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EXHIBIT 10.12
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of December 31, 1996, by and among Xxxxxx
technic, Inc., a Michigan corporation (the "Corporation"),
Verwaltungsgesellschaft Xxxxxx technik GmbH & Co. KG, a German limited
partnership ("GKG"), Xxxxxx Xxxx, a Michigan resident ("Valk") and LDM
Technologies, Inc., a Michigan corporation ("Purchaser"). GKG and Valk are
sometimes collectively referred to as "Sellers" and GKG, Valk, the Corporation
and Purchaser are sometimes collectively referred to as the "Parties".
RECITALS:
A. GKG is the owner of 90% of the issued and outstanding common stock of
the Corporation (9,000 shares).
X. Xxxx is the owner of 10% of the issued and outstanding common stock of
the Corporation (1,000 shares).
C. The Corporation desires to redeem from GKG and GKG desires to sell one
thousand six hundred seventeen (1,617) shares of the stock of the Corporation
(the "Redeemed Shares").
D. GKG desires to sell and Purchaser desires to purchase from GKG five
thousand seven hundred seven (5,707) shares of the stock of the Corporation
(the "GKG Shares") and Valk desires to sell and Purchaser desires to purchase
from Valk one thousand (1,000) shares of the stock of the Corporation (the
"Valk Shares"), the GKG Shares and the Valk Shares collectively representing in
total an eighty percent (80%) equity interest in the Corporation after
consummation of the transactions contemplated by this Agreement, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto agree as follows:
1. Sale of Stock. GKG agrees to sell and Purchaser agrees to purchase the
GKG Shares. Valk agrees to sell and Purchaser agrees to purchase the Valk
Shares. The Corporation agrees to purchase and GKG agrees to sell the Redeemed
Shares.
2. Purchase Price. The purchase price for the GKG Shares purchased
hereunder shall be Two Million One Hundred Thousand ($2,100,000.00) Dollars.
The total price for the purchase of the Redeemed Shares shall be paid by the
issuance of a Subordinated Promissory Note from the Corporation to GKG in the
face amount of $595,000.00 payable over five (5) years in equal semi-annual
installments of principal and interest bearing interest at the rate of five
percent (5%) per annum as set forth more fully in Exhibit 2 annexed hereto (the
"Corporation's Note").
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The total purchase price for the Valk Shares purchased hereunder shall be
Three Hundred Seventy-One Thousand Dollars ($371,000.00) plus the transfer to
Valk on the date of the Escrow Closing (as defined in the Escrow Agreement
referred to in Section 3 below) of an insurance policy (the "Policy") described
below:
Insurer Policy No. Policy Face Amount
----------------------- -------------- ------------------
Prudential Insurance 77417163 $350,000.00
Company of America
("Prudential")
In order to effectuate the transfer of the ownership of the Policy to
Valk, the Corporation agrees to execute and deliver any documents required for
the Corporation to become the owner of the Policy. On the date of the Escrow
Closing, the Corporation shall deliver to Valk the original Policy and such
other documents, certificates or letters issued by Prudential which are
reasonably acceptable to Valk for the purpose of transferring the complete
ownership of the Policy to Valk, and confirming that Valk is the sole owner of
the Policy and containing the acknowledgement of Prudential that Valk is the
sole owner of the Policy. The Policy shall be transferred to Valk free and
clear of all liens, claims, encumbrances, pledges, security interests, policy
loans and rights of third persons.
Acknowledgment and Confirmation of Valk. Valk hereby acknowledges and confirms
that, notwithstanding the redemption by the Corporation of the Redeemed Shares
and payment thereof under the Corporation's Note by the Corporation to GKG as
provided for in the first paragraph of this Section 2 and any treatment thereof
from a tax or corporate law standpoint, Valk is not entitled to any similar or
corresponding redemption, distribution, transfer, dividend, payment or
consideration hereunder or from the Corporation or any of the parties to this
Agreement, in any form or for any reason, other than rights to payments or
benefits he is expressly granted in this Agreement or its Exhibits.
3. Payment of Purchase Price. The purchase price for the GKG Shares shall
be paid by the Purchaser in cash or by cashier's check or confirmed bank wire
transfer to an account designated by GKG at the Escrow Closing (as defined in
an escrow agreement attached hereto as Exhibit 3 (the "Escrow Agreement")).
The purchase price for the Redeemed Shares shall be paid by the Corporation's
Note delivered in escrow on the date hereof in accordance with the Escrow
Agreement and delivered to GKG at the Escrow Closing. The purchase price for
the Valk Shares shall be paid by the Purchaser in cash or by cashier's check or
confirmed bank wire transfer to an account designated by Valk at the Escrow
Closing.
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4. Closing. The transfer of shares and other transactions shall be
deemed to have closed and occurred with full economic effect on December 31,
1996. The Parties, no later than January 16, 1997, shall enter into the Escrow
Agreement and, in accordance with the terms of the Escrow Agreement, copies of
all documents required by the Escrow Agreement to be delivered at the Escrow
Closing will be delivered into escrow.
5. Representations and Warranties of GKG and Valk. GKG and Valk represent
and warrant to LDM as follows with the understanding that all such
representations and warranties apply to both GKG and Valk except in cases where
the representation or warranty is made by GKG alone or Valk alone:
A. Corporate Status. The Corporation is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Michigan and has the corporate power and authority to
own, lease and operate its properties and assets and to carry on its
business as presently conducted. The Corporation is duly qualified
to do business as a foreign corporation in all jurisdictions where
the nature of the business conducted or the properties owned,
operated or leased by it require such qualification and failure to
so qualify would materially and adversely affect its business or
condition (financial or otherwise). Annexed hereto as Exhibit 5A
are true, complete and correct copies of the Articles of
Incorporation and By-Laws of the Corporation, as presently in
effect, and a list of the jurisdictions in which the Corporation is
qualified to do business.
B. Capitalization. The authorized capital stock of the
Corporation consists of 50,000 shares of voting common stock, of
which 10,000 shares are issued and outstanding. No share of stock
is owned by the Corporation for its own account. The Corporation is
not a party to any agreement or obligation of any nature to issue
shares of capital stock, debentures, bonds, or evidences of
indebtedness convertible, in whole or in part, into shares of
capital stock, or options, warrants, calls or rights to purchase or
receive shares of capital stock other than a Stock Option Agreement
dated November 23, 1989 between GKG and Valk (the "Stock Option
Agreement"). Each outstanding share of stock is validly issued,
fully paid and non-assessable. Except for transfer restrictions on
unregistered shares generally imposed by state and federal
securities laws and the provisions of a Shareholders Agreement among
the Corporation, GKG and Valk dated November 23, 1989 (the "Current
Shareholder Agreement"), there is no restriction on transfers of
shares of stock and there is no registration covenant with respect
thereto.
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C. Authority and Enforceability. The Corporation and GKG have
the full power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby. This Agreement and
all other documents and certificates executed by the Corporation and
GKG pursuant to and in furtherance of the purpose of this Agreement
are and shall be fully enforceable against the Corporation and GKG
in accordance with their terms except as enforceability may be
limited by bankruptcy, reorganization, moratorium, insolvency and
similar laws affecting creditor rights generally and by general
principles of equity.
This Agreement and all other documents and certificates executed by
Valk pursuant to and in furtherance of the purpose of this
Agreement are and shall be fully enforceable against Valk in
accordance with their terms except as enforceability may be limited
by bankruptcy, reorganization, moratorium, insolvency and similar
laws affecting creditor rights generally and by general principles
of equity.
D. Subsidiaries and Investments. The Corporation does not
directly or indirectly own, control, or participate in any other
corporation, association, partnership, joint venture, trust or other
business organization or similar arrangement.
E. Financial Statements.
(i) Reviewed financial statements of the Corporation for the
fiscal year ended December 31, 1995 have been delivered
to Purchaser and are annexed hereto as Exhibit 5E. The
year-end financial statements of the Corporation fairly
present (in accordance with U.S. generally accepted
accounting principles applied on a consistent basis) the
financial condition and the assets and liabilities of the
Corporation as of the date of such statements and the
results of operations and changes in financial position of
the Corporation for the respective periods reported. All
interim financial statements delivered or made available to
Purchaser for periods after December 31, 1995 were prepared
in the ordinary course and in accordance with past practice.
Except as disclosed in the year-end financial statements,
during the last three years there has been no material
change
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in accounting principles and practices of the Corporation as
theretofore applied, including, without limitation, the
basis upon which assets and liabilities are recorded and
earnings and profits are ascertained.
(ii) The minute books and stock register of the Corporation are,
and at the Escrow Closing will be, current, true, correct
and complete in all material respects and all signatures
contained therein are and will be the genuine signatures of
the persons purported to have signed.
F. Tax Returns and Audits. Except as disclosed in the year-end
financial statements or Exhibit 5F:
(i) All federal, state, local and foreign returns and reports
required to be filed by the Corporation with respect to
taxes have been filed, except for returns and reports for
such periods which are not yet due.
(ii) All taxes which were required to have been recorded,
collected, withheld, segregated and paid by the Corporation
(a) have been, as the case may be, recorded, collected,
withheld, segregated and paid in full when and as required,
or (b) are being contested in good faith by appropriate
proceedings and adequate measures and are disclosed in the
year-end financial statements.
(iii) The Corporation has not made any agreement with the
Internal Revenue Service or any other person extending the
period for assessment or collection of taxes payable by the
Corporation, nor has the Corporation received any notice
that a claim for assessment and collection of taxes has
been asserted against the Corporation, whether as a result
of any audit of any period ending prior to the Escrow
Closing or otherwise.
G. No Breach. The consummation of the acquisition and the other
transactions contemplated hereby:
(i) do not and will not violate, conflict with, or breach any
provision of law or the Articles of Incorporation or
By-Laws of the Corporation;
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(ii) do not constitute and will not constitute a breach of or
default under any provision of any contract, indenture,
mortgage, deed of trust or other agreement or instrument
to which the Corporation is a party or by which it or its
properties or assets are bound, or cause an acceleration
of payments thereunder other than the Current
Shareholders Agreement;
(iii) do not and will not violate any order, rule or
regulation of any person which is a regulatory agency
validly exercising jurisdiction over the Corporation; and
(iv) have not resulted and will not result in the creation
or imposition of any lien upon any property or asset of
the Corporation.
H. Necessary Permits and Approvals. The Corporation has all
permits, registrations, licenses, and authorizations (including
without limitation all of the same relating to production or
disposition of hazardous wastes) which are necessary to conduct its
business and the absence of which would materially and adversely
affect its business, forecasted sales as set forth in Exhibit 5H
("Sales Forecast") or condition (financial or otherwise).
I. Employee Benefit Plans. To the best of GKG's and Valk's
knowledge:
(i) Exhibit 5I contains a true, complete and correct listing
and summary description of each bonus, deferred
compensation, pension, profit-sharing or retirement plan,
arrangement or practice, and each other employee benefit
plan (as defined in Section 3(3) of ERISA), and each other
fringe benefit plan, arrangement or practice, maintained
by the Corporation, to which the Corporation contributes
or is required to contribute, or under which any employee
of the Corporation is accruing benefits, whether formal or
informal, whether legally binding or not, and whether
affecting one or more of its employees. Such employee
benefit plans are herein referred to as the "Plans". No
Plan has been completely or partially terminated. The
Corporation does not have and will not have any funding
deficiency or any additional funding requirement with
respect to any Plan for past years, and all required
contributions have
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been made to such Plans for the Corporation's current
fiscal year, prorated through the date of Escrow
Closing.
(ii) The Corporation has not maintained or contributed to,
or been obligated or will become obligated to
contribute to, any multi-employer plan as defined in
Section 3(37) of ERISA.
J. Title to Property, etc. Except as disclosed in the year-end
financial statements and Exhibit 5J, the Corporation has (directly
or indirectly) good and marketable title to, or valid leasehold
interests in, all real and personal property and assets, tangible
and intangible, reflected in the year-end financial statements
(other than property or assets disposed of in the ordinary course of
business), free and clear of any lien, encumbrance, security
interest, lease, mortgage, pledge, conditional sale agreement,
contract, option, charge or claims of any nature whatsoever.
K. No Adverse Communication or Event. To the best of GKG's and
Valk's actual knowledge, having made due inquiry of Valk and Xxxxxx
Xxxx (Xxxx and Xxxxxx Xxxx being referred to hereinafter as the
"Management Group"), neither the Corporation, GKG nor Valk has
received any communication from any of the customers or suppliers of
the Corporation regarding, or has knowledge of, any event which has
occurred or is anticipated and which would have a material and
adverse effect on the business, Sales Forecast or condition
(financial or otherwise) of the Corporation.
L. Contracts and Commitments.
(i) Exhibits 5H and 5L contain, and at the Escrow
Closing will contain, a list of each executory contract,
agreement, lease, commitment and proposal (whether oral or
written) to which the Corporation is a party, the author or
the recipient (together with a summary of the essential
terms for any such items that are oral) and which conforms
to one or more of the following descriptions (each of the
same being hereinafter referred to in this Section as a
"contract"):
(a) any contract for the purchase or sale of tooling;
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(b) any contract for employment or for consulting services;
(c) any contract pertaining to collective bargaining by, or
wages, benefits or conditions of employment of, employees
of the Corporation;
(d) any contract for the lease of real or personal property;
(e) any contract with any manufacturer's or sales
representative for, dealer in, or distributor of, the
services and goods of the Corporation;
(f) any resin supply contract;
(g) any contract involving the borrowing or lending of money
or extension of credit by or to any person who is an
employee of the Corporation, or by or to any other person;
and
(h) any other contract in an amount exceeding $50,000.00 to
which the Corporation is a party or by which it or its
properties or assets are bound.
(ii) The Corporation has delivered to Purchaser copies of all
written contracts, agreements, leases, commitments and
proposals and summaries of such items which are oral and are
listed on Exhibits 5H and/or 5L.
M. No Violations or Pending Litigation. Except as disclosed in
Exhibit 5M:
(i) the Corporation is not, and at the Escrow Closing will not be,
a party to any suit or other adjudicatory proceeding of a legal
nature or a party to or subject to any judgment, order, writ,
injunction, or decree which materially and adversely affects,
or might reasonably be expected to materially and adversely
affect its business, prospects, condition (financial or
otherwise), property or assets;
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(ii) the Corporation is not a party to any grievance or
arbitration proceeding between the Corporation and any of
its employees;
(iii) to the best of GKG's and Valk's actual knowledge, having
made due inquiry of GKG or the Management Group, neither
the Corporation nor GKG nor Valk has received written or
oral notice from any member of the Management Group or
from any outside authority, or any other written
communication, internal or otherwise, that the Corporation
is in material violation of any law (including without
limitation, the Employees Retirement Income Security Act,
the Occupational Safety and Health Act of 1970, the Export
Administration Act of 1979, the Foreign Corrupt Practices
Act, the Comprehensive Environmental Response Compensation
and Liability Act of 1980 and any other statute relating
to protection of the environment or production and
disposal of hazardous wastes), rule, regulation, ordinance
or order of any person validly exercising jurisdiction
over the Corporation or that there is any claim, action,
investigation or proceeding of any kind, involving,
without limitation, any proceeding to dissolve, limit or
impair any corporate power, right or privilege of the
Corporation pending or threatened against or relating to
the Corporation or any of its properties or assets.
Notwithstanding the foregoing, it is hereby disclosed that
the U.S. Environmental Protection Agency ("USEPA")
examined a reported possible disposal of hazardous
substance on the Corporation's real property at 0000
Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx which was alleged to have
taken place before the Corporation acquired the property.
Information with respect to the EPA investigation is
included in Exhibit 5M. As of the date of this Agreement,
neither GKG nor Valk is aware that the USEPA has
undertaken any enforcement action against the Corporation
in connection with this prior investigation;
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(iv) (a) Except as set forth in Exhibit 5M hereto, and to
the best of GKG's and Valk's actual knowledge, having
made due inquiry of GKG and the Management Group, the
Corporation's ownership, occupancy, maintenance,
operation and use of the Corporation's Real Property
are and at all times have been, in compliance with all
Environmental Laws the non-compliance with which would
or could have a material adverse effect upon the
Corporation's business;
(b) All Permits with respect to the use of the Real
Property which are required pursuant to Environmental
Laws have been obtained and the same are, and have been
at all times, in full force and effect where the
failure to have such Permit would have a material
adverse effect upon the Corporation's business. To the
best of GKG's and Valk's actual knowledge, having made
due inquiry of GKG and the Management Group, there has
been no change in any fact or circumstance reported or
assumed in any application for or grant thereof which
would have a material and adverse effect on the
validity of any such Permit or the renewal or transfer
thereof;
(c) Except as disclosed on Exhibit 5M and in Section
5M(iii) of this Agreement and to the best of GKG's and
Valk's actual knowledge, having made due inquiry of GKG
and the Management Group:
(1) Neither the Corporation, GKG, Valk nor any
previous owner or any past or present operator,
user or occupant of any of the Real Property has
received (or has actual knowledge of) any
Environmental Citations;
(2) No Environmental Citation or claim is pending or
threatened under any Environmental Law concerning
the past or present ownership, maintenance,
operation or occupancy of the Corporation's Real
Property or any portion thereof or concerning the
Corporation or which relates to Hazardous Activity
or Hazardous
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Materials; and
(3) No basis exists for any governmental investigation or
any such Environmental Citation to be instituted or
filed.
(d) Except as set forth in Exhibit 5M, and to the best of the
GKG's and Valk's actual knowledge, having made due inquiry
of GKG and the Management Group, neither the Corporation,
GKG, Valk nor any prior owner, occupant, operator or user of
the Real Property or any portion thereof or any other
person, has permitted, conducted or is aware of any
Hazardous Activity conducted with respect to the Real
Property or any geologically or hydrologically adjoining
property or is aware of any other operation resulting, now
or in the past, in the discharge or release of Hazardous
Materials on or from the Real Property or any portion
thereof that would or could have a material adverse effect
on the Corporation;
(e) Except as set forth in Exhibit 5M, and to the best actual
knowledge of GKG and Valk, having made due inquiry of GKG
and the Management Group, there are no Hazardous Materials
present in the surface water, groundwater or soil (either
surface or subsurface) at the Real Property or at any
geologically or hydrologically connected property including,
without limitation, any hazardous materials contained in
barrels, above or underground storage tanks, landfills, land
disposals, land treatment units, waste piles, containment
buildings, dumps, solid waste management units, equipment
(movable or fixed) or other containers, either temporary or
permanent, and deposited or located in or on land, water,
sumps, or any other part of the Real Property or such
connected property, or incorporated into any structure
thereon, in violation of, or creating any liability under,
any Environmental Law the non-compliance with which would
have a material adverse effect on the Corporation's
business;
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(f) to the best of GKG's and Valk's actual knowledge,
having made due inquiry of GKG or the Management Group,
and except as disclosed in subsection (iii) above and
Exhibit 5M, neither the Management Group nor GKG nor
Valk is aware of the presence of any underground
storage tanks on the Corporation's Real Property;
(g) The Corporation has delivered to the Purchaser true,
complete and correct copies and results of any reports,
studies, analyses, boring logs, tests or monitoring
possessed, under the control of the Corporation,
whether in draft or final form, pertaining to Hazardous
Materials and/or Hazardous Activities in, on, or under
the Real Property and/or concerning compliance with
Environmental Laws;
(h) The Corporation has not been accused, or found liable
under any Environmental Law or, to the best of GKG's
and Valk's actual knowledge, having made due inquiry of
GKG and the Management Group, except as set forth on
Exhibit 5M and Section 5M(iii) of this Agreement, is
not under investigation in respect thereof and no Real
Property, site or facility (as defined under CERCLA) of
the Corporation is listed or proposed for listing on
the National Priorities List or is listed on the
Comprehensive Environmental Response, Compensation,
Liability Information System List or any comparable
list maintained by any foreign, federal, state,
regional, county or local authority. There are no
proceedings pending, or to the best of the actual
knowledge of GKG and Valk, having made due inquiry of
GKG and the Management Group, threatened, under any
Environmental Law against or affecting the Corporation
or the Real Property, in any court or before any
governmental authority or arbitration board or tribunal
which, if adversely determined, would or could have a
material adverse effect on the Corporation's business.
The Corporation is not in default with respect to any
order of any court or governmental authority or
arbitration board or tribunal;
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(i) Except as set forth on Exhibit 5M and in Section
5M(iii) of this Agreement and to the best of GKG's
and Valk's actual knowledge, having made due
inquiry of the Management Group, any and all
Hazardous Materials owned by the Corporation, or
for which the Corporation is responsible under any
Environmental Law, which have been transported,
emitted, released, removed, or which have
otherwise come to be located away from the Real
Property, have at all times been used,
transported, recycled, treated, stored or disposed
of by the Corporation in accordance with
Environmental Laws;
(j) The Real Property listed on Exhibit 5M constitutes
all of the Real Property previously or now leased,
owned or operated by the Corporation and since its
date of incorporation the Corporation has never
leased, owned or operated any other real property;
(k) All of the real property acquired by the
Corporation was acquired in a transaction which
required the transfer of title to the Corporation,
as buyer, by deeds which were duly recorded in the
real estate records for the counties in which each
such parcel of real estate is located;
(l) The following definitions shall apply under this
Section 5M(iv) and this Agreement:
(i) "Environmental Citations" means any written
notice, communication, inquiry, warning,
citation, summons, directive, injunction,
order or claim, concerning the violation of
any Environmental Law in connection with the
Real Property or any portion thereof, or any
leachate or contamination emanating
therefrom;
(ii) "Environmental Laws" means all applicable
foreign, federal, state, regional, county and
local administrative, regulatory and judicial
laws, rules, statutes, codes, ordinances,
regulations, binding interpretations, binding
policies, permits, approvals,
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authorizations, rulings, injunctions,
decrees, orders, judgments, common law and
any similar items in effect on the date of
this Agreement and through the date of the
Escrow Closing relating to the protection
of human health, safety, or the environment
(including ambient air, surface water,
ground water, land surface or subsurface
strata); including, without limitation, the
following laws, as amended prior to the
Closing: (a) CERCLA; (b) the Hazardous
Materials Transportation Control Act of
1970 (49 U.S.C. Section Section 1802 et
seq.); (c) RCRA; (d) the Clean Water Act;
(e) the Safe Drinking Water Act (42 U.S.C.
Section Section 300h et seq.); (f) the
Clean Air Act (42 U.S.C. Section Section
1857 et seq.); (g) the Solid Waste Disposal
Act (42 U.S.C. Section Section 6901 et
seq.); (h) the Toxic Substances Control Act
(15 U.S.C. Section Section 2601 et seq.);
(i) the Emergency Planning and Community
Right-to-Know Act of 1986 (42 U.S.C.
Section Section 11001 et seq.); (j) the
Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. Section Section
136 et seq.); (k) the Radon Gas and Indoor
Air Quality Research Act (42 U.S.C. Section
Section 7401 et seq.); (l) the National
Environmental Policy Act of 1975 (42 U.S.C.
Section Section 4321); (m) the Rivers and
Harbors Act of 1899 (33 U.S.C. Section
Section 401 et seq.); (n) the Oil Pollution
Act of 1990 (33 U.S.C. Section Section 1321
et seq.); (o) the Occupational Safety and
Health Act of 1970 (29 U.S.C. Section
Section 651 et seq.); (p) counterparts of
any of the foregoing federal statutes
enacted within or outside the United
States, any State of the United States or,
region, county or local government
(including any subdivisions thereof) with
jurisdiction over the Real Property, the
Corporation or in force therein including,
without limitation, any such statutes
relating to Hazardous Activity and
Hazardous Materials; and (q) any and all
laws, rules, codes, ordinances,
regulations, binding interpretations,
binding policies,
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licenses, permits, approvals, plans,
authorizations, directives, rulings, injunctions,
decrees, orders and judgments relating to
hazardous wastes, hazardous substances, toxic
substances, pollution, polychlorinated biphenyls,
petroleum (its derivatives, by-products, or
constituents) the protection of human health,
safety, or the environment;
(iii) "Hazardous Activity" means the generation,
manufacturing, production, processing, refinement,
treatment, pumping, injection, pouring, handling,
storage, use (including any withdrawal or other
use of groundwater), management, transfer,
distribution, transportation, deposit, disposal
(including, without limitation, arrangement for
placement in any landfill, temporary or permanent
holding area, impoundment, sump or dump), dumping,
escaping, placing, dispersal, release, discharge,
spill, emission, injection, leak, leaching,
migration of Hazardous Materials in, on, under,
about or from the Real Property or any part
thereof into the indoor or outdoor environment
including, without limitation, the ambient air,
surface water, groundwater or surface or
subsurface strata and any other act or thing,
business or operation, that materially increases
the danger, or risk of danger, or poses an
unreasonable risk of harm to persons or property,
on or off the Real Property, or which may
materially adversely impact the value of the Real
Property;
(iv) "Hazardous Material" means any solid, liquid or
gaseous material, alone or in combination, mixture
or solution, which is now defined, listed or
identified as "hazardous" (including "hazardous
substances" and "hazardous wastes"), "toxic", a
"pollutant" or a "contaminant" pursuant to any
Environmental Law including, without limitation,
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asbestos, urea formaldehyde, polychlorinated
biphenyls (PCBs), radon, fuel oil, petroleum
(including its derivatives, by-products or other
constituents) and any other dangerous, explosive,
corrosive, flammable, infectious, radioactive,
carcinogenic or mutagenic material which is
prohibited, limited, controlled or regulated under
any Environmental Law, or which poses a threat or
nuisance to the safety or health of any person on
the Real Property or any property geologically or
hydrologically adjacent to, or surrounding, the
Real Property or the environment, or the presence
of which could constitute a trespass by the
Corporation;
(v) "Permits" means all governmental or other
licenses, permits, certificates, approvals,
authorizations and orders material to the ability
of the Corporation to carry on its business as it
is presently being conducted;
(vi) "Real Property" means all real estate relating to
or used in the operation of the Corporation's
business which was previously or currently owned,
operated or leased by the Corporation;
(v) there are no warranty or product liability claims now
pending or, to the actual knowledge of GKG or Valk,
threatened against or otherwise affecting the Corporation
other than goods returned in the ordinary course of
business.
N. Occurrences Since Last Certified Financial Statements. Except as
disclosed on Exhibit 5N, since December 31, 1995, the Corporation has
not agreed to do or done any of the following:
(i) suffered any material and adverse change in
or to its business or condition (financial or otherwise) or,
to the best of the actual knowledge of the Management Group
and GKG, its prospects for future business;
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(ii) suffered any physical damage or destruction, whether
or not covered by insurance, materially and adversely
affecting its business, financial condition, property
or assets;
(iii) been subject to any labor organizing election or
activity, any labor dispute or threat thereof;
(iv) increased wages, salary or wage rate or other forms
of material compensation except for any wage or
salary increase to an employee which did not exceed
10% of prior base salary of such employee, and which
was consistent with prior practice;
(v) made any payment of, or arrangement, agreement or
commitment for payment of, any bonus, profit sharing,
or other incentive compensation or retirement,
termination or severance benefit to or for any
salaried employee of the Corporation other than
pursuant to an Employee Benefit Plan in a manner
consistent with prior practice, or made any payment
or reimbursement to or for any salaried employee of
the Corporation for expenses other than in the
ordinary course of business;
(vi) guaranteed, endorsed or indemnified the obligation of
any person, other than the endorsement of checks,
drafts, letters of credit, and similar commercial
instruments in the ordinary course of business in a
manner consistent with prior practice or pursuant to
a contract or other item listed and/or described in
Exhibit 5L;
(vii) sold, assigned, transferred or disposed of any asset
or cancelled any debt or claim having a value in the
aggregate of more than $5,000.00, except, in each
case, in the ordinary course of business in a manner
consistent with prior practice;
(viii) issued or sold or entered into an agreement to issue
or sell any debenture, bond or other instrument of
indebtedness including, without limitation, any such
debenture, bond or other instrument convertible, in
whole or in part, into share of, or into an option,
warrant or right to purchase, authorized capital
stock or other capital stock of the Corporation;
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(ix) issued or sold or entered into any agreement
(other than this Agreement) to issue or sell any
authorized capital stock or other capital stock of the
Corporation; granted any option, warrant or right for
the purchase of authorized capital stock or other
capital stock of the Corporation; declared or paid any
dividend, or made any distribution in respect of any
share of its authorized capital stock; or made any
direct or indirect redemption, purchase or other
acquisition of any share of its authorized capital
stock; or
(x) entered into any capital purchase transaction
with any related party of GKG and Valk.
O. Broker and Fees. GKG warrants that it has not entered into
any agreement for the payment of a broker's fee or commission in
connection with the execution, delivery or performance of this
Agreement or the consummation of the acquisition or the other
transactions contemplated by this Agreement and related documents.
Valk warrants that he and the Corporation, individually and
collectively, have not entered into any agreement for the payment of
a broker's fee or commission in connection with the execution,
delivery or performance of this Agreement or the consummation of the
acquisition or the other transactions contemplated by this Agreement
and related documents.
P. Other Liabilities. To the best of GKG's and Valk's actual
knowledge, the Corporation does not have any material liability
(fixed or contingent) or obligation which is not fully reflected or
provided for in accordance with U.S. generally accepted accounting
principles, applied on a consistent basis, in the December 31, 1995
financial statements, other than:
(i) liabilities specifically permitted by or provided for
in this Agreement;
(ii) obligations which are to be performed after the date of
this Agreement under any contract or other item listed
and/or summarized in Exhibit 5L; and
(iii) other liabilities or obligations disclosed in writing
to Purchaser.
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Q. Dividends and Loans. Except as required by this Agreement, the
Corporation has not declared or set aside any dividends or other
distributions with respect to its capital stock. The Corporation is
not indebted to GKG or Valk or to any party related to either of them
except as set forth on Exhibit 5Q.
R. Ownership of Shares. GKG warrants that it has good and marketable
title to all of the GKG Shares and the Redeemed Shares being sold and
conveyed pursuant to this Agreement, subject to no lien, encumbrance,
security interest, restriction, contract, commitment, charge or claim
of any nature whatsoever, except for the Current Shareholder
Agreement. Valk warrants that he has good and marketable title to all
of the Valk Shares being sold and conveyed pursuant to this Agreement,
subject to no lien, encumbrance, security interest, restriction,
contract, commitment, charge or claim of any nature whatsoever, except
for the Current Shareholder Agreement. At the Escrow Closing, GKG
warrants that Purchaser shall receive good and marketable title to the
GKG Shares and the Redeemed Shares and, at the Escrow Closing, Valk
warrants that the Purchaser shall receive good and marketable title to
the Valk Shares, in each case free and clear of all liens,
encumbrances, security interest, restrictions, contracts, commitments,
charges or claims of any nature whatsoever except the New Shareholders
Agreement as defined in Section 12 below. GKG warrants that it is not
a party to any voting trust, proxy or other agreement or understanding
with respect to the voting of any of the stock of the Corporation,
including the GKG Shares, the Valk Shares and the Redeemed Shares,
except the Current Shareholder Agreement. Valk warrants that Valk is
not a party to any voting trust, proxy or other agreement or
understanding with respect to the voting of any of the stock of the
Corporation, including the GKG Shares, the Valk Shares and the
Redeemed Shares, except the Current Shareholder Agreement.
S. Customer Relationships. Exhibit 5S contains, and at the Escrow
Closing will be updated to contain, a true, complete and correct (a)
list of all customers of the Corporation within the preceding 24
months, (b) list of all current customers of the Corporation, and (c)
statement, to the best of GKG's and Valk's actual knowledge, regarding
any known or threatened significant loss of future business volume
from any customer of the Corporation.
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T. Quality Ratings. Exhibit 5T contains, and at the Escrow Closing will
be updated to contain, a true, complete and correct list of (a) all
quality ratings assigned to the Corporation by any of its customers,
(b) any additions, deletions, or variances with respect thereto over
the past 24 months, and (c) to the best of GKG's and Valk's actual
knowledge, any known or threatened future changes with respect
thereto.
U. To the extent that each of Valk and the Corporation certifies under
penalty of perjury, and verifies as true, the representations set
forth in Exhibit 5U, as applicable to each of them, such Exhibits are
incorporated herein by reference as if such certification and
representations were made as a part of this Agreement. In the event
either Valk or the Corporation does not make such certification and
representations in the manner provided herein and under the Internal
Revenue Code and Income Tax Regulations, it is understood the
Purchaser and the Corporation shall withhold and pay over as federal
income tax ten percent (10%) of the amount provided to be paid under
this Agreement for the sale of the GKG Shares and/or the Redeemed
Shares and/or the Valk Shares, as appropriate (or such other amount as
shall be required by law to be withheld and paid over to taxing
authorities over time). GKG, Valk and the Corporation understand that
the certifications provided for herein may be disclosed to the
Internal Revenue Service by the Purchaser or the Corporation and that
any false statement could be punished by fine, imprisonment or both.
V. Warranties True as of Closing. The representations and warranties of
GKG and Valk set forth herein are true, complete and correct as of the
date of this Agreement and will be true, complete and correct as of
the date of Escrow Closing.
W. Survival of Warranties; Limitation. The representations and
warranties of GKG and Valk shall be deemed material to the Purchaser
and to have been relied upon by the Purchaser notwithstanding any
investigation made before or after the date of this Agreement and each
such representation shall continue in full force and effect until that
date which is eighteen (18) months after the date of Escrow Closing at
which time they shall terminate except (i) as to claims which are
asserted by third parties prior to such date and notice of which shall
have been given by Purchaser to GKG and Valk prior to such date; and
(ii) the representations and warranties set forth in Sections 5B and
5R above.
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6. Representations of Purchaser. Purchaser hereby represents and
warrants to GKG and Valk as follows:
A. Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Michigan.
B. Authority and Enforceability. Purchaser has full corporate
power and lawful authority to enter into this Agreement and to carry
out the transactions contemplated hereby. This Agreement and all
other documents and certificates executed by Purchaser pursuant to
and in furtherance of the purpose of this Agreement are and shall be
fully enforceable against Purchaser in accordance with their terms,
except as enforceability may be limited by bankruptcy,
reorganization, moratorium, insolvency and similar laws affecting
creditor rights generally and by general principles of equity.
C. Default. The consummation of the acquisition and the other
transactions hereby:
(i) do not and will not violate, conflict with,
or breach any provision of law or the Articles of
Incorporation or By-Laws of Purchaser;
(ii) as of the Escrow Closing, will not constitute a
breach of or default under any provision of any contract,
indenture, mortgage, deed of trust or other agreement or
instrument to which Purchaser is a party or by which it or
its properties or assets are bound, or cause an acceleration
of payments thereunder;
(iii) do not and will not violate any order, rule or
regulation of any person which is a regulatory agency validly
exercising jurisdiction over Purchaser.
D. Securities Law Representation. Purchaser is purchasing the
Shares for its own account for investment purposes and not with a
view toward distribution or resale of any of the Shares.
E. Survival of Warranties; Limitation. The representations and
warranties of Purchaser shall be deemed material to the GKG and Valk
and to have been relied upon by the GKG and Valk notwithstanding any
investigation made before or after the date of this Agreement and
each such representation shall continue in full force and effect
until that date which is eighteen (18) months after the date of
Escrow Closing at which time they shall terminate except as to
claims which are asserted by third parties prior to such date and
notice of which shall have been
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given by GKG and/or Valk to Purchaser prior to such date.
F. Broker and Fees. Purchaser has not entered into any
agreement for the payment of a broker's fee or commission in
connection with the execution, delivery or performance of this
Agreement or the consummation of the acquisition or the other
transactions contemplated by this Agreement and the related
documents.
7. Conditions to Purchaser's Obligations. All obligations of Purchaser
under this Agreement are subject to the fulfillment or waiver by Purchaser on
or prior to the Escrow Closing (as defined in the Escrow Agreement) of each of
the following conditions:
A. All of the representations and warranties of both GKG and
Valk shall be true at the time of Escrow Closing as though such
representations and warranties were made at such time.
B. The Corporation, GKG and Valk shall have performed and
complied with all agreements and conditions required by this
Agreement to be performed or complied with by the date of Escrow
Closing.
C. There shall not have been, prior to the Escrow Closing, any
substantial fire, accident or other casualty or any civil commotion,
riot, or act of God which would have a material adverse effect on
the business of the Corporation.
D. There shall be no material adverse change in the operation of
the Corporation's business prospects, operations, earnings or
financial position from the date of the certified year-end financial
statements to the date of Escrow Closing.
E. Purchaser shall have had an opportunity to conduct a due
diligence investigation of the Corporation and its properties, and
shall be fully satisfied with the results of such investigation.
F. The approval of all parties whose approval of or consent to
the transaction is required (including but not limited to the
respective shareholders and Boards of Directors of LDM, GKG and the
Corporation, the Corporation's lenders, any local, state or federal
governmental authorities having jurisdiction over the Corporation
and the customers of the Corporation) shall have been obtained
unless the failure to obtain such approvals or consents is solely a
result of the acts or omissions of the Xxxxxxxxx.
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X. GKG and Valk shall have waived any pre-emptive rights either
of them may have under the Corporation's Articles of Incorporation
or the Current Shareholder Agreement to purchase the Valk Shares or
the GKG Shares.
H. The Current Shareholder Agreement and the Stock Option
Agreement and the Split-Dollar Insurance Agreement dated February
25, 1991 between the Corporation and Valk shall have been terminated
on or before the date of Escrow Closing.
X. Xxxx shall not have exercised his rights under the Stock
Option Agreement on or before the date of the Escrow Closing.
8. Conduct of Business Pending Closing. Except as agreed to by
Purchaser, from and after the date hereof, the Corporation:
A. Shall carry on its business in substantially the same manner
presently conducted and shall not introduce any material new method
of management, operation or accounting without Purchaser's prior
written consent.
B. Shall use its best efforts to preserve its business
organization intact, retain the services of its employees and
preserve the goodwill of suppliers, customers and others having
business relations with it.
C. Shall not enter into or agree to enter into any transaction,
agreement or commitment on behalf of or affecting the Corporation
other than in the ordinary course of business.
D. Shall not amend, restate or revoke its Articles of
Incorporation or By-Laws.
E. Shall not declare any dividend or make any payment or
distribution to its stockholders or purchase or redeem any shares of
its stock.
F. Shall not make any wage or salary increase or grant or pay
any bonuses.
G. Shall perform all of its obligations under contracts and
agreements to which it is a party or by which it is bound.
H. Shall not mortgage, pledge, encumber, hypothecate or transfer
any of its properties.
I. Shall furnish Purchaser or Purchaser's representatives with
any and all such information concerning the business and financial
operations of the Corporation as Purchaser may reasonably request.
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9. Indemnification.
A. Indemnification by GKG and Valk. Subject to the limitations
set forth elsewhere in this Agreement, GKG and Valk, severally (GKG
for 90% of any claim and Valk for 10% of any claim), hereby agree to
indemnify, defend and hold harmless Purchaser, its officers,
directors, employees, shareholders, successors and assigns
(collectively "Purchaser's Indemnified Persons"), both individually
and in their corporate capacities, from and against all demands,
suits, claims, actions or causes of action, assessments, losses,
costs, damages, liabilities, settlements, penalties and forfeitures,
and reasonable costs and expenses incident thereto (collectively the
"Indemnity Losses" and individually an "Indemnity Loss") asserted
against, suffered or incurred by any of Purchaser's Indemnified
Persons as a result of or in connection with:
(i) Any and all monetary damages or deficiency
resulting from any misrepresentation, breach of warranty
and/or nonfulfillment of any agreement or covenant on the
part of GKG or Valk, respectively, under this Agreement or
resulting from any misrepresentation or omission from any
certificate, schedule, list or other instrument to be
furnished by the Corporation, GKG or Valk to Purchaser under
this Agreement; and
(ii) Any and all actions, suits, proceedings,
demands, assessments, judgments, costs and expenses,
including reasonable attorneys fees, incident to any of the
foregoing.
B. Indemnification by Purchaser. Purchaser hereby agrees to
indemnify, defend and hold harmless GKG and Valk and their
respective personal representatives, successors and assigns
(collectively "Sellers' Indemnified Persons"), from and against any
Indemnity Loss asserted against, suffered or incurred by any of the
Sellers' Indemnified Persons as a result of or in connection with:
(i) Any and all monetary damages or deficiency
resulting from any misrepresentation, breach of warranty
and/or nonfulfillment of any agreement or covenant on the
part of Purchaser under this Agreement or resulting from any
misrepresentation or omission from any certificate,
schedule, list or other instrument to be furnished by
Purchaser to GKG or Valk under this Agreement; and
(ii) Any and all actions, suits, proceedings,
demands, assessments, judgments, costs and
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expenses, including reasonable attorneys fees, incident
to any of the foregoing.
C. Notice. If any person believes that he, she or it has
suffered or incurred any Indemnity Loss, that person shall so notify
the indemnifying party promptly in writing describing such loss or
expense, the amount thereof, if known, and the method of computation
of such Indemnity Loss, all with reasonable particularity. If any
action at law, suit in equity or administrative action is instituted
by or against a third party with respect to which any person intends
to claim any liability or expense as an Indemnity Loss under this
Section, such person shall promptly notify the indemnifying party of
such action. Any notice delivered in accordance with this Section
9C is hereafter referred to as an "Indemnity Claim".
D. Defense of Claim. The indemnifying party shall have twenty
(20) days after receipt of an Indemnity Claim to notify the
indemnified party that it elects to conduct and control any legal or
administrative action or suit with respect to an Indemnity Claim.
If the indemnifying party does not give such notice, the indemnified
person shall have the right to defend, contest, settle or compromise
such Indemnity Claim in the exercise of its exclusive discretion,
and the indemnifying party shall, upon request from the indemnified
person, promptly pay the indemnified person in accordance with the
other terms and conditions of this Section the amount of any
Indemnity Loss resulting from its liability to the third party
claimant. If the indemnifying party gives such notice, it shall
have the right to undertake, conduct and control, through counsel of
its own choosing and at its sole expense, the conduct and settlement
of such Indemnity Claim, and the indemnified person shall cooperate
with the indemnifying party in connection therewith; provided,
however, that:
(i) the indemnifying party shall not thereby
permit to exist any lien, encumbrance or other adverse
charge securing the claims indemnified hereunder upon any
asset of the indemnified person;
(ii) the indemnifying party shall not thereby
consent to the imposition of any injunction against the
indemnified person without the written consent of the
indemnified person;
(iii) the indemnifying party shall permit the
indemnified person to participate in such conduct or
settlement through counsel chosen by the indemnified person,
but the fees and expenses of such counsel shall be borne by
the
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indemnified person; and
(iv) upon a final determination of such action or
suit, the indemnifying party shall agree promptly to
reimburse to the extent required under this Section the
indemnified person for the full amount of any Indemnity Loss
resulting from such action or suit and all reasonable and
related expenses incurred by the indemnified person, except
fees and expenses of counsel for the indemnified person
incurred after the assumption of the conduct and control of
such action or suit by the indemnifying party. So long as
the indemnifying party is contesting any Indemnity Claim in
good faith, the indemnified person shall not pay or settle
any such Indemnity Claim. Notwithstanding the foregoing, the
indemnified person shall have the right to pay or settle any
such Indemnity Claim, provided that in such event the
indemnified person shall waive any right to indemnity
therefor from the indemnifying party and no amount in respect
thereof shall be claimed as an Indemnity Loss under this
Section.
E. Cooperation. If requested by the indemnifying party, the
indemnified person agrees to cooperate with the indemnifying party
or its counsel in contesting any Indemnity Claim which the
indemnifying party elects to contest or, if appropriate, in making
any counterclaim against the person asserting the Indemnity Claim,
or any cross-complaint against any person, and further agrees to
take such other action as reasonably may be requested by an
indemnifying party to reduce or eliminate any loss or expense for
which the indemnifying party would have responsibility, but the
indemnifying party will reimburse the indemnified person for any
expenses which are approved in advance by the indemnifying party and
which are incurred by the indemnified party in so cooperating or
acting at the request of the indemnifying party.
F. Right to Participate. The indemnified person agrees to
afford the indemnifying party and its counsel the opportunity to be
present at, and to participate in, conferences with all persons,
including governmental authorities, asserting any claim against the
indemnified person or conferences with representatives of or counsel
for such persons.
G. Payment of Losses. The indemnifying party shall pay to the
indemnified person in cash the amount of any Indemnity Loss to which
the indemnified person may become entitled by reason of the
provisions of this Agreement, such payment to be made within fifteen
(15) business days
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after the amount of any Indemnity Loss is finally determined either
by mutual agreement of the Parties hereto or pursuant to the final
unappealable judgment of a court of competent jurisdiction.
H. Failure to Give Notice Timely. Notwithstanding the notice
requirements provided herein, the right to indemnification under
this Agreement shall not be affected by any failure to give or any
delay in giving such notice unless, and then only to the extent
that, the rights and remedies of the Party to whom such notice was
to have been given shall have been prejudiced.
I. Minimization of Indemnities. The Parties hereto shall each
use reasonable efforts to minimize the obligation of the other to
indemnify under this Agreement by, among other reasonable things and
without limiting the generality of the foregoing, taking such
reasonable remedial action as it believes may minimize such
obligation and seeking to the maximum extent possible reimbursement
from insurance carriers under applicable insurance policies covering
any such liability.
J. Assignment of Claims. The Parties agree that upon
satisfaction of the obligation to indemnify hereunder, and in
consideration thereof, to assign to the Party making such payment or
giving such credit any and all claims, causes of action and demands
of whatever kind and nature which such indemnified party may have
against any person, firm or other entity giving rise to such
Indemnify Loss, and to reasonably cooperate in any efforts to
recover therefrom.
K. Deductible/Threshold Amount. GKG and Valk shall severally
indemnify the Purchaser in accordance with Section 10A above;
provided, however, that any indemnification by GKG and Valk pursuant
to this Section 10 shall not be required unless and until the
aggregate amount of all such claims or losses exceeds $25,000 (the
"Threshold Amount") and then only to the extent of such claims or
losses in excess of the Threshold Amount.
The Purchaser shall indemnify GKG and Valk in accordance with
Section 10B above; provided, however, that any indemnification by
the Purchaser pursuant to this Section 10 shall not be required
unless and until the aggregate amount of all such claims or losses
exceeds $25,000 (the "Threshold Amount") and then only to the
extent of such claims or losses in excess of the Threshold Amount.
L. Cap on Indemnification. The maximum amount of indemnification
by GKG and Valk under Section 9 above (including reasonable
attorney fees and reasonable costs) shall be $2,471,000, $2,100,000
for GKG and $371,000 for Valk; provided, however, that
notwithstanding the
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preceding cap on liability of GKG, in the event that Purchaser is
required to pay any amount under the revenue bond guaranty referred
to in Section 16 below, due to the insolvency of the Corporation, a
material cause of which insolvency was a misrepresentation or
breach of warranty by GKG hereunder, GKG shall reimburse Purchaser
for such guaranty payment up to a maximum of $2,500,000, but only
to the extent that the effect of such misrepresentation or breach
of warranty contributed to such insolvency and GKG shall thereupon
be subrogated to all the rights of Purchaser under such guaranty to
the extent of such reimbursement. The maximum amount of
indemnification by the Purchaser of GKG and Valk (on a combined
basis and allocated 90% to GKG and 10% to Valk) shall be
$1,000,000.00.
M. Indemnification Agreement Between GKG and Valk. On or before
the date of the Escrow Closing, GKG and Valk will enter into an
Indemnification Agreement in the form attached as Exhibit 9M.
10. Amendment of the Articles of Incorporation of the Corporation. On
the date of the Escrow Closing, the Corporation, GKG, Valk and LDM shall
undertake the actions required to amend the Articles of Incorporation of the
Corporation in the manner set forth on Exhibit 10 annexed hereto to provide that
certain corporate actions of the Corporation may only be taken by unanimous
consent of its shareholders.
11. Amendment of the By-Laws of the Corporation. On the date of the
Escrow Closing, the Corporation, GKG, Valk and LDM shall undertake the actions
required to amend and restate the By-Laws of the Corporation in the manner set
forth in Exhibit 11 annexed hereto.
12. Shareholder Agreement. On the date of the Escrow Closing, the
Corporation, LDM and GKG shall enter into a shareholders' agreement (the "New
Shareholders' Agreement") in the form set forth in Exhibit 12 annexed hereto.
13. Termination of Valk's Option Rights. On the date of the Escrow
Closing, GKG and Valk shall terminate the Stock Option Agreement, Valk shall
relinquish his rights under the Stock Option Agreement and GKG shall make a
payment of $350,000.00 to Valk pursuant to an Assignment of Stock Option Rights
and an Agreement to Extinguish Option in the form attached hereto as Exhibit 13.
14. Licensing Agreement. On the date of the Escrow Closing, the
Corporation, LDM and Xxxxxx technik GmbH ("GTG"), an affiliate of GKG, shall
enter into a Licensing Agreement in the form annexed as Exhibit 14.
15. Management Services Agreement. On the date of the Escrow Closing,
the Corporation and LDM shall enter into a Management Services Agreement in the
form annexed as Exhibit 15.
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16. Assumption of Liability under Guaranty. On the date of the Escrow
Closing, LDM shall assume the obligations of GTG under a certain guaranty of a
$2,500,000.00 revenue bond financing issued in favor of the Corporation.
17. Employment Related Agreements. On the date of the Escrow Closing,
the Corporation and Valk shall enter into an Employment Agreement and a
Deferred Compensation Agreement which shall be mutually satisfactory to them.
18. Subordinated Promissory Note. On the date of the Escrow Closing, the
Subordinated Promissory Note shall be delivered to GKG in exchange for the
Redeemed Shares.
19. Observers. Prior to the Escrow Closing, Purchaser may station one or
more agents or employees as observers/advisors at the Corporation to assist
Purchaser's due diligence process and to facilitate process improvements by the
Corporation in anticipation of Closing. However, such individuals shall have
no authority to direct the operations of the Corporation and neither GKG, Valk,
the Corporation nor Purchaser shall have any liability for their acts or
omissions.
20. Termination. This Agreement may be terminated as follows:
A. Termination by Mutual Agreement. This Agreement may be
terminated by the mutual agreement in writing of the Parties at any
time prior to the Closing.
B. Termination by Purchaser. This Agreement and any obligations
of Purchaser hereunder may be terminated by Purchaser at any time
prior to or at the Escrow Closing if the conditions precedent set
forth in Section 7 above have not been fulfilled or waived by
Purchaser.
C. Termination by Seller. This Agreement and any obligations of
GKG and Valk hereunder may be terminated by GKG or Valk at any time
prior to (following two (2) days notice and Purchaser's inability or
refusal to cure) or at the Escrow Closing if (i) Purchaser shall
have materially breached or materially failed to perform any of its
covenants or obligations hereunder; (ii) any representation or
warranty of Purchaser contained herein is false or misleading in any
material respect; (iii) Purchaser shall fail to make any delivery
specified herein; or (iv) GKG or Valk shall have delivered a
certificate to the Escrow Agent (as defined in the Escrow Agreement)
to the effect that since December 31, 1996, either GKG or Valk
became aware of a fact, event or condition which would constitute a
material (i.e., a potential loss or liability of $100,000 or more)
breach of a representation or warranty of GKG or Valk contained in
Section 5 of this Agreement.
In the event of such termination by any Party, no Party shall have
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any further rights, obligations or liabilities under this Agreement.
21. Best Efforts. Subject to the terms and conditions of this Agreement,
each of the Parties shall use its reasonable best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary or
desirable to consummate the transactions provided for in this Agreement and the
Escrow Agreement; provided, however, that none of the Parties shall be
responsible for events occurring which are beyond their control, and no Party
shall be required to expend funds outside of the ordinary course of business.
22. Further Assurances. GKG and Valk, after the Closing, without further
consideration, shall execute, acknowledge, and deliver any further assignments,
conveyances and other assurances, documents and instruments of transfer
reasonably requested by Purchaser, and shall take any other action consistent
with the terms of this Agreement that may reasonably be requested by Purchaser
for the purpose of assigning, transferring granting, conveying and confirming
the GKG Shares and the Valk Shares to Purchaser, and the Parties agree to
cooperate with each other as may otherwise be appropriate to carry out the
transactions contemplated by this Agreement and the Escrow Agreement.
23. Confidential Nature of Information. Each Party agrees that it will
treat in confidence all documents, materials and other information which it
shall have obtained regarding the Parties during the course of the negotiations
leading to the consummation of the transactions contemplated by this Agreement
(whether obtained before or after the date hereof), and the preparation of this
Agreement and other related documents. The obligation of each Party to treat
such documents, materials and other information in confidence shall not apply
to any information which (i) such Party can demonstrate was already lawfully in
its possession prior to the disclosure thereof by the other Party, (ii) is
known to the public and did not become so known through any violation of a
legal obligations, (iii) became known to the public through no fault of such
Party, (iv) is later lawfully acquired by such Party from other sources, (v) is
required to be disclosed under the provisions of any state or United States
statute or regulation issued by a duly authorized agency, board or commission
thereof, or (vi) is required to be disclosed by a rule or order of any court of
competent jurisdiction.
24. Expenses. Each of the Parties shall pay all legal and accounting fees
and other costs and expenses incurred or to be incurred by it in negotiating
and preparing this Agreement and in closing and carrying out the transactions
contemplated by this Agreement, except as otherwise expressly provided for
herein. The Parties expressly agree that all legal fees and other documented
costs and expenses incurred by Valk in connection with this transaction prior
to January 1, 1997 are to be paid by the Corporation and that all legal fees
and other documented costs and expenses incurred by Valk in connection with
this transaction after
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January 1, 1997 are to be paid in accordance with a Certain Agreement Regarding
Attorney Fees dated as of December 31, 1996 among GKG, Valk, the Corporation,
Xxxxxx Xxxxxx and Xxxxxx Xxxx.
25. Headings. The subject headings of the Sections of this Agreement are
included for purposes of convenience only and shall not affect the construction
or interpretation of any of its provisions.
26. Entire Agreement. This Agreement, including the schedules and
exhibits referred to herein which form a part of this Agreement, contain the
entire understanding of the Parties with respect to the transactions
contemplated by this Agreement. There are no representations, warranties,
covenants or undertakings other than those expressly set forth or provided for
in this Agreement. Matters disclosed by GKG and Valk to Purchaser pursuant to
any Section of this Agreement (or any schedules or exhibits referenced therein)
shall be deemed disclosed pursuant to all Sections of this Agreement. This
Agreement supersedes all prior agreements and understandings between the
Parties with respect to the transactions contemplated by this Agreement.
27. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
Parties. The Party for whose benefit a warranty, representation, covenant or
condition is intended may in writing waive any inaccuracies in the warranties
and representations contained in this Agreement or waive compliance with any of
the covenants or conditions contained herein and so waive performance of any of
the obligations of the other Parties hereto, and any defaults hereunder;
provided, however, that such waiver shall not affect or impair the waiving
Party's rights with respect to any other warranty, representation or covenant
or any default hereunder, nor shall any waiver constitute a continuing waiver.
28. Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
29. Schedules and Exhibits. All schedules and exhibits attached to this
Agreement are incorporated herein and made a part hereof in the same manner as
if such schedules and exhibits were set forth at length in the text of this
Agreement.
30. Successors. This Agreement shall be binding upon, and shall inure to
the benefit of, the Parties and their respective successors and assigns;
provided, however, that neither this Agreement nor any of the rights or
obligations hereunder may be assigned or delegated by any party without the
prior written consent of the other Parties hereto.
31. Notices. All notices, requests, demands, and other communications to
be given under this Agreement shall be in writing
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and shall be deemed to have been duly given on the date of service if served
personally on the Party to whom notice is to be given, or on the third day
after mailing if mailed to the Party to whom notice is to be given by certified
mail, return receipt requested, and properly addressed as follows:
If to Purchaser:
LDM Technologies, Inc.
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxx
Vice President of Finance
With a Required Copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxx & Xxxxxxxxx, P.C.
000 X. Xxx Xxxxxx Xx., Xxxxx 000
Xxxx, Xxxxxxxx 00000
If to GKG and GTG:
Verwaltungsgesellschaft Xxxxxx technik GmbH & Co. KG
Breitenau Postfach 1354
D-82453 Garmisch-Partenkirchen, Germany
Attention: Xxxxxx Xxxxxx
With a Required Copy to:
Xxxxxxx Xxxxxxxxx, Esq.
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxx.
Xxx Xxxx, XX 00000
If to Valk:
Xxxxxx Xxxx
Xxxxxx technic, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
With a Required Copy to:
Xxxxxx X. Van Dis, Esq.
Miller, Canfield, Paddock & Stone
000 X. Xxxxxxxx Xxx.
Xxxxxxxxx, XX 00000
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If to the Corporation:
Xxxxxx Xxxx, President
Xxxxxx technic, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
With a Required Copy to:
Xxxxxx X. Van Dis, Esq.
Miller, Canfield, Paddock & Stone
000 X. Xxxxxxxx Xxx.
Xxxxxxxxx, XX 00000
32. Gender. Any reference to the masculine gender shall be deemed to
include the feminine and neuter genders unless the context otherwise requires.
33. Governing Law. This Agreement and all transactions contemplated
hereby shall be governed, construed and enforced in accordance with the laws of
the State of Michigan.
33. Arbitration. Any controversy or claim arising out of or relating to
this Agreement or the breach thereof shall be settled by arbitration before
three arbitrators appointed according to the Commercial Arbitration Rules of
the American Arbitration Association and the laws of the State of Michigan.
The arbitration shall be held in Southfield, Michigan. Judgment upon the award
rendered by a majority of the arbitrators may be entered in any court having
jurisdiction thereof. In the event of arbitration, the Parties agree as
follows:
A. Each Party shall have an absolute veto over any arbitrator,
although said veto must be utilized in good faith.
B. The arbitrators will be urged to permit discovery as long as
said discovery does not unduly delay the arbitration process.
C. The arbitrators shall complete their proceedings and render
their decision within 90 days after submission of the dispute to
them, unless the Parties shall agree to an extension.
D. There can be no award of money without an opinion of law and
a finding of facts upon which said award is based.
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IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly
authorized officers on the date set forth above.
XXXXXX TECHNIC, INC.,
a Michigan corporation
By:____________________________
Xxxxxx Xxxx
Its: President
______________________________
XXXXXX XXXX
VERWALTUNGSGESELLSCHAFT XXXXXX
TECHNIK GMBH & CO. KG
By:___________________________
Xxxxxx Xxxxxx
Its: Managing Director
LDM TECHNOLOGIES, INC.,
a Michigan corporation
By:___________________________
Xxxxxxx X. Xxxx
Its: President
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LIST OF EXHIBITS
Exhibit 2 The Corporation's Note
Exhibit 3 Escrow Agreement
Exhibit 5A Articles of Incorporation and By-Laws of the Corporation
Exhibit 5E Reviewed Financial Statements of the Corporation for the Fiscal
Year Ended December 31, 1995.
Exhibit 5F List of Tax Matters
Exhibit 5H Sales Forecast
Exhibit 5I List and Summary Descriptions of Employee Benefit Plans of the
Corporation
Exhibit 5J List of Liens and Encumbrances
Exhibit 5L List of Contracts, Agreements, Leases and Commitments of the
Corporation
Exhibit 5M List of Violations and Pending Litigation
Exhibit 5N List of Occurrences since December 31, 1995 Financial Statements
Exhibit 5Q List of Loans and Debts of the Corporation
Exhibit 5S List of Customers of the Corporation
Exhibit 5T List of Quality Ratings of the Corporation
Exhibit 5U Tax Certifications
Exhibit 9M Indemnification Agreement Between GKG and Valk
Exhibit 10 Certificate of Amendment of Articles of Incorporation of the
Corporation
Exhibit 11 Amended and Restated By-Laws of the Corporation
Exhibit 12 New Shareholders Agreement
Exhibit 13 Assignment of Stock Option Rights and Agreement to Extinguish Option
Exhibit 14 Licensing Agreement
Exhibit 15 Management Services Agreement
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