EXHIBIT 10.1
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made and
entered into effective as of June 27, 2005, by and between TRANS-INDUSTRIES,
INC., a Delaware corporation (the "Company"), and XXXXX-RELIANCE CORPORATION, a
Delaware corporation (the "Purchaser").
WHEREAS, the Company desires to issue and sell to the Purchaser, and the
Purchaser desires to purchase from the Company, newly issued shares of the
Company's Common Stock, par value $0.10 per share (the "Common Stock"), at the
price per share and upon and subject to the other terms and conditions set forth
in this Agreement;
ACCORDINGLY, the Company and the Purchaser hereby agree as follows:
1. AUTHORIZATION OF SALE OF THE COMMON STOCK
The Company has authorized the issuance and sale to the Purchaser of
shares of Common Stock with an aggregate value of $250,000, as determined in
Section 2.2 below, all upon and subject to the terms and conditions set forth in
this Agreement.
2. AGREEMENT TO SELL AND PURCHASE THE COMMON STOCK
2.1 PURCHASE AND SALE
Upon the terms and subject to the terms and conditions set forth in this
Agreement, at the Closing (as defined below), the Company shall issue and sell
to the Purchaser, and the Purchaser shall purchase from the Company, 384,615
shares of Common Stock. The shares of Common Stock to be issued and sold by the
Company to the Purchaser hereunder are referred to herein collectively as the
"Purchased Shares."
2.2 PURCHASE PRICE
The total purchase price payable to the Company by the Purchaser for all
of the Purchased Shares to be issued and sold to such Purchaser hereunder shall
be equal to $250,000. The per share purchase price of the Purchased Shares shall
be $0.65 (equal to the higher of (1) the average closing purchase price of the
Common Stock as listed on the NASDAQ SmallCap Market for the 30 calendar day
period preceding the Closing Date (as defined below); or (2) the listed closing
price on the day before the Closing Date.)
2.3 USE OF PROCEEDS
The Company shall use the proceeds of the sale of the Purchased Shares to
pay the fees and expenses incurred by the Company in connection with the
transactions contemplated by this Agreement and to redeem shares of the
Company's Series A Preferred Stock, par value One Dollar ($1.00) ("Series A
Preferred Stock"), from the Company's Profit Sharing Plan.
3. THE CLOSING; CLOSING ACTIONS
3.1 THE CLOSING
The consummation of the purchase and sale of the Purchased Shares and the
other transactions and deliveries contemplated by this Agreement (the "Closing")
shall take place at the offices of Xxxxxx, Halter & Xxxxxxxx LLP at 0000
XxXxxxxx Xxxxxxxxxx Xxxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000,
simultaneously with the execution and delivery of this Agreement by the Company
and the Purchaser on the date of this Agreement (the "Closing Date").
3.2 CLOSING ACTIONS
In connection with the execution and delivery of this Agreement, except as
specifically set forth below, the following actions shall occur simultaneously
with, or prior to, the execution and delivery of this Agreement (the "Closing
Actions").
(i) The Company shall deliver to the Purchaser a certificate of the
Secretary of State of the State of Delaware, dated as of the Closing Date, as to
the status of the Company as a corporation in good standing under the laws of
the State of Delaware as of the Closing Date.
(ii) The Company shall deliver to the Purchaser a certificate
executed by its Secretary, in form and substance satisfactory to the Purchaser,
certifying the resolutions authorizing the transactions contemplated by this
Agreement and certain incumbency matters.
(iii) Within ten days of the Closing Date, the Company shall deliver
to the Purchaser one or more certificates or other instruments representing the
Purchased Shares being purchased by the Purchaser at the Closing pursuant to
Section 2.1, which certificates and instruments shall be in a form satisfactory
to the Purchaser and registered in the name of the Purchaser or such nominee or
nominees as the Purchaser may designate in writing to the Company, against
receipt by the Company of payment of the full amount of the Purchase Price for
the Purchased Shares either by check or by wire-transfer of immediately
available funds to the Company in accordance with wire-transfer instructions
furnished by the Company to the Purchaser at least two business days prior to
the Closing Date.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
Except (i) as disclosed in any Exchange Act Filings (as defined in Section
4.8 below) filed by the Company with the SEC subsequent to December 31, 2004 or
(ii) as disclosed in the Schedule of Exceptions attached to this Agreement as
Exhibit I, the Company hereby represents and warrants to the Purchaser as
follows (which representations and warranties shall be deemed to apply, where
appropriate, to each subsidiary of the Company):
4.1 ORGANIZATION AND QUALIFICATION
The Company is a corporation that has been duly incorporated and is
validly existing and in good standing under the laws of the State of Delaware.
The Company has all requisite corporate power and authority to own and operate
its properties and assets and to conduct its
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business as it is presently being conducted and as it is proposed to be
conducted. The Company is duly qualified as a foreign corporation to transact
business in, and is in good standing in, each jurisdiction in which its
ownership, lease or operation of its properties or assets, the nature of its
activities or the conduct of its business makes such qualification necessary,
except for any failure or failures to be so qualified could not, individually or
in the aggregate, reasonably be expected to result in a material adverse effect
on the condition, financial or otherwise, or the earnings, assets, liabilities,
business or prospects of the Company. Except as disclosed in Section 4.7(d), the
Company is not in violation or breach of any of the terms, conditions or
provisions of such Certificate of Incorporation or By-Laws.
4.2 AUTHORIZATION
The Company has all requisite corporate power and authority to execute and
deliver (a) this Agreement, and (b) the Purchased Shares (collectively, the
"Transaction Documents"), and to perform its obligations under the Transaction
Documents. The execution and delivery by the Company of each of the Transaction
Documents and the performance by the Company of its obligations thereunder have
been duly authorized by all necessary corporate action on its part, and no other
corporate proceedings on its part are necessary to authorize its execution and
delivery of the Transaction Documents or its performance of its obligations
under the Transaction Documents.
4.3 PURCHASED SHARES
The Purchased Shares and the issuance, sale and delivery thereof upon the
terms and conditions set forth in this Agreement have been duly authorized by
all requisite action of the Board of Directors of the Company and all requisite
stockholder action. When issued and delivered to the Purchaser upon the terms
and conditions of this Agreement (and paid for as contemplated by this
Agreement), the Purchased Shares will be validly issued and fully paid and
nonassessable, with no personal liability attached to the ownership thereof and
not subject to any preemptive rights, rights of first refusal or other similar
rights of any stockholder of the Company or any other person, and, based upon
the representations and warranties of the Purchaser set forth in Section 5 of
this Agreement, shall have been issued in compliance with all applicable
securities laws.
4.4 DUE EXECUTION AND DELIVERY; BINDING OBLIGATIONS
Each Transaction Document has been duly executed and delivered by the
Company, and each such Transaction Document constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or conveyance or
similar laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability and except as rights of indemnity or
contribution may be limited by federal or state securities or other laws or the
public policy underlying such laws.
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4.5 NO CONFLICT OR VIOLATION
The execution and delivery by the Company of each Transaction Document,
and the performance by the Company of its obligations under each Transaction
Document, will not result in any conflict with, or result in a violation or
breach of any of the terms, conditions or provisions of, or constitute (with or
without due notice, lapse of time or both) a default under, or give rise to a
right of termination, cancellation or acceleration of any obligation under, or
result in the creation of any lien upon any of the properties or assets of the
Company or any of its subsidiaries under, (i) the Certificate of Incorporation
or the By-Laws of the Company, or the certificate of incorporation, articles of
incorporation or by-laws of any subsidiary of the Company, (ii) any material
contract to which the Company or any of its subsidiaries is a party or to which
any of their respective properties or assets is subject; or (iii) any law,
statute, ordinance, rule, regulation, judgment, order, decree, license or permit
applicable to the Company or any of its subsidiaries or to which any of their
respective properties or assets is subject.
4.6 CONSENTS AND APPROVALS
The execution and delivery by the Company of each Transaction Document,
and the performance by the Company of its obligations under each Transaction
Document, do not and will not require any consent, approval, license, permit,
order or authorization of, or any registration, notification, declaration or
filing with, any person (including any securities exchange or self-regulatory
organization or any governmental agency, entity or authority), except for (i)
such as have been obtained or made and are in full force and effect as of the
Closing, (ii) the filing of any notice with respect to the Closing with any
governmental agency, entity or authority which may be required subsequent to the
Closing under the Securities Act of 1933, as amended (the "Securities Act"), any
state securities laws, or the rules and regulations promulgated thereunder (and
which, if required, will be filed on a timely basis as may be so required), and
(iii) the approval of the shareholders of the Company which may be required by
NASD listing standards.
4.7 CAPITALIZATION
(a) All outstanding shares of capital stock of the Company of every class
and series have been duly authorized and validly issued, free of any preemptive
or similar rights except such as have been fully complied with, and are fully
paid and nonassessable, with no liability attaching to the ownership thereof.
(b) Except as set forth in Section 4.7(d) below and the (x) Certificate of
Incorporation, (y) the two Stock Purchase Agreements entered into in 2005 by and
between the Company and Xxxx X. Xxxxxx and Xxxxxx Xxxxxx, respectively, or (z)
the Registration Rights Agreement, the Investor Rights Agreement, the Right of
First Refusal Agreement, or the Voting Agreement (all of which were entered into
by the Company and the various other parties thereto as of March 4, 2004, as
they may have been amended), there are no outstanding (i) rights of first offer
or first refusal, "drag-along" rights, "tag-along" rights or other similar
rights or agreements, arrangements or commitments of any character which
obligate the Company or any of its subsidiaries, or, to the knowledge of the
Company, any stockholder of the Company or other person, to transfer, sell or
vote any Company Securities (as defined below), (ii) obligations on
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the part of the Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire any Company Securities, (iii) liabilities on the part of the
Company or any of its subsidiaries for dividends declared or accumulated but
unpaid with respect to Company Securities, (iv) obligations on the part of the
Company or any of its subsidiaries to register for public sale any Company
Securities, and (v) obligations on the part of the Company or any of its
subsidiaries or, to the knowledge of the Company, of any stockholder of the
Company or other person for the voting of Company Securities in any manner
whatsoever. "Company Securities" means (i) shares of capital stock or other
voting securities of the Company, (ii) securities of the Company or any of its
subsidiaries convertible into or exchangeable for shares of capital stock or
voting securities of the Company, and (iii) options, warrants or other rights to
acquire from the Company or any of its subsidiaries.
(c) Except as set forth in (x) the 1996 Stock Option Plan with respect to
options granted or to be granted thereunder, (y) warrants beneficially owned by
Xxxxx X. Xxxxxx, Xx. or (z) the Certificate of Incorporation, no Company
Securities will become issuable to any Person, nor will the conversion or
exercise price or exchange factor or ratio of any Company Securities be reduced,
pursuant to any so-called "anti-dilution" or similar adjustment provisions of
any Company Securities or pursuant to any agreements, arrangements or
commitments to which the Company or any of its subsidiaries is a party.
(d) The Company has no liability whatsoever to any stockholder, former
stockholder or other person, whether fixed or variable, accrued or contingent,
for the payment of any dividends, whether or not declared and whether cumulative
or non-cumulative, except for the Company's liability for cumulative dividends
accrued with respect to the shares of the Series A Preferred Stock, presently
issued and outstanding in accordance with the terms thereof as set forth in the
Certificate of Incorporation. None of such dividends are currently due or
payable, and the total amount of the Company's liability for such accrued
cumulative dividends on the Prior Preferred Stock as of May 31, 2005, was
$625,282.19.
(e) All shares of capital stock and other equity or debt securities of the
Company and its subsidiaries (including any predecessors of the Company and such
subsidiaries) issued prior to the Closing have been offered, sold and issued
either pursuant to an effective registration statement under the Securities Act
of 1933, as amended (the "Securities Act"), or in a transaction exempt from
registration under the Securities Act, and in compliance with all applicable
state securities laws and all rules and regulations promulgated under the
Securities Act and applicable state securities laws. Neither the Company nor any
of its subsidiaries nor any predecessor thereof has violated the Securities Act
or any applicable state securities laws or any rules or regulations promulgated
thereunder in connection with the issuance, sale and delivery of any securities.
4.8 EXCHANGE ACT FILINGS
The Company has timely filed all documents required to be filed by the
Company (the "Exchange Act Filings") with the Securities and Exchange Commission
(the "SEC") pursuant to the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the "1934 Act"). As of their
respective filing dates, all Exchange Act Filings complied in all material
respects with the requirements of the 1934 Act, and none of the
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Exchange Act Filings contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances in which they
were made, not misleading. All financial statements of the Company included in
any Exchange Act Filings complied as to form in all material respects with the
then applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, were prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved ("GAAP") (except as may be indicated in the notes thereto
or, in the case of unaudited statements, as permitted by Form 10-Q and
Regulation S-X) and fairly present the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and changes in financial position for
the periods then ended (subject, in the case of unaudited statements, to
normally, recurring year-end audit adjustments).
4.9 FINANCIAL STATEMENTS
All financial statements of the Company included, whether as exhibits or
otherwise, or incorporated by reference in the Exchange Act Filings have been
prepared from and in accordance with the books and records of the Company and
its subsidiaries (which have been maintained in accordance with good business
practices and are true and complete in all material respects), and fairly
present in all material respects the consolidated financial position and
consolidated results of operations, stockholders' equity and cash flows of the
Company and its subsidiaries as of the respective dates thereof and for the
respective periods indicated therein in accordance with GAAP, subject, in the
case of any unaudited financial statements included among such financial
statements, to normal, recurring year-end adjustments (which adjustments are not
material, individually or in the aggregate) and the lack of footnotes and other
presentation items required by GAAP. Since January 1, 2005, except as required
by applicable law or GAAP, there has been no change in any accounting principle,
procedure or practice followed by the Company or any of its subsidiaries or in
the method of applying any such principle, procedure or practice.
4.10 UNDISCLOSED LIABILITIES
The Company and its subsidiaries do not have any liabilities or
obligations whatsoever (whether matured or unmatured, known or unknown, fixed or
contingent or otherwise) of a type required to be reflected on or reserved
against in, or to be disclosed in the notes to, a balance sheet prepared in
accordance with GAAP, except (i) to the extent expressly reflected on or
reserved against in, or otherwise disclosed in the notes to, the Company's
audited consolidated financial statements as of and for the period ended
December 31, 2004 (the "Latest Audited Financial Statements"), as set forth in
the company's Annual Report on Form 10-K as filed with the SEC pursuant to the
1934 Act (the "Annual Report"), (ii) for those liabilities or obligations
expressly disclosed or reflected in Exchange Act Filings filed by the Company
with the SEC subsequent to the Annual Report, and (iii) for those liabilities or
obligations arising since December 31, 2004 in the ordinary course of business
consistent (in amount and kind) with past practice, none of which, except as
expressly set forth in any Exchange Act Filings filed by the Company with the
SEC subsequent to the Annual Report, is a liability or obligation arising from
any breach of contract, breach of warranty, tort, infringement claim, violation
of law or any action, suit or proceeding.
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4.11 NO MATERIAL CHANGE
Since December 31, 2004,
(a) there has been no material adverse change or any development involving
a prospective material adverse effect on or affecting the condition, financial
or otherwise, or the earnings, assets, liabilities, business or prospects of the
Company, whether or not arising in the ordinary course of business;
(b) there have been no transactions entered into by the Company other than
those in the ordinary course of business, which are material with respect to the
Company; and
(c) there has been no dividend or distribution of any kind declared, paid
or made by the Company on or with respect to any class or series of its capital
stock, nor has the Company repurchased or redeemed any shares of its capital
stock.
4.12 ENVIRONMENTAL MATTERS
Except as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the condition, financial or
otherwise, or the earnings, assets, liabilities, business or prospects of the
Company,
(a) the Company is in compliance with all applicable Environmental Laws
(as defined below);
(b) the Company has all permits, authorizations and approvals required
under any applicable Environmental Laws and is in compliance with the
requirements of such permits authorizations and approvals;
(c) there are no pending or, to the knowledge of the Company, threatened
Environmental Claims (as defined below) against the Company; and
(d) under applicable law, there are no circumstances with respect to any
property or operations of the Company that are reasonably likely to form the
basis of an Environmental Claim against the Company.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any federal, state, local or
municipal statute, law, rule, regulation, ordinance, code, policy or rule of
common law and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
the environment, human health or safety, or any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority. "Environmental Claims" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in any way to
any Environmental Law.
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4.13 NO DEFAULTS
The Company is not in material default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, deed, trust, note, lease, sublease, voting
agreement, voting trust, or other instrument or agreement to which the Company
is a party or by which it may be bound, or to which any of the property or
assets of the Company is subject, except for any such defaults as could not,
either individually or in the aggregate, reasonably be expected to result in a
material adverse effect on or affecting the condition, financial or otherwise,
or in the earnings, assets, liabilities, business or prospects of the Company.
4.14 LABOR MATTERS
There exists no material dispute with any employees or group of employees
of the Company, whether or not covered by any collective bargaining agreement,
and, to the knowledge of the Company, no such dispute is or has been threatened.
4.15 NO ACTIONS
There are no actions, suits, proceedings or investigations before or by
any court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, threatened against or affecting the Company
which if determined adversely to the Company could, either individually or in
the aggregate, reasonably be expected to result in a material adverse effect on
the condition, financial or otherwise, or the earnings, assets, liabilities,
business or prospects of the Company or which relates in any way to the
transactions contemplated by this Agreement, nor, to the knowledge of the
Company, is there any reasonable basis for any such action, suit or proceeding.
Neither the Company nor any of its subsidiaries is in default with respect to
any judgment, order or decree of any court or governmental agency or
instrumentality applicable the Company or any such subsidiary.
4.16 INTELLECTUAL PROPERTY
(a) The Company owns or is licensed to use or otherwise possesses the
legal right to use all patents, patent applications, inventions, trademarks,
trade names, applications for registration of trademarks, service marks, service
xxxx applications, copyrights, know-how, manufacturing processes, formulae,
trade secrets, licenses and rights in any thereof and any other intangible
property and assets that are material to the business of the Company as now
conducted and as proposed to be conducted (collectively, "Proprietary Rights").
(b) The Company does not have any knowledge of, and the Company has not
given or received any notice of, any pending conflicts with or infringement of
the rights of others with respect to any Proprietary Rights or with respect to
any license of Proprietary Rights which are material to the business of the
Company.
(c) No action, suit, arbitration, or legal, administrative or other
proceeding, or investigation is pending, or, to the knowledge of the Company,
threatened, which involves any Proprietary Rights and which, if determined
adversely to the Company, could reasonably be expected to result in a material
adverse effect on the condition, financial or otherwise, or the
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earnings, assets, liabilities, business or prospects of the Company, nor, to the
knowledge of the Company, is there any reasonable basis therefor.
4.17 PERMITS
The Company possesses and is operating in compliance with all material
licenses, certificates, consents, authorizations, approvals and permits from all
governmental agencies, entities and authorities of any foreign, federal, state,
local or other jurisdiction regulatory necessary to conduct the businesses now
operated by it, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such permit or any
circumstance which would lead it to believe that such proceedings are reasonably
likely which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could reasonably be expected to result in a
material adverse effect on the condition, financial or otherwise, or the
earnings, assets, liabilities, business or prospects of the Company, nor, to the
knowledge of the Company, is there any reasonable basis therefor.
4.18 COMPLIANCE
The Company has conducted and is conducting its business in compliance
with all applicable statutes, laws, rules, regulations, ordinances, codes,
decisions, decrees, directives and orders of any foreign or federal, state,
local or other jurisdiction, except where any failure to so comply could not,
either individually or in the aggregate, reasonably be expected to result in a
material adverse effect on the condition, financial or otherwise, or the
earnings, assets, liabilities, business or prospects of the Company.
4.19 TAXES
(a) (i) The Company and its subsidiaries (including their predecessors)
have timely filed in accordance with all applicable laws (taking into account
valid extensions) all tax returns, reports and declarations ("Tax Returns")
required to be filed by them, and all such Tax Returns are true, correct and
complete in all material respects, (ii) the Company and its subsidiaries
(including their predecessors) have timely paid all Taxes (as defined below) due
and required to be paid by them, including any Taxes levied upon any of their
properties, assets, income or franchises, (iii) all amounts required to be
collected or withheld by the Company and its subsidiaries (including their
predecessors) have been collected or withheld and any such amounts which are
required to be remitted to any taxing authority have been duly remitted, (iv) no
taxing authority in any jurisdiction in which the Company or any subsidiary
thereof (including any predecessors thereof) has not filed Tax Returns has made
a claim, assertion or threat that such non-filing entity is or may be subject to
taxation in such jurisdiction, (v) no audit, investigation or other proceeding
is in progress, pending, proposed or, to the knowledge of the Company,
threatened, in each case with regard to any Taxes or Tax Returns of the Company
or any subsidiary thereof (including their predecessors), and (vi) neither the
Company nor any subsidiary thereof nor any predecessor thereof is a party to or
bound by a Tax sharing or Tax allocation or similar agreement or arrangement.
The accruals and reserves for Taxes in the Latest Audited Financial Statements
were complete and adequate to cover any liability of the Company and its
subsidiaries for Taxes for the periods through the dates thereof. The Company
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is not currently, nor has it been at any time, a "United States real property
holding corporation" as such term is defined in Section 897 of the Internal
Revenue Code of 1986, as amended.
(b) As used herein, "Taxes" means (i) all income taxes (including any tax
on or based upon net income, gross income, income as specially defined,
earnings, profits or selected items of income, earnings or profits) and all
gross receipts, sales, use, ad valorem, transfer, franchise, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property or windfall profits taxes, alternative or add-on minimum taxes, customs
duties and other taxes, fees, assessments or charges of any kind whatsoever,
together with all interest and penalties, additions to tax and other additional
amounts, in each case imposed by any taxing authority (domestic or foreign) on
any person (if any) and (ii) any liability for the payment of any amount of the
type described in clause (i) above as a result of (A) being a "transferee"
(within the meaning of Section 6901 of the Code or any other applicable law) of
another person, (B) being a member of an affiliated, combined or consolidated
group or (C) a contractual arrangement or otherwise.
4.20 OTHER GOVERNMENTAL PROCEEDINGS
To the Company's knowledge, there are no rulemaking or similar proceedings
before any Federal, state, local or foreign government bodies that involve or
affect the Company, which, if subject to an action unfavorable to the Company,
could involve a prospective material adverse change in or effect on the
condition, financial or otherwise, or in the earnings, assets, liabilities,
business or prospects of the Company.
4.21 INSURANCE
The Company maintains insurance of the type and in the amount that the
Company reasonably believes is adequate for its business, including insurance
covering all real and personal property owned or leased by the Company against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against by similarly situated companies, all of which insurance is in
full force and effect.
4.22 {INTENTIONALLY LEFT BLANK.}
4.23 CONTRACTS
All material contracts to which the Company or any of its subsidiaries is
a party and which are described or incorporated by reference in any Exchange Act
Filing filed by the Company with the SEC subsequent to December 31, 2002, are in
full force and effect on the date hereof, except for any such contracts the
termination or expiration of which could not, individually or in the aggregate,
reasonably be expected to result in a material adverse effect on the condition,
financial or otherwise, or the earnings, assets, liabilities, business or
prospects of the Company. Neither the Company nor any of its subsidiaries nor,
to the knowledge of the Company, any other party is in material breach of or
default under any contract which is material to the business of the Company or
any of its subsidiaries.
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4.24 NO INTEGRATED OFFERING
Neither the Company, nor any of its affiliates, nor any person acting on
its or their behalf, has directly or indirectly made any offers or sales in any
security or solicited any offers to buy any security under circumstances that
would require registration under the Securities Act of the issuance and sale of
the Purchased Shares to the Purchaser. Other than additional possible sales to
the Purchaser or sales pursuant to the two Stock Purchase Agreements entered
into in 2005 by and between the Company and Xxxx X. Xxxxxx and Xxxxxx Xxxxxx,
respectively, the Company will not make any offers or sales of any security that
would cause the offering of the Purchased Shares to be integrated with any other
offering of securities by the Company for purposes of any registration
requirement under the Securities Act or any applicable rules of any national
securities exchange on which any securities of the Company are on the date
hereof or hereafter become traded.
4.25 BROKERS AND FINDERS
No action has been taken by the Company or any other person on the
Company's behalf that would give rise to any valid claim against the Company or
the Purchaser for a brokerage commission, finder's fee or other like payment
with respect to the transactions contemplated by any of the Transaction
Documents.
4.26 DISCLOSURE
No representation or warranty made by the Company in this Agreement or in
any other writing furnished pursuant hereto contains an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
and facts contained herein or therein, in light of the circumstances in which
they were or are made, not misleading
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as follows:
5.1 AUTHORIZATION
The Purchaser has the requisite power and authority to execute and deliver
the Transaction Documents to which it is a party and to perform its obligations
under such Transaction Documents. The execution and delivery by the Purchaser of
the Transaction Documents to which it is a party and the performance by the
Purchaser of its obligations under such Transaction Documents have been duly
authorized by all necessary action on its part, and no other proceedings on its
part are necessary to authorize its execution and delivery of such Transaction
Documents or its performance of its obligations under such Transaction
Documents.
5.2 DUE EXECUTION AND DELIVERY; BINDING OBLIGATIONS
Each Transaction Document to which the Purchaser is a party has been duly
executed and delivered by the Purchaser, and each such Transaction Document
constitutes the legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
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moratorium, fraudulent transfer or conveyance or similar laws relating to or
limiting creditors' rights generally or by equitable principles relating to
enforceability and except as rights of indemnity or contribution may be limited
by federal or state securities or other laws or the public policy underlying
such laws.
5.3 CONSENTS AND APPROVALS
The execution and delivery by the Purchaser of each Transaction Document
to which it is a party, and the performance by the Purchaser of its obligations
under each such Transaction Document, do not and will not require any consent,
approval, license, permit, order or authorization of, or any registration,
declaration or filing with, any Person (including any governmental agency,
entity or authority), except for (i) such as have been obtained or made and are
in full force and effect, and (ii) the approval of the shareholders of the
Company which may be required by NASD listing standards.
5.4 INVESTMENT REPRESENTATIONS
Solely for establishing that the offer, sale and issuance of the Purchased
Shares being purchased by the Purchaser pursuant to this Agreement are exempt
from the registration requirements of the Securities Act and the comparable
provisions of state securities laws and not in any way to mitigate the
responsibility or liability of the Company for any breach of the representations
and warranties made by the Company in this Agreement, on which the Purchaser is
relying in full in connection with its, his or her decision to invest in the
Company:
(a) The Purchaser is acquiring the Purchased Shares to be purchased by it
under this Agreement, for its own account, for investment and not with a view to
the distribution thereof in violation of the Securities Act or applicable state
securities laws.
(b) The Purchaser understands that the Purchased Shares have not been
registered under the Securities Act or applicable state securities laws by
reason of their issuance by the Company in transactions exempt from the
registration requirements of the Securities Act and applicable state securities
laws, and that the Company's reliance upon such exemptions is based in part on
the representations of the Purchaser contained in this Agreement; and that each
such security must be held indefinitely unless a subsequent disposition thereof
is registered under the Securities Act and applicable state securities laws or
is exempt from registration.
(c) The Purchaser further understands that the exemption from registration
under the Securities Act afforded by Rule 144 (the provisions of which are known
to the Purchaser) depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis for sales of only limited amounts and
under limited circumstances.
(d) The Purchaser has had the opportunity to ask questions of the
Company's officers and directors about the business and financial condition of
the Company and its subsidiaries, understands that its, purchase of the
Purchased Shares being purchased by it pursuant to this Agreement, are
speculative investments which involve a high degree of risk of loss of the
entire investment therein; and has such knowledge and experience in financial
and business matters that it is capable of evaluating the risks and merits of
its investment in such Purchased Shares.
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(e) The Purchaser is an "accredited investor" as such term is defined in
Rule 501 of Regulation D promulgated under the Securities Act.
(f) The Purchaser has not employed any broker or finder in connection with
the transactions contemplated by the Transaction Documents.
(g) The principal office of the Purchaser is located at the address listed
on the signature page hereto, and substantially all of the decisions of the
Purchaser with respect to its investment pursuant to this Agreement were made at
such location.
6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Notwithstanding any investigation made at any time by or on behalf of any
party to this Agreement, all covenants, agreements, representations and
warranties made by the Company and the Purchaser in this Agreement and in any of
the other Transaction Documents shall survive the execution and delivery of this
Agreement and the issuance and delivery to the Purchaser of the Purchased
Shares.
7. INDEMNIFICATION
7.1 INDEMNIFICATION OF PURCHASER INDEMNITEES
The Company shall indemnify, defend and hold the Purchaser and its
respective officers, directors, partners, managing directors, affiliates,
employees, agents, consultants, representatives, successors and assigns (each a
"Purchaser Indemnitee") harmless from and against all Losses (as hereinafter
defined) incurred or suffered by a Purchaser Indemnitee arising out of, relating
to or resulting from (i) any breach of any of the representations or warranties
made by the Company in this Agreement or in any of the other Transaction
Documents or (ii) any breach of any of the covenants or agreements made by the
Company in this Agreement or in any of the other Transaction Documents. Such
right of indemnification shall be in addition to and not in lieu of any and all
other rights and remedies available to the Purchaser at law or in equity.
7.2 INDEMNIFICATION PRINCIPLES
For purposes of this Agreement, "Losses" shall mean and include each and
all of the following items: claims, actions, demands, losses (including losses
of earnings), liabilities, obligations, payments, damages (actual, punitive and
consequential), charges, judgments, fines, penalties, amount paid in settlement,
costs and expenses (including interest which may be imposed in connection
therewith, costs and expenses of investigation, actions, suits, proceedings,
demands, assessments, and fees, expenses and disbursements of counsel,
consultants and other experts).
8. TRANSFERS OF SECURITIES
8.1 RESTRICTIVE LEGENDS; EXCHANGES; LOST, STOLEN OR MUTILATED CERTIFICATES
Each certificate or other instrument evidencing Purchased Shares and each
certificate or other instrument for any such Purchased Shares issued to
subsequent transferees of any such
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Purchased Shares shall (unless otherwise permitted by the provisions of Section
8.3) be stamped or otherwise imprinted with a legend in substantially the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR ANY STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM
UNDER SAID ACT OR APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.
8.2 NOTICE OF TRANSFER
(a) If in the opinion of counsel for the Purchaser any proposed transfer
of Purchased Shares may be effected without registration under the Securities
Act, the holder of such Purchased Shares shall thereupon be entitled to transfer
such Purchased Shares in accordance with the terms of the notice delivered by it
to the Company.
(b) Each certificate or other instrument evidencing the securities issued
upon the transfer of any Purchased Shares (and each certificate or other
instrument evidencing any untransferred balance of such securities) shall bear
the legends set forth in Section 8.1 unless (i) in the opinion of such counsel,
registration of future transfer is not required by the applicable provisions of
the Securities Act or (ii) the Company shall have waived the requirement of such
legends; provided, however, that such legend shall not be required on any
certificate or other instrument evidencing the securities issued upon such
transfer in the event such transfer shall be made in compliance with the
requirements of Rule 144.
(c) Upon surrender by the Purchaser to the Company of any certificate,
representing Purchased Shares, the Company at its expense will, within five
business days, issue in exchange therefor, and deliver to the Purchaser, a new
certificate or certificates representing such Purchased Shares, in such
denominations as may be requested by such Purchaser. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of any
certificate representing any Purchased Shares purchased or acquired by the
Purchaser hereunder, and in case of any such loss, theft or destruction, upon
delivery of any indemnity agreement satisfactory to the Company, or in any case
of any such mutilation, upon surrender and cancellation of such certificate, the
Company at its expense will, within five business days, issue and deliver to the
Purchaser a new certificate or other instrument for such Purchased Shares of
like tenor, in lieu of such lost, stolen, destroyed or mutilated certificate.
8.3 TRANSFER PURSUANT TO RULE 144
The Company covenants that (a) the Company will comply at all times with
the public information requirements of Rule 144(c)(1); and (b) at all times as
Rule 144 is available for use by any Purchaser, the Company will furnish such
Purchaser, upon its request, with all information within the possession of the
Company reasonably required for the preparation and filing of Form 144.
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9. MISCELLANEOUS COVENANTS
9.1 CERTAIN TAXES
The Company shall pay, and will hold each Purchaser harmless from, (a) any
and all liability with respect to any transfer, transfer gains, stamp or similar
Taxes which may be determined to be payable in connection with (i) the execution
and delivery and performance of this Agreement or any modification, amendment or
alteration of the terms or provisions of this Agreement, and (b) all Taxes
arising as a result of the issuance of the Purchased Shares to the Purchaser
(collectively, "Transaction-Related Taxes").
9.2 PRESS RELEASE; LISTING OF COMMON SHARES
The Company shall timely file a Current Report on Form 8-K under the 1934
Act disclosing the transactions contemplated hereby. In addition, the Company
will make such other filings and notices in the manner and time required by the
SEC and each national securities exchanges or automated quotation system upon
which shares of Common Stock are currently listed.
9.3 REGISTRATION RIGHTS
The Company shall grant registration rights to the Purchaser with regard
to the Purchased Shares. The cost of registration shall be paid by the Company
and shall occur as soon as practicable. The term "Registration" refers to a
registration effected by preparing and filing a registration statement or
similar document in compliance Securities Act, and a declaration or ordering of
effectiveness of such registration statement or document. The Purchaser has been
informed that the Company may not be able to maintain its current listing on the
NASDAQ SmallCap Market on which shares of Common Stock are currently listed
because the Company may not meet continued listing standards due to (i) the fact
that the closing price of the Common Stock may be below $1.00 for 30 consecutive
business days (as of the close on June 21, 2005, the closing price of the Common
Stock had been below $1.00 for 23 consecutive business days) and/or (ii) the
Company is concerned that it may fail to meet the minimum shareholders equity
requirement for the quarter ending June 30, 2005. The obligation to register
shall be nullified in the event that the Common Stock does not meet the
applicable requirements to be listed on a National Securities Exchange or
automated quotation system (which shall be defined to include NASDAQ Small Cap,
Bulletin Board, and Pink Sheets).
10. EXPENSES
The Company shall pay (a) all costs and other expenses incurred from time
to time by the Company in connection with the Company's performance of and
compliance with all agreements and conditions contained herein on its part to be
performed or complied with (including the costs and expenses of its counsel
incurred in connection with the drafting, review and negotiation of the
Transaction Documents), (b) all out-of-pocket costs and expenses reasonably
incurred by the Purchaser and their respective affiliates (including the
reasonable fees and expenses of Xxxxxx, Halter & Xxxxxxxx LLP) in connection
with the preparation, negotiation, execution and delivery of this Agreement and
the other Transaction Documents and the purchase of the Purchased Shares
hereunder (provided, the payment obligations of the Company with respect to this
clause
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(b) shall not exceed an aggregate amount agreed upon by the Company and the
Purchaser); (c) all out-of-pocket costs and expenses actually incurred by the
Purchaser (including the fees, charges and disbursements of counsel for the
Purchaser) in connection with (A) the preparation, negotiation, execution and
delivery of any amendments, modifications or waivers of the provisions of this
Agreement or any other Transaction Document and (B) the enforcement or
protection of the Purchaser' rights under the provisions of this Agreement or
any other Transaction Document; and (d) any Transaction-Related Taxes. All
amounts payable under this Section 10 shall be payable by the Company promptly
after written demand therefor.
11. NOTICES
Any notices, demands, consents or other communications that are given or
made hereunder shall be in writing and shall be given or made to any party
hereto by physical delivery, U.S. mail (registered or certified mail, postage
prepaid, return receipt requested) or overnight courier or by transmission by
facsimile to such party at its, his or her address (or facsimile number) set
forth below, or such other address (or facsimile number) as shall have been
specified by like notice by such party:
(a) if to the Company, to:
Trans-Industries, Inc.
0000 Xxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Dawda, Mann, Xxxxxxx & Xxxxxx, PLC
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other person at such other place as the Company shall designate to
each Purchaser in writing; and
(b) if to the Purchaser, to the Purchaser's address (or facsimile number)
as set forth on the signature page, or to such other address for the Purchaser
as the Purchaser may specify in written notice given to the Company in
accordance with this section.
Each such notice, demand, consent or other communication shall be
effective upon receipt in the case of physical delivery or overnight courier,
upon confirmation of receipt by or on behalf of the addressee in the case of
transmission by facsimile if received prior to 5:00 p.m. local time at the
destination of such facsimile transmission, and, if received after 5:00 p.m.
local time at the destination of such facsimile transmission, on the next
business day immediately after
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the date of such receipt, and five business days after deposit in the U.S. mail
in the case of mailing.
12. MISCELLANEOUS PROVISIONS
12.1 ENTIRE AGREEMENT
This Agreement and the other Transaction Documents constitute the entire
agreement among the parties with respect to the subject matter hereof and
thereof and supersede any prior or contemporaneous understandings, negotiations,
agreements or representations by or among such parties, written or oral, that
may have related in any way to the subject matter hereof or thereof, including
any letter of intent or term sheet dated as of or prior to the date hereof,
between the Company and one or more of the Purchaser (or their affiliates).
12.2 FURTHER ASSURANCES
The Company will, and will cause its subsidiaries to, execute any and all
further documents, agreements and instruments, and take all such further actions
that may be required under any applicable law, or which the Purchaser may
reasonably request, to effectuate the transactions contemplated by the
Transaction Documents, all at the expense of the Company.
12.3 FURTHER ASSURANCES
(a) Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and permitted assigns
of such party, and all covenants and agreements by or on behalf of the Company
or the Purchaser which are contained in this Agreement or in any of the other
Transaction Documents shall bind and inure to the benefit of their respective
heirs, successors, and permitted assigns, except that the Company shall not
assign its rights or obligations hereunder without the consent of the Purchaser.
(b) The Purchaser shall have the right, without the consent of the Company
but subject to compliance with applicable securities laws and the applicable
provisions of this Agreement and the other Transaction Documents, to assign, all
or part of, the securities acquired by it hereunder and assign, all or part of,
its rights and obligations under this Agreement or any of the other Transaction
Documents.
12.4 COUNTERPARTS
This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement. Counterparts
transmitted by facsimile may be treated as an original instrument and relied
upon for all purposes as such.
12.5 GOVERNING LAW; WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION
(a) All questions concerning the construction, interpretation and validity
of this Agreement shall be governed by and construed and enforced in accordance
with the internal law of the State of Ohio, without giving effect to any choice
or conflict of law provision or rule
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(whether in the State of Ohio or any other jurisdiction) that would cause the
application of the law of any jurisdiction other than the State of Ohio. In
furtherance of the foregoing, the internal law of the State of Ohio will control
the interpretation and construction of this Agreement, even if under such
jurisdiction's choice of law or conflict of law analysis, the internal law of
some other jurisdiction would ordinarily or necessarily apply.
(b) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO
ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS
RELATED HERETO.
(c) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the non-exclusive jurisdiction of any
court of the State of Ohio or federal court of the United States of America
sitting in the State of Ohio, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such court of the
State of Ohio or, to the extent permitted by law, in such federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
(d) Each of the parties hereto irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court of the
State of Ohio or federal court sitting in the State of Ohio. Each of the parties
hereto irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
12.6 WAIVERS AND AMENDMENTS
(a) No failure or delay of the Purchaser in exercising any power or right
in this Agreement or in any other Transaction Document shall operate as a waiver
hereof or thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such right or
power, preclude any other or further exercise of any other right or power. No
waiver of any provision of this Agreement or any other Transaction Document or
consent to any departure by the Company therefrom shall in any event be
effective unless the same shall be authorized as provided for in Section
12.6(b), and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on the Company
in any case shall entitle the Company to any other or further notice or demand
in similar or other circumstances.
-18-
(b) Except as provided in Section 12.3, neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to a written
instrument which specifically references this Agreement which has been signed by
the party against whom such waiver, amendment or modification is sought to be
enforced or such party's authorized officer or representative.
12.7 INCORPORATION OF SCHEDULES AND EXHIBITS
The annexes, schedules and exhibits identified in this Agreement are
incorporated herein by reference and made a part hereof as though fully
rewritten herein.
12.8 INTERPRETATION AND CONSTRUCTION
The term "this Agreement" means this Common Stock Purchase Agreement,
together with all annexes, schedules and exhibits hereto, as the same may from
time to time be amended, modified, supplemented or restated in accordance with
the terms hereof. Accounting terms used but not otherwise defined herein shall
have the meanings given to them under GAAP. The use in this Agreement of the
term "including" means "including, without limitation." The words "herein,"
"hereof," "hereunder" and other words of similar import refer to this Agreement
as a whole, including its annexes, schedules and exhibits, as the same may from
time to time be amended, modified, supplemented or restated, and not to any
particular section, subsection, paragraph, subparagraph or clause contained in
this Agreement. All references to sections, annexes, schedules and exhibits mean
the sections of this Agreement and the annexes, schedules and exhibits attached
to this Agreement, except where otherwise stated. The title of and the section
and paragraph headings in this Agreement are for convenience of reference only
and shall not govern or affect the interpretation of any of the terms or
provisions of this Agreement. The use herein of the masculine, feminine or
neuter forms shall also denote the other forms, as in each case the context may
require or permit. Where specific language is used to clarify by example a
general statement contained herein, such specific language shall not be deemed
to modify, limit or restrict in any manner the construction of the general
statement to which it relates. The language used in this Agreement has been
chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party. All references to payment
amounts herein are United States dollar amounts, and all payments hereunder
shall be made in United States dollars. Unless expressly provided otherwise, the
measure of a period of one month or year for purposes of this Agreement shall be
that date of the following month or year corresponding to the starting date,
provided that if no corresponding date exists, the measure shall be that date of
the following month or year corresponding to the next day following the starting
date. For example, one month following February 18 is March 18, and one month
following March 31 is May 1.
12.9 NO FIDUCIARY RELATIONSHIP
No provision in this Agreement or in any other Transaction Document and no
course of dealing among the parties hereto shall be deemed to create any
fiduciary duty by the Purchaser or any of their respective affiliates to the
Company or its directors, officers, employees, stockholders or affiliates.
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12.10 SEVERABILITY
It is the desire and intent of the parties that the provisions of this
Agreement be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
* * *
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IN WITNESS WHEREOF, the parties have executed this Common Stock Purchase
Agreement as of the date first written above.
THE COMPANY:
TRANS-INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: President
IN WITNESS WHEREOF, the parties have executed this Common Stock Purchase
Agreement as of the date first written above.
THE PURCHASER:
XXXXX-RELIANCE CORPORATION
By: /s/ Xxxxx X. Xxxxxx, Xx.
------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: Chairman of the Board
