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EXHIBIT 10.8
AGREEMENT FOR
EXCHANGE OF STOCK
THIS AGREEMENT is made on July 25, 1996, by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
both individually and as Trustee of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Revocable
Living Trust dated October 21, 1993, as amended (collectively "▇▇▇▇▇▇▇▇"), LDM
INDUSTRIES INC., a Michigan corporation ("LDM"), and ▇▇▇▇, ▇▇▇▇▇▇▇ AND
▇▇▇▇▇, P.L.C., a Michigan professional limited liability company ("KRW").
RECITALS:
▇. ▇▇▇▇▇▇▇▇ owns 100 shares (14.29%) of the issued and outstanding common
stock of LDM, represented by LDM Certificate No. 9 (the "LDM Stock").
A difference of opinion has arisen between ▇▇▇▇▇▇▇▇ and the other
stockholders of LDM regarding the future direction of LDM. This difference
of opinion is interfering with the proper management and operation of LDM's
business, and therefore ▇▇▇▇▇▇▇▇ and LDM have agreed to consummate the
transactions described in this Agreement. All parties agree that this will
be in the best interest of LDM and its shareholders.
▇. ▇▇▇▇▇▇▇▇ desires to sell and transfer the LDM Stock, and LDM wishes to
purchase the LDM Stock, pursuant to the terms set forth herein.
C. LDM has a number of subsidiaries and affiliates, including Industrial
Machining Corporation of Arkansas, an Arkansas corporation ("Industrial
Machining").
D. LDM owns 2,500 shares (83.33%) of the issued and outstanding common stock
of Industrial Machining, represented by Industrial Machining
Certificate No. 19 (the "Industrial Machining Stock"). LDM and ▇▇▇▇▇▇▇▇
desire to exchange the Industrial Machining Stock for the LDM Stock,
pursuant to the terms set forth herein.
E. KRW is willing to serve as escrow agent to facilitate the consummation of
the transactions described herein.
F. The parties to this Agreement wish to set forth their understandings with
regard to the transactions described above.
NOW, THEREFORE, in consideration of the mutual agreements herein recited
and for other valuable consideration, the parties agree as follows:
1. Exchange of LDM Stock for Industrial Machining Stock. At the closing
as defined herein ("Closing"), ▇▇▇▇▇▇▇▇ will transfer and convey the
LDM stock to LDM. As consideration for the transfer of the LDM Stock, at
Closing LDM will transfer and convey the Industrial Machining Stock to
▇▇▇▇▇▇▇▇. In addition, LDM will pay ▇▇▇▇▇▇▇▇ the sum of Five Hundred
2
Thousand Dollars ($500,000) in cash upon execution of this Agreement,
and at or prior to the Closing, LDM will cause IMCA to open a new corporate
bank account and will deposit Seven Million Dollars ($7,000,000) into such
account, to be available to IMCA immediately upon Closing. LDM and ▇▇▇▇▇▇▇▇
each represent and warrant to the other that the Industrial Machining Stock and
the LDM Stock, respectively, are now and will be delivered at the Closing free
and clear of any and all security interests, liens, and other encumbrances of
any kind.
2. Escrow of Documents. Upon execution of this Agreement, the following
documents shall be placed into escrow with KRW:
A. An Assignment Separate From Certificate executed by LDM,
transferring the Industrial Machining Stock to ▇▇▇▇▇▇▇▇;
B. The Industrial Machining Stock;
C. An Assignment Separate From Certificate executed by ▇▇▇▇▇▇▇▇,
transferring the LDM Stock to LDM;
D. The LDM Stock;
E. The written resignations of all officers and directors of
Industrial Machining, other than ▇▇▇▇▇▇▇▇; and
F. The written resignations of ▇▇▇▇▇▇▇▇ as an officer and/or
director of LDM and all of its subsidiaries and affiliates (other than
Industrial Machining).
ALL of the above documents shall be effective upon delivery to the designated
parties by KRW, acting in its capacity as escrow agent.
3. Closing. The Closing of the transactions described herein shall take
place at the principal office of LDM on a Closing date as follows:
A. The Closing date shall be a day on or before September 28, 1996,
selected by LDM for that purpose. Seven days notice shall be provided
to ▇▇▇▇▇▇▇▇ prior to the Closing.
B. At the Closing, KRW shall release to ▇▇▇▇▇▇▇▇ the Industrial
Machining Stock, the Assignment by LDM in favor of ▇▇▇▇▇▇▇▇, and the
resignations of the officers and directors of Industrial Machining.
C. At the Closing, KRW shall release to LDM the LDM Stock, the
Assignment executed by ▇▇▇▇▇▇▇▇ in favor of LDM, and ▇▇▇▇▇▇▇▇'▇ written
resignations.
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D. LDM shall have created a new corporate bank account for IMCA,
funded in the amount of Seven Million Dollars ($7,000,000).
E. If ▇▇▇▇▇▇▇▇ protests the Closing, does not attend the Closing,
or otherwise fails to deliver any appropriate documentation at the
Closing, then (i) KRW shall retain possession of the escrowed documents to
be delivered to ▇▇▇▇▇▇▇▇ until subsequent demand by ▇▇▇▇▇▇▇▇, (ii) LDM
shall deliver to KRW the Seven Million Dollars ($7,000,000) due to be
deposited for IMCA's account at the Closing, to be held in KRW's client
trust account without interest and to be deposited into an IMCA corporate
account upon subsequent demand by ▇▇▇▇▇▇▇▇, (iii) upon receipt of such
funds from LDM, KRW shall deliver to LDM the escrowed documents to be
delivered to LDM hereunder, and (iv) LDM and Industrial Machining will
adjust their transfer books to reflect that the LDM Stock and the
Industrial Machining Stock have been cancelled and/or transferred pursuant
to this Agreement, as appropriate.
4. Contingencies. The sole contingency regarding the
transactions described herein is LDM's ability to arrange financing
reasonably satisfactory to LDM for the Seven Million Dollars ($7,000,000) to be
deposited by LDM to an account in favor of IMCA at Closing. LDM agrees to use
its best efforts to achieve satisfactory financing to close the transactions
described herein. If, in spite of its best efforts, LDM is unable to arrange
satisfactory financing on or before September 28, 1996, then (a) the Five
Hundred Thousand Dollars ($500,000) paid by LDM to ▇▇▇▇▇▇▇▇ upon execution
hereof shall be treated by the parties as a loan by LDM to ▇▇▇▇▇▇▇▇ from the
date of delivery of such funds, payable on or before March 1, 1997 together
with simple interest at six percent (6%) per annum, and (b) KRW shall return
to ▇▇▇▇▇▇▇▇ and LDM the documents which each party delivered to KRW to be
placed in escrow. ▇▇▇▇▇▇▇▇'▇ obligations under this Agreement are subject to
no contingencies, and LDM shall be entitled to specific performance of all of
▇▇▇▇▇▇▇▇'▇ obligations hereunder.
5. Key-Man Insurance Policies. LDM is the owner of two (2) key-man life
insurance policies insuring the life of ▇▇▇▇▇▇▇▇. At the Closing, IMCA
shall have the option to purchase and take an assignment of either or both of
such policies by paying LDM an amount equal to the cash value of the policies
to be assumed. If there are any outstanding loans on either of said policies,
they shall be paid by LDM on or before the Closing date. ▇▇▇▇▇▇▇▇ shall give
LDM at least fifteen (15) days prior notice of his desire to cause IMCA to
assume either or both of such policies, and LDM shall take the appropriate
steps to arrange for such assignment with the respective insurers.
6. Bank Loan Covenants and Guaranties. The parties agree to obtain
releases or modifications from LDM's and Industrial Machining's
respective banks and other credit providers as necessary to permit the
consummation of the transactions described herein. If ▇▇▇▇▇▇▇▇ has
guaranteed any obligation of LDM or any of its related entities (other than
IMCA), then the parties agree to use their best efforts to obtain releases from
such guaranties within a reasonable time at no cost to ▇▇▇▇▇▇▇▇. Similarly, if
LDM or any of its officers, directors (other than ▇▇▇▇▇▇▇▇), affiliates or
related entities have guaranteed any obligation of IMCA, then the parties agree
to use
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their best efforts to obtain releases from such guaranties within a
reasonable time at no cost to the released parties.
7. Indemnification Following Closing. Following the Closing, (a) LDM
shall indemnify, defend, and hold harmless ▇▇▇▇▇▇▇▇, Industrial
Machining, and its officers, directors and employees from and against any loss,
cost, damage or expense related, directly or indirectly, to the operations of
LDM, its subsidiaries and affiliates after the Closing, and (b) ▇▇▇▇▇▇▇▇ shall
indemnify, defend, and hold harmless LDM, its subsidiaries and affiliates, and
their respective officers, directors and employees from and against any loss,
cost, damage or expense related, directly or indirectly, to the operations of
Industrial Machining after the Closing. The obligations set forth in this
paragraph shall continue indefinitely following the Closing.
8. Confidentiality.
▇. ▇▇▇▇▇▇▇▇ covenants and agrees that ▇▇▇▇▇▇▇▇ shall not use or
disclose (i) any non-public information, knowledge or data relating in
any way to the business, financial condition, sales, customers, operations,
suppliers, products, technologies or services of LDM, its affiliates or
subsidiaries, (ii) any other proprietary or confidential information,
knowledge, data or details of the past, present or future business affairs
or practices of LDM, or LDM's affiliates or subsidiaries, or (iii) any
information or facts relating to this Agreement, any agreement referred to
herein or the sale consummated thereunder. ▇▇▇▇▇▇▇▇ further covenants not
to interfere with or attempt to disrupt any relationship or arrangement,
whether contractual or otherwise, between LDM, or any of LDM's affiliates
or subsidiaries, and their respective customers, suppliers, agents,
representatives, or others doing business for or with LDM, or any of LDM's
affiliates or subsidiaries.
B. LDM, on its own behalf and on behalf of its shareholders
covenants and agrees that LDM shall not use or disclose (i) any
non-public information, knowledge or data relating in any way to the
business, financial condition, sales, customers, operations, suppliers,
products, technologies or services of Industrial Machining, (ii) any other
proprietary or confidential information, knowledge, data or details of the
past, present or future business affairs or practices of Industrial
Machining, or (iii) any information or facts relating to this Agreement,
any agreement referred to herein or the sale consummated thereunder.
9. Limited Liability of Escrow Agent. Unless otherwise expressly provided
herein, KRW, its successors and substitutes shall:
A. Not be held liable for any action taken or omitted under this
Agreement so long as it shall have acted in good faith and without gross
negligence;
B. Have no responsibility to inquire into or determine the
genuineness, authenticity, or sufficiency of any items or property deposited
to the escrow account;
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C. Be entitled to deem the signatories of any documents or
instruments submitted to it hereunder as being those purported to be
authorized by and on behalf of the parties hereto, and shall further be
entitled to rely upon the genuineness of the signatures of such signatories
without inquiry and without requiring substantiating evidence of any kind;
D. Be entitled to refrain from taking any action contemplated by this
Agreement in the event it becomes aware of any disagreement between the
parties as to any material facts or as to the occurrence of any
contemplated event precedent to such action;
E. Be, and hereby is indemnified and saved harmless by the other
parties hereto from all losses, costs and expenses which may be
incurred by it as a result of KRW's involvement in any litigation or other
proceeding arising from performance of its duties hereunder, provided that
such proceeding shall not result from any action taken or omitted by KRW
and for which KRW shall have been adjudged grossly negligent.
10. Notices. All notices, waivers and consents under this Agreement
shall be in writing and shall be deemed to have been duly given only if
delivered personally or sent by certified mail, postage prepaid, return receipt
requested, addressed as follows:
A. If to LDM, to:
LDM Industries Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇, Chairman
B. If to ▇▇▇▇▇▇▇▇, to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
C. If to KRW, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇, P.L.C.
Detroit Center, Suite 2500
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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or at such other address as may be specified in writing from time to
time by the party entitled to receive such notice. Such notice, waiver or
consent shall be deemed to have been given as of the date so delivered or
deposited in the United States mail, as the case may be.
11. Successors Bound by Agreement. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective personal and legal representatives, successors and assigns. The
parties agree for themselves, their personal and legal representatives,
successors and assigns to do all acts necessary to carry out the intents and
purposes of this Agreement.
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan,
notwithstanding the fact that one or more of the parties is or may hereafter
become domiciled in a different state.
13. Waiver. The waiver of a breach of any provision of this
Agreement by any party shall not operate or be construed as a waiver of
any subsequent breach. Each and every right, remedy and power granted to any
party or allowed it by law shall be cumulative and not exclusive of any other.
14. Counterparts and Facsimiles. This Agreement may be executed by the
parties hereto in any number of separate counterparts, in person or by
facsimile, each of which shall be an original but all of which taken together
shall constitute one and the same instrument. It shall not be necessary that
all of the parties sign any one counterpart.
15. Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes any and all other
agreements, negotiations and discussions, either oral or written, between or
among any of the parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective on
the date set forth above.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Individually and as
Trustee of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Revocable
Living Trust Dated October 21, 1993, as
Amended
▇▇▇▇, ▇▇▇▇▇▇▇ AND ▇▇▇▇▇, LDM INDUSTRIES INC.
P.L.C., Escrow Agent
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: ▇▇▇ ▇▇▇▇▇▇
-------------------------------- -------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Member ▇▇▇ ▇▇▇▇▇▇, Chairman
of the Firm
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AMENDMENT TO
AGREEMENT FOR
EXCHANGE OF STOCK
THIS AMENDMENT is made effective the 27th day of September, 1996 by and
among ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, both individually and as Trustee of the ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Revocable Living Trust dated October 21, 1993, as amended
(collectively "▇▇▇▇▇▇▇▇"), LDM INDUSTRIES INC., a Michigan corporation ("LDM"),
and ▇▇▇▇, ▇▇▇▇▇▇▇ AND ▇▇▇▇▇, P.L.C., a Michigan professional limited liability
company ("KRW").
RECITALS:
▇. ▇▇▇▇▇▇▇▇, LDM and KRW previously entered into an Agreement For Exchange of
Stock on July 25, 1996 ("Exchange Agreement") in which ▇▇▇▇▇▇▇▇ agreed
to sell and transfer 100 shares of the issued and outstanding common stock
of LDM, represented by LDM Certificate No. 9 ("LDM Stock") in exchange for
the stock ("Industrial Machining Stock") held by LDM in Industrial
Machining Corporation of Arkansas, an Arkansas corporation ("Industrial
Machining").
B. As a condition precedent to LDM's obligations under the Exchange Agreement,
LDM had to obtain financing reasonably satisfactory to LDM for
$7,000,000 ("Transfer Amount") which was to be deposited in an account
established by Industrial Machining.
C. LDM was unable to acquire financing satisfactory to it for the Transfer
Amount.
D. In order to complete the transactions contemplated by the Exchange
Agreement, LDM, ▇▇▇▇▇▇▇▇ and KRW desire to amend the Exchange Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein recited
and for other valuable consideration, the parties agree as follows:
1. Amendment of Paragraph 1. Paragraph 1 of the Exchange Agreement shall
be amended to read as follows:
1. Exchange of LDM Stock for Industrial Machining Stock. At the
closing as defined herein ("Closing"), ▇▇▇▇▇▇▇▇ will transfer and convey
the LDM Stock to LDM. As consideration for the transfer of the LDM Stock,
at Closing LDM will transfer and convey the Industrial Machining Stock to
▇▇▇▇▇▇▇▇. In addition, LDM will pay ▇▇▇▇▇▇▇▇ the sum of Five Hundred
Thousand Dollars ($500,000) in cash upon execution of this Agreement, and
at or prior to the Closing, LDM will deposit the sum of Four Million
Dollars ($4,000,000) into a new corporate bank account for Industrial
Machining established by ▇▇▇▇▇▇▇▇.
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Further, LDM shall deliver to ▇▇▇▇▇▇▇▇ a promissory note for the sum of
Three Million Dollars ($3,000,000) (the "Note"). The Note shall
provide for monthly installments of principal of Ninety Thousand Dollars
($90,000) together with accrued simple interest thereon at the rate of six
and 1/2 percent (6.5%) per annum. The entire balance of the Note shall be
paid within two years from the date the Note is issued to ▇▇▇▇▇▇▇▇. The
Note shall be subordinated to LDM's obligations to The Huntington National
Bank ("HNB"), and ▇▇▇▇▇▇▇▇ shall execute a Debt Subordination Agreement
satisfactory to HNB prior to receipt of the Note. LDM and ▇▇▇▇▇▇▇▇ each
represent and warrant to the other that the Industrial Machining Stock and
the LDM Stock, respectively, are now and will be delivered at the Closing
free and clear of any and all security interests, liens and other
encumbrances of any kind.
2. Amendment of ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇ 3D of the Exchange Agreement
shall be amended to read as follows:
D. LDM shall have deposited the amount of Four Million Dollars
($4,000,000) into a new Industrial Machining corporate bank account
established by ▇▇▇▇▇▇▇▇, or shall have delivered a check in such amount to
▇▇▇▇▇▇▇▇, payable to Industrial Machining.
3. Amendment of Paragraph 4. The first sentence only of Paragraph 4
of the Exchange Agreement shall be amended to read as follows:
The sole contingency regarding the transactions described herein is
LDM's ability to arrange financing reasonably satisfactory to LDM for the
Four Million Dollars ($4,000,000) to be deposited by LDM to an account in
favor of Industrial Machining, or paid by check delivered to ▇▇▇▇▇▇▇▇, at
Closing.
4. Conflicts. The terms and conditions of this Amendment shall govern
and control the terms and provisions of the Exchange Agreement if or whenever
any term or provision of the Exchange Agreement is inconsistent or in conflict
with the terms and provisions of this Amendment.
5. Miscellaneous. Except as modified by this Amendment, the Exchange
Agreement remains in full force and effect. All defined terms contained herein
shall have the same meanings as in the Exchange Agreement. All modifications
agreed upon by the parties are contained in this Amendment, and no additional
modifications to the Exchange Agreement shall be effective unless in writing
and signed by the parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LDM INDUSTRIES INC., a
Michigan corporation
By:
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Its:
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▇▇▇▇, ▇▇▇▇▇▇▇ AND ▇▇▇▇▇, P.L.C.,
a Michigan professional
limited liability company
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Its: Member
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