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EXHIBIT 10.28
OPERATING AGREEMENT
OF
▇▇▇▇ ▇▇▇▇▇▇▇▇ OVERHEAD SYSTEMS, L.L.C.
THIS OPERATING AGREEMENT is made and entered into as of the lst day of
November, 1997, by and between ▇▇▇▇ Corporation, a Delaware corporation
("▇▇▇▇"), Automotive Industries Manufacturing, Inc., a Delaware corporation and
wholly-owned subsidiary of Lear ("AIM") and ▇▇▇▇▇▇▇▇ Corporation, a Michigan
corporation ("▇▇▇▇▇▇▇▇"). Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in Article XII hereof.
ARTICLE I.
FORMATION
1.1 BACKGROUND. Lear and ▇▇▇▇▇▇▇▇ have been involved in the designing,
engineering, manufacturing, sales, marketing and servicing of Products and have
particular expertise and technical know-how with respect to the Products. The
Members desire to operate the Company for the purpose of designing, engineering,
manufacturing, marketing, selling and servicing of Products in the United States
and other countries worldwide, as may be agreed upon by the Members (the
"Business").
1.2 FORMATION. On or before Closing, the Company will be formed
pursuant to the Michigan Limited Liability Company Act (the "Act") in accordance
with the terms and conditions of its Articles of Organization. Upon the request
of the Board of Directors of the Company or as required by law, the Members
shall promptly execute all amendments of the Articles of Organization and all
other documents and take all such other actions as may be necessary or advisable
to enable the Company to accomplish all filing, recording, publishing and other
ministerial acts necessary or appropriate to comply with all requirements for
the formation and continued operation of the Company under the Act.
1.3 INTENT. It is the intent of the Members that the Company be
operated in a manner consistent with its treatment as a "partnership" for
federal and state income tax purposes. No Member shall take any action
inconsistent with the express intent of the Members as set forth herein.
1.4 PARTICIPATING PERCENTAGES. The participating percentages
("Participating Percentages") of the Members in the Company are as follows:
Member Participating Percentage
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▇▇▇▇▇▇▇▇ 50%
Lear and AIM (jointly owned) 50%
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ARTICLE II.
GENERAL PROVISIONS
2.1 NAME. The name of the Company shall be "▇▇▇▇ ▇▇▇▇▇▇▇▇ Overhead
Systems, L.L.C." or such other name as the Board of Directors may from time to
time select. In addition, either Member shall have the unilateral right at any
time to remove its name from the name of the Company, and the Company and the
Members agree to cooperate and to take any necessary actions to effectuate such
name change.
2.2 PRINCIPAL PLACE OF BUSINESS. The principal place of business
of the Company shall be located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or such other place as the Members may from time to time agree.
2.3 COMPANY PURPOSES. The Company shall be formed for the purposes
of (a) the designing, engineering, manufacturing, selling, marketing and
servicing of Products; and (b) the engaging in any and all acts, things,
businesses and activities that are related, incidental or conducive, directly or
indirectly, to the attainment of the foregoing purposes with respect to the
Products, including the licensing of technical assistance and the procurement of
marketing and sales services and representation from the Members and their
Affiliates. The Company may engage in other business only upon the unanimous
vote of the Members. The Company shall have the power to do any and all acts
necessary, appropriate, proper, advisable, incidental or convenient to or for
the furtherance of the purposes and business described herein.
2.4 EXPANSION. Either Member may at any time cause the Company to
make recommendations to the Members with regard to the engaging by the
Company in business involving goods and/or services other than or in addition to
the Products which would require consideration of additional enhancements to the
Company's capital structure by contribution of existing operations of the
Members, acquisition of third-party operations, or other capital improvements as
necessary or desirable. Any expansion of the purposes of the Company beyond
those set forth in Section 2.3 hereof shall require the unanimous consent of the
Members.
2.5 TERM. The term of the Company commenced on the filing of the
Articles of Organization and shall continue until the Company is terminated in
accordance with the terms of the Articles of Organization, this Agreement or
applicable law and the filing of the Certificate of Dissolution in accordance
with Section 10.5 of this Agreement.
2.6 REGISTERED AGENT; REGISTERED OFFICE. The Registered Agent for
the Company shall be ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and the Registered Office for the
Company shall be located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The
Members shall have the power from time to time to appoint a new Registered Agent
and/or specify a new Registered Office.
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ARTICLE III.
CONTRIBUTIONS
3.1 CAPITAL CONTRIBUTIONS BY THE MEMBERS. As of the date of this
Agreement, each Member agrees to make its respective initial capital
contribution set forth in subsections (a) and (b) below, each such contribution
to be in accordance with the initial approved capital plan:
(a) Lear and AIM shall contribute good and marketable title to
the assets specified in the Transfer Agreement (as hereinafter defined) (the
"Lear Assets") subject to indebtedness of $10 million to be assumed by the
Company but free and clear of all Liens other than Permitted Encumbrances. The
Members agree that the Lear Assets are valued at $21 million (prior to
considering the $10 million indebtedness) and shall constitute ▇▇▇▇'▇ and AIM's
initial capital contribution and, in addition, shall entitle Lear to receive
from the Company a preferred distribution of $3 million as provided in Section
4.2(d). The allocation of the total value of the Lear Assets to the individual
assets will be agreed upon by Lear and ▇▇▇▇▇▇▇▇ within thirty (30) days after
Closing. The assumption of existing liabilities for each Member is being done to
establish a desirable amount of leverage that is consistent with the business
plan for the Company and is pursuant to a plan which is intended to qualify
under Treasury Reg. Subsection.1.707-5(a)(4).
(b) ▇▇▇▇▇▇▇▇ shall contribute good and marketable title to the
assets described in the Transfer Agreement (the "▇▇▇▇▇▇▇▇ Assets") subject to
indebtedness of $10 million to be assumed by the Company but free and clear of
all Liens other than Permitted Encumbrances. The Members agree that the ▇▇▇▇▇▇▇▇
Assets are valued at $18 million (prior to considering the $10 million
indebtedness) and shall constitute ▇▇▇▇▇▇▇▇'▇ initial capital contribution. The
allocation of the total value of the ▇▇▇▇▇▇▇▇ Assets to the individual assets
will be agreed upon by Lear and ▇▇▇▇▇▇▇▇ within thirty (30) days after Closing.
The assumption of existing liabilities for each Member is being done to
establish a desirable amount of leverage that is consistent with the business
plan for the Company and is pursuant to a plan which is intended to qualify
under Treasury Reg. Subsection.1.707-5(a)(4).
(c) Lear and ▇▇▇▇▇▇▇▇ will enter into a Services Agreement in
the form attached as Exhibit A detailing certain services each will provide the
Company. Lear and ▇▇▇▇▇▇▇▇ will enter into a Transfer Agreement with the Company
in the form attached as Exhibit B detailing the method in which the Lear Assets
and ▇▇▇▇▇▇▇▇ Assets will be transferred to the Company.
(d) Additional capital contributions shall require the
unanimous action of the Members in accordance with Section 6.3 hereof. Any
increase in the capital of the Company shall be contributed by the Members in
accordance with their Participating Percentages. In the event the Members are
unable to unanimously agree upon the need for additional capital, either Member
may, at its sole option, loan to the Company from time to time such amounts as
may be reasonably necessary for the short term (in no event for a period greater
than six months including any period of renewal or other extension) continued
operation of the existing business of the Company but not for any capital
improvements, expansion, or manufacture of Products not reasonably necessary to
fulfill an existing purchase order. Any loans from a Member to the Company shall
be on commercially reasonable terms applicable to a senior bank loan.
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Capital accounts shall be maintained for each Member in the manner required by
Treasury Regulation Sections 1.704-1(b)(2)(ii)(b)(1) and (b)(2)(iv).
(e) Section 8.4 of the Transfer Agreement provides that
additional capital contributions will be required and Section 4.2(d) hereof
provides that ▇▇▇▇'▇ preferential distribution will be reduced, if certain
levels of pre-tax, pre-depreciation and amortization levels are not achieved. If
those levels are not achieved, the parties agree that the initial value of Lear
Assets or ▇▇▇▇▇▇▇▇ Assets, as the case may be, are overstated. To adjust the
capital accounts to reflect the actual value of the Lear Assets or the ▇▇▇▇▇▇▇▇
Assets:
(i) Prior to any payment required under Section 8.4
of the Transfer Agreement, the capital account of either
Member shall be reduced by the amount of any such payment.
(ii) The capital account of Lear shall be reduced by
any reduction of the amount of its special distribution
pursuant to Section 4.2(d).
(f) The Lear-AIM Membership interest shall be jointly owned by
Lear and AIM. Lear and AIM agree that said Membership Interest shall be
allocated between them based upon the value of the properties each contributes
to the Company. In connection with such contributions and in connection with
allocations and distributions, the term "Lear" shall also include AIM, but not
otherwise.
3.2 FIRST TIER DEBT. It is the intention of the Members that the
expenditures necessary to develop and operate the Business will be financed with
the initial Capital Contributions, additional capital contributions, Company
revenues, third-party loans and, in the sole discretion of the Members, Member
Loans. The Members agree that in the event Capital Contributions and Company
revenues are insufficient, the Company shall first seek loans from third-party
lenders (the "First Tier Debt").
3.3 MEMBER LOANS. Except as otherwise provided herein, if funds are
needed by the Company in addition to the Capital Contributions, Company revenues
and First Tier Debt, the Members may, but shall not be obligated to, loan
additional funds to the Company ("Member Loans"). Except as otherwise
unanimously agreed by the Members, all Member Loans shall be made on a pro-rata
basis according to each Member's respective Participating Percentage in such
amount as may be determined to be necessary by the Board of Directors pursuant
to Section 6 hereof. All Member Loans shall bear interest at the Prime Rate (as
the same may change from time to time) plus 1%, shall compound annually, shall
be nonrecourse to the Members, shall be repayable in whole or part at any time
without penalty, and shall be evidenced by a promissory note executed by or on
behalf of the Company which shall contain such other terms and conditions as are
commercially reasonable or as may be agreed to by the Members. Except for the
distributions referenced in Section 4.2 (b) hereof, the amount of principal and
interest payable on Member Loans shall be paid to the Members which have made
Member Loans to the Company pro-rata based upon the principal balance of the
Member Loans outstanding prior to any distribution of available funds to the
Members pursuant to Article IV being made.
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3.4 EMPLOYEE CONTRIBUTION. The Members agree to each assign to work for
the Company the employees currently working at operations transferred to the
Company. The employees so assigned will be leased to the Company from Lear and
▇▇▇▇▇▇▇▇ under an agreement in substantially the forms attached as Exhibits C-1
and C-2, with the cost to be borne by the Company. Additional support,
supervisory and management employees will be leased to the Company by Lear and
▇▇▇▇▇▇▇▇ as agreed.
3.5 INTELLECTUAL PROPERTY CONTRIBUTION. The Members agree to license or
sub-license the intellectual property and know-how to be used by the Company and
included as part of the Lear Assets or the ▇▇▇▇▇▇▇▇ Assets (collectively, the
"Intellectual Property") on a royalty-free (except for any pass through of the
actual royalty payments owing by the Member to any unaffiliated third party) and
worldwide basis under a license or sub-license in substantially the forms
attached as Exhibits D-1 and D-2. The Company, upon the unanimous approval of
the Members, shall have the right to license or sub-license its affiliates to
use such Intellectual Property provided any license or sub-license to a foreign
affiliate of the Company shall bear a royalty at a fair market rate.
3.6 PURCHASE AND SUPPLY AGREEMENT. The Company will enter into a
Purchase and Supply Agreement with Lear and ▇▇▇▇▇▇▇▇ in the form attached hereto
as Exhibit E, which agreement describes the procedures and responsibilities
concerning the purchase and sale of Products.
ARTICLE IV.
DISTRIBUTIONS
4.1 AMOUNT AND TIME OF DISTRIBUTIONS.
(a) CASH FLOW. "Cash Flow" shall mean the sum of
Operating Cash Flow and Capital Proceeds.
(b) OPERATING CASH FLOW. "Operating Cash Flow" means the gross
cash proceeds from the Company's operations less the portion thereof used to pay
or establish reserves for Company expenses and fees, principal and interest
payments on Company debt (including First Tier Debt and Member Loans or other
loans), capital improvements, replacements and contingencies, all as determined
by the Board of Directors in its reasonable discretion. Operating Cash Flow
shall not be reduced by depreciation, amortization, or other similar non-cash
allowances, and shall be increased by any reductions in reserves which, when
previously established, reduced Operating Cash Flow.
(c) CAPITAL PROCEEDS. "Capital Proceeds" of the Company means
the net cash proceeds from all sales, dispositions and refinancings of the
Company's property, less any portion thereof used to make principal and interest
payments on Company debt or established reserves, as determined by the Board of
Directors in its reasonable discretion. Capital Proceeds shall be increased by
any reductions in reserves which, when previously established, reduced Capital
Proceeds. Distributions of Capital Proceeds shall be made from time to time in
the reasonable discretion of the Board of Directors. The Members may unanimously
agree to suspend such distributions at any time for such duration as the Members
may determine, which agreement shall be binding upon the Company.
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4.2 DISTRIBUTIONS OF OPERATING CASH FLOW.
(a) Distributions, if any, of Cash Flow shall be made from
time to time in the reasonable discretion of the Board of Directors. The Members
may unanimously agree to suspend such distributions at any time for such
duration as the Members may determine, which agreement shall be binding upon the
Company. Distributions, if any, shall be made to the Members pro-rata based on
their Participating Percentages, except as set forth in Section 4.2(d).
(b) The Company shall within ninety (90) days after the end of
each Fiscal Year, distribute to the Members pro rata based upon their
Participating Percentages an amount equal to thirty-five percent (35%) of the
Company's taxable income for the immediately preceding Fiscal Year in order for
the Members to satisfy their respective tax liability resulting from the taxable
income of the Company for the immediately preceding Fiscal Year.
(c) Except as provided in Section 4.2(b), the Company shall
not make any distributions of Cash Flow to the Members until all Member Loans
are repaid in full.
(d) Lear shall be entitled to a special preferential
distribution of $3 million on January 1, 2002, provided that the amount of the
distribution shall be reduced by the amount that the EBITDA for 1998 and 1999
generated by the operations contributed by Lear at the Initial Closing (as
defined in the Transfer Agreement) is less than that defined and shown on
Exhibit H. Such reduction shall be in addition to any payments required from
Lear to the Company for EBITDA shortfall provided in the Transfer Agreement.
4.3 WRONGFUL WITHDRAWAL. Except as provided in Section 4.4 hereof, no
Member may withdraw or resign from the Company. Upon the attempted withdrawal or
resignation of a Member in breach of this Agreement, such Member shall not be
entitled to receive the value of such Member's Interest. Rather, such Member
shall merely be entitled to continue to receive its share of distributions as
provided in Sections 4.1 and 4.2 hereof (reduced by any damages incurred by the
Company as a result of such attempted withdrawal or resignation) as if such
withdrawing or resigning Member was still a Member of the Company.
4.4 PERMITTED WITHDRAWAL.
(a) Right to Withdraw. Neither Member shall have the right to
withdraw from the Company until the third (3rd) anniversary of the date of this
Agreement, except pursuant to Subsection 4.5(c) hereof. After the third (3rd)
anniversary of the date of this Agreement, either Member may withdraw from the
Company at any time by providing written notice to the other Member of its
intent to do so at least ninety (90) days prior to the date of such proposed
withdrawal and by complying with the remainder of this Section 4.4.
(b) Withdrawal After Not Meeting Company Goals. If one Member
(the "Selling Member") sends a notice of withdrawal within sixty (60) days after
receiving the annual certified financial
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statements for the Company for the years ended December 31, 2000, or December
31, 2001, and the Company has not met the goals set forth on Schedule 4.5
attached hereto for the Company's previous fiscal year, then the other Member
shall have thirty (30) days in which to notify the Selling Member that it wishes
to purchase all but not less than all of the Selling Member's Interest for cash
at the Fair Market Value.
(i) If the non-selling Member notifies the Selling
Member that it does desire to purchase the Selling Member's
Interest, then the Members shall obtain the Fair Market Value
of such Interest. After the Fair Market Value has been
determined, the non-selling Member may ratify its decision to
purchase the Interest of the Selling Member (and the Selling
Member shall be obligated to sell its Interest at that price,
payable in cash) or specify that the Company will be
liquidated.
(ii) If the non-selling Member does not purchase the
Interest of the Selling Member, the Company will be liquidated
and dissolved. The Members will attempt to agree on how the
Company's obligations to its customers will be completed.
Failing agreement by the parties, the Company shall stay in
existence for the sole purpose of completing its obligations
to customers. As soon as existing obligations are satisfied,
the Company will be liquidated and dissolved.
(c) Withdrawal After Material Default. If prior to the receipt
of a written notice of withdrawal, there has been a Material Breach of this
Agreement or any of the Ancillary Agreements, then the non-breaching Member may,
at its option, by written notice to the breaching Member given within thirty
(30) days of the expiration of the applicable cure period(remedies pursuant to
this Section 4.5(c) are available only if the required notice is given within
thirty (30) days of the expiration of the applicable cure period):
(i) Liquidate the Company, in which case the
Company shall be liquidated as provided in subsection (b)(ii)
above;
(ii) State a proposed purchase price at which it is
willing to purchase the breaching Member's Interest, at which
time the breaching Member must either sell its Interest to the
other Member at that price or purchase the other Member's
Interest at one hundred thirty-five percent (135%) of that
price, in both cases payable in cash;
(iii) Request that the breaching Member state a
proposed price at which it is willing to purchase the interest
of the non-breaching Member. If the breaching Member provides
such a price within thirty (30) days after such notice, the
non-breaching Member may, at its option, either sell its
Interest at that price or purchase the breaching Member's
Interest at a price
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equal to eighty (80%) percent of the proposed purchase price
(and the breaching Member shall be obligated to purchase at
that price), in each case payable in cash. Alternatively, at
such price the non-breaching Member may request a
determination of the Fair Market Value of the breaching
Member's Interest and after such determination of the Fair
Market Value has been completed, elect to buy or sell as
specified in the immediately preceding sentence or elect
either alternative in subsection (iv) below; or
(iv) Request a determination of the Fair Market Value
of the breaching Member's Interest in which case the
non-breaching Member may, after the determination of the Fair
Market Value has been completed, purchase the breaching
Member's Interest for eighty (80%) percent of the Fair Market
Value payable in cash (and the breaching Member shall be
obligated to sell its Interest at that price) or may elect to
liquidate the Company in the manner provided in subsection
(b)(ii) above.
(d) Withdrawal Without Cause; Change of Control. If a Member
wishes to withdraw and neither of the conditions in subsections (b) or (c) above
pertains, then the withdrawing Member must provide a written notice of its
intent to withdraw to the other Member and specify a price upon which it is
willing to purchase the Interest of the other Member. In the event of a change
of Control of a Member where after such change of Control, Control is held,
directly or indirectly, by an entity described on Schedule 4.5(d) attached
hereto, such Member will be deemed to have given a withdrawal notice unless the
other Member consents in writing, and within thirty days after the change of
Control, such Member shall notify in writing the non-withdrawing Member of a
price at which it would be willing to sell its Interest. The other Member may
then, at its option, exercised by written notice given to the withdrawing Member
within thirty (30) days after receipt of notice from the withdrawing Member,
elect to:
(i) Liquidate the Company in which case the Company
shall be liquidated as provided subsection (b)(ii) above;
(ii) Purchase the Interest of the withdrawing Member
at eighty percent (80%) of the purchase price specified by the
withdrawing Member, payable in cash (and the withdrawing
Member is obligated to sell its Interest at that price);
(iii) Sell its Interest to the withdrawing Member at
the purchase price specified by the withdrawing Member (and
the withdrawing Member is obligated to purchase such Interest
at that price, payable in cash); or
(iv) Request a determination of the Fair Market Value
of the withdrawing Member's Interest in which case the
non-withdrawing Member may, after the determination of the
Fair Market Value has been completed, purchase the withdrawing
Member's Interest for eighty percent (80%) of the
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Fair Market Value price or the price specified in subsection
(d)(ii) above (and the withdrawing Member is obligated to sell
its Interest at that price) or may elect to liquidate the
Company in the manner provided in subparagraph (b)(ii) above.
(e) The closing of all transactions shall occur within sixty
(60) days after the price has been determined and the purchasing Member has been
determined. Each Member shall use its best efforts to promptly conclude the
transfer as provided herein, and any transfer of an Interest pursuant to this
Section 4.4 shall be made upon the express warranty that the Interest of the
selling Member is transferred free and clear of any Liens of whatsoever nature
(except as arise pursuant to this Agreement) and without prejudice to later
enforcement by the Company or the purchasing Member of any unsatisfied
obligation of the selling Member to the Company or the purchasing Member
existing as of the date of transfer or arising subsequent to such date from
facts or circumstances which existed on or before such date. In connection with
the closing of the transfer of a Member's Interest pursuant to this Section 4.4,
the Company and the purchasing Member shall cause all Member Loans of the
selling Member to be repaid in full (and all mortgages and security interests
securing such Member Loans, if any, shall be released and discharged of record
by the selling Member) and cause the selling Member and its Affiliates to be
released from all guarantees, indemnities and similar obligations, if any,
relating to obligations of the Company. All such releases shall be in form and
substance reasonably satisfactory to the selling Member and the Company.
4.5 RETURN OF CAPITAL. No Member shall be entitled to the return
of, or interest on, that Member's Capital Contributions except as provided
herein.
4.6 RESTRICTED DISTRIBUTIONS. Notwithstanding any provision to the
contrary contained in this Agreement, the Company shall not make any
distribution to any Member on account of its Interest if such distribution would
violate Section 307 of the Act.
ARTICLE V.
PROFITS AND LOSSES
5.1 PROFIT AND LOSS ALLOCATIONS.
(a) PROFIT ALLOCATION. Profits and any item thereof for any
Fiscal Year shall be allocated to the Members pro rata based on their
Participating Percentages.
(b) LOSS ALLOCATIONS. Losses and any item thereof for any
Fiscal Year shall be allocated to the Members pro rata based on their
Participating Percentages.
(c) ADJUSTMENT TO ALLOCATIONS. It is the intention of the
Members that Profit or Loss for each Fiscal Year will be allocated to the
Members by Sections 5.1(a) and (b) hereof in such a manner that would cause each
Member's Adjusted Capital Account Balance at the end of such Fiscal Year to
equal the amount that would be distributed to such Member in respect of its
Interest upon a hypothetical liquidation of the Company at the end of such
Fiscal Year. In determining the amounts distributable to the
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Members upon a hypothetical liquidation, it shall be presumed that (i) all of
the Company's assets would be sold at their Gross Asset Value, (ii) payments to
any holder on any nonrecourse debt would be limited to the Gross Asset Value of
the assets secured by repayment of such debt, and (iii) all distributions to the
Members would be made solely in accordance with Sections 4.2 and 4.3 hereof. If,
upon the advice of the accounting firm retained to prepare the income tax
returns of the Company, it is determined that the intentions set forth in this
Section 5.1(c) are not being met by the allocations made pursuant to Sections
5.1(a) and (b) hereof, the Board of Directors shall make such allocations of
Profit or Loss, or items of income, gain, loss or deduction, comprising such
Profit or Loss as are necessary to achieve the intentions set forth herein.
5.2 SPECIAL ALLOCATIONS.
(a) MINIMUM GAIN CHARGEBACK. Notwithstanding any other
provision of this Agreement, if there is a net decrease in Minimum Gain during
any Fiscal Year, each Member shall be specially allocated items of Company
income and gain for such year (and, if necessary, for subsequent years) in an
amount equal to the portion of that Member's share of the net decrease in
Minimum Gain during such year that is allocable to the disposition of any
Company assets subject to one or more nonrecourse liabilities of the Company.
The items to be so allocated shall be determined in accordance with Treasury
Regulation Section 1.704-2(j)(2)(i). Any Member's share of any net decrease in
Minimum Gain shall be determined in accordance with Treasury Regulation Section
1.704-2(g). This Section 5.2(a) is intended to comply with the minimum gain
chargeback requirement in the Treasury Regulations and shall be interpreted
consistently therewith.
(b) NONRECOURSE DEDUCTIONS. Nonrecourse deductions for any
Fiscal Year shall be allocated to the Members in accordance with their
Participating Percentages. For purposes of this Section 5.2(b), "nonrecourse
deductions" shall have the meaning set forth in Section 1.704-2(b)(1) of the
Treasury Regulations. The amount of nonrecourse deductions for a Fiscal Year
shall equal the excess, if any, of the net increase, if any, in the amount of
Minimum Gain during that Fiscal Year over the aggregate amount of any
distributions during that Fiscal Year of proceeds of a nonrecourse liability (as
that term is defined in Treasury Regulation Section 1.704-2(b)(3)) that are
allocable to an increase in Minimum Gain, determined according to the provisions
of Treasury Regulation Section 1.704-2(d).
(c) MEMBER MINIMUM GAIN CHARGEBACK NOTWITHSTANDING ANY OTHER
PROVISION OF THIS AGREEMENT EXCEPT SECTION 5.2(A). If there is a net decrease in
Member Minimum Gain attributable to Member Nonrecourse Debt during any Fiscal
Year, each Member who has a share of the Member Minimum Gain attributable to
such Member Nonrecourse Debt shall be specially allocated items of Company
income and gain for such year (and, if necessary, subsequent years) in an amount
equal to the portion of such Member's share of the net decrease of Member
Minimum Gain attributable to such Member Nonrecourse Debt that is allocable to
the disposition of any Company assets subject to such Member Nonrecourse Debt.
The items to be so allocated shall be determined in accordance with Treasury
Regulation Section 1.704-2(j)(2)(ii). Any Member's share of the net decrease in
Member Minimum Gain shall be determined in accordance with Treasury Regulation
Section 1.704-2(i)(5). This Section 5.2(c) is
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intended to comply with the minimum gain chargeback requirements in the Treasury
Regulations and shall be interpreted consistently therewith.
(d) MEMBER NONRECOURSE DEDUCTIONS. Any Member nonrecourse
deductions for any Fiscal Year shall be specially allocated to the Member who
bears economic risk of loss with respect to the Member Nonrecourse Debt to which
such Member nonrecourse deductions are attributable in accordance with Treasury
Regulation Section 1.704-2(i). For purposes of this Section 5.2(d), "Member
nonrecourse deductions" has the same meaning as "partner nonrecourse deduction"
in Treasury Regulation Section 1.704-2(i)(1). The amount of Member nonrecourse
deductions with respect to a Member Nonrecourse Debt for a Fiscal Year equals
the excess, if any, of the net increase, if any, in the amount of Member Minimum
Gain attributable to such Member Nonrecourse Debt during that Fiscal Year over
the aggregate amount of any distributions during that Fiscal Year to the Member
that bears the economic risk of loss for such Member Nonrecourse Debt to the
extent such distributions are from the proceeds of such Member Nonrecourse Debt
and are allocable to an increase in Member Minimum Gain attributable to such
Member Nonrecourse Debt, determined in accordance with Treasury Regulation
Section 1.704-2(i)(1).
(e) QUALIFIED INCOME OFFSET. In the event any Member
unexpectedly receives any adjustment, allocation or distribution described in
paragraphs (4), (5) or (6) of Treasury Regulation Section 1.704-(b)(2)(ii)(d), a
pro rata portion of each item of Company income and gain shall be specially
allocated to the Member in an amount and manner sufficient to eliminate, to the
extent required by the Treasury Regulations, the Adjusted Capital Account
Deficit of that Member as quickly as possible.
(f) GROSS INCOME ALLOCATION. In the event that any Member has
a deficit Capital Account at the end of any Fiscal Year that is in excess of the
sum of (i) the amount that such Member is obligated to restore and (ii) the
amount that the Member is deemed to be obligated to restore pursuant to the
penultimate sentence of Treasury Regulation Sections 1.704-2(g)(1) and (i)(5),
that Member shall be specially allocated items of Company income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 5.2(f) shall be made only if and to the extent that
such Member would have a deficit Capital Account in excess of such sum after all
other allocations provided for in this Article V have been made as if Sections
5.2(e) and 5.2(f) were not in the Agreement.
(g) ALLOCATION IN THE EVENT OF SECTION 754 ELECTION. To the
extent an adjustment to the adjusted tax basis of any Company asset pursuant to
Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining
Capital Accounts, the amount of that adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases the basis of the asset), then that gain or
loss shall be specially allocated to the Members in the manner consistent with
the manner in which their Capital Accounts are required to be adjusted pursuant
to that Treasury Regulation.
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5.3 CURATIVE ALLOCATIONS.
(a) REGULATORY ALLOCATIONS. The allocations set forth in
Section 5.2 hereof ("Regulatory Allocations") are intended to comply with
certain requirements of Treasury Regulations Section 1.704-1(b) and 1.704-2. The
Regulatory Allocations may not be consistent with the manner in which the
Members intend to divide Partnership distributions. Accordingly, the Board of
Directors is authorized to divide allocations of Profits, Losses and other items
among the Members so as to prevent the Regulatory Allocations from distorting
the manner in which Company distributions are required to be divided among the
Members pursuant to this Agreement. In general, the Members anticipate that this
will be accomplished by specially allocating Profits and Losses and items of
income, gain, loss and deduction among the Members so that the net amount of the
Regulatory Allocations and such special allocations to each Member is zero. The
Board of Directors will have complete discretion to accomplish this result in
any reasonable manner.
(b) RECHARACTERIZATION OF FEES OR DISTRIBUTIONS. In the event
that a guaranteed payment to a Member is ultimately recharacterized as a
distribution for federal income tax purposes (as the result of an audit of the
Company's return or otherwise) and if such Recharacterization has the effect of
disallowing a deduction or reducing the adjusted basis of any asset of the
Company, then an amount of Company gross income equal to such disallowance or
reduction shall be allocated to the recipient of such payment. In the event that
a distribution to a Member is ultimately recharacterized as a guaranteed payment
for federal income tax purposes (as a result of an audit of the Company's return
or otherwise), and if any such recharacterization gives rise to a deduction,
such deduction shall be allocated to the recipient of the distribution.
5.4 SPECIAL TAX ALLOCATIONS.
(a) CONTRIBUTED PROPERTY. In accordance with Code Section
704(c) and the Treasury Regulations thereunder, including Treasury Regulation
Section 1.704-1(b)(2)(iv)(d)(3), income, gain, loss and deduction with respect
to any property contributed to the Company shall, solely for tax purposes, be
allocated among the Members in any permissible manner so that a contributing
Member, to the maximum extent possible, recognizes the variation, if any,
between the Adjusted Basis and the initial Gross Asset Value of the property
contributed by that Member. The Members shall agree on which acceptable
accounting method is used.
(b) ADJUSTED PROPERTY. In the event the Gross Asset Value of
any Company asset is adjusted pursuant to subsection (b) of the definition of
Gross Asset Value, subsequent allocations of income, gain, loss and deduction
with respect to that asset shall take into account any variation between the
Gross Asset Value of that asset before such adjustment and its Gross Asset Value
after such adjustment in the same manner as the variation between Adjusted Basis
and Gross Asset Value is taken into account under Section 5.4(a) hereof with
respect to contributed property, and such variation shall be allocated in
accordance with the principles of Treasury Regulation Section
1.704-1(b)(2)(iv)(f).
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(c) RECAPTURE OF DEDUCTIONS AND CREDITS. If any "recapture" of
deductions or credits previously claimed by the Company is required under the
Code upon the sale or other taxable disposition of any Company property, those
recaptured deductions or credits shall, to the extent possible, be allocated to
the Members pro rata in the same manner that the deductions and credits giving
rise to the recapture items were originally allocated using the "first-in,
first-out" method of accounting; provided, however, that this Section 5.4(c)
shall only affect the characterization of income allocated among the Members for
tax purposes.
(d) EFFECT OF SECTION 5.4 ALLOCATIONS. Allocations pursuant to
this Section 5.4 are solely for purposes of federal, state and local taxes and
shall not affect or in any way be taken into account in computing any Member's
Capital Account or share of Profits, Losses, other items or distributions
pursuant to any provision of this Agreement. Except as provided in this Section
5.4, the income, gains, losses and credits of the Company for each taxable
period shall, for federal, state and local income tax purposes, be allocated
among the Members in the same manner and proportion that such items have been
allocated to the Members' Capital Accounts.
(e) DISCRETION OF THE BOARD OF DIRECTORS. Any elections or
other decisions relating to the allocations under this Section 5.4 shall be made
by the Board of Directors in any manner that reasonably reflects the purpose and
intention of this Agreement.
5.5 KNOWLEDGE OF TAX CONSEQUENCES. The Members are aware of the income
tax consequences of the allocations made by this Article V and the economic
impact of the allocations on the amounts receivable by them under this
Agreement. The Members hereby agree to be bound by the provisions of this
Article V in reporting their share of Company income and loss for income tax
purposes.
ARTICLE VI.
MANAGEMENT OF THE COMPANY
6.1 BOARD OF DIRECTORS. The business and affairs of the Company shall
be managed under the direction and control of a Board of Directors (the "Board
of Directors"), which shall consist of six (6) individuals; three (3) of the
Directors shall be nominated and appointed by ▇▇▇▇ and three (3) of the
Directors shall be nominated and appointed by ▇▇▇▇▇▇▇▇. The nominees and
appointees of each Member shall be officers or employees of such Members. The
Directors of the Company initially shall be the following persons:
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▇▇▇▇ Nominees ▇▇▇▇▇▇▇▇ Nominees
------------- -----------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(a) ELECTION. Directors shall be elected at the annual meeting
of the Members and each Director shall be elected to hold office for a term of
one (1) year or until his successor shall be elected and qualified.
(b) VACANCIES. Vacancies in the Board of Directors arising
from any cause shall be filled by the Member who nominated and appointed the
Director to the seat that has become vacant.
(c) RESIGNATION AND REMOVAL. A Director may resign by written
notice to the Company. The resignation shall be effective upon its receipt by
the Company or at a subsequent time as set forth in the notice of resignation. A
Director may be removed, with or without cause, at any time, by the Member which
nominated and appointed him.
(d) COMMITTEES. The Board of Directors may, upon unanimous
consent of all of the Directors, establish an Executive Committee and such other
committees as they may determine (collectively, "Committees") and may authorize
such Committees to exercise any and all of the powers of the Board, to the
extent permitted by law, and may designate the members of any such Committees.
Each Committee so established shall have at least one (1) Director nominated and
appointed by ▇▇▇▇▇▇▇▇ and one (1) Director nominated and appointed by ▇▇▇▇.
(e) MEETINGS. An Organizational Meeting of the Board of
Directors shall be held immediately following the Annual Meeting of Members. The
Annual Members' Meeting shall be held within six months after the end of each
Fiscal Year, as determined by the Chairman of the Board in each Fiscal Year. The
Chairman of the Board shall also convene additional meetings of the Board of
Directors upon the request of any two or more Directors. In addition to the
meetings of the Board of Directors following the Annual Meeting of Members, the
Board of Directors shall meet at least once each fiscal quarter at a date and
time to be determined by the Chairman of the Board. Due notice of all meetings
of the Board of Directors, as provided in this Agreement and as required by
applicable law, shall be given. All meetings of the Board of Directors shall be
presided over by the Chairman of the Board or any representative nominated by
the Chairman of the Board. Meetings may be held within or outside the State of
Michigan. In the event that any member of the Board of Directors cannot attend a
meeting of the Board of Directors, he may appoint a proxy to represent and vote
for him. A Power of Attorney or an Appointment Letter by which the proxy is
appointed shall be presented at or before the commencement of the meeting.
(f) NOTICE. Written notice of meetings of the Board of
Directors or Committees shall be provided to each Director or Committee member,
as applicable, sent to the Director's or Committee
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member's last known residence or place of business, not less than three (3)
business days prior to the date of the meeting. Notice of the meeting shall
specify the time and place of holding of the meeting and any and all business to
be transacted at such meeting. Notice may be waived by any writing either before
or after such meeting. Attendance of a Director or Committee member at a meeting
constitutes a waiver of notice of the meeting except where a Director or
Committee member attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
(g) QUORUM AND VOTING. A quorum for the transaction of
business shall consist of two (2) Directors or Committee members being present
in person or by proxy, provided one (1) of the Directors or Committee members
present has been appointed by ▇▇▇▇▇▇▇▇ and one (1) of the Directors or Committee
members present has been appointed by ▇▇▇▇. The vote of the majority of the
Directors or Committee members present at a meeting at which a quorum is present
constitutes the action of the Board of Directors or the Committee unless the
vote of a larger number is required by law or this Agreement; provided, however,
that no decision of the Board of Directors or any Committee thereof will be
effective unless concurred in by at least one Director appointed by each Member.
In the event a quorum is not present, the Chairman of the Board or the Chairman
of the Committee shall reschedule the meeting and provide due notice as provided
herein.
(h) ADJOURNMENT. If at any meeting of the Board of Directors,
the Directors are unable to reach agreement, any Director present may require
that the matter be adjourned for consideration and a decision at the next
meeting of the Board of Directors in order: (i) to provide an opportunity for
consultation with one or both Members, or (ii) to provide an opportunity for a
more complete attendance when the matter is considered.
(i) ACTION BY UNANIMOUS WRITTEN CONSENT. Action required or
permitted to be taken pursuant to authorization voted at a meeting of the Board
of Directors or a Committee may be taken without a meeting, without prior notice
and without a vote if before or after the action all members of the Board of
Directors or the Committee consent thereto in writing. Such consent shall be
filed with the minutes of the proceedings of the Board of Directors or the
Committee and shall have the same effect as a vote of the Board of Directors or
the Committee for all purposes.
(j) PARTICIPATION BY COMMUNICATION EQUIPMENT. A member of the
Board of Directors or a Committee may participate in a meeting of the Board of
Directors or Committee by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Such participation constitutes presence in person
at the meeting.
6.2 RIGHTS AND POWERS OF THE BOARD OF DIRECTORS. The Board of Directors
shall have full, exclusive and complete power to manage and control the business
and affairs of the Company. Decisions of the Board of Directors within the scope
of its authority shall be binding upon the Company and each Member.
Notwithstanding the foregoing, the rights and powers of the Board of Directors
shall be limited as set forth in Section 6.3 hereof.
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6.3 ACTIONS REQUIRING UNANIMOUS MEMBER APPROVAL. Notwithstanding
anything to the contrary contained in this Agreement, neither the Board of
Directors nor the Company shall have the authority, right, power or privilege to
do or undertake any of the following acts without the prior unanimous approval
of the Members:
(a) Amendment of the Company's Articles of Organization or
this Operating Agreement;
(b) Admission of a Person as a new Member; declaration or
payment of any distribution by the Company (whether in cash or by issuance of
membership Interests), or the direct or indirect redemption, retirement,
purchase or other acquisition of any membership Interest in the Company; or
authorization of a call for additional capital contributions;
(c) Sell, transfer, exchange, lease, assign, mortgage, pledge,
hypothecate or otherwise dispose of assets (tangible or intangible) of the
Company outside of the ordinary course of business of the Company.
(d) Enter into any agreement, contract, transaction or
obligation of the Company that involves consideration exceeding $2.5 million in
any one transaction or a series of related transactions (other than purchases
and sales of inventory items in the ordinary course of business).
(e) Merge or consolidate the Company with or into another
Person or, except as provided in Section 4.5 hereof, dissolve the Company;
(f) Appoint or remove, other than for cause, the President or
chief financial officer of the Company;
(g) Enter into (other than Purchase Orders issued to the
Company on the terms set forth in the Purchase and Supply Agreement), amend or
waive any rights under any contracts or other agreements with a Member, or any
Affiliate of a Member which involve aggregate payments or other consideration
exceeding $50,000 in any one transaction or series of related transactions;
(h) Approval of the annual budget of the Company and each
annual and any long-range or other business plan of the Company; any material
change to, or deviation from, the most recently approved annual budget and any
expenditures not contemplated by such budget aggregating more than $1 million or
which would require additional funding from the Members by way of capital
contributions or Member Loans, and approval of any expenditure aggregating more
than $1 million even if included in the annual budget of the Company;
(i) Appointment or removal of the independent accountants of
the Company;
(j) Set compensation for members of the Board of Directors of
the Company;
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(k) Except as otherwise permitted pursuant to Section 4.5
hereof, take any action which would cause the dissolution of the Company or make
it impossible for the Company to continue in the ordinary course of business; or
(l) Take any other action which this Agreement specifically
requires to be unanimously agreed upon by the Members.
6.4 FILING OF DOCUMENTS. The Board of Directors shall file or cause to
be filed all certificates or documents as may be determined by the Board of
Directors to be necessary or appropriate for the formation, continuation,
qualification and operation of a limited liability company in the State of
Michigan and any other state or jurisdiction in which the Company may elect to
do business. To the extent that the Board of Directors determines the action to
be necessary or appropriate, it shall do all things to maintain the Company as a
limited liability company under the laws of the State of Michigan and any other
state or jurisdiction in which the Company may elect to do business.
6.5 LIABILITY OF BOARD OF DIRECTORS. The Board of Directors shall not
be liable to the Company or the Members for errors in judgment or for acts or
omissions committed in good faith, except for acts or omissions which are
adjudged by a court of competent jurisdiction to be grossly negligent,
fraudulent, willful and wanton misconduct, or material breach of the fiduciary
duty of loyalty to the Company.
6.6 INDEMNIFICATION OF THE BOARD OF DIRECTORS AND OFFICERS. The
Company, its receiver or trustee shall, to the maximum extent allowed by law,
indemnify, defend and hold harmless the members of the Board of Directors, the
Members who appointed or nominated them and their respective Affiliates, and the
officers of the Company (each, an "Indemnitee"), to the extent of the Company's
assets, from and against any liability, damage, cost, expense, loss, claim or
judgment incurred by the Indemnitee arising out of any claim based upon acts
performed or omitted to be performed by the Indemnitee in connection with the
business of the Company, including without limitation, attorneys' fees and costs
incurred by the Indemnitee in settlement or defense of such claims.
Notwithstanding the foregoing, no Indemnitee shall be so indemnified, defended
or held harmless for claims based upon his or its acts or omissions in breach of
this Agreement, or which constitute fraud, gross negligence, willful misconduct,
or a material breach of the fiduciary duty of loyalty to the Company. Except as
otherwise expressly prohibited by this Agreement, amounts incurred by an
Indemnitee in connection with any action or suit arising out of or in connection
with Company affairs shall be reimbursed by the Company.
6.7 TRANSACTIONS WITH MEMBERS OR AFFILIATES. Except as otherwise
provided in Section 6.3(g) hereof, the Members and any of their respective
Affiliates shall have the right to contract or otherwise deal with the Company
in connection with the sale of goods or services by the Members or their
Affiliates to the Company in the following circumstances: (a) with the consent
of the Members or (b) if (i) the compensation paid or promised for such goods or
services is reasonable and is paid only for goods and services actually
furnished to the Company, (ii) the goods or services to be furnished shall be
reasonable for and necessary to the Company, and (iii) the terms for the
furnishing of such goods or services shall be at least as favorable to the
Company as would be attainable in an arms-length transaction. Any payment made
to a Member or any Affiliate thereof for such goods or services shall be
disclosed to all Members
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at the time of payment. The burden of proving reasonableness with respect to
transactions described in Section 6.7(b) above shall be upon the Member
transacting business with the Company.
6.8 OFFICERS.
(a) OFFICES. The officers of the Company shall consist of a
Chairman, a President and CEO, a Secretary/Treasurer and CFO, a Vice President
and Chief Technical Officer, a Vice President Marketing and Business
Development, and a Vice President European Operations. Officers other than
President, Secretary, and Treasurer may be left vacant in the discretion of the
Board of Directors. The Directors shall have the sole power to remove any
officer with or without cause and shall have the right to fill any vacancy in
such position howsoever created, provided that no office restricted to a person
nominated by one of the Members may be vacated or filled without the affirmative
action of a Director nominated by such Member.
(b) CHAIRMAN. The Chairman shall preside at all meetings of
the Board of Directors and Members. At any time the President is an immediate
past former employee of one Member or its affiliates, the Chairman shall be
designated by the other Member. If the President is not an immediate past former
employee of either Member or its affiliates, the office of the Chairman shall
rotate on an annual basis, alternating between a Director nominated by ▇▇▇▇ and
a Director nominated by ▇▇▇▇▇▇▇▇. The first Chairman shall be nominated by
▇▇▇▇▇▇▇▇.
(c) PRESIDENT. The President shall be the Chief Executive
Officer of the Company, shall be responsible for the general management of the
business of the Company, shall be responsible for the implementation of all
orders and resolutions of the Board of Directors, and shall have the power and
responsibility for the performance of other duties as the Board of Directors may
from time to time prescribe. Except as required by law or this Agreement,
subject to direction or limitation by the Board of Directors, the President
shall have full responsibility and authority to act for and on behalf of the
Company in all of its matters. In the absence or disability of the Chairman, the
President shall perform and exercise the powers of the Chairman. The first
President shall be nominated by ▇▇▇▇.
(d) SECRETARY/TREASURER AND CHIEF FINANCIAL OFFICER. The
Secretary/Treasurer and Chief Financial Officer, subject to the control of the
Board of Directors and the Chairman, shall, in general, perform all the duties
of Secretary and Treasurer, including those relating to the minutes of meetings
of the Board of Directors and Members, notice of such meetings, Member lists,
attestation of contracts, documents and instruments to which the Company is a
Member, if attestation is required, the custody of all funds and securities of
the Company, and shall perform all acts incident to the office with respect to
the Company's funds, securities, and financial instruments and documents, at all
times subject to direction or limitation by the Board of Directors and
President.
(e) VICE PRESIDENT AND CHIEF TECHNICAL OFFICER. The Vice
President and Chief Technical Officer shall be responsible for the research,
design, and engineering activities of the Company. Except as required by law or
this Agreement, subject to direction or limitation by the Board of Directors
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and the Chairman or President, the Vice President and Chief Technical Officer
shall have full responsibility and authority to act for and on behalf of the
Company in all such matters.
(f) OTHER VICE PRESIDENTS. Other Vice Presidents provided for
in Section 6.8 (a) shall be responsible for those duties decided upon by the
Board of Directors at the time the position is so appointed, subject to
direction or limitation by the Board of Directors and President.
(g) OTHER OFFICERS. Other officers may be appointed by the
Board of Directors only with the unanimous consent of the Members.
(h) FINANCIAL AUTHORITY OF OFFICERS. The President shall have
the right to make capital expenditures for budgeted and non-budgeted items in
such amounts as are established by resolution of the Board of Directors from
time to time.
6.9 COMPENSATION OF DIRECTORS. No Director of the Company who at the
time is also employed or retained by, or is an officer, director, partner,
member or principal of a Member or its Affiliate, shall receive any compensation
for his or her services to the Company in such capacity, in each case without
the unanimous approval of all Members.
ARTICLE VII.
THE MEMBERS
7.1 MEETINGS OF THE MEMBERS. The Board of Directors shall decide the
time, place and agenda for all annual meetings of the Members, subject to the
provisions of this Agreement and applicable law; provided that at least 10 days'
prior written notice shall be given to all Members with respect to any meeting
of the Members, including an annual meeting of the Members. An annual meeting of
the Members shall be held every year, no later than six (6) months after the end
of the Fiscal Year, at a place to be designated by the Board of Directors within
the State of Michigan unless otherwise unanimously agreed upon by the Board of
Directors. Special meetings of Members of the Company may be held at any time in
compliance with resolutions of the Board of Directors, this Agreement or
applicable law. The Chairman of the Board of Directors shall call a special
meeting of the Members to be held within thirty (30) days of the request
therefor made by any Member. A waiver of any required notice shall be equivalent
to the giving of such notice if such waiver is in writing and signed by the
Person entitled to such notice, whether before, at or after the time stated
therein. The Members may make use of telephones and other electronic devices to
hold meetings, provided that each Member is able to simultaneously participate
with the other Members with respect to all discussions and votes of the Members.
The Members may act without a meeting if the action taken is reduced to writing
(either prior to or thereafter) and consented to in writing by all of the
Members. Written minutes shall be taken at each meeting of the Members; however,
any action taken or matter agreed upon by the Members at the meeting shall be
deemed final, whether or not written minutes are prepared or finalized.
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7.2 VOTING OF THE MEMBERS. Unless the specific language herein requires
unanimous consent, all actions, approvals, elections and consents required in
this Agreement to be made by the Members shall be effective if approved by a
majority-in-interest of the Members. All meetings of Members shall be presided
over by the Chairman of the Board of Directors. In the event the Chairman of the
Board is unable to or prevented from attending the meeting, the President shall
preside over the meeting. For determining the voting interest of a Member,
reference shall be made to its Participating Percentage.
7.3 OTHER BUSINESS INTERESTS OF THE MEMBERS. This Agreement shall not
be construed to grant any right, privilege or option to any Member to
participate in any manner in any other business, corporation, partnership or
investment in which the other Member hereto may participate, including those
which may be the same as or similar to the Company's business and in direct
competition therewith. Each of the Members expressly waives the doctrine of
corporate opportunity (or any analogous doctrines), subject to the terms of the
Noncompetition Agreements, and consents subject to the terms of the
Noncompetition Agreements, to the participation by the other Member or its
Affiliates and any officer, director, stockholder, associate, member, partner,
beneficiary or employee thereof in any other such business, corporation,
partnership or investment.
7.4 RIGHTS AND OBLIGATIONS OF MEMBERS.
(a) FIDUCIARY DUTY. Subject to Section 7.3, each Member shall
have a fiduciary duty to the other Member to take into account the best
interests of the Company when exercising its membership rights under this
Agreement or when acting through a director; provided, however, that each Member
or any director nominated or appointed by a Member shall be entitled to vote
consistent with the Member's own interests when the Member's own interest is
not, or may not be, consistent with the interest of the Company or the Members
as a whole. To the extent that, at law or in equity, a director, a Member or its
board of directors, or Affiliate thereof, has duties (including fiduciary
duties) and liabilities relating thereto to the Company or to the Members, such
director, Member, its directors or Affiliates, acting in connection with the
Company's business or affairs shall not be liable to the Company or to any
Member for its good-faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they modify the duties and
liabilities of a Member, the Board of Directors or an Affiliate otherwise
existing at law or in equity, are agreed by the Members to replace such other
duties and liabilities of such Persons.
(b) LIMITATION OF LIABILITY. Each Member's and the Board of
Directors' liability for the debts and obligations of the Company shall be
limited as set forth in the Act and other applicable law.
(c) COMPANY RECORDS. For any purpose relating to its Interest,
upon written request, the designated representatives of each Member shall have
the right, during ordinary business hours, to inspect and copy the Company
records required to be maintained by the Board of Directors at the Company's
place of business as set forth in Section 8.1 hereof. The designated
representative of each Member shall have the right at any reasonable time to
inspect and copy records of the Company including, but not limited to, all
checks, bills, invoices, vouchers, statements, cash receipts, correspondence and
other records in connection with the management of the Company.
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7.5 DEFAULTING MEMBER.
(a) EVENTS OF DEFAULT. A Member's violation or breach of any
of the terms or provisions of this Agreement or any Ancillary Agreement shall
constitute an event of default hereunder unless the Member so defaulting (the
"Defaulting Member") shall cure the same within 30 days (or, with respect to the
breach of an Ancillary Agreement, within such cure period, if any, as may be
provided therein) after receiving written notice of such violation or breach
from the other Member; provided, further, that if a default under this Agreement
is a nonmonetary default and cannot reasonably and with due diligence and in
good faith be cured within said 30-day period, and if the Defaulting Member
immediately commences and proceeds to complete the cure of such default with due
diligence and in good faith, the 30-day period with respect to such default
under this Agreement shall be extended to include such additional period of time
as may be reasonably necessary to cure such default.
(b) REMEDIES ON DEFAULT. Subject to the terms of this
Agreement, upon the occurrence of a default by a Member, the other Member shall
have all rights and remedies available at law and in equity and may institute
arbitration and/or legal proceedings in accordance with Section 13.17 hereof
against the Defaulting Member with respect to any damages or losses incurred by
the non-Defaulting Member. The non-defaulting Member shall also have rights set
forth in Section 4.5 (c) hereof if the default is a Material Breach.
ARTICLE VIII.
BOOKS, RECORDS, REPORTS AND ACCOUNTING
8.1 RECORDS. The Board of Directors shall keep or cause to be kept at
the place of business of the Company the following: (a) true and full
information regarding the status of the business and financial condition of the
Company; (b) promptly after becoming available, a copy of the Company's federal,
state and local income tax returns for each year; (c) a current list of the name
and last known business, residence or mailing address of each Member and member
of the Board of Directors; (d) a copy of this Agreement and the Articles of
Organization and all amendments thereto, together with executed copies of any
written powers of attorney pursuant to which this Agreement and the Articles of
Organization and all amendments thereto have been executed; (e) true and full
information regarding the amount of cash and description and statement of the
agreed value of any other property or services contributed by each Member and
which each Member has agreed to contribute in the future, and the date on which
each has become a Member; and (f) other information regarding the affairs of the
Company as is just and reasonable. Any such records maintained by the Company
may be kept on or be in the form of any information storage device, provided
that the records so kept are convertible into legible written form within a
reasonable period of time.
8.2 FISCAL YEAR AND ACCOUNTING. The Fiscal Year of the Company shall be
the calendar year or such other accounting period as shall be required under the
Code. All amounts computed for the purposes of this Agreement and all applicable
questions concerning the economic rights of Members shall be determined using
the accrual method of accounting in accordance with U.S. generally accepted
accounting principles consistently applied ("GAAP") and shall accurately reflect
the financial position and
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results of operations of the Company. All decisions as to other accounting
matters, except as specifically provided to the contrary herein, shall be made
by the Board of Directors. The books and records of the Company shall be audited
at the end of each Fiscal Year by an independent certified public accountant
designated by ▇▇▇▇ and reasonably acceptable to ▇▇▇▇▇▇▇▇. In addition to any
other rights of the Members to access to information of the Company, the Members
shall have the right, at their expense, to cause their auditors or other
representatives at any time during normal business hours to examine, review
and/or audit all of the books and records of the Company and, in connection
therewith, the Member and its representatives shall have access to the Company's
accountants and auditors and their work papers.
8.3 ANNUAL REPORTS. As soon as practicable, but in no event later than
four months after the close of each Fiscal Year, the Board of Directors shall
cause to be furnished to the Members as of the last day of that Fiscal Year
reports containing such financial statements of the Company for the Fiscal Year,
presented in accordance with GAAP, including a balance sheet, a statement of
income, a statement of Members' equity and a statement of cash flows, which
statements shall have been audited by the independent certified public
accountant retained by the Company.
8.4 INTERIM REPORTS. As soon as practicable, but in no event later than
the first business day following the 15th day of the month after the close of
each calendar quarter, the Board of Directors shall cause to be furnished to the
Members unaudited financial statements of the Company for that calendar quarter,
including a balance sheet and statement of income. If requested by a Member at
least 90 days prior to any June 30, as soon as practicable but in no event later
than three (3)] weeks after the close of the calendar quarter ending on or about
June 30, the Board of Directors shall cause to be furnished to the Members as of
the last day of the first half of the Fiscal Year of the Company reports
containing such financial statements of the Company for such half Fiscal Year,
presented in accordance with GAAP, including a balance sheet, statement of
income, statement of Members' equity and a statement of cash flows, which
statements shall have been audited by the independent certified public
accountant retained by the Company.
8.5 PREPARATION OF TAX RETURNS. The Board of Directors shall arrange
for the preparation and timely filing of all returns of the Company for federal,
state and local income tax purposes and shall cause to be furnished to the
Members the tax information reasonably required for federal, state and local
income tax reporting purposes. The classification, realization and recognition
of income, gain, losses and deductions and other items, for federal income tax
purposes, shall be on that method of accounting as the Board of Directors shall
determine, in its reasonable discretion, to be in the best interests of the
Members.
8.6 TAX ELECTIONS. Unless otherwise directed by both Members, the Board
of Directors may determine whether to make any available elections pursuant to
the Code in its reasonable discretion.
8.7 TAX MATTERS MEMBER. ▇▇▇▇ is hereby designated as the tax matters
Member. All tax elections shall be approved by both Members. All tax returns
prepared by the tax matters Member shall be provided to the other Member for
review at least ten (10) days prior to the filing date.
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8.8 BUDGET. At the commencement of each Fiscal Year, the Board of
Directors shall submit a budget for approval at the annual meeting of Members
for the coming Fiscal Year projecting profit and loss, cash flow and capital
expenditures.
ARTICLE IX.
TRANSFERS
9.1 TRANSFERS.
(a) RESTRICTION. Except as provided in Section 4.5 hereof, or
this Article IX, a Member shall not make any Transfer of all or any portion of
its Interest including, without limitation, a Transfer of a right to Profits,
Losses or distributions, without the unanimous consent of all Members which
consent may be withheld or granted in each Member's sole discretion.
(b) REQUIREMENTS FOR TRANSFEREE BECOMING A SUBSTITUTED MEMBER.
No Person shall become a substituted Member in the Company until and unless the
following conditions precedent are satisfied: (i) the Transferee shall have
assumed, in a form acceptable to the other Member, any and all of the
obligations under this Agreement with respect to the Interest to which the
Transfer relates; (ii) all reasonable expenses required in connection with the
Transfer shall have been paid by or for the account of the Transferee; and (iii)
all agreements, articles, minutes, written consents and all other necessary
documents and instruments shall have been executed and filed and all other acts
shall have been performed which the Board of Directors deems necessary to make
the Transferee a substitute Member of the Company and to preserve the status of
the company as a limited liability company;
(c) PERMITTED TRANSFEREES. Notwithstanding anything in this
Agreement to the contrary, each Member may at any time, without the consent of
the other Member, Transfer all or any portion of its Interest in the Company to
any Affiliate (a "Permitted Transferee"), subject to the provisions of Section
9.1(b)(i), (ii) and (iii), and provided (i)such Permitted Transferee is not
otherwise a Competing Enterprise (as defined in the Noncompetition and
Nonsolicitation Agreements described in Section 11.1 hereof) or an Affiliate of
a Competing Enterprise, and (ii) such Transfer would not cause a deemed
termination of the Company for tax purposes. In addition, no Transfer by a
Member or any of its Permitted Transferees under this Section shall release such
Member from any obligations or liabilities under this Agreement. Any Member or
Permitted Transferee intending to Transfer any membership Interest of the
Company pursuant to this Section shall notify the other Members of any intended
Transfer not less than thirty (30) days prior to such Transfer, giving the name
and address of the intended Permitted Transferee and the Permitted Transferee's
status as set forth in this Section and shall provide such additional
information as the other Member may reasonably request.
9.2 RIGHT OF FIRST OFFER; RIGHT OF FIRST REFUSAL. Any Member may sell
all but not less than all of its Interest, but only on the following terms and
conditions.
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(a) By complying with the remaining terms of this Section 9.2,
a Member ("Selling Party") may sell all but not less than all of its Interest to
a Bona Fide Third Party which agrees to be bound by all of the terms of this
Agreement and the Ancillary Agreements, including Noncompetition and Non-
Solicitation Agreement on the same terms as those applicable to the Selling
Party. With regard to the Purchase and Supply Agreement of the Selling Party:
(i) If the buyer is not the other Member, the
Purchase and Supply Agreement will be assigned to and assumed
by the buyer if the buyer is capable of performing in the
reasonable opinion of the other Member, and otherwise it shall
be assigned to the other Member.
(ii) The Selling Party will transfer to the same
party specified in subsection (i) above and the assignee will
assume all of the Selling Party's contracts with OEMs for the
purchase of Products under the Purchase and Supply Agreement.
If any OEM will not permit such transfer, the Selling Party
will continue to fulfill its obligations to the OEM under its
contracts and to the Company under the Purchase and Supply
Agreement with respect thereto.
.
(b) If the Selling Party has not received an unsolicited offer
from a Bona Fide Third Party (i) the Selling Party must notify the non-Selling
Party of the desire of the Selling Party to sell its Interest. The notice shall
specify the price and other terms on which the Selling Party is willing to sell
its Interest; (ii) the non-Selling Party shall then have thirty days in which to
offer to purchase from the Selling Party all, but not less than all, of the
Interest offered on the terms and conditions set forth in the notice. If the
non-Selling Party determines not to purchase the Interest from the Selling Party
on the terms and conditions set forth in the notice, or if the non-Selling Party
fails to notify the Selling Party in writing of its intentions within thirty
days of the notice from the Selling Party, then subject to the other terms and
conditions of this Agreement, the Selling Party may sell all, but not less than
all, of its Interest to any Bona Fide Third Party for a price and on the terms
and conditions no less favorable to the Selling Party than set forth in the
notice during the following , a period which is one hundred eighty (180) days if
no filing is required under the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust Act ("HSR") or if a
filing is required under HSR the shorter of 240 days or 30 days after expiration
or early termination of the HSR pre-merger notification period, provided the
Selling Party sends a written notice to the non-Selling Party stating the name
of the purchaser and the price and terms of the transaction at least thirty (30)
days prior to closing and provided further that the Selling Member and purchaser
comply with the requirements of Section 9.1(b) on or prior to such closing..
(c) If the Selling Party receives an unsolicited offer for the
purchase of all of its Interest from a Bona Fide Third Party and decides to
entertain the offer, then:
(i) the Selling Party must notify the non-Selling
Party of the unsolicited offer received by the Selling Party
from the Bona Fide Third Party for the purchase of the Selling
Party's Interest. The notice shall state
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the terms and conditions of the transaction and the identity
of the Bona Fide Third Party;
(ii) the non-Selling Party shall have thirty (30)
days in which to offer to purchase from the Selling Party all
but not less than all of its Interest on the terms and
conditions proposed by the Bona Fide Third Party. If the
non-Selling Party decides not to purchase the Selling Party's
Interest on the terms and conditions set forth in the notice,
or if the non-Selling Party fails to notify the Selling Party
of its intentions within thirty (30) days of the notice from
the Selling Party, then the Selling Party may sell all, but
not less than all, of its Interest in the Company to the Bona
Fide Third Party on the terms and conditions set forth in the
notice within a period which is one hundred eighty (180) days
if no filing is required under the HSR or if a filing is
required under HSR the shorter of 240 days or 30 days after
the expiration or early termination of the HSR pre-merger
notification, provided the Selling Party and the Bona Fide
Third Party comply with the requirements of Section 9.1(b) on
or prior to the closing of such sale.
9.3 CLOSING. The closing of any purchase by one Member of the other
Member's Interest under Section 9.2 shall occur within sixty (60) days after
written notice to the Selling Party of the other Member's election to purchase
if no filing is required under HSR, or if a filing is required under HSR, the
shorter of 240 days or 30 days after the expiration or early termination of the
HSR pre-merger notification period.
9.4 TRANSFERS VOID. If a Member purports to withdraw or Transfer its
Interest in breach of any provision of this Agreement, that purported withdrawal
or Transfer shall be void and of no effect.
9.5 BANKRUPTCY OF A MEMBER. A Member shall continue as a Member of the
Company upon the Bankruptcy of that Member.
ARTICLE X.
LIQUIDATION AND WINDING UP
10.1 DISSOLUTION. The Company shall dissolve only upon the earlier of:
(a) the unanimous vote of the Members;
(b) the election of either Member to liquidate under Section
4.5 of this Agreement;
(c) upon the acquisition by one Person of all of the
outstanding Interests;
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(d) the occurrence of any event which makes it unlawful for
the business of the Company to be carried on;
(e) the entry of a decree of judicial dissolution under
Section 801(e) of the Act; or
(f) the sale or other disposition of all or substantially all
of the Company's assets and the collection of all assets received in connection
with such sale or other disposition.
10.2 CONTINUATION OF THE BUSINESS OF THE COMPANY. If the resignation of
a Member leaves only one remaining Member, that remaining Member shall have the
right, exercisable by the Member within 90 days of the occurrence of such
resignation, to admit an additional Member to the Company or to readmit the
resigned Member, and that newly admitted (or re-admitted) Member along with the
remaining Member may elect to continue the business of the Company as set forth
in Section 10.1(d) hereof without dissolution.
10.3 LIQUIDATION. Upon the dissolution of the Company, the Company
shall cease to carry on its business, except insofar as may be necessary for the
winding up of its business, but its separate existence shall continue until the
Certificate of Dissolution has been filed as required by the Act. Upon
dissolution of the Company, the business and affairs of the Company shall be
wound up and the Company liquidated as rapidly as business circumstances permit,
the Board of Directors shall act as the liquidating trustee, and the assets of
the Company shall be liquidated. Unless the Members unanimously agree to the
contrary, the Board of Directors shall first seek the assistance of a qualified
investment banker to evaluate the Company as a going business and for a
reasonable period of time (not to exceed six (6) months) to seek a buyer for the
Company's business as a whole or in such separate parts as yield the greatest
return to the Members. There shall be no prohibition or impediment to the
purchase of the assets of the business by either Member on the same basis as a
purchase by a third party. The proceeds of any sale shall be distributed (to the
extent permitted by applicable law) in the following order:
(a) first, to creditors, including Members that are creditors,
in the order of priority as required by applicable law (whether by payment or
making of reasonable provision for payment thereof);
(b) second, to the Members in accordance with Section 4.3.
10.4 REASONABLE TIME FOR WINDING UP. A reasonable time shall be allowed
for the orderly winding up of the business and affairs of the Company and the
liquidation of its assets pursuant to Section 10.3 hereof in order to minimize
any losses otherwise related to that winding up. The liquidating trustee may set
up reasonable reserves for contingent, conditional and non-mature liabilities
and obligations of the Company.
10.5 DEFICIT CAPITAL ACCOUNT. Upon liquidation, each Member shall look
solely to the assets of the Company for the return of that Member's Capital
Contribution. Except as provided herein, no Member shall be personally liable
for a deficit Capital Account balance of that Member, it being expressly
understood that the distribution of liquidation proceeds shall be made solely
from existing Company assets
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in the order and priority set forth in Section 10.3 hereof. It is the intent of
this provision and the Qualified Income Offset provision of Section 5.2(e) that
the tax allocations to the Members meet the alternate test for substantial
economic effect under Treasury Regulation Section 1.704-1(b)(2)(ii)(d).
10.6 CERTIFICATE OF DISSOLUTION. When all debts, liabilities and
obligations have been paid, satisfied, compromised or otherwise discharged, or
adequate provisions have been made therefor, and all of the remaining property
and assets have been distributed to the Members, a Certificate of Dissolution
shall be executed and filed as required by the Act.
ARTICLE XI.
NONCOMPETITION AND NONSOLICITATION
11.1 NONCOMPETITION AND NONSOLICITATION. ▇▇▇▇▇▇▇▇ agrees to enter into
a separate noncompetition and nonsolicitation agreement with the Company and
▇▇▇▇, in substantially the form attached hereto as Exhibit F (the "▇▇▇▇▇▇▇▇
Noncompetition Agreement"), to prevent ▇▇▇▇▇▇▇▇ and its respective Affiliates
from competing with the business or soliciting the employees of the Company or
▇▇▇▇. ▇▇▇▇ agrees to enter into a separate noncompetition and nonsolicitation
agreement with the Company and ▇▇▇▇▇▇▇▇, in substantially the form attached
hereto as Exhibit F (the "▇▇▇▇ Noncompetition Agreement"), to prevent ▇▇▇▇ and
its respective Affiliates from competing with the business or soliciting the
employees of the Company or ▇▇▇▇▇▇▇▇.
ARTICLE XII.
DEFINITIONS
The following terms used in this Agreement shall have the meanings
described below:
"ACT" means the Michigan Limited Liability Company Act, MCLA 450.4101,
et seq., as it may be amended from time to time.
"ADJUSTED BASIS" shall have the meaning given such term in Code Section
1011.
"ADJUSTED CAPITAL ACCOUNT BALANCE" means that amount with respect to
any Member equal to the balance of such Member's Capital Account at the end of
the Fiscal Year after increasing the balance on such Member's Capital Account by
any amount which the Member is deemed to be obligated to restore pursuant to the
penultimate sentence of Treasury Regulation Sections 1.704-2(g)(1) and (i)(5).
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means with respect to any Member,
the deficit balance, if any, in that Member's Capital Account as of the end of
the relevant Fiscal Year, after giving effect to the following adjustments: (i)
credit to that Capital Account the amount by which that Member is obligated to
restore or is deemed to be obligated to restore pursuant to the penultimate
sentence of Treasury Regulation Sections 1.704-2(g)(1) and (i)(5), and (ii)
debit to that Capital Account the items described in
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paragraphs (4), (5) and (6) in Section 1.704-1(b)(2)(ii)(d) of the Treasury
Regulations. This definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury
Regulations and shall be interpreted consistently therewith.
"AFFILIATE" OR "AFFILIATE" means a Person who, with respect to any
other Person directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with such other Person.
"AGREEMENT" means this Agreement, as it may be amended, restated or
supplemented from time to time, complete with all Exhibits and Schedules hereto.
Such Agreement shall constitute an "operating agreement" within the meaning of
the Act.
"ANCILLARY AGREEMENTS" means the Noncompetition and Non-Solicitation
Agreements attached as Exhibits F and G, the Purchase and Supply Agreement
attached as Exhibit E, the Leased Worker Agreements attached as Exhibits C-1 and
C-2, the Technology License Agreements attached as Exhibits D-1 and D-2, the
Transfer Agreement attached as Exhibit B, and all other agreements,
certificates, instruments or other documents delivered in connection with the
execution of this Agreement.
"BANKRUPTCY" means, with respect to a Member or the Company, the
happening of any of the following:
(a) the making of a general assignment for the benefit of
creditors;
(b) the filing of a voluntary petition in bankruptcy or the
filing of a pleading in any court of record admitting in writing an inability to
pay debts as they become due;
(c) the entry of an order, judgment or decree by any court of
competent jurisdiction adjudicating the Company or a Member to be bankrupt or
insolvent;
(d) the filing of a petition or answer seeking any
reorganization, liquidation, dissolution or similar relief under any statute,
law or regulation;
(e) the filing of an answer or other pleading admitting the
material allegations of, or consenting to, or defaulting in answering, a
bankruptcy petition filed against the Company or a Member in any bankruptcy
proceeding;
(f) the filing of an application or other pleading or any
action otherwise seeking, consenting to or acquiescing in the appointment of a
liquidating trustee, receiver or other liquidator of all or any substantial part
of the Company's or a Member's properties;
(g) the commencement of any proceeding seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation which has not been quashed or
dismissed within ninety (90) days; or
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(h) the appointment without consent of the Company or such
Member or acquiescence of a liquidating trustee, receiver or other liquidator of
all or any substantial part of the Company's or a Member's properties without
such appointment being vacated or stayed within 90 days and, if stayed, without
such appointment being vacated within 90 days after the expiration of any such
stay.
"CAPITAL ACCOUNT" means the accounting record of each Member's capital
interest in the Company. There shall be credited to each Member's Capital
Account (a) the amount of any contribution of cash by that Member, (b) the Gross
Asset Value of property contributed by that Member, (c) that Member's allocable
share of Profits and any items in the nature of income or gain that are
specially allocated to that Member (not including allocations pursuant to
Section 5.4 hereof) and (d) the amount of any Company liabilities that the
Member assumes or takes subject to under Code Section 752. There shall be
debited against each Member's Capital Account (i) the amount of all
distributions of cash to that Member unless a distribution to the Member is a
loan or is deemed a payment under Code Section 707(c), (ii) the Gross Asset
Value of property distributed to that Member by the Company, (iii) that Member's
allocable share of Losses and any items in the nature of expenses or losses
which are specially allocated to that Member (not including allocations pursuant
to Section 5.4 hereof), and (iv) the amount of any liabilities of that Member
that the Company assumes or takes subject to under Code Section 752. The
transferee of all or a portion of an Interest shall succeed to that portion of
the transferor Member's Capital Account that is allocable to the portion of the
Interest transferred. This definition of Capital Account and the other
provisions herein relating to the maintenance of Capital Accounts are intended
to comply with Treasury Regulation Sections 1.704-1(b) and 1.704-2 and shall be
interpreted and applied in a manner consistent with those Treasury Regulation
Sections. In the event the Board of Directors reasonably determines that it is
prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto (including, without limitation, debits or credits relating to
liabilities that are secured by contributed or distributed property or which are
assumed by the Company or the Members), are computed in order to comply with
that Treasury Regulation, the Board of Directors may make such modification. The
Board of Directors shall also make any appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Treasury Regulation Sections 1.704-1(b) and 1.704-2.
"BONA FIDE THIRD PARTY" shall mean an entity less than five percent
(5%) of the stock or other ownership of which is owned directly or indirectly by
any Member or its respective Affiliates, which has equal or better financial
stability as the Company.
"CAPITAL CONTRIBUTION" means, with respect to any Member, the amount of
money contributed by that Member to the Company and, if property other than
money is contributed, the initial Gross Asset Value of such property, net of
liabilities assumed or taken subject to by the Company.
"CLOSING" shall mean the closing on the Initial Closing Date, as
defined in the Transfer Agreement.
"CODE" means the Internal Revenue Code of 1986 (or successor thereto),
as amended from time to time.
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"COMPANY" means the limited liability company formed pursuant to this
Agreement, as such limited liability company may from time to time be
constituted.
"CONTROL" shall mean the right, directly or indirectly, to elect a
majority of the Board of Directors, Operating Committee or similar governing
body of an entity.
"DEFAULTING MEMBER" means a Member that has committed an event of
default as described in Section 7.5 hereof.
"DEPRECIATION" means, for each Fiscal Year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for that year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of the Fiscal Year or other period,
Depreciation shall be an amount which bears the same ratio to that different
Gross Asset Value (as originally computed) as the federal income tax
depreciation, amortization, or other cost recovery deduction for that Fiscal
Year or other period bears to the adjusted tax basis (as originally computed);
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for the applicable year or period is zero,
Depreciation shall be determined with reference to the Gross Asset Value (as
originally computed) using any reasonable method selected by the Board of
Directors.
"EFFECTIVE DATE" means the date of this Agreement.
"FAIR MARKET VALUE" shall have the meaning set forth in Section 13.18.
"FISCAL YEAR" means the year on which the accounting and federal income
tax records of the Company are kept.
"GROSS ASSET VALUE" means with respect to any Company asset, the
asset's Adjusted Basis, except as follows:
(a) the initial Gross Asset Value of any asset contributed by
a Member to the Company shall be the gross fair market value of that asset, as
determined by the contributing Member and the non-contributing Member;
(b) the Gross Asset Value of all Company assets shall be
adjusted to equal their respective gross fair market values, as determined by
the Board of Directors, as of the date upon which any of the following occurs:
(i) the acquisition of an additional interest in the Company after the Effective
Date by any new or existing Member, in exchange for more than a de minimis
Capital Contribution or the distribution by the Company to a Member of more than
a de minimis amount of Company property as consideration for an interest in the
Company, if the Board of Directors determines that such adjustment is necessary
or appropriate to reflect the relative economic interest of the Members of the
Company; and (ii) the liquidation of the Company within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)(g);
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(c) the Gross Asset Value of any Company asset distributed to
any Member shall be the gross fair market value of that asset on the date of
distribution, as determined by the Member receiving that distribution and the
other Member; and
(d) if an election under Code Section 754 has been made, the
Gross Asset Value of Company assets shall be increased (or decreased) to reflect
any adjustments to the adjusted basis of the assets pursuant to Code Section
734(b) or Code Section 743(b), but only to the extent that those adjustments are
taken into account in determining Capital Accounts pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m) and Section 5.2(g) hereof; provided,
however, that Gross Asset Value shall not be adjusted pursuant to this
subsection (d) to the extent that the Board of Directors determines that an
adjustment pursuant to subsection (b) hereof is necessary or appropriate in
connection with a transaction that would otherwise result in an adjustment
pursuant to this subsection (d).
If the Gross Asset Value of an asset has been determined or adjusted hereby,
that Gross Asset Value shall thereafter be determined by taking into account all
adjustments for Depreciation, if any, taken with respect to that asset for
purposes of computing Profits and Losses.
"INTEREST" means the interest of a Member in the Company representing
such Member's rights, powers and privileges as specified in this Agreement.
"LIEN" means any pledge, lien (including tax lien), charge, claim,
encumbrance, security interest, mortgage, option, restriction on transfer
(including, without limitation, any buy-sell agreement or right of first refusal
or offer), forfeiture, penalty, equity or other right of another person of every
nature and description whatsoever.
"MATERIAL BREACH" shall mean a breach of an obligation under this
Agreement or any of the Ancillary Agreements which, if not cured as provided in
Section 7.5, would have a material adverse impact on the sales, operations,
profitability, prospects or financial viability of the Company or the rights of
any Member under such agreement.
"MEMBER" means any Person that executes this Agreement as a Member, and
any other Person admitted to the Company as an additional or substituted Member,
that has not made a disposition of such Person's entire Interest.
"MEMBER LOAN" means a loan to the Company from a Member in accordance
with Section 3.3 hereof.
"MEMBER MINIMUM GAIN" means an amount, with respect to each Member
Nonrecourse Debt, equal to the Minimum Gain that would result if such Member
Nonrecourse Debt were treated as a nonrecourse liability, determined in
accordance with Treasury Regulation Section 1.704-2(i).
"MEMBER NONRECOURSE DEBT" shall have the meaning of "partner
nonrecourse debt" set forth in Treasury Regulation Section 1.704-2(b)(4).
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"MINIMUM GAIN" shall have the meaning set forth in Treasury Regulation
Section 1.704-2(d).
"PARTICIPATING PERCENTAGE" shall have the meaning set forth in Section
1.4.
"PERMITTED ENCUMBRANCES" shall mean (a) liens for any current real
estate or ad valorem taxes or assessments not yet delinquent or being contested
in good faith by appropriate proceedings; (b) inchoate mechanic's,
materialmen's, laborer's, and carrier's liens and other similar inchoate liens
arising by operation of law or statute in the ordinary course of the business of
the contributing Member for obligations which are not delinquent and which will
be paid or discharged in the ordinary course of such business by the
contributing Member assumed by the Company in accordance with the Transfer
Agreement, and (b) Liens disclosed on Exhibit A (as to the Lear Assets) or
Exhibit B (as to the ▇▇▇▇▇▇▇▇ Assets).
"PERSON" means an individual, firm, corporation, partnership, limited
liability company, limited liability partnership, association, estate, trust,
pension or profit-sharing plan, or any other entity, including any governmental
entity.
"PRIME RATE" means the annual base rate of interest charged by Comerica
Bank, Detroit, Michigan, or any successor thereof, for corporate loans, and
referred to by such bank as its "prime rate" or, if no such rate is so referred
to by such bank, the annual rate of interest charged by such bank on 90-day
unsecured commercial loans to its most creditworthy borrowers, which rate is to
be adjusted on the first day of each calendar quarter.
"PRODUCTS" means automobile or truck interior overhead modular systems
and components including hard trim components, harness and electrification
interface to body harness, electronic value added features, interior trunk and
engine compartment lighting components and assemblies, substrates and complete
headliners, sun visors, overhead consoles, handles, hooks, and other
miscellaneous overhead trim installed above the "belt line" of an automobile or
truck, but excluding (a) mirrors and other rear vision systems and electronic
and other value added features incorporated into or attached to such mirrors and
rear vision systems, (b) windows, (c) sunroofs and (d) pillars which are not
attached to or an integral part of the headliner.
"PROFITS" and "LOSSES" means for each Fiscal Year or other period, an
amount equal to the Company's taxable income or loss for that year or period,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(a) any income of the Company exempt from federal income tax
not otherwise taken into account in computing Profits or Losses shall be added
to that taxable income or loss;
(b) any expenditures of the Company described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(i), shall be subtracted from that
taxable income or loss;
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(c) in the event the Gross Asset Value of any Company asset is
adjusted as required by subsections (b) or (c) of the definition of Gross Asset
Value, the amount of that adjustment shall be taken into account as gain or loss
from the disposition of that asset (assuming the asset was disposed of just
prior to the adjustment) for purposes of computing Profits or Losses in the
Fiscal Year of adjustment;
(d) gain or loss resulting from any disposition of Company
property with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the property
disposed of, notwithstanding that the Adjusted Basis of that property may differ
from its Gross Asset Value;
(e) in lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing the taxable income or loss,
there shall be taken into account the Depreciation for the Fiscal Year or other
period; and
(f) any items of income, gain, loss or deduction that are
specially allocated shall not be taken into account in computing Profits or
Losses.
"PURCHASE AND SUPPLY AGREEMENT" shall mean an agreement between the
Company and a Member in substantially the form attached hereto as Exhibit G and
H.
"REGISTERED AGENT" means the Registered Agent for service of process on
the Company in the State of Michigan, which Agent may be either an individual
resident of the State of Michigan or a corporation authorized to do business in
the State of Michigan.
"REGISTERED OFFICE" means the business office in the State of Michigan
of the Registered Agent.
"SELLING MEMBER" shall mean a Member which desires to sell, transfer or
otherwise dispose of its Interest or Interest pursuant to the provisions of this
Agreement.
"TAX MATTERS MEMBER" means the "tax matters partner" as defined in Code
Section 6231(a)(7).
"TRANSFER" means to, directly or indirectly, sell, assign, transfer,
give, donate, pledge, hypothecate, deposit, alienate, bequeath, devise or
otherwise transfer, dispose of or encumber to any Person other than the Company.
"TRANSFEREE" means a Person to whom a Transfer is made.
"TREASURY REGULATIONS" means pronouncements, as amended from time to
time, or their successor pronouncements, which clarify, interpret and apply the
provisions of the Code, and which are designated as "Treasury Regulations" by
the United States Department of the Treasury.
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ARTICLE XIII.
MISCELLANEOUS
13.1 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan without giving effect to
any applicable principles of conflicts of laws.
13.2 NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
(i) in person, (ii) to the extent receipt is confirmed, by telecopy, facsimile
or other electronic transmission service, (iii) by a nationally recognized
overnight courier service, or (iv) by registered or certified mail (postage
prepaid return receipt requested), to the parties at the following address:
To Lear: ▇▇▇▇ Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice President and
General Counsel
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
To ▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Varnum, Riddering, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
13.3 SEVERABILITY. If any provision of this Agreement shall be
conclusively determined by a court of competent jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement shall not be
affected thereby.
13.4 BINDING EFFECT. Except as otherwise provided herein, this
Agreement shall inure to the benefit of and be binding upon the Members, their
respective successors, legal representatives, and permitted assigns.
13.5 PRONOUNS AND PLURALS. All pronouns and any variations thereof are
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the appropriate Person(s) may require.
13.6 NO THIRD PARTY RIGHTS. This Agreement is intended to create
enforceable rights between the parties hereto only, and creates no rights in, or
obligations to, any other Persons whatsoever.
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13.7 TIME IS OF ESSENCE. Time is of the essence in the performance of
each and every obligation herein imposed.
13.8 FURTHER ASSURANCES. The parties hereto shall execute all further
instruments and perform all acts which are or may become necessary to effectuate
the intent and accomplish the purposes of this Agreement.
13.9 ESTOPPEL CERTIFICATES. The Members hereby agree that, at the
request from time to time of any Member, they will each execute and deliver an
estoppel certificate stating, to the extent true, that this Agreement is in full
force and effect and that to the best of such Member's knowledge and belief
there are no defaults by any Member (or that certain defaults exist), as the
case may be, under this Agreement.
13.10 SCHEDULES INCLUDED IN EXHIBITS; INCORPORATION BY REFERENCE. Any
reference to an Exhibit to this Agreement contained herein shall be deemed to
include any Schedules to such Exhibit. Each of the Exhibits referred to in this
Agreement, and each Schedule to such Exhibits, is hereby incorporated by
reference in this Agreement as if such Schedules and Exhibits were set out in
full in the text of this Agreement.
13.11 AMENDMENTS. This Agreement may not be amended except by unanimous
written agreement of all of the Members executed by duly authorized officers.
13.12 CREDITORS. None of the provisions of this Agreement shall be for
the benefit of or enforceable by any creditors of the Company.
13.13 COUNTERPARTS; FACSIMILE TRANSMISSION. This Agreement may be
executed by the parties hereto in counterparts, each of which shall be deemed to
be an original instrument, but all of which together shall constitute one and
the same instrument. The Agreement may be executed and delivered by facsimile
transmission.
13.14 ENTIRE AGREEMENT; SECTION HEADINGS. This Agreement constitutes
the entire Agreement among the parties hereto relating to the subject matter
hereof and supersedes all prior agreements, understandings, and arrangements,
oral or written, among the parties with respect to the subject matter hereof.
The Section headings in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
13.15 ASSIGNMENT. This Agreement and each and every covenant, term and
condition hereof shall be binding upon and inure to the benefit of the Members
hereto and their respective successors and permitted assigns. Except as
otherwise specifically provided in this Agreement, neither this Agreement nor
any rights or obligations hereunder shall be assignable or be delegated directly
or indirectly by any Member hereto to a third party without the prior written
consent of all the Members to this Agreement.
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13.16 NO AGENCY CREATED. This Agreement does not create any agency
relationship between the Members. No Member hereto shall have any authority to
enter into, assume or create any obligations or agreements on behalf of or in
the name of any other of the Members.
13.17 ARBITRATION. Any dispute, controversy or claim (hereinafter
"Dispute") between the parties of any kind or nature whatsoever, arising under
or related to this Agreement whether arising in contract, tort or otherwise,
shall be resolved according to the following procedure. If a Dispute (excluding
business decisions to be voted on by Members or Directors) arises among the
Members under this Agreement or any Ancillary Agreement which is not resolved by
good faith negotiation, then such Dispute, upon 30 days' prior notice from one
Member to the other of its intent to arbitrate (an "Arbitration Notice"), shall
be submitted to and settled by arbitration; provided, however, that nothing
contained herein shall preclude any party hereto from seeking or obtaining (a)
injunctive relief, or (b) equitable or other judicial relief to enforce the
provisions hereof or to preserve the status quo pending resolution of disputes
hereunder. The parties specifically acknowledge and agree that the provisions of
the Noncompetition Agreements shall be specifically enforceable by a court of
competent jurisdiction and that any claim for damages under this Agreement or
any Ancillary Agreement (including the Noncompetition Agreements), although
arising out of the same facts and circumstances, shall nonetheless be resolved
through arbitration hereunder. Such arbitration shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration Association
existing at the time of submission by one arbitrator. The Members shall attempt
to agree upon an arbitrator. If one cannot be agreed upon, the Member which did
not give the Arbitration Notice may request the Chief Judge of the United States
District Court for the Eastern District of Michigan or the Chief Judge of the
United States District Court for the Western District of Michigan to appoint an
arbitrator. If he or she will not, the arbitrator shall be appointed by the
American Arbitration Association. If an arbitrator so selected becomes unable to
serve, his or her successor shall be similarly selected or appointed. All
arbitration hearings shall be conducted on an expedited schedule, and all
proceedings shall be confidential. Either Member may at its expense make a
stenographic record thereof. The arbitrator shall apportion all costs and
expenses of arbitration (including the arbitrator's fees and expenses, the fees
and expenses of experts, and the fees and expenses of counsel to the parties),
between the prevailing and non-prevailing Member as the arbitrator deems fair
and reasonable. Any arbitration award shall be binding and enforceable against
the parties hereto and judgment may be entered thereon in any court of competent
jurisdiction. The arbitration will take place at Southfield, Michigan or Grand
Rapids, Michigan at the election of the Member not giving the Arbitration
Notice.
13.18 FAIR MARKET VALUE. The Fair Market Value of any Member's Interest
shall mean the consideration that a willing buyer will pay a willing seller to
accept. The parties will attempt to agree on such a Fair Market Value in the
manner provided in subsection (b). If the parties cannot agree on a Fair Market
Value, then the Fair Market Value shall be determined as follows:
(a) The Members shall attempt to mutually agree upon an
independent investment banker or independent appraiser of established reputation
which shall determine such Fair Market Value. The Members shall have sixty (60)
days after one Member has requested an appraisal to agree on such an independent
appraiser.
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(b) If the Members cannot mutually agree on an independent
appraiser in accordance with the provisions of subsection (a), then:
(i) Each Member, within thirty (30) days, shall
select an independent investment banker or independent
appraiser of established reputation, qualified to determine
the Fair Market Value of the Interest.
(ii) The independent investment bankers or appraisers
so selected mutually shall select a third independent
investment bankers or appraiser of established reputation
which is qualified to determine the Fair Market Value of the
Interest and which shall have no material relationship with
either party, and
(iii) The Fair Market Value shall be the value agreed
upon by two of the three independent investment bankers or
appraisers so selected, or absent agreement, the average of
the two closest values calculated by the investment bankers or
appraisers.
(iv) If either Member fails to appoint an investment
banker or appraiser within thirty (30) days, the investment
bankers or appraiser appointed by the Member which does
appoint an investment banker or appraiser shall determine the
Fair Market Value.
(c) The Fair Market Value of an Interest shall be the Fair
Market Value of the Company multiplied by a fraction the numerator is the
Interests percentage interest in the profits and losses of the Company and the
denominator of which is 100.
(d) Each Member shall have an opportunity to meet with the
investment bankers or appraisers to present its information relative to the Fair
Market Value being determined.
(e) Each Member shall bear the cost of any investment bankers
or independent appraiser that it selects. If only one investment banker or
appraiser has been selected or if a third investment banker or appraiser is
appointed, the cost of that investment banker or appraiser shall be borne
equally by the Members. Each Member shall bear its respective internal costs of
the appraisal.
IN WITNESS WHEREOF, the parties have executed this Operating Agreement
by their duly authorized officer effective as of the day and year first above
written.
WITNESSED BY: ▇▇▇▇▇▇▇▇ CORPORATION
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------- ---------------------
37
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇: Chief Executive Officer and President
Date:
-------------------------------------
WITNESSED BY: ▇▇▇▇ CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇.▇. ▇▇▇▇▇▇▇▇
------------------------- ----------------------------------------
Its Vice President
Date:
-------------------------------------
WITNESSED BY: AUTOMOTIVE INDUSTRIES
MANUFACTURING, INC.
By ▇▇▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
----------------------- ------------------
Vice Pres.
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EXHIBIT LIST
A Promissory Note
B. Transfer Agreement
C-1 ▇▇▇▇▇▇▇▇ Leased Worker Agreement
C-2 Lear Leased Worker Agreement
D-1 ▇▇▇▇▇▇▇▇ Technology License Agreement
D-2 Lear Technology License Agreement
E. Purchase and Supply Agreement
▇. ▇▇▇▇▇▇▇▇ Noncompetition and Non-Solicitation Agreement
▇. ▇▇▇▇ Noncompetition and Non-Solicitation Agreement
H. EBITDA for 1998 and 1999
40
SCHEDULE 4.5(D)
Any entity which directly or through an Affiliate:
1) Manufactures and sells more than $750 million of automotive
seats in any year;
2) Manufactures and sells more than $100 million of automotive
windows in any year;
3) Manufactures and sells more than $50 million of automotive
mirrors in any year; or
4) Manufactures and sells more than $50 million of electronics
for use in automotive dashboards, consoles, overhead systems
and mirrors in any year.
41
EXHIBIT B
AMENDED AND RESTATED
TRANSFER AGREEMENT
THIS AMENDED AND RESTATED TRANSFER AGREEMENT (this "Agreement") is
entered into as of this 31st day of October, 1997, by and among ▇▇▇▇
CORPORATION, a Delaware corporation ("▇▇▇▇"), AUTOMOTIVE INDUSTRIES
MANUFACTURING INC., a Delaware corporation ("AIM"), ▇▇▇▇▇▇▇▇ CORPORATION, a
Michigan corporation ("▇▇▇▇▇▇▇▇"), and ▇▇▇▇ ▇▇▇▇▇▇▇▇ OVERHEAD SYSTEMS, L.L.C., a
Michigan limited liability company (the "Company"). Lear, AIM and ▇▇▇▇▇▇▇▇ are
sometimes referred to in this Agreement as the "Transferors" or individually as
a "Transferor."
RECITALS:
WHEREAS, Lear and ▇▇▇▇▇▇▇▇ as members of the Company have executed an
Operating Agreement of the Company dated September 3, 1997 (the "Operating
Agreement"), which Operating Agreement provides for the transfer of certain
assets from Lear, ▇▇▇▇▇▇▇▇ and Eurotrim to the Company and the assumption by the
Company of certain liabilities of Lear, ▇▇▇▇▇▇▇▇ and Eurotrim;
WHEREAS, Lear and ▇▇▇▇▇▇▇▇ and the Company have entered into a Transfer
Agreement, dated September 3, 1997 (the "Original Transfer Agreement"), and the
parties hereto desire that this Agreement should amend, restate and supersede
the Original Transfer Agreement;
WHEREAS, ▇▇▇▇▇▇▇▇ desires to transfer to the Company all of the
outstanding common stock of ▇▇▇▇▇▇▇▇ Eurotrim Limited, a corporation
incorporated under the laws of the Republic of Ireland ("Eurotrim");
WHEREAS, Lear desires to transfer to the Company the entire ownership
interest of Empetek autodily, s.r.o., a corporation incorporated under the laws
of the Czech Republic ("Empetek");
NOW THEREFORE, in consideration of and in reliance upon the mutual
representations, warranties and obligations in this Agreement and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree and hereby amend and restate the Original
Transfer Agreement as follows:
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ARTICLE 1
TRANSFER OF ASSETS
1.1 Definition Reference. Certain capitalized terms are defined in
Article 10. Capitalized terms not defined herein shall have the meaning ascribed
to them in the Operating Agreement.
1.2 Transferred Lear Assets. As of the closing dates indicated (as
defined in Article 7), Lear and AIM will convey, transfer and assign to the
Company, free and clear of all Liens other than Permitted Encumbrances, and the
Company hereby accepts, the following assets (collectively, the "Transferred
Lear Assets"):
(a) the entire ownership interest of Empetek (to be
transferred as of the Initial Closing Date);
(b) ▇▇▇▇'▇ ▇▇▇▇▇▇▇▇, Michigan facility described on Schedule
1.2(b)(1) and all machinery, equipment, tools, fixtures, furniture and
other fixed assets located at such facility, including but not limited
to those assets listed on Schedule 1.2(b)(2) and inventory and supplies
associated therewith (to be transferred as of the Initial Closing
Date);
(c) the machinery, equipment, tools, fixtures, furniture and
other assets located at ▇▇▇▇'▇ Sheboygan, Wisconsin facility and at
▇▇▇▇'▇ Colne and Tipton, England facilities are listed on
Schedules 1.2(c)(1), (2) and (3), respectively (to be transfered as of
the Initial Closing Date). The inventory and supplies associated with
the Sheboygan, Colne and ▇▇▇▇▇▇ facilities will be transferred as of
one or more Subsequent Closing Dates. The inventories shall be at least
equal to the amounts reflected on the applicable balance sheets as of
October 31, 1997, and AIM or Lear will contribute to the Company an
amount in cash equal to any shortfall in the amount of inventory or the
Company will refund to AIM or Lear an amount in cash equal to any
excess over the October 31, 1997 amount. Prior to December 31, 1997,
the parties will review the feasibility and desirability of modifying
the purchasing arrangement between the Company and Lear with the
Company assuming control of the production and/or inventory at the
Sheboygan, Colne and ▇▇▇▇▇▇ facilities.;
(d) all accounts receivable of Lear or AIM arising on or after
November 1, 1997, which are related to the business operations and
assets of the businesses referenced in (b) above, except retained
tooling receivables as provided in Subsection B below (to be
transferred as of the Initial Closing Date);
(e) all of the assets specifically identified in Schedule
1.2(e) or otherwise reflected on the balance sheets included as part of
Schedule 1.2(e) (as of the respective closing dates indicated); and
(f) all completed tooling which is related to the business
operations and assets of the businesses referred to in (a) - (c) above
shall be transferred (as of the respective
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43
closing dates indicated); all tooling which is applicable to Products
sold by Lear for vehicles in which the Product launch will occur prior
to November 1, 1997, shall be completed by Lear through customer
approval and then transferred to the Company. Any tooling which is
related to the business operations and assets of the businesses
referred to in (a) - (c) above for future programs with a start of
production date after November 1, 1997, shall be transferred (as of the
respective closing dates indicated) at its work-in-process stage
together with any liabilities or prepaid assets associated with such
work in process tools.
Notwithstanding anything set forth in this Section 1.2, all assets of Lear or
AIM not described in (a) through (f) above, including, but not limited to, the
following assets, shall be excluded from the transfers contemplated hereby (the
"Excluded Lear Assets"):
A. all accounts receivable of Lear or AIM relating to
the businesses transferred as described in Subsection
(c) above arising at any time, and all accounts
receivable of Lear or AIM relating to the businesses
transferred as described in Subsections (b) above
arising prior to November 1, 1997;
B. accounts receivable or payments with respect to
tooling completed or to be completed by ▇▇▇▇ as
described in Subsection (f) above; and
C. all of the assets specifically identified in Schedule
1.2(C) hereto.
1.3 Transferred ▇▇▇▇▇▇▇▇ Assets. As of the closing dates indicated (as
defined in Article 7), ▇▇▇▇▇▇▇▇ and Eurotrim will convey, transfer and assign to
the Company, free and clear of all Liens other than Permitted Encumbrances, and
the Company hereby accepts, the following assets (collectively, the "Transferred
▇▇▇▇▇▇▇▇ Assets"):
(a) ▇▇▇▇▇▇▇▇'▇ 128th South facility in Holland, Michigan
described on Schedule 1.3(a)(1) and all machinery, equipment, tools,
fixtures, furniture and other fixed assets located at such facility,
including but not limited to the machinery, equipment and other
tangible assets of DHT located at such facility and those assets listed
on Schedule 1.3(a)(2) and all inventory and supplies associated
therewith, but excluding certain furniture and fixtures and equipment
related to ▇▇▇▇▇▇▇▇ Customer Business Units located at such facility,
including but not limited to those assets listed on Schedule 1.3(a)(3)
(to be transferred as of the Initial Closing Date);
(b) certain specified machinery, equipment, tools, fixtures,
furniture and other assets located at ▇▇▇▇▇▇▇▇'▇ Grand Haven, Michigan
facility described on Schedule 1.3(b) (to be transferred as of the
Initial Closing Date) and the inventory and supplies associated
therewith (to be transferred as of one or more Subsequent Closing
Dates). The inventories shall be at least equal to the amounts
reflected on the applicable balance sheet as of October 31, 1997, and
▇▇▇▇▇▇▇▇ will contribute to the Company an amount in cash equal to any
shortfall in the amount of inventory or the Company will refund to
▇▇▇▇▇▇▇▇ an amount in
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44
cash equal to any excess over the October 31, 1997 amount. Prior to
December 31, 1997, the parties will review the feasibility and
desirability of modifying the purchasing arrangement between the
Company and ▇▇▇▇▇▇▇▇ with the Company assuming control of the
production and/or inventory at the Grand Haven facility);
(c) all of the issued and outstanding shares of capital stock
of Eurotrim (to be transferred as of the Initial Closing Date);
(d) [intentionally omitted]
(e) all of the assets specifically identified in Schedule
1.3(e) or otherwise reflected on the balance sheets included as part of
Schedule 1.3(e) (as of the respective closing dates indicated); and
(f) all completed tooling which is related to the business
operations and assets referred to in (a)-(b) above shall be transferred
as of the respective closing dates indicated; all tooling which is
applicable to Products sold by ▇▇▇▇▇▇▇▇ for vehicles in which the
Product launch will occur prior to November 1, 1997, shall be completed
by ▇▇▇▇▇▇▇▇ through customer approval and then transferred to the
Company. Any tooling which is related to the business operations and
assets of the businesses referred to in (a) - (b) above for future
programs with a start of production date after November 1, 1997, shall
be transferred (as of the respective closing dates indicated) at its
work-in-process stage together with any liabilities or prepaid assets
associated with such work in process tools.
Notwithstanding anything set forth in this Section 1.3, all assets of ▇▇▇▇▇▇▇▇
not described in (a) through (f) above, including, but not limited to, the
following assets, shall be excluded from the transfers contemplated hereby (the
"Excluded ▇▇▇▇▇▇▇▇ Assets"):
A. all accounts receivable of ▇▇▇▇▇▇▇▇ arising at any
time;
B. accounts receivable or payments with respect to
tooling completed or to be completed by ▇▇▇▇▇▇▇▇ as
described in Subsection (f) above; and
C. all of the assets specifically identified in
Schedule 1.3C hereto.
1.4 Transfer of Contracts. As of the closing dates indicated on
Schedule 1.4, ▇▇▇▇▇▇▇▇, ▇▇▇▇ and AIM will convey, transfer and assign to the
Company and the Company will assume their respective rights and obligations
under their respective contracts identified on Schedule 1.4 (the "Assigned
Contracts"), subject to any required approvals. The Assigned Contracts will
include ▇▇▇▇▇▇▇▇'▇ production and supply contract with Aeroplex.
1.5 Relocating Assets and Operations. The responsibility for and
expense of moving the transferred assets shall allocated as follows:
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(a) ▇▇▇▇ shall be responsible for all of the relocation and
set-up expenses relating to the transfer of the Transferred ▇▇▇▇ Assets
located in the Sheboygan, Wisconsin facility to the Marlette, Michigan
facility, which relocation shall be completed on or before July 1,
2000, unless otherwise approved by the Members.
(b) ▇▇▇▇ shall be responsible for all of the relocation and
set-up expenses relating to the transfer of the Transferred ▇▇▇▇ Assets
located in the Colne, England facility to the Tipton, England facility,
which relocation shall be completed on or before July 1, 2000, unless
otherwise approved by the Members.
(c) ▇▇▇▇ shall be responsible for all of the relocation and
set-up expenses relating to the transfer of the Transferred ▇▇▇▇ Assets
located in the Tipton, England facility (including the ▇▇▇▇ Transferred
Assets from Colne, England) to another facility, at a location to be
determined by the Company, which relocation shall be completed on or
before July 1, 2000, unless otherwise approved by the Members.
(d) ▇▇▇▇▇▇▇▇ shall be responsible for all of the relocation
and set-up expenses relating to the transfer of the Transferred
▇▇▇▇▇▇▇▇ Assets located in the Grand Haven, Michigan facility to the
facility located at ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or to Marlette,
Michigan which relocation shall be completed on or before July 1, 2000
unless otherwise approved by the Members.
1.6 Certain Production. With respect to the Grand Haven, Sheboygan,
Colne and Tipton facilities, any production being conducted at such facilities
as of the Closing Date applicable to such facility may continue to be conducted
at such facility at the discretion of the Transferor with respect to that
facility. With respect to production to be commenced after the Closing Date
applicable to such facility, the parties to this Agreement may by mutual written
consent agree to conduct such production at such facility; provided, however,
that the Company shall have the unilateral right (exercisable upon nine months
advance notice) to require that such product be removed from such facility to a
location designated by the Company.
1.7 Capital Expenditures. With respect to each of the facilities
referenced in Section 1.5 hereof, the Company shall pay the costs of those
capital expenditures related to the production of Products that are approved in
advance by the Company.
1.8 Eurotrim. The parties intend and agree to operate Eurotrim's
business at Eurotrim's present location in Naas, Ireland.
ARTICLE 2
ASSUMPTION OF LIABILITIES
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2.1 Assumed ▇▇▇▇ Liabilities. As of the closing dates indicated, the
Company will assume the following specified debts, liabilities and obligations
of ▇▇▇▇ and AIM (the "Assumed ▇▇▇▇ Liabilities"):
(a) all accounts payable of ▇▇▇▇ and AIM incurred after
November 1, 1997, which are related to the Transferred ▇▇▇▇ Assets and
the business being transferred by ▇▇▇▇ and AIM to the Company, except
(i) costs to complete tooling described in Section 1.2(f), (ii) costs
to relocate equipment as provided in Section 1.5 and (iii) accounts
payable related to the business operation and assets described in
Section 1.2(c).
(b) those liabilities reflected on the balance sheets included
in Schedule 1.2(e) or otherwise specifically identified on Schedule
2.1(as of the respective closing dates indicated).
2.2 Assumed ▇▇▇▇▇▇▇▇ Liabilities. As of the closing dates indicated,
the Company will assume the following specified debts, liabilities and
obligations of ▇▇▇▇▇▇▇▇ (the "Assumed ▇▇▇▇▇▇▇▇ Liabilities"):
(a) all accounts payable of ▇▇▇▇▇▇▇▇ incurred after November
1, 1997, which are related to the Transferred ▇▇▇▇▇▇▇▇ Assets and the
business being transferred by ▇▇▇▇▇▇▇▇ to the Company, except (i) costs
to complete tooling described in Section 1.3(f), (ii) costs to relocate
equipment as provided in Section 1.5 and (iii) accounts payable related
to the business operation and assets described in Section 1.3(b); and
(b) those liabilities reflected on the balance sheets included
in Schedule 1.3(e) or otherwise specifically identified on Schedule 2.2
(as of the respective closing dates indicated).
2.3 Excluded Liabilities. Except for the liabilities expressly assumed
by the Company under the terms of this Agreement, the Company is not assuming
and shall not be liable for any debts, liabilities or obligations of, or
litigation or claims against, ▇▇▇▇, AIM, ▇▇▇▇▇▇▇▇ or their respective
subsidiaries and affiliates.
ARTICLE 3
CAPITAL CONTRIBUTION AND PRORATIONS
3.1 Capital Contributions. The assets transferred to the Company as
described in Article 1 are capital contributions and/or loans to the Company as
provided in the Operating Agreement.
3.2 Prorations. As of the applicable closing dates , the real and
personal property taxes, water, gas, electricity and other utilities, local
business or other license fees or taxes, rents and other similar periodic
charges shall be prorated between the appropriate Transferor and the Company,
with such Transferor bearing the pro rata portion of such taxes, charges and
other amounts which relate
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to the period prior to the date of this Agreement and the Company bearing the
pro rata portion of such taxes, charges and other amounts which relate to the
period on and after the date of this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Each of ▇▇▇▇, AIM and ▇▇▇▇▇▇▇▇ (each a "Transferor") represents and
warrants to the Company and to the parties to this Agreement other than itself
as follows with respect to itself:
4.1 Corporate Status and Authority. Transferor is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to own,
lease and operate the Transferred Assets being transferred by such Transferor
pursuant to this Agreement and to carry on that portion of its business being
transferred to the Company pursuant to this Agreement. Transferor has the power
and authority to execute, deliver and perform this Agreement and all other
agreements and documents to be executed and delivered by it in connection
herewith. Transferor is qualified to do business as a foreign corporation in
each jurisdiction where the failure to do so would reasonably be expected to
have a materially adverse effect on the Transferred Assets or business being
transferred by such Transferor to the Company. The execution, delivery and
performance of this Agreement and the transfer to the Company by Transferor of
such Transferor's Transferred Assets have been duly authorized by all requisite
corporate action on Transferor's part. Transferor has duly executed this
Agreement, and this Agreement constitutes Transferor's legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, moratorium,
reorganization or similar laws affecting creditors' rights and to equitable
principles.
4.2 Conflicts and Consents. Transferor's execution and delivery of this
Agreement, and the performance of its obligations hereunder, do not (a) conflict
with or violate any provision of Transferor's Articles of Incorporation or
Bylaws, (b) violate or, alone or with notice or the passage of time or both,
result in the breach or the termination of, or otherwise give any contracting
party the right to terminate or declare a default under, the terms of any
material written agreement relating to the business or the Transferred Assets
being transferred by such Transferor to the Company pursuant to this Agreement,
or (c) violate any judgment, order, decree, or any material law, statute,
regulation or other judicial or governmental restriction to which Transferor is
subject. Transferor is not required to make any filing with, or to obtain any
permit, authorization, consent or approval of, any governmental or regulatory
authority as a condition to the lawful performance by Transferor of its
obligations hereunder, except for governmental approvals pursuant to the Merger
Control Statute and Article 85.
4.3 Title to Assets. Transferror has good and marketable title to the
Transferred Assets being transferred by such Transferror to the Company pursuant
to this Agreement, free and clear of all Liens except for Permitted
Encumbrances. Title to the Transferred Assets being transferred by Transferor to
the Company pursuant to this Agreement does not, and to its knowledge there
exists
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48
no condition affecting the title to or use of any part of its Transferred Assets
which would, prevent the Company from occupying, using, or enforcing its rights
acquired hereunder in respect of any part of such Transferred Assets from and
after the date of this Agreement to the same full extent that Transferror could
continue to do so if the transactions contemplated hereby did not take place.
4.4 Accounts Receivable. Those Transferred Assets being transferred by
Transferor to the Company which are accounts receivable have arisen in the
ordinary course of business, and are valid and collectible. None of Transferor's
accounts receivable being transferred to the Company are or will be subject to
any set-off or counterclaim.
4.5 Inventories. Those Transferred Assets being transferred by
Transferor which constitute finished goods inventory are saleable in the
ordinary course of business consistent with past practice. All of Transferor's
work-in-process, raw materials and supplies inventories which are included in
the Transferred Assets can be used or consumed in the usual and ordinary course
of business as now conducted and are not in amounts in excess of normal
requirements.
4.6 Condition of Assets. All of the Transferred Assets being
transferred by the Transferor to the Company which are tangible assets are, in
the aggregate, in good operating condition, normal wear and tear excepted, are
capable of being used for their intended purpose in the ordinary course of
business consistent with past practice and are, in the aggregate, all the assets
necessary to conduct the business of Transferor being transferred to the
Company.
4.7 Owned Real Property. A complete and accurate legal description of
each Transferor's Owned Real Property or Transferor's Leased Real Property
included in the Transferred Assets and being transferred to the Company pursuant
to this Agreement is set forth on Schedule 4.7. There are no currently pending
condemnation proceedings which affect such Transferor's Owned Real Property
being transferred or Transferor's Leased Real Property, the lease for which is
being transferred, to the Company pursuant to this Agreement nor are there any
currently ongoing improvements by any public authority, any part of the cost of
which will be assessed against such Owned Real Property. Since January 1, 1997,
Transferor has not experienced any material interruption in the delivery of
adequate service of any utilities or other public authorities required in the
operation of its business. The Transferor's Owned Real Property and Transferor's
Leased Real Property have adequate water supply, and storm and sanitary sewage
facilities for the current needs of the business as conducted by the Transferor.
The buildings located on the Owned Real Property are free of any material
structural defects or zoning, use or other restrictions which could reasonably
be expected to threaten their continued operation in substantially the same
manner as currently operated by the Transferor.
4.8 Environmental Matters. Except as set forth on Schedule 4.8(a) with
respect to ▇▇▇▇ or AIM or on Schedule 4.8(b) with respect to ▇▇▇▇▇▇▇▇:
(a) Neither the Transferred Assets transferred by such
Transferror nor any real property leased by Transferor which lease is
being assumed by the Company nor any real
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49
property where the business being transferred by Transferor to the
Company is being conducted contain or have previously contained any
Hazardous Substances or underground storage tanks.
(b) To the Knowledge of Transferor, there has been no Release
of any Hazardous Substances at any or from any properties adjacent to
any of Transferor's Owned Real Property, any real property leased by
Transferor which lease is being assumed by the Company or any real
property where the business being transferred to the Company is being
conducted.
(c) The business and Transferred Assets of Transferor being
transferred to the Company, any real property leased by Transferor
which lease is being assumed by the Company and any real property where
the business being transferred by Transferor to the Company is being
conducted have complied and are in compliance with all Environmental
Laws in all material respects.
(d) With respect to the business and the Transferred Assets
being transferred by Transferor to the Company, any real property
leased by Transferor which lease is being assumed by the Company and
any real property where the business being transferred by Transferor to
the Company is being conducted, Transferor has obtained and is in
material compliance with all permits, licenses, and other
authorizations that are required pursuant to Environmental Law.
(e) With respect to the business and Transferred Assets being
transferred by Transferor to the Company, any real property leased by
Transferor which lease is being assumed by the Company and any real
property where the business being transferred by Transferor to the
Company is being conducted, Transferor has not received any written or
oral notice, report, or information regarding actual or alleged
violations of Environmental Law, or any liabilities or potential
liabilities, including any investigatory, remedial, or corrective
obligations relating to it or its facilities arising under
Environmental Law, the subject of which has not been fully resolved or
settled.
(f) With respect to the business and Transferred Assets being
transferred by Transferor to the Company, any real property leased by
Transferor which lease is being assumed by the Company and any real
property where the business being transferred by Transferor to the
Company is being conducted, Transferor has not treated, stored,
disposed of, arranged for or permitted the disposal of, transported,
handled, or released any substance, including without limitation any
Hazardous Substance, or owned or operated any property or facility (and
no such property or facility is contaminated by any such substance) in
a manner that has given or would give rise to liabilities, including
any liability for response costs, corrective action costs, personal
injury, property damage, natural resources damages, or attorney fees,
pursuant to any Environmental Law.
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50
(g) Neither this Agreement nor the consummation of the
transaction that is the subject of this Agreement will result in any
obligations for site investigation or cleanup, or notification to or
consent of government agencies, pursuant to any Environmental Law.
(h) No environmental lien has attached to any of the
Transferred Assets being transferred to the Company by Transferor.
(i) No facts, events, or conditions relating to the business
or Transferred Assets being transferred by such Transferor to the
Company, any real property leased by Transferor which lease is being
assumed by the Company or any real property where the business being
transferred by Transferor to the Company is being conducted will
prevent, hinder, or limit continued compliance with Environmental Law,
give rise to any investigatory, remedial, or corrective obligations
pursuant to Environmental Law, or give rise to any other liabilities
pursuant to Environmental Law.
4.9 Taxes. Transferor has filed all federal, state and local tax
returns required to be filed by it with respect to the business and Transferred
Assets being transferred by such Transferor to the Company, and has paid all
taxes which have become due pursuant thereto or otherwise, other than taxes the
liability for which is being contested in good faith. There are no tax claims,
audits or proceedings pending in connection with the properties, business,
income, expenses, net worth and franchises of Transferor and, to the Knowledge
of Transferor, there are no such threatened claims, audits or proceedings.
4.10 Financial Information. Schedule 4.10(a) with respect to ▇▇▇▇, AIM
and Empetek, and Schedule 4.10(b) with respect to ▇▇▇▇▇▇▇▇ and Eurotrim contain
unaudited internal financial projections concerning the Transferred Assets and
business operations being transferred by such Transferor to the Company (the
"Financial Projections"). To the knowledge of Transferor, the assumptions
underlying such Transferor's Financial Projections are accurate and there are no
material facts known to such Transferor that would make such Financial
Projections or underlying assumptions inaccurate or invalid.
4.11 Litigation. No material claim, litigation, action, or proceeding
is pending, or, to the knowledge of Transferor, threatened, and no order,
injunction or decree is outstanding, against or relating to the business or
Transferred Assets being transferred by Transferor to the Company or the Assumed
▇▇▇▇▇▇▇▇ Liabilities or Assumed ▇▇▇▇ Liabilities, as the case may be, of such
Transferor which are being assumed by the Company, and, to the Knowledge of
Transferor, there is no state of facts or event which would reasonably be
expected to form the basis for such a claim, litigation, action, investigation
or proceeding.
4.12 Employee Benefits. Except as disclosed in Schedule 4.12 to this
Agreement, with respect to the business, operations and Transferred Assets being
transferred by each Transferor to the Company:
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51
(a) Transferor has delivered or made available to the other
parties to this Agreement prior to the execution of this Agreement
copies of all of Transferor's Benefit Plans currently adopted,
maintained by, sponsored in whole or in party by, or contributed to by
Transferor.
(b) None of Transferor's Benefit Plans is or has been a
"multiemployer plan" within the meaning of Section 3(37) of ERISA.
(c) All of Transferor's Benefit Plans are in material
compliance with the applicable terms of ERISA, the Internal Revenue
Code and any other applicable laws, rules or regulations.
(d) Each ERISA Plan of Transferor which is intended to be
qualified under Section 401(a) of the Internal Revenue Code has
received a favorable determination letter which takes into account the
Tax Reform Act of 1986 and subsequent legislation for which a
determination letter is available from the Internal Revenue Service,
and Transferor is not aware of any circumstances likely to result in
revocation of any such favorable determination letter.
(e) As of the date of the most recent actuarial valuation, no
Pension Plan of Transferor had any "unfunded current liability," as
that term is defined in Section 302(d)(8)(A) of ERISA, and the fair
market value of the assets of any such plan exceeds the plan's "benefit
liabilities," as that term is defined in Section 4001(a)(16) of ERISA,
which were determined under actuarial factors that would apply if the
plan terminated in accordance with all applicable legal requirements
and assuming the adoption of interest rate and mortality tables
described in Section 417(e)(3)(A)(i) and the use of such interest rates
published in January 1997, and assuming that all participants take a
lump sum distribution of their vested accrued benefits on January 1,
1997. Since the date of the most recent actuarial valuation, there has
been (i) no material change in the financial position of any Pension
Plan of Transferor, (ii) no change in the actuarial assumptions with
respect to any Pension Plan of Transferor, and (iii) no increase in
benefits under any Pension Plan of Transferor as a result of plan
amendments or changes in applicable law which is reasonably likely to
materially adversely affect the funding status of any such plan.
4.13 Labor and Employment Matters. Except as disclosed on Schedule 4.13
to this Agreement with respect to persons employed in connection with the
business, operations and Transferred Assets being transferred by such Transferor
to the Company: (a) Transferor is not a party to any collective bargaining or
similar agreement, (b) Transferor is in substantial compliance with any
collective bargaining or similar agreement to which it is a party and with all
applicable laws concerning employment and employment practices, terms and
conditions of employment, wages and hours, occupational safety and health, and
is not engaged in any material unfair labor or employment practices, (c) there
is, and during twelve (12) months prior to the date of this Agreement there has
been, no labor strike or other material dispute between Transferor and its
employees, and (d) there
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are no material charges, investigations, administrative proceedings or formal
complaints of discrimination pending against Transferor before any federal,
state or local agency or court.
4.14 Compliance with Contracts. With respect to the Assigned Contracts
listed on Schedule 1.4, except as provided on such Schedule: (a) the Assigned
Contracts are valid, binding and enforceable agreements in accordance with their
terms; (b) neither Transferor nor the other party to any Assigned Contract to
which such Transferor is a party is in default under or in breach of any
thereof; (c) no event has occurred which, with notice or lapse of time or both,
would constitute such a default or breach; and (d) there is no requirement to
obtain the written consent of any third party to the assignment thereof to the
Company. There have been no discussions or correspondence concerning the breach
or termination of any of the foregoing and there is no default under or any
breach of any of the foregoing by any other party thereto.
4.15 Compliance with Laws. Transferor holds all material governmental
permits, licenses, certificates, permits or other permissions necessary to use
and operate the Transferred Assets of Transferor. Transferor is presently using
the Transferred Assets and conducting its business in compliance with all
applicable statutes, ordinances, rules, regulations and orders of any
governmental authority, except for immaterial violations. Transferor is not
subject to or in default under any judgment, order or decree of any court,
administrative agency or other governmental authority applicable to the
Transferred Assets or the business conducted using the Transferred Assets.
4.16 Brokers and Finders. No broker, finder or other person or entity
acting in a similar capacity has participated on behalf of Transferor in
bringing about the transaction herein contemplated, rendered any services with
respect thereto or been in any way involved therewith.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES REGARDING EMPETEK
▇▇▇▇ and AIM, jointly and severally, represent and warrant to the
Company and ▇▇▇▇▇▇▇▇ as follows:
5.1 Capitalization. The registered ownership interest of Empetek
consists of 26,354,000 Czech crowns, all of which have been contributed to
Empetek. All of the registered ownership interest of Empetek has been duly
authorized, is duly and validly issued and outstanding, is fully paid and
nonassessable, and is owned of record and beneficially solely by ▇▇▇▇, free and
clear of any Liens, charges or other encumbrances of any nature whatsoever.
There are no outstanding options, warrants, contracts, preemptive rights,
proxies, calls, commitments or demands or rights of any character obligating
Empetek to issue any ownership interest or options or rights with respect
thereto, and there are no existing or outstanding securities of any kind
convertible or exchangeable for any ownership interest of Empetek. The Articles
of Incorporation, Bylaws, minute books and stock books of Empetek which have
been furnished to ▇▇▇▇▇▇▇▇ are true and complete and current up to the date of
this Agreement.
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5.2 Absence of Undisclosed Liabilities. Except to the extent
specifically reflected and adequately reserved against in the balance sheet of
Empetek included in Schedule 5.2 or otherwise disclosed in Schedule 5.2, Empetek
had no material liabilities or obligations whatsoever, whether accrued,
absolute, contingent or otherwise.
5.3 Material Contracts. Except as set forth on Schedule 5.3, Empetek is
not a party to nor bound by any contract or agreement that could reasonably be
expected to result in aggregate payments by Empetek or liability of Empetek in
excess of the amount identified in Schedule 5.3.
5.4 Corporate Status and Authority. Empetek is a corporation duly
organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation, with full corporate power and
authority to own, lease and operate its assets and to carry on its business as
presently conducted. Empetek is qualified to do business as a foreign
corporation in each jurisdiction where the failure to do so would reasonably be
expected to have a materially adverse effect on its assets or business. The
execution, delivery and performance of this Agreement by ▇▇▇▇ has been duly
authorized by all requisite corporate action on Empetek's part.
5.5 Conflicts and Consents. ▇▇▇▇'▇ execution and delivery of this
Agreement, and the performance of its obligations hereunder, do not (a) conflict
with or violate any provision of Empetek's Articles of Incorporation or Bylaws,
(b) violate or, alone or with notice or the passage of time or both, result in
the breach or the termination of, or otherwise give any contracting party the
right to terminate or declare a default under, the terms of any material written
agreement relating to Empetek's business or assets, or (c) violate any judgment,
order, decree, or any material law, statute, regulation or other judicial or
governmental restriction to which Empetek is subject.
5.6 Title to Assets. Empetek has good and marketable title to its
assets, free and clear of all Liens except for Permitted Encumbrances. Title to
the assets of Empetek does not, and to their knowledge there exists no condition
affecting the title to or use of any part of its assets which would, prevent
Empetek from occupying, using, or enforcing its rights acquired hereunder in
respect of any part of such sssets from and after the date of this Agreement to
the same full extent that Empetek could continue to do so if the transactions
contemplated hereby did not take place.
5.7 Accounts Receivable. Empetek's accounts receivable have arisen in
the ordinary course of business, and are valid and collectible. None of
Empetek's accounts receivable are or will be subject to any set-off or
counterclaim.
5.8 Inventories. Empetek's finished goods inventory is saleable in the
ordinary course of business consistent with past practice. All of Empetek's
work-in-process, raw materials and supplies inventories which are included in
the Transferred Assets can be used or consumed in the usual and ordinary course
of business as now conducted and are not in amounts in excess of normal
requirements.
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5.9 Condition of Assets. Empetek's tangible assets are, in the
aggregate, in good operating condition, normal wear and tear excepted, are
capable of being used for their intended purpose in the ordinary course of
business consistent with past practice and are, in the aggregate, all the assets
necessary to conduct the business of Empetek as presently conducted.
5.10 Owned Real Property. A complete and accurate legal description of
Empetek's Owned Real Property and Leased Real Property is set forth on Schedule
5.10. There are no currently pending condemnation proceedings which affect
Empetek's Owned Real Property being transferred or Leased Real Property nor are
there any currently ongoing improvements by any public authority, any part of
the cost of which will be assessed against such Owned Real Property. Since
January 1, 1997, Empetek has not experienced any material interruption in the
delivery of adequate service of any utilities or other public authorities
required in the operation of its business. Empetek's Owned Real Property and
Leased Real Property have adequate water supply, and storm and sanitary sewage
facilities for the current needs of the business as conducted by the Empetek.
The buildings located on the Owned Real Property are free of any material
structural defects or zoning, use or other restrictions which could reasonably
be expected to threaten their continued operation in substantially the same
manner as currently operated by Empetek.
5.11 Environmental Matters. Except as set forth on Schedule 5.11,
(a) Empetek's owned or leased real property does not contain
and has not previously contained any Hazardous Substances or
underground storage tanks.
(b) To the Knowledge of ▇▇▇▇, there has been no Release of any
Hazardous Substances at any or from any properties adjacent to any of
Empetek's Owned Real Property or any real property leased by Empetek.
(c) Empetek's business, assets and real property have complied
and are in compliance with all Environmental Laws in all material
respects.
(d) Empetek has obtained and is in material compliance with
all permits, licenses, and other authorizations that are required
pursuant to applicable Environmental Law.
(e) Empetek has not received any written or oral notice,
report, or information regarding actual or alleged violations of
Environmental Law, or any liabilities or potential liabilities,
including any investigatory, remedial, or corrective obligations
relating to it or its facilities arising under Environmental Law, the
subject of which has not been fully resolved or settled.
(f) Empetek has not treated, stored, disposed of, arranged for
or permitted the disposal of, transported, handled, or released any
substance, including without limitation any Hazardous Substance, or
owned or operated any property or facility (and no such property or
facility is contaminated by any such substance) in a manner that has
given or would give
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55
rise to liabilities, including any liability for response costs,
corrective action costs, personal injury, property damage, natural
resources damages, or attorney fees, pursuant to any Environmental Law.
(g) Neither this Agreement nor the consummation of the
transaction that is the subject of this Agreement will result in any
obligations for site investigation or cleanup, or notification to or
consent of government agencies, pursuant to any Environmental Law.
(h) No environmental lien has attached to any of material
assets of Empetek.
(i) No facts, events, or conditions relating to Empetek or its
assets will prevent, hinder, or limit continued compliance with
Environmental Law, give rise to any investigatory, remedial, or
corrective obligations pursuant to Environmental Law, or give rise to
any other liabilities pursuant to Environmental Law.
5.12 Taxes. Empetek has filed all federal, state and local tax returns
required to be filed by it, and has paid all taxes which have become due
pursuant thereto or otherwise, other than taxes the liability for which is being
contested in good faith. There are no tax claims, audits or proceedings pending
in connection with the properties, business, income, expenses, net worth and
franchises of Empetek and, to the Knowledge of ▇▇▇▇, there are no such
threatened claims, audits or proceedings.
5.13 Litigation. No material claim, litigation, action, or proceeding
is pending, or, to the knowledge of ▇▇▇▇, threatened, and no order, injunction
or decree is outstanding, against or relating to Empetek, there is no state of
facts or event which would reasonably be expected to form the basis for such a
claim, litigation, action, investigation or proceeding.
5.14 Employee Benefits. Except as disclosed in Schedule 5.14 to this
Agreement, with respect to Empetek:
(a) Empetek has delivered or made available to the other
parties to this Agreement prior to the execution of this Agreement
copies of all of Empetek's Benefit Plans currently adopted, maintained
by, sponsored in whole or in party by, or contributed to by Empetek.
(b) All of Empetek's Benefit Plans are in material compliance
with theapplicable terms of all applicable laws, rules or regulations.
5.15 Labor and Employment Matters. Except as disclosed on Schedule 5.15
to this Agreement: (a) Empetek is not a party to any collective bargaining or
similar agreement, (b) Empetek is in substantial compliance with any collective
bargaining or similar agreement to which it is a party and with all applicable
laws concerning employment and employment practices, terms and conditions of
employment, wages and hours, occupational safety and health, and is not engaged
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56
in any material unfair labor or employment practices, (c) there is, and during
twelve (12) months prior to the date of this Agreement there has been, no labor
strike or other material dispute between Empetek and its employees, and (d)
there are no material charges, investigations, administrative proceedings or
formal complaints of discrimination pending against Empetek before any federal,
state or local agency or court.
5.16 Compliance with Contracts. With respect to the material contracts
of Empetek: (a) such contracts are valid, binding and enforceable agreements in
accordance with their terms; (b) neither Empetek nor the other party to such
material contract to which Empetek is a party is in default under or in breach
of any thereof; (c) no event has occurred which, with notice or lapse of time or
both, would constitute such a default or breach; and (d) there is no requirement
to obtain the written consent of any third party as a result of the transactions
contemplated by this Agreement. There have been no discussions or correspondence
concerning the breach or termination of any of the foregoing and there is no
default under or any breach of any of the foregoing by any other party thereto.
5.17 Compliance with Laws. Empetek holds all material governmental
permits, licenses, certificates, permits or other permissions necessary to use
its assets and operate its business. Empetek is presently using its assets and
conducting its business in compliance with all applicable statutes, ordinances,
rules, regulations and orders of any governmental authority, except for
immaterial violations. Empetek is not subject to or in default under any
judgment, order or decree of any court, administrative agency or other
governmental authority applicable to their respective assets and business.
5.18 Brokers and Finders. No broker, finder or other person or entity
acting in a similar capacity has participated on behalf of Empetek in bringing
about the transaction herein contemplated, rendered any services with respect
thereto or been in any way involved therewith.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES REGARDING EUROTRIM
▇▇▇▇▇▇▇▇ represents and warrants to ▇▇▇▇ and AIM as follows:
6.1 Capitalization. The issued and outstanding capital stock of
Eurotrim consists of one ordinary share. All of the issued and outstanding
capital stock of Eurotrim has been duly authorized, is duly and validly issued
and outstanding, is fully paid and nonassessable, and is owned of record and
beneficially solely by ▇▇▇▇▇▇▇▇, free and clear of any Liens, charges or other
encumbrances of any nature whatsoever. There are no outstanding options,
warrants, contracts, preemptive rights, proxies, calls, commitments or demands
or rights of any character obligating Eurotrim to issue any shares of stock or
options or rights with respect thereto, and there are no existing or outstanding
securities of any kind convertible or exchangeable for shares of stock or other
securities of Eurotrim. The Articles of Incorporation, Bylaws, minute books and
stock books of
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Eurotrim which have been furnished to ▇▇▇▇ are true and complete and current up
to the date of this Agreement.
6.2 Absence of Undisclosed Liabilities. Except to the extent
specifically reflected and adequately reserved against in the balance sheet of
Eurotrim included in Schedule 6.2 or otherwise disclosed in Schedule 6.2,
Eurotrim had no material liabilities or obligations whatsoever, whether accrued,
absolute, contingent or otherwise.
6.3 Material Contracts. Except as set forth on Schedule 6.3, Eurotrim
is not a party to or bound by any contract or agreement that could reasonably be
expected to result in aggregate payments by Eurotrim or liability of Eurotrim in
excess of the amount identified in Schedule 6.3.
6.4 Corporate Status and Authority. Eurotrim is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to own,
lease and operate its assets and to carry on its business as presently
conducted. Eurotrim is qualified to do business as a foreign corporation in each
jurisdiction where the failure to do so would reasonably be expected to have a
materially adverse effect on its assets or business. The execution, delivery and
performance of this Agreement by ▇▇▇▇▇▇▇▇ has been duly authorized by all
requisite corporate action on Eurotrim's part.
6.5 Conflicts and Consents. ▇▇▇▇▇▇▇▇'▇ execution and delivery of this
Agreement, and the performance of its obligations hereunder, do not (a) conflict
with or violate any provision of Eurotrim's Articles of Incorporation or Bylaws,
(b) violate or, alone or with notice or the passage of time or both, result in
the breach or the termination of, or otherwise give any contracting party the
right to terminate or declare a default under, the terms of any material written
agreement relating to Eurotrim's business or assets, or (c) violate any
judgment, order, decree, or any material law, statute, regulation or other
judicial or governmental restriction to which Eurotrim is subject.
6.6 Title to Assets. Eurotrim has good and marketable title to its
assets , free and clear of all Liens except for Permitted Encumbrances. Title to
the Transferred Assets being transferred by Eurotrim to the Company pursuant to
this Agreement does not, and to its knowledge there exists no condition
affecting the title to or use of any part of its assets which would, prevent
Eurotrim from occupying, using, or enforcing its rights acquired hereunder in
respect of any part of such Assets from and after the date of this Agreement to
the same full extent that Eurotrim could continue to do so if the transactions
contemplated hereby did not take place.
6.7 Accounts Receivable. Eurotrim's accounts receivable have arisen in
the ordinary course of business, and are valid and collectible. None of
Eurotrim's accounts receivable are or will be subject to any set-off or
counterclaim.
6.8 Inventories. Eurotrim's finished goods inventory is saleable in the
ordinary course of business consistent with past practice. All of Eurotrim's
work-in-process, raw materials and
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supplies inventories which are included in the Transferred Assets can be used or
consumed in the usual and ordinary course of business as now conducted and are
not in amounts in excess of normal requirements.
6.9 Condition of Assets. Eurotrim's tangible assets are, in the
aggregate, in good operating condition, normal wear and tear excepted, are
capable of being used for their intended purpose in the ordinary course of
business consistent with past practice and are, in the aggregate, all the assets
necessary to conduct the business of Eurotrim as presently conducted.
6.10 Leased Real Property. A complete and accurate legal description of
Eurotrim's Leased Real Property is set forth on Schedule 6.10. There are no
currently pending condemnation proceedings which affect Eurotrim's Leased Real
Property nor are there any currently ongoing improvements by any public
authority, any part of the cost of which will be assessed against such Leased
Real Property. Since January 1, 1997, Eurotrim has not experienced any material
interruption in the delivery of adequate service of any utilities or other
public authorities required in the operation of its business. Eurotrim's Leased
Real Property has adequate water supply, and storm and sanitary sewage
facilities for the current needs of the business as conducted by the Eurotrim.
The buildings located on the Leased Real Property are free of any material
structural defects or zoning, use or other restrictions which could reasonably
be expected to threaten their continued operation in substantially the same
manner as currently operated by the Eurotrim.
6.11 Environmental Matters. Except as set forth on Schedule 6.11,
(a) Eurotrim's Leased Real Property does not contain and has
not previously contained any Hazardous Substances or underground
storage tanks.
(b) To the Knowledge of ▇▇▇▇▇▇▇▇, there has been no Release of
any Hazardous Substances at any or from any properties adjacent to any
real property leased by Eurotrim.
(c) Eurotrim's business, assets and real property have
complied and are in compliance with all Environmental Laws in all
material respects.
(d) Eurotrim has obtained and is in material compliance with
all permits, licenses, and other authorizations that are required
pursuant to applicable Environmental Law.
(e) Eurotrim has not received any written or oral notice,
report, or information regarding actual or alleged violations of
Environmental Law, or any liabilities or potential liabilities,
including any investigatory, remedial, or corrective obligations
relating to it or its facilities arising under Environmental Law, the
subject of which has not been fully resolved or settled.
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(f) Eurotrim has not treated, stored, disposed of, arranged
for or permitted the disposal of, transported, handled, or released any
substance, including without limitation any Hazardous Substance, or
owned or operated any property or facility (and no such property or
facility is contaminated by any such substance) in a manner that has
given or would give rise to liabilities, including any liability for
response costs, corrective action costs, personal injury, property
damage, natural resources damages, or attorney fees, pursuant to any
Environmental Law.
(g) Neither this Agreement nor the consummation of the
transaction that is the subject of this Agreement will result in any
obligations for site investigation or cleanup, or notification to or
consent of government agencies, pursuant to any Environmental Law.
(h) No environmental lien has attached to any of material
assets of Eurotrim.
(i) No facts, events, or conditions relating to Eurotrim or
its assets will prevent, hinder, or limit continued compliance with
Environmental Law, give rise to any investigatory, remedial, or
corrective obligations pursuant to Environmental Law, or give rise to
any other liabilities pursuant to Environmental Law.
6.12 Taxes. Eurotrim has filed all federal, state and local tax returns
required to be filed by it , and has paid all taxes which have become due
pursuant thereto or otherwise, other than taxes the liability for which is being
contested in good faith. There are no tax claims, audits or proceedings pending
in connection with the properties, business, income, expenses, net worth and
franchises of Eurotrim and, to the Knowledge of ▇▇▇▇▇▇▇▇, there are no such
threatened claims, audits or proceedings.
6.13 Litigation. No material claim, litigation, action, or proceeding
is pending, or, to the knowledge of ▇▇▇▇, threatened, and no order, injunction
or decree is outstanding, against or relating to Eurotrim, there is no state of
facts or event which would reasonably be expected to form the basis for such a
claim, litigation, action, investigation or proceeding.
6.14 Employee Benefits. Except as disclosed in Schedule 6.14 to this
Agreement, with respect to Eurotrim:
(a) Eurotrim has delivered or made available to the other
parties to this Agreement prior to the execution of this Agreement
copies of all of Eurotrim's Benefit Plans currently adopted, maintained
by, sponsored in whole or in party by, or contributed to by Eurotrim.
(b) All of Eurotrim's Benefit Plans are in material compliance
with the applicable terms of all applicable laws, rules or regulations.
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6.15 Labor and Employment Matters. Except as disclosed on Schedule 6.15
to this Agreement : (a) Eurotrim is not a party to any collective bargaining or
similar agreement, (b) Eurotrim is in substantial compliance with any collective
bargaining or similar agreement to which it is a party and with all applicable
laws concerning employment and employment practices, terms and conditions of
employment, wages and hours, occupational safety and health, and is not engaged
in any material unfair labor or employment practices, (c) there is, and during
twelve (12) months prior to the date of this Agreement there has been, no labor
strike or other material dispute between Eurotrim and its employees, and (d)
there are no material charges, investigations, administrative proceedings or
formal complaints of discrimination pending against Eurotrim before any federal,
state or local agency or court.
6.16 Compliance with Contracts. With respect to the material contracts
of Eurotrim: (a) such contracts are valid, binding and enforceable agreements in
accordance with their terms; (b) neither Eurotrim nor the other party to such
material contract to which such Eurotrim is a party is in default under or in
breach of any thereof; (c) no event has occurred which, with notice or lapse of
time or both, would constitute such a default or breach; and (d) there is no
requirement to obtain the written consent of any third party as a result of the
transactions contemplated by this Agreement. There have been no discussions or
correspondence concerning the breach or termination of any of the foregoing and
there is no default under or any breach of any of the foregoing by any other
party thereto.
6.17 Compliance with Laws. Eurotrim holds all material governmental
permits, licenses, certificates, permits or other permissions necessary to use
its assets and operate its business. Eurotrim is presently using its assets and
conducting its business in compliance with all applicable statutes, ordinances,
rules, regulations and orders of any governmental authority, except for
immaterial violations. Eurotrim is not subject to or in default under any
judgment, order or decree of any court, administrative agency or other
governmental authority applicable to Eurotrim's asses and business.
6.18 Brokers and Finders. No broker, finder or other person or entity
acting in a similar capacity has participated on behalf of Eurotrim in bringing
about the transaction herein contemplated, rendered any services with respect
thereto or been in any way involved therewith.
ARTICLE 7
CLOSING
7.1 Closing. The consummation of the transactions and transfers
contemplated hereby shall take place at one or more closings (the "Closings").
The initial transfers contemplated hereby shall take place as of November 1,
1997 (the "Initial Closing Date") unless otherwise mutually agreed to by ▇▇▇▇,
AIM and ▇▇▇▇▇▇▇▇. The subsequent transfers contemplated hereby shall take place
at such dates and times (the "Subsequent Closing Dates") as are mutually agreed
to by ▇▇▇▇, AIM and ▇▇▇▇▇▇▇▇ and in each case shall be on or before December 31,
1999. Notwithstanding the foregoing, each of the Closings shall be subject to
the fulfillment or waiver of the conditions
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precedent contained in Sections 7.2. The transfers and deliveries described
herein for each such Closing shall be mutually interdependent and regarded as
occurring simultaneously at such Closing; and no such transfer or delivery shall
become effective until all the other transfers and deliveries provided for in
herein with respect to such Closing have also been consummated.
7.2 Conditions Precedent. The obligations of each party to this
Agreement to complete each Closing and consummate the transactions contemplated
hereby are contingent upon the fulfillment of each of the following conditions
on or before each such Initial Closing Date or Subsequent Closing Date, as the
case may be, except to the extent that such party waives one or more such
conditions to its obligations:
(a) Representations and Warranties. The representations and
warranties of the other parties to this Agreement shall be true and
correct in all material respects on and as of such Initial Closing Date
or Subsequent Closing Date, as the case may be, with the same effect as
though such representations and warranties had been made on and as of
such date except for representations and warranties that speak as of
specific date other than such Initial Closing Date or Subsequent
Closing Date, which shall be true and correct in all material respects
as of such date.
(b) Consents and Approvals. All material consents, approvals,
permits, licenses and actions or filings or notices (including those
required pursuant to the European Union merger control statute or
Article 85) to any governmental or regulatory authority (including, but
not limited to, authorities of the United States, the European Union,
any European country, or any other national, state or local
governmental authority) or of any third party necessary to permit the
parties to perform their respective obligations hereunder and to
consummate the transactions contemplated hereby shall have been duly
obtained, made or given and shall be in full force and effect, and all
waiting periods under applicable laws shall have expired or be
terminated.
(c) Litigation. No claim, action, suit, arbitration or other
proceeding by or before any federal, state, local or foreign court or
governmental, regulatory or administrative agency or authority shall be
pending or threatened on the Initial Closing Date or the Subsequent
Closing Date, as the case may be, which seeks to enjoin, restrain or
prohibit the consummation, or to change in any material respect, the
transactions contemplated by this Agreement or seeks material damages
from one or more parties to this Agreement in connection with the
contemplated transactions.
(d) Material Adverse Change. There shall have been no
determination by either ▇▇▇▇ or ▇▇▇▇▇▇▇▇ that the Closing and the
consummation of the transactions contemplated by this Agreement are not
in the best interests of such party and its shareholders by reason of a
material adverse change since the date of this Agreement in the
Transferred Assets, business, financial condition or results of
operations of the businesses being transferred by
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▇▇▇▇ and AIM (in the case of a determination by ▇▇▇▇▇▇▇▇) or by
▇▇▇▇▇▇▇▇ (in the case of a determination by ▇▇▇▇).
(e) Completion of Schedules. Each of the parties hereto shall
have completed the Schedules and Exhibits to be provided by such party
pursuant to this Agreement, the Operating Agreement and the Agreements
contemplated thereby in form and substance satisfactory to the other
parties hereto.
(f) Completion of Tooling Schedules. Each party shall have
completed and delivered to the other parties schedules concerning such
party's tooling and such schedules shall be satisfactory in form and
substance to the other parties hereto.
(g) Closing Documentation. Each party shall have received at
such Closing the following documentation signed by all necessary
parties to such documentation:
(i) ▇▇▇▇ of Sale. Each Transferor shall execute and
deliver a ▇▇▇▇ of sale in the form attached hereto as Exhibit
A.
(ii) Assignment and Assumption. Each Transferor will
execute an assignment of accounts receivable, intangible
assets and contracts and the Company will execute assumptions
of the transferred obligations therewith.
(iii) Stock Transfer Agreement and Stock Power. At
the Closing on the Initial Closing Date, ▇▇▇▇ shall execute
and deliver to the Company the Stock Transfer Agreement
attached as Exhibit B-1 hereto with respect to the ownership
interest of Empetek, and ▇▇▇▇▇▇▇▇ shall execute and deliver to
the Company the Stock Transfer Agreement attached as Exhibit
B-2 hereto with respect to the outstanding shares of Eurotrim.
(iv) Warranty Deed. Each Transferor shall execute and
deliver a Warranty Deed with respect to Owned Real Property
being transferred by such Transferor to the Company.
(v) Title Insurance. With respect to Owned Real
Property, the Transferor transferring such Owned Real Property
shall deliver to the Company a written title insurance binder
or policy for such Owned Real Property naming the Company as
an insured.
(vi) Other Agreements. The Operating Agreement among
▇▇▇▇, ▇▇▇▇▇▇▇▇ and the Company, and all other agreements
referenced therein will have been executed and delivered by
all parties.
ARTICLE 8
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ADDITIONAL AGREEMENTS
8.1 Repurchase of Accounts Receivable. If an account receivable that
was included in the Transferred Assets is not paid in full within ninety (90)
days after the Effective Date, then upon the written request of the Company the
Transferor that transferred such account receivable to the Company shall within
thirty (30) days after such written report repurchase such account receivable
from the Company for cash in an amount equal to the unpaid balance of such
account receivable. With respect to any account receivable of Transferor that is
not paid in full within ninety (90) days after the Effective Date, upon the
written request of the Company, such Transferor shall repurchase such account
receivable from the Company for cash in an amount equal to the unpaid balance of
such account receivable.
8.2 Expenses; Transfer Taxes. Each Transferor shall pay all real estate
and conveyance taxes, filing fees, survey fees and title insurance premiums with
respect to the Transferred Assets being transferred by such Transferor to the
Company. Each Transferor shall pay all of the expenses incident to the
transactions contemplated by this Agreement which are incurred by such
Transferor or its representatives.
8.3 Further Assurances. The parties hereto shall execute all further
instruments and perform all acts which are or may become necessary to effectuate
the intent and accomplish the purposes of this Agreement.
8.4 Assignment of Contracts. To the extent the assignment of any
contract, lease, commitment or other asset to be assigned to the Company
pursuant to this Agreement shall require the consent of any other person, this
Agreement shall not constitute a contract to assign the same if an attempted
assignment would constitute a breach thereof or give rise to any right of
acceleration or termination. Each Transferor shall use its reasonable best
efforts to obtain consents to any such assignment. If such consent is not
obtained, the transferor agrees to cooperate with the Company in any reasonable
arrangement designed to provide for the Company the benefits thereunder,
including, but not limited to, having (a) the Company act as agent for such
Transferor; and (b) such Transferor enforce for the benefit of the Company, at
the Company's expense, any and all rights of such Transferor against the other
party thereto arising out of the cancellation by such other party or otherwise.
8.5 Waiver of Bulk Transfer Laws. The Company hereby waives compliance
with the provisions of any so-called "Bulk Transfer Laws," or any similar law as
enacted in any jurisdiction, to the extent applicable to the transactions
contemplated hereby.
8.6 Operation and Maintenance. Each Transferor agrees that from the
date of this Agreement until its tangible Transferred Assets are transferred to
the Company, such Transferor shall operate and maintain such Transferred Assets
in the ordinary course of its business.
ARTICLE 9
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INDEMNIFICATION
9.1 Survival of Representations and Warranties. The representations and
warranties contained in Article 4 (with respect to Lear, AIM and ▇▇▇▇▇▇▇▇),
Article 5 (with respect to Lear and AIM), and Article 6 (with respect to
▇▇▇▇▇▇▇▇) of this Agreement shall survive the Closing and continue to be binding
for a period of five (5) years after the date hereof. The covenants and
agreements of the parties hereto contained herein shall survive the Closing and
shall remain in full force and effect until they have been performed.
9.2 Indemnification by Lear. Lear and AIM shall jointly and severally
indemnify the Company and ▇▇▇▇▇▇▇▇ and their respective directors, officers,
employees and agents (the "▇▇▇▇▇▇▇▇ Indemnified Parties") against and hold them
harmless from:
(a) Representations. All Liability, loss, damage, deficiency or
expense resulting from or arising out of any breach of any
representation or warranty by Lear or AIM herein;
(b) Covenants. All Liability, loss, damage or deficiency
resulting from or arising out of any breach or nonperformance of any
covenant or obligation made or incurred by Lear or AIM herein;
(c) Liabilities. Any imposition (including, but not limited
to, imposition by operation of any bulk transfer or other Law) by a
third party upon any of the ▇▇▇▇▇▇▇▇ Indemnified Parties of any
Liability of Lear or AIM which the Company has not specifically agreed
to assume pursuant to this Agreement; and
(d) Costs. Any and all reasonable costs and expenses
(including, but not limited to, reasonable legal, accounting, expert
witness and consulting fees) related to any of the foregoing.
9.3 Indemnification by ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ shall indemnify the Company,
Lear and AIM and their respective directors, officers, employees and agents (the
"Lear Indemnified Parties") against and hold them harmless from:
(a) Representations. All Liability, loss, damage, deficiency or
expense resulting from or arising out of any breach of any
representation or warranty by ▇▇▇▇▇▇▇▇ herein;
(b) Covenants. All Liability, loss, damage or deficiency
resulting from or arising out of any breach or nonperformance of any
covenant or obligation made or incurred by ▇▇▇▇▇▇▇▇ herein;
(c) Liabilities. Any imposition (including, but not limited
to, imposition by operation of any bulk transfer or other Law) by a
third party upon any of the Lear
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Indemnified Parties of any Liability of ▇▇▇▇▇▇▇▇ which the Company has
not specifically agreed to assume pursuant to this Agreement; and
(d) Costs. Any and all reasonable costs and expenses
(including, but not limited to, reasonable legal, accounting, expert
witness and consulting fees) related to any of the foregoing.
9.4 Indemnification for Misrepresented Financial Information.
Notwithstanding anything in this Article 9 to the contrary, in the event that a
Transferor's representation contained in Section 4.10 concerning Historical
Financial Information or Financial Projections materially differs from or
understates historical or expected financial results, that Transferor shall
compensate the other Member for the difference between the value of the
Transferor's business contributed to the Company based upon the information set
forth herein less the value of such business based upon the correct information
as determined pursuant to this Section 9.4. If the actual aggregate EBITDA for
1998 and 1999 for the Transferred Assets and related business operations
contributed by a Transferor to the Company is less than an amount equal to the
projected EBITDA contained in the Financial Projections (as defined in Schedule
9.4 hereto) minus $1,000,000, then within ninety (90) days after the end of 1999
the Transferor shall contribute to the Company an amount in cash equal to the
amount by which projected EBITDA minus $1,000,000 exceeds the actual aggregate
EBITDA for such years.
9.5 Third Party Claims. If any legal proceedings shall be instituted or
any claim asserted by any third party in respect of which ▇▇▇▇▇▇▇▇ Indemnified
Parties on the one hand, or Lear Indemnified Parties on the other hand, may be
entitled to indemnity hereunder, the party asserting such right to indemnity
(the "Indemnitee") shall give the party from whom indemnity is sought (the
"Indemnifying Party") prompt written notice (the "Claims Notice") thereof. The
Claims Notice shall describe the asserted claim in reasonable detail and shall
indicate an estimate of the amount of the Liability that has been or may be
suffered by the Indemnitee. A delay in giving the Claims Notice shall only
relieve the recipient of liability to the extent the recipient suffers actual
prejudice because of the delay. The Indemnifying Party shall be entitled to
assume the defense of any action, suit or claim brought against the Indemnitee
with respect to which the Indemnifying Party may have any indemnity liability
hereunder. The Indemnifying Party shall be responsible for any legal or other
expenses incurred by the Indemnifying Party in connection with the defense
thereof. In the event the Indemnifying Party assumes such defense, the
Indemnitee shall continue to have the right to be represented, at its own
expense, by counsel of its choice in connection with the defense of such a
proceeding or claim. Neither the Indemnifying Party nor the Indemnitee shall
make any settlement of any claim or consent to the entry of any judgment without
the written consent of the other party (which consent shall not be unreasonably
withheld). The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such proceeding or
claim. Each party, without cost to the other party, shall make available to the
other party and their attorneys and accountants all books and records of such
party relating to such proceeding or litigation.
ARTICLE 10
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CERTAIN DEFINITIONS
When used in this Agreement, the following terms in all of their tenses
and cases shall have the meanings assigned to them below or elsewhere in this
Agreement:
"Affiliate" of any Person means any person directly or indirectly
controlling, controlled by, or under common control with, any such Person.
"Benefit Plan" of any party means any and all employee benefit plans of
such party as defined in ERISA, including, but not limited to, all pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus or other incentive plans, all other
employee programs, arrangements or agreements, all medical, vision, dental or
other health plans, all life insurance plans, and all other employee benefit
plans or fringe benefit plans currently adopted, maintained by, sponsored by or
contributed to by any party or its subsidiary for the benefit of employees,
retirees, dependents, spouses, directors, or other beneficiaries.
"Contracts" means any commitment, understanding, instrument, lease,
pledge, mortgage, indenture, note, license, agreement, purchase or sale order,
contract, promise, or similar arrangement evidencing or creating any obligation,
whether written or oral.
"DHT" means ▇▇▇▇▇▇▇▇ Happich Technology, an entity affiliated with
▇▇▇▇▇▇▇▇.
"Environmental Law" shall mean all federal, state, and local statutes,
regulations, ordinances, and similar provisions having the force or effect of
law, all judicial and administrative orders and determinations, all contractual
obligations, and all common law concerning public health and safety, worker
health and safety, and pollution or protection of the environment including
without limitation all those relating to the presence, use, production,
generation, handling, transport, treatment, storage, disposal, distribution,
labeling, testing, processing, discharge, release, threatened release, control,
or cleanup of any Hazardous Substance.
"EBITDA" means earnings before interest, taxes, depreciation and
amortization as determined according to generally accepted accounting principles
consistently applied.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Plan" of a party means a Benefit Plan of that party or any
subsidiary of such party which is an "employee pension benefit plan," as that
term is defined in Section 3(2) of ERISA.
"Governmental Authority" means any foreign, federal, state, regional or
local authority, agency, body, court or instrumentality, regulatory or
otherwise, which, in whole or in part, was formed by or operates under the
auspices of any foreign, federal, state, regional or local government.
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"Hazardous Substance" means any substance in any concentration which is
or could be detrimental to human health or safety or to the environment,
currently or hereafter listed, defined, or designated as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any Environmental Law,
whether by type or by quantity, including any substance containing any such
substance as a component. Hazardous Substance includes, without limitation, any
toxic waste, pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste, special waste, industrial substance, oil or petroleum or any
derivative or byproduct thereof, radon, radioactive material, asbestos,
asbestos-containing material, urea, formaldehyde, foam insulation, lead and
Polychlorinated Biphenyls.
"Intellectual Property Rights" means know-how, manufacturing
techniques, trade secrets and confidential proprietary information, but does not
include patents and trademarks.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
"Knowledge" means with respect to Lear the actual knowledge as of the
applicable closing date of ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any other manager
or staff employee of Lear or Empetek associated with the Transferred Lear Assets
and transferred business operations. "Knowledge" means with respect to ▇▇▇▇▇▇▇▇
the actual knowledge as of the applicable closing date of ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, or any other manager or staff employee of ▇▇▇▇▇▇▇▇ or Eurotrim
associated with the Transferred ▇▇▇▇▇▇▇▇ Assets and transferred business
operations.
"Law" means any common law and any federal, state, regional, local or
foreign law, rule, statute, ordinance, rule, order or regulation in effect as of
the Effective Date (other than federal or state antitrust Laws as they may
relate to the transactions contemplated by this Agreement).
"Liabilities" means responsibilities, obligations, duties, commitments,
claims, and liabilities of any and every kind, whether known or unknown,
accrued, absolute, contingent or otherwise.
"Lien" means any pledge, lien (including tax lien), charge, claim,
encumbrance, security interest, mortgage, option, restriction on transfer
(including, without limitation, any buy-sell agreement or right of first refusal
or offer), forfeiture, penalty, equity or other right of another Person of every
nature and description whatsoever.
"Owned Real Property" means those certain parcels of owned real
property, together with the buildings, structures and other improvements erected
thereon, and together with all easements, rights and privileges appurtenant
thereto, which are described in Schedule 4.7 hereto (or Schedule 5.10 hereto in
the case of Empetek).
"Pension Plan" of a party shall mean any ERISA Plan of that party or
any subsidiary of that party which is also a "defined benefit plan" as defined
in Section 414(j) of the Internal Revenue Code.
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"Permitted Encumbrances" means all matters set forth in Schedule 9.1,
and shall also include the following:
(a) all liens for taxes and assessments, both general and
special, and other governmental charges which are not yet due and
payable as of the Effective Date;
(b) all land use, building and zoning codes and ordinances of
general effect, and other laws, ordinances, regulations, rules, orders,
licenses and determinations of any federal, state, county, municipal or
other governmental authority, now or hereafter enacted of general
effect, made or issued by any such governmental authority affecting the
Owned Real Property;
(c) all easements, rights-of-way, covenants, conditions,
restrictions, reservations, licenses, agreements, and other matters of
record;
(d) all electric power, telephone, gas, sanitary sewer, storm
sewer, water and other utility lines, pipelines, service lines, and
facilities of any nature on, over or under the Owned Real Property, and
all licenses, easements and rights-of-way, and other agreements
relating thereto; and
(e) other imperfections of title, easements and encumbrances,
if any, which taken together with items (a) through (d) above do not,
individually or in the aggregate, materially adversely affect the
marketability or insurability of title to any parcel of Owned Real
Property or materially detract from the Company's title to or ability
to use the Transferred Assets other than Owned Real Property.
"Person" means any individual, firm, corporation, partnership, limited
liability company, limited liability partnership, association, estate, trust,
pension or profit-sharing plan, or any other entity, including any government
entity.
"Petroleum Products" means petroleum, gasoline, oil, fuel oil, diesel
fuel and petroleum solvents.
"Products" shall have the meaning attributed to it in the Operating
Agreement.
"RCRA" means Resource Conservation and Recovery Act of 1976, as
amended.
"Release" means any direct or indirect spilling, pumping, pouring,
emitting, emptying, placing, discharging, injecting, escaping, leaking, dumping,
or disposing on or into any building or facility or the environment whether
intentional or unintentional.
"Storage" means storage as defined by RCRA as of the Effective Date or
by any similar Law of any jurisdiction where Transferor presently conducts
business.
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"Tax" means any charge or assessment by or liability to any
Governmental Authority, including, but not limited to, any deficiency, interest
or penalty.
"Transferred Assets" means the Transferred Lear Assets and the
Transferred ▇▇▇▇▇▇▇▇ Assets, collectively.
"Treatment" means treatment as defined by RCRA as of the Effective Date
or by any similar Law of any jurisdiction where the Transferred Assets are
located as of the Effective Date.
ARTICLE 11
CONSTRUCTION
11.1 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan without giving effect to
any applicable principles of conflicts of laws.
11.2 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
(i) in person, (ii) to the extent receipt is confirmed, by telecopy, facsimile
or other electronic transmission service, (iii) by a nationally recognized
overnight courier service, or (iv) by registered or certified mail (postage
prepaid return receipt requested), to the parties at the following address:
To Lear ▇▇▇▇ Corporation
or AIM: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and General Counsel
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
To ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporation
or Eurotrim: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Varnum, Riddering, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
To the Company: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Overhead Systems, L.L.C.
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▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy No. _____________
11.3 Severability. If any provision of this Agreement shall be
conclusively determined by a court of competent jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement shall not be
affected thereby.
11.4 Binding Effect. Except as otherwise provided herein, this
Agreement shall inure to the benefit of and be binding upon the parties, their
respective successors, legal representatives and permitted assigns.
11.5 Pronouns and Plurals. All pronouns and variations thereof are
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the appropriate Person(s) may require.
11.6 No Third Party Rights. This Agreement is intended to create
enforceable rights between the parties hereto only, and creates no rights in, or
obligations to, any other Persons whatsoever.
11.7 Time is of Essence. Time is of the essence in the performance of
each and every obligation herein imposed.
11.8 Schedules Included in Exhibits; Incorporation by Reference. Any
reference to an Exhibit to this Agreement contained herein shall be deemed to
include any Schedules to such Exhibit. Each of the Exhibits referred to in this
Agreement, and each Schedule to such Exhibits, is hereby incorporated by
reference in this Agreement as if such Schedules and Exhibits were set out in
full in the text of this Agreement.
11.9 Amendments. This Agreement may not be amended except by unanimous
written agreement of all of the parties hereto.
11.10 Creditors. None of the provisions of this Agreement shall be for
the benefit or enforceable by any creditors of any party hereto.
11.11 Counterparts; Facsimile Transmission. This Agreement may be
executed by the parties hereto in counterparts, each of which shall be deemed to
be an original instrument,
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but all of which together shall constitute one and the same document. The
Agreement may be executed and delivered by facsimile transmission.
11.12 Entire Agreement; Section Headings. This Agreement constitutes
the entire Agreement among the parties hereto relating to the subject matter
hereof and supersedes all prior agreements, understandings, and arrangements,
oral or written, among the parties with respect to the subject matter hereof.
The Section headings in this Agreement are for reference purposes only and shall
be affect in any way the meaning or interpretation of this Agreement.
11.13 Assignment. This Agreement and each and every covenant, term and
condition hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns. Except as otherwise
specifically provided in this Agreement, neither this Agreement nor any rights
or obligations hereunder shall be assignable or be delegated directly or
indirectly by any party hereto to a third party without the prior written
consent of all the parties to this Agreement.
11.14 Arbitration. Any dispute, controversy or claim (hereinafter
"Dispute") between the parties of any kind or nature whatsoever, arising under
or relating to this Agreement whether arising in contract, tort or otherwise,
shall be resolved according to the following procedure. If a Dispute arises
among two or more parties to this Agreement which is not resolved by good faith
negotiation, then such Dispute, upon 30 days' prior notice from one party to the
others of its intent to arbitrate (an "Arbitration Notice"), shall be submitted
to and settled by arbitration; provided, however that nothing contained herein
shall preclude any party hereto from seeking or obtaining (a) injunctive relief,
or (b) equitable or other judicial relief to enforce the provisions hereof or to
preserve the status quo pending resolution of disputes hereunder. Such
arbitration shall be conducted in accordance with the commercial arbitration
rules of the American Arbitration Association existing at the time of submission
by one arbitrator. The parties shall attempt to agree upon an arbitrator. If one
cannot be agreed upon, the Member which did not give the Arbitration Notice may
request the Chief Judge of the United States District Court for the Eastern
District of Michigan or the Chief Judge of the United States District Court for
the Western District of Michigan to appoint an arbitrator. If he or she will not
the arbitrator shall be appointed by the American Arbitration Association. If an
arbitrator so selected becomes unable to serve, his or her successor shall be
similarly selected or appointed. All arbitration hearings shall be conducted on
an expedited schedule, and all proceedings shall be confidential. Any party may
at its expense make a stenographic record thereof. The arbitrator shall
apportion all costs and expenses of arbitration (including the arbitrator's fees
and expenses, the fees and expenses of experts, and the fees and expenses of
counsel to the parties), between the prevailing and non-prevailing party as the
arbitration panel deems fair and reasonable. Any arbitration award shall be
binding and enforceable against the parties hereto and judgment may be entered
thereon in
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any court of competent jurisdiction. The arbitration will take place at
Southfield, Michigan, or Grand Rapids, Michigan, at the election of the Member
not giving the Arbitration Notice.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
▇▇▇▇ CORPORATION AUTOMOTIVE INDUSTRIES
("▇▇▇▇") MANUFACTURING, INC.
("AIM")
By:
---------------------------- By: ▇.▇. ▇▇▇▇▇▇▇▇
--------------------------
Its: Its:
----------------------- --------------------
▇▇▇▇▇▇▇▇ CORPORATION LEAR ▇▇▇▇▇▇▇▇ OVERHEAD
("▇▇▇▇▇▇▇▇") SYSTEMS, L.L.C.
(the "Company")
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------- --------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Its: Chief Executive Officer and President Its:
---------------------
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A ▇▇▇▇ of Sale
Exhibit B-1 Empetek Stock Transfer Agreement
Exhibit B-2 Eurotrim Stock Transfer Agreement
Schedule 1.2(a) Transferred Lear Assets
Schedule 1.2(b) Excluded Lear Assets
Schedule 1.3(a) Transferred ▇▇▇▇▇▇▇▇ Assets
Schedule 1.3(b) Excluded ▇▇▇▇▇▇▇▇ Assets
Schedule 1.4 Assigned Contracts
Schedule 2.1 Assumed Lear Liabilities
Schedule 4.7 Owned Real Property
Schedule 4.8(a) Lear Environmental Disclosures
Schedule 4.8(b) ▇▇▇▇▇▇▇▇ Environmental Disclosures
Schedule 4.10(a) Lear and Empetek Projected Financial Information
Schedule 4.10(b) ▇▇▇▇▇▇▇▇ and Eurotrim Projected Financial Information
Schedule 4.12 Employee Benefits Disclosures
Schedule 4.13 Labor and Employment Matter Disclosures
Schedule 5.2 Empetek Undisclosed Liabilities
Schedule 5.3 Empetek Material Contracts
Schedule 5.10 Empetek Real property
Schedule 5.11 Empetek Environmental Matters
Schedule 5.14 Empetek Benefits
Schedule 5.15 Empetek Labor and Employment Matters
Schedule 6.2 Eurotrim Undisclosed Liabilities
Schedule 6.3 Eurotrim Material Contracts
Schedule 6.10 Eurotrim Real Property
Schedule 6.11 Eurotrim Environmental Matters
Schedule 6.14 Eurotrim Benefits
Schedule 6.15 Eurotrim Labor Employment Matters
Schedule 9.4 Projected EBITDA
Schedule 11.1 Permitted Encumbrances
74
TRANSFER AGREEMENT
SCHEDULE 9.4
1. Projected aggregate EBITDA for calendar 1998 and 1999 for the
Transferred Lear Assets and related business operations
contributed by Lear, AIM and LIS is $24,131,000.
2. Projected aggregate EBITDA for calendar 1998 and 1999 for the
Transferred ▇▇▇▇▇▇▇▇ Assets and related business operations
contributed by ▇▇▇▇▇▇▇▇ is $15,903,000.
75
EXHIBIT C-1
DONNELLY U.S. LEASED WORKER AGREEMENT
THIS LEASED WORKER AGREEMENT (this "Agreement") is entered into as of
this 1st day of November, 1997 (the "Effective Date"), by and among ▇▇▇▇▇▇▇▇
CORPORATION, a Michigan corporation, ("▇▇▇▇▇▇▇▇") and ▇▇▇▇ ▇▇▇▇▇▇▇▇ OVERHEAD
SYSTEMS L.L.C., a Michigan limited liability company (together with its
subsidiaries, the "Company").
RECITALS:
WHEREAS, Lear and ▇▇▇▇▇▇▇▇ Corporation as members of the Company have
executed an Operating Agreement of the Company dated September 3, 1997 (the
"Operating Agreement"); capitalized terms not defined herein shall have the
meaning ascribed to them in the Operating Agreement;
WHEREAS, the parties desire that the Company shall lease and eventually
employ (subject to the terms of this Agreement) those ▇▇▇▇▇▇▇▇ employees
associated with the business being transferred by ▇▇▇▇▇▇▇▇ to the Company as
contemplated by the Operating Agreement;
NOW THEREFORE, for good and valuable consideration including the mutual
promises contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1
ASSIGNMENT OF LEASED WORKERS
1.1 "LEASED WORKERS" shall mean those persons identified on Schedule A
who are employed by ▇▇▇▇▇▇▇▇ as of the effective date of their assignment to the
Company, as supplemented from time to time to include additional ▇▇▇▇▇▇▇▇
employees, if any, assigned to the Company as Leased Workers under this
Agreement. With respect to persons or positions identified on Schedule A,
▇▇▇▇▇▇▇▇ may substitute a different individual for the individual listed on
Schedule ▇. ▇▇▇▇▇▇▇▇'▇ employees associated with ▇▇▇▇▇▇▇▇'▇ Grand Haven,
Michigan facility are not Leased Workers and are not being assigned to the
Company pursuant to this Agreement.
1.2 ASSIGNMENT OF LEASED WORKERS. Effective as of the Effective Date,
▇▇▇▇▇▇▇▇ hereby assigns the Leased Workers identified on Schedule A who are
currently employed by ▇▇▇▇▇▇▇▇ (primarily at ▇▇▇▇▇▇▇▇'▇ 128th South Facility in
Holland, Michigan) to perform the
76
services performed by such Leased Workers immediately prior to the Effective
Date ("Services") for the term of this Agreement. Schedule A will be
supplemented from time to time to include additional ▇▇▇▇▇▇▇▇ employees, if any,
assigned to the Company as Leased Workers under this Agreement and to exclude
▇▇▇▇▇▇▇▇ employees whose employment with ▇▇▇▇▇▇▇▇ terminates prior to their
assignment to the Company and employees who elect not to accept employment with
the Company and are reassigned by ▇▇▇▇▇▇▇▇.
1.3 EMPLOYEE COMPENSATION. While a Leased Worker is performing Services
under this Agreement, ▇▇▇▇▇▇▇▇ will pay all wages and compensation and provide
all benefits to the Leased Worker, subject to payment by the Company for the
Services as provided by this Agreement.
1.4 STATUS. The ▇▇▇▇▇▇▇▇ employees assigned to perform Services for the
Company are solely the employees of ▇▇▇▇▇▇▇▇ and nothing contained in this
Agreement shall be construed to create any other relationship between the
parties. ▇▇▇▇▇▇▇▇ has recruited, interviewed, tested, selected, hired and
trained the Leased Workers. ▇▇▇▇▇▇▇▇ will maintain all necessary payroll and
personnel records and compute wages and withhold applicable federal, state and
local taxes and social security payments for the Leased Workers. ▇▇▇▇▇▇▇▇ and
the Company shall cooperate to discipline, review and evaluate employees.
▇▇▇▇▇▇▇▇ has sole responsibility to determine compensation and terminate Leased
Workers assigned pursuant to this Agreement.
ARTICLE 2
PAYMENTS BY THE COMPANY TO ▇▇▇▇▇▇▇▇
2.1 PAYMENT. The Company agrees to pay ▇▇▇▇▇▇▇▇ an amount equal to
▇▇▇▇▇▇▇▇'▇ direct costs (wages, compensation, withholding and employment taxes,
and bonuses) of employing the Leased Workers to perform the Services (as further
described on Schedule B) and an amount equal to ▇▇▇▇▇▇▇▇'▇ indirect actual costs
related and appropriately allocated to the Leased Workers, including, but not
limited to, employee benefits, workers' compensation insurance, and payments to
the Michigan Employment Security Commission. ▇▇▇▇▇▇▇▇ shall submit to the
Company monthly invoices for the Services, which invoices shall be due and
payable within seven (7) days of receipt.
ARTICLE 3
WORKERS' COMPENSATION AND OTHER MATTERS
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3.1 WORKERS' COMPENSATION. ▇▇▇▇▇▇▇▇ shall maintain, at its expense,
workers' compensation insurance for Leased Workers, covering any compensable
work-related injuries or illnesses they sustain on the premises owned or leased
by the Company during their work assignment. ▇▇▇▇▇▇▇▇ shall provide a copy of
the workers' compensation insurance certificate annually on its renewal date to
the Company.
3.2 OSHA. The Company will provide ▇▇▇▇▇▇▇▇ with all information
required under the Occupational Safety and Health Act, or other applicable laws,
regarding any work- related injuries or illnesses sustained by Leased Workers
while on Company premises during their work assignment.
3.3 GENERAL LIABILITY INSURANCE. ▇▇▇▇▇▇▇▇ shall maintain, at its
expense, general liability insurance to cover the tortious actions or negligence
of Leased Workers while on the premises of the Company during their work
assignment. ▇▇▇▇▇▇▇▇ shall provide a copy of the liability insurance certificate
annually on its renewal date to the Company.
3.4 UNEMPLOYMENT BENEFITS. ▇▇▇▇▇▇▇▇ shall be responsible for
unemployment benefits for Leased Workers.
3.5 DRUG/ALCOHOL POLICY. Leased Workers will be subject to ▇▇▇▇▇▇▇▇'▇
Employee Alcohol and Drug Testing policy. ▇▇▇▇▇▇▇▇ will notify the Company if a
Leased Worker is selected for a drug and alcohol test, and will coordinate with
the Company the scheduling of the test. ▇▇▇▇▇▇▇▇ will pay for the cost of the
aforementioned tests, and will recommend to the Company what disciplinary action
must be taken in the event of a positive test result.
3.6 EMPLOYMENT LAWS. ▇▇▇▇▇▇▇▇ and the Company shall comply with the
Americans with Disabilities Act, the Civil Rights Act, the Age Discrimination in
Employment Act, the Fair Labor Standards Act, and other applicable state and
federal labor and employment laws.
3.7 SAFETY. The Company shall provide the Leased Worker with (i) a
suitable workplace which complies with all applicable safety and health
standards, statutes and ordinances, (ii) all necessary information, training and
safety equipment with respect to hazardous substances, and (iii) adequate
instructions, assistance, supervision, and time to perform the services
requested of them. The Company is responsible for all claims, losses, damages
and expenses concerning (i) hazardous substances and all other pollutants and
contaminants present at or released from the workplace which the Company
provides for the Leased Workers, or (ii) any violations of applicable safety or
health standards, statutes and ordinances.
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3.8 EMPLOYEE RECORDS. Personnel files for Leased Workers will be
maintained by ▇▇▇▇▇▇▇▇. The Company shall provide performance feedback to Leased
Workers and will provide ▇▇▇▇▇▇▇▇ with written documentation of such feedback.
All information contained in personnel files for Leased Workers will be
available to appropriate staff of the Company on request. For each Leased Worker
that becomes an employee of the Company, that employee's complete personnel file
with be transferred to the Company.
ARTICLE 4
TRANSITION
4.1 OFFER OF EMPLOYMENT. The Company agrees to offer to employ each
Leased Worker between six (6) and fifteen (15) months after the effective date
of the assignment of such Leased Worker by ▇▇▇▇▇▇▇▇ to the Company. The Leased
Worker shall have forty-five (45) days from the date of such employment offer to
accept or reject the offer. The terms of the employment offer shall include
compensation and benefits broadly comparable (as agreed by ▇▇▇▇▇▇▇▇) to the
compensation and benefits paid by ▇▇▇▇▇▇▇▇ to such Leased Worker immediately
prior to such offer of employment by the Company. ▇▇▇▇▇▇▇▇ and the Company shall
encourage Leased Workers to consider and accept employment offers from the
Company. If a Leased Worker is hired as an employee of the Company, this
Agreement shall no longer apply to that Leased Worker after the date of hire.
Notwithstanding the foregoing, Leased Workers who are fifty (50) years of age or
older and who have five (5) or more years of service at ▇▇▇▇▇▇▇▇ will be leased
by the Company for a period of at least five (5) years.
4.2 RETURN TO ▇▇▇▇▇▇▇▇. Leased Workers assigned as of the Effective
Date (but not new hires of the Company or temporary agency employees) will have
the opportunity to transfer to other ▇▇▇▇▇▇▇▇ facilities through the ▇▇▇▇▇▇▇▇
Job Posting Program and at the time of such transfer will cease to be Leased
Workers. ▇▇▇▇▇▇▇▇ will, at the request of the Company, replace any Leased
Workers who return to ▇▇▇▇▇▇▇▇ with other ▇▇▇▇▇▇▇▇ Leased Workers, temporary
agency employees, or new hires. In addition, after receiving an employment offer
from the Company pursuant to Section 4.1, each Leased Worker who was employed by
▇▇▇▇▇▇▇▇ prior to the Effective Date shall have forty-five (45) days from the
date of such offer to the Company to accept such offer or to elect to seek other
employment at ▇▇▇▇▇▇▇▇. Leased Workers who make such an election may return to
▇▇▇▇▇▇▇▇ through the provisions of ▇▇▇▇▇▇▇▇'▇ Job Posting Program and/or Staff
Reduction Program. All Leased Workers shall remain Leased Workers until their
assignment to ▇▇▇▇▇▇▇▇ or a ▇▇▇▇▇▇▇▇ affiliate; provided, however, that the
Company may cease leasing any Leased Worker who does not accept the Company's
offer of employment within forty-five (45) days of such offer. The timing of any
such return shall be mutually agreed upon the respective
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79
human resource managers of ▇▇▇▇▇▇▇▇ and the Company, based upon the number of
such employees and the availability of other positions. In addition, if a
significant number of the Leased Workers elect to return to ▇▇▇▇▇▇▇▇, then
▇▇▇▇▇▇▇▇ and the Board of Directors of the Company agree to discuss and consult
together concerning the process for such return in order to help reduce any
potential adverse impact on the respective business operations of ▇▇▇▇▇▇▇▇ and
the Company. All returns to ▇▇▇▇▇▇▇▇ shall be subject to the business needs and
policies of ▇▇▇▇▇▇▇▇ and the rights of ▇▇▇▇▇▇▇▇ employees. Leased Workers who
become employees of the Company will separate their employment from ▇▇▇▇▇▇▇▇ as
of the date they become an employee of the Company.
ARTICLE 5
INDEMNIFICATION
▇▇▇▇▇▇▇▇ shall indemnify and hold harmless the Company, its agents and
employees from and against any and all claims, losses, actions, damages,
expenses, and all other liabilities, including but not limited to attorney's
fees, arising out of or resulting from a Leased Worker's willful misconduct or
reckless performance of or failure to perform the work within the scope of the
assignment hereunder to the extent any such claim, loss, action, damage, expense
or other liability is attributable to bodily injury to or death of any person or
damage to or destruction of any property, whether belonging to the Company or to
another provided, however, that ▇▇▇▇▇▇▇▇ shall not be liable for any injury,
death, damage or destruction to the extent caused by the negligent or willful
acts or omissions of the Company, its agents, employees or contractors. The
Company shall give notice in writing to ▇▇▇▇▇▇▇▇ of any such claim, loss,
action, damage, expense or other liability within 15 days after discovery of the
event upon which the claim may be based or the learning of such claim, whichever
occurs first.
ARTICLE 6
CONSTRUCTION
6.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan without giving effect to any
applicable principles of conflicts of laws.
6.2 NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
(i) in person, (ii) to the extent receipt is confirmed, by telecopy, facsimile
or other electronic transmission service, (iii) by a nationally recognized
overnight courier service, or (iv) by registered or
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certified mail (postage prepaid return receipt requested), to the parties at the
following address:
To ▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Varnum, Riddering, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
To the Company: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Overhead Systems, L.L.C.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. ________________
With a copy to: ▇▇▇▇ Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and
General Counsel
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
6.3 SEVERABILITY. If any provision of this Agreement shall be
conclusively determined by a court of competent jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement shall not be
affected thereby.
6.4 BINDING EFFECT. Except as otherwise provided herein, this Agreement
shall inure to the benefit of and be binding upon the parties, their respective
successors, legal representatives and permitted assigns.
6.5 NO THIRD PARTY RIGHTS. This Agreement is intended to create
enforceable rights between the parties hereto only, and creates no rights in, or
obligations to, any other Persons whatsoever.
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6.6 TIME IS OF ESSENCE. Time is of the essence in the
performance of each and every obligation herein imposed.
6.7 SCHEDULES; INCORPORATION BY REFERENCE. Any reference to a Schedule
or Exhibit to this Agreement contained herein shall be deemed to include any
Schedules to such Exhibit. Each of the Exhibits and Schedules to this Agreement,
and each Schedule to such Exhibits, is hereby incorporated by reference in this
Agreement as if such Schedules and Exhibits were set out in full in the text of
this Agreement.
6.8 AMENDMENTS. This Agreement may not be amended except by written
agreement executed by duly authorized officers of all of the parties hereto.
6.9 ENTIRE AGREEMENT; SECTION HEADINGS. This Agreement, the Operating
Agreement, the agreements contemplated thereby, and any other related written
agreement between the parties hereto constitute the entire Agreement among the
parties hereto relating to the subject matter hereof and supersede all prior
agreements, understandings, and arrangements, oral or written, among the parties
with respect to the subject matter hereof. The Section headings in this
Agreement are for reference purposes only and shall be affect in any way the
meaning or interpretation of this Agreement.
6.10 ASSIGNMENT. This Agreement and each and every covenant, term and
condition hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns. Except as otherwise
specifically provided in this Agreement or the Operating Agreement (particularly
Section 9.2(a) thereof), neither this Agreement nor any rights or obligations
hereunder shall be assignable or be delegated directly or indirectly by any
party hereto to a third party (other than an Affiliate of the Member) without
the prior written consent of all the parties to this Agreement.
6.11 ARBITRATION. Any dispute, controversy or claim (hereinafter
"Dispute") between the parties of any kind or nature whatsoever, arising under
or relating to this Agreement whether arising in contract, tort or otherwise,
shall be resolved according to the following procedure. If a Dispute (excluding
business decisions to be voted on by Members or Directors) arises among the
Members under this Agreement which is not resolved by good faith negotiation,
then such Dispute, upon 30 days' prior notice from one Member to the other of
its intent to arbitrate (an "Arbitration Notice"), shall be submitted to and
settled by arbitration; provided, however, that nothing contained herein shall
preclude any party hereto from seeking or obtaining (a) injunctive relief, or
(b) equitable or other judicial relief to enforce the provisions hereof or to
preserve the status quo pending resolution of disputes hereunder. Such
arbitration shall be conducted in accordance with the commercial arbitration
rules of the American Arbitration Association existing at the time of submission
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by one arbitrator. The Members shall attempt to agree upon an arbitrator. If one
cannot be agreed upon, the Member which did not give the Arbitration Notice may
request the Chief Judge of the United States District Court for the Eastern
District of Michigan or the Chief Judge of the United States District Court for
the Western District of Michigan to appoint an arbitrator. If he or she will
not, the arbitrator shall be appointed by the American Arbitration Association.
If an arbitrator so selected becomes unable to serve, his or her successor shall
be similarly selected or appointed. All arbitration hearings shall be conducted
on an expedited schedule, and all proceedings shall be confidential. Either
Member may at its expense make a stenographic record thereof. The arbitrator
shall apportion all costs and expenses of arbitration (including the
arbitrator's fees and expenses, the fees and expenses of experts, and the fees
and expenses of counsel to the parties), between the prevailing and
non-prevailing Member as the arbitrator deems fair and reasonable. Any
arbitration award shall be binding and enforceable against the parties hereto
and judgment may be entered thereon in any court of competent jurisdiction. The
arbitration will take place at Southfield, Michigan or Grand Rapids, Michigan at
the election of the Member not giving the Arbitration Notice.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
▇▇▇▇▇▇▇▇ CORPORATION
("▇▇▇▇▇▇▇▇")
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Its Chief Executive Officer and President
▇▇▇▇ ▇▇▇▇▇▇▇▇ OVERHEAD SYSTEMS,
LLC
By/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
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LIST OF EXHIBITS AND SCHEDULES
Schedule A Leased Workers
Schedule B Payment by Company to ▇▇▇▇▇▇▇▇
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EXHIBIT D-1
▇▇▇▇▇▇▇▇ TECHNOLOGY LICENSE AGREEMENT
THIS TECHNOLOGY LICENSE AGREEMENT (this "Agreement") is entered into
effective as of November 1, 1997 (the "Effective Date"), by and among ▇▇▇▇▇▇▇▇
CORPORATION, a Michigan corporation ("▇▇▇▇▇▇▇▇"), (Lear and ▇▇▇▇▇▇▇▇ are
sometimes referred to herein as the "Members"), and ▇▇▇▇ ▇▇▇▇▇▇▇▇ OVERHEAD
SYSTEMS L.L.C., a Michigan limited liability company (together with its
subsidiaries, the "Company"); and ▇▇▇▇ CORPORATION, a Delaware Corporation
("Lear").
RECITALS:
WHEREAS, ▇▇▇▇ Corporation ("Lear") and ▇▇▇▇▇▇▇▇ as members of the
Company have executed a revised Operating Agreement of the Company on the date
hereof (the "Operating Agreement") creating a joint venture between Lear and
▇▇▇▇▇▇▇▇; capitalized terms not defined herein shall have the meaning ascribed
to them in the Operating Agreement;
WHEREAS, Lear is a party to this Agreement in order to protect its
rights and perform its obligations hereunder;
WHEREAS, ▇▇▇▇▇▇▇▇ is the owner of certain intellectual property rights
principally covering or principally used in the manufacture of Products (as such
term is defined in the Operating Agreement);
WHEREAS, the parties desire to enter into this Agreement to provide
certain rights for the Company to license certain specified intellectual
property rights from ▇▇▇▇▇▇▇▇; and
WHEREAS, the Company may develop improvements to the intellectual
property rights licensed from ▇▇▇▇▇▇▇▇ and may develop other intellectual
property rights and the parties desire to enter into this Agreement to provide
certain rights for ▇▇▇▇▇▇▇▇ to license such improvements and intellectual
property rights from the Company;
NOW THEREFORE, for good and valuable consideration including the mutual
promises contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
85
ARTICLE 1
DEFINITIONS
1.1 "INTELLECTUAL PROPERTY RIGHTS" shall mean United States,
international and foreign patents and patent applications (including United
States provisional applications and all PCT patent applications), any and all
patents issuing therefrom or otherwise corresponding thereto, and all
divisionals, continuations, continuations-in-part, reissues, reexamination
certificates and extensions thereof, describing and/or claiming Technology, and
all mask works, industrial design registrations and applications for such
registrations, technology, and all other proprietary rights covering or
otherwise related to Technology and/or processes for manufacture and/or use of
Products embodying Technology arising prior to or during the term of this
Agreement.
1.2 "TECHNOLOGY" shall mean technological developments principally
covering or principally used in the manufacture of Products including, but not
be limited to, the technology described on Schedule A hereto, ideas, concepts,
inventions, processes, principles of operation, formulae, patterns, drawings,
prints, proposals, devices, software, compilations of related information,
records, specifications and the knowhow, arising before or during the term of
this Agreement. Technology shall not include existing or future technological
developments or intellectual property rights of ▇▇▇▇▇▇▇▇ or its Affiliates
relating to or concerning either (a) "Electronic Components" as such term is
defined in the Purchase and Supply Agreement by and among the parties hereto,
(b) optics or lenses, or (c) bent or coated glass.
1.3 "IMPROVEMENT" shall mean (i) any alteration, modification or
enhancement to Technology or Intellectual Property Rights which improves the
effectiveness, efficiency, performance or other attribute of, or otherwise
relates to, Technology or Intellectual Property Rights, or any element thereof,
or (ii) any new product or material which performs substantially the same
function as Technology or Intellectual Property Rights but does so through a
different method or process.
ARTICLE 2
LICENSE GRANT BY ▇▇▇▇▇▇▇▇
2.1 LICENSE GRANT. ▇▇▇▇▇▇▇▇ hereby grants unto the Company a
royalty-free, paid-up, worldwide, exclusive license of ▇▇▇▇▇▇▇▇'▇ Technology and
Intellectual Property Rights (a) identified as Group A and Group B on Schedule A
attached hereto to make, have made, use, and sell the Products (but not to make,
have made, use, or sell anything other than the Products) and (b) identified as
Group C on Schedule A attached hereto, to make, have made, use and sell those
Products included within the existing order for Volvo (but not to make, have
made, use or sell any other Product or anything other than Products).
Notwithstanding the exclusive license, ▇▇▇▇▇▇▇▇ reserves the right to use its
Technology and Intellectual Property Rights to the extent not prohibited by the
Noncompetition and Non-Solicitation Agreement between ▇▇▇▇▇▇▇▇ and Lear of even
date. The term of this license is described in Article 9 of this Agreement.
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2.2 SUBLICENSES. The Company may not sublicense ▇▇▇▇▇▇▇▇'▇ Technology
or Intellectual Property Rights without ▇▇▇▇▇▇▇▇'▇ prior written consent;
provided, however, that the Company shall have the right to sublicense
▇▇▇▇▇▇▇▇'▇ Technology and Intellectual Property Rights to the Company's
subsidiaries (any non-U.S. subsidiaries shall be required to pay a commercially
reasonable royalty rate to the Company for such sublicense, which royalty rate
shall be no less than the royalty paid by such subsidiaries to Lear pursuant to
the Company's Technology License with Lear of even date).
ARTICLE 3
IMPROVEMENTS AND LICENSE GRANT BY THE COMPANY
3.1 OWNERSHIP OF IMPROVEMENTS. The Company shall own and shall have all
rights, including Intellectual Property Rights, in all Improvements which are
conceived and reduced to practice by the Company's personnel or by third party
personnel working on the Company's behalf.
3.2 LICENSE GRANT. The Company hereby grants and agrees to grant to
▇▇▇▇▇▇▇▇ or Lear, as the case may be, a royalty-free, paid-up, worldwide,
non-exclusive, non-transferrable license of the Improvements, Technology and
Intellectual Property Rights of the Company on the terms set forth in this
Agreement.
ARTICLE 4
JOINTLY DEVELOPED TECHNOLOGY
4.1 JOINTLY DEVELOPED TECHNOLOGY
(a) Technology and Intellectual Property Rights developed
jointly by ▇▇▇▇▇▇▇▇ and the Company after the date of this Agreement
shall be owned by the Company, and the Company shall have all rights in
and to such jointly developed Technology and Intellectual Property
Rights. Technology and Intellectual Property Rights developed jointly
by ▇▇▇▇▇▇▇▇ and Lear or by ▇▇▇▇▇▇▇▇, Lear and the Company shall be
owned by the Company and the Company shall have all rights in and to
such jointly developed Technology and Intellectual Property Rights.
(b) The Company hereby grants unto ▇▇▇▇▇▇▇▇ a royalty-free,
paid-up, worldwide, non-assignable, non-transferrable, non-exclusive
license of any jointly developed Technology and Intellectual Property
Rights on the terms set forth in this Agreement.
ARTICLE 5
PROSECUTION OR MAINTENANCE OF
INTELLECTUAL PROPERTY RIGHTS
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5.1 MAINTENANCE BY ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ shall retain the right to (but
shall not be obligated to) prosecute and/or maintain [at the Company's] expense,
all of the Technology and Intellectual Property Rights licensed by ▇▇▇▇▇▇▇▇ to
the Company pursuant to Article 2 of this Agreement. The Company shall have the
right to prosecute and/or maintain at the Company's expense any of the
Intellectual Property Rights licensed hereunder in any country when the Company
has been notified by ▇▇▇▇▇▇▇▇ that ▇▇▇▇▇▇▇▇ no longer wishes to prosecute or
maintain such Intellectual Property Rights in such country, and ▇▇▇▇▇▇▇▇ hereby
agrees to notify the Company of its intent to cease prosecution or payment of
maintenance fees of any of such Intellectual Property Rights in any such
country, at least sixty (60) days prior to the date of any abandonment of any
right or the date of any required payment or filing which ▇▇▇▇▇▇▇▇ does not
intend to make or file. With respect to any Intellectual Property Rights
abandoned by ▇▇▇▇▇▇▇▇ and prosecuted and maintained by the Company pursuant to
this Section 5.2, the Company agrees to grant unto ▇▇▇▇▇▇▇▇ a royalty-free,
paid-up, worldwide, non-exclusive license to such Intellectual Property Rights.
5.2 MAINTENANCE BY THE COMPANY. The Company shall retain the right to
(but shall not be obligated to) prosecute and/or maintain at its expense, all of
the Improvements, Technology and Intellectual Property Rights licensed by the
Company to ▇▇▇▇▇▇▇▇ pursuant to Article 3 or Article 4 of this Agreement.
▇▇▇▇▇▇▇▇ shall have the right to prosecute and/or maintain at ▇▇▇▇▇▇▇▇'▇ expense
any of the Intellectual Property Rights of the Company licensed hereunder in any
country when ▇▇▇▇▇▇▇▇ has been notified by the Company that the Company no
longer wishes to prosecute or maintain such Intellectual Property Rights in such
country, and the Company hereby agrees to notify ▇▇▇▇▇▇▇▇ of its intent to cease
prosecution or payment of maintenance fees of any of such Intellectual Property
Rights in any such country, at least sixty (60) days prior to the date of any
abandonment of any right or the date of any required payment or filing which the
Company does not intend to make or file.
ARTICLE 6
COOPERATION AND CONFIDENTIALITY
6.1 EXCHANGE OF INFORMATION. During the term of this License, ▇▇▇▇▇▇▇▇,
the Company and their respective Affiliates will exchange information concerning
all Technology and Intellectual Property Rights conceived or developed by any of
them relating to Products and processes or techniques used in the manufacture of
Products.
6.2 COOPERATION. The Company and ▇▇▇▇▇▇▇▇ agree to cooperate with each
other in the prosecution of pending applications concerning the Intellectual
Property Rights or any new applications based upon any Improvements thereto by
providing, upon request, technical information and data in an appropriate form
relating to the subject matter or any pending or issued applications and/or
improvements.
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6.3 CONFIDENTIALITY. The Company acknowledges that some of the
Intellectual Property Rights and Technology licensed pursuant to this Agreement
or developed by ▇▇▇▇▇▇▇▇ or the Company after the date of this Agreement relate
to information which is not publicly available ("Confidential Information"),
including, without limitation, information exchanged pursuant to Section 6.1
hereof, the Technology listed or described in Schedule B and any jointly
developed Technology. The Company hereby agrees not to disclose the Confidential
Information to any third parties for a period of ten (10) years after the
receipt of such Confidential Information, except to only (a) those employees of
the Company having a legitimate business need-to-know and (b) consultants
engaged by the Company. The Company agrees that prior to making disclosures to
any consultant, it will obtain a confidentiality and non-use agreement. For
purposes of this section, any Affiliate of the Company other than ▇▇▇▇▇▇▇▇, Lear
or a subsidiary of the Company is deemed to be a third party.
6.4 CONFIDENTIALITY EXCEPTIONS. Notwithstanding the provisions of
Section 6.3, Confidential Information shall not include (a) information which is
known to the public or is generally known within the industry or business, (b)
information which the Company is required to disclose pursuant to law or order
of a court having jurisdiction (provided that the Company offers the ▇▇▇▇▇▇▇▇ an
opportunity to obtain an appropriate protective order or administrative relief
against disclosure of such Confidential Information), and (c) information which
was legally acquired by the Company from a third party in good faith, provided
that such disclosure by the third party was not in breach of any agreement
between such third party and the other party hereto.
6.5 PROTECTION OF RIGHTS. The parties hereto agree that it shall be the
policy of the Company to protect the Intellectual Property Rights and not to
infringe upon the intellectual property rights of third parties.
ARTICLE 7
INDEMNIFICATION
7.1 NO REPRESENTATION OR INDEMNIFICATION. Nothing in this Agreement is
intended to state or otherwise imply that the exercise of any right or license
granted by ▇▇▇▇▇▇▇▇ pursuant to this Agreement by the Company will not infringe
rights of third parties. ▇▇▇▇▇▇▇▇ does not undertake any obligation to indemnify
the Company against, or assume any responsibility for, any claim of infringement
by any third party relating to or arising out of any exercise of any right or
license referenced in this Agreement.
7.2 LIMITED WARRANTY. ▇▇▇▇▇▇▇▇ warrants that to its knowledge, except
as set forth in Schedule C, no claim has been asserted that the exercise of
rights or licenses transferred or granted by ▇▇▇▇▇▇▇▇ to the Company pursuant to
this Agreement infringe upon any third party rights.
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7.3 NO INDEMNIFICATION BY THE COMPANY CONCERNING NON-PRODUCT USES. The
Company does not undertake any obligation to indemnify ▇▇▇▇▇▇▇▇ against, or
assume any responsibility for, any claim of infringement by any third party
relating to or arising out of any exercise by ▇▇▇▇▇▇▇▇ of any right or license
granted by the Company to ▇▇▇▇▇▇▇▇ pursuant to this Agreement.
7.4 INDEMNIFICATION BY THE COMPANY CONCERNING PRODUCTS. The Company
agrees to indemnify and hold harmless ▇▇▇▇▇▇▇▇ and its Affiliates from and
against any loss, cost, expense (including, but not limited to, costs of
investigation and defense, attorney's fees, expert witnesses, consultants and
litigation support services), liability, settlement and damages as a result of
any claim(s) that the manufacture or sale of any Products after the Closingt
Date infringes upon any patent or other intellectual property rights of any
third party.
ARTICLE 8
INFRINGEMENT OF LICENSED INTELLECTUAL PROPERTY RIGHTS
8.1 ACTION BY THE COMPANY. The Company shall have the right but shall
not be obligated to institute proceedings in its own name or in the name of
▇▇▇▇▇▇▇▇ against any third party infringer (in the field of use of Products) of
any Intellectual Property Rights licensed by ▇▇▇▇▇▇▇▇ to the Company pursuant to
this Agreement. If ▇▇▇▇▇▇▇▇ or the Company becomes aware of any actual,
threatened, or apparent infringement of any of the licensed Intellectual
Property Rights by any Person in the field of use of Products, such party agrees
to provide the other party with written notice prior to suit of such actual,
threatened, or apparent infringement and agrees to furnish to the other party
any available evidence of such actual, threatened, or apparent infringement.
▇▇▇▇▇▇▇▇ agrees to cooperate in any proceedings instituted by the Company
against third party infringers and to provide information relating to such
proceedings which the Company may reasonably request. In the event that the
Company determines that it lacks standing to commence such a proceeding,
▇▇▇▇▇▇▇▇ agrees to execute such documents and take such actions as the Company
may reasonably request for the purpose of commencing such infringement
proceedings. The Company shall have the right to control prosecution of such
proceedings regardless of whether the proceedings are commenced in ▇▇▇▇▇▇▇▇'▇
name or in the name of the Company; provided, however, that in the event of a
counterclaim against ▇▇▇▇▇▇▇▇, the litigation shall be jointly managed by
▇▇▇▇▇▇▇▇ and the Company and ▇▇▇▇▇▇▇▇'▇ costs and expenses (including, but not
limited to, reasonable attorney's fees) will be paid by the Company pursuant to
Section 7.4.
8.2 ACTION BY ▇▇▇▇▇▇▇▇. In the event ▇▇▇▇▇▇▇▇ notifies the Company or
receives notice from the Company of actual, threatened, or apparent infringement
of any licensed rights or Intellectual Property Rights by a third party, and the
Company does not institute proceedings against such a third party within sixty
(60) days of notification, then ▇▇▇▇▇▇▇▇ may institute proceedings against such
a third party, at ▇▇▇▇▇▇▇▇'▇ expense, and in the Company's name (if necessary).
The Company agrees to cooperate fully with the Company in such proceedings. Any
recovery awarded in such proceedings shall be retained by ▇▇▇▇▇▇▇▇.
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ARTICLE 9
TERM AND TERMINATION
9.1 TERM. The licenses granted hereunder shall continue so long as
either Lear or ▇▇▇▇▇▇▇▇ are:
(a) Members of the Company or
(b) operating the business of the Company after a withdrawal
by the other unless otherwise terminated as provided herein.
9.2 DEFAULT. If any party fails to comply with any of its obligations
hereunder, and after notice from another party such failure continues for sixty
(60) days, such action shall constitute a default hereunder and under the
Operating Agreement; provided, however, if a default under this Agreement cannot
reasonably and with due diligence and good faith be cured within said 60-day
period, and if the defaulting party promptly commences and proceeds to complete
the cure of such default with due diligence and in good faith, the 60-day period
with respect to such default shall be extended to include such additional period
of time as may be reasonably necessary to cure such default.
9.3 REMEDIES ON DEFAULT. Upon the occurrence of a default hereunder,
which is not cured during the applicable cure period, the non-breaching parties
shall have the rights and remedies available at law and in equity and may
institute arbitration and/or legal proceedings in accordance with Section 10.11
hereof with respect to any damages or losses incurred by the non-defaulting
party. If the default is by a Member, and the default is a Material Default (as
defined in the Operating Agreement), the other Member shall also have all rights
provided in the Operating Agreement, including that included in Section 4.5(c)
thereof.
ARTICLE 10
CONSTRUCTION
10.1 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan without giving effect to
any applicable principles of conflicts of laws.
10.2 NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
(i) in person, (ii) to the extent receipt is confirmed, by telecopy, facsimile
or other electronic transmission service, (iii) by a nationally recognized
overnight courier service, or (iv) by registered or certified mail (postage
prepaid return receipt requested), to the parties at the following address:
To ▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ Corporation
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▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Varnum, Riddering, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
To the Company: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Overhead Systems, L.L.C.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy No. ________________
With a copy to: ▇▇▇▇ Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and
General Counsel
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
10.3 SEVERABILITY. If any provision of this Agreement shall be
conclusively determined by a court of competent jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement shall not be
affected thereby.
10.4 BINDING EFFECT. Except as otherwise provided herein, this
Agreement shall inure to the benefit of and be binding upon the parties, their
respective successors, legal representatives and permitted assigns.
10.5 NO THIRD PARTY RIGHTS. This Agreement is intended to create
enforceable rights between the parties hereto only, and creates no rights in, or
obligations to, any other Persons whatsoever.
10.6 TIME IS OF ESSENCE. Time is of the essence in the performance of
each and every obligation herein imposed.
10.7 SCHEDULES INCLUDED IN EXHIBITS; INCORPORATION BY REFERENCE. Any
reference to an Exhibit to this Agreement contained herein shall be deemed to
include any Schedules to such Exhibit. Each of the Exhibits referred to in this
Agreement, and each Schedule to such Exhibits, is
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hereby incorporated by reference in this Agreement as if such Schedules and
Exhibits were set out in full in the text of this Agreement.
10.8 AMENDMENTS. This Agreement may not be amended except by written
agreement executed by duly authorized officers of all of the parties hereto.
10.9 ENTIRE AGREEMENT; SECTION HEADINGS. This Agreement, the Operating
Agreement and the agreements contemplated by the Operating Agreement constitute
the entire agreement among the parties hereto relating to the subject matter
hereof and supersede all prior agreements, understandings, and arrangements,
oral or written, among the parties with respect to the subject matter hereof.
The Section headings in this Agreement are for reference purposes only and shall
be affect in any way the meaning or interpretation of this Agreement.
10.10 ASSIGNMENT. Except as otherwise specifically provided in this
Agreement or the Operating Agreement (particularly Section 9.2(a) thereof),
neither this Agreement nor any rights or obligations hereunder shall be
assignable or be delegated directly or indirectly by any party hereto to a third
party (other than an Affiliate of the Member) without the prior written consent
of all the parties to this Agreement.
10.11 ARBITRATION. Any dispute, controversy or claim (hereinafter
"Dispute") between the parties of any kind or nature whatsoever, arising under
or related to this Agreement whether arising in contract, tort or otherwise,
shall be resolved according to the following procedure. If a Dispute (excluding
business decisions to be voted on by Members or Directors) arises among the
Members under or relating to this Agreement which is not resolved by good faith
negotiation, then such Dispute, upon 30 days' prior notice from one Member to
the other of its intent to arbitrate (an "Arbitration Notice"), shall be
submitted to and settled by arbitration; provided, however, that nothing
contained herein shall preclude any party hereto from seeking or obtaining (a)
injunctive relief, or (b) equitable or other judicial relief to enforce the
provisions hereof or to preserve the status quo pending resolution of disputes
hereunder. Such arbitration shall be conducted in accordance with the commercial
arbitration rules of the American Arbitration Association existing at the time
of submission by one arbitrator. The Members shall attempt to agree upon an
arbitrator. If one cannot be agreed upon, the Member which did not give the
Arbitration Notice may request the Chief Judge of the United States District
Court for the Eastern District of Michigan or the Chief Judge of the United
States District Court for the Western District of Michigan to appoint an
arbitrator. If he or she will not, the arbitrator shall be appointed by the
American Arbitration Association. If an arbitrator so selected becomes unable to
serve, his or her successor shall be similarly selected or appointed. All
arbitration hearings shall be conducted on an expedited schedule, and all
proceedings shall be confidential. Either Member may at its expense make a
stenographic record thereof. The arbitrator shall apportion all costs and
expenses of arbitration (including the arbitrator's fees and expenses, the fees
and expenses of experts, and the fees and expenses of counsel to the parties),
between the prevailing and non-prevailing Member as the arbitrator deems fair
and reasonable. Any arbitration award shall be binding and enforceable against
the parties hereto and judgment may be entered thereon in any court of competent
jurisdiction. The arbitration will take place at Southfield,
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93
Michigan or Grand Rapids, Michigan at the election of the Member not giving the
Arbitration Notice.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
▇▇▇▇▇▇▇▇ CORPORATION
("▇▇▇▇▇▇▇▇")
By/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Its Chief Executive Officer and President
-----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ OVERHEAD SYSTEMS,
LLC
By /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Its
---------------------------
▇▇▇▇ CORPORATION
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Its
---------------------------
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94
LIST OF EXHIBITS AND SCHEDULES
Schedule A Description of Licensed ▇▇▇▇▇▇▇▇ Technology
Schedule B Confidential Information
Schedule C Claims Asserted
95
SCHEDULE A
▇▇▇▇▇▇▇▇ LICENSE AGREEMENT
DESCRIPTION OF LICENSED TECHNOLOGY
TITLE/
COUNTRY SERIAL NO. PATENT NO. PATENT DATE DESCRIPTION
------- ---------- ---------- ----------- -----------
GROUP A
-------
USA 132,004 4,807,096 21NO1989 Interior Light/Carrier Module
for Vehicles
USA 07/535111 5153572 060C992 Touch-Sensitive Control Circuit
USA 07/598,129 5,189,417 23FE1993 Detection Circuit for Matrix
Touch Pad
USA 07/605497 5239152 24AU1993 Touch Sensor Panel with Hidden Graphic
Mode
USA 07/909782 5475577 12DE1995 Accessory Attachment Plate for Vehicle
Panels
USA 08/040,188 5,572,205 05NO1996 Touch Control System
USA 08/367,844 5,671,996 30SE1997 Vehicle/Instrumentation/Console Lighting
EPC 95650048.2 Vehicle Instrumentation/Console
USA 08/482029 5,667,896 16SE1997 Vehicle Window Assembly for Mounting
Interior Vehicle
USA 29/032,836 Rail Module
USA 60/027,996 Digital Compass
USA 08/740,701 Touch Control System
USA 29,057,275 Vehicle Rail Module Exterior Surface
Incorporating a Handle, Coathook and
Lamp
USA 584 Continuation of Vehicle Window Assembly
for Mounting
Interior Vehicle
USA 08/901,929 Vehicle Instrumentation/Console Lighting
Pyroelectric Intrusion Detection in Motor
Vehicles
USA 117,220 4,862,594 9/5/89 Magnetic Compass System for a Vehicle
USA 267,972 4,937,945 7/3/90 Magnetic Compass with Hall Effect
Encoder
USA 596,854 5,131,154 7/21/92 Magnetic Compass with Optical Encoder
USA 811,578 5,255,442 10/26/93 Vehicle Compass with Electronic Sensor
USA 142,509 5,644,851 7/8/97 Compensation System for Electronic
Compass
USA 457,621 5,632,092 5/27/97 Compensation System for Electronic
Compass
USA 823,469 Compensation System for Electronic
Compass
EPC 93/90086.1 Vehicle Electronic Sensor
Japan 511672/93 5,255,442 Vehicle Compass with Electronic Sensor
EPC 95/904055.1 5,644,851 Compensation System for Electronic
Compass
Japan 7-512748 5,644,851 Compensation System for Electronic
Compass
USA 08/901,929 Pyroelectric Intrusion Detection in Motor
Vehicles
96
TITLE/
COUNTRY SERIAL NO. PATENT NO. PATENT DATE DESCRIPTION
------- ---------- ---------- ----------- -----------
GROUP B
-------
USA 29/071,095 Vehicular Coat
Hook Assembly
(Design)
Brazil PCT/US95/15705 Mounting Clip
Canada Mounting Clip
European PCT/US95/15705 Mounting Clip
Japan PCT/US95/15705 Mounting Clip
South Korea Mounting Clip
Mexico Mounting Clip
United States 08/349,031 Mounting Clip
United States 08/701,589 5,662,375 ▇/▇/▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇/▇▇▇▇/▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 08/312,820 Modular Panel
Assembly
United States 08/681,316 Modular Panel
Assembly
WIPO PCT/US95/12387 Modular Panel
Assembly
United States 60,031,558 Single Lens, Push-
Push, Dual Lamp
Assembly
United States Overhead Console
with Magnetic
Sensor Roof
Mounting
United States Visor with
Structural Foam
Core
United States CHMSL/Task
Lamp
United States Visor Detent
Control
United States Blow Molded Visor
97
COUNTRY
TITLE/
SERIAL NO. PATENT NO. PATENT DATE DESCRIPTION GROUP B
---------- ---------- ----------- ------------- --------
United States
United States
Clamshell Visor
W/Heat Fabric
Edges
Visor Construction United States
Visor with Powered United States
Mirror Door
60/009/852 Vehicle Interior United States
Light w/Light Pipe
for Uniform
Illumination
08/784,028 Vehicle Interior United States
Light w/Light Pipe
For Uniform
Illumination
Visor Mounting United States
Clam Visor with United States
Lighted Mirror
60/012,088 Overhead Console United States
with Drop-Down
Door
60/034,375 Overhead Console United States
with Drop-Down
Door
08/804,354 Overhead Console United States
with Drop-Down
Door
Flex Web ▇▇▇▇▇▇
▇▇▇▇▇
-▇▇-
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Visor with Courtesy
Lighting
United States Anti-Rotation
Mounting Clip
United States Vanity Mirror
W/Dimmer Switch
United States Vanity Mirror
W/Dimmer Switch
TITLE/
COUNTRY SERIAL NO. PATENT NO. PATENT DATE DESCRIPTION
------- ---------- ---------- ----------- -----------
GROUP B
-------
United States Sunglass Holder for
Vehicle
United States PCB Pin Clip
United States Sun Visor with
Support Pin
United States Electrochromic
Sunvisor
United States Lighted Vanity
W/Mirror
United States 60/040,833 Forward Sun
Protection With
Accessory
Integration
United States Windshield
Mounted Visor
United States 60/023,104 Expandable Coat
Hook
United States 60/025,166 Grab Handle
Assembly and
Method of
Assembling Same
United States Grab Handle
Assembly and
Method of
Assembling Same
United States 60/021,096
99
Visor with WIPO PCT/US97/11751
Integrally Molded
Unitary Frame
Visor with United States
Integrally Molded
Unitary Frame
Visor Mirror and United States
Endcap Mirror
Assembly
Vanity Lamp
TITLE/
PATENT DATE DESCRIPTION COUNTRY SERIAL NO. PATENT NO.
----------- ----------- ------- ---------- ----------
GROUP B
-------
United States
United States 60/022,238
Overhead Console
Comp. Compass
Garage Door
Opener Bin United States 08/896,043
Garage Door United States
Opener Bin
Sliding United States
Auxiliary Sun
Visor Blade
Assembly
Happich Visor United States
Bracket Patent
Visor with Pressed United States
Substrate/Molded
Frame Clamshell
Pivoting Coat Hook with Finger Access
Notch United States
100
Vanity Mirror/Door United States
Spring, Lamp
Switch
Overhead Console United States
with Garage Door
Opener
60/052,454 Vehicle Soft United States
Console with
Interchangeable
Accessor Bins and
In-Molded Skin and
Fastener
Garnish Trim United States
Mounted
Components
Illumination/Visor United States
Vanity Mirror
Snap Together
Clamshell Visor
With Snap-in
Mirror Assembly
TITLE/
PATENT DATE DESCRIPTION COUNTRY SERIAL NO. PATENT NO.
----------- ----------- ------- ---------- ----------
GROUP B
-------
United States
United States
Visor with Fabric
Plain and Tear Seal
at Eye Ends
Aubiliary Visor United States
with Molded
Torque Connector
Terminal Strip Bulb United States
Retainer
EPP Clamshell United States
Visor
Vehicle Sun Visor
with Rigid Interior
Skin
101
TITLE/
COUNTRY SERIAL NO. PATENT NO. PATENT DATE DESCRIPTION
------- ---------- ---------- ----------- ------------
GROUP C
-------
Ireland A vehicle rearview
mirror and a vehicle
control system
incorporating such
mirror
Ireland Push Button
Support Member
Ireland A Printed Circuit
Board Pin
Connector
Ireland Electro-Optic
Rearview Mirror
System (EC Mirror)
102
SCHEDULE B
CONFIDENTIAL TECHNOLOGY
-----------------------
All manufacturing processes, methods or techniques used in the
manufacture of Products, including, but not limited to, those Product utilizing
any of the Technology or Intellectual Property Rights listed on Schedule A.
103
SCHEDULE C
ASSERTED CLAIMS
Prince Corporation ("Prince") has asserted that products manufactured
in accordance with Intellectual Property Rights listed on Schedule A violate
patents of Prince Corporation.
In January 1995, Prince asserted ▇▇▇▇▇▇▇▇ was in violation of its
Patent No. 953305. After some discussions between counsel for both parties, the
matter was dropped.
Approximately eight years ago, Prince contacted ▇▇▇▇▇▇▇▇ about alleged
infringement of a compass. After preliminary meetings, no further assertions
were made.
Prince is currently asserting that ▇▇▇▇▇▇▇▇'▇ consoles with garage door
openers violate Prince Patent No. 4,595,228. ▇▇▇▇▇▇▇▇ does not believe it
infringes. Extensive correspondence and counterproposals have been exchanged,
including an offer to license the patent at $.17 per unit. ▇▇▇▇▇▇▇▇ has provided
Lear with copies of the relevant correspondence.
104
EXHIBIT D-2
LEAR TECHNOLOGY LICENSE AGREEMENT
THIS TECHNOLOGY LICENSE AGREEMENT (this "Agreement") is entered into as
of this 1st day of November, 1997 (the "Effective Date"), by and among ▇▇▇▇
CORPORATION, a Delaware corporation ("Lear"), (Lear and ▇▇▇▇▇▇▇▇ are sometimes
referred to herein as the "Members"), and ▇▇▇▇ ▇▇▇▇▇▇▇▇ OVERHEAD SYSTEMS L.L.C.,
a Michigan limited liability company (together with its subsidiaries, the
"Company"); and ▇▇▇▇▇▇▇▇ CORPORATION, a Michigan corporation ("▇▇▇▇▇▇▇▇").
RECITALS:
WHEREAS, Lear and ▇▇▇▇▇▇▇▇ as members of the Company have executed an
Operating Agreement of the Company dated September 3, 1997 (the "Operating
Agreement") creating a joint venture between Lear and ▇▇▇▇▇▇▇▇; capitalized
terms not defined herein shall have the meaning ascribed to them in the
Operating Agreement;
WHEREAS, ▇▇▇▇▇▇▇▇ is a party to this Agreement in order to protect its
rights and perform its obligations hereunder;
WHEREAS, Lear is the owner of certain intellectual property rights
principally covering or principally used in the manufacture of Products (as such
term is defined in the Operating Agreement);
WHEREAS, the parties desire to enter into this Agreement to provide
certain rights for the Company to license certain specified intellectual
property rights from Lear; and
WHEREAS, the Company may develop improvements to the intellectual
property rights licensed from Lear and may develop other intellectual property
rights and the parties desire to enter into this Agreement to provide certain
rights for Lear to license such improvements and intellectual property rights
from the Company;
NOW THEREFORE, for good and valuable consideration including the mutual
promises contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "INTELLECTUAL PROPERTY RIGHTS" shall mean United States,
international and foreign patents and patent applications (including United
States provisional applications and all PCT patent applications), any and all
patents issuing therefrom or otherwise corresponding thereto, and all
divisionals, continuations, continuations-in-part, reissues, reexamination
certificates and extensions thereof, describing and/or claiming Technology, and
all mask works, industrial design registrations
105
and applications for such registrations, technology, and all other proprietary
rights covering or otherwise related to Technology and/or processes for
manufacture and/or use of Products embodying Technology arising prior to or
during the term of this Agreement.
1.2 "TECHNOLOGY" shall mean technological developments principally
covering or principally used in the manufacture of Products including, but not
be limited to, the technology described on Schedule A hereto, ideas, concepts,
inventions, processes, principles of operation, formulae, patterns, drawings,
prints, proposals, devices, software, compilations of related information,
records, specifications and the knowhow, arising before or during the term of
this Agreement. Technology shall not include existing or future technological
developments or intellectual property rights of Lear or its Affiliates relating
to or concerning the items and matters disclosed on attached Exhibit 1.
1.3 "IMPROVEMENT" shall mean (i) any alteration, modification or
enhancement to Technology or Intellectual Property Rights which improves the
effectiveness, efficiency, performance or other attribute of, or otherwise
relates to, Technology or Intellectual Property Rights, or any element thereof,
or (ii) any new product or material which performs substantially the same
function as Technology or Intellectual Property Rights but does so through a
different method or process.
ARTICLE 2
LICENSE GRANT BY LEAR
2.1 LICENSE GRANT. Lear hereby grants unto the Company a royalty-free,
paid-up, worldwide, exclusive license of ▇▇▇▇'▇ Technology and Intellectual
Property Rights to make, have made, use, and sell the Products (but not to make,
have made, use, or sell anything other than the Products). Notwithstanding the
exclusive license, Lear reserves the right to use its Technology and
Intellectual Property Rights to the extent not prohibited by the Noncompetition
and Non-Solicitation Agreement between ▇▇▇▇ and ▇▇▇▇ of even date. The term of
this license is described in Article 9 of this Agreement.
2.2 SUBLICENSES. The Company may not sublicense ▇▇▇▇'▇ Technology or
Intellectual Property Rights without ▇▇▇▇'▇ prior written consent; provided,
however, that the Company shall have the right to sublicense ▇▇▇▇'▇ Technology
and Intellectual Property Rights to the Company's subsidiaries (any non-U.S.
subsidiaries shall be required to pay a commercially reasonable royalty rate to
the Company for such sublicense, which royalty rate shall be no less than the
royalty paid by such subsidiaries to Lear pursuant to the Company's Technology
License with Lear of even date).
ARTICLE 3
IMPROVEMENTS AND LICENSE GRANT BY THE COMPANY
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106
3.1 OWNERSHIP OF IMPROVEMENTS. The Company shall own and shall have all
rights, including Intellectual Property Rights, in all Improvements which are
conceived and reduced to practice by the Company's personnel or by third party
personnel working on the Company's behalf.
3.2 LICENSE GRANT. The Company hereby grants and agrees to grant to
Lear or ▇▇▇▇▇▇▇▇, as the case may be, a royalty-free, paid-up, worldwide,
non-exclusive, non-transferrable license of the Improvements, Technology and
Intellectual Property Rights of the Company on the terms set forth in this
Agreement.
ARTICLE 4
JOINTLY DEVELOPED TECHNOLOGY
4.1 JOINTLY DEVELOPED TECHNOLOGY.
(a) Technology and Intellectual Property Rights developed
jointly by Lear and the Company after the date of this Agreement shall
be owned by the Company, and the Company shall have all rights in and
to such jointly developed Technology and Intellectual Property Rights.
Technology and Intellectual Property Rights developed jointly by Lear
and ▇▇▇▇▇▇▇▇ or by Lear, ▇▇▇▇▇▇▇▇ and the Company shall be owned by the
Company and the Company shall have all rights in and to such jointly
developed Technology and Intellectual Property Rights.
(b) The Company hereby grants unto Lear a royalty-free,
paid-up, worldwide, non-assignable, non-transferrable, non-exclusive
license of any jointly developed Technology and Intellectual Property
Rights on the terms set forth in this Agreement.
ARTICLE 5
PROSECUTION OR MAINTENANCE OF
INTELLECTUAL PROPERTY RIGHTS
5.1 MAINTENANCE BY ▇▇▇▇. ▇▇▇▇ shall retain the right to (but shall not
be obligated to) prosecute and/or maintain [at the Company's expense], all of
the Technology and Intellectual Property Rights licensed by Lear to the Company
pursuant to Article 2 of this Agreement. The Company shall have the right to
prosecute and/or maintain at the Company's expense any of the Intellectual
Property Rights licensed hereunder in any country when the Company has been
notified by Lear that Lear no longer wishes to prosecute or maintain such
Intellectual Property Rights in such country, and Lear hereby agrees to notify
the Company of its intent to cease prosecution or payment of maintenance fees of
any of such Intellectual Property Rights in any such country, at least sixty
(60) days prior to the date of any abandonment of any right or the date of any
required payment or filing which Lear does not intend to make or file. With
respect to any Intellectual Property Rights abandoned by Lear and prosecuted and
maintained by the Company pursuant to this Section 5.2, the
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107
Company agrees to grant unto Lear a royalty-free, paid-up, worldwide,
non-exclusive license to such Intellectual Property Rights.
5.2 MAINTENANCE BY THE COMPANY. The Company shall retain the right to
(but shall not be obligated to) prosecute and/or maintain at its expense, all of
the Improvements, Technology and Intellectual Property Rights licensed by the
Company to Lear pursuant to Article 3 or Article 4 of this Agreement. Lear shall
have the right to prosecute and/or maintain at ▇▇▇▇'▇ expense any of the
Intellectual Property Rights of the Company licensed hereunder in any country
when Lear has been notified by the Company that the Company no longer wishes to
prosecute or maintain such Intellectual Property Rights in such country, and the
Company hereby agrees to notify Lear of its intent to cease prosecution or
payment of maintenance fees of any of such Intellectual Property Rights in any
such country, at least sixty (60) days prior to the date of any abandonment of
any right or the date of any required payment or filing which the Company does
not intend to make or file.
ARTICLE 6
COOPERATION AND CONFIDENTIALITY
6.1 EXCHANGE OF INFORMATION. During the term of this License, Lear, the
Company and their respective Affiliates will exchange information concerning all
Technology and Intellectual Property Rights conceived or developed by any of
them relating to Products and processes or techniques used in the manufacture of
Products.
6.2 COOPERATION. The Company and Lear agree to cooperate with each
other in the prosecution of pending applications concerning the Intellectual
Property Rights or any new applications based upon any Improvements thereto by
providing, upon request, technical information and data in an appropriate form
relating to the subject matter or any pending or issued applications and/or
improvements.
6.3 CONFIDENTIALITY. The Company acknowledges that some of the
Intellectual Property Rights and Technology licensed pursuant to this Agreement
or developed by Lear or the Company after the date of this Agreement relate to
information which is not publicly available ("Confidential Information"),
including, without limitation, information exchanged pursuant to Section 6.1
hereof, the Technology listed or described in Schedule B and any jointly
developed Technology. The Company hereby agrees not to disclose the Confidential
Information to any third parties for a period of ten (10) years after the
receipt of such Confidential Information, except to only (a) those employees of
the Company having a legitimate business need-to-know and (b) consultants
engaged by the Company. The Company agrees that prior to making disclosures to
any consultant, it will obtain a confidentiality and non-use agreement. For
purposes of this section, any Affiliate of the Company other than Lear, ▇▇▇▇▇▇▇▇
or a subsidiary of the Company is deemed to be a third party.
6.4 CONFIDENTIALITY EXCEPTIONS. Notwithstanding the provisions of
Section 6.3, Confidential Information shall not include (a) information which is
known to the public or is
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108
generally known within the industry or business, (b) information which the
Company is required to disclose pursuant to law or order of a court having
jurisdiction (provided that the Company offers the Lear an opportunity to obtain
an appropriate protective order or administrative relief against disclosure of
such Confidential Information), and (c) information which was legally acquired
by the Company from a third party in good faith, provided that such disclosure
by the third party was not in breach of any agreement between such third party
and the other party hereto.
6.5 PROTECTION OF RIGHTS. The parties hereto agree that it shall be the
policy of the Company to protect the Intellectual Property Rights and not to
infringe upon the intellectual property rights of third parties.
ARTICLE 7
INDEMNIFICATION
7.1 NO REPRESENTATION OR INDEMNIFICATION. Nothing in this Agreement is
intended to state or otherwise imply that the exercise of any right or license
granted by Lear pursuant to this Agreement by the Company will not infringe
rights of third parties. Lear does not undertake any obligation to indemnify the
Company against, or assume any responsibility for, any claim of infringement by
any third party relating to or arising out of any exercise of any right or
license referenced in this Agreement.
7.2 LIMITED WARRANTY. Lear warrants that to its knowledge, except as
set forth in Schedule C, no claim has been asserted that the exercise of rights
or licenses transferred or granted by Lear to the Company pursuant to this
Agreement infringe upon any third party rights.
7.3 NO INDEMNIFICATION BY THE COMPANY CONCERNING NON-PRODUCT USES. The
Company does not undertake any obligation to indemnify Lear against, or assume
any responsibility for, any claim of infringement by any third party relating to
or arising out of any exercise of any right or license granted by the Company to
Lear pursuant to this Agreement.
7.4 INDEMNIFICATION BY THE COMPANY CONCERNING PRODUCTS. The Company
agrees to indemnify and hold harmless Lear and its Affiliates from and against
any loss, cost, expense (including, but not limited to, costs of investigation
and defense, attorney's fees, expert witnesses, consultants and litigation
support services), liability, settlement and damages as a result of any claim(s)
that the manufacture or sale of any Products after the Closing Date infringes
upon any patent or other intellectual property rights of any third party.
ARTICLE 8
INFRINGEMENT OF LICENSED INTELLECTUAL PROPERTY RIGHTS
8.1 ACTION BY THE COMPANY. The Company shall have the right but shall
not be obligated to institute proceedings in its own name or in the name of Lear
against any third party
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109
infringer (in the field of use of Products) of any Intellectual Property Rights
licensed by Lear to the Company pursuant to this Agreement. If Lear or the
Company becomes aware of any actual, threatened, or apparent infringement of any
of the licensed Intellectual Property Rights by any Person in the field of use
of Products, such party agrees to provide the other party with written notice
prior to suit of such actual, threatened, or apparent infringement and agrees to
furnish to the other party any available evidence of such actual, threatened, or
apparent infringement. Lear agrees to cooperate in any proceedings instituted by
the Company against third party infringers and to provide information relating
to such proceedings which the Company may reasonably request. In the event that
the Company determines that it lacks standing to commence such a proceeding,
Lear agrees to execute such documents and take such actions as the Company may
reasonably request for the purpose of commencing such infringement proceedings.
The Company shall have the right to control prosecution of such proceedings
regardless of whether the proceedings are commenced in ▇▇▇▇'▇ name or in the
name of the Company; provided, however, that in the event of a counterclaim
against Lear, the litigation shall be jointly managed by Lear and the Company
and ▇▇▇▇'▇ costs and expenses (including, but not limited to, reasonable
attorney's fees) will be paid by the Company pursuant to Section 7.4.
8.2 ACTION BY LEAR. In the event Lear notifies the Company or receives
notice from the Company of actual, threatened, or apparent infringement of any
licensed rights or Intellectual Property Rights by a third party, and the
Company does not institute proceedings against such a third party within sixty
(60) days of notification, then Lear may institute proceedings against such a
third party, at ▇▇▇▇'▇ expense, and in the Company's name (if necessary). The
Company agrees to cooperate fully with the Company in such proceedings. Any
recovery awarded in such proceedings shall be retained by Lear.
ARTICLE 9
TERM AND TERMINATION
9.1 TERM. The licenses granted hereunder shall continue so long
as either Lear or Lear are:
(a) Members of the Company or
(b) operating the business of the Company after a withdrawal
by the other unless otherwise terminated as provided herein.
9.2 DEFAULT. If any party fails to comply with any of its obligations
hereunder, and after notice from another party such failure continues for sixty
(60) days, such action shall constitute a default hereunder and under the
Operating Agreement; provided, however, if a default under this Agreement cannot
reasonably and with due diligence and good faith be cured within said 60-day
period, and if the defaulting party promptly commences and proceeds to complete
the cure of such default with due diligence and in good faith, the 60-day period
with respect to such default shall be
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110
extended to include such additional period of time as may be reasonably
necessary to cure such default.
9.3 REMEDIES ON DEFAULT. Upon the occurrence of a default hereunder,
which is not cured during the applicable cure period, the non-breaching parties
shall have the rights and remedies available at law and in equity and may
institute arbitration and/or legal proceedings in accordance with Section 10.11
hereof with respect to any damages or losses incurred by the non-defaulting
party. If the default is by a Member, and the default is a Material Default (as
defined in the Operating Agreement), the other Member shall also have all rights
provided in the Operating Agreement, including that included in Section 4.5(c)
thereof.
ARTICLE 10
CONSTRUCTION
10.1 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan without giving effect to
any applicable principles of conflicts of laws.
10.2 NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
(i) in person, (ii) to the extent receipt is confirmed, by telecopy, facsimile
or other electronic transmission service, (iii) by a nationally recognized
overnight courier service, or (iv) by registered or certified mail (postage
prepaid return receipt requested), to the parties at the following address:
To ▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Varnum, Riddering, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
To the Company: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Overhead Systems, L.L.C.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy No. ________________
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With a copy to: ▇▇▇▇ Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and
General Counsel
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
10.3 SEVERABILITY. If any provision of this Agreement shall be
conclusively determined by a court of competent jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement shall not be
affected thereby.
10.4 BINDING EFFECT. Except as otherwise provided herein, this
Agreement shall inure to the benefit of and be binding upon the parties, their
respective successors, legal representatives and permitted assigns.
10.5 NO THIRD PARTY RIGHTS. This Agreement is intended to create
enforceable rights between the parties hereto only, and creates no rights in, or
obligations to, any other Persons whatsoever.
10.6 TIME IS OF ESSENCE. Time is of the essence in the performance
of each and every obligation herein imposed.
10.7 SCHEDULES INCLUDED IN EXHIBITS; INCORPORATION BY REFERENCE. Any
reference to an Exhibit to this Agreement contained herein shall be deemed to
include any Schedules to such Exhibit. Each of the Exhibits referred to in this
Agreement, and each Schedule to such Exhibits, is hereby incorporated by
reference in this Agreement as if such Schedules and Exhibits were set out in
full in the text of this Agreement.
10.8 AMENDMENTS. This Agreement may not be amended except by written
agreement executed by duly authorized officers of all of the parties hereto.
10.9 ENTIRE AGREEMENT; SECTION HEADINGS. This Agreement, the Operating
Agreement and the agreements contemplated by the Operating Agreement constitute
the entire agreement among the parties hereto relating to the subject matter
hereof and supersede all prior agreements, understandings, and arrangements,
oral or written, among the parties with respect to the subject matter hereof.
The Section headings in this Agreement are for reference purposes only and shall
be affect in any way the meaning or interpretation of this Agreement.
10.10 ASSIGNMENT. Except as otherwise specifically provided in this
Agreement or the Operating Agreement (particularly Section 9.2(a) thereof),
neither this Agreement nor any rights or obligations hereunder shall be
assignable or be delegated directly or indirectly by any party hereto
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to a third party (other than an Affiliate of the Member) without the prior
written consent of all the parties to this Agreement.
10.11 ARBITRATION. Any dispute, controversy or claim (hereinafter
"Dispute") between the parties of any kind or nature whatsoever, arising under
or related to this Agreement whether arising in contract, tort or otherwise,
shall be resolved according to the following procedure. If a Dispute (excluding
business decisions to be voted on by Members or Directors) arises among the
Members under or relating to this Agreement which is not resolved by good faith
negotiation, then such Dispute, upon 30 days' prior notice from one Member to
the other of its intent to arbitrate (an "Arbitration Notice"), shall be
submitted to and settled by arbitration; provided, however, that nothing
contained herein shall preclude any party hereto from seeking or obtaining (a)
injunctive relief, or (b) equitable or other judicial relief to enforce the
provisions hereof or to preserve the status quo pending resolution of disputes
hereunder. Such arbitration shall be conducted in accordance with the commercial
arbitration rules of the American Arbitration Association existing at the time
of submission by one arbitrator. The Members shall attempt to agree upon an
arbitrator. If one cannot be agreed upon, the Member which did not give the
Arbitration Notice may request the Chief Judge of the United States District
Court for the Eastern District of Michigan or the Chief Judge of the United
States District Court for the Western District of Michigan to appoint an
arbitrator. If he or she will not, the arbitrator shall be appointed by the
American Arbitration Association. If an arbitrator so selected becomes unable to
serve, his or her successor shall be similarly selected or appointed. All
arbitration hearings shall be conducted on an expedited schedule, and all
proceedings shall be confidential. Either Member may at its expense make a
stenographic record thereof. The arbitrator shall apportion all costs and
expenses of arbitration (including the arbitrator's fees and expenses, the fees
and expenses of experts, and the fees and expenses of counsel to the parties),
between the prevailing and non-prevailing Member as the arbitrator deems fair
and reasonable. Any arbitration award shall be binding and enforceable against
the parties hereto and judgment may be entered thereon in any court of competent
jurisdiction. The arbitration will take place at Southfield, Michigan or Grand
Rapids, Michigan at the election of the Member not giving the Arbitration
Notice.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
▇▇▇▇▇▇▇▇ CORPORATION
("▇▇▇▇▇▇▇▇")
By/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
_____________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Its Chief Executive Officer and President
_____________________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇ OVERHEAD SYSTEMS,
LLC
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By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
_____________________
Its___________________
▇▇▇▇ CORPORATION
("▇▇▇▇")
By /s/ ▇.▇. ▇▇▇▇▇▇▇▇
_____________________
Its___________________
LIST OF EXHIBITS AND SCHEDULES
Schedule A Description of Licensed Lear Technology
Schedule B Confidential Information
Schedule C Claims Asserted
Exhibit 1 Excluded Technology
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EXHIBIT 1
EXCLUDED TECHNOLOGY
Technology shall not include existing or future technological
developments or intellectual property rights of Lear or its Affiliates relating
to or concerning__________________ . [To be mutually agreed upon by Lear and
▇▇▇▇▇▇▇▇ within 30 days after the date hereof].
115
EXHIBIT E
PURCHASE AND SUPPLY AGREEMENT
THIS PURCHASE AND SUPPLY AGREEMENT (this "Agreement") is entered into
as of this 1st day of November, 1997 (the "Effective Date"), by and among ▇▇▇▇
CORPORATION, a Delaware corporation ("Lear"), ▇▇▇▇▇▇▇▇ CORPORATION, a Michigan
corporation ("▇▇▇▇▇▇▇▇"), (Lear and ▇▇▇▇▇▇▇▇ are sometimes referred to herein as
the "Members"), EMPETEK AUTODILY S.R.O., a corporation organized and existing
under the laws of the Czech Republic ("Empetek"), ▇▇▇▇▇▇▇▇ EUROTRIM LIMITED, a
corporation organized and existing under the laws of the Republic of Ireland
("Eurotrim") and ▇▇▇▇ ▇▇▇▇▇▇▇▇ OVERHEAD SYSTEMS L.L.C., a Michigan limited
liability company (together with its subsidiaries, the "Company").
RECITALS:
WHEREAS, Lear and ▇▇▇▇▇▇▇▇ as members of the Company have executed an
Operating Agreement of the Company dated September 3, 1997 (the "Operating
Agreement"); capitalized terms not defined herein shall have the meaning
ascribed to them in the Operating Agreement; and
WHEREAS, the Company may request assistance from Lear or ▇▇▇▇▇▇▇▇ with
respect to sales to original equipment manufacturers of vehicles ("OEMs"); and
WHEREAS, if requested by the Company, Lear and ▇▇▇▇▇▇▇▇ will from time
to time enter into contracts with OEMs to produce Products (as such term is
defined in the Operating Agreement); and
WHEREAS, the parties desire to enter into this Agreement to provide the
terms of production and sale of the Products by the Company to Lear or ▇▇▇▇▇▇▇▇
for resale to the OEMs if the Company has requested such assistance with an OEM;
and
WHEREAS, the parties desire to enter into this Agreement to provide for
▇▇▇▇▇▇▇▇ and Lear to have certain rights as preferred suppliers to the Company.
NOW THEREFORE, for good and valuable consideration including the mutual
promises contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
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ARTICLE 1
SALES AND MARKETING
1.1 SALES REPRESENTATION TO OEMS. At the request of the Company, Lear
and ▇▇▇▇▇▇▇▇ will, from time to time, represent the Company by providing sales
and customer support as sales representative with respect to the Company's
Products. The Board of Directors of the Company will make such appointments. Its
determination of whether the Company, Lear, ▇▇▇▇▇▇▇▇ or another party will be
appointed as sales representative of the Company's Products at any OEM shall be
based upon capacity, experience, the nature of the relationship with the OEM and
the cost to the Company. OEMs may be assigned to Lear or ▇▇▇▇▇▇▇▇ from time to
time by the Company, and if accepted shall be "Lear OEMs" or "▇▇▇▇▇▇▇▇ OEMs" as
the case may be. The Board of Directors may also request Lear or ▇▇▇▇▇▇▇▇ to
jointly provide sales and customer service or to cooperate with the Company to
provide sales and customer service to any OEM. The Board of Directors may, from
time to time, change or cancel the appointment of any party as a sales
representative for any OEM.
Should the Company appoint Lear or ▇▇▇▇▇▇▇▇ as a sales representative,
the prices, terms and conditions of sale of Products from the Company to Lear
and ▇▇▇▇▇▇▇▇ will be established by the Company. Lear and ▇▇▇▇▇▇▇▇ will sell the
Company's Products to OEMs for the same price and on the same terms as it
purchases the Products from the Company, except to the extent the Board of
Directors permits Lear and ▇▇▇▇▇▇▇▇ to recoup sales costs.
1.2 RESPONSIBILITY FOR NON-OEM CUSTOMERS. Sales and customer support of
Products sold to customers who are not OEMs (including the Members) shall be the
responsibility of the Company; provided, however, that if the primary sales
contact is with the OEM, then the responsibility for sales and customer support
shall be determined according to Section 1.1 hereof (even if the Product is sold
to a customer that is not an OEM).
1.3 RESPONSIBILITY OF SALES REPRESENTATIVES. In case Lear or ▇▇▇▇▇▇▇▇
is appointed as a sales representative to provide sales and customer support to
any OEM:
(a) SCOPE OF RESPONSIBILITIES. As used in this Agreement,
sales and customer support to be provided by Lear or ▇▇▇▇▇▇▇▇ shall
include the following responsibilities and functions: primary customer
contacts in the acquisition phase of any project prior to assurances by
the OEM that a purchase will be made or issuance of a purchase order by
an OEM (whichever occurs first), including customer contacts with
respect to design, engineering and specifications, and may also include
customer contacts relating to prototyping, testing and program
management.
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If Lear or ▇▇▇▇▇▇▇▇ is providing sales and customer support to
an OEM, the Company and Lear or ▇▇▇▇▇▇▇▇ will work together to
coordinate all activities. The following responsibilities and functions
shall be the responsibility of the Company: product design and
development, program management, engineering, quality assurance,
prototyping, testing and validation, and tooling. In addition, the
Company will provide such technical and design support as is required,
including training Lear and ▇▇▇▇▇▇▇▇ personnel and working with the
OEM.
Product research and development, design, engineering and
customer coordination for program management for the type of Products
now sold by Lear ("Lear R & D") will be performed by Lear and for the
type of Products now sold by ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇ R & D") will be
performed by ▇▇▇▇▇▇▇▇ until sufficient personnel have been transferred
to the Company. It is anticipated that the Company will promptly retain
sufficient resources to provide ▇▇▇▇▇▇▇▇ R & D and that ▇▇▇▇▇▇▇▇'▇
support would be minimal.
(b) COSTS AND EXPENSES. Lear and ▇▇▇▇▇▇▇▇ shall each be
responsible for their own direct and indirect costs and expenses of
their respective sales activities provided pursuant to this Agreement.
Neither Lear nor ▇▇▇▇▇▇▇▇ will be reimbursed for any such expenses with
respect to Prior Contracts (as hereinafter defined) or New Contracts
(as hereinafter defined), except as specifically approved by the Board
of Directors.
Lear will not be reimbursed for any costs incurred by it for
Lear R & D with respect to Prior Contracts. ▇▇▇▇▇▇▇▇ will be reimbursed
for any costs incurred by it for performing Program Management and
Advanced Quality to the extent such services were included as expenses
of the Company in the business plans submitted by ▇▇▇▇▇▇▇▇. The
reimbursement shall be in the amounts set forth on Exhibit A, payable
in the years set forth therein.
ARTICLE 2
CONTRACTS TO SUPPLY PRODUCTS TO OEMS
2.1 PARTIES TO PRODUCT CONTRACTS. Contracts to supply Products shall be
between the OEM and the Company unless the OEM is a "Lear OEM" or a "▇▇▇▇▇▇▇▇
OEM". Contracts entered into after the Effective Date to supply Products to Lear
OEMs shall be
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between Lear and the Lear OEM, and purchase orders under such contracts shall be
issued by the Lear OEM to Lear. Contracts entered into after the Effective Date
to supply Products to ▇▇▇▇▇▇▇▇ OEMs shall be between ▇▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇▇
OEM, and purchase orders under such contracts shall be issued by the ▇▇▇▇▇▇▇▇
OEM to ▇▇▇▇▇▇▇▇. Notwithstanding the foregoing, an OEM may contract directly
with the Company or obtain appropriate assurances from the Company if the OEM so
requests.
2.2 PRODUCT CONTRACTS PRIOR TO THE EFFECTIVE DATE. Contracts entered
into by Lear or ▇▇▇▇▇▇▇▇ or projects sourced to them prior to the Effective Date
and included within their Business Plan to supply Products ("Prior Contracts")
shall remain between the parties to such Prior Contract.
2.3 NEGOTIATION OF CONTRACTS. The Company and any other party providing
sales and customer support to an OEM agree to cooperate with each other in
preparing bids and negotiating contracts to supply Products to OEMs. The prices
and terms will be established based upon customer requirements and needs as
negotiated with the OEMs, provided that the final price and terms for any new
contract to supply Products to an OEM (a "New Contract") will be established by
the Company.
2.4 COMPANY CONTRACTUAL COMMITMENT. With respect to each New Contract
or Prior Contract between Lear or ▇▇▇▇▇▇▇▇ and an OEM, the Company agrees and
consents to be contractually bound to fulfill the contractual obligations of
Lear or ▇▇▇▇▇▇▇▇, as the case may be, with respect to such New Contract or Prior
Contract on the terms and conditions specified therein; provided, however, that
the price to be received by the Company and other terms shall be modified as
provided by this Agreement. The Company agrees to execute such documentation as
Lear, ▇▇▇▇▇▇▇▇ or an OEM may deem reasonably necessary to evidence the
obligations of the Company pursuant to this Section 2.4.
2.5 WARRANTY AND INDEMNIFICATION. With respect to contracts between an
OEM and Lear or ▇▇▇▇▇▇▇▇ with respect to Products, the Company will warrant to
Lear or ▇▇▇▇▇▇▇▇, as the case may be, the same warranties made by Lear or
▇▇▇▇▇▇▇▇ to the OEMs pursuant to the Prior Contracts and New Contracts. The
Company agrees to indemnify, defend and hold Lear and ▇▇▇▇▇▇▇▇ and their
respective officers, directors, employees and affiliates harmless from and
against any and all loss, damage, claim, expense (including reasonable
attorney's fees) or other liability resulting from or relating to any warranty
or product liability claim concerning Products supplied by the Company,
including Products supplied pursuant to Prior Contracts or New Contracts;
provided, however, that the Company makes no warranty and shall have no
obligation to indemnify a Member concerning components supplied to the Company
by such Member. The Company shall have the right to participate in the
negotiation, litigation and shall have the right to approve any settlement
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(which approval will not be unreasonably withheld) of any such claim for which
the Company is obligated to indemnify pursuant to this paragraph. With respect
to components supplied by a Member or its Affiliate to the Company, the
manufacturer of such component shall provide the Company with a warranty
comparable to the warranty customarily provided by such manufacturer to third
party purchasers of such components.
ARTICLE 3
PURCHASE ORDERS, INVOICING AND PAYMENT PROCEDURES
3.1 PURCHASE ORDERS. With respect to both New Contracts and Prior
Contracts between an OEM and Lear or ▇▇▇▇▇▇▇▇, it is contemplated that the OEM
which is a party to such contract will issue purchase orders to Lear or
▇▇▇▇▇▇▇▇, whichever is a party to that contract. On the Effective Date, with
respect to Prior Contracts and promptly upon receipt of a new purchase order for
Products, Lear or ▇▇▇▇▇▇▇▇, as the case may be, shall promptly issue a
corresponding purchase order to the Company on the same terms and, except as
permitted by this Agreement, at the same price.
The purchase order terms and conditions from the Member to the Company
will include all terms and conditions contained in the OEM purchase order to the
Member, including delivery and product warranty terms. The Company shall
indemnify and hold harmless the Member from and against all loss, cost, expense
(including but not limited to costs of litigation and defense, attorneys fees,
expert witnesses, consultants and litigation support services or devices),
liability settlement or damages ("Damages") arising from any claim based on the
manufacture, assembly, delivery, sale or use of the Product, except for Damages
caused by the design or engineering performed by such Member.
3.2 SHIPMENT OF PRODUCT. Unless otherwise specified, Products shall be
shipped directly from the Company to the OEM purchasing such Product. Shipment
notices shall be transmitted simultaneously to the OEM and the Member
responsible for sales to that OEM.
3.3 COMPANY INVOICES TO LEAR OR ▇▇▇▇▇▇▇▇.
(a) With respect to New Contracts between an OEM and Lear or
▇▇▇▇▇▇▇▇, the Company will invoice Lear for Products shipped to Lear
OEMs and will invoice ▇▇▇▇▇▇▇▇ for Products shipped to ▇▇▇▇▇▇▇▇ OEMs.
In the case of New Contracts, the amount of such invoices shall be
equal to 100% of the amount to be invoiced to the OEM except as
otherwise agreed to by the Member and the Company pursuant to the last
sentence of Section 1.4 hereof.
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(b) With respect to Prior Contracts, the Company will invoice
Lear or ▇▇▇▇▇▇▇▇ whichever is a party to such Prior Contract for
Products shipped to OEMs.
(c) With respect to Products shipped directly to a Member for
further processing by that Member, the price from the Company to a
Member shall be determined by the Board of Directors of the Company.
3.4 INVOICES TO OEMS.
The parties shall agree on a method for promptly invoicing OEM
customers.
3.5 ACCOUNTS RECEIVABLE.
(a) Lear and ▇▇▇▇▇▇▇▇ shall each be responsible for accounting
for, managing and collecting accounts receivable owed to them by OEM
customers.
(b) Company invoices to ▇▇▇▇▇▇▇▇ or Lear shall result in an
account receivable owed by ▇▇▇▇▇▇▇▇ or Lear, as the case may be, to the
Company. Any such accounts receivable shall be payable on the 30th prox
day of the month following invoicing. Such payment terms shall apply
regardless of whether ▇▇▇▇▇▇▇▇ or Lear, as the case may be, has
collected the corresponding account receivable from the OEM; provided,
however, that if the actions or omissions of the Company are
responsible for a delay in payment by the OEM to Lear or ▇▇▇▇▇▇▇▇ with
respect to a particular invoice, then the Company shall not receive
payment of its corresponding account receivable until the OEM has paid
Lear or ▇▇▇▇▇▇▇▇, as the case may be.
ARTICLE 4
COMPANY PURCHASES FROM MEMBERS
4.1 ▇▇▇▇▇▇▇▇ AS PREFERRED SUPPLIER OF ELECTRONICS.
(a) The Company agrees that ▇▇▇▇▇▇▇▇ shall be the preferred
supplier of Electronic Components. For purposes of this Agreement,
"Electronic Components" shall mean those electronics described on
Exhibit B which are included within Products, except proprietary
electronics of other Persons consented to by ▇▇▇▇▇▇▇▇ or specified by
an OEM customer after ▇▇▇▇▇▇▇▇ has been given the opportunity to
persuade the OEM customer to
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utilize ▇▇▇▇▇▇▇▇ Electronic Components or proprietary Electronic
Components available through ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ may add to the
electronics specified on Exhibit B from time to time any type of
electronic device on which it has expended or committed to expend
$50,000 for Product Development.
(b) When the Company intends to purchase Electronic
Components, the Company shall provide ▇▇▇▇▇▇▇▇ with specifications for
such Electronic Components so that ▇▇▇▇▇▇▇▇ may prepare a quotation for
the Company's consideration. The Company shall not provide
specifications to or solicit bids from any third party until such
quotation has been submitted by ▇▇▇▇▇▇▇▇, provided such submission by
▇▇▇▇▇▇▇▇ is timely made. The Company will not design, engineer,
manufacture Electronic Components or purchase any Electronic Components
from any person other than ▇▇▇▇▇▇▇▇ unless:
(i) ▇▇▇▇▇▇▇▇ consents, or;
(ii) An OEM customer has specified another Person's
Electronic Component; and ▇▇▇▇▇▇▇▇ has been given the
opportunity to persuade the OEM customer to purchase or
specify a ▇▇▇▇▇▇▇▇ Electronic Component; or
(iii) ▇▇▇▇▇▇▇▇ is not competitive in terms of
technology, price, quality and delivery of Electronic
Component; provided, however, that if the Company does not
believe ▇▇▇▇▇▇▇▇ is competitive, it shall inform ▇▇▇▇▇▇▇▇ the
reasons it is not competitive and provide ▇▇▇▇▇▇▇▇ the
opportunity to revise its quotations, specifications, or
delivery system; provided further, that with respect to any
Products which will be sold to countries of the European
Economic Area, the Company shall not inform ▇▇▇▇▇▇▇▇ of the
price or specific terms of any bid for Electronic Components
by any other Person.
▇▇▇▇▇▇▇▇'▇ status as preferred supplier of Electronic Components shall
not obligate ▇▇▇▇▇▇▇▇ to supply any particular Electronic Component and shall
not obligate ▇▇▇▇▇▇▇▇ to match any particular third party quotation.
4.2 ▇▇▇▇▇▇▇▇ AS PREFERRED SUPPLIER OF REAR VISION SYSTEMS. The Company
agrees that ▇▇▇▇▇▇▇▇ shall be the preferred supplier of Rear Vision Systems. For
purposes of this Agreement, "Rear Vision Systems" shall include all systems to
provide vision or
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object detection behind or along side of a vehicle other than by direct vision,
including, but not limited to inside and outside mirrors, camera systems, and
blind spot detection systems and all features which are added to or are a part
thereof.
The Company will not purchase any Rear Vision Systems from any person
other than ▇▇▇▇▇▇▇▇ unless:
(a) ▇▇▇▇▇▇▇▇ consents, or;
(b) An OEM customer has specified another Person's Rear Vision
System; and ▇▇▇▇▇▇▇▇ has been given the opportunity to persuade the OEM
customer to purchase or specify a ▇▇▇▇▇▇▇▇ Rear Vision System, or
(c) ▇▇▇▇▇▇▇▇ is not competitive in terms of technology, price,
quality and delivery of Rear Vision Systems; provided, however, that if
the Company does not believe ▇▇▇▇▇▇▇▇ is competitive, it shall inform
▇▇▇▇▇▇▇▇ the reasons it is not competitive and provide ▇▇▇▇▇▇▇▇ the
opportunity to revise its quotations, specifications, or delivery
system; provided further, that with respect to any Products which will
be sold to countries of the European Economic Area, the Company shall
not inform ▇▇▇▇▇▇▇▇ of the price or specific terms of any bid for Rear
Vision Systems by any other Person.
The Company will not engage in the business of designing,
manufacturing, assembling, or selling Rear Vision Systems, except to the extent
of assembling mirrors in connection with the integrated electronics and overhead
system for Volvo pursuant to the existing purchase order form Volvo to Eurotrim.
▇▇▇▇▇▇▇▇'▇ status as a preferred supplier of Rear Vision Systems shall
not obligate ▇▇▇▇▇▇▇▇ to provide any particular Rear Vision System and shall not
obligate ▇▇▇▇▇▇▇▇ to match any particular third party quotation.
4.3 LEAR AS PREFERRED SUPPLIER. The Company agrees that Lear shall be
the preferred supplier of those components of Products to which the parties may
agree from time to time ("Lear Components"). The Company will not purchase any
Lear Components from any person other than Lear unless:
(a) Lear consents, or;
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(b) An OEM customer has specified another Person's Lear
Component; and Lear has been given the opportunity to persuade the OEM
customer to purchase or specify a Lear Component manufactured by Lear,
or
(c) Lear is not competitive in terms of technology, price,
quality and delivery of Lear Components; provided, however, that if the
Company does not believe Lear is competitive, it shall inform Lear the
reasons it is not competitive and provide Lear the opportunity to
revise its quotations, specifications, or delivery system; provided
further, that with respect to any Products which will be sold to
countries of the European Economic Area, the Company shall not inform
Lear of the price or specific terms of any bid for Lear Components by
any other Person. ▇▇▇▇'▇ status as a preferred supplier of Lear
Components shall not obligate Lear to supply any particular Lear
Components and shall not obligate Lear to match any particular third
party quotation.
4.4 CERTAIN SUPPLY ARRANGEMENTS. Pursuant to the Transfer Agreement,
certain of ▇▇▇▇▇▇▇▇'▇ assets and operations in its Grand Haven, Michigan
facility and certain of ▇▇▇▇'▇ assets and operations in its Sheboygan, Wisconsin
and Colne and Tipton, England facilities (collectively, the "Designated
Facilities") will be transferred to the Company at a future date pursuant to the
Transfer Agreement. Prior to such transfer, Products produced by each of the
Designated Facilities by Lear or ▇▇▇▇▇▇▇▇, as the case may be, pursuant to New
Contracts and Prior Contracts shall be supplied to the Company on the prices and
terms described in Exhibit C until the date such Designated Facility is
transferred to the Company pursuant to the Transfer Agreement.
4.5 DHT ARRANGEMENTS. With respect to Prior Contracts for which
▇▇▇▇▇▇▇▇'▇ affiliate DHT is a supplier and which are not assignable and with
respect to Prior Contracts or New Contracts manufactured under any license of
DHT which cannot be transferred or sublicensed, DHT will subcontract the
Products from the Company and the Company will supply the Products to DHT on the
terms of such Prior Contracts and New Contracts and DHT will resell the Products
to the OEM that is a party to such contracts.
ARTICLE 5
TERM AND TERMINATION
5.1 TERM. This Agreement shall continue so long as Lear and ▇▇▇▇▇▇▇▇
are both Members of the Company unless otherwise terminated as provided herein.
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5.2 DEFAULT. If any party fails to comply with any of its obligations
hereunder, and after notice such failure continues for thirty (30) days with
respect to a monetary default or sixty (60) days with respect to a non-monetary
default, such action shall constitute a default hereunder and under the
Operating Agreement, provided, however, if a non-monetary default under this
Agreement cannot reasonably and with due diligence and good faith be cured
within said 60-day period, and if the defaulting party promptly commences and
proceeds to complete the cure of such default with due diligence and in good
faith, the 60-day period with respect to such default shall be extended to
include such additional period of time as may be reasonably necessary to cure
such default.
5.3 REMEDIES ON DEFAULT. Upon the occurrence of a default hereunder
which is not cured during the applicable cure period, the non-breaching parties
shall have the rights and remedies available at law and in equity and may
institute arbitration and/or legal proceedings in accordance with Section 6.11
hereof with respect to any damages or losses incurred by the non-defaulting
party. If the default is by a Member and the default is a Material Default as
defined in the Operating Agreement, the other Member shall also have all rights
provided in the Operating Agreement, including that included in Section 4.5(c)
thereof.
ARTICLE 6
CONSTRUCTION
6.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan without giving effect to any
applicable principles of conflicts of laws.
6.2 NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
(i) in person, (ii) to the extent receipt is confirmed, by telecopy, facsimile
or other electronic transmission service, (iii) by a nationally recognized
overnight courier service, or (iv) by registered or certified mail (postage
prepaid return receipt requested), to the parties at the following address:
To Lear: ▇▇▇▇ Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and
General Counsel
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
To ▇▇▇▇▇▇▇▇
or Eurotrim: ▇▇▇▇▇▇▇▇ Corporation
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125
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Varnum, Riddering, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
To the Company: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Overhead Systems, L.L.C.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy No. ________________
6.3 SEVERABILITY. If any provision of this Agreement shall be
conclusively determined by a court of competent jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement shall not be
affected thereby.
6.4 BINDING EFFECT. Except as otherwise provided herein, this Agreement
shall inure to the benefit of and be binding upon the parties, their respective
successors, legal representatives and permitted assigns.
6.5 NO THIRD PARTY RIGHTS. This Agreement is intended to create
enforceable rights between the parties hereto only, and creates no rights in, or
obligations to, any other Persons whatsoever.
6.6 TIME IS OF ESSENCE. Time is of the essence in the performance
of each and every obligation herein imposed.
6.7 SCHEDULES INCLUDED IN EXHIBITS; INCORPORATION BY REFERENCE. Any
reference to an Exhibit to this Agreement contained herein shall be deemed to
include any Schedules to such Exhibit. Each of the Exhibits referred to in this
Agreement, and each Schedule to such Exhibits, is hereby incorporated by
reference in this Agreement as if such Schedules and Exhibits were set out in
full in the text of this Agreement.
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6.8 AMENDMENTS. This Agreement may not be amended except by written
agreement executed by duly authorized officers of all of the parties hereto.
6.9 ENTIRE AGREEMENT; SECTION HEADINGS. This Agreement, the Operating
Agreement and the agreements contemplated by the Operating Agreement constitute
the entire Agreement among the parties hereto relating to the subject matter
hereof and supersede all prior agreements, understandings, and arrangements,
oral or written, among the parties with respect to the subject matter hereof.
The Section headings in this Agreement are for reference purposes only and shall
be affect in any way the meaning or interpretation of this Agreement.
6.10 ASSIGNMENT. This Agreement and each and every covenant, term and
condition hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns. Except as otherwise
specifically provided in this Agreement or the Operating Agreement (particularly
Section 9.2(a) thereof), neither this Agreement nor any rights or obligations
hereunder shall be assignable or be delegated directly or indirectly by any
party hereto to a third party (other than an Affiliate of the Member) without
the prior written consent of all the parties to this Agreement.
In the event either Member withdraws from the Company pursuant to
Section 4.4 of the Operating Agreement, all of its rights hereunder and all
contracts between that Member and OEMs for the sale of Products shall be
assigned to the other Member. Provided, however, if an OEM will not permit such
transfer, the withdrawing Member will continue to fulfill its obligations to the
OEM under its contracts and to the Company under this Agreement.
6.11 ARBITRATION. Any dispute, controversy or claim (hereinafter
"Dispute") between the parties of any kind or nature whatsoever, arising under
or related to this Agreement whether arising in contract, tort or otherwise,
shall be resolved according to the following procedure. If a Dispute (excluding
business decisions to be voted on by Members or Directors) arises among the
Members under this Agreement or any Ancillary Agreement which is not resolved by
good faith negotiation, then such Dispute, upon 30 days' prior notice from one
Member to the other of its intent to arbitrate (an "Arbitration Notice"), shall
be submitted to and settled by arbitration; provided, however, that nothing
contained herein shall preclude any party hereto from seeking or obtaining (a)
injunctive relief, or (b) equitable or other judicial relief to enforce the
provisions hereof or to preserve the status quo pending resolution of disputes
hereunder. Such arbitration shall be conducted in accordance with the commercial
arbitration rules of the American Arbitration Association existing at the time
of submission by one arbitrator. The Members shall attempt to agree upon an
arbitrator. If one cannot be agreed upon, the Member which did not give the
Arbitration Notice may
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request the Chief Judge of the United States District Court for the Eastern
District of Michigan or the Chief Judge of the United States District Court for
the Western District of Michigan to appoint an arbitrator. If he or she will
not, the arbitrator shall be appointed by the American Arbitration Association.
If an arbitrator so selected becomes unable to serve, his or her successor shall
be similarly selected or appointed. All arbitration hearings shall be conducted
on an expedited schedule, and all proceedings shall be confidential. Either
Member may at its expense make a stenographic record thereof. The arbitrator
shall apportion all costs and expenses of arbitration (including the
arbitrator's fees and expenses, the fees and expenses of experts, and the fees
and expenses of counsel to the parties), between the prevailing and
non-prevailing Member as the arbitrator deems fair and reasonable. Any
arbitration award shall be binding and enforceable against the parties hereto
and judgment may be entered thereon in any court of competent jurisdiction. The
arbitration
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will take place at Southfield, Michigan or Grand Rapids, Michigan at the
election of the Member not giving the Arbitration Notice.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
▇▇▇▇ CORPORATION
("Lear")
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
____________________
▇▇▇▇▇▇▇▇ CORPORATION
("▇▇▇▇▇▇▇▇")
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
_________________
▇▇▇▇▇▇▇▇ EUROTRIM LIMITED
("Eurotrim")
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
_____________________
EMPETEK
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
_____________________
▇▇▇▇ ▇▇▇▇▇▇▇▇ OVERHEAD SYSTEMS,
LLC
By /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
____________________
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LIST OF EXHIBITS AND SCHEDULES
EXHIBIT A REIMBURSEMENT FOR PRIOR CONTRACTS
EXHIBIT B ELECTRONIC COMPONENTS
EXHIBIT C PURCHASE PRICE FROM MEMBER FACILITIES
130
EXHIBIT C
PURCHASE PRICE FROM MEMBER FACILITIES
_____________________________________
COMPANY PRICE AS A PERCENT
OF PRICE TO CUSTOMER
__________________________________
1998 1999 2000
---- ---- ----
Grand Haven 64 77.1 77.1
Sheboygan 90.5 91.9 91.9
Colne & ▇▇▇▇▇▇ 89.3 88.3 88
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EXHIBIT F
▇▇▇▇▇▇▇▇ NONCOMPETITION AND NON-SOLICITATION AGREEMENT
THIS NONCOMPETITION AND NON-SOLICITATION AGREEMENT ("Agreement") is
dated as of November, 1997 by and among ▇▇▇▇ CORPORATION, a Delaware corporation
("Lear"), and ▇▇▇▇▇▇▇▇ CORPORATION, a Michigan corporation ("▇▇▇▇▇▇▇▇").
Capitalized terms not otherwise defined herein shall have the meaning set forth
in the Operating Agreement (as defined below).
RECITALS
WHEREAS, as of the date hereof, ▇▇▇▇▇▇▇▇ and Lear have been admitted as
members of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Overhead Systems, L.L.C., a Michigan limited liability
company (the "Company"), and Lear and ▇▇▇▇▇▇▇▇ have entered into an Operating
Agreement of the Company dated of even date herewith (the "Operating
Agreement");
WHEREAS, pursuant to, and in consideration of ▇▇▇▇'▇ entering into the
Operating Agreement, ▇▇▇▇▇▇▇▇ has agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants, agreements and understandings contained herein and in the Operating
Agreement, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. COVENANTS.
(A) UNAUTHORIZED DISCLOSURE. ▇▇▇▇▇▇▇▇ acknowledges that given
▇▇▇▇▇▇▇▇'▇ relationship with the Company, ▇▇▇▇▇▇▇▇ has and will transfer certain
information to the Company and/or Lear, and has been and will be exposed to and
has received and will receive information relating to the confidential affairs
of the Company, including, without limitation, business and marketing plans,
strategies, customer information, other information concerning the Company's
products, promotions, development, financing, expansion plans, and other forms
of information considered by the Company to be confidential and in the nature of
trade secrets (collectively, the "Confidential Information"). The term
Confidential Information shall include, without limitation, information relating
to the Company's manuals, procedures, Products, designs, technology, practices,
pricing, and methods of designing, engineering, testing and manufacturing
Products except technology know-how, and other intellectual property rights
licensed by ▇▇▇▇▇▇▇▇ to the Company. ▇▇▇▇▇▇▇▇ agrees that, during the Term and
thereafter, it will keep all Confidential Information strictly confidential;
132
during the Term it will not use any Confidential Information except on behalf of
the Company; and during the Term and thereafter it will not disclose any
Confidential Information, either directly or indirectly, to any Person without
the prior written consent of Lear. This confidentiality covenant has no
temporal, geographical or territorial restriction. Upon termination of this
Agreement, ▇▇▇▇▇▇▇▇ will promptly deliver to Lear all notes, memoranda,
writings, lists, files, reports, customer lists, correspondence, tapes, disks,
cards, maps, logs, data, drawings or any other tangible product or document that
has been produced by, received by or otherwise submitted to ▇▇▇▇▇▇▇▇ during or
prior to the Term which constitutes or embodies Confidential Information of the
Company.
(B) NONCOMPETITION. Except as provided on Exhibit A, ▇▇▇▇▇▇▇▇
agrees that it will not during the Term, directly or indirectly (including,
without limitation, through an Affiliate), be or become, own, manage, operate,
join, finance, advise or counsel, consult with, control, or participate in the
ownership, management, operation or control of, or be connected in any other
manner including, without limitation, being a stockholder (excepting less than
1% stockholdings for investment purposes only in securities of publicly held and
traded companies), member, partner or investor in, any Competing Enterprise.
Competing Enterprise means any Person engaged in a business or operation
anywhere in the world (collectively, the "Territory") which is directly or
indirectly in the business of designing, engineering, manufacturing, selling,
marketing and/or servicing of Products. ▇▇▇▇▇▇▇▇ acknowledges and agrees that
the agreements contained in this Section 1(b) are reasonable and necessary to
protect the legitimate business interests of Lear and the Company and are legal,
valid and binding obligations of ▇▇▇▇▇▇▇▇ enforceable to the fullest extent
permitted by applicable law.
(C) NON-SOLICITATION. ▇▇▇▇▇▇▇▇ agrees that, during the Term,
it will not in any way, directly or indirectly (including, without limitation,
through an Affiliate), solicit for employment or endeavor to entice away from
the Company or Lear, any Person who is an employee or full time consultant of
the Company or Lear, other than Persons whose employment with the Company or
Lear shall have been terminated by the Company or Lear, as the case may be,
prior to the date of solicitation; provided, however, this Section 1(c) shall
not prevent ▇▇▇▇▇▇▇▇ from employing any such Person who contacts ▇▇▇▇▇▇▇▇ on his
or her own initiative without any direct or indirect solicitation by, or
encouragement from, ▇▇▇▇▇▇▇▇; provided further, that this Section 1(c) shall not
be deemed to prohibit any general solicitations of employment not specifically
directed at particular employees of the Company or Lear.
(D) REMEDIES. ▇▇▇▇▇▇▇▇ and Lear agree that any breach of the
terms of this Agreement would result in irreparable injury and damage to the
Company and/or Lear for which the Company and/or Lear would have no adequate
remedy at law; therefore, ▇▇▇▇▇▇▇▇ also agrees that in the event of any such
breach, the Company and/or Lear shall be entitled
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to an immediate injunction and restraining order to prevent such breach by
▇▇▇▇▇▇▇▇ (including any and all Persons acting for or with it) without having to
prove actual damages or post a bond or other security, and to recover all costs
and expenses incurred by the Company, including reasonable attorneys' fees and
costs, in addition to any other remedies to which the Company and/or Lear may be
entitled at law or in equity. The terms of this Section 1(d) shall not be
construed as an election of remedies nor prevent the Company and/or Lear from
pursuing any other available remedies for any breach hereof, including, without
limitation, the recovery of damages. ▇▇▇▇▇▇▇▇ and Lear further agree that the
provisions of the covenants set forth in this Section 1 are reasonable and
valid. Should a court of competent jurisdiction or arbitration tribunal
determine, however, that any provision of any of such covenants is unreasonable,
either in period of time, scope, geographical area or otherwise, the parties
hereto agree that the covenant shall be interpreted and/or reformed and be
enforced to the maximum extent that such court or arbitration tribunal deems
reasonable.
2. EXCLUSIONS TO NONCOMPETITION. Notwithstanding the provisions
of Section 1(b) above, and any provision of the Operating Agreement:
(a) If ▇▇▇▇▇▇▇▇ becomes aware of an opportunity for the
manufacture or sale of a Product which ▇▇▇▇▇▇▇▇ believes the Company should
pursue (the "Opportunity"), ▇▇▇▇▇▇▇▇ shall present that Opportunity together
with all relevant information regarding the Opportunity to the Company. The
Board of Directors of the Company shall meet within thirty (30) days after
▇▇▇▇▇▇▇▇ presents the Opportunity and all relevant information to the Company to
decide whether the Company should pursue the Opportunity. If the Company does
not undertake the Opportunity because one or more of the directors appointed by
Lear votes against it, then ▇▇▇▇▇▇▇▇ may pursue that Opportunity independently,
even though it involves the manufacture or sale of Products; provided, however:
(i) ▇▇▇▇▇▇▇▇ shall not expand the scope of the
Products being manufactured or sold, the customer base for the Products, or the
geographic area in which the Products are manufactured or sold, without again
first offering each such Opportunity to the Company in accordance with the
provisions of Section 2(a) hereof (for direct sale in the event of a purchaser
other than an original equipment manufacturer of automobiles or light duty
trucks ("OEM") or for manufacture under the terms of the Purchase and Supply
Agreement in the event the purchaser is an OEM).
(ii) The Company shall have an option for one (1)
year after the date ▇▇▇▇▇▇▇▇ has begun the business of the Opportunity to
purchase ▇▇▇▇▇▇▇▇'▇ interest in the Opportunity at a price equal to the sum of
the amount ▇▇▇▇▇▇▇▇ paid for that Opportunity, capital expenditures incurred
by ▇▇▇▇▇▇▇▇ in connection with such Opportunity, the net
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operating loss incurred by ▇▇▇▇▇▇▇▇ in connection with such Opportunity, and
interest on such expenditures and losses at the rate of Member loans to the
Company.
(iii) For five (5) years following the expiration
of the one (1) year option period referenced in Section 2(a)(ii), the Company
will have continuing option to purchase ▇▇▇▇▇▇▇▇'▇ interest in the Opportunity
for its Fair Market Value (as defined in the Operating Agreement) as of the time
of exercise of this option, payable in cash.
(b) If ▇▇▇▇▇▇▇▇ has an opportunity to acquire a business
(whether by purchase of capital stock or assets or otherwise) which includes
among other lines of business the manufacture or sale of one or more Products
(the "Target Business"), ▇▇▇▇▇▇▇▇ shall present the opportunity to the Company.
▇▇▇▇▇▇▇▇ may present the opportunity to purchase the entire Target Business, or
if ▇▇▇▇▇▇▇▇ wishes to acquire the remaining portion of the Target Business,
shall offer the Company the option to acquire that portion of the business of
the Target Business relating to the manufacture or sale of Products, in either
case together with all relevant information regarding the Target Business. The
purchase price for the portion of the Target Business relating to the
manufacture or sale of Products shall be allocated based upon the respective
Fair Market Values of each portion of the Target Business. The Board of
Directors of the Company shall meet within thirty (30) days after ▇▇▇▇▇▇▇▇
presents the opportunity to acquire the Target Business (or portion thereof
relating to the manufacture or sale of Products) and all relevant information
regarding the Target Business to the Company to decide whether the Company
should acquire the Target Business or portion thereof relating to the
manufacture or sale of Products, as the case may be. If the Company does not
undertake to purchase the Target Business or the portion of the Target Business
relating to the manufacture or sale of Products because one or more of the
directors appointed by Lear votes against it, then ▇▇▇▇▇▇▇▇ may acquire the
Target Business or portion thereof relating to the manufacture or sale of
Products independently, even though it involves the manufacture or sale of
Products. In the event ▇▇▇▇▇▇▇▇ acquires all or any portion of the Target
Business consisting of the manufacture or sale of Products:
(i) ▇▇▇▇▇▇▇▇ shall not expand the scope of the
Products being manufactured or sold, the customer base for the Products, or the
geographic area in which the Products are manufactured or sold by the Target
Business, without again first offering each such opportunity to the Company in
accordance with the provisions of Section 2(b) (for direct sale in the event of
a purchaser other than an OEM or for manufacture under the terms of a Purchase
and Supply Agreement in the event of a purchaser which is an OEM).
(ii) The Company shall have an option for one (1)
year after the date ▇▇▇▇▇▇▇▇ has consummated the purchase of the Target Business
or portion thereof consisting of the manufacture or sale of Products to purchase
that portion of the Target Business relating to the manufacture or sale of
Products, as the case may be, for a price equal to the
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part of the following that is related to the manufacture or sale of Products:
the sum of the purchase price for the Target Business, capital expenditures
incurred by ▇▇▇▇▇▇▇▇ in connection with the Target Business, any net operating
loss incurred by ▇▇▇▇▇▇▇▇ in connection with the Target Business, and interest
on any of the expenditures or losses at the rate of Member loans to the Company.
(iii) For five years following the expiration of the one
(1) year option period referenced in Section 2(b)(ii), the Company will have a
continuing option to purchase ▇▇▇▇▇▇▇▇'▇ interest in that portion of the Target
Business related to the manufacture or sale of Products for its Fair Market
Value (as defined in the Operating Agreement) as of the time of exercise of this
option, payable in cash.
(c) The determination of whether the Company will accept an
Opportunity presented pursuant to Section 2(a), acquire a Target Business or the
portion thereof relating to the manufacture or sale of Products pursuant to
Section 2(b), or exercise an option pursuant to Sections 2(a)(ii), 2(a)(iii),
2(b)(ii) or 2(b)(iii) will be made solely by the directors of the Company
appointed by Lear.
(d) As a condition to ▇▇▇▇▇▇▇▇'▇ pursuing the Opportunity or
Target Business independently if the Company elects not to undertake the
Opportunity or acquire the Target Business, ▇▇▇▇▇▇▇▇ shall (i) ensure that the
Opportunity and ▇▇▇▇▇▇▇▇'▇ interest in the Opportunity or that part of Target
Business manufacturing or selling Products are transferable to the Company, (ii)
not sell or assign its interest in the Opportunity or the part of the Target
Business to an Affiliate unless the Affiliate agrees to be bound by this
Agreement, (iii) notify the Company at least sixty (60) days prior to entering
into an agreement to sell or assign all or any part of its interest in the
Opportunity or the Target Business during the period of the options granted
pursuant to Sections 2(a) (ii), 2(a)(iii), 2(b)(ii) or 2(b)(iii) hereof, and
(iv) not take any other actions which would frustrate the intent and purpose of
the options granted in this Section 2.
3. ACKNOWLEDGMENTS.
(a) INTERESTS OF LEAR. ▇▇▇▇▇▇▇▇ acknowledges that (i) the
business of the Company is or may be carried on throughout the Territory, the
Company is interested in and solicits or canvasses opportunities throughout the
Territory and its competitors are located throughout the Territory, (ii) the
Company's reputation in the industry and its relationship with customers are the
result of the transfer of value from Lear and ▇▇▇▇▇▇▇▇, (iii) the nature of the
Company's business is such that the ongoing relationship between the Company and
its customers and suppliers are material and have a significant effect on the
ability of the Company to continue its business successfully, and (iv) any
injury or damage to the
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Company caused by a breach of the terms of this Agreement by ▇▇▇▇▇▇▇▇ would
cause injury or damage to Lear.
(b) ADVICE OF COUNSEL. ▇▇▇▇▇▇▇▇ acknowledges that it has been
represented in connection with this Agreement and the Operating Agreement by
competent legal counsel of its choice and that it is fully informed of all legal
and practical implications of the covenants entered into by it. ▇▇▇▇▇▇▇▇ has
entered into this Agreement and the Operating Agreement freely and without any
undue influence or coercion by Lear or any other Person.
4. TERM. The term of this Agreement (the "Term") shall begin on the
date hereof and end on the date two (2) years after the date of the withdrawal
of ▇▇▇▇▇▇▇▇ as a Member of the Company (whether by voluntary or involuntary
withdrawal, upon the sale or Transfer of its Interest to a Person other than an
Affiliate, or upon the complete liquidation and dissolution of the Company);
provided, however, in the event of any breach by ▇▇▇▇▇▇▇▇ of the provisions of
Section 1(b) hereof, the Term shall be extended with respect to the covenants
contained in Section 1(b) for such period as such breach continues. Nothing in
this Agreement shall create any right in ▇▇▇▇▇▇▇▇ to be or remain a Member of
the Company.
5. TERMINATION OF AGREEMENT. This Agreement shall terminate at the end
of the Term except with respect to any breach of this Agreement that shall have
occurred prior to such termination and with respect to any provisions of this
Agreement which by their terms expressly continue in effect beyond the
expiration of the Term. The existence of any claim or cause of action by
▇▇▇▇▇▇▇▇ against Lear or the Company, whether predicated on this Agreement, the
Operating Agreement or otherwise, shall not constitute a defense to the
enforcement by Lear and/or the Company of the covenants and agreements contained
in Section 1 hereof.
6. EFFECTIVENESS. This Agreement shall become effective as of
the date of this Agreement.
7. NOTICES. Every notice relating to this Agreement shall be in writing
and shall be deemed given (i) upon delivery if sent by facsimile
transmission(provided receipt is confirmed by a report from the facsimile
machine from which the facsimile was transmitted); upon delivery if sent by
personal delivery; three (3) business days after mailing if mailed by registered
or certified mail, postage prepaid, return receipt requested; or one (1)
business day after sending if sent by reputable overnight courier, in each case
to the parties at the following addresses and/or facsimile numbers:
If to ▇▇▇▇▇▇▇▇:
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▇▇▇▇▇▇▇▇ Corporation,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Lear:
▇▇▇▇ Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and General Counsel
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇.
8. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of Lear, the Company and its successors and assigns.
This Agreement shall be binding upon and shall inure to the benefit of ▇▇▇▇▇▇▇▇
and its successors. Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by ▇▇▇▇▇▇▇▇ without the prior written
consent of Lear.
9. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by duly authorized officers of ▇▇▇▇▇▇▇▇ and Lear. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreement or representation, oral or written, express or implied, with
respect to the subject matter hereof has been made by either party which is not
expressly set forth in this Agreement.
10. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior or contemporaneous agreements, promises,
representations or understandings, written or oral, between them as to such
subject matter.
11. HEADING. The headings contained herein are solely for the purpose
of reference, are not part of this Agreement and shall not in any way affect
the meaning or interpretation of this Agreement.
12. SEVERABILITY. If any provision of this Agreement, or any
application thereof to any circumstances, is invalid, in whole or in part, such
provision or application shall to
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138
that extent be severable and shall not affect other provisions or applications
of this Agreement.
13. DEFINITIONS. For purposes of this Agreement:
(a) "AFFILIATE" means a Person who, with respect to any other
Person, directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with such other Person.
(b) "CONTROL" means the right, directly or indirectly, to
elect a majority of the Board of Directors, Operating Committee or similar
governing body of an entity.
(c) "PERSON" means and includes, without limitation, an
individual, a partnership, a joint venture, a corporation, a limited liability
company, a trust, a business association or other entity, an unincorporated
organization, or a government or a governmental entity.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan without
reference to the principles of conflict of laws.
15. ARBITRATION. Any dispute, controversy or claim (hereinafter
"Dispute") between the parties of any kind or nature whatsoever, arising under
or relating to this Agreement whether arising in contract, tort or otherwise,
shall be resolved according to the following procedure. The parties agree that
if a Dispute arises under this Agreement which is not resolved by good faith
negotiation, then such Dispute, upon 30 days' prior written notice from one
party to the other of its intent to arbitrate (an "Arbitration Notice"), shall
be submitted to and settled exclusively by final and binding arbitration;
provided, however, that nothing contained herein shall preclude any party hereto
from seeking or obtaining from a court of competent jurisdiction (a) injunctive
relief, or (b) equitable or other judicial relief to specifically enforce the
provisions hereof or to preserve the status quo pending resolution of disputes
hereunder. The parties specifically acknowledge and agree that the provisions of
Section 1 of this Agreement shall be specifically enforced by a court of
competent jurisdiction and that any claim for damages under this Agreement,
although arising out of the same facts and circumstances, shall nonetheless be
resolved through arbitration hereunder. Such arbitration shall be conducted in
accordance with Michigan law and the Commercial Arbitration Rules of the
American Arbitration Association existing at the time of submission by one
arbitrator. The Members shall attempt to agree upon an arbitrator. If one cannot
be agreed upon, the Member which did not give the Arbitration Notice may request
the Chief Judge of the United States District Court for the Eastern District of
Michigan or the Chief Judge of the United States District Court for the Western
District of Michigan to appoint an
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139
arbitrator. If an arbitrator so selected becomes unable to serve, his or her
successor shall be similarly selected or appointed. All arbitration hearings
shall be conducted on an expedited schedule, and all proceedings shall be
confidential. Either party may at its expense make a stenographic record
thereof. The arbitrator shall apportion all costs and expenses of arbitration
(including the arbitrator's fees and expenses, the reasonable fees and expenses
of experts, and the fees and expenses of counsel to the parties), between the
prevailing and non-prevailing party as the arbitrator deems fair and reasonable.
Any arbitration award shall be binding and enforceable against the parties
hereto and judgment may be entered thereon in any court of competent
jurisdiction. The arbitration will take place at Southfield, Michigan or Grand
Rapids, Michigan at the election of the Member not giving the Arbitration
Notice.
16. COUNTERPARTS. This Agreement may be executed with counterpart
signature pages or in separate counterparts, each of which shall for all
purposes be deemed to be an original and all of which taken together shall
constitute one and the same Agreement.
17. RECITALS. The Recitals to this Agreement are incorporated
herein as a part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Noncompetition
Agreement to be executed by their duly authorized officers as of the date first
written above.
▇▇▇▇ CORPORATION
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
_____________________________ _________________________
Its:__________________________
▇▇▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
______________________________ _____________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Its:Chief Executive Officer and President
_____________________________________
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EXHIBIT A
▇▇▇▇▇▇▇▇ shall be permitted to design, manufacture and sell
electronics, lenses and optics, and flat and curved coated glass for displays,
to Persons other than the Company, even if such electronics constitute or are
part of Products.
141
EXHIBIT G
LEAR NONCOMPETITION AND NON-SOLICITATION AGREEMENT
THIS NONCOMPETITION AND NON-SOLICITATION AGREEMENT ("Agreement") is
dated as of [ ], 1997 by and among ▇▇▇▇ CORPORATION, a Delaware corporation
("Lear"), and ▇▇▇▇▇▇▇▇ CORPORATION, a Michigan corporation ("▇▇▇▇▇▇▇▇").
Capitalized terms not otherwise defined herein shall have the meaning set forth
in the Operating Agreement (as defined below).
RECITALS
WHEREAS, as of the date hereof, ▇▇▇▇▇▇▇▇ and Lear have been admitted as
members of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Overhead Systems, L.L.C., a Michigan limited liability
company (the "Company"), and Lear and ▇▇▇▇▇▇▇▇ have entered into an Operating
Agreement of the Company dated of even date herewith (the "Operating
Agreement");
WHEREAS, pursuant to, and in consideration of ▇▇▇▇▇▇▇▇'▇ entering into
the Operating Agreement, Lear has agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants, agreements and understandings contained herein and in the Operating
Agreement, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. COVENANTS.
(a) UNAUTHORIZED DISCLOSURE. Lear acknowledges that given
▇▇▇▇'▇ relationship with the Company, Lear has and will transfer certain
information to the Company and/or ▇▇▇▇▇▇▇▇, and has been and will be exposed to
and has received and will receive information relating to the confidential
affairs of the Company, including, without limitation, business and marketing
plans, strategies, customer information, other information concerning the
Company's products, promotions, development, financing, expansion plans, and
other forms of information considered by the Company to be confidential and in
the nature of trade secrets (collectively, the "Confidential Information"). The
term Confidential Information shall include, without limitation, information
relating to the Company's manuals, procedures, Products, designs, technology,
practices, pricing, and methods of designing, engineering, testing and
manufacturing Products except technology know-how and other intellectual
property rights licensed by Lear to the Company. Lear agrees that, during the
142
Term and thereafter, it will keep all Confidential Information strictly
confidential; during the Term it will not use any Confidential Information
except on behalf of the Company; and during the Term and thereafter it will not
disclose any Confidential Information, either directly or indirectly, to any
Person without the prior written consent of ▇▇▇▇▇▇▇▇. This confidentiality
covenant has no temporal, geographical or territorial restriction. Upon
termination of this Agreement, Lear will promptly deliver to ▇▇▇▇▇▇▇▇ all notes,
memoranda, writings, lists, files, reports, customer lists, correspondence,
tapes, disks, cards, maps, logs, data, drawings or any other tangible product or
document that has been produced by, received by or otherwise submitted to Lear
during or prior to the Term which constitutes or embodies Confidential
Information of the Company.
(b) NONCOMPETITION. Except as provided on Exhibit A, Lear
agrees that except through ownership in the Company it will not during the Term,
directly or indirectly (including, without limitation, through an Affiliate), be
or become, own, manage, operate, join, finance, advise or counsel, consult with,
control, or participate in the ownership, management, operation or control of,
or be connected in any other manner including, without limitation, being a
stockholder (excepting less than 1% stockholdings for investment purposes only
in securities of publicly held and traded companies), member, partner or
investor in, any Competing Enterprise. Competing Enterprise means any Person
engaged in a business or operation anywhere in the world (collectively, the
"Territory") which is directly or indirectly in the business of designing,
engineering, manufacturing, selling, marketing and/or servicing of Products.
Lear acknowledges and agrees that the agreements contained in this Section 1(b)
are reasonable and necessary to protect the legitimate business interests of
▇▇▇▇▇▇▇▇ and the Company and are legal, valid and binding obligations of Lear
enforceable to the fullest extent permitted by applicable law.
(c) NON-SOLICITATION. Lear agrees that, during the Term, it
will not in any way, directly or indirectly (including, without limitation,
through an Affiliate), solicit for employment or endeavor to entice away from
the Company or ▇▇▇▇▇▇▇▇, any Person who is an employee or full time consultant
of the Company or ▇▇▇▇▇▇▇▇, other than Persons whose employment with the Company
or Lear shall have been terminated by the Company or ▇▇▇▇▇▇▇▇, as the case may
be, prior to the date of solicitation; provided, however, this Section 1(c)
shall not prevent Lear from employing any such Person who contacts Lear on his
or her own initiative without any direct or indirect solicitation by, or
encouragement from, Lear; provided further, that this Section 1(c) shall not be
deemed to prohibit any general solicitations of employment not specifically
directed at particular employees of the Company or ▇▇▇▇▇▇▇▇.
(d) REMEDIES. Lear and ▇▇▇▇▇▇▇▇ agree that any breach of the
terms of this Agreement would result in irreparable injury and damage to the
Company and/or ▇▇▇▇▇▇▇▇
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143
for which the Company and/or ▇▇▇▇▇▇▇▇ would have no adequate remedy at law;
therefore, Lear also agrees that in the event of any such breach, the Company
and/or ▇▇▇▇▇▇▇▇ shall be entitled to an immediate injunction and restraining
order to prevent such breach by Lear (including any and all Persons acting for
or with it) without having to prove actual damages or post a bond or other
security, and to recover all costs and expenses incurred by the Company,
including reasonable attorneys' fees and costs, in addition to any other
remedies to which the Company and/or ▇▇▇▇▇▇▇▇ may be entitled at law or in
equity. The terms of this Section 1(d) shall not be construed as an election of
remedies nor prevent the Company and/or Lear from pursuing any other available
remedies for any breach hereof, including, without limitation, the recovery of
damages. Lear and ▇▇▇▇▇▇▇▇ further agree that the provisions of the covenants
set forth in this Section 1 are reasonable and valid. Should a court of
competent jurisdiction or arbitration tribunal determine, however, that any
provision of any of such covenants is unreasonable, either in period of time,
scope, geographical area or otherwise, the parties hereto agree that the
covenant shall be interpreted and/or reformed and be enforced to the maximum
extent that such court or arbitration tribunal deems reasonable.
2. EXCLUSIONS TO NONCOMPETITION. Notwithstanding the provisions
of Section 1(b) above, and any provision of the Operating Agreement:
(a) If Lear becomes aware of an opportunity for the
manufacture or sale of a Product which Lear believes the Company should pursue
(the "Opportunity"), Lear shall present that Opportunity together with all
relevant information regarding the Opportunity to the Company. The Board of
Directors of the Company shall meet within thirty (30) days after Lear presents
the Opportunity and all relevant information to the Company to decide whether
the Company should pursue the Opportunity. If the Company does not undertake the
Opportunity because one or more of the directors appointed by ▇▇▇▇▇▇▇▇ votes
against it, then Lear may pursue that Opportunity independently, even though it
involves the manufacture or sale of Products; provided, however:
(i) Lear shall not expand the scope of the Products being
manufactured or sold, the customer base for the Products, or the geographic area
in which the Products are manufactured or sold, without again first offering
each such Opportunity to the Company in accordance with the provisions of
Section 2(a) hereof (for direct sale in the event of a purchaser other than an
original equipment manufacturer of automobiles or light duty trucks ("OEM") or
for manufacture under the terms of the Purchase and Supply Agreement in the
event the purchaser is an OEM).
(ii) The Company shall have an option for one (1)
year after the date Lear has begun the business of the Opportunity to purchase
▇▇▇▇'▇ interest in the Opportunity
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144
at a price equal to the sum of the amount Lear paid for that Opportunity,
capital expenditures incurred by Lear in connection with such Opportunity, the
net operating loss incurred by Lear in connection with such Opportunity, and
interest on such expenditures and losses at the rate of Member loans to the
Company.
(iii) For five (5) years following the expiration of the
one (1) year option period referenced in Section 2(a)(ii), the Company will
have continuing option to purchase ▇▇▇▇'▇ interest in the Opportunity for
its Fair Market Value (as defined in the Operating Agreement) as of the time of
exercise of this option, payable in cash.
(b) If Lear has an opportunity to acquire a business (whether
by purchase of capital stock or assets or otherwise) which includes among other
lines of business the manufacture or sale of one or more Products (the "Target
Business"), Lear shall present the opportunity to the Company. Lear may present
the opportunity to purchase the entire Target Business, or if Lear wishes to
acquire the remaining portion of the Target Business, shall offer the Company
the option to acquire that portion of the business of the Target Business
relating to the manufacture or sale of Products, in either case together with
all relevant information regarding the Target Business. The purchase price for
the portion of the Target Business relating to the manufacture or sale of
Products shall be allocated based upon the respective Fair Market Values of each
portion of the Target Business. The Board of Directors of the Company shall meet
within thirty (30) days after Lear presents the opportunity to acquire the
Target Business (or portion thereof relating to the manufacture or sale of
Products) and all relevant information regarding the Target Business to the
Company to decide whether the Company should acquire the Target Business or
portion thereof relating to the manufacture or sale of Products, as the case may
be. If the Company does not undertake to purchase the Target Business or the
portion of the Target Business relating to the manufacture or sale of Products
because one or more of the directors appointed by ▇▇▇▇▇▇▇▇ votes against it,
then Lear may acquire the Target Business or portion thereof relating to the
manufacture or sale of Products independently, even though it involves the
manufacture or sale of Products. In the event Lear acquires all or any portion
of the Target Business consisting of the manufacture or sale of Products:
(i) Lear shall not expand the scope of the Products being
manufactured or sold, the customer base for the Products, or the geographic area
in which the Products are manufactured or sold by the Target Business, without
again first offering each such opportunity to the Company in accordance with the
provisions of Section 2(b) (for direct sale in the event of a purchaser other
than an OEM or for manufacture under the terms of a Purchase and Supply
Agreement in the event of a purchaser which is an OEM).
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145
(ii) The Company shall have an option for one (1) year
after the date Lear has consummated the purchase of the Target Business or
portion thereof consisting of the manufacture or sale of Products to purchase
that portion of the Target Business relating to the manufacture or sale of
Products, as the case may be, for a price equal to the part of the following
that is related to the manufacture or sale of Products: the sum of the purchase
price for the Target Business, capital expenditures incurred by Lear in
connection with the Target Business, any net operating loss incurred by Lear in
connection with the Target Business, and interest on any of the expenditures or
losses at the rate of Member loans to the Company.
(iii) For five years following the expiration of the one
(1) year option period referenced in Section 2(b)(ii), the Company will have a
continuing option to purchase ▇▇▇▇'▇ interest in that portion of the Target
Business related to the manufacture or sale of Products for its Fair Market
Value (as defined in the Operating Agreement) as of the time of exercise of this
option, payable in cash.
(c) The determination of whether the Company will accept an
Opportunity presented pursuant to Section 2(a), acquire a Target Business or the
portion thereof relating to the manufacture or sale of Products pursuant to
Section 2(b), or exercise an option pursuant to Sections 2(a)(ii), 2(a)(iii),
2(b)(ii) or 2(b)(iii) will be made solely by the directors of the Company
appointed by Lear.
(d) As a condition to ▇▇▇▇'▇ pursuing the Opportunity or
Target Business independently if the Company elects not to undertake the
Opportunity or acquire the Target Business, Lear shall (i) ensure that the
Opportunity and ▇▇▇▇'▇ interest in the Opportunity or that part of Target
Business manufacturing or selling Products are transferable to the Company, (ii)
not sell or assign its interest in the Opportunity or the part of the Target
Business to an Affiliate unless the Affiliate agrees to be bound by this
Agreement, (iii) notify the Company at least sixty (60) days prior to entering
into an agreement to sell or assign all or any part of its interest in the
Opportunity or the Target Business during the period of the options granted
pursuant to Sections 2(a) (ii), 2(a)(iii), 2(b)(ii) or 2(b)(iii) hereof, and
(iv) not take any other actions which would frustrate the intent and purpose of
the options granted in this Section 2.
3. ACKNOWLEDGMENTS.
(a) INTERESTS OF ▇▇▇▇▇▇▇▇. Lear acknowledges that (i) the
business of the Company is or may be carried on throughout the Territory, the
Company is interested in and solicits or canvasses opportunities throughout the
Territory and its competitors are located throughout the Territory, (ii) the
Company's reputation in the industry and its relationship
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146
with customers are the result of the transfer of value from ▇▇▇▇▇▇▇▇ and Lear,
(iii) the nature of the Company's business is such that the ongoing relationship
between the Company and its customers and suppliers are material and have a
significant effect on the ability of the Company to continue its business
successfully, and (iv) any injury or damage to the Company caused by a breach of
the terms of this Agreement by Lear would cause injury or damage to ▇▇▇▇▇▇▇▇.
(b) ADVICE OF COUNSEL. Lear acknowledges that it has been
represented in connection with this Agreement and the Operating Agreement by
competent legal counsel of its choice and that it is fully informed of all legal
and practical implications of the covenants entered into by it. Lear has entered
into this Agreement and the Operating Agreement freely and without any undue
influence or coercion by ▇▇▇▇▇▇▇▇ or any other Person.
4. TERM. The term of this Agreement (the "Term") shall begin on the
date hereof and end on the date two (2) years after the date of the withdrawal
of Lear as a Member of the Company (whether by voluntary or involuntary
withdrawal, upon the sale or Transfer of its Interest to a Person other than an
Affiliate, or upon the complete liquidation and dissolution of the Company);
provided, however, in the event of any breach by Lear of the provisions of
Section 1(b) hereof, the Term shall be extended with respect to the covenants
contained in Section 1(b) for such period as such breach continues. Nothing in
this Agreement shall create any right in Lear to be or remain a Member of the
Company.
5. TERMINATION OF AGREEMENT. This Agreement shall terminate at the end
of the Term except with respect to any breach of this Agreement that shall have
occurred prior to such termination and with respect to any provisions of this
Agreement which by their terms expressly continue in effect beyond the
expiration of the Term. The existence of any claim or cause of action by Lear
against ▇▇▇▇▇▇▇▇ or the Company, whether predicated on this Agreement, the
Operating Agreement or otherwise, shall not constitute a defense to the
enforcement by ▇▇▇▇▇▇▇▇ and/or the Company of the covenants and agreements
contained in Section 1 hereof.
6. EFFECTIVENESS. This Agreement shall become effective as of
the date of this Agreement.
7. NOTICES. Every notice relating to this Agreement shall be in writing
and shall be deemed given (i) upon delivery if sent by facsimile
transmission(provided receipt is confirmed by a report from the facsimile
machine from which the facsimile was transmitted); upon delivery if sent by
personal delivery; three (3) business days after mailing if mailed by registered
or certified mail, postage prepaid, return receipt requested; or one (1)
business day
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after sending if sent by reputable overnight courier, in each case to the
parties at the following addresses and/or facsimile numbers:
If to Lear:
▇▇▇▇ Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and General Counsel
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇▇:
▇▇▇▇▇▇▇▇ Corporation,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
8. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of ▇▇▇▇▇▇▇▇, the Company and its successors and
assigns. This Agreement shall be binding upon and shall inure to the benefit of
Lear and its successors. Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by Lear without the prior written
consent of ▇▇▇▇▇▇▇▇.
9. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by duly authorized officers of Lear and ▇▇▇▇▇▇▇▇. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreement or representation, oral or written, express or implied, with
respect to the subject matter hereof has been made by either party which is not
expressly set forth in this Agreement.
10. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior or contemporaneous agreements, promises,
representations or understandings, written or oral, between them as to such
subject matter.
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148
11. HEADING. The headings contained herein are solely for the purpose
of reference, are not part of this Agreement and shall not in any way affect the
meaning or interpretation of this Agreement.
12. SEVERABILITY. If any provision of this Agreement, or any
application thereof to any circumstances, is invalid, in whole or in part, such
provision or application shall to that extent be severable and shall not affect
other provisions or applications of this Agreement.
13. DEFINITIONS. For purposes of this Agreement:
(a) "AFFILIATE" means a Person who, with respect to any other
Person, directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with such other Person.
(b) "CONTROL" means the right, directly or indirectly, to
elect a majority of the Board of Directors, Operating Committee or similar
governing body of an entity.
(c) "PERSON" means and includes, without limitation, an
individual, a partnership, a joint venture, a corporation, a limited liability
company, a trust, a business association or other entity, an unincorporated
organization, or a government or a governmental entity.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan without reference to the
principles of conflict of laws.
15. ARBITRATION. Any dispute, controversy or claim (hereinafter
"Dispute") between the parties of any kind or nature whatsoever, arising under
or relating to this Agreement whether arising in contract, tort or otherwise,
shall be resolved according to the following procedure. The parties agree that
if a Dispute arises under this Agreement which is not resolved by good faith
negotiation, then such Dispute, upon 30 days' prior written notice from one
party to the other of its intent to arbitrate (an "Arbitration Notice"), shall
be submitted to and settled exclusively by final and binding arbitration;
provided, however, that nothing contained herein shall preclude any party hereto
from seeking or obtaining from a court of competent jurisdiction (a) injunctive
relief, or (b) equitable or other judicial relief to specifically enforce the
provisions hereof or to preserve the status quo pending resolution of disputes
hereunder. The parties specifically acknowledge and agree that the provisions of
Section 1 of this Agreement shall be specifically enforced by a court of
competent jurisdiction and that any claim for damages under this Agreement,
although arising out of the
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149
same facts and circumstances, shall nonetheless be resolved through arbitration
hereunder. Such arbitration shall be conducted in accordance with Michigan law
and the Commercial Arbitration Rules of the American Arbitration Association
existing at the time of submission by one arbitrator. The Members shall attempt
to agree upon an arbitrator. If one cannot be agreed upon, the Member which did
not give the Arbitration Notice may request the Chief Judge of the United States
District Court for the Eastern District of Michigan or the Chief Judge of the
United States District Court for the Western District of Michigan to appoint an
arbitrator. If an arbitrator so selected becomes unable to serve, his or her
successor shall be similarly selected or appointed. All arbitration hearings
shall be conducted on an expedited schedule, and all proceedings shall be
confidential. Either party may at its expense make a stenographic record
thereof. The arbitrator shall apportion all costs and expenses of arbitration
(including the arbitrator's fees and expenses, the reasonable fees and expenses
of experts, and the fees and expenses of counsel to the parties), between the
prevailing and non-prevailing party as the arbitrator deems fair and reasonable.
Any arbitration award shall be binding and enforceable against the parties
hereto and judgment may be entered thereon in any court of competent
jurisdiction. The arbitration will take place at Southfield, Michigan or Grand
Rapids, Michigan at the election of the Member not giving the Arbitration
Notice.
16. COUNTERPARTS. This Agreement may be executed with counterpart
signature pages or in separate counterparts, each of which shall for all
purposes be deemed to be an original and all of which taken together shall
constitute one and the same Agreement.
17. RECITALS. The Recitals to this Agreement are incorporated herein as
a part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Noncompetition
Agreement to be executed by their duly authorized officers as of the date first
written above.
▇▇▇▇ CORPORATION
_____________________________ By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
_____________________
Its:_____________________
▇▇▇▇▇▇▇▇ CORPORATION
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150
______________________________ By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
______________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Its: Chief Executive Officer and President
_____________________________________
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151
EXHIBIT A
Lear shall be permitted to:
1) Continue the design, manufacture and sale of:
(a) headliners for current models of the Ford Taurus and
Windstar, provided it subcontracts the substrate to
the Company.
(b) the sunshade and MGB convertible hardtop currently
manufactured at its facility in Colne, England.
2) Design, manufacture and sell to Persons other than the
Company, interior pillar covers which are not integrated with
or attached to headliners.
3) Continue its 40% ownership of [Impassa], its joint venture in
Mexico, provided (a) Lear will take whatever action permitted
by it under its joint venture agreement to restrict Impassa
from selling Products in the Territory, and (b) the Company
shall have an option to purchase ▇▇▇▇'▇ interest in Impassa at
any time during the five years following the date of this
Agreement at a price of Fair Market Value (as defined in the
Operating Agreement), payable in cash.
4) Design, manufacture and sell to Persons other than the Company
those electronics described on a Schedule those electronics
which Lear has developed or to which Lear has rights and which
are mutually agreed to by ▇▇▇▇▇▇▇▇ and Lear within 30 days
after the date hereof, even if such electronics constitute or
are part of the Products.
152
EXHIBIT H
1. Projected aggregate EBITDA for calendar 1998 and 1999 for the
Transferred Lear Assets and related business operations
contributed by Lear is $24,131,000.
2. Projected aggregate EBITDA for calendar 1998 and 1999 for the
Transferred ▇▇▇▇▇▇▇▇ Assets and related business operations
contributed by ▇▇▇▇▇▇▇▇ is $15,903,000.