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Exhibit 4.6.1
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
March 17, 2000
WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF
PRECISION OPTICS CORPORATION, INC.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON MARCH 17, 2005,
OR IF NOT A BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M.,
NEW YORK TIME, ON THE IMMEDIATELY PRECEDING BUSINESS DAY
No. 1
THIS CERTIFIES that, for good and valuable consideration, FIRST
SECURITY VAN KASPER ("FSVK"), or registered assigns (the "Warrantholder"), is
entitled to subscribe for and purchase from Precision Optics Corporation Inc., a
Massachusetts corporation (the "Company"), at a price of $19.00 per share (such
price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time and from time to time prior
to the Expiration Date (as defined below), up to 47,368 fully paid,
nonassessable shares of Common Stock, par value $0.01 per share, of the Company
("Common Stock"), subject, however, to the provisions and upon the terms and
conditions hereinafter set forth, including without limitation the provisions of
Section 2 hereof. "Expiration Date" shall mean 5:00 P.M., New York time, on
March 17, 2005, which is five years from the date hereof, or if not a Business
Day, as defined herein, at 5:00 P.M., New York time, on the immediately
preceding business day. "Business Day" shall mean a day other than a Saturday,
Sunday or other day on which banks in the State of California are authorized by
law to remain closed.
SECTION 1. EXERCISE OF WARRANT
(a) CASH EXERCISE
This Warrant may be exercised, at any time and from time to time prior
to the Expiration Date, by the Warrantholder, in whole or in part (but not as to
a fractional share of Common Stock and in no event for less than 500 shares
(unless less than an aggregate of 500 shares are then purchasable under all
outstanding Warrants held by a Warrantholder)), by the completion of the
subscription form attached hereto and by the surrender of this Warrant (properly
endorsed) at the Company's offices at 22 East Broadway, Gardner, Massachusetts
(or at such other location in the United States as the Company may designate by
notice in writing to the Warrantholder at the address of the Warrantholder
appearing on the books of the Company), and by payment to the Company of the
Warrant Price, in cash or by certified or official bank check, for each share
being purchased.
(b) NET EXERCISE
Notwithstanding anything to the contrary contained in Section 1(a), the
Warrantholder may elect to exercise this Warrant and receive shares on a "net
exercise" basis in an amount equal to the value of this Warrant by delivery of
the subscription form attached hereto and surrender of this Warrant at the
principal office of the Company, in which event the Company shall issue to
Holder a number of shares computed using the following formula:
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X = (P)(Y)(A-B)
-----------
A
Where: X = the number of shares of Common Stock to be issued
to Holder.
P = the portion of the Warrant being exercised.
Y = the number of shares of Common Stock issuable
upon exercise of this Warrant.
A = the Current Market Price (as determined pursuant
to Section 1(d)) of one share of Common Stock.
B = Warrant Price.
(c) PROCEDURE FOR EXERCISE
In the event of any exercise of the rights represented by this Warrant,
a certificate or certificates for the total number of whole shares of Common
Stock so purchased, registered in the name of the Warrantholder, shall be
delivered to the Warrantholder within a reasonable time, not exceeding five
Business Days, after the rights represented by this Warrant shall have been so
exercised; and, unless this Warrant has expired, a new Warrant representing the
number of shares (except a remaining fractional share), if any, with respect to
which this Warrant shall not then have been exercised shall also be issued to
the Warrantholder within such time. With respect to any such exercise, the
Warrantholder shall for all purposes be deemed to have become the holder of
record of the number of shares of Common Stock evidenced by such certificate or
certificates from the date on which this Warrant was surrendered and if exercise
is pursuant to Section 1(a), payment of the Warrant Price was made, irrespective
of the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date on which the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of this
Warrant and no payment or adjustment shall be made upon any exercise on account
of any cash dividends on the Common Stock issued upon such exercise. If any
fractional interest in a share of Common Stock would, except for the provisions
of this Section 1, be delivered upon any such exercise, the Company, in lieu of
delivering the fractional share thereof, shall pay to the Warrantholder an
amount in cash equal to the Current Market Price of such fractional interest, as
determined below.
(d) CURRENT MARKET PRICE
For any computation hereunder, the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the daily Market
Price per share for the 10 consecutive Trading Days prior to the date in
question. "Market Price" is defined as the closing bid prices of such security
on the principal United States securities exchange or trading market on which
such security is listed or traded as reported by the Research Service of Nasdaq
Trading and Market Services (or a comparable reporting service of national
reputation), or if the foregoing does not apply, the last reported sale price of
such security in the over-the-counter market on the electronic bulletin board
for such security as reported by Nasdaq, or, if no sale price is reported for
such security by Nasdaq, the average of the bid and asked prices of any market
makers for such security as reported in the "pink sheets" by the National
Quotation Bureau, Inc. If Market Price cannot be established as described above,
Market Price shall be the fair market value of the Common Stock as determined in
good faith by the Board of Directors. The term "Trading Day" shall mean a day on
which Nasdaq or the principal national securities exchange on which the Common
Stock is listed or admitted to trading is open for the transaction of business.
SECTION 2. ADJUSTMENTS
Prior to the Expiration Date, the Warrant Price and the number of
shares issuable upon the exercise of this Warrant, shall be subject to
adjustment from time to time as provided in this Section 2. In the event that
any
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adjustment of the Warrant Price as required herein results in a fraction of a
cent, such Warrant Price shall be rounded up or down to the nearest cent;
provided that, in no event shall the Warrant Price per share be reduced below
$.01.
(a) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company, at
any time prior to the Expiration Date, subdivides (by any stock split, stock
dividend, reclassification or otherwise) its shares of Common Stock into a
greater number of shares, then, after the date of record for effecting such
subdivision, the Warrant Price in effect immediately prior to such subdivision
will be proportionately reduced. If the Company, at any time prior to the
Expiration Date, combines (by reverse stock split, reclassification or
otherwise) its shares of Common Stock into a smaller number of shares, then,
after the date of record for effecting such combination, the Warrant Price in
effect immediately prior to such combination will be proportionately increased.
(b) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Warrant Price pursuant to the provisions of this Section 2, the number of shares
of Common Stock issuable upon exercise of this Warrant shall be increased or
decreased to equal the quotient obtained by dividing (i) the product of (A) the
Warrant Price in effect immediately prior to such adjustment, multiplied by (B)
the number of shares of Common Stock issuable upon exercise of this Warrant
immediately prior to such adjustment, by (ii) the adjusted Warrant Price.
(c) CONSOLIDATION, MERGER OR SALE. In case of any capital
reorganization or any reclassification of the shares of Common Stock of the
Company, or in the case of any consolidation with or merger of the Company into
or with another corporation or the sale of all or substantially all of its
assets to another corporation effected in such a manner that the holders of
Common Stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for Common Stock, then, as part of such
reorganization, reclassification, consolidation, merger or sale, as the case may
be, lawful provision shall be made so that the holder of the Warrant shall have
the right thereafter to receive, upon the exercise hereof, the kind and amount
of shares of stock or other securities or property which the holder would have
been entitled to receive if, immediately before such reorganization,
reclassification, consolidation or merger, the holder had held the number of
shares of Common Stock which were then purchasable upon the exercise of the
Warrant had the Warrant been exercised. In any such case, appropriate adjustment
(as determined in good faith by the Board of Directors of the Company) shall be
made in the application of the provisions set forth herein with respect to the
rights and interests thereafter of the holder of the Warrant, to the end that
the provisions set forth herein (including provisions with respect to
adjustments of the exercise price) shall thereafter be applicable, as nearly as
reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the exercise of this Warrant.
(d) NOTICE OF ADJUSTMENT. Upon the occurrence of any event which
requires any adjustment of the Warrant Price, then, and in each such case, the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Warrant Price resulting from such adjustment and the increase or
decrease in the number of shares issuable upon exercise of this Warrant, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. Such calculation shall be certified by the Chief
Financial Officer of the Company.
(e) MINIMUM ADJUSTMENT OF THE EXERCISE PRICE. No adjustment of the
Warrant Price shall be made in an amount of less than .1% of the Warrant Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than .1% of such
Warrant Price.
(f) NO FRACTIONAL SHARES. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Warrant Price of a share of
Common Stock on the date of such exercise.
(g) OTHER NOTICES. In case at any time:
(i) the Company shall declare any dividend upon the Common
Stock payable in shares of
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stock of any class or make any other distribution (other than dividends or
distributions payable in cash out of retained earnings consistent with the
Company's past practices with respect to declaring dividends and making
distributions) to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;
(iii) there shall be any capital reorganization of the
Company, or reclassification of the Common Stock, or consolidation or merger of
the Company with or into, or sale of all or substantially all of its assets to,
another corporation or entity; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
(v) then, in each such case, the Company shall give to the
holder of this Warrant (a) notice of the date or estimated date on which the
books of the Company shall close or a record shall be taken for determining the
holders of Common Stock entitled to receive any such dividend, distribution, or
subscription rights or for determining the holders of Common Stock entitled to
vote in respect of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up and (b) in the case of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable estimate thereof by the Company) when the same shall take place. Such
notice shall also specify the date on which the holders of Common Stock shall be
entitled to receive such dividend, distribution, or subscription rights or to
exchange their Common Stock for stock or other securities or property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding-up, as the case may be. Such notice
shall be given at least fifteen (15) days prior to the record date or the date
on which the Company's books are closed in respect thereto. Failure to give any
such notice or any defect therein shall not affect the validity of the
proceedings referred to in clauses (i), (ii), (iii) and (iv) above.
Notwithstanding the foregoing, the Company may publicly disclose the substance
of any notice delivered hereunder prior to delivery of such notice to the holder
of this Warrant.
(h) NO ADJUSTMENT FOR DIVIDENDS
Except as provided in Section 2(a) of this Agreement, no adjustment in
respect of any cash dividends shall be made during the term of this Warrant or
upon the exercise of this Warrant.
(i) FORM OF WARRANT AFTER ADJUSTMENTS
The form of this Warrant need not be changed because of any adjustments
in the Warrant Price or the number or kind of the shares purchasable pursuant to
this Warrant, and Warrants theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated in this
Warrant, as initially issued; PROVIDED, HOWEVER, that the Company may, at any
time in its sole discretion (which shall be conclusive), make any change in the
form of Warrant certificate that it may deem appropriate and that does not
affect the substance thereof. Any Warrant certificate thereafter issued, whether
upon registration of transfer of, or in exchange or substitution for, an
outstanding Warrant certificate may be in the form so changed.
(j) TREATMENT OF WARRANTHOLDER
Prior to due presentment for registration of transfer of this Warrant,
the Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
all purposes and shall not be affected by any notice to the contrary.
(k) STOCK TO BE RESERVED
The Company will at all times reserve and keep available out of its
authorized Common Stock, solely for
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the purpose of issuance upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant. The Company covenants that all shares of Common Stock
which shall be so issued, upon full payment of the Warrant Price therefore or as
otherwise set forth herein, shall be duly and validly issued and fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, and, without limiting the generality of the foregoing, the
Company covenants that it will from time to time take all such action as may be
required to ensure that the par value per share, if any, of the Common Stock is
at all times equal to or less than the effective Warrant Price. The Company will
take all such action as may be necessary to ensure that all such shares of
Common Stock may be so issued without violation of any applicable law or
regulation, or of any requirement of any national securities exchange or
automated quotation system upon which the Common Stock of the Company may be
listed. The Company will not take any action that results in any adjustment
under this Section 2, if the total number of shares of Common Stock issued and
issuable after such action upon exercise of this Warrant would exceed the total
number of shares of Common Stock then authorized by the Company's Certificate of
Incorporation. The Company has not granted and will not grant any right of first
refusal with respect to shares issuable upon exercise of this Warrant, and there
are no preemptive rights associated with such shares.
(l) ISSUE TAX
The issuance of certificates for shares of Common Stock upon exercise
of any Warrant shall be made without a charge to the Warrantholder for any
issuance tax in respect thereof, provided that the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the
Warrantholder.
(m) CLOSING OF BOOKS
The Company will at no time close its transfer books against the
transfer of the shares of Common Stock issued or issuable upon the exercise of
this Warrant in any manner that interferes with the timely exercise of this
Warrant.
(n) DEFINITION OF COMMON STOCK
As used herein the term "Common Stock" shall mean and include the
Common Stock, par value $0.01, of the Company as authorized on the date hereof,
or shares of any class or classes resulting from any recapitalization or
reclassification thereof which are not limited to any fixed sum or percentage
and are not subject to redemption by the Company and in case at any time there
shall be more than one such resulting class, the shares of each class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassification bears to the total
number of shares of all such classes resulting from all such reclassification.
SECTION 3. REGISTRATION RIGHTS
FSVK (and certain assignees thereof) are entitled to the
benefit of such registration rights in respect of the shares issuable upon
exercise of this Warrant as are set forth in that certain Registration Rights
Agreement dated as of March 17, 2000 among the Company, FSVK and the holders of
the Company's Common Stock named therein (as such agreement may be amended in
accordance with its terms).
SECTION 4. NO STOCKHOLDERS RIGHTS OR LIABILITIES
This Warrant shall not entitle the Warrantholder to any voting rights
or other rights as a stockholder of the Company. No provision hereof, in the
absence of affirmative action by the Warrantholder to purchase shares of Common
Stock, and no mere enumeration herein of the rights or privileges of the
Warrantholder shall give rise to any liability of such Warrantholder for the
Warrant Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
SECTION 5. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
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In case the certificate or certificates evidencing the Warrants shall
be mutilated, lost, stolen or destroyed, the Company shall, at the request of
the Warrantholder, issue and deliver in exchange and substitution for and upon
cancellation of the mutilated certificate or certificates, or in lieu of and
substitution for the certificate or certificates lost, stolen or destroyed, a
new Warrant certificate or certificates of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence satisfactory to
the Company of such loss, theft or destruction of such Warrant and an agreement
of indemnity, if requested.
SECTION 6. NOTICES
All notices, requests and other communications required or permitted to
be given or delivered hereunder shall be in writing, and shall be delivered, or
shall be sent by certified or registered mail or overnight courier, postage
prepaid, or by facsimile, and if to the Warrantholder , at First Security Van
Kasper, 600 California Street, Suite 1700, San Francisco, CA 94108, Attention:
Ronald F. Richards, facsimile number (415) 675-2458, or to such address or
facsimile number as shall have been furnished to the Company by notice from such
Warrantholder and if to the Company, at 22 East Broadway, Gardner, MA 01440;
Attention: Chief Financial Officer, facsimile number (978) 630-1487, or at such
other address or facsimile number as shall have been furnished to the
Warrantholder by notice from the Company, with a copy to Ropes & Gray, One
International Place, Boston, MA 02110, Attention: Patrick O'Brien, facsimile
number (617) 951-7050.
SECTION 7. RESTRICTIONS ON TRANSFER
(a) If, at the time of the surrender of this Warrant in connection with
any exercise, transfer, or exchange of this Warrant, this Warrant (or, in the
case of any exercise, the shares issuable hereunder), shall not be registered
under the Securities Act and under applicable state securities or blue sky laws,
the Company may require, as a condition of allowing such exercise, transfer, or
exchange, (i) that the holder or transferee of this Warrant, as the case may be,
furnish to the Company a written opinion of counsel (which opinion shall be in
form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that such exercise, transfer, or exchange may be
made without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Company an investment letter in form and sub-stance reasonably
acceptable to the Company and (iii) that the transferee be an "accredited
investor" as defined in Rule 501(a) promulgated under the Securities Act.
(b) Notwithstanding anything in the Warrant to the contrary, this
Warrant shall not be exercisable to the extent (but only to the extent) that (a)
the number of shares of Common Stock beneficially owned by the holder of this
Warrant and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised portion of
this Warrant or the unexercised or unconverted portion of any other securities
of the Company subject to a limitation on conversion or exercise analogous to
the limitation contained herein) and (b) the number of shares of Common Stock
issuable upon exercise of this Warrant (or portion thereof) with respect to
which the determination described herein is being made, would result in
beneficial ownership by such holder and its affiliates of more than 9.99% of the
outstanding shares of Common Stock. To the extent the above limitation applies,
the determination of whether and to what extent this Warrant shall be
exercisable with respect to other securities owned by such holder shall be in
the sole discretion of the holder and submission of this Warrant for full or
partial exercise shall be deemed to be the holder's determination of whether and
the extent to which this Warrant is exercisable, in each case subject to such
aggregate percentage limitation. No prior inability to exercise this Warrant
pursuant to this Section shall have any effect on the applicability of the
provisions of this Section with respect to any subsequent determination of
exercisability. For purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulation 13D-G thereunder, except as
otherwise provided in clause (a) hereof. The restrictions contained in this
Section 8(g) may not be amended without the written consent of the Company and
the holder of this Warrant.
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SECTION 8. AMENDMENTS AND WAIVERS
This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
SECTION 9. SEVERABILITY
If one or more provisions of this Warrant are held to be unenforceable
under applicable law, such provisions shall be excluded from this Warrant, and
the balance of this Warrant shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
SECTION 10. GOVERNING LAW
THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
SECTION 12. HEADINGS
The headings in this Warrant are for purposes of reference only and
shall not limit or otherwise affect any of the terms hereof.
SECTION 13. COUNTERPARTS
This Warrant may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the Company and FSVK have executed this Warrant on
and as of the day and year first above written.
PRECISION OPTICS CORPORATION, INC.,
A MASSACHUSETTS CORPORATION
By: /s/ JACK P. DREIMILLER
-------------------------------------
Jack P. Dreimiller, Senior Vice
President, Finance
Attest:
/s/ RICHARD E. FORKEY
------------------------------
Richard E. Forkey, President
FIRST SECURITY VAN KASPER
By: /s/ RONALD F. RICHARDS
-------------------------------------
Ronald F. Richards, Managing Director
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SUBSCRIPTION FORM
(To be executed upon exercise of this Warrant)
_______________________:
The undersigned hereby irrevocably elects to exercise the right of
purchaser represented by the within Warrant for, and to purchase thereunder,
______________ shares of Common Stock, as provided for therein, and either
tenders herewith payment of the purchase price in full in the form of cash or a
certified or official bank check in the amount of $_____________ or, if the
undersigned elects pursuant to Section 1(b) of the within Warrant to convert
such Warrant into Common Stock a net issuance basis, the undersigned exercises
the within Warrant by exchange under the terms of Section 1(b).
Please issue a certificate or certificates for such Common Stock in the
name of, and pay any cash for any fractional share to:
Name:______________________________
Address:___________________________
Social
Security No:_______________________
If said number of shares shall not be all the shares purchasable under
the within Warrant, a new Warrant is to be issued in the name of said
undersigned for the balance remaining of the shares purchasable thereunder
rounded up to the next higher number of shares.
Name_______________________________
Signature__________________________
Note: The above signature must correspond
exactly with the name on the first page
of this Warrant or with the name of the
assignee appearing in the assignment
form below.
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ASSIGNMENT
(To be executed only upon assignment of Warrant)
For value received, _______________________________ hereby sells,
assigns and transfers unto _______________________ the within Warrant
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ____________________ attorney, to
transfer said Warrant on the books of the within-named Company with respect to
the number of Warrants set forth below, with full power of substitution in the
premises:
Name(s) of
Assignee(s)/Address No. of Warrants
------------------- ---------------
And if said number of Warrants shall not be all the Warrants represented by the
Warrant, a new Warrant is to be issued in the name of said undersigned for the
balance remaining of the Warrants registered by said Warrant.
Name_________________________
Dated: __________________ Signature____________________
Note: The above signature must correspond
exactly with the name on the face of
this Warrant
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