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EXHIBIT 4-D
Warrant Certificate No. 1 Warrant to Purchase
3,077 Shares
WARRANT AGREEMENT
Dated as of January 1, 1998
To Subscribe for and Purchase Common Stock of
AMERICAN PRECISION INDUSTRIES INC.
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THIS CERTIFIES THAT, for value received, DECISION PROCESSES
INTERNATIONAL (CONNECTICUT, LTD.) (herein called "DPI"), or its permitted
assigns, is entitled to subscribe for and purchase from AMERICAN PRECISION
INDUSTRIES INC., a Delaware corporation (herein called the "Company"), at the
price of Nineteen Dollars and 50 Cents ($19.50) per share (subject to
adjustments as provided herein) at any time after the date hereof to and
including December 31, 2007, THREE THOUSAND SEVENTY-SEVEN (3,077) fully paid and
non-assessable shares of the Company's Common Stock, $.66-2/3 par value.
This Warrant was originally issued in connection with execution by the
Company and DPI of a Retainer Agreement dated as of January 1, 1998 (herein
called the "Retainer Agreement"). As used herein, "this Warrant" and "the
Warrants" shall mean the Warrant originally issued to DPI pursuant to the
Retainer Agreement and any Warrants that may be issued in substitution or
exchange therefor. All Warrants shall be dated said original issue date.
This Warrant is subject to the following terms and conditions:
1. EXERCISE OF WARRANT.
(a) Exercise. The rights represented by this Warrant may be
exercised by the holder hereof, in whole or in part (but not as to a
fractional share of Common Stock), by written notice of exercise
delivered to the Company and by the surrender of this Warrant (properly
endorsed if required) at the principal business office of the Company
and upon payment to it of the purchase price for such shares. The
Company agrees that the shares so purchased shall be, and shall be
deemed to be, issued to the holder hereof as the record owner of such
shares as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such shares.
Certificates for the shares of stock so purchased shall be delivered to
the holder hereof within a reasonable time, not exceeding ten (10)
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, if any, with respect to which this
Warrant shall not then have been exercised shall also be delivered to
the holder hereof within such time.
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(b) Payment of Exercise Price. Payment of the exercise price
for the shares to be issued upon the exercise of this Warrant shall be
made by certified or official bank check; provided, however, the holder
hereof shall also have the right, at its election, in lieu of paying
the exercise price by certified or official bank check, to instruct the
Company in the Form For Exercise of Warrant to retain, in payment of
the exercise price, a number of shares of Common Stock (the "Payment
Shares") equal to the quotient of (i) the aggregate exercise price of
the shares as to which this Warrant is then being exercised divided by
(ii) the "Average Closing Price" as of the date of exercise and to
deduct the number of Payment Shares from the shares to be delivered to
the holder hereof. "Average Closing Price" means, as of any date, (x)
if shares of Common Stock are listed on a national securities exchange,
the average of the closing sales prices therefor on the largest
securities exchange on which such shares are traded on the last ten
trading days before such date, (y) if such shares are listed on the
NASDAQ National Market System but not on any national securities
exchange, the average of the closing sales prices therefor on the
NASDAQ National Market System on the last ten trading days before such
date or (z) if such shares are not listed on either a national
securities exchange or the NASDAQ National Market System, the average
of the sales prices therefor on the last twenty trading days before
such date.
2. VALIDITY OF ISSUANCE AND RESERVATION OF SHARES. The Company
covenants and agrees that all shares which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance,
be duly authorized and issued, fully paid, nonassessable, and free from
all taxes, liens, charges and pre-emptive rights with respect to the
issue thereof, and, without limiting the generality of the foregoing,
the Company covenants and agrees that it will from time to time take
all such action as may be requisite to assure that the par value per
share of the Common Stock is at all times equal to or less than the
then effective purchase price per share of the Common Stock issuable
pursuant to this Warrant. The Company further covenants and agrees that
during the period within which the rights represented by this 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 this Warrant, a sufficient number of
shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.
3. WARRANT ADJUSTMENTS. The above provisions are, however, subject to
the following:
(a) Adjustment of Shares. The warrant purchase price and the
number of shares purchasable pursuant hereto shall be subject to
adjustment from time to time as hereinafter provided.
(b) Adjustment of Price for Stock Sales. Except as provided in
paragraph (h) below, if and whenever the Company shall issue or sell
any shares of its Common Stock for a consideration per share less than
the warrant purchase price in effect immediately prior to the time of
such issue or sale, and/or the Company shall issue or sell any shares
of its Common Stock for a consideration per share less than the market
price on the date of such issue or sale, then, forthwith upon such
issue or sale, the warrant purchase price shall be reduced to the lower
of the prices (calculated to the nearest cent) determined as follows:
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(i) by dividing (1) an amount equal to the sum of
(aa) the number of shares of Common Stock outstanding
immediately prior to such issue or sale multiplied by the then
existing warrant purchase price, and (bb) the consideration,
if any, received by the Company upon such issue or sale, by
(2) the total number of shares of Common Stock outstanding
immediately after such issue or sale; or
(ii) by multiplying the warrant purchase price in
effect immediately prior to the time of such issue or sale by
a fraction, the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding immediately prior
to such issue or sale multiplied by the market price
immediately prior to such issue or sale, plus (2) the
consideration received by the Company upon such issue or sale,
and the denominator of which shall be the product of (3) the
total number of shares of Common Stock outstanding immediately
after such issue or sale, multiplied by (4) the market price
immediately prior to such issue or sale.
No adjustment of the warrant purchase price, however, shall be made in
an amount less than $.01 per share, 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 $.01 per share or more.
(c) Further Provisions with respect to Stock Sales. For the
purposes of paragraph (b), the following provisions (i) to (vii),
inclusive, shall also be applicable:
(i) In case at any time the Company shall grant
(whether directly or by assumption in a merger or otherwise)
any rights to subscribe for or to purchase, or any options for
the purchase of, Common Stock or any stock or securities
convertible into or exchangeable for Common Stock (such
convertible or exchangeable stock or securities being herein
called "Convertible Securities") whether or not such rights or
options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the
price per share at which Common Stock is issuable upon the
exercise of such rights or options or upon conversion or
exchange of such Convertible Securities (determined by
dividing (aa) the total amount if any, received or receivable
by the Company as consideration for the granting of such
rights or options, plus the minimum aggregate amount of
additional consideration payable to the Company upon the
exercise of such rights or options, plus, in the case of such
rights or options which relate to Convertible Securities, the
minimum aggregate amount of additional consideration, if any,
payable upon the issue or sale of such Convertible Securities
and upon the conversion or exchange thereof, by (bb) the total
maximum number of shares of Common Stock issuable upon the
exercise of such rights or options or upon the conversion or
exchange of all such Convertible Securities issuable upon the
exercise of such rights or options) shall be less than the
warrant purchase price in effect immediately prior to the time
of the granting of such rights or options (or less than the
market price determined as of the date of granting such rights
or options, as the case may be), then the total maximum number
of shares of Common Stock issuable upon the exercise of rights
or options or upon conversion or exchange of the total maximum
amount of such Convertible Securities issuable upon the
exercise of such rights or options shall (as of the date of
granting of such rights or options) be deemed to have been
issued for such price per share. Except
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as provided in paragraph (f) below, no further adjustments of
the warrant purchase price shall be made upon the actual issue
of such Common Stock or of such Convertible Securities upon
exercise of such rights or options or upon the actual issue of
such Common Stock upon conversion or exchange of such
Convertible Securities.
(ii) In case the Company shall issue (whether
directly or by assumption in a merger or otherwise) or sell
any Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable,
and the price per share for which Common Stock is issuable
upon such conversion or exchange (determined by dividing (aa)
the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (bb) the total maximum
number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities) shall be less
than the warrant purchase price in effect immediately prior to
the time of such issue or sale (or less than the market price,
determined as of the date of such issue or sale of such
Convertible Securities, as the case may be), then the total
maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities
shall (as of the date of the issue or sale of such Convertible
Securities) be deemed to be outstanding and to have been
issued for such price per share, provided that (x) except as
provided in paragraph (f) below, no further adjustments of the
warrant purchase price shall be made upon the actual issue of
such Common Stock upon conversion or exchange of such
Convertible Securities, and (y) if any such issue or sale of
such Convertible Securities is made upon exercise of any
rights to subscribe for or to purchase or any option to
purchase any such Convertible Securities for which adjustments
of the warrant purchase price have been or are to be made
pursuant to other provisions of this paragraph (c), no further
adjustment of the warrant purchase price shall be made by
reason of such issue or sale.
(iii) In case the Company shall declare a dividend or
make any other distribution upon any stock of the Company
payable in Common Stock or Convertible Securities, any Common
Stock or Convertible Securities, as the case may be, issuable
in payment of such dividend or distribution shall be deemed to
have been issued or sold without consideration.
(iv) In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase
any such Common Stock or Convertible Securities shall be
issued or sold for cash, the consideration received therefor
shall be deemed to be the amount received by the Company
therefor, without deduction therefrom of any expenses incurred
or any underwriting commissions or concessions paid or allowed
by the Company in connection therewith. In case any shares of
Common Stock or Convertible Securities or any rights or
options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for a consideration other
than cash, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair market
value of such consideration as determined by the Board of
Directors of the Company,
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without deduction of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in
connection therewith. In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase
such Common Stock or Convertible Securities shall be issued in
connection with any merger or consolidation in which the
Company is the surviving corporation, the amount of
consideration therefor shall be deemed to be the fair market
value as determined by the Board of Directors of the Company
of such portion of the assets and business of the
non-surviving corporation or corporations as such Board shall
determine to be attributable to such Common Stock, Convertible
Securities, rights or options, as the case may be. In the
event of any consolidation or merger of the Company in which
the Company is not the surviving corporation or in the event
of any sale of all or substantially all of the assets of the
Company for stock or other securities of any corporation, the
Company shall be deemed to have issued a number of shares of
its Common Stock for stock or securities of the other
corporation computed on the basis of the actual exchange ratio
on which the transaction was predicated and for a
consideration equal to the fair market value on the date of
such transaction of such stock or securities of the other
corporation, and if any such calculation results in adjustment
of the warrant purchase price, the determination of the number
of shares of Common Stock issuable upon exercise of this
Warrant immediately prior to such merger, conversion or sale,
for purposes of paragraph 3(h) shall be made after giving
effect to such adjustment of the warrant purchase price.
(v) In case the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them
(aa) to receive a dividend or other distribution payable in
Common Stock or in Convertible Securities, or (bb) to
subscribe for or purchase Common Stock or Convertible
Securities, then such record date shall be deemed to be the
date of the issue or sale of the shares of Common Stock deemed
to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date
of the granting of such right of subscription or purchase, as
the case may be.
(vi) The number of shares of Common Stock outstanding
at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common
Stock for the purposes of this paragraph (3).
(vii) "Market price" shall mean the average of the
high and low prices of the Common Stock sales on all exchanges
on which the Common Stock may at the time be admitted to
trading, or, if there shall have been no sales on any such
exchange on any such day, the average of the bid and asked
prices at the end of such day, or, if the Common Stock shall
not be so admitted to trading, the average of the bid and
asked prices at the end of the day in the over-the-counter
market, in each case averaged over a period of 20 consecutive
business days prior to the date as of which "market price" is
being determined. If at any time the Common Stock is not
admitted to trading on any exchange or quoted in the
over-the-counter market, the "market price" shall be deemed to
be the fair market value thereof determined in good faith by
the Board of Directors of the Company as of a date which is
within 15 days of the date as of which the determination is to
be made.
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(d) Adjustment of Price for Corporate Distributions. In case
the Company shall declare a dividend upon the Common Stock payable
otherwise than out of consolidated earnings or consolidated earned
surplus, determined in accordance with generally accepted accounting
principles, including the making of appropriate deductions for minority
interests, if any, in subsidiaries (except in Common Stock or
Convertible Securities, but including other securities), the warrant
purchase price in effect immediately prior to the declaration of such
dividend shall be reduced by an amount equal, in the case of a dividend
in cash, to the amount thereof payable per share of the Common Stock
or, in the case of any other dividend, to the fair market value thereof
per share of the Common Stock as determined by the Board of Directors
of the Company. For the purposes of the foregoing, a dividend other
than in cash shall be considered payable out of earnings or surplus
(other than revaluation or paid-in-surplus) only to the extent that
such earnings or surplus are charged an amount equal to the fair market
value of such dividend as determined by the Board of Directors of the
Company. Such reductions shall take effect as of the date on which a
record is taken for the purpose of such dividend, or, if a record is
not taken, the date as of which the holders of Common Stock of record
entitled to such dividend are to be determined.
(e) Adjustment of Price for Subdivisions and Combinations of
Shares. In case the Company shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares, the warrant
purchase price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding shares
of Common Stock of the Company shall be combined into a smaller number
of shares, the warrant purchase price in effect immediately prior to
such combination shall be proportionately increased.
(f) Readjustments. Upon the happening of any of the following
events, namely, if the purchase price provided for in any rights or
options referred to in clause (i) of paragraph (c), the additional
consideration, if any, payable upon the conversion or exchange of
Convertible Securities referred to in clause (i) or (ii) of paragraph
(c), or the rate at which any Convertible Securities referred to in
clause (i) or clause (ii) of paragraph (c) are convertible into or
exchangeable for Common Stock shall change (other than under or by
reason of provisions designed to protect against dilution), the warrant
purchase price in effect at the time of such event shall forthwith be
readjusted to the warrant purchase price which would have been in
effect at such time had such rights, options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold; and on the expiration of any such
option or right or the termination of any such right to convert or
exchange such Convertible Securities, the warrant purchase price then
in effect hereunder shall forthwith be increased to the warrant
purchase price which would have been in effect at the time of such
expiration or termination had such right, option or Convertible
Securities, to the extent outstanding immediately prior to such
expiration or termination, never been issued, and the Common Stock
issuable thereunder shall no longer be deemed to be outstanding. If the
purchase price provided for in any such right or option referred to in
clause (i) of paragraph (c) or the rate at which any Convertible
Securities referred to in clause (i) or clause (ii) of paragraph (c)
are convertible into or exchangeable for Common Stock, shall decrease
at any time under or by reason of provisions with respect thereto
designed to protect against
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dilution, then in case of the delivery of Common Stock upon the
exercise of any such right or option or upon conversion or exchange of
any such Convertible Securities, the warrant purchase price then in
effect hereunder shall forthwith be decreased to such lower price, if
any, as would have been obtained had such right, option or Convertible
Securities never been issued as to such Common Stock and had
adjustments been made upon the issuance of the shares of Common Stock
delivered as aforesaid.
(g) Adjustment of Number of Shares Purchasable. Except as
provided in paragraph (h) below, upon each adjustment of the warrant
purchase price (or upon the happening of any event described herein
which would have required an adjustment in the warrant purchase price
but for the fact that the consideration paid or payable to the Company
by reason of such event is not less than the warrant purchase price in
effect immediately prior thereto or the market price of the shares of
Common Stock issued or issuable by reason thereof), the holder of this
Warrant shall thereafter be entitled to purchase, at the warrant
purchase price resulting from such adjustment (or, if there has not
been any adjustment in such price, at the then existing warrant
purchase price), the number of shares (calculated to the nearest share)
determined as follows:
(i) In all cases other than adjustments in the
warrant purchase price arising under paragraph (d):
(1) by dividing (aa) the number of shares of
Common Stock purchasable pursuant to this Warrant
immediately prior thereto by (bb) the total number of
shares of Common Stock outstanding immediately prior
thereto; and
(2) multiplying the result by the total
number of shares of Common Stock outstanding
immediately thereafter.
(ii) In the case of an adjustment in the warrant
purchase price arising under paragraph (d):
(1) by multiplying the warrant purchase
price in effect immediately prior to such adjustment
by the number of shares purchasable pursuant to this
Warrant immediately prior to such adjustment; and
(2) dividing the product thereof by the
warrant purchase price resulting from such
adjustment.
For purposes of the foregoing computation, the total number of shares
of Common Stock outstanding at any time shall be deemed to include the
total number of shares of Common Stock issuable upon (x) the exercise
of all then outstanding rights to subscribe for or to purchase, and
options for the purchase of, Common Stock or Convertible Securities,
and (y) the conversion or exchange of such Convertible Securities and
all other outstanding Convertible Securities, but shall not be deemed
to include any shares of Common Stock issuable upon the exercise of any
unexercised portion of this Warrant.
(h) Exclusions. Anything herein to the contrary
notwithstanding, the Company shall not be required to make any
adjustment of the warrant purchase price in connection
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with any shares of Common Stock reserved for issuance (x) upon the
exercise of stock options granted to the Directors, officers and
employees of the Company which have been granted or are available for
grant pursuant to stock option plans in effect on the date hereof or at
the time of the holder's exercise of this Warrant, or (y) upon the
exercise of any conversion rights held by the holder or holders of the
Company's Series B Seven Percent (7%) Cumulative Convertible Preferred
Stock, Fifty Dollars ($50.00) par value per share, or any securities
issued in exchange or in payment or redemption of said Series B Seven
Percent (7%) Cumulative Convertible Preferred Stock, or (z) upon the
exercise of any rights to purchase 50,000 shares of Common Stock set
forth in the Warrant Agreement dated July 8, 1997, granted by the
Company to Patricof & Co. Capital Corp.
(i) Reorganizations. If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation
or merger of the Company with another corporation, or the sale of all
or substantially all of its assets or outstanding capital stock to
another corporation shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities or assets
with respect to or in exchange for Common Stock, then, as a condition
of such reorganization, reclassification, consolidation, merger or
sale, lawful and adequate provision shall be made whereby the holder
hereof shall thereafter have the right to purchase and receive upon the
basis and upon the terms and conditions specified in this Warrant and
in lieu of the shares of the Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares
of such stock immediately theretofore purchasable and receivable upon
the exercise of the rights represented hereby had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in
any such case appropriate provisions shall be made with respect to the
rights and interests of the holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions fore
adjustments of the warrant purchase price and of the number of shares
purchasable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof.
(j) Notice of Adjustments. Upon any adjustment of the warrant
purchase price or the number of shares purchasable pursuant hereto,
then and in each such case the Company shall give written notice
thereof to the registered holder of this Warrant, which notice shall
state the warrant purchase price resulting from such adjustment and the
increase or decrease, if any, in the number of shares purchasable upon
the exercise of this Warrant, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is
based.
4. COMMON STOCK. As used herein, the term "Common Stock" shall mean and
include the Company's presently authorized shares of capital stock and
shall also include any capital stock of any class of the Company
hereafter authorized which shall not be limited to a fixed sum or
percentage of par value in respect of the rights of the holders thereof
to participate in dividends or in the distribution of assets upon the
voluntary or
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involuntary liquidation, dissolution or winding up of the Company;
provided that the shares purchasable pursuant to this Warrant shall
include shares designated as Common Stock of the Company on the date of
original issue of this Warrant or, in the case of any reclassification
of the outstanding shares thereof, the stock, securities or assets
provided for in paragraph 3(i) above.
5. NO RIGHTS AS STOCKHOLDER. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a stockholder of the
Company.
6. NOTICE OF PROPOSED TRANSFERS. The holder of this Warrant, by
acceptance hereof, agrees to give written notice to the Company before
transferring this Warrant or transferring any Common Stock issuable or
issued upon the exercise hereof, of such holder's intention to do so,
describing briefly the manner of any such proposed transfer. Promptly
after such written notice is received by the Company, copies thereof
shall be presented to counsel for the Company and to counsel for such
holder. If in the opinion of each such counsel the proposed transfer
may be effected without registration or qualification (under any
Federal or State law) of this Warrant or the shares of Common Stock
issuable or issued on the exercise hereof, the Company, as promptly as
practicable, shall notify such holder of such opinion, whereupon such
holder shall be entitled to effect such transfer in accordance with the
terms of the notice delivered by such holder to the Company, provided
that an appropriate legend may be endorsed on this Warrant or the
certificates for such shares respecting restrictions upon transfer
thereof necessary or advisable in the opinion of counsel for the
Company to prevent transfers which would be in violation of Section 5
of the Securities Act of 1933, as amended (herein called the "1933
Act").
7. INVESTMENT REPRESENTATION; RESALE LIMITATIONS; REGISTRATION RIGHTS.
(a) Investment Representation. The holder of this Warrant, by
acceptance hereof, represents and warrants that this Warrant and shares
of Common Stock purchased by the holder pursuant to the exercise of
this Warrant, are and will be acquired by the holder for investment and
not with a view to, or for sale in connection with, any distribution
thereof, nor with any present intention, of selling, transferring or
disposing of the same.
(b) Resale Limitations. The shares of Common Stock which may
be purchased hereunder may not be offered for sale, sold or otherwise
transferred, unless:
(i) A registration statement with respect to such
securities shall be effective under the 1933 Act, together
with proof satisfactory to counsel for the Company that the
holder of this Warrant shall have complied with applicable
state securities laws, or
(ii) The Company shall have received an opinion of
counsel satisfactory to the Company that no violation of the
1933 Act, or such other applicable law, will be involved in
such transfer, or
(iii) The Company shall receive a "no action" letter
from the Securities and
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Exchange Commission (herein called the "SEC") and the
equivalent ruling or letter pursuant to applicable state law
in form satisfactory to the Company covering such transfer,
and the Company may withhold transfer, registration and delivery of
such securities until one of the three conditions set forth in this
paragraph 7(b) shall have been met.
(c) Legend. All certificates representing the shares of Common
Stock issued upon the exercise of this Warrant shall contain an
appropriate legend indicating the fact that the shares have not been
registered under the 1933 Act and the conditions affecting the
transferability of such shares. A similar notation will be placed in
the Company's stock transfer ledger.
8. NOTICES. Any notice or other thing required or desired to be served,
given or delivered hereunder shall be in writing, and shall be deemed
to have been validly served, given or delivered upon deposit in the
United States registered or certified mail with proper postage prepaid
and addressed to the party to be notified as follows:
(a) If to the Company at:
American Precision Industries Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: President
(b) If to the holder of this Warrant at:
Decision Processes International
(Connecticut, Ltd.)
00 Xxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: President
or to such other address as either party may hereafter designate for
itself by written notice to the other party in the manner herein
prescribed.
9. GENERAL. This Warrant shall be construed in accordance with the laws
of the State of Delaware. Whenever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and
valid under the applicable law, but, if any provision of this Warrant
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Warrant. The paragraph headings herein
are for convenience only and shall not affect the interpretation of any
of the provisions hereof.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed at
Buffalo, New York by its duly authorized officers under its corporate seal, and
this Warrant is dated July 1, 1998.
AMERICAN PRECISION INDUSTRIES INC.
By
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Xxxx Xxxxxxxxxxx, Chairman,
President and Chief Executive Officer
(CORPORATE SEAL)
ATTEST:
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Xxxxx X. Xxxxxx, Secretary
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FORM
FOR
EXERCISE OF WARRANT
The undersigned hereby elects to purchase _________ shares of Common
Stock, $.66-2/3 par value, of AMERICAN PRECISION INDUSTRIES INC. (the "Company")
in accordance with the WARRANT AGREEMENT dated ___________, 19__. The
undersigned hereby delivers the following to the Company in full payment for the
shares purchased hereby:
Exercise Price ($______ per share) x ______ shares purchased =
Aggregate Exercise Price $
Paid by: certified or official bank check payable
to "American Precision Industries Inc."
OR
--
By the retention by the Company of ______ shares
per paragraph 1(b) of the WARRANT AGREEMENT.
(Aggregate Exercise Price Average Closing Price =
Payment Shares)
(Total shares purchased - Payment Shares = Shares
to be issued to undersigned)
Please register these shares as follows:
Name of record owner:
Address:
Social Security No.:
Please mail shares to [above address] or
Dated:
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Signature of Warrant Holder
13
Exhibit 4-D
Warrant Certificate No. 2 Warrant to Purchase
6,154 Shares
WARRANT AGREEMENT
Dated as of January 1, 1998
To Subscribe for and Purchase Common Stock of
AMERICAN PRECISION INDUSTRIES INC.
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THIS CERTIFIES THAT, for value received, DECISION PROCESSES
INTERNATIONAL (CONNECTICUT, LTD.) (herein called "DPI"), or its permitted
assigns, is entitled to subscribe for and purchase from AMERICAN PRECISION
INDUSTRIES INC., a Delaware corporation (herein called the "Company"), at the
price of Nineteen Dollars and 50 Cents ($19.50) per share (subject to
adjustments as provided herein) at any time after the date hereof to and
including December 31, 2007, SIX THOUSAND ONE HUNDRED FIFTY-FOUR (6,154) fully
paid and non-assessable shares of the Company's Common Stock, $.66-2/3 par
value.
This Warrant was originally issued in connection with execution by the
Company and DPI of a Retainer Agreement dated as of January 1, 1998 (herein
called the "Retainer Agreement"). As used herein, "this Warrant" and "the
Warrants" shall mean the Warrant originally issued to DPI pursuant to the
Retainer Agreement and any Warrants that may be issued in substitution or
exchange therefor. All Warrants shall be dated said original issue date.
This Warrant is subject to the following terms and conditions:
1. EXERCISE OF WARRANT.
(a) Exercise. The rights represented by this Warrant may be
exercised by the holder hereof, in whole or in part (but not as to a
fractional share of Common Stock), by written notice of exercise
delivered to the Company and by the surrender of this Warrant (properly
endorsed if required) at the principal business office of the Company
and upon payment to it of the purchase price for such shares. The
Company agrees that the shares so purchased shall be, and shall be
deemed to be, issued to the holder hereof as the record owner of such
shares as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such shares.
Certificates for the shares of stock so purchased shall be delivered to
the holder hereof within a reasonable time, not exceeding ten (10)
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, if any, with respect to which this
Warrant shall not then have been exercised shall also be delivered to
the holder hereof within such time.
(b) Payment of Exercise Price. Payment of the exercise price
for the shares to be issued upon the exercise of this Warrant shall be
made by certified or official bank
14
check; provided, however, the holder hereof shall also have the right,
at its election, in lieu of paying the exercise price by certified or
official bank check, to instruct the Company in the Form For Exercise
of Warrant to retain, in payment of the exercise price, a number of
shares of Common Stock (the "Payment Shares") equal to the quotient of
(i) the aggregate exercise price of the shares as to which this Warrant
is then being exercised divided by (ii) the "Average Closing Price" as
of the date of exercise and to deduct the number of Payment Shares from
the shares to be delivered to the holder hereof. "Average Closing
Price" means, as of any date, (x) if shares of Common Stock are listed
on a national securities exchange, the average of the closing sales
prices therefor on the largest securities exchange on which such shares
are traded on the last ten trading days before such date, (y) if such
shares are listed on the NASDAQ National Market System but not on any
national securities exchange, the average of the closing sales prices
therefor on the NASDAQ National Market System on the last ten trading
days before such date or (z) if such shares are not listed on either a
national securities exchange or the NASDAQ National Market System, the
average of the sales prices therefor on the last twenty trading days
before such date.
2. VALIDITY OF ISSUANCE AND RESERVATION OF SHARES. The Company
covenants and agrees that all shares which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance,
be duly authorized and issued, fully paid, nonassessable, and free from
all taxes, liens, charges and pre-emptive rights with respect to the
issue thereof, and, without limiting the generality of the foregoing,
the Company covenants and agrees that it will from time to time take
all such action as may be requisite to assure that the par value per
share of the Common Stock is at all times equal to or less than the
then effective purchase price per share of the Common Stock issuable
pursuant to this Warrant. The Company further covenants and agrees that
during the period within which the rights represented by this 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 this Warrant, a sufficient number of
shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.
3. WARRANT ADJUSTMENTS. The above provisions are, however, subject to
the following:
(a) Adjustment of Shares. The warrant purchase price and the
number of shares purchasable pursuant hereto shall be subject to
adjustment from time to time as hereinafter provided.
(b) Adjustment of Price for Stock Sales. Except as provided in
paragraph (h) below, if and whenever the Company shall issue or sell
any shares of its Common Stock for a consideration per share less than
the warrant purchase price in effect immediately prior to the time of
such issue or sale, and/or the Company shall issue or sell any shares
of its Common Stock for a consideration per share less than the market
price on the date of such issue or sale, then, forthwith upon such
issue or sale, the warrant purchase price shall be reduced to the lower
of the prices (calculated to the nearest cent) determined as follows:
(i) by dividing (1) an amount equal to the sum of
(aa) the number of shares of Common Stock outstanding
immediately prior to such issue or sale multiplied by
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the then existing warrant purchase price, and (bb) the
consideration, if any, received by the Company upon such issue
or sale, by (2) the total number of shares of Common Stock
outstanding immediately after such issue or sale; or
(ii) by multiplying the warrant purchase price in
effect immediately prior to the time of such issue or sale by
a fraction, the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding immediately prior
to such issue or sale multiplied by the market price
immediately prior to such issue or sale, plus (2) the
consideration received by the Company upon such issue or sale,
and the denominator of which shall be the product of (3) the
total number of shares of Common Stock outstanding immediately
after such issue or sale, multiplied by (4) the market price
immediately prior to such issue or sale.
No adjustment of the warrant purchase price, however, shall be made in
an amount less than $.01 per share, 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 $.01 per share or more.
(c) Further Provisions with respect to Stock Sales. For the
purposes of paragraph (b), the following provisions (i) to (vii),
inclusive, shall also be applicable:
(i) In case at any time the Company shall grant
(whether directly or by assumption in a merger or otherwise)
any rights to subscribe for or to purchase, or any options for
the purchase of, Common Stock or any stock or securities
convertible into or exchangeable for Common Stock (such
convertible or exchangeable stock or securities being herein
called "Convertible Securities") whether or not such rights or
options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the
price per share at which Common Stock is issuable upon the
exercise of such rights or options or upon conversion or
exchange of such Convertible Securities (determined by
dividing (aa) the total amount if any, received or receivable
by the Company as consideration for the granting of such
rights or options, plus the minimum aggregate amount of
additional consideration payable to the Company upon the
exercise of such rights or options, plus, in the case of such
rights or options which relate to Convertible Securities, the
minimum aggregate amount of additional consideration, if any,
payable upon the issue or sale of such Convertible Securities
and upon the conversion or exchange thereof, by (bb) the total
maximum number of shares of Common Stock issuable upon the
exercise of such rights or options or upon the conversion or
exchange of all such Convertible Securities issuable upon the
exercise of such rights or options) shall be less than the
warrant purchase price in effect immediately prior to the time
of the granting of such rights or options (or less than the
market price determined as of the date of granting such rights
or options, as the case may be), then the total maximum number
of shares of Common Stock issuable upon the exercise of rights
or options or upon conversion or exchange of the total maximum
amount of such Convertible Securities issuable upon the
exercise of such rights or options shall (as of the date of
granting of such rights or options) be deemed to have been
issued for such price per share. Except as provided in
paragraph (f) below, no further adjustments of the warrant
purchase price shall be made upon the actual issue of such
Common Stock or of such
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Convertible Securities upon exercise of such rights or options
or upon the actual issue of such Common Stock upon conversion
or exchange of such Convertible Securities.
(ii) In case the Company shall issue (whether
directly or by assumption in a merger or otherwise) or sell
any Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable,
and the price per share for which Common Stock is issuable
upon such conversion or exchange (determined by dividing (aa)
the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (bb) the total maximum
number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities) shall be less
than the warrant purchase price in effect immediately prior to
the time of such issue or sale (or less than the market price,
determined as of the date of such issue or sale of such
Convertible Securities, as the case may be), then the total
maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities
shall (as of the date of the issue or sale of such Convertible
Securities) be deemed to be outstanding and to have been
issued for such price per share, provided that (x) except as
provided in paragraph (f) below, no further adjustments of the
warrant purchase price shall be made upon the actual issue of
such Common Stock upon conversion or exchange of such
Convertible Securities, and (y) if any such issue or sale of
such Convertible Securities is made upon exercise of any
rights to subscribe for or to purchase or any option to
purchase any such Convertible Securities for which adjustments
of the warrant purchase price have been or are to be made
pursuant to other provisions of this paragraph (c), no further
adjustment of the warrant purchase price shall be made by
reason of such issue or sale.
(iii) In case the Company shall declare a dividend or
make any other distribution upon any stock of the Company
payable in Common Stock or Convertible Securities, any Common
Stock or Convertible Securities, as the case may be, issuable
in payment of such dividend or distribution shall be deemed to
have been issued or sold without consideration.
(iv) In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase
any such Common Stock or Convertible Securities shall be
issued or sold for cash, the consideration received therefor
shall be deemed to be the amount received by the Company
therefor, without deduction therefrom of any expenses incurred
or any underwriting commissions or concessions paid or allowed
by the Company in connection therewith. In case any shares of
Common Stock or Convertible Securities or any rights or
options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for a consideration other
than cash, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair market
value of such consideration as determined by the Board of
Directors of the Company, without deduction of any expenses
incurred or any underwriting commissions or concessions paid
or allowed by the Company in connection therewith. In case any
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shares of Common Stock or Convertible Securities or any rights
or options to purchase such Common Stock or Convertible
Securities shall be issued in connection with any merger or
consolidation in which the Company is the surviving
corporation, the amount of consideration therefor shall be
deemed to be the fair market value as determined by the Board
of Directors of the Company of such portion of the assets and
business of the non-surviving corporation or corporations as
such Board shall determine to be attributable to such Common
Stock, Convertible Securities, rights or options, as the case
may be. In the event of any consolidation or merger of the
Company in which the Company is not the surviving corporation
or in the event of any sale of all or substantially all of the
assets of the Company for stock or other securities of any
corporation, the Company shall be deemed to have issued a
number of shares of its Common Stock for stock or securities
of the other corporation computed on the basis of the actual
exchange ratio on which the transaction was predicated and for
a consideration equal to the fair market value on the date of
such transaction of such stock or securities of the other
corporation, and if any such calculation results in adjustment
of the warrant purchase price, the determination of the number
of shares of Common Stock issuable upon exercise of this
Warrant immediately prior to such merger, conversion or sale,
for purposes of paragraph 3(h) shall be made after giving
effect to such adjustment of the warrant purchase price.
(v) In case the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them
(aa) to receive a dividend or other distribution payable in
Common Stock or in Convertible Securities, or (bb) to
subscribe for or purchase Common Stock or Convertible
Securities, then such record date shall be deemed to be the
date of the issue or sale of the shares of Common Stock deemed
to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date
of the granting of such right of subscription or purchase, as
the case may be.
(vi) The number of shares of Common Stock outstanding
at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common
Stock for the purposes of this paragraph (3).
(vii) "Market price" shall mean the average of the
high and low prices of the Common Stock sales on all exchanges
on which the Common Stock may at the time be admitted to
trading, or, if there shall have been no sales on any such
exchange on any such day, the average of the bid and asked
prices at the end of such day, or, if the Common Stock shall
not be so admitted to trading, the average of the bid and
asked prices at the end of the day in the over-the-counter
market, in each case averaged over a period of 20 consecutive
business days prior to the date as of which "market price" is
being determined. If at any time the Common Stock is not
admitted to trading on any exchange or quoted in the
over-the-counter market, the "market price" shall be deemed to
be the fair market value thereof determined in good faith by
the Board of Directors of the Company as of a date which is
within 15 days of the date as of which the determination is to
be made.
(d) Adjustment of Price for Corporate Distributions. In case
the Company shall
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declare a dividend upon the Common Stock payable otherwise than out of
consolidated earnings or consolidated earned surplus, determined in
accordance with generally accepted accounting principles, including the
making of appropriate deductions for minority interests, if any, in
subsidiaries (except in Common Stock or Convertible Securities, but
including other securities), the warrant purchase price in effect
immediately prior to the declaration of such dividend shall be reduced
by an amount equal, in the case of a dividend in cash, to the amount
thereof payable per share of the Common Stock or, in the case of any
other dividend, to the fair market value thereof per share of the
Common Stock as determined by the Board of Directors of the Company.
For the purposes of the foregoing, a dividend other than in cash shall
be considered payable out of earnings or surplus (other than
revaluation or paid-in-surplus) only to the extent that such earnings
or surplus are charged an amount equal to the fair market value of such
dividend as determined by the Board of Directors of the Company. Such
reductions shall take effect as of the date on which a record is taken
for the purpose of such dividend, or, if a record is not taken, the
date as of which the holders of Common Stock of record entitled to such
dividend are to be determined.
(e) Adjustment of Price for Subdivisions and Combinations of
Shares. In case the Company shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares, the warrant
purchase price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding shares
of Common Stock of the Company shall be combined into a smaller number
of shares, the warrant purchase price in effect immediately prior to
such combination shall be proportionately increased.
(f) Readjustments. Upon the happening of any of the following
events, namely, if the purchase price provided for in any rights or
options referred to in clause (i) of paragraph (c), the additional
consideration, if any, payable upon the conversion or exchange of
Convertible Securities referred to in clause (i) or (ii) of paragraph
(c), or the rate at which any Convertible Securities referred to in
clause (i) or clause (ii) of paragraph (c) are convertible into or
exchangeable for Common Stock shall change (other than under or by
reason of provisions designed to protect against dilution), the warrant
purchase price in effect at the time of such event shall forthwith be
readjusted to the warrant purchase price which would have been in
effect at such time had such rights, options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold; and on the expiration of any such
option or right or the termination of any such right to convert or
exchange such Convertible Securities, the warrant purchase price then
in effect hereunder shall forthwith be increased to the warrant
purchase price which would have been in effect at the time of such
expiration or termination had such right, option or Convertible
Securities, to the extent outstanding immediately prior to such
expiration or termination, never been issued, and the Common Stock
issuable thereunder shall no longer be deemed to be outstanding. If the
purchase price provided for in any such right or option referred to in
clause (i) of paragraph (c) or the rate at which any Convertible
Securities referred to in clause (i) or clause (ii) of paragraph (c)
are convertible into or exchangeable for Common Stock, shall decrease
at any time under or by reason of provisions with respect thereto
designed to protect against dilution, then in case of the delivery of
Common Stock upon the exercise of any such right or option or upon
conversion or exchange of any such Convertible Securities, the warrant
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purchase price then in effect hereunder shall forthwith be decreased to
such lower price, if any, as would have been obtained had such right,
option or Convertible Securities never been issued as to such Common
Stock and had adjustments been made upon the issuance of the shares of
Common Stock delivered as aforesaid.
(g) Adjustment of Number of Shares Purchasable. Except as
provided in paragraph (h) below, upon each adjustment of the warrant
purchase price (or upon the happening of any event described herein
which would have required an adjustment in the warrant purchase price
but for the fact that the consideration paid or payable to the Company
by reason of such event is not less than the warrant purchase price in
effect immediately prior thereto or the market price of the shares of
Common Stock issued or issuable by reason thereof), the holder of this
Warrant shall thereafter be entitled to purchase, at the warrant
purchase price resulting from such adjustment (or, if there has not
been any adjustment in such price, at the then existing warrant
purchase price), the number of shares (calculated to the nearest share)
determined as follows:
(i) In all cases other than adjustments in the
warrant purchase price arising under paragraph (d):
(1) by dividing (aa) the number of shares of
Common Stock purchasable pursuant to this Warrant
immediately prior thereto by (bb) the total number of
shares of Common Stock outstanding immediately prior
thereto; and
(2) multiplying the result by the total
number of shares of Common Stock outstanding
immediately thereafter.
(ii) In the case of an adjustment in the warrant
purchase price arising under paragraph (d):
(1) by multiplying the warrant purchase
price in effect immediately prior to such adjustment
by the number of shares purchasable pursuant to this
Warrant immediately prior to such adjustment; and
(2) dividing the product thereof by the
warrant purchase price resulting from such
adjustment.
For purposes of the foregoing computation, the total number of shares
of Common Stock outstanding at any time shall be deemed to include the
total number of shares of Common Stock issuable upon (x) the exercise
of all then outstanding rights to subscribe for or to purchase, and
options for the purchase of, Common Stock or Convertible Securities,
and (y) the conversion or exchange of such Convertible Securities and
all other outstanding Convertible Securities, but shall not be deemed
to include any shares of Common Stock issuable upon the exercise of any
unexercised portion of this Warrant.
(h) Exclusions. Anything herein to the contrary
notwithstanding, the Company shall not be required to make any
adjustment of the warrant purchase price in connection with any shares
of Common Stock reserved for issuance (x) upon the exercise of stock
options granted to the Directors, officers and employees of the Company
which have been
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granted or are available for grant pursuant to stock option plans in
effect on the date hereof or at the time of the holder's exercise of
this Warrant, or (y) upon the exercise of any conversion rights held by
the holder or holders of the Company's Series B Seven Percent (7%)
Cumulative Convertible Preferred Stock, Fifty Dollars ($50.00) par
value per share, or any securities issued in exchange or in payment or
redemption of said Series B Seven Percent (7%) Cumulative Convertible
Preferred Stock, or (z) upon the exercise of any rights to purchase
50,000 shares of Common Stock set forth in the Warrant Agreement dated
July 8, 1997, granted by the Company to Patricof & Co. Capital Corp.
(i) Reorganizations. If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation
or merger of the Company with another corporation, or the sale of all
or substantially all of its assets or outstanding capital stock to
another corporation shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities or assets
with respect to or in exchange for Common Stock, then, as a condition
of such reorganization, reclassification, consolidation, merger or
sale, lawful and adequate provision shall be made whereby the holder
hereof shall thereafter have the right to purchase and receive upon the
basis and upon the terms and conditions specified in this Warrant and
in lieu of the shares of the Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares
of such stock immediately theretofore purchasable and receivable upon
the exercise of the rights represented hereby had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in
any such case appropriate provisions shall be made with respect to the
rights and interests of the holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions fore
adjustments of the warrant purchase price and of the number of shares
purchasable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof.
(j) Notice of Adjustments. Upon any adjustment of the warrant
purchase price or the number of shares purchasable pursuant hereto,
then and in each such case the Company shall give written notice
thereof to the registered holder of this Warrant, which notice shall
state the warrant purchase price resulting from such adjustment and the
increase or decrease, if any, in the number of shares purchasable upon
the exercise of this Warrant, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is
based.
4. COMMON STOCK. As used herein, the term "Common Stock" shall mean and
include the Company's presently authorized shares of capital stock and
shall also include any capital stock of any class of the Company
hereafter authorized which shall not be limited to a fixed sum or
percentage of par value in respect of the rights of the holders thereof
to participate in dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Company; provided that the shares purchasable pursuant to this Warrant
shall include shares designated as Common Stock
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of the Company on the date of original issue of this Warrant or, in the
case of any reclassification of the outstanding shares thereof, the
stock, securities or assets provided for in paragraph 3(i) above.
5. NO RIGHTS AS STOCKHOLDER. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a stockholder of the
Company.
6. NOTICE OF PROPOSED TRANSFERS. The holder of this Warrant, by
acceptance hereof, agrees to give written notice to the Company before
transferring this Warrant or transferring any Common Stock issuable or
issued upon the exercise hereof, of such holder's intention to do so,
describing briefly the manner of any such proposed transfer. Promptly
after such written notice is received by the Company, copies thereof
shall be presented to counsel for the Company and to counsel for such
holder. If in the opinion of each such counsel the proposed transfer
may be effected without registration or qualification (under any
Federal or State law) of this Warrant or the shares of Common Stock
issuable or issued on the exercise hereof, the Company, as promptly as
practicable, shall notify such holder of such opinion, whereupon such
holder shall be entitled to effect such transfer in accordance with the
terms of the notice delivered by such holder to the Company, provided
that an appropriate legend may be endorsed on this Warrant or the
certificates for such shares respecting restrictions upon transfer
thereof necessary or advisable in the opinion of counsel for the
Company to prevent transfers which would be in violation of Section 5
of the Securities Act of 1933, as amended (herein called the "1933
Act").
7. INVESTMENT REPRESENTATION; RESALE LIMITATIONS; REGISTRATION RIGHTS.
(a) Investment Representation. The holder of this Warrant, by
acceptance hereof, represents and warrants that this Warrant and shares
of Common Stock purchased by the holder pursuant to the exercise of
this Warrant, are and will be acquired by the holder for investment and
not with a view to, or for sale in connection with, any distribution
thereof, nor with any present intention, of selling, transferring or
disposing of the same.
(b) Resale Limitations. The shares of Common Stock which may
be purchased hereunder may not be offered for sale, sold or otherwise
transferred, unless:
(i) A registration statement with respect to such
securities shall be effective under the 1933 Act, together
with proof satisfactory to counsel for the Company that the
holder of this Warrant shall have complied with applicable
state securities laws, or
(ii) The Company shall have received an opinion of
counsel satisfactory to the Company that no violation of the
1933 Act, or such other applicable law, will be involved in
such transfer, or
(iii) The Company shall receive a "no action" letter
from the Securities and Exchange Commission (herein called the
"SEC") and the equivalent ruling or letter pursuant to
applicable state law in form satisfactory to the Company
covering such
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transfer,
and the Company may withhold transfer, registration and delivery of
such securities until one of the three conditions set forth in this
paragraph 7(b) shall have been met.
(c) Legend. All certificates representing the shares of Common
Stock issued upon the exercise of this Warrant shall contain an
appropriate legend indicating the fact that the shares have not been
registered under the 1933 Act and the conditions affecting the
transferability of such shares. A similar notation will be placed in
the Company's stock transfer ledger.
8. NOTICES. Any notice or other thing required or desired to be served,
given or delivered hereunder shall be in writing, and shall be deemed
to have been validly served, given or delivered upon deposit in the
United States registered or certified mail with proper postage prepaid
and addressed to the party to be notified as follows:
(a) If to the Company at:
American Precision Industries Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: President
(b) If to the holder of this Warrant at:
Decision Processes International
(Connecticut, Ltd.)
00 Xxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: President
or to such other address as either party may hereafter designate for
itself by written notice to the other party in the manner herein
prescribed.
9. GENERAL. This Warrant shall be construed in accordance with the laws
of the State of Delaware. Whenever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and
valid under the applicable law, but, if any provision of this Warrant
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Warrant. The paragraph headings herein
are for convenience only and shall not affect the interpretation of any
of the provisions hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed at
Buffalo, New York by its duly authorized officers under its corporate seal, and
this Warrant is dated December 31, 1998.
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AMERICAN PRECISION INDUSTRIES INC.
By
------------------------------------------
Xxxx Xxxxxxxxxxx, Chairman,
President and Chief Executive Officer
(CORPORATE SEAL)
ATTEST:
-------------------------------
Xxxxx X. Xxxxxx, Secretary
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FORM
FOR
EXERCISE OF WARRANT
The undersigned hereby elects to purchase _________ shares of Common
Stock, $.66-2/3 par value, of AMERICAN PRECISION INDUSTRIES INC. (the "Company")
in accordance with the WARRANT AGREEMENT dated ___________, 19__. The
undersigned hereby delivers the following to the Company in full payment for the
shares purchased hereby:
Exercise Price ($______ per share) x ______ shares purchased =
Aggregate Exercise Price $
Paid by: certified or official bank check payable
to "American Precision Industries Inc."
OR
--
By the retention by the Company of ______ shares
per paragraph 1(b) of the WARRANT AGREEMENT.
(Aggregate Exercise Price Average Closing Price =
Payment Shares)
(Total shares purchased - Payment Shares = Shares
to be issued to undersigned)
Please register these shares as follows:
Name of record owner:
Address:
Social Security No.:
Please mail shares to [above address] or
Dated:
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Signature of Warrant Holder
