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EXHIBIT 10.1
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made and
entered into
effective as of January 3, 2006, by and between TRANS-INDUSTRIES,
INC., a
Delaware corporation (the "Company"), and CLARK-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, 732,064
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
$0.3415 (equal to the higher of (1) the average closing purchase
price of the
Common Stock as listed on the NASDAQ SmallCap Market or Pink Sheets
for the 30
calendar day period preceding the Closing Date (as defined below);
(2) the
listed closing price on the day before the Closing Date; or (3) in
the event the
purchase will equal or exceed 20% or more of the Common Stock or
voting power
previously outstanding, the per share book value of the Common
Stock.)
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 for working-capital
and other
general corporate purposes, including the payment of accounts
payable,
delinquent taxes and indebtedness to banks.
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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 Calfee, Halter & Griswold
LLP at 1400
McDonald Investment Center, 800 Superior Avenue, Cleveland, Ohio
44114,
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
ACTIONS AT OR PRIOR TO THE CLOSING
In
connection with the execution and delivery of this Agreement,
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) 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 business as it is
presently being
conducted and as it is proposed to be conducted. The Company is
duly qualified
as
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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.
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
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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
and (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).
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 the (x) Certificate of Incorporation, or (y)
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 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.
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(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
Harry E. Figgie, Jr. 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 Company's Series A
Preferred Stock,
par value One Dollar ($1.00) ("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 December 31, 2005, was $41,057.
(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,
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
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).
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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 December 31, 2004,
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.
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.
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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.
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.
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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 mark
applications, copyrights, know-how, manufacturing processes,
formulae, trade
secrets, licenses and rights in any thereof and any other
intangible property
and assets that are mate