed and delivered by a duly
authorized officer as of October 19, 2007.

 

 

 

NATURE VISION, INC.

 

/s/   Jeffrey Zernov

 

Name:  

Jeffrey Zernov

 

Title:  

President

 

 

 

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WARRANT EXERCISE

(To be signed only upon exercise of warrant)

The undersigned, the holder of the foregoing warrant, hereby irrevocably elects
to exercise the purchase right represented by such warrant for, and to purchase
thereunder, ______________ shares of common stock, to which such warrant relates
and herewith makes payment of $____________ therefor in cash, certified check,
or bank draft and requests that the shares of common stock be issued in the name
of ________________________, whose address is set forth below the signature of
the undersigned.

 

 

 

 

 

Dated: 

_________, 20__

 

 

 

 

 

 

(Signature)

 

 

 

 

 

 

 

 

 

 

 

(Address)

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WARRANT ASSIGNMENT

(To be signed only upon transfer of warrant)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_____________________________________________ the purchase right represented by
the foregoing warrant to purchase shares of common stock in Nature Vision, Inc.,
a Minnesota corporation, to which such warrant relates and
appoints________________________ ____________________________________ attorney
to transfer such purchase right on the books of Nature Vision, Inc., with full
power of substitution in the premises.

 

 

 

 

 

 

 

 

 

 

 

(Signature of Richard Kiphart)

Dated:  

 

 

 

 

 

 

 

 

 

 

 

 

 

(Name and Address of Transferee)

 

 

 

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