EXHIBIT 4(s)
THIS SECURITY HAS BEEN ACQUIRED IN A TRANSACTION NOT INVOLVING ANY PUBLIC
OFFERING AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE ACT.
PICO PRODUCTS, INC.
______________________________
STOCK PURCHASE WARRANT
SUBJECT TO CALL
______________________________
Right to Purchase Certificate No. 1
39,382 shares of Common Stock Dated as of September 12, 1997
1. GRANT. For consideration of $3.00 and other value received,
PICO PRODUCTS, INC., a New York corporation (the "Company"), hereby grants to
ALLIED CAPITAL CORPORATION or its registered assigns (the "Holder"), at the
exercise price set forth in Section 3 below, the right to purchase up to
39,382 shares (the "Warrant Shares") of the Company's Common Stock, par value
$.01 per share (the "Common Stock"). The number of Warrant Shares to be
received upon the exercise of this Warrant is subject to adjustment from time
to time as hereinafter set forth.
2. EXERCISE PERIOD. The right to exercise this Warrant, in whole
or in part, shall commence as of the date hereof, and shall expire on that
date (the "Expiration Date") which is the later of: (i) three years from the
date on which all Obligations with respect to the Debentures are satisfied in
full; or (ii) six years from the date hereof.
3. EXERCISE PRICE. (a) The per share exercise price (the
"Exercise Price") of this Warrant shall be equal to the average closing price
for the 90 calendar days preceding the date which is 120 calendar days
following the date of filing with the Securities and Exchange Commission of
the Company's Form 10-K for the fiscal year ended July 31, 1997 (the "Pricing
Date"). In the event there is no closing price on any day during such 90 day
period, then the average of the most recent bid and asked price shall be used
as the price for such day for purposes of calculating the Exercise Price.
(b) In the event that any or a portion of this Warrant is
exercised prior to the Pricing Date, the per share exercise price of this
Warrant will be equal to the average closing price (or average of the most
recent bid and asked price in the event there is no closing price on any such
day) for the 90 calendar days preceding the actual date of exercise (the
"Preliminary
Exercise Price"), subject to adjustment based on the actual Exercise Price on
the Pricing Date as determined in accordance with Section 3(a) hereof;
provided that at the time of such determination, the Common Stock is traded
in the over-the-counter market or on a national or regional securities
exchange.
4. ANTI-DILUTION ADJUSTMENTS. The number of Warrant Shares to be
received by the Holder upon exercise of this Warrant and the Exercise Price
shall be subject to adjustment from time to time as follows:
(a) If the Company shall issue, or be deemed to have issued
(pursuant to subsection (3) of Section 4(b)), any shares of Common Stock,
(other than "Excluded Stock" as defined below) for a consideration
(determined in the manner provided in subsections (1), (2) and (3) of Section
4(b)) per share less than the Exercise Price, the Exercise Price to be in
effect following such issuance shall be adjusted to a price (calculated to
the nearest cent) determined by dividing:
(I) an amount equal to the sum of (x) the number of shares of
Common Stock outstanding immediately prior to such issue (including
as outstanding all shares of Common Stock issuable upon exercise of
the Warrants) multiplied by the then existing Exercise Price, and
(y) the consideration, if any, received by the Company upon such
issue; by
(II) the total number of shares of Common Stock outstanding
immediately after such issue (including as outstanding all shares
of Common Stock issuable upon exercise of the Warrants).
No adjustment of the Exercise Price however shall be made in an
amount less than $.001 per share, and 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 $.001 per share or more.
(b) For the purposes of Section 4(a), the following provisions
shall be applicable:
(1) In the case of the issuance of Common Stock for cash, the
consideration shall be deemed to be the amount of cash paid therefor without
deducting any discounts, commissions or expenses 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; provided, however, that if, at the time of
such determination, the Common Stock is traded in the over-the-counter market
or on a national or regional securities exchange, such fair market value as
determined by the Board of
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Directors shall be the "fair market value" (as defined in Section 9(b) below)
of the shares of Common Stock being issued.
(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 into or exchangeable for Common Stock
(other than Excluded Stock), or (iii) options to purchase or rights to
subscribe for securities by their terms convertible into or exchangeable for
Common Stock (other than Excluded Stock):
(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 have been issued at the time
such options or rights were issued and for consideration equal to the
aggregate consideration (determined in the manner provided in subsections (1)
and (2) of this Section 4(b)), if any, received (or to be received) by the
Company upon the issuance of such options or rights and upon exercise thereof
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 have been
issued at the time such securities were issued or such options or rights were
issued and for consideration equal to the aggregate consideration received
(or to be received) by the Company for any such securities and related
options or rights (excluding any cash received on account of accrued interest
or accrued dividends), and 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 subsections (1) and (2) of
this Section 4(b)); and
(C) 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 the anti-dilution provisions, if any, of
such options, rights or securities, unless the event giving rise to such
adjustment does not also give rise to an adjustment in the Exercise Price
pursuant to the terms of this Section 4), then the Exercise Price shall
forthwith be readjusted to such Exercise Price as would have been obtained
had the adjustment 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.
(c) "Excluded Stock" shall mean:
(1) all shares of Common Stock issued and outstanding on the
effective date hereof;
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(2) all shares of Common Stock into which securities issued
and outstanding on the date hereof are convertible (including shares issuable
to each of City National Bank, Xxxxxxx Xxxxx Capital Partners, LP and The
Xxxxxxx Corporation, in each case pursuant to warrants issued either prior to
or on the date hereof);
(3) subject to adjustment pursuant to stock splits, stock
dividends and the like, up to 780,750 shares of Common Stock or other
securities issued to employees of the Company under any agreement,
arrangement or plan, including any stock incentive plan, which is or may be
approved by the Board of Directors and the stockholders of the Company; and
(4) all shares of Common Stock distributed as to holders of
the Company's Series B Redeemable Preferred Stock as payment in kind of
dividends, as permitted by the terms thereof.
(d) 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 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
Exercise Price in effect immediately prior to such event shall be
proportionately decreased, and the number of Warrant Shares shall be
proportionately increased.
(e) 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
Exercise Price in effect immediately prior to such event shall be
proportionately increased, and the number of Warrant Shares shall be
proportionately decreased.
(f) In case, at any time after the date hereof, of any capital
reorganization, or any reclassification of the Common 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 of the consolidation or
merger of the Company with or into another person, or of the sale or other
disposition of all or substantially all the properties and assets of the
Company as an entirety to any other person, the Holder shall, after such
reorganization, reclassification, consolidation, merger, sale or other
disposition, receive upon exercise of the Warrant, the kind and number of
shares of stock, or other securities or property or cash 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 a holder of the number of shares of Common Stock deliverable upon
exercise of this Warrant would have been entitled on such reorganization,
reclassification, consolidation, merger, sale or other disposition had this
Warrant been exercised immediately prior to such event. The provisions of
this Section 4(f) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales or other dispositions.
(g) Upon any adjustment of the Exercise Price, then and in each
such case the Company shall give written notice thereof, by first class mail,
postage prepaid, addressed to the holder of this Warrant at the last
registered address of such holder as shown on the books of the
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Company, which notice shall state the facts leading to, and the Exercise
Price resulting from, such adjustment.
5. PRIOR NOTICE AS TO CERTAIN EVENTS. If at any time:
(a) the Company shall pay any dividend payable in stock upon
its Common Stock or make any distribution (other than cash dividends) to the
holders of its Common Stock;
(b) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or
any other rights;
(c) there shall be any reorganization or reclassification of
the capital stock of the Company, or a consolidation or merger of the Company
with, or a sale of all or substantially all its assets to, another entity; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in each such case, the Company shall give prior written
notice, by first class mail, postage prepaid, addressed to the Holder at its
address shown on the books of the Company, of the date on which (i) the books
of the Company shall close or a record shall be taken for such stock
dividend, distribution or subscription rights or (ii) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall also
specify the date as of which the holders of the Common Stock of record shall
participate in said dividend, distribution or subscription rights or shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, dissolution,
liquidation or winding up, as the case may be. Such written notice shall be
given at least 10 days prior to the action in question.
6. RESERVATION OF COMMON STOCK. The Company shall, at all times,
reserve and keep available for issuance and delivery upon the exercise of
this Warrant such number of its authorized but unissued shares of Common
Stock or other securities of the Company as will be sufficient to permit the
exercise in full of this Warrant. Upon such issuance, all such shares will
be validly issued, fully paid and nonassessable, free and clear of all liens,
security interests, charges and other encumbrances or restrictions on sale
and free and clear of all preemptive rights.
7. NO VOTING RIGHTS; LIMITATIONS OF LIABILITY. Prior to exercise,
this Warrant will not entitle the Holder to any voting rights or other rights
as a stockholder of the Company. No provision of this Warrant, in the
absence of affirmative action by the Holder to exercise this Warrant, and no
enumeration in this Warrant of the rights or privileges of the Holder, will
give rise to any liability of such Holder for the Exercise Price.
8. EXERCISE PROCEDURE. (a) This Warrant may be exercised prior
to the Expiration Date, by presenting it and tendering the Exercise Price,
at the option of the Holder (i) in legal
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tender, or (ii) by bank cashier's or certified check, at the principal office
of the Company along with written subscription substantially in the form of
Exhibit "A" attached hereto. The date on which this Warrant is thus
surrendered, accompanied by tender or payment as hereinbefore or hereinafter
provided, is referred to herein as the "Exercise Date." The Company shall
forthwith at its sole expense (including the payment of issue taxes), issue
and deliver to Holder certificates for the proper number of Warrant Shares
upon exercise of this Warrant within 10 days after the Exercise Date, and
such Warrant Shares shall be deemed issued and the Holder deemed the holder
of record of such Warrant Shares, for all purposes as of the opening of
business on the Exercise Date, notwithstanding any delay in the actual
issuance.
(b) The Company shall pay any and all documentary, stamp or
similar issue or transfer taxes payable in respect of the issue or delivery
of the Warrant Shares.
(c) In the event this Warrant is partially exercised, the Company
shall forthwith issue and deliver to Holder a new Warrant of like tenor to
purchase that number of shares with respect to which such partial exercise
did not apply.
9. CASHLESS EXERCISE.
(a) RIGHT TO CONVERT. Notwithstanding anything herein to the
contrary, in lieu of payment of the applicable Exercise Price, the Holder may
elect to receive upon exercise of this Warrant, the number of Warrant Shares
reduced by a number of shares of Common Stock having the aggregate Fair
Market Value equal to the aggregate Exercise Price for the Warrant Shares.
(b) FAIR MARKET VALUE. For purposes hereof, the Fair Market Value
of a share of Common Stock is determined as follows:
(i) If the Common Stock of the Company is listed on a
national securities exchange or admitted to unlisted trading privileges on
such exchange or listed for trading on the Nasdaq Stock Market (National
Market), the Fair Market Value shall be the last reported sale price of the
Common Stock on such exchange or system on the last trading day prior to the
date of exercise of this Warrant or if no such sale is made on such day, the
average closing bid and asked prices for such day on such exchange or system.
(ii) If the Common Stock of the Company is not so listed or
admitted to unlisted trading privileges, the Fair Market Value shall be the
mean of the last reported bid and asked prices reported by the National
Quotation Bureau, Inc., on the last trading day prior to the date of the
exercise of this Warrant.
(iii) If the Common Stock of the Company is not so listed or
admitted to unlisted trading privileges and bid and asked prices are not so
reported, the Fair Market Value shall be an amount reasonably determined in
such reasonable manner as may be prescribed by the Board of Directors of the
Company.
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(c) METHOD OF EXERCISE. This Warrant may be exercised in
accordance with the provisions of this Section 9 by the surrender of this
Warrant at the principal office of the Company together with a written
statement specifying that the Holder thereby intends to so exercise the
Warrant. With the exception of the payment of the Exercise Price, the
provisions of Section 8 hereof shall apply to any such exercise.
10. CALL.
(a) CALL RIGHTS. Within 90 days after all of the Obligations with
respect to the Debentures have been fully paid (the "Call Period"), the
Company may purchase from the Holder all or any portion of the Warrant
Shares, at a price per share equal to $3.00 (the "Call Price"), or, if the
Warrants have not been exercised, may have the right to purchase warrants to
acquire all or any portion of the Warrant Shares, at a price per share equal
to $3.00 less the exercise price per share.
(b) CALL PROCEDURE. The Company shall give Holder 15 days prior
written notice of its intent to exercise its call rights. The call rights
may then be exercised by tendering the Call Price in legal tender or by bank
cashier's or certified check at the principal office of the Holder. The date
on which the legal tender is thus surrendered is referred to herein as the
Call Date. The Holder shall deliver this Warrant or the certificate(s)
representing the shares purchased hereunder (as the case may be) within ten
days after the Call Date, and such shares shall be deemed transferred to the
Company for all purposes as of the opening of business on the Call Date
notwithstanding any delay in the actual transfer of certificate(s). In the
event that less than all of the warrants subject to this Section 10(a) hereof
are called, the balance of the warrants subject to call will be promptly
reissued to the Holder without the legend referencing the call rights. The
call rights with respect to such warrants will terminate immediately.
(c) LEGEND. The Company shall cause a certificate evidencing
shares of Common Stock acquired pursuant to this Warrant to bear the
following legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT
TO CERTAIN CALL PROVISIONS DESCRIBED IN THAT CERTAIN
WARRANT GRANTED BY THE COMPANY DATED AS OF SEPTEMBER 12, 1997.
Upon expiration of the Call Period, the Company shall cause a
certificate evidencing such shares to be reissued without the above-described
legend.
11. SALE OF WARRANT OR SHARES. Neither this Warrant nor any of
the Warrant Shares have been registered under the Act or under the securities
laws of any state. Neither this Warrant nor any of the Warrant Shares (when
issued) may be sold, assigned, transferred, pledged or hypothecated or
otherwise disposed of in the absence of: (a) an effective registration
statement for this Warrant or the Warrant Shares, as the case may be, under
the Act and such registration or qualification as may be necessary under the
securities laws of any state, or (b) an
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opinion of counsel reasonably satisfactory to the Company that such
registration or qualification is not required. The Company shall cause a
certificate or certificates evidencing all or any of the Warrant Shares
issued upon exercise of the purchase rights herein prior to said registration
and qualification of such shares to bear the following legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
THE SECURITIES LAWS OF ANY STATE. THE SHARES MAY NOT BE OFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR HYPOTHECATED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND SUCH REGISTRATION
OR QUALIFICATION AS MAY BE NECESSARY UNDER THE SECURITIES LAWS OF
ANY STATE, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
12. TRANSFER. This Warrant shall be registered on the books
of the Company which shall be kept at the offices of the Company for that
purpose, and shall be transferable in whole or in part, but only on such
books by the Holder in person or by duly authorized attorney with written
notice substantially in the form of Exhibit "B" attached hereto, and only in
compliance with the preceding paragraph. The Company may issue appropriate
stop orders to its transfer agent to prevent a transfer in violation of the
preceding paragraph.
13. REPLACEMENT OF WARRANT. At the request of the Holder and on
production of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant and (in the case of loss,
theft or destruction) if required by the Company, upon reasonably
satisfactory indemnification, the Company, at Holder's expense, will issue in
lieu thereof a new Warrant of like tenor.
14. INVESTMENT COVENANT. By its acceptance hereof, the Holder
represents and warrants that this Warrant is, and any Warrant Shares issued
hereunder will be, acquired for its own account for investment purposes, and
the Holder covenants that it will not distribute the same in violation of any
state or federal law or regulation.
15. GOVERNING LAW. This Warrant shall be construed according to
the laws of New York (other than its conflict of law rules).
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed on its behalf, in its corporate name, by its Chief Executive Officer,
and its corporate seal to be hereunto affixed and the said seal to be
attested by its Secretary, as of the ___ day of September, 1997.
ATTEST: PICO PRODUCTS, INC.
a New York corporation
By: By: [Seal]
----------------------- --------------------------
Xxxx X. Xxxxxxxx Xxxxxxx X. Xxxxx, Xx.
Chairman and Chief Executive Officer
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EXHIBIT A
IRREVOCABLE SUBSCRIPTION
To: PICO PRODUCTS, INC.
The undersigned hereby elects to exercise its right under the attached
Warrant by purchasing ________________ shares of the Common Stock of PICO
PRODUCTS, INC., and hereby irrevocably subscribes to such issue. The
certificates for such shares shall be issued in the name of:
------------------------------
(Name)
------------------------------
(Address)
------------------------------
(Taxpayer Number)
and delivered to:
------------------------------
(Name)
------------------------------
(Address)
The Exercise Price of $____ per share is enclosed.
OR
In lieu of payment of the Exercise Price, the
undersigned hereby invokes the provisions of Section 9
of the Warrant.
Date:
------------------
Signed:
------------------------------
(Name of Holder, Please Print)
------------------------------
(Address)
------------------------------
(Signature)
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EXHIBIT B
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
--------------------------------
(Name)
--------------------------------
(Address)
the attached Warrant, together with all right, title and interest
therein to purchase _____________ shares of the Common Stock of PICO
PRODUCTS, INC., and does hereby irrevocably appoint _______________________
as attorney-in-fact to transfer said Warrant on the books of PICO PRODUCTS,
INC., with full power of substitution in the premises.
Done this ______ day of ____________ 19____.
--------------------------------
(Signature)
--------------------------------
(Name and title)
--------------------------------
--------------------------------
(Address)
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