<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): March 5, 1998
BINGHAM FINANCIAL SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
Michigan 0-23381 38-3313951
(State or other (Commission (I.R.S.Employer
jurisdiction of File Number) Identification No.)
incorporation)
31700 Middlebelt Road, Suite 125, Farmington Hills, MI 48334
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (248) 932-9656
(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 5, 1998, pursuant to an Agreement and Plan of Merger dated as of
February 17, 1998 (the "Merger Agreement") BAC Acquiring Corp. and BSC
Acquiring Corp. (collectively the "Acquiring Subs") merged into Bloomfield
Acceptance Company, L.L.C. ("BAC"), and Bloomfield Servicing Company, L.L.C.,
("BSC") respectively, whereupon the separate existence of the Acquiring Subs
ceased and BAC and BSC were continued as the surviving corporations and as
wholly owned subsidiaries of Bingham Financial Services Corporation
("Bingham"). The description of the merger included herein does not purport to
be complete and is qualified in its entirety by reference to the Merger
Agreement which is filed as Exhibit 2.1 hereto.
Pursuant to the terms of the Merger Agreement, 281,818 shares of Bingham
common stock, without par value, were issued to the Shareholders of BAC and
BSC. Additional consideration of up to Five Hundred-Thousand Dollars
($500,000.00), in the form of Bingham common stock, to be valued at market on
the date of issuance, will be paid to the Shareholders subject to the
performance of the merged entities over the two year period following the
merger.
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ITEM 5. OTHER EVENTS
On February 26, 1998 the Board of Directors of Bingham Financial Services
Corporation resolved to increase the size of the board from five to six
members. The Board further resolved to fill the vacancy created by the
appointment of Arthur A. Weiss.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a. FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. It is
impracticable at this time to provide the required financial
statements. The required financial statements will be filed with an
amendment to this Form 8-K as soon as practicable, and in any event
no later than 60 days after the date that this report is required to
be filed.
b. PRO FORMA FINANCIAL INFORMATION. It is impracticable at this
time to provide the required pro forma financial information. The
required financial information will be filed with an amendment to
this Form 8-K as soon as practicable, and in any event no later than
60 days after the date that this report is required to be filed.
c. EXHIBITS.
2.1 Agreement And Plan of Merger dated as of February 17, 1998 by
and among Bingham Financial Services Corporation, a Michigan
corporation, BAC Acquiring Corp., a Michigan corporation, BSC
Acquiring Corp., a Michigan corporation, Bloomfield Acceptance
Company, L.L.C., a Michigan limited liability company, and
Bloomfield Servicing Company, L.L.C., a Michigan limited liability
company. Omitted from such exhibit, as filed, are the remaining
exhibits referenced in such agreement. The Registrant will furnish
supplementally a copy of any such exhibits to the Commission upon
request.
2.2 Certificate of Merger for BAC, dated March 5, 1998.
2.3 Certificate of Merger for BSC, dated March 5, 1998.
2.4 Employment Agreement dated as of March 4, 1998 by and between
Bingham Financial Services Corporation and Daniel E. Bober.
2.5 Employment Agreement dated as of March 4, 1998 by and between
Bingham Financial Services Corporation and Creighton J. Weber.
2.6 Bloomfield Shareholders Agreement dated March 5, 1998.
2.7 Shareholders Agreement dated March 5, 1998.
2.8 Press Release of the Registrant, dated February 17, 1998.
2.9 Press Release of the Registrant, dated March 9, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BINGHAM FINANCIAL SERVICES CORPORATION
/s/ Jeffrey P. Jorissen
--------------------------------------------
Name: Jeffrey P. Jorissen
Title: President, Chief Executive
Officer, and Chief Financial Officer
Dated: March 13, 1998
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION METHOD OF FILING
- ------- ----------- ----------------
<S> <C> <C>
2.1 Agreement And Plan Of Merger dated as of February Filed herewith
17, 1998
2.2 Certificate of Merger for BAC, dated March 5, 1998 Filed herewith
2.3 Certificate of Merger for BSC, dated March 5, 1998 Filed herewith
2.4 Employment Agreement of Daniel E. Bober Filed herewith
2.5 Employment Agreement of Creighton J. Weber Filed herewith
2.6 Bloomfield Shareholders Agreement Filed herewith
2.7 Shareholders Agreement Filed herewith
2.8 Press Release dated February 17, 1998 Filed herewith
2.9 Press Release dated March 9, 1998 Filed herewith
</TABLE>
6
<PAGE> 1
EXHIBIT 2.1
================================================================================
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BINGHAM FINANCIAL SERVICES CORPORATION,
BAC ACQUIRING CORP.,
BSC ACQUIRING CORP.,
BLOOMFIELD ACCEPTANCE COMPANY, L.L.C.
BLOOMFIELD SERVICING COMPANY, L.L.C.
AND
DANIEL E. BOBER, CREIGHTON J. WEBER, JOSEPH DROLSHAGEN,
JAMES BENNETT, PATRICIA JORGENSEN, DEBORAH JENKINS,
LYNNE BASZCZUK, JAMES A. SIMPSON,
KATHERYNE L. ZELENOCK AND JEFFREY C. URBAN
FEBRUARY 17, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1. THE MERGER.......................................................2
1.1. The Mergers.......................................................2
1.2. Surviving Companies...............................................2
1.3. Merger Consideration..............................................2
1.4. Conversion of Shares..............................................4
1.5. Closing...........................................................5
1.6. Closing Deliveries................................................6
1.7. Articles of Incorporation.........................................8
1.8. Bylaws............................................................9
1.9. Managers and Officers.............................................9
1.10. No Fractional Shares.............................................9
1.11. Issuance of Stock Options........................................9
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF BAC, BSC AND THE
SHAREHOLDERS..........................................................10
2.1. Organization and Qualification...................................10
2.2. Capitalization...................................................10
2.3. Authorization....................................................11
2.4. Non-Contravention................................................12
2.5. Financial Statements.............................................12
2.6. Accounts Receivable..............................................12
2.7. Liabilities......................................................12
2.8. Brokerage and Loan Sale Activities...............................12
2.9. Investigations; Litigation.......................................13
2.10. Absence of Certain Changes......................................13
2.11. Title to Property; Condition....................................13
2.12. Tax Returns.....................................................13
2.13. Insurance.......................................................14
2.14. Benefit Plans...................................................14
2.15. Contracts and Commitments; No Default...........................15
2.16. Labor Matters...................................................15
2.17. Intellectual Property Rights....................................15
2.18. Hazardous Substances and Hazardous Wastes.......................16
2.19. Brokers.........................................................16
2.20. Shareholders' Representations...................................16
2.21. Accuracy of Information.........................................18
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF PARENT.........................18
3.1. Organization.....................................................18
3.2. Authority and Validity of Agreement..............................18
3.3. Consents and Approvals...........................................18
3.4. Capitalization...................................................19
3.5. Deliveries......................................................19
3.6. Liabilities.....................................................19
3.7. Non-Contravention................................................19
3.8. Brokers..........................................................19
3.9. Accuracy of Information..........................................20
</TABLE>
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<TABLE>
<S> <C> <C>
ARTICLE 4. COVENANTS........................................................20
4.1 Affirmative Covenants of the Companies and the Shareholders......20
4.2 Negative Covenants of the Companies..............................20
4.3. Confidentiality..................................................22
4.4. Further Assurances; Cooperation; Notification....................23
4.5. Access...........................................................23
ARTICLE 5. CONDITIONS TO OBLIGATION OF PARENT AND ACQUIRING SUBS............24
ARTICLE 6. CONDITIONS TO THE OBLIGATIONS OF BAC, BSC AND THE
SHAREHOLDERS..........................................................25
ARTICLE 7. TERMINATION AND ABANDONMENT......................................25
7.1. Methods of Termination...........................................25
7.2. Procedure Upon Termination.......................................26
ARTICLE 8. SURVIVAL AND INDEMNIFICATION.....................................26
8.1. Survival.........................................................26
8.2. Indemnification by Parent........................................27
8.3. Indemnification by Shareholders..................................27
8.4 Escrow of Parent Common Stock....................................27
8.5 Disclosure of Known Breaches.....................................28
8.6. Limitation on Indemnification....................................28
8.7. Indemnification De Minimis Threshold.............................29
8.8. Claims for Indemnification.......................................30
8.9. Netting of Claims................................................31
8.10. Claims Period...................................................31
8.11. Rejected Settlement of Claims...................................31
8.12. Limitation of Indemnification Obligations.......................31
ARTICLE 9. MISCELLANEOUS PROVISIONS.......................................31
9.1. Expenses.........................................................31
9.2. Amendment and Modification.......................................31
9.3. Waiver of Compliance; Consents...................................32
9.4. No Third Party Beneficiaries.....................................32
9.5. Notices..........................................................32
9.6. Assignment.......................................................33
9.7. Governing Law....................................................33
9.8. Counterparts.....................................................33
9.9. Headings.........................................................33
9.10. Entire Agreement................................................34
9.11. Injunctive Relief...............................................34
9.12. Arbitration.....................................................34
9.13. Attorneys Fees..................................................34
9.14. Venue Jurisdiction..............................................35
9.14. Time of the Essence.............................................35
</TABLE>
<PAGE> 4
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of February 17, 1998 (the
"Agreement"), is by and among BINGHAM FINANCIAL SERVICES CORPORATION, a Michigan
corporation ("Parent"), BAC ACQUIRING CORP., a Michigan corporation and a wholly
owned subsidiary of Parent ("BAC Acquiring Sub"), BSC ACQUIRING CORP., a
Michigan corporation and a wholly owned subsidiary of Parent ("BSC Acquiring
Sub") (BAC Acquiring Sub and BSC Acquiring Sub together being the "Acquiring
Subs"), Bloomfield Acceptance Company, L.L.C., a Michigan limited liability
company ("BAC"), Bloomfield Servicing Company, L.L.C., a Michigan limited
liability company ("BSC") (BAC and BSC together being the "Companies"), DANIEL
E. BOBER, a shareholder of BAC and BSC ("Bober"), CREIGHTON J. WEBER, a
shareholder of BAC and BSC ("Weber"), JOSEPH DROLSHAGEN, a shareholder of BAC
and BSC ("Drolshagen"), JAMES BENNETT, a shareholder of BAC and BSC ("Bennett"),
PATRICIA JORGENSEN, a shareholder of BAC and BSC ("Jorgensen"), DEBORAH JENKINS,
a shareholder of BAC and BSC ("Jenkins"), LYNNE BASZCZUK, a shareholder of BAC
("Baszczuk"), JAMES A. SIMPSON, a shareholder of BAC and BSC ("Simpson"),
KATHERYNE L. ZELENOCK, a shareholder of BAC and BSC ("Zelenock") and JEFFREY C.
URBAN, a shareholder of BAC and BSC ("Urban") (each a "Shareholder" and
collectively, the "Shareholders").
RECITALS
A. BAC and BSC are both currently Michigan limited liability companies.
However, BAC and BSC have heretofore elected to be taxed as corporations.
Therefore, the references in this Agreement to the Shareholders of BAC and BSC,
respectively, reflect the fact that the Companies have become corporate in their
status for Federal income tax purposes, that their members have become
"shareholders" in that regard and that the Shareholders' member interests are
treated as shareholdings.
B. The Boards of Directors of Parent and BAC Acquiring Sub and the
shareholder of BAC Acquiring Sub each have approved the merger of BAC Acquiring
Sub with and into BAC, upon the terms and subject to the conditions set forth
herein (the "BAC Merger") and deem it advisable and in the best interests of
their respective shareholders that the foregoing merger be consummated;
C. The Boards of Directors of Parent and BSC Acquiring Sub and the
shareholder of BSC Acquiring Sub each have approved the merger of BSC Acquiring
Sub with and into BSC, upon the terms and subject to the conditions set forth
herein (the "BSC Merger") and deem it advisable and in the best interests of
their respective shareholders that the foregoing merger be consummated;
D. The Boards of Directors of Parent and the Acquiring Subs and the
shareholder of the Acquiring Subs have determined that the BAC Merger and the
BSC Merger are in the best interests of Parent, the Acquiring Subs, and their
respective shareholders, and have approved and adopted this Agreement and
consented to the transactions contemplated hereby;
E. The Managers and Shareholders of BAC have determined that the BAC
Merger is in the best interests of BAC and its Shareholders, and have
unanimously approved and adopted this Agreement and consented to the
transactions contemplated hereby;
<PAGE> 5
F. The Managers and Shareholders of BSC have determined that the BSC
Merger is in the best interests of BSC and its Shareholders and have unanimously
approved and adopted this Agreement and consented to the transactions
contemplated hereby; and
G. For Federal income tax purposes, it is intended that the BAC Merger
and the BSC Merger (together the "Mergers") will qualify as reorganizations
within the meaning of Section 368(a)(2)(E) of the Internal Revenue Code of 1986,
as amended (the "Code").
NOW, THEREFORE, in reliance on the respective representations and
warranties and in consideration of the respective covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE 1.
THE MERGER
1.1. The Mergers.
Simultaneously with the Closing (defined below), the parties will
effect the Mergers by filing with the appropriate authorities the required
number of duly executed Certificates of Merger substantially in the form of
Exhibits 1.1A and 1.1B, respectively. The Mergers will become effective at the
time specified in the respective Certificates of Merger (the "Effective Time").
1.2. Surviving Companies.
At the Effective Time, BAC Acquiring Sub will be merged with and into
BAC and BSC Acquiring Sub will be merged with and into BSC, in accordance with
the applicable provisions of the Michigan Business Corporation Act and the
Michigan Limited Liability Company Act (the "Acts"), whereupon the separate
existence of each of the Acquiring Subs will cease and BAC and BSC,
respectively, will continue as the surviving entities (the "Surviving
Companies"). The identity, existence, rights, privileges, powers, franchises,
properties and assets of BAC and BSC, respectively, shall continue unaffected
and unimpaired by the Merger, and all of the rights, privileges, powers,
franchises, properties, and assets of the respective Acquiring Subs shall be
vested in the respective Surviving Companies.
1.3. Merger Consideration.
The consideration payable to the Shareholders shall consist of the
following:
(a) At the Closing, as defined, Parent shall issue to the
Shareholders 272,727 shares of Parent common stock, without par value
(the "Initial Consideration"); and
(b) At the Closing, Parent shall issue 9,091 shares of Parent
common stock to certain Shareholders (the "Special Consideration"),
which stock will be placed in escrow pursuant to an escrow agreement to
be entered into between Parent, the Shareholders receiving the Special
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Consideration and an escrow agent (the "Special Consideration Escrow
Agreement"), substantially in the form attached hereto as Exhibit
1.3(b);
(c) On or before May 31, 1999, Parent will issue to the
Shareholders that number of shares of Parent common stock equal in
value to $500,000 (the "Additional Consideration", and collectively
with the Initial Consideration and the Special Consideration, the
"Shares") if, but only if, the business of the Surviving Companies has
attained (on a cumulative basis from the date of Closing) an annualized
Return on Investment, as defined below, of not less than 15.0% (the
"Required ROI") for the period ended March 31, 1999, subject to the
following adjustments:
(i) If the Required ROI under Section 1.3(c) above
has not been attained and the Additional Consideration has not
been earned during the period ended March 31, 1999, on or
before May 31, 2000, Parent will issue to the Shareholders
that number of shares of Parent common stock equal in value to
the Additional Consideration if, but only if, the business of
the Surviving Companies has attained (on a cumulative basis
from the date of Closing) the Required ROI as of the end of
any quarter annual period ending after March 31, 1999, but not
later than March 31, 2000; and
(ii) If the Required ROI under Section 1.3(c)(i)
above has not been attained and the Additional Consideration
has not been earned during the period ended March 31, 2000,
but the business of the Surviving Companies has attained (on a
cumulative basis from the date of Closing) an annualized
Return on Investment of not less than 10.0% (the "Minimum
ROI"), on or before May 31, 2000, Parent will issue to the
Shareholders that number of shares of Parent common stock
equal in value to the prorata portion of the shares of Parent
common stock which would have been issued had the Required ROI
been achieved. The shares of Parent common stock to be issued
will be equal in value to that portion of the Additional
Consideration determined by multiplying the Additional
Consideration by a fraction in which the numerator is the
actual cumulative Return on Investment through March 31, 2000,
and the denominator is the Required ROI, each measured on an
annualized basis through March 31, 2000.
(d) For purposes of this Section 1.3, Return on Investment
means the quotient, calculated on an annual basis, of (x) the earnings
before taxes (but after deduction of interest) of the Surviving
Companies for the applicable period, divided by (y) Parent's investment
in the business of the Surviving Companies. Parent's investment in the
business of the Surviving Companies shall equal the sum of $3,500,000
plus all capital expenditures in excess of $10,000. The computation of
Return on Investment shall be calculated:
(i) in accordance with generally accepted accounting
principles, applied on a basis consistent with prior periods;
(ii) after elimination of the accounting effect of
all intercompany transactions between the Surviving Companies;
and
(iii) after elimination of the accounting effect of
FASB 125 and any subsequent amendments to FASB 125, e.g.,
elimination of the adjustments to the financial statements
which set up any servicing rights, servicing liabilities,
forecasted
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securitization profits, interest-only strip receivables, etc.
as currently required by FASB 125 and any subsequent
amendments.
Return on Investment of the Surviving Companies for the period
ending March 31, 1999 will be determined on or before May 15, 1999 and
for the applicable four fiscal quarters ending on any quarter-annual
date thereafter through March 31, 2000, respectively, within forty-five
(45) days after the end of such period. The Additional Consideration
will be issued on or before the end of the month in which the
respective determination of Return on Investment is made.
(e) In the event that the Required ROI has not been achieved
on or before the measurement period ending March 31, 2000, due to the
timing of securitizations of loans, which securitizations occur
subsequent to that date, the achievement of both the Required ROI and
the Minimum ROI will be re-measured as of June 30, 2000 so as to take
into account on a prorata basis the income attributable to loans
securitized during the additional three month period from April 1, 2000
through June 30, 2000, provided that those loans have either been
closed (and warehoused) or were subject to accepted loan commitments in
force as of March 31, 2000 (and are closed so as to be included in a
completed securitization on or before June 30, 2000). In making that
redetermination, expenses incurred that are directly associated with
the closing and warehousing of those loans, and/or the related
securitization, during that three month period will be taken in
account, but not any other expenses.
(f) The shares of Parent common stock issued in respect of the
Additional Consideration will be valued by taking the average of the
mean between the bid and ask closing quotations (or, if available, the
closing prices) of such shares on the NASD Over the Counter Bulletin
Board (or equivalent trading market on which the shares are then
traded) for the last ten (10) trading days prior to the date set for
issuance of such shares.
1.4. Conversion of Shares.
At the Effective Time:
(a) The equity interest of each Shareholder of BAC and each
Shareholder of BSC outstanding immediately prior to the Mergers will,
by virtue of the BAC Merger and BSC Merger and without any action on
the part of the holder thereof, be converted into (i) the right to
receive the shares of Parent common stock issued in respect of the
Initial Consideration, as set forth below; (ii) the right to receive
the shares of Parent common stock issued in respect of the Special
Consideration, as set forth below; and (ii) the right to receive the
shares of Parent common stock, adjusted to the nearest whole number,
equal to each Shareholder's Distribution Percentage, as set forth
below, multiplied by the total number of shares, if any, of Parent
common stock issued in respect of the Additional Consideration as
determined in Section 1.3(c) and in accordance with Section 1.3(f)
above:
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<TABLE>
<CAPTION>
Additional
Consideration
Initial Special Distribution
Shareholder Consideration Consideration Percentage
----------- ------------- ------------- ----------
<S> <C> <C> <C>
Bober 96,730 -- 23.400%
Weber 96,730 -- 23.400%
Drolshagen 25,695 -- 8.671%
Bennett 17,130 -- 4.336%
Jorgensen 5,136 -- 0.864%
Jenkins 13,689 -- 3.465%
Baszczuk 1,708 -- 0.864%
Simpson 9,545 5,455 21.000%
Zelenock 4,773 2,727 10.500%
Urban 1,591 909 3.500%
-------- ------- ---------
272,727 9,091 100.000%
</TABLE>
(b) The Shareholders will cease to have any rights as
Shareholders, members or otherwise of the Companies except such rights,
if any, as they may have pursuant to the Acts.
(c) Each share of common stock of BAC Acquiring Sub, no par
value, issued and outstanding immediately prior thereto will, by virtue
of the BAC Merger and without any action on the part of the holder
thereof, be converted into a membership interest in BAC.
(d) Each share of common stock of BSC Acquiring Sub, no par
value, issued and outstanding immediately prior thereto will, by virtue
of the BSC Merger and without any action on the part of the holder
thereof, be converted into a membership interest in BSC.
(e) Any tax obligation or liability incurred by any
Shareholder as a result of the receipt of any shares of Parent common
stock issued in respect of the Initial Consideration, the Special
Consideration and the Additional Consideration is solely the obligation
of such Shareholder.
1.5. Closing.
The completion of the transactions contemplated herein and the Mergers
(the "Closing") will be effective (for the sake of any Closing prorations and
adjustments) as of the close of business on February 28, 1998, and will be
consummated on March 4, 1998 or such other date as the parties mutually agree
(the "Closing Date"). The Closing will be held at such location as the parties
mutually agree.
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1.6 Closing Deliveries.
(a) Capitalized terms not defined in this Section are defined
elsewhere in this Agreement. At the Closing, the Companies and the
Shareholders shall properly execute (as necessary), or cause to be
executed, and deliver to Purchaser the following documents:
(i) The shareholders agreement between the
Shareholders, Parent and Parent's current Board of Directors
(the "Shareholders Agreement"), substantially in the form
attached hereto as Exhibit 1.6;
(ii) Consent to Transfer, substantially in the form
attached hereto as Exhibit 1.6(ii), among Parent, BAC, BSC,
Simpson Zelenock, P.C., Simpson, Zelenock and Urban, of the
Technology Agreement, dated effective January 29, 1998 among
Systems/Software Solutions, Inc., a Michigan corporation, BAC,
BSC, Simpson Zelenock, P.C., and certain of the Shareholders;
(iii) Employment Agreements for Bober and Weber;
(iv) The Escrow Agreement;
(v) The Special Consideration Escrow Agreement;
(vi) Investor Questionnaires for each
Shareholder;
(vii) Assignment of Membership Interests in BAC and
BSC, substantially in the form attached as Exhibit 1.6(vii);
(viii) An opinion of Simpson Zelenock, P.C.,
addressed to Parent, substantially in the form attached as
Exhibit 5(f);
(ix) A copy of each of the Companies' Articles of
Organization, certified by the Director of the Corporation,
Securities and Land Development Bureau of the Michigan
Department of Consumer and Industry Services (the
"Department"), and a Certificate of Status for each of the
Companies issued by the Department.
(x) A certificate for each of the Companies, executed
by an officer of each Company, to the effect that (i) all of
the representations, warranties and covenants made by the
Companies in this Agreement are true and correct in accordance
with their terms on the Closing Date with the same effect as
though made on and as of the Closing Date; and (ii) all
covenants and agreements undertaken to be performed by the
Companies under this Agreement have been taken or performed in
all material respects. Attached to such certificate shall be a
copy of the Companies' operating agreements and a copy of the
minutes or resolutions approving the transactions contemplated
in this Agreement, and the officers of the Companies executing
such certificates shall certify that, as of the
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Closing Date, such operating agreements and minutes or
resolutions are true, complete and correct, have not been
altered or repealed and are in full force and effect; and
(xi) Such other documents and instruments as are
contemplated in this Agreement or as Parent or Parent's
counsel may reasonably request in order to evidence or
consummate the transactions contemplated in this Agreement or
to effectuate the purpose or intent of this Agreement,
including but not limited to certain securities forms to be
filed on behalf of the Shareholders.
(b) At the Closing, Parent shall properly execute (if
necessary) and deliver to the Shareholders:
(i) Stock certificates representing the Initial
Consideration, which will be placed in escrow pursuant to the
Escrow Agreement;
(ii) Employment Agreements for Bober and Weber;
(iii) The Shareholders Agreement;
(iv) The Escrow Agreement;
(v) The Special Consideration Escrow Agreement;
(vi) An opinion of Jaffe, Raitt, Heuer & Weiss,
Professional Corporation counsel to Parent, addressed to the
Shareholders, substantially in the form attached as Exhibit
6(d);
(vii) A copy of Parent's Restated Articles of
Incorporation, certified by the Director of the Department,
and a Certificate of Good Standing for Parent issued by the
Department;
(viii) A certificate, executed by an officer of
Parent, to the effect that (i) all of the representations,
warranties and covenants made by Parent in this Agreement are
true and correct on the Closing Date with the same effect as
though made on and as of the Closing Date; and (ii) all
covenants and agreements undertaken to be performed by Parent
under this Agreement have been taken or performed. Attached to
such certificate shall be a copy of Parent's bylaws and a copy
of the minutes or resolutions approving the transactions
contemplated in this Agreement, and the officer of Parent
executing such certificate shall certify that, as of the
Closing Date, such bylaws and minutes or resolutions are true,
complete and correct, have not been altered or repealed and
are in full force and effect; and
(ix) Such other documents and instruments as are
contemplated in this Agreement or as the Shareholders or
Shareholder's counsel may reasonably request in order to
evidence or consummate the transactions contemplated in this
Agreement or to effectuate the purpose or intent of this
Agreement.
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(c) Under Section 4.2(b) of this Agreement, the Companies have
agreed not to declare or pay, or agree to declare or pay, in any manner
whatsoever, any dividend on, or make any other distribution in respect
of, outstanding shares of capital stock, securities, options or other
interests, except from Excess Cash. Therefore, at Closing, "Excess
Cash" shall be determined as that cash which remains after the
following adjustments, effective as of the close of business on
February 28, 1998:
(i) There shall be reserved funds necessary for
operation of the Companies' businesses in the ordinary course
immediately after Closing (i.e., aggregate current assets of
the Companies shall equal or exceed aggregate current
liabilities, after eliminating the effect of those
transactions identified in Section 1.3(d)(ii) and (iii) of
this Agreement, and there shall be on hand at least $25,000 in
cash for use by the Companies subsequent to the Effective
Time).
(ii) The Companies shall reserve and/or pay all funds
necessary for payment of closing expenses related to these
Transactions that are not in fact paid prior to Closing and
that are not such expenses that are incurred by Parent or its
Affiliates.
(iii) In determining Excess Cash, the Companies shall
adjust their income and expense as of the close of business on
February 28, 1998. Unless an expense is otherwise specifically
identifiable as related to a specific point in or period of
time, it will be assumed for Closing proration purposes that
expenses which are incurred for services provided or to be
provided with respect to periods beginning before March 1,
1998 and concluding after February 28, 1998, have been
incurred uniformly on a daily basis during the billing period
in which the adjustment and proration occurs.
(iv) If within 30 days following Closing, Parent has
not given the Shareholders notice of its objection to the
foregoing determination of Excess Cash (which notice must
contain a statement of the basis of Parent's objection), then
the determination of Excess Cash shall be final and binding on
all parties. If Parent gives notice of objection, then the
issues in dispute will be submitted for resolution by the
Parent's certified public accountants (the "Accountants"). In
that event: (i) all parties will be afforded an opportunity to
present to the Accountants any material relating to the
determination and to discuss the determination with the
Accountants; and (ii) the determination by the Accountants, as
set forth in a notice delivered to both parties by the
Accountants, will be binding and conclusive on the parties.
The foregoing procedure shall be deemed to be an "Arbitration
Proceeding" in accordance with and subject to the provisions
of Section 9.12 of this Agreement.
1.7. Articles of Organization.
The Articles of Organization of BAC and BSC, respectively, as in effect
immediately prior to the Effective Time will be the Articles of Organization of
the respective Surviving Companies until further amended in accordance with
applicable law.
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<PAGE> 12
1.8. Operating Agreements.
The Operating Agreements of BAC and BSC, respectively, as in effect
immediately prior to the Effective Time will be amended and restated in the
forms attached as Exhibits 1.8A and 1.8B, respectively, and such amended and
restated Operating Agreements will be the Operating Agreements of the respective
Surviving Companies until amended or repealed in accordance with the Articles of
Organization of the respective Surviving Companies and applicable law.
1.9. Managers and Officers.
(a) Immediately after the Effective Time of the Mergers, the
managers and officers of the respective Surviving Companies will be as
set forth below, and will serve in such capacities until their
respective successors are duly elected and qualified:
BAC
MANAGERS OFFICERS
Jeffrey P. Jorissen Daniel E. Bober - President
Gary A. Shiffman Creighton J. Weber - Executive Vice President
Milton M. Shiffman Deborah Jenkins -Vice President
Daniel E. Bober James Bennett - Vice President
Creighton J. Weber Joseph Drolshagen - Vice President
Patricia Jorgensen - Secretary and Treasurer
BSC
MANAGERS OFFICERS
Jeffrey P. Jorissen Daniel E. Bober - President
Gary A. Shiffman Creighton J. Weber - Executive Vice President
Milton S. Shiffman Deborah Jenkins -Vice President
Daniel E. Bober Patricia Jorgensen - Secretary and Treasurer
Creighton J. Weber Carol Glowacki - Vice President
(b) It is contemplated that the boards of managers of each
Surviving Company will meet quarterly and that interim operating
decisions will be made by the officers of each Surviving Company,
respectively, and where necessary, by executive committees to be
populated by mostly officers of the respective Surviving Companies.
1.10 No Fractional Shares. Anything in this Agreement to the contrary
notwithstanding, any fractional shares of Parent common stock otherwise issuable
in the Merger shall be rounded upward or downward to the nearest whole number of
shares of Parent common stock. Fractional interests of .500 and greater shall be
rounded upward.
1.11 Issuance of Stock Options. In connection with the transactions
contemplated herein and to promote the success of the Surviving Companies,
including the attraction and retention of key employees, and to specifically
link their long term financial success to the success of Parent and the
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<PAGE> 13
growth of its shareholder value, at the Closing Parent will award non-qualified
options to purchase up to 30,000 shares of Parent common stock pursuant to
Parent's Stock Option Plan (collectively, the "Stock Options"), in the amounts
and to those employees Bober recommends to Parent's Compensation Committee, upon
the terms and conditions contained in the form of non-qualified stock option
agreement (the "Option Agreement"), attached hereto as Exhibit 1.11.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
OF BAC, BSC AND THE SHAREHOLDERS
Except as expressly set forth herein or in the disclosure letter
delivered to Parent by BAC, BSC and the Shareholders upon the execution and
delivery of this Agreement (the "Disclosure Letter"), BAC, BSC and each of the
Shareholders, jointly and severally, represent and warrant to Parent and to
Acquiring Subs that the following statements are true, complete and correct as
of the date hereof and shall be true, complete and correct as of the Closing
Date; provided, however, that the representations and warranties of L.B. shall
be limited to those matters concerning BAC only, and provided further that the
representations and warranties of L.B. are limited to Section 2.20 only, to
reflect the scope of her limited involvement with the Companies:
2.1. Organization and Qualification.
Each of the Companies is a limited liability company duly organized and
validly existing under the laws of the State of Michigan, has full power and
authority to carry on its business as it is now being conducted and to own,
lease and operate its properties and assets. Each of the Companies has
heretofore delivered to Parent complete and correct copies of its articles of
organization and operating agreement, as presently in effect. Each of the
Companies has delivered to Parent the appropriate documentation to show that the
Companies will be taxable as corporations for federal income tax purposes,
effective as of January 1, 1998. In addition, each of the Companies has
delivered to Parent a certificate of status, showing its existence and
qualification, from the State of Michigan bearing a date within thirty (30) days
of the date of this Agreement. Each of the Companies is duly qualified or
licensed to do business as a foreign limited liability company and is in good
standing in every jurisdiction in which the character or location of the
properties and assets owned, leased or operated by it or the nature of the
business conducted by it requires such qualification or licensing, except where
the failure to be so qualified, licensed or in good standing in such other
jurisdiction could not, individually or in the aggregate, have a material
adverse effect on the business of each of the Companies taken as a whole.
Neither of the Companies owns or controls any interest in any corporation,
partnership, joint venture or other business association or entity.
2.2. Capitalization.
BAC and BSC currently have the following members (which are referred to
in this Agreement as Shareholders) and member interests, which constitute all of
the outstanding ownership interests in the Companies:
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<PAGE> 14
<TABLE>
<CAPTION>
MEMBERS BAC BSC
- ------- --- ---
<S> <C> <C>
Bober 32.81% 35.84%
Weber 32.81% 35.84%
Drolshagen 12.16% 6.08%
Bennett 6.08% 6.08%
Jorgensen 1.21% 2.43%
Jenkins 4.86% 4.86%
Baszczuk 1.21% --
Simpson 5.32% 5.32%
Zelenock 2.66% 2.66%
Urban 0.89% 0.89%
- ------------------------------------------------------------
100.00% 100.00%
============================================================
</TABLE>
All issued and outstanding shares of capital stock or other ownership
interests of each of the Companies are duly authorized, validly issued, fully
paid and nonassessable and have not been issued in violation of any preemptive
rights. There are no outstanding options, warrants, conversion privileges or
other rights to purchase or acquire any shares of capital stock or other equity
securities of either of the Companies or any outstanding securities that are
convertible into or exchangeable for such shares, securities or rights. There
are no contracts, commitments, understandings, arrangements or restrictions by
which either of the Companies or any of the Shareholders are bound to issue or
acquire any additional shares of its capital stock or other equity securities or
any options, warrants, conversion privileges or other rights to purchase or
acquire any capital stock or other equity securities of either of the Companies
or any securities convertible into or exchangeable for such shares, securities
or rights.
2.3. Authorization.
The Shareholders of each of the Companies have taken all action
required by law or the articles of organization of each of the Companies and
otherwise to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions described herein (the "Transactions").
No other consent or approval from any party is necessary to validly complete the
Transactions, other than as may be required under the Acts to effectuate the
Mergers. This Agreement has been duly and validly executed and delivered by the
Shareholders, BAC and BSC, and is the valid and binding legal obligation of each
of the Shareholders, BAC and BSC, enforceable against each of them in accordance
with its terms, subject to the effect of applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance and other laws affecting the
rights of creditors generally (the "Enforceability Exceptions"), or the
availability of specific performance, injunctive relief and other equitable
remedies and to general principles of equity (regardless of whether such
principles are considered in a proceeding in equity or at law).
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<PAGE> 15
2.4. Non-Contravention.
Neither the execution, delivery and performance of this Agreement, nor
the consummation of the Transactions will: (i) violate or be in conflict with
any provision of the articles of organization or operating agreement of either
of the Companies; (ii) require that written consent first be obtained from any
third party (other than as required by the Act, specific to the Mergers only);
or (iii) constitute a default under, any instrument, agreement or obligation to
which either of the Companies is a party.
2.5. Financial Statements.
BAC has delivered to Parent the audited financial statements, including
balance sheet, statement of earnings and statement of cash flows, and notes
thereto, for BAC as of and for the fiscal years ended December 31, 1995, 1996
and 1997 (collectively, the "BAC Financial Statements"). The BAC Financial
Statements shall include the unqualified opinion of BAC's independent certified
accountants. BSC has delivered to Parent the audited financial statements,
including balance sheet, statement of earnings and statement of cash flows, and
notes thereto, for BSC as of and for the fiscal years ended December 31, 1995,
1996 and 1997 (collectively, the "BSC Financial Statements"). The BSC Financial
Statements shall include the unqualified opinion of BSC's independent certified
accountants. The BAC Financial Statements and the BSC Financial Statements each:
(i) were prepared in accordance with generally accepted accounting principles;
and (ii) fairly present the financial position and the results of operations of
BAC and BSC, respectively.
2.6. Accounts Receivable.
(i) The accounts receivable which are reflected in the BAC and
BSC Financial Statements or which arose subsequent thereto were validly obtained
in the ordinary course of business of BAC and BSC, respectively; and (ii) except
to the extent of applicable reserves shown in the balance sheets, all of the
receivables owing to each of the Companies constitute valid and enforceable
claims arising from bona fide arms-length transactions, and neither of the
Companies has received any written or oral claims, defenses or refusals to pay,
or granted any rights of set-off with respect to any receivables.
2.7. Liabilities.
To their knowledge, neither of the Companies has any liability or
obligation of any nature, whether asserted or unasserted, accrued, absolute or
contingent or otherwise, and whether due or to become due, that is not reflected
or reserved against on either the BAC Financial Statements, or the BSC Financial
Statements, except those that may have been incurred after December 31, 1997 in
the ordinary course of business and consistent with past practices.
2.8 Brokerage and Loan Sale Activities.
The business of the Companies includes originating and acting as
lender, correspondent, broker and servicing agent for commercial real estate
mortgages (with respect to directly originated whole loans) which are thereafter
sold, individually or on a pooled basis, to institutional purchasers or in
securitization transactions (collectively, the "Activities"). Neither of the
Companies has any liability or obligation of any nature, whether asserted or
unasserted, accrued, absolute or contingent or otherwise,
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<PAGE> 16
and whether due or to become due, in connection with or arising from the
Activities that is not reflected or reserved against on either the BAC Financial
Statements, or the BSC Financial Statements, except those that may have been
incurred after December 31, 1997 in the ordinary course of business and
consistent with past practices. In connection with the Activities, the Companies
have entered into various servicing agreements, correspondent agreements and
purchase and sale agreements, a complete list of which is attached to the
Disclosure Letter. The Companies represent and warrant that they are in material
compliance with all of the representations and warranties made in all of the
servicing agreements, correspondent agreements and purchase and sale agreements
attached to the Disclosure Letter.
2.9. Investigations; Litigation.
There are no claims or actions by anyone against or affecting the
Companies that are pending or, to the knowledge of the Companies or any of the
Shareholders, that have been threatened. To the knowledge of the Companies or
any of the Shareholders, there is no basis for any such claim or action.
2.10. Absence of Certain Changes.
Since December 31, 1997, neither of the Companies has suffered any
adverse change in its condition (financial or otherwise), working capital,
assets, properties, liabilities, obligations, reserves or businesses, or
experienced any event or failed to take any action which could reasonably be
expected to have a material adverse effect on the business of such company.
2.11. Title to Property; Condition.
(a) BAC has good and marketable title in and to all of the
assets reflected in the BAC Financial Statements and all assets
purchased or otherwise acquired since December 31, 1997 (except for
such assets as may have been sold or otherwise disposed of in the
ordinary course of business), subject to no lien of any kind or nature;
(b) BSC has good and marketable title in and to all of the
assets reflected in the BSC Financial Statements and all assets
purchased or otherwise acquired since December 31, 1997 (except for
such assets as may have been sold or otherwise disposed of in the
ordinary course of business), subject to no lien of any kind or nature;
(c) The Companies own no, and at no prior time have owned any,
real property;
(d) The Companies do not sell from inventory; and
(e) To their knowledge, all facilities used by the Companies
in connection with their respective businesses are in good condition,
needing no major repairs and all operating equipment used by the
Companies is in good condition and operable for its intended purposes.
2.12. Tax Returns.
The Companies have delivered to Parent copies of all tax returns filed
on behalf of the Companies for 1995 and 1996 and will timely file with
appropriate taxing authorities and will provide Parent with copies of all tax
returns for the year 1997 as soon as such tax returns are available. Proper
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<PAGE> 17
and accurate amounts have been and will be withheld by the Companies from their
respective employees and properly deposited in appropriate accounts, for all
periods up to and through the Closing Date in full and complete compliance with
the tax withholding, deposit and payment provisions of applicable federal, state
and local laws. Each of the Companies has filed the appropriate documentation to
elect to be taxable as corporations for federal income tax purposes as of
January 1, 1998 (the "Election"). Each of the Companies has filed all federal,
state and local, as well as other returns and reports that were required to be
filed for all periods for which returns were due up to and through the Closing
Date, and each of the Companies has made payments of all governmental taxes,
levies, duties, license and registration fees, charges or withholdings of any
nature whatsoever ("Taxes") shown to be due and payable in respect of such
returns, reports and Election. All such returns are true, correct and complete
in all material respects so that no claims for additional taxes, penalties or
interest will be asserted by any taxing authority including those arising out of
a late payment of Taxes. Neither of the Companies owes any deficiency for any
Taxes, and no tax returns are presently under audit or examination by any
federal, state or local tax authority, and neither the Companies nor the
Shareholders have received notice of any adjustments proposed or asserted by the
Internal Revenue Service or any other agency in respect of any liability for
Taxes arising out of or relating to the returns or the Election. Any and all
Taxes relating to the Companies or their operation in respect of periods prior
to March 1, 1998 are the sole and exclusive obligation of the Shareholders and
will be duly paid and discharged as and when they become due and payable. To the
extent any such taxes are levied against the Companies after February 28, 1998
but in respect of activities or items prior to March 1, 1998, if the
Shareholders fail to timely pay or otherwise provide to the satisfaction of
Parent for such taxes, the Companies may pay and discharge such Taxes and
thereafter be reimbursed therefor by the Shareholders without regard to the
limitations or restrictions, if any, contained in Section 8.6 of this Agreement.
2.13. Insurance.
The Disclosure Letter contains an accurate and complete list of all
policies of fire and other casualty, general liability, theft, life, workers'
compensation, health, directors and officers liability, business interruption
and other forms of insurance owned or held by the Companies, specifying the
insurer, the policy number, the term of the coverage and, in the case of any
"claims made" coverage, the same information as to predecessor policies for the
previous five years. All premiums that are due as of the date hereof and as of
the Closing Date with respect thereto have been paid (or will be paid in the
ordinary course within policy requirements) and no notice has been received by
either the Companies or the Shareholders that the present policies are not in
full force and effect. Neither of the Companies has been denied any form of
insurance and no policy of insurance has been revoked or rescinded during the
past three years, except as described in the Disclosure Letter.
2.14. Benefit Plans.
Neither of the Companies maintains, nor is party to, bound by or a
contributor to, or required to contribute to, (a) any employee pension benefit
plans whether or not qualified under Section 401(a) of the Code, (b) any
employee welfare benefit plans, or (c) any other compensation, fringe or welfare
plan or program, policy, understanding or arrangement providing plan benefits or
welfare, with respect to its employees or employees of others (collectively, the
"Employee Plans"). As used in this Section, the terms "employee pension benefit
plan" and "employee welfare benefit plan" will have the respective meanings
assigned to such terms in Section 3 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). Each Employee Plan meets all applicable
requirements of ERISA, and has been operated and administered in accordance with
the Code, ERISA and the plan document. All required
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<PAGE> 18
government filings and disclosures have been timely and fully made, are true,
correct and complete in all material respects, and no prohibited transaction or
other act or omission which could result in the imposition of an excise tax has
occurred.
2.15. Contracts and Commitments; No Default.
The Disclosure Letter sets forth a complete and accurate list of all
written agreements or other binding commitments or proposals involving the
provision of goods or services to or by BAC or BSC involving an aggregate sale
price or consideration of more than $5,000, or which are not terminable without
penalty at the option of BAC or BSC upon no more than thirty (30) days' notice
(the "Contracts"). The aggregate amount of the liabilities or obligations for
the provision or purchase of goods or services by BAC and BSC under written
agreements or other binding commitments or proposals not listed in the
Disclosure Letter does not exceed $50,000. The Companies have made available to
Parent true and accurate copies of the Contracts. The Contracts are valid,
binding and in full force and effect, and are enforceable in accordance with
their respective material terms (subject to the Enforceability Exceptions).
Neither of the Companies is in default under any of the Contracts, nor has any
notice of default been received by either of the Companies. To their knowledge,
all other parties to the Contracts have performed or are performing all material
obligations required to be performed by them and are not in default thereunder.
2.16. Labor Matters.
The Disclosure Letter sets forth a list of all employees of the
Companies and includes their position, current salary and 1997 wage information
for each person. Except as set forth in the Disclosure Letter and except as are
not material to the business of either of the Companies: (i) each of the
Companies is and has at all times been in compliance with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, including without limitation any such laws
respecting employment discrimination and occupational safety and health
requirements, and has not and is not engaged in any unfair labor practice; (ii)
there is no unfair labor practice complaint against either of the Companies or
any of the Shareholders pending or, to the knowledge of each of the Companies
and the Shareholders, threatened before the National Labor Relations Board or
any other comparable government authority; (iii) there is no labor strike,
dispute, slowdown or stoppage actually pending or, to the knowledge of each of
the Companies and the Shareholders, threatened against or directly affecting
either of the Companies; (iv) no collective bargaining agreement is binding and
in force against either of the Companies or is currently being negotiated by
either of the Companies or the Shareholders; (v) neither of the Companies is
delinquent in payments to any person for any wages, salaries, commissions,
bonuses or other direct or indirect compensation for any services performed by
them or amounts required to be reimbursed to such persons, including without
limitation any amounts due under any pension plan, welfare plan or compensation
plan; and (vi) there has not been, within one year of the date hereof, any
written or verbal communication to Bober or Weber, by any current officer or key
employee of either of the Companies, expressing a desire to terminate such
person's employment.
2.17. Intellectual Property Rights.
Neither of the Companies owns or uses any patents, trade names, service
names, trademarks, service marks or copyrights, or applications therefor, nor
has it conducted business under any corporate, trade or fictitious name other
than its current corporate name. There are no pending or, to the
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<PAGE> 19
knowledge of the Companies and the Shareholders, threatened claims of
infringement upon the rights to any intellectual or intangible property of
others or, except as set forth in the Disclosure Letter, any agreements or
undertakings with respect to any such rights.
2.18. Hazardous Substances and Hazardous Wastes.
To the knowledge of the Companies, there is not now, nor has there ever
been, any disposal, release or threatened release of Hazardous Materials (as
defined below) on, from or under properties leased by or to either of the
Companies or subject to pending or completed foreclosure procedures by BAC (the
"Properties"). There has not been generated by or on behalf of either of the
Companies any Hazardous Material, other than in compliance with applicable law.
No Hazardous Material has been disposed of or allowed to be disposed of by or on
behalf of either of the Companies on or off any of the Properties during the
period that either of the Companies leased the property which may, to the
knowledge of the Companies and the Shareholders, give rise to a clean-up
responsibility, personal injury liability or property damage claim against
either of the Companies or either being named a potentially responsible party
for any such clean-up costs, personal injuries or property damage or create any
cause of action by any third party against either of the Companies. For purposes
of this subsection, the terms "disposal," "release," and "threatened release"
shall have the definitions assigned thereto by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, and the term
"Hazardous Material" means any hazardous or toxic substance, material or waste
or pollutants, contaminants or asbestos containing material which is or becomes
regulated by any Authority in any jurisdiction in which any of the Properties is
located. The term "Hazardous Material" includes without limitation any material
or substance which is (i) defined as a "hazardous waste" or a "hazardous
substance" under applicable Law, (ii) designated as a "hazardous substance"
pursuant to Section 311 of the Federal Water Pollution Control Act, (iii)
defined as a "hazardous waste" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, or (iv) defined as a "hazardous substance"
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
2.19. Brokers.
Neither the Shareholders nor either of the Companies or any of their
respective directors, officers or employees has employed any other broker,
finder, or financial advisor or incurred any liability for any brokerage fee or
commission, finder's fee or financial advisory fee, in connection with the
transactions contemplated hereby, nor is there any basis known to either of the
Companies or any of the Shareholders for any such fee or commission to be
claimed by any person or entity.
2.20. Shareholders' Representations.
In addition to the foregoing representations of each of the
Shareholders, each of the Shareholders individually represents and warrants to
Parent as follows:
(a) The Shareholder is acquiring the Shares pursuant to the
Mergers for such Shareholder's sole account (and such Shareholder
and/or such Shareholder's immediate family members and/or trusts for
their benefit will be the sole beneficial owner or owners thereof) for
the purpose of investment and not with a view to distribution thereof
within the meaning of the Securities Act of 1933, as amended and the
rules and regulations thereunder (the "Securities Act"), nor with any
present intention of distribution or selling such Shares in connection
with
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<PAGE> 20
any such distribution, and such Shareholder understands that such
shares have not been registered under the Securities Act or any
applicable state securities law and therefore cannot be resold unless
they are registered under the Securities Act and any applicable state
securities laws or unless an exemption from registration is available.
The Shareholder acknowledges that the Shares will be subject to the
restrictions of Rule 144 of the Securities Act, which governs the
public sale in ordinary trading transactions of "restricted securities"
and of securities owned by affiliates. Restricted securities are
securities acquired directly or indirectly from an issuer or an
affiliate in a transaction not involving any public offering. In
addition, the Shareholder acknowledges that the Shares may also be
subject to the restrictions of Rule 145 of the Securities Act, which
restricts the resale of securities issued in connection with a
reclassification, merger or consolidation, or transfer of assets.
(b) The Shareholder has been provided with a copy of Parent's
prospectus dated November 13, 1997 (the "Prospectus") and has had
sufficient time to review and consider the Prospectus. The Shareholder
has been afforded an opportunity to ask questions of and receive
answers from representatives of Parent concerning the Prospectus and to
obtain any additional information by written request to verify the
accuracy of the Prospectus and to obtain copies of any documents
identified in the Prospectus. In addition to the Prospectus, there are
available over the Internet various public filings made by the Parent
with the Securities and Exchange Commission pursuant to its EDGAR
filing requirements (the "Parent Reports"). The Shareholder has had
access to, and has had sufficient time to review and consider, such
Parent Reports. The Shareholder has been afforded an opportunity to ask
questions of and receive answers from representatives of Parent
concerning the terms and conditions of the Transactions and to obtain
any additional information as such Shareholder has requested in writing
to verify the accuracy of the Parent Reports and copies of any exhibits
identified in such documents that such Shareholder has requested.
(c) The Shareholder has accurately and truthfully completed
and executed the Investor Questionnaire, in the form of Exhibit 2.20.
(d) The Shareholder has consented to the following legend on
the certificate or certificates for the Shares to be issued to each
such Shareholder in connection with the Mergers:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
APPLICABLE STATE SECURITIES LAWS AND MAY BE SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED ONLY IF A REGISTRATION
STATEMENT WITH RESPECT TO SUCH TRANSACTION IS IN EFFECT
PURSUANT TO THE PROVISIONS OF SUCH LAWS OR IF, IN THE OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER, AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS IS AVAILABLE.
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2.21. Accuracy of Information.
No representation or warranty in this Agreement by the Companies or the
Shareholders, nor any statement in their Disclosure Letter, to the knowledge of
the Companies or the Shareholders contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
OF PARENT
Parent represents and warrants to the Shareholders that the following
statements are true, complete and correct as of the date hereof and shall be
true, complete and correct as of the Closing Date, with respect to Parent and
the Acquiring Subs, and their respective businesses:
3.1. Organization.
Each of Parent and the Acquiring Subs is a corporation duly organized,
validly existing and in good standing under the laws of the State of Michigan
and each has all requisite corporate power and authority to own, lease and
operate its respective properties and to carry on its business as it is now
being conducted. Acquiring Subs are recently-formed Michigan corporations that
have not conducted, and will not conduct prior to the Closing, any activities
other than those incident to their formation and in connection with the
consummation of the Mergers. Each of Parent and Acquiring Subs is duly qualified
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary and where the failure to qualify could have a
material adverse effect on the business, results of operations or financial
condition of the Parent and its subsidiaries taken as a whole.
3.2. Authority and Validity of Agreement.
The execution and delivery of this Agreement and the consummation of
the Transactions have been duly and validly authorized and approved by the
Boards of Directors of Parent and Acquiring Subs and the shareholder of the
Acquiring Subs, and no other corporate proceedings on the part of Parent or
either of the Acquiring Subs are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed by each of Parent and the Acquiring Subs and constitutes
valid and binding obligations of Parent and each of the Acquiring Subs,
enforceable against each of them in accordance with their terms, subject to the
Enforceability Exceptions or the availability of specific performance,
injunctive relief and other equitable remedies and to general principles of
equity (regardless of whether such principles are considered in a proceeding in
equity or at law).
3.3. Consents and Approvals.
The execution and delivery of this Agreement and the consummation of
the Transactions will not, except for any applicable requirements of the
Securities Act and state securities laws, and the filing
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<PAGE> 22
and recordation of appropriate merger documents as required by the Acts, require
any filing with or permit, consent or approval of any authority.
3.4. Capitalization.
The authorized capital stock of the Parent consists of 10,000,000
shares of common stock and 10,000,000 shares of preferred stock, of which there
were 1,295,000 shares of Parent common stock issued and outstanding as of
January 31, 1998. The Shares to be issued and delivered in the Mergers will be,
at the time of issuance and delivery, validly issued, fully paid, nonassessable
and free of preemptive rights.
3.5 Deliveries
Parent has delivered to the Companies and the Shareholders the
Prospectus, copies of all filings with the Securities and Exchange Commission
since the date of the Prospectus and a disclosure letter ("Parent's Disclosure
Letter") provided by Parent to the Companies and the Shareholders prior to the
execution of this Agreement. Parent has delivered to the Companies and the
Shareholders, as part of its filings with the Securities and Exchange
Commission, a copy of Parent's special financial report on Form 10-K, including
audited financial statements for the period June 30, 1997 to September 30, 1997
and a copy of Parent's quarterly report on Form 10-Q, for the quarterly period
ended December 31, 1997. Except as set forth in Parent's Disclosure Letter,
Parent's 1997 audited financial statements and the financial statements
contained in Parent's quarterly report for the period ended December 31, 1997;
(i) were prepared in accordance with generally accepted accounting principles;
and (ii) fairly present the financial position and the results of operations of
Parent for the period therein reflected, subject in the case of the quarterly
statements to audit and customary year-end adjustments.
3.6 Liabilities
Except as described in Parent's Disclosure Letter, Parent does not have
any liability or obligation of any nature, whether asserted or unasserted,
accrued, absolute or contingent or otherwise, and whether due or to become due,
that is not reflected or reserved against on Parent's Financial Statements,
except those that may have been incurred after December 31, 1997 in the ordinary
course of business and consistent with past practices.
3.7. Non-Contravention.
Neither the execution, delivery and performance of this Agreement nor
the consummation of the transactions contemplated herein will: (i) violate or be
in conflict with any provision of the articles of incorporation or bylaws of
Parent or either of the Acquiring Subs; or (ii) to the knowledge of Parent
constitute a default under, any instrument or other agreement or obligation to
which the Parent or either of the Acquiring Subs is a party.
3.8. Brokers
Parent has employed no broker, finder, or financial advisor or incurred
any liability for any brokerage fee or commission, finder's fee or financial
advisory fee, in connection with the Transactions, nor is there any basis known
to Parent for any such fee or commission to be claimed by any person or entity.
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3.9. Accuracy of Information.
No representation or warranty in this Agreement by Parent, or any
statement in Parent's Disclosure Letter, to the knowledge of Parent, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained therein or herein not
misleading. Except as disclosed in Parent's Disclosure Letter, Parent has no
knowledge of any information which if made public, would materially impact the
trading price of Parent's common stock.
ARTICLE 4.
COVENANTS
4.1 Affirmative Covenants of the Companies and the Shareholders. The
Companies and the Shareholders hereby covenant and agree with Parent and the
Acquiring Subs that, prior to the Closing, unless otherwise expressly
contemplated by this Agreement or consented to, in writing, by Parent, the
Companies each shall:
(a) Operate its business in the usual and ordinary course,
consistent with reasonable past practices;
(b) Use reasonable efforts to preserve intact its business
organization and assets, maintain its material rights and franchises,
retain the services of its officers, key employees and managers, and
maintain existing good relationships with its material customers,
clients, vendors and suppliers;
(c) Use reasonable efforts to keep in full force and effect
all liability insurance and bonds comparable in amount and scope of
coverage to that currently maintained;
(d) Confer with Parent from time-to-time at Parent's
reasonable request to report on all operational matters of a material
nature, and to report periodically, as Parent shall reasonably request,
on the general status of the ongoing operations of the business of the
Companies;
(e) Provide Parent with monthly financial statements fifteen
(15) days after the end of each month; and
(f) File their federal and state income tax returns, and all
required state and local income and franchise tax returns for the
fiscal tax year coinciding with or ending in 1997 (if applicable), on
or before the due date for filing such returns (including extensions).
4.2 Negative Covenants of the Companies.
Except as expressly contemplated by this Agreement, including the
completion of the contribution of $300,000 in Systems/Software Solutions, Inc.
pursuant to the Technology Agreement, or those actions otherwise consented to in
writing by Parent, which consent shall not be unreasonably withheld, from the
date of this Agreement until the Effective Time, the Companies each shall not do
any of the following:
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(a) (i) Increase the compensation payable or to become payable
to any director, officer, manager or employee, except for increases in
salary, bonuses or wages payable or to become payable in the ordinary
course of business and consistent with past practice to employees who
are not directors, officers or managers or as set forth on Schedule
4.2, (ii) grant any severance or termination pay (other than pursuant
to normal severance policy) to, or enter into any severance agreement
with, any director, officer, manager or employee providing for payment
in excess of $5,000, (iii) enter into any employment agreement of any
nature whatsoever with any director, officer, manager or employee that
would extend beyond the Effective Time, except on an at-will basis, or
(iv) establish, adopt, enter into or amend any employee benefit plan or
arrangement, except as may be required to comply with applicable law;
(b) Declare or pay, or agree to declare or pay, in any manner
whatsoever, any dividend on, or make any other distribution in respect
of, outstanding shares of capital stock, securities, options or other
interests, except from Excess Cash, determined as provided in Section
1.6(c) of this Agreement;
(c) Issue, deliver, award, grant or sell, or authorize the
issuance, delivery, award, grant or sale of (including the grant of any
security interests, liens, claims, pledges, limitations in voting
rights, charges or other encumbrances), any shares of any class of its
capital stock (including shares held in treasury), any securities
convertible into or exercisable or exchangeable for any such shares, or
any rights, warrants or options to acquire any such shares, or amend or
otherwise modify the terms of any such rights, warrants or options, the
effect of which shall be to make such terms more favorable to the
holders thereof;
(d) Acquire or agree to acquire, by merging or consolidating
with, by purchasing an equity interest in or a portion of the assets
of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof, or otherwise acquire or agree to acquire any assets of any
other person (other than the purchase of assets from suppliers or
vendors in the ordinary course of business);
(e) Sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage,
pledge, transfer or otherwise dispose of, any amount of any of its
operating assets, except for actions taken in the ordinary course of
business and consistent with reasonable past practices;
(f) Except as set forth in the Disclosure Letter, the
Shareholders agree not to sell or transfer their shares or other
ownership interests in the Companies;
(g) Adopt any amendments to the articles of organization or
operating agreements of the Companies;
(h) Change any methods of accounting in effect at December 31,
1997, or make (including an election to file a Subchapter S Return) or
rescind any express or deemed election relating to taxes, settle or
compromise any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to Taxes, or
change any method of reporting income, gain, expense, loss or deduction
for foreign, federal, state, provincial or local income tax
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purposes from those employed in the preparation of income tax returns
for taxable years ending on or prior December 31, 1997, except as may
be required by law or for the purpose of implementing the Companies'
earlier election to be taxed as a corporation under the Code;
(i) Incur any obligation for borrowed money or purchase money
indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument, except for those borrowings made with the prior
written consent of Parent, or in the ordinary course of the Companies'
business;
(j) Agree in writing or otherwise to do any of the foregoing
unless the terms of such agreement are terminable upon the Effective
Time of the Merger contemplated in this Agreement;
(k) (i) perform any act which, if performed, would prevent or
excuse the performance of this Agreement by the Companies or which
would result in any representation or warranty herein contained of the
Companies to be untrue in any material respect and result in a material
adverse effect, if originally made on and as of the Effective Time, or
(ii) fail to perform any act which, if omitted to be performed, would
prevent or excuse the performance of this Agreement by the Companies or
which would result in any representation or warranty herein contained
of the Companies to be untrue in any material respect and result in a
material adverse effect, if originally made on and as of the Effective
Time; or
(l) Initiate, solicit or encourage (including by way of
furnishing any information or assistance in connection with) any
inquiries or the making of any offer that constitutes, or may
reasonably be expected to lead to, any "Competing Transaction" (as such
term is defined below), enter into discussions or negotiate with any
person or entity in furtherance of such inquiries or to obtain a
Competing Transaction. The Companies shall promptly notify Parent if
any such inquiries or proposals are received by the Companies or by any
of their respective officers, directors, financial advisors, attorneys,
accountants or other representatives. For purposes of this Agreement,
the term "Competing Transaction" shall mean any of the following
involving the Companies (other than the transactions contemplated by
this Agreement): (i) any merger, consolidation, share exchange,
business combination, or other similar transaction; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of the
assets of the Companies or a subsidiary thereof, in a single
transaction except as permitted in Section 4.2 (e); (iii) any sale or
exchange for any outstanding shares of capital stock of the Companies
or any subsidiary thereof; or (iv) any agreement to, or announcement by
the Companies of a proposal, plan or intention, to do any of the
foregoing.
4.3. Confidentiality.
The parties hereto reconfirm that Confidentiality Agreement executed on
December 1, 1997, and in connection therewith, will not use, or permit the use
of, any of the information relating to any other party hereto furnished to it in
connection with the Transactions ("Information") in a manner or for a purpose
detrimental to such other party or otherwise than in connection with the
Transactions, and they will not disclose, divulge, provide or make accessible
(collectively, "Disclose"), or permit the Disclosure of, any of the Information
to any person or entity, other than their responsible directors, officers,
employees, investment advisors, accountants, counsel and other authorized
representatives and agents, except as may be required by judicial or
administrative process. Except as may be required of
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Parent, in the sole opinion of Parent's counsel, to comply with applicable
securities law, each of the parties agrees to keep in confidence the fact of and
content of the negotiations and the agreements concerning the Transactions and
the Mergers until such time as a joint public announcement is issued. In the
event Parent seeks to issue a public announcement, a copy of the proposed
announcement will be provided to Bober not less than twenty four (24) hours
before the proposed issue time. If Parent and Bober cannot agree to the language
of the announcement prior to the proposed issue time, Parent may nevertheless
issue the announcement if, in the sole opinion of Parent's counsel, the
announcement is required to comply with applicable securities laws. The parties
hereto also will promptly return to the party from whom originally received all
original and duplicate copies of written materials containing Information should
the Transactions not occur. Notwithstanding anything to the contrary, this
Section shall supersede and take precedence over paragraph 12 of that letter of
intent entered into between Parent, the Companies and the Shareholders, dated
January 7, 1998 (but not the Confidentiality Agreement referred to therein).
This Section 4.3 survives Closing and any termination of this Agreement.
4.4. Further Assurances; Cooperation; Notification.
(a) Each party hereto will, before, at and after Closing,
execute and deliver such instruments and take such other actions as the
other party or parties, as the case may be, may reasonably require in
order to carry out the intent of this Agreement, including, but not
limited to, any securities filings.
(b) At all times from the date hereof until the Closing, each
party will promptly notify the other in writing of the occurrence of
any event which it reasonably believes will or may result in a failure
by such party to satisfy the conditions specified in Article 5 and
Article 6 hereof.
4.5. Access.
(a) Between the date of this Agreement and the Closing and at
all times subject to the Confidentiality Agreement, BAC and BSC will
(a) afford Parent and its Representatives ("Parent's Advisors")
reasonable access to BAC's and BSC's officers, offices, contracts,
books and records, and other documents and data; (b) furnish Parent and
Parent's Advisors with copies of all such contracts, books and records,
and other existing documents and data as Parent may reasonably request;
and (c) furnish Parent and Parent's Advisors with such additional
financial, operating, and other data and information as Parent may
reasonably request.
(b) Between the date of this Agreement and the Closing and at
all times subject to the Confidentiality Agreement, Parent will (a)
afford the Companies and their Representatives (the "Companies'
Advisors") reasonable access to Parent's officers, offices, contracts,
books and records, and other documents and data; (b) furnish the
Companies and the Companies' Advisors with copies of all such
contracts, books and records, and other existing documents and data as
the Companies may reasonably request; and (c) furnish the Companies and
the Companies' Advisors with such additional financial, operating, and
other data and information as the Companies may reasonably request. For
purposes of this Section, the "Advisor" of a party is defined as any
director, officer, agent, consultant, advisor or other professional
representative of that party, including legal counsel, accountants and
financial advisors.
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ARTICLE 5.
CONDITIONS TO OBLIGATION OF PARENT AND ACQUIRING SUBS
The following are conditions to the obligations of the Parent and
Acquiring Subs to close the Transactions:
(a) No material adverse changes, which shall be defined as the
Companies' inability to perform their businesses substantially in the
manner and substantially to the extent previously performed, shall have
occurred with respect to the Companies, their businesses and the
markets for their products and services between December 31, 1997 and
the Closing;
(b) Each of the representations and warranties of the
Companies and the Shareholders contained in this Agreement shall be
true and correct in all material respects as of the Closing as though
made on and as of the Closing, and Parent shall have received an
officer's certificate from each of the Companies to that effect;
(c) The full performance in all material respects of all
obligations of each of the Companies and the Shareholders contained in
this Agreement;
(d) Both the BAC and BSC Financial Statements shall fully
comply with Regulation S-X of the Rules and Regulations so as to allow
Parent to satisfy its SEC filing and reporting obligations in respect
of the Transactions;
(e) The execution and delivery of the Shareholders Agreement
to Parent;
(f) The execution and delivery of the Technology Agreement;
(g) Parent's receipt of the opinion of Simpson Zelenock, P.C.,
counsel for the Companies, dated on the Closing Date, substantially in
the form attached as Exhibit 5(g);
(h) The execution and delivery of employment agreements by and
between the respective Surviving Companies and Bober and Weber, in the
form reasonably agreed to by and between Parent, Bober and Weber
respectively, and attached hereto as Exhibit 5(h) (the "Employment
Agreements");
(i) Consents from all other third parties whose consent is
necessary to the Transactions under this Agreement shall have in fact
been obtained or waived;
(j) The absence of indication that the following businesses
will cease to do business with the Companies after notice of the
proposed Transactions: Nomura Asset Capital Corporation, Lincoln
National Life Insurance Company (or its affiliates), Sun-America Life
Insurance Company (or its affiliates), Metropolitan Realty Corporation
and Allstate Life Insurance Company; and
(k) The absence of any injunction, court decree or similar
ruling which prohibits the consummation of the Transactions.
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ARTICLE 6.
CONDITIONS TO THE OBLIGATION OF BAC, BSC AND THE SHAREHOLDERS
The following are conditions to the obligations of the Companies and
the Shareholders to close the Transactions:
(a) No material adverse changes, which does not include a
decline in the market value of Parent common stock, but is defined as
Parent's inability to perform its business substantially in the manner
and substantially to the extent previously performed, shall have
occurred with respect to Parent, its business and the market for its
products and services between December 31, 1997 and the Closing;
(b) Each of the representations and warranties of Parent and
the Acquiring Subs contained in this Agreement shall be true and
correct in all material respects as of the Closing as though made on
and as of the Closing, and the Companies shall have received an
officer's certificate from the Parent and the Acquiring Subs to that
effect;
(c) The full performance in all material respects of all
obligations of the Parent contained in this Agreement;
(d) The Companies' receipt of the opinion of Jaffe, Raitt,
Heuer & Weiss, Professional Corporation, counsel for Parent, dated on
the Closing Date, substantially in the form attached as Exhibit 6(d);
(e) The execution and delivery of the Technology Agreement;
(f) The arrangement of a warehousing line of credit or other
credit or securitization facility, as deemed necessary by BAC and
Parent;
(g) The receipt by Bober and Weber of the Employment
Agreements; and
(h) The absence of any injunction, court decree or similar
ruling which prohibits the consummation of the Transactions.
ARTICLE 7.
TERMINATION AND ABANDONMENT
7.1. Methods of Termination.
This Agreement may be terminated and the transactions contemplated
herein may be abandoned in accordance with the following:
(a) By mutual written consent of Parent, each of the Acquiring
Subs, each of the Companies and Shareholders holding a majority in
interest in BAC and BSC;
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(b) By Parent and the Acquiring Subs, if a material breach of
a representation or warranty of Article 2 is discovered prior to
Closing and cannot be resolved pursuant to Section 8.5;
(c) By Parent and the Acquiring Subs, if any of the conditions
provided for in Article 5 have not been satisfied in all material
respects or waived in writing by Parent prior to Closing; or
(d) By the Companies and the Shareholders, if a material
breach of a representation or warranty of Article 3 is discovered prior
to Closing and cannot be resolved pursuant to Section 8.5;
(e) By the Companies and the Shareholders, if any of the
conditions provided for in Article 6 have not been satisfied in all
material respects or waived in writing by the Companies and
Shareholders prior to Closing; and
(f) By any party, if on March 10, 1998, the Transactions have
not closed.
7.2. Procedure Upon Termination.
In the event of termination and abandonment pursuant to
Section 7.1, written notice thereof will forthwith be given to the other party
or parties, and the provisions of this Agreement (except to the extent provided
in Section 9.1) will terminate, and the transactions contemplated herein will be
abandoned, without further action by any party hereto. If this Agreement is
terminated as provided herein: (i) each party will, upon request, redeliver all
documents, work papers and other material of any other party (and all copies
thereof) relating to the transactions contemplated herein, whether so obtained
before or after the execution hereof, to the party furnishing the same; (ii) the
confidentiality obligations of Section 4.3 will continue to be applicable; and
(iii) except as provided in this Section, no party will have any liability for a
breach of any representation, warranty, agreement, covenant or other provision
of this Agreement, unless such breach was due to a willful or bad faith action
or omission of such party or any representative, agent, employee or independent
contractor thereof.
ARTICLE 8.
SURVIVAL AND INDEMNIFICATION
8.1. Survival.
The representations, warranties and covenants of each of the parties
hereto will survive the Closing until two (2) years after the Closing Date,
except for the representations and warranties in Section 2.12, which shall
survive the Closing for the applicable statute of limitations under which claims
may be asserted.
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8.2. Indemnification by Parent.
Except as provided in Section 8.5, and subject to the limitation on
recourse set forth in Section 8.6, from and after the Effective Time Parent
agrees to indemnify each of the Shareholders from and against any and all loss,
liability or damage suffered or incurred by them (including any and all costs
and expenses, including without limitation reasonable legal fees and expenses
incurred, in connection with enforcing the indemnification rights of
Shareholders pursuant to this Section 8.2) by reason of: (i) any untrue
representation of or breach of warranty set forth in Article 3; and (ii) any
loss, liability or damage suffered or incurred by the Shareholders by reason of
any nonfulfillment of any covenant, agreement or undertaking of Parent in this
Agreement.
8.3. Indemnification by Shareholders.
Except as provided in Section 8.5 and subject to the limitation on
recourse set forth in Section 8.6, from and after the Effective Time the
Shareholders jointly and severally agree to indemnify Parent, each of the
Acquiring Subs, the Surviving Companies and their respective directors,
officers, employees and agents, from and against any and all loss, liability or
damage suffered or incurred by it (including any and all costs and expenses,
including without limitation reasonable legal fees and expenses incurred, in
connection with enforcing the indemnification rights of Parent or either of the
Acquiring Subs or the Surviving Companies pursuant to this Section 8.3) by
reason of: (i) any untrue representation of or breach of warranty set forth in
Article 2; and (ii) any and all loss, liability or damage suffered or incurred
by Parent or either of the Acquiring Subs or the Surviving Companies by reason
of any nonfulfillment of any covenant, agreement or undertaking of either of the
Companies or any Shareholder in this Agreement.
8.4. Escrow of Parent Common Stock.
At Closing, certificates representing 272,727 shares of Parent common
stock (the "Escrow Shares") shall be delivered by the Shareholders to NBD Bank,
as escrow agent (the "Escrow Agent") under an Escrow Agreement substantially in
the form attached hereto as Exhibit 8.4. The Escrow Shares shall be held in
escrow as security for any claims Parent may have pursuant to Section 8.3 for a
period of two (2) years after the Closing (the "Escrow Termination Date"), under
the terms of the Escrow Agreement. In the event that shares of Parent common
stock are issued in respect of the Additional Consideration at a time when the
Escrow Shares are still subject to the Escrow Agreement, such shares will also
be placed in escrow and will be subject to the terms of the Escrow Agreement as
part of the Escrow Shares, as if such shares had been placed in escrow at the
Closing. If at the Escrow Termination Date, no unresolved claims filed by Parent
remain outstanding, the Escrow Shares shall be released to the Shareholders. If
at the Escrow Termination Date, indemnification claims are outstanding which
equal or exceed the fair market value of the Escrow Shares, the Escrow Shares
shall remain in escrow until the resolution of the claim or claims. If at the
Escrow Termination Date, indemnification claims are outstanding and the value of
the Escrow Shares exceeds such indemnification claims, upon request by the
Shareholders, Escrow Agent may release an amount of Escrow Shares (the "Release
Shares"), provided that the Escrow Agent shall retain in escrow sufficient
shares of Parent common stock the fair market value of which is at least two (2)
times the amount of the indemnification claim or claims outstanding (the
"Reserve Shares") and provided however, that notwithstanding Section 8.6(b), if
the Reserve Shares are insufficient to cover the indemnification claims as
finally determined, the Shareholders will be jointly and severally liable for
any such deficiency up to an amount equal to what the fair market value of the
Release Shares was on the Escrow Termination Date.
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Notwithstanding any other provision of this Agreement, Parent may enforce this
liability or obligation by any action or proceeding seeking a money judgment
against any one or more of the Shareholders.
8.5 Disclosure of Known Breaches
(a) If prior to Closing, Parent has actual knowledge of any
material (either individually or cumulatively) breach of the
representations or warranties contained in Article 2 by the Companies
or the Shareholders, and fails to disclose such breach, Parent may not
proceed to Closing and claim indemnification from the Shareholders
pursuant to Section 8.3.
(b) If prior to Closing, the Shareholders have knowledge of
any material (either individually or cumulatively) breach of the
representations or warranties contained in Article 3 by Parent, and
fail to disclose such breach, the Shareholders may not proceed to
Closing and claim indemnification from Parent pursuant to Section 8.4.
(c) If a breach of the representations or warranties contained
in Article 2 or 3 is discovered by any party prior to closing (the
"Discovering Party"), the Discovering Party shall provide the breaching
party with notice of the breach and a fifteen (15) day period to cure
or resolve the breach in good faith. If the breaching party is unable
to cure or resolve the breach, the Discovering Party must either waive
the breach or terminate the Agreement pursuant to Section 7.1(b) or
(d).
8.6. Limitation on Indemnification.
The following provisions shall control all indemnity obligations and
rights under this Agreement, notwithstanding any other provision of this
Agreement to the contrary.
(a) Except as provided in Section 8.7(b), and except with
respect to indemnification obligations arising by reason of a breach of
a representation or warranty under Section 2.12 of this Agreement, the
Shareholders' aggregate indemnification obligations under this Article
8 will be limited to the shares of Parent common stock issued in
respect of the Initial Consideration and the Additional Consideration.
Except as provided in Section 8.7(b), Parent's aggregate
indemnification obligations under this Article 8 will be limited to
$3,500,000.
(b) Except with respect to indemnification obligations arising
by reason of a breach of a representation or warranty under Section
2.12 of this Agreement, and the application of the provisions of
Section 8.4 and 8.7(b), no party or person who may at any time seek
indemnification from any Shareholder under or pursuant to Section 8.3
of this Agreement (each an Indemnified Party, as defined) shall enforce
that liability or obligation by any action or proceeding wherein a
money judgment is sought against any one or more of the Shareholders,
except that an Indemnified Party may bring an appropriate action or
proceeding to enable that Indemnified Party to enforce and realize upon
its interest under the Escrow Agreement with respect to the Escrow
Shares. However, and subject to the two foregoing exceptions: (i) any
judgment in any such action or proceeding shall be enforceable against
any Shareholder only to the extent of each Shareholder's interest in
the Escrow Shares (and shall be enforced ratably against the interest
of all such Shareholders in accordance with their respective
interests); and (ii) no Indemnified Party shall sue for, seek or demand
any deficiency judgment against any Shareholder in any such action or
proceeding, under or by reason of or under or in connection
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with this Agreement or the Escrow Agreement. The provisions of this
Section 8.6 shall not, however, (i) constitute a waiver, release or
impairment of any obligation evidenced by this Article 8 or the Escrow
Agreement; (ii) impair the right of an Indemnified Party to name any
Shareholder as a party defendant in any arbitration, action or suit
seeking to enforce the Escrow Agreement; or (iii) affect the validity
or enforceability of the indemnification obligations under this Article
8.
(c) Notwithstanding the qualification of "knowledge" of those
representations and warranties under Section 2.7, but subject to all
other express limitations imposed under the provisions of this Article
8, a breach of Section 2.7 or an inaccuracy in those representations
and warranties will entitle Parent to full indemnification and will not
in any way limit the indemnification obligations of the Shareholders
under this Article 8, even if the Shareholders did not have knowledge
of the liability or obligation.
(d) Notwithstanding the disclosure of potential liabilities in
the Disclosure Letter with respect to those representations and
warranties under Section 2.7 and 2.8 of this Agreement, if any such
potential liabilities accrue, Parent is entitled to full
indemnification by the Shareholders, subject only to the express
limitations imposed under the provisions of this Article 8.
8.7. Indemnification De Minimis Threshold.
(a) Except with respect to indemnification obligations arising
by reason of a breach of a representation or warranty under Section
2.12 of this Agreement and except as expressly provided otherwise
herein, and subject to the provisions of Section 8.7(b), neither the
Shareholders nor the Parent, as the case may be, will be entitled to
indemnification under this Agreement unless the aggregate of all claims
with respect to matters arising hereunder is more than One Hundred
Thousand Dollars ($100,000) (the "Threshold Amount"). When the
aggregate amount of all such indemnification claims hereunder equals or
exceeds the Threshold Amount, the Parent or the Shareholders, as the
case may be, will be entitled to full indemnification of all claims,
including the One Hundred Thousand Dollars ($100,000) that amounted to
the Threshold Amount. The parties hereto agree that the Threshold
Amount is not a deductible amount, nor will the Threshold Amount be
deemed to be a definition of "material" for any purpose in this
Agreement.
(b) Notwithstanding the foregoing, in the case of any untrue
representation under Section 2 or 3 with respect to which any party
hereunder making that representation had actual knowledge, or had
actual knowledge of the potential or probable loss, liability or damage
without disclosing such to the other party on or prior to the Closing
Date (and as a result such other party has no knowledge thereof), such
non-disclosing party will promptly pay the other party the full
indemnification claim without regard to the Threshold Amount set forth
in this Section, or the overall limitation on amount or recourse as set
forth in Section 8.6, and the time limitations set forth in Section 8.1
shall be extended an additional three (3) years. For the purpose of
this Section 8.6(b), actual knowledge of one or more Shareholders shall
not be imputed to any other Shareholders who do not have that actual
knowledge. Nevertheless, this limitation upon the imputation of
knowledge shall not limit the rights of Parent, the Acquiring
Subsidiaries and the Surviving Companies to obtain full indemnification
against the Escrow Shares of all Shareholders, as provided under
Section 8.4 and the Escrow Agreement.
29
<PAGE> 33
8.8. Claims for Indemnification.
The parties intend that all indemnification claims hereunder be made as
promptly as practicable by the party seeking indemnification (the "Indemnified
Party"). Whenever any claim arises for indemnification hereunder the Indemnified
Party will promptly notify the party from whom indemnification is sought (the
"Indemnifying Party") of the claim and, when known, the facts constituting the
basis for such claim. In the case of any such claim for indemnification
hereunder resulting from or in connection with any claim or legal proceedings of
a third party (a "Third Party Claim"), the notice to the Indemnifying Party will
specify, if known, the amount or an estimate of the amount of the liability
arising therefrom. The Indemnifying Party shall have the right to dispute and
defend all Third Party Claims and thereafter so defend and pay any adverse final
judgment or award or settlement amount in regard thereto. Such defense shall be
controlled by the Indemnifying Party, and the cost of such defense shall be
borne by the Indemnifying Party, except that the Indemnified Party shall have
the right to participate in such defense at its own expense; and provided,
however, that the Indemnifying Party must first acknowledge that the claim is a
bona fide indemnification claim under this Agreement in order for the
Indemnifying party to control the defense. The Indemnified Party shall cooperate
in all reasonable respects in the defense of any such claim, including making
personnel, books, and records relevant to the claim available to the
Indemnifying Party, without charge, except for reasonable out-of-pocket
expenses. If the Indemnifying Party fails to take action within thirty (30) days
as set forth above, then the Indemnified Party shall have the right to pay,
compromise or defend any Third Party Claim and to assert the amount of any
payment on the Third Party Claim plus the reasonable expenses of defense or
settlement of the claim. The Indemnified Party shall also have the right,
exercisable in good faith, to take such action as may be necessary to avoid a
default prior to the assumption of the defense of the Third Party Claim by the
Indemnifying Party, and any reasonable expenses incurred by Indemnified Party so
acting shall be paid by the Indemnifying Party. Except as otherwise provided
herein, the Indemnified Party will not settle or compromise any Third Party
Claim for which it is entitled to indemnification hereunder without the prior
written consent of the Indemnifying Party, which will not be unreasonably
withheld. If the Indemnifying Party is of the opinion that the Indemnified Party
is not entitled to indemnification, or is not entitled to indemnification in the
amount claimed in such notice, it will deliver, within ten (10) business days
after the receipt of such notice, a written objection to such claim and written
specifications in reasonable detail of the aspects or details objected to, and
the grounds for such objection. If the Indemnifying Party filed timely written
notice of objection to any claim for indemnification, the validity and amount of
such claim will be determined by arbitration pursuant to Section 9.12 hereof.
Subject to the limitations of Sections 8.6 and 8.7, if timely notice of
objection is not delivered or if a claim by an Indemnified Party is admitted in
writing by an Indemnifying Party or if an arbitration award is made in favor of
an Indemnified Party, the Indemnified Party, as a non-exclusive remedy, will
have the right to set-off the amount of such claim or award against any amount
yet owed, whether due or to become due, by the Indemnified Party or any
subsidiary thereof to any Indemnifying Party by reason of this Agreement or any
agreement or arrangement or contract to be entered into at the Closing.
30
<PAGE> 34
8.9 Netting of Claims
All indemnification claims shall be net of any insurance proceeds or
payments from any other responsible parties (in both cases net of recovery
costs), as well as of the corresponding actual realizable tax benefit.
8.10 Claims Period
Notwithstanding anything in this Agreement to the contrary, Parent and
the Shareholders shall not be entitled to any recovery under this Article 8
unless a claim for indemnification is made within sixty (60) days after the
first two audit cycles are completed; provided however, that claims involving
Environmental matters will be allowed if made within two (2) years after the
Effective Time and claims based on the representations and warranties made in
Section 2.12 will be allowed if made within the applicable statute of
limitations.
8.11 Rejected Settlement of Claims
If an Indemnified Party refuses to agree to a proposed
settlement by the Indemnifying party that would fully indemnify the Indemnified
Party, the Indemnifying Party's exposure is limited to the settlement offer,
provided however, that the indemnity will not be so limited if the proposed
settlement would expose the Indemnified Party to criminal or regulatory
liability or would in any material way impugn the reputation of the Indemnified
Party and its affiliates, officers and directors.
8.12 Limitation of Indemnification Obligations
The indemnification obligations of L.B. shall be limited to (i) pro
rata several liability only; and (ii) claims arising under Section 2.20.
ARTICLE 9.
MISCELLANEOUS PROVISIONS
9.1. Expenses.
Other than as expressly provided for in this Agreement, each of the
parties hereto will bear its own costs, fees and expenses in connection with the
negotiation, preparation, execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby, including without
limitation fees, commissions and expenses payable to brokers, finders,
investment bankers, consultants, exchange or transfer agents, attorneys,
accountants and other professionals, whether or not the Transactions is
consummated.
9.2. Amendment and Modification.
Subject to applicable law, this Agreement may be amended or modified by
the parties hereto at any time prior to the Closing with respect to any of the
terms contained herein; provided, however, that all such amendments and
modifications must be in writing duly executed by all of the parties hereto.
31
<PAGE> 35
9.3. Waiver of Compliance; Consents.
Any failure of a party to comply with any obligation, covenant,
agreement or condition herein may be expressly waived in writing by the party
entitled hereby to such compliance, but such waiver or failure to insist upon
strict compliance with such obligation, covenant, agreement or condition will
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. No single or partial exercise of a right or remedy will preclude any
other or further exercise thereof or of any other right or remedy hereunder.
Whenever this Agreement requires or permits the consent by or on behalf of a
party, such consent will be given in writing in the same manner as for waivers
of compliance.
9.4. No Third Party Beneficiaries.
Nothing in this Agreement will entitle any person or entity (other than
a party hereto and his, her or its respective successors and assigns permitted
hereby) to any claim, cause of action, remedy or right of any kind.
9.5. Notices.
All notices, requests, demands and other communications required or
permitted hereunder will be made in writing and will be deemed to have been duly
given and effective: (i) on the date of delivery, if delivered personally; (ii)
on the earlier of the fourth (4th) day after mailing or the date of the return
receipt acknowledgment, if mailed, postage prepaid, by certified or registered
mail, return receipt requested; or (iii) on the date of transmission, if sent by
facsimile, telecopy, telegraph, telex, overnight courier or other similar means
of communication:
If to either of the Companies or the Shareholders:
To: Bloomfield Acceptance Company, L.L.C.
Bloomfield Servicing Company, L.L.C.
260 East Brown Street, Suite 350
Birmingham, Michigan 48009
Attention: Daniel E. Bober
Fax: (248) 644-5760
With a copy to:
Simpson Zelenock, P.C.
260 E. Brown Street Suite 300
Birmingham, Michigan 48009-6332
Attention: James A. Simpson
Fax: (248) 647-2776
or to such other person or address as either the Companies or the Shareholders
will furnish to the other parties hereto in writing in accordance with this
Section.
32
<PAGE> 36
If to Parent or the Acquiring Subs:
To: Bingham Financial Services Corporation
31700 Middlebelt Road, Suite 145
Farmington Hills, Michigan 48334
Attention: Jeffrey P. Jorissen
Fax: (248) 932-3072
With a copy to:
Jaffe, Raitt, Heuer & Weiss,
Professional Corporation
One Woodward Avenue, Suite 2400
Detroit, MI 48226
Attn: Peter Sugar
Fax: (313) 961-8358
or to such other person or address as either Parent or Acquiring Subs will
furnish to the other parties hereto in writing in accordance with this Section.
9.6. Assignment.
This Agreement and all of the provisions hereof will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned (whether voluntarily,
involuntarily, by operation of law or otherwise) by any of the parties hereto
without the prior written consent of the other parties, provided, however, that
upon the Companies' consent, which will not be unreasonably withheld, Parent may
assign this Agreement upon notice to the Companies and each of the Shareholders,
in whole or in any part, and from time to time, to a wholly-owned, direct or
indirect, subsidiary of Parent, if Parent remains bound hereby.
9.7. Governing Law.
This Agreement and all legal relations among the parties hereto will be
governed by and construed in accordance with the internal substantive laws of
the State of Michigan (without regard to principles of conflict of laws that
might otherwise apply) as to all matters, including without limitation matters
of validity, construction, effect, performance and remedies.
9.8. Counterparts.
This Agreement may be executed simultaneously in one or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
9.9. Headings.
The table of contents and the headings of the sections and Sections of
this Agreement are inserted for convenience only and will not constitute a part
hereof.
33
<PAGE> 37
9.10. Entire Agreement.
The Schedules, the Exhibits, the Disclosure Letters and other writings
referred to in this Agreement, together with this Agreement embody the entire
agreement and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement and together they are referred to as "this
Agreement" or the "Agreement". This Agreement supersedes all prior and
contemporaneous oral and written agreements and understandings between the
parties with respect to the transaction or transactions contemplated by this
Agreement (including without limitation the letter of intent dated January 7,
1998 between Parent, the Companies, and Shareholders and all amendments and
extensions thereof, but not including the Confidentiality Agreement).
9.11. Injunctive Relief.
It is expressly agreed among the parties hereto that monetary damages
would be inadequate to compensate a party hereto for any breach by any other
party of its covenants in Section 4.3. Accordingly, the parties agree and
acknowledge that any such violation or threatened violation of Section 4.3 will
cause irreparable injury to the other and that, in addition to any other
remedies which may be available, such party will be entitled to injunctive
relief against the threatened breach of Section 4.3 hereof or the continuation
of any such breach without the necessity of proving actual damages and may seek
specific enforcement of the terms thereof.
9.12. Arbitration.
In the event of any dispute relating to or arising out of any provision
of the Agreement, each party shall promptly designate one or more
representatives, and such representatives shall meet promptly in an effort to
resolve the dispute extrajudicially. If the attempts to resolve the dispute
stated in the preceding sentence are unsuccessful after a maximum period of
thirty (30) days, the parties shall submit such dispute to arbitration, as
provided below. With the sole exception of the injunctive relief contemplated by
Section 9.11 hereof, any controversy or claim arising out of or relating to this
Agreement, or the making, performance or interpretation hereof, including
without limitation alleged fraudulent inducement hereof, will be settled by
binding arbitration in Southfield, Michigan by a panel of three arbitrators in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon any arbitration award may be entered in any court
having jurisdiction thereof and the parties consent to the jurisdiction of the
courts of the State of Michigan for this purpose. Notwithstanding anything to
the contrary within this Agreement, this Section 9.12 will not apply to
interpleader claims under the Escrow Agreement and Special Consideration Escrow
Agreement.
9.13. Attorneys Fees.
If any arbitration, litigation or similar proceedings are brought by
any party to enforce any obligation or to pursue any remedy under this
Agreement, the party prevailing in any such arbitration, litigation or similar
proceedings will be entitled to costs of collection, if any, and reasonable
attorneys fees incurred in connection with such proceedings and in collecting or
enforcing any award granted therein.
34
<PAGE> 38
9.14. Venue and Jurisdiction.
The parties agree that all actions or proceedings arising in connection
with this Agreement and the instruments, agreements and documents executed
pursuant to the terms of this Agreement shall be tried, litigated and arbitrated
only in the courts of the United States located in the Eastern District of
Michigan, the Oakland County, Michigan Circuit Court, or the office of the
American Arbitration Association located nearest Southfield, Michigan. Each of
the Companies, the Shareholders and Parent irrevocably accept for itself or
himself and in respect of its or his property, generally and unconditionally,
the jurisdiction of such courts. Each of the Companies, Shareholders and Parent
irrevocably consent to the service of process out of any such courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to such party, at its address as set forth in this
Agreement, or in the records of the Surviving Company, such service to become
effective ten (10) days after such mailing. Nothing in this Section 9.14 shall
affect the right of any party to serve process in any other manner permitted by
law. Each of the Companies, the Shareholders and Parent irrevocably waive any
right it or he may have to assert the doctrine of forum non conveniens or to
object to venue to the extent any proceeding is brought in accordance with this
Section 9.14.
9.15 Time of the Essence.
"Time is of the essence" with respect to all dates and time periods
under this Agreement.
[The remainder of this page intentionally left blank.]
35
<PAGE> 39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
<TABLE>
<CAPTION>
PARENT: BAC:
<S> <C>
BINGHAM FINANCIAL SERVICES CORPORATION, BLOOMFIELD ACCEPTANCE COMPANY, L.L.C.,
a Michigan corporation a Michigan limited liability company
By: /s/ Jeffrey P. Jorissen By: /s/ Daniel E. Bober
------------------------------------ -----------------------------------
Jeffrey P. Jorissen, President, Daniel E. Bober, President
Chief Executive Officer and Chief
Financial Officer
ACQUIRING SUBS: BSC:
BAC ACQUIRING CORP., a Michigan corporation BLOOMFIELD SERVICING COMPANY, L.L.C.,
a Michigan limited liability company
By: /s/ Jeffrey P. Jorissen By: /s/ Daniel E. Bober
------------------------------------ -----------------------------------
Jeffrey P. Jorissen, President Daniel E. Bober, President
BSC ACQUIRING CORP., a Michigan corporation SHAREHOLDERS:
By: /s/ Jeffrey P. Jorissen
------------------------------------ /s/ Daniel E. Bober
Jeffrey P. Jorissen, President --------------------------------------
Daniel E. Bober
/s/ Creighton J. Weber
--------------------------------------
Creighton J. Weber
/s/ James Bennett
--------------------------------------
James Bennett
/s/ Joseph Drolshagen
--------------------------------------
Joseph Drolshagen
/s/ Patricia Jorgensen
--------------------------------------
Patricia Jorgensen
/s/ Deborah Jenkins
--------------------------------------
Deborah Jenkins
[signatures continued on the next page]
</TABLE>
36
<PAGE> 40
<TABLE>
<S><C>
Signatures continued, Agreement and Plan of
Merger dated February 17, 1998 /s/ Lynne Baszczuk
--------------------------------------
Lynne Baszczuk
/s/ James A. Simpson
--------------------------------------
James A. Simpson
/s/ Katheryne L. Zelenock
--------------------------------------
Katheryne L. Zelenock
/s/ Jeffrey C. Urban
--------------------------------------
Jeffrey C. Urban
</TABLE>
37
<PAGE> 41
EXHIBITS and SCHEDULES
Exhibit 1.1A Certificates of Merger - BAC into BAC Acquiring Sub
Exhibit 1.1B Certificates of Merger - BSC into BSC Acquiring Sub
Exhibit 1.3(b) Special Consideration Escrow Agreement
Exhibit 1.6 Shareholders Agreement
Exhibit 1.6(ii) Consent to Transfer
Exhibit 1.6(vii) Assignment of Membership Interests in BAC and BSC
Exhibit 1.8A Second Amended and Restated Operating Agreement of
BAC
Exhibit 1.8B Amended and Restated Operating Agreement of BSC
Exhibit 1.11 Form of Option Agreement
Exhibit 2.4 Companies' Disclosure Letter
Exhibit 2.20 Investor Questionnaire
Exhibit 3.5 Parent's Disclosure Letter
Exhibit 5(g) Opinion of Simpson Zelenock, P.C.
Exhibit 5(h) Employment Agreements of Key Employees
Exhibit 6(d) Opinion of Jaffe, Raitt, Heuer & Weiss, Professional
Corporation
Exhibit 8.4 Escrow Agreement
<PAGE> 1
EXHIBIT 2.2
<TABLE>
<CAPTION>
C&S 550m (11/97)
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES - CORPORATION,
SECURITIES & LAND DEVELOPMENT BUREAU
Date Received (FOR BUREAU USE ONLY)
<S> <C>
EFFECTIVE DATE:
Name Expiration date for new assumed names: N/A
Eric S. Bronstein, Esq. Expiration date for transferred assumed names appear in Item 6
Address
One Woodward Ave., Suite 2400
City State Zip
Detroit MI 48226
</TABLE>
Document will be returned to the name and address you enter above.
CERTIFICATE OF MERGER
CROSS ENTITY MERGER FOR USE BY PROFIT CORPORATIONS, LIMITED LIABILITY COMPANIES
AND LIMITED PARTNERSHIPS
Pursuant to the provisions of Act 284, Public Acts of 1972, (profit
corporations), Act 23, Public Acts of 1993 (limited liability companies) and
Act 213, Public Acts of 1982 (limited partnerships), the undersigned entities
execute the following Certificate of Merger:
1. The Plan of Merger (Consolidation) is as follows:
BAC ACQUIRING CORP., A MICHIGAN CORPORATION (THE
"DISAPPEARING COMPANY"), WILL MERGE WITH AND INTO BLOOMFIELD
ACCEPTANCE COMPANY, L.L.C., A MICHIGAN LIMITED LIABILITY
COMPANY (THE "SURVIVING COMPANY"), WITH THE SURVIVING
COMPANY ASSUMING ALL OF THE LIABILITIES OF THE
DISAPPEARING COMPANY, THE PARENT COMPANY OF THE
DISAPPEARING COMPANY (THE "PARENT") RECEIVING A 100%
MEMBERSHIP INTEREST IN THE SURVIVING COMPANY, AND THE FORMER
MEMBERS OF THE SURVIVING COMPANY RECEIVING SHARES IN THE
PARENT.
a. The name of each constituent entity and its identification
number is:
BAC ACQUIRING CORP. 512447
BLOOMFIELD ACCEPTANCE COMPANY, L.L.C. LC1130
b. The name of the surviving (new) entity and its
identification number is:
BLOOMFIELD ACCEPTANCE COMPANY, L.L.C. LC1130
Corporations and Limited Liability Companies provide the
street address of the survivor's principal place of
business:
260 EAST BROWN ST., SUITE 300, BIRMINGHAM, MI 48009
2. (Complete only if an effective date is desired other than the
date of filing. The date must be no more than 90 days
after the receipt of this document in this office.) N/A
The merger (consolidation) shall be effective on the
____________ day of ________________________________, 19_____.
<PAGE> 2
<TABLE>
3. COMPLETE FOR PROFIT CORPORATIONS ONLY
For each constituent stock corporation, state:
<S> <C> <C> <C>
Designation and number of
outstanding shares in each Indicate class or series of Indicate class or series
Name of corporation class or series shares entitled to vote entitled to vote as a class
BAC ACQUIRING CORP. 100 SHARES COMMON STOCK COMMON STOCK ONLY
</TABLE>
If the number of shares is subject to change prior to the effective date of
the merger or consolidation, the manner in which the change may occur is as
follows: N/A
The manner and basis of converting shares are as follows: EACH SHARE OF THE
DISAPPEARING COMPANY SHALL BE CONVERTED INTO A ONE PERCENT (1%) MEMBERSHIP
INTEREST IN THE SURVIVING COMPANY.
The amendments to the Articles, or a restatement of the Articles, of the
surviving corporation to be effected by the merger are as follows: N/A
The plan of merger will be furnished by the surviving limited liability
company, on request and without cost, to any shareholder of any constituent
profit corporation.
The plan of merger was approved by the Board of Directors and the sole
shareholder of the following Michigan corporation(s) in accordance with Section
703a of the Act.
BAC ACQUIRING CORP.
________________________________________________________________________
____________________________________________________
BY: ___________________________________
JEFFREY P. JORISSEN, PRESIDENT
BAC ACQUIRING CORP.
4. COMPLETE FOR ANY LIMITED LIABILITY COMPANIES ONLY
Check one of the following
X There are no changes to be made to the articles of organization
of the surviving limited liability company.
___ The amendments to the Articles, or a restatement of the
Articles, of the surviving limited liability company to be effected
by the merger are as follows:
The manner and basis of converting the membership interests in each limited
liability company into membership interests in the surviving company, or into
cash or other property, or into a combination thereof are as follows: EACH OF
THE PRE-MERGER MEMBERS OF THE SURVIVING COMPANY WILL RECEIVE SHARES OF COMMON
STOCK OF THE PARENT COMPANY OF THE DISAPPEARING COMPANY, AS SET FORTH IN THE
AGREEMENT AND PLAN OF MERGER AMONG THE PARTIES.
The plan of merger was approved by the members of each constituent limited
liability company in accordance with section 702(1).
<PAGE> 3
The plan of merger was approved by the members of each domestic limited
liability company in accordance with section 705a(5) and by each constituent
business organization in the manner provided by the laws of the jurisdiction
in which it is organized.
Signed this __________ day of March, 1998
By
__________________________________________
(Signature)
Daniel E. Bober Manager
__________________________________________
(Type or Print Name and Title)
BLOOMFIELD ACCEPTANCE COMPANY, L.L.C.
__________________________________________
(Name of Limited Liability Company)
5. LIMITED PARTNERSHIPS - N/A
6. COMPLETE FOR CORPORATIONS AND LIMITED LIABILITY COMPANIES ONLY
The assumed names being transferred to continue for the remaining effective
period of the certificate of assumed name on file prior to the merger are:
N/A
New assumed names under which business is to be conducted are: N/A
Name of person or organization Preparer's name and business
remitting fees: telephone number:
JAFFE, RAITT, HEUER & WEISS, ERIC S. BRONSTEIN, ESQ.
PROFESSIONAL CORPORATION 313/961-8380
$150
<PAGE> 1
EXHIBIT 2.3
<TABLE>
<S><C>
C&S 550m (11/97)
- ------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES - CORPORATION, SECURITIES & LAND DEVELOPMENT BUREAU
- ------------------------------------------------------------------------------------------------------------------------------------
Date Received (FOR BUREAU USE ONLY)
- ---------------------------------------
- ------------------------------------------------------------------
Name EFFECTIVE DATE:
Eric S. Bronstein, Esq. Expiration date for new assumed names: N/A
Expiration date for transferred assumed names appear in Item 6
- ------------------------------------------------------------------
Address
One Woodward Ave., Suite 2400
- ------------------------------------------------------------------
City State Zip
Detroit MI 48226
- ------------------------------------------------------------------------------------------------------------------------------------
Document will be returned to the name and address you enter above.
CERTIFICATE OF MERGER
CROSS ENTITY MERGER FOR USE BY PROFIT CORPORATIONS, LIMITED LIABILITY COMPANIES
AND LIMITED PARTNERSHIPS
Pursuant to the provisions of Act 284, Public Acts of 1972, (profit
corporations), Act 23, Public Acts of 1993 (limited liability companies) and Act
213, Public Acts of 1982 (limited partnerships), the undersigned entities
execute the following Certificate of Merger:
- ------------------------------------------------------------------------------------------------------------------------------------
1. The Plan of Merger (Consolidation) is as follows:
BSC ACQUIRING CORP., A MICHIGAN CORPORATION (THE "DISAPPEARING
COMPANY"), WILL MERGE WITH AND INTO BLOOMFIELD SERVICING COMPANY,
L.L.C., A MICHIGAN LIMITED LIABILITY COMPANY (THE "SURVIVING COMPANY"),
WITH THE SURVIVING COMPANY ASSUMING ALL OF THE LIABILITIES OF THE
DISAPPEARING COMPANY, THE PARENT COMPANY OF THE DISAPPEARING COMPANY
(THE "PARENT") RECEIVING A 100% MEMBERSHIP INTEREST IN THE SURVIVING
COMPANY, AND THE FORMER MEMBERS OF THE SURVIVING COMPANY RECEIVING
SHARES IN THE PARENT.
a. The name of each constituent entity and its identification number is:
BSC ACQUIRING CORP. 516995
----------------------------------------------------------------------
BLOOMFIELD SERVICING COMPANY, L.L.C. B01933
----------------------------------------------------------------------
b. The name of the surviving (new) entity and its identification number
is:
BLOOMFIELD SERVICING COMPANY, L.L.C. B01933
----------------------------------------------------------------------
Corporations and Limited Liability Companies provide the street address
of the survivor's principal place of business:
260 EAST BROWN ST., SUITE 350, BIRMINGHAM, MI 48009
- ----------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
2. (Complete only if an effective date is desired other than the date of filing. The date must be no more than 90 days
after the receipt of this document in this office.) N/A
The merger (consolidation) shall be effective on the day of , 19 .
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
<TABLE>
<S><C>
3. COMPLETE FOR PROFIT CORPORATIONS ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
For each constituent stock corporation, state:
Designation and number of
outstanding shares in each Indicate class or series of Indicate class or series
Name of corporation class or series shares entitled to vote entitled to vote as a class
BSC ACQUIRING CORP. 100 SHARES COMMON STOCK COMMON STOCK ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
If the number of shares is subject to change prior to the effective date of the merger or consolidation, the manner in which
the change may occur is as follows: N/A
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
The manner and basis of converting shares are as follows: EACH SHARE OF THE
DISAPPEARING COMPANY SHALL BE CONVERTED INTO A ONE PERCENT (1%) MEMBERSHIP
INTEREST IN THE SURVIVING COMPANY.
The amendments to the Articles, or a restatement of the Articles, of the
surviving corporation to be effected by the merger are as follows: N/A
The plan of merger will be furnished by the surviving limited liability company,
on request and without cost, to any shareholder of any constituent profit
corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
The plan of merger was approved by the Board of Directors and the sole
shareholder of the following Michigan corporation(s) in accordance with Section
703a of the Act.
BSC ACQUIRING CORP.
- ----------------------------------------------------------------
BY:
-----------------------------------
JEFFREY P. JORISSEN, PRESIDENT
BSC ACQUIRING CORP.
- ------------------------------------------------------------------------------------------------------------------------------------
4. COMPLETE FOR ANY LIMITED LIABILITY COMPANIES ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
Check one of the following
X There are no changes to be made to the articles of organization of the
- surviving limited liability company.
The amendments to the Articles, or a restatement of the Articles, of
the surviving limited liability company to be effected by the merger
are as follows:
-
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
The manner and basis of converting the membership interests in each limited
liability company into membership interests in the surviving company, or into
cash or other property, or into a combination thereof are as follows: EACH OF
THE PRE-MERGER MEMBERS OF THE SURVIVING COMPANY WILL RECEIVE SHARES OF COMMON
STOCK OF THE PARENT COMPANY OF THE DISAPPEARING COMPANY, AS SET FORTH IN THE
AGREEMENT AND PLAN OF MERGER AMONG THE PARTIES.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
The plan of merger was approved by the members of each constituent limited
liability company in accordance with section 702(1).
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
<TABLE>
<S><C>
- ------------------------------------------------------------------------------------------------------------------------------------
The plan of merger was approved by the members of each domestic limited
liability company in accordance with section 705a(5) and by each constituent
business organization in the manner provided by the laws of the jurisdiction in
which it is organized.
- ------------------------------------------------------------------------------------------------------------------------------------
Signed this day of March, 1998
By
----------------------------------------------------------------------------------------------
(Signature)
Daniel E. Bober Manager
----------------------------------------------------------------------------------------------
(Type or Print Name and Title)
BLOOMFIELD SERVICING COMPANY, L.L.C.
----------------------------------------------------------------------------------------------
(Name of Limited Liability Company)
5. LIMITED PARTNERSHIPS - N/A
6. COMPLETE FOR CORPORATIONS AND LIMITED LIABILITY COMPANIES ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
The assumed names being transferred to continue for the remaining effective period of the certificate of assumed name on file
prior to the merger are: N/A
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
New assumed names under which business is to be conducted are: N/A
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Name of person or organization Preparer's name and business
remitting fees: telephone number:
JAFFE, RAITT, HEUER & WEISS, ERIC S. BRONSTEIN, ESQ.
PROFESSIONAL CORPORATION 313/961-8380
$150
</TABLE>
<PAGE> 1
EXHIBIT 2.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of March
4, 1998, by and among BLOOMFIELD ACCEPTANCE COMPANY, L.L.C., a Michigan limited
liability company ("BAC"), BLOOMFIELD SERVICING COMPANY, L.L.C., a Michigan
limited liability company ("BSC") (BAC and BSC shall together be referred to as
the "Subsidiaries"), BINGHAM FINANCIAL SERVICES CORPORATION, a Michigan
corporation ("Bingham"), and DANIEL E. BOBER (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive has been jointly employed by BAC and BSC;
WHEREAS, as of the date of this Agreement, the Subsidiaries have been
acquired by Bingham, and each has become a wholly-owned subsidiary of Bingham;
WHEREAS, Bingham and the Subsidiaries desire to continue the employment of
the Executive by the Subsidiaries, and the Executive desires to be employed by
the Subsidiaries, on the terms and subject to the conditions set forth below.
All rights and obligations of the Subsidiaries hereunder shall be joint and
several among BAC and BSC;
WHEREAS, Bingham has agreed to guarantee payment of the Subsidiaries'
obligations to the Executive under this Agreement and to provide certain stock
options as provided herein.
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, the parties agree as follows:
1. Employment.
(a) The Subsidiaries agree to employ the Executive and the Executive
accepts the employment, on the terms and subject to the conditions set forth
below. During the term of employment hereunder, the Executive shall serve as
the President of each of the Subsidiaries, and shall do and perform diligently
all such services, acts and things as are customarily done and performed by the
President of companies in similar business and in size to the Subsidiaries,
together with such other duties as may reasonably be requested from time to
time by the Managers of the Subsidiaries (the "Managers"), which duties shall
be consistent with the Executive's positions as set forth above.
(b) For service as an officer and employee of the Subsidiaries, the
Executive shall be entitled to the full protection of the applicable
indemnification provisions of the Articles of Organization and Operating
Agreements of the Subsidiaries, as they may be amended from time to time. The
Subsidiaries agree that the Executive will be named as an additional insured
under the Subsidiaries' Directors' and Officers' Errors and Omissions Insurance
during his employment hereunder.
2. Term of Employment.
Subject to the provisions for termination provided below, the term of the
Executive's employment under this Agreement shall commence on the date of this
Agreement and shall continue thereafter for a period of three (3) years.
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3. Devotion to the Subsidiaries' Business.
The Executive shall devote his entire productive time, ability and
attention to the business of the Subsidiaries during the term of this
Agreement; however, the expenditure of reasonable amounts of time to various
charitable and other community activities, or to the Executive's own, personal
investments, provided the amount of time so devoted does not materially impair,
detract or adversely affect the performance of the Executive's duties under
this Agreement, shall not be deemed a breach of this Agreement.
4. Compensation.
(a) During the term of this Agreement, the Subsidiaries shall pay or
provide, as the case may be, to the Executive the compensation and other
benefits and rights set forth in Sections 4, 5 and 6 of this Agreement.
(b) Base Compensation. As compensation for the services to be performed
hereafter, the Subsidiaries shall pay to the Executive, during his employment
hereunder, a base salary (the "Base Salary") payable in accordance with the
Subsidiaries' usual pay practices (and in any event no less frequently than
monthly) at the rate of One Hundred Fifty Thousand Dollars ($150,000.00) per
year.
(c) Annual Salary Increase. On January 1 of each year, commencing January
1, 1999, the Base Salary shall be increased by five percent (5%) of the Base
Salary for the immediately prior year or such greater increase as may be deemed
appropriate by the Managers of the Subsidiaries, in their sole discretion.
(d) Annuity Contribution. During the Executive's employment hereunder,
the Subsidiaries will contribute premiums toward the annuity plan of the
Executive's choice, with an aggregate maximum contribution by the Subsidiaries
of $25,000 per year.
(e) Bonus. The Managers shall prepare and adopt an executive bonus plan
(the "Bonus Plan") which shall be established for the payment of an incentive
bonus to the Executive based on the Subsidiaries achieving certain performance
criteria to be established by the Subsidiaries and the Executive, but in any
event to include the following terms:
(i) An incentive bonus opportunity of One Hundred Fifty
Thousand Dollars ($150,000.00) per year upon the attainment of
mutually agreed-upon, reasonable, planned objective financial
performance by the Subsidiaries; and
(ii) An incentive super-bonus opportunity of an amount to be
agreed upon between the Executive and the Subsidiaries, contingent
upon the attainment of mutually agreed-upon, reasonable, planned
objective financial performance by the Subsidiaries.
(f) Disability. During any period that the Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness
(the "Disability Period"), the Executive shall continue to receive his full
Base Salary, bonuses and other benefits at the rate in effect for such period
until his employment is terminated by the Subsidiaries pursuant to Section
8(b)(ii) hereof; provided, however, that payments so made to the Executive
during the Disability Period shall be reduced by the sum of the amounts, if
any, which were paid to the Executive at or prior to the time of any such
payment under disability benefit plans of the Subsidiaries.
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5. Benefits.
(a) Insurance. The Subsidiaries shall provide to the Executive life,
disability, medical, hospitalization and dental insurance for himself, his
spouse and eligible family members as may be determined by the Managers to be
consistent with industry standards.
(b) Benefit Plans. The Executive, at his election, may participate,
during his employment hereunder, in all retirement plans, 401(K) plans and
other benefit plans of the Subsidiaries generally available from time to time
to other executive employees of Bingham or the Subsidiaries and for which the
Executive qualifies under the terms of the plans (and nothing in this Agreement
shall or shall be deemed to in any way affect the Executive's right and
benefits under any such plan except as expressly provided herein). The
Executive shall also be entitled to participate in any equity, stock option or
other employee benefit plan that is generally available to senior executives,
as distinguished from general management, of Bingham or the Subsidiaries. The
Executive's participation in and benefits under any such plan shall be on the
terms and subject to the conditions specified in the governing document of the
particular plan.
(c) Annual Vacation. The Executive shall be entitled to four (4) weeks
vacation time each year without loss of compensation. The Executive may be
absent from his employment for vacation on dates to be mutually agreed upon by
the Subsidiaries and the Executive, and approval of the Subsidiaries shall not
be unreasonably withheld. In the event that the Executive is unable for any
reason to take the total amount of vacation time authorized herein during any
year, he may accrue such unused time and add it to the vacation time for any
following year. Upon any termination of this Agreement for any reason
whatsoever, accrued and unused vacation time shall be paid to the Executive
within ten (10) days of such termination based on the Base Salary in effect on
the date of such termination; provided, however, that no more than twenty (20)
days of accrued vacation time may be carried over at any time.
6. Reimbursement of Business Expenses.
The Subsidiaries shall reimburse the Executive or provide him with an
expense allowance during the term of this Agreement for travel, entertainment,
and other expenses reasonably and necessarily incurred by the Executive in
connection with the Subsidiaries' business. The Executive shall furnish such
documentation with respect to reimbursement to be paid hereunder as the
Subsidiaries shall reasonably request.
7. Payment in the Event of Death or Permanent Disability.
(a) In the event of the Executive's death or "permanent disability" (as
defined below) during the term of this Agreement, the Subsidiaries shall pay to
the Executive (or his successors and assigns in the event of his death) an
amount equal to two times the Executive's then effective per annum rate of Base
Salary, plus a pro rata portion of the incentive bonus applicable to the year
in which such death or permanent disability occurs, as such bonus is determined
under the Bonus Plan, less the sum of all amounts paid to the Executive from
any disability plan or policy of the Subsidiaries for any disability related to
the Executive's death or permanent disability.
(b) The pro rata portion of the incentive bonus described in Section 4(d)
shall be paid when and as provided in the Bonus Plan. The remainder of the
benefit to be paid pursuant to Section 4(d) shall be paid within ninety (90)
days after the date of death or permanent disability, as the case may be.
(c) Except as otherwise provided in Sections 7(a) and 7(b), in the event
of the Executive's death or permanent disability, the Executive's employment
hereunder shall terminate
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and the Executive shall be entitled to no further compensation or other
benefits under this Agreement, except as to that portion of any unpaid salary
and other benefits accrued and earned by him hereunder up to and including the
date of such death or permanent disability, as the case may be.
(d) For purposes of this Agreement, the Executive's "permanent disability"
shall be deemed to have occurred after one hundred eighty (180) consecutive
days during which the Executive, by reason of his physical or mental disability
or illness, shall have been unable to discharge his duties under this
Agreement. The date of permanent disability shall be such one hundred
eightieth (180th) day. In the event either the Subsidiaries or the Executive,
after receipt of notice of the Executive's permanent disability from the other,
dispute that the Executive's permanent disability shall have occurred, the
Executive shall promptly submit to a physical examination by the chief of
medicine of any major accredited hospital in Michigan and, unless such
physician shall issue his written statement to the effect that in his opinion,
based on his diagnosis, the Executive is capable of resuming his employment and
devoting his full time and energy to discharging his duties within thirty (30)
days after the date of such statement, such permanent disability shall be
deemed to have occurred.
8. Termination of Employment.
(a) Termination for Cause.
(i) The Subsidiaries shall have the right to terminate this Agreement
if
(A) the Executive commits acts or omissions constituting
active and deliberate dishonesty established by a final
judgment or actual receipt of an improper benefit or profit
in money, property or services, or
(B) if the Executive continuously fails to perform his
duties under this Agreement in any material manner and has
not cured such failure within 60 days following his receipt
of notice of such failure from the Subsidiaries specifying
how he has so failed to perform. The mere fact that the
Subsidiaries do not achieve Business Plan goals and/or the
Executive does not achieve Bonus Plan goals established under
this Agreement, shall not, in and of themselves, constitute
cause for termination of this Agreement.
(ii) The Subsidiaries may at their option terminate this Agreement
for the reasons stated in this section 8(a) by giving written notice of
termination to the Executive without prejudice to any other remedy to which
the Subsidiaries may be entitled at law, in equity, or under this Agreement.
(iii) The notice of termination required by section 8(a)(ii)
shall specify the ground for the termination and shall be supported by a
statement of all relevant facts.
(iv) Termination under this Section 8(a) shall be considered "for
cause" for the purposes of this Agreement.
(v) In the event of termination of this Agreement "for cause," or a
termination on account of the Executive voluntarily terminating his employment
hereunder (other than for "good reason" under Section 8(c) below), the
Executive shall be entitled to no further compensation or other benefits under
this Agreement, except as to that portion of any unpaid salary and other
benefits accrued and earned by him hereunder up to and including the effective
date of such termination.
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(b) Termination Without Cause.
(i) This Agreement shall be terminated upon the death of the Executive.
(ii) This Agreement shall be terminated upon the permanent disability
(as defined in Section 7(d)) of the Executive. Such termination shall be
effected by giving 10 days' written notice of termination to the Executive.
Termination pursuant to this provision shall not prejudice the Executive's
rights to continued compensation pursuant to Section 7 of this Agreement.
(iii) This Agreement may be terminated by either Executive or the
Subsidiaries at any time after the initial term on not less than sixty (60)
days prior written notice.
(iv) Termination under this Section 8(b) shall not be considered "for
cause" for the purposes of this Agreement.
(c) Termination for Good Reason. The Executive may terminate this
Agreement for any of the following reasons: (i) the Subsidiaries' material
breach of the Agreement, if the Subsidiaries have not cured such breach within
60 days following their receipt of written notice from the Executive's
specifying the breach; (ii) the assignment of the Executive without his consent
to a position, responsibilities or duties of a materially lesser status or
degree of responsibility than his position, responsibilities or duties upon the
commencement of his employment hereunder; (iii) the relocation of the
Subsidiaries' offices outside of the metropolitan Detroit, Michigan area
without the Executive's consent; or (iv) the requirement by the Subsidiaries
that the Executive be based anywhere other than the Subsidiaries principal
executive offices without the Executive's consent. Termination by the
Executive upon any of the foregoing bases shall be deemed a termination for
"good reason".
(d) Resignation of Executive. Upon any termination of this Agreement, the
Executive shall be deemed to have resigned from all offices and directorships
held by the Executive in the Subsidiaries.
(e) Payment on Termination. Notwithstanding any provision of this
Agreement, if the Subsidiaries terminate this Agreement without cause, other
than pursuant to Sections 8(b)(i) and 8(b)(ii), or if the Executive terminates
this Agreement for good reason under Section 8(c), the Subsidiaries shall pay
the Executive his Base Salary and any bonus and benefits accruing up to the
effective date of the termination, plus: $325,000 if the termination occurs
during the initial six (6) months of employment hereunder; or $250,000 if the
termination occurs during the term of this Agreement but not during the initial
six (6) months of employment.
9. Effect of the Subsidiaries' Merger, Transfer of Assets, or Dissolution.
In the event of any voluntary or involuntary dissolution of both of the
Subsidiaries resulting from either a merger or consolidation in which neither
of the Subsidiaries are the consolidated or surviving company, or a transfer of
all or substantially all of the assets of both of the Subsidiaries, pursuant to
which the Executive's employment under this Agreement is terminated, the
Subsidiaries shall pay to the Executive, immediately prior to such merger,
consolidation, or transfer of assets, an amount equal to the sum of (a) the
portion of any unpaid salary, a pro rata portion of the incentive bonus
applicable to the year in which the termination takes place and benefits
accrued and earned by the Executive hereunder, up to and including the
effective date of such change in control; and (b) the greater of (i) an amount
equal to two (2) years' Base Salary at the rate in effect on the date of such
termination; or (ii) the full Base Salary and other benefits (excluding
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any bonus) which would otherwise have been paid to the Executive for the
remainder of the term of this Agreement.
10. Stock Options. In the event of termination of the Executive's
employment under this Agreement for "cause", all stock options in Bingham or
other stock-based compensation awarded to the Executive shall lapse and be of
no further force or effect whatsoever in accordance with Bingham's 1997 Stock
Option Plan. In the event that the Subsidiaries terminate the Executive's
employment under this Agreement without "cause", or upon the death or permanent
disability of the Executive, or in the event of the termination of this
Agreement for "good reason" under Section 8(c) hereof, or upon the occurrence
of an event giving rise to the Executive's right of payment under Section 9
hereof, all stock options and other stock based compensation awarded to the
Executive shall become fully vested and immediately exercisable, provided,
however, that such options and other stock based compensation shall be
automatically forfeited upon the Executive's breach of any of the provisions of
Section 11 hereof. Any Stock Option Agreements between Bingham and the
Executive shall be amended to conform to the provisions of this Section 10.
11. Covenant Not To Compete and Confidentiality.
(a) The Executive acknowledges the Subsidiaries' reliance and expectation
of the Executive's continued commitment to performance of his duties and
responsibilities under this Agreement. In light of such reliance and
expectation on the part of the Subsidiaries, the Executive agrees that:
(i) for a period commencing on the date of this Agreement and
ending upon the expiration of the Executive's employment under
this Agreement for any reason, the Executive shall not, directly
or indirectly, engage in, or have an interest in or be associated
with (whether as an officer, director, stockholder, partner,
associate, employee, consultant, owner or otherwise) any
corporation, firm or enterprise which is engaged in any business
which is materially similar to or which is competitive with the
business then or at any time during the term of this Agreement
conducted or actively proposed to be conducted by the
Subsidiaries, or any company owned or controlled by Bingham or
under common control with Bingham or the Subsidiaries
("Affiliate"), anywhere within the continental United States or
Canada (the "Business"); provided, however, that the Executive
shall be permitted to make passive investments in real estate,
active investments in real estate that do not interfere or
conflict with the performance of the Executive's duties or
directly compete with the Business, and passive investments in the
stock of any publicly traded business (including a competitive
business), so long as the stock investment in any competitive
business does not rise above one percent (1%) of the outstanding
shares of such business;
(ii) for a two year period commencing upon the termination
for any reason of Executive's employment under this Agreement, the
Executive shall not, in the continental United States or Canada,
engage in the Business;
(iii) the Executive will not at any time, for so long as any
Confidential Information (as defined below) shall remain
confidential or otherwise remain wholly or partially protectable,
either during the term of this Agreement or thereafter, use or
disclose, directly or indirectly, to any person outside of the
Subsidiaries or any Affiliate any Confidential Information;
(iv) promptly upon the termination of this Agreement for any
reason, the Executive (or in the event of the Executive's death,
his personal
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representative) shall return to the Subsidiaries any and all
copies (whether prepared by or at the direction of the
Subsidiaries or the Executive) of all records, drawings,
materials, memoranda and other data constituting or pertaining to
Confidential Information;
(v) for a period commencing on the date of this Agreement and
ending upon the expiration of one (1) year from the termination of
this Agreement for any reason, the Executive shall not directly or
indirectly divert, or by aid to others, do anything which would
tend to divert, from the Subsidiaries or any Affiliate any trade
or business with any customer or supplier with whom the Executive
had any contact or association during the term of the Executive's
employment with the Subsidiaries or with any party whose identity
or potential as a customer or supplier was confidential or learned
by the Executive during his employment by the Subsidiaries; and
(vi) for a period commencing on the date of this Agreement
and ending upon the expiration of one (1) year from the
termination of this Agreement for any reason, the Executive shall
not, either directly or indirectly, induce or attempt to induce
any person with whom the Executive was acquainted while in the
Subsidiaries' employ to leave the employment of the Subsidiaries
or any of the Affiliates.
As used in this Agreement, the term "Confidential Information" shall mean
all business information of any nature and in any form which at the time or
times concerned is not generally known or available to those persons engaged in
business similar to that conducted or contemplated by the Subsidiaries or any
Affiliate (other than by the act or acts of an employee not authorized by the
Subsidiaries to disclose such information) and which relates to any one or more
of the aspects of the present or past business of the Subsidiaries or any of
the Affiliates or any of their respective predecessors, including, without
limitation, patents and patent applications, inventions and improvements
(whether or not patentable), development projects, policies, processes,
formulas, techniques, know-how, and other facts relating to sales, advertising,
promotions, financial matters, customers, customer lists, customer purchases or
requirements, and other trade secrets.
(b) The Executive agrees and understands that the remedy at law for any
breach by him of this Section 11 will be inadequate and that the damages
flowing from such breach are not readily susceptible to being measured in
monetary terms. Accordingly, it is acknowledged that, upon adequate proof of
the Executive's violation of any legally enforceable provision of this Section
11, the Subsidiaries shall be entitled to immediate injunctive relief and may
obtain a temporary order restraining any threatened or further breach. Nothing
in this Section 11 shall be deemed to limit the Subsidiaries' remedies at law
or in equity for any breach by the Executive of any of the provisions of this
Section 11 which may be pursued or availed of by the Subsidiaries.
12. No Conflicting Agreements. The Executive represents and warrants
that he is not a party to any agreements, contracts, understandings or
arrangements, whether written or oral, in effect which would prevent him from
rendering exclusive services to the Subsidiaries during the term hereof, and
that he has not made and will not make any commitment to do any act in conflict
with this Agreement.
13. Arbitration. Any dispute or controversy arising out of or relating to
this Agreement shall be settled finally and exclusively by arbitration in the
State of Michigan in accordance with the rules of the American Arbitration
Association then in effect. Such arbitration shall be conducted by an
arbitrator(s) appointed by the American Arbitration
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Association in accordance with its rules and any finding by such arbitrator(s)
shall be final and binding upon the parties. Judgment upon any award rendered
by the arbitrator(s) may be entered in any court having jurisdiction thereof,
and the parties consent to the jurisdiction of the Oakland County, Michigan
Circuit Court for this purpose. Nothing contained in this Section 13 shall be
construed to preclude the Subsidiaries from obtaining injunctive or other
equitable relief to secure specific performance or to otherwise prevent a
breach or contemplated breach of this Agreement by the Executive as provided in
Section 11 hereof.
14. Notice. All notices, requests, consents and other communications,
required or permitted to be given hereunder to be given under this Agreement
shall be personally delivered in writing or shall have been deemed duly given
when received after it is posted in the United States mail, postage prepaid,
registered or certified, return receipt requested addressed as follows:
If to the Subsidiaries:
Bloomfield Acceptance Company and
Bloomfield Servicing Company
c/o Bingham Financial Services Corporation
31700 Middlebelt Road, Suite 125
Farmington Hills, Michigan 48334
Attn: Jeffrey P. Jorissen
If to the Executive:
Daniel E. Bober
260 East Brown Street, Suite 100
Birmingham, Michigan 48009
In all events, with a copy to:
Jaffe, Raitt, Heuer & Weiss,
Professional Corporation
One Woodward Avenue, Suite 2400
Detroit, Michigan 48226
Attn: Arthur A. Weiss
15. Guarantee by Bingham. Following a default by the Subsidiaries of
their obligation to make any payment to the Executive in accordance with the
terms of this Agreement, Bingham agrees that it shall make such payment to the
Executive in satisfaction of such obligation, provided, that in no event shall
Bingham be liable for or obligated to make any payment to the Executive unless
and until the Subsidiaries have first defaulted in fulfilling such obligation.
16. Miscellaneous.
(a) The provisions of this Agreement are severable and if any one or more
provisions may be determined to be illegal or otherwise unenforceable, in whole
or in part, the remaining provisions and any partially unenforceable provision
to the extent enforceable in any jurisdiction nevertheless shall be binding and
enforceable.
(b) The rights and obligations of the Subsidiaries under this Agreement
shall inure to the benefit of, and shall be binding on, the Subsidiaries and
their respective successors and assigns, and the rights and obligations (other
than obligations to perform services) of the
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Executive under this Agreement shall inure to the benefit of, and shall be
binding upon, the Executive and his heirs, personal representatives and
assigns. This Agreement is personal to Executive and he may not assign his
obligations under this Agreement in any manner whatsoever.
(c) The failure of any party to enforce any provision or protections of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions as to any future violations thereof, nor prevent that
party thereafter from enforcing each and every other provision of this
Agreement. The rights granted the parties herein are cumulative and the waiver
of any single remedy shall not constitute a waiver of such party's right to
assert all other legal remedies available to it under the circumstances.
(d) This Agreement supersedes all agreements and understandings between
the parties and may not be modified or terminated orally. No modification,
termination or attempted waiver shall be valid unless in writing and signed by
the party against whom the same is sought to be enforced.
(e) This Agreement shall be governed by and construed according to the
laws of the State of Michigan.
(f) Captions and section headings used herein are for convenience and are
not a part of this Agreement and shall not be used in construing it.
(g) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement on
the date first written above.
SUBSIDIARIES: EXECUTIVE:
BLOOMFIELD ACCEPTANCE COMPANY, L.L.C.,
a Michigan limited liability company
By: /s/ Jeffrey P. Jorissen /s/ DANIEL E. BOBER
---------------------------------- ----------------------------------------
Jeffrey P. Jorissen, Manager DANIEL E. BOBER
BLOOMFIELD SERVICING COMPANY, L.L.C., BINGHAM:
a Michigan limited liability company
BINGHAM FINANCIAL SERVICES CORPORATION,
a Michigan corporation,
By: /s/ Jeffrey P. Jorissen as to Sections 10 and 15 only
----------------------------------
Jeffrey P. Jorissen, Manager
By: /s/ Jeffrey P. Jorissen
-----------------------------------
Jeffrey P. Jorissen, its President
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EXHIBIT 2.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of March
4, 1998, by and among BLOOMFIELD ACCEPTANCE COMPANY, L.L.C., a Michigan limited
liability company ("BAC"), BLOOMFIELD SERVICING COMPANY, L.L.C., a Michigan
limited liability company ("BSC") (BAC and BSC shall together be referred to as
the "Subsidiaries"), BINGHAM FINANCIAL SERVICES CORPORATION, a Michigan
corporation ("Bingham"), and CREIGHTON J. WEBER (the "Executive").
WITNESSETH:
WHEREAS, the Executive has been jointly employed by BAC and BSC;
WHEREAS, as of the date of this Agreement, the Subsidiaries have been
acquired by Bingham, and each has become a wholly-owned subsidiary of Bingham;
WHEREAS, Bingham and the Subsidiaries desire to continue the employment of
the Executive by the Subsidiaries, and the Executive desires to be employed by
the Subsidiaries, on the terms and subject to the conditions set forth below.
All rights and obligations of the Subsidiaries hereunder shall be joint and
several among BAC and BSC;
WHEREAS, Bingham has agreed to guarantee payment of the Subsidiaries'
obligations to the Executive under this Agreement and to provide certain stock
options as provided herein.
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, the parties agree as follows:
1. Employment.
(a) The Subsidiaries agree to employ the Executive and the Executive
accepts the employment, on the terms and subject to the conditions set forth
below. During the term of employment hereunder, the Executive shall serve as
the Executive Vice President of each of the Subsidiaries, and shall do and
perform diligently all such services, acts and things as are customarily done
and performed by the Executive Vice President of companies in similar business
and in size to the Subsidiaries, together with such other duties as may
reasonably be requested from time to time by the Managers of the Subsidiaries
(the "Managers"), which duties shall be consistent with the Executive's
positions as set forth above.
(b) For service as an officer and employee of the Subsidiaries, the
Executive shall be entitled to the full protection of the applicable
indemnification provisions of the Articles of Organization and Operating
Agreements of the Subsidiaries, as they may be amended from time to time. The
Subsidiaries agree that the Executive will be named as an additional insured
under the Subsidiaries' Directors' and Officers' Errors and Omissions Insurance
during his employment hereunder.
2. Term of Employment.
Subject to the provisions for termination provided below, the term of the
Executive's employment under this Agreement shall commence on the date of this
Agreement and shall continue thereafter for a period of three (3) years.
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3. Devotion to the Subsidiaries' Business.
The Executive shall devote his entire productive time, ability and
attention to the business of the Subsidiaries during the term of this
Agreement; however, the expenditure of reasonable amounts of time to various
charitable and other community activities, or to the Executive's own, personal
investments, provided the amount of time so devoted does not materially impair,
detract or adversely affect the performance of the Executive's duties under
this Agreement, shall not be deemed a breach of this Agreement.
4. Compensation.
(a) During the term of this Agreement, the Subsidiaries shall pay or
provide, as the case may be, to the Executive the compensation and other
benefits and rights set forth in Sections 4, 5 and 6 of this Agreement.
(b) Base Compensation. As compensation for the services to be performed
hereafter, the Subsidiaries shall pay to the Executive, during his employment
hereunder, a base salary (the "Base Salary") payable in accordance with the
Subsidiaries' usual pay practices (and in any event no less frequently than
monthly) at the rate of One Hundred Fifty Thousand Dollars ($150,000.00) per
year.
(c) Annual Salary Increase. On January 1 of each year, commencing January
1, 1999, the Base Salary shall be increased by five percent (5%) of the Base
Salary for the immediately prior year or such greater increase as may be deemed
appropriate by the Managers of the Subsidiaries, in their sole discretion.
(d) Annuity Contribution. During the Executive's employment hereunder,
the Subsidiaries will contribute premiums toward the annuity plan of the
Executive's choice, with an aggregate maximum contribution by the Subsidiaries
of $25,000 per year.
(e) Bonus. The Managers shall prepare and adopt an executive bonus plan
(the "Bonus Plan") which shall be established for the payment of an incentive
bonus to the Executive based on the Subsidiaries achieving certain performance
criteria to be established by the Subsidiaries and the Executive, but in any
event to include the following terms:
(i) An incentive bonus opportunity of One Hundred Fifty
Thousand Dollars ($150,000.00) per year upon the attainment of mutually
agreed-upon, reasonable, planned objective financial performance by the
Subsidiaries; and
(ii) An incentive super-bonus opportunity of an amount to be agreed
upon between the Executive and the Subsidiaries, contingent upon the
attainment of mutually agreed-upon, reasonable, planned objective financial
performance by the Subsidiaries.
(f) Disability. During any period that the Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness
(the "Disability Period"), the Executive shall continue to receive his full
Base Salary, bonuses and other benefits at the rate in effect for such period
until his employment is terminated by the Subsidiaries pursuant to Section
8(b)(ii) hereof; provided, however, that payments so made to the Executive
during the Disability Period shall be reduced by the sum of the amounts, if
any, which were paid to the Executive at or prior to the time of any such
payment under disability benefit plans of the Subsidiaries.
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<PAGE> 3
5. Benefits.
(a) Insurance. The Subsidiaries shall provide to the Executive life,
disability, medical, hospitalization and dental insurance for himself, his
spouse and eligible family members as may be determined by the Managers to be
consistent with industry standards.
(b) Benefit Plans. The Executive, at his election, may participate,
during his employment hereunder, in all retirement plans, 401(K) plans and
other benefit plans of the Subsidiaries generally available from time to time
to other executive employees of Bingham or the Subsidiaries and for which the
Executive qualifies under the terms of the plans (and nothing in this Agreement
shall or shall be deemed to in any way affect the Executive's right and
benefits under any such plan except as expressly provided herein). The
Executive shall also be entitled to participate in any equity, stock option or
other employee benefit plan that is generally available to senior executives,
as distinguished from general management, of Bingham or the Subsidiaries. The
Executive's participation in and benefits under any such plan shall be on the
terms and subject to the conditions specified in the governing document of the
particular plan.
(c) Annual Vacation. The Executive shall be entitled to four (4) weeks
vacation time each year without loss of compensation. The Executive may be
absent from his employment for vacation on dates to be mutually agreed upon by
the Subsidiaries and the Executive, and approval of the Subsidiaries shall not
be unreasonably withheld. In the event that the Executive is unable for any
reason to take the total amount of vacation time authorized herein during any
year, he may accrue such unused time and add it to the vacation time for any
following year. Upon any termination of this Agreement for any reason
whatsoever, accrued and unused vacation time shall be paid to the Executive
within ten (10) days of such termination based on the Base Salary in effect on
the date of such termination; provided, however, that no more than twenty (20)
days of accrued vacation time may be carried over at any time.
6. Reimbursement of Business Expenses.
The Subsidiaries shall reimburse the Executive or provide him with an
expense allowance during the term of this Agreement for travel, entertainment,
and other expenses reasonably and necessarily incurred by the Executive in
connection with the Subsidiaries' business. The Executive shall furnish such
documentation with respect to reimbursement to be paid hereunder as the
Subsidiaries shall reasonably request.
7. Payment in the Event of Death or Permanent Disability.
(a) In the event of the Executive's death or "permanent disability" (as
defined below) during the term of this Agreement, the Subsidiaries shall pay to
the Executive (or his successors and assigns in the event of his death) an
amount equal to two times the Executive's then effective per annum rate of Base
Salary, plus a pro rata portion of the incentive bonus applicable to the year
in which such death or permanent disability occurs, as such bonus is determined
under the Bonus Plan, less the sum of all amounts paid to the Executive from
any disability plan or policy of the Subsidiaries for any disability related to
the Executive's death or permanent disability.
(b) The pro rata portion of the incentive bonus described in Section
4(d) shall be paid when and as provided in the Bonus Plan. The remainder of the
benefit to be paid pursuant to Section 4(d) shall be paid within ninety (90)
days after the date of death or permanent disability, as the case may be.
(c) Except as otherwise provided in Sections 7(a) and 7(b), in the event
of the Executive's death or permanent disability, the Executive's employment
hereunder shall terminate
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and the Executive shall be entitled to no further compensation or other
benefits under this Agreement, except as to that portion of any unpaid salary
and other benefits accrued and earned by him hereunder up to and including the
date of such death or permanent disability, as the case may be.
(d) For purposes of this Agreement, the Executive's "permanent disability"
shall be deemed to have occurred after one hundred eighty (180) consecutive
days during which the Executive, by reason of his physical or mental disability
or illness, shall have been unable to discharge his duties under this
Agreement. The date of permanent disability shall be such one hundred
eightieth (180th) day. In the event either the Subsidiaries or the Executive,
after receipt of notice of the Executive's permanent disability from the other,
dispute that the Executive's permanent disability shall have occurred, the
Executive shall promptly submit to a physical examination by the chief of
medicine of any major accredited hospital in Michigan and, unless such
physician shall issue his written statement to the effect that in his opinion,
based on his diagnosis, the Executive is capable of resuming his employment and
devoting his full time and energy to discharging his duties within thirty (30)
days after the date of such statement, such permanent disability shall be
deemed to have occurred.
8. Termination of Employment.
(a) Termination for Cause.
(i) The Subsidiaries shall have the right to terminate this Agreement
if
(A) the Executive commits acts or omissions constituting active
and deliberate dishonesty established by a final judgment or actual
receipt of an improper benefit or profit in money, property or
services, or
(B) if the Executive continuously fails to perform his duties
under this Agreement in any material manner and has not cured such
failure within 60 days following his receipt of notice of such failure
from the Subsidiaries specifying how he has so failed to perform. The
mere fact that the Subsidiaries do not achieve Business Plan goals
and/or the Executive does not achieve Bonus Plan goals established
under this Agreement, shall not, in and of themselves, constitute
cause for termination of this Agreement.
(ii) The Subsidiaries may at their option terminate this Agreement for
the reasons stated in this section 8(a) by giving written notice of termination
to the Executive without prejudice to any other remedy to which the Subsidiaries
may be entitled at law, in equity, or under this Agreement.
(iii) The notice of termination required by section 8(a)(ii) shall
specify the ground for the termination and shall be supported by a statement
of all relevant facts.
(iv) Termination under this Section 8(a) shall be considered "for
cause" for the purposes of this Agreement.
(v) In the event of termination of this Agreement "for cause," or a
termination on account of the Executive voluntarily terminating his employment
hereunder (other than for "good reason" under Section 8(c) below), the
Executive shall be entitled to no further compensation or other benefits under
this Agreement, except as to that portion of any unpaid salary and other
benefits accrued and earned by him hereunder up to and including the effective
date of such termination.
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(b) Termination Without Cause.
(i) This Agreement shall be terminated upon the death of the Executive.
(ii) This Agreement shall be terminated upon the permanent disability
(as defined in Section 7(d)) of the Executive. Such termination shall be
effected by giving 10 days' written notice of termination to the Executive.
Termination pursuant to this provision shall not prejudice the Executive's
rights to continued compensation pursuant to Section 7 of this Agreement.
(iii) This Agreement may be terminated by either Executive or the
Subsidiaries at any time after the initial term on not less than sixty (60)
days prior written notice.
(iv) Termination under this Section 8(b) shall not be considered "for
cause" for the purposes of this Agreement.
(c) Termination for Good Reason. The Executive may terminate this
Agreement for any of the following reasons: (i) the Subsidiaries' material
breach of the Agreement, if the Subsidiaries have not cured such breach within
60 days following their receipt of written notice from the Executive's
specifying the breach; (ii) the assignment of the Executive without his consent
to a position, responsibilities or duties of a materially lesser status or
degree of responsibility than his position, responsibilities or duties upon the
commencement of his employment hereunder; (iii) the relocation of the
Subsidiaries' offices outside of the metropolitan Detroit, Michigan area
without the Executive's consent; or (iv) the requirement by the Subsidiaries
that the Executive be based anywhere other than the Subsidiaries principal
executive offices without the Executive's consent. Termination by the
Executive upon any of the foregoing bases shall be deemed a termination for
"good reason".
(d) Resignation of Executive. Upon any termination of this Agreement, the
Executive shall be deemed to have resigned from all offices and directorships
held by the Executive in the Subsidiaries.
(e) Payment on Termination. Notwithstanding any provision of this
Agreement, if the Subsidiaries terminate this Agreement without cause, other
than pursuant to Sections 8(b)(i) and 8(b)(ii), or if the Executive terminates
this Agreement for good reason under Section 8(c), the Subsidiaries shall pay
the Executive his Base Salary and any bonus and benefits accruing up to the
effective date of the termination, plus: $325,000 if the termination occurs
during the initial six (6) months of employment hereunder; or $250,000 if the
termination occurs during the term of this Agreement but not during the initial
six (6) months of employment.
9. Effect of the Subsidiaries' Merger, Transfer of Assets, or Dissolution.
In the event of any voluntary or involuntary dissolution of both of the
Subsidiaries resulting from either a merger or consolidation in which neither
of the Subsidiaries are the consolidated or surviving company, or a transfer of
all or substantially all of the assets of both of the Subsidiaries, pursuant to
which the Executive's employment under this Agreement is terminated, the
Subsidiaries shall pay to the Executive, immediately prior to such merger,
consolidation, or transfer of assets, an amount equal to the sum of (a) the
portion of any unpaid salary, a pro rata portion of the incentive bonus
applicable to the year in which the termination takes place and benefits
accrued and earned by the Executive hereunder, up to and including the
effective date of such change in control; and (b) the greater of (i) an amount
equal to two (2) years' Base Salary at the rate in effect on the date of such
termination; or (ii) the full Base Salary and other benefits (excluding
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<PAGE> 6
any bonus) which would otherwise have been paid to the Executive for the
remainder of the term of this Agreement.
10. Stock Options. In the event of termination of the Executive's
employment under this Agreement for "cause", all stock options in Bingham or
other stock-based compensation awarded to the Executive shall lapse and be of
no further force or effect whatsoever in accordance with Bingham's 1997 Stock
Option Plan. In the event that the Subsidiaries terminate the Executive's
employment under this Agreement without "cause", or upon the death or permanent
disability of the Executive, or in the event of the termination of this
Agreement for "good reason" under Section 8(c) hereof, or upon the occurrence
of an event giving rise to the Executive's right of payment under Section 9
hereof, all stock options and other stock based compensation awarded to the
Executive shall become fully vested and immediately exercisable, provided,
however, that such options and other stock based compensation shall be
automatically forfeited upon the Executive's breach of any of the provisions of
Section 11 hereof. Any Stock Option Agreements between Bingham and the
Executive shall be amended to conform to the provisions of this Section 10.
11. Covenant Not To Compete and Confidentiality.
(a) The Executive acknowledges the Subsidiaries' reliance and
expectation of the Executive's continued commitment to performance of his
duties and responsibilities under this Agreement. In light of such reliance and
expectation on the part of the Subsidiaries, the Executive agrees that:
(i) for a period commencing on the date of this Agreement and
ending upon the expiration of the Executive's employment under
this Agreement for any reason, the Executive shall not, directly
or indirectly, engage in, or have an interest in or be associated
with (whether as an officer, director, stockholder, partner,
associate, employee, consultant, owner or otherwise) any
corporation, firm or enterprise which is engaged in any business
which is materially similar to or which is competitive with the
business then or at any time during the term of this Agreement
conducted or actively proposed to be conducted by the
Subsidiaries, or any company owned or controlled by Bingham or
under common control with Bingham or the Subsidiaries
("Affiliate"), anywhere within the continental United States or
Canada (the "Business"); provided, however, that the Executive
shall be permitted to make passive investments in real estate,
active investments in real estate that do not interfere or
conflict with the performance of the Executive's duties or
directly compete with the Business, and passive investments in the
stock of any publicly traded business (including a competitive
business), so long as the stock investment in any competitive
business does not rise above one percent (1%) of the outstanding
shares of such business;
(ii) for a two year period commencing upon the termination
for any reason of Executive's employment under this Agreement, the
Executive shall not, in the continental United States or Canada,
engage in the Business;
(iii) the Executive will not at any time, for so long as any
Confidential Information (as defined below) shall remain
confidential or otherwise remain wholly or partially protectable,
either during the term of this Agreement or thereafter, use or
disclose, directly or indirectly, to any person outside of the
Subsidiaries or any Affiliate any Confidential Information;
(iv) promptly upon the termination of this Agreement for any
reason, the Executive (or in the event of the Executive's death,
his personal
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representative) shall return to the Subsidiaries any and all
copies (whether prepared by or at the direction of the
Subsidiaries or the Executive) of all records, drawings,
materials, memoranda and other data constituting or pertaining to
Confidential Information;
(v) for a period commencing on the date of this Agreement and
ending upon the expiration of one (1) year from the termination of
this Agreement for any reason, the Executive shall not directly or
indirectly divert, or by aid to others, do anything which would
tend to divert, from the Subsidiaries or any Affiliate any trade
or business with any customer or supplier with whom the Executive
had any contact or association during the term of the Executive's
employment with the Subsidiaries or with any party whose identity
or potential as a customer or supplier was confidential or learned
by the Executive during his employment by the Subsidiaries; and
(vi) for a period commencing on the date of this Agreement
and ending upon the expiration of one (1) year from the
termination of this Agreement for any reason, the Executive shall
not, either directly or indirectly, induce or attempt to induce
any person with whom the Executive was acquainted while in the
Subsidiaries' employ to leave the employment of the Subsidiaries
or any of the Affiliates.
As used in this Agreement, the term "Confidential Information" shall mean
all business information of any nature and in any form which at the time or
times concerned is not generally known or available to those persons engaged in
business similar to that conducted or contemplated by the Subsidiaries or any
Affiliate (other than by the act or acts of an employee not authorized by the
Subsidiaries to disclose such information) and which relates to any one or more
of the aspects of the present or past business of the Subsidiaries or any of
the Affiliates or any of their respective predecessors, including, without
limitation, patents and patent applications, inventions and improvements
(whether or not patentable), development projects, policies, processes,
formulas, techniques, know-how, and other facts relating to sales, advertising,
promotions, financial matters, customers, customer lists, customer purchases or
requirements, and other trade secrets.
(b) The Executive agrees and understands that the remedy at law for any
breach by him of this Section 11 will be inadequate and that the damages
flowing from such breach are not readily susceptible to being measured in
monetary terms. Accordingly, it is acknowledged that, upon adequate proof of
the Executive's violation of any legally enforceable provision of this Section
11, the Subsidiaries shall be entitled to immediate injunctive relief and may
obtain a temporary order restraining any threatened or further breach. Nothing
in this Section 11 shall be deemed to limit the Subsidiaries' remedies at law
or in equity for any breach by the Executive of any of the provisions of this
Section 11 which may be pursued or availed of by the Subsidiaries.
12. No Conflicting Agreements. The Executive represents and warrants
that he is not a party to any agreements, contracts, understandings or
arrangements, whether written or oral, in effect which would prevent him from
rendering exclusive services to the Subsidiaries during the term hereof, and
that he has not made and will not make any commitment to do any act in conflict
with this Agreement.
13. Arbitration. Any dispute or controversy arising out of or relating to
this Agreement shall be settled finally and exclusively by arbitration in the
State of Michigan in accordance with the rules of the American Arbitration
Association then in effect. Such arbitration shall be conducted by an
arbitrator(s) appointed by the American Arbitration
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Association in accordance with its rules and any finding by such arbitrator(s)
shall be final and binding upon the parties. Judgment upon any award rendered
by the arbitrator(s) may be entered in any court having jurisdiction thereof,
and the parties consent to the jurisdiction of the Oakland County, Michigan
Circuit Court for this purpose. Nothing contained in this Section 13 shall be
construed to preclude the Subsidiaries from obtaining injunctive or other
equitable relief to secure specific performance or to otherwise prevent a
breach or contemplated breach of this Agreement by the Executive as provided in
Section 11 hereof.
14. Notice. All notices, requests, consents and other communications,
required or permitted to be given hereunder to be given under this Agreement
shall be personally delivered in writing or shall have been deemed duly given
when received after it is posted in the United States mail, postage prepaid,
registered or certified, return receipt requested addressed as follows:
If to the Subsidiaries:
Bloomfield Acceptance Company and
Bloomfield Servicing Company
c/o Bingham Financial Services Corporation
31700 Middlebelt Road, Suite 125
Farmington Hills, Michigan 48334
Attn: Jeffrey P. Jorissen
If to the Executive:
Creighton J. Weber
260 East Brown Street, Suite 300
Birmingham, Michigan 48009
In all events, with a copy to:
Jaffe, Raitt, Heuer & Weiss,
Professional Corporation
One Woodward Avenue, Suite 2400
Detroit, Michigan 48226
Attn: Arthur A. Weiss
15. Guarantee by Bingham. Following a default by the Subsidiaries of
their obligation to make any payment to the Executive in accordance with the
terms of this Agreement, Bingham agrees that it shall make such payment to the
Executive in satisfaction of such obligation, provided, that in no event shall
Bingham be liable for or obligated to make any payment to the Executive unless
and until the Subsidiaries have first defaulted in fulfilling such obligation.
16. Miscellaneous.
(a) The provisions of this Agreement are severable and if any one or
more provisions may be determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions and any partially unenforceable
provision to the extent enforceable in any jurisdiction nevertheless shall be
binding and enforceable.
(b) The rights and obligations of the Subsidiaries under this Agreement
shall inure to the benefit of, and shall be binding on, the Subsidiaries and
their respective successors and assigns, and the rights and obligations (other
than obligations to perform services) of the
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Executive under this Agreement shall inure to the benefit of, and shall be
binding upon, the Executive and his heirs, personal representatives and
assigns. This Agreement is personal to Executive and he may not assign his
obligations under this Agreement in any manner whatsoever.
(c) The failure of any party to enforce any provision or protections of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions as to any future violations thereof, nor prevent that
party thereafter from enforcing each and every other provision of this
Agreement. The rights granted the parties herein are cumulative and the waiver
of any single remedy shall not constitute a waiver of such party's right to
assert all other legal remedies available to it under the circumstances.
(d) This Agreement supersedes all agreements and understandings between
the parties and may not be modified or terminated orally. No modification,
termination or attempted waiver shall be valid unless in writing and signed by
the party against whom the same is sought to be enforced.
(e) This Agreement shall be governed by and construed according to the
laws of the State of Michigan.
(f) Captions and section headings used herein are for convenience and
are not a part of this Agreement and shall not be used in construing it.
(g) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement on
the date first written above.
SUBSIDIARIES: EXECUTIVE:
BLOOMFIELD ACCEPTANCE COMPANY, L.L.C.,
a Michigan limited liability company
By:/s/ Jeffrey P. Jorissen /s/ Creighton J. Weber
------------------------------- -----------------------------------
Jeffrey P. Jorissen, Manager CREIGHTON J. WEBER
BLOOMFIELD SERVICING COMPANY, L.L.C., BINGHAM:
a Michigan limited liability company
BINGHAM FINANCIAL SERVICES
CORPORATION,
a Michigan corporation,
By: /s/ Jeffrey P. Jorissen as to Sections 10 and 15 only
--------------------------------
Jeffrey P. Jorissen, Manager
By: /s/ Jeffrey P. Jorissen
--------------------------------
Jeffrey P. Jorissen, its President
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EXHIBIT 2.6
BLOOMFIELD SHAREHOLDERS AGREEMENT
THIS BLOOMFIELD SHAREHOLDERS AGREEMENT (this "AGREEMENT") is made and
entered into effective as of March 5, 1998, by and among Daniel E. Bober
("BOBER"), Creighton J. Weber ("WEBER"), Joseph Drolshagen, James Bennett,
Deborah Jenkins, Patricia Jorgensen, Lynne Baszczuk, James A. Simpson,
Katheryne L. Zelenock and Jeffrey C. Urban (each of whom is referred
individually as a "SHAREHOLDER" and collectively as the "SHAREHOLDERS").
RECITALS
The Shareholders are the owners of certain stock (the "STOCK") of Bingham
Financial Services Corporation ("BINGHAM") issued to each of them in connection
with the merger of Bloomfield Acceptance Company, L.L.C. ("BAC") and Bloomfield
Servicing Company, L.L.C. ("BSC"), respectively, with BAC Acquiring Corp., a
Michigan corporation, and BSC Acquiring Corp., a Michigan corporation,
respectively (each of which was a wholly owned subsidiary of Bingham). The
merger was effected contemporaneously with the execution and delivery of this
Agreement, under and pursuant to an Agreement and Plan of Merger (the "MERGER
AGREEMENT"), dated as of February 17, 1998, by and among all of the foregoing
parties.
Immediately prior to the execution of this Agreement, the Shareholders
have joined in the execution of a Shareholders Agreement (the "BINGHAM
SHAREHOLDERS AGREEMENT") with Bingham and Jeffrey P. Jorissen, Gary A.
Shiffman, Milton M. Shiffman, Robert H. Orley and Brian M. Hermelin, to which
this Agreement is subject in all particulars.
NOW THEREFORE, for and in consideration of the foregoing Recitals, the
mutual covenants and agreements contained in this Agreement and other good and
valuable consideration, the receipt and adequacy of which is acknowledged, each
of the Shareholders agrees as follows:
1. TERM. All of the rights and obligations in this Agreement shall
terminate 10 years from the date of this Agreement, or upon the consummation of
a sale of the Stock which has been subject to, and has complied with, the
"tag-along rights" as set forth in Section 2 of the Bingham Shareholders
Agreement (but in that event, termination shall only be effective with respect
to and to the extent of the shares of Stock included in any such sale), or upon
the dissolution or liquidation of Bingham, whichever occurs sooner (the
"TERM").
2. PERFORMANCE OF BINGHAM SHAREHOLDERS AGREEMENT. Each of the
Shareholders has executed the Bingham Shareholders Agreement, and acknowledges
that it is binding on them in accordance with its terms, and that the terms and
provisions of this Agreement are subject to the Bingham Shareholders Agreement.
Therefore: (i) no action shall be taken by any Shareholder hereunder that will
cause a breach, or violation of or default under any term, provision or
requirement of the Bingham Shareholders Agreement; and (ii) each Shareholder
hereunder will observe, perform and discharge each and every obligation imposed
on them under the Bingham Shareholders Agreement.
3. VOTING AGREEMENT. During the term of this Agreement, and to the extent
that any vote, consent or approval is permitted to or required of the
Shareholders (including any action to be taken as a group under the Bingham
Shareholders Agreement), in connection with which the Shareholders' discretion
is not controlled by the Bingham Shareholders Agreement, each Shareholder shall
take all action necessary from time to time to vote his or her shares of Stock
(and/or grant his or her approval and/or consent) in accordance with the
determination of the holders of a Majority in Interest of the shares of Stock
subject to this Agreement.
4. SPECIAL VOTING AGREEMENT. For so long as the firm of Simpson Zelenock,
P.C. (or any successor to it) shall be performing legal services for BAC and/or
BSC (the "COMPANIES"), James A.
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Simpson, Katheryne L. Zelenock and Jeffrey C. Urban (together "SZU") shall take
all action necessary from time to time to accomplish the voting of their
respective shares of Stock in accordance with the determination of the holders
of a Majority in Interest of the shares of Stock subject to this Agreement,
determined without first taking into consideration any Stock held by SZU.
5. SPECIAL POWER OF ATTORNEY. Each Shareholder hereby makes, constitutes,
and appoints Bober and Weber as their agent and attorney-in-fact in their name,
place and stead, to take the following actions: (i) to negotiate, settle,
compromise and adjust any indemnification claim by Bingham against the
Shareholders as a group (as opposed to one or more, but less than all, of the
Shareholders - hereafter the "SHAREHOLDER GROUP"), by way of offset under or
pursuant to the provisions of Article 8 of the Merger Agreement; (ii) to
negotiate and agree upon any release of shares of Stock (in whole or in part)
to the Shareholder Group from the Escrow Agreement among the Shareholders,
Bingham and NBD Bank (as Escrow Agent), dated March 5, 1998, and/or under or
pursuant to the provisions of Article 8 of the Merger Agreement; and (iii) to
take any action (including the giving of consent or approval, or the voting of
shares of Stock) that has been approved or authorized under or pursuant to the
terms and conditions of this Agreement, for which purpose the Shareholders
hereby grant Bober and Weber an irrevocable proxy to vote each of their shares
of Stock in order to execute all actions to be taken hereunder in accordance
with the terms, provisions and requirements of this Agreement. This Power of
Attorney is a special Power of Attorney coupled with an interest, and shall not
be revoked and shall survive the assignment, delivery, or transfer by the
Shareholder of any portion of his or her Stock and, being coupled with an
interest, shall survive the death or disability or cessation of the existence
as a legal entity of the Shareholder. Each Shareholder hereby gives and grants
to Bober and Weber, acting together, full power and authority to do and perform
each and every act and thing whatsoever requisite, necessary or appropriate to
be done in or in connection with this Power of Attorney as fully to all intents
and purposes as he or she might or could do if personally present, hereby
ratifying all that those attorneys shall lawfully do or cause to be done by
virtue of this Power of Attorney. The existence of this Power of Attorney shall
not preclude execution of any such instrument by the Shareholder individually
on any such matter, or the existence and implementation of any other power of
attorney under the Escrow Agreement. Any person dealing with Bingham, BAC
and/or BAC, or their Affiliates, may conclusively presume and rely on the fact
that any such instrument executed by Bober and Weber pursuant to this Power of
Attorney is authorized, regular and binding without further inquiry. This
Power of Attorney may be exercised by Bober and Weber by a facsimile signatures
of both of them or by listing all of the Shareholders executing any instrument
with a single signature by both Bober and Weber acting as attorney-in-fact for
all of them.
6. RESTRICTIONS UPON TRANSFERS AND OTHER RIGHTS DURING LOCK-UP PERIOD.
During the period of time under which any sale, transfer, assignment,
hypothecation, pledge, gift or other disposal of any Stock (each a "TRANSFER")
by any Shareholder would be restricted by the provisions of Section 4.1 of the
Bingham Shareholders Agreement (the duration of which restrictions thereunder
is hereafter referred to as the "LOCK-UP PERIOD"), no such Transfer shall occur
except in accordance with the provisions and requirements in (i) the Bingham
Shareholder Agreement and (ii) this Agreement. During the Lock-up Period, all
Shareholders shall be subject to the following:
A. Permitted Transfers. Only the following Transfers shall be
permitted under this Agreement (each a "PERMITTED TRANSFER"):
(1) Transfers among two or more of the Shareholders,
provided that Transfers among SZU shall be first among them,
pro rata (or among those of them who shall remain
Shareholders), to the extent that they shall determine by
agreement among themselves (a copy of any such agreement must
be provided to and be acceptable to Bingham and a Majority in
Interest of the Other Shareholders).
(2) Any Shareholder may Transfer all or part of his
or her Stock to a Michigan revocable inter-vivos trust of
which that Shareholder is the grantor, or to another entity
controlled by that Shareholder formed primarily for estate
planning
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purposes, for the benefit of that Shareholder (and/or his or
her spouse, children and/or grandchildren). Any Transfer in
this manner shall be deemed to be a Transfer within the
Shareholder Group.
(3) Each such Permitted Transfer shall be subject to
the following conditions and requirements: (i) all Stock so
Transferred shall remain subject to the terms and conditions
of this Agreement and the Bingham Shareholders Agreement; (ii)
the Permitted Transferee shall make no Transfers of that Stock
except in accordance with the terms of this Agreement and the
Bingham Shareholders Agreement; (iii) Bingham and the Other
Shareholders shall have received at least ten (10) days prior
written notice of the proposed Transfer together with those
organizational and transfer documentation pertaining to the
proposed transfer that Bingham, Bober and/or Weber shall
request; and (iv) Bingham and the Other Shareholders (as
defined in Paragraph below) shall have received the written
agreement of the Permitted Transferee to be bound in all
respects by this Agreement and the Bingham Shareholders
Agreement.
B. Termination of Employment. In the event that a Shareholder
who is an Employee of either of the Companies shall voluntarily
terminate his or her employment with such Company or Companies, or
whose employment shall be terminated for any reason (other than by
reason of death or Permanent Disability), in either case on or
before the date when the Lock-up Period shall expire, the following
options, rights and obligations shall arise:
(1) Voluntary Termination or Termination for Cause.
In the event of a voluntary termination by a Shareholder, or a
discharge for Cause, the Other Shareholders shall have the
option to purchase all of the shares of Stock then held by
that Shareholder, for the lesser of (i) the Share Price as of
the effective date of termination of Employment or (ii) the
Share Price as of the date when the Lock-up Period shall
expire. The Other Shareholders shall give written notice of
their intention to exercise this option within five Business
Days after the end of the Lock-up Period, and if exercised
shall complete the purchase of all such Stock for cash (or in
other good funds) within that five day period.
(2) Share Price. The Share Price shall be determined
by taking the average of the mean between the bid and ask
closing quotations for the five trading days immediately prior
to the applicable dates (or, if available, the closing prices)
of such shares of Stock on the NASD Over the Counter Bulletin
Board (or an equivalent trading market on which those shares
are then traded).
(3) Registration Postponement. In the event that any
shares of Stock that are subject to the foregoing option are
not then registered as provided under Section 3 of the Bingham
Shareholders Agreement, the closing of the sale (but not the
effective date for valuation of the Share Price) shall be
postponed, at the option of a Majority in Interest of the
Other Shareholders exercising the option to purchase, elected
within 30 days after their exercise of their option to
purchase the shares of Stock, until those shares become
registered (as defined in Section 3.1[a] of that Agreement),
but no shall such postponement extend for longer than 120 days
in the aggregate.
(4) Forfeit of Earnout. The terminating Shareholder
shall cease to have any rights in or with respect to any
Additional Consideration under or pursuant to Section 1.3 of
the Merger Agreement, and the Additional Consideration that
would have been allocated to that Shareholder shall be
reallocated prorata among the Other Shareholders who then
retain rights to Additional Consideration under the
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<PAGE> 4
Merger Agreement. The pro-rata share of the Additional
Consideration to be reallocated to those Other Shareholders
shall be determined for each Other Shareholder by using a
fraction, the numerator of which is the total number of shares
of Stock originally issued for the benefit of each such Other
Shareholders as Initial Consideration, Special Consideration
and/or Additional Consideration (after the award of all
Additional Consideration but without the shares of Stock to be
reallocated hereunder), and the denominator of which is the
total number of shares of all Stock issued to all Other
Shareholders as Initial Consideration, Special Consideration
and the Additional Consideration as it shall be earned under
Section 1.3 of the Merger Agreement but without the shares of
Stock to be reallocated hereunder). In each case, the number
of shares in the numerator or denominator shall be adjusted to
reflect any shares of Stock that have been Transferred
pursuant to a Transfer permitted under or pursuant to the
Bingham Shareholders Agreement (i.e., to reflect shares of
Stock no longer held within the Shareholder Group).
(5) Definition of Permanent Disability. For the
purpose of this Agreement, the definition of "PERMANENT
DISABILITY" shall be as follows: (i) A period of 180
consecutive days during which a Shareholder (as an employee)
fails to perform his or her customary duties under employment
arrangements with the Companies as a result of incapacity due
to physical or mental illness; or (ii) any other physical or
mental condition for which the respective Board of Directors
of the Company or Companies approves that Shareholder's
retirement from active employment based on a condition that
they specifically recognize by written Board Resolution to be
a permanent disability.
C. Effect of Continuing Escrow. In the event that at the
expiration of the Lock-Up Period any portion or all of the Stock
continues to be held under and pursuant to the terms of the Escrow
Agreement, then the sale and purchase of Stock under the provisions
of the foregoing Paragraph shall be postponed until the final
resolution of all disputes thereunder and the release of the Stock
(or that portion thereof to be released) therefrom. This delay
shall not, however, affect the determination of the sale price,
which shall be established without regard to this delay, but shall
be subject to reduction to reflect any shares of the Stock that are
offset by Bingham under the terms of the Escrow Agreement and
Article 8 of the Merger Agreement.
7. POST LOCK-UP PERIOD TRANSFERS AND RESTRICTIONS. After the expiration
of the Lock-up Period, no Shareholder shall Transfer any portion or all of his
or her Stock (except in connection with a Permitted Transfer under Paragraph )
without fully complying with the following:
A. Minimum Required Holding. Without the approval of the Board
of Directors of BAC or BSC (as applicable), no Shareholder (other
than Lynne Baszczuk or Patricia Jorgensen) who is an Employee or
Affiliate of the Companies shall Transfer more than 50% of his or
her Stock to any person (in one or more Transfers on cumulative
basis, determined taking into account all Stock originally held by
that Shareholder and/or acquired hereafter in relation to that
Stock), but not taking into account Stock that is not subject to
this Agreement. This requirement is hereafter referred to as the
"MINIMUM REQUIRED HOLDING" and it shall apply to all other
provisions of this Agreement after the expiration of the Lock-Up
Period. An "EMPLOYEE" is any person who is actually employed on a
full or part time basis by one or both of the Companies, Bingham or
any other Affiliate of Bingham. An "AFFILIATE OF THE COMPANIES" is
any person who provides goods or services to one or both of the
Companies, Bingham or any other Affiliate of Bingham. An "AFFILIATE
OF BINGHAM" is any business entity in which Bingham, directly or
indirectly,
4
<PAGE> 5
holds or controls 50% or more of the equity securities
entitled to vote on governance matters generally.
B. Option to Purchase. Subject to the Minimum Required Holding
provisions in the foregoing Paragraph , in the event that any
Shareholder desires to Transfer any portion of or interest in his or
her Stock, to a person other than a Permitted Transferee, the Other
Shareholders shall have the first option to purchase all such Stock,
at a price and upon terms of payment hereinafter provided.
(1) Notice and Exercise. The Transferring Shareholder shall give
Bingham and the Other Shareholders written notice of his or
her intention to Transfer, and the Other Shareholders, within
five Business Days after receiving that notice (the "NOTICE
PERIOD"), shall notify the Transferring Shareholder in writing
as to their intention with respect to the exercise of this
option and, if exercising this option, shall complete the
purchase of all such Stock for cash (or in other good
funds) within the Notice Period.
(2) Terms of Sale. The exact terms of the proposed
Transfer shall be fully and accurately communicated to the
Other Shareholders with the notice required under this
paragraph, and the same terms shall be provided to the Other
Shareholders if they exercise their option to purchase (the
"PROPOSED TERMS"). An exact copy of all written agreements
and memoranda of the proposed Transfer shall be delivered to
the Other Shareholders together with a complete written
summary of their terms and all other terms and provisions
which have any material bearing thereon, regardless of whether
or not included in any such memorandum or agreement. If the
Transfer is to take place through a market trade on a public
exchange, the price shall be the higher price of the Stock as
of the close of trading on the date when the notice is
received by Bober and Weber, or on the date of the Other
Shareholders' exercise of the foregoing option to purchase.
The market price shall be determined by taking the average of
the mean between the bid and ask closing quotations (or, if
available, the closing prices) of such shares of Stock on the
NASD Over the Counter Bulletin Board (or an equivalent trading
market on which those shares are then traded).
(3) Sale To Outside Parties. If the Other Shareholder(s) do not
exercise their option and consummate their purchase within the
Notice Period, the Transferring Shareholder shall be free to
Transfer his or her Stock pursuant to the terms and provisions
of the Proposed Terms, subject nevertheless to the Minimum
Required Holding and the Bingham Shareholder Agreement.
(4) Registration and Postponement. In the event that
any shares of Stock that are subject to the foregoing option
are not then registered as provided under Section 3 of the
Bingham Shareholders Agreement, the closing of the sale (but
not the effective date for valuation of the Share Price) shall
be postponed, at the option of a Majority in Interest of the
Other Shareholders exercising the option to purchase, elected
within 30 days after their exercise of their option to
purchase the shares of Stock, until those shares become
registered (as defined in Section 3.1[a] of that Agreement),
but no shall such postponement extend for longer than 120 days
in the aggregate.
C. Seizure Of Stock. The seizure or Transfer of any shares of
Stock of any Shareholder under any legal process whatsoever or by
operation of law or by court order, by or to any person or by any
receiver, trustee or officer appointed by any court to take over the
assets of that Shareholder shall constitute a prohibited Transfer of
that Stock (a "SEIZURE"). The person Seizing those shares of Stock
shall, for the purpose of this Agreement, be subject to all of the
restrictions in connection with any proposed Transfer of those
shares of Stock contained in
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<PAGE> 6
this Agreement as if a Shareholder originally joining in the
execution of this Agreement. The Other Shareholder(s) shall be
entitled to the same rights and options provided in this
Paragraph 7, except that their option to purchase may be exercised at
any time up to 90 days after the Seizure.
8. MAJORITY IN INTEREST. Wherever this Agreement calls for the approval
or vote of a "MAJORITY IN INTEREST" that vote, consent or approval shall
require the affirmative vote of Shareholders, the Other Shareholders, or those
Other Shareholders then exercising an option to purchase (as the case may be),
who in the aggregate own more than 50% of the Stock then subject to this
Agreement (in the case of any action not relating to the exercise of an option
to purchase Stock hereunder), or in connection with the exercise of any such
Option, 50% of the Stock then subject to this Agreement that is then held by or
for the benefit of the Other Shareholders (including holders who have received
their shares of Stock by way of a Permitted Transfer within the Shareholder
Group). However, no Shareholder shall have voting, consent or approval rights
in the event that he or she is in default of any provision of this Agreement.
9. AFTER-ACQUIRED STOCK. This Agreement shall be construed to extend to
all shares of Stock issued for the benefit of any of the Shareholders as
Initial Consideration, Special Consideration and/or Additional Consideration
under the Merger Agreement, and cover any additional shares of Stock in Bingham
which may hereafter be issued to or acquired by any Shareholder by reason of
any stock spilt, distribution or other transaction attributable to the Stock
originally obtained by the Shareholders. This Agreement shall not apply to
shares of the securities of Bingham acquired by any Shareholder in any public
market, through the exercise of options granted by the Companies or Bingham
and/or in a separate transaction with Bingham or any of its Affiliates.
10. SPECIFIC PERFORMANCE. The Shareholders acknowledge that they will be
irreparably damaged in the event this Agreement is not specifically enforced,
and it is the intention of the Shareholders that this Agreement be enforceable
by a decree of specific performance. That remedy, however, shall be cumulative
and not exclusive and shall be in addition to any other remedy which the
parties may have by law.
11. OTHER SHAREHOLDERS. Except where expressly stated otherwise in this
Agreement, wherever by the terms of this Agreement an option may be exercised
by more than one Shareholder, the following rules shall apply:
A. The Shareholders (the "OTHER SHAREHOLDERS") entitled to
exercise the option shall be those Shareholders whose shares of
Stock are not then subject to sale under that option; and
B. The option shall be exercised in proportion to the relative
holdings of the Stock by each such Other Shareholder on the date of
the first exercise thereof. However, if an Other Shareholder does
not exercise an option to acquire the full amount of stock available
to that Other Shareholder, the remaining Other Shareholders shall
have the right to acquire those shares for which the option is
unexercised (in similarly proportionate amounts if there are two or
more Other Shareholders desiring to purchase).
In all events, each option granted by this Agreement must be exercised for all
shares available to the Other Shareholders (irrespective of their allocable
portions thereof) at the date of the exercise thereof.
12. CONTRIBUTION. Each Shareholder shall indemnify hold the other
Shareholders harmless from and against any and all claims, losses, damages,
liability, costs and expenses incurred by those other Shareholders by reason of
the a successful claim asserted by Bingham based on any untrue representation
by that Shareholder under Article 2 of the Merger Agreement with respect to
which that Shareholder had actual knowledge, or had actual knowledge of the
potential or probable loss, liability or damage without disclosing that
knowledge to Bingham or the other Shareholders on or prior to the Closing.
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<PAGE> 7
13. REQUIRED LEGEND. Simultaneously with the execution of this Agreement,
each Shareholder shall surrender all certificates of stock, except those
certificates representing shares which are or were acquired through ordinary
brokerage transactions, or under stock option plans instituted by Bingham, and
not pursuant to this Agreement, to Bingham for endorsement with the following
legend, which shall be conspicuously placed on such certificates:
"The sale, transfer, assignment, pledge, hypothecation
or other disposition of the shares represented by this
certificate is restricted by the provisions of the
Bloomfield Shareholders Agreement, dated as of March
___, 1998 (as it may be amended from time to time), to
which the the holder of this certificate, among
others, is Party, a copy of which may be inspected at
the principal office of Bingham Financial Services
Corporation. The provisions of the Bloomfield
Shareholders Agreement are incorporated herein by
reference."
All certificates of stock issued to or acquired by any such Shareholder after
the date of this Agreement, except certificates representing shares which are
or were acquired through ordinary brokerage transactions and not pursuant to
this Agreement or under stock option plans instituted by Bingham, shall also
bear the foregoing legend; provided, however, that Bingham shall remove the
required legend from any shares transferred to a third party (i.e., a party
other than a Shareholder or Permitted Transferee) as permitted in this
Agreement, so that such transferee shall not be subject to the requirements
contained in this Agreement.
14. WAIVERS AND AMENDMENTS. With the written consent of a Majority in
Interest of the Shareholders, the obligations of the Shareholders under this
Agreement that are not controlled by the Bingham Shareholders Agreement may be
waived (either generally or in a particular instance, either retroactively or
prospectively and either for a specified period of time or indefinitely. Upon
the effectuation of each such waiver, consent, agreement of amendment or
modification, the Company promptly shall give written notice thereof to the
record holders of the then outstanding Common Stock. However, neither this
Agreement nor any of its provision may be changed, waived, discharged or
terminated orally, but only by a statement in writing signed by the party
against which enforcement of that change, waiver, discharge or termination is
sought, except to the extent provided in this Paragraph 12.
15. GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of Michigan as such laws are applied to agreements
between Michigan residents entered into and to be performed entirely within
Michigan.
16. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
17. ENTIRE AGREEMENT. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof.
18. NOTICES, ETC. Notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given upon
personal delivery or upon the second day following mailing by registered air
mail, postage prepaid, addressed to the Shareholders, as indicated on Schedule
1 attached to the Bingham Shareholders Agreement, or at such other address as a
Shareholder shall have furnished to Bingham for notices under that Agreement,
in accordance with the terms of that Agreement. Any such notice to Bingham of
change of address shall be simultaneously sent to all Shareholders under this
Agreement.
19. DELAYS OR OMISSIONS. No delay or omission to exercise any right, power
or remedy accruing to any Shareholder under this Agreement shall impair any
right, power or remedy of that Shareholder nor shall it be construed to be a
waiver of any breach or default, or an acquiescence therein,
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<PAGE> 8
or in any similar breach or default thereafter occurring, nor shall any
waiver of any single breach or default be deemed a waiver of any other breach
or default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any Shareholder of any breach
or default under this Agreement, or any waiver on the part of any Shareholder
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
20. SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall be modified in such manner as to be
valid, legal, and enforceable but so as to most nearly retain the intent of the
parties, and the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
21. TITLES AND SUBTITLES. The titles and subtitles of this Agreement are
intended for reference and shall not by themselves determine the construction
or interpretation of this Agreement.
22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
23. EXPENSES. Each Shareholder shall pay his or her own costs and
expenses in connection with the performance of this Agreement.
In witness whereof, the parties have caused this Shareholders Agreement to
be executed as of the day and year first above written.
/s/DANIEL E. BOBER /s/CREIGHTON J. WEBER
- ------------------ ---------------------
DANIEL E. BOBER CREIGHTON J. WEBER
/s/JOSEPH DROLSHAGEN /s/JAMES BENNETT
- -------------------- ------------------
JOSEPH DROLSHAGEN JAMES BENNETT
/s/PATRICIA JORGENSEN /s/DEBORAH JENKINS
- --------------------- ------------------
PATRICIA JORGENSEN DEBORAH JENKINS
/s/LYNNE BASZCZUK /s/JAMES A. SIMPSON
- ----------------- -------------------
LYNNE BASZCZUK JAMES A. SIMPSON
/s/KATHERYNE L. ZELENOCK /s/JEFFREY C. URBAN
- ------------------------ -------------------
KATHERYNE L. ZELENOCK JEFFREY C. URBAN
8
<PAGE> 1
EXHIBIT 2.7
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this "Agreement"), dated March 4, 1998, is
made and entered into by and among BINGHAM FINANCIAL SERVICES CORPORATION, a
Michigan corporation (the "Company") and the persons listed on Schedule 1
attached hereto (each of whom is referred to herein individually as a
"Shareholder" and collectively as the "Shareholders"). This Agreement shall be
effective as of the Effective Time, as defined below.
RECITALS
A. All of the members of Bloomfield Acceptance Company, L.L.C., a Michigan
limited liability company ("BAC") and Bloomfield Servicing Company, L.L.C., a
Michigan limited liability company ("BSC"), respectively, as listed on Schedule
1 hereto (each a "Member" and collectively, the "Members"), have entered into
that certain Agreement and Plan of Merger (the "Merger Agreement"), dated of
even date herewith, by and among the Company, BAC, BSC, BAC Acquiring Corp., a
Michigan corporation and a wholly owned subsidiary of the Company, BSC
Acquiring Corp., a Michigan corporation and a wholly owned subsidiary of the
Company, and each of the Members.
B. Pursuant to the Merger Agreement, BAC Acquiring Corp. shall merge with
and into BAC, and BSC Acquiring Corp. shall merge with and into BSC, with the
Members becoming shareholders of the Company, with respective shareholdings as
set forth on Schedule 1 hereto, all as of the effective time of the mergers
(the "Effective Time").
C. The Company's authorized capital stock consists of 10,000,000 shares of
common stock and 10,000,000 shares of preferred stock, of which there were
1,295,000 shares of common stock, without par value, issued and outstanding as
of January 31, 1998 (the "Common Stock"). The shares of the Common Stock have
all of the rights, preferences and limitations of shares of common stock stated
in the Michigan Business Corporation Act, as amended (the "Act").
D. The number of authorized and outstanding shares of Common Stock, as set
forth in paragraph C above, will not change prior to the Effective Time.
E. At the Effective Time, BAC Acquiring Corp. and BSC Acquiring Corp.
shall cease to exist separately, and shall be merged with and into BAC and BSC
(together the "Subsidiaries"), respectively, in accordance with the provisions
of the Merger Agreement and in accordance with the provisions of and with the
effect provided in the Act and in the Michigan Limited Liability Company Act.
F. At the Effective Time, the member interests of each Member shall be
converted into shares of the Company in the respective amounts set forth on
Schedule 1 hereto and each Member shall thereby become a shareholder of the
Company. In addition to the Members, current directors of the Company (the
"Directors") have executed and joined this
<PAGE> 2
Agreement as Shareholders and own shares of Common Stock in the amounts set
forth on Schedule 1 hereto.
NOW THEREFORE, for and in consideration of the foregoing Recitals, the
mutual covenants and agreements contained in this Agreement and other good and
valuable consideration, the receipt and adequacy of which is acknowledged, the
Company and each of the Shareholders agree as follows:
SECTION 1. DIRECTORS, OFFICERS AND VOTING.
1.1 Appointment and Nomination of Bober and Weber. Each of the Directors
agrees that, no later than the first meeting of the Board of Directors of the
Company (the "Board") following the date of this Agreement, the Directors shall
expand the number of directors of the Company by two in accordance with the
Company Bylaws and shall cause Daniel E. Bober ("Bober") and Creighton J. Weber
("Weber") to be appointed to the Board. Each of the Directors further agrees
that so long as he remains a Director of the Company and until this Agreement
is terminated or expires, he will: (a) vote to nominate Bober for election or
reelection as a director of the Company and vote to appoint Bober to the
Executive Committee of the Company's board; (b) neither propose, nor vote, to
expand the size of the Executive Committee of the Board beyond three (3) in
number without Bober's consent; (c) until the later of the expiration of his
term at the annual meeting of the Company's stockholders to be held in 1999, or
his successor is duly elected and qualified, vote to retain Weber as a director
of the Company; and (d) take all action necessary from time to time (including,
without limitation, the execution of written consents, the calling of special
meetings, the filling of vacancies, and the waiving of notice and attendance at
meetings) to accomplish the nominations of Bober and Weber in accordance with
and to the extent of this Section 1.
1.2 Voting Agreement. Each of the Shareholders agrees that he or she
shall take all action necessary from time to time (including, without
limitation, the voting of securities of the Company, the execution of written
consents, the calling of special meetings, the removal of directors, the
filling of vacancies on the Board of Directors, the waiving of notice and
attendance at meetings) to accomplish the elections of Weber and Bober in
accordance with and to the extent of this Section 1, and to accomplish the
elections to the Board of Arthur A. Weiss and other director-nominees endorsed
by the Board.
1.3 Appointment of Vice Presidents. Each of the Directors agrees that,
no later than the first meeting of the Board following the date of this
Agreement, the Directors shall nominate and elect each of Bober and Weber to be
a Vice President of the Company, in accordance with the Bylaws of the Company,
until his successor is duly elected. Each of the Directors further agrees that
he or she shall take all action necessary, including the casting of votes as
directors and the execution of written consents, to accomplish the election of
each of Bober and Weber as a Vice President of the Company in accordance with
and to the extent of this Section 1.3.
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<PAGE> 3
SECTION 2. TAG-ALONG RIGHTS.
2.1 Proposed Transfer. If one or more of the Shareholders proposes (the
person or group making such proposal being the "Selling Group" and the
remaining Shareholders being the "Tag-Along Group") a Transfer (as defined
below) of five percent (5%) or more of the then-issued and outstanding common
stock of the Company, and provided that the Transfer is not an Exempt Transfer
(as defined below), then each of the Shareholders comprising the Tag-Along
Group (each a "Tag-Along Shareholder") shall have the right ("Tag-Along Right")
to require the proposed purchaser(s) to purchase from such Tag-Along
Shareholder up to the number of whole shares of Common Stock not to exceed the
number derived by multiplying the total number of shares of Common Stock to be
purchased by the proposed purchaser(s) by a fraction, the numerator of which is
the total number of shares of Common Stock owned by such Tag-Along Shareholder,
and the denominator of which is the total number of shares of Common Stock
owned by the Shareholders. Any shares purchased from Tag-Along Shareholders
pursuant to this Section shall be paid for at the same price per Share and upon
the same terms of payment and conditions, including price per share and the
total number of shares proposed to be transferred, as such proposed Transfer by
the Selling Group (the "Transfer Terms").
2.2 Tag-Along Notice. The Selling Group shall promptly notify the Company
and the Tag-Along Group in the event they propose to make a Transfer giving
rise to Tag-Along Rights, and shall furnish the Tag-Along Group with the
Transfer Terms and a copy of any written offer or agreement pertaining thereto.
The Tag-Along Right may be exercised by any Tag-Along Shareholder by delivery
of a written notice to the Selling Group (the "Tag-Along Notice") within twenty
(20) days following such Tag-Along Shareholder's receipt of such notice from
the Selling Group. The Tag-Along Notice shall state the number of shares of
Common Stock that such Tag-Along Shareholder proposes to include in the
Transfer to the proposed purchaser (not to exceed the number determined in
accordance with Section 2.1 above). In the event that the proposed purchaser
does not purchase the specified number of shares from the Tag-Along
Shareholders on the Transfer Terms, then the Selling Group shall only be
permitted to sell any other number of shares of Common Stock to the proposed
purchaser (an "Alternate Transfer") if: (a) the number of shares to be sold in
the Alternate Transfer is less than five percent (5%) of the then-issued and
outstanding common stock of the Company; or (b) the Tag-Along Shareholders are
given five (5) days written notice of the proposed Alternate Transfer and the
right to participate pro rata in the Alternate Transfer (calculated using the
formula set forth in Section 2.1) under the same terms and conditions as the
Selling Group.
2.3 Closing. At the closing of any Transfer pursuant to this Section 2,
the proposed purchaser shall remit to each selling Shareholder the
consideration for the total sales price of the Common Stock of such Shareholder
sold pursuant hereto, upon delivery by such Shareholder of certificate(s) for
such shares duly endorsed in blank for transfer or accompanied by stock
power(s) duly executed in blank and such other transfer documentation,
including but not limited to representations and warranties of title, as shall
be reasonably required by the purchaser or its counsel.
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<PAGE> 4
2.4 Transfer. A "Transfer" of stock under this Section 2 shall mean a
sale to be consummated in a single transfer or a series of related transfers,
to a single purchaser or a group of purchasers, as part of a single transaction
or group of related transactions. For purposes of this Section 2, the
following shall be deemed to be a single purchaser: (a) relatives of a person
or the person's spouse living in the same household, (b) trusts or estates in
which any one person has a 10 percent or greater interest or of which he or she
is trustee, executor or administrator, and (c) any number of corporations,
partnerships, limited liability companies or other entities in which any one
person holds a 10 percent or greater beneficial interest. For purposes of this
Section 2, transactions which occur or are proposed to occur more than six (6)
months apart shall not be considered to be a group of related transactions, so
long as those transactions are not part of an expressly related group of
transactions.
2.5 Exempt Transfer. The following transactions shall constitute "Exempt
Transfers" as that term is used in this Section 2: (a) a Transfer to the
Company; (b) a Transfer entirely between or among any of the Shareholders
executing this Agreement; (c) a Transfer by will or intestate succession to a
Shareholder's executors, administrators, testamentary trustees, legatees or
beneficiaries; (d) a Transfer to a Shareholder's immediate family members or to
a Michigan revocable inter-vivos trust, of which a Shareholder is the grantor,
or another entity controlled by such Shareholder formed primarily for estate
planning purposes for the benefit of said Shareholder (and/or his spouse,
children, grandchildren, parents and/or siblings) (the parties identified in
(c) and (d), or any one of them are hereinafter collectively referred to as
"Permitted Transferees"); or (e) a Transfer in a public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Act"), or pursuant to Rule 144 promulgated thereunder.
SECTION 3. REGISTRATION RIGHTS.
The Company covenants and agrees as follows:
3.l Definitions. For purposes of this Section 3:
(a) The terms "register", "registered," and "registration" refer to
a registration effected by preparing and filing a registration statement
or similar document pursuant to the Act, and the declaration or ordering
of effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means Common Stock of the
Company and any Common Stock issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of any capital stock of the Company, held by the Holders (as
defined below); provided, however, that Common Stock or other securities
shall only be treated as Registrable Securities if and so long as (1)
they have not been sold to or through a broker or dealer or underwriter
in a public distribution or a public securities transaction, and (2) they
have not been sold in a transaction exempt from the registration and
prospectus delivery
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requirements of the Act under Section 4(1) thereof so that all transfer
restrictions and restrictive legends with respect thereto are removed
upon the consummation of such sale;
(c) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are,
Registrable Securities;
(d) The term "Holder" means any person who was a Member of BAC
and/or BSC and is the record owner of Registrable Securities, or any
assignee thereof in accordance with Section 3.12 hereof; and
(e) The term "SEC" means the Securities and Exchange Commission or
any other federal agency at the time administering the Act.
3.2 Company Registration. If at any time more than two years after the
date of this Agreement, the Company (without any obligation to do so) proposes
to register any of its stock or other securities under the Act in connection
with the public offering of such securities solely for cash (other than a
registration relating solely to the sale of securities to participants in a
Company stock plan, or a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities or a SEC
Rule 145 transaction), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within thirty (30) days after mailing of such notice by the
Company in accordance with Section 5.6, the Company shall, subject to the
provisions of Sections 3.6, 3.7, 3.8 and 3.9, cause to be registered under the
Act all of the Registrable Securities that each such Holder has requested to be
registered. Notwithstanding the foregoing, the Company will not be required to
give notice to the Holders of Registrable Securities if the underwriters
managing the proposed offering have advised the Company in writing that in
their judgment market conditions will not allow the inclusion of any secondary
shares in such offering. In the event the managing underwriters and the
Company subsequently determine to add any secondary shares in the offering,
such notice shall be provided, and each Holder shall have the registration
rights provided in this Section 3.
3.3 Demand Registration. Subject to the terms of this Agreement, in the
event that the Company shall, not sooner than two years after the date of this
Agreement, receive from the Holders representing at least thirty percent (30%)
of the Registrable Securities then outstanding, a written notice that it or
they intend to offer or cause to be offered for public sale at least
twenty-five percent (25%) of the Registrable Securities then outstanding (or
any lesser percentage if the Registrable Securities to be included in the
registration statement have an aggregate offering price to the public greater
than $3,000,000), the Company will so notify all Holders. Upon written request
of any Holder given within fifteen (15) days after the receipt by such Holder
from the Company of such notification, the Company will use its best efforts to
cause such of the Registrable Securities as may be requested by any Holder
(including the
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<PAGE> 6
Holder giving the initial notice of intent to offer) to be registered under the
Securities Act as expeditiously as possible (a "Demand Registration"). The
Company shall not be required to effect more than one (1) Demand Registration.
If (i) in the good faith judgment of the Board of Directors of the Company, a
Demand Registration would be materially detrimental to the Company and the
Board of Directors of the Company concludes, as a result, that it is essential
to defer the filing of such registration statement at such time, and (ii) the
Company shall furnish to each Holder a certificate signed by the President of
the Company stating that, in the good faith judgment of the Board of Directors
of the Company, it would be materially detrimental to the Company for such
registration statement to be filed in the near future, then the Company shall
have the right to defer such filing for the period during which such Demand
Registration would be materially detrimental, provided that the Company may not
defer the filing for a period of more than ninety (90) days after receipt of
the request for a Demand Registration, and more than once in any 12-month
period.
3.4 Form S-3 Registration. In case, at any time after two years from date
of this Agreement, the Company shall receive from Bober and Weber a written
request or requests that the Company effect a registration on Form S-3 for a
public offering of Registrable Securities the aggregate offering price of which
would exceed $500,000.00, the Company will:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities
of any other Holder or Holders joining in such request as are specified
in a written request given within fifteen (15) days after receipt of such
written notice from the Company, and the Company shall continue to keep
such Form S-3 current and effective for a period of one (1) year
following its initial filing or until all securities registered under
such Form S-3 have been sold, whichever sooner occurs, provided, however,
that the Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 3.4: (i) if Form
S-3 is not available for such offering by the Holders; (ii) if the
Company shall furnish to the Holders a certificate signed by the
President of the Company stating that in the good faith judgment of the
Board of Directors of the Company it would be detrimental to the Company
and its stockholders for such Form S-3 Registration to be effected at
such time, in which event the Company shall have the right to defer the
filing of the Form S-3 registration statement for a period of not more
than ninety (90) days after receipt of the request of the Holder or
Holders under this Section 3.4; (iii) if the Company has, within the
twelve (12) month period preceding the date of such request, already
effected two registrations for the Holders pursuant to Section 3.2, 3.3
or this Section 3.4; or (iv) in any particular jurisdiction in which the
Company would be
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<PAGE> 7
required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or
compliance.
(c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so
requested to be registered as soon as practicable after receipt of the
request or requests of the Holders.
3.5 Expenses of Registration. The Company shall bear and pay all expenses
incurred in connection with any registration, filing or qualification of
Registrable Securities with respect to a total of three registrations, whether
pursuant to Section 3.2, 3.3 or 3.4 or a combination thereof, including
(without limitation) all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses and fees and reimbursements the counsel, independent
certified public accountants, underwriters and other persons retained by the
Company, the expense of reporting or disclosing this Agreement or its attendant
rights and obligations (including filings required under Section 13(d) of the
Securities Exchange Act of 1934, as amended), the expense of any annual audit,
the expense of any liability insurance and the expense and fees for listing the
securities, but excluding underwriting discounts and commissions and stock
transfer taxes relating to Registrable Securities.
3.6 Obligations of the Company. Whenever required under Section 3.2, 3.3
or 3.4 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts and take
all steps necessary to cause such registration statement to become
effective, and, upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration
statement effective for up to 90 days (or longer if otherwise provided in
this Section 3) or until all of the securities registered thereunder are
sold, whichever occurs sooner.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities
covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements
of the Act, and such other documents as they may reasonably request in
order to facilitate the disposition of Registrable Securities owned by
them.
(d) Furnish to the counsel of any Holder, a copy of the registration
statement five (5) days prior to the filing of such registration
statement.
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<PAGE> 8
(e) Use its best efforts to register and qualify the securities
covered by such registration statement for listing on a national
securities exchange, the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") or such other similar exchange.
(f) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by
the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business
or to file a general consent to service of process in any such states or
jurisdictions.
(g) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each
Holder participating in such underwriting shall also enter into and
perform its obligations under such an agreement.
(h) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a
result of which the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances then existing.
3.7 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 3 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
3.8 Underwriting Requirements. In connection with any offering involving
an underwriting of shares of the Company's capital stock, the Company shall not
be required under Section 3.2 or 3.3 to include any of the Holders' securities
in such underwriting unless they accept the terms of the underwriting as agreed
upon between the Company and the underwriters selected by the persons entitled
to select the underwriters, and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success of the
offering by the Company. If the total amount of securities, including
Registrable Securities, requested by Holders to be included in such offering
exceeds the amount of securities sold other than by the Company that the
underwriters determine in their sole discretion is compatible with the success
of the offering, then the Company shall be required to include in the offering
only that number of such securities, including Registrable Securities, which
the underwriters determine in their sole discretion will not jeopardize the
success of the offering (the securities so included to be apportioned pro rata
among all selling stockholders
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<PAGE> 9
according to the total amount of securities owned by each selling stockholder
or in such other proportions as shall mutually be agreed to by such selling
stockholders). For purposes of the preceding parenthetical concerning
apportionment, for any selling stockholder which is a holder of Registrable
Securities and which is a partnership or corporation, the partners, retired
partners and stockholders of such holder, or the estates and family members of
any such partners and retired partners and any trusts for the benefit of any of
the foregoing persons shall be deemed to be a single "selling stockholder" and
any pro-rata reduction with respect to such "selling stockholder" shall be
based upon the aggregate amount of shares owned by all entities and individuals
included in such "selling stockholder," as defined in this sentence.
3.9 Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 3.
3.10 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 3:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the Act) for
such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the Securities Exchange Act
of 1934, as amended (the "1934 Act"), against any losses, claims,
damages, or liabilities (joint or several) to which they may become
subject under the Act, or the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact contained
in such registration statement, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements
thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities
law or any rule or regulation promulgated under the Act, or the 1934 Act
or any state securities law; and the Company will pay to each such
Holder, underwriter or controlling person, as incurred, any legal or
other expenses reasonably incurred by one law firm retained by them (or
such additional law firms retained by a Holder or Holders if such Holder
or Holders reasonably believe there exists a conflict of interest among
them) in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity
agreement contained in this subsection 3.10(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any loss, claim, damage, liability or action
to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information
furnished expressly for use in
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<PAGE> 10
connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of
its officers who has signed the registration statement, each person, if
any, who controls the Company within the meaning of the Act, any
underwriter, any other Holder selling securities in such registration
statement and any controlling person of any such underwriter or other
Holder, against any losses, claims, damages or liabilities (joint or
several) to which any of the foregoing persons may become subject, under
the Act, or the 1934 Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will
pay, as incurred, any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this subsection 3.10(b), in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this subsection 3.10(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; provided, that, the obligation to
indemnify will be in several, not joint and several, among such sellers
of Registrable Securities, and in no event shall any indemnity under this
subsection 3.10(b) exceed the net proceeds from the offering received by
such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 3.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying patty under this Section
3.10, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party (together with all other
indemnified parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the
fees and expenses to be paid by the indemnifying patty, if representation
of such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented
by such counsel in such proceeding. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of
any such action, if prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified
party under this Section 3.8, but the failure to deliver written notice
to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 3.10.
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<PAGE> 11
(d) The obligations of the Company and Holders under this Section
3.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 3, and
otherwise.
3.11 Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration, the Company
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of SEC
Rule 144, the Act and the 1934 Act, (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be
reasonably requested in availing any Holder of any rule or regulation of
the SEC which permits the selling of any such securities without
registration or pursuant to such form.
3.12 Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Section 3 may only be
assigned to a Permitted Transferee of the underlying Registrable Securities who
has executed and delivered to the Company a counterpart of this Agreement,
binding such Permitted Transferee to all of the restrictions and obligations
contained herein.
3.13 "Market Stand-Off" Agreement. Each Holder hereby agrees that for a
period of 180 days following the effective date of any registration effected
pursuant to Sections 3.2, 3.3 or 3.4 (provided the Holders are given written
notice of the offering at least fifteen (15) days prior to the Company's filing
with the SEC of a registration statement relating thereto), it shall not,
unless otherwise agreed by the Company and the managing underwriters, if any,
directly or indirectly sell, offer to sell, contract to sell (including,
without limitation, any short sale), grant any option to purchase or otherwise
transfer or dispose of (other than to donees who agree to be similarly bound)
any securities of the Company held by it at any time during such period except
Common Stock included in such registration. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to the
Registrable Securities of each Holder (and the shares or securities of every
other person subject to the foregoing restriction) until the end of such
period.
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3.14 Termination. The rights provided in this Section 3 shall terminate
upon the termination of this Agreement.
SECTION 4. TRANSFER RESTRICTION AND STOCK CERTIFICATE LEGEND.
4.1 Restriction on Transfer. No Shareholder who was a Member may sell,
convey, hypothecate or otherwise transfer ownership of any of the shares of
Common Stock held by such Shareholder: (i) for a period of two (2) years
following the date of this Agreement; and (ii) after the two years from the
date of this Agreement, unless such shares are registered pursuant to an
effective registration statement under, or in accordance with an exemption
from, federal and state securities laws. Notwithstanding anything contained
herein to the contrary, any Shareholder may transfer all or part of his stock
of the Company to a Michigan revocable inter-vivos trust, of which such
Shareholder is the grantor, or to another entity controlled by such Shareholder
formed primarily for estate planning purposes, for the benefit of said
Shareholder (and/or his spouse, children, grandchildren, parents and/or
siblings); provided, however, that in such event (i) all stock so transferred
shall remain subject to the terms and conditions of this Agreement; (ii) the
Permitted Transferee shall make no transfers of such stock except in accordance
with the terms of this Agreement; (iii) the Company shall have received at
least ten (10) days prior written notice of such transfer together with such
organizational and transfer documentation pertaining to the proposed transfer
as the Company shall request; and (iv) the Company shall have received the
agreement, in writing, of such Permitted Transferee to be bound in all respects
by this Agreement. Upon the occurrence of any event requiring or permitting
the purchase of stock under this Agreement, such Shareholder's Permitted
Transferee or any subsequent transferee shall be required to sell or transfer
his stock as provided in this Agreement, in the same manner and to the same
extent as the original Shareholder would have been required to sell or transfer
such stock. All references in this Agreement to stock of the Company shall be
deemed to include stock owned by any transferee or Permitted Transferee, except
that payment for such stock shall be made to the record owner thereof.
4.2 Required Legend. Simultaneously with the execution of this Agreement,
each Shareholder shall surrender all certificates of stock, except those
certificates representing shares which are or were acquired through ordinary
brokerage transactions and not pursuant to this Agreement or as part of the
Company's initial public offering, to the Company for endorsement with the
following legend, which shall be conspicuously placed on such certificates:
"The sale, transfer, assignment, pledge, hypothecation or other
disposition of the shares represented by this certificate is restricted
by the provisions of the Shareholders Agreement, dated as of March 4,
1998 (as it may be amended from time to time), to which the Company and
the holder of this certificate, among others, are parties, a copy of
which may be inspected at the principal office of the Company. The
provisions of such agreement are incorporated herein by reference."
All certificates of stock issued to or acquired by any such Shareholder
after the date of this Agreement, except certificates representing shares which
are or were acquired through
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<PAGE> 13
ordinary brokerage transactions and not pursuant to this Agreement or as part
of the Company's initial public offering, shall also bear the foregoing legend;
provided, however, that the Company shall remove the required legend from any
shares transferred to a third party (i.e., a party other than a Shareholder or
Permitted Transferee) as permitted in this Agreement, so that such transferee
shall not be subject to the requirements contained in this Agreement.
4.3 Effect of Missing Legend. Section 4.2 above notwithstanding, the fact
that such legend has not been placed on a given certificate of Stock held by
any Shareholder who was a Member hereunder shall not affect the rights of the
parties to this Agreement in any way, and all certificates of stock on which
such legend has not been placed, except those certificates representing shares
which are or were acquired through ordinary brokerage transactions and not
pursuant to this Agreement or as part of the Company's initial public offering,
shall be deemed to have had that legend placed on them for the purposes of this
Agreement.
4.4 Availability of Agreement. The Company shall maintain a copy of this
Agreement at its principal place of business and shall make such copies
available for review to any person who shall inquire about the Agreement.
SECTION 5. MISCELLANEOUS.
5.1 Waivers and Amendments. With the written consent of all of the
Shareholders, the obligations of the Company and the rights of the holders of
Common Stock under this Agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its board of directors, may enter
into a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such waiver or supplemental agreement shall reduce
the aforesaid unanimity which is required to consent to any waiver or
supplemental agreement, without the unanimous consent of the record or
beneficial holders of all of the then outstanding Common Stock, on a fully
converted basis. Upon the effectuation of each such waiver, consent, agreement
of amendment or modification, the Company promptly shall give written notice
thereof to the record holders of the then outstanding Common Stock. This
Agreement or any provision hereof may not be changed, waived, discharged or
terminated orally, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this Section 5.1.
5.2 Termination. All of the rights and obligations in this Agreement
shall terminate ten (10) years from the date of this Agreement, or upon the
consummation of a sale which has been subject to, and has complied with, the
tag-along rights as set forth in Section 2 above (to the extent of the shares
of Common Stock included in such sale), or upon the dissolution or liquidation
of the Company, whichever occurs sooner. If not sooner terminated, all
tag-along rights (under Section 2) and registration rights (under Section 3)
shall be permanently terminated when the Shareholders, as a group, hold less
than ten percent (10%) of the issued and outstanding Common Stock of the
Company.
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5.3 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Michigan as such laws are applied to agreements
between Michigan residents entered into and to be performed entirely within
Michigan.
5.4 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
5.5 Entire Agreement. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof.
5.6 Notices, Etc. Ad notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery or upon the seventh day following mailing by registered
air mail, postage prepaid, addressed (a) if to the Shareholders, as indicated
on Schedule 1 attached hereto, or at such other address as it shall have
furnished to the Company, (b) if to the Company, to Bingham Financial Services
Corporation, 31700 Middlebelt Road, Suite 125, Farmington Hills, Michigan
48334, and addressed to the attention of the corporate secretary, or at such
other address as the Company shall have furnished to the Shareholders, or (c)
if to any other holder of Common Stock at such address as such holder shall
have furnished to the Company in writing, or, until such holder so furnishes an
address to the Company, then to and at the address of the last holder of such
Common Stock, who so furnished an address to the Company.
5.7 Delays or Omissions. No delay or omission to exercise any right, power
or remedy accruing to any holder of any securities issued or sold or to be
issued or sold hereunder, upon any breach or default of the Company under this
Agreement shall impair any such right, power or remedy of such holder nor shall
it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or in any similar breach or default thereafter occurring,
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of any holder
of any breach or default under this Agreement, or any waiver on the part of any
holder of any provisions or conditions of this Agreement, must be in writing
and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any holder, shall be cumulative and not alternative.
5.8 Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall be modified in such manner as to be
valid, legal, and enforceable but so as to most nearly retain the intent of the
parties, and the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
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5.9 Titles and Subtitles. The titles and subtitles of this Agreement are
intended for reference and shall not by themselves determine the construction
or interpretation of this Agreement.
5.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.11 Expenses. The Company and each Shareholder shall pay its own costs
and expenses in connection with the negotiation, execution, delivery and
performance of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Shareholders Agreement to
be executed by themselves or by their respective representatives thereunto duly
authorized as of the day and year first above written. The undersigned
Shareholders execute this Agreement with respect to all shares of capital stock
of the Company currently owned and hereafter acquired, to the extent provided
herein.
"The Company"
BINGHAM FINANCIAL SERVICES CORPORATION,
a Michigan corporation
/s/J.P. Jorissen
By: -----------------------------
Jeffrey P. Jorissen
Its: President, Chief Executive Officer
and Chief Financial Officer
[signatures continue on following page]
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Shareholders Agreement
Bingham Financial Services Corporation
signatures, continued
"Shareholders"
/s/JEFFREY P. JORISSEN /s/DANIEL E. BOBER
------------------------------ -----------------------------------
JEFFREY P. JORISSEN DANIEL E. BOBER
/s/GARY A. SHIFFMAN /s/CREIGHTON J. WEBER
------------------------------ -----------------------------------
GARY A. SHIFFMAN CREIGHTON J. WEBER
/s/MILTON M. SHIFFMAN /s/JOSEPH DROLSHAGEN
------------------------------ -----------------------------------
MILTON M. SHIFFMAN JOSEPH DROLSHAGEN
/s/ROBERT H. ORLEY /s/JAMES BENNETT
------------------------------ -----------------------------------
ROBERT H. ORLEY JAMES BENNETT
/s/BRIAN M. HERMELIN /s/PATRICIA JORGENSEN
------------------------------ -----------------------------------
BRIAN M. HERMELIN PATRICIA JORGENSEN
/s/DEBORAH JENKINS
-----------------------------------
DEBORAH JENKINS
/s/LYNNE BASZCZUK
-----------------------------------
LYNNE BASZCZUK
/s/JAMES A. SIMPSON
-----------------------------------
JAMES A. SIMPSON
/s/KATHERYNE L. ZELENOCK
-----------------------------------
KATHERYNE L. ZELENOCK
/s/JEFFREY C. URBAN
-----------------------------------
JEFFREY C. URBAN
16
<PAGE> 17
SCHEDULE 1 TO SHAREHOLDERS AGREEMENT
BINGHAM FINANCIAL SERVICES CORPORATION
<TABLE>
<CAPTION>
Shareholder Number of Shares
-------------------------- -----------------
<S> <C>
"Directors"
Jeffrey P. Jorissen 10,500
Gary A. Shiffman 25,000
Milton M. Shiffman 72,500
Robert H. Orley 10,000
Brian M. Hermelin 30,000
"Members"
Daniel E. Bober 96,730
Creighton J. Weber 96,730
Joseph Drolshagen 25,695
James Bennett 17,130
Patricia Jorgensen 5,136
Deborah Jenkins 13,689
Lynne Baszczuk 1,708
James A. Simpson 15,000
Katheryne L. Zelenock 7,500
Jeffrey C. Urban 2,500
</TABLE>
17
<PAGE> 1
EXHIBIT 2.8
Bingham Financial Services Corporation
31700 Middlebelt
Suite 125
Farmington Hills, MI 48334
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
Jeffrey P. Jorissen Mike Arneth Stephanie Miahra
Chief Executive Officer General Information Analyst Inquiries
(248) 932-3100 (312) 266-7800 (415) 986-1591
FOR IMMEDIATE RELEASE
TUESDAY, FEBRUARY 17, 1998
BINGHAM FINANCIAL SERVICES CORPORATION ANNOUNCES
MERGER WITH BLOOMFIELD ACCEPTANCE COMPANY
Farmington Hills, MI, February 17, 1998 - Bingham Financial Services Corporation
(NASDAQ OTC Bulletin Board: BFSC), a specialty finance company, today announced
that it has entered into an agreement whereby the businesses of Bingham
Financial and Bloomfield Acceptance Company, a Birmingham, Michigan based
originator and servicer of commercial mortgage loans, will be merged. The
business combination will be effected through all stock mergers of Bloomfield
Acceptance and its mortgage servicing affiliate, Bloomfield Servicing Company,
with two newly-formed subsidiaries of Bingham. The closing is scheduled to occur
before February 28, 1998, and is subject to customary closing conditions.
Formed in 1994, Bloomfield Acceptance is a nationwide leader on a direct basis
for all classes of income-producing properties with a specialty in manufactured
housing communities but including multifamily, office, retail, light industrial,
hotel, nursing home, congregate care, self storage and parking properties. In
1997, Bloomfield Acceptance had originations of approximately $267 million and
has originated nearly $1 billion in loans in the last four years.
"We are pleased with the addition of expertise and growth prospects presented by
combining with Bloomfield Acceptance," stated Jeff Jorissen, Chief Executive
Officer of Bingham Financial. "The business combination with Bloomfield
Acceptance is expected to advance Bingham's business strategy in several
important ways:
First - Bloomfield Acceptance adds a proven, complementary business in
commercial mortgage lending, a financial services category in which
Bingham wishes to operate;
<PAGE> 2
Second - Bloomfield Acceptance currently operates as a lender for manufactured
home communities, which is related to Bingham's current core business;
Third - The owners and executive officers of Bloomfield Acceptance add
successful, experienced capabilities in managing lending,
securitization and servicing operations to Bingham's management team;
and
Fourth - Opportunities to grow the historical business of Bloomfield Acceptance
are expected to be significantly enhanced by Bingham's strong capital
base and access to financing sources."
Dan Bober, President of Bloomfield Acceptance, said, "Our executive team and
operating personnel are excited about the combination with Bingham. Bingham's
current manufactured home lending business and financial strength present a
natural fit and solid base for growing and expanding the combined businesses."
Bingham Financial Services Corporation is a specialty finance company whose
primary business activity has been the origination of installment contracts to
buyers of manufactured homes.
2
<PAGE> 1
EXHIBIT 2.9
Bingham Financial Services Corporation
31700 Middlebelt
Suite 125
Farmington Hills, MI 48334
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
Jeffrey P. Jorissen Mike Arneth Stephanie Miahra
Chief Executive Officer General Information Analyst Inquiries
(248) 932-3100 (312) 266-7800 (415) 986-1591
FOR IMMEDIATE RELEASE
THURSDAY, MARCH 9, 1998
BINGHAM FINANCIAL SERVICES CORPORATION ANNOUNCES
COMPLETION OF MERGER WITH BLOOMFIELD ACCEPTANCE COMPANY
FARMINGTON HILLS, MI, MARCH 9, 1998 - BINGHAM FINANCIAL SERVICES CORPORATION
(NASD OTC BULLETIN BOARD: BFSC), a specialty finance company, announced today
that it completed its previously announced transaction with Bloomfield
Acceptance Company, a Birmingham, Michigan based originator and servicer of
commercial mortgage loans, whereby the businesses of Bingham Financial and
Bloomfield Acceptance have been merged. The business combination was effected
through all stock mergers of Bloomfield Acceptance and its mortgage servicing
affiliate, Bloomfield Servicing Company, with two newly-formed subsidiaries of
Bingham.
Formed in 1994, Bloomfield Acceptance is a nationwide lender on a direct basis
for all classes of income-producing properties with a specialty in manufactured
housing communities but including multifamily, office, retail, light
industrial, hotel, nursing home, congregate care, self storage and parking
properties. In 1997, Bloomfield Acceptance had originations of approximately
$267 million and has originated nearly $1 billion in loans in the last four
years.
Bingham Financial Services Corporation is a specialty finance company whose
primary business activity has been the origination of installment contracts to
purchasers of manufactured homes. The Company's shares are traded on the NASD
OTC Bulletin Board under the symbol BFSC.
