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EXHIBIT 10.4
EXECUTION COPY
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), is made this 16th day of
April, 1999, between WORLD WIDE INDUSTRIAL INVEST B.V., a private limited
company organized under the laws of the Netherlands ("World Wide"), and SATURN
ELECTRONICS & ENGINEERING, INC., a Michigan corporation whose address is 000 Xxx
Xxxxxxxxx, Xxxxxx Xxxxx, XX 00000 ("Saturn").
RECITALS:
A. World Wide is the owner of 619,610 shares of Class A Voting stock and
619,610 shares of Class B Nonvoting stock of Saturn, no par value
(collectively, the "Stock"), which Stock constitutes twenty percent (20%) of the
issued and outstanding stock of Saturn.
B. Saturn desires to purchase and redeem the Stock upon the terms and
conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the promises contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, World Wide and Saturn agree as follows:
1. PURCHASE AND SALE OF STOCK; CLOSING. World Wide agrees to assign,
convey, sell and transfer to Saturn at Closing (defined below), and Saturn
agrees to purchase, redeem and acquire from World Wide at Closing, all of World
Wide's right, title and interest in and to the Stock, free and clear of all
liens, charges, security interests, pledges, restrictions, claims and
encumbrances of any kind. At the Closing, World Wide shall deliver to Saturn the
original of all stock certificates evidencing the Stock (as described on
Attachment 1 to this Agreement), duly endorsed for transfer or accompanied by
stock powers or assignments duly signed. The closing of the purchase and sale
(the "Closing") shall take place on April 30, 1999 or such other date mutually
agreed by the parties.
2. PAYMENT FOR STOCK; CONDITIONS TO CLOSING. The purchase price for the
Stock shall be Twenty Seven Million Dollars (U.S. $27,000,000). The purchase
price shall be paid by Saturn in cash at Closing via federal wire transfer to a
bank account designated by World Wide. The purchase and sale of the Stock is
subject to fulfillment or waiver of the following conditions:
(a) Approval of the purchase by Saturn's Board of Directors.
(b) Approval of the purchase by World Wide's Board of Directors and General
Shareholders Assembly.
(c) Compliance by the parties with applicable provisions of the
Stockholders Agreement among the stockholders of Saturn dated March 21, 1995, as
amended by an Amendment No. 1 to Stockholders Agreement dated December 13, 1996,
or receipt of a waiver
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by the stockholders of Saturn in the form of Attachment 2 attached hereto
waiving compliance with Section 2.3 of the Stockholders Agreement if applicable.
3. REPRESENTATIONS.
(a) World Wide represents and warrants to Saturn now and as of the Closing
date that:
(i) The sale and transfer of the Stock to Saturn was duly authorized
and does not violate any contract or agreement to which World
Wide is a party or is bound or any requirement of law applicable
to World Wide, and all approvals required to transfer the Stock
to Saturn have been (or will be by Closing) obtained.
(ii) World Wide is the sole owner, beneficially and of record, of the
Stock, and has good and marketable title to the Stock, free and
clear of any and all liens, charges, security interests, pledges,
restrictions, claims and encumbrances of any kind.
(b) Saturn represents and warrants to World Wide now and as of the Closing
date that:
(i) The purchase of the Stock by Saturn was duly authorized and does
not violate any contract or agreement to which Saturn is a party
or is bound or any requirement of law applicable to Saturn, and
all approvals required to purchase the Stock have been (or will
be by Closing) obtained.
(ii) Saturn has provided to World Wide copies of the financial
information listed on Attachment 3 attached hereto (collectively,
the "Financial Information"). To the best of Saturn's knowledge,
the Financial Information does not contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements
therein not misleading as of the date prepared and in light of
the circumstances in which they were made. To the best of
Saturn's knowledge, Saturn has disclosed to World Wide all
material transactions which are currently active and for which
Saturn has obtained a signed letter of intent or memorandum of
understanding as of March 17, 1999. The Forecasts (defined below)
that constitute part of the Financial Information have been
prepared in good faith taking into consideration all material
information of which the President and Chief Financial Officer of
Saturn were aware at the time the Forecasts were prepared. World
Wide acknowledges and agrees that Saturn is not making any
representation or warranty regarding any forward-looking
statements provided to World Wide, including those that
constitute part of the Financial Information (collectively, the
"Forecasts"), or that Saturn will achieve the numbers set forth
in the Forecasts. World Wide further acknowledges and agrees that
such Forecasts are subject to uncertainty, unknown or changed
opportunities, changed circumstances and other factors which
could affect the Forecasts and cause actual results to differ
materially (beneficially or
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detrimentally) from those set forth in the Forecasts. Saturn
provided to World Wide estimated net income of Saturn as a
percentage of Saturn revenues in the following percentages: 6.8%
for the year 2000, 7.2% for the year 2001 and 7.7% for the year
2002. World Wide acknowledges and agrees that these percentages
are Forecasts as used in this paragraph and that the disclaimers
set forth in this paragraph apply to these percentages.
(iii)Saturn represents and warrants that Saturn and its subsidiaries,
on a consolidated basis, has not been a U.S. real property
holding corporation within the meaning of Section 897(c)(2) of
the United States Internal Revenue Code during the applicable
period specified in Section 897(c)(l)(A)(ii) thereof. Saturn
shall indemnify and hold World Wide harmless from and against any
assessment, penalty or interest charge arising out of or
resulting from any breach of the representation made in the
previous sentence.
4. RELEASE AND WAIVER OF WORLD WIDE. In consideration of the purchase price
to be paid for the Stock, World Wide, for itself and its successors and assigns,
as of the date of Closing releases and discharges Saturn and its directors,
officers, shareholders, employees, affiliates, agents, successors and assigns,
from any and all claims, demands, actions, suits, liabilities and causes of
action of any kind and nature whatsoever, fixed or contingent, and waives all
rights, which World Wide may have against Saturn and/or the released parties by
reason of World Wide having been a shareholder of Saturn and owner of the Stock.
5. RELEASE AND WAIVER OF WORLD WIDE DESIGNATED DIRECTORS. Conditioned on
receipt by Saturn of written representations from Xx. Xxxxx Xxxxxxx and Xx.
Xxxxxx Xxxxx that, to the best of their knowledge, they have not breached their
fiduciary duties as directors of Saturn (copies of such representations are
attached hereto as Attachment 4), Saturn agrees:
(a) As of the date of Closing (the effective date of his resignation)
regarding Xx. Xxxxxxx, and as of May 22, 1997 (the effective date he no longer
was a director) regarding Xx. Xxxxx, Saturn releases and discharges Messrs.
Xxxxxxx and Xxxxx from any and all claims, demands, actions, suits, liabilities
and causes of action of any kind and nature whatsoever, fixed or contingent, and
waives all rights, which Saturn may have against either of them by reason of
their having served on the Saturn Board of Directors.
(b) Saturn currently has in place Directors & Officers Liability insurance
(attached hereto as Attachment 5 is a summary of such insurance) and agrees to
use reasonable best efforts to keep such insurance (or comparable insurance) in
place until December 31, 2001.
(c) Attached hereto as Attachment 6 is a true and correct copy of Saturn's
Articles of Incorporation, as amended to date. At present, Saturn does not
contemplate amending Article VIII of its Articles of Incorporation which
addresses indemnification of directors and officers of Saturn.
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6. STOCKHOLDERS AGREEMENT: RESIGNATION. World Wide acknowledges and agrees
that, upon transfer of the Stock to Saturn, World Wide shall cease to be a party
to the Stockholders Agreement among the shareholders of Saturn dated March 21,
1995, as amended, and World Wide shall not have any rights or obligations
thereunder, including, but not limited to, the right to designate a director of
Saturn. World Wide shall deliver to Saturn at Closing the resignation of Xxxxx
Xxxxxxx resigning as a director of Saturn, which resignation shall be effective
upon execution.
7. ADDITIONAL COVENANTS. Saturn and World Wide, on behalf of themselves and
their respective subsidiaries, covenant and agree as follows:
(a) Saturn agrees to terminate the license agreement it currently holds
from Bitron, a subsidiary of World Wide, as it applies to certain products at no
cost to Bitron. Upon execution of this Agreement, Saturn and Bitron shall
execute and deliver the Amendment No. 2 to Technical Information and License
Agreement (the "License Agreement") in the form attached as Attachment 7 to this
Agreement, which Amendment shall become effective upon Closing of this
Agreement. Saturn does not have any of the products being terminated from the
License Agreement in production. Promptly after execution of Amendment No. 2,
Saturn shall cease using Bitron Technology (as defined in the License Agreement)
related to such products and shall return to Bitron all documentation related to
such products in accordance with Section 3.06(b) and Article V of the License
Agreement (all of the obligations of which shall continue, notwithstanding the
termination of Article III pursuant to Amendment No. 2 to the License
Agreement). If an opportunity arises with respect to the products for which the
license will be terminated, Saturn and World Wide may elect to discuss the
opportunity and may mutually agree upon the terms of World Wide/Bitron, Inc.
granting to Saturn a license for any of these products on a case-by-case basis.
(b) For a period of three (3) years from the date of this Agreement, Saturn
and World Wide agree not to employ or solicit to employ any person who is
employed by the other party in an executive, management or professional level
position or any person who is otherwise considered a key employee, without the
other party's prior written consent.
(c) For a period of three (3) years from the date of this Agreement, World
Wide and Saturn agree not to operate a production facility within a twenty-five
(25) mile radius of any existing production facility of the other party. The
parties acknowledge that operation by World Wide or its affiliates of commercial
offices (that is non-production facilities) in the greater Detroit, Michigan
area would not constitute a breach of this provision.
(d) For a period of three (3) years from the date of this Agreement, World
Wide and Bitron agree not to misuse any confidential or proprietary written
information regarding Saturn obtained from Saturn in connection with Saturn
Board of Director meetings to unfairly compete with Saturn. This restriction
shall not apply to information which (i) is now or subsequently becomes publicly
known or available through no fault of World Wide or Bitron S.p.A; or (ii) is
rightfully furnished to World Wide or Bitron S.p.A. by a third person who is not
prohibited from disclosing the information acquired by it in any manner.
Promptly after execution of this Agreement, World Wide shall return to Saturn
all documentation and information regarding Saturn in the possession of World
Wide or any of its subsidairies received in connection with
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Saturn Board of Director and Shareholder meetings, and World Wide shall not
retain any copies thereof.
(e) Except as permitted pursuant to the License Agreement, Saturn and World
Wide agree that they will not, without the other party's prior written consent,
use for any purpose or disclose to any person or entity any confidential or
proprietary information or trade secrets acquired by it in any manner
(including, but not limited to, information acquired in connection with Saturn
Board of Director and Shareholder meetings) which pertains to the business or
manner of operation of the other party's business (any such information,
"Confidential Information"). This restriction shall not apply to Confidential
Information that (i) is now or subsequently becomes publicly known or available
without breach of this provision by the recipient, (ii) or is, in the written
opinion of legal counsel, required to be disclosed by law or court order. If
either party (the "Requested Party") is requested or required (by oral
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any Confidential
Information of the other party, such Requested Party will provide the other
party with prompt notice of such request(s), to the extent practicable, so that
the party whose Confidential Information would be disclosed may seek an
appropriate protective order and/or waive compliance with the provisions of this
section. If, failing the entry of a protective order or the receipt of a waiver
hereunder, the Requested Party is, in the opinion of its counsel, compelled to
disclose Confidential Information or notes under pain of liability for contempt
or other censure or penalty, the Requested Party may disclose such Confidential
Information of the other party (to the extent necessary to avoid such liability,
censure, or penalty) without liability hereunder. Each party understands and
agrees that money damages may not be a sufficient remedy for any breach of its
obligations under this section and that the other party shall be entitled to
equitable relief, including injunction and specific performance, as a remedy for
any such breach. Such remedies shall not be deemed to be the exclusive remedies
for a breach of this section but may be in addition to all other remedies
available at law or equity to the parties.
8. MISCELLANEOUS.
(a) Entire Agreement and Amendment. This Agreement contains the entire
agreement between the parties with respect to the matters described herein and
is a completely integrated and exclusive statement as to the terms thereof and
supersede all previous agreements. This Agreement may not be altered or modified
except by a writing signed by the parties hereto.
(b) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(c) Governing Law and Choice of Forum. Michigan law shall govern the
construction and enforceability of this Agreement. Any and all actions
concerning any dispute arising hereunder shall be filed and maintained only in a
court sitting in Michigan.
(d) Further Assurances. Saturn and World Wide agree that they shall
execute and deliver any and all additional writings, instruments and other
documents contemplated hereby or referred to herein and shall take such further
actions as shall be reasonably required in order to
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effectuate the terms and conditions of this Agreement and carry out its
purposes.
(e) Transfer Taxes. World Wide shall pay and indemnify Saturn from and
against any sales, use, excise, transfer or other similar tax imposed with
respect to the sale of the Stock to Saturn, and any interest and penalties
related thereto. World Wide shall not be responsible for tax assessments,
penalties or interest charges arising out of or resulting from a breach of
Saturn's representations and warranties set forth in Section 3(b)(iii) above.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
WORLD WIDE INDUSTRIAL INVEST B.V.
By: /s/ Xxxxxx Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxx Xxxxxxx, Director
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx, Director
By: /s/ Pierfranco Riva
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Pierfranco Riva, Director
SATURN ELECTRONICS & ENGINEERING, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
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Xxxxxxx X. Xxxxx, Xx.
Its: CEO and President
Bitron, S.p.A. signs this Agreement to agree to be bound by the covenants set
forth in Section 7 of this Agreement.
BITRON, S.p.A.
By: /s/
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Its: President
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