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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 September 30, 2005, 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
$750,000, 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, 1,008,606
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 $750,000. The per share purchase
price of the Purchased Shares shall be
$0.7436 (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); (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, (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 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 August 31,
2005, was $13,686.
(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 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 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 respec
