EXHIBIT 2
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT ("Agreement") is entered into by and between INMOLD, INC. an
Indiana corporation ("Inmold, Inc."), GP PLASTICS, INC., a Michigan corporation
("GP"), and the persons listed in Exhibit 1 hereto, who are holders of all
outstanding shares of GP's common stock (collectively referred to herein as
the "Shareholders" or individually as a "Shareholder").
WHEREAS, GP has both common and preferred classes of capital stock
authorized,
WHEREAS, the Shareholders constitute the holders of all of the shares of
outstanding common stock of GP and wish to exchange, all of their GP shares
solely for 1,000,000 restricted shares of the voting stock of Inmold, Inc., in a
transaction taxable to the GP Shareholders, and
WHEREAS, Inmold, Inc. has agreed to exchange 1,000,000 restricted shares of
its voting stock with the Shareholders for all of the outstanding GP common
stock owned by the Shareholders.
WITNESSETH:
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and conditions herein contained, the parties hertby agree as follows:
1 . Plan of Reorganization. The Shareholders are the owners of all
issued and outstanding common stock of GP totaling 43,610 shares, par value $
1.00 per share (the "GP Shares"). It is the intention of the parties hereto
that all of the GP Shares shall be acquired for investment by Inmold, Inc.
solely in exchange for 1,000,000 shares of its restricted voting common stock,
par value $.00001 per share (the "Inmold, Inc. Shares").
2. The Transaction.
2.01 Plan of Exchange. On the terms and subject to the
conditions set forth in this Agreement, each of the Shareholders hereby
severally agrees to assign, transfer and deliver to Inmold, Inc. at the Closing,
free and clear any and all liens, pledges, encumbrances, charges, restrictions
or claims of any kind, nature or description, the number of GP Shares set forth
after each respective Shareholder's name on Exhibit 1, in the aggregate
constituting all of the issued and outstanding shares of common stock of GP, and
Inmold, Inc. agrees to acquire said GP Shares on said date by issuing and
delivering in exchange therefor an aggregate of 1,000,000 restricted Shares, so
that each GP Share outstanding in the hands of the Shareholders immediately
prior to the Closing shall be converted into its pro-rata share of 1,000,000
Imold, Inc. restricted Shares. No fractional shares of Inmold, Inc. Shares shall
be issued in connection with the exchange transaction, but in lieu thereof
anyone entitled to a fractional interest in such lnmold, Inc. Shares arising
from the exchange/organization shall be issued the aggregate number of Inmold,
Inc. Shares issuable to said Shareholder at the Closing, rounded to the nearest
whole Inmold, Inc. Share. The schedule set forth in Exhibit 1 shows the number
of the Inmold, Inc. Shares which are to be issued to each of the Shareholders.
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2.02 Closing and Delivery of Shares. The exchange of the GP Shares
for the Inmold, Inc. Shares (the "Closing") shall take place at the office of
Hoops, Hoops & Hoops, P.L.C., 00000 X. Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx
Xxxxx, Xxxxxxxx, 00000 at 11:00 a.m. on or before June 13, 1997, or at such
other place or such other time as may be agreed upon by the parties hereto (the
"Closing Date"). At the Closing, the Shareholders will deliver certificates for
all of the GP Shares, duly endorsed and with all necessary transfer tax and
other revenue stamps affixed thereto by Inmold, Inc., which will be acquired at
each Shareholder's expense, in order to make Inmold, Inc. the sole owner
thereof, free and clear of all claims and encumbrances. Delivery of restricted
certificates for the Inmold, Inc. Shares will be made to the Shareholders as set
forth in Exhibit 1. The Shareholders hereby irrevocably designate, empower,
authorize, nominate, constitute, and appoint Xxxx Xxxxxx to act at the Closing
as their agent and attorney in fact coupled with an interest in their GP Shares
to be exchanged, in order to accept delivery of the certificates of Inmold,
Inc. Shares to be issued in their respective names, and to give a good and
sufficient receipt and acquittance for the same, and in connection therewith to
make delivery of their GP Shares to Inmold, Inc.
2.03 Unused.
2.04 Closing Events. At the Closing, each of the respective parties
hereto shall execute, acknowledge and deliver (or shall cause to be executed,
acknowledged and delivered) any and all certificates, opinions, financial
statements, schedules, agreements, resolutions, rulings or other instruments
required by this Agreement to be so delivered at or prior to the Closing,
together with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or evidence the
transaction contemplated hereby.
2.05 Shareholder Consents. By their signatures hereto, all
Shareholders of GP and Inmold, Inc. shall be deemed to have voted to approve
the arrangement and reorganization (exchange of stock), transaction, i.e. the
exchange of 3,911,122 free trading shares of Inmold, Inc. common stock with the
holders of all outstanding shares of the common stock of Xxxxxxx Confectionery
Products, Inc. "SCP") for 7,822,244 shares of SCP's common stock held by them
on a 1 share of lnmold, Inc. for 2 shares of SCP basis and the balance of the
arrangement and reorganization (exchange of stock) transaction whereby Inmold,
Inc. will acquire all of the outstanding common stock of GP in exchange for
1,000,000 shares of Inmold, Inc.'s restricted common stock under this Agreement
and the fairness thereof By their exchanges, SCP Shareholders shall likewise be
deemed to have consented to the arrangement and reorganization (exchange of
stock) transaction by favorable Shareholder Vote at a Special Meeting for
Shareholders, conducted on April 9, 1997.
3. Termination.
3.01 This Agreement may be terminated by action of the Board of
Directors of Inmold, Inc. or the Board of Directors of GP at any time prior to
the Closing Date if:
(a) There shall be any actual or threatened action or proceeding by or
before any court or any other governmental body which shall seek to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement and which, in the
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judgment of such Board of Directors made in good faith and based upon
the advice of legal counsel, makes it inadvisable to proceed with the
transactions contemplated by this Agreement; or the Oakland County,
Michigan, Circuit Court fails to approve the fairness of Inmold,
Inc.'s 3,911,122 shares of common stock in exchange for SCP's
7,822,244 shares of common stock in the arrangement and reorganization
(exchange of stock) transaction under this Agreement which has been
approved by vote of a majority in number of SCP shareholders holding
at least 3/4 in value of the outstanding shares of SCP's common stock
at the time of the Closing hereunder; or
(b) the Closing shall not have occurred prior to July 1, 1997, or such
later date as shall have been approved by the Board of Directors of
both Inmold, Inc. and GP.
In the event of termination pursuant to this Section 3.01, no obligation, right
or liability shall arise hereunder and each party shall bear all of the
expenses incurred by them in connection with the negotiation, drafting and
execution of this Agreement and the consummation of the transactions herein
contemplated.
3.02 This Agreement may be terminated at any time prior to the
Closing Date by action of the Board of Directors of Inmold,Inc. if:
(a) GP or the Shareholders shall fail to comply in any material
respect with any of its or their conditions or agreements contained
in this Agreement or if any of the representations or warranties of
GP or the Shareholders contained herein shall be inaccurate in any
material respect; or
(b) there shall have been any material change after December 27, 1996
in the assets, properties, business or financial condition of GP
taken as a whole which could have a materially adverse effect on the
value of the business of GP as a whole, except for any changes
disclosed in the Exhibits hereto.
If this Agreement is terminated pursuant to this Section 3.02, this Agreement
shall be of no further force or effect, no obligation, right or liability shall
arise hereunder, and GP shall bear its own costs as well as the legal,
accounting, printing and other costs incurred by Inmold, Inc. in connection with
the negotiation, preparation and execution of this Agreement and the
transactions herein contemplated.
3.03 This Agreement may be terminated at any time prior to the
Closing Date by action of the Board of Directors of GP if.
(a) Inmold, Inc. shall fail to comply in any material respect with
any of its covenants or agreements contained in this Agreement or if
any of the representations or warranties of Inmold, Inc. contained
herein shall be inaccurate in any material respect; or
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(b) there shall have been any material change after December 27, 1996
in the assets, properties, business or financial condition of Inmold,
Inc. taken as a whole which could have a materially adverse effect on
the value of the business of Inmold, Inc. taken as a whole, except any
changes disclosed in the Exhibits hereto.
If this Agreement is terminated pursuant to this Section 3.03, this Agreement
shall be of no further force or effect, no obligation, right or liability shall
arise hereunder, and Inmold, Inc. shall bear its own costs, as well as the
legal, accounting, printing and other costs incurred by GP in connection with
the negotiation, preparation and execution of this Agreement and the
transactions herein contemplated.
4. Representations and Warranties of GP. GP represents and warrants to
Inmold, Inc. that:
4.01 Organization, Standing, Qualification, etc. GP is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Michigan and has all requisite corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws, regulations,
ordinances and orders of public authorities to own its properties and assets and
to carry on its business as it is presently being conducted. GP is qualified to
do business in the State of Michigan, but otherwise the nature, of GP's business
and the ownership of its properties do not require it to become qualified in any
other state as a foreign corporation.
4.02 GP's Capitalization. The authorized capital stock of GP consists
of 50,000 shares of common stock, par value $ 1.00 per share, of which 43,610
shares are validly issued, fully paid, nonassessable and outstanding, and 1,000
shares of Class A, nonvoting (except as to matters affecting such Class), 6%
preferred stock, of which 673.063 shares are validly issued, fully paid,
nonaccessable and outstanding. No dividends or distributions can be declared
or paid on the common stock while any dividends are due and unpaid on the
preferred stock. All outstanding shares are duly authorized, fully paid,
validly issued and nonassessable in accordance with applicable law. No
dividends or other distributions of the assets of GP have ever been declared or
paid on the common stock of GP.
The preferred stock has been issued to the holders of debt of GP,
without modification of other rights of those creditors. When all of the debt
for which particular shares have been issued is paid, plus accrued dividends
thereon, the shares should be considered to have been redeemed.
4.03. Articles of Incorporation and By-Laws. The complete Articles of
Incorporation and By-Laws of GP, which will be in effect on the Closing Date,
are attached hereto as Exhibit 4.03.
4.04. Financial Statements.
(a) Attached hereto as Exhibit 4.04 is the unaudited balance sheet of
GP as of February 28, 1997 and the unaudited statement of operation and
change in
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financial position for the 5 month period then ended, including the
notes thereto (collectively referred to as the GP Financial
Statements").
(b) All such GP Financial Statements have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the period involved and are true, complete and correct as
of the date of any of such balance sheet. Except as and to the extent
reflected or reserved against therein, GP did not have any liabilities
or obligations (absolute or contingent) which were not, but should
have been reflected in a balance sheet or the notes thereto prepared
in accordance with generally accepted accounting principles, and all
assets reflected therein are properly reported and present fairly the
value of the assets of GP in accordance with generally accepted
accounting principles. The statement of operations presents fairly the
results of operations of GP for the period indicated. Such statement
of changes in financial position presents fairly the information which
should be presented therein, in accordance with generally accepted
accounting principles.
(c) The books and records, financial and others, of GP are in all
material respects complete and correct and have been maintained in
accordance with good business and accounting practice.
(d) No relevant reports concerning GP are required under the
Securities and Exchange Act of 1934, because it has no class of
securities registered under that Act.
(e) The fair market value of the assets of GP exceeds the amount of
its liabilities as of the date hereof.
4.05 Authorization. This Agreement and the issuance of the GP Shares
have each been duly authorized, executed and delivered by GP, and constitutes a
legal, valid and binding obligation of GP enforceable in accordance with its
terms. No consent of any federal, state, municipal or other governmental
authority is required by GP for the execution, delivery or performance of this
Agreement by GP . No consent of any party to any contract or agreement to which
GP is a party or to which any of the property and assets of GP are subject is
required for the execution, delivery or performance of this Agreement, with the
exception of the requirements under the loan and security agreement between GP
and The CIT Group/Credit Finance, Inc. (the "CIT Agreement"), a copy of which is
attached as Exhibit 4.05 hereto.
4.06 Litigation and Threats Thereof. Except as described in Exhibit
4.06, there is no action, suit proceeding, or investigation pending, at law or
in equity, or to the knowledge of GP's management, threatened against or
affecting GP before or in any court, either state or Federal, public board, or
body which calls into question the creation, organization or existence of GP,
the validity of this Agreement or the authority of GP to execute, deliver and
carry out the terms of the Agreement or which judgment, order or finding can
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise) of GP. GP has no knowledge of
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any material default on its part with respect to any judgment, order, writ,
injunction, decree, award, rule or regulation of any court, arbitrator or
governmental agency or instrumentality.
4.07 Subsidiaries. GP does not own, directly or indirectly, any
interest or investment, whether equity or debt, in any corporation , business,
trust or other entity.
4.08 Compliance with Law and Other Instruments. Except as set forth
in Exhibit 4.08, GP is not in violation or material default of any term of its
Articles of Incorporation or By-Laws, or of any agreement, contract, commitment,
instrument, indenture, judgment, decree or court or administrative orders,
applicable to it and has timely filed all reports, tax returns and any other
documents required by it to be filed with any governmental agency or anyone
else. The execution, delivery and performance of this Agreement and the taking
of action contemplated hereby will not result in any violation of or be in
conflict with or constitute a default under (a) the Articles of Incorporation
or By-Laws of GP, or (b) any material agreement or instrument to which GP or any
consolidated subsidiary is a party or by which it is bound with the exception of
the CIT Agreement, or (c) any material judgment, decree or order to which GP is
subject, or result in the creation of any material lien, charge or encumbrance
on any of the properties of GP.
4.09 Contracts and Commitments.
(a) Except as set forth in Exhibit 4.09, there are no material
contracts, agreements, franchises, license agreements or other
commitments to which GP is a party or by which it or any of its
properties are bound;
(b) GP is not a party to any contract, agreement, other commitment or
instrument or subject to any charter or other corporate restriction
or any judgment, order, writ, injunction, decree or award which
materially and adversely affects, or in the future may (as far as GP
can foresee) materially and adversely affect, the business,
operations, properties, assets or condition of GP;
(c) Except as set forth in Exhibit 4.09 or as reflected in the most
recent GP balance sheet included in the GP Financial Statements, GP is
not a party to any material, oral or written (i) contract for the
employment of any officer or employee which is not terminable on 30
days' (or less) notice, (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension or retirement plan,
agreement or arrangement, (iii) agreement, contract or indenture
relating to the borrowing of money with the exception of the CIT
Agreement (see Exhibit 4.09), (iv) guaranty of any obligation, other
than one on which GP is a primary obligor, for the borrowing of money
or otherwise, excluding endorsements made for collection and other
guaranties of obligations, which, in the aggregate do not exceed
$10,000, (v) consulting or other similar contract with an unexpired
term of more than one year or providing for payments in excess of
$10,000 in the aggregate, (vi) collective bargaining agreement, (vii)
agreement with any present or former shareholder, officer or director
of GP, or (viii) consent, agreement or other commitment involving
payments by it of more than $10,000 in the aggregate.
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4.10 Liabilities. Except as set forth in Exhibit 4.10 or as disclosed
or provided for in the GP Financial Statements, to the best of its knowledge
after due inquiry, has no debt, obligation or liability of any nature, whether
accrued, absolute, contingent or otherwise, whether due or to become due to any
person or entity, including any of its officers, directors, or shareholders, in
excess of $10,000.
4.11 Title and Related Matters. GP has good and marketable title to
all of its properties, interests in properties and assets, real and personal,
which are reflected in the latest balance sheet included in the GP Financial
Statements or acquired after that date (except properties, interests in
properties and assets sold or otherwise disposed of after such date in the
ordinary course of business), free and clear of all mortgages, liens, pledges,
charges or encumbrances except: (i) statutory liens or claims not yet
delinquent, (ii) such imperfections of title and easements and/or after acquired
property liens or contractual commitments or restrictions or power of attorney
as do not and will not materially detract from or interfere with the present or
proposed use of the properties subject thereto or affected thereby, or otherwise
materially impair present and future business operations of such properties and
the combined business after the acquisition under this Agreement, (iii) as
described in the GP Financial Statements or (iv) as described in Section 4.09.
GP owns free and clear of any liens, claims, encumbrances, royalty interests or
other restrictions or limitations of any nature whatsoever, any and all
procedures, techniques, business plans, processes or other information utilized
in the conduct of GP's business or operations, whether or not reported in the
most recent balance sheet included in the GP Financial Statements. The plans,
structures, equipment and other assets of GP that are necessary to the operation
of its business are in good operating condition and repair.
4.12 Access to Properties and Records. Prior to the Closing Date, GP
will afford to the officers and authorized representatives of Inmold, Inc. full
access to the properties, books and records of GP in order that Inmold, Inc.
may have full opportunity to make such reasonable investigation as it shall
desire to make of the affairs of GP, and GP will furnish Inmold, Inc. with such
additional financial and operating data and other information as to the
business and properties of GP as Inmold, Inc. shall, from time to time,
reasonably request including, without limitation, financial statements of GP as
published from time to time.
4.13 Directors and Officers. The Board of Directors and principal
officers of GP as of the Closing Date, shall be those persons identified in
Exhibit 4.13 hereto.
4.14 Tax Returns. Except as set forth in Exhibit 4.14, within the
times and in the manner prescribed by law, GP has filed all federal, state and
local tax returns required by law and has paid all taxes, assessments and
penalties due and payable. All taxes and governmental charges levied or
assessed against the property or the business of GP have been paid or are being
paid under agreements with the particular tax collection agency, other than
taxes or charges the payment of which are not yet due or which, if due, are not
yet delinquent or are being contested in good faith or have not been finally
determined.
4.15 Prior Sales. Attached hereto as Exhibit 4.15 is a true, correct
and complete statement, which is dated not more than ten (10) days prior to the
date of this Agreement, setting forth the names and addresses of the purchasers
of any securities of GP that have been privately
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offered and sold by GP within two years prior to the date of the statement, the
prices paid by those purchasers and a brief description of the facts upon which
GP relied in claiming an exemption from the registration requirements under the
state and federal securities laws in connection, with those sales.
4.16 Compliance with Laws and Regulations. GP has complied with all
applicable statutes and regulations of any federal, state or other applicable
jurisdiction or agency thereof, except to the extent that noncompliance would
not materially and adversely affect the business, operations, properties,
assets or condition of GP or would result in any material liability.
4.17 Material Contract Defaults. Except as set forth in Exhibit 4.17,
neither GP nor any other party is in default in any material respect under the
terms of any outstanding contract, agreement, lease or other commitment which is
material to the business, operations , properties or assets or the condition of
GP, and there is no event of default or event which, with notice of lapse of
time or both, would constitute a default in any material respect under any such
contract, agreement, lease or other commitment in respect of which it has not
taken adequate steps to prevent such a default from occurring.
4.18 Absence of Certain Changes or Events. Since the date of the GP
Financial Statements furnished to Inmold, Inc., and except as set forth in or
permitted by this Agreement and the Exhibits hereto, there has not been, with
respect to GP:
(a) Any change in the business, operations, method of management or
accounting, or financial condition or the manner of conducting the
business of GP other than changes in the ordinary course of business,
none of which has had a material adverse effect on such business,
operations or financial condition, taken as a whole;
(b) Any damage, destruction or loss (whether or not covered by
insurance) materially and adversely affecting the assets, business,
operations or condition of GP;
(c) Any declaration, setting aside or payment of any dividend or
other distribution in respect of the shares of GP of any class, or any
direct or indirect redemption, purchase or other acquisition of any
shares of any class of GP with the exception of redeemable preferred
stock referred to in Exhibit 4.02;
(d) Any material increase in the direct or indirect compensation or
other benefits payable or to become payable by GP to any of its
officers, directors, employees or agents over the respective rates and
amounts set forth in the GP Financial Statements;
(e) Any sale, lease, abandonment or other disposition by GP of any
real property otherwise than in the ordinary course of business , or
any sale, assignment, transfer, license or other disposition by GP of
any tangible or intangible asset;
(f) Any option, warrant or right to purchase, or other right to
acquire shares of any class of GP granted to any person;
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(g) Any employment, bonus or deferred compensation agreement entered into
between GP and any of its directors, officers or other employees or
consultants;
(h) Any issuance of shares of GP beyond the shares then issued and
outstanding;
(i) Any indebtedness incurred by GP for borrowed money not now repaid, or
any commitment to borrow money entered into by GP; Any amendment of the
Articles of Incorporation or By-Laws of GP;
(k) Any material obligation or liability, absolute or contingent, paid or
incurred, except current liabilities in the ordinary course of business and
costs incurred in connection with this transaction, except for finder's fees
shown on an attached Schedule.
(l) Any material obligation or liability, absolute or contingent, paid
except liabilities reflected in or shown on the GP balance sheet as of
February 28, 1997, and current liabilities incurred since that date in the
ordinary course of business or in connection with this transaction;
(m) Any sale or transfer, or any agreement, arrangement or option for the
sale or transfer, of any of its assets, property or rights having an
aggregate value of $10,000 or more (other than in the ordinary course of
business); or
(n) Any other material transaction.
Notwithstanding the foregoing, any and all of the foregoing changes or events
shall be permitted upon the written consent of Inmold, Inc. by action of its
Board of Directors, evidenced by the delivery by Inmold, Inc. to GP of a
certified copy of resolutions of such Board specifying the change or event
consented to by Inmold, Inc.
The GP Financial Statements and the notes thereto cover all lost and unjust
enrichment, as well as contract liabilities, including without limitation
restitutionary, quasi contract and equitable liabilities, which exist as of the
date hereof, regardless of when the causes of action accrued.
4.19 Action Prior to Closing. From and after the date of this Agreement
until the Closing Date, GP will:
(a) carry on its business in substantially the same manner as it has
heretofore;
(b) maintain and keep its properties in as good repair and condition as at
present, except for depreciation due to ordinary wear and tear and damage due
to casualty;
(c) maintain in full force and effect insurance comparable in amount and
in scope of coverage to that now maintained by it;
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(d) perform in all material respects all of its obligations under material
contracts, leases and documents relating to or affecting its assets,
properties and business;
(e) use its best efforts to maintain and preserve its business
organization intact, to retain its key employees and to maintain its
relationship with its material customers; and
(f) fully comply with and perform in a material respects all obligations
and duties imposed upon it by all federal and state laws and all rules,
regulations and orders imposed by federal or state governmental authorities.
5. Investment Intent; Continuity of Business Enterprise. Inmold, Inc. is
acquiring the GP shares hereunder for investment and not with a view to the
distribution thereof or in connection with the underwriting of such a
distribution, and Inmold, Inc. has no commitment or present intention to
liquidate GP or sell or otherwise dispose of a material portion of GP business
or assets following the consummation of the transactions contemplated hereby.
5.A. Representations and Warranties of Inmold, Inc. Inmold, Inc. is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Indiana and has all requisite corporate power and authority
to own its properties and assets and to carry on its business as it is presently
being conducted.
5.01 Inmold, Inc.'s Capitalization. The authorized capital stock of Inmold,
Inc. consists of 100,000,000 shares of common stock, par value $.00001 per share
("Inmold, Inc. Shares"), of which 4,000,000 Inmold, Inc. Shares are issued and
outstanding, and 5,000,000 shares of "blank check" preferred stock, par value
$.00001 per share, of which no shares are issued or outstanding. All outstanding
shares of common stock are duly authorized, fully paid, validly issued and
nonassessable in accordance with applicable law. No dividends or other
distribution of the assets of Inmold, Inc. have ever been declared or paid on
the capital stock of Inmold, Inc. Except for the transactions contemplated by
this Agreement, there are no outstanding warrants, options, preemptive rights or
rights to subscribe for or purchase any shares of Inmold, Inc.'s capital stock
or any outstanding securities that are convertible into Shares of Inmold, Inc.'s
capital stock, except for a certain agreement between GP and Precision Masters,
Inc. The Inmold, Inc. Shares have been duly authorized and, when issued to the
Shareholders on the Closing Date will be validly issued, fully paid and
nonassessable.
5.02 Financial Statements and Reports. Inmold, Inc., being newly organized,
has no substantial assets (other than $40 from sale of 4,000,000 shares of
common stock and no liabilities). Attached hereto as Exhibit 5.02 are an
unaudited pro forma financial statement of Inmold, Inc. dated March 1, 1997 (the
"Inmold, Inc. Financial Statements"). The Inmold, Inc, Financial Statements
have been prepared on an unaudited basis in accordance with generally accepted
accounting principles consistently applied and fairly present the financial
condition of Inmold, Inc. as of the respective dates for the respective periods
indicated. Since the date of the
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Inmold, Inc. Financial Statements, the existence or standing of Inmold, Inc. has
not been adversely affected by any occurrence or development known to Inmold,
Inc. and there has no material adverse change in the financial condition.
5.03 Authorization. The Board of Directors of Inmold, Inc. has approved
this Agreement and the transactions contemplated hereby, and has authorized the
execution and delivery of this Agreement by Inmold, Inc. Inmold, Inc. has full
power, authority and legal right to enter into this Agreement and to consummate
the transactions contemplated hereby and this Agreement constitutes a legal,
valid and binding obligation of Inmold, Inc. enforceable in accordance with
its terms.
5.04 Litigation. There is no action, suit, proceeding, or investigation
pending, at law, or in equity, or to the knowledge of Inmold, Inc.'s
management, threatened, against or affecting Inmold, Inc. before or in any
court, either state or Federal, public board, or body which calls into
question the creation, organization or existence of Inmold, Inc., the validity
of this Agreement or the authority of Inmold, Inc. to execute, deliver and
carry out the terms of the Agreement or which judgment, order or finding can
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise) of Inmold, Inc.
5.05 Subsidiaries. Inmold. Inc. owns no subsidiaries.
5.06 Compliance with Law and Other Instruments. Inmold, Inc. is not in
violation or default of any terms in its Articles of Incorporation or By-Laws,
or of any agreement, contract, commitment, instrument, indenture, judgment,
decree or order, applicable to it and has timely filed all reports and any other
documents required by it to be filed with any governmental agency. The
execution, delivery and performance of this Agreement and the taking of action
contemplated hereby will not result in any violation of or be in conflict with
or constitute a default under any such terms, or result in the creation of any
mortgage, lien, change or encumbrance upon any of the properties or assets of
Inmold, Inc.
5.07 Contracts and Commitments. Inmold, Inc. is not a party to any material
contract or commitment, except for this Agreement and all agreements,
expressly referred to herein, in the Inmold, Inc. Financial Statements or in any
Exhibit to this Agreement.
5.08 Liabilities. Except as set forth in Exhibit 5.02 or in the Inmold,
Inc. Financial Statements, Inmold, Inc., to the best of its knowledge, after
due inquiry, has no debt, obligation or liability of any nature, whether
accrued, absolute, contingent or otherwise, whether due or to become due to
any person or entity, including any of its officers, directors, or
shareholders, in excess of $10,000.
5.09 Inmold, Inc. Tax Returns. Within the times and in the manner
prescribed by law, Inmold, Inc., being newly organized, has not yet been
obligated to file any federal, state or local tax returns or been required by
law to pay any taxes, assessments and penalties.
5.10 Brokers. Neither Inmold, Inc. nor any officer or director of Inmold,
Inc. has employed any broker, finder or agent or has agreed to pay or has
otherwise incurred any
11
brokerage fee, finder's fee or commission with respect to the transactions
contemplated by this Agreement.
5.11 Prohibited Acts. Prior to the Closing Date, Inmold, Inc. shall not do
any of the following acts without the prior written consent of GP: (a) declare
or pay any dividends or other distributions on its stock or purchase or redeem
any of its stock; (b) issue any stock or other securities; including any right
or option to purchase or otherwise acquire any of its stock, or issue any notes
or other evidences of indebtedness not in the usual course of business; or (c)
make capital expenditures in excess of an aggregate of $10,000.
5.12 Additional Warranties. Inmold, Inc. further represents and warrants
that all disclosures made in the Exhibits attached hereunder are true on and as
of the Closing Date, as though such representations and warranties had been made
at and as of such time. Sale of 4,000,000 shares of Inmold, Inc. common stock to
Xxxx X. Xxxxxxx/Xxxxxx X. Xxxxxxx was exempt from registration as a private
placement sale to accredited investors under section 4(2) and Regulation D under
the Securities Act of 1933, as amended (the "1933 Act") and the Michigan
Uniform Securities Act ("MUSA"). Contribution of those shares to SCP's capital
was exempt from registration as a no sale transaction. Exchange of 3,911,122 of
those shares for 7,822,244 outstanding shares of SCP common stock was exempt
under section 3(a)(10) of the 1933 Act and as a no sale and a reorganization,
arrangement under MUSA. Sale of 1,000,000 Inmold, Inc. shares exchanged for all
outstanding shares of common stock will be exempt under section 4(2) and
Regulation D of the 1933 Act.
6. Representations and Warranties of Shareholders. Each Shareholder
represents and warrants that:
6.01 Ownership of GP Shares. Each Shareholder is the sole owner of the GP
Shares set forth in Exhibit 1 as being owned by him, her or it and those shares
are free from any claim, lien or other encumbrance.
(a) Each Shareholder has been informed and agrees that the issuance of the
Inmold, Inc. shares hereunder to him, her or it is being made without
registration and are being acquired by him, her or it for investment only
and not for distribution and that they are restricted securities under
Regulation D under the 1933 Act, Sections 402(b)(a) and (21) of the
Michigan Uniform Securities Act, as amended ("MUSA"), or any other
appropriate state securities laws and that the Inmold, Inc. Shares issued
to him, her or it hereunder may not be sold or transferred without
registration under the 1933 Act and MUSA or other appropriate securities
laws or a written legal opinion of counsel to Inmold, Inc., unless an
exemption from such registration is confirmed to be available by a written
legal opinion of counsel to Inmold, Inc.
(b) Each Shareholder has been provided with copies of the Inmold, Inc.
Financial Statements.
(c) Each Shareholder has been provided with the opportunity to ask
questions of, and receive answers from Inmold, Inc. and its officers,
employees and agents concerning
12
Inmold, Inc. and terms and conditions of the issuance of the Inmold, Inc.
Shares and of prior private offers and sales of Immold, Inc . Shares, has
received satisfactory answers to any of those questions and has no further
questions at this time.
(d) Each Shareholder understands that, prior to the Closing, Inmold, Inc.
has been a non-operating company. Each Shareholder, therefore, understands
that his, her or its investment in the Inmold, Inc. Shares and Inmold, Inc.
is speculative and may remain so for an indefinite period and acknowledges
that he, she or it is able to bear the economic risk of his, her or its
investment in the Inmold, Inc. Shares should it be determined ultimately to
be worthless, and has such knowledge and experience in financial or business
matters that he, she or it is capable of evaluating the merits and risks of
his, her or its investment in the Inmold, Inc. Shares and Inmold, Inc.
(e) Each Shareholder has executed and delivered to Inmold, Inc. an
Investment Letter acknowledging the representations set forth in above
among others, and each Shareholder further represents and warrants that the
statements made therein are true and correct.
(f) Each Shareholder has answered, executed and delivered an Offeree
Questionnaire in a form acceptable to Inmold, Inc. regarding certain
personal information with respect to such Shareholder and further represents
and warrants that the statements made therein are true and correct.
6.02 Authorization. The execution of this Agreement has been duly authorized
by each Shareholder and this Agreement is binding upon each Shareholder in
accordance with its terms.
7. Conditions to Closing.
7.01 Conditions Precedent to Shareholders' Obligations. The obligations of
the Shareholders under this Agreement are subject to the satisfaction, at or
before the Closing of each of the following conditions precedent:
(a) Representations and Warranties. The representations and warranties
made by Inmold, Inc. herein shall be true on and as of the Closing Date, as
though such representations and warranties had been made at and as of such
time.
(b) Performance. Inmold, Inc. shall have performed and complied with
all agreements and conditions contained herein required to be performed or
complied with by it prior to or at the Closing.
(c) Consent. Inmold, Inc. shall have secured all permits, consents and
authorizations that are known to Inmold, Inc. to be necessary to consummate
this Agreement and to issue the Inmold, Inc. Shares to be issued to the
Shareholders.
(d) Compliance Certificate. At the Closing, Inmold, Inc. shall have
delivered to Shareholders or their representative an Officer's Compliance
Certificate executed by its President to the effect that the representations
and warranties of Inmold, Inc. are true and
13
accurate as of the Closing Date and that all conditions specified in
Sections 7.01(a) and (e), inclusive, and 7.01(h) have been fulfilled.
(e) Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be
satisfactory in substance and form to Shareholders and counsel to the
Shareholders, and Shareholders and counsel to the Shareholders shall have
received all such counterpart originals or certified or other copies of
such documents as Shareholders or such counsel may reasonably request.
(f) No Material Adverse Change. Prior to the Closing Date, there shall not
have occurred any material adverse change in the financial condition,
business and operations of Inmold, Inc., nor shall any event have occurred
which, with the lapse of time or the giving of notice, may cause or create
any material adverse change in the financial condition, business or
operations of Inmold, Inc.
(g) Opinion of Counsel to Inmold, Inc. GP shall receive an opinion dated
the Closing Date from counsel to Inmold, Inc. satisfactory to GP, to the
effect that:
(i) Inmold, Inc. is a corporation validly existing and in good
standing under the laws of the state of Indiana and has all the requisite
corporate power to own, lease and operate its assets and carry on its
business as now being conducted in any jurisdiction in which it is now
conducting business.
(ii) The Inmold, Inc. Shares to be exchanged for the GP Shares at the
Closing will be duly authorized, legally issued, fully paid and non-
assessable.
(iii) The Execution and delivery by Inmold, Inc. of this Agreement and
the consummation of the transactions contemplated hereby will not conflict
with or result in the breach of any provision of Inmold, Inc.'s Articles of
Incorporation or By-Laws or constitute default or give rise to right of
termination, cancellation or acceleration under any of the terms, conditions
or provisions of any known mortgage, indenture, license agreement or
obligation or violate any court order, writ, injunction or decree applicable
to Inmold, Inc. or any of its properties or assets of which counsel has
knowledge after making inquiry of the principal executive officers with
respect thereto.
(iv) Based solely on a review of the Articles of Incorporation, By-
Laws, corporate minutes and stock record books of Inmold, Inc., (i) the
authorized capital stock of Inmold, Inc. is as set forth in Section 5.01,
and the shares of Inmold, Inc. stock referred to in Section 5.01 constitute
all of the issued and outstanding shares of capital stock of Inmold, Inc.;
(ii) the outstanding shares of Inmold, Inc. capital stock are validly
issued, fully paid and non-assessable and are not subject to any pre-emptive
rights of any shareholder of Inmold, Inc.; and (iii) there are no
outstanding subscriptions, options, rights, warrants, convertible
securities, or other agreements or commitments known to such counsel
obligating Inmold, Inc. to issue or transfer from treasury any additional
shares of its capital stock of any class;
14
(v) This Agreement has been duly and validly authorized, executed and
delivered and constitutes the legal and binding obligation of Inmold, Inc.,
except as limited by bankruptcy and insolvency laws and by other laws
affecting the rights of creditors generally; and
(vi) Aside from the action dealing with approving the arrangement and
reorganization (exchange of stock) transaction and the acquisition under
this Agreement in Oakland County Circuit Court, such counsel does not know
of any suit, action, arbitration, or legal, administrative or other
proceeding or governmental investigation pending or threatened against or
affecting Inmold, Inc. or its business or properties or financial or other
condition.
(h) Opinion of Counsel to GP. Inmold, Inc. shall receive an opinion dated
the Closing Date from counsel to GP, comparable to that required under
Paragraph 7.01(g).
7.02 Conditions Precedent to Inmold, Inc.'s Obligations. The obligations of
Inmold, Inc. hereunder are subject to the satisfaction, at or before the
Closing, of each of the following conditions precedent:
(a) Representations and Warranties. The representations and warranties
made by GP and the Shareholders herein shall be true on and as of the
Closing Date as though such representations and warranties had been made at
and as of such time.
(b) Concerted Action. This Agreement shall be executed by each of the
Shareholders and each of the Shareholders should have performed his, her or
its obligations hereunder.
(c) The obligations of Inmold, Inc. shall also be subject to the
conditions set forth in Section 7.01 herein by GP.
8.00 Miscellaneous.
8.01. Survival of Agreements. All covenants, agreements, representations and
warranties made herein shall survive execution and delivery of this Agreement
and the Closing hereunder.
8.02. Modifications, Waiver. No modification or waiver of any provision of
this Agreement or consent to any departure therefrom shall be effective unless
in writing and approved by all of the parties hereto.
8.03. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the Transactions contemplated hereby, and supersedes
all negotiations, agreements, representations, warranties, commitments, whether
in writing or oral, prior to the date hereof
15
8.04. Successors and Assigns. All of the terms of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto.
8.05. Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original , and such counterparts together shall constitute one
instrument. Each party shall receive a duplicate original of the counterpart
copy or copies executed by it.
8.06. Governing, Law and Forum. This Agreement shall be governed by the laws
of the State of Michigan without regard to its principles of conflicts of laws.
8.07 Severability. In the event any portion of this Agreement or the
application of such provision to any part shall be held by a court of competent
jurisdiction to be contrary to law, the remaining provisions of this Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
persons thereunto duly authorized as of the 22nd day of May,1997.
GP PLASTICS, INC. INMOLD, INC.
By:/s/ Xxxx X. Xxxxxx By:/s/ Xxxx X. Xxxxxxx
-------------------------------- --------------------------
Xxxx X. Xxxxxx Xxxx X. Xxxxxxx
Its: Chairman of the Board Its: Acting President
Address: Address:
0000 Xxxxxxxxxx Xxxxx 000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx Xxxxx, Xxxxxxxx 00000 Xxxx, Xxxxxxxx 00000
Confirmed as to SCP shareholder consent in Section 2.05 of the Agreement.
XXXXXXX CONFECTIONERY PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx
President
16
Shareholders of GP Plastics Inc. and the number of shares of GP Plastic, Inc.'s
common stock owned on the date of this agreement are set forth below each
person's signature hereto, including any stock options or rights thereto:
/s/ Xxxx X. Xxxxxx
------------------- ---------------------------
Xxxx X. Xxxxxx Xxxxx Xxxxxxx
0000 Xxxxx Xxxx 0000 X. Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000 Xxxx, Xxxxxxxx 00000
Common Shares Owned 21,000 Common Shares Owned 200
Option or Rights Owned 0 Option or Rights Owned 0
---------------------------
Xxxx X. Xxxxxx
4809 Foxcroft
Xxxx, Xxxxxxxx 00000
Common Shares Owned 6,542
Option or Rights Owned 0
---------------------------
Xxxxx X. Xxxxxxxxx
00000 Xxxxx Xxxx
Xxxxxx Xxxxxxxx, Xxxxxxxx 00000
Common Shares Owned 6,542
Option or Rights Owned 0
---------------------------
Xxxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Common Shares Owned 3,360
Option or Rights Owned 0
---------------------------
Xxxxxxx Xxxxxxx
c/o Xxxxxx Xxxxx, C.P.A.
00000 Xxxxxxxx Xxxxx, #000
X.X. Xxx 0000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Common Shares Owned 3,966
Option or Rights Owned 0
17
Shareholders of GP Plastics Inc. and the number of shares of GP Plastic, Inc.'s
common stock owned on the date of this agreement are set forth below each
person's signature hereto, including any stock options or rights thereto:
---------------------------------- --------------------------
Xxxx X. Xxxxxx Xxxxx Xxxxxxx
0000 Xxxxx Xxxx 0000 X. Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000 Xxxx, Xxxxxxxx 00000
Common Shares Owned_______________ Common Shares Owned________
Option or Rights Owned____________ Option or Rights Owned_____
/s/ Xxxx X. Xxxxxx
----------------------------------
Xxxx X. Xxxxxx
4809 Foxcroft
Xxxx, Xxxxxxxx 00000
Common Shares Owned_______________
Option or Rights Owned____________
----------------------------------
Xxxxx X. Xxxxxxxxx
00000 Xxxxx Xxxx
Xxxxxx Xxxxxxxx, Xxxxxxxx 00000
Common Shares Owned_______________
Option or Rights Owned____________
----------------------------------
Xxxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Common Shares Owned_______________
Option or Rights Owned____________
----------------------------------
Xxxxxxx Xxxxxxx
c/o Xxxxxx Xxxxx, C.P.A.
00000 Xxxxxxxx Xxxxx, #000
X.X. Xxx 0000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Common Shares Owned_______________
Option or Rights Owned____________
18
Shareholders of GP Plastics Inc. and the number of shares of GP Plastic, Inc.'s
Common stock owned on the date of this agreement are set forth below each
person's signature hereto including any stock options or rights thereto;
---------------------------------- -----------------------------
Xxxx X. Xxxxxx Xxxxx Xxxxxxx
0000 Xxxxx Xxxx 0000 X. Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000 Xxxx, Xxxxxxxx 00000
Common Shares Owned 21,000 Common Shares Owned 200
Option or Rights Owned 0 Option or Rights Owned 0
----------------------------------
Xxxx X. Xxxxxx
4809 Foxcroft
Xxxx, Xxxxxxxx 00000
Common Shares Owned 6,542
Options or Rights Owned 0
/s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxxx
00000 Xxxxx Xxxx
Xxxxxx Xxxxxxxx, Xxxxxxxx 00000
Common Shares Owned 6,542
Option or Rights Owned 0
----------------------------------
Xxxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Common Shares Owned 3,360
Option or Rights Owned 0
----------------------------------
Xxxxxxx Xxxxxxx
c/o Xxxxxx Xxxxx, C.P.A.
00000 Xxxxxxxx Xxxxx, #000
X.X. Xxx 0000
Xxxxxxxxx Xxxxx, Xxxxxxxx 00000
Common Shares Owned 3,966
Option or Rights Owned 0
19
Shareholders of GP Plastics Inc. and the number of shares of GP Plastic,Inc.
common stock, owned on the date of this agreement are set forth below each
person's signature hereto, including any stock options or rights thereto:
---------------------------------- ---------------------------
Xxxx X. Xxxxxx Xxxxx Xxxxxxx
0000 Xxxxx Xxxx 0000 X. Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000 Xxxx, Xxxxxxxx 00000
Common Shares Owned 21,000 Common Shares Owned 200
Option or Rights Owned 0 Option or Rights Owned 0
----------------------------------
Xxxx X. Xxxxxx
4809 Foxcroft
Xxxx, Xxxxxxxx 00000
Common Shares Owned 6,542
Option or Rights Owned 0
----------------------------------
Xxxxx X. Xxxxxxxxx
00000 Xxxxx Xxxx
Xxxxxx Xxxxxxxx, Xxxxxxxx 00000
Common Shares Owned 6,542
Option or Rights Owned 0
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Common Shares Owned 3,360
Option or Rights Owned 0
----------------------------------
Xxxxxxx Xxxxxxx
c/o Xxxxxx Xxxxx, C.P.A.
00000 Xxxxxxxx Xxxxx #000
X.X. Xxx 0000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Common Shares Owned 3,966
Option Or Rights Owned 0
20
Shareholders of GP Plastics Tnc. and the number of shares of GP Plastic, Inc.'s
common stock owned on the date of this agreement are set forth below each
person's signature hereto, including any stock options or rights thereto:
---------------------------------- ---------------------------
Xxxx X. Xxxxxx Xxxxx Xxxxxxx
0000 Xxxxx Xxxx 0000 X. Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000 Xxxx, Xxxxxxxx 00000
Common Shares Owned 21,000 Common Shares Owned 200
Option or Rights Owned 0 Option or Rights Owned 0
----------------------------------
Xxxx X. Xxxxxx
4809 Foxcroft
Xxxx, Xxxxxxxx 00000
Common Shares Owned 6,542
Option or Fights Owned 0
----------------------------------
Xxxxx X. Xxxxxxxxx
00000 Xxxxx Xxxx
Xxxxxx Xxxxxxxx, Xxxxxxxx 00000
Common Shares Owned 6,542
Option or Rights Owned 0
----------------------------------
Xxxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Common Shares Owned 3,360
Option or Rights Owned 0
/s/ Xxxxxx X. Xxxxx For Xxxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxxx
c/o Xxxxxx Xxxxx, C.P.A.
00000 Xxxxxxxx Xxxxx, #000
X.X. Xxx 0000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Common Shares Owned 3,966
Option or Rights Owned 0
21
/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
29302 New Bradford
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Common Shares Owned 1,000
Option or Rights Owned 0
----------------------------------
Xxxxxxxx Xxxxx
3025 Los Altos Drive, Apt.11
Xxxxxxxx Xxxxxx, Xxxxxxx 00000
Common Shares Owned 1,000
Option or Rights Owned 0
22
EXHIBIT 1
SHAREHOLDERS OF GP PLASTICS INC.
Names of Each Common Number of GP Inmold, Inc.
Shareholder Common Shares Common Shares
to Be Received
--------------------------------------------------------------------------------
Xxxx X. Xxxxxx 21,000 481,541
Xxxx X. Xxxxxx 6,542 150,011
Xxxxx X. Xxxxxxxxx 6,542 150,011
Xxxxxx X. Xxxxxxx 3,360 77,047
Xxxxxxx Xxxxxxx 3,966 90,942
Xxxxxx X. Xxxxxx 13000 22,931
Xxxxxxxx Xxxxx 1,000 22,931
Xxxxx Xxxxxxx 200 4,586
TOTAL 43,610 1,000,000
EXHIBIT 3.01 (a)
INMOLD, INC. SHAREHOLDER VOTE
APPROVING THE STOCK DIVDEND/EXCHANGE
TRANSACTION AND THE FAIRNESS THEREOF
The undersigned, being the holder of all outstanding capital stock of
Imnold, Inc. on the date hereof, hereby acknowledges that the Board of
Directors of this Corporation and its Shareholders in Xxxxxxx Confectionery
Products, Inc. vs. Xxxxxxxxxx, Case No. 97-536279-CZ in the Oakland County,
Michigan Circuit Court have approved the arrangement and reorganization
(exchange of stock) transaction calling for the exchange of 3,911,122 free
trading shares of Inmold, Inc. common stock owned by this Corporation with the
holders of all outstanding shares of the common stock of this Corporation in
the amount of 7,822,244 outstanding shares of SCP's common stock on the basis of
I share of Inmold, Inc. for 2 shares of SCP and the additional terms of the
Transaction contemplating that Inmold, Inc. will attempt to acquire all of the
outstanding capital stock of GP Plastics, Inc. in exchange for 1,000,000 newly
issued shares of Inmold, Inc.'s restricted common stock.
XXXXXXX CONFECTIONERY
PRODUCTS, INC.
April 10, 1997
By: Xxxx X. Xxxxxxx
-----------------------------
Xxxx X. Xxxxxxx
Chairman of the Board
EXHIBIT 4.02
LIST OF GP CAPITAL STOCK ISSUANCES
The following is a list of GP Common and Preferred Stock Issuances in
the 3-year period ending on the closing date of this Transaction:
Exemption under
which Stock was
Issued and Copy of
Name and address of Description of Any Special
Shareholder and Class of Stock Consideration Date of Agreement on Sales
Time of Sale Issued Paid Issuance Within Past 3 Years
------------ ------ ---- -------- -------------------
Xxxx X. Xxxxxx Common Loan to GP 11/22/96 Section 4(2) of the Securities
4809 Foxcroft 6,542 Shares Act of 1933 (Section4(2)
Xxxx, XX 00000
Xxxxx X. Xxxxxxxxx Common Exchange for 11/22/96 Section4(2)
00000 Xxxxx Xxxx 6,542 Shares A.E.P. Stock 03/13/96
Macomb Xxxxxxxx, XX
00000
Xxxxxx X. Xxxxxxx Common Loan to GP 11/22/96 Section4(2)
000 Xxxxxxxx Xxxxx 4,360 Shares
Xxxxxxxxxx Xxxxx, XX 00000
Xxxxxx X. Xxxxxx Common Bonus from 01/16/97 Section4(2)
29302 New Bradford 1,000 Shares Xxxxxx X. Xxxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Redeemable Preferred Stock
-------------------------
See attached list and
description in Conversion of 09/13/96 Section4(2)
Exhibit 4.09(a) Accounts Payable
In List Attached
Hereto
21
PREFERRED STOCK ISSUED
Xxx Mold $ 333,000
Precision Masters 108,000
PPG, Inc. 96,700
X. Xxxxxxxx 145,680
Xxx Xxxxxxx 266,099
Xxx Graphics 38,934
Xxxxxx 41,077
V. Xxxxx Xxxx 244,636
----------
$1,274,126
Provision For: $2,000,000 in obligations
1,000 authorized shares
$2,000 per share
Amount of Number
Creditor Obligation Of Shares Notes
--------------- ---------- ----------- ---------------------------------------
1. Xxx Mold, Inc. $ 50,000 25.0000 Redeemable 45 days after Close.
50,000 25.0000 Redeemable 90 days after Close.
100,000 50.0000 Redeemable 6 months after Close.
133,000 66.5000 18 monthly payments of $7,388.89,
starting 7 months after Close.
2. Precision Masters $ 40,000 20.0000 Redeemable 30 days after Close.
Inc.
68,000 34.0000 Redeemable one year after Close.
Also has provision to convert
to public equity.
3. PPG Industries, Inc. $ 96,700 48.3500 30 monthly payments at $4,000.00
starting 13 months after Close.
4. X. Xxxxxxxx, Inc. $ 72,840 36.4200 Redeemable 6 months after Close.
72,840 36.4200 36 monthly payments at $2,023.33
starting 7 months after Close.
5. Xxx Xxxxxxx Sales $ 30,000 15.0000 Redeemable 60 days after Close.
30,000 15.0000 Redeemable 120 days after Close.
206,099 103.0495 36 monthly payments at $5,725.00
starting 6 months after Close.
Amount of Number
Creditor Obligation Of Shares Notes
--------------- ---------- ----------- ---------------------------------------
6. Xxx Automotive $ 38,934 19.4670 4 monthly payments of $5,988.89
Graphics starting 1 month after Close. Fifth
and final payment of balance by
January 15, 1997.
7. Xxxxxx Metal $ 20,539 10.2695 Redeemable 6 months after Close.
Products
20,538 10.2690 24 monthly payments of $855.77
starting 7 months after Close.
9. V. Xxxxx Xxxx $ 244,636 122.318 Monthly payments of $17,500
starting October 15, 1996.
EXHIBIT 4.03
ARTICLES OF INCORPORATION
OF GP
-----
22
STATE OF MICHIGAN
CORPORATION AND SECURITIES COMMISSION
LANSING, MICHIGAN
DO NOT WRITE IN SPACE BELOW - FOR COMMISSION USE
Compared by:
Date Received: [illegible]
April 6, 1965
Date: FILED
April 8, 1965 April 8, 1965
[illegible]
Examiner:
[illegible]
ARTICLES OF INCORPORATION
These Articles of Incorporation are signed and acknowledged by the incorporators
for the purpose of forming a corporation for profit under the provisions of Act
No. 827 of the Public Acts of 1981, as amended, as follows:
ARTICLE I.
The name of the corporation is G-P PLASTICS, INC.
ARTICLE II.
The purpose or purposes for which the corporation is formed are as follows:
To manufacture objects by injection molding, extrusion, and all other
means of fabricating from plastic materials; to buy, alter, sell,
rent, store, trade, manfacture, and otherwise deal in all forms of
tangible personal property; to design, engineer, create, and
manufacture all forms of machinery and equipment; and
in general to carry on any business in connection therewith and incident thereto
not forbidden by the laws of the State of Michigan and with all the powers
conferred upon corporations by the laws of the State of Michigan.
ARTICLE III.
Location of the first registered office is:
1615 Kingsmere Circle Rochester Oakland Michigan
--------------------------------------------------------------------------------
(No.) (Street) (City) (County) (Zip Code)
Postoffice address of the first registered office is:
1615 Kingsmere Circle Rochester Oakland County Michigan
--------------------------------------------------------------------------------
(No. and Street or P.O. Box) (City) (Zip Code)
ARTICLE IV.
The name of the first resident agent is Xxxxxx X. Xxxxxxx
-----------------------------------------
ARTICLE V.
The total authorized capital stock is
Preferred shs. None Par Value $ per share
(1)
Common shs. 50,000 Par Value $ 1.00
Book Value $________________
per share
Preferred None Price fixed for sale $__________
and for shs. of (2) no par value
Common None Book Value $____________________
per share
Price fixed for sale $__________
(3) A statement of all or any of the designations and the powers, preferences
and rights, and the qualifications, limitations or restrictions thereof is as
follows:
None
ARTICLE VI.
The names and places of residence or business of each of the incorporators and
the number and class of shares subscribed for by each are as follow: (Statute
requires one or more incorporators)
Number of Shares
Name Residence or Business Address
(No.) (Street) (City) (State) Par Stock Non-Par Stock
Common Preferred Common Preferred
Xxxxxx X. Xxxxxxx, 1615 Kingsmere, Rochester, Mich. 10,000
Xxxx Xxxxxx, 45951 00 0/0 Xxxx, Xxxxxx Xxxx, Xxxx. 7,000
Xxxxxx Xxxxxxx, 25355 Samoset, Southfield, Mich. 5,000
Vardon D. Pance, 000 X. Xxxxxxxxxx, Xxxxx Xxx, Mich. 5,000
Xxxxx X. Xxxxxxxx, 7655 Fielding, Detroit, Mich. 5,000
Xxxx Xxxxx 16255 Andover, Fraser, Mich. 1,500
Xxxxxx X. Xxxxx, 3050 Xxxxxxx, Ferndale, Mich. 1,500
ARTICLE VII.
The names and addresses of the first board of directors are as follows:
(Statute requires at lease three directors)
Name Residence or Business Address
(No.) (Street) (City) (State)
Xxxxxx X. Xxxxxxx 0000 Xxxxxxxxx Xxxxxx Xxxxxxxxx, Xxxxxxxx
Xxxx Xxxxxx 45951 00 0/0 Xxxx Xxxxxx Xxxx, Xxxxxxxx
Vardon D. Pance 000 X. Xxxxxxxxxx Xxxxx Xxx, Xxxxxxxx
ARTICLE VIII.
The term of the corporate existence is perpetual.
If term is for a limited number of seats, then state the numbers of years
instead of perpetual.
ARTICLE IX.
OPTIONAL. (Please delete Article IX if not applicable.)
Whenever a compromise or arrangement or any plan of reorganization of this
corporation is proposed between this corporation and its creditors or any class
of them and/or between this corporation and its shareholders or any class of
them, any court of equity jursidiction within the state of Michigan, may on the
application of any receiver or receivers appointed for this corporation, order a
meeting of the creditors or class creditors, and/or the shareholders or class of
shareholders, as the case may be, to be affected by the proposed compromise or
arrangement or reorganization, to be summoned in such manner as said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the shareholders or class of
shareholders, as the case may be to be affected by the propose compromise or
arrangement or reorganization, agree to any compromise or arrangement or to any
reorganization of this corporation as a consequence to such compromise or
arrangement, said compromise or arrangement and said reorganization shall, if
sanctioned by the court to which the said application has been made, be binding
on all the creditors or class of creditors, and/or on all the shareholders or
class of shareholders, as the case may be, and also on this corporation.
ARTICLE X.
(Here insert any desired additional provisions authorized by the Act).
None
We, the incorporators, sign out names this 2nd day of April 1965
(All parties appearing under Article VI. are required to sign in this space)
Xxxxxx X. Xxxxxxx: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------------------------------------
Xxxx Xxxxxx: /s/ Xxxx Xxxxxx
----------------------------------------------------------------------------
Xxxxxx Xxxxxxx: /s/ Xxxxxx Xxxxxxx
----------------------------------------------------------------------------
Vardon D. Pance: /s/ Vardon D. Pance
----------------------------------------------------------------------------
Xxxxx X. Xxxxxxxx: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------------------------------------------
Xxxx Xxxxx: /s/ Xxxx Xxxxx
----------------------------------------------------------------------------
Xxxxxx X. Xxxxx: /s/ Xxxxxx X. Xxxxx
----------------------------------------------------------------------------
STATE OF MICHIGAN_________________} (One or more of the parties signing must
SS ackknowledge before the Notary)
COUNTY OF Xxxxx }
On the 5th day of April 1965.
before me personally appeared Xxxxxx X. Xxxxxxx
to me known to be the persons described in and who executed the foregoing
instrument, and acknowledge that he executed the same as his free act and deed.
/s/ Xxxxx X. XxXxxxx
--------------------------------------
(Signature of Notary)
Xxxxx X. XxXxxxx
--------------------------------------
(Print or type name of Notary)
MAIL THREE SIGNED AND ACKNOWLEDGED Notry Public for Oakland County,
COPIES TO: State of Michigan, acting in
Xxxxx County.
Michigan Corporation & Securities Commission
My commmission expires March 18, 1968
X.X. Xxx 000 Xxxxxxx, Xxxxxxxx 00000 (Notarial seal required if
acknowledgement taken out of State)
MICHIGAN DEPARTMENT OF COMMERCE - CORPORATION AND SECURITIES BUREAU
Date Received Adjusted Pursuant To (For Bureau Use Only)
April 24, 1996 Telephone Authorization
Per Xxxxxxxxx Xxxxx.
FILED
Name April 30, 1996
Xxxx X. Xxxxxx
Address Adminstration
0000 Xxxxxxxxxx Xxxxx XXXXXXXX XXXXXXXXXX XX
Xxxx Xxxxx Zip Code COMMERCE
Rochester Hills, MI. 48309 EFFECTIVE DATE
Corporation & Securities
Bureau
Document will be returned to the name and address you enter above
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
For use by Domestic Profit Corporations
(Please read information and instructions on the last page)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Xxx 000, Public Acts of 1982 (nonprofit corporations), the
undersigned corporation executes the following Certificate:
1. The present name of the corporation is:
G-P Plastics, Inc.
2. The identification number assigned by the Bureau is: 148-466
3. The location of the registered office is:
0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx Xxxxxxxx 00000
-------------------------------------------------------------------------------
(Street Address) (City) (Zip Code)
4. Article V of the Articles of Incorporation is hereby amended to read as
----
follows:
See attachment
5. COMPLETE SECTION (a) IF THE AMENDMENT WAS ADOPTED BY THE UNANIMOUS CONSENT
OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF DIRECTORS OR
TRUSTEES; OTHERWISE, COMPLETE SECITON (b). DO NOT COMPLETE BOTH.
a. [ ] The foregoing amendment to the Articles of Incorporation was duly
adopted on the________day of
______________________,19________,in accordance with the provisions of
the Act by the unanimous consent of the incorporators(s) before the first
meeting of the Board of Directors or Trustees.
Signed this___________day of_____________,19______________.
------------------------------------------- --------------------------------
(Signature) (Signature)
------------------------------------------- --------------------------------
(Type or Print Name) (Type or Print Name)
------------------------------------------- --------------------------------
(Signature) (Signature)
------------------------------------------- --------------------------------
(Type or Print Name) (Type or Print Name)
b. [X] The foregoing amendment to the Articles of Incorporation was duly adopted
on the 7th day of March, 1996. The amendment:(check one of the following)
--- ----- ----
[ ] was duly adopted in accordance with Section 611(2) of the Act by
the vote of the shareholders if a profit corporation, or by the
vote of the shareholders or members if a nonprofit corporation, or
by the vote of directors if a nonprofit corporation organized on a
nonstock directorship basis. The necessary votes were cast in
favor of the amendment.
[ ] was duly adopted by the written consent of all directors pursuant
to Section 525 of the Act and the corporation is a nonprofit
corporation organized on a n onstock directorship basis.
[ ] was duly adopted by the written consent of the shareholders or
members having not less than the minimum number of votes required
by statute in accordance with Section 407(1) and (2) of the Act if
a nonprofit corporation, or Section 407(1) of the Act if a profit
corporation. Written notice to shareholders who have not consented
in writing has been given. (Note: Written consent by less than all
of the shareholders or members is permitted only if such provision
appears in the Articles of Incorporation.)
[X] was duly adopted by the written consent of all the shareholders or
members entitled to vote in accordance with section 407(3) of the
Act if a nonprofit corporation, or Section 407(2) of the Act if a
profit corporation.
Signed this 7th day of March, 1996
--- ------ ----
By /s/ Xxxx X. Xxxxxx - President
----------------------------------------------------
(Only Signature of President, Vice President,
Chairperson, or Vice-Chairperson)
Xxxx X. Xxxxxx President
-----------------------------------------------------
(Type or Print Name) (Type or Print Title)
ARTICLE V ATTACHMENT
G.P. PLASTICS, INC.
AMENDMENT TO ARTICLES OF INCORPORATION
The total authorized shares:
1. Common Shares 50,000
Preferred Shares 1,000 Class A
2. A statement of all or any of the relative rights, preferences and
limitations of each class is as follows:
(1) Dividends: annual dividends are required to be paid on all shares
of Class A Preferred Stock that are outstanding on the last day of each
calendar quarter in the fiscal year of this Corporation. Such dividends shall
be at a rate equal to: 6% simple per annum of the unpaid and undischarged
Redemption Price, as hereinafter provided, without compounding.
This corporation shall be prohibited from declaring or paying any dividend
on its outstanding common stock at any time when the tangible net worth of this
corporation is not at least $400,000, determined in accordance with generally
accepted accounting principles or shown in the most recent quarterly financial
statements of this corporation, modified for this purpose to equal the
aggregate of this corporation's cash, collectible accounts receivable, inventory
(at lower of cost or market) and fixed assets (at fair market value), less
total liabilities of this corporation.
(2) Voting: shares of Class A Preferred Stock are non-voting as to all
matters that do not affect the legal rights and/or terms of the Class A
Preferred Stock.
1
(3) Subject to: any rights, terms, and/or conditions concerning dividends
and other liquidating and non-liquidating distributions, interest and costs that
have priority over Class A Preferred Stock, which are attributable to any
other classes of capital stock (other than common stock) and to indebtedness of
any kind of this corporation whether now existing, authorized and/or issued,
and/or existing authorized and/or issued at any time in the future.
(4.) Preferences: no dividends or liquidating or other distributions may be
declared or paid with respect to the common stock, par value of $1.00 per
share, of this corporation, unless and until all regular and liquidating
dividends, including dividends of the Redemption Price required to be declared
and paid (both accrued and cumulated) are paid on all then outstanding shares of
Class A Preferred Stock for the period of time commencing with the first date
on which any shares of Class A Preferred Stock were first issued and outstanding
and ending with the date on which such common stock dividends and/or
distributions are to be so declared and/or paid.
(5) Collateral Nature of Shares and Mandatory Redemption and Voluntary
Purchase:
i. Outstanding shares of Class A Preferred Stock shall be mandatorily
redeemed (in whole or in part) on the record date established by the Board of
Directors of this corporation. Redemption may be of the whole or a fractional
part of each outstanding share of Class A Preferred Stock. Funds used to pay
less than the full Redemption Price, plus all accrued and cumulated dividends
through the date of redemption shall first be applied to cumulated dividends,
then to accrued dividends and finally to the Redemption Price, effective as of
the record date for the redemption.
2
A. For purposes of this paragraph I. Above, the Redemption Price shall be
the sum of $_________ Per share of Class A Preferred Stock outstanding,
exclusive of the accrued or cumulated dividends, which shall be calculated on
the shares of Class A Preferred Stock being redeemed at the end of the last full
calendar quarter endings, just prior to such record date (after reductions for
previous disputed payments and/or liquidating dividends paid to the holder(s) of
the shares being redeemed by this corporation.
B. Shares of Class A Preferred Stock are being given to holders of
outstanding indebtedness of this corporation with Redemption Prices equal to
the amount of each such indebtedness and without any consideration agreements or
accommodations in exchange therefor on the part of each recipient creditor. Any
payments of the Redemption Price shall apply to reduce that indebtedness and any
payments of that indebtedness through means other than payments of this
Redemption Price shall operate to reduce the Redemption Price on the shares of
the Class A Preferred Stock of that creditor pro rata, The shares of Class A
Preferred Stock shall not be transferrable without the consent of this
corporation and they shall secure the indebtedness of each recipient creditor
that is outstanding on the date of their receipt hereof The holder thereof shall
have no rights to enforce his, her or its security interest therein by
foreclosure or otherwise, except as to dividends duly declared and the
Redemption Price paid thereon. As the indebtedness secured thereby is paid, the
total Redemption Price she be correspondingly reduced. Nothing associated with
receipt and acceptance of the ownership of the shares of Class A Preferred Stock
by any creditor shall limit, waive or infringe in any way upon his, her or its
rights to enforce the indebtedness secured thereby, or any other collateral
therefor on the same basis as if no such stock had been issued, received and
accepted by him, her or it. When the
3
indebtedness secured by any shares of Class A Preferred Stock has been paid
along with all dividends due thereon, such shares shall be canceled
automatically enforcing his rights as a shareholder.
ii. In addition to the foregoing, the Board of Directors of this
corporation may elect for any reason: (a) to call any and all Shares of Class A
Preferred Stock for mandatory redemption by this corporation at any time,
whether on a pro rata or a non-pro rata basis, with or without fixing a record
date therefor and with or without the consent of the shareholder(s) whose
shares are being redeemed, by paying to the then record holder of the shares
being redeemed the, Redemption Price, plus all accrued and cumulated dividends
with respect thereto; or (b) aside from a mandatory redemption pursuant to such
call described above under sub-paragraph II to purchase any and/or all such
shares voluntarily, either on a pro rata or a non-pro rata basis at any time
without fixing a record date therefor, provided that such purchase and the
terms, prices and conditions there of are consented to by the shareholder(s)
whose shares are being purchased.
iii. Once all of the Redemption Price that is due and all accrued and
cumulated dividends that are due to be declared and paid on outstanding shares
of Class A Preferred Stock being mandatorily redeemed by this corporation have
been paid, the shares shall be deemed to have been retired, canceled and added
back to authorized, but unissued status of Class A Preferred Stock and the
record holders thereof at the date' of retirement shall promptly tender any and
all stock certificates evidencing such shares to this corporation, duly endorsed
to this corporation, with signatures appropriately guaranteed.
4
Name of person or organization Preparer's name and business
remitting fees: telephone number:
Xxxx X. Xxxxxx Xxxxxxxxx X. Xxxxx
------------------------------- ----------------------------
(000 )000-0000
------------------------------- ----------------------------
INFORMATION AND INSTRUCTIONS
1. The amendment cannot be filed until this form, or a comparable document, is
submitted.
2. Submit one original of this document. Upon filling, the document will be
added to the records of the Corporation and Securities Bureau. The
original will be returned to the address appearing in the box on the front
as evidence of filing.
Since this document will be maintained on optical disk media, it is
important that the filing be legible. Documents with poor black and
white contrast, or otherwise illegible, will be rejected.
3. This document is to be used pursuant to the provisions of sections 631 of
the Act for the purpose of amending the articles of incorporation of a
domestic profit corporation or nonprofit corporation. Do not use this form
for restated articles. A nonprofit corporation is one incorporated to
carry put any lawful purpose or purposes not Involving pecuniary profit or
gain for its directors, officers, shareholders, or members. A 'nonprofit
corporation formed an a nonstock directorship basis, as authorized by
Section 302 of the Act, may or may not have members, but if it has members,
the members are not entitled to vote.
4. Item 2 - Enter the identification number previously assigned by the Bureau.
If this number is unknown, leave it blank.
5. Item 4 - The articles being amended must be set forth in its entirety.
However, if the article being amended is divided into separately
identifiable sections, only the sections being amended need be included.
6. This document is effective on the date endorsed "filed" by the Bureau. A
later effective date, no more than 90 days after the date of delivery, may
be stated as an additional article.
7. If the amendment is adopted before the first meeting of the board of
directors, item 5(a) must be completed and signed in ink by a majority of
the incorporators if more than one listed in Article V of the Articles of
Incorporation If a profit corporation, and all the incorporators if a
nonprofit corporation. If the amendment is otherwise adopted, Item 5(b)
must be completed and signed in ink by the president, vice-president,
chairperson, or vice-chairperson of the corporation.
8. FEES- Make remittance payable to the State of Michigan. Include corporation
name and identification number on check or money order.
NONREFUNDABLE FEE ................................................... $10.00
TOTAL MINIMUM FEE ................................................... $10.00
ADDITIONAL FEES DUE FOR INCREASED AUTHORIZED SHARES OF PROFIT CORPORATIONS ARE:
each additional 20,000 authorized shares or portion thereof .... $30.00
maximum fee for first 10,000,000 authorized shares ........... $5,000.00
each additional 20,000 authorized shares or portion thereof
in excess of 10,000,000 shares ................................ $30.00
maximum fee per filing for authorized shares in excess of
10,000,000 shares ......................................... $200,000.00
9. Mail form and fee to: The office is located at:
Michigan Department of Commerce 0000 Xxxxxxxxxx Xxx
Corporation and Securities Xxxxxx Xxxxxxx, XX 00000
Corporation Division Telephone: (000) 000-0000
P.O. B0X 30054
Xxxxxxx, XX 00000-0000
[SEAL OF THE STATE OF MICHIGAN]
Michigan Department of Commerce
Lansing, Michigan
This is to Certify That
G-P PLASTICS, INC.
was validly incorporated on April 8, 1965, as a Michigan profit corporation, and
said corporation is validly in existence under the laws of this State.
This certificate is issued to attest to the fact that the corporation is in good
standing in this office as of this date and is duly authorized to transact
business or conduct affairs in Michigan and for no other purpose. It is in the
usual form, made by me as the proper officer, and is entitled to have full
faith and credit given it in every court and office within the United States.
In testimony whereof, I have hereunto set
my hand and affixed the Seal of the
Department, in the City of Lansing,
this 14th day of March, 1996.
/s/ Xxxx X. Xxxxx, Director
----------------------------------------
SEAL APPEARS ONLY ON ORIGINAL Corporation & Securities Bureau
EXHIBIT 4.04
FINANCIAL STATEMENTS OF
GP
--
The financial statements of GP as of February 28,1997, are unaudited.
23
G P PLASTICS, INC.
INTERIM FINANCIAL STATEMENT
Five Months Ended February 28,1997
SALES 4,330,603
COST OF SALES
Materials 1,992,627
Direct Wages and Benefits 387,569
Manufacturing Overhead 1,185,641
---------
Total Cost of Sales 3,565,837
GROSS PROFIT 764,766
ADMINISTRATION &
SELLING EXPENSE 636,178
-------
INCOME (LOSS) FROM OPERATIONS 128,588
OTHER INCOME (EXPENSE)
Other Income 6,461
Interest Expense (152,329)
---------
Total Other Income (Expense) (145,868)
---------
NET INCOME (LOSS) BEFORE TAXES (17,280)
Provision for Tax -0-
---------
NET INCOME (LOSS) (17,280)
Add-Back Depreciation 161,530
---------
CASH FLOW 144,250
G P PLASTICS, INC.
BALANCE SHEET
At February 28, 1997
CURRENT ASSETS
Cash 258,371
Accounts Receivable 1,647,443
Inventory 633,403
Pre-Paid Expenses 30,328
Other Current 7,528
---------
Total Current Assets 2,577,073
PROPERTY AND EQUIPMENT
Property and Equipment 4,594,682
Less Accumulated Depreciation (2,833,328)
---------
Total Property and Equipment 1,761,359
OTHER ASSETS
Goodwill 547,670
Other 274,545
-------
Total Other Assets 822,215
---------
TOTAL ASSETS 5,160,662
CURRENT LIABILITIES
Accounts Payable 1,355,399
Accrued Expense 567,577
Current Portion, LTD 244,000
Other Current 365,630
---------
Total Current Liabilities 2,512,606
REVOLVING LINE OF CREDIT 1,981,618
LONG TERM DEBT
Term Loan 804,682
Notes Payable 114,797
-------
Total Long Term Debt 919,479
---------
TOTAL LIABILITIES 5,413,703
STOCKHOLDERS EQUITY
Capital Stock 518,499
Preferred Stock 1,284,126
Retained Earnings (2,055,666)
---------
Stockholders Equity (253,041)
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 5,160,662
G P PLASTICS, INC.
September 30, 1996
FINANCIAL STATEMENTS AND
ACCOUNTANT'S REVIEW REPORT
G P PLASTICS, INC.
TABLE OF CONTENTS
Page
----
Accountant's Review Report............................................... 1
FINANCIAL STATEMENTS:
Consolidated Balance Sheet............................................. 2
Consolidated Statement of Retained Earnings............................ 3
Consolidated Statement of Income....................................... 4
Consolidated Statement of Cash Flows................................... 5
Notes to the Financial Statements...................................... 6
SUPPLEMENTARY INFORMATION:
Schedules of Manufacturing Expenses.................................... 12
Schedules of Administrative and Selling Expenses....................... 13
[LETTERHEAD OF HESSENAUR & ASSOCIATES, CPA, P.C. APPEARS HERE]
March 21, 1997
Board of Directors
G P Plastics, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxx 00000
I have reviewed the accompanying consolidated balance sheet of G P Plastics,
Inc. as of September 30, 1996 and related consolidated statements of income,
retained earnings, and cash flows for the year then ended, in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants. All information included in
these financial statements is the representation of management of G P Plastics,
Inc.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that should be
made to the financial statements in order for them to be in conformity with
generally accepted accounting principles.
My review was made for the purposes of expressing limited assurance that there
are no material modifications that should be made to the financial statements in
order for them to be in conformity with generally accepted accounting
principles. The information included in the accompanying pages 12 and 13 is
presented only for supplementary analysis purposes. Such information has been
subjected to the inquiry and analytical procedures applied in the review of the
basic financial statements, and I am not aware of any material modifications
that should be made thereto.
/s/ Hessenaur & Associates
HESSENAUR & ASSOCIATES, CPA, P.C.
G P PLASTICS, INC.
CONSOLIDATED BALANCE SHEET
September 30, 1996
ASSETS
Current Assets:
---------------
Cash $ 403,138
Accounts receivable (less allowance
for doubtful accounts of $30,000) 1,140,741
Accounts receivable - officers 48,337
Interest receivable 292
Inventories:
Raw materials 179,504
Work in process 30,905
Finished goods 346,157
Prepaid property taxes 26,912
----------
Total Current Assets $2,175,986
Property and Equipment:
-----------------------
Machinery and equipment $3,587,790
Furniture and fixtures 420,108
Vehicles 81,729
Tooling 142,592
Leasehold improvements 265,042
----------
Total $4,497,261
Less accumulated depreciation 2,676,097
----------
Net Book Value 1,821,164
Other Assets:
-------------
Notes receivable (Note 3) $ 138,000
Goodwill 411,541
Cash surrender value officers
life insurance 129,109
Deposits 18,500
----------
Total Other Assets 697,150
----------
$4,694,300
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
-------------------
Current portion of notes payable $ 229,354
Bank line of credit (Note 4) 1,470,732
Accounts payable, trade 1,509,473
Withheld and accrued payroll taxes 95,851
Accrued:
Commissions 110,343
Interest 113
Insurance 41,986
Michigan Single Business Tax 13,936
Payroll 52,716
Property taxes 143,279
Vacation 18,601
Deferred revenue - tooling 6,127
Reserve for litigation loss (Note 8) 230,000
----------
Total Current Liabilities $3,922,311
Long-term Debt
--------------
Notes payable,net of current
portion (Note 5) $1,007,751
Stockholders Equity:
--------------------
Common stock - Authorized 50,000
shares, issued and outstanding,
43,610 shares $ 518,499
Preferred stock (Note 12) 1,284,126
Retained earnings (2,038,387)
----------
Total Stockholders Equity (235,762)
----------
$4,694,300
==========
(See accountant's review report and notes to
the financial statements)
- 2 -
G P PLASTICS, INC.
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
For the Year Ended September 30, 1996
Balance October 1, 1995 $(1,220,590)
Add: Net (loss) from October 1,
1995 to September 30, 1996 (817,797)
-------------
Balance September 30, 1996 $(2,038,387)
=============
(See accountant's review report and notes to
the financial statements)
- 3 -
G P PLASTICS, INC.
CONSOLIDATED STATEMENT OF INCOME
For the Year Ended September 30, 1996
Sales
-----
Trade sales $ 8,313,902
Tooling sales 407,380
-----------
Total Sales $ 8,721,282
Cost of sales:
Beginning inventory $ 460,507
Material purchases 4,538,690
Tooling cost 330,012
Direct wages 558,335
Manufacturing expenses 2,272,194
Freight 115,148
----------
Total $8,274,886
Less, ending inventory 556,566
----------
Total Cost of Sales 7,718,320
-----------
Gross Profit $ 1,002,962
Administrative and Selling Expense 1,507,422
-----------
Operating Profit (Loss) $ (504,460)
Other Income (Expense):
-----------------------
Interest income $ 24,162
Interest expense (335,674)
Loss on sale of equipment (7,564)
Miscellaneous income 5,739
----------
Total Other Income (Expenses) (313,337)
-----------
Net (Loss) $ (817,797)
===========
(see accountant's review report and notes to
the financial statements)
- 4 -
G P PLASTICS, INC.
CONSOLIDATED SCHEDULE OF MANUFACTURING EXPENSES
For the Year Ended September 30, 1996
Indirect labor $ 599,427
Production administration wages 211,428
Vacation payroll 63,019
Depreciation:
Machinery and equipment 241,628
Furniture and fixtures 16,313
Leasehold improvements 3,714
Factory supplies 55,819
Insurance:
Employee health 105,450
General 35,980
Workers compensation 57,604
Protective clothing 12,411
Rent 183,822
Repair and maintenance:
Building 25,213
Machinery and equipment 62,332
Tools and fixtures 69,419
Quality control expenses 13,328
Taxes:
Payroll 168,791
Property 74,586
Truck expenses 2,468
Utilities:
Electricity 235,278
Gas and water 13,579
Waste removal 16,199
Other manufacturing expenses 4,086
----------
Total Manufacturing Expenses $2,272,194
==========
(See accountant's review report)
- 12 -
G P PLASTICS, INC.
CONSOLIDATED SCHEDULE OF ADMINISTRATIVE AND SELLING EXPENSES
For The Year Ended September 30, 1996
Administration wages $ 597,347
Auto lease 6,653
Bad Debts 21,033
Commissions 314,555
Computer supplies and expenses 22,841
Consulting fees 108,242
Depreciation 18,475
Employee benefits 2,154
Health insurance 51,489
Legal 142,363
Accounting 57,330
Office supplies and expenses 41,732
Officers life insurance 9,899
Postage 4,881
Royalties 2,776
Taxes:
Payroll 36,195
Michigan Single Business 17,398
Telephone 22,360
Travel and entertainment 9,207
Vehicle expenses 20,492
----------
Total Administrative and Selling
Expenses $1,507,422
==========
(See accountant's review report)
- 13 -
G P PLASTICS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended September 30, 1996
INCREASE (DECREASE) IN CASH
Cash Flows from Operating Activities:
Cash received from customers $ 8,877,735
Cash paid to suppliers and employees (9,281,267)
Interest received 24,719
Interest paid (336,069)
-----------
Net Cash Used by Operating
Activities $ (714,882)
Cash Flows Used in Investing Activities:
Acquisition of fixed assets (130,447)
Proceeds from sale of building 643,000
Acquisition of subsidiary (376,192)
Acquisition of goodwill (411,541)
Decrease in cash surrender value
officers life insurance 11,180
Advances repaid by officer 10,516
Increase in deposits (1,000)
Receipts on note receivable 189,616
-----------
Net Cash Used by Investments (64,868)
Cash Provided by Financing Activities:
Pay off line of credit (1,107,081)
Repayment of long term liabilities (947,891)
Proceeds from new financing 2,593,040
Proceeds from common stock 492,333
-----------
Net Cash Provided by Financing
Activities 1,030,401
-----------
Net Increase in Cash $ 250,651
Cash, Beginning of Period 152,486
-----------
Cash, End of Period $ 403,137
===========
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Net (loss) $ (817,797)
Adjustments:
Depreciation 280,650
Lose on sale of equipment 7,563
Increase in:
Inventory (96,059)
Decrease in:
Accounts receivable 151,954
Prepaid expenses 132,048
Accounts payable (85,895)
Accrued expenses (287,346)
-----------
Net Cash Used by Operating Activities $ (714,882)
===========
(See accountant's review report and notes to
the financial statements)
-5-
GP PLASTICS, INC.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Nature of Business
The Company generates substantially all earnings revenue and earnings
from injection molding of plastic parts. The Companys principal
customers are major automotive manufacturing companies in the United
States.
B. Basis of Consolidation
The attached consolidated financial statements include the accounts of
G P Plastics, Inc. and its fully-owned subsidiary AL-KO Enterprises,
Inc. d/b/a A.E.P. Technologies, Inc. The accompanying income statement
includes the results of operations of A.E.P. Technologies, Inc. from
the acquisition date of April 6, 1996 through September 30, 1996. Also
see Note 11 regarding the purchase of A.E.P. Technologies, Inc.
during the current fiscal year.
C. Allowance for Doubtful Accounts
The Company provides an allowance for uncollectible accounts based
upon prior experience and managements assessment of collectibility of
existing specific accounts.
D. Property and Equipment
Property and equipment is stated at cost. Depreciation is provided by
use of the straight-line and accelerated methods over the estimated
useful lives of the related assets.
E. Inventories
Raw material inventories are valued at the lower of cost or market,
cost being determined using the first-in, first-out method. Work in
process and finished goods are valued at standard cost.
F. Goodwill
Goodwill, represents the excess of the cost of acquiring its
subsidiary over the fair value of their net assets at the date of
acquisition and acquiring the related financing. The goodwill is
amortized by the straight line method over a forty year period
starting October 1, 1996.
G. Cash Equivalents
For purposes of the statement of cash flows, all highly liquid debt
instruments with a maturity of three months or less are considered
cash equivalents.
(See accountant's review report)
- 6 -
G P PLASTICS, INC.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. Use of Estimates
The Process of preparing financial statements in conformity with
generally accepted accounting principles requires the us of estimates
and assumptions regarding certain types of assets, liabilities, income
and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements.
Accordingly, upon settlement, actual results may differ from estimated
amounts.
NOTE 2 CREDIT RISK FROM CASH DEPOSITS
The Company maintains its cash balance in one financial institution
located in Troy, Michigan. The balances are insured by the Federal
Deposit Corporation up to $100,000. At September 30, 1996, the
Company's uninsured cash balances totaled $539,257.
NOTE 3 NOTES RECEIVABLE
Note receivable officer is unsecured, bears interest at 3.9%, requires
annual payments of interest only and principle is payable October 1,
1997.
NOTE 4 BANK LINE OF CREDIT
The Company has a revolving line of credit with CIT Group/Credit
Financing, Inc. Allowable borrowing is based on 85% of eligible
accounts receivable and 50% of raw material and finished goods
inventory. Advances on the credit line are payable on demand and bear
interest at 3.75% over prime. The credit line is secured by
substantially all assets and is personally guaranteed by the principal
shareholder.
(See accountant's review report)
- 7 -
G P PLASTICS, INC.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1996
NOTE 5 - NOTES PAYABLE
Note payable CIT Group/Credit Financing,
Inc. is payable in monthly installments
of $18,705 plus interest at 3.75% over
prime and matures August 2001. The note
is secured by substantially all assets
of Company. $1,122,308
Note payable NBD in secured by a specific
vehicle, bears interest at 8.75% and is
payable in monthly installments $505 including
interest through August of 1999. 15,541
Note payable Life insurance is secured by cash
surrender value of life insurance, bears interest
at 6% and is payable at termination of life
insurance policy. 99,256
-----------
$1,237,105
Current portion 229,354
-----------
$1,007,751
===========
The approximate aggregate maturities of long-term liabilities,
for the next five years, as of September 30, 1996 are as follows:
1997 $ 229,354
1998 229,799
1999 229,780
2000 224,464
2001 224,452
NOTE 6 LEASE COMMITMENTS
The Company leases its facilities under an operating lease which
expired March 1994. A majority shareholder is part owner of the
lessor. The lease requires monthly lease Payments of $14,832, plus
taxes and insurance. The monthly lease payments are scheduled to
increase $250 annually. The Company has two five year renewal options
on this lease, with tile same rent plus scheduled increases as
mentioned above. Renewal options have not been exercised and the
Company continues leasing the facilities on a month by month basis.
Total rent expense for the year ended September 30, 1996 was
$190,475.
(See accountant's review report)
- 8 -
G P PLASTICS, INC.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1996
NOTE 7 - DEFERRED COMPENSATION PLAN
The Company has a defined contribution deferred compensation
plan Covering all full-time employees of the company who have one
year of service and are age 21 or older. Contributions to the
plan are determined each year by the Board of Directors. No
contributions have been made to the plan, or accrued over the
past year.
NOTE 8 - LITIGATION LOSS, CONTINGENCIES
A creditor to a former subsidiary of the Company has filed a
claim against G P Plastics, Inc. for $163,184 plus interest and
legal expenses. A surety bond for $231,345 has been posted by
the Company regarding this litigation. The surety bond is
secured by a cash certificate of deposit owned by the Company.
At this time, management has estimated the loss regarding this
litigation to be $230,000. The company has included in the
financial statements a loss on litigation and a reserve for
litigation loss for $230,000. Actual loss could be greater than
this amount, however managements does not expect a material
difference from the reported amount.
NOTE 9 - INCOME TAXES
The Company has $6,151,140 net loss carryforward for financial
reporting purposes to offset future income through 2010. For tax
reporting purposes the Company has $4,327,169 net loss
carryforward. The Company also has $24,304 tax credit
carryforwards available to offset future income taxes for
financial reporting and federal tax reporting purposes.
NOTE 10 - SUPPLEMENTAL DISCLOSURE FOR STATEMENT OF CASH FLOW
The following are noncash investing and financing transactions
for the year ended September 30, 1996:
Common stock exchanged for purchase
of subsidiary $ 103,333
Preferred stock exchanged for
purchase of subsidiary 244,636
Preferred stock exchanged for
Company accounts payable 1,039,490
(See accountant's review report)
- 9 -
G P PLASTICS, INC.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1996
NOTE 11 - PURCHASE OF SUBSIDIARY
On April 6, 1996 the Company acquired all the stock of Al-Ko
Enterprises, Inc. d/b/a A.E.P. Technologies, Inc. and the building
occupied by them. A.E.P. Technologies, Inc. is a plastics injection
molding business operating since 1977 and had total sales of
approximately $3,500,000 for the year ended December 31, 1995. The
purchase method was used to account for the business acquisition, and
the following values were assigned to the assets and liabilities
acquired:
Cash $ 3,004
Accounts receivable, net 583,389
Inventory 187,932
Prepaid expenses 7,799
Building 644,742
Property and equipment 895,402
Receivables from officers 39,469
Accounts payable (590,189)
Accrued expenses (29,592)
Line of credit payable (400,985)
Long term liabilities (169,248)
Mortgage payable - building (447,562)
---------
Total Cost $724,161
=========
The purchase Price was funded as follows:
Cash to sellers $155,364
Cash for fees and expenses 220,828
Exchange of common stock 103,333
Issuance of redeemable
preferred stock 244,636
---------
$724,161
=========
The building was sold by the Company on August 30, 1996 for a total
sale price of $643,000.
In July 1996 the operations of A.E.P. Technologies, Inc. were
physically moved to the Companies manufacturing location. The
consolidation was made to provided for cost savings relating to
duplications of two locations and improved efficiencies.
(See accountant's review report)
- 10 -
G P PLASTICS, INC.
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1996
NOTE 12 - PREFERRED STOCK - REDEEMABLE
In conjunction with the purchase of subsidiary and new financing the
Company entered into various agreements for the issuance and
redemption of preferred stock. All outstanding preferred stock is
subject to redemption agreements. Generally the preferred stock has a
10% per annum dividend requirement, various redemptions at face value
over the next 42 months and redemptions are subject to the Company
having a minimum tangible net worth of $400,000.
(See accountant's review report)
EXHIBIT 4.04(d)
S.E.C. 1934 ACT REPORTS
OF GP
GP is not a reporting company.
EXHIBIT 4.05
SECURITY AGREENIENT BETWEEN GP and CIT GROUP/CREDIT FINANCE, INC.
First page of the Security Agreement is attached hereto. The full text is
available from Imnold, Inc.
25
LOAN AND SECURITY AGREEMENT
This Agreement is between the undersigned Borrower and the undersigned
Lender concerning loans and other credit accommodations to be made by Lender to
Borrower.
SECTION 1. PARTIES
1.1 The "Borrower" is the person, firm, corporation or other entity,
identified as the Borrower in Section 10.6(c) and its successors and assigns.
If more than one Borrower is specified in Section 10.6(c), all references to
Borrower shall mean each of them, jointly and severally, individually and
collectively, and the successors and assigns of each.
1.2 The "Lender" is The CIT Group/Credit Finance, Inc. and its successors
and assigns.
SECTION 2. LOANS AND OTHER CREDIT ACCOMMODATIONS
2.1 Revolving loans. Lender shall, subject to the terms and conditions
contained herein, make revolving loans to Borrower ("Revolving Loans") in
amounts requested. by Borrower from time to time, but not in excess of the Net
Availability existing immediately prior to the making of the requested loan and
provided the requested loan would not cause the outstanding Obligations to
exceed the Maximum Credit.
(a) The "Maximum Credit" is set forth in Section 10.1(a) hereof.
(b) The "Gross Availability" shall be calculated at any time as (i) the
product obtained by multiplying the outstanding amount of Eligible Accounts, net
of all taxes, discounts, allowances and credits given or claimed, by the
Eligible Accounts Percentage set forth in Section 10.1(b),
plus: (ii) the product(s) obtained by multiplying the applicable
Eligible Inventory Percentage(s), if any, set forth in Section 10. I
(b) by the values (as determined by Lender based on the lower of cost
or market) of Eligible Inventory, but the amount so added shall not
exceed any sublimits set forth in Section 10.1(c),
(c) The "Net Availability" shall be calculated at any time as an amount
equal to the Gross Availability minus the aggregate amount of all
then-outstanding Obligations to Lender other than the then outstanding principal
balance of the Tenn Loan, if any.
(d) "Eligible Accounts" are accounts created by Borrower in the ordinary
course of its business which are and remain acceptable to Lender for lending
purposes. General criteria for Eligible Accounts are set forth below but may be
revised from time to time by Lender, in its sole judgment, on fifteen (15)
days' prior written notice to Borrower. Lender shall, in general, deem
EXHIBIT 4.08
MATERIAL GP DEFAULTS OR VIOLATIONS
The following list includes all material violations or defaults on the part of
GP with respect to its Articles of Incorporation, By-Laws, Agreements,
Contracts, Conunitments, Instruments, Indentures, Judgments, Decrees, Court or
Administrative Orders, Filings of any Report, Tax Return or any other Document:
None
26
EXHIBIT 4.09(a)
LIST OF MATERIAL CONTRACTS, AGREEMENTS, LICENSES, FRANCHISES
AND OTHER COMMITMENTS OF GP
See financial statements in Exhibit 4.04.
1. A financing arrangement with The CIT Group/Credit Finance, Inc. consisting
of (i) a term loan in the initial amount of $1,156,000, secured by the
fixed assets of GP, and (ii) a working capital line of credit secured by
accounts receivable and inventories. The latter varies in amount, but
stood at approximately $1,100,000 at the closing of the loan on
September 13, 1996. Monthly principal payments of $20,000 are being made on
the term loan .
2. GP leases its facilities at 000 0 Xxxxxxxxxx Xxxxx in Rochester Hills under
a lease dated March, 1984 and extended for an additional five (5) years in
March, 1994, ending March 31, 1999. Monthly lease payments are $17,290.
3. At the time of the new financing with The CIT Group/Credit Finance, Inc.,
GP negotiated extended term agreements with its creditors covering aged
obligations. These obligations consist of a combination of cash paid at the
time of closing of the new financing and redeemable preferred stock of GP
for the balance. The redeemable preferred stock is redeemable by the
creditors over periods ranging from 12 to 36 months. Payments cannot be
made, however, unless GP's tangible net worth exceeds $400,000.
4. GP has also cast the remaining payments to V. Xxxxx Xxxx for his majority
holdings of A.E.P. stock, in the amount of $244,000, in the form of
redeemable preferred stock. Redemption payments are spread over a period of
fourteen (14) months, with the same restriction on payments as cited in
paragraph 3 above.
5. GP is also obligated on certain loans involving related parties in the
amount of $275,000. The lenders are Xxxxxx Xxxxxxx and Xxxx Xxxxxx, both
members of the Board of Directors.
27
EXIBIT 4.09(c)
LIST OF MATERIAL ORAL OR WRITTEN (i) EMPLOYMENT AGREEMENTS,
(ii) EMPLOYER BENEFIT PLANS, (iii) LOAN AND ASSET RESTRICTION
(E.G. LIEN) AGREEMENTS,
(OTHER THAN WITH CIT, SHOWN IN EXHIBIT 4.09(a) ABOVE),
(iv) GUARANTEES OF $I 0,000 OR MORE, (v) CONSULTING OR SIMILAR CONTRACTS
WITH MORE THAN 1 YEAR TO RUN AND PAYMENTS EXCEEDING $10,000,
(vi) COLLECTIVE BARGAINING AGREEMENTS,
(vii) FORMER SHAREHOLDER, OFFICER OR/AND DIRECTOR AGREEMENTS AND
(viii) CONTRACTUAL OBLIGATIONS FOR OVER $10,000
None
28
EXHIBIT 4.10
LIABILITIES OF GP
NOT DISCLOSED OR PROVIDED
FOR IN FINANCIAL STATEMENTS
CONTAINED IN EXHIBIT 4.04
Other than liabilities and obligations disclosed in the Financial Statements and
in Exhibits 4.09 and 4.10, GP has knowledge only of an environmental
situation in a very limited area of its property. A plan to eliminate it, using
the soil vapor evaporation process, will be implemented in mid-1997 at a cost
which management of GP does not expected to affect GP's financial condition
materially. The work is being monitored by the Department of Environmental
Quality of the State of Michigan.
29
EXHIBIT 4.13
OFFICERS AND DIRECTORS
OF GP
Name Title(s)
Xxxx X. Xxxxxx Director, Chairman of the Board
and Secretary
Xxxx X. Xxxxxx Director and Treasurer
Xxxxxx X. Xxxxxxx Director
Xxxxxx X. Xxxxxxx Director
Xxxxx X. Xxxxxxxxx Director
30
EXHIBIT 4.14
UNFILED OR UNPAID GP TAX RETURNS AND/OR CHARGES
The following sets forth a list of all unfiled tax returns and/or unpaid
taxes or charges on the part of GP:
All unpaid real estate, Federal, State and local tax obligations are either
not yet due or are subject to arrangements with the respective tax authorities.
31
EXHIBIT 4.15
PRIVATE SECURITIES SALES
OF GP
WITHIN THE LAST TWO YEARS
Private sales of GP's capital stock in the past two (2) years;
including Preferred Stock:
Type Summary of
of Facts Relied
Exemption on for
Type of Name(s) Date from Exemption
Security of of Price Registration from
Sold Purchaser Purchase Paid per Share Claimed Registration
---- --------- -------- -------------- ------- ------------
Common Xxxx X. Xxxxxx 11/22/96 Consideration for Section 4(2) of the CFO,
Stock Loan to GP 1933 Act (Section 4(2)) Treasurer &
6,542 Director of GP
Common Xxxxx X. Xxxxxxxxx 11/22/96 Exchange for Section 4(2) Director and
Stock 03/13/96 A.E.P. Stock heads GP's
6,542 Marketing
Common Xxxxxx X. Xxxxxxx 11/22/96 Consideration for Section 4(2) Director and
Stock Loan to GP Manufacturers
4,360 Rep for GP
Common Xxxxxx X. Xxxxxx 01/16/97 Gift from Section 4(2) Manufacturers
Stock Xxxxxx X. Xxxxxxx Rep for GP
1,000
Redeemable See Exhibit 4.02 for detail
Preferred Stock
32
EXHIBIT 4.17
MATERIAL DEFAULTS IN CONTRACTS
OF GP
Any material default of any contract on the part of GP, which has not been
waived. The following is a summary list thereof. None
33
SCHEDULE 4.18(k)
GP has not incurred any obligations for finders fees since February 28, 1997.
34
EXHIBIT 5.02
FINANCIAL STATEMENTS
INMOLD, INC.
Inmold, Inc. has not acquired GP at this time, nor does it have an operating
history. For this reason, it has no financial statements, other than the
Balance Sheet printed below:
INMOLD, INC.
PRO-FORMA BALANCE SHEET
AT MARCH 1, 1997
CURRENT ASSETS
Cash 40.00
Accounts Receivable
Inventory
Pre-Paid Expenses
Other Current
Total Current Assets 40.00
PROPERTY AND EQUIPMENT
Property and Equipment
Less Accumulated Depreciation
Total Property and Equipment 0.00
OTHER ASSETS 0.00
-----
TOTAL ASSETS 40.00
CURRENT LIABILITIES
Accounts Payable
Accrued Expense
Current Portion, LTD
Total Current Liabilities 0.00
LONG TERM DEBT
Term Loan
Notes Payable
Total long Term Debt 0.00
-----
TOTAL LIABILITIES 0.00
STOCKHOLDERS EQUITY
Common Stock (4,000,000 shares at $0.00001 par value) 40.00
Additional Paid-In Capital 0.00
Retained Earnings 0.00
-----
Stockholders Equity 40.00
-----
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 40.00
35
EXHIBIT 5.06
INMOLD, INC. ARTICLES OF INCORPOPATION AND BY-LAWS
First pages of the Articles of Incorporation and By-Laws are attached hereto.
The full texts are available from Inmold, Inc.
36
ARTICLES OF INCORPORATION
OF
INMOLD, INC.
These Articles of Incorporation are signed by the incorporator(s) for the
purpose of forming a profit corporation pursuant to the provisions of the
Indiana Business Corporation Law, as amended as follows:
ARTICLE I
INMOLD, INC.
The name of the Corporation is Inmold, Inc.
ARTICLE II
Purpose and Powers
The purpose or purposes for which the Corporation is organized is to engage
in any activity within the purposes for which corporations may be organized
under the Indiana Business Corporation Law.
Specifically, and not by way of limitation on the foregoing, the nature of
the business, or objects or purposes to be transacted, promoted or carried on
are:
Manufacturing of products of all types and at all locations for sale at
wholesale and at retail.
In furtherance and not in limitation of the general powers conferred by the
laws of the State of Indiana and of the above-stated general objects, it is
hereby expressly provided that the Corporation shall also have the following
powers:
(a) To invest, manufacture, distribute, sell, market, patent and
improve products and processes of any type, for any kind to produce, sell
and use products of any kind and description to buy, purchase, receive,
take by grant, gift, devise, bequest, license, rent, lease, franchise or
otherwise acquire; to own, use hold, alter, maintain, improve, invest in,
employ, or otherwise utilize; to franchise, transfer, license, sell,
convey, generally deal in, rent, or lease, mortgage, exchange and otherwise
trade in and dispose of real property or personal property (of any kind or
description including choses in action) of all kinds or any interest or
right therein, wherever situated, including without limitation properties
located within and without the States of Michigan and Indiana and in any
and all of the states, districts,
BY-LAWS
OF
INMOLD, INC.
(a Indiana corporation)*
* * *
ARTICLE I
Incorporators and Shareholders
Section 1. ANNUAL MEETING. The annual meeting of the shareholders for the
election of directors and for the transaction of such other business as may
properly come before the meeting shall be held (unless such action is taken by
written consent of the shareholders in lieu of a particular annual meeting) on
the regularly scheduled meeting day which shall be the First Tuesday in April of
each year (or if that day be a legal holiday at the place where such meeting is
to be held, then on the next succeeding business day) at the registered office
of the Corporation at 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxx, Xxxxxxxx 00000, at
10:30 A.M. local time or at such other time on said day at such place, either
within or without the State of Indiana, as the Board of Directors of the
Corporation (hereinafter called the Board) may designate in the notice thereof.
Failure to hold an annual meeting or delay in holding an annual meeting is
governed by the Indiana Business Corporation Law.
Section 2. SPECIAL MEETINGS. Special meetings of the shareholders for any
purpose or purposes, unless otherwise prescribed by statute or by the Articles
of Incorporation of the Corporation, may be called by the chairman of the Board
or by the President, and shall be called by the President or Secretary upon the
order of the Board, or at the request in writing (stating the purpose or
purposes of the proposed meeting) of shareholders owning a majority in amount of
all of the issued and outstanding capital stock of the Corporation and entitled
to vote at such meeting. The time and place, either within or without the State
of Indiana, shall be fixed by the Board unless it shall refuse to so act, in
which case such matters shall be fixed by the Chairman of the Board or President
if the meeting is called by such persons or by the requesting shareholders, if
the meeting is requested by them.
Section 3. NOTICE OF MEETINGS. Except as otherwise required by law, the
Articles of Incorporation of the Corporation or stock exchange rules, written
notice of each annual or special meeting of the shareholders shall be given not
less than ten nor more than 60 days before the date of the meeting to each
shareholder of record entitled to vote at such meeting
----------
- Section citations refer to relevant sections of the Indiana Business
Corporation Law, as amended, and successor legislation. The Sections may not be
the only sections bearing on particular situations.
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF INCORPORATION
OF
INMOLD, INC.
I, XXX XXXX XXXXXX, Secretary of State of Indiana, hereby certify that Articles
of Incorporation of the above corporation have been presented to me at my
office accompanied by the fees prescribed by law; that I have found such
Articles conform to law; all as prescribed by the provisions of the Indiana
Business Corporation Law, as amended.
NOW, THEREFORE, I hereby issue to such corporation this Certificate of
Incorporation, and further certify that its corporate existence will begin
January 10, 1997.
In Witness Whereof, I have hereunto set
my hand and affixed the seal of the
State of Indiana, at the City of
[SEAL STATE OF INDIANA] Indianapolis, this Tenth day of January,
1997.
XXX XXXX XXXXXX,
XXX XXXX XXXXXX, Secretary of State
AT
Deputy
EXHIBIT 5.12
ADDITIONAL WARRANTIES OF INMOLD, INC.
(a) Articles of Incorporation, By-Laws and Certificates of Good Standing of
Imnold, Inc. It has no subsidiaries.
See Exhibit 5.06.
(b) Inmold, Inc. is not a reporting company under the Securities and
Exchange Act of 1934.
(c) Government reports and tax returns not timely filed by Inmold, Inc.
None
(d) Material contracts and commitments of Inmold, Inc..
None, except as disclosed within financial statements under Exhibit 5.02.
(e) Material liabilities of Inmold, Inc. not disclosed or provided for in
financial statements contained in Exhibit 5.02.
None
(f) Officers and Directors of Inmold, Inc. elected or appointed to date:
Xxxx X. Xxxxxxx Secretary and Director
Xxxx X. Xxxxxx Treasurer
Xxxxxx X. Xxxxxxx Director
J. Will Xxxxx Director
(g) Private sales of Inmold, Inc. Common stock within the last two years:
4,000,000 shares of common stock sold at $.00001 par value per share to Xxxxxxx
Confectionery Products, Inc., a Michigan corporation, on January 20, 1997. The
purchase price of $40 was paid to Inmold, Inc. by Xxxxxx X. Xxxxxxx/Xxxx X.
Xxxxxxx. 90,000 shares of common stock were also privately placed with the
Xxxxxx Xxxxxxx Hoops Irrevocable Trust, dated April 14, 1992 for par value
$.00001 therefor.
(h) Material defaults in contracts to which Inmold, Inc. is a party.
None
37