<PAGE> 1
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SEC 1746 POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION
(2-98) CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM
DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER.
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<TABLE>
<CAPTION>
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OMB APPROVAL
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<S> <C> <C>
OMB Number: 3235-0145
Expires: November 30, 1999
UNITED STATES Estimated average burden
SECURITIES AND EXCHANGE COMMISSION hours per response....14.9
WASHINGTON, D.C. 20549 ----------------------------
</TABLE>
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 5)*
AMERICAN PRECISION INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
SERIES B SEVEN PERCENT (7%) CUMULATIVE CONVERTIBLE PREFERRED STOCK
Common Stock $.66 2/3 par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
#029069-10-1
- --------------------------------------------------------------------------------
(CUSIP Number)
STANLEY WEISS, ESQ, 80 MAIN STREET, WEST ORANGE, NEW JERSEY 07052 (973)736-1815
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
FEBRUARY 14, 2000
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition that is the subject of
this Schedule 13D, and is filing this schedule because of
Sections 240.13d-1(e), 240.13d-1(f) of 240.13d-1(g), check the
following box [ ].
NOTE: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all
exhibits. See Section 240.13d-7 for other parties to whom
copies are to be sent.
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent
amendment containing information which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however,
see the Notes).
<PAGE> 2
CUSIP No. 029069-10-1..................
- --------------------------------------------------------------------------------
1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only).
Inter Scan Holding, Ltd.
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
---------------------------------------------------------------------
(b) X
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. SEC Use Only
-----------------------------------------------------------------
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions)
--------------------------------------------
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
-----------------------------------------------------------------
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization. Switzerland
- --------------------------------------------------------------------------------
Sole Voting Power 1,236,337 shares (100%) of Series B Seven
Percent (7%) Cumulative Convertible Preferred Stock
7. convertible into 1,538,603 shares (18.25%) of Common Stock,
(plus such additional shares of Common Stock provided in
Section 6B(i) of the Convertible Preferred Stock) as directed
by Issuer's Board of Directors through July 8, 2000.
Number Of --------------------------------------------------------------
Shares
Beneficially 8. Shared Voting Power
Owned by -------------------------------------------
Each --------------------------------------------------------------
Reporting
Person Sole Dispositive Power 1,236,337 shares (100%) of Series B
With Seven Percent (7%) Cumulative Convertible Preferred Stock
convertible into 1,538,603 shares (18.25%) of Common Stock
9. (plus such additional shares of Common Stock provided in
Section 6B(i) of the Convertible Preferred Stock) subject to
the Issuer's right of first refusal and the rights of Danaher
Corporation in the Support Agreement annexed as Appendix C.
--------------------------------------------------------------
10. Shared Dispositive Power
--------------------------------------
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,236,337
shares of Series B Preferred Stock.
<PAGE> 3
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
-----------------------------------------------------
- --------------------------------------------------------------------------------
Percent of Class Represented by Amount in Row (11) 100% of the
13. outstanding Series B Preferred Stock and approximately 18.25% of Common
Stock, assuming conversion of all Series B Preferred Stock.
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) CO
<PAGE> 4
CUSIP No. 029069-10-1..................
- --------------------------------------------------------------------------------
1. Name of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only).
Holger Hjelm as the ultimate beneficial owner of both Inter Scan Holding,
Ltd. and STC Interfinans AB
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
---------------------------------------------------------------------
(b) X
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. SEC Use Only
-----------------------------------------------------------------
- --------------------------------------------------------------------------------
4. Source of Funds (See Instructions)
--------------------------------------------
- --------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
-----------------------------------------------------------------
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization Sweden
- --------------------------------------------------------------------------------
Sole Voting Power 1,236,337 shares (100%) of Series B Seven
Percent (7%) Cumulative Convertible Preferred Stock
7. convertible into 1,538,603 shares (18.25%) of Common Stock
(plus such additional shares provided in Section 6B(i) of the
Convertible Preferred Stock) as directed by Issuer's Board of
Directors through July 8, 2000 and 260,000 shares (3.08%) of
Common Stock to be voted in accordance with Section 1.6 of the
Support Agreement which is annexed as Appendix C plus options
to acquire 2,966 shares of Common Stock.
Number Of --------------------------------------------------------------
Shares
Beneficially 8. Shared Voting Power
Owned by -------------------------------------------
Each --------------------------------------------------------------
Reporting
Person Sole Dispositive Power 1,236,337 shares (100%) of Series B
With Seven Percent (7%) Cumulative Convertible Preferred Stock
convertible into 1,538,603 shares (18.25%) of Common Stock
9. (plus such additional shares provided in Section 6B(i) of the
Convertible Preferred Stock) subject to the Issuer's right of
first refusal and 260,000 shares (3.08%) of Common Stock, both
of which are subject to the rights of Danaher Corporation in
the Support Agreement which is annexed as Appendix C plus
option to acquire 2,966 shares of Common Stock.
--------------------------------------------------------------
10. Shared Dispositive Power
--------------------------------------
- --------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,236,337
shares of Series B Preferred Stock and 260,000 shares of Common Stock, plus
options to acquire 2,966 shares of Common Stock.
<PAGE> 5
- --------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
-----------------------------------------------------
- --------------------------------------------------------------------------------
Percent of Class Represented by Amount in Row (11) 100% of the
13. outstanding Series B Preferred Stock and approximately 21.33% of Common
Stock, assuming conversion of all Series B Preferred Stock, (excluding,
such additional shares provided in Section 6B(i) of the Convertible
Preferred Stock, and the options)
- --------------------------------------------------------------------------------
14. Type of Reporting Person (See Instructions) IN
<PAGE> 6
SCHEDULE 13D- AMENDMENT NO. 5
-----------------------------
CUSIP# 029069-10-1 COMMON STOCK PAGE 6 OF 8 PAGES
- ------------------------------- -----------------
INTRODUCTION
- ------------
The ownership of 20,000 shares of Series A Seven Percent (7%)
Cumulative Convertible Preferred Stock of American Precision Industries Inc.
("API") and a $5,000,000 Exchangeable Promissory Note which were exchangeable
into 1,236,337 shares of Series B Seven Percent (7%) Cumulative Convertible
Preferred Stock ("Series B Preferred Stock") was reported by Inter Scan Holding
Ltd. and Holger Hjelm (collectively the "Reporting Persons") in a Schedule 13D
filed with the Securities and Exchange Commission ("SEC") on July 16, 1997, as
amended by Schedule 13D Amendment No. 1 filed with the SEC on July 17, 1997,
Amendment No. 2 filed with the SEC on November 24, 1997, Amendment No. 3 filed
with the SEC on March 13, 1998 and Amendment No. 4 filed with the SEC on
September 7, 1999 wherein the Reporting Persons reported the purchase of 260,000
shares of Common Stock of API which purchase was to be funded by a line of
credit from Marine Midland Bank reported in Amendment No. 3.
The cover pages of the Reporting Persons are hereby amended to report
that (1) Inter Scan Holding Ltd. ("Inter Scan") paid in full the line of credit
extended by Marine Midland Bank; (2) Inter Scan transferred the 260,000 shares
of Common Stock held by it to an affiliate company, STC Interfinans AB; and (3)
Holger Hjelm executed a Support Agreement with Danaher Company ("Danaher") dated
February 15, 2000 ("Support Agreement"). A copy of the Support Agreement dated
February 15, 2000 is annexed as Appendix C. Items 4, 5, 6 and 7 are hereby
amended as set forth in this Schedule 13D Amendment No. 5. All other cover pages
and items remain unchanged, and are incorporated herein by reference.
ITEM 4. PURPOSE OF TRANSACTION Item 4 is hereby amended to read as follows:
(a) 260,000 shares of Common Stock held by Inter Scan were transferred
to an affiliate, STC Interfinans AB, on February 14, 2000 as part of an
internal reorganization of companies in which Holger Hjelm is the
ultimate beneficial owner.
(b) Pursuant to the Agreement and Plan of Merger between API and
Danaher dated February 15, 2000 ("Merger Agreement"), Danaher agreed to
make a tender offer to the shareholders of API for all of the
outstanding shares of the company. Pursuant to the Support Agreement,
the reporting persons support the tender offer and will tender API
securities owned by them and their affiliates to Danaher.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER Item 5 is hereby amended to read as
follows:
(a) On February 14, 2000, Inter Scan transferred the 260,000 shares of
Common Stock of API to its affiliate, STC Interfinans AB, a Swedish
Corporation. Holger Hjelm is the ultimate beneficial owner of both
InterScan and STC Interfinans AB. Mr. Hjelm is the ultimate beneficial
owner of approximately 21.33% of API's
<PAGE> 7
SCHEDULE 13D- AMENDMENT NO. 5
-----------------------------
CUSIP# 029069-10-1 COMMON STOCK PAGE 7 OF 8 PAGES
- ------------------------------- -----------------
common stock assuming conversion of all Series B Preferred Stock
excluding such additional shares received upon conversion under Section
6B of the Convertible Preferred Stock and his options, received as a
director, to acquire 2966 shares of API Common Stock. Section 6B(i)
of the Convertible Preferred Stock is attached as Appendix D. Pursuant
to it, the Series B Preferred Stock is convertible into 1,538,603
shares of common stock plus an additional number of shares which
varies with the number of days since the last dividend payment.
(b) On February 15, 2000, Holger Hjelm signed the Support Agreement
annexed as Appendix C which obligates him and his affiliates to
support Danaher's tender offer and to tender their API securities to
Danaher. The Issuer's Board of Directors direct the vote through July
8, 2000 on the Series B Preferred Stock and the Common Stock into which
it is convertible. Danaher has the right to direct the vote on the
260,000 shares of common stock now owned by STC Interfinancs AB until
termination of the Support Agreement.
(c) InterScan transferred the 260,000 shares of API Common Stock to STC
Interfinans AB on February 14, 2000.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER Item 6 is hereby amended to read as follows:
There are no contracts, arrangements, understandings or relationships
among the persons named in Item 2 with respect to any securities of the API. The
only contracts, arrangements, understandings or relationships between any such
persons and any other person with respect to any securities of API are as
follows:
(1) The Stock Purchase Agreement and Exhibits thereto which
are filed as Appendix A to Amendment No. 1. The Stock Purchase Agreement
contains provisions concerning the voting of the securities [Section 3 of the
Shareholder Agreement, Exhibit 5.1(d)(1)]; finder fees [Section 11.8 of the
Stock Purchase Agreement]; guarantee of profits [Section 6 of the Shareholder
Agreement, Exhibit 5.1(d)(1) and Pages 3 and 4 of the Note, Exhibit 2.1(a)(ii)];
right of first refusal [Section 4 of the Shareholder Agreement, Exhibit
5.1(d)(1)]; and the giving of proxies [Section 3 of the Shareholder Agreement,
Exhibit 5.1(d)(1)], all of which are incorporated herein by reference.
(2) The line of credit extended to Inter Scan by Marine
Midland Bank was paid in full during the week of February 7, 2000 and the Series
B Preferred Stock pledged to secure the line of credit is being returned to
InterScan Holding Ltd.
<PAGE> 8
SCHEDULE 13D- AMENDMENT NO. 5
-----------------------------
CUSIP# 029069-10-1 COMMON STOCK PAGE 8 OF 8 PAGES
- ------------------------------- -----------------
(3) The Support Agreement is filed herewith as Appendix C.
Under this Agreement, Holger Hjelm, as the ultimate beneficial owner, agreed to
support the tender offer of Danaher Corporation and to tender all the API
securities owned by him and his affiliates.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS Item 7 is hereby amended to include
the following exhibit:
Appendix C - Support Agreement
Appendix D - Section 6B(i) of the Convertible Preferred Stock
SIGNATURE
- ---------
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
FEBRUARY 22, 2000 /s/ Stanley Weiss
- ----------------- ------------------------
Stanley Weiss, Esq.
Attorney at Law
----------------
<PAGE> 9
SCHEDULE 13D
------------
CUSIP#029069-10-1 COMMON STOCK
- ------------------------------
POWER OF ATTORNEY
FOR EXECUTING FORMS 3,4 AND 5
AND
SCHEDULE 13D
Know all by these presents, that the undersigned hereby constitutes and
appoints each of Stanley Weiss, James J. Tanous and Deborah K. Pawlowski,
signing singly, its true and lawful attorney-in-fact, with respect to the
undersigned's status as a director of American Precision Industries Inc. and
potential beneficial owner of more than 10% of the voting securities of
American Precision Industries Inc., to:
(1) execute for and on behalf of the undersigned Forms 3,4 and 5 in accordance
with Section 16(a) of the Securities Exchange Act of 1934 and the rules
thereunder, and Schedule 13D, and any amendments thereto, in accordance
with Section 13(d) of the Securities Exchange Act of 1934 and the rule
thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned
which may be necessary or desirable to complete the execution of any
such Forms 3,4 or 5 and any such Schedule 13D and any amendments thereto
and timely filing of such form and Schedule with the United States
Securities and Exchange Commission, the New York Stock Exchange and any
other authority; and
(3) take any other action of any type whatsoever in connection with the
foregoing which, in the opinion of such attorney-in-fact, may be of
benefit to, in the best interest of, or legally required by, the
undersigned;
it being understood that the documents executed by such attorney-in-fact on
behalf of the undersigned pursuant to this Power of Attorney shall be in such
form and shall contain such terms and conditions as such attorney-in-fact may
approve in his discretion.
The undersigned hereby grants to each such attorney-in-fact full power
and authority to do and perform all and every act and thing whatsoever
requisite, necessary and proper to be done in the exercise of any of the rights
and powers herein granted, as fully to all intents and purposes as such
attorney-in-fact might or could do if personally present, with full power of
substitution or revocation, hereby ratifying and confirming all that such
attorney-in-fact, or his/her substitute or substitutes, shall lawfully do or
cause to be done by virtue of this power of attorney and the rights and powers
herein granted. The undersigned acknowledges that the foregoing
attorneys-in-fact, in serving in such capacity at the request of the
undersigned, are not assuming any of the undersigned's responsibilities to
comply with Section 16 or Section 13(d) of the Securities Exchange Act of 1934.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney
to be executed as of this 13th day of July 1997.
By /s/ Holger Hjelm
-----------------------
Holger Hjelm
<PAGE> 10
SCHEDULE 13D
------------
CUSIP# 029069-10-1 COMMON STOCK
- -------------------------------
POWER OF ATTORNEY
FOR EXECUTING FORMS 3, 4 AND 5
AND
SCHEDULE 13D
Know all by these presents, that the undersigned hereby constitutes and
appoints each of Stanley Weiss, James J. Tanous and Deborah K. Pawlowski,
signing singly, its true and lawful attorney-in-fact, with respect to the
undersigned's status as a holder of more that 10% of the voting securities of
American Precision Industries Inc., to:
(1) execute for and on behalf of the undersigned Forms 3, 4 and 5 in
accordance with Section 16(a) of the Securities Exchange Act of 1934
and the rules thereunder, and Schedule 13D, and any amendments thereto,
in accordance with Section 13(d) of the Securities Exchange Act of 1934
and the rule thereunder;
(2) do and perform any and all acts for and on behalf of the undersigned
which may be necessary or desirable to complete the execution of any
such Forms 3, 4 or 5 and any such Schedule 13D and any amendments
thereto and the timely filing of such form and Schedule with the United
States Securities and Exchange Commission, the New York Stock Exchange
and any other authority, and
(3) take any other action of any type whatsoever in connection with the
foregoing which, in the opinion of such attorney-in-fact, may be of
benefit to, in the best interest of, or legally required by, the
undersigned;
it being understood that the documents executed by such attorney-in-fact on
behalf of the undersigned pursuant to this Power of Attorney shall be in such
form and shall contain such terms and conditions as such attorney-in-fact may
approve in his discretion.
The undersigned hereby grants to each such attorney-in-fact full power and
authority to do and perform all and every act and thing whatsoever requisite,
necessary and proper to be done in the exercise of any of the rights and powers
herein granted, as fully to all intents and purposes as such attorney-in-fact
might or could do if personally present, with full power of substitution or
revocation, hereby ratifying and confirming all that such attorney-in-fact, or
his/her substitute or substitutes, shall lawfully do or cause to be done by
virtue of this power of attorney and the rights and powers herein granted. The
undersigned acknowledges that the foregoing attorneys-in-fact, in serving in
such capacity at the request of the undersigned, are not assuming any of the
undersigned's responsibilities to comply with Section 16 or Section 13(d) of
the Securities Exchange Act of 1934.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be
executed as of this 11th day of July 1997.
Inter Scan Holding Ltd.
By /s/ Dr. Rudolf Heiz
------------------------
Dr. Rudolf Heiz
By /s/ Max E. Huber
------------------------
Max E. Huber
<PAGE> 11
EXECUTION COPY
--------------
SUPPORT AGREEMENT
SUPPORT AGREEMENT (this "Agreement"), dated as of February 15,
2000, by and between Danaher Corporation, a Delaware corporation ("Parent"), Mr.
Holger Hjelm ("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.
1.1 TENDER. Seller hereby agrees to validly tender (or cause
the record 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
<PAGE> 12
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 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 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 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,
-2-
<PAGE> 13
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 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 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 to Parent as follows:
(a) TITLE. Seller or one of the Seller Affiliates has good
and valid 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 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
-3-
<PAGE> 14
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 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.
5.1 SURVIVAL. The representations and warranties made herein
shall 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 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 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
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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<PAGE> 15
Holger Hjelm
STC Interfinance AB
Grev Turegatan 20, Box 55605
S-102, 14 Stockholm
Sweden
Facsimile: (011) 46-8-7830066/6666333
copy to Seller's Counsel:
Stanley Weiss
80 Main Street
West Orange, New Jersey 07052
Facsimile: (973) 325-3115
If to the Company:
American Precision Industries Inc.
2777 Walden Avenue
Buffalo, New York 14225
Attention: Kurt Wiedenhaupt, President
Facsimile: (716) 684-2155
Copy to Company's Counsel
Jaeckle Fleischmann & Mugel LLP
Fleet Bank Building
Twelve Fountain Plaza
Buffalo, New York 14202-2292
Attention: James J. Tanous
Facsimile: (716) 856-0432
If to Parent:
Danaher Corporation
1250 24th Street, N.W.
Washington, D.C. 20037
Attention: Patrick W. Allender
Facsimile: (202) 828-0860
copy to:
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<PAGE> 16
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Trevor S. Norwitz, Esq.
Fax: (212) 403-2000
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 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 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 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 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 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 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 Hart-Scott-Rodino Antitrust Improvements Act of 1976; provided,
however, that in either case Seller shall receive the same aggregate cash
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<PAGE> 17
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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<PAGE> 18
IN WITNESS WHEREOF, Parent and Seller have caused this
Agreement to be duly executed as of the day and year first above written.
DANAHER CORPORATION
By: /s/ Daniel L. Coma
----------------------------
Name: DANIEL L. COMA
Title: Vice President
By: /s/ Holger Hjelm
----------------------------
Name: HOLGER HJELM
AMERICAN PRECISION INDUSTRIES INC.
By: /s/ K. Wiedenhaupt
----------------------------
Name: K. WIEDENHAUPT
Title:
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<PAGE> 19
APPENDIX D
Section 6. Conversion of Series B Preferred Stock.
(A) Optional Conversion. Holders of Series B Preferred Stock shall have the
right, at their option, to convert as many shares of Series B Preferred Stock as
they choose into the shares of the Corporation's Common Stock, on the terms and
conditions set forth below.
(B) Terms of Conversion. The conversion of the Series B Preferred Stock
shall be upon the following terms and conditions:
(i) Conversion Ratio. The Series B Preferred Stock shall be
convertible, at the principal office of the Corporation and at such other
office or offices, if any, as the Board of Directors of the Corporation may
designate, into fully paid and non-assessable shares of Common Stock. The
number of shares of Common Stock to be delivered upon conversion shall be
determined by the following calculation:
The sum of the LV and UD per share times CPS = NCS
--------------------------------------------
CP
where LV equals the Series B Liquidation Value per share; UD equals seven
percent (7%) of the per share LV per annum from and after the date on which
dividends on such share became cumulative to and including the date of
conversion less the aggregate of the dividends paid during the same period,
computed without interest; CPS equals the number of shares of Series B
Preferred Stock to be converted; CP equals the conversion price for a share
of Common Stock which shall be $17.00 per share as adjusted pursuant to
subsection (ii) or (iii) below; and NCS equals the number of shares of
Common Stock to be delivered upon conversion.
