EXHIBIT 10.4
STOCK RESTRICTION AGREEMENT
This Stock Restriction Agreement ("Agreement") entered into on May 23,
2005 and effective the 16th day of March, 2005 by and among Trans-Industries,
Inc., a Delaware corporation (the "Company"), Xxxx X. Xxxxxx ("Xxxxxx") and
Xxxxxx Xxxxxx ("Xxxxxx") (collectively, Xxxxxx and Xxxxxx hereinafter may be
referred to as the "Shareholders") is as follows; to wit:
RECITALS
X. Xxxxxx is the holder of record of 579,389 shares of the common stock of the
Company ("Common Stock").
X. Xxxxxx is or may be acquiring additional Common Stock pursuant to the
Agreement for Management Succession, Resignation and Severance of CEO and Other
Miscellaneous Matters, and the Stock Purchase Agreement thereunder.
X. Xxxxxx is the holder of record of 495,938 shares of the Common Stock of the
Company.
D. The Company and Shareholders desire to secure the continuity of the
management and business policies of the Company and to provide for certain
restrictions with respect to the sale of Common Stock by the Shareholders.
NOW THEREFORE, in consideration of the mutual promises and covenants set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
I. DEFINITIONS
The following definitions and interpretations will apply to the following
terms used in this Agreement:
A. An "Affiliate" of a specified person means any other person which, directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with such specified person. For purposes of this
definition, (a) "control" of any person means possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities, by
contract, or otherwise and (b) an individual will be deemed to "control" (i)
such individual's spouse, natural or adopted children or grandchildren or (ii) a
trust for the benefit of any one or more of such individual, such individual's
spouse, natural or adopted children or grandchildren.
B. "Xxxxxx" means Xxxx X. Xxxxxx, his Affiliates, agents, assigns, heirs or
transferees.
C. "Company" means Trans-Industries, Inc., a Delaware corporation.
D. "Xxxxxx" means Xxxxxx Xxxxxx, his Affiliates, agents, assigns, heirs or
transferees.
E. "Notice" means written notice.
F. "Shareholder" means (i) each person whose signature appears on a signature
page to this Agreement and each person or entity who has signed, is obligated to
sign, or may sign this Agreement from time to time; and (ii) any Affiliate,
executor, administrator, guardian, custodian, trustee, receiver, or other legal
representative of a person described in the foregoing clause who obtains legal
or beneficial ownership of any shares of capital stock of the Company or the
power to transfer or vote the same in the event of such a Person's death,
disability or other incapacity.
G. "Shares" means shares of the Company's Common Stock, whether now or hereafter
outstanding.
H. "Single Identifiable Beneficial Owner" means any single person or two or more
persons when acting as a partnership, limited partnership, syndicate or other
group for the purpose of acquiring, holding or dispensing of securities of the
Company, as defined in Rule 13d-3 of the Securities Exchange Act of 1934.
I. "Transfer" means to sell, give, assign, pledge, bequeath, exchange, dispose
of, hypothecate, or otherwise transfer whether by testamentary disposition,
survivorship arrangement or otherwise, encumber in any respect, or grant any
interest in (whether voluntarily or involuntarily or by operation of law and
whether with or without consideration), and specifically includes all transfers
upon divorce, in bankruptcy or by way of execution, seizure, or sale by legal
process.
II. RESTRICTIONS ON TRANSFERS
A. Shareholders. No Shareholder shall Transfer any Shares now or hereafter held
by him or her, except as permitted by this Agreement and in accordance with its
terms.
B. Company. The Company shall not cause or permit the Transfer of any of the
Shares to be made on its books unless the Transfer is permitted by this
Agreement and has been made in accordance with its terms.
III. RESTRICTION ON SALE OF SHARES
A. Annual Restriction on Xxxxxx. Xxxxxx covenants and agrees not to Transfer in
excess of One Hundred Sixty-Five Thousand (165,000) Shares of Common Stock in
any single calendar year.
B. Annual Restriction on Xxxxxx. Xxxxxx covenants and agrees not to Transfer in
excess of One Hundred Sixty-Five Thousand (165,000) Shares of Common Stock in
any single calendar year.
C. Restrictions on Transfer to Identifiable Owner. Shareholders covenant and
agree that they shall not, independently or together, sell to Single
Identifiable Beneficial Owner in excess of One Hundred Thousand (100,000) Shares
of Common Stock in any three-year period.
D. Transfer Pursuant To Rule 144 And Security Compliance. The Shareholders in
the Company covenant and agree that they shall comply with all applicable
securities laws and/or
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regulations, including all applicable state requirements and all obligations and
conditions contained herein to be performed in a manner which is in compliance
with such laws and regulations. Furthermore, the parties and the Company agree
to comply with all applicable public information requirements of Rule 144(C)(1)
and (B) at all times as Rule 144 is available for use by any Shareholder, the
Company will furnish the Shareholder, after the Shareholder's request, with all
information within the possession of the Company reasonably required for the
preparation and filing of Form 144, if required. The parties further agree that
any transfer or proposed transfer in violation of Rule 144 will be a prohibited
transfer as defined above.
E. Restrictive Legends. All certificates representing any Shares of Common Stock
subject to the provisions of this Agreement shall have endorsed on the legend:
Any sale, assignment, transfer or other disposition of the Shares
represented by this Certificate is restricted by and subject to the
terms and provisions of a certain Stock Restriction Agreement
effective as of the 16th day of March, 2005 between the registered
holder hereof and the Corporation. A copy of said Agreement is on
file with the Secretary of the Corporation.
IV. MISCELLANEOUS PROVISIONS
A. 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.
B. 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.
C. 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.
D. 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.
E. 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.
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F. 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 ad paragraph headings in this Agreement are intended
only for convenience of reference and shall 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.
G. 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.
IN WITNESS WHEREOF, and intending to be legally bound, Company, Xxxxxx,
and Xxxxxx have executed and delivered this Agreement.
AGREED TO AND ACCEPTED BY
THE COMPANY
Dated: May 23, 2005 BY: /s/ Xxxxxxx Xxxxx
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XXXXXXX XXXXX
TITLE: Chief Operating Officer
AGREED TO AND ACCEPTED BY:
Dated: May 9, 2005 /s/ Xxxx X. Xxxxxx
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XXXX X. XXXXXX
AGREED TO AND ACCEPTED BY:
Dated: May 7, 2005 /s/ Xxxxxx Xxxxxx
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XXXXXX XXXXXX
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