STANDSTILL AGREEMENT
This Standstill Agreement ("Agreement") is entered into as of December 31,
1995 between Xxxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx"), Xxxxxx Manufacturing, Inc.
("Xxxxxx"), a Minnesota corporation and Sanwa Business Credit Corporation, a
Delaware corporation ("Lender").
RECITALS
X. Xxxxxxxxxx is the owner of 224,250 shares of common stock in and a
member of the Board of Directors of Xxxxxx;
X. Xxxxxxxxxx is the owner of options to acquire 38,000 shares of common
stock in Xxxxxx;
X. Xxxxxx has requested Lender to restructure the terms of its
obligations to Lender and in connection therewith, has offered to enter into
that certain Income Sharing Agreement (the "Income Sharing Agreement") of even
date herewith;
D. It is a condition of Lender's agreement to restructure the obligations
of Xxxxxx to Lender that Xxxxxxxxxx enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the parties agree as follows:
1. TERM OF AGREEMENT. This Agreement shall apply until the first to
occur of the following: (i) expiration of the Income Sharing Agreement; (ii) the
death of Xxxxxxxxxx; or (iii) the occurrence of an event (other than one caused
by Xxxxxxxxxx, directly or indirectly) which causes an "ownership change" in
respect of Xxxxxx for the purposes of Section 382(g)(1) of the Internal Revenue
Code of 1986, as amended (the "Termination Date").
2. COVENANTS OF XXXXXXXXXX. Prior to the Termination Date, neither
Xxxxxxxxxx nor any person, corporation or other entity controlled by Xxxxxxxxxx
will, directly or indirectly: (i) acquire, offer to acquire or agree to acquire,
or (ii) exercise any option or right to acquire (now or hereafter existing), or
(iii) transfer, offer to or transfer or agree to transfer any Xxxxxx stock or
option or right to acquire any Xxxxxx stock or otherwise take any similar steps
to diminish the value of the net operating losses of Xxxxxx.
3. SPECIFIC PERFORMANCE. Xxxxxxxxxx acknowledges and agrees that Lender
would suffer irreparable damage in the event any of the provisions of this
Agreement were not performed in accordance with the specific terms or otherwise
were breached. Accordingly, it is agreed that Lender shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof in
addition to any other remedy to which Lender may be entitled at law or equity.
4. NO FIDUCIARY DUTY. Nothing in this Agreement shall be construed to
create or impose upon the Lender any fiduciary duty to Xxxxxxxxxx, or any other
implied obligation to act or refrain from acting with respect to Xxxxxx in any
manner contrary to what the Lender may determine is in its own best interests.
5. SUCCESSORS; CONTINUING EFFECT. This Agreement is being entered into
for the benefit of, and shall be binding upon, Xxxxxxxxxx, Xxxxxx and Lender and
their respective successors and assigns. This Agreement shall inure to the
benefit of and be enforceable by any future holder or holders of any obligations
of Xxxxxx to Lender or any part of any of the same.
6. AMENDMENTS. This Agreement may be amended only by a written
instrument executed by Xxxxxxxxxx and Lender and, if such amendment affects
Xxxxxx, by Xxxxxx.
7. WAIVERS. No waiver shall be deemed to be made by any party of any of
its rights hereunder unless the same shall be in writing and then only with
respect to the specific instance involved, and no such waiver shall impair or
offset the rights of the waiving party or the obligations of the party benefited
by such waiver in any other respect or at any other time.
8. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT HAS BEEN
DELIVERED FOR ACCEPTANCE BY LENDER IN CHICAGO, ILLINOIS AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS
OF LAW PROVISIONS) OF THE STATE OF ILLINOIS. EACH OF THE PARTIES HERETO HEREBY
(i) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION TO ENFORCE OR DEFEND ANY
MATTER ARISING FROM OR RELATED TO THIS AGREEMENT; (ii) IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN XXXX COUNTY, ILLINOIS,
OVER ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY MATTER ARISING FROM OR
RELATED TO THIS AGREEMENT; AND (iii) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
SUCH PARTY MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING. EACH OF XXXXXX AND XXXXXXXXXX
HEREBY: (i) AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (ii) AGREES NOT TO
INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST LENDER OR ANY OF LENDER'S
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR PROPERTY, CONCERNING ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT OTHER THAN ONE LOCATED
IN XXXX COUNTY, ILLINOIS. NOTHING IN THIS SECTION 8 SHALL AFFECT OR IMPAIR
LENDER'S RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW OR LENDER'S
RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST XXXXXX OR XXXXXXXXXX OR THE
PROPERTY OF XXXXXX OR XXXXXXXXXX IN THE COURTS OF ANY OTHER JURISDICTION.
9. FURTHER ACTIONS. After the execution of this Agreement each party
will execute and deliver all such documents and instruments and do all such
other acts and things as may be reasonably necessary to carry out the provisions
of this Agreement.
10. NOTICES. Except as otherwise expressly provided for herein, any and
all notices given in connection with this Agreement shall be deemed adequately
given only if in writing and addressed to the party for whom such notices are
intended at the address set forth below. All notices shall be sent by personal
delivery, Federal Express or other overnight messenger service, first class
registered or certified mail, postage prepaid, return receipt requested,
facsimile
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transmission with a duplicate copy sent contemporaneously by U.S. Mail, or by
other means at least as fast and reliable as first class mail. A written notice
shall be deemed to have been given to the recipient party on the earlier of (a)
the date it shall be delivered to the address required by this Agreement, (b)
the date delivery shall have been refused at the address required by this
Agreement; or (c) with respect to notices sent by mail, the date as of which the
postal service shall have indicated such notice to be undeliverable at the
address required by this Agreement. Any and all notices referred to in this
Agreement, or which either party desires to give to the other, shall be
addressed as follows:
If to Xxxxxxxxxx: Xxxxxx X. Xxxxxxxxxx
c/x Xxxxxx Manufacturing, Inc.
000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
If to Green Isle: Xxxxxx Manufacturing, Inc.
000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx Xxxxxx President and Chief Executive
Officer
Fax: (000) 000-0000
with a copy to: Winthrop & Weinstine, P.A.
3200 Minneapolis World Trade Center
00 Xxxx Xxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Xxxx Xxxxxx
Fax: (000) 000-0000
If to the Lender: Sanwa Business Credit Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Asset Management Division
Fax: (000) 000-0000
with a copy to: Xxxxxxxx & Xxxxxx, Ltd.
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
The above addresses may be changed by notice of such changed, mailed as provided
herein, to the last address designated.
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11. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be executed
in any number of counterparts, and by each of the parties on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all of which shall constitute but one and the same instrument. Delivery of an
executed counterpart of this Agreement by telefacsimile shall be equally as
effective as delivery of a manually executed counterpart of this Agreement, but
the failure to deliver a manually executed counterpart shall not affect the
validity, enforceability or binding effect of this Agreement.
12. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior
written and oral agreements, and all contemporaneous oral agreements, relating
to such matters.
13. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day, month and year first above written.
/s/ Xxxxxx X. Xxxxxxxxxx
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XXXXXX X. XXXXXXXXXX
XXXXXX MANUFACTURING, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
-----------------------------
Its: President
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SANWA BUSINESS CREDIT CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------
Its: Group Vice President
-----------------------------
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