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Exhibit 10.1
AMENDED AND RESTATED WARRANT AGREEMENT
AMENDED AND RESTATED WARRANT AGREEMENT (the " Amended
Agreement "), dated December 16, 2008 by and between
ACTION PRODUCTS INTERNATIONAL, INC. , a Florida corporation
(the " Company "), and REGISTRAR AND TRANSFER COMPANY
, as Warrant Agent (the " Warrant Agent ").
WHEREAS, the Company and the Warrant Agent entered into a
Warrant Agreement (the " Original Agreement ") dated
June 12, 2003; and
WHEREAS, each record holder of the Company’s common stock,
$0.001 par value, (the " Common Stock ") on the record date
of June 12, 2003 (the " Record Date "), received one
(1) warrant (a " Warrant ") to purchase an additional
share of the Company’s Common Stock for each one
(1) share of Common Stock (a " Common Share ") held on
the Record Date at an exercise price as determined in the Original
Agreement; and
WHEREAS, the Warrants were exercisable until June 11, 2004,
unless earlier redeemed as provided in the Original Agreement;
and
WHEREAS, the Company approved extending the expiration date to
December 31, 2010, unless earlier redeemed as provided in the
Original Agreement; and
WHEREAS, the Company approved reducing the Exercise Price to
$1.00 per Common Share from the Amended Effective Date to through
December 31, 2010, unless earlier redeemed as provided in this
Amended Agreement; and
WHEREAS, the Company desires the Warrant Agent to act on behalf
of the Company, and the Warrant Agent is willing to so act, in
connection with the issuance, registration, transfer and exchange
of certificates representing the Warrants and the exercise of the
Warrants; and
WHEREAS, the Company and the Warrant Agent desire to amend and
restated the Original Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining
the terms and provisions of the Warrants and the certificates
representing the Warrants and the respective rights and obligations
thereunder of the Company, the holders of certificates representing
the Warrants and the Warrant Agent, the parties hereto agree as
follows:
1. Definitions . Capitalized terms used herein and not
otherwise defined shall have the following meanings, unless the
context shall otherwise require:
" Amended Effective Date " shall mean December 16,
2008.
" Corporate Office " shall mean the office of the Warrant
Agent (or its successor) at which at any particular time its
principal business shall be administered, which office is located
on the date hereof at 10 Commerce Drive, Cranford, New Jersey
07016.
" Effective Date " shall mean July 31, 2003.
" Exercise Date " shall mean as to any Warrant, the date
on which the Warrant Agent shall have received both (a) the
Warrant Certificate representing such Warrant, with the Exercise
Form thereon duly executed by the Registered Holder hereof with
such Registered Holder’s signature guaranteed, and
(b) payment in cash or by bank or cashier’s check made
payable to the Warrant Agent for the account of the Company, of the
amount in lawful money of the United States of America equal to the
applicable Exercise Price.
" Exercise Price " shall mean $1.00 per
Common Share, subject to modification and adjustment as provided in
Section 8.
" Expiration Date " shall mean, unless the Warrants are
redeemed as provided in Section 9 hereof prior to such date,
5:00 p.m. (Eastern Time) December 31, 2010.
" Registered Holder " shall mean the person in whose name
any certificate representing the Warrants shall be registered on
the books maintained by the Warrant Agent pursuant to
Section 6.
" Warrant Certificate " shall mean a certificate
representing each of the Warrants substantially in the form annexed
to the Original Agreement as Exhibit A. The outstanding Warrant
Certificates shall be deemed amended consistent with the amendments
as provided herein.
2. Warrants and Issuance of Warrant Certificates .
(a) Each Warrant shall entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase at the
Exercise Price therefor from the Effective Date until the
Expiration Date one (1) Common Share upon the exercise
thereof, subject to modification and adjustment as provided in
Section 8.
(b) From time to time, up to the Expiration Date, the Warrant
Agent shall countersign and deliver Warrant Certificates in
required denominations of one or whole number multiples thereof to
the person entitled thereto in connection with any transfer or
exchange permitted under this Amended Agreement. No Warrant
Certificates shall be issued except (i) Warrant Certificates
initially issued hereunder, (ii) those issued on or after the
Effective Date, upon the exercise of fewer than all Warrants
represented by any Warrant Certificate, to evidence any unexercised
Warrants held by the exercising Registered Holder,
(iii) Warrant Certificates issued upon any transfer or
exchange of Warrants, (iv) Warrant Certificates issued in
replacement of lost, stolen, destroyed or mutilated Warrant
Certificates pursuant to Section 7, and (v) at the option
of the Company, Warrant Certificates in such form as may be
approved by its Board of Directors, to reflect any adjustment or
change in the Exercise Price, the number of shares of Common Shares
purchasable upon exercise of the Warrants or the redemption price
therefor made pursuant to Section 9 hereof.
3. Form and Execution of Warrant Certificates . The
Warrant Certificates shall be substantially in the form annexed to
the Original Agreement and may have such letters, numbers or other
marks of identification or designation and such legends, summaries
or endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the
provisions of this Amended Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or
market on which the Warrants may be listed, or to conform to usage.
The Warrant Certificates shall be dated the date of issuance
thereof (whether upon initial issuance, transfer, exchange or in
lieu of mutilated, lost, stolen or destroyed Warrant Certificates).
Warrant Certificates shall be executed on behalf of the Company by
its Chairman of the Board, President or any Vice President and by
its Treasurer or an Assistant Treasurer or its Secretary or an
Assistant Secretary, by manual signatures or by facsimile
signatures printed thereon, and shall have imprinted thereon a
facsimile of the Company’s seal. Warrant Certificates shall
be manually countersigned by the Warrant Agent and shall not be
valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer of the Company before
the date of issuance of the Warrant Certificates or before
countersignature by the Warrant Agent and issue and delivery
thereof, such Warrant Certificates, nevertheless, may be
countersigned by the Warrant Agent, issued and delivered with the
same force and effect as though the person who signed such Warrant
Certificates had not ceased to be such officer of the Company.
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4. Exercise .
(a) Warrants may be exercised commencing at any time on or after
the Effective Date, but not after the Expiration Date, upon the
terms and subject to the conditions set forth herein and in the
applicable Warrant Certificate. A Warrant shall be deemed to have
been exercised immediately prior to the close of business on the
Exercise Date, provided that the Warrant Certificate representing
such Warrant, with the Exercise Form thereon duly executed by the
Registered Holder thereof with such Registered Holder’s
signature guaranteed, together with payment in cash or by bank or
cashier’s check made payable to the order of the Company, of
an amount in lawful money, of the United States of America equal to
the applicable Exercise Price, has been received in good funds by
the Warrant Agent or the Company. If received by the Company, the
Company shall deliver the original Warrant Certificate and Exercise
Form to the Warrant Agent as soon as practicable. The person
entitled to receive the securities deliverable upon such exercise
shall be treated for all purposes as the holder of such securities
as of the close of business on the Exercise Date. As soon as
practicable on or after the Exercise Date and in any event within
five business days after such date, the Warrant Agent on behalf of
the Company shall cause to be issued to the person or persons
entitled to receive the same a certificate or certificates for the
Common Shares deliverable upon such exercise, and the Warrant Agent
shall deliver the same to the person or persons entitled thereto.
Upon the exercise of Warrants, the Warrant Agent shall promptly
notify the Company in writing of such fact and of the number of
securities delivered upon such exercise and shall cause all
payments of an amount in cash or by check made payable to the order
of the Company, equal to the Exercise Price, to be deposited
promptly in the Company’s bank account.
(b) If any Warrants are exercised which exercise was solicited
by a broker-dealer with whom the Company agreed in writing to pay a
solicitation fee for exercise of the Warrant (a "
Broker-Dealer "), then the soliciting Broker-Dealer shall be
entitled to receive from the Company upon exercise of each of the
Warrants so exercised, a fee of not less than six percent
(6%) and not greater than ten percent (10%), the exact
percentage to be determined by a separate agreement between the
Company and the Broker-Dealer, of the aggregate price of the
Warrants so exercised (the " Exercise Fee "); provided,
that, at the time of exercise, (i) the market price of the
Company’s Common Shares is equal to or greater than the
Exercise Price, (ii) the Broker-Dealer is a member of
Financial Industry Regulation Authority, Inc. (iii) the
Warrant is not held in a discretionary account, unless prior
specific written approval for exercise has been received by the
Broker-Dealer from its customer, (iv) disclosure of the
compensation arrangement is made in documents provided to the
holders of the Warrants, and (v) the solicitation of the
Warrant is not in violation of Regulation M promulgated under the
Securities Exchange Act of 1934, as amended. Within five
(5) days after the end of each month, the Warrant Agent will
notify the Company of each Warrant Certificate which has been
properly completed for exercise by holders of Warrants during the
last month. The Warrant Agent will provide the Company with such
information, in connection with the exercise of each Warrant, as
the Company shall reasonably request. In the event that an Exercise
Fee is paid to a Broker-Dealer with respect to a Warrant which was
not properly completed for exercise or in respect of which such
Broker-Dealer is not entitled to an Exercise Fee, such
Broker-Dealer will return such Exercise Fee to the Company.
(c) The Company shall not be obligated to issue any fractional
share interests or fractional warrant interests upon the exercise
of any Warrant or Warrants, nor shall it be obligated to issue
scrip or pay cash in lieu of fractional interests. Any fractional
interest shall be rounded up to the nearest whole figure.
(d) Anything in this Section 4 notwithstanding, no Warrant
will be exercisable unless at the time of exercise the Company has
filed with the Securities and Exchange Commission, and there shall
be then effective, a registration statement under the 1933 Act
covering the offer and sale of the Common Shares issuable upon
exercise of such Warrant and such offer and sale of the Common
Shares have been so registered or qualified or deemed to be exempt
under the securities laws of the state of residence of the holder
of such Warrant.
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(e) In addition, if it is required by law and
upon instruction by the Company, the Warrant Agent will deliver to
each Registered Holder a prospectus that complies with the
provisions of Section 5 of the 1933 Act and the Company agrees
to supply the Warrant Agent with a sufficient number of
prospectuses to effectuate that purpose.
5. Reservation of Shares; Payment of Taxes .
(a) The Company covenants that it will at all times reserve and
keep available out of its authorized Common Stock, solely for the
purpose of issuance upon exercise of warrants, such number of
shares of Common Stock as shall then be issuable upon the exercise
of all outstanding Warrants. The Company covenants that all Common
Shares which shall be issuable upon exercise of the Warrants shall,
at the time of delivery thereof, be duly and validly issued and
fully paid and nonassessable and free from all preemptive or
similar rights, taxes, liens and charges with respect to the
issuance thereof.
(b) The Company shall pay all documentary, stamp or similar
taxes and other governmental charges that may be imposed with
respect to the issuance of Warrants, or the issuance or delivery of
any Common Shares upon exercise of the Warrants; provided, however,
that if Common Shares are to be delivered in a name other than the
name of the Registered Holder of the Warrant Certificate
representing any Warrant being exercised, then no such delivery
shall be made unless the person requesting the same has paid to the
Warrant Agent the amount of transfer taxes or charges incident
thereto, if any.
6. Exchange and Registration of Transfer .
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants or
may be transferred in whole or in part. Warrant Certificates to be
so exchanged shall be surrendered to the Warrant Agent at its
Corporate Office, and, upon satisfaction of the terms and
conditions hereof, the Company shall execute and the Warrant Agent
shall countersign, issue and deliver in exchange therefor the
Warrant Certificate or Certificates which the Registered Holder
making the exchange shall be entitled to receive.
(b) The Warrant Agent shall keep, at its Corporate Office, books
in which, subject to such reasonable regulations as it may
prescribe, it shall register Warrant Certificates and the transfer
thereof. Upon due presentment for registration of transfer of any
Warrant Certificate at such office, the Company shall execute and
the Warrant Agent shall issue and deliver to the transferee or
transferees a new Warrant Certificate or Certificates representing
an equal aggregate number of Warrants.
(c) With respect to any Warrant Certificates presented for
registration of transfer, or for exchange or exercise, the Exercise
Form or Assignment Form, as the case may be, on the reverse thereof
shall be duly endorsed or be accompanied by a written instrument or
instruments of transfer and subscription, in form satisfactory to
the Company and the Warrant Agent, duly executed by the Registered
Holder thereof with such Registered Holder’s signature
guaranteed.
(d) A service charge may be imposed by the Warrant Agent for any
exchange, registration or transfer of Warrant Certificates.
(e) All Warrant Certificates surrendered for exercise or for
exchange shall be promptly canceled by the Warrant Agent.
(f) Prior to due presentment for registration or transfer
thereof, the Company and the Warrant Agent may deem and treat the
Registered Holder of any Warrant Certificate as the absolute owner
thereof of each Warrant represented thereby (notwithstanding any
notations of ownership or writing thereon made by anyone other than
the Company or the Warrant Agent) for all purposes and shall not be
affected by any notice to the contrary.
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7. Loss or Mutilation . Upon receipt by
the Company and the Warrant Agent of evidence satisfactory to them
of the ownership of and the loss, theft, destruction or mutilation
of any Warrant Certificate and (in the case of loss, theft or
destruction) of indemnity satisfactory to them, and (in case of
mutilation) upon surrender and cancellation thereof, the Company
shall execute and the Warrant Agent shall countersign and deliver
in lieu thereof a new Warrant Certificate representing an
equa
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