EXHIBIT (d)(3)
SUPPORT AGREEMENT
SUPPORT AGREEMENT (this "Agreement"), dated as of February 15, 2000, by
and between ▇▇▇▇▇▇▇ Corporation, a Delaware corporation ("Parent"), ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇ ("Seller"), and (solely for the purposes of Section 1.3 and Section 5.10
hereof) American Precision Industries Inc. a Delaware corporation (the
"Company").
WHEREAS, concurrently herewith, Parent, Alpha Acquisition I Corp. (the
"Purchaser"), a Delaware corporation and a subsidiary of Parent, and the Company
are entering into an Agreement and Plan of Merger of even date herewith (the
"Merger Agreement", which term shall not include any amendment to such Agreement
which decreases the Offer Price or changes the form of consideration payable in
the Offer, unless Seller consents to the inclusion of such amendment in such
term). Capitalized terms used but not defined herein shall have the meanings set
forth in the Merger Agreement. Pursuant to the Merger Agreement, the Purchaser
agrees to make a tender offer (the "Offer") for all outstanding Shares of the
Company, at $19.25 per Share (the "Offer Price") net to the seller in cash, to
be followed by a merger (the "Merger") of the Purchaser with and into the
Company;
WHEREAS, the Offer will provide that Shares may be tendered by tendering
shares of Series B Seven Percent (7%) Cumulative Convertible Preferred Stock,
par value $1.00 per share ("Series B Preferred Stock") which are convertible
into Shares along with an instruction to the Purchaser not to convert such
shares of Series B Preferred Stock until payment is made for the Series B
Preferred Stock pursuant to the Offer;
WHEREAS, as of the date hereof, Seller and entities directly or
indirectly controlled by Seller ("Seller Affiliates") beneficially own 1,236,337
shares of Series B Preferred Stock, which are convertible into Shares pursuant
to the terms of the Series B Preferred Stock, and a further 260,000 Shares
(together, the "Owned Shares"); and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement and make the Offer, Parent and the Purchaser have required that Seller
agree, and Seller hereby agrees to enter into the agreements set forth herein;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Tender and to Vote.
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1.1 Tender. Seller hereby agrees to validly tender (or cause the record
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owner of such shares to validly tender), pursuant to and in accordance with the
terms of the Offer, but in no event earlier than March 3, 2000 or later than the
then scheduled expiration date of the Offer, all of the Shares and shares of
Series B Preferred Stock owned by Seller and the Seller Affiliates, including
any Shares acquired before or after the date hereof and prior to the termination
of the Offer, whether upon the conversion of Series B Preferred Stock or
otherwise (collectively, the "Tender Shares" which term, as used herein, shall
include the Owned Shares where the context requires) by physical delivery of the
certificates therefor, and to not withdraw such Tender
Shares, except following termination of the Offer pursuant to its terms or
expiration of this Agreement pursuant to Section 2 of this Agreement. Upon
accepting for payment the Shares in the Offer, Purchaser shall pay in cash an
amount for the Series B Preferred Stock equal to the product of the number of
Shares to be issued, calculated in accordance with Section 6(B) of the terms of
the Series B Preferred Stock, multiplied by the greater of (i) the Offer Price
and (ii) the amount per share of Company common stock paid by Purchaser in the
Offer. Seller hereby permits Parent and the Purchaser to publish and disclose in
the Offer Documents and, if approval of the Company's stockholders is required
under applicable law, the Proxy Statement (including all documents and schedules
filed with the Securities and Exchange Commission) its identity and ownership of
the Tender Shares and the nature of its commitments, arrangements and
understandings under this Agreement.
1.2 Voting. Seller hereby agrees that, during the time this Agreement
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is in effect but only to the extent Seller and the Seller Affiliates have the
right to vote with respect to the Tender Shares, at any meeting of the
stockholders of the Company, however called, Seller shall (and shall cause the
Seller Affiliates to) (a) vote the Tender Shares in favor of the Merger; (b)
vote the Tender Shares against any action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement; and (c) vote the Tender
Shares against any action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that would impede, interfere with, delay,
postpone or attempt to discourage the Merger or the Offer, including, but not
limited to: (i) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or any of its
subsidiaries; (ii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries or a reorganization, recapitalization or
liquidation of the Company and its subsidiaries; (iii) any change in the
management or board of directors of the Company, except as otherwise agreed to
in writing by the Purchaser; (iv) any material change in the present
capitalization or dividend policy of the Company; or (v) any other material
change in the Company's corporate structure or business.
1.3 Company Consent and Agreements. The Company hereby consents to this
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Agreement, agrees that Seller's compliance with this Agreement will not violate
the Shareholder Agreement between InterScan Holding Ltd. ("InterScan") and the
Company dated July 8, 1997 (the "Shareholder Agreement") in any respect. The
Company further agrees that as long as it has the right to vote with respect to
Tender Shares, it will take all action in its capacity as proxy holder under the
Shareholder Agreement consistent with this Agreement and the transactions
contemplated hereby, including voting the Tender Shares in accordance with
Section 1.2. The Company, on behalf of itself and its subsidiaries, hereby
consents to any transfer by InterScan to any other Affiliates of InterScan of
Series B Preferred Stock and its rights and obligations under the Amended and
Restated Stock Purchase Agreement dated July 3, 1997, as amended, between the
Company and InterScan, the Registration Agreement dated July 8, 1997 between the
Company and InterScan and the Shareholder Agreement, provided, that any such
transferee agrees to be bound by all the terms to which InterScan is bound under
said agreements.
1.4 No Inconsistent Arrangements. Seller hereby covenants and agrees
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that, except as contemplated by this Agreement and the Merger Agreement, it
shall not (i) except to Parent or the Purchaser, transfer (which term shall
include, without limitation, any sale, gift,
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pledge or other disposition), or consent to any transfer of, any or all of the
Tender Shares or any interest therein, (ii) except with Parent, enter into any
contract, option or other agreement or understanding with respect to any
transfer of any or all of the Tender Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to the
Tender Shares, (iv) deposit any Tender Shares into a voting trust or enter into
a voting agreement or arrangement with respect to the Tender Shares or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of its obligations hereunder or the transactions contemplated hereby
or by the Merger Agreement or which would make any representation or warranty of
Seller hereunder untrue or incorrect.
1.5 No Solicitation. Seller hereby agrees that he shall not, and shall
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not permit or authorize any of his affiliates, representatives or agents to,
directly or indirectly, encourage, solicit, explore, participate in or initiate
discussions or negotiations with, or provide or disclose any information to, any
corporation, partnership, person or other entity or group (other than Parent,
the Purchaser or any of their affiliates or representatives) concerning any
Acquisition Transaction or enter into any agreement, arrangement or
understanding requiring the Company to abandon, terminate or fail to consummate
the Merger or any other transactions contemplated by the Merger Agreement.
Seller and the Seller Affiliates will immediately cease any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Acquisition Transaction. From and after the execution of this Agreement,
Seller shall immediately advise Parent in writing of the receipt, directly or
indirectly, of any inquiries, discussions, negotiations or proposals relating to
an Acquisition Transaction, identify the offeror and furnish to Parent a copy of
any such proposal or inquiry, if it is in writing, or a written summary of any
oral proposal or inquiry relating to an Acquisition Transaction. Seller shall
promptly advise Parent in writing of any development relating to such proposal,
including the results of any discussions or negotiations with respect thereto.
Any action taken by the Company or any member of the Board of Directors of the
Company including Seller acting in such capacity, in accordance with the proviso
to the second sentence of Section 6.10(a) of the Merger Agreement shall be
deemed not to violate this Section 1.5
2. Expiration. This Agreement and the parties' obligations hereunder
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shall terminate on the earliest of (i) the payment for the Owned Shares pursuant
to the Offer, (ii) June 1, 2000, or (iii) the termination of the Merger
Agreement pursuant to Section 8.1(e) thereof.
3. Representation and Warranties. Seller hereby represents and warrants
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to Parent as follows:
(a) Title. Seller or one of the Seller Affiliates has good and valid
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title to the Owned Shares, free and clear of any lien, pledge, charge,
encumbrance or claim of whatever nature (other than the Shareholder Agreement)
and, upon the purchase of the Tender Shares by Parent or the Purchaser, Seller
or one of the Seller Affiliates will deliver good and valid title to the Tender
Shares, free and clear of any lien, charge, encumbrance or claim of whatever
nature.
(b) Ownership of Shares. On the date hereof, the Owned Shares are
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owned of record or beneficially by Seller or one of the Seller Affiliates and,
on the date hereof, the Owned Shares constitute all of the Shares (except for
the director shares) owned of record or
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beneficially by Seller or one of the Seller Affiliates. Except as provided by
the Shareholder Agreement, Seller or one of the Seller Affiliates has sole
voting power and sole power of disposition with respect to all of the Owned
Shares, with no restrictions, subject to applicable federal securities laws, on
Seller's rights of disposition pertaining thereto.
4. Further Assurances. From time to time, at the Parent's request and
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without further consideration, Seller shall execute and deliver such additional
documents and take all such further action as may be reasonably necessary or
desirable to consummate and make effective the transactions contemplated by
Section 1 of this Agreement. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to use all reasonable best efforts to take, or
cause to be taken, all actions necessary or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement and the Merger Agreement, including providing any necessary
information and material with respect to all filings made by Seller with any
Governmental Entity in connection with this Agreement and the Merger Agreement
and the transactions contemplated hereby and thereby.
5. Miscellaneous.
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5.1 Survival. The representations and warranties made herein shall
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terminate upon Seller's sale of the Tender Shares to the Purchaser in the Offer
other than Seller's representations and warranties in Section 3 which shall
survive the sale of the Tender Shares and the termination of this Agreement
following such sale.
5.2 Entire Agreement; Assignment. This Agreement (i) constitutes the
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entire agreement between the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof and (ii)
shall not be assigned by operation of law or otherwise, provided that either of
the parties may assign their rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of such party, but no such assignment shall
relieve such party of its obligations hereunder if such assignee does not
perform such obligations.
5.3 Amendments. This Agreement may not be modified, amended, altered or
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supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
5.4 Notices. All notices, requests, claims, demands and other
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communications hereunder shall be in writing and shall be given by hand
delivery, telegram, telex or telecopy or by any courier service, such as Federal
Express, providing proof of delivery. All communications hereunder shall be
delivered to the respective parties at the following addresses:
If to Seller:
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▇▇▇▇▇▇ ▇▇▇▇▇
STC Interfinance ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇
▇-▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇-▇-▇▇▇▇▇▇▇/6666333
copy to Seller's Counsel:
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
American Precision Industries Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to Company's Counsel
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & Mugel LLP
Fleet Bank Building
Twelve Fountain Plaza
Buffalo, New York 14202-2292
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Parent:
▇▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
copy to:
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Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
5.5 Governing Law; Jurisdiction. This Agreement shall be governed by
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and construed in accordance with the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
5.6 Specific Performance. Each of Parent and Seller recognizes and
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acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other to sustain damages for which it would not
have an adequate remedy at law, and therefore each of Parent and Seller agrees
that in the event of any such breach the other shall be entitled to the remedy
of specific performance of such covenants and agreements and injunctive and
other equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity.
5.7 Counterparts. This Agreement may be executed in counterparts, each
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of which shall be deemed to be an original, but all of which shall constitute
one and the same Agreement.
5.8 Descriptive Headings. The descriptive headings used herein are
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inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
5.9 Severability. Whenever possible, each provision or portion of any
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provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
5.10 Possible Restructuring. Seller agrees to cooperate with Parent and
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the Purchaser in restructuring the transactions contemplated herein if Parent
and the Purchaser reasonably determine that such a restructuring would be
advantageous to provide that either: (i) Seller shall sell, and the Purchaser
shall purchase, all of Seller's shares of Series B Preferred Stock within two
business days after (and conditioned upon) the consummation of the Offer; or
(ii) Seller shall tender its Series B Preferred Stock into the Offer for Shares
immediately upon acceptance for purchase, if Seller obtains confirmation
satisfactory to Seller that such conversion would not require Seller to make a
filing under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976; provided,
however, that in either case Seller shall receive the same aggregate cash
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amount Seller would have received by tendering its Series B Preferred Stock to
the Purchaser pursuant to the Offer and provided that Seller shall reasonably
determine that he not be in any other way disadvantaged thereby. Parent, the
Purchaser and the Company agree that if for any reason whatsoever Seller does
not receive full payment for the Series B Preferred Stock within one week of
acceptance for purchase pursuant to the Offer, the Company will immediately
reissue the Series B Preferred Stock to Seller and cancel any Shares into which
such Series B Preferred Stock has been converted.
* * *
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IN WITNESS WHEREOF, Parent and Seller have caused this Agreement to be
duly executed as of the day and year first above written.
▇▇▇▇▇▇▇ CORPORATION
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: __________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President - Corporate
Development
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
By: ___________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
AMERICAN PRECISION INDUSTRIES INC.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
By: ___________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: President
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