EXHIBIT 10.3
STOCK PURCHASE AGREEMENT
NOW COMES Xxxx X. Xxxxxx (hereinafter referred to as "Purchaser") and
Trans-Industries, Inc. (hereinafter referred to as the "Company"), on May 23,
2005, to enter into the following agreement effective as of the 16th day of
March, 2005.
BACKGROUND
A. Purchaser served as the Chief Executive Officer of the Company for
several years.
B. Purchaser is or may be receiving a roll over distribution from the
Company's Profit Sharing Plan consisting of cash, securities or a
combination of both.
C. Purchaser desires to purchase from the Company its Common Stock, and
the Company does agree to sell to Purchaser Common Stock.
NOW THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties do hereby agree as follows; to wit:
I. PURCHASE OF SHARES OF COMMON STOCK
1.1 Cumulative Purchase Price. The Company agrees to sell, and Purchaser agrees
to purchase the Company's Common Stock (the "Common Stock") having a cumulative
value equivalent to all of the cash proceeds distributed to Purchaser or his
individual retirement account ("XXX") from the Company's Profit Sharing Plan,
less the sum of Fifty-Nine Thousand ($59,000.00) Dollars.
1.2 Share Purchase Price. The per share purchase price of the Common Stock sold
hereunder shall be the higher of: (1) the average purchase price of the stock
as listed on the Nasdaq exchange, or other equivalent exchange, for the 30-day
period preceding the Closing Date, (2) the listed closing price on the day
before the Closing Date, or (3) in the event the purchase will equal or exceed
20% or more of the Common Stock or voting power previously outstanding, the per
share book value of the Common Stock. If the Common Stock is no longer listed or
traded on the NASDAQ exchange, the Company and Purchaser will mutually agree on
the per share purchase price of the Common Stock. If the Company and Purchaser
do not mutually agree on a per share purchase price of the Common Stock within
ten days following the occurrence of a Triggering Event (as defined below), the
per share purchase price will mean the Appraised Value (as defined below).
"Triggering Event" means a payment, distribution or rollover from the Company's
Profit Sharing Plan to Purchaser or an affiliate of Purchaser. "Appraised Value"
means the per share price for Common Stock determined by an appraisal (an "ERISA
Appraisal") dated within 30 days of a Triggering Event that is conducted in
connection with the Agreement for Management Succession, Resignation, Severance
of CEO, and other Miscellaneous Matters dated as of the date hereof by and
between the Company and Purchaser. If no ERISA Appraisal exists that is dated
within 30 days of a Triggering Event, "Appraised Value" will mean the fair
market value per share price for the Common Stock determined by an
independent appraiser qualified to appraise the Common Stock (the "Appraiser").
The Appraiser will be mutually selected by the Company and Purchaser. If the
Company and Purchaser fail to agree on the Appraiser within one business day,
each will name an independent qualified appraiser and instruct those two
appraisers to, within five business days, name a third appraiser who will be the
Appraiser determine the Appraised Value. The Company and Purchaser will share
equally in the costs of the Appraiser and determining the Appraised Value. The
determination of the Appraised Value will be final and binding on the parties.
1.3 Use of Proceeds. The Company shall use the proceeds from the sale of the
Common Stock to redeem, or pay accrued but unpaid interest on, the Series A
Preferred Stock held in the Company's Profit Sharing account to the fullest
extent possible.
II. RIGHT OF FIRST REFUSAL
2.1 Right of First Refusal. The Common Stock acquired hereunder shall be subject
to the terms and conditions of the Amended Right of First Refusal Agreement
entered into contemporaneously herewith, and the terms and conditions of said
Agreement are incorporated herein.
III. STOCK RESTRICTION AGREEMENT
3.1 Stock Restriction Agreement. The Common Stock acquired hereunder shall be
subject to the terms and conditions of the Stock Restriction Agreement among the
parties herein and Xxxxxx Xxxxxx dated effective as of March 16, 2005 and the
terms and conditions of said Agreement are incorporated herein.
IV. REGISTRATION RIGHTS
4.1 Registration Rights. The Company shall, within a reasonable time, grant
registration rights to the Purchaser with regard to the Common Stock purchased
by him hereunder. The term "registration" refers to a registration effected by
preparing and filing a registration statement or similar document in compliance
with the Securities Act of 1933, as amended (the "Securities Act"), and the
declaration or ordering of effectiveness of such registration statement or
document. The obligation to register shall be null and void in the event that
the Company's Common Stock is delisted from the national securities exchange or
automated quotation system upon which shares of the Common Stock are currently
listed.
V. THE CLOSING ACTIONS
5.1 The Closing. The consummation of the purchase and sale of the Common Stock
and the other transactions and deliveries contemplated by this Agreement (the
"Closing") shall take place at the office of the Company located at 0000 Xxxxxx
Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000 on the first business day following a
Triggering Event or as soon as practicable thereafter (the "Closing Date").
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VI. REPRESENTATIONS AND WARRANTIES
Purchaser represents and warrants to the Company that:
6.1 he is an "accredited investor" within the meaning of Rule 501 promulgated
under the Securities Act of 1933 (the "Securities Act");
6.2 he has sufficient knowledge and experience in investing in companies similar
to the Company so as to be able to evaluate the risks and merits of an
investment in the Company and he is able financially to bear the risks thereof;
6.3 he has had an opportunity to discuss the Company's business, management and
financial affairs with the Company's management;
6.4 he is aware that:
(a) The Common Stock represents "restricted securities" as that term is
defined in Rule 144 promulgated under the act;
(b) The Common Stock cannot be sold or transferred without registration
under the Securities Act and any applicable state securities laws
(the "State Acts"), unless Purchaser establishes to the reasonable
satisfaction of the Company that such registration is not necessary;
(c) any certificates which may be issued to evidence the Common Stock
shall bear the following legend, in addition to any other legend
required by law:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), or any
state securities acts and may not be sold, transferred or otherwise
disposed of unless a registration statement under the Act and any
applicable state securities acts with respect to such shares is
effective or unless the holder establishes to the reasonable
satisfaction of the Company that such shares may be sold without
registration under the Act and such acts."
6.5 he is acquiring the Common Stock for his own account and not on behalf of
any other person;
6.6 he is acquiring the Common Stock for investment and not with a view to or
for sale in connection with any distribution of the Common Stock or with the
intent to divide his participation with others or resell or otherwise
participate in a distribution of the Common Stock, directly or indirectly;
6.7 neither he no anyone acting on his behalf has paid or will pay any
commission or other remuneration to any person in connection with the purchase
of Common Stock; and
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6.8 he will not sell the Common Stock (i) without registration under the Act and
the applicable State Acts, unless he establishes to the satisfaction of the
Company that such registration is not necessary, or (ii) without compliance with
any restrictions imposed by the Act or any applicable State Acts.
VII. SPECIAL PERFORMANCE
7.1 In connection with any action or proceeding to enforce the terms of this
Agreement, the parties acknowledge that there will not be an adequate remedy at
law and failure to perform by either party will cause irreparable harm.
Therefore, the parties consent and agree that each shall be entitled to specific
performance of the obligations of this Agreement.
VIII. MISCELLANEOUS PROVISIONS
8.1 Counterparts; Signature Pages. This Agreement may be executed and delivered
in multiple counterparts, each of which will be deemed an original, and all of
which together will constitute one and the same instrument. This Agreement may
be executed and delivered by facsimile and with separate signature pages with
the same effect as though all parties had executed and delivered the same
original signature page.
8.2 Entire Agreement. This Agreement constitutes the exclusive statement of the
agreement between the parties concerning the subject matter hereof, and
supersedes all other agreements, oral or written, between the parties concerning
such subject matter. All negotiations among the parties hereto are superseded by
this Agreement, and there are no representations, warranties, promises,
understandings or agreements, oral or written, in relation to the subject matter
hereof between the parties other than those expressly set forth herein.
8.3 Amendments; Waivers. No amendment or modification of this Agreement or any
provision hereof, including the provisions of this sentence, will be effective
or enforceable as against a party hereto unless made in a written instrument
which specifically references this Agreement and which is signed by the party
against whom enforcement of such amendment or modification is sought.
8.4 Binding Effect. This Agreement, when executed and delivered by both parties
hereto, will be binding upon and will inure to the benefit of each of the
parties and their respective successors, legal representatives and assigns.
8.5 Third Parties. No provision of this Agreement is intended or may be
construed to confer on any person, other than the parties hereto and their
respective successors and assigns, any rights hereunder.
8.6 Interpretation. In each place where it is used in this Agreement, the word
"including" is intended and shall be construed to mean "including but not
limited to". The section and paragraph headings in this Agreement are intended
only for convenience of reference and shall
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be disregarded in interpreting the provisions of this Agreement. Whenever the
context requires in this Agreement, the masculine gender includes the feminine
or neuter, the neuter gender includes the masculine or feminine, the singular
number includes the plural, and the plural number includes the singular.
8.7 Governing Law. This Agreement and the rights and obligations of the parties
hereunder will be governed by and construed in accordance with the laws of the
State of Michigan applicable to contracts made and to be performed entirely
within Michigan and without regard to the conflicts-of-laws provisions thereof.
AGREED TO AND ACCEPTED BY:
/s/ Xxxx X. Xxxxxx
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XXXX X. XXXXXX
AGREED TO AND ACCEPTED BY
TRANS-INDUSTRIES, INC.
BY: /s/ Xxxxxxx Xxxxx
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XXXXXXX XXXXX
Its Chief Operating Officer
