SETTLEMENT AGREEMENT
SETTLEMENT AGREEMENT ("Agreement"), dated as of September 21,
1999, by and among Trident Rowan Group, Inc., a Maryland corporation ("TRG"),
Xxxx Xxxxxx ("Xxxxxx"), Gianni Bulgari ("Bulgari"), Xxxxxx Xxxxx ("Chase"),
Xxxxxxx Xxxxx ("Arbib") and Xxxxxxx Xxxxx ("Xxxxx") as principal shareholders of
TRG (each a "Shareholder", collectively the "Shareholders").
WHEREAS, the purpose of this Agreement is to, among other things,
(i) resolve all existing disputes among the Shareholders regarding the
operations of TRG, (ii) create stability in the management of TRG (iii)
facilitate a sale of TRG and/or Moto Guzzi Corp. ("MGC") to, and/or a
significant investment in TRG and/or MGC by, a third party source and (iv) agree
upon a strategic plan for TRG (and MGC, as MGC's controlling shareholder) with
the goal of maximizing shareholder value;
WHEREAS, upon deliberation, the Board of Directors of TRG has
approved the terms of this Agreement;
WHEREAS, the parties to this Agreement have come to a mutual
agreement to resolve all existing disputes among them concerning the subject
matter hereof on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, do hereby agree
as follows:
1. TRG Board of Directors.
a. Board Composition. TRG will propose that at the
upcoming shareholders' meeting (i) the number of members on the TRG Board of
Directors (the "Board") will be reduced to seven members; (ii) the staggered
Board be dismantled and (iii) to take such other actions as may be required to
carry out the intents and purposes of this Agreement. The nominees to the Board
that TRG will propose in its annual proxy will be Chase, Hauser, Arbib and
Bulgari, an independent director, Xxxxxx Xxxxxxx ("Xxxxxxx"), nominated by
Xxxxxx and two independent directors, Xxxxxx Xxxxx Xxxxx ("Xxxxx Xxxxx") and
Xxxx Xxxxxx ("Xxxxxx"), nominated by Bulgari. The parties agree that all
nominations are acceptable to all parties hereto. TRG agrees that the by-laws of
TRG will be amended to provide that the affirmative vote of four out of seven
directors (or a majority of the entire Board as it may otherwise be constituted)
shall be required for all actions requiring TRG Board approval and that the TRG
Board will take all actions as may be required to carry out the intents and
purposes of this Agreement.
b. Chairman of the Board. An independent Board member
chosen by the other independent Board members will be the Chairman of the Board
of TRG.
c. Chief Executive Officers. Arbib and Xxxxxx will
serve as co- Chief Executive Officers of TRG.
2. Chief Executive Officers.
The parties hereto agree that each of Xxxxxx and Arbib's
existing agreements with TRG as amended, copies of which amendments are annexed
hereto, and the benefits emanating therefrom will not be terminated without
cause. All current accruals including unpaid compensation under each of Xxxxxx
and Arbib's consulting agreements will be paid as soon as reasonably and
commercially possible by TRG. In addition, the parties agree that Arbib's
consulting agreement will be amended to reflect that his compensation will be
appropriately adjusted if he dedicates more than half of his time to TRG-related
matters.
3. Loan from Tamarix Investors.
The parties hereto agree that TRG will honor its
contractual obligation to repay the outstanding loan from Tamarix Investors upon
maturity of the loan, upon the terms annexed hereto.
4. Investment Bank.
The parties hereto agree that TRG will retain an
internationally recognized independent investment bank to explore corporate
options for TRG to maximize TRG's value, including, focusing on financings and
the sale of TRG to, or merger of TRG into a third party. The investment bank
retained shall be requested specifically to explore corporate options for TRG,
including, but not limited to, a tax-efficient merger of TRG into MGC, with the
goal that it be completed no more than 18 months from the date of this
Agreement. In the event MGC is sold for cash or in exchange for securities, or
if TRG's ownership interest in MGC drops below 15% on a fully diluted basis, the
parties agree that they will cooperate so as to provide for the liquidation of
TRG and the distribution of its cash or other assets on a tax-efficient basis
that is equitable to the TRG shareholders as a whole.
5. Continuing Obligations of Parties. The parties hereby
agree to use their best efforts to work together to carry out the intents and
purposes of this Agreement as soon as possible. The parties agree that until TRG
is sold, liquidated or merged, they will continue to vote their shares in TRG to
maintain the Board and officer compositions and contractual arrangements as
proposed in this Agreement. If any appointed director or his successor resigns,
is disabled or dies, then the parties agree to support and vote for the
nomination of his successor made with respect to Bulgari, Xxxxxx, Xxxxx Xxxxx
and/or Arbib by Bulgari and with respect to Chase, Xxxxxxx and/or Xxxxxx by
Xxxxxx.
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6. Termination. Subject to Section 9.a. below, this Agreement
shall terminate (i) with respect to any individual Shareholder, upon his sale or
other disposition of more than 50% of his TRG holdings; (ii) with respect to the
Shareholders, upon the sale or disposition of more than 50% of the TRG holdings
owned by all the Shareholders in the aggregate.
7. MGC. The parties hereto agree to use their best efforts as
shareholders and directors of MGC to cause MGC to enter into a comprehensive
agreement with TRG, as MGC's largest shareholder, that reflects a unified plan
to maximize the value of both TRG and MGC. The parties agree that such efforts
will include, without limitation, seeking to have MGC (A) retain TRG's
investment bank (or visa versa), (B) agree not to issue any preferred security
or other arrangement that would adversely impact on TRG's voting rights in MGC,
(C) nominate directors recommended by TRG from time to time so that TRG
continues to maintain a majority representation on MGC's board and (D) consider
(i) a merger with TRG, (ii) third party financings recommended by TRG and (iii)
the sale of MGC to, or the merger of MGC with, third party purchasers
recommended by TRG. With respect to clause (B) above, TRG and the shareholders
agree to negotiate in good faith with MGC to agree upon a mutually satisfactory
MGC board composition on the condition that MGC remove any purported
restrictions or proposed restrictions that could adversely impact TRG's voting
rights in MGC. The Shareholders agree to vote their MGC shares with TRG on all
matters relating to MGC, and as directors of MGC to take into account the
desires of TRG as the largest shareholder of MGC and TRG's desire to maximize
the value of both TRG and MGC.
8. Fiduciary Duty. The Shareholders agree that
notwithstanding anything to the contrary contained in this Agreement, all
activities and agreements will be subject to the Shareholders' respective
fiduciary duties as officers and directors of TRG and MGC, as the case may be.
9. Miscellaneous.
a. Each Shareholder may transfer his TRG shares and the
rights and obligations associated therewith under this Agreement, only to any
entity controlled by, controlling or under common control with, such
Shareholder. This Agreement shall be binding upon TRG and its successors.
Nothing in this Agreement shall create or be deemed to create any third party
beneficiary rights or any other rights of any kind in any person or entity not a
party to this Agreement.
b. This Agreement shall be interpreted, and any disputes
arising hereunder shall be governed, by the internal laws of the State of New
York applicable to contracts made and to be wholly performed within such State,
without regard to principles of conflict of laws.
c. The parties agree that any and all disputes, claims or
controversies arising out of or relating to this Agreement that are not resolved
by their mutual agreement within 30 days of written notice being given, setting
forth the subject of the dispute, shall be
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submitted to final and binding arbitration before J.A.M.S/ENDISPUTE, or its
successor, pursuant to the United States Arbitration Act, 9 U.S.C. Sec. 1 et
seq. Any of the parties hereto may commence the arbitration process called for
in this Agreement by filing a written demand for arbitration with
J.A.M.S/ENDISPUTE, with a copy to the other parties. The arbitration will be
conducted in accordance with the provisions of J.A.M.S/ENDISPUTE's Streamlined
Arbitration Rules and Procedures in effect at the time of filing of the demand
for arbitration. The parties will cooperate with J.A.M.S/ENDISPUTE and with one
another in selecting an arbitrator from J.A.M.S/ENDISPUTE's panel of neutrals,
and in scheduling the arbitration proceedings. The parties covenant that they
will participate in the arbitration in good faith, and that they will share
equally in its costs. The provisions of this paragraph may be enforced by any
court of competent jurisdiction, and the party and/or parties seeking
enforcement shall be entitled to an award of all costs, fees and expenses,
including attorneys' fees, to be paid by the party and/or parties against whom
enforcement is ordered.
d. No provisions of this Agreement may be amended unless
pursuant to an instrument in writing executed by all of the parties hereto.
e. No provision of this Agreement may be waived in any manner
except by written agreement or by operation of law. In the event any provision
is waived, the balance of the provisions shall nevertheless remain in full force
and effect and shall in no way be waived, affected, impaired or otherwise
invalidated. No delay in enforcing this Agreement shall constitute or be deemed
to constitute a waiver of any provision or all of this Agreement.
f. This Agreement constitutes the entire agreement among the
parties hereto relating to the subject matter hereof and supersedes any prior
agreement or understanding among or between the parties relating to the subject
matter hereof. Each of the parties represents that in executing this Agreement
it or he is not relying upon any representations, promises or statements,
whether oral or in writing that are not contained herein.
g. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement contemplated hereunder shall not
impair or in way affect the legality or unenforceability of the remaining
provisions hereof or thereof, as applicable. In lieu of any illegal or
unenforceable provision hereof, the parties hereto agree to the substitution of
a legal or enforceable provision as similar in terms to such illegal or
unenforceable provision as may be possible.
h. TRG is a party to this Agreement pursuant to all sections
other than Sections 6 and 8 and TRG's obligations hereunder are subject to its
obligation to retain a Board seat for the nominee of Finprogetti. S.p.A.
i. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
TRIDENT ROWAN GROUP, INC.
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
Title: CEO
By: /s/ Xxxx Xxxxxx
---------------------------
XXXX XXXXXX
By: /s/ Gianni Bulgari
---------------------------
GIANNI BULGARI
By: /s/ Xxxxxx Xxxxx
---------------------------
XXXXXX XXXXX
By: /s/ Xxxxxxx Xxxxx
---------------------------
XXXXXXX XXXXX
By: /s/ Xxxxxxx Xxxxx
---------------------------
XXXXXXX XXXXX
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AMENDMENT TO AGREEMENTS
Reference is made to that certain Employment Agreement dated as of March
25, 1998 and as amended by letter dated July 15, 1999 by and between Trident
Rowan Group, Inc., a Maryland corporation (the "Company"), and Xxxx X. Xxxxxx
(the "Employment Agreement") and that certain Consulting Agreement dated as of
March 25, 1998 and as amended by letter dated July 6, 1999 by and between the
Company and Xxxxxxx Xxxxx (the "Consulting Agreement"). This Amendment is made
as of September 21, 1999, by and between the undersigned parties hereto.
WITNESSETH:
WHEREAS, the parties hereto desire to amend the Employment Agreement and
the Consulting Agreement in connection with the Settlement Agreement dated as of
September 21, 1999, by and among the Company and certain of its shareholders.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1) The Employment Agreement and the Consulting Agreement shall continue
in full force and effect with continued payment of salary, grants of stock and
options and provision of benefits until the Company is liquidated or dissolved
or all or substantially all of its assets are sold; provided, however, that
commencing on March 25, 2001, all payments of salary, grants of stock and
options and provision of benefits pursuant to the Employment Agreement and the
Consulting Agreement will continue to be paid and granted at the rate specified
in the Employment and Consulting Agreement on a per diem basis until such date
the Company is liquidated or dissolved or all or substantially all of its assets
are sold.
2) Xxxx Xxxxxx and Xxxxxxx Xxxxx shall serve as Co-Chief Executive
Officer's of the Company.
3) Other than as expressly set forth herein, the Employment Agreement
and the Consulting Agreement are hereby ratified and confirmed and shall remain
unchanged in all other respects.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Amendment has been executed as of the day and
year first above written.
Trident Rowan Group, Inc.
By: /s/ Xxxx Xxxxxx
-----------------------
Name: Xxxx Xxxxxx
Title: CEO
/s/ Xxxx Xxxxxx
-------------------------
XXXX XXXXXX
/s/ Xxxxxxx Xxxxx
-------------------------
XXXXXXX XXXXX
TAMARIX INVESTORS, LDC
c/o TAMARIX CAPITAL CORPORATION
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
July 27, 0000
Xxxxxx X. Xxxxx, Xxxxxxxx of the Board of Directors
Trident Rowan Group
0 Xxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Re: Payment on Promissory Note In the Principal Amount of
$2 Million Running from TRG to Tamarix Investors, LDC
Dear Xxxxxx:
As you are aware, the amount owed to Tamarix Investors LDC ("Tamarix") is once
again in default, the previously granted extension to pay having expired.
Tamarix hereby agrees to an additional extension to pay the amount owed to
November 29, 1999 (5:00 P.M. New York time) and Tamarix further agrees that (a)
interest on all amounts due shall be at the rate of 10% per annum (and not at
the default rate specified in the loan agreement), and (b) it will not sell the
Moto Guzzi Corp. shares it holds as collateral unless and until the balance due
by TRG to Tamarix is not paid on the new extended date, all of the above
agreements by Tamarix being subject to the following conditions:
1. TRG repays immediately $300,000 of the loan (which Tamarix hereby
directs TRG to pay to Finprogetti on behalf of the amount owed
Finprogetti by Tamarix), leaving a balance due on November 29 of
$1,637,443.45;
2. TRG hereby acknowledges that the full amount of $1,637,443.45 is due no
later than 5:00 P.M. New York time November 29, 1999; and
3. While Tamarix is agreeing hereby to an extension of the time to pay,
Tamarix expressly maintains the right to exercise all other remedies
which it currently
possesses, including the right at any time to nominate a majority to the
Board of Directors of TRS.
Sincerely yours,
/s/ Xxxx X. Xxxxxx
--------------------
Xxxx X. Xxxxxx
Agreed and Accepted:
By: /s/ Xxxxxx X. Xxxxx
----------------------
Xxxxxx X. Xxxxx
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