-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PEIxtOgLMHrZxOQsWE015ew6nYk/66adygnn81hawuCB6Vp5j+WeHAtjlxitRJ0Z yEGuaziIQj8aIXK3mgzW2w== 0000950144-02-004908.txt : 20020508 0000950144-02-004908.hdr.sgml : 20020508 ACCESSION NUMBER: 0000950144-02-004908 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20020508 GROUP MEMBERS: AER PARTNERS GROUP MEMBERS: BATTERY PARTNERS GROUP MEMBERS: ELMWOOD PARTNERS II GROUP MEMBERS: JON A. LINDSETH, TRUSTEE GROUP MEMBERS: THE KINDT-COLLINS COMPANY SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AER ENERGY RESOURCES INC /GA CENTRAL INDEX KEY: 0000863872 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 341621925 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-44292 FILM NUMBER: 02638047 BUSINESS ADDRESS: STREET 1: 4600 HIGHLANDS PKWY STE G CITY: SMYRNA STATE: GA ZIP: 30082 BUSINESS PHONE: 4044332127 MAIL ADDRESS: STREET 1: 4600 HIGHLANDS PKWY STREET 2: SUITE G CITY: SMYRNA STATE: GA ZIP: 30082 FORMER COMPANY: FORMER CONFORMED NAME: AEROBIC POWER SYSTEMS INC DATE OF NAME CHANGE: 19920206 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LINDSETH JON A CENTRAL INDEX KEY: 0000928110 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 12651 ELMWOOD AVE CITY: CLEVELAND STATE: OH ZIP: 44111 BUSINESS PHONE: 2162524122 MAIL ADDRESS: STREET 1: C/O KINDT COLLINS CO STREET 2: 12651 ELMWOOD AVENUE CITY: CLEVLAND STATE: OH ZIP: 44111 SC 13D/A 1 g75868sc13da.txt AER ENERGY RESOURCES INC./JON A. LINDSETH UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (AMENDMENT NO. 9)* Under the Securities Exchange Act of 1934 AER Energy Resources, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, no par value - -------------------------------------------------------------------------------- (Title of Class of Securities) Common Stock: 000944 10 8 - -------------------------------------------------------------------------------- (CUSIP Number) Mark D. Kaufman, Esq. Sutherland Asbill & Brennan LLP 999 Peachtree Street, N.E. Atlanta, Georgia 30309-3996 (404) 853-8107 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 22, 2002 - -------------------------------------------------------------------------------- (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 which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 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 Rule 13d-7(b) 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). The Exhibit Index is located immediately following page 39 of this filing. SCHEDULE 13D CUSIP No. 000944 10 8 Page 2 of 39 Pages ----------- --------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) JON A. LINDSETH - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [ ] (B) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 36,667,654 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 36,667,654 -------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 36,667,654 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 66.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- SCHEDULE 13D CUSIP No. 000944 10 8 Page 3 of 39 Pages ----------- --------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) THE KINDT-COLLINS COMPANY - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [ ] (B) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 212,994 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 212,994 -------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 212,994 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.8% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- SCHEDULE 13D CUSIP No. 000944 10 8 Page 4 of 39 Pages ----------- --------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) AER PARTNERS - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [ ] (B) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION OHIO - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 3,189,915 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 3,189,915 -------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,189,915 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- SCHEDULE 13D CUSIP No. 000944 10 8 Page 5 of 39 Pages ----------- --------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) ELMWOOD PARTNERS II - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [ ] (B) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF/BK - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION OHIO - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 33,113,515 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 33,113,515 -------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 33,113,515 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 60.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- SCHEDULE 13D CUSIP No. 000944 10 8 Page 6 of 39 Pages ----------- --------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) BATTERY PARTNERS - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [ ] (B) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 121,230 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 121,230 -------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 121,230 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- SCHEDULE 13D CUSIP No. 000944 10 8 Page 7 of 39 Pages ----------- --------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) JON A. LINDSETH, TRUSTEE UNDER JON A. LINDSETH TRUST AGREEMENT DATED APRIL 25, 1986, AS MODIFIED - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [ ] (B) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 36,424,660 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH -------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 36,424,660 -------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 36,424,660 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 65.7% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- Item 1. SECURITY AND ISSUER. The equity securities to which this Amendment No. 9 ("Amendment No. 9") to Schedule 13D relates are shares of common stock, no par value (the "Common Stock"), of AER Energy Resources, Inc., a Georgia corporation ("AER Energy"). The address of AER Energy's principal executive office is 4600 Highlands Parkway, Suite G, Smyrna, Georgia 30082. Item 2. IDENTITY AND BACKGROUND. (a)-(c) The persons filing this Amendment No. 9 (collectively, the "Reporting Persons") are Jon A. Lindseth ("Mr. Lindseth"), Jon A. Lindseth, Trustee, under the Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified (the "Trustee", with the Ohio trust created under such agreement referred to as the "Trust"), The Kindt-Collins Company, a Delaware corporation ("Kindt-Collins"), and Elmwood Partners II ("Elmwood"), Battery Partners ("Battery Partners") and AER Partners ("AER Partners"), all Ohio partnerships. Mr. Lindseth is the Trustee of the Trust, the Chairman of the Board of Directors of Kindt-Collins and the Managing Partner of each of AER Partners, Battery Partners and Elmwood. Amendment No. 9 is being filed pursuant to Exchange Act Rules 13d-1(k)(1) and 13d-2 to report the purchase on April 22, 2002 by Elmwood of 100,000 shares of Series E Convertible Preferred Stock (the "Series E Preferred Stock") and a warrant (the "Warrant") to purchase up to 1,851,852 shares of Common Stock. In addition, certain adjustments to the number of shares of Common Stock beneficially owned by the Reporting Persons and their respective percentages of Common Stock beneficially owned have been made to reflect the application of automatic changes in the conversion rate of shares of Series A Convertible Preferred Stock, no par value (the "Series A Preferred Stock"), Series B Convertible Preferred Stock, no par value (the "Series B Preferred Stock"), and Series D Convertible Preferred Stock, no par value (the "Series D Preferred Stock"), owned by them pursuant to the anti-dilution provisions of such securities. THE TRUST: The Trust is a revocable trust created to manage and invest certain assets for the benefit of Mr. Lindseth (and to transfer such assets upon his death to specified beneficiaries). The Page 8 of 39 principal business address of the Trustee is Jon A. Lindseth, Trustee under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified, c/o The Kindt-Collins Company, 12651 Elmwood Avenue, Cleveland, Ohio 44111. Each of Elmwood, Battery Partners and AER Partners are investment partnerships which are composed of substantially the same partners. The principal place of business and principal office of Elmwood, Battery Partners and AER Partners is 12651 Elmwood Avenue, Cleveland, Ohio 44111. KINDT-COLLINS: Kindt-Collins is engaged in the business of manufacturing and distributing products for use in the metal casting industry, including industrial grade wax, aluminum casting patterns, and related abrasives, plastics and lumber. The principal place of business and principal office of Kindt-Collins is located at 12651 Elmwood Avenue, Cleveland, Ohio 44111. The following tables set forth certain information as to the executive officers and directors of Kindt-Collins and the general partners of AER Partners and Elmwood, including their business addresses and principal occupations.
Position with Kindt-Collins Name and Business Address and Principal Occupation - ------------------------- --------------------------- Jon A. Lindseth Chairman of the Board and The Kindt-Collins Company Treasurer 12651 Elmwood Avenue Cleveland, OH 44111 Leo L. Kovachic Director and President The Kindt-Collins Company 12651 Elmwood Avenue Cleveland, OH 44111 Joseph D. Sullivan Director and Secretary; Calfee, Halter & Griswold Partner, Calfee, Halter, 1800 Society Building & Griswold Cleveland, OH 44114
AER PARTNERS: Although AER Partners is organized as a general partnership, the partnership agreement delegates the authority to vote and decide the disposition of any securities owned by Page 9 of 39 the partnership to either of Mr. Lindseth (individually or as the Trustee) and his son, Mr. Steven W. Lindseth (as trustee), as co-Managing Partners. As a practical matter, Mr. Lindseth acts as the Managing Partner of AER Partners. Certain information regarding the general partners of AER Partners is set forth below.
Position with Partnership Name and Business Address and Principal Occupation - ------------------------- ------------------------- Jon A. Lindseth, Trustee Managing Partner; Mr. Lindseth under Jon A. Lindseth Trust is Chairman of the Board and Agreement dated April 25, Treasurer, Kindt-Collins 1986, as modified c/o Jon A. Lindseth The Kindt-Collins Company 12651 Elmwood Avenue Cleveland, Ohio 44111 Virginia M. Lindseth (spouse Partner of Jon A. Lindseth), Trustee under Virginia M. Lindseth Trust Agreement dated April 25, 1986, as modified 46155 Fairmount Boulevard Hunting Valley, OH 44022 Andrew M. Lindseth Partner; Chairman of the ImageScan, Inc. Board, ImageScan, Inc. Suite 109 103 Carnegie Center Princeton, NJ 08540 Steven W. Lindseth, Trustee Partner; Steven W. Lindseth under Steven W. Lindseth Trust is President, Complient, LLC Agreement dated March 1, 1989, and Director, Nextec as modified Applications, Inc. Complient, LLC 4543 Taylor Lane Warrensville Heights, OH 44128 Karen L. Parker, Trustee Partner under Karen L. Parker Declaration of Trust dated March 3, 1990, as modified 240 Old Green Bay Road Glencoe, IL 60022
Page 10 of 39 Peter L. Lindseth, Trustee Partner; Peter L. Lindseth is under Peter L. Lindseth an associate professor at Declaration of Trust University of Connecticut dated May 12, 1994 School of Law. University of Connecticut School of Law 65 Elizabeth Street Hartford, CT 06105-2290 Sullivan Family Limited Partner; Mr. Sullivan and his Partnership spouse, Sandra H. Sullivan, c/o Joseph D. Sullivan are the general partners of Calfee, Halter & Griswold the Sullivan Family Limited 1800 Society Building Partnership. Cleveland, OH 44114 Joseph D. Sullivan Trustee Partner; Mr. Sullivan is a UAW Mary M. Sullivan dtd partner of Calfee, Halter & December 24, 1975 Griswold. c/o Joseph D. Sullivan Calfee, Halter & Griswold 1800 Society Building Cleveland, OH 44114 Louise A. Phillips, Successor Partner Trustee under Fletcher Family Revocable Living Trust Agreement dated February 20, 1992 7 Warwick Lane Rocky River, OH 44116 Mary E. Gail Trust Partner c/o Louise A. Phillips, Trustee 7 Warwick Lane Rocky River, OH 44116 Ann M. Rich Trust Partner c/o Louise A. Phillips, Trustee 7 Warwick Lane Rocky River, OH 44116 Susan K. Salo Trust Partner c/o Louise A. Phillips, Trustee 7 Warwick Lane Rocky River, OH 44116
Page 11 of 39 Louise I. Palmer Trust Partner c/o Louise A. Phillips, Trustee 7 Warwick Lane Rocky River, OH 44116 Edvins Auzenbergs, Trustee Partner; Mr. Auzenbergs is Under Edvins Auzenbergs retired. Declaration of Trust dated August 11, 1995 23301 Wingfoot Drive Westlake, OH 44145-4380 Leo L. Kovachic Partner; President, The Kindt-Collins Company Kindt-Collins 12651 Elmwood Avenue Cleveland, OH 44111 Leonard A. Principe Partner; Sales Manager, The Kindt-Collins Company Kindt-Collins 12651 Elmwood Avenue Cleveland, OH 44111
BATTERY PARTNERS: Although Battery Partners is organized as a general partnership, the partnership agreement delegates the authority to vote and decide the disposition of any securities owned by the partnership to either of Mr. Lindseth (individually or as the Trustee) and his son, Mr. Steven W. Lindseth (as trustee), as co-Managing Partners. As a practical matter, Mr. Lindseth acts as the Managing Partner of Battery Partners. Certain information regarding the general partners of Battery Partners is set forth below.
Position with Partnership Name and Business Address and Principal Occupation - ------------------------- ------------------------- Jon A. Lindseth, Trustee Managing Partner; Mr. Lindseth under Jon A. Lindseth Trust is Chairman of the Board Agreement dated April 25, and Treasurer, Kindt-Collins 1986, as modified c/o Jon A. Lindseth The Kindt-Collins Company 12651 Elmwood Avenue Cleveland, Ohio 44111
Page 12 of 39 Virginia M. Lindseth (spouse Partner of Jon A. Lindseth), Trustee under Virginia M. Lindseth Trust Agreement dated April 25, 1986, as modified 46155 Fairmount Boulevard Hunting Valley, OH 44022 Andrew M. Lindseth Partner; Chairman of the ImageScan, Inc. Board, ImageScan, Inc. Suite 109 103 Carnegie Center Princeton, NJ 08540 Steven W. Lindseth, Trustee Partner; Steven W. Lindseth under Steven W. Lindseth Trust is President, Complient, LLC Agreement dated March 1, 1989, and Director, Nextec as modified Applications, Inc. Complient, LLC 4543 Taylor Lane Warrensville Heights, OH 44128 Sharon H. Lindseth (spouse of Partner Steven W. Lindseth) 1820 County Line Road Gates Mills, OH 44040 Karen L. Parker, Trustee Partner under Karen L. Parker Declaration of Trust dated March 3, 1990, as modified 240 Old Green Bay Road Glencoe, IL 60022 Stephen C. Parker (spouse of Partner Karen L. Parker) 240 Old Green Bay Road Glencoe, IL 60022 Peter L. Lindseth, Trustee Partner; Peter L. Lindseth is under Peter L. Lindseth an associate professor at the Declaration of Trust, University of Connecticut dated May 12, 1994 School of Law. University of Connecticut School of Law 65 Elizabeth Street Hartford, CT 06105-2290
Page 13 of 39 Joseph D. Sullivan, Trustee Partner; Mr. Sullivan is a UAW Mary M. Sullivan dtd partner of Calfee, Halter & December 24, 1975 Griswold. Calfee, Halter & Griswold 1800 Society Building Cleveland, OH 44114 Joseph D. Sullivan, Trustee Partner; Mr. Sullivan is a for Stephanie D. Sullivan partner of Calfee, Halter & Calfee, Halter & Griswold Griswold. 1800 Society Building Cleveland, OH 44114 Joseph D. Sullivan, Trustee Partner; Mr. Sullivan is a for Laura W. Sullivan partner of Calfee, Halter & Calfee, Halter & Griswold Griswold. 1800 Society Building Cleveland, OH 44114 Joseph D. Sullivan, Trustee Partner; Mr. Sullivan is a for M. Hannah Sullivan partner of Calfee, Halter & Calfee, Halter & Griswold Griswold. 1800 Society Building Cleveland, OH 44114 Joseph D. Sullivan, Trustee Partner; Mr. Sullivan is a for J. D. Sullivan, Jr. partner of Calfee, Halter & Calfee, Halter & Griswold Griswold. 1800 Society Building Cleveland, OH 44114 Louise A. Phillips, Successor Partner Trustee under Fletcher Family Revocable Living Trust Agreement dated February 20, 1992 7 Warwick Lane Rocky River, OH 44116 Mary E. Gail Trust Partner c/o Louise A. Phillips, Trustee 7 Warwick Lane Rocky River, OH 44116
Page 14 of 39 Ann M. Rich Partner 15 Warwick Lane Rocky River, OH 44116 Susan K. Salo Partner 1 Windsor Court Rocky River, OH 44116 Louise I. Palmer Partner Main Street Beckett, MA 01223 Edvins Auzenbergs, Trustee Partner; Mr. Auzenbergs is under Edvins Auzenbergs retired. Declaration of Trust dated August 11, 1995 23301 Wingfoot Drive Westlake, OH 44145-4380 Leo L. Kovachic Partner; President, The Kindt-Collins Company Kindt-Collins 12651 Elmwood Avenue Cleveland, OH 44111 Leonard A. Principe Partner; Sales Manager, The Kindt-Collins Company Kindt-Collins 12651 Elmwood Avenue Cleveland, OH 44111 John M. Trenary Partner 7320 Tamarisk Drive Fort Collins, CO 80525-9195 Patricia R. Westbrook Partner 1082 Baliff Court Atlanta, GA 30319 Lisa A. Martina Trust Partner 276 Riverside Drive #10D New York, NY 10025 Janice M. Trenary Partner 5746 Crestwood Drive Fort Collins, CO 80525
ELMWOOD: Page 15 of 39 Although Elmwood is organized as a general partnership, the partnership agreement delegates the authority to vote and decide the disposition of any securities owned by the partnership to either of Mr. Lindseth (individually or as the Trustee) and his son, Mr. Steven W. Lindseth (as trustee), as co-Managing Partners. As a practical matter, Mr. Lindseth acts as the Managing Partner of Elmwood. Certain information regarding the general partners of Elmwood is set forth below.
Position with Partnership Name and Business Address and Principal Occupation - ------------------------ -------------------------- Jon A. Lindseth, Trustee Managing Partner; Mr. Lindseth under Jon A. Lindseth Trust is Chairman of the Board and Agreement dated April 25, Treasurer, Kindt-Collins. 1986, as modified c/o Jon A. Lindseth The Kindt-Collins Company 12651 Elmwood Avenue Cleveland, Ohio 44111 Virginia M. Lindseth (spouse Partner of Jon A. Lindseth), Trustee under Virginia M. Lindseth Trust Agreement dated April 25, 1986, as modified 46155 Fairmount Boulevard Hunting Valley, OH 44022 Andrew M. Lindseth Partner; Chairman of the ImageScan, Inc. Board, ImageScan, Inc. Suite 109 103 Carnegie Center Princeton, NJ 08540 Steven W. Lindseth, Trustee Partner; Steven W. Lindseth under Steven W. Lindseth Trust is President, Complient, LLC Agreement dated March 1, 1989, and Director, Nextec as modified Applications, Inc. Complient, LLC 4543 Taylor Lane Warrensville Heights, OH 44128 Karen L. Parker, Trustee Partner under Karen L. Parker Declaration of Trust dated March 3, 1990, as modified 240 Old Green Bay Glencoe, IL 60022
Page 16 of 39 Peter L. Lindseth, Trustee Partner; Peter L. Lindseth is under Peter L. Lindseth an associate professor at the Declaration of Trust, University of Connecticut dated May 12, 1994 School of Law. University of Connecticut School of Law 65 Elizabeth Street Hartford, CT 06105-2290 Joseph D. Sullivan, Trustee Partner; Mr. Sullivan is a under Joseph D. Sullivan partner of Calfee, Halter & Declaration of Trust dated Griswold. April 7, 1984, as modified Calfee, Halter & Griswold 1800 Society Building Cleveland, OH 44114 Sandra H. Sullivan (spouse of Partner Joseph D. Sullivan), Trustee under Sandra H. Sullivan Declaration of Trust dated April 7, 1984, as modified 9040 Little Mountain Road Kirtland Hills, Ohio 44060 Louise A. Phillips, Successor Partner Trustee under Fletcher Family Revocable Living Trust Agreement dated February 20, 1992 7 Warwick Lane Rocky River, OH 44116 Edvins Auzenbergs, Trustee Partner; Mr. Auzenbergs is under Edvins Auzenbergs retired. Declaration of Trust dated August 11, 1995 23301 Wingfoot Drive Westlake, OH 44145-4380 Leo L. Kovachic Partner; President, The Kindt-Collins Company Kindt-Collins 12651 Elmwood Avenue Cleveland, OH 44111
Page 17 of 39 Leonard A. Principe Partner; Sales Manager, The Kindt-Collins Company Kindt-Collins 12651 Elmwood Avenue Cleveland, OH 44111 In addition to serving as Chairman of the Board and Treasurer of Kindt-Collins and Managing Partner of each of AER Partners, Battery Partners and Elmwood, Mr. Lindseth serves as the Chairman of the Board of AER Energy, as well as the Chairman of the Boards of each of Hines Flask Company and Shanafelt Manufacturing Company, both of which serve the metal casting industry, Complient, LLC, a limited liability company developing and marketing consumer products, and as a director of Nextec Applications, Inc., a company formed to develop products utilizing fabric coating technology. The principal business addresses of each of these organizations (other than AER Energy) are as follows: Hines Flask Company 3431 West 140th Street Cleveland, OH 44111 Shanafelt Manufacturing Company 2600 Winfield Way, N.E. Canton, OH 44705 Complient, LLC 4543 Taylor Lane Warrensville Heights, OH 44128 Nextec Applications, Inc. 2611 Commerce Way Vista, CA 92083 (d) Neither Kindt-Collins, Elmwood, Battery Partners, AER Partners, the Trustee, the Trust nor any of the persons listed in the above tables, including Mr. Lindseth, has been convicted during the last five years in any criminal proceeding (excluding traffic violations or similar misdemeanors). (e) Neither Kindt-Collins, Elmwood, Battery Partners, AER Partners, the Trustee, the Trust nor any of the persons listed in the above tables, including Mr. Lindseth, has been a party during the last five years to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or 18 of 39 mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws. (f) All of the individuals named in the above tables are citizens of the United States of America. Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 is hereby amended and supplemented to include the following additional information: Elmwood purchased a total of 100,000 shares of Series E Preferred Stock and the Warrant on April 22, 2002 for an aggregate purchase price of $1,000,000 in cash. Elmwood borrowed funds from Kindt-Collins to pay the cash portion of the purchase price. The loan from Kindt-Collins is not secured by any of the assets of Elmwood and bears interest at 5.54% per year. Kindt-Collins borrowed these funds from The Huntington National Bank pursuant to a previously existing demand revolving credit facility that bears interest at LIBOR plus 1.85% per year. Item 4. PURPOSE OF TRANSACTION. Item 4 is hereby amended to include the following additional information: Mr. Lindseth, as a co-Managing Partner of Elmwood, directed the separate purchase by Elmwood of 100,000 shares of Series E Preferred Stock and the Warrant for investment purposes. Kindt-Collins, Mr. Lindseth, the Trust, Elmwood, Battery Partners and AER Partners own their respective AER Energy securities for investment purposes. Mr. Lindseth, on behalf of himself, as the Trustee or as Managing Partner of AER Partners, Elmwood or Battery Partners, may seek for investment purposes to purchase additional shares of Common Stock, additional shares of Series E Preferred Stock, or other series of preferred stock of AER Energy in the open market or in privately negotiated transactions. Additionally, the number of shares of AER Common Stock deemed to be beneficially owned by Mr. Lindseth, the Trustee and Elmwood due to the conversion features of the shares of Series A Preferred Stock, the Series B Preferred Stock, the Series D Preferred Stock and the Series E Preferred Stock (and the corresponding percentages of the AER Common Stock beneficially 19 of 39 owned by them) may automatically change from time to time without any action on the part of such persons due to (i) fluctuations in the amount of accrued and unpaid dividends with respect to such securities, which dividends may be converted into Common Stock at the same conversion rate as the shares of stock upon which such dividends accrued and (ii) the effect of certain anti-dilution and other terms of such securities upon the conversion rate set forth therein. In addition, the Warrant and the other warrants purchased together with such securities also contain exercise price adjustment and anti-dilution provisions, which may cause the aggregate number of shares of Common Stock that may be received upon the exercise in full of such warrants to be adjusted. Joseph D. Sullivan, on behalf of himself or certain Sullivan family partnerships and trusts, may seek for investment purposes to purchase additional shares of Common Stock in the open market or in privately negotiated transactions. Item 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 is hereby amended in its entirety to read as follows: The percentages set forth below are based on 25,522,121 shares of Common Stock outstanding as of the close of business on March 11, 2002 (as reported in AER Energy's most recent Form 10-K), plus, pursuant to Rule 13d-3(d)(1)(i), such additional number of shares that each person may acquire within 60 days pursuant to the exercise of any option, warrant or right, the conversion of any security or the power to revoke a trust or similar arrangement. (a) Kindt-Collins beneficially owns directly 212,994 shares of the Common Stock, or 0.8% of the outstanding Common Stock, of which 112,994 shares may be acquired pursuant to the exercise in full of a warrant that is immediately exercisable. AER Partners beneficially owns directly 3,189,915 shares of Common Stock, or 12.5% of the outstanding Common Stock. Elmwood beneficially owns directly 33,113,515 shares of Common Stock, or 60.0% of the outstanding Common Stock, of which (i) 6,507,108 shares may be acquired (as of April 22, 2002) pursuant to the exercise in full of immediately exercisable warrants (including the Warrant), (ii) 5,390,691 shares may be acquired (as of April 22, 2002) pursuant to the conversion in full of 202,250 shares of Series A Preferred Stock, all of which 20 of 39 are immediately convertible, (iii) 3,554,533 shares may be acquired (as of April 22, 2002) pursuant to the conversion in full of 102,250 shares of Series B Preferred Stock, all of which are immediately convertible, (iv) 9,671,766 shares may be acquired (as of April 22, 2002) pursuant to the conversion in full of 272,000 shares of Series D Preferred Stock, all of which are immediately convertible, and (v) 4,830,918 shares may be acquired (as of April 22, 2002) pursuant to the conversion in full of 100,000 shares of Series E Preferred Stock, all of which are immediately convertible. Elmwood beneficially owns (i) 202,250 shares of Series A Preferred Stock, or 50.0% of the outstanding Series A Preferred Stock, (ii) 102,250 shares of Series B Preferred Stock, or 100.0% of the outstanding Series B Preferred Stock, (iii) 272,000 shares of Series D Preferred Stock, or 90.7% of the outstanding Series D Preferred Stock, and (iv) 100,000 shares of Series E Preferred Stock, or 100% of the outstanding Series E Preferred Stock. Battery Partners beneficially owns directly 121,230 shares of Common Stock, or 0.5% of the outstanding Common Stock. The Trust beneficially owns indirectly, through its interests in AER Partners, Elmwood and Battery Partners, 36,424,660 shares of Common Stock, or 65.7% of the outstanding Common Stock. As discussed above, Mr. Lindseth claims beneficial ownership of all such shares indirectly owned by the Trust. The partnership agreements among the partners of AER Partners, Elmwood and Battery Partners delegate to Mr. Lindseth (individually or as the Trustee), as a co-Managing Partner of each partnership, the authority to vote and decide the disposition of shares of the Common Stock owned by AER Partners and Elmwood; otherwise, Mr. Lindseth (individually and as Trustee) disclaims beneficial ownership of (i) that percentage interest in the Common Stock attributed to the partners of each of AER Energy and Elmwood as set forth in the foregoing tables, other than the Trustee and Virginia M. Lindseth (Mr. Lindseth's spouse) as Trustee under the Virginia M. Lindseth Trust Agreement dated April 25, 1986, as modified (the "VML Trustee") and (ii) that percentage interest in the Common Stock owned indirectly by the partners of Battery Partners (other than the Trustee and the VML Trustee) through their respective ownership interests in Battery Partners. Steven W. Lindseth, Mr. Lindseth's son, is also a co-Managing Partner of AER Partners, Elmwood Partners and Battery 21 of 39 Partners. However, as a practical matter Mr. Lindseth acts as Managing Partner and Steven W. Lindseth disclaims beneficial ownership of (i) that percentage interest in the Common Stock attributable to the partners of each of AER Partners and Elmwood Partners other than himself as set forth in the foregoing tables and (ii) that percentage interest in the Common Stock owned indirectly by the partners (other than himself) of Battery Partners through their respective ownership interests in Battery Partners. The following table sets forth the allocation of shares of Common Stock beneficially owned by AER Partners among all of its partners. However, except as otherwise provided, nothing contained herein shall be an admission that any of such partners beneficially own such shares of Common Stock.
Number of Shares Percentage Percentage Partner of Common Stock Interest(1) - ------------------ ---------------- ----------- Jon A. Lindseth, Trustee 1,490,120.9 5.8% under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified Virginia M. Lindseth, Trustee 85,272.8 0.3 under Virginia M. Lindseth Trust Agreement dated April 25, 1986, as modified Andrew M. Lindseth 120,888.2 0.5 Steven W. Lindseth, Trustee 120,888.2 0.5 under Steven W. Lindseth Trust Agreement dated March 1, 1989, as modified Karen L. Parker, Trustee 120,888.2 0.5 under Karen L. Parker Declaration of Trust dated March 3, 1990, as modified Peter L. Lindseth, Trustee 120,888.2 0.5 under Peter L. Lindseth Declaration of Trust, dated May 12, 1994, as modified Sullivan Family Limited 299,852.0 1.2 Partnership
22 of 39 Joseph D. Sullivan Trustee 229,179.0 0.9 UAW Mary M. Sullivan dtd December 24, 1975 Louise A. Phillips, Successor 227,932.2 0.9 Trustee under Fletcher Family Revocable Living Trust Agreement dated February 20, 1992 Mary E. Gail Trust 28,709.2 0.1 Ann M. Rich Trust 28,709.2 0.1 Susan K. Salo Trust 28,709.2 0.1 Louise I. Palmer Trust 28,709.2 0.1 Edvins Auzenbergs, Trustee 205,660.2 0.8 under Edvins Auzenbergs Declaration of Trust dated August 11, 1995 Leo L. Kovachic 33,439.9 0.1 Leonard A. Principe 20,067.8 0.1
- --------- (1) The percentages set forth below are based on 25,522,121 shares of Common Stock outstanding as of the close of business on March 11, 2002 (as reported in AER Energy's most recent Form 10-K), plus, pursuant to Rule 13d-3(d)(1)(i), such additional number of shares that each person may acquire within 60 days pursuant to the exercise of any option, warrant or right, the conversion of any security or the power to revoke a trust or similar arrangement. The following table sets forth the allocation of shares of Common Stock beneficially owned by Elmwood among all of its partners. However, except as otherwise provided, nothing contained herein shall be an admission that any of such partners beneficially own such shares of Common Stock. 23 of 39
Number of Shares Percentage Partner of Common Stock Interest(2) - ------- ---------------- ----------- Jon A. Lindseth, Trustee 15,468,481.8 39.1% under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified Virginia M. Lindseth, Trustee 885,190.5 3.4 under Virginia M. Lindseth Trust Agreement dated April 25, 1986, as modified Steven W. Lindseth, Trustee 1,254,902.9 4.7 under Steven W. Lindseth Trust Agreement dated March 1, 1989, as modified Andrew M. Lindseth 1,254,902.9 4.7 Karen L. Parker, Trustee 1,254,902.9 4.7 under Karen L. Parker Declaration of Trust dated March 3, 1990, as modified Peter L. Lindseth, Trustee 1,254,902.9 4.7 under Peter L. Lindseth Declaration of Trust, dated May 12, 1994, as modified Joseph D. Sullivan, Trustee 3,401,950.1 11.9 under Joseph D. Sullivan Declaration of Trust dated April 7, 1984, as modified Sandra H. Sullivan, Trustee 2,089,760.8 7.6 under Sandra H. Sullivan Declaration of Trust dated April 7, 1984, as modified Edvins Auzenbergs, Trustee 2,134,894.5 7.8 under Edvins Auzenbergs Declaration of Trust dated August 11, 1995 Louise A. Phillips, Successor 3,558,179.6 12.4 Trustee under Fletcher Family Revocable Living Trust Agreement dated February 20, 1992 Leonard A. Principe 208,317.1 0.8 Leo L. Kovachic 347,129.0 1.3
24 of 39 - --------- (2) The percentages set forth below are based on 25,522,121 shares of Common Stock outstanding as of the close of business on March 11, 2002 (as reported in AER Energy's most recent Form 10-K), plus, pursuant to Rule 13d-3(d)(1)(i), such additional number of shares that each person may acquire within 60 days pursuant to the exercise of any option, warrant or right, the conversion of any security or the power to revoke a trust or similar arrangement. The following table sets forth the allocation of shares of Series A Preferred Stock held by Elmwood among all of its partners. However, except as otherwise provided, nothing contained herein shall be an admission that any of such partners beneficially own such shares of Series A Preferred Stock.
Number of Shares of Percentage Partner Series A Preferred Stock Interest(3) - ------- ------------------------ ----------- Jon A. Lindseth, Trustee 94,478.1 23.4% under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified Virginia M. Lindseth, Trustee 5,406.5 1.3 under Virginia M. Lindseth Trust Agreement dated April 25, 1986, as modified Steven W. Lindseth, Trustee 7,664.7 1.9 under Steven W. Lindseth Trust Agreement dated March 1, 1989, as modified Andrew M. Lindseth 7,664.7 1.9 Karen L. Parker, Trustee 7,664.7 1.9 under Karen L. Parker Declaration of Trust dated March 3, 1990, as modified Peter L. Lindseth, Trustee 7,664.7 1.9 under Peter L. Lindseth Declaration of Trust, dated May 12, 1994, as modified
25 of 39 Joseph D. Sullivan, Trustee 20,778.4 5.1 under Joseph D. Sullivan Declaration of Trust dated April 7, 1984, as modified Sandra H. Sullivan, Trustee 12,763.8 3.2 under Sandra H. Sullivan Declaration of Trust dated April 7, 1984, as modified Edvins Auzenbergs, Trustee 13,039.5 3.2 under Edvins Auzenbergs Declaration of Trust dated August 11, 1995 Louise A. Phillips, Successor 21,732.6 5.4 Trustee under Fletcher Family Revocable Living Trust Agreement dated February 20, 1992 Leonard A. Principe 1,272.4 0.3 Leo L. Kovachic 2,120.2 0.5
- --------- (3) The percentages set forth below are based on 404,500 shares of Series A Preferred Stock outstanding as of April 22, 2002. The following table sets forth the allocation of shares of Series B Preferred Stock held by Elmwood among all of its partners. However, except as otherwise provided, nothing contained herein shall be an admission that any of such partners beneficially own such shares of Series B Preferred Stock.
Number of Shares of Percentage Partner Series B Preferred Stock Interest(4) - ------- ------------------------ ----------- Jon A. Lindseth, Trustee 47,764.6 46.7% under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified Virginia M. Lindseth, Trustee 2,733.3 2.7 under Virginia M. Lindseth Trust Agreement dated April 25, 1986, as modified
26 of 39 Steven W. Lindseth, Trustee 3,875.0 3.8 under Steven W. Lindseth Trust Agreement dated March 1, 1989, as modified Andrew M. Lindseth 3,875.0 3.8 Karen L. Parker, Trustee 3,875.0 3.8 under Karen L. Parker Declaration of Trust dated March 3, 1990, as modified Peter L. Lindseth, Trustee 3,875.0 3.8 under Peter L. Lindseth Declaration of Trust, dated May 12, 1994, as modified Joseph D. Sullivan, Trustee 10,504.8 10.3 under Joseph D. Sullivan Declaration of Trust dated April 7, 1984, as modified Sandra H. Sullivan, Trustee 6,452.9 6.3 under Sandra H. Sullivan Declaration of Trust dated April 7, 1984, as modified Edvins Auzenbergs, Trustee 6,592.3 6.4 under Edvins Auzenbergs Declaration of Trust dated August 11, 1995 Louise A. Phillips, Successor 10,987.2 10.7 Trustee under Fletcher Family Revocable Living Trust Agreement dated February 20, 1992 Leonard A. Principe 643.3 0.6 Leo L. Kovachic 1,071.9 1.0
- --------- (4) The percentages set forth below are based on 102,250 shares of Series B Preferred Stock outstanding as of April 22, 2002. The following table sets forth the allocation of shares of Series D Preferred Stock held by Elmwood among all of its partners. However, except as otherwise provided, nothing 27 of 39 contained herein shall be an admission that any of such partners beneficially own such shares of Series D Preferred Stock.
Number of Shares of Percentage Partner Series D Preferred Stock Interest(5) - ------- ------------------------ ----------- Jon A. Lindseth, Trustee 127,060.7 42.4% under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified Virginia M. Lindseth, Trustee 7,271.1 2.4 under Virginia M. Lindseth Trust Agreement dated April 25, 1986, as modified Steven W. Lindseth, Trustee 10,308.0 3.4 under Steven W. Lindseth Trust Agreement dated March 1, 1989, as modified Andrew M. Lindseth 10,308.0 3.4 Karen L. Parker, Trustee 10,308.0 3.4 under Karen L. Parker Declaration of Trust dated March 3, 1990, as modified Peter L. Lindseth, Trustee 10,308.0 3.4 under Peter L. Lindseth Declaration of Trust, dated May 12, 1994, as modified Joseph D. Sullivan, Trustee 27,944.2 9.3 under Joseph D. Sullivan Declaration of Trust dated April 7, 1984, as modified Sandra H. Sullivan, Trustee 17,165.6 5.7 under Sandra H. Sullivan Declaration of Trust dated April 7, 1984, as modified Edvins Auzenbergs, Trustee 17,536.4 5.8 under Edvins Auzenbergs Declaration of Trust dated August 11, 1995
28 of 39 Louise A. Phillips, Successor 29,227.5 9.7 Trustee under Fletcher Family Revocable Living Trust Agreement dated February 20, 1992 Leonard A. Principe 1,771.2 0.6 Leo L. Kovachic 2,851.4 1.0
- --------- (5) The percentages set forth below are based on 300,000 shares of Series D Preferred Stock outstanding as of April 22, 2002. The following table sets forth the allocation of shares of Series E Preferred Stock held by Elmwood among all of its partners. However, except as otherwise provided, nothing contained herein shall be an admission that any of such partners beneficially own such shares of Series E Preferred Stock.
Number of Shares of Percentage Partner Series E Preferred Stock Interest(6) - ------- ------------------------ ----------- Jon A. Lindseth, Trustee 46,713.5 46.7% under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified Virginia M. Lindseth, Trustee 2,673.2 2.7 under Virginia M. Lindseth Trust Agreement dated April 25, 1986, as modified Steven W. Lindseth, Trustee 3,789.7 3.8 under Steven W. Lindseth Trust Agreement dated March 1, 1989, as modified Andrew M. Lindseth 3,789.7 3.8 Karen L. Parker, Trustee 3,789.7 3.8 under Karen L. Parker Declaration of Trust dated March 3, 1990, as modified Peter L. Lindseth, Trustee 3,789.7 3.8 under Peter L. Lindseth Declaration of Trust, dated
29 of 39 May 12, 1994, as modified Joseph D. Sullivan, Trustee 10,273.6 10.3 under Joseph D. Sullivan Declaration of Trust dated April 7, 1984, as modified Sandra H. Sullivan, Trustee 6,310.9 6.3 under Sandra H. Sullivan Declaration of Trust dated April 7, 1984, as modified Edvins Auzenbergs, Trustee 6,447.2 6.4 under Edvins Auzenbergs Declaration of Trust dated August 11, 1995 Louise A. Phillips, Successor 10,745.4 10.7 Trustee under Fletcher Family Revocable Living Trust Agreement dated February 20, 1992 Leonard A. Principe 629.1 0.6 Leo L. Kovachic 1,048.3 1.0
- --------- (6) The percentages set forth below are based on 100,000 shares of Series E Preferred Stock outstanding as of April 22, 2002. The following table sets forth the allocation of shares of Common Stock beneficially owned by Battery Partners among all of its partners. However, except as otherwise provided, nothing contained herein shall be an admission that any of such partners beneficially own such shares of Common Stock.
Number of Shares Percentage Percentage Partner of Common Stock Interest(7) - ------------------ ---------------- ----------- Jon A. Lindseth, Trustee 33,753.7 0.13% under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified Virginia M. Lindseth, Trustee 2,859.6 0.01 under Virginia M. Lindseth Trust Agreement dated April
30 of 39 25, 1986, as modified Andrew M. Lindseth 4,053.7 0.02 Katherine S. Lindseth 4,053.7 0.02 Steven W. Lindseth, Trustee 4,053.7 0.02 under Steven W. Lindseth Trust Agreement dated March 1, 1989, as modified Sharon H. Lindseth 4,053.7 0.02 Karen L. Parker, Trustee 4,053.7 0.02 under Karen L. Parker Declaration of Trust dated March 3, 1990, as modified Stephen C. Parker 4,053.7 0.02 Peter L. Lindseth, Trustee 4,053.7 0.02 under Peter L. Lindseth Declaration of Trust, dated May 12, 1994, as modified Joseph D. Sullivan Trustee 13,089.9 0.05 UAW Mary M. Sullivan dtd December 24, 1975 J. D. Sullivan, Trustee 1,162.6 0.01 for Stephanie D. Sullivan J. D. Sullivan, Trustee 1,162.6 0.01 for J. D. Sullivan, Jr J. D. Sullivan, Trustee 1,162.6 0.01 for Laura W. Sullivan J. D. Sullivan, Trustee 1,162.6 0.01 for M. Hannah Sullivan Louise A. Phillips, Successor 6,843.8 0.03 Trustee under Fletcher Family Revocable Living Trust Agreement dated February 20, 1992 Mary E. Gail Trust 1,162.6 0.01 Ann M. Rich 1,162.6 0.01
31 of 39 Susan K. Salo 1,162.6 0.01 Louise I. Palmer 1,162.6 0.01 Edvins Auzenbergs, Trustee 6,896.4 0.03 under Edvins Auzenbergs Declaration of Trust dated August 11, 1995 Leo L. Kovachic 6,290.4 0.03 Leonard A. Principe 673.6 0.003 John M. Trenary 3,030.8 0.01 Patricia R. Westbrook 3,030.8 0.01 Lise A. Martina Trust 4,053.7 0.02 Janice M. Trenary 3,030.9 0.01
- --------- (7) The percentages set forth below are based on 25,522,121 shares of Common Stock outstanding as of the close of business on March 11, 2002 (as reported in AER Energy's most recent Form 10-K), plus, pursuant to Rule 13d-3(d)(1)(i), such additional number of shares that each person may acquire within 60 days pursuant to the exercise of any option, warrant or right, the conversion of any security or the power to revoke a trust or similar arrangement. Mr. Lindseth (individually and as the Trustee), as a co-Managing Partner of each of AER Partners, Elmwood and Battery Partners, and as Chairman of the Board of Kindt-Collins, may be deemed to have beneficial ownership of (i) all the shares of Common Stock beneficially owned by each of AER Partners, Elmwood and Kindt-Collins, (ii) all of the shares of Series A Preferred Stock, Series B Preferred Stock, Series D Preferred Stock and Series E Preferred Stock owned by Elmwood, (iii) in the case of Mr. Lindseth individually, 30,000 shares of Common Stock owned directly by him and (iv) in the case of Mr. Lindseth both individually and as the Trustee, 121,230 shares of Common Stock owned by Battery Partners, for an aggregate of [A] 36,667,654 shares of Common Stock in the case of Mr. Lindseth and [B] 36,424,660 shares of Common Stock in the case of the Trustee. Generally, Mr. Lindseth and the Trustee each disclaim beneficial ownership of that percentage interest in the Common Stock, the Series A Preferred Stock, the Series B Preferred Stock and the 32 of 39 Series D Preferred Stock attributable to the partners (other than the Trustee and the VML Trustee) of each of AER Partners, Elmwood and Battery Partners as further described above. Similarly, Steven W. Lindseth, Mr. Lindseth's son, as a co-Managing Partner of each of AER Partners and Elmwood, may be deemed to have beneficial ownership of all the shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock and Series D Preferred Stock beneficially owned by each of AER Partners and Elmwood, as well as 121,230 shares of Common Stock owned by Battery Partners and 15,300 shares of Common Stock that he owns directly, for an aggregate beneficial ownership of 36,439,960 shares of Common Stock (or 65.7% of the total shares of Common Stock outstanding). However, as a practical matter, Mr. Lindseth, his father, acts as Managing Partner of such partnerships and Steven W. Lindseth disclaims beneficial ownership of that percentage interest in the Common Stock and AER Energy preferred stock attributable to the partners (other than himself) of AER Partners, Elmwood and Battery Partners as further described above. As a result of the transactions reported in this Amendment No. 9 (including changes resulting from adjustments to the conversion rates of the Series A Preferred Stock and the Series B Preferred Stock), Mr. Lindseth's total beneficial ownership in AER Energy's Common Stock is now 66.0% of the total shares outstanding and the Trustee's total beneficial ownership in AER Energy's Common Stock is now 65.7% of the total shares outstanding (in each case if all the shares Mr. Lindseth and the Trustee may be deemed to beneficially own are included). Mr. Joseph D. Sullivan owns 299,575 shares of Common Stock directly. Mrs. Sandra H. Sullivan owns 120,000 shares of Common Stock directly. Mr. Joseph D. Sullivan and Mrs. Sandra H. Sullivan each also (i) have an indirect interest through the Waho Fund, a family general partnership, in a percentage of the 52,500 shares of Common Stock owned by such partnership corresponding to their respective ownership interests in such partnership and (ii) have an indirect interest through the Pine Fund Corporation, a corporation wholly owned by Mr. and Mrs. Sullivan, in a percentage interest of the 20,000 shares of Common Stock owned by such corporation corresponding to their respective ownership interests in such corporation. Mr. Leo L. Kovachic owns 1,000 shares of Common Stock directly. 33 of 39 (b) Kindt-Collins has the sole power to vote and direct the disposition of the 212,994 shares of Common Stock it beneficially owns, and Mr. Lindseth has sole voting and dispositive power with respect to these shares with the other directors of Kindt-Collins listed in Item 2 above. AER Partners, Elmwood and Battery Partners are all managed by Mr. Lindseth (individually and as the Trustee). His son, Mr. Steven W. Lindseth, also has, pursuant to the relevant partnership agreements, the power to vote and direct the disposition of the Common Stock owned by such partnerships (for a total of 36,424,660 shares of the Common Stock), but as a practical matter Mr. Lindseth exercises this power. Mr. Lindseth has sole voting and dispositive power with respect to the 30,000 shares owned by him. Mr. Steven W. Lindseth has sole voting and dispositive control over the 15,300 shares of Common Stock he owns directly. Mr. Joseph D. Sullivan has sole voting and dispositive control over: (i) 299,575 shares of Common Stock he owns directly, (ii) 8,700 shares of Common Stock he holds as Trustee for the Laura S. McKenna Trust dated April 1, 1984, (iii) 10,000 shares he holds as Trustee for the Stephanie D. Sullivan Trust dates May 28, 1986, (v) 52,500 shares of Common Stock owned by the Waho Fund, of which Mr. Sullivan is a general partner (vi) 20,000 shares of Common Stock owned by the Pine Fund Corporation, of which Mr. Sullivan is the President and (vii) 50,000 shares of Common Stock owned by the Sullivan Family Fund, a charitable corporation; for a total of 440,775 shares of Common Stock. Mrs. Sandra H. Sullivan has sole voting and dispositive control over the 120,000 shares of Common Stock she owns directly. Mr. Leo L. Kovachic has sole voting and dispositive power over the 1,000 shares he owns directly. (c) None. (d) Kindt-Collins is a subchapter S corporation and as such, each of its shareholders has the right to receive dividends from, or the proceeds from the sale of, its stock. AER Partners, Elmwood and Battery Partners are each partnerships and as such, each of their respective partners (including the Trustee) has the right to receive distributions from, or 34 of 39 proceeds from the sale of, any Common Stock owned by such partnership. Such interests of the Trustee relate to more than 5% of the Common Stock. (e) Kindt-Collins ceased to be a beneficial owner of 5% or more of the Common Stock on February 6, 1996, when it sold all but 212,994 of its shares of Common Stock beneficially owned to Elmwood. Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Except as described herein or filed previously with respect to the Schedule 13D, there are no new contracts, arrangements, understandings or relationships with respect to the Common Stock. Item 7. MATERIAL TO BE FILED AS EXHIBITS. EXHIBIT A Securities Purchase Agreement, dated February 27, 2001(1) EXHIBIT B Articles of Amendment to Articles of Incorporation of AER Energy Resources, Inc., dated February 27, 2001(1) EXHIBIT C Warrant, dated February 27, 2001, to purchase 776,699 shares of Common Stock(1) EXHIBIT D Promissory Note, dated February 20, 2001, issued by Elmwood Partners II, as maker, to The Huntington National Bank, as payee(1) EXHIBIT E Commercial Guaranty, between Kindt-Collins and The Huntington National Bank(1) EXHIBIT F Securities Purchase Agreement, dated September 27, 2000(2) EXHIBIT G Articles of Amendment to Articles of Incorporation of AER Energy Resources, Inc., dated September 27, 2000(2) EXHIBIT H Warrant, dated September 27, 2000, to purchase 470,035 shares of Common Stock(2) 35 of 39 EXHIBIT I Promissory Note, dated September 15, 2000, issued by Elmwood Partners II, as maker, to The Kindt-Collins Company, as payee(3) EXHIBIT J Securities Purchase Agreement, dated as of January 31, 2002(4) EXHIBIT K Articles of Amendment to Articles of Incorporation of AER Energy Resources, Inc., dated January 31, 2002(4) EXHIBIT L Revolving Credit Note, dated August 28, 2001, issued by AER Energy Resources, Inc., as maker, to Elmwood Partners II, as payee(4) EXHIBIT M Revolving Credit Note, dated November 20, 2001, issued by AER Energy Resources, Inc., as maker, to Elmwood Partners II, as payee(4) EXHIBIT N Warrant, dated January 31, 2002, to purchase 3,408,522 shares of Common Stock(4) EXHIBIT O Promissory Note, dated February 4, 2002, issued by Elmwood Partners II, as maker, to The Kindt-Collins Company, as payee(4) EXHIBIT P Securities Purchase Agreement, dated as of April 22, 2002 EXHIBIT Q Articles of Amendment to Articles of Incorporation of AER Energy Resources, Inc., dated April 18, 2002 EXHIBIT R Warrant, dated April 22, 2002, to purchase 1,851,852 shares of Common Stock EXHIBIT S Revolving Note, dated July 1, 1998, issued by The Kindt-Collins Company, as maker, to The Huntington National Bank, as payee EXHIBIT T Promissory Note, dated April 22, 2002, issued by Elmwood Partners II, as maker, to The Kindt-Collins Company, as payee EXHIBIT U Agreement with respect to joint filing of Amendment No. 9 to Schedule 13D pursuant to Rule 13d-1(k)(1)(iii), dated April 29, 2002, by and 36 of 39 among Jon A. Lindseth, Jon A. Lindseth, Trustee under Jon A. Lindseth Trust Agreement, dated April 25, 1986, as modified, The Kindt-Collins Company, Elmwood Partners II, Battery Partners and AER Partners - --------- (1) Incorporated by reference from Amendment No. 7 to Schedule 13D for Jon A. Lindseth et al., as filed with the Securities and Exchange Commission on March 20, 2001. (2) Incorporated by reference from AER Energy Resources, Inc.'s Form 10-Q for the quarter ended September 30, 2000 (File No. 0-21926), as filed with the Securities and Exchange Commission on November 13, 2000. (3) Incorporated by reference from Amendment No. 6 to Schedule 13D for Jon A. Lindseth et al., as filed with the Securities and Exchange Commission on December 8, 2000. (4) Incorporated by reference from Amendment No. 8 to Schedule 13D for Jon A. Lindseth et al., as filed with the Securities and Exchange Commission on March 13, 2002. 37 of 39 SIGNATURES 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. THE KINDT-COLLINS COMPANY April 29, 2002 By: /s/ Jon A. Lindseth ---------------------------------------- Jon A. Lindseth, Chairman BATTERY PARTNERS April 29, 2002 By: /s/ Jon A. Lindseth ---------------------------------------- Jon A. Lindseth, under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified, Managing Partner AER PARTNERS April 29, 2002 By: /s/ Jon A. Lindseth ---------------------------------------- Jon A. Lindseth, Trustee under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified, Managing Partner ELMWOOD PARTNERS II April 29, 2002 By: /s/ Jon A. Lindseth ---------------------------------------- Jon A. Lindseth, Trustee under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified, Managing Partner 38 of 39 JON A. LINDSETH, TRUSTEE UNDER JON A. LINDSETH TRUST AGREEMENT DATED APRIL 25, 1986, AS MODIFIED April 29, 2002 By: /s/ Jon A. Lindseth ---------------------------------------- Jon A. Lindseth, Trustee under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified April 29, 2002 /s/ Jon A. Lindseth ------------------------------------------- Jon A. Lindseth 39 of 39 INDEX TO EXHIBITS
Exhibit Description of Exhibit - ------- ---------------------- EXHIBIT A Securities Purchase Agreement, dated February 27, 2001(1) EXHIBIT B Articles of Amendment to Articles of Incorporation of AER Energy Resources, Inc., dated February 27, 2001(1) EXHIBIT C Warrant, dated February 27, 2001, to purchase 776,699 shares of Common Stock(1) EXHIBIT D Promissory Note, dated February 20, 2001, issued by Elmwood Partners II, as maker, to The Huntington National Bank, as payee(1) EXHIBIT E Commercial Guaranty, between Kindt-Collins and The Huntington National Bank(1) EXHIBIT F Securities Purchase Agreement, dated September 27, 2000(2) EXHIBIT G Articles of Amendment to Articles of Incorporation of AER Energy Resources, Inc., dated September 27, 2000(2) EXHIBIT H Warrant, dated September 27, 2000, to purchase 470,035 shares of Common Stock(2) EXHIBIT I Promissory Note, dated September 15, 2000, issued by Elmwood Partners II, as maker, to The Kindt-Collins Company, as payee(3) EXHIBIT J Securities Purchase Agreement, dated as of January 31, 2002(4) EXHIBIT K Articles of Amendment to Articles of Incorporation of AER Energy Resources, Inc., dated January 31, 2002(4) EXHIBIT L Revolving Credit Note, dated August 28, 2001, issued by AER Energy Resources, Inc., as maker, to Elmwood Partners II, as payee(4) EXHIBIT M Revolving Credit Note, dated November 20, 2001, issued by AER Energy Resources, Inc., as maker, to Elmwood Partners II, as payee(4)
EXHIBIT N Warrant, dated January 31, 2002, to purchase 3,408,522 shares of Common Stock(4) EXHIBIT O Promissory Note, dated February 4, 2002, issued by Elmwood Partners II, as maker, to The Kindt-Collins Company, as payee(4) EXHIBIT P Securities Purchase Agreement, dated as of April 22, 2002 EXHIBIT Q Articles of Amendment to Articles of Incorporation of AER Energy Resources, Inc., dated April 18, 2002 EXHIBIT R Warrant, dated April 22, 2002, to purchase 1,851,852 shares of Common Stock EXHIBIT S Revolving Note, dated July 1, 1998, issued by The Kindt-Collins Company, as maker, to The Huntington National Bank, as payee EXHIBIT T Promissory Note, dated April 22, 2002, issued by Elmwood Partners II, as maker, to The Kindt-Collins Company, as payee EXHIBIT U Agreement with respect to joint filing of Amendment No. 9 to Schedule 13D pursuant to Rule 13d-1(k)(1)(iii), dated April 29, 2002, by and among Jon A. Lindseth, Jon A. Lindseth, Trustee under Jon A. Lindseth Trust Agreement, dated April 25, 1986, as modified, The Kindt-Collins Company, Elmwood Partners II, Battery Partners and AER Partners
- --------- (1) Incorporated by reference from Amendment No. 7 to Schedule 13D for Jon A. Lindseth et al., as filed with the Securities and Exchange Commission on March 20, 2001. (2) Incorporated by reference from AER Energy Resources, Inc.'s Form 10-Q for the quarter ended September 30, 2000 (File No. 0-21926), as filed with the Securities and Exchange Commission on November 13, 2000. (3) Incorporated by reference from Amendment No. 6 to Schedule 13D for Jon A. Lindseth et al., as filed with the Securities and Exchange Commission on December 8, 2000. (4) Incorporated by reference from Amendment No. 8 to Schedule 13D for Jon A. Lindseth et al., as filed with the Securities and Exchange Commission on March 13, 2002. EX-99.P 3 g75868ex99-p.txt SECURITIES PURCHASE AGREEMENT EXHIBIT P SECURITIES PURCHASE AGREEMENT THIS IS A SECURITIES PURCHASE AGREEMENT (this "Agreement") by and between the undersigned ("Purchaser"), and AER Energy Resources, Inc., a Georgia corporation ("AER"), dated as of April 22, 2002, and by which Purchaser and AER, in consideration of the agreements set forth below (the mutuality, adequacy and sufficiency of which are hereby acknowledged), hereby agree as follows: 1. AGREEMENT TO PURCHASE AND SELL. Upon the terms set forth in this Agreement, Purchaser hereby agrees to purchase from AER and AER agrees to sell to Purchaser (a) 100,000 shares of AER's no par value Series E Convertible Preferred Stock (the "Shares") and (b) a warrant to purchase 1,851,852 shares of AER's no par value Common Stock (the "Warrant") in the form attached hereto as EXHIBIT A. The aggregate purchase price for the Shares and the Warrant shall be $1,000,000. 2. THE CLOSING. The closing shall occur at 10:00 a.m. on April 22, 2002 (the "Closing") at the offices of Sutherland Asbill & Brennan LLP, 999 Peachtree Street, N.E., Atlanta, Georgia 30309-3996, or as the parties shall otherwise agree. At the Closing, the following shall occur: (a) AER shall deliver to Purchaser (i) a duly completed and executed share certificate in the name of Purchaser representing the Shares, and (ii) a duly completed and executed Warrant. (b) Purchaser shall deliver to AER by wire transfer in immediately available federal funds the aggregate purchase price of the Shares and the Warrant. 3. REPRESENTATIONS AND WARRANTIES. (a) BY AER, AER hereby represents and warrants to Purchaser that: (i) AER is a duly incorporated and organized Georgia corporation validly existing and in good standing under Georgia law; (ii) AER has the power and authority to issue the Shares and the Warrant to Purchaser pursuant to this Agreement and to execute, deliver and otherwise perform this Agreement, and without limiting the foregoing, the Board of Directors of AER has authorized and approved the execution, delivery and performance of this Agreement; (iii) the Shares, the AER Common Stock ("Common Stock") issuable upon exercise of the Warrant (the "Warrant Shares") and the Common Stock issuable upon conversion of the Shares (the "Conversion Shares") when issued will be validly issued, fully paid and non-assessable shares of capital stock of AER free and clear of any liens, encumbrances, adverse rights or claims of any kind whatsoever, and AER will at all times maintain a number of authorized but unissued shares of Common Stock for issuance of the Warrant Shares and the Conversion Shares; (iv) this Agreement and the Warrant each has been duly executed and delivered by AER, and constitutes the legal, valid and binding obligation of AER, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency and other laws and equitable principles affecting creditors' rights generally and the discretion of the courts in granting equitable remedies; (v) the execution, delivery and performance of this Agreement and the Warrant each is in compliance with, and is not and will not be, after the giving of notice or the passage of time or both, in violation of (A) the articles of incorporation or bylaws of AER as amended or restated, (B) any applicable law, regulation or order to which AER or its assets is subject or bound, or (C) any agreement to which AER or its assets is subject or bound (and without limiting the foregoing, will not result in any preemptive rights); (vi) all of the documents (the "SEC Documents") filed by AER within the last thirty-six months prior to the date of this Agreement with the Securities and Exchange Commission (the "Commission") in accordance with the requirements of the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (collectively the "Securities Acts"), conformed in all material respects to the requirements of the Securities Acts and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (vii) the authorized capital stock of AER consists of 100,000,000 shares of common stock, no par value ("Common Stock") and 10,000,000 shares of preferred stock, no par value. As of February 28, 2002, AER had 25,522,121 shares of Common Stock outstanding and 909,000 shares of preferred stock outstanding. Other than warrants previously issued to Purchaser, FW AER II, L.P. (or their affiliates) and Rayovac Corporation, the warrants issued in connection with the Series D Convertible Preferred Stock issuance, stock options granted to employees, restricted stock issued to directors and AER's outstanding Series A, Series B, Series C and Series D Convertible Preferred Stock, all as described in the SEC Documents, AER has no outstanding securities convertible into (or exercisable or exchangeable for) or evidencing the right to purchase or subscribe for, shares of its capital stock or authorized subscriptions, options, warrants, calls, rights, commitments or any other agreements or arrangements, obligating it to issue any shares of its capital stock or securities convertible into capital stock; (viii) the financial statements (including any related notes) included in the SEC Documents (the "Financial Statements"), have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved (except as may be noted therein) and fairly present, in all material respects, the financial condition, results of operations and cash flows of AER as of the dates thereof and for the periods ended on such dates (in each case subject, as to interim statements, to changes resulting from year-end adjustments (none of which were or could be expected to be material in amount or effect)); and (ix) except as set forth in the Financial Statements and the staffing reductions of which Purchaser is aware, since December 31, 2001, AER has conducted its -2- business only in the ordinary course in substantially the same manner as theretofore conducted, and AER has not undergone or suffered any material adverse change in its condition, financial or otherwise, business, operations, affairs, properties, assets or prospects. (b) BY PURCHASER. Purchaser hereby represents and warrants to AER: (i) this Agreement has been duly executed and delivered by Purchaser, and constitutes the legal, valid and binding obligation of Purchaser, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency and other laws and equitable principles affecting creditors' rights generally and the discretion of the courts in granting equitable remedies; (ii) Purchaser will acquire the Shares, the Conversion Shares, the Warrant and the Warrant Shares (collectively the "Securities") for its own account, to hold for investment, and with no present intention of dividing its participation with others or reselling or otherwise participating, directly or indirectly, in a distribution of the Securities, and it will not make any sale, transfer, or other disposition of the Securities in violation of the Securities Act or any applicable state securities laws (the "State Acts"). There will be placed on the Warrant and any certificates for the Shares, the Conversion Shares and the Warrant Shares, a legend stating in substance: THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS IN RELIANCE ON ONE OR MORE EXEMPTIONS THEREUNDER AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN TRANSACTIONS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT THEREUNDER. THE SECURITIES EVIDENCED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED IN A SECURITIES PURCHASE AGREEMENT TO WHICH THE CORPORATION IS A PARTY. ANY TRANSFER OF THE SECURITIES REPRESENTED HEREBY IN VIOLATION OF SAID AGREEMENT SHALL BE VOID. THE CORPORATION WILL MAIL TO THE HOLDER OF THESE SECURITIES A COPY OF SUCH RESTRICTIONS WITHOUT CHARGE WITHIN FIVE (5) DAYS AFTER RECEIPT OF WRITTEN REQUEST THEREFOR ADDRESSED TO THE CORPORATION. (iii) Purchaser, in offering to subscribe for the Securities hereunder, has been given access to all material and relevant information concerning AER, thereby enabling -3- Purchaser to make an informed investment decision concerning the Securities. Purchaser has relied solely upon an independent investigation made by it and its representatives, if any, and has, prior to the date hereof, been given access to and the opportunity to examine data and information relating to AER. In making its investment decision to purchase the Securities, Purchaser is not relying on any oral or written representations or assurances from AER or any other person or any representation of AER or any other person other than as set forth in this Agreement. Without limiting the foregoing, Purchaser has reviewed AER's Annual Report on Form 10-K for the year ended December 31, 2001. Purchaser is an "accredited investor" as defined in Rule 501 of Regulation D under the Securities Act. (iv) Purchaser understands and acknowledges that an investment in the Securities involves a high degree of risk. Purchaser represents that Purchaser is able to bear the economic risk of an investment in the Securities, which Purchaser acknowledges are currently illiquid and may remain illiquid indefinitely, including a possible total loss of its investment. In making this statement Purchaser hereby represents and warrants to AER that Purchaser has adequate means of providing for Purchaser's current needs and contingencies, that Purchaser is able to afford to hold the Securities for an indefinite period and that Purchaser has such knowledge and experience in financial and business matters that Purchaser is capable of evaluating the merits and risks of the investment in the Securities. Further, Purchaser represents that Purchaser has no present need for liquidity in the Securities and Purchaser is willing to accept such investment risks. (v) Purchaser understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon or made any recommendation or endorsement of AER or the Securities. (vi) This Agreement is made by AER with Purchaser in reliance upon Purchaser's representations and covenants made in this Section 3(b), which reliance by its execution of this Agreement Purchaser hereby confirms. (vii) Purchaser understands that the Securities have not been registered under the Securities Act or any State Acts and are being offered and sold pursuant to exemptions therefrom based in part upon the representations of Purchaser contained herein. (viii) Purchaser knows of no public solicitation or advertisement of an offer in connection with the proposed issuance and sale of the Securities. (ix) Purchaser has reviewed with its tax advisors the U.S. federal, state, local and foreign tax consequences of an investment in the Securities and the transactions contemplated by this Agreement. Purchaser is relying solely on such advisors and not on any statements or representations of AER or any of its agents and understands that Purchaser (and not AER) shall be responsible for Purchaser's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. - 4 - (x) Purchaser's acquisition of the Securities is not a transaction (or any element of a series of transactions) that is a part of a plan or scheme to evade the registration provisions of the Securities Act. 4. REGISTRATION OF SHARES. (a) DEMAND REGISTRATION. If at any time prior to eight (8) years from the date of the Closing, AER shall receive a written request from Purchaser who is then holding Shares, Conversion Shares, the Warrant and Warrant Shares representing at least 25% of the Common Stock issuable upon conversion of the Shares or exercise of the Warrant that AER file a registration statement under the Securities Act, covering the registration of at least $500,000 of shares of Common Stock owned by Purchaser, or "affiliates" or "associates" thereof, as such terms are defined in the Securities Act (collectively, the "Third Party Shareholders") to the extent such shares of Common Stock are not then freely tradable under the Securities Act. Purchaser and any Third Party Shareholder shall have ten (10) days in which to notify AER of its intention to join in the request to register its shares. Not later than ninety (90) days after receipt by AER of a written request for a demand registration pursuant to this Section 4(a), AER shall file a registration statement with the Commission relating to the shares as to which such request for a demand registration relates (the "Requested Shares") and AER shall use its best efforts to cause the registration statement (which may cover, without limitation, an offering on a delayed or continuous basis open for up to one hundred eighty (180) days pursuant to Commission Rule 415) for the Requested Shares to become effective under the Securities Act. AER shall be obligated to effect only three (3) registrations pursuant to this Section 4(a) for Purchaser and the Third Party Shareholders together, and only if the proposed aggregate selling price in any such offering is at least $500,000. (b) DELAY OF REGISTRATION. Notwithstanding anything to the contrary in Section 4(a), AER shall have the right (i) to defer the initial filing or request for acceleration of effectiveness of any registration pursuant to Section 4(a) or (ii) after effectiveness, to suspend effectiveness of any registration pursuant to Section 4(a) or (ii) after effectiveness, to suspend effectiveness of any such registration statement or to require holders to suspend further sales pending amendment (collectively a "Delay"), if, in the good faith judgment of the Board of Directors of AER and upon the advice of counsel to AER, such delay in filing or requesting acceleration of effectiveness or such suspension of effectiveness or suspension of sales is necessary in light of the existence of material non-public information (financial or otherwise) concerning AER disclosure of which at the time is not, in the opinion of the Board of Directors of AER and upon the advice of counsel, (A) otherwise required and (B) in the best interests of AER; PROVIDED, HOWEVER that AER will not invoke a Delay for more than three (3) months, unless the reason for the Delay is that AER is then engaged in an acquisition, in which case it will use its best efforts to end the Delay as soon as possible and PROVIDED, FURTHER that AER will not invoke Delays for more than an aggregate of six (6) months in any calendar year. The one hundred eighty (180) day period referred to herein during which the registration statement may be kept current after its effective date shall be extended for an additional number of business days equal to the number of business days during which the right to sell shares was suspended pursuant to the preceding sentence, and, if and to the extent necessary to effect such extension, the eight (8)-year period referred to above shall also be extended. In addition, the eight (8)-year -5- period will also be extended if any registration has been delayed pursuant to the foregoing and cannot be completed within such period. (c) "PIGGYBACK" REGISTRATION. If at any time prior to eight (8) years from the date of the Closing, AER shall determine to proceed with the preparation and filing of a registration statement under the Securities Act in connection with the proposed offer and sale for money of any of its equity securities by it or any of its security holders (other than on Form S-4 or Form S-8 promulgated under the Securities Act or any successor or similar form), AER will give written notice of its determination to Purchaser. Upon the written request of Purchaser or any Third Party Shareholder given to AER within ten (10) days after Purchaser's receipt of any such notice by AER, AER will cause all the Conversion Shares and Warrant Shares and other shares of Common Stock which Purchaser and any of the Third Party Shareholders have requested to have registered (the "Piggyback Shares") to be included in such registration statement; PROVIDED, HOWEVER, that if the managing underwriter, in the case of an underwritten public offering, determines and advises in writing that the inclusion in the registration statement of all the Piggyback Shares proposed to be included by Purchaser or the Third Party Shareholders would interfere with the successful marketing of the securities proposed to be registered by AER, then the number of such Piggyback Shares to be included in the registration statement shall be reduced in accordance with the recommendations of the managing underwriter, except that if the managing underwriter determines and advises that the inclusion in such registration statement of any Piggyback Shares would so interfere, then no Piggyback Shares shall be included in such registration statement; provided that any such reduction shall be made pro rata with respect to Purchaser and the Third Party Shareholders requesting such registration. (d) EXPENSES. With respect to each inclusion of shares in a registration statement pursuant to Section 4(a) or 4(b), AER shall bear the following fees, costs and expenses, all registration, filing and NASD fees, printing expenses, fees and disbursements of counsel and accountants for AER and all legal fees and disbursements and other expenses of complying with state securities or blue sky laws of any jurisdictions in which the securities to be offered are to be registered or qualified. Fees and disbursements not expressly included above shall be borne pro rata by Purchaser and the Third Party Shareholders whose shares are included in such registration statement. (e) INDEMNIFICATION, ETC. In the event that shares are registered pursuant to Section 4(a) or 4(b), AER, Purchaser and the Third Party Shareholders shall execute reasonable and customary underwriting, indemnification and lock-up agreements relating to such registration and shall undertake reasonable and customary registration procedures. (f) TERMINATION OF RIGHTS. Notwithstanding anything to the contrary in this Section 4, all registration rights set forth in this Section 4 shall terminate with respect to Purchaser and each Third Party Shareholder at such time as it or he is able to sell all of its or his Common Stock subject to such registration rights pursuant to Rule 144 under the Securities Act within a single three (3)-month period. -6- 5. SURVIVAL; INDEMNIFICATION. The representations, warranties and agreements made in this Agreement shall survive the Closing. Each party, acknowledging that the other is entitled to rely on its representations, warranties and agreements in this Agreement in order to preserve the benefit of the bargain otherwise represented by this Agreement, agrees that neither the survival of such representations, warranties and agreements, nor their enforceability nor any remedies for breaches of them shall be affected by any knowledge of a party regardless of when or how such party acquired such knowledge. 6. MISCELLANEOUS. (a) GOOD FAITH EFFORTS; FURTHER ASSURANCES; COOPERATION. The parties shall in good faith undertake to perform their obligations in this Agreement, to satisfy all conditions and to cause the transactions contemplated in this Agreement to be carried out promptly in accordance with the terms of this Agreement. Upon the execution of this Agreement and thereafter, each party shall do such things as may be reasonably requested by the other in order more effectively to consummate or document the transactions contemplated by this Agreement. The parties shall cooperate with each other and their respective counsel, accountants or representatives in connection with any actions required to be taken as part of their respective rights and obligations under this Agreement. (b) NOTICES. Each notice, communication and delivery under this Agreement (i) shall be made in writing signed by the party making the same, (ii) shall specify the section of this Agreement pursuant to which it is given, (iii) shall be given either in person or by a nationally recognized next business day delivery service or by telecopier, and (iv) if not given in person, shall be given to a party at the address set forth below such party's signature (or at such other address as a party may furnish to the other party to this Agreement pursuant to this Section 6(b)). If notice is given pursuant to this Section 6(b) of a permitted successor or assign of a party, then notice shall also thereafter be given as set forth above to such successor or assign of such party. (c) ASSIGNMENT. No assignment or transfer by Purchaser or any Third Party Shareholder of their respective rights and obligations under this Agreement shall be made by merger or other operation of law or otherwise except with the prior written consent of AER. This Agreement is binding upon the parties and their successors and assigns and inures to the benefit of the parties and their permitted successors and assigns and, when appropriate to effect the binding nature of this Agreement for the benefit of the other parties, of any other successor or assign. (d) SEVERABILITY. Any determination by any court of competent jurisdiction of the invalidity of any provision of this Agreement that is not essential for accomplishing its purposes shall not affect the validity of any other provision of this Agreement, which shall remain in full force and effect and which shall be construed as to be valid under applicable law. (e) CONTROLLING LAW; INTEGRATION; AMENDMENT; WAIVER. This Agreement is governed by, and shall be construed and enforced in accordance with, the laws of the State of Georgia (except the laws of that state that would render such choice of laws ineffective). This -7- Agreement supersedes all prior negotiations, agreements and understandings between the parties as to its subject matter, constitutes the entire agreement between the parties as to its subject matter and may not be altered or amended except in writing signed by the parties. The failure of any party at any time or times to require performance of any provision of this Agreement shall in no manner affect the right to enforce the same; and no waiver by any party of any provision or of a breach of any provision of this Agreement, whether by conduct or otherwise, in any one of more instances shall be deemed or construed either as a further or continuing waiver of any such provision or breach or as a waiver of any other provision or of a breach of any other provision of this Agreement. (f) COPIES. This Agreement may be executed in two or more copies, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement or its terms to produce or account for more than one of such copies. [signatures commence on the following page] -8- DULY EXECUTED and delivered by Purchaser and AER, on April 22, 2002. PURCHASER: ELMWOOD PARTNERS II By: /s/ Jon A. Lindseth ---------------------------------------- Jon A. Lindseth, Trustee under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified, Managing Partner Address: 12651 Elmwood Avenue Cleveland, Ohio 44111 Phone: (216) 252-4122 Fax Number: (216) 252-5639 AER: AER ENERGY RESOURCES, INC. By: /s/ J.T. Moore ------------------------------------------ J.T. Moore Vice President and Chief Financial Officer Address: 4600 Highlands Parkway, Suite G Smyrna, Georgia 30082 Phone: (770) 433-2127 Fax Number: (770) 433-2286 * * * * * -9- EXHIBIT A FORM OF WARRANT - 10 - EX-99.Q 4 g75868ex99-q.txt ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION EXHIBIT Q THIS WARRANT AND THE SECURITIES PURCHASED ON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL EITHER (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) THE CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION AND ITS COUNSEL THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION THEREWITH. Warrant to Purchase Warrant No. 2002-8 1,851,852 Shares FORM OF WARRANT TO PURCHASE COMMON STOCK OF AER ENERGY RESOURCES, INC. THIS CERTIFIES that Elwood Partners II, an Ohio limited partnership ("Holder") or any subsequent holder hereof, has the right to purchase from AER Energy Resources, Inc., a Georgia corporation (the "Company"), up to 1,851,852 fully paid and nonassessable shares of the Company's Common Stock, no par value ("Common Stock"), at the Exercise Price (as defined herein), subject to adjustment as provided below, at any time on or before 5:00 p.m., Atlanta, Georgia time, on April 22, 2007. This Warrant is issued and all rights hereunder shall be held subject to all of the conditions, limitations and provisions set forth herein. 1. EXERCISE. This Warrant may be exercised as to all or any lesser number of full shares of Common Stock covered hereby upon surrender of this Warrant, with the Subscription Form attached hereto duly executed, together with the full Exercise Price in cash, or by certified or official bank check payable in New York Clearing House Funds or wire transfer payable in immediately available federal funds for each share of Common Stock as to which this Warrant is exercised, at the office of the Company, AER Energy Resources, Inc., 4600 Highlands Parkway, Suite G, Smyrna, GA 30082, or at such other office or agency as the Company may designate in writing (such surrender and payment hereinafter called the "Exercise of this Warrant"). The "Date of Exercise" of the Warrant shall be defined as the date that the original Warrant and Subscription Form are received by the Company. This Warrant shall be canceled upon its Exercise, and, as soon as practicable thereafter, the Holder hereof shall be entitled to receive a certificate or certificates for the number of shares of Common Stock purchased upon such Exercise and a new Warrant or Warrants (containing terms identical to this Warrant) representing any unexercised portion of this Warrant. Each person in whose name any certificate for shares of Common Stock is issued shall, for all purposes, be deemed to have become the Holder of record of such shares on the Date of Exercise of this Warrant, irrespective of the date of delivery of such certificate. Nothing in this Warrant shall be construed as conferring upon the Holder hereof any rights as a shareholder of the Company. 2. PAYMENT OF WARRANT EXERCISE PRICE. Payment of the Exercise Price may be made by any of the following, or a combination thereof, at the election of Holder: (i) cash, certified check or cashier's check or wire transfer payable in immediately available federal funds; or (ii) surrender of this Warrant at the principal office of the Company together with notice of election, in which event the Company shall issue Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B)/A where: X = the number of shares of Common Stock to be issued to Holder (not to exceed the number of shares set forth on the cover page of this Warrant, as adjusted pursuant to the provisions of Section 5 of this Warrant). Y = the number of shares of Common Stock for which this Warrant is being exercised. A = the Market Price of one share of Common Stock (for purposes of this Section 2(ii), the "Market Price" shall be defined as the average closing bid price of the Common Stock for the five trading days prior to the Date of Exercise of this Warrant (the "Five-Day Average Closing Bid Price"), as reported on the Nasdaq National Market, or if the Common Stock is not traded on the Nasdaq National Market, the Five-Day Average Closing Bid Price in the over-the-counter market; provided, however, that if the Common Stock is listed on a stock exchange, the Market Price shall be the Five-Day Average Closing Bid Price on such exchange). B = the Exercise Price. It is intended that the Common stock issuable upon exercise of this Warrant in a cashless exercise transaction shall be deemed to have been acquired at the time this Warrant was issued, for purposes of Rule 144(d)(3)(ii). 3. EXERCISE PRICE. The Exercise Price shall initially be $0.216 per share. However, if 120% of the -2- average closing bid price of a share of Common Stock (as reported on any tier of The Nasdaq Stock Market, Inc., including the Over-the-Counter Bulletin Board automated quotation system or on a national securities exchange) for 20 consecutive trading days ending on April 22, 2003 (the "20-Day Average Closing Bid Price"), is less than the Exercise Price, then the Exercise Price shall be adjusted to equal the greater of (i) 120% of the 20-Day Average Closing Bid Price or (ii) $0.135. Notwithstanding the foregoing, in the event that the Exercise Price is adjusted pursuant to this Section 3, no such adjustment shall be made to the number of Shares of Common Stock that may be received upon the Exercise of this Warrant. 4. TRANSFER AND REGISTRATION. Subject to the provisions of Section 8 of this Warrant, this Warrant may be transferred on the books of the Company, wholly or in part, in person or by attorney, upon surrender of this Warrant properly endorsed, with signature guaranteed. This Warrant shall be canceled upon such surrender and, as soon as practicable thereafter, the person to whom such transfer is made shall be entitled to receive a new Warrant or Warrants as to the portion of this Warrant transferred, and the Holder of this Warrant shall be entitled to receive a new Warrant or Warrants as to the portion hereof retained. 5. ANTI-DILUTION ADJUSTMENTS. (a) If the Company shall at any time declare a dividend payable in shares of Common Stock, then the Holder hereof, upon Exercise of this Warrant after the record date for the determination of Holders of Common Stock entitled to receive such dividend, shall be entitled to receive upon Exercise of this Warrant, in addition to the number of shares of Common Stock as to which this Warrant is Exercised, such additional shares of Common stock as such Holder would have received had this Warrant been Exercised immediately prior to such record date. (b) If the Company shall at any time effect a recapitalization or reclassification of such character that the shares of Common stock shall be changed into or become exchangeable for a larger or smaller number of shares, then upon the effective date thereof, the number of shares of Common Stock which the Holder hereof shall be entitled to purchase upon Exercise of this Warrant shall be increased or decreased, as the case may be, in direct proportion to the increase or decrease in the number of shares of Common Stock by reason of such recapitalization or reclassification, and the Exercise Price shall be, in the case of an increase in the number of shares, proportionately decreased and, in the case of a decrease in the number of shares, proportionally increased. (c) If the Company shall at any time distribute to Holders of Common Stock cash, evidences of indebtedness or other securities or assets (other than cash dividends or distributions payable out of earned surplus or net profits for the current or preceding year) then, in any such case, the Holder of this Warrant shall be entitled to receive, upon Exercise of this Warrant, with respect to each share of Common Stock issuable upon such Exercise, the amount of cash or evidences of indebtedness or other securities or assets which such Holder would have been entitled to receive with respect to each such share of Common stock as a result of the happening of such event had this -3- Warrant been Exercised immediately prior to the record date or other date fixing shareholders to be affected by such event (the "Determination Date") or, in lieu thereof, if the Board of Directors of the Company should so determine at the time of such distribution, a reduced Exercise Price determined by multiplying the Exercise Price on the Determination Date by a fraction, the numerator of which is the result of such Exercise Price reduced by the value of such distribution applicable to one share of Common Stock (such value to be determined by the Board in its discretion) and the denominator of which is such Exercise Price. (d) If the Company shall at any time consolidate or merge with any other corporation or transfer all or substantially all of its assets or dissolve, then the Company shall deliver written notice to the Holder of such merger, consolidation or sale of assets or dissolution at least thirty (30) days prior to the closing of such merger, consolidation or sale of assets or dissolution, and this Warrant shall terminate and expire immediately prior to the closing of such merger, consolidation or sale of assets or dissolution. (e) As used in this Warrant, the term "Exercise Price" shall mean the purchase price per share specified in Section 3 of this Warrant until the occurrence of an event stated in Section 5(b) or 5(c) and thereafter shall mean said price as adjusted from time to time in accordance with the provisions of said sections. No such adjustment pursuant to Section 5(b) or 5(c) shall be made unless such adjustment would change the Exercise Price at the time by $.01 or more; provided, however, that all adjustments not so made shall be deferred and made when the aggregate thereof would change the Exercise Price at the time by $.01 or more. No adjustment made pursuant to any provision of this Section 5 shall have the effect of increasing the total consideration payable upon Exercise of this Warrant in respect of all the Common Stock as to which this Warrant may be exercised. (f) In the event that at any time, as a result of an adjustment made pursuant to this Section 5, the Holder of this Warrant shall, upon Exercise of this Warrant, become entitled to receive shares and/or other securities or assets (other than Common Stock) then, wherever appropriate, all references herein to shares of Common Stock shall be deemed to refer to and include such shares and/or other securities or assets; and thereafter the number of such shares and/or other securities or assets shall be subject to adjustment from time to time in a manner and upon terms as nearly equivalent as practicable to the provisions of this Section 5. 6. FRACTIONAL INTERESTS. No fractional shares or scrip representing fractional shares shall be issuable upon the Exercise of this Warrant, but on Exercise of this Warrant, the Holder hereof may purchase only a whole number of shares of Common Stock. The Company shall make a payment in cash in respect of any fractional shares which might otherwise be issuable upon Exercise of this Warrant, calculated by multiplying the fractional share amount by the market price of the Company's Common Stock on the Date of Exercise as reported on the Nasdaq National Market or such other exchange or system on which the Company's Common Stock is traded. -4- 7. RESERVATION OF SHARES. The Company shall at all times reserve for issuance such number of authorized and unissued shares of Common Stock (or other securities substituted therefor as herein above provided) as shall be sufficient for Exercise of this Warrant. The Company covenants and agrees that upon Exercise of this Warrant, all shares of Common Stock issuable upon such Exercise shall be duly and validly issued, fully paid, nonassessable and not subject to preemptive rights of any shareholders. 8. RESTRICTIONS ON TRANSFER. This Warrant and the Common Stock issuable on Exercise hereof have been or will be acquired by the Holder hereof for investment for its own account and not with a view to the distribution thereof, have not been registered under the Securities Act of 1933, as amended (the "Act"), or under any state securities laws (the "State Acts") and may not be sold, transferred, pledged, hypothecated or otherwise disposed of in the absence of registration or the availability of an exemption from registration under the Act and any applicable State Acts and, in the event a Holder believes an exemption from the registration requirements of the Act and any applicable State Acts is available, the Holder must deliver a legal opinion satisfactory in form and substance to the Company and its counsel, stating that such exemption is available. All shares of Common Stock issued upon Exercise of this Warrant shall bear an appropriate legend to such effect. Holder has represented to the Company that it and any transferee of all or any portion of this Warrant is and will remain at all times while this Warrant is outstanding an "accredited investor" as defined in Regulation D promulgated under the Act. 9. BENEFITS OF THIS WARRANT. Nothing in this Warrant shall be construed to confer upon any person other than the Company and the Holder of this Warrant any legal or equitable right, remedy or claim under this Warrant and this Warrant shall be for the sole and exclusive benefit of the Company and the Holder of this Warrant. 10. APPLICABLE LAW. This Warrant is issued under and shall for all purposes be governed by and construed in accordance with the laws of the State of Georgia. Jurisdiction for any dispute regarding this Warrant lies in Georgia. 11. LOSS OF WARRANT. Upon receipt by the Company of evidences of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of indemnity or security reasonably satisfactory to the Company, and upon surrender and cancellation of this Warrant, if mutilated, the Company shall execute and deliver a new Warrant of like tenor and date. - 5 - 12. PURCHASE AGREEMENT. This Warrant is issued and sold pursuant to that certain Securities Purchase Agreement dated as of April 22, 2002 (the "Purchase Agreement"). The Holder shall be entitled to all of the rights and benefits and subject to all of the obligations of a Purchaser under the Purchase Agreement, including without limitation, rights with respect to registration under the Act. The terms of the Purchase Agreement are hereby incorporated herein for all purposes and shall be considered a part of this Warrant as if they had been fully set forth herein. 13. NOTICE TO COMPANY AND HOLDER. Notices or demands pursuant to this Warrant to be given or made by the Holder of this Warrant to or on the Company shall be sufficiently given or made if sent by certified or registered mail, return receipt requested, postage prepaid, and addressed, until another address is designated in writing by the Company, AER Energy Resources, Inc., 4600 Highlands Parkway, Suite G, Smyrna, GA 30082, Attention: Chief Executive Officer. Notices or demands pursuant to this Warrant to be given or made by the Company to or on the Holder of this Warrant shall be sufficiently given or made if sent by certified or registered mail, return receipt requested, postage prepaid, and addressed to the Holder as follows: Elmwood Partners II, 12651 Elmwood Avenue, Cleveland, OH 44111 with a copy to any other person designated in writing by Holder. (SIGNATURE FOLLOWS ON NEXT PAGE.) -6- IN WITNESS WHEREOF, this Warrant is hereby executed effective as of the date set forth below. Dated as of April 22, 2002. AER ENERGY RESOURCES, INC. By: /s/ J. T. Moore ------------------------------------------ J. T. Moore Vice President and Chief Financial Officer -7- SUBSCRIPTION FORM TO: AER ENERGY RESOURCES, INC. The undersigned hereby irrevocably exercises the right to purchase _______________ shares of Common Stock of AER Energy Resources, Inc., a Georgia corporation, evidenced by the attached Warrant, and herewith makes payment of the Exercise Price with respect to such shares in full, all in accordance with the conditions and provisions of said Warrant. The undersigned represents that it is an "accredited investor" as defined in Regulation D under the Securities Act of 1933, as amended, agrees not to offer, sell, transfer or otherwise dispose of any of such Common Stock, except in accordance with the provisions of Section 8 of the Warrant, and consents that the following legend may be affixed to the certificates for the Common Stock hereby subscribed for, if such legend is applicable: "The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities law, and may not be sold, transferred, pledged, hypothecated or otherwise disposed of until either (i) a registration statement under the Securities Act and applicable state securities laws shall have become effective with regard thereto, or (ii) the corporation shall have received an opinion of counsel acceptable to the corporation and its counsel that an exemption from registration under the Securities Act or applicable state securities laws is available in connection therewith." The undersigned requests that certificates for such shares be issued, and a warrant representing any unexercised portion thereof be issued, pursuant to the Warrant in the name of the Registered Holder and delivered to the undersigned at the address set forth below: [ ] The undersigned hereby elects to make payment of the Exercise Price through a cashless exercise pursuant to Section 2(ii) of the Warrant. (Check Box if applicable) Dated: ------------------------------ - -------------------------------------------------------------------------------- Signature of Registered Holder - -------------------------------------------------------------------------------- Name of Registered Holder (Print) - -------------------------------------------------------------------------------- Address - -------------------------------------------------------------------------------- The attached Warrant and the securities issuable on exercise thereof have not been registered under the Securities Act of 1933, as amended, or any state securities law and may not be sold, transferred, pledged, hypothecated or otherwise disposed of in the absence of registration or the availability of an exemption from registration under said Act or any state securities law. - -------------------------------------------------------------------------------- ASSIGNMENT (To be executed by the registered Holder desiring to transfer the Warrant) FOR VALUE RECEIVED, the undersigned Holder of the attached Warrant hereby sells, assigns and transfers unto the person or persons below named the right to purchase ____________ shares of the Common Stock of AER ENERGY RESOURCES, INC. evidenced by the attached Warrant and does hereby irrevocably constitute and appoint _____________________________ attorney to transfer the said Warrant on the books of the Company, with full power of substitution in the premises. Dated: ----------------------------- ----------------------------------- Signature Fill in for new Registration of Warrant: Signature Guarantee: - ---------------------------------------- ----------------------------------- Name Name of Guarantor By: - ---------------------------------------- -------------------------------- Name: - ---------------------------------------- ----------------------------- Address Title: ---------------------------- Please print name and address of assignee (including zip code) - -------------------------------------------------------------------------------- NOTICE The signature to the foregoing Subscription Form or Assignment must correspond to the name as written upon the face of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever. - -------------------------------------------------------------------------------- EX-99.R 5 g75868ex99-r.txt WARRANT, DATED APRIL 22, 2002 EXHIBIT R ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF AER ENERGY RESOURCES, INC. In accordance with Sections 14-2-602 and 14-2-1006 of the Georgia Business Corporation Code (the "Code"), AER Energy Resources, Inc. (the "Corporation"), a corporation organized and existing under and by virtue of the Code, DOES HEREBY CERTIFY: 1. The name of the Corporation is AER Energy Resources, Inc. 2. The following resolution setting forth an amendment to the Corporation's Articles of Incorporation has been duly adopted by the Corporation's Board of Directors: RESOLVED, that Article II of the Corporation's Articles of Incorporation is hereby amended by adding the following provisions to the end of Section 2.4: "The Corporation is authorized to issue 200,000 shares of Series E Convertible Preferred Stock, no par value (the "Series E Preferred Stock"). The Series E Preferred Stock shall have the terms, preferences, limitations and relative rights set forth on EXHIBIT A hereto." 3. The "EXHIBIT A" referenced in the foregoing resolution is included in these Articles of Amendment and is the same "EXHIBIT A" as is attached hereto. 4. The foregoing resolution containing the amendment was duly adopted on April 18, 2002 by the Corporation's Board of Directors in accordance with the provisions of Sections 14-2-602 and 14-2-1002 of the Code. This amendment was adopted by the Corporation's Board of Directors without shareholder action and such shareholder action was not required, except that this amendment was duly approved by the holders of Series A, B, C and D Preferred Stock pursuant to the requirements of the Corporation's Articles of Incorporation. IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be signed by the undersigned duly authorized officer, this 18th day of April, 2002. AER ENERGY RESOURCES, INC. By: /s/ J.T. Moore ------------------------------------------ J.T. Moore Vice President and Chief Financial Officer EXHIBIT A TERMS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF SERIES E CONVERTIBLE PREFERRED STOCK OF AER ENERGY RESOURCES, INC. The following terms shall have the meanings specified: "Articles of Incorporation" shall mean the Articles of Incorporation of the Corporation, as amended. "Board of Directors" shall mean the board of directors of the Corporation. "Bylaws" shall mean the bylaws of the Corporation, as amended. "Common Stock" shall mean the common stock, no par value per share, of the Corporation. "Conversion Notice" shall have the meaning provided in Section (d)(5) hereof. "Conversion Price" shall equal $0.207; PROVIDED, HOWEVER, that if 115% of the average closing bid price of the Common Stock as reported on the OTC-BB for the 20 consecutive trading days ending on April 22, 2003 (such 20-day average price being referred to in this definition as the "Adjusted Price") is less than the Conversion Price, then the Conversion Price shall equal the greater of (1) 115% of the Adjusted Price and (2) $0.135 PROVIDED, FURTHER, that the Conversion Price shall also be subject to the adjustments provided in Section (d)(6) hereof. "Conversion Rate" shall equal such number of shares of Common Stock equal to (1) the then applicable Liquidation Value, divided by (2) the then applicable Conversion Price. "Conversion Rights" shall have the meaning provided in Section (d) hereof. "Conversion Shares" shall mean the shares of Common Stock into which each share of Series E Preferred Stock is convertible pursuant to Section (d) hereof. "Corporation" shall mean AER Energy Resources, Inc., a Georgia corporation. "Extraordinary Transaction" shall mean any of the following events: (1) the consummation of a merger, share exchange, acquisition of stock or other similar transaction, as a result of which the Corporation shall not continue to exist or shall continue to exist only as a subsidiary of another entity (other than a parent or subsidiary of the Corporation); (2) the consummation of a sale of all or substantially all the assets of the Corporation to a person or entity (other than a parent or subsidiary of the Corporation); or (3) the public announcement of a tender offer (other than by a parent or subsidiary of the Corporation) for all of the outstanding shares of Common Stock. "Georgia Code" shall mean the Georgia Business Corporation Code, O.C.G.A. ss.14-2-101 et seq., as amended. "Liquidation" shall have the meaning provided in Section (b) hereof. "Liquidation Value," with respect to a share of Series E Preferred Stock, shall equal the Stated Value of such share plus all accrued but unpaid dividends with respect to such share. "Original Issue Date" shall mean, with respect to a share of Series E Preferred Stock, the date that such share was purchased from the Corporation. "OTC-BB" shall mean the Over-the-Counter Bulletin Board automated quotation system operated by The Nasdaq Stock Market, Inc. ("Nasdaq"), or any successor quotation system. "Redemption Notice" shall have the meaning provided in Section (e)(1) hereof. "Redemption Price" shall have the meaning provided in Section (e)(1) hereof. "Securities Act" shall mean the Securities Act of 1933, as amended. "Series A Preferred Stock" shall mean the 425,000 shares of Series A Convertible Preferred Stock, no par value, established by the Corporation on September 27, 2000. "Series B Preferred Stock" shall mean the 250,000 shares of Series B Convertible Preferred Stock, no par value, established by the Corporation on February 28, 2001. "Series C Preferred Stock" shall mean the 500,000 shares of Series C Convertible Preferred Stock, no par value, established by the Corporation on June 12, 2001. "Series D Preferred Stock" shall mean the 400,000 shares of Series D Convertible Preferred Stock, no par value, established by the Corporation on February 1, 2002. "Series E Preferred Stock" shall mean the 200,000 shares of Series E Convertible Preferred Stock, no par value, hereby established. A-2 "Stated Value" per share of the Series E Preferred Stock shall mean the per share issue price for any share of Series E Preferred Stock, as adjusted pursuant to Section (d)(6) hereof after the Original Issue Date. The initial Stated Value per share of Series E Preferred Stock is $10.00. The terms, preferences, limitations and relative rights of the Series E Preferred Stock are as follows: (a) DIVIDEND RIGHTS. The following dividend rights shall apply to the Series E Preferred Stock: (1) The holders of outstanding shares of Series E Preferred Stock shall be entitled to receive cash dividends when, as and if declared by the Board of Directors out of any funds legally available therefor at the rate of 6.75% of the Liquidation Value per annum, or $0.675 per share of Series E Preferred Stock based upon the initial Stated Value per share. (2) Dividends shall accrue on each share of Series E Preferred Stock from the Original Issue Date, and shall accrue from day to day, whether or not earned or declared and whether or not there shall be funds legally available for the payment of such dividends. Such dividends shall be cumulative so that, if such dividends in respect of any previous or current quarterly dividend period, at the rate specified above, shall not have been paid or declared and a sum sufficient for the payment thereof set apart, the deficiency shall first be fully paid before any dividend or other distribution shall be paid on or declared and set apart for the Common Stock or any other stock ranking junior to the Series E Preferred Stock. Any accumulation of dividends on the Series E Preferred Stock shall not bear interest. (3) No cash dividend shall be paid or declared on Common Stock or any other stock ranking junior to the Series E Preferred Stock as to dividend preference unless (A) full accrued and unpaid dividends on the Series E Preferred Stock for all past dividend periods and the then current dividend period shall have been paid or declared and a sum sufficient for the payment above set apart and (B) the Corporation shall also pay each holder of the Series E Preferred Stock the amount of such cash dividend per share of Common Stock, multiplied by the number of shares of Common Stock that such holder would have received if, immediately prior to the declaration date of such dividend, all shares of Series E Preferred Stock owned by such holder were converted into Common Stock pursuant to Section (d) hereof. (4) Each dividend shall be paid to the holders of record of the Series E Preferred Stock as they shall appear on the stock register of the Corporation on such record date, not exceeding 45 days nor less than 10 days preceding a dividend payment date, as shall be fixed by the Board of Directors or a duly authorized committee thereof. A-3 (5) The Series E Preferred Stock shall rank as to payment of dividends on a parity with the Series A, Series B, Series C and Series D Preferred Stock. (b) LIQUIDATION RIGHTS. (1) Subject to the rights of any class of stock of the Corporation with liquidation preferences senior to the Series E Preferred Stock, in the event of the liquidation, dissolution or winding up for any reason, including, without limitation, bankruptcy, of the Corporation or any of the Corporation's subsidiaries, the assets of which constitute all or substantially all the assets of the business of the Corporation and its subsidiaries taken as a whole (each such event being referred to as a "Liquidation"), the holders of the outstanding shares of Series E Preferred Stock shall be entitled to receive in exchange for and in redemption of each share of their Series E Preferred Stock, and on a parity with the holders of any capital stock ranking pari passu to the Series E Preferred Stock, from any funds, proceeds or assets legally available for distribution to shareholders, an amount equal to the greater of (1) the Liquidation Value as of the date that the Liquidation is approved by the shareholders of the Corporation, or, if no such approval is required, the Board of Directors, or (2) the aggregate amount of such funds, proceeds or assets, multiplied by a fraction: (x) the numerator of which is the number of Conversion Shares to which the holder of such share of Series E Preferred Stock would be entitled to receive by virtue of converting such share; and (y) the denominator of which is the aggregate of the number of Conversion Shares, shares of Common Stock outstanding, and all other shares of outstanding capital stock of any series the holders of which are entitled to participate in the proceeds of a Liquidation. (2) All the preferential amounts to be paid to the holders of Series E Preferred Stock under this Section (b) shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any funds, proceeds or assets of the Corporation to, the holders of shares of Common Stock or any class or series of stock of the Corporation ranking junior to the Series E Preferred Stock in connection with a Liquidation as to which this Section (b) applies. If the funds, proceeds and assets to be distributed to the holders of Series E Preferred Stock are insufficient to permit the payment to such holders of the full amounts payable to such holders, the funds, proceeds and assets legally available for distribution shall be distributed ratably among the holders of Series E Preferred Stock in proportion to the full amount each such holder is otherwise entitled to receive. (3) The Series E Preferred Stock shall rank as to payments upon Liquidation on a parity with the Series A, Series B, Series C and Series D Preferred Stock. A-4 (c) VOTING RIGHTS. Except as provided herein or by the Code, the Series E Preferred Stock shall not have any voting rights. (d) CONVERSION. The holders of Series E Preferred Stock shall have conversion rights as follows (the "Conversion Rights"): (1) Conversion Rate. (A) For purposes of this Section (d), each share of Series E Preferred Stock shall be convertible, at the times and under the conditions described in this Section (d), at the rate of one share of Series E Preferred Stock to the number of shares of Common Stock that equals the Conversion Rate. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of the surrender of the shares of Series E Preferred Stock to be converted in accordance with the procedures described in Section (d)(5) hereof. (B) No fractional shares of Common Stock shall be issued upon conversion of Series E Preferred Stock, and any shares of Series E Preferred Stock surrendered for conversion that would otherwise result in a fractional share of Common Stock shall be redeemed in cash at the then effective Conversion Price per share, payable as promptly as possible when funds are legally available therefor. (2) Conversion at Option of Holders. Subject to Section (d)(5) hereof, each share of Series E Preferred Stock shall be convertible, at the option of the holder thereof, at any time after issuance, in whole or in part, at the office of the Corporation or any transfer agent for the Series E Preferred Stock, into Common Stock at the then effective Conversion Rate. (3) Conversion at Option of Company. (A) Beginning on April 22, 2005, and if all the conditions of Section (d)(3)(B) are satisfied, the Corporation may require that each holder of Series E Preferred Stock convert such holder's shares of Series E Preferred Stock into Common Stock in accordance with Section (d) hereof. (B) All of the following conditions must be met in order for the Corporation to exercise the conversion rights set forth in Section (d)(3)(A) hereof: (i) the average closing bid price of a share of the Common Stock (as reported on the OTC-BB) for any 20 trading days out of the 30 trading days immediately preceding such exercise shall be greater than or equal to 250% of the Conversion Price as of the date of such exercise; A-5 (ii) a registration statement filed under the Securities Act covering the resale of shares of Common Stock that may be received upon the conversion of all shares of the Series E Preferred Stock (the "Resale Registration Statement") is effective and has been continuously effective for at least three months; (iii) from the effective date of the Resale Registration Statement until the date of such exercise, the Common Stock has been continuously listed or quoted on a national securities exchange, on any tier of The Nasdaq Stock Market, Inc. or on an automated inter-dealer quotation system (including the OTC-BB), and the Corporation has not received any written notice stating that such exchange, market or system has delisted or is seeking to delist the Common Stock from such exchange, market or system; and (iv) for a three-month period ending on the Conversion Date with respect to such exercise, there has not been a public announcement of an Extraordinary Transaction that is pending on or has been consummated before the Conversion Date. (4) Conversion Upon Extraordinary Transaction. At any time after the date that an Extraordinary Transaction has been announced and is then pending, any holder of Series E Preferred Stock may convert all of its shares of Series E Preferred Stock into a number of shares of Common Stock calculated by dividing (A) the greater of (i) the then applicable Liquidation Value and (ii) the Stated Value, plus the dividends that would have accrued on the Series E Preferred Stock in the event that no dividends were declared and paid by the Corporation for a period of three years from the Original Issue Date, by (B) the then applicable Conversion Price. (5) Mechanics of Conversion. Before any holder of Series E Preferred Stock shall be entitled to receive certificates representing the shares of Common Stock into which shares of Series E Preferred Stock are converted in accordance with Sections (d)(2), (d)(3), (d)(4) or (e)(2) hereof, such holder shall surrender the certificate or certificates for such shares of Series E Preferred Stock, duly endorsed, with signatures guaranteed, at the office of the Corporation or of any transfer agent for the Series E Preferred Stock, and shall give written notice to the Corporation at such office of the name or names in which such holder wishes the certificate or certificates for shares of Common Stock to be issued, if different from the name shown on the books and records of the Corporation (the "Conversion Notice"). The Conversion Notice shall also contain such representations as may reasonably be required by the Corporation to the effect that the shares to be received upon conversion are not being acquired and will not be transferred in any way that might violate the then applicable securities laws. The Corporation shall, as soon as practicable thereafter and in no event later than 10 days after the delivery of said certificates and Conversion Notice, issue and deliver at such office to such holder of Series E Preferred Stock, or to the nominee A-6 or nominees of such holder as provided in the Conversion Notice, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. The conversion shall be effective at the time the Corporation accepts the Conversion Notice as being proper in form and substance. The person or persons entitled to receive the shares of Common Stock issuable upon a conversion pursuant to Sections (d)(2), (d)(3), (d)(4) or (e)(2) hereof shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of the effective date of conversion pursuant to this Section (d). All certificates issued upon the exercise or occurrence of the conversion shall contain a legend governing restrictions upon such shares imposed by law (if any) or agreement of the holder or his or its predecessors, successors or permitted assigns. (6) Conversion Price Adjustments. The Stated Value (and therefore, the Liquidation Value, the Conversion Price, the corresponding Conversion Rate and the figures set forth in the definition of Conversion Price) shall be subject to adjustment from time to time as follows: (A) Common Stock Issued at Less Than the Current Conversion Price. If the Corporation shall issue any Common Stock other than Excluded Securities (as hereinafter defined) without consideration or for a consideration per share less than the then current Conversion Price, the Conversion Price in effect immediately prior to each such issuance shall immediately (except as provided below) be reduced by multiplying the Conversion Price by a fraction of which the numerator shall be an amount equal to the sum of (x) the number of shares of Common Stock outstanding immediately prior to such issuance multiplied by the current Conversion Price plus (y) the consideration, if any, received by the Corporation upon such issuance and the denominator shall be the total number of shares of Common Stock outstanding immediately after such issuance multiplied by the current Conversion Price. For the purposes of any adjustment of the Conversion Price pursuant to Section (d)(6)(A) hereof, the following provisions shall be applicable: (i) Cash. In the case of the issuance of Common Stock for cash, the amount of the consideration received by the Corporation shall be deemed to be the amount of the cash proceeds received by the Corporation for such Common Stock before deducting therefrom any discounts, commissions, taxes or other expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with the issuance and sale thereof. (ii) Consideration Other Than Cash. In the case of the issuance of Common Stock (otherwise than upon the conversion of A-7 shares of capital stock or other securities of the Corporation) for a consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as determined by the Board of Directors, irrespective of any accounting treatment, whose determination shall be conclusive. (iii) Options and Convertible Securities. Except with respect to any securities that are Excluded Securities, in the case of the issuance of (1) options, warrants or other rights to purchase or acquire Common Stock (whether or not at the time exercisable), (2) securities by their terms convertible into or exchangeable for Common Stock (whether or not at the time so convertible or exchangeable) or (3) options, warrants or rights to purchase such convertible or exchangeable securities (whether or not at the time exercisable): (a) the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options, warrants or other rights to purchase or acquire Common Stock shall be deemed to have been issued at the time such options, warrants or rights were issued and for a consideration equal to the consideration (determined in the manner provided in Sections (d)(6)(A)(i) and (ii) hereof, if any, received by the Corporation upon the issuance of such options, warrants or rights plus the minimum purchase price provided in such options, warrants or rights for the Common Stock covered thereby; (b) the aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange for any such convertible or exchangeable securities, or upon the exercise of options, warrants or other rights to purchase or acquire such convertible or exchangeable securities and the subsequent conversion or exchange thereof, shall be deemed to have been issued at the time such securities were issued or such options, warrants or rights were issued and for a consideration equal to the consideration, if any, received by the Corporation for any such securities and related options, warrants or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the additional consideration (determined in the manner provided in Sections (d)(6)(A)(i) and (ii) hereof), if any, to be received by the Corporation upon the conversion or exchange of such securities, or upon the exercise of any related options, warrants or rights to A-8 purchase or acquire such convertible or exchangeable securities and the subsequent conversion or exchange thereof; (c) on any change in the number of shares of Common Stock deliverable upon exercise of any such options, warrants or rights or conversion or exchange of such convertible or exchangeable securities or any change in the consideration to be received by the Corporation upon such exercise, conversion or exchange, including, but not limited to, a change resulting from the anti-dilution provisions thereof, the Conversion Price as then in effect shall forthwith be readjusted to such Conversion Price as would have been obtained had an adjustment been made upon the issuance of such options, warrants or rights not exercised prior to such change, or of such convertible or exchangeable securities not converted or exchanged prior to such change, upon the basis of such change; (d) on the expiration or cancellation of any such options, warrants or rights, or the termination of the right to convert or exchange such convertible or exchangeable securities, if the Conversion Price shall have been adjusted upon the issuance thereof, the Conversion Price shall forthwith be readjusted to such Conversion Price as would have been obtained had an adjustment been made upon the issuance of such options, warrants, rights or such convertible or exchangeable securities on the basis of the issuance of only the number of shares of Common Stock actually issued upon the exercise of such options, warrants or rights, or upon the conversion or exchange of such convertible or exchangeable securities; and (e) if the Conversion Price shall have been adjusted upon the issuance of any such options, warrants, rights or convertible or exchangeable securities, no further adjustment of the Conversion Price shall be made for the actual issuance of Common Stock upon the exercise, conversion or exchange thereof. (B) Excluded Securities. Notwithstanding the foregoing, no adjustment shall be made pursuant to this Section (d) as a result of the issuance or deemed issuance of any of the foregoing (collectively, the "Excluded Securities"): A-9 (i) any shares of Common Stock upon the conversion of shares of Series A, Series B, Series C, Series D or Series E Preferred Stock; (ii) securities of the Corporation offered to the public pursuant to an effective registration statement under the Securities Act; (iii) any securities of the Corporation (including any shares of Common Stock that may be issuable pursuant to the conversion or exercise of any options, warrants or rights of the Corporation) pursuant to any commercial agreement if the issuance of such securities is approved by the Board of Directors; (iv) any shares of Common Stock as a result of the adjustments to the Conversion Price and the Conversion Rate under this Section (d) or the similar provisions of the Series A, Series B, Series C or Series D Preferred Stock; (v) any options, warrants or rights of the Corporation, and any shares of Common Stock issued at any time following the Original Issue Date (including any shares of Common Stock that may be issuable pursuant to the conversion or exercise of any options, warrants or rights of the Corporation), in each case granted under any employee stock option or incentive plan in which employees or directors of the Corporation may participate; (vi) any shares of Common Stock issued in a transaction to which Section (d)(6)(C) or (D) applies; or (vii) any shares of Common Stock issued pursuant to the exchange, conversion or exercise of options, warrants or other rights of the Corporation that have previously been incorporated into computations hereunder on the date when such options, warrants or other rights of the Corporation were issued. (C) Stock Dividends, Subdivisions, Reclassifications or Combinations. If the Corporation shall (i) declare a dividend or make a distribution on its Common Stock in shares of its Common Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares, or (iii) combine or reclassify the outstanding Common Stock into a smaller number of shares, the Conversion Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the holder of any shares of Series E Preferred Stock surrendered for conversion after such date shall be entitled to receive the number of shares of Common Stock which he would have A-10 owned or been entitled to receive had such Series E Preferred Stock been converted immediately prior to such date. Successive adjustments in the Conversion Price shall be made whenever any event specified above shall occur. (D) Other Distributions. In case the Corporation shall fix a record date for making of a distribution to all holders of shares of its Common Stock of (i) shares of any class other than its Common Stock, (ii) evidences of indebtedness of the Corporation, (iii) assets (excluding cash dividends or distributions, or dividends or distributions referred to in Section (d)(6)(C) hereof), or (iv) rights or warrants (excluding those referred to in Section (d)(6)(A) hereof), in each such case the Conversion Price in effect immediately prior thereto shall be reduced immediately thereafter to the price determined by dividing (1) an amount equal to the difference resulting from (x) the number of shares of Common Stock outstanding on such record date multiplied by the Conversion Price per share on such record date, less (y) the fair market value (as determined by the Board of Directors, whose determination shall be conclusive) of said shares or evidences of indebtedness or assets or rights or warrants to be so distributed, by (2) the number of shares of Common Stock outstanding on such record date. Such adjustment shall be made successively whenever such a record date is fixed. In the event that such distribution is not so made, the Conversion Price then in effect shall be readjusted, effective as of the date when the Board of Directors determines not to distribute such shares, evidences of indebtedness, assets, rights or warrants, as the case may be, to the Conversion Price which would then be in effect if such record date had not been fixed. (7) De Minimis Adjustments. No adjustment to the Conversion Price (and, therefore, the Conversion Rate) shall be made if such adjustment would result in a change in the Conversion Price of less than $0.01, but any lesser adjustment shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustments so carried forward, shall amount to $0.01 or more. (8) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the Series E Preferred Stock such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series E Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall be insufficient to effect the conversion of all then outstanding shares of the Series E Preferred Stock, the Corporation shall take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. A-11 (9) Notices of Record Date. In the event of any taking by the Corporation of a record of the holders of any series or class of securities other than Series E Preferred Stock (A) for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution or (B) with respect to an Extraordinary Transaction (other than a tender offer) or any other action described in Section (d)(6)(C) or (D) hereof, the Corporation shall mail to each holder of Series E Preferred Stock, at least 10 days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or action, and the amount and character of such dividend, distribution or action; provided, however, that the failure to give such notice shall not impair the validity of such dividend, distribution, Extraordinary Transaction or other action. (e) REDEMPTION. (1) Optional Redemption. The Series E Preferred Stock is redeemable by the Corporation, in whole or in part, at any time or from time to time after issuance of the Series E Preferred Stock at the option of the Corporation, on at least 20 but not more than 90 days' written notice (the "Redemption Notice"). With respect to any such redemption, each share of Series E Preferred Stock will be redeemable at a price equal to the greater of (A) the then applicable Liquidation Value and (B) the Stated Value, plus the dividends that would have accrued on the Series E Preferred Stock in the event that no dividends were declared and paid by the Corporation for a period of three years from April 22, 2002 (the "Redemption Price"). The Redemption Price is payable in cash. Any holder of Series E Preferred Stock may, in lieu of receiving cash pursuant to this Section (e), exercise such holder's conversion rights pursuant to Section (d)(2) hereof by giving the Corporation a Conversion Notice no later than 10 days after the Corporation delivers the Redemption Notice. (2) Mandatory Redemption. On April 22, 2007, the Company must, at its option (A) redeem each share of Preferred Stock for a cash payment equal to the then applicable Liquidation Value or (B) convert each share of Series E Preferred Stock into a number of shares of Common Stock equal to the then Conversion Rate in accordance with the applicable provisions of Section (d). (f) PROTECTIVE PROVISIONS. In addition to any other rights provided by law, so long as any shares of Series E Preferred Stock are then outstanding, except where the vote or written consent of the holders of a greater number of shares is required by law or by another provision of the Articles of Incorporation, without first obtaining the affirmative vote or written consent of the holders of 66 2/3% of the total number of shares of Series E Preferred Stock outstanding, voting together as a single class, the Corporation shall not: (1) amend or repeal any provision of, or add any provision to, the Articles of Incorporation or the Bylaws, if such action would materially and A-12 adversely alter the preferences, rights, privileges or powers of, or restrictions provided for the benefit of, holders of Series E Preferred Stock; or (2) issue any shares of capital stock with preferences, limitations and relative rights that would be superior to or pari passu with the Series E Preferred Stock. (g) NOTICES. Any notice required by the provisions hereof to be given to the holders of shares of Series E Preferred Stock shall be deemed given (i) on the date of delivery, if such notice is hand-delivered to such holder or (ii) on the third business day following (and not including) the date on which such notice is either sent via express courier or deposited in the United States Mail, first-class, postage prepaid, and addressed to each holder of record at his address appearing on the books of the Corporation. Notice by any other means shall not be deemed effective until actually received. (h) DETERMINATION OF MARKET PRICE. In each case where these Articles of Amendment refer to the OTC-BB to calculate the market price of the Common Stock and at such time the Common Stock is not quoted on the OTC-BB, the following provisions shall apply: (1) If the Common Stock is listed on a national securities exchange, the average closing bid price shall be calculated according to the closing price of the Common Stock as reported by such exchange. (2) If the Common Stock is not listed on a national securities exchange but is quoted on any tier of Nasdaq, or any successor thereto, the average closing bid price shall be calculated according to the closing bid price of the Common Stock as reported by such tier of Nasdaq. (3) If the Common Stock is not listed on a national securities exchange or quoted on a tier of Nasdaq, the average closing bid price shall be calculated according to the closing price of the Common Stock as reported by the "Pink Sheets" published by The National Quotation Bureau, Inc., or any successor thereto, or as reported by any other electronic or non-electronic quotation system that publishes or reports daily quotations of the Common Stock. (4) If none of the foregoing apply, the average closing bid price shall be as determined in good faith by a resolution of the Board of Directors. * * * A-13 EX-99.S 6 g75868ex99-s.txt REVOLVING NOTE, DATED JULY 1, 1998 EXHIBIT S THE HUNTINGTON NATIONAL BANK REVOLVING NOTE ================================================================================ City Office Cleveland (66) Division 20-79 Branch 079-1120 [ ] Secured --------- ----- -------- Account No. 8291713758 Note No. [X] Unsecured ---------- ------------------ Account Name The Kindt Collins Company ------------------------------------------------------------------- [X] Corporation [ ] Partnership [ ] Individual/Proprietorship [ ] Other ----- Bank Approval Officer Initial Bank Closing Officer Initial ------- ------- ================================================================================ $5,000,000.00 Cleveland, Ohio July 1, 1998 ------- FOR VALUE RECEIVED, the undersigned, jointly and severally if more than one, promise to pay to the order of The Huntington National Bank (hereinafter called the "Bank", which term shall include any holder hereof) at such place as the Bank may designate or, in the absence of such designation, at any of the Bank's offices, the sum of Five Million and No/100 Dollars ($5,000,000.00), or so much thereof as shall have been advanced by the Bank at any time and not hereafter repaid (hereinafter called the "Principal Sum") together with interest as hereinafter provided, and payable at the time(s) and in the manner(s) hereinafter provided. The proceeds of the loan evidenced hereby may be advanced, repaid and readvanced, in partial amounts, during the term of this Note and prior to maturity. Each such advance shall be made to the undersigned upon receipt by the Bank of disbursement instructions and upon receipt, review and approval by the Bank of the undersigned's application for an advance, which shall be in such form and contain such information as the Bank shall from time to time prescribe. The Bank shall be entitled to rely on any oral or telephonic communication requesting an advance and/or providing disbursement instructions hereunder, which shall be received by it in good faith from anyone reasonably believed by the Bank to be the undersigned, or the undersigned's authorized agent. The undersigned agree that all advances made by the Bank will be evidenced by entries made by the Bank into its electronic data processing system and/or internal memoranda maintained by the Bank. The undersigned further agree that the sum or sums shown on the most recent printout from the Bank's electronic data processing system and/or such memoranda shall be rebuttably presumptive evidence of the amount of the Principal Sum and of the amount of any accrued interest. Each request for an advance shall constitute a warranty and representation by the undersigned that no event of default hereunder or under any related loan documents has occurred and is continuing and that no event or circumstance which would constitute such an event of default, but for the requirement that notice be given or time elapse or both, has occurred and is continuing. [ ] If marked, this Note is executed and any advances contemplated hereunder are to be made pursuant to a loan agreement dated ___________, 19__ and all the covenants, representations, agreements, terms and conditions contained therein, including, but not limited to, additional conditions of default and conditions to any partial advances, are incorporated herein as if fully rewritten. INTEREST Prior to maturity, interest will accrue on the unpaid balance of the Principal Sum at a variable rate of interest per annum, which shall change in the manner set forth below, equal to 1.85 percentage points in excess of the Daily Fluctuating LIBO Rate (as hereinafter defined), such sum to be rounded up, if necessary, to the nearest whole multiple of one-sixteenth of one percent (1/16 of 1.0%) per annum. If the obligation evidenced by this Note is not paid at maturity, whether maturity occurs by lapse of time, demand, acceleration or otherwise, the unpaid balance of the Principal Sum and any unpaid interest thereon shall, thereafter until paid, bear interest at a rate equal to 2.0 percentage points (which shall be 0.00 percentage points, unless completed) in excess of the variable rate of interest indicated above. All interest shall be calculated on the basis of a 360 day year for the actual number of days the Principal Sum or any part thereof remains unpaid. The amount of any payment shall first be applied to the payment of any interest which is due. As used herein, Daily Fluctuating LIBO Rate shall mean the rate obtained by dividing (1) the actual or estimated per annum rate, or the arithmetic mean of the per annum rates, of interest for deposits in U.S. dollars for one (1) month periods, as offered and determined by the Bank in its sole discretion based upon information which appears on page 3750, captioned British Bankers Assoc. Interest Settlement Rates, of Telerate, a service of Telerate Systems Incorporated (or such other page that may replace that page on that service for the purpose of displaying London interbank offered rates; or, if such service ceases to be available, such other reasonably comparable money rate service as the Bank may select) or upon information obtained from any other reasonable procedure, on each date the Daily Fluctuating LIBO Rate is determined; by (2) an amount equal to one minus the stated maximum rate (expressed as a decimal), if any, of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves) that is specified on each date the Daily Fluctuating LIBO Rate is determined by the Board of Governors of the Federal Reserve System (or any successor agency thereto) for determining the maximum reserve requirement with respect to eurocurrency funding (currently referred to as "Eurocurrency liabilities" in Regulation D of such Board) maintained by a member bank of such System, or any other regulations of any governmental authority having jurisdiction with respect thereto, all as conclusively determined by the Bank. Subject to any maximum or minimum interest rate limitation specified herein or by applicable law, the Daily Fluctuating LIBO Rate shall change automatically without notice to the undersigned immediately on each Banking Day with each change in the Daily Fluctuating LIBO Rate or the reserve requirement, as applicable, with any change thereto effective as of the opening of business on the day of the change. As used herein, Banking Day shall mean any day other than a Saturday or a Sunday on which banks are open for business in Columbus, Ohio, and on which banks in London, England, settle payments. In the event that the Bank reasonably determines that by reason of (1) any change arising after the date of this Note affecting the interbank eurocurrency market or affecting the position of the Bank with respect to such market, adequate and fair means do not exist for ascertaining the applicable interest rates by reference to which the Daily Fluctuating LIBO Rate then being determined is to be determined, (2) any change arising after the date of this Note in any applicable law or governmental rule, regulation or order (or any interpretation thereof, including the introduction of any new law or governmental rule, regulation or order), or (3) any other circumstance affecting the Bank or the interbank market (such as, but not limited to, official reserve requirements required by Regulation D of the Board of Governors of the Federal Reserve System), the Daily Fluctuating LIBO Rate plus the applicable spread shall not represent the effective pricing to the Bank of making advances based upon such rate, then, and in any such event, the ability of the undersigned to request advances based upon the Daily Fluctuating LIBO Rate shall be suspended until the Bank shall notify the undersigned that the circumstances causing such suspension no longer exist and, beginning on the date of such suspension and prior to maturity, interest will accrue on the Principal Sum at a variable rate of interest per annum, which shall change in the manner set forth below, equal to the Prime Commercial Rate (as hereinafter defined). In the event that on any date the Bank shall have reasonably determined that the making or continuation of advances based upon the Daily Fluctuating LIBO Rate has become unlawful by compliance by the Bank in good faith with any law, governmental rule, regulation or order, then, and in any such event, the Bank shall promptly give notice thereof to the undersigned. In such case, the ability of the undersigned to request an advance hereunder based upon the Daily Fluctuating LIBO Rate shall be terminated and, when required by law, interest will accrue on the Principal Sum prior to maturity at a variable rate of interest per annum, which shall change in the manner set forth below, equal to the Prime Commercial Rate. As used herein, Prime Commercial Rate shall mean the rate established by the Bank from time to time based on its consideration of economic, money market, business and competitive factors, and it is not necessarily the Bank's most favored rate. Subject to any maximum or minimum interest rate limitation specified herein or by applicable law, any variable rate of interest on the obligation evidenced hereby shall change automatically without notice to the undersigned immediately with each change in the Prime Commercial Rate. If during any time when the Principal Sum is accruing interest hereunder based upon the Prime Commercial Rate the obligation evidenced by this Note is not paid at maturity, whether maturity occurs by lapse of time, demand, acceleration or otherwise, the unpaid balance of the Principal Sum and any unpaid interest thereon shall, thereafter until paid, bear interest at a rate equal to ___ percentage points (which shall be 0.00 percentage points, unless completed) in excess of the Prime Commercial Rate. If, due to (1) the introduction of or any change in or in the interpretation of any law or regulation, (2) the compliance with any guideline or request from any central bank or other public authority (whether or not having the force of law), or (3) the failure of the undersigned to repay any advance when required by the terms of this Note, there shall be any loss or increase in the cost to the Bank of agreeing to make or making, funding or maintaining any advance hereunder based upon the Daily Fluctuating LIBO Rate, then the undersigned agree that the undersigned shall, from time to time, upon demand by the Bank, pay to the Bank additional amounts sufficient to compensate the Bank for such loss or increased cost. A certificate as to the amount of such loss or increase cost, submitted to the undersigned by the Bank, shall be conclusive evidence, absent manifest error, of the correctness of such amount. MANNER OF PAYMENT The Principal Sum shall be due and payable on demand and accrued interest shall be payable monthly, beginning on July 31, 1998, and at final maturity, whether by demand, acceleration or otherwise. LATE CHARGE Any installment or other payment not made within 10 days of the date such payment or installment is due shall be subject to a late charge equal to 5% of the amount of the installment or payment. SECURITY As security for the payment of the obligations evidenced hereby, and of all other obligations and liabilities of the undersigned, and each of them, to the Bank, whether now existing or hereafter arising, the undersigned hereby grant the Bank a security interest in the following property, including all substitutions and additions thereto, and the proceeds thereof (all, together with any other property in which the Bank shall at any time be given a security interest, hereinafter referred to as the "Collateral"): - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- If, at the time of payment and discharge hereof, any of the undersigned shall be then directly or contingently liable to the Bank as maker, indorser, surety or guarantor of any other Note, bill of exchange, or other instrument, then the Bank may continue to hold any of the Collateral as security therefor, even though this Note shall have been surrendered to the undersigned. The Bank shall not be bound to take any steps necessary to preserve any rights in the Collateral against prior parties. If any obligation evidenced by this Note is not paid when due, the Bank may, at its option, demand, sue for, collect or make any compromise or settlement it deems desirable with reference to the Collateral, and shall have the rights of a secured party under the law of the State of Ohio, and the undersigned shall be liable for any deficiency. DEFAULT Upon the occurrence of any of the following events: (1) the undersigned fails to pay any installment when due hereunder or to perform any obligation of the undersigned to the Bank; (2) the undersigned fails to do all things necessary to preserve and maintain the value and collectibility of the Collateral; (3) any event occurs and continues which constitutes a default by any of the undersigned under any other obligation to or agreement with the Bank; (4) the Collateral declines in value or becomes unsatisfactory to the Bank and the undersigned fails to furnish immediately upon demand additional Collateral satisfactory to the Bank; (5) any guarantor revokes its guaranty, or any event occurs and continues which constitutes a default by any guarantor under its guaranty; (6) the undersigned fails to furnish true and complete financial statements from time to time on request of the Bank; (7) the death or dissolution of any of the undersigned, or any indorser, surety, accommodation party or guarantor; (8) any representation, warranty or other information given to the Bank by any of the undersigned, or by an indorser, surety, accommodation party or guarantor proves to be false, untrue or misleading; or (9) the Bank for any reason deems itself insecure with respect to the obligations evidenced hereby; then the Bank may, at its option, without notice or demand, accelerate the maturity of the obligations evidenced hereby, which obligations shall become immediately due and payable and the undersigned shall no longer have the right to receive advances or readvances hereunder. In the event the Bank shall institute any action for the enforcement or collection of the obligations evidenced hereby, the undersigned agree to pay all costs and expenses of such action, including reasonable attorneys' fees, to the extent permitted by law. GENERAL PROVISIONS All of the parties hereto, including the undersigned, and any indorser, surety, accommodation party or guarantor, hereby: (1) severally waive presentment, notice of dishonor, protest, notice of protest, and diligence in bringing suit against any party hereto; (2) consent that, without discharging or modifying the duties of any of them and without notice, the Bank may (A) extend the time of payment an unlimited number of times before or after maturity, (B) grant any other indulgence at any time and from time to time to any party hereto, (C) delay in exercising or omit to exercise any right against, or delay in taking or omit to take any action to collect from or pursue the Bank's remedies against, any party hereto, (D) release or modify any collateral, security or guaranties; and (3) severally waive any claim, right or remedy which such party may now have or hereafter acquire against any other party or parties hereto that arises hereunder and/or from the performance by such party hereunder including, without limitation, any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification or participation in any claim, right or remedy of the Bank against the other party or parties, or any security which the Bank now has or hereafter acquires, whether such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise. The Bank shall not be required to pursue any party hereto, including any guarantor, or to exercise any rights against any Collateral herefor before exercising any other such rights. The obligations evidenced hereby may from time to time be evidenced by another note or notes given in substitution, renewal or extension hereof. Any security interest or mortgage which secures the obligations evidenced hereby shall remain in full force and effect notwithstanding any such substitution, renewal, or extension. No waiver of any term or condition of this Note shall be effective unless in writing and signed by the party giving or granting the waiver. No amendment of any term or condition of this Note shall be effective unless in writing and signed by the undersigned and the Bank. No failure or delay on the part of the Bank in exercising any right, power or privilege under this Note, related loan documents or law nor any course of dealing, shall operate as a waiver of such right, power or privilege or preclude any other or further exercise thereof or of any other right, power or privilege. The captions used herein are for reference only and shall not be deemed a part of this Note. If any of the terms or provisions of this Note shall be deemed unenforceable, the enforceability of the remaining terms and provisions shall not be affected. This Note shall be governed by and construed in accordance with the law of the State of Ohio. The undersigned agree that, to the extent that any of the undersigned make a payment or payments to the Bank, or the Bank receives any proceeds of Collateral, which payment or payments or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to any of the undersigned, its estate, trustee, receiver or any other party, including without limitation any guarantor, under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such payment or repayment, the obligations under this Note or the part thereof which has been paid, reduced or satisfied by such amount shall be reinstated and continued in full force and effect as of the date such initial payment, reduction or satisfaction occurred. WARRANT OF ATTORNEY Each of the undersigned authorizes any attorney at law to appear in any Court of Record in the State of Ohio or in any other state or territory of the United States of America after the above indebtedness becomes due, whether by acceleration or otherwise, to waive the issuing and service of process, and to confess judgment against any one or more of the undersigned in favor of the Bank for the amount then appearing due together with costs of suit, and thereupon to waive all errors and all rights of appeal and stays of execution. No such judgment or judgments against less than all of the undersigned shall be a bar to a subsequent judgment or judgments against any one or more of the undersigned against whom judgment has not been obtained hereon, this being a joint and several warrant of attorney to confess judgment. The attorney at law authorized hereby to appear for each of the undersigned may be an attorney at law also representing the Bank, and each of the undersigned hereby expressly waive any conflict of interest that may exist by virtue of such representation. WAIVER OF RIGHT TO TRIAL BY JURY EACH OF THE UNDERSIGNED ACKNOWLEDGES THAT, AS TO ANY AND ALL DISPUTES THAT MAY ARISE BETWEEN ANY OF THE UNDERSIGNED AND THE BANK, THE COMMERCIAL NATURE OF THE TRANSACTION OUT OF WHICH THIS NOTE ARISES MAKES ANY SUCH DISPUTE UNSUITABLE FOR TRIAL BY JURY. ACCORDINGLY, EACH OF THE UNDERSIGNED HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY AS TO ANY AND ALL DISPUTES THAT MAY ARISE RELATING TO THIS NOTE OR TO ANY OF THE INSTRUMENTS OR DOCUMENTS EXECUTED IN CONNECTION HEREWITH. Borrower: The Kindt Collins Company By: /s/ Leo L. Kovachic ------------------------------ Name: Leo L. Kovachic ---------------------------- Title: President --------------------------- WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE. EX-99.T 7 g75868ex99-t.txt PROMISSORY NOTE, DATED APRIL 22, 2002 EXHIBIT T --------- PROMISSORY NOTE WITH AMORTIZATION SCHEDULE $1,000,000.00 Cleveland, Ohio April 22, 2002 FOR VALUE RECEIVED, the undersigned, ELMWOOD PARTNERS II, an Ohio general partnership (the "Maker"), promises to pay to the order of THE KINDT-COLLINS COMPANY, a Delaware corporation (hereinafter with its assignees referred to as the "Payee"), the principal sum of One Million Dollars ($1,000,000.00), together with the interest on the unpaid principal balance at the nominal annual rate of 5.54% per annum. The principal amount of this Note shall be payable in semi-annual installments together with interest accrued on the outstanding principal balance on each June 30 and December 31 as provided in the Amortization Schedule attached hereto until the principal amount and interest have been paid in full. The Maker shall have the right to prepay all or any part of the principal sum of this Note, without penalty, at any time or times together with interest accrued on the prepaid principal amount to the date of such prepayment. All payments of principal and interest shall be made at such place as the Payee shall designate in writing to the Maker from time to time. In the event the Maker shall (1) fail to make any payment of principal and/or interest due hereunder on the date or dates of payment called for hereunder, and such non-payment shall not have been made within fifteen (15) days: (2) be subject to the entry of a decree or order by a court having jurisdiction in the premises adjudging the Maker a bankrupt or insolvent, which decree or order shall continue undischarged or unstayed for a period of thirty (30) days; (3) be subject to the institution of proceedings to be adjudicated a voluntary bankrupt, or consent to the filing of a bankruptcy proceeding against it, or file a petition or answer or consent seeking reorganization under federal bankruptcy laws or any other similar applicable state law, or consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of all or substantially all of its property, or make an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due (each constituting an "event of default"), then the Payee may declare the entire remaining indebtedness owing hereunder, including accrued interest, to become immediately due and payable by notice in writing given to the Maker, which notice shall be effective upon receipt by the Maker. By accepting this Note the Payee represents, warrants and agrees that it is acquiring this Note for investment purposes and not with a view to the distribution of any portion thereof. WITNESS the due execution hereof, as of the day and year first written above. ELMWOOD PARTNERS II By: ---------------------------------- Jon A. Lindseth, Managing Partner ELMWOOD PARTNERS II Payment of Note Interest Compound Period Semiannual Nominal Annual Rate 5.5400% Periodic Rate 2.7700% Daily Rate 0.0152% CASH FLOW DATA
- ------------------------------------------------------------------------------------------------------------ EVENT START DATE AMOUNT NUMBER PERIOD END DATE - ------------------------------------------------------------------------------------------------------------ Loan 04/22/2002 1,000,000.00 1 Loan -- 2 Payment 06/30/2003 50,000.00 20 Semiannual 12/31/2012 AMORTIZATION SCHEDULE -- NORMAL AMORTIZATION 4/22/02 PAYMENT INTEREST PRINCIPAL BALANCE - ------------------------------------------------------------------------------------------------------------ Loan 04/22/2002 1,000,000.00 Loan -- 2002 Totals -- -- 1,000,000.00 1 06/30/2002 10,488.00 10,488.00 1,000,000.00 2 12/31/2002 27,700.00 27,700.00 1,000,000.00 2002 Totals 3 06/30/2003 77,700.00 27,700.00 50,000.00 950,000.00 4 12/31/2003 76,315.00 26,315.00 50,000.00 900,000.00 2003 Totals 5 06/30/2004 74,930.00 24,930.00 50,000.00 850,000.00 6 12/31/2004 73,545.00 23,545.00 50,000.00 800,000.00 2004 Totals 7 06/30/2005 72,160.00 22,160.00 50,000.00 750,000.00 8 12/31/2005 70,775.00 20,775.00 50,000.00 700,000.00 2005 Totals 9 06/30/2006 69,390.00 19,390.00 50,000.00 650,000.00 10 12/31/2006 68,005.00 18,005.00 50,000.00 600,000.00 2006 Totals 11 06/30/2007 66,620.00 16,620.00 50,000.00 550,000.00 12 12/31/2007 65,235.00 15,235.00 50,000.00 500,000.00 2007 Totals 13 06/30/2008 63,850.00 13,850.00 50,000.00 450,000.00 14 12/31/2008 62,465.00 12,465.00 50,000.00 400,000.00 2008 Totals 15 06/30/2009 61,080.00 11,080.00 50,000.00 350,000.00
Page 1 of 2 ELMWOOD PARTNERS II Payment of Note Interest Compound Period Semiannual Nominal Annual Rate 5.5400% Periodic Rate 2.7700% Daily Rate 0.0152%
CASH FLOW DATA - ---------------------------------------------------------------------------------------------------------------------------------- EVENT START DATE AMOUNT NUMBER PERIOD END DATE - ---------------------------------------------------------------------------------------------------------------------------------- Loan 04/22/2002 1,000,000.00 1 Loan -- 2 Payment 06/30/2003 50,000.00 20 Semiannual 12/31/2012
AMORTIZATION SCHEDULE - NORMAL AMORTIZATION 16 12/31/2009 59,695.00 9,695.00 50,000.00 300,000.00 2009 Totals 17 06/30/2010 58,310.00 8,310.00 50,000.00 250,000.00 18 12/31/2010 56,925.00 6,925.00 50,000.00 200,000.00 2010 Totals 19 06/30/2011 55,540.00 5,540.00 50,000.00 150,000.00 20 12/31/2011 54,155.00 4,155.00 50,000.00 100,000.00 2011 Totals 21 06/30/2012 52,770.00 2,770.00 50,000.00 50,000.00 22 12/31/2012 51,385.00 1,385.00 50,000.00 1,329,038.00 329,038.00 1,000,000.00
Page 2 of 2 EX-99.U 8 g75868ex99-u.txt AGREEMENT WITH RESPECT TO JOINT FILING EXHIBIT U AGREEMENT Pursuant to Securities Exchange Act Rule 13d-1(k)(1)(iii) The undersigned hereby agree that Amendment No. 9 to the Schedule 13D, filed pursuant to the Securities Exchange Act of 1934 and executed by each of the undersigned of even date herewith, is filed on behalf of each of the undersigned. DULY EXECUTED this 29th day of April, 2002. AER PARTNERS THE KINDT-COLLINS COMPANY By: /s/ Jon A. Lindseth By: /s/ Jon A. Lindseth ------------------------------- ------------------------------- Jon A. Lindseth, Trustee under Jon A. Lindseth, Chairman Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified, Managing Partner BATTERY PARTNERS By: /s/ Jon A. Lindseth JON A. LINDSETH, TRUSTEE UNDER ------------------------------- JON A. LINDSETH TRUST AGREEMENT Jon A. Lindseth, under DATED APRIL 25, 1986, AS MODIFIED Jon A. Lindseth Trust Agreement dated April 25, 1986, By: /s/ Jon A. Lindseth as modified, Managing Partner ------------------------------- Jon A. Lindseth, Trustee under Jon A. Lindseth Trust Agreement /s/ Jon A. Lindseth dated April 25, 1986, as ---------------------------------- modified Jon A. Lindseth ELMWOOD PARTNERS II By: /s/ Jon A. Lindseth ------------------------------- Jon A. Lindseth, Trustee under Jon A. Lindseth Trust Agreement dated April 25, 1986, as modified, Managing Partner -----END PRIVACY-ENHANCED MESSAGE-----