MUTUAL RELEASE AND SETTLEMENT AGREEMENT
This Mutual Release and Settlement Agreement (this "Agreement") is made
and entered into this 12th day of February, 1997 by and among The ▇▇▇▇▇ ▇▇▇▇▇▇▇
Company ("CW"), DTI Acquisition Corp. ("Subsidiary") and Trident Rowan Group,
Inc., formerly known as De Tomaso Industries, Inc. ("DTI") (CW, Subsidiary and
DTI are hereinafter collectively referred to as the "Parties"). The purpose of
this Agreement is to memorialize the terms and conditions under which the
Parties have agreed to terminate that certain Agreement and Plan of Merger,
dated as of August 14, 1996 (the "Merger Agreement"), including amendment of the
terms of that certain Promissory Note, dated September 17, 1996, in the
principal amount of $2,000,000, executed by CW in favor of DTI (the "Promissory
Note").
In consideration of the obligations undertaken by CW as set forth in this
Agreement, each of Subsidiary and DTI, for itself and for its respective
successors, assigns and predecessors, hereby releases and forever discharges CW
and all of its direct and indirect employees, agents, representatives,
attorneys, directors, officers, servants, successors, assigns, predecessors,
stockholders, subsidiaries, parents, divisions and affiliates (such persons
having such a relation to any of the Parties being referred to collectively as
their "Representatives"), from, and agrees to indemnify them for and hold them
harmless against, any and all claims, debts, demands, rights, liabilities,
causes of action, losses, damages, costs or expenses (including attorneys' fees)
of whatsoever kind and nature (collectively, "Losses"), directly or indirectly
arising from, resulting from, or relating in any way to the Merger Agreement or
the transactions contemplated thereunder, including, without limitation, any and
all Losses allegedly incurred by either or both of Subsidiary and DTI or any of
their respective Representatives as a result of, among other things, (i) the
breach by CW or any of its Representatives of any provisions of the Merger
Agreement, (ii) the breach of any other duty or obligation allegedly owed to
either or both of Subsidiary and DTI or any of their respective Representatives,
(iii) any alleged act or omission on the part of CW or any of its
Representatives related, directly or indirectly, to the business of Subsidiary
or DTI or the business relationships between or among any of the Parties, or
(iv) any communications made by CW or any of its Representatives to either or
both of Subsidiary and DTI or any of their respective Representatives, from the
beginning of time through the date hereof. In addition, Subsidiary and DTI
hereby release and forever discharge any third party with whom CW has had
conversations or other contacts regarding a possible merger with, or acquisition
of, CW from any and all claims directly or indirectly arising from such
conversations, including, without limitation, claims of tortious interference
with contractual relationship.
In consideration of the obligations undertaken by Subsidiary and DTI as
set forth in this Agreement, CW, for itself and for its successors, assigns and
predecessors, hereby releases and forever discharges Subsidiary and DTI and all
of their respective Representatives from, and agrees to indemnify them for and
hold them harmless against, any and all Losses, directly or indirectly arising
from, resulting from, or relating in any way to the Merger Agreement or the
transactions contemplated thereunder, including, without limitation, any and all
Losses allegedly incurred by CW or any of its Representatives as a result of,
among other things, (i) the breach by either or both of Subsidiary or DTI or any
of their respective Representatives of any provisions of the Merger Agreement,
(ii) the breach of any other duty or obligation
allegedly owed to CW or any of its Representatives, (iii) any alleged act or
omission on the part of either or both of Subsidiary and DTI or any of their
respective Representatives related, directly or indirectly, to the business of
CW or the business relationships between or among any of the Parties, or (iv)
any communications made by either or both of Subsidiary or DTI or any of their
respective Representatives to CW or any of its Representatives, from the
beginning of time through the date hereof.
Each of the Parties agrees and understands that it may have suffered
damages as a result of the matters referred to above that are unknown to it at
present. Each Party acknowledges that the release and other consideration
received by such Party under this Agreement is intended to and does release and
discharge any claims by such Party in regard to such unknown damages, including
effects or consequences thereof, and regardless of mistake or fact of law, and
each Party does hereby waive any rights to assert in the future any such claims.
Notwithstanding anything contained herein to the contrary, none of the
Parties hereto is releasing the others from any obligation expressly arising
under (a) the terms of this Agreement, (b) the Promissory Note, as amended by
the Allonge (as defined in Section 3 hereof), or (c) the Confidentiality
Agreement (as defined in subsection 6.b hereof).
Furthermore, and in consideration of the obligations undertaken in this
Agreement, the Parties also agree as follows:
1. Reimbursement of Expenses. CW hereby agrees to pay to DTI, not later
than close of business February 18, 1997, Two Hundred Thousand Dollars
($200,000), as liquidated damages in lieu of reimbursement for expenses incurred
by DTI in connection with the negotiation and preparation of the Merger
Agreement. In the event of the failure to pay this amount when due, such payment
shall accrue interest at an annual rate of fourteen percent (14%) until paid in
full.
2. Change of Control. In the event that CW experiences a Change of Control
at any time subsequent to the date hereof through May 11, 1998, the following
provisions shall apply:
a. CW shall provide DTI with written notice of such Change of Control not
later than the effective date of such Change of Control.
b. As additional liquidated damages in lieu of any potential claims for
Losses to DTI attributable to the non-consummation of the transactions
contemplated by the Merger Agreement, CW agrees to pay an additional
amount (the "Change of Control Fee") to DTI as of the effective date of
such Change of Control of Five Hundred Thousand Dollars ($500,000).
c. In the event that CW fails to notify DTI of a Change of Control as
provided for in subsection 2.a. above or fails to pay the Change of
Control Fee when due pursuant to Subsection 2.b. above, the Change of
Control Fee shall accrue interest from and after
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the effective date of the Change of Control at an annual rate of fourteen
percent (14%) until such Change of Control Fee is paid by CW in full.
d. For purposes of this Section 2, a "Change of Control" shall mean (i) a
merger or consolidation to which CW is a party with a third party which
results in a transfer of ownership of a majority of the outstanding shares
of voting common stock of CW, (ii) any acquisition by a third party of a
majority of the outstanding shares of voting common stock of CW, or (iii)
a sale of all or substantially all of the assets of CW to a third party
(including for this purpose the sale of stock of material subsidiaries).
3. Allonge to Promissory Note. On the date hereof, CW and DTI shall
execute, and CW shall deliver to DTI, the Allonge to Promissory Note (the
"Allonge") in the form attached hereto as Exhibit A.
4. Termination of Merger Agreement. Effective immediately upon execution
of this Agreement by each of the Parties, the Merger Agreement, and all rights
and obligations of each of the Parties thereunder, shall terminate and be of no
further force and effect and the sole binding and enforceable rights and
obligations of the Parties to each other shall be those rights and obligations
provided for in this Agreement, the Promissory Note, as amended by the Allonge,
and the Confidentiality Agreement.
5. Press Release. DTI shall promptly issue a press release regarding the
termination of the Merger Agreement and the transactions contemplated
thereunder, which press release shall be in the form attached hereto as Exhibit
B and made a part hereof. Each Party covenants and agrees not to make any
statements to third parties inconsistent with the terms of such press release or
which disparage or otherwise reflect poorly on the other Parties. DTI's press
release shall not be disseminated by DTI to any media located in the
Washington-Baltimore metropolitan areas (except pursuant to national
distribution).
6. Other Provisions.
a. The Parties acknowledge and agree that this Agreement is in settlement
of potential claims for Loss, and is in no way an admission of liability
by any Party with regard to such potential claims, liability for which is
expressly denied.
b. Each of CW and DTI hereby agree that the terms and conditions of the
Mutual Non-Disclosure and Confidentiality Agreement, dated June 12, 1996,
between CW and DTI (the "Confidentiality Agreement") shall survive
execution of this Agreement and shall remain in full force and effect.
Furthermore, except as provided in Section 5 above, the Parties agree that
all communications among the Parties and their respective counsel relating
to this Agreement and the subject matter hereof, the terms and conditions
of this Agreement, and all negotiations relating thereto, are privileged
and confidential and shall not be discussed, commented upon, referred to
or disclosed in any manner to anyone other than the Parties and their
counsel, accountants and other advisors, unless such disclosure is
compelled by a court order or otherwise by law, and
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shall not, under any circumstances, be disclosed, mentioned or in any
manner used in any subsequent proceeding between the parties, except for
the purpose of enforcing this Agreement; provided, however, that the
parties may disclose, without further comment, that the business
relationship between CW, on the one hand, and Subsidiary and DTI, on the
other hand, has been voluntarily terminated pursuant to a confidential
agreement among the Parties. Notwithstanding the foregoing, CW may
disclose the terms of this Agreement to any person or entity that is
interested in engaging in a Change of Control transaction with CW and each
of CW and DTI may make such disclosure of the terms of this Agreement as
is required by applicable law. In addition, each Party shall be entitled
to disclose to its employees and contractors the circumstances surrounding
the termination of the Merger Agreement.
c. This Agreement shall be binding upon each Party and its successors,
assigns, and predecessors.
d. Each Party hereby represents and warrants to the other Parties that it
has the authority and is duly authorized to execute, deliver and perform
this Agreement.
e. This Agreement is to be interpreted and governed by the laws of the
State of Maryland.
f. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been
duly given when delivered if by hand, by express delivery or facsimile
transmission (with a copy by mail) or three business days after the same
is mailed, by certified or registered mail with postage prepaid:
If to CW, to: The ▇▇▇▇▇ ▇▇▇▇▇▇▇ Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
President and CEO
With copies to: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Executive Vice
President and General Counsel
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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and
▇▇▇▇▇▇, Flyer & ▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Flyer, Esq.
or to such other person or address as CW shall furnish to DTI in writing.
If to DTI or
Subsidiary, to: Trident Rowan Group, Inc.
Finprogetti S.p.A.
▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
Fax: ▇▇-▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
With a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer
& ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
or to such other person or address as DTI shall furnish to CW in writing.
g. If, as a result of a breach of any of the provisions of this Agreement,
legal action shall be commenced, the prevailing party thereto shall be
entitled to recover all costs and expenses from the other party,
including, without limitation, all reasonable attorneys' fees.
h. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
i. In the event of the failure by CW to pay any amount owed to DTI under
Section 1 hereof when due, or any amount owed to DTI under Section 2
hereof within five (5) business days after same is due, CW hereby
irrevocably authorizes and appoints DTI as its true and lawful
attorney-in-fact, to confess judgment against CW in the full amount so due
in favor of DTI in any Court of Record in the State of Maryland. CW
expressly waives summons and other process and consents to the immediate
execution of said judgment. The authority herein granted to confess
judgment shall not be exhausted by any exercise thereof but shall continue
from time to time and at all times until full
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payment of all amounts due hereunder. CW hereby ratifies and confirms the
acts of said attorney-in-fact as fully as if done by CW itself.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, by
their respective duly authorized officers, as of the day and year first above
written.
ATTEST: TRIDENT ROWAN GROUP, INC.
F/k/a DE TOMASO INDUSTRIES, INC.
_______________________________ By: ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
ATTEST: DTI ACQUISITION CORP.
_______________________________ By: ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
ATTEST: THE ▇▇▇▇▇ ▇▇▇▇▇▇▇ COMPANY
_______________________________ By: ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
President and Chief Executive
Officer
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EXHIBIT B
Press Release
TRG and The ▇▇▇▇▇ ▇▇▇▇▇▇▇ Company ("CW") have decided to terminate the
agreement pursuant to which TRG was to acquire CW. The termination was mutually
agreed to by the parties in accordance with the terms of their agreement.
CW will pay to TRG $1.2 million, representing repayment of a loan
previously made and a payment in respect of expenses incurred, and an additional
sum payable under certain cirumstances.
TRG and CW are actively collaborating in the development of real estate
services business opportunities in Europe.