FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT
This First Amendment to the Asset Purchase Agreement (the "First
Amendment") is made as of the 28th day of February, 2000 by and among CLARION
TECHNOLOGIES, INC., a Delaware corporation ("Clarion"), CLARION-DRAKE
ACQUISITION, INC., a Michigan corporation ("Purchaser"), DRAKE PRODUCTS
CORPORATION, a Michigan corporation ("Company"), and XXXXXXX X. XXXXXXX, and
XXXXXXX X. XXXXXX ("Shareholders").
WHEREAS, the parties entered into an Asset Purchase Agreement (the
"Purchase Agreement") concerning Purchaser's acquisition of substantially all of
Drake's assets; and
WHEREAS, the parties desire to amend the Purchase Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and subject to the conditions hereinafter set forth, the
parties do hereby declare and agree as follows:
1. AMENDMENTS. Effective on the date hereof, the Asset Purchase
Agreement shall be amended as set forth in this Section 1 of the First
Amendment.
1.1 Section 1.3(a)(ii) of the Asset Purchase Agreement is
amended in its entirety to read as follows:
"Plus, two million (2,000,000) shares of Clarion's common stock, $.001
par value (the "Shares") subject to the terms of a Registration and
Lock-Up Agreement in the form attached to the First Amendment as
Exhibit 1.3(a)(ii) (the "Registration and Lock-Up Agreement");"
1.2 Section 1.3(a)(iii) of the Asset Purchase Agreement is
amended in its entirety to read as follows:
"Plus, an unsecured subordinated promissory note in the original
principal amount of Five Million Dollars ($5,000,000) bearing interest
at the rate of twelve percent (12%) per annum in the form attached to
the First Amendment as Exhibit 1.3(a)(iii) (the "Promissory Note")
subject to adjustment as provided in Section 1.3(f) hereof; and"
1.3 Section 1.3(a)(iv) of the Asset Purchase Agreement is
amended in its entirety to read as follows:
"Plus, an unsecured subordinated promissory note in the original
principal amount of Eighty Thousand Thousand Dollars ($80,000) bearing
no interest in the form attached to the First Amendment as Exhibit
1.3(a)(iii) (the "SECOND PROMISSORY NOTE") subject to adjustment as
provided in Section 1.3(f) and Section 9.14 hereof; and"
1.4 Section 8.2 of the Asset Purchase Agreement is amended in
its entirety to read as follows:
"8.2 INDEMNIFICATION BY CLARION AND THE PURCHASER.
Clarion and the Purchaser, jointly and severally, agree to indemnify
the Company and the Shareholders from and against any and all loss,
liability or damage suffered or incurred by it or them by reason of (i)
any untrue representation of, or breach of warranty by, Clarion or the
Purchaser in any part of this Agreement, (ii) Purchaser's
non-assumption of those sales representation agreements identified on
Exhibit 1.1(b) hereto arising after the Closing Date; (iii) any
nonfulfillment of any covenant, agreement or undertaking of Clarion or
the Purchaser in any part of this Agreement which by its terms is to
remain in effect after any Closing and has not been specifically waived
in writing at such Closing by the party or parties hereof entitled to
the benefits thereof, (iv) any amounts owed Xxxxx Xxxxxxx ("Xxxxxxx")
of Post Ranstad pursuant to a certain letter agreement dated January
11, 1999 from the Company to Xxxxxxx for services performed through
January 31, 2000, limited to $170,000, (v) any failure to fully and
completely observe, pay, perform and discharge any of the Company's
outstanding obligations and liabilities assumed by Purchaser in
accordance with the Liabilities Undertaking; and (vi) any and all
actions, proceedings, claims, demands, suits, judgment, costs and
expenses, including without limitation, legal fees and expenses,
incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or
enforcing the indemnification rights of the Company or the Shareholders
pursuant to this Section 8.2"
1.5 The word "and" appearing at the end of first (1st) Section
8.3(h) is hereby deleted.
1.6 The reference to the second (2nd) Section 8.3(h) is hereby
amended to read as Section 8.3(i) and the period (.) at the end of said Section
8.3(i) is hereby deleted and replaced with a semicolon (;).
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1.7 The following Section 8.3(j) is hereby added to the Asset
Purchase Agreement:
"any liability, cost, expense, penalty or obligation incurred by it as
a result of the Company's failure to maintain, during any period prior
to Closing, authority to transact business in the State of South
Carolina."
1.8 The following Section 9.14 is hereby added to the Asset
Purchase Agreement:
9.14 DELAY IN CLOSING PENALTY.
Purchaser and Clarion jointly and severally agree to pay to Company a
penalty in the amount of twenty seven thousand five hundred dollars
($27,500), but not to exceed fifty five thousand dollars ($55,000) in
the aggregate, for each day that the Closing extends beyond February
14, 2000 ("Closing Delay Penalty"). The parties hereto agree that the
aggregate Closing Delay Penalty shall be added to the principal balance
of the Second Promissory Note.
1.9 The following Section 9.15 is hereby added to the Asset
Purchase Agreement.
9.15 CERTAIN EQUIPMENT.
Purchaser and Clarion agree, at no cost to the Company or the
Shareholders, that the Company may store on the Real Property, in its
current location, certain Laser Etch equipment (the "Laser Equipment")
for a period of up to two (2) years commencing on the date of Closing.
Any and all expenses related to the Laser Equipment shall be the
responsibility of the Company.
1.10 The following Section 9.16 is hereby added to the Asset
Purchase Agreement.
9.16 ADDITIONAL REAL ESTATE.
Purchaser and Clarion agree to purchase, or to cause their designee to
purchase, within six (6) months from the Closing Date, certain real
estate situated Xxxxxxxxxxx Xxxxxxxx, Xxxxxxxx Xxxxxx, Xxxxx xx Xxxxx
Xxxxxxxx, as described within an Agreement to Sell and Buy dated on or
about November, 1994, by and between Millearn GeneralPartnership and
the Company. The terms of such purchase shall be set forth in a
separate real estate purchase agreement in form and substance that is
reasonably acceptable to all parties.
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1.11 The following Section 9.17 is hereby added to the Asset
Purchase Agreement.
9.17 EARLY PAYMENT OF PROMISSORY NOTE.
Purchaser and Clarion agree that in the event Clarion undertakes, at
anytime after the Closing date, a public offering or offerings of debt
or equity securities, solely for cash, with aggregate gross cash
proceeds to Clarion or Purchaser in excess of $25,000,000, they shall
use their best efforts to cause LaSalle Bank, National Association and
Bank One, Michigan, or any successor thereto, to permit Purchaser and
Clarion to make a payment of principal and accrued interest on the
Promissory Note in an amount equal to the lesser of the gross cash
proceeds to Clarion or Purchaser in excess of $25,000,000, obtained by
Clarion or Purchaser from such public offering of debt or equity
securities, or the remaining unpaid balance of principal and accrued
interest due under the Promissory Note ("Early Payment"). Upon
receiving permission for the Early Payment, Purchaser and Clarion
hereby agree to make the Early Payment.
1.12 The following Section 9.18 is hereby added to the Asset
Purchase Agreement.
9.18 PRIORITY OF SELLER SUBORDINATE DEBT
Purchaser and Clarion agree that neither one of them shall incur
indebtedness to a seller in connection with an acquisition that has
priority over the indebtedness evidenced by the Promissory Note and the
Second Promissory Note ("Seller Subordinate Debt"). Purchaser and
Clarion further agree that any Seller Subordinate Debt shall be PARI
PASSU or subordinate to the indebtedness evidenced by the Promissory
Note and the Second Promissory Note.
2. OTHER TERMS. In all other respects, the Purchase Agreement made
between the parties shall remain unchanged and in full force and effect.
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3. MISCELLANEOUS.
3.1 FURTHER ACTS. The parties agree to do all acts and things,
and will execute all writings requested by each other which shall be and become
necessary, proper or advisable to carry out, to put into effect and/or make
operative a portion or portions of this First Amendment.
3.2 SUCCESSORS. This First Amendment shall be binding upon the
parties to this First Amendment and their respective successors, assigns, heirs,
personal representatives, executors, and administrators.
3.3 CAPITALIZED TERMS. Unless otherwise specifically defined
in this First Amendment, or other reference is made, all capitalized terms shall
have the meaning ascribed to them in the Purchase Agreement.
3.4 GOVERNING LAW. This First Amendment shall be construed and
governed in accordance with the laws of the State of Michigan without regard to
conflict of laws provisions.
3.5 COUNTERPARTS. This First Amendment may be simultaneously
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument. A facsimile signature
shall have the same effect as an original signature and shall be binding upon
the parties hereto. Upon the request of a party hereto, original signatures
shall promptly be substituted for any facsimile signature.
3.6 ENTIRE AGREEMENT; AMENDMENT. This First Amendment and the
Purchase Agreement referred to herein constitute the entire agreement of the
parties to this First Amendment with respect to the subject matter of this First
Amendment. This First Amendment may be amended only by a written instrument
executed by all of the parties to this First Amendment.
[ALL SIGNATURES APPEAR ON NEXT PAGE. THE
REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the day and year first above written.
CLARION: COMPANY:
CLARION TECHNOLOGIES, INC. DRAKE PRODUCTS CORPORATION
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- --------------------------------
Xxxxxxx X. Xxxxxxx
Its: Chief Financial Officer Its: President
--------------------------------
PURCHASER:
Clarion-Drake Acquisition, Inc. SHAREHOLDERS:
By: /s/ Xxxxx W, Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- --------------------------------
Xxxxxxx X. Xxxxxxx
Its: Chief Financial Officer
--------------------------------
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
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