STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of October 15, 1996 (the
"Agreement"), is between Xxxxxxx X. Xxxxxxxxx ("Xxxxxxxxx"), and MASCOTECH,
INC., a Delaware corporation (the "Company").
WHEREAS, Xxxxxxxxx is the beneficial owner of shares of the Company's
Common Stock, par value $1.00 per share (the "Common Stock"); and
WHEREAS, Xxxxxxxxx desires to sell and the Company desires to purchase
1,000,000 shares of Common Stock (the "Repurchased Stock") owned beneficially by
Xxxxxxxxx upon the terms and conditions hereinafter provided; and
WHEREAS, simultaneously herewith the Company has entered into a stock
purchase agreement with Masco Corporation (the "Company Agreement") providing
for the Company to repurchase 17,000,000 shares of Common Stock and warrants to
purchase 10,000,000 shares of Common Stock;
NOW, THEREFORE, it is hereby agreed as follows:
1. PURCHASE AND SALE OF REPURCHASED STOCK; CLOSING.
(a) Subject to the satisfaction or waiver of the conditions set forth in
Section 5 hereof, Xxxxxxxxx hereby agrees to sell, convey, transfer and deliver
to the Company, and the Company hereby agrees to purchase from Xxxxxxxxx, the
Repurchased Stock in consideration for $13,625,000 (the "Purchase Price").
(b) The closing of the purchase and sale of the Repurchased Stock (the
"Closing") shall take place at the offices of the Company at 00000 Xxx Xxxx
Xxxx, Xxxxxx Xxxxxxxx 00000 at 10:00 a.m. Detroit time not later than three
business days following the satisfaction of the conditions set forth in Section
5 hereof, or at such other time as shall be agreed to in writing by the Company
and Xxxxxxxxx (the "Closing Date").
(c) At the Closing,
(i) Xxxxxxxxx will deliver to the Company a certificate or
certificates evidencing the Repurchased Stock being purchased by the
Company hereby, free and clear of any claim, lien, pledge, option, charge,
security interest or encumbrance of any nature whatsoever (collectively
"Encumbrances"), duly endorsed for transfer to the Company's order or
accompanied by stock powers duly executed to the Company's order and with
all requisite documentary or stock transfer tax stamps affixed; and
(ii) the Company will pay to Xxxxxxxxx the Purchase Price for the
Repurchased Stock by (aa) the wire transfer of $6,000,000 in immediately
available funds to such bank
account as Xxxxxxxxx shall have designated in writing to the Company at
least three days prior to the Closing, and (bb) the delivery to Xxxxxxxxx
of an unsecured Promissory Note in the principal amount of $7,625,000
substantially in the form attached as Exhibit A.
2. REPRESENTATIONS AND COVENANTS OF XXXXXXXXX. Xxxxxxxxx hereby
represents, warrants and covenants to the Company as follows:
(a) Title to Common Stock. Xxxxxxxxx is the record holder and sole
beneficial owner of the Repurchased Stock being sold pursuant to this Agreement
and such Repurchased Stock will be delivered free and clear of any Encumbrances.
(b) Authority: Execution and Delivery, Etc. Xxxxxxxxx has full power
and authority to enter into this Agreement and Xxxxxxxxx has full power to sell
the Repurchased Stock in accordance with the terms hereof. This Agreement has
been duly executed and delivered by Xxxxxxxxx and constitutes the valid and
binding obligation of Xxxxxxxxx, enforceable against Xxxxxxxxx in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the rights of
creditors generally and except as rights to specific enforcement may be limited
by the application of equitable principles (whether such equitable principles
are applied in a proceeding at law or in equity).
(c) Consents, No Conflicts, Etc. Neither the execution and delivery of
this Agreement, the consummation by Xxxxxxxxx of the transactions contemplated
by this Agreement nor compliance by Xxxxxxxxx with any of the provisions hereof
will (with or without the giving of notice or the passage of time) at the time
of delivery of the Repurchased Stock (i) violate or conflict with any agreement,
instrument, judgment or decree applicable to Xxxxxxxxx or any assets or
properties of Xxxxxxxxx, (ii) violate any material order, writ, injunction,
decree, statute, rule or regulation applicable to Xxxxxxxxx or any material
assets or properties of Xxxxxxxxx or (iii) require Xxxxxxxxx to obtain any
material consent, approval, permission or other authorization of or by, or to
make any material designation, declaration, filing, registration or
qualification with, any court, arbitrator or governmental, administrative or
self-regulatory authority or any other third party whatsoever, other than any
disclosure of the transactions contemplated hereby that may be required in
Xxxxxxxxx'x filings pursuant to the federal securities laws.
(d) No Brokers. Xxxxxxxxx has not entered into, and will not enter
into, any agreement, arrangement or understanding with any person or firm with
respect to the Repurchased Stock which will result in the obligation of the
Company to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby. Xxxxxxxxx agrees to
indemnify and hold the Company harmless from and against any and all claims,
liabilities and obligations with respect to any finder's fees, brokerage
commissions or similar payments asserted by any person on the basis of any act
or statement alleged to have been made by Xxxxxxxxx.
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(e) Access to Information. Xxxxxxxxx acknowledges that he has been
offered access to the business records of the Company and such additional
information as he has requested in order that he may make an informed decision
regarding the transactions contemplated hereby and has been given the
opportunity to meet with Company officials and to have representatives of the
Company answer questions regarding the Company's affairs and condition.
Xxxxxxxxx is an experienced and sophisticated participant in transactions of the
kind contemplated hereby, is capable of evaluating the merits and risks of
transactions of the kind contemplated hereby, is experienced in the evaluation
of enterprises such as the Company and has undertaken such investigation and
evaluated such information regarding the Company as he has deemed necessary to
make an informed and intelligent decision with respect to the execution and
performance of this Agreement.
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY. The Company hereby
represents, warrants and covenants to Xxxxxxxxx as follows:
(a) Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
(b) Authority, Execution and Delivery, Etc. The Company has full
corporate power and authority to enter into this Agreement and to purchase the
Repurchased Stock in accordance with the terms hereof. The execution, delivery
and performance of this Agreement have been duly authorized by the Company and
no other actions on the part of the Company are required. This Agreement has
been duly executed and delivered by the Company and constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws affecting
the rights of creditors generally and except as rights to specific enforcement
may be limited by the application of equitable principles (whether such
equitable principles are applied in a proceeding at law or in equity).
(c) Consents, No Conflicts, Etc. Neither the execution and delivery of
this Agreement, the consummation by the Company of the transactions contemplated
hereby, nor compliance by the Company with any of the provisions hereof will
(with or without the giving of notice or the passage of time) (i) violate or
conflict with any provision of the Certificate of Incorporation or By-Laws of
the Company or any agreement, instrument, judgment, decree, statute or
regulation applicable to the Company or any assets or properties of the Company,
(ii) violate any material order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or any material assets or properties of the
Company or (iii) except as set forth in the Credit Agreement, dated as of
September 2, 1993, as amended, among the Company, the banks signatory thereto,
and NBD Bank (formerly, NBD Bank, N.A.), as Agent (the "Credit Agreement"),
require any material consent, approval, permission or other authorization of or
by, or to make any material designation, declaration, filing, registration or
qualification with, any court, arbitrator or governmental, administrative or
self-regulatory authority or any other third party whatsoever, other than any
disclosure of the transactions contemplated hereby that may be required in the
Company's filings pursuant to the federal securities laws and the rules of the
New York Stock Exchange.
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(d) After giving effect to the repurchase of the Repurchased Stock and
the transactions contemplated by the Company Agreement, the Company will not be
insolvent and will not have unreasonably small capital with which to engage in
its businesses. The completion of the transactions contemplated hereby and
thereby will comply with the Delaware General Corporation Law. The Company is
not a party to, and is not engaged in any discussions with any third person with
respect to any agreement other than the Company Agreement pursuant to which the
Company would repurchase any material amount of its shares of its capital stock
and, except as previously disclosed in its public filing with the Securities and
Exchange Commission (the "Commission"), the Company is not a party to, and is
not engaged in any discussions with any third person with respect to any
agreement to issue any material amount of its securities.
(e) No Material Changes. The Company has filed all required forms,
reports and documents with the Commission required to be filed by it since
December 31, 1994 pursuant to the Securities Act of 1933, as amended (the
"Securities Act") and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated thereunder
(collectively, the "Company SEC Documents"), all of which have complied in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act and such rules and regulations. As of their respective dates, the
Company SEC Documents did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Other than as disclosed in the documents referred to in
this Section 3(e), since the filing of the Quarterly Report on Form 10-Q for the
period ended June 30, 1996, there has been no material adverse change in the
results of operations or financial condition of the Company.
(f) No Brokers. The Company has not entered into and will not enter
into any agreement, arrangement or understanding with any person or firm which
will result in the obligation of Xxxxxxxxx to pay any finder's fee, brokerage
commission or similar payment in connection with the transactions contemplated
hereby. The Company will pay the fees and expenses of Xxxxx Xxxxxx Inc.
incurred in connection with the transactions contemplated by this Agreement and
agrees to indemnify and hold Xxxxxxxxx harmless from and against any and all
claims, liabilities and obligations with respect to any such fees and expenses
and finder's fees, brokerage commissions or similar payments asserted by any
person on the basis of any act or statement alleged to have been made by the
Company.
(g) Adequacy of Capital and Surplus. As of the date hereof the
transactions contemplated hereby and under the Company Agreement could be
consummated without the capital of the Company being impaired under the Delaware
General Corporation Law.
4. OTHER AGREEMENTS.
(a) Cooperation. Xxxxxxxxx and the Company will each cooperate with the
other and use reasonable efforts to cause the fulfillment of the conditions to
the other's obligations hereunder. Without limiting the generality of the
foregoing, if any order, decree, preliminary or permanent
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injunction or restraining order shall have been enacted, entered, promulgated or
enforced by any court or other governmental authority having jurisdiction which
prohibits or restricts the consummation of the transactions contemplated hereby,
or if any action, suit, claim or proceeding before any court or governmental
authority shall be threatened or shall have been commenced and be pending which
seeks to prohibit or restrict the consummation of the transactions contemplated
hereby, each of Xxxxxxxxx and the Company shall use reasonable efforts and take
such actions as may be necessary, at his or its own expense, as the case may be,
to have any such order, stay, judgment or decree lifted or dismissed and any
such suit, action or proceeding dismissed or terminated.
5. CONDITIONS TO THE CLOSING.
(a) It shall be a condition to the Company's obligation to purchase the
Repurchased Stock at the Closing that:
(i) the representations and warranties of Xxxxxxxxx shall be true
and correct in all material respects (and by the tendering of the
Repurchased Stock by Xxxxxxxxx at the Closing Xxxxxxxxx shall be deemed to
have represented and warranted that this is so) and Xxxxxxxxx shall have
complied in all material respects with all covenants required to be
performed prior to the Closing Date;
(ii) there is not in effect at the time any preliminary or
permanent injunction or other order by any court or governmental authority
having jurisdiction which prevents or restrains the purchase or sale and
delivery of the Repurchased Stock;
(iii) the Company shall have obtained any waiver or consent required
under the Credit Agreement or shall have obtained substitute financing on
terms reasonably acceptable to the Company in order to repurchase the
Repurchased Stock;
(iv) Masco Corporation ("Masco") shall have delivered to the
Company duly executed amendments to the following agreements with Masco:
Corporate Services Agreement, dated as of January 1, 1987, the Corporate
Opportunities Agreement, dated as of May 1, 1984, and the Amended and
Restated Securities Purchase Agreement, dated as of November 23, 1993;
(v) Masco shall have delivered to the Company a duly executed
termination of the Warrant Agreement, dated as of March 31, 1993, between
Masco and the Company;
(vi) there shall be a simultaneous closing under the Company
Agreement; and
(vii) the purchase of the Repurchased Stock shall not result in the
capital of the Company being impaired under the Delaware General
Corporation Law.
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(b) It shall be a condition to the obligations of Xxxxxxxxx to sell the
Repurchased Stock at the Closing that:
(i) the representations and warranties of the Company shall be
true and correct in all material respects (and by tendering the Purchase
Price at the Closing the Company shall be deemed to have represented and
warranted that this is so) and the Company shall have complied in all
material respects with all covenants required to be performed prior to the
Closing Date;
(ii) there is not in effect at the time any preliminary or
permanent injunction or other order by any court or governmental authority
having jurisdiction which prevents or restrains the purchase or sale and
delivery of the Repurchased Stock; and
(iii) there shall be a simultaneous closing under the Company
Agreement.
6. SPECIFIC PERFORMANCE.
(a) Xxxxxxxxx acknowledges that money damages are an inadequate remedy
for a breach of this Agreement which would prevent consummation of the sale of
the Repurchased Stock to the Company because of the difficulty of ascertaining
the amount of damage that would be suffered by the Company in such event.
Therefore, Xxxxxxxxx agrees that the Company may obtain specific performance to
mandate the sale of the Repurchased Stock to the Company in accordance with this
Agreement in the event Xxxxxxxxx'x breach would otherwise prevent consummation
of the sale of the Repurchased Stock to the Company as set forth in this
Agreement.
(b) The Company acknowledges that money damages are an inadequate remedy
for a breach of this Agreement which would prevent consummation of the purchase
of the Repurchased Stock by the Company because of the difficulty of
ascertaining the amount of damage that would be suffered by Xxxxxxxxx in such
event. Therefore, the Company agrees that Xxxxxxxxx may obtain specific
performance to mandate the purchase of the Repurchased Stock by the Company in
accordance with this Agreement in the event the Company's breach would otherwise
prevent consummation of the purchase of the Repurchased Stock by the Company as
set forth in this Agreement.
7. MISCELLANEOUS.
(a) Expenses. Each party shall be liable for his or its own expenses,
as the case may be, in connection with the transactions contemplated by this
Agreement.
(b) Amendments, Etc. All amendments or waivers of any provisions of
this Agreement may only be made pursuant to a written instrument executed by the
parties hereto or their successors and assigns.
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(c) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns; nothing in this Agreement is intended to confer on any person or entity
other than the parties hereto and their respective successors and assigns any
rights, remedies, obligations or liabilities by reason of this Agreement.
(d) Notices. All notices, requests and other communications provided
for hereunder shall be effective upon receipt, shall be in writing and shall be
deemed to have been duly given if delivered in person or by courier, telegraph,
telex or by facsimile transmission with electromechanical report of delivery:
If to the Company:
MascoTech, Inc.
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxxx
With a copy to:
Xxxxxx Xxxxxxx PLLC
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxx X. Xxxxxxxxxxx, Xx., Esq.
If to Xxxxxxxxx:
c/o Masco Corporation
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
With a copy to:
Masco Corporation
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
or to such other address with respect to any party as such party shall notify
the others in writing.
(e) Governing Law and Jurisdiction. This Agreement shall be construed
and enforced in accordance with, and the rights of the parties shall be governed
by, the laws of the State of Michigan (without regard to the choice of law
provisions thereof).
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(f) Headings. The descriptive headings of the several paragraphs of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
(g) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
(h) Complete Agreement. This Agreement and the Exhibits attached hereto
contain the entire agreement between the parties with respect to the subject
matter hereof and, except as provided herein, supersedes all previous
negotiations, commitments and writings.
(i) Termination. This Agreement shall terminate if the Closing
contemplated hereby shall not have occurred on or prior to December 31, 1996.
Notwithstanding the foregoing, the provisions of Section 7(a) shall survive
termination of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed and delivered
this Agreement as of the date first above written.
/s/ Xxxxxxx X. Xxxxxxxxx
XXXXXXX X. XXXXXXXXX
MASCOTECH, INC.
By:/s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
Vice President, Controller and Treasurer
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Exhibit A
PROMISSORY NOTE
$7,625,000.00 _________, 1996
FOR VALUE RECEIVED, MascoTech, Inc., a Delaware corporation with its
principal offices located at 00000 Xxx Xxxx Xxxx, Xxxxxx, Xxxxxxxx 00000
("MascoTech"), hereby promises to pay to the order of Xxxxxxx X. Xxxxxxxxx, c/o
Masco Corporation, 00000 Xxx Xxxx Xxxx, Xxxxxx, Xxxxxxxx 00000 ("Payee"), in
lawful money of the United States of America, the principal sum of Seven Million
Six Hundred Twenty Five Thousand Dollars ($7,625,000.00) (the "Principal
Amount"), together with interest, in accordance with the terms hereof.
This Note is referred to in, and issued pursuant to, that certain Stock
Purchase Agreement, dated as of October 15, 1996, by and between MascoTech and
Payee (the "Stock Purchase Agreement"). Capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Stock Purchase
Agreement.
The Principal Amount shall be due and payable in one, lump-sum payment on
September 30, 1997 (the "Maturity Date"). Interest from the date hereof on the
unpaid Principal Amount shall accrue at the per annum rate of six and five-
eights percent (6-5/8%), and shall be payable in four installments on December
31, 1996, March 31, 1997, June 30, 1997 and September 30, 1997.
This Note may be prepaid in whole at any time or in part from time to
time, with accrued interest, without penalty or premium.
MascoTech agrees to pay all costs of collection of any amounts due
hereunder when incurred, including, without limitation, reasonable attorneys'
fees and expenses, unless prohibited by law.
MascoTech hereby waives presentment for payment, demand, notice of
dishonor, notice of protest and all other notices and demands in connection with
the delivery, acceptance, performance or default of this Note and agrees that
this Note may not be changed, modified or terminated orally, but only by an
agreement in writing signed by MascoTech and Payee.
This Note shall become immediately due and payable upon notice by Payee to
MascoTech if one or more of the following events shall have occurred and be
continuing (except in the case of the events specified in clauses (e) and (f) in
which event this Note shall become immediately due and payable without any such
notice):
(a) any event or condition shall occur which results in the acceleration
of the maturity of any indebtedness for borrowed money in excess of
$10,000,000 or enables (or, with the giving of notice or lapse of time or
both, would enable) the holder of such indebtedness or any person acting
on such holder's behalf to accelerate the maturity thereof;
(b) default in the payment of interest upon this Note when it becomes
due and payable and continuance of such default for a period of 5 days; or
(c) default in the payment of all or any part of the principal of this
Note as and when the same shall become due and payable;
(d) any representation or warranty of MascoTech in the Stock Purchase
Agreement should prove to have been incorrect in any material respect when
made or deemed made;
(e) MascoTech shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors;
(f) an involuntary case or other proceeding shall be commenced against
MascoTech seeking liquidation, reorganization or other relief with respect
to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days;
or an order for relief shall be entered against MascoTech under the
federal bankruptcy laws as now or hereafter in effect;
(g) a judgment or order for the payment of money in excess of $5,000,000
shall be rendered against MascoTech and such judgment or order shall
continue unsatisfied and unstayed for a period of 20 days.
This Note shall be governed by, and construed in accordance with, the law
of the State of Michigan.
Any notice or other communication under this Note shall be in writing and
shall be considered given when mailed by certified or registered mail, return
receipt requested, to the Chief Financial Officer of MascoTech or to the Payee,
as the case may be, at the address set forth in the first paragraph of this Note
(or at such other address as either party may specify by notice to the other).
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed in
its corporate name by a duly authorized officer, as of the date first written
above.
MASCOTECH, INC.
By:
Name:
Title:
BH\ 00000
XX\ DRM
