AGREEMENT
THIS AGREEMENT ("Agreement") is entered into this 31st day of March,
1999 by and among CLARION TECHNOLOGIES, INC., a Delaware corporation ("Parent"),
and R. XXXXXXX XXXX, JR., an individual resident of Illinois ("Stockholder"),
with respect to an Agreement and Plan of Merger dated June 3, 1998 (the "Merger
Agreement") between Clarion House, Inc., a Nevada corporation which was the
predecessor of Parent (hereinafter included in the term "Parent"), and
Stockholder pertaining to the acquisition by Parent from Stockholder of all of
the outstanding shares of capital stock of ROSE & ASSOCIATES, INC., a Delaware
corporation ("Rose").
R E C I T A L S
- - - - - - - -
A. The Merger Agreement provided for the receipt by Stockholder of
950,000 shares of Parent's common stock (the "Shares") and a promissory note in
the original principal amount of One Million Nine Hundred Thousand Dollars
($1,900,000) (the "Note") in exchange for all of the outstanding capital stock
of Rose.
B. The parties hereto desire to modify the consideration delivered
pursuant to the Merger Agreement by means of a purchase money debt reduction.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants hereinafter set forth, the parties hereto agree as follows:
1. PURCHASE MONEY DEBT REDUCTION. Parent and Stockholder hereby agree,
subject to satisfaction of the conditions precedent specified in the following
section of this Agreement, that the consideration payable to Stockholder in
connection with the Merger Agreement shall be modified by means of a purchase
money debt reduction to consist solely of the Shares. The principal amount of
and all accrued interest on the Note after December 31, 1998 shall be reduced to
Zero Dollars and No Cents ($0.00) effective as of December 31, 1998, the parties
agreeing that Parent owes Stockholder only interest on the Note accrued to and
including December 31, 1998, which amount shall be paid to Stockholder within
180 days of the date hereof.
2. CONDITIONS PRECEDENT. Stockholder's agreement in the preceding
section shall be conditioned upon receipt of (a) Amendment No. 1 to Employment
Agreement in form acceptable to Stockholder on the date hereof and (b) interest
on the Note to and including December 31, 1998 within 180 days of the date
hereof. Upon satisfaction of the two conditions precedent just specified,
Stockholder shall deliver to Parent the Note and the assignment document in the
form attached hereto as Exhibit A. Parent agrees to indemnify Stockholder for
any taxes or costs, including legal and/or accounting fees incurred by him as a
result of the modification of the terms of the sale of his shares of Rose
pursuant to the Merger Agreement reflected by this Agreement. Parent shall pay
Stockholder's legal and/or accounting costs as such costs are incurred so that
Stockholder shall not be required to advance his own funds to pay such fees or
costs. Parent agrees that Stockholder shall retain the right to contest any
demand from or determination by the Internal Revenue Service or other
governmental authority, or not, as he shall determine. Parent shall make any
indemnification payment required hereunder within ten (10) days after request
therefor from Stockholder.
3. STOCKHOLDER'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS. As an
inducement to Parent to enter into this Agreement and to consummate the
transactions contemplated herein, Stockholder hereby represents and warrants to
Parent and agrees as follows:
3.1 AUTHORITY AND CAPACITY OF STOCKHOLDER. Stockholder has full
power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby. This Agreement is the legal, valid and binding
obligation of Stockholder enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the rights of creditors generally. No action, consent or approval by
or filing with any person or entity, including, without limitation, any federal,
territorial, state, municipal, foreign or other court or governmental or
administrative body or agency is required in connection with the execution,
delivery and performance by Stockholder of this Agreement, and consummation by
Stockholder of the transactions contemplated by him herein. Stockholder has the
right, power, legal capacity and authority to enter into and perform his
obligations under this Agreement, and no approvals or consents of any other
persons are necessary in connection with it.
3.2 TITLE TO NOTE. Stockholder is the current holder of the Note and
no other party has any interest thereon or claim thereon.
4. PARENT'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS. As an
inducement to Stockholder to enter into this Agreement and to consummate the
transactions contemplated herein, Parent represents and warrants to Stockholder
and agrees as follows:
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Parent is a
corporation duly organized, existing and in good standing under the laws of
Delaware and has full corporate power and authority to own or lease its
properties and to carry on its business as now conducted.
4.2 CORPORATE AUTHORITY. The execution and delivery of this
Agreement and the consummation of the transactions contemplated herein by Parent
have been, or prior to the Closing Date will have been, duly authorized by
Parent's board of directors, and neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, nor
compliance with nor fulfillment of the terms and provisions herein, will: (i)
conflict with or result in a breach of the terms, conditions or provisions of or
constitute a default under the Certificate of Incorporation or Bylaws of Parent,
any material agreement, instrument or judgment to which it is a party or by
which it is bound or any statute or regulatory provisions affecting Parent; (ii)
give any party to or with rights under any such agreement, instrument or
judgment the right to terminate, modify or otherwise change the material rights
or obligations of Parent under such agreement, instrument or judgment; or (iii)
require the approval, consent or authorization of any federal, state or local
court, governmental authority or regulatory body, other than in connection with
or in compliance with the provisions of law. Parent has, and will have at the
Closing Date, full corporate power and corporate authority to do and perform all
acts and things required to be done by Parent and this Agreement, subject to
compliance with the provisions of law.
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5. CLOSING.
5.1 TIME AND PLACE. The parties shall exchange executed counterparts
of this Agreement and Amendment No. 1 to Employment Agreement on March 31, 1999.
Employee shall deliver the items referred to in Section 5.2 hereof to Parent
promptly after the satisfaction of the conditions precedent referred to in
Section 2 on a date (the "Closing Date") and at such time as may be mutually
agreed by the parties.
5.2 STOCKHOLDER'S OBLIGATIONS ON CLOSING DATE. On the Closing Date,
Stockholder shall deliver or cause to be delivered to Parent the following:
5.2.1 The original Note.
5.2.2 A document of assignment in the form attached hereto as
Exhibit A.
6. COSTS. Parent shall pay all costs and expenses incurred by
Stockholder in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated hereby.
7. MISCELLANEOUS PROVISIONS.
7.1 NOTICES. Any notice or demand required or permitted to be given
hereunder shall be in writing and shall be deemed effective forty-eight (48)
hours after having been deposited in the United States mail, postage prepaid,
registered or certified, return receipt requested, addressed to each party in
the following manner:
TO PARENT: CLARION TECHNOLOGIES, INC.
0000 Xxxxx Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxxxx, XX 00000
TO STOCKHOLDER: R. XXXXXXX XXXX, JR.
000 Xxxxxx Xxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Any party may change the address to which such notices are to be sent
by giving the other parties notice in the manner set forth herein.
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7.2 CAPTIONS. The title or headings of the various sections,
articles and paragraphs hereof are intended solely for convenience of reference
and are not intended and shall not be deemed for any purpose whatsoever to
modify or explain or place any construction upon any of the provisions of this
Agreement.
7.3 EXHIBITS AND SCHEDULES. All statements contained in any Exhibit,
Schedule, certificate or other instrument delivered by or on behalf of the
parties hereto, or in connection with the transactions contemplated hereby, are
an integral part of this Agreement and shall be deemed representations and
warranties hereunder. All representations, warranties and agreements made by the
parties to this Agreement or pursuant hereto, shall survive the Closing Date and
any investigations made by or on behalf of the parties. All of the Schedules and
Exhibits hereto shall be attached on or before the Closing Date and at such time
shall become a part of this Agreement and shall be incorporated herein as if
attached on the execution date.
7.4 NUMBER. Throughout this Agreement, wherever the context so
requires, the singular shall include the plural, and the masculine gender shall
include the feminine and neuter genders, and vice versa.
7.5 SEVERABILITY. In the event that any provision in this Agreement
shall be held invalid or unenforceable, such provision shall be severable from,
and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining provisions of this Agreement.
7.6 AMENDMENT OR MODIFICATION. The parties hereto may amend or
modify this Agreement in such manner as may be agreed upon only by a written
instrument executed by such parties.
7.7 COUNTERPARTS. This Agreement is being executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one and the same instrument.
7.8 SUCCESSORS AND ASSIGNS. All of the terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective transferees, successors and assigns.
7.9 GOVERNING LAW. The parties hereby agree that this Agreement
shall be construed, enforced and governed by the laws of the State of Illinois.
7.10 ATTORNEYS' FEES. In the event any party hereto shall institute
an action to enforce any rights hereunder, the prevailing party in such action
shall be entitled, in addition to any other relief awarded by the court, to such
reasonable attorneys' fees as the court may award.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
"PARENT"
CLARION TECHNOLOGIES, INC.,
a Delaware corporation
By:___________________________________________
Xxxx X. Xxxxxxxxxx, Chief Executive Officer
"STOCKHOLDER"
_______________________________________________
R. XXXXXXX XXXX, JR.
