Exhibit 10.2
STANDSTILL AGREEMENT
This Agreement (the "AGREEMENT") is entered into as of February 11,
2002, by and among MAZEL STORES, INC. ("MAZEL"), REUVEN D. DESSLER ("Dessler")
JACOB KOVAL ("Koval") and JAY L. SCHOTTENSTEIN ("Schottenstein") (Dessler, Koval
and Schottenstein collectively referred to as the "Buyer Related Parties"), and
the ZS Fund L.P. (the "ZS Fund").
R E C I T A L S
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WHEREAS, MAZEL and MZ Wholesale Acquisition, LLC ("Buyer") entered into
that certain Asset Purchase Agreement of even date herewith pursuant to which
Buyer acquired all of the Acquired Assets and Assumed Liabilties as described in
the Asset Purchase Agreement upon the terms and conditions set forth therein;
and
WHEREAS, as a material condition of MAZEL and Buyer entering into the
Asset Purchase Agreement, MAZEL required that the Buyer Related Parties execute
and deliver this Agreement, and Buyer required that the ZS Fund simultaneously
enter into this Agreement.
NOW, THEREFORE, in consideration of the premises, covenants,
agreements, representations and warranties contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. For purposes of this Agreement, the following terms shall have the
following meanings:
"Affiliate" shall have the meaning set forth in Rule 12b-2 of
Regulation 12 B under the Securities Exchange Act of 1934 and shall also have
the meaning given to "Affiliated Person" in Section 2 of The Investment Company
Act of 1940;
"Associate" shall have the meaning set forth in Rule 12b-2 of
Regulation 12 B under the Securities Exchange Act of 1934;
"Common Stock" means the Common Stock of MAZEL or any securities of
MAZEL issued in substitution thereof;
"Control" means the power to direct or cause the direction of the
management or policies of a person whether through ownership of securities, by
contract or otherwise;
"Group" shall have the meaning set forth in Section 13(d)(3) of the
Securities Exchange Act of 1934;
"Person" shall mean any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government or department or
agency of a government;
"Proxy" shall have the meaning set forth in Rule 14a-1 of Regulation
14A under the Securities Exchange Act of 1934;
"Solicit" shall have the meaning set forth in Rule 14a-1 of Regulation
14A under the Securities Exchange Act of 1934;
"Voting Securities" includes the Common Stock, and any other securities
of MAZEL entitled to vote generally for the election of directors or any
securities having the right to convert into such securities or any option or
rights to acquire any of the foregoing, now or hereafter outstanding.
2. RESTRICTIONS ON CERTAIN ACTIONS. A. During the term of this
Agreement (as hereinafter defined), none of the Buyer Related Parties, without
the prior consent of ZS Fund and MAZEL's Board of Directors, specifically
expressed in a resolution adopted by a majority of the directors of MAZEL who
are not employees, representatives
or agents of Buyer or any of the Buyer Related Parties, shall acquire, or permit
any Affiliate or Associate of Buyer or any of the Buyer Related Parties to
acquire, directly or indirectly or in conjunction with or through any other
Person, by purchase or otherwise, beneficial ownership of any additional shares
of Common Stock or any other Voting Securities of MAZEL, if such acquisition
would cause Buyer, the Buyer Related Parties, and their Affiliates directly or
indirectly to own more than thirty-three (33%) percent of all Voting Securities
outstanding.
B. During the term of this Agreement (as hereinafter defined), the ZS
Fund, without the prior consent of the Buyer Related Parties and MAZEL's Board
of Directors, specifically expressed in a resolution adopted by a majority of
the directors of MAZEL who are not employees, representatives or agents of the
ZS Fund, shall acquire, or permit any Affiliate or Associate of the ZS Fund to
acquire, directly or indirectly or in conjunction with or through any other
Person, by purchase or otherwise, beneficial ownership of any additional shares
of Common Stock or any other Voting Securities of MAZEL, if such acquisition
would cause the ZS Fund and its Affiliates directly or indirectly to own more
than thirty-six (36%) percent of all Voting Securities outstanding.
3. TERM. The term of this Agreement shall be for a period of two (2)
years, commencing on the date hereof.
4. REMEDIES. Each of the Buyer Related Parties and the ZS Fund
specifically acknowledges and agrees that (i) the provisions of this Agreement
are reasonable and necessary to protect the proper and legitimate interests of
MAZEL, ZS Fund and the Buyer Related Parties, and (ii) MAZEL and ZS Fund or the
Buyer Related Parties, as the case may be, would be irreparably harmed in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached, making any
remedy at law inadequate. Accordingly, each of the Buyer Related Parties and the
ZS Fund further acknowledges and agrees that (i) MAZEL and ZS Fund or the Buyer
Related Parties, as the case may be, shall be entitled to an injunction and/or
injunctions to redress breaches or threatened breaches hereof and to specific
performance, in addition to any other appropriate relief, all of the same being
cumulative, and (ii) that MAZEL and ZS Fund or the Buyer Related Parties, as the
case may be, may apply to any court of competent jurisdiction for specific
performance, injunctive or other relief to enforce this Agreement and/or to
prevent any violation of it, and shall not be required to post any bond as a
condition of procuring such injunctive or other equitable relief. The Buyer
Related Parties shall be liable, jointly and severally, for all fees and costs,
including reasonable attorneys' fees, suffered or incurred by MAZEL and ZS Fund
in enforcing this Agreement in the event of any breach or threatened breach
thereof by the Buyer Related Parties. The ZS Fund likewise agrees that it shall
be liable for all fees and costs, including reasonable attorneys' fees, suffered
or incurred by MAZEL and the Buyer Related Parties in enforcing this Agreement
in the event of any breach or threatened breach thereof by the ZS Fund.
5. MISCELLANEOUS.
5.1 ENTIRE AGREEMENT. This Agreement and the Asset Purchase Agreement
constitutes the entire agreement between the parties hereto and supersedes any
prior understandings, agreements, or representations by or between the parties,
written or oral, to the extent they relate in any way to the subject matter
hereof.
5.2 SEVERABILITY. If any term, provision or restriction contained in
this Agreement is held invalid, void, or unenforceable by a court of competent
jurisdiction, the remaining terms and provisions hereof shall be remain in full
force and effect and shall in no way be affected, impaired or invalidated.
5.3 SUCCESSOR AND ASSIGNS. This Agreement shall be binding upon the
Buyer Related Parties and the ZS Fund and their respective heirs, personal
representatives, and successors, and shall inure to the benefit of MAZEL and its
successors and assigns.
5.4 CONSENT, DECISIONS AND ACTIONS OF BUYER RELATED PARTIES. For all
purposes of this Agreement, the consent, decision or action of any two (2) out
of the (3) Buyer Related Parties shall be deemed to constitute the consent,
decision or action, as the case may be, of the Buyer Related Parties.
5.5 GOVERNING LAW; JURISDICTION.. This Agreement shall be governed by
and construed in accordance with the domestic laws of the State of Ohio without
giving effect to any choice or conflict of law provision or rule (whether of the
Ohio or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of Ohio.
5.6 AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
MAZEL. No waiver by MAZEL of any default or breach hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent default
or breach hereunder or affect in any way any of MAZEL's rights arising by virtue
of any prior or subsequent such occurrence.
5.7 CONSTRUCTION. The parties hereto have participated jointly in
the negotiation and draft-in of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by all of the parties and no presumption or burden of
proof shall arise favoring or disfavoring any Party by virtue of the authorship
of any of the provisions of this Agreement.
5.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Standstill
Agreement to be executed by their duly authorized officers on the date first
above written.
MAZEL STORES, INC.
By: /s/ Peter J. Hayes
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Name: Peter J. Hayes
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Title: CEO
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/s/ Reuven D. Dessler
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Reuven D. Dessler
/s/ Jacob Koval
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Jacob Koval
/s/ Jay L. Schottenstein
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Jay L. Schottenstein
ZS Fund L.P.
By: NL SHERWOOD & CO. L.P.
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By: /s/ Robert A. Horne
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Name: Robert A. Horne
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Title: Vice President
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[INSERT ACKNOWLEDGMENTS]