<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D C 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )1
Excel Industries, Inc.
(Name of issuer)
Common Stock, No par value ("Common Stock")
(Title of class of securities)
300657 10 3
(CUSIP number)
Frank V. J. Darin, Vice President, Ford Motor Company Fund
The American Road, Dearborn, Michigan 48121 (313) 322-3000
(Name, address and telephone number of person
authorized to receive notices and communications)
January 11, 1994
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box _______.
Check the following box if a fee is being paid with the statement X.
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Note. Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 6 Pages)
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1 The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
<PAGE> 2
CUSIP No. 300657 10 3 13D Page 2 of 6 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Ford Motor Company Fund (I.R.S. Identification No. 38 1459376N)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b) X
See Items 4 and 6 herein.
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Michigan
7 SOLE VOTING POWER
NUMBER OF 1,047,201 shares of Common Stock
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY None
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 1,047,201 shares of Common Stock
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,047,201
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* X
See Items 4 and 6 herein.
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IS ROW (11)
9.9%
14 TYPE OF REPORTING PERSON*
OO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
CUSIP NO. 300657 10 3 13D Page 3 of 6 Pages
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock of Excel Industries, Inc.,
whose principal executive offices are located at 1120 North Main Street,
Elkhart, Indiana 46515.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed by Ford Motor Company Fund (the "Fund"), a
charitable organization incorporated under the laws of the State of Michigan as
a non-profit corporation. The principal executive offices of the Fund are
located at The American Road, Dearborn, Michigan 48121.
The principal business of the Fund is to make charitable contributions
to organizations that have been established and are operated exclusively for
charitable, scientific, literary, or educational purposes.
Information concerning the trustees and executive officers of the Fund
is set forth in Attachment I hereto, which are incorporated herein by
reference. The business address of each such trustee and executive officer is
Ford Motor Company Fund, The American Road, Dearborn, Michigan 48121.
During the last five years, neither the Fund nor any of its trustees
or executive officers identified in Attachment I (i) has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Ford Motor Company ("Ford") contributed the 1,047,201 shares of Common
Stock of the Issuer reported herein to the Fund on January 11, 1994. No
payment or other consideration was provided by the Fund in connection with its
acquisition of such shares.
ITEM 4. PURPOSE OF TRANSACTION.
Ford acquired 1,187,461 shares of Common Stock of the Issuer pursuant
to a certain Stock Purchase Agreement between Ford and the Issuer entered into
on August 19, 1986 (the "Stock Purchase Agreement"), and 672,269 shares of
Common Stock of the Issuer pursuant to a certain Stock Exchange Agreement and
Plan Reorganization entered into on August 19, 1986 (the "Stock Exchange
Agreement") among Ford, Modular Concept, Inc., then a wholly-owned subsidiary
of Ford ("MCI"), and the Issuer. Ford acquired all of aforementioned shares of
Common Stock of the Issuer for investment purposes under the aforementioned
agreements at a closing which occurred on October 7, 1986 (the "Closing").
Copies of the Stock Purchase Agreement and the Stock Exchange Agreement, which
are incorporated herein by reference, are appended hereto as Exhibits A and B,
respectively. Pursuant to Sections 6.10 and 8 (pgs. 31-34) of the Stock
Purchase Agreement, and Sections 3 and 4 of a certain Shareholders Agreement
discussed in Item 6(a) hereof, Ford has certain rights to acquire additional
shares of Common Stock of the Issuer in accordance with the terms and
conditions specified in such sections.
Pursuant to Section 6.2 of the Stock Purchase Agreement (pg. 19), the
by-laws of the Issuer were amended on or prior to the Closing to increase the
number of persons on its board of directors from four to seven, and to cause
two persons designated by Ford to be elected to fill two of the three
newly-created vacancies on the board of directors of the Issuer. The Issuer
has agreed that, for as long as Ford owns more than 10% of the issued and
outstanding Common Stock of the Issuer, it will cause two persons designated by
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CUSIP NO. 300657 10 3 13D Page 4 of 6 Pages
Ford to be included in the seven person slate of nominees which the Issuer
proposes to its shareholders for election as directors at each of its annual
meeting of shareholders, and use its good faith reasonable efforts to assure
that all such nominees, including the persons designated by Ford, are elected
as directors of the Issuer.
Pursuant to Section 7.3 of the Stock Purchase Agreement, Ford has
agreed, while the Shareholders Agreement discussed in Item 6(a) hereof remains
in effect, to not attempt to elect any person to the board of directors of the
Issuer except as provided in Section 6.2 of the Stock Purchase Agreement.
Pursuant to Section 6.3 of the Stock Purchase Agreement (pgs. 20-21), on or
before the Closing, the by-laws of the Issuer were to be amended to require the
favorable vote of an extraordinary majority of the board of directors to
approve certain matters, as provided in such Section.
Pursuant to Section 6.9 of the Stock Purchase Agreement (pgs. 25-26),
the Issuer is to provide Ford with notice regarding certain transaction
involving the acquisition of Common Stock of the Issuer by third parties, as
provided in such Section.
Pursuant to Section 7.2 of the Stock Purchase Agreement (pgs. 27-30),
Ford has limited its ownership interest in Common Stock of the Issuer to a
certain percentage and subject to certain conditions as provided in such
Section.
One or more of the provisions of the Stock Purchase Agreement, Stock
Exchange Agreement and Shareholders Agreement discussed in Item 6(a) hereof may
impede the acquisition of control of the Issuer by any person.
Since the acquisition by Ford of 1,859,730 shares of the Issuer's
Common Stock on October 7, 1986, the Issuer effected a 5-for-4 stock split of
its Common Stock in 1987 and paid a 10% stock dividend in 1989. These actions
increased the number of shares of the Common Stock of the Issuer held by Ford
to 2,557,128. The Issuer issued additional shares of Common Stock in 1992 and
1993 which had the effect of reducing the percentage of the issued and
outstanding shares of Common Stock of the Issuer owned by Ford from 40.1% to
24.2%
On January 11, 1994, Ford contributed 1,047,201 shares of Common Stock
of the Issuer to the Fund, thereby leaving Ford with 1,509,927 shares of the
Common Stock of the Issuer. In connection with such contribution, Ford
assigned to the Fund certain of its rights, and the Fund assumed the
obligations of Ford, under the Stock Purchase Agreement and the Shareholders
Agreement discussed in Item 6(a) hereof with respect to the shares of Common
Stock of the Issuer so contributed. This contribution has resulted in the
filing of this initial Schedule 13D by the Fund and a separate filing by Ford
of Amendment No. 1 to its Schedule 13D dated October 16, 1986 pursuant to Rule
13d-2 dated the date hereof.
On January 13, 1994, each of the Fund and Ford exercised the
registration rights provided in Section 9 and Exhibit D of the Stock Purchase
Agreement by requesting that the Issuer effect registration under the
Securities Act of 1933 of all their respective shares of Common Stock of the
Issuer. Also on January 13, 1994, the Fund, Ford and the Issuer issued a joint
press release announcing the plan by the Fund and Ford to sell all their shares
of Common Stock of the Issuer in a secondary public offering expected to be
completed in the first quarter of 1994. A copy of such press release, which is
incorporated herein by reference, is appended hereto as Exhibit C.
Except as described in this Item 4, the Fund has no plans or proposals
as of the date hereof which relate to or would result in:
(a) The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
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CUSIP NO. 300657 10 3 13D Page 5 of 6 Pages
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
(d) Any change in the present board of directors or management of
the Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend
policy of the Issuer;
(f) Any other material change in the business or corporate
structure of the Issuer;
(g) Changes in the charter, by-laws or instruments corresponding
thereto of the Issuer or other actions which may impede the acquisition of
control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of the Issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
(j) Any action similar to any of those enumerated in sub-items (a)
through (i) above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date hereof, the Fund is the beneficial owner of
1,047,201 shares of Common Stock of the Issuer, which represents 9.9% of the
issued and outstanding shares of Common Stock of the Issuer.
(b) The Fund has the sole power to vote or direct the vote, and
has the sole power to dispose or to direct the disposition of, all 1,047,201
shares of Common Stock of the Issuer beneficially owned by the Fund.
(c) The Fund did not have any transactions in the Common Stock of
the Issuer prior to the acquisition on January 11, 1994 of the shares of Common
Stock of the Issuer herein reported.
(d) No person other than the Fund has the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale by
the Fund of, the shares of Common Stock of the Issuer herein reported.
(e) As of the date hereof, the Fund is the beneficial owner of
more than five percent of the Common Stock of the Issuer.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
(a) Ford, certain shareholders of the Issuer (the "Shareholders")
and the Issuer entered into a Shareholders Agreement dated October 7, 1986 (the
"Shareholders Agreement"). A copy of the Shareholders Agreement is appended
hereto as Exhibit D. Ford assigned to the Fund certain of its rights, and the
Fund assumed the obligations of Ford under the Shareholders Agreement with
respect to the 1,047,201 shares of Common Stock of the Issuer reported herein.
Pursuant to Section I of the Shareholders Agreement (pgs. 1-3),
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CUSIP NO. 300657 10 3 13D Page 6 of 6 Pages
the Fund, Ford and the Shareholders have undertaken to each vote their
respective shares of Common Stock of the Issuer as provided in such Section.
(b) Pursuant to Sections 3 and 4 of the Shareholders Agreement
(pgs. 4-8), the Issuer has a right of first refusal in the event Ford or the
Fund shall offer for sale its respective shares of Common Stock of the Issuer
except for (1) a public sale on any stock exchange on which shares of Common
Stock of the Issuer are traded; or (2) a sale in a public offering pursuant to
an effective Registration Statement under the Securities Act of 1933, as
amended, and any applicable state law. In addition, Ford has a right of first
refusal to purchase any shares of Common Stock of the Issuer which the
Shareholders may offer for sale except for (1) a public sale on any stock
exchange on which shares of Common Stock of the Issuer are traded; or (2) a
sale in a public offering pursuant to an effective Registration Statement under
the Securities Act of 1933, as amended, and any applicable state law. The
terms and conditions of the grant and exercise of the right of first refusal
are as specified in such Sections.
(c) As discussed in Item 4 hereof, in connection with the
contribution by Ford to the Fund of 1,047,201 shares of Common Stock of the
Issuer and pursuant to an Acknowledgement and Assignment and Assumption
Agreement dated January 11, 1994 between Ford and the Fund (the "Assignment and
Assumption Agreement"), the Fund has assumed Ford's obligations under the
Shareholders Agreement with respect to the shares so contributed. A copy of
the Assignment and Assumption Agreement, which is incorporated herein by
reference, is appended hereto as Exhibit E.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following documents are appended hereto as Exhibits:
Exhibit A Stock Purchase Agreement between the Issuer
and Ford, dated as of August 19, 1986.
Exhibit B Stock Exchange Agreement and Plan of
Reorganization among the Issuer, Ford,
and MCI dated as of August 19, 1986.
Exhibit C Press Release dated January 13, 1994
Exhibit D Shareholders Agreement among the Issuer,
certain shareholders of the Issuer and Ford
dated October 7, 1986.
Exhibit E Acknowledgement and Assignment and Assumption
Agreement dated January 11, 1994 between Ford
and the Fund.
After reasonable inquiry, and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
/s/ FRANK V. J. DARIN
--------------------------
Frank V. J. Darin
Vice President
Ford Motor Company Fund
Dated: January 20, 1994
<PAGE> 7
ATTACHMENT I
The following table sets forth the name, position, business or
residential address and present principal occupation or employment of
each trustee and executive officer of Ford Motor Company Fund.
<TABLE>
<CAPTION>
Name and Position Present Principal Occupation or Employment
----------------- ------------------------------------------
<S> <C>
Alex Trotman Chairman of the Board, President and
Trustee Chief Executive Officer
Ford Motor Company
The American Road
Dearborn, MI 48121-1899
Frank V. J. Darin Director - Corporate Affairs
Vice President Ford Motor Company
The American Road
Dearborn, MI 48121-1899
Alfred B. Ford 1201 Parklane Towers West
Trustee 1 Parklane Blvd.
Dearborn, MI 48126
Allan D. Gilmour Vice Chairman
Trustee Ford Motor Company
The American Road
Dearborn, MI 48121-1899
Sheila F. Hamp 1201 Parklane Towers West
Trustee 1 Parklane Blvd.
Dearborn, MI 48126
John W. Martin, Jr. Vice President - General Counsel
Trustee Ford Motor Company
The American Road
Dearborn, MI 48121-1899
David N. McCammon Vice President - Finance and Treasurer
Trustee and Treasurer Ford Motor Company
The American Road
Dearborn, MI 48121-1899
Peter J. Pestillo Executive Vice President - Corporate Relations
Trustee Ford Motor Company
The American Road
Dearborn, MI 48121-1899
David W. Scott Vice President - Public Affairs
Trustee Ford Motor Company
The American Road
Dearborn, MI 48121-1899
Stanley A. Seneker Executive Vice President and
Trustee Chief Financial Officer
Ford Motor Company
The American Road
Dearborn, MI 48121-1899
</TABLE>
<PAGE> 8
EXHIBIT A
STOCK PURCHASE AGREEMENT
BETWEEN
FORD MOTOR COMPANY
AND
EXCEL INDUSTRIES, INC.
Dated as of August 19, 1986
<PAGE> 9
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
Recitals..................................................... 1
Section 1. SALE AND PURCHASE OF THE PURCHASE SHARES......... 2
Section 2. ISSUER TENDER OFFER...................... ... 2
Section 3. LEGEND ON STOCK CERTIFICATES..................... 3
Section 4. REPRESENTATIONS AND WARRANTIES OF EXCEL.......... 4
Section 4.1. Due Organization and Corporate Authority
of Excel and its Subsidiaries.............. 4
Section 4.2. Capitalization of Excel.................... 5
Section 4.3. Valid Issuance of the Ford Shares.......... 6
Section 4.4. Books and Records of Excel................. 6
Section 4.5. Authorization.............................. 7
Section 4.6. Absence of Conflicts....................... 7
Section 4.7. Consents................................... 8
Section 4.8. Due Execution.............................. 9
Section 4.9. Financial Statements of Excel.............. 9
Section 4.10. Excel Disclosure Exhibit................... 10
Section 4.10(a) No Infringement....................... 10
Section 4.10(b) Noncompetition Agreements............. 10
Section 4.10(c) Insurance............................. 10
Section 4.11. Absence of Changes in Business............. 10
Section 4.12. Litigation and Related Matters............. 11
Section 4.13. Brokers and Finders........................ 11
Section 4.14. Powers of Attorney......................... 11
Section 4.15. Documents True and Complete................ 11
Section 4.16. Subsidiaries............................... 12
Section 4.17. Absence of Undisclosed Liabilities......... 12
</TABLE>
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<TABLE>
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<S> <C>
Section 4.18. Compliance with Environmental, Health,
Safety and Similar Laws................... 13
Section 4.19. No Omission of Material Facts.............. 13
Section 5. REPRESENTATIONS AND WARRANTIES OF FORD............ 14
Section 5.1. Corporate Organization..................... 14
Section 5.2. Authorization.............................. 14
Section 5.3. Due Execution.............................. 14
Section 5.4. Absence of Conflicts....................... 14
Section 5.5. Consents................................... 15
Section 5.6. Brokers and Finders........................ 16
Section 5.7. Investment Representations................. 16
Section 6. COVENANTS OF EXCEL................................ 19
Section 6.1. HSR Act Filings............................ 19
Section 6.2. Ford Representation on Excel's Board of
Directors.................................. 19
Section 6.3. Supermajority Voting Provisions............ 20
Section 6.4. Indiana Business Corporation Law........... 21
Section 6.5. Financial Statements....................... 21
Section 6.6. Additional Information..................... 23
Section 6.7. Reporting Requirements; Rule 144........... 24
Section 6.8. Cooperation................................ 25
Section 6.9. Notice to Ford of Sales to or Offers by
Third Parties.............................. 25
Section 6.10. Additional Purchase Rights of Ford......... 26
Section 6.11. American Stock Exchange Application........ 26
Section 6.12. Supermajority Transactions................. 26
Section 7. COVENANTS OF FORD................................. 27
Section 7.1. HSR Act Filings............................ 27
</TABLE>
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<TABLE>
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Page
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<S> <C>
Section 7.2. Standstill Provisions...................... 27
Section 7.3. Board Representation....................... 30
Section 7.4. No Purchases of Excel Common Stock
Pending Closing............................ 30
Section 8. PURCHASE OPTION OF FORD.......................... 31
Section 8.1. Exceptions................................. 31
Section 8.2. Quantity of Shares to be Purchased......... 31
Section 8.3. Price...................................... 32
Section 8.4. Exclusive Right............................ 32
Section 8.5. Exercise of the Purchase Option............ 32
Section 9. REGISTRATION RIGHTS.............................. 34
Section 10. CONDITIONS TO FORD'S OBLIGATIONS AT CLOSING...... 34
Section 10.1. Satisfaction of Conditions Precedent and
Closing of Transactions Contemplated By
the Stock Exchange Agreement............... 35
Section 10.2. Accuracy of Representations and Warranties;
Performance of Covenants................... 35
Section 10.3. Certificates of Corporate Officers......... 35
Section 10.4. Legal Opinion.............................. 36
Section 10.5. No Material Change......................... 36
Section 10.6. Reporting Requirements; No Court Order..... 36
Section 10.7. Indiana and Other States' Laws............. 37
Section 10.8. No Governmental Change..................... 37
Section 10.9. Shareholders Agreement..................... 38
Section 10.10. Commencement and Substantial Completion
of Tender Offer............................ 38
Section 10.11. Approval of AMEX Listing Application....... 38
Section 10.12. Supply Contract............................ 38
Section 11. CONDITIONS TO EXCEL'S OBLIGATIONS AT CLOSING..... 38
</TABLE>
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<TABLE>
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<S> <C>
Section 11.1. Satisfaction of Conditions Precedent and
Closing of Transactions Contemplated By
the Stock Exchange Agreement............... 38
Section 11.2. Accuracy of Representations and Warranties;
Performance of Covenants................... 39
Section 11.3. Certificates of Corporate Officers......... 39
Section 11.4. Legal Opinion.............................. 39
Section 11.5. Reporting Requirements; No Court Order..... 40
Section 11.6. Approval of AMEX Listing Application....... 40
Section 11.7. Supply Contract............................ 40
Section 11.8. Shareholders Agreement..................... 41
Section 12. CLOSING........................................... 41
Section 12.1. Excel's Obligations at Closing............. 41
Section 12.2. Ford's Obligations at Closing.............. 41
Section 13. GENERAL PROVISIONS................................ 42
Section 13.1. Notices.................................... 42
Section 13.2. Survival................................... 42
Section 13.3. Indemnification by Excel................... 43
Section 13.4. Governing Law.............................. 44
Section 13.5. Entire Agreement........................... 44
Section 13.6. Modifications and Amendments............... 44
Section 13.7. Waivers and Extensions..................... 44
Section 13.8. Titles and Headings........................ 45
Section 13.9. Successors and Assigns..................... 45
Section 13.10. Assignment................................. 45
Section 13.11. Third Parties.............................. 45
Section 13.12. Counterparts............................... 46
Section 13.13. Termination................................ 46
</TABLE>
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SCHEDULE OF EXHIBITS
Exhibit A Purchase and Supply Agreement
Exhibit B Shareholders Agreement
Exhibit C(1) Excel Consolidated Balance Sheet and
Related Statements, December 31, 1985,
as certified by Price Waterhouse
Exhibit C(2) Unaudited Excel Consolidated Balance Sheet
and Related Statements, June 30, 1986
Exhibit D Registration Rights
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<PAGE> 14
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is dated and effective as of
August , 1986 and is entered into by and between Ford Motor
Company, a corporation organized and existing under the laws of the
State of Delaware ("Ford") and Excel Industries, Inc., a
corporation organized and existing under the laws of the State of
Indiana ("Excel").
R E C I T A L S:
A. Concurrently with the execution of this Agreement, Ford,
Modular Concepts, Inc., a wholly-owned subsidiary of Ford ("MCI"),
and Excel are executing a Stock Exchange Agreement and Plan of
Reorganization (the "Stock Exchange Agreement") pursuant to which
Ford agrees to exchange its shares of common stock of MCI for
672,269 shares of Excel common stock (the "Exchange Shares"). The
closing of such exchange transaction is expressly conditioned upon
the consummation of the transactions set forth in this Stock
Purchase Agreement.
B. Provided Excel acquires and retires 701,000 shares of the
currently issued and outstanding common stock of Excel pursuant to
an issuer tender offer at an agreed upon premium above the current
market price of such stock, Ford desires to purchase, and Excel
desires to issue and sell, an additional 1,187,461 shares of Excel
common stock in accordance with the terms and conditions set forth
herein.
C. As a result of such transactions, Ford would own approxi-
mately 40% of the then issued and outstanding shares of the common
stock of Excel.
<PAGE> 15
NOW, THEREFORE, in consideration of the premises, the mutual
covenants contained herein and each act done pursuant hereto, the
parties hereby agree as follows:
Section 1. Sale and Purchase of the Purchase Shares. Subject
to the terms and conditions of this Agreement, Ford hereby agrees
to purchase, and Excel hereby agrees to issue and sell, 1,187,461
shares of Excel common stock (the "Purchase Shares") and any
"Additional Shares" (as defined and as required as set forth below)
in consideration of the payment by Ford to Excel at the "Closing"
(as defined in Section 12 below) of $16,618,000 in cash and the
fulfillment by Ford at Closing of its obligations set forth in
Section 12.2(ii) below. In the event that for any reason Excel
acquires and retires less than 701,000 shares of Excel common stock
as a result of the "Tender Offer" (as defined in Section 2 below),
then, at no additional cost to Ford, Excel shall issue and deliver
to Ford an additional number of shares of Excel common stock (the
"Additional Shares") which, when added to the Exchange Shares and
the Purchase Shares, will constitute not less than 40% of the then
issued and outstanding shares of Excel common stock.
Section 2. Issuer Tender Offer. As soon as is reasonably
practicable, Excel shall commence an issuer tender offer pursuant
to the provisions of Section 13(e) of the Securities Exchange Act
of 1934, as amended, in which Excel solicits tenders for 701,000
shares of Excel common stock currently outstanding at a per share
price of $18.00; provided, however, that the conditions to the
consummation of the acquisition of shares by Excel in such tender
offer shall include, without limitation, the following: (i) the
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<PAGE> 16
expiration of applicable waiting period(s) under the HSR Act (as
defined in Section 4.7 below) with respect to all HSR Filings (as
defined in Section 4.7 below); and (ii) the simultaneous or
previous consummation of the transactions set forth in the Stock
Exchange Agreement and this Agreement. The issuer tender offer
described in this Section 2 shall be referred to herein as the
"Tender Offer". Excel shall use its good faith reasonable efforts
to consummate the acquisition and retirement of 701,000 shares in
the Tender Offer; provided, however, that (i) Excel shall not be
obligated to make any recommendation, or cause its board of
directors to make any recommendation, to any of Excel's
shareholders whether to tender all or any shares of Excel common
stock in the Tender Offer, and (ii) Excel shall not be required to
retain any person or entity to solicit tenders in the Tender Offer.
In the event the issuance of any Additional Shares is required
pursuant to Section 1 above, Excel shall issue and deliver to Ford
such Additional Shares at the Closing or as soon as possible
thereafter but in no event later than 30 days after the Closing.
Section 3. Legend on Stock Certificates. The stock certifi-
cates representing the Exchange Shares, Purchase Shares, Additional
Shares, any other shares of Excel common stock acquired by Ford
pursuant to this Agreement at the time of Closing or thereafter and
all shares of Excel common stock issued to Ford as a stock divi-
dend, stock split or any other pro rata adjustment with respect to
such shares (collectively, the "Ford Shares"), shall bear the
following two legends:
"The securities represented hereby have not been
registered under the Securities Act of 1933, as
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<PAGE> 17
amended (the 'Act') or any applicable state
securities laws ("Blue Sky Laws'). Any transfer
of such securities will be invalid unless a
Registration Statement under the Act or as
required by Blue Sky Laws is in effect as to
such transfer or in the opinion of counsel
satisfactory to the Company such Registration is
unnecessary in order for such transfer to comply
with the Act or Blue Sky Laws."
"The securities represented hereby are subject
to (a) the terms and provisions of a certain
Stock Purchase Agreement dated and effective
August , 1986 between Ford Motor Company and
the Company; and (b) certain restrictions on
transfer (except for (i) a public sale on any
stock exchange on which Excel common stock is
traded, or (ii) a sale in a public offering
pursuant to an effective Registration Statement
under the Securities Act of 1933, as amended,
and any applicable state law) and other con-
ditions, as specified in a certain Shareholders
Agreement. A complete and correct copy of each
such agreement is available for inspection at
the principal office of Excel Industries, Inc.
and will be furnished to the owner of such
shares upon written request and without charge."
Any shares of Excel common stock acquired by Ford in public market
purchases in accordance with the provisions of this Agreement shall
contain only the second legend set forth above.
Section 4. Representations and Warranties of Excel. Excel
represents and warrants as follows with respect to Excel and, as to
Sections 4.4, 4,11, 4.12, 4.13, 4.14, 4.18 and 4.19 as to each of
Excel and its subsidiaries:
Section 4.1. Due Organization and Corporate Authority of
Excel and its Subsidiaries. Each of Excel and its subsidiaries is
a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is organized, and is
duly qualified to do business and is in good standing as a foreign
corporation in all other jurisdictions in which the nature of the
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<PAGE> 18
corporation's business or its properties makes such qualification
necessary except such jurisdictions, if any, in which the failure to be so
qualified or licensed will not have a material adverse effect on the conduct of
its business or the ownership of its properties.
Section 4.2. Capitalization of Excel. The authorized capital stock
of Excel consists of 100,000 shares of no par preferred stock, none of
which is issued and outstanding, and 20,000,000 shares of no par common
stock, of which 3,472,202 shares are validly issued and outstanding, fully
paid and non-assessable and 119,790 shares are reserved for issuance under
Excel's Incentive Stock Option Plan (the "ISOP"). Except as set forth in
the preceding sentence and except for options granted under the ISOP, Excel
does not have any shares of its capital stock issued or outstanding and
there are no outstanding (i) securities or obligations of Excel convertible
into or exchangeable for such shares; (ii) warrants, rights or options to
subscribe for or purchase from Excel such shares or any such convertible or
exchangeable securities or obligations; or (iii) obligations of Excel to
issue any such shares, any such convertible or exchangeable securities or
obligations or any such warrants, rights or options. Except for shares
reserved for issuance under the ISOP, no shares of Excel common stock have
been reserved for issuance pursuant to an employee stock option plan or
otherwise. All outstanding shares of Excel common stock were issued in
compliance with all applicable federal and state securities laws. The
Tender Offer will be conducted in compliance with all applicable laws.
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<PAGE> 19
Section 4.3. Valid Issuance of the Ford Shares. The Ford
Shares, when issued, sold and delivered in accordance with the
terms hereof, will be newly issued and will be duly and validly
issued, fully paid and non-assessable and to the knowledge of
Excel, its officers and directors, and based in part upon the
representations of Ford in this Agreement, will be issued in com-
pliance with all applicable federal and state securities laws.
Upon consummation of the Tender Offer and the issuance of any
Additional Shares, the Ford Shares will constitute not less than
40% of the then issued and outstanding shares of Excel common
stock.
Section 4.4. Books and Records of Excel. Excel keeps and
maintains full and complete books, accounts and records which
accurately account for and reflect the assets, properties, liabil-
ities, obligations, affairs and results of the conduct and
operation of its business and maintains internal accounting
controls which provide reasonable assurance that (i) transactions
are executed with management's authorization; (ii) transactions are
recorded as necessary to permit preparation of Excel's financial
statements and to maintain accountability for the assets of Excel;
(iii) access to the assets of Excel is permitted only in accordance
with management's authorization; and (iv) the reported accounta-
bility of the assets of Excel is compared with existing assets at
reasonable intervals. The minute book of Excel contains a record,
accurate and complete in all material respects, of all meetings and
consents of the shareholders and board of directors (and all com-
mittees thereof) of Excel heretofore held including all such
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<PAGE> 20
meetings and consents relating to the issuance of the issued and
outstanding shares of Excel common stock. Such books and records,
and all other necessary documents, records, deeds, agreements and
the like relating to Excel's affairs are in its possession and
under its control.
Section 4.5. Authorization. Excel has the corporate power
to enter into this Agreement, the Purchase and Supply Agreement
attached hereto as Exhibit A (the "Supply Contract") and the
Shareholders Agreement attached hereto as Exhibit B (the "Share-
holders Agreement") and to carry out its obligations hereunder and
thereunder. The execution, delivery and performance of this
Agreement and each of the agreements contemplated hereby including,
without limitation, the Supply Contract and the Shareholders Agree-
ment, have been duly authorized by all necessary actions on the
part of Excel, including any stockholder approvals required by law.
Section 4.6. Absence of Conflicts. The execution, delivery
and performance of this Agreement and each of the agreements con-
templated hereby are not prohibited by, and do not materially
violate any provision or result in the material breach of (i) the
Articles of Incorporation or Code of By-Laws of Excel; (ii) any
contract, indenture, agreement, lease or license to which Excel or
any of its subsidiaries is a party or by which Excel, its subsidi-
aries or any of its or their assets are bound; (iii) any obliga-
tion, loan or guaranty to which Excel is bound; or (iv) any applic-
able law, rule, regulation, order, writ or decree of any court or
any other governmental authority. Also, such execution, delivery
and performance will not result in the creation or imposition of
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<PAGE> 21
any "Lien" on any of the assets of Excel or any of its subsidi-
aries. For purposes of this Agreement, a "Lien" shall mean any
lien, encroachment, easement, encumbrance, mortgage, hypothecation,
pledge, conditional sales contract, equity, charge, hire or hire
purchase agreement, or other similar conflicting ownership or
security interest in favor of any third party created by, through
or under Excel or its Subsidiaries, as the case may be, except for
(a) any lien for state or local property taxes not yet due and
payable and (b) such easements, rights of way and other imper-
fections of title, if any, as do not, individually or in the
aggregate, materially affect the operations of Excel or its
Subsidiaries, as the case may be, as a whole.
Section 4.7. Consents. No consent, approval, authorization
or order of, and no filing with or notification to, any govern-
mental authority or other person or entity (including, without
limitation, persons and entities having contractual relationships
with Excel) is required to be made or obtained by Excel in con-
nection with the execution, delivery and performance of this Agree-
ment, or the agreements contemplated hereby, which, if not made or
obtained would have a material adverse effect upon the performance
of Excel hereunder, other than the filings, if any, required to be
made in connection with the transactions contemplated herein under
the Hart-Scott-Rodino Antitrust Improvement Act of 1976 (the "HSR
Act" or "HSR Filings"), Indiana law, the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934 (the
"1934 Act") and the regulations promulgated under such Acts and
under the rules of the American Stock Exchange, Inc. (the "AMEX").
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<PAGE> 22
Section 4.8. Due Execution. This Agreement has been duly
executed and delivered by Excel and constitutes the legal, valid
and binding obligation of Excel; assuming the due authorization,
execution and delivery by Ford, the agreements contemplated hereby,
including, without limitation, the Supply Contract and the
Shareholders Agreement, will constitute the legal, valid and
binding obligation of Excel.
Section 4.9. Financial Statements of Excel. Exhibit C(1)
to this Agreement sets forth the consolidated balance sheet of
Excel as of December 31, 1985, together with the related statement
of income and retained earnings for the year ending on that date,
certified by Price Waterhouse, South Bend, Indiana, Excel's inde-
pendent public accountants, whose opinions with respect to such
financial statements are included in Exhibit C(1). Exhibit C(2) to
this Agreement sets forth an unaudited interim consolidated balance
sheet of Excel as of June 30, 1986, together with the related
unaudited interim statement of income and retained earnings for the
six-month period ending on that date. The financial statements in
Exhibits C(1) and C(2) are hereinafter collectively referred to as
the "Excel Financial Statements." The Excel Financial Statements
have been prepared in accordance with generally accepted accounting
principles consistently applied by Excel throughout the periods
indicated and fairly present (i) the financial position of Excel as
of the respective dates of the balance sheets included in the Excel
Financial Statements; and (ii) the results of Excel's operations
for the respective periods indicated.
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<PAGE> 23
Section 4.10. Excel Disclosure Exhibit. Excel has hereto-
fore furnished to Ford a disclosure exhibit (the "Excel Disclosure
Exhibit") which specifically sets forth all the exceptions to the
representations and warranties of Excel contained herein and which
contains, without limitation, the following information as of the
date hereof:
(a) No Infringement. A list of any patent, trade-
mark, trade name, service mark, brand name or copyright
belonging to any other person, firm or corporation on
which Excel has infringed or is now infringing.
(b) Noncompetition Agreements. A list of each
agreement restricting the freedom of Excel or any
employee or officer of Excel to compete in any line of
business with any person or entity.
(c) Insurance. A list and brief description, or in
lieu thereof a copy, of all policies of directors and
officers liability insurance held by Excel and of all
claims pending thereunder. Excel is not in default with
respect to any provision of any of such insurance
policies, nor has it failed to give any notice or present
any claim thereunder in timely fashion or as required by
any of such insurance policies.
Section 4.11. Absence of Changes in Business. Except as
specifically set forth in the Excel Disclosure Exhibit, there has
not been, since June 30, 1986, any material adverse change to the
financial condition, prospects or business of Excel and its sub-
sidiaries as reflected in the Excel Financial Statements.
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<PAGE> 24
Section 4.12. Litigation and Related Matters. Except as
specifically set forth in the Excel Disclosure Exhibit, there are
no actions, suits or proceedings pending, or to the knowledge of
Excel, its officers and directors, threatened against Excel, before
or by any federal, state, municipal or other governmental
authority, and there are no such actions, suits or proceedings
pending, or to the knowledge of Excel, its officers and directors,
threatened that would affect the transactions contemplated by this
Agreement or the Stock Exchange Agreement. Except as specifically
set forth in the Excel Disclosure Exhibit, Excel is not a party to
any actions, suits, proceedings or litigation, whether civil or
criminal, nor to the knowledge of Excel, its officers and
directors, is any such action, suit proceeding or litigation
threatened by or against Excel.
Section 4.13. Brokers and Finders. Excel has not employed
any broker, agent or finder or incurred any liability for any
brokerage fee, agent's commission or finder's fee in connection
with the transactions contemplated hereby.
Section 4.14. Powers of Attorney. Except as specifically
set forth in the Excel Disclosure Exhibit, Excel does not have any
powers of attorney or similar authorizations outstanding, other
than those issued in the ordinary course of business with respect
to customs, insurance, tax, foreign corporation qualification,
patent, copyright and trademark applications, and federal and state
securities laws.
Section 4.15. Documents True and Complete. Excel has
delivered to Ford true and complete copies of the documents
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<PAGE> 25
referred to herein, including, without limitation, the documents
described below:
(a) Articles of Incorporation and Code of By-Laws of
Excel, as amended to the date hereof; and
(b) The insurance policies referred to in Section
4.10(c) hereof.
Section 4.16. Subsidiaries. Excel owns 100% of the equity
securities, voting and non-voting, of each of its subsidiaries, and
none of the securities are pledged, mortgaged or encumbered. There
are no outstanding (i) securities or obligations of such subsidi-
aries convertible into or exchangeable for shares of Excel's sub-
sidiaries' equity securities, (ii) warrants, rights, rights or
options to subscribe for or purchase from any subsidiary such
securities or any such convertible or exchangeable securities or
obligations, or (iii) obligations of any subsidiary of Excel to
issue any such securities, any such convertible or exchangeable
securities or obligations or any such warrants, rights or options.
No securities of any subsidiary of Excel have been reserved for
issuance pursuant to an employee stock option plan or otherwise.
Section 4.17. Absence of Undisclosed Liabilities. As of
December 31, 1985 and June 30, 1986, Excel did not have any
material liabilities or obligations of any nature, whether
absolute, accrued, contingent or otherwise and whether due or to
become due, that under generally accepted accounting principles
should have been reflected in the Excel Financial Statements dated,
respectively, as of such dates, but were not so reflected.
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<PAGE> 26
Section 4.18. Compliance with Environmental, Health, Safety
and Similar Laws. Except as specifically set forth in the Excel
Disclosure Exhibit, (i) the operations of Excel do not violate any
applicable environmental, health and safety or other similar law or
requirement of or agreement with any governmental authority having
jurisdiction; (ii) Excel's current method of operation in the con-
duct of its business will not violate any building, environmental,
health and safety or other similar laws, requirements or regula-
tions currently enacted but that have future effective dates;
(iii) Excel is not subject to any order, writ, ruling, injunction,
judgment or stipulation issued by any court or governmental
authority which materially affects, or might reasonably be expected
to affect, Excel's business; and (iv) Excel is not now using, nor
has it used at any time in the past, any land, buildings or
facilities owned by or leased to Excel for the disposal, storage,
treatment, processing or other handling of hazardous waste or
contaminants.
Section 4.19. No Omission of Material Facts. The state-
ments, representations and warranties of Excel contained herein and
in the Excel Disclosure Exhibit are true and correct in all
material respects, to the best knowledge of Excel, none of the
other information or documents furnished or to be furnished to Ford
pursuant to this Agreement is false and misleading in any material
respect, and this Agreement does not omit any material fact which
is required to be stated herein or which is necessary in order to
make the statements contained herein not misleading.
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<PAGE> 27
Section 5. Representations and Warranties of Ford. Ford
hereby represents and warrants to Excel as follows:
Section 5.1. Corporate Organization. Ford is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power
to carry on its business as now conducted and as proposed to be
conducted.
Section 5.2. Authorization. Ford has the corporate power
to enter into this Agreement, the Supply Contract and the
Shareholders Agreement and to carry out its obligations hereunder
and thereunder. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
hereby, including, without limitation, the Supply Contract and the
Shareholders Agreement, have been duly authorized by all necessary
actions on the part of Ford, including any stockholder approvals
required by law.
Section 5.3. Due Execution. This Agreement has been duly
executed and delivered by Ford and constitutes the legal, valid and
binding obligation of Ford; assuming the due authorization,
execution and delivery by Excel, the agreements contemplated
hereby, including, without limitation, the Supply Contract and the
Shareholders Agreement will constitute the legal, valid and binding
obligation of Ford.
Section 5.4. Absence of Conflicts. The execution, delivery
and performance of this Agreement and each of the agreements con-
templated hereby are not prohibited by, and do not materially
violate any provision or result in the material breach of (i) the
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<PAGE> 28
Certificate of Incorporation or By-Laws of Ford; (ii) any contract,
indenture, agreement, lease or license to which Ford or any of its
subsidiaries is a party or by which Ford, its subsidiaries or any
of its or their assets are bound; (iii) any obligation, loan or
guaranty to which Ford is bound; or (iv) any applicable law, rule,
regulation, order, writ or decree of any court or any other
governmental authority. Also, such execution, delivery and per-
formance will not result in the creation or imposition of any
"Lien" on any of the assets of Ford or any of its subsidiaries.
For purposes of this Agreement, a "Lien" shall mean any lien,
encroachment, easement, encumbrance, mortgage, hypothecation,
pledge, conditional sales contract, equity, charge, hire or hire
purchase agreement, or other similar conflicting ownership or
security interest in favor of any third party created by, through
or under Ford or its subsidiaries, as the case may be, except for
(a) any lien for state or local property taxes not yet due and
payable and (b) such easements, rights of way and other imper-
fections of title, if any, as do not, individually or in the
aggregate, materially affect the operations of Ford or its
subsidiaries, as the case may be, as a whole.
Section 5.5. Consents. No consent, approval, authorization
or order of, and no filing with or notification to, any govern-
mental authority or other person or entity (including, without
limitation, persons and entities having contractual relationships
with Ford) is required to be made or obtained by Ford in connection
with the execution, delivery and performance of this Agreement, or
the agreements contemplated hereby, which, if not made or obtained
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<PAGE> 29
would have a material adverse effect upon the performance of Ford
hereunder, other than the filings, if any, required to be made in
connection with the transactions contemplated herein under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976 (the "HSR Act"
or "HSR Filings"), Indiana law, the Securities Act of 1933, as
amended (the "1933 Act"), and the regulations promulgated
thereunder.
Section 5.6. Brokers and Finders. Ford has not employed
any broker, agent, or finder or incurred any liability for any
brokerage fee, agent's commission or finder's fee in connection with
the transactions contemplated hereby.
Section 5.7. Investment Representations.
(a) The Ford Shares to be acquired by Ford pursuant
to the Stock Exchange Agreement and this Agreement are
being acquired for investment for its own account, not as
a nominee or agent, and not with a view to the sale or
distribution of any part thereof, and Ford has no present
intention of selling, granting participation in or other-
wise distributing the same, but subject, nevertheless, to
any requirement of law that the disposition of its
property shall at all times be within its control.
(b) Ford represents that it does not have any con-
tract, undertaking, agreement or arrangement with any
person to sell, transfer, or grant participations to such
person or to any third person, with respect to any of the
Ford Shares.
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<PAGE> 30
(c) Ford understands that the Ford Shares to be
acquired by it pursuant to the Stock Exchange Agreement
and this Agreement will not be registered under the 1933
Act or applicable state securities laws on the ground
that the issuance provided for in the Stock Exchange
Agreement and this Agreement is exempt from registration
pursuant to section 4(2) of the 1933 Act and Rule 506 of
Regulation D promulgated under the 1933 Act by the SEC,
and state law exemptions relating to offers and sales not
by means of a public offering, and that Excel's reliance
on such exemptions is predicated on Ford's representa-
tions set forth herein.
(d) Ford agrees that in no event will it make a
disposition of any of the Ford Shares unless and until it
shall have complied with the provisions of the Share-
holders Agreement.
(e) Ford acknowledges that the Ford Shares are
"restricted securities" which must be held until subse-
quently registered under the 1933 Act or an exemption
from such registration is available and further acknow-
ledges that Excel has informed Ford of such fact in
writing prior to the date hereof. Ford is aware of the
provisions of Rule 144 promulgated under the 1933 Act
which permit limited resale of restricted securities
acquired in a private placement subject to the satis-
faction of certain conditions, including, among other
things, the existence of a public market for such
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<PAGE> 31
securities, the availability of certain current public
information about the issuer, the resale occurring not
less than two years after a party has purchased and paid
for the security to be sold, the sale being through a
"broker's transaction" or in transactions directly with a
"market maker" (as provided by Rule 144(f)) and the
number of shares being sold during any three-month period
not exceeding specified limitations.
(f) Ford confirms that (i) all documents, records
and books pertaining to Excel, its businesses or any
other matter which have been requested by Ford have been
made available to Ford; (ii) it understands and has fully
considered the risk factors involved in the transactions
contemplated herein and the limitations on trans-
ferability pertaining to the Ford Shares; (iii) it is
aware of the business affairs and financial condition of
Excel and has acquired sufficient information about Excel
to reach an informed and knowledgeable decision to
acquire the Ford Shares; (iv) it has had ample oppor-
tunity to ask questions of Excel and to seek tax or legal
advice prior to acquiring the Ford Shares; and (v) it has
the capacity to protect its own interests in connection
with the purchase of the Ford Shares by reason of Ford's
business and financial experience; provided, however,
that nothing contained in this Section 5(f) shall in any
way modify or limit the effect of any of the representa-
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<PAGE> 32
tions, warranties or covenants of Excel set forth in this
Agreement.
(g) Ford confirms that it is able to bear the
economic risk of its investment in the Ford Shares, to
hold the Ford Shares for an indefinite period of time and
to afford a complete loss of the consideration paid for
the Ford Shares.
Section 6. Covenants of Excel. Excel hereby covenants and
agrees with Ford as follows:
Section 6.1. HSR Act Filings. Excel shall file, or cause
to be filed, all reports and documents as may be necessary to
comply with the HSR Act and applicable rules and regulations as
soon as practicable after the date of this Agreement. The parties
shall cooperate with and assist one another as may reasonably be
requested in connection with the preparation and submission of such
filings.
Section 6.2. Ford Representation on Excel's Board of
Directors. On or before the Closing, Excel shall (i) amend its
Code of By-Laws to increase the number of persons on its board of
directors from four to seven; (ii) cause two persons designated by
Ford to be elected to fill two of the three newly-created vacan-
cies; (iii) for as long as Ford owns greater than 10% of the issued
and outstanding Excel common stock (a) cause two persons designated
by Ford to be included in the seven-person slate of nominees which
Excel proposes to its shareholders for election as directors at
each of its annual shareholders' meetings, and (b) use its good
faith reasonable efforts to assure that all such nominees,
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<PAGE> 33
including the persons designated by Ford, are elected as directors
of Excel. In the event that (i) Ford owns greater than 10% of the
issued and outstanding Excel common stock and (ii) despite
compliance by Excel of its obligations set forth above, no person
designated by Ford is elected to serve as a director of Excel by
the shareholders of Excel, then Excel shall invite a person desig-
nated by Ford to attend all meetings of its board of directors as a
nonvoting observer and shall give such person copies of all
notices, minutes, consents and other materials that it provides to
Excel's directors; provided, however, that such person shall agree
to hold in confidence and trust and to act in a fiduciary manner
with respect to all information so provided in the same manner and
to the same extent as if such person were a member of Excel' s board
of directors.
Section 6.3. Supermajority Voting Provisions. On or before
the Closing, Excel shall amend its Code of By-Laws to provide that
the following matters shall thereafter require the favorable vote
of (a) at least six directors, if no directors abstain from voting;
or (b) all directors who vote, if one or more directors abstain and
at least a majority of all directors vote:
(i) Any acquisition or any expansion or change of
the business of Excel involving an expenditure or appro-
priation of assets of more than 20% of Excel's previous
quarter-end net worth, or $8,000,000, whichever is
greater;
(ii) The liquidation or sale of all or a portion
(with sales greater than 10% of the previous year's
sales or assets with a book value greater than 20% of
the previous quarter-end net worth, or $8,000,000,
whichever is greater) of Excel's business;
(iii) Any borrowing of money or other financing
arrangements whereby Excel incurs obligations through a
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<PAGE> 34
single transaction or a series of related transactions
for amounts in excess of 20% of the previous quarter-end
net worth, or $8,000,000, whichever is greater;
(iv) Any recommendation to modify or modification of
Excel' s Articles of Incorporation or Code of By-Laws;
(v) Any merger or consolidation of Excel with or
into any other corporation;
(vi) Any issuance of shares of Excel common stock or
other equity interests in Excel or rights to acquire
such common stock or other equity interests (except for
any shares issued as stock dividends or in a stock
split, options to purchase Excel common stock granted
pursuant to Excel's Incentive Stock Option Plan, and the
issuance of shares upon the exercise of any such
options); or
(vii) Any transaction which provides for any
restrictions on the declaration of dividends not
required by law (except for all such restrictions in
effect on the date hereof).
Section 6.4. Indiana Business Corporation Law. Excel shall
not permit its Code of By-Laws to be amended to modify in any
manner the provision thereof which states, in effect, that IND.
CODE Section 23-1-42 (1986) does not apply to the acquisition of the Ford
Shares by Ford. Excel shall cause the resolutions duly adopted by
its board of directors approving the acquisition of the Ford Shares
pursuant to the Stock Exchange Agreement and this Agreement to
remain in full force and effect until the Closing.
Section 6. 5. Financial Statements. From and after the date
hereof, until Ford no longer owns at least 1% of the outstanding
Excel common stock, Excel shall furnish to Ford the following
financial statements and reports, such financial statements and
reports to be prepared in accordance with generally accepted
accounting principles consistently applied:
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<PAGE> 35
(a) as soon as available, and in any event within
45 days after the end of each of the first three fiscal
quarters (commencing with the first quarter ending
after the Closing), an unaudited consolidated balance
sheet of Excel as of the end of each such quarter, and
an unaudited consolidated statement of income and
retained earnings of Excel for the portion of such
fiscal year ended with the last day of such quarter,
all in reasonable detail and stating in comparative
form the figures for the corresponding date and period
in the previous fiscal year and prepared and certified
by the chief financial officer of Excel, subject,
however, to year-end adjustments (for purposes of this
Section 6.5(a) delivery to Ford of a copy of Excel's
quarterly report on Form 10-Q as filed with the SEC
shall be deemed compliance);
(b) as soon as available, and in any event within
ninety days after the end of each fiscal year of Excel,
a balance sheet of Excel as of the end of such fiscal
year, a statement of income and retained earnings of
Excel for such fiscal year, and a statement of changes
in financial position of Excel for such fiscal year,
all in reasonable detail and stating in comparative
form the figures as of the end of and for the previous
fiscal year and accompanied by an opinion addressed to
Excel from independent certified public accountants of
recognized standing selected by Excel (for purposes of
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<PAGE> 36
this Section 6.5(b) delivery to Ford of a copy of
Excel' s annual report on Form 10-K as filed with the
SEC shall be deemed compliance);
(c) as soon as available, and in any event within
ninety days after the end of each fiscal year of Excel,
a business plan and an annual budget for Excel's suc-
ceeding fiscal year which has previously been approved
by Excel's board of directors, and a multi-year
business plan, if any, and, as soon as available,
copies of any amendments thereto or revisions thereof;
and
(d) promptly after becoming available for distri-
bution to the public, copies of all registration state-
ments, proxy statements and regular, periodic and other
reports, if any, which Excel shall have filed with the
SEC (or any governmental agency or agency substituted
therefor) or with any national securities exchange.
Section 6.6. Additional Information. From and after the
date hereof until Ford no longer owns at least 1% of the out-
standing common stock of Excel, Excel shall:
(a) furnish to Ford such nonconfidential infor-
mation concerning Excel as Ford may from time to time
reasonably request;
(b) offer Ford the right to visit the properties of
Excel at reasonable times, to interview, on prior
notice to Excel, key employees of Excel at their places
of employment at reasonable times and to examine the
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<PAGE> 37
books of account of Excel provided no confidential
information is revealed in any such visit, interview or
examination; and
(c) furnish to Ford as soon as practical, with a
complete and correct copy of the minutes of proceedings
of the shareholders, board of directors of Excel and
any committee of the board of directors, to the extent
no confidential information is contained therein.
Section 6.7. Reporting Requirements; Rule 144. From and
after the date hereof, Excel shall comply with all of the reporting
requirements of the 1934 Act. With a view to making available to
Ford the benefits of Rule 144 ("Rule 144"), promulgated under the
1933 Act, and any other rule or regulation of the SEC that may at
any time permit a shareholder to sell securities to the public
without registration, Excel agrees to:
(a) comply with public information reporting
requirements of the SEC which are a condition to the
availability of an exemption under Rule 144 for the
sale of unregistered securities; and
(b) furnish to Ford, for as long as Ford owns any
Excel common stock, forthwith upon request, (i) a
written statement by Excel that it has complied with
the 1933 Act and the 1934 Act and any reporting
requirements imposed upon Excel under Rule 144, and
(ii) such other information as Ford may reasonably
request to enable Ford to avail itself of any rule or
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<PAGE> 38
regulation of the SEC which permits the selling of any
restricted securities without registration.
Section 6.8. Cooperation. Excel shall cooperate with Ford
in supplying such information as may reasonably be requested by
Ford to complete and file any information reporting forms presently
or hereafter required by any government agency or securities
exchange as a condition to the availability of an exemption,
presently existing or hereafter adopted, from the registration
requirements of securities laws applicable to the sale by Ford of
any of the Ford Shares.
Section 6.9. Notice to Ford of Sales to or Offers by Third
Parties. Not later than ten days after it first becomes aware of
an offer for sale or sales by Excel or a shareholder of Excel to
any individual or entity other than Ford or an affiliate of Ford,
including existing shareholders of Excel (such individual or entity
being hereafter referred to as a "Third Party"), of an amount of
Excel common stock that, in the aggregate and taken together with
any existing shareholdings of such Third Party and its affiliates,
exceeds 5% of the then issued and outstanding Excel common stock,
Excel shall notify Ford in writing of such offer or sale or sales
and, to the extent known to Excel, the number of shares of Excel
common stock offered or sold to such Third Party, the purchase
price per share and the total number of shares of Excel common
stock held or which would be held by such Third Party following the
consummation of such offer or such sale or sales. Such notice
shall be in addition to any notice required under any other pro-
vision of this Agreement. For the purposes of this Agreement,
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"affiliate" shall mean any person or entity directly or indirectly
controlling, controlled by, or under common control with, another
person or entity.
Section 6.10. Additional Purchase Rights of Ford. Notwith-
standing the provisions of Section 7.2 below, for so long as Ford
shall own at least 20% of the issued and outstanding Excel common
stock, in the event that subsequent to the date of this Agreement,
a Third Party acquires more than the percentage of the then issued
and outstanding Excel common stock owned by Ford, Excel shall sell
to Ford, at Ford' s option, up to that number of shares of Excel
common stock as would enable Ford to have the same percentage of
the issued and outstanding Excel common stock as is owned by such
Third Party, at the average price per share and terms as the sales
to such Third Party. Ford may exercise this option by notifying
Excel, in writing, of its intention to do so (a "Notice of Exer-
cise") within sixty (60) days after its receipt of the notice of
such Third Party acquisition as required by Section 6.9 hereof.
The closing of any such sale to Ford hereunder shall occur not more
than (i) thirty (30) days following the date of the related Notice
of Exercise, or (ii) ten (10) days following the expiration of all
applicable waiting periods (and any extensions thereof) under the
HSR Act, whichever is later.
Section 6.11. American Stock Exchange Application. Excel
shall file an application with the AMEX to list the Ford Shares as
soon as practicable after the date of this Agreement.
Section 6.12. Supermajority Transactions. From and after
the date hereof and to the Closing, Excel shall not, without first
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obtaining the written approval of Ford, enter into or make any
commitment to enter into any transaction or perform any other act
which after the Closing will be covered by the provisions of
Section 6.3(i) through Section 6.3(vii) above, except that
(a) Excel has amended and will amend its Code of By-Laws as
contemplated by Sections 6.2, 6.3 and 6.4 above, and (b) Excel will
conduct the Tender Offer as contemplated in Section 2 above.
Section 7. Covenants of Ford. Ford hereby covenants and
agrees with Excel as follows:
Section 7.1. HSR Act Filings. Ford shall file, or cause to
be filed, all reports and documents as may be necessary to comply
with the HSR Act and applicable rules and regulations as soon as
practicable after the date of this Agreement. The parties shall
cooperate with and assist one another as may reasonably be
requested in connection with the preparation and submission of such
filings.
Section 7.2. Standstill Provisions.
(a) Ford shall not directly or indirectly acquire
any ownership interest in any shares of Excel common
stock, other than the Ford Shares, if after completion
of any such acquisition, Ford would own in excess of
40.16% of the issued and outstanding Excel common stock
unless any one of the following shall occur: (i) a
majority of the directors of Excel not designated by
Ford shall have first approved as hereinafter provided
of such acquisition in writing, or (ii) the shares of
Excel common stock collectively owned and controlled by
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<PAGE> 41
James J. Lohman, John D. Burt, James E. Crawford,
William M. Gude, James O. Futterknecht, Jr., Louis R.
Csokasy and Terrance L. Lindberg shall be less than
100,000 shares adjusted for stock dividends, stock
splits and other pro rata adjustments; (iii) if as a
result of material breaches by Excel of purchase orders
issued pursuant to the Supply Contract and after bona
fide applications of the provisions of paragraph 6 of
the Supply Contract, Ford is required to transfer
production of "Parts" (as defined in the Supply
Contract) utilized on two or more vehicles manufactured
by Ford from Excel to other suppliers during any 12
month period (a "Failure to Perform"); or (iv) a Third
Party shall have acquired more shares of Excel common
stock than those shares owned by Ford (a "Third Party
Acquisition") or a Third Party announces its intention
to make a Third Party Acquisition.
(b) In the event Ford elects to acquire any owner-
ship interest in shares of Excel common stock under
Section 7.2(a) (i) above, Ford shall furnish the
directors of Excel a written notice which sets forth
(i) the number of shares of Excel common stock Ford
wishes to acquire, (ii) the manner in which Ford wishes
to acquire such shares, and (iii) the purchase price
Ford is willing to pay for such shares. In the event
that a majority of the directors of Excel not desig-
nated by Ford approve of such acquisition of shares in
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<PAGE> 42
writing, then Ford shall be authorized to acquire such
number of shares in the manner and for the purchase
price set forth in such notice.
(c) In the event Ford elects to acquire any owner-
ship interest in shares of Excel common stock as a
result of a Failure to Perform under Section 7.2(a)
(iii) above, Ford shall only be entitled to purchase
shares of authorized but unissued shares of Excel
common stock from Excel for cash at the then market
price of such stock and Excel agrees to sell Ford such
shares upon such terms; provided, however, that in the
event Ford desires to then purchase more than Excel's
then authorized but unissued shares, Ford shall be
entitled to purchase any such additional shares from
third parties.
(d) In the event that (i) Ford acquires shares of
Excel common stock under Section 7.2(a) (iv) above as a
result of a Third Party Acquisition; and (ii) after
such acquisition by Ford, Ford owns more shares of
Excel common stock than such Third Party, then Excel
shall be entitled to purchase from Ford that number of
shares of Excel common stock then owned by Ford which
exceeds the shares then owned by such Third Party. The
purchase price to Excel shall be equal to Ford' s cost
of such shares and Excel shall only be entitled to
exercise such option for a period of sixty (60) days
after Ford acquires such shares.
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(e) In the event that (i) Ford acquires shares of
Excel common stock under Section 7.2(a) (iv) above as a
result of a Third Party' s announcement of its intention
to make a Third Party Acquisition; and (ii) within
sixty (60) days of any such acquisition by Ford, such
Third Party withdraws its offer to make a Third Party
Acquisition, then Excel shall be entitled to purchase
from Ford that number of shares of Excel common stock
so acquired by Ford pursuant to Section 7.2(a) (iv).
The purchase price to Excel shall be equal to Ford's
cost of such shares and Excel shall only be entitled to
exercise such option for a period of sixty (60) days
after such Third Party withdraws its offer to make a
Third Party Acquisition.
Section 7.3. Board Representation. Until the termination
of the Shareholders Agreement in accordance with the provisions of
Section 6 thereof, Ford shall not attempt in any manner to elect
any person to the board of directors of Excel, except such persons
who are proposed and nominated by Excel for election in accordance
with the provisions of Section 6.2 above.
Section 7.4. No Purchases of Excel Common Stock Pending
Closing. Ford represents and warrants that neither it nor, to the
best of its knowledge, any of its affiliates now owns, and
covenants and agrees that neither it nor any of its affiliates will
acquire prior to Closing, any direct or indirect ownership interest
in any shares of Excel common stock.
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Section 8. Purchase Option of Ford. Ford shall have the
right to purchase from Excel (the "Purchase Option") additional
shares of Excel common stock in the quantity and pursuant to the
provisions set forth in this Section 8. The Purchase Option shall
arise upon any issuance by Excel, other than those set forth in
Section 8.1 hereof, of shares of Excel common stock (or securities
convertible into Excel common stock) after the Closing Date (a "New
Issuance").
Section 8.1. Exceptions. An issuance of Excel common stock
pursuant to any of the following events set forth in this Section
8.1 shall not be a New Issuance and shall not give rise to the
Purchase Option:
(a) any stock split, stock dividend or other pro
rata adjustments in the number of issued and outstand-
ing shares of Excel common stock;
(b) issuance or exercise of any option pursuant to
Excel's Incentive Stock Option Plan;
(c) an offering or sale of shares of Excel common
stock under any Employee Stock Purchase Plan which
Excel may hereafter duly and properly adopt; or
(d) an issuance of Excel common stock to Ford
pursuant to the terms of this Agreement.
Section 8.2. Quantity of Shares to be Purchased. Except as
provided in Section 8.1 hereof, as long as Ford shall own any
shares of Excel common stock, the Purchase Option in connection
with each New Issuance shall entitle Ford to purchase from Excel up
to but not in excess of that number of shares of Excel common stock
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<PAGE> 45
which represents the same percentage of such New Issuance as the
percentage of issued and outstanding Excel common stock owned by
Ford immediately preceding the New Issuance.
Section 8.3. Price. The price per share of Excel common
stock and the terms upon which such stock shall be purchased pur-
suant to an exercise of the Purchase Option, shall be as follows:
(i) if the New Issuance is a private placement, the price per share
and the terms proposed to be paid in such New Issuance, or (ii) if
the New Issuance is a public offering, the initial public offering
price set forth on the cover page of the final prospectus less an
amount which represents a pro rata allocation to each share of
Excel common stock included in such public offering of the sum of
all costs and expenses (including, without limitation, brokerage
fees, underwriters' discounts, commissions, filing fees, attorneys'
fees and printing costs) incurred by Excel in connection with such
public offering.
Section 8.4. Exclusive Right. Excel shall not, from and
after the Closing Date, grant to any person or entity a right to
purchase additional shares of Excel common stock (or securities
convertible into Excel common stock) which is exercisable upon the
issuance of Excel common stock pursuant to any of the events set
forth in Section 8.1(a), (b) or (c) above.
Section 8.5. Exercise of the Purchase Option.
(a) Excel shall give Ford written notice of any New
Issuance setting forth the number of shares of Excel
common stock proposed to be issued and the price and
the terms of such New Issuance. Ford shall have the
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<PAGE> 46
right to exercise the Purchase Option by notifying
Excel, in writing, within sixty (60) days after receipt
of such notice, of its intent to exercise the Purchase
Option, specifying the number of shares that it intends
to purchase. If a proposed New Issuance is to be
effected through a public offering, Ford's notice of
intent to exercise the Purchase Option shall be suffic-
ient if Ford states therein that its election to
purchase is conditional on the initial public offering
price, as set forth on the cover page of the final
prospectus with respect to such offering, not exceeding
a specified price per share. Excel shall notify Ford,
in writing, of the initial public offering price of a
New Issuance within seven (7) days after the date the
registration statement with respect to such New
Issuance shall have become effective.
(b) The closing pursuant to the exercise of the
Purchase Option shall occur at the offices of Excel or
such other place as the parties shall mutually agree
upon, not more than (i) thirty (30) days following the
date Ford shall have delivered its notice of intent as
provided in Section 8.4(a) hereof, or (ii) ten (10)
days following the expiration of all applicable waiting
periods (and any extensions thereof) under the HSR Act,
whichever is later. At such closing, Ford shall pay
the purchase price, as determined pursuant to Section
8.3 hereof, for the shares of Excel common stock which
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Ford has elected to acquire against delivery by Excel
of a certificate or certificates for such shares, and
Ford shall deliver to Excel such investment and other
representations as may be required by applicable
federal and state securities laws.
(c) If Ford fails to exercise the Purchase Option
hereof with respect to a particular New Issuance, the
Purchase Option shall lapse (but only with respect to
that New Issuance), provided that Excel actually
consummates such New Issuance within ninety (90) days
following delivery of the initial notice of the New
Issuance to Ford, on terms no more favorable to the
purchaser or purchasers thereof than those set forth in
the notice or notices required pursuant to Section
8.4(a). Ford's failure to exercise its Purchase Option
in connection with any New Issuance shall not affect
Ford's right to exercise its Purchase Option in con-
nection with any other New Issuance by Excel.
Section 9. Registration Rights. Excel hereby grants Ford
registration rights with respect to the Ford Shares in accordance
with the terms and provisions set forth in Exhibit D which is
attached hereto and incorporated herein by reference.
Section 10. Conditions to Ford's Obligations at Closing. The
obligations of Ford to acquire the Ford Shares pursuant to the
Stock Exchange Agreement and this Agreement shall be subject to the
fulfillment at or prior to the Closing of each of the following
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conditions, except to the extent any such condition is waived by
Ford:
Section 10.1. Satisfaction of Conditions Precedent and
Closing of Transactions Contemplated By the Stock Exchange Agree-
ment. Each of the conditions precedent to the respective obliga-
tions of Ford and Excel to consummate the transactions contemplated
by the Stock Exchange Agreement shall have been satisfied or duly
waived, and to the extent practicable, the transactions
contemplated by the Stock Exchange Agreement shall be closed
concurrently with the transactions contemplated by this Agreement.
Section 10.2. Accuracy of Representations and Warranties;
Performance of Covenants. The representations and warranties of
Excel set forth in this Agreement (including, without limitation,
those contained in the Excel Disclosure Exhibit) shall be true and
correct in all material respects on the date hereof and as though
made anew as of the Closing, except with respect to (i) the effect
of transactions expressly permitted by this Agreement; (ii) changes
in laws, statutes, rules or regulations after the date of this
Agreement; and (iii) transactions that have been consented to in
writing by Ford. In addition, all covenants or transactions
contemplated herein to be performed by Excel on or before the
Closing shall have been complied with or performed.
Section 10.3. Certificates of Corporate Officers. Excel
shall have delivered to Ford (i) a certificate, dated as of the
Closing and signed by its President as to the matters set forth in
Section 10.2 hereof; and (ii) a certificate of the corporate
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<PAGE> 49
Secretary of Excel, dated as of the Closing, containing the resolu-
tions of Excel's board of directors approving the issuance of the
Ford Shares to Ford as contemplated in the Stock Exchange Agreement
and this Agreement, and as to the factual matters set forth in
Sections 4.1, 4.2, 4.3, 4.4, 4.7, 4.8, 4.9, 4.11, 4.13 and 4.14.
Section 10.4. Legal Opinion. Ford shall have received an
opinion, dated as of the Closing, in form and substance reasonably
satisfactory to Ford, from Sommer & Barnard, counsel to Excel, as
to the matters set forth in Sections 4.1, 4.2, 4.3, 4.4, 4.5 and
4.8, and to the best of their knowledge, the matters set forth in
Sections 4.6, 4.7, 4.12 and 4.16. Such opinion of counsel may rely
on opinions of other counsel as to matters governed by laws other
than federal laws and the laws of the State of Indiana, provided
that such counsel shall state in his opinion that such opinion of
other counsel is satisfactory in scope and form to him and that, in
his opinion, Ford and he are justified in relying thereon.
Section 10.5. No Material Change. The business and assets
of Excel and its subsidiaries shall not have suffered any material
and adverse effect as the result of fire, explosion, flood,
accident, act of God, taking of property by any governmental
authority or any other casualty or similar event (whether or not
covered by insurance).
Section 10.6. Reporting Requirements; No Court Order. Any
mandatory waiting period under the HSR Act shall have expired and
all reviews and approvals from governmental authorities shall have
been obtained. No court shall have entered and maintained in
effect an injunction or other similar order against consummation of
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any of the transactions contemplated herein; no action, proceeding
or investigation shall have been instituted or commenced by any
governmental body or authority and remain pending, with a view to
restraining or prohibiting the transactions contemplated herein;
and no governmental body or authority shall have notified any party
to this Agreement that consummation of the transactions contem-
plated herein would constitute a violation of applicable law or
that such body or authority intends to commence proceedings to
restrain the consummation of the transactions contemplated herein,
unless such notice shall have been withdrawn in writing prior to
the Closing.
Section 10.7. Indiana and Other States' Laws. The parties
shall have completed all filings with the State of Indiana or such
other state or states Excel or Ford may have deemed reasonably
necessary or appropriate and received all necessary or appropriate
approvals, authorizations or other consents or, in the event no
approval, authorization or consent is required, the waiting period
required thereunder, including any extension thereof shall have
expired without any substantial opposition from the respective
competent authority.
Section 10.8. No Governmental Change. No change shall have
occurred or been announced or proposed after the date hereof and
prior to the Closing in the laws, rules, regulations or policies of
any governmental authority in any jurisdiction in which any assets
of Excel are located or in which its business is conducted or to
which any of its assets or business are subject, which might
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<PAGE> 51
reasonably be expected to materially and adversely affect its
assets or its business.
Section 10.9. Shareholders Agreement. Ford and certain
shareholders of Excel who collectively own on the date of this
Agreement and upon consummation of the transactions contemplated by
this Agreement and the Stock Exchange Agreement, including the
Tender Offer, greater than 10% of the then issued and outstanding
Excel common stock shall have entered into the Shareholders
Agreement substantially in the form attached hereto as Exhibit B.
Section 10.10. Commencement and Substantial Completion of
Tender Offer. Excel shall have commenced the Tender Offer and
there shall have been not less than 351,000 shares of Excel common
stock tendered to Excel as of the Closing.
Section 10.11. Approval of AMEX Listing Application. AMEX
shall have approved Excel's listing application with respect to the
Ford Shares.
Section 10.12. Supply Contract. Excel shall have duly and
properly executed and delivered the Supply Contract to Ford.
Section 11. Conditions to Excel's Obligations at Closing.
The obligations of Excel to issue and sell the Ford Shares pursuant
to the Stock Exchange Agreement and this Agreement shall be subject
to the fulfillment at or prior to the Closing of each of the
following conditions, except to the extent any such condition is
waived by Excel:
Section 11.1. Satisfaction of Conditions Precedent and
Closing of Transactions Contemplated By the Stock Exchange Agree-
ment. Each of the conditions precedent to the respective obliga-
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tions of Excel and Ford to consummate the transactions contemplated
by the Stock Exchange Agreement shall have been satisfied or duly
waived, and to the extent practicable, the transactions
contemplated by the Stock Exchange Agreement shall be closed
concurrently with the transactions contemplated by this Agreement.
Section 11.2. Accuracy of Representations and Warranties;
Performance of Covenants. The representations and warranties of
Ford set forth in this Agreement shall be true and correct in all
material respects on the date hereof and as though made anew as of
the Closing, except with respect to (i) the effect of transactions
expressly permitted by this Agreement; (ii) changes in laws,
statutes, rules or regulations after the date of this Agreement;
and (iii) transactions that have been consented to by Excel. In
addition, all covenants or transactions contemplated herein to be
performed by Ford on or before the Closing shall have been complied
with or performed.
Section 11.3. Certificates of Corporate Officers. Ford
shall have delivered to Excel (i) a certificate, dated as of the
Closing and signed by an officer of Ford as to the matters set
forth in Section 11.2 hereof.
Section 11.4. Legal Opinion. Ford shall have delivered to
Excel an opinion of the Associate General Counsel and Secretary of
Ford dated as of the Closing in form and substance reasonably
satisfactory to Excel as to the matters set forth in Sections 5.1,
5.2, 5.3, and to best of his knowledge, the matters set forth in
5.4 and 5.6. Such opinion of counsel may rely on opinions of other
counsel as to matters governed by laws other than federal laws and
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<PAGE> 53
the laws of jurisdictions where such counsel is admitted to
practice, provided that such counsel shall state in his opinion
that such opinion of other counsel is satisfactory in scope and
form to him and that, in his opinion, Excel and he are justified in
relying thereon.
Section 11.5. Reporting Requirements; No Court Order. Any
mandatory waiting period under the HSR Act shall have expired and
all reviews and approvals from governmental authorities shall have
been obtained. No court shall have entered and maintained in
effect an injunction or other similar order against consummation of
any of the transactions contemplated herein; no action, proceeding
or investigation shall have been instituted or commenced by any
governmental body or authority and remain pending, with a view to
restraining or prohibiting the transactions contemplated herein;
and no governmental body or authority shall have notified any party
to this Agreement that consummation of the transactions contem-
plated herein would constitute a violation of applicable law or
that such body or authority intends to commence proceedings to
restrain the consummation of the transactions contemplated herein,
unless such notice shall have been withdrawn in writing prior to
the Closing.
Section 11.6. Approval of AMEX Listing Application. AMEX
shall have approved Excel's listing application with respect to the
Ford Shares.
Section 11.7. Supply Contract. Ford shall have duly and
properly executed and delivered the Supply Contract to Excel.
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Section 11.8. Shareholders Agreement. Ford shall have duly
and properly executed the shareholders Agreement to Excel.
Section 12. Closing. The purchase and sale of the Ford
Shares shall be consummated at such time and place as is mutually
agreed upon by Ford and Excel (the "Closing") as soon as practic-
able after all of the conditions set forth in Section 10 have been
satisfied or waived in writing by Ford and all of the conditions
set forth in Section 11 have been satisfied or waived in writing by
Excel.
Section 12.1. Excel's Obligations at Closing. At the
Closing, Excel shall:
(i) duly and properly execute and deliver the Supply
Contract to Ford;
(ii) duly and properly execute and deliver the
Shareholders Agreement to Ford;
(iii) deliver to Ford valid stock certificates repre-
senting the Purchase Shares in accordance with Section
3 above; and
(iv) deliver to Ford duly and properly executed
certificates and legal opinions in accordance with
Section 10 above.
Section 12.2. Ford's Obligations at Closing. At the
Closing, Ford shall:
(i) deliver to Excel $16,618,000 in immediately
available funds;
(ii) duly and properly execute and deliver the Supply
Contract to Excel;
(iii) duly and properly execute and deliver the Share-
holders Agreement to Excel; and
(iv) deliver to Excel duly and properly executed
certificates and legal opinions in accordance with
Section 11 above.
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<PAGE> 55
Section 13. General Provisions.
Section 13.1. Notices. All notices demands, requests,
consents, approvals or other communications (collectively
"Notices") required or permitted to be given hereunder or which are
given with respect to this Agreement shall be in writing and shall
be personally delivered or deposited in the United States mail,
registered or certified, return receipt requested, postage prepaid,
addressed as set forth below, or such other address as such party
shall have specified most recently by written notice. Notice shall
be deemed given on the date of delivery if personally delivered.
Notice mailed as provided herein shall be deemed given on the third
business day following the date so mailed.
To Excel: Excel Industries, Inc.
1120 N. Main Street
Elkhart, Indiana 46514
Attention: Chief Executive Officer
with a copy to: Sommer & Barnard
54 Monument Circle, 9th Floor
Indianapolis, Indiana 46204
Attention: James K. Sommer
To Ford: Ford Motor Company
Glass Division
300 Renaissance Center
P. O. Box 43343
Detroit, Michigan 48243
Attention: General Manager
with a copy to: Ford Motor Company
The American Road
Dearborn, Michigan 48121
Attention: Secretary
Section 13.2. Survival. All representations and warranties
made by the parties to this Agreement shall survive the Closing and
any investigations made by or on behalf of the parties. All state-
ments as to factual matters contained in the Excel Disclosure
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Exhibit and the Ford Disclosure Exhibit and any other certificate
or instrument delivered by or on behalf of Excel or Ford pursuant
hereto or in connection with the transactions contemplated hereby
shall be deemed to be representations and warranties by Excel or
Ford hereunder as of the date of such exhibit, certificate or
instrument.
Section 13.3. Indemnification by Excel. Excel shall
indemnify and hold Ford harmless from and against all loss, cost,
damage, penalty or expense, including attorneys' fees, for claims
and lawsuits arising out of Excel's or any of Excel's subsidiaries'
treatment, storage, disposal, or the arranging therefor, or the
existence on Excel's or any of Excel's subsidiaries' property, of
any hazardous or toxic substance (including any constituent
thereof) or Excel's discharge into the environment of any hazardous
or toxic substance (including any constituent thereof), including,
without limitation, claims of natural resource damage, personal
injury, property damage, or response or remedial costs, whether at
common law, or under any domestic or foreign law, including, without
limitation, the Comprehensive Environmental Response Compensation
and Liability Substance Control Act, and any state statute or
municipal ordinance creating liability for the treatment, storage
or disposal, or the arranging therefor, or the existence on property,
of hazardous or toxic substances; provided, however, that this
indemnification and hold harmless provision shall not apply to
any decrease in the value of any Excel common stock owned by Ford.
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Section 13.4. Governing Law. This Agreement shall be
governed by, interpreted under, and construed and enforced in
accordance with the internal laws, and not the laws pertaining to
conflicts or choice of laws, of the State of Indiana applicable to
agreements made and to be performed wholly within the State of
Indiana.
Section 13.5. Entire Agreement. This Agreement and the
Stock Exchange Agreement executed concurrently herewith, including
the exhibits thereto, the MCI Disclosure Exhibit and the Excel
Disclosure Exhibit, and the Supply Contract and the Shareholders
Agreement, constitute the entire agreement of the parties and
supersedes all prior and contemporaneous agreements, understand-
ings, covenants, representations and warranties, negotiations and
discussions between the parties, whether oral or written, with
respect to the subject matter hereof; provided, however, that any
supply agreements or purchase orders in effect between the parties
shall remain in effect pursuant to their terms.
Section 13.6. Modifications and Amendments. No amendment,
modification, waiver or termination of this Agreement shall be
binding unless executed in writing by the parties hereto.
Section 13.7. Waivers and Extensions. Either party to this
Agreement may waive any right, breach, or default which such party
has the right to waive, provided that such waiver will not be
effective against the waiving party unless it is in writing, is
signed by such party, and specifically refers to this Agreement.
Waivers may be made in advance or after the right waived has arisen
or the breach or default waived has occurred and may be condi-
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tional. No waiver of any breach of any agreement or provisions
herein contained shall be deemed a waiver of any proceeding or
succeeding breach thereof or of any other agreement or provision
herein contained. No extension of time for performance of any
obligations or acts shall be deemed an extension of the time for
performance of any other obligations or acts.
Section 13.8. Titles and Headings. Titles and headings of
sections of this Agreement are for convenience only and shall not
affect the construction of any provision of this Agreement.
Section 13.9. Successors and Assigns. This Agreement and
the provisions hereof shall be binding upon and shall inure to the
benefit of each of the parties and their respective permitted
successors and assigns.
Section 13.10. Assignment. The rights, duties and obliga-
tions hereunder may not be assigned or delegated by either party
without the prior written consent of the other party; provided,
however, that Ford may assign its rights hereunder to a majority-
owned subsidiary of Ford in which event Ford shall remain liable on
all of its duties and obligations hereunder. Any other assignment
or delegation of rights, duties or obligations hereunder made
without the prior written consent of the other party hereto shall
be void and of no effect.
Section 13.11. Third Parties. Nothing contained herein
shall be deemed to confer upon any person or entity, other than the
parties hereto and their respective successors and assigns, any
right or remedy under or by reason of this Agreement.
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Section 13.12. Counterparts. This Agreement may be executed
in counterparts each of which shall be deemed an original, but all
of which taken together shall constitute but one and the same
instrument.
Section 13.13. Termination. This Agreement shall terminate
and shall be of no further force or effect:
(a) Upon mutual agreement of the parties; or
(b) Upon notice given by either party to the other
party in the event the Closing has not occurred on or
before December 31, 1986.
No termination of this Agreement shall release, or be
construed as releasing, any party hereto from any liability or
damage to the other party hereto arising out of, in connection with
or otherwise relating to, directly or indirectly, such party's
material breach, such party's material default or such party's
failure in performance of any of its material covenants, agree-
ments, duties or obligations arising hereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
EXCEL INDUSTRIES, INC. FORD MOTOR COMPANY
By: /s/ JAMES J. LOHMAN By: /s/ D.E. SIDDALL
-------------------- ------------------
James J. Lohman, President & CEO D.E. Siddall, General Manager, Glass Div.
- -------------------------------- ----------------------------------------
printed, title printed, title
-46-
<PAGE> 60
PURCHASE AND SUPPLY AGREEMENT
THIS AGREEMENT is effective on the day of ,
1986 and is between EXCEL INDUSTRIES, INC., an Indiana
corporation, with its principal place of business at 1120 N. Main
St., Elkhart, Indiana 46514 ("Excel") and FORD MOTOR COMPANY, a
Delaware corporation, with its principal place of business at The
American Road, Dearborn, Michigan 48121 ("Ford").
R E C I T A L S
A. Excel is in the business of manufacturing modular framed
glass parts for cars and trucks, including minivans and vans.
B. Excel has purchased from Ford the stock of Modular
Concepts, Inc. which also manufactures modular framed glass parts
and Ford has purchased shares of Excel stock.
C. As part of the transactions described above Ford will
purchase for itself and Ford Motor Company of Canada, Ltd. (which
has delegated authority to Ford to purchase goods and services),
and Excel will manufacture and supply, certain modular framed
glass parts in accordance with this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Ford Motor Company on behalf of itself and Ford Motor
Company of Canada, Ltd. ("Ford Canada") will purchase from Excel
and Excel will manufacture and supply to Ford 70% of the
requirements by dollar volume of Ford and Ford Canada for modular
EXHIBIT A
to
STOCK PURCHASE AGREEMENT
<PAGE> 61
- 2 -
framed glass parts using RIM and PVC technology ("Part" or
"Parts") for cars and trucks, including minivans and vans,
manufactured by Ford and Ford Canada commencing with Ford's 1990
model year and extending for four model years thereafter. The
parties understand that actual purchase and supply may vary above
or below seventy percent due to changes in the mix of vehicle
production at Ford's assembly plants during a model year. The
parties will make good faith efforts to purchase and supply the
percentage of requirements specified herein in each model year of
this Agreement and to balance the purchase and supply of Parts
between (i) windshields and backlites, and (ii) other Parts.
Ford will make good faith efforts to have any company which
manufactures any cars and trucks, including minivans and vans,
for Ford or Ford Canada to purchase Parts for such vehicles from
Excel.
2. Excel will make good faith efforts, at all times, to be competive
as a supplier of Parts with the best supplier available to Ford on a composite
basis, taking into account technology, quality, service, price and delivery.
Ford shall issue purchase orders to Excel for Parts in which Excel is
competitive to fulfill Ford's sourcing obligations under Section 1 hereof, but
if Excel is not competitive with respect to a Part, Ford shall have no
obligation to issue or continue purchase orders for such Part to Excel. If
during the sourcing of Parts for a particular model year, it shall reasonably
appear that Ford's obligation to source at least 70% of its Parts
<PAGE> 62
- 3 -
requirements for that model year to Excel is in jeopardy because
of Excel's noncompetitiveness on a particular Part or Parts, Ford
shall so notify Excel and Excel shall be given the opportunity to
demonstrate its competitiveness on such Part or Parts prior to
sourcing such Part or Parts, and Ford and Excel shall discuss the
basis for Ford's assessment of Excel's competitive position,
including discussions at senior managerial levels if necessary.
3. (a) Excel will make good faith efforts to develop its
ability to manufacture Parts using PVC technology for the 1990
model year. Ford's commitment to source 70% of its requirements
for Parts and Excel's commitment to supply such Parts shall not
extend to Parts using PVC technology until such time as Excel
demonstrates that it has or will have adequate capability to
manufacture such Parts in accordance with Ford's normal sourcing
timing.
(b) Excel will make good faith efforts to achieve Q1
status at each of its manufacturing facilities which supplies
Parts to Ford within two years after the date of this Agreement
or within two years after commencing supply of Parts to Ford from
such facility, whichever is later.
4. (a) Pursuant to Section 7. hereof, Ford shall issue a
separate purchase order with respect to each Part purchased
hereunder. The price for a particular Part supplied shall be a
price agreed upon by Ford and Excel. The purchase order shall
include mutually agreed upon provisions regarding productivity
and economics generally commensurate with Ford practice on
productivity and economics in effect at the time the purchase
order is issued.
<PAGE> 63
- 4 -
(b) The prices agreed upon for (i) each Part sourced
hereunder; (ii) other such Parts which Ford agrees to first
source to Excel after the date of this Agreement and (iii) Parts
for Ford's MN-12 vehicle shall be reduced by 2% until the earlier
of (x) completion of model year 2000 or (y) when the aggregate
amount of such price reduction shall have reached $14 million.
5. This Agreement shall be extended automatically for
successive periods of two model years each after model year 1994
unless Ford notifies Excel in writing at least one year in
advance of the expiration of any initial or extended term that
the Agreement will not be extended.
6. If a quality, delivery, or service problem develops
during a model year, Ford will notify Excel of the problem and
Ford and Excel will work diligently, in accordance with Ford
operating procedures, to resolve the problem. If the problem is
not resolved after reasonable effort, then Excel shall be
afforded a reasonable opportunity to demonstrate to Ford's
satisfaction its capability to resolve the problem within an
additional time selected by Ford and set forth in a written
notice to Excel. If Excel is unable to so satisfy Ford, Ford may
terminate its purchase obligations with respect to the problem
Part or Parts. Ford's purchase of Parts from another supplier
under this section shall be treated as purchases from Excel for
purposes of fulfilling the sourcing percentage requirement in
Section 1. hereof.
<PAGE> 64
- 5 -
7. Ford will issue its standard production purchase orders
to Excel to implement the purchase and supply obligations of this
Agreement. A copy of Ford's current standard production purchase
order is attached as Exhibit A. The payment terms of the
purchase orders will be net 15th/30th prox and the delivery terms
will be F.O.B. Carrier Excel's Plant. Section 14(a) of the
purchase order will not apply. Sections 14(b)-(d) of the
purchase order shall apply to terminations of purchases of one or
more Parts for noncompetitiveness as described in Section 2
hereof, but not to terminations for any other reason.
8. The parties recognize that the success of the
commitments undertaken pursuant to this Agreement rests on their
cooperation in resolving any issues which may arise during the
term of this Agreement. The parties will discuss problems fully
and candidly with each other and will strive to achieve mutually
satisfactory resolutions. Opportunities for improving
technology, quality, service, price and delivery will be reviewed
with each other when appropriate in an effort at achieving true
teamwork.
9. Although one or more of the terms may be left open in
this Agreement, Ford and Excel specifically intend that this
Agreement shall constitute a present contract, which is valid,
binding and enforceable in accordance with its terms on the date
hereof.
10. This Agreement shall be governed by, interpreted under,
and construed and enforced in accordance with the laws of the
State of Michigan.
<PAGE> 65
- 6 -
11. No amendment, modification, waiver or termination of
this Agreement shall be binding unless executed in writing by the
parties hereto.
12. This Agreement and the rights, duties and obligations
hereunder may not be assigned or delegated by either party,
except for their respective wholly-owned subsidiaries, without
the prior written consent of the other party.
IN WITNESS WHEREOF, the parties have duly and properly
executed this Agreement on the _______ day of _____________,
1986.
EXCEL INDUSTRIES, INC.
By: _____________________
FORD MOTOR COMPANY
By: ______________________
<PAGE> 66
[LOGO]
Glass Division 300 Renaissance Center
Ford Motor Company P.O. Box 43343
Detroit, Michigan 48243
August 15, 1986
Excel Industries, Inc.
1120 N. Main Street
Elkhart, Indiana
Gentlemen:
This letter is written to confirm that the attached
purchase order was issued to Donnelly Corporation by Ford Motor
Company ("Ford") on behalf of Modular Concepts, Inc. pursuant
to a delegation of authority issued to Ford by letter of
D. E. Siddall, Chairman of the Board of Modular Concepts, Inc.
Very truly yours,
Ford Motor Company
By: /s/ D.E. SIDDALL
--------------------------
D. E. Siddall
General Manager,
Glass Division
Attachment
<PAGE> 67
[LOGO] PURCHASE ORDER PURCHASE ORDER NUMBER
FE-200157
(SHOW THIS NUMBER ON ALL
SHIPPING AND BILLING DOCUMENTS
THE FORD MOTOR COMPANY DATE OF ORDER 5-29-86
BUYER HEREBY AGREES TO TERM OF ORDER
PURCHASE AND RECEIVE, AND __ 19 ______ Model Year(s)
/x/ From 5-1 1986
To 2-28 1987 (see below)
Donnelly Corporation / / This order will be renewed
414 East Fortieth Street automatically succeeding
Holland, Michigan 49423 annual or model years unless
Buyer notifies Seller before
completion of Buyer's
production for the current
annual or model year that the
order will not be renewed.
SELLER MUST COMPLY WITH FORD
QUALITY SYSTEM STANDARD Q-101.
DELIVERY DATE /x/ AS DIRECTED
SELLER AGREES TO SELL AND DELIVER SUPPLIES ON SHIPMENT
OR SERVICES SPECIFIED HEREIN SUBJECT TO THE RELEASE
TERMS AND CONDITIONS ON THE FACE AND REVERSE
SIDE HEREOF
SHIP TO TAX STATUS CHARGE AND MAIL INVOICE TO:
As Directed on Release NOT SUBJECT TO SALES OR Modular Concepts, Inc.
USE TAX. REASON PURCHASED P.O. Box 426
FOR RESALE OR FOR USE IN 800 N. College Street
INDUSTRIAL PROCESSING OR Fulton, Kentucky 42041
MANUFACTURING.
DELIVERIES OF SUPPLIES
AGAINST THIS ORDER ARE
EXEMPT FROM SALES AND USE
TAX. EXEMPTION CERTIFICATE
ON REVERSE SIDE HEREOF.
SHIPPING POINT
Holland, Michigan
F.O.B. TRANSPORTATION TERMS ROUTING PAYMENT TERMS
/x/ CARRIER /x/ COLLECT /x/ AS DIRECTED /x/ NET 15TH
SELLERS PLANT BY TRAFFIC AND 30TH APROX.
/ / DESTINATION / / PREPAID / / OTHER_____ / / OTHER ______
/ / Other_____ / / Other_____ ________________ _______________
QUANTITY DESCRIPTION OF SUPPLIES OR SERVICES PRICE
Released Donnelly to supply rim molding for Taurus $10.50 ea.
quarter window part no. E6DB-5429700-1-DJ
to Modular Concepts through February 28, 1987.
If this order is to be terminated on February
28, 1987, notice must be given to Donnelly in
writing no later than December 1, 1986. If such
notice is not given by December 1, 1986, this
order will automatically renew one month at a
time with 90 day notice required for cancellation.
Modular Concepts will supply to Donnelly the
tempered glass part, the bright trim molding,
clips, and clip adhesive at no charge, freight
prepaid.
Donnelly is guaranteed and agrees to supply a
minimum of 300 pair per day five days a week
between May 2, 1986 and February 28, 1987,
excluding holidays.
This P.O. supersedes Modular Concepts' Order
No. GP0868 Cross Reference Tool Order No.
ST-02057.
APPROXIMATELY
____ PERCENT
OF BUYER'S
PURCHASES OF
THE SUPPLIES
DESCRIBED
HEREIN
PRODUCTION SAMPLES REQUIRED - NO ________ DATE ________
By /s/ JANET E. BAILEY
_________________________________
FORD MOTOR COMPANY PURCHASING
GLASS DIVISION
MAY 85 GD 2701
ORIGINAL
<PAGE> 68
TERMS AND CONDITIONS
1. OFFER, ACCEPTANCE AND MODIFICATION - This purchase order is an offer to
Seller by Buyer to enter into the purchase agreement it describes, and it
shall be the complete and exclusive statement of such purchase agreement.
Seller shall accept the offer in writing or by beginning work hereunder.
Modifications proposed by Seller are not part of the agreement in the
absence of Buyer's written acceptance.
2. SAMPLES - Seller, at its own expense, shall fabricate from production
tooling and processes and furnish to Buyer the number of samples specified
on the face of this purchase order, or if none is specified, a reasonable
number of samples. Seller shall inspect such samples before delivery and
shall certify inspection results in the manner requested by Buyer.
3. CHANGES - (a) Buyer at any time, by written order, may change the design
(including drawings, materials, and specifications), processing, method of
packing and shipping, and the place of delivery, of the supplies and
services.
(b) if any such change affects cost or timing, Buyer shall adjust purchase
price and delivery schedules equitably.
(c) Seller shall not make any change in the design, processing, packing,
shipping, or place of delivery of the supplies and services without Buyer's
written approval.
4. BAILED PROPERTY - Unless otherwise specified, Seller bears all
responsibility for loss and damage to articles owned by Buyer and possessed
by Seller for use in performing this purchase order, including
responsibility for loss and damage which occur despite Seller's exercise of
reasonable care, but excluding normal wear and tear. Seller shall (a)
properly house and maintain such articles on Seller's premises. (b) mark
them "Property of Ford Motor Company'' (or the appropriate Ford Associated
Company as the case may be), (c) refrain from commingling them with the
property of Seller or with that of a third party, and (d) maintain them
as personally. Buyer shall have the right to enter Seller's premises at
reasonable times to inspect such articles and Seller's records pertaining
(XXXX) . Upon request, Seller immediately shall deliver such articles to a
carrier selected by Buyer, at Buyer's option F.O.B. Carrier. Seller's
facility or F.O.B. Buyer's facility, freight collect, property packed and
marked in accordance with the requirements of the carrier and Buyer.
5. RELEASES - If delivery dates are not specified in this purchase order,
Seller shall procure materials and fabricate, assemble, and ship supplies
only as authorized in shipment releases issued to Seller by Buyer. Buyer
may return overshipments to Seller at Seller's expense for all packing,
handling, sorting, and transportation. Buyer from time to time and with
reasonable notice may change or temporarily suspend shipping schedules
specified in the purchase order of such shipment releases.
6. FINISHED INVENTORY - Notwithstanding the provisions of Section 5 hereof,
Seller shall maintain at its expense finished inventory at the latest design
level and in the quantity specified on the face of this purchase order,
based on releases for the preceding month, or, if none is specified, an
adequate quantity. Buyer at its option may draw down such inventory and,
in such event, Seller shall have a reasonable time to replenish the
inventory:
7. PACKING, MARKING, ROUTING AND SHIPPING - (a) Seller shall pack and ship the
supplies in accordance with the requirements of Buyer and the carrier
transporting such supplies. Seller shall mark each package in accordance
with the current edition of Buyer's Package Identification or Steel
Packaging Standards, as applicable, and additional instructions of Buyer
and the carrier. Seller shall reimburse Buyer for all expenses incurred by
Buyer as a result of improper packing, marking, routing, or shipping.
(b) Upon request, Seller shall advise Buyer with regard to packing,
marking, routing, and shipping that will enable Buyer to secure the most
economical transportation rates.
(c) Seller shall not charge separately for packing, marking, or shipping,
or for materials used therein, unless Buyer specifies in writing that it
will separately reimburse Seller for such charges, in which case Seller
shall add such charges to its invoice as a separate item and attach thereto
appropriate supporting data.
(d) Buyer may require shipment of any of the supplies by a more
expeditious method of transportation if Seller fails to meet the shipping
requirements of this purchase order, and Seller shall bear the cost
difference of such transportation unless such failure is due to an
excusable delay of Section 17.
(e) Seller shall be responsible for any loss, damage, or injury which
results from, or occurs during, shipment of goods F.O.B. Seller's Plant via
Seller's vehicles.
8. PACKING SLIPS AND BILLS OF LADING - (a) Seller shall obtain a straight bill
of lading from the carrier of these supplies and shall include on each
packing slip and bill of lading the number of this purchase order and the
location of the destination facility.
(b) Seller shall include a numbered master packing slip with each shipment.
If less than a carload or truckload is being shipped, the slip shall be
included in one of the packages which shall be marked "Packing Slip Inside."
In carload and truckload shipments the master packing slip shall be
enclosed in an unsealed envelope that is affixed near the door on the
inside of the freight vehicle.
(c) Seller shall retain the original bill of lading for three years from
the date of shipment unless otherwise directed by the Traffic Manager at
the destination facility.
9. INVOICES - Seller shall furnish invoices as specified in this purchase
order, or as directed on the applicable shipment release. Seller shall
include on each invoice the number of this purchase order and the location
of the destination facility. If applicable to Seller, each invoice shall
contain the following assurance: "Seller represents that it has complied
with the Fair Labor Standards Act of 1938, as amended, in producing the
supplies or performing the services covered by this invoice."
10. EXPORT/IMPORT - For each international shipment, Seller shall include a
priced invoice with the master packing slip and upon request shall furnish
all other required documents. Export credits shall belong to Buyer. Seller
upon request shall furnish all documents required to obtain export credits
and customs drawbacks and shall identify the country of origin of the
materials used in these supplies and the value added thereto in such
country.
11. INSPECTION - Buyer at its option may reject, or retain and
correct, supplies that fail to meet the requirements of this purchase
order. If Buyer elects to correct the supplies, it shall consult with
Seller on the method of correction. Seller shall reimburse Buyer for
reasonable expenses resulting from rejection or correction.
12. WARRANTY - Seller warrants that the supplies and services will conform to
the applicable drawings and specifications and will be free of defects in
design (to the extent that Seller furnished the design) and in materials
and workmanship.
13. PROPRIETARY RIGHTS - (a) Seller at its expense will investigate and defend
or otherwise handle, or at Buyer's option provide all reasonable assistance
to Buyer in Buyer's investigation, defense, or handling of every claim
that may be brought against Buyer or against those selling or using any
product of Buyer for any alleged infringement of any present or future
patent: copyright, industrial design right or other proprietary right,
based on the sale or use of the supplies hereof (i) alone, (ii) in
combination by reason of their content, design or structure, or (iii) in
combination in accordance with Seller's recommendations. Seller's
obligations shall apply even though Buyer furnishes all or any portion of
the design and specifies all or any portion of the processing. Seller will
pay all expenses and damages that Buyer and those using or selling Buyer's
products may sustain by reason of each such claim.
(b) Seller grants to Buyer and its Associated Companies a nonexclusive,
royality free, irrevocable license to rebuild and have rebuilt the supplies
purchased by Buyer under this purchase order.
(c) Seller will neither assert nor transfer to another a right to assert
against Buyer and/or its Associated Companies, or dealers or customers
thereof any copyright of Seller that is applicable to any works of
authorising furnished to Buyer or any of Buyer's Associated Companies in
the course of Seller's activity hereunder.
(d) All technical information disclosed heretofore and hereafter by Seller
to Buyer in connection with these supplies or services is disclosed on a
nonconfidential basis.
14. TERMINATION AT OPTION OF BUYER - (a) Buyer may terminate its
purchase obligations hereunder in whole or in part, at any time, by a
written notice of termination to Seller. Buyer shall have such right of
termination notwithstanding the existence of an excusable delay of Section
17. (b) Upon receipt of the notice of termination, Seller unless otherwise
directed by Buyer, shall (i) terminate promptly all work under this
purchase order, (ii) (XXXX) title and deliver to Buyer the finished work,
the work in process, and the parts and materials which Seller produced or
acquired in accordance with this purchase order and which Seller can not
use in producing goods for itself or for others, (iii) settle all claims by
subcontractors for actual costs that are rendered unrecoverable by such
termination: and (iv) take actions reasonably necessary to protect
property in Seller's possession in which Buyer has an interest. (c) Upon
termination by Buyer under this Section, Buyer's obligation to Seller shall
be: (i) the purchase order price for all finished work and completed
services which conform to the requirements of the purchase order: (ii)
Seller's actual cost of the work in process and parts and materials
transferred to Buyer in accordance with subsection (b) (ii) hereof: (iii)
Seller's actual costs of settling the claims by subcontractors of
subsection (b) (iii) hereof: and (iv) Seller's actual cost of carrying out
its obligations of subsection (b)(iv) hereof, but Buyer's obligations shall
not exceed those Buyer would have had to Seller in the absence of
termination. (d) Seller shall furnish to Buyer, within one month after the
date of termination. Seller's termination claim, which shall consist
exclusively of the items of Buyer's obligation to Seller that are listed
in subsection (c) hereof. Buyer may audit Seller's records, before or
subsequent to payment, to verify amounts requested in Seller's termination
claim. (e) Buyer shall have no obligation to Seller if Buyer terminates its
purchase obligations of this purchase order because of default by Seller.
15. DELEGATION AND ADVERTISING - Seller shall not delegate all of its
substantive duties of this purchase order without Buyer's written approval.
Seller shall not refer to Buyer in advertising or public release without
Buyer's written approval.
16. COMPLIANCE WITH LAW - Buyer serves from time to time as a contractor for
the United States Government. Accordingly, Seller shall comply with federal
laws, rules, and regulations applicable to subcontractors of government
contractors, including those relating to equal employment opportunity and
affirmative action in the employment of minorities (Executive Order 11246),
women (Executive Order 11375), the handicapped (29USC793), and certain
veterans (38USC2012), contracting with business concerns operating in areas
of surplus labor (41CFR 1-1.805), contracting with women owned business
concerns (Executive Order 12138), and contracting with small and
disadvantaged business concerns (Pub. L. 95-507). Contract clauses required
by the Government in such circumstances are incorporated herein by
reference.
17. EXCUSABLE DELAYS - Neither Buyer nor seller shall be liable for a failure
to perform that arises from causes or events beyond its reasonable control
and without its fault or negligence, including labor disputes of any kind.
In the event of a delay in performance, Buyer at its option may acquire
possession of all finished goods, work in process, and parts and materials
produced or acquired for the work hereof, and Seller shall deliver such
articles to Buyer, at Buyer's option F.O.B. Carrier. Seller's facility or
F.O.B. Buyer's facility, freight collect.
18. SALES AND USE TAXES - Unless otherwise specified, Seller shall not
include in its price nor otherwise charge to Buyer state or local sales or
use taxes on the supplies of this purchase order. Buyer will use the
supplies for resale or in industrial processing or manufacturing. With
regard to supplies imported into Canada, Buyer certifies that the supplies
are to be used in or attached to taxable goods for sale. Buyer also
certifies that it holds appropriate certificates and permits from the
taxing authorities of the applicable governments (including California
seller's permit SZ-OHA-30-607383 and Ontario permit nos. 12031402G,
13240609G, and 81390009G), regarding exemption of these supplies from
sales and use taxes.
19. APPLICABLE LAW - This purchase order shall be governed by the law of
Buyer's principal place of business, and litigation on contractual clauses
arising from the purchase order shall be brought only in that jurisdiction.
<PAGE> 69
SHAREHOLDERS AGREEMENT
This SHAREHOLDERS AGREEMENT, made as of , 1986,
by and among Ford Motor Company, a Delaware corporation, with
offices at The American Road, Dearborn, Michigan ("Ford"), Excel
Industries, Inc., an Indiana corporation, with offices at 1120 N.
Main Street, Elkhart, Indiana ("Excel") and James J. Lohman,
Gerald G. Fellows, Robert J. Kennedy, Ralph R. Whitney, Jr., John
D. Burt, James E. Crawford, William M. Gude, James O.
Futterknecht, Jr., Louis R. Csokasy and Terrance L. Lindberg
(collectively, the "Excel Shareholders").
R E C I T A L S
A. Ford and Excel are parties to a Stock Purchase Agreement
and a Stock Exchange Agreement and Plan of Reorganization, both
dated and effective August , 1986 (collectively the "Related
Agreements"), pursuant to which Ford will acquire approximately
40% of the issued and outstanding common stock of Excel and
obtain certain rights regarding the management of Excel.
B. The Excel Shareholders and Ford have agreed on how they
will vote their respective shares of Excel common stock on
certain matters and have agreed to grant certain rights of first
refusal in accordance with the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual undertakings
contained herein, the parties do hereby agree as follows:
1. Shareholders Meetings. At any annual or special meeting
of the shareholders of Excel:
EXHIBIT B
to
STOCK PURCHASE AGREEMENT
<PAGE> 70
(a) Ford agrees to vote its shares of common stock of
Excel (the "Ford Shares") in favor of all directors nominated by
the Board of Directors of Excel, so long as at least two of the
nominees are individuals proposed by Ford for election to the
Board of Directors.
(b) The Excel Shareholders agree to vote the Share-
holders' Shares (as defined in Section 2(b) hereof) in favor of
all directors nominated by the Board of Directors of Excel, so
long as at least two of the nominees are individuals proposed by
Ford for election to the Board of Directors.
(c) The parties agree to vote their respective shares of
Excel common stock against the appointment by Excel as its
independent public accountants and auditors any firm of certified
public accountants that is not one of the current "Big Eight"
public accounting firms, or a successor to any such firm.
(d) In the event any of the following transactions is
approved and recommended by the Board of Directors of Excel as
provided in the Stock Purchase Agreement and submitted to the
holders of Excel common stock for approval, the parties agree to
vote their respective shares of Excel common stock in favor of
any such transaction:
(i) Any acquisition or any expansion or change of the
business of Excel involving an expenditure or appropria-
tion of assets of more than 20% of Excel's previous
quarter-end net worth, or $8,000,000, whichever is
greater;
(ii) Any liquidation or sale of all or a portion (with
sales greater than 10% of the previous year's sales or
assets with a book value greater than 20% of the previous
quarter-end net worth, or $8,000,000, whichever is greater)
of Excel's business;
-2-
<PAGE> 71
(iii) Any borrowing of money or other financing arrange-
ments whereby Excel incurs obligations through a single
transaction or a series of related transactions for
amounts in excess of 20% of the previous quarter-end net
worth, or $8,000,000, whichever is greater;
(iv) Any recommendation to modify or modification of
Excel' s Articles of Incorporation or Code of By-Laws;
(v) Any merger or consolidation of Excel with or into
any other corporation;
(vi) Any issuance of shares of Excel common stock or
other equity interests in Excel or rights to acquire such
common stock or other equity interests (except any shares
issued as stock dividends or in a stock split, for options
to purchase Excel common stock granted pursuant to Excel's
Incentive Stock Option Plan, and the issuance of shares
upon the exercise of any such options); or
(vii) Any transaction which provides for any restric-
tions on the declaration of dividends not required by law
(except for all such restrictions in effect on the date
hereof).
2. Representations and Warranties.
(a) Each party hereto represents and warrants to the
other parties that:
(i) such party has the full legal right, power and
authority to enter into this Agreement and to perform
fully his or its obligations hereunder;
(ii) such party has duly executed this Agreement and,
when this Agreement has been delivered by such party, it
shall constitute the valid and legally binding obligation
of such party enforceable in accordance with its terms;
(iii) the execution, delivery or performance of this
Agreement by such party will not conflict with or result
in any violation of or a default under any provision of
the Certificate or Articles of Incorporation or By-Laws of
such party, if such party is a corporation, or of any
mortgage, indenture, lease, agreement or other instrument,
permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation
applicable to such party; and
(iv) no consent, approval, order or authorization of,
or registration, declaration or filing with, any govern-
mental authority is required on the part of such party in
-3-
<PAGE> 72
connection with the execution and delivery of this Agree-
ment, except for filings and consents to be made under
Sections 4.7 and 5.5 of the Stock Purchase Agreement.
(b) The Excel Shareholders each individually represents
and warrants that on the date hereof he owns and controls the
voting rights of the number of shares of common stock of Excel
which appear after his name:
<TABLE>
<S> <C>
Number of Shares of
Excel Shareholder Excel Common Stock
----------------- -------------------
James J. Lohman ....................
Gerald G. Fellows ..................
Robert J. Kennedy ..................
Ralph R. Whitney, Jr. ..............
John D. Burt .......................
James E. Crawford ..................
William M. Gude ....................
James O. Futterknecht, Jr. .........
Louis R. Csokasy ...................
Terrance L. Lindberg ............... -------------
Total .....................
</TABLE>
All of the shares of Excel common stock collectively owned by the
Excel Shareholders at any time shall be referred to herein as the
"Shareholders' Shares".
3. Right of First Refusal. While this Agreement remains in
effect and subject to the provisions of the Stock Purchase
Agreement (a) each of the Excel Shareholders grants to Ford a
right of first refusal to purchase any shares of Excel common
stock which such Excel Shareholder may offer for sale, except for
(i) a public sale on any stock exchange on which Excel common
stock is traded; (ii) a sale in a public offering pursuant to an
effective Registration Statement under the Securities Act of
1933, as amended, and any applicable state law; or (iii) a sale
to Excel in the Tender Offer (as defined in the Stock Purchase
-4-
<PAGE> 73
Agreement); and (b) Ford grants to Excel a right of first refusal
to purchase any shares of Excel common stock that Ford may offer
for sale, except for (i) a public sale on any stock exchange on
which Excel common stock is traded; or (ii) a sale in a public
offering pursuant to an effective Registration Statement under
the Securities Act of 1933, as amended, and any applicable state
law.
4. Procedure for Right of First Refusal. The rights of first
refusal granted pursuant to Section 3 above shall be governed by the
following provisions:
(a) A party granting a right of first refusal pursuant
hereto shall not sell his or its shares (except as permitted by
Section 3) unless he or it shall have received a written bona
fide offer subject to no material conditions (a "bona fide
offer") to purchase any of the shares of Excel common stock he or
it owns from a third party which is not an affiliate of Ford.
Upon receipt of a bona fide offer, the party which proposes to
sell his or its shares (the "Selling Shareholder") shall afford
the party to whom the right of first refusal has been granted (or
its designees) the right of first refusal, as provided below, to
acquire all (but not less than all) of the shares (the "Offered
Shares") covered by the bona fide offer on terms no less favor-
able to the Selling Shareholder than those offered by the third
party.
(b) If the Selling Shareholder proposes to sell pursuant
to a bona fide offer, he or it shall give written notice (an
"Offer Notice") to that effect to Excel and each of the other
-5-
<PAGE> 74
parties hereto, which contains a complete and correct description
of the bona fide offer setting forth all the terms thereof and
the name of the offeror. Prior to the Offer Notice, the Selling
Shareholder may give a notice to Excel or Ford, as the case may
be (a "Preliminary Notice") to the ef fect that he or it may
implement the right of first refusal procedures of this Agreement
specifying the approximate number of shares of Excel common stock
he or it may wish to sell. A Preliminary Notice shall not in any
way bind a Selling Shareholder to sell his or its shares.
(c) The right of first refusal shall be exercised by the
party to whom the right of first refusal is granted (the
"Purchaser"), only as follows:
(i) If Excel is the Purchaser, the Board of Directors
of Excel shall determine whether it wishes to exercise the
right of first refusal (by a majority vote of the
Directors not designated by Ford) and shall notify Ford in
writing of its determination within ninety (90) days after
the Offer Notice is given (reduced by the number of days
by which the giving of such Offer Notice was preceded by a
related Preliminary Notice, but not reduced below sixty
(60) days). If Ford is the Purchaser, Ford shall notify
the Selling Shareholder in writing of its determination
whether it wishes to exercise the right of first refusal
within ninety (90) days after the Offer Notice is given
(reduced by the number of days by which the giving of such
Offer Notice was preceded by a related Preliminary Notice,
but not reduced below sixty (60) days).
(ii) If the Purchaser determines to exercise the right
of first refusal, it may do so by notifying the Selling
Shareholder in writing of such determination, the total
consideration offered by it for the Offered Shares in
accordance with subdivision (iii) of this subsection 4(c)
and the method it will use to pay for such shares.
(iii) The Purchaser shall offer to pay for the Offered
Shares on terms no less favorable to the Selling Share-
holder as those offered by the third party in the bona
fide offer; provided that the offered payment must include
cash at least equal to the amount of cash consideration
provided for in the bona fide offer.
-6-
<PAGE> 75
(iv) If the payment offered is on identical terms as
those offered by the third party or if the Purchaser and
the Selling Shareholder agree that the payment offered is
on terms no less favorable to the Selling Shareholder as
those offered by the third party in the bona fide offer,
the Offered Shares shall be purchased at a closing under
subsection 4(d).
(d) The closing of the purchase of Offered Shares pur-
suant to this Section 4 shall be held at a mutually acceptable
place no later than ninety (90) days after the written notice of
exercise is given by the Purchaser, or on such earlier date as
mutually agreeable, subject to obtaining any necessary govern-
mental or third party approvals. The Selling Shareholder, the
Purchaser, and Excel shall act with diligence to obtain any such
approvals within a reasonable period of time and such closing
shall, in such event, be held promptly upon obtaining such
approvals. At such closing, the Purchaser shall tender the
payment for the Offered Shares, the Selling Shareholder shall
transfer to the Purchaser the Offered Shares being so purchased,
free and clear of any liens, encumbrances and adverse claims, and
the parties shall execute such documents as may be necessary to
effectuate the sale.
(e) If the party to whom the right of first refusal is
granted elects not to exercise the right of first refusal, or if
the period for the exercise of such right expires without a
timely and proper notice in accordance with Section 4(c) above,
the Selling Shareholder may sell the Offered Shares, provided
that:
(i) such sale must be made upon the terms set forth
and to the third party named in the Offer Notice;
-7-
<PAGE> 76
(ii) such sale must be made within one hundred twenty
(120) days after notice of the non-exercise of the right
of first refusal is given or the date on which such right
expired unexercised; and
(iii) the Selling Shareholder and the transferee shall
provide and execute such documents, including opinions of
counsel, as Excel shall reasonably request to demonstrate
that such transfer may be effected without registration of
the Offered Shares under the Securities Act of 1933, as
amended.
Each Selling Shareholder shall be relieved of any further obliga-
tions under this Agreement with respect to the shares sold
pursuant to this Agreement.
5. Legends on Certificates. All of the stock certificates
held by Ford and the Excel Shareholders shall bear legends
referring to the restrictions provided for under this Agreement
as follows:
"The shares represented by this certificate are
subject to certain restrictions on transfer
(except for (i) a public sale on any stock
exchange on which Excel common stock is traded,
or (ii) a sale in a public offering pursuant to
an effective Registration Statement under the
Securities Act of 1933, as amended, and any
applicable state law) and other conditions, as
specified in a certain Shareholders Agreement,
a complete and correct copy of which is avail-
able for inspection at the principal office of
Excel Industries, Inc. and will be furnished to
the owner of such shares upon written request
and without charge."
Each Excel Shareholder agrees to deliver to Excel his stock
certificate(s) representing shares of Excel common stock owned by
him so that the legend set forth above may be placed on such
stock certificate(s), and Excel shall cause the legend set forth
above to be placed on the stock certificate(s) to be delivered to
Ford pursuant to the Related Agreements. Any holder of Excel
-8-
<PAGE> 77
common stock may require Excel to remove such legend from his or
its certificate(s) upon termination of this Agreement or a sale
permitted under Section 3(a) (i) or (ii) above provided that such
person provides Excel an opinion of counsel, satisfactory to
Excel and in which counsel to Excel concurs, to the effect that
such legend may be so removed.
6. Term. This Agreement shall terminate at such time as
Ford owns less than 10% of the total issued and outstanding
common stock of Excel or Ford acquires greater than 50% of the
total issued and outstanding common stock of Excel in accordance
with the Stock Purchase Agreement; provided, however, that this
Agreement shall not terminate in the event that (i) Ford acquires
greater than 50% of the total issued and outstanding common stock
of Excel under Section 7.2(a)(iv) of the Stock Purchase
Agreement; (ii) Excel exercises its option to purchase Excel
common stock from Ford under Section 7.2(d) or (e) of the Stock
Purchase Agreement; and (iii) as a result of such exercise by
Excel, Ford no longer owns greater than 50% of the issued and
outstanding common stock of Excel.
7. Assignment. As used herein, the term "Ford" shall
include Ford Motor Company or its permitted successors or assigns
and the term "Excel" shall include Excel Industries, Inc. or its
permitted successors or assigns. Ford and Excel may assign their
respective rights and obligations under this Agreement only to
such person who shall also be assigned and assume the rights and
obligations of the Related Agreements in accordance with the
respective terms of such agreements. This Agreement shall be
-9-
<PAGE> 78
binding upon and inure to the benefit of the parties hereto and
their respective successors, permitted assigns, heirs, estates
and legal representatives.
8. Remedies. The parties hereto stipulate that the remedies
at law in the event of a default by a party in performing its
obligations hereunder are not and will not be adequate and that,
to the extent permitted by applicable law, the provisions of this
Agreement may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an
injunction against a violation of any of the provisions hereof or
otherwise. No course of dealing and no delay on the part of any
party hereto in exercising any right, power or remedy shall
operate as a waiver thereof or otherwise prejudice such party's
rights, powers or remedies. No right, power or remedy conferred
by this Agreement upon any party shall be exclusive of any other
right, power or remedy referred to herein or now or hereafter
available at law, in equity, by statute, or otherwise.
9. Amendment and Modification. This Agreement or any term
hereof may be changed, waived, discharged or terminated only by
an instrument in writing, signed by the party or parties against
whom such change, waiver, discharge or termination is sought to
be enforced.
10. Third Parties. Nothing contained herein shall be deemed
to confer upon any person or entity, other than the parties
hereto and their respective heirs, successors and assigns, any
right or remedy under or by reason of this Agreement.
-10-
<PAGE> 79
11. Notices. All notices, consents, requests or other com-
munications required or permitted herein shall be in writing and
shall be delivered, personally or by certified or registered
mail, telex, facsimile transmission or by means of air freight
service, with a receipt requested.
<TABLE>
<S> <C>
If to Excel: 1120 N. Main Street
Elkhart, Indiana 46514
Attention: Chief Executive
Officer
if to Ford: Glass Division
300 Renaissance Center
P.O. Box 43343
Detroit, Michigan 48243
Attention: General Manager
if to Gerald G. Fellows: O.F. Mossberg & Sons, Inc.
7 Grasso Avenue
North Haven, Connecticut 06473
if to Robert J. Kennedy or Hammond, Kennedy & Company, Inc.
Ralph R. Whitney, Jr.: 230 Park Avenue
New York New York 10169
if to James J. Lohman,
John D. Burt, James E. Crawford,
William M. Gude, James O. Excel Industries, Inc.
Futterknecht, Jr., Louis R. 1120 N. Main Street
Csokasy, or Terrance L. Lindberg: Elkhart, Indiana 46514
</TABLE>
Any notice delivered personally, or sent by telex, facsimile
transmission or telegraph shall be deemed to have been given on
the date sent. Any other notice shall be deemed to have been
given on the date received as reflected in the return receipt or
air freight receipt.
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana.
-11-
<PAGE> 80
13. Counterparts. This Agreement may be executed in two or
more counterparts, each of which will be deemed an original, but
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
<TABLE>
<S> <C>
EXCEL INDUSTRIES, INC. FORD MOTOR COMPANY
By: _______________ By: _______________
Printed, Title Printed, Title
______________________ ______________________
James J. Lohman Gerald G. Fellows
______________________ ______________________
Robert J. Kennedy Ralph R. Whitney, Jr.
______________________ ______________________
John D. Burt James E. Crawford
______________________ ______________________
William M. Gude James O. Futterknecht, Jr.
______________________ ______________________
Louis R. Csokasy Terrance L. Linderg
</TABLE>
-12-
<PAGE> 81
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
------------
ASSETS 1985 1984*
---- ----
<S> <C> <C>
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . $ 791,798 $ 40,316
Accounts receivable, less allowances of
$156,000 in 1985 and $142,000 in 1984 . . . . . 13,568,654 10,538,295
Customer tooling to be billed . . . . . . . . . . 2,264,715 816,765
Inventories (Notes 2 and 3) . . . . . . . . . . . 10,982,696 9,489,239
Prepaid expenses . . . . . . . . . . . . . . . . . 496,890 144,817
---------- ----------
Total current assets . . . . . . . . . . . . 28,104,753 21,029,432
Cash surrender value of life insurance (net of
policy loans of $873,000 in 1985 and $895,000
in 1984) . . . . . . . . . . . . . . . . . . . . . 751,117 572,429
Property, plant and equipment (Notes 2 and 5):
Land . . . . . . . . . . . . . . . . . . . . . . . 197,745 201,287
Buildings and improvements . . . . . . . . . . . . 3,657,645 3,141,357
Machinery and equipment . . . . . . . . . . . . . 9,344,585 5,325,899
Less - Accumulated depreciation . . . . . . . . . (2,862,369) (1,697,714)
--------- ---------
10,337,606 6,970,829
Other assets . . . . . . . . . . . . . . . . . . . . 956,814 690,173
--------- --------
Total assets . . . . . . . . . . . . . . . . . $ 40,150,290 $ 29,262,863
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Note payable to bank (Note 5) . . . . . . . . . . $ 3,000,000 $ 168,333
Accounts payable . . . . . . . . . . . . . . . . . 8,175,890 5,325,842
Accrued payrolls . . . . . . . . . . . . . . . . . 1,168,537 1,551,340
Other accrued liabilities . . . . . . . . . . . . 1,641,062 1,517,538
Current instalments of long-term debt (Note 5) . . 996,000 537,000
----------- ----------
Total current liabilities . . . . . . . . . . 14,981,489 9,100,053
Long-term debt (Note 5) . . . . . . . . . . . . . . 9,690,404 6,357,057
Other long-term liabilities, primarily employee
benefits (Note 4) . . . . . . . . . . . . . . . . 1,638,800 1,285,300
Deferred federal income taxes (Notes 2 and 8) . . . 429,000 183,000
Shareholders' equity:
Common stock - no par value, 3,370,992 issued
and outstanding in 1985 and 3,064,579 in 1984
(Note 10) . . . . . . . . . . . . . . . . . . . 11,487,269 8,527,427
Retained earnings . . . . . . . . . . . . . . . . 2,351,409 4,000,236
Cumulative translation adjustment (Note 2) . . . . (428,081) (190,210)
---------- ----------
Total shareholders' equity . . . . . . . . . 13,410,597 12,337,453
---------- ----------
Total liabilities and shareholders' equity . . $40,150,290 $ 29,262,863
---------- ----------
---------- ----------
</TABLE>
* Certain amounts have been reclassified to conform with classifications adopted
in 1985.
The accompanying notes are an integral part of this statement.
EXHIBIT C(1)
to
STOCK PURCHASE AGREEMENT
-16-
<PAGE> 82
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------------
1985 1984 1983
---- ---- ----
<S> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . $92,159,475 $86,025,167 $67,104,586
Other income . . . . . . . . . . . . . . 327,981 245,955 332,172
---------- ---------- ----------
92,487,456 86,271,122 67,436,758
Costs and expenses:
Cost of goods sold . . . . . . . . . . 79,958,102 70,764,799 54,780,487
Selling, general and
administrative expenses . . . . . . . 7,011,271 6,867,614 5,891,951
Interest expense . . . . . . . . . . . 1,135,703 1,468,609 1,569,465
---------- ---------- ----------
88,105,076 79,101,022 62,241,903
Income before income taxes . . . . . . . 4,382,380 7,170,100 5,194,855
Income tax provision (Notes 2 and 8). . . 1,845,000 3,300,000 2,413,000
---------- ---------- ----------
Net Income . . . . . . . . . . . . . . . $ 2,537,380 $ 3,870,100 $ 2,781,855
---------- ---------- ----------
---------- ---------- ----------
Net income per share (Notes 2 and 10) . . $0.75 $1.27 $1.15
------ ------ ------
------ ------ ------
</TABLE>
- -------------------
The accompanying notes are an integral part of this statement.
-17-
<PAGE> 83
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Cumulative
Shares Common Retained Translation
Outstanding Stock Earnings Adjustment Total
----------- ----- -------- ---------- -----
<S> <C> <C> <C> <C> <C>
Balance at January
1, 1983 . . . . . . . . . 25,000 $ 250,000 $ $ $ 250,000
Net income . . . . . . . . 2,781,855 2,781,855
Retirement of
common stock . . . . . . (175) (1,750) (10,591) (12,341)
Eighty-for-one
stock split . . . . . . . 1,961,175
Effect of exchange
rate changes . . . . . . (27,625) (27,625)
--------- ---------- ---------- -------- ---------
Balance at December
31, 1983 . . . . . . . . 1,986,000 248,250 2,771,264 (27,625) 2,991,889
Net income . . . . . . . . 3,870,100 3,870,100
Issuance of
common stock . . . . . . 800,000 6,474,017 6,474,017
Cash dividends . . . . . . (835,968) (835,968)
Stock dividend
declared . . . . . . . . 278,579 1,805,160 (1,805,160) --
Effect of exchange (162,585) (162,585)
rate changes. . . . . . . --------- ---------- ---------- -------- --------
Balance at December
31, 1984 . . . . . . . . 3,064,579 8,527,427 4,000,236 (190,210) 12,337,453
Net income . . . . . . . . 2,537,380 2,537,380
Cash dividends . . . . . . (1,226,365) (1,226,365)
Stock dividend
declared . . . . . . . . 306,413 2,959,842 (2,959,842) --
Effect of exchange
rate changes . . . . . . (237,871) (237,871)
--------- ---------- ---------- -------- --------
Balance at December
31, 1985 . . . . . . . . 3,370,992 $11,487,269 $2,351,409 $ (428,081) $13,410,597
--------- ---------- ---------- ---------- ----------
--------- ---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of this statement.
18
<PAGE> 84
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1985 1984* 1983*
---- ---- ----
<S> <C> <C> <C>
Financial resources were provided by:
Net income . . . . . . . . . . . . . . . . . . . $ 2,537,380 $ 3,870,100 $ 2,781,855
Add (deduct) income charges (credits) not
affecting working capital:
Depreciation . . . . . . . . . . . . . . . 1,225,916 946,038 794,258
Deferred taxes . . . . . . . . . . . . . . 246,000 64,000 119,000
Other . . . . . . . . . . . . . . . . . . . 11,468 34,618 (23,378)
----------- ----------- -----------
Working capital provided by operations . . . . . . 4,020,764 4,914,756 3,671,735
Financial resources used for investment
activities:
Purchase of properties . . . . . . . . . . . . . (4,750,644) (2,630,483) (859,555)
Other. . . . . . . . . . . . . . . . . . . . . . (183,217) (754,356) 165,788
----------- ----------- -----------
(4,933,861) (3,384,839) (693,767)
Financial resources used for cash dividends . . . (1,226,365) (835,968) --
Financial resources provided from
financing activities:
Issuance of long-term debt . . . . . . . . . . 5,264,052 8,200,000 --
Common stock issued . . . . . . . . . . . . . -- 6,474,017 --
Reduction of long-term debt . . . . . . . . . (1,930,705) (6,610,286) (1,513,339)
Repurchase of common stock . . . . . . . . . . -- -- (12,341)
----------- ----------- -----------
3,333,347 8,063,731 (1,525,680)
Net increase in working capital . . . . . . . . . 1,193,885 8,757,680 1,452,288
Working capital at beginning of year . . . . . 11,929,379 3,171,699 1,719,411
----------- ----------- -----------
Working capital at end of year . . . . . . . . $13,123,264 $11,929,379 $ 3,171,699
----------- ----------- -----------
----------- ----------- -----------
ANALYSIS OF CHANGES IN WORKING CAPITAL
Increase (decrease) in current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . $ 751,482 $ (38,560) $(3,625,696)
Accounts receivable . . . . . . . . . . . . . . 3,030,359 669,773 4,544,745
Customer tooling to be billed . . . . . . . . . 1,447,950 442,276 338,428
Inventories . . . . . . . . . . . . . . . . . . 1,493,457 177,892 2,937,062
Prepaid expenses . . . . . . . . . . . . . . . . 352,073 26,818 (11,107)
----------- ----------- -----------
7,075,321 1,278,199 4,183,432
----------- ----------- -----------
(Increase) decrease in current liabilities:
Note payable to bank . . . . . . . . . . . . . . (2,831,667) 6,341,601 1,188,841
Account payable . . . . . . . . . . . . . . . . (2,850,048) (494,545) (3,436,029)
Accrued payrolls . . . . . . . . . . . . . . . . 382,803 (96,848) 42,465
Other accrued liabilities . . . . . . . . . . . (123,524) (520,864) --
Income taxes . . . . . . . . . . . . . . . . . . -- 1,258,137 386,427
Current installments on long-term debt . . . . . (459,000) 992,000 (912,848)
----------- ----------- -----------
(5,881,436) 7,479,481 (2,731,144)
----------- ----------- -----------
Net increase in working capital . . . . . . . . . $ 1,193,885 $ 8,757,680 $ 1,452,288
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
*Certain amounts have been reclassified to conform with classifications adopted
in 1985.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT.
19
<PAGE> 85
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1-DESCRIPTION OF BUSINESS:
Excel Industries, Inc. (the Company) is engaged in the manufacture and sale of
a broad line of window assemblies. The Company's products are used in the
manufacture of automobiles, heavy and light trucks, buses and recreational
vehicles.
NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant intercompany transactions,
profits and balances are eliminated.
Currency translation
The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 52, whereby the assets and liabilities of the Company's Canadian
subsidiary are translated at rates of exchange in effect at year-end and the
income statement is translated at the average rates of exchange for the year.
Gains and losses resulting from translation are accumulated in a separate
component of shareholders' equity.
Net income per share
Net income per share was computed using the weighted average number of shares
outstanding during the period after giving retroactive effect to the stock
split and stock dividends discussed in Note 10. The weighted average number of
shares was 3,370,992 in 1985, 3,048,393 in 1984 and 2,414,289 in 1983.
During April 1984, the Company sold 800,000 shares of common stock and retired
existing indebtedness. If this transaction had occurred as of January 1, 1984,
earnings per share would have been $1.20 for 1984 due to the increased number
of shares.
Inventories
Inventories are valued at the lower of cost or market. Cost is determined
using the last-in first-out (LIFO) method for domestic inventories and the
first-in, first-out (FIFO) method for Canadian inventories.
Properties
Plant and equipment are carried at cost and include expenditures for new
facilities and those which substantially increase the useful lives of existing
plant and equipment. Maintenance and repairs are charged to expense. When
properties are retired or otherwise disposed, the related cost and accumulated
depreciation are removed from the respective accounts and any profit or loss on
disposition is included in income.
Depreciation
The Company provides for depreciation of plant and equipment using methods and
rates designed to amortize the cost of such equipment over its useful life.
Depreciation is computed principally on accelerated methods for new plant and
equipment and the straight-line method for used equipment. The estimated
useful lives of buildings and improvements range from 10 to 40 years, and 2 to
20 years for machinery and equipment.
Income taxes
Deferred income taxes are provided for items reported in the statement of
income in periods which differ from those in which they are subject to
taxation. The primary items which are accounted for differently for income tax
purposes are depreciation and expense recognition with respect to certain
accruals.
Investment tax credits are accounted for under the "flow through" method.
Such credits were approximately $110,000 in 1985, $115,000 in 1984 and minimal
in 1983.
Research and development
Research and development expenditures are charged to operations as incurred.
NOTE 3-INVENTORIES:
Inventories consist of the following:
<TABLE>
<CAPTION>
December 31,
------------
1985 1984
---- ----
<S> <C> <C>
Raw materials.................... $ 5,863,756 $ 5,273,684
Work in process and
finished goods ................ 5,118,940 4,215,555
----------- -----------
$10,982,696 $ 9,489,239
----------- -----------
----------- -----------
</TABLE>
At December 31, 1985 the current cost of inventories exceeded the LIFO
inventory value by $234,000. In 1984 the LIFO inventory value approximated
current cost.
20
<PAGE> 86
NOTE 4-PENSION AND OTHER EMPLOYEE BENEFIT PLANS:
The Company and its subsidiaries have pension plans covering substantially all
of their employees. Total pension expense for 1985, 1984 and 1983 was $316,000,
$248,000 and $270,000 respectively, which includes amortization of prior
service costs over periods not to exceed 30 years. It is generally the
Company's policy to make annual contributions to the plans in amounts sufficient
to satisfy the minimum funding requirements of ERISA. Accumulated plan
benefits and plan net assets for the Company's domestic defined benefit plans
as of the most recent valuation dates (January 1, 1985 for the current year)
follow:
<TABLE>
<CAPTION>
1985 1984 1983
---- ---- ----
<S> <C> <C> <C>
Actuarial present value of
accumulated plan benefits:
Vested . . . . . . . . . . . . . . $10,008,000 $ 9,708,000 $ 9,760,000
Non-vested . . . . . . . . . . . . 330,000 347,000 490,000
----------- ----------- -----------
$10,338,000 $10,055,000 $10,250,000
----------- ----------- -----------
----------- ----------- -----------
Net assets available for
benefits . . . . . . . . . . . . . . $11,180,000 $11,088,000 $11,290,000
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The assumed rate of return used in determining the actuarial present value of
accumulated plan benefits was primarily 7.5% in 1985 and 1984, and 7% in 1983
for active plans. The Company's Canadian pension plan is not required to report
to certain governmental agencies pursuant to ERISA. For that plan, the
actuarially computed value of vested benefits as of December 31, 1985 did not
exceed pension funds and balance sheet accruals.
The Company has a plan, which provides deferred compensation and death
benefits for certain existing and former officers. The estimated present value
of the ultimate liability to the officers is accrued at December 31, 1985.
NOTE 5-LONG-TERM AND SHORT-TERM DEBT:
Following is a summary of long-term debt of the Company:
<TABLE>
<CAPTION>
1985 1984
---- ----
<S> <C> <C>
Term loan . . . . . . . . . . . . $ 3,150,000 $3,325,000
Revolving credit agreement . . . 3,500,000 2,300,000
Industrial Revenue Bonds . . . . 2,838,095 1,128,571
Canadian borrowings . . . . . . . 1,198,309 140,486
----------- ----------
10,686,404 6,894,057
Less-current portion . . . . . . (996,000) (537,000)
----------- ----------
$ 9,690,404 $6,357,057
----------- ----------
----------- ----------
</TABLE>
In 1984 the Company entered into a financing arrangement with a bank
providing for long-term financing on a combination revolving and term basis,
with interest at 1/4% above the prime lending rate. The interest rate was 9.75%
at December 31, 1985.
This arrangement includes a revolving credit agreement of $3.5 million which
expires on July 25, 1987. The Company was utilizing the entire line of credit
at December 31, 1985. The Company is obligated to pay a commitment fee of 1/2%
per annum on any unused portion.
The agreement with the bank requires that the Company maintain certain
working capital and equity levels. The Company may declare and pay cash
dividends, provided they do not exceed 50% of consolidated net income for the
fiscal year.
The Industrial Revenue Bonds bear interest at approximately 75% of the prime
lending rate. The bonds are secured by assets with a book value of
approximately $2.8 million.
Long-term debt maturities are $5,081,000 in 1987, $996,000 in 1988, $1,029,000
in 1989, $807,000 in 1990 and $1,777,000 thereafter.
In 1985, the Company entered into a short-term line of credit arrangement with
a bank whereby interest is charged at the prime lending rate. At December 31,
1985, the Company has used $3 million of this $5 million line.
Maximum short-term borrowings during the year were $3,000,000 outstanding at
December 31, 1985.
NOTE 6-CONTINGENCIES:
A chemical cleaning compound, trichloroethylene ("TCE"), has been found in the
soil and groundwater on the Company's property in Elkhart, Indiana, and, in
1981, TCE was found in a well field of the City of Elkhart in close proximity to
the Company's facility. The City removed certain production wells from service
and installed interceptor wells intended to prevent further contamination.
However, the EPA and the State of Indiana have insisted upon a more permanent
solution. The Company engaged a private engineering firm to study the problem
and has proposed a plan for remedial action. Although there has been no claim
of any negligence on the part of the Company, the Company may be liable for the
entire cost of any remedial action. The Company believes that adequate
provisions
21
<PAGE> 87
have been recorded for the cost to be incurred.
There are claims and pending legal proceedings against the Company and its
subsidiaries with respect to taxes, workmen's compensation, warranties, and
other matters arising out of the ordinary conduct of the business. The
ultimate result of these claims and proceedings at December 31, 1985 is not
determinable, but, in the opinion of management, adequate provision for
anticipated costs has been made or insurance coverage exists to cover such
costs.
NOTE 7 - LEASES:
The Company leases certain of its manufacturing facilities, sales offices,
transportation and other equipment. Total rental expense for all leases, except
those with terms of a month or less, was approximately $503,000 in 1985,
$463,000 in 1984 and $460,000 in 1983. Lease commitments for future years are
for lesser amounts.
NOTE 8 - INCOME TAXES:
Pre-tax income reported by U.S. and Canadian subsidiaries was as follows:
<TABLE>
<CAPTION>
1985 1984 1983
---- ---- ----
<S> <C> <C> <C>
United States . . . . $1,777,929 $3,449,214 $2,516,655
Canada . . . . . . . 2,604,451 3,720,886 2,678,200
--------- --------- ---------
$4,382,380 $7,170,100 $5,194,855
--------- --------- ---------
--------- --------- ---------
<CAPTION>
The provision for income taxes is summarized below:
1985 1984 1983
---- ---- ----
Current:
U.S. Federal. . . . $ 566,000 $1,599,000 $ 827,000
Canadian . . . . . 1,019,000 1,330,000 1,268,000
State . . . . . . 158,000 270,000 253,000
--------- --------- ---------
$1,743,000 $3,199,000 $2,348,000
Deferred:
Accelerated
depreciation . . 266,000 126,000 119,000
Accrued expenses
deductible
when paid . . . 13,000 (248,000) (162,000)
Other . . . . . . . . (177,000) 223,000 108,000
--------- --------- ---------
102,000 101,000 65,000
--------- --------- ---------
$1,845,000 $3,300,000 $2,413,000
--------- --------- ---------
--------- --------- ---------
</TABLE>
The provision for income taxes computed by applying the Federal statutory
rate to income before taxes is reconciled to the recorded provision as follows:
<TABLE>
<CAPTION>
1985 1984 1983
---- ---- ----
<S> <C> <C> <C>
United States statutory tax rate . . . . 46.0% 46.0% 46.0%
State income taxes, net of
Federal benefit . . . . . . . . . . . 1.9 2.0 2.6
FSC/DISC benefit . . . . . . . . . . . (.4) (1.1) (.9)
Investment tax credit earned
in current year . . . . . . . . . . . (2.5) (1.6) --
Canadian earnings subject to
tax at a reduced rate . . . . . . . . (4.3) (1.1) --
Other . . . . . . . . . . . . . . . . . 1.3 1.8 (1.3)
----- ----- ----
42.0% 46.0% 46.4%
----- ----- ----
----- ----- ----
</TABLE>
The Company has not provided U.S. income taxes on the undistributed
earnings of its Canadian subsidiary except to the extent dividends are
anticipated. The amount of undistributed earnings of its Canadian subsidiary at
December 31, 1985, from which dividends are not anticipated, was $5,400,000.
Generally, such earnings have been reinvested in Canada and tax credits are
available to substantially offset U.S. taxes on remittances.
NOTE 9 - SEGMENT INFORMATION AND MAJOR CUSTOMERS:
The Company operates in predominately one industry segment, the design,
engineering and manufacture of components sold to manufacturers in the
ground transportation industry.
The Company, through its subsidiaries, operates in two countries: the
United States and Canada. The Company's Canadian subsidiary had net sales of
$22,196,000 in 1985, $27,170,000 in 1984 and $21,605,000 in 1983. Total assets
of the Canadian subsidiary were approximately $9,250,000 in 1985, $7,600,000 at
December 31, 1984 and $11,000,000 at December 31, 1983. Intercompany sales were
insignificant.
Sales to three major customers, Ford Motor Company, General Motors
Corporation and Chrysler Corporation, were approximately 29%, 19% and 12%
respectively of the Company's net sales in 1985 as compared to 24%, 20%, and
15% in 1984. Sales to each of two major customers, General Motors Corporation
and Ford Motor Company were approximately 25% of net sales in 1983. Sales to
customers outside of the United States and Canada were not significant.
22
<PAGE> 88
NOTE 10-COMMON STOCK:
On January 19, 1984, the Board of Directors authorized an eighty to one stock
split with respect to the shares of common stock outstanding as of February 1,
1984. Stock dividends of 10% each were declared on December 14, 1984 and
December 19, 1985. Average shares outstanding and all per share amounts
included in the financial statements and notes are based on the increased
number of shares giving effect to the stock split and stock dividends. Shares
outstanding at December 31, 1983 have been restated to give retroactive effect
to the stock split.
In 1984, the Board and shareholders adopted an incentive stock option plan
for key employees and reserved 100,000 shares of common stock for this purpose.
This amount was increased to 121,000 shares with the stock dividends. The plan
provides that the purchase price shall be no less than the fair market value of
a share of common stock of the Company on the date on which the option is
granted. During 1985, 24,200 options were granted at an average grant price of
$8.36. Total options granted were 33,880 at an average grant price of $7.87
through December 31, 1985. At December 31, 1985 all options are exercisable,
but none have been exercised.
NOTE 11-SUBSEQUENT EVENT:
During January, 1986, the Company purchased certain assets of the Jacksonville,
Florida Division of Irvin Industries, Inc. The purchase price was approximately
$13 million, subject to revision upon final audit.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
Excel Industries, Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of shareholders' equity and of changes in
financial position present fairly the financial position of Excel Industries,
Inc. and its subsidiaries at December 31,1985 and December 31, 1984 and the
results of their operations and changes in their financial position for each of
the three years in the period ended December 31, 1985, in conformity with
generally accepted accounting principles consistently applied. Our
examinations of these statements were made in accordance with generally
accepted auditing standards and accordingly included such tests of the
accounting records and such other auditing procedures as we considered
necessary in the circumstances.
/s/ PRICE WATERHOUSE
-----------------------
Price Waterhouse
South Bend, Indiana
February 19, 1986
23
<PAGE> 89
EXCEL INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
<TABLE>
<CAPTION>
June 30 December 31
1986 1985
--------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
ASSETS:
Current Assets
Cash $ 126 $ 951
Accounts receivable, less allowances
of (1986-$143;1985-$156) 19,318 13,615
Customer tooling to be billed 2,418 1,973
Inventories (Note 2) 16,811 11,414
Other current assets 602 498
------- -------
Total current assets 39,275 28,451
Property, Plant and Equipment,
less accumulated depreciation of
(1986-$4,461;1985-$3,033) 21,851 10,652
Other Assets 842 1,708
------- -------
$61,968 $40,811
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Note payable to bank $ 3,558 $ 3,000
Accounts payable 11,885 8,278
Accrued liabilities 3,709 2,917
Current installments on long-term debt 1,221 1,010
------- -------
Total current liabilities 20,373 15,205
Long-term debt 23,746 9,880
Other long-term liabilities 1,665 1,639
Deferred income taxes 489 429
Stockholders' equity
Common stock-authorized 20,000,000
shares without par value; issued
3,472,000 shares 11,508 11,500
Retained earnings 4,580 2,586
Cumulative foreign translation adjust-
ment (393) (428)
------- -------
15,695 13,658
$61,968 $40,811
------- -------
------- -------
</TABLE>
NOTE: The balance sheet at December 31, 1985 has been restated to
reflect the pooling of interests with Urethane Technology, Inc.
EXHIBIT C(2)
to
Page 1 Stock Purchase Agreement
<PAGE> 90
EXCEL INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
June 30
1986 1985
---- ----
<S> <C> <C>
Net sales $34,230 $22,519
Other income 115 80
------ ------
34,345 22,599
Costs and expenses:
Cost of goods sold 29,195 19,241
Selling and administrative 2,080 1,969
Interest 685 263
------ ------
31,960 21,473
------ ------
Income before income taxes 2,385 1,126
Provision for taxes on income 1,105 564
----- -----
Net income $ 1,280 $ 562
----- -------
----- -------
Net income per share $ .37 $ .16*
------- -------
Cash dividends per share $ .10 $ .09*
------ ------
Average shares outstanding 3,471 3,471*
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30
1986 1985
---- ----
<S> <C> <C>
Net sales $70,578 $43,647
Other income 168 150
------- ------
70,746 43,797
Costs and expenses:
Cost of goods sold 60,256 36,853
Selling and administrative 4,100 3,963
Interest 1,373 463
------ ------
65,729 41,279
------ ------
Income before income taxes 5,017 2,518
Provision for taxes on income 2,338 1,180
------ -----
Net income $2,679 $1,338
----- -----
----- -----
Net income per share $ .77 $ .38*
----- -----
Cash dividends per share $ .20 $ .18*
----- -----
Average shares outstanding 3,471 3,471*
</TABLE>
* Adjusted for January 27, 1986 10% stock dividend
NOTE: Prior periods have been restated to reflect the pooling
of interests with Urethane Technology, Inc.
Page 2
<PAGE> 91
EXCEL INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CHANGES
IN FINANCIAL POSITION (UNAUDITED)
(in thousands of dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30 June 30
1986 1985
------- -------
<S> <C> <C>
Financial Resources were provided by -
Operations:
Net income $ 2,679 $ 1,338
Depreciation 1,428 609
Deferred income taxes 60 60
----- -----
4,167 2,007
----- -----
Financing Activities:
Bridge loan for acquisition 10,000 -
Utilization of revenue bond funds 896 600
Revolving credit drawdown - 1,200
Miscellaneous 298 213
------ -----
11,194 2,013
------ -----
Total Financial Resources Available 15,361 4,020
Financial Resources were used for:
Additions to properties - net 3,299 2,716
Dividends paid or declared 685 613
Reduction in long-term debt 581 80
Noncurrent assets and liabilities
of acquired business:
Properties: 9,312 -
Long-term debt (4,300) -
Other 112 -
Miscellaneous 16 219
------ -----
9,705 3,628
------ -----
Increase in working capital 5,656 392
Working capital:
Beginning of year 13,246 11,974
------ -----
End of second quarter $18,902 $12,366
------ -----
------ -----
ANALYSIS OF CHANGES IN WORKING CAPITAL
Working capital of acquired business $ 3,757 $ -
------ -----
Increase (decrease) in current assets:
Cash (825) (23)
Accounts receivable 5,703 1,908
Customer tooling to be billed 445 529
Inventories 1,227 2,162
Prepaid expenses 88 171
------ -----
6,638 4,747
(Increase) decrease in current liabilities:
Note payable to bank (558) (332)
Accounts payable (3,607) (3,671)
Accrued liabilities (792) (352)
Current installments on long-term debt 218 -
------ -----
(4,739) (4,355)
------ -----
Increase in working capital $ 5,656 $ 392
------ -----
------ -----
</TABLE>
NOTE: Prior periods have been restated to reflect the pooling
of interests with Urethane Technology, Inc.
Page 3
<PAGE> 92
EXCEL INDUSTRIES, INC.
Notes to Consolidated Financial Statements
Note 1 - Basis of Presentation:
The financial statements have been prepared from
the unaudited financial records of the Company. In the
opinion of management, all adjustments necessary for a fair
presentation of the results of operations for the interim
periods have been reflected.
Note 2 - Inventories:
Inventories consist of the following:
<TABLE>
<CAPTION>
June 30 December 31
1986 1985
------- -----------
<S> <C> <C>
Raw materials $9,968 $5,907
Work in process and
finished goods 6,843 5,507
------- -------
$16,811 $11,414
------- -------
------- -------
</TABLE>
Note 3 - Contingencies:
A chemical cleaning compound, trichloroethylene
("TCE"), has been found in the soil and groundwater on the
Company's property in Elkhart, Indiana, and, in 1981, TCE
was found in a well field of the City of Elkhart close to
the Company's facility. The City removed certain production
wells from service and installed interceptor wells intended
to prevent further contamination. However, the EPA and the
State of Indiana have insisted upon a more permanent solution.
The Company engaged a private engineering firm to study the
problem and has proposed a plan for remedial action. Although
there has been no claim of any negligence on the part of the
Company, the Company may be liable for the entire cost of
any remedial action. The Company believes that adequate
provisions have been recorded for the cost to be incurred.
Page 4
<PAGE> 93
EXHIBIT D
TO
STOCK PURCHASE AGREEMENT
REGISTRATION RIGHTS
Set forth below are the rights and obligations of Excel
Industries, Inc. (the "Company") and Ford Motor Company ("Ford"),
pursuant to the Stock Purchase Agreement, dated August , 1986
(the "Agreement"), with regard to the registration of securities
of the Company.
1. Definitions.
(a) All capitalized terms used herein without defini-
tion shall have the respective meanings specified therefor in
the "Agreement".
(b) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time adminis-
tering the Securities Act.
(c) "Common Stock" shall mean the common stock of the
Company.
(d) "Holder" shall mean Ford and any permitted trans-
feree or assignee of Ford meeting the conditions set forth in
Section 8 hereof.
(e) "Registrable Securities" shall mean the Common
Stock of the Company issued to Ford pursuant to the Agreement
and the Stock Exchange Agreement and Plan of Reorganization
at or after the Closing and all shares of Common Stock issued
as a result of pro rata adjustments with respect to such
Common Stock.
<PAGE> 94
(f) "Securities Act" shall mean the Securities Act of
1933.
2. Registration on Request. Upon the written request by a
Holder that the Company effect the registration under the
Securities Act of all or part of such Holder's Registrable
Securities, the Company will promptly thereupon use its good
faith reasonable efforts to effect the registration under the
Securities Act of the Registrable Securities. Any such request
shall specify the intended methods of disposition of such
Registrable Securities to the extent required to permit the
disposition of such Registrable Securities in accordance with the
intended methods of disposition.
Each registration requested pursuant to this Section 2 shall
be effected by the filing of a registration statement on Form S-1
(or any other form which such Holder may reasonably select). The
Company shall not register any class of securities similar to the
Registrable Securities for sale for its own account or for the
account of any other person until the expiration of 120 days
after the effectiveness of any registration requested pursuant to
this Section 2.
A registration requested pursuant to this Section 2 will not
be deemed to have been effected unless it has been declared
effective by the Commission, provided that a registration which
does not become effective after the Company has filed a registra-
tion statement with respect thereto solely by reason of the
refusal to proceed of the Holder requesting such registration
(other than any refusal to proceed based upon the advice of such
-2-
<PAGE> 95
Holder's counsel that the registration statement, or the pro-
spectus contained therein, contains 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) shall
be deemed to have been effected by the Company at the request of
such Holder.
The Holder requesting the registration shall pay all reason-
able expenses of registration in connection with each registra-
tion effected pursuant to this Section 2.
3. Incidental Registration. If the Company proposes to
register any of its Common Stock under the Securities Act whether
or not for sale for its own account (other than in connection with
the Company Incentive Stock Option Plan or any employee benefit
plan) in a manner which would permit registration of Registrable
Securities for sale to the public under the Securities Act, it
will give written notice to each Holder of its intention to do so,
specifying the form and manner and the other relevant facts
involved in such proposed registration. Upon the written request
of any Holder, delivered to the Company within 30 days after any
such notice is given (which request shall specify the number of
Registrable Securities intended to be disposed of by such Holder
and the intended methods of disposition thereof), the Company will
use its good faith reasonable efforts to effect the registration
under the Securities Act of all the Registrable Securities which
the Company has been so requested to register by one or more
Holders, to the extent required to permit the disposition (in
-3-
<PAGE> 96
accordance with the intended methods of disposition thereof as
aforesaid) of the Registrable Securities so to be registered. The
Company shall pay all expenses in connection with any registration
under this Section 3 except for those incremental expenses
directly attributable to the inclusion of Registrable Securities
requested under this Section 3, which incremental expenses shall
be paid by the Holders of such Registrable Securities.
4. Registration Procedures. Whenever the Company is required
to use its good faith reasonable efforts to effect the registra-
tion of any Registrable Securities under the Securities Act as
provided in Sections 2 or 3, the Company shall, as expeditiously
as reasonably possible:
(a) prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use
its good faith reasonable efforts to cause such registration
statement to become effective;
(b) prepare and file with the Commission such amend-
ments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary
to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such
registration statement until such time as all of such
securities have been disposed of in accordance with the
intended methods of disposition by the Holder set forth in
such registration statement, but in no event for a period of
more than 120 days after such registration becomes effective;
-4-
<PAGE> 97
(c) furnish to each Holder such number of conformed
copies of such registration statement and of each such
amendment and supplement thereto (in each case including all
exhibits) such number of copies of the prospectus included in
such registration statement (including each preliminary
prospectus and any summary prospectus), in conformity with
the requirements of the Securities Act, and such other
documents, as such Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities
owned by such Holder;
(d) use its good faith reasonable efforts to register
or qualify the Registrable Securities covered by such
registration statement under such other securities or blue
sky laws of such jurisdictions as such Holder shall request,
and do any and all other acts and things which may be
necessary or advisable to enable such Holder to consummate
the disposition in such jurisdictions of the Registrable
Securities owned by such Holder, provided that the Company
shall not be required to qualify generally to do business as
a foreign corporation in any jurisdiction where it would not
be required but for this Section 4(d), or to subject itself
to taxation in any such jurisdiction;
(e) furnish to each Holder a signed original, addressed
to such Holder, of (i) an opinion of counsel for the Company,
dated the effective date of such registration statement, and
(ii) a "comfort" letter signed by the independent public
-5-
<PAGE> 98
accountants who have certified the Company's financial state-
ments included in such registration statement, covering
substantially the same matters with respect to such regis-
tration statement (and the prospectus included therein) and,
in the case of such accountants' letter, with respect to
events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in
underwritten public offerings of securities;
(f) notify such Holder of any such securities covered
by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the
Securities 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 any material fact required to be
stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing,
and at the request of such Holder, prepare and furnish to
such Holder a number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the state-
ments therein not misleading in light of the circumstances
then existing;
-6-
<PAGE> 99
(g) otherwise use its good faith reasonable efforts to
comply with all applicable rules and regulations of the
Commission, and make available to its securities holders, as
soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, but not more than
18 months, beginning with the first month of the first fiscal
quarter after the effective date of such registration state-
ment, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act; and
(h) use its good faith reasonable efforts to obtain, or
maintain, the listing of such Registrable Securities on the
American Stock Exchange or on a comparable national
securities exchange.
The Company may require of each Holder, with regard to any
Registrable Securities as to which any registration is being
effected, to furnish the Company such information regarding each
such Holder and the distribution of such Registrable Securities
as the Company may from time to time reasonably request in
writing and as shall be required by law or by the Commission in
connection therewith.
5.1 Underwriting Agreement. If requested by the underwriters
for any underwritten offering by a Holder of Registrable Secur-
ities pursuant to a registration requested under Section 2, the
Company shall enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such
representations and warranties by the Company and such other
terms and provisions as are customarily contained in such agree-
-7-
<PAGE> 100
ments, including, without limitation, indemnities to the effect
and to the extent provided in Section 7. Such Holder, as the
holder of Registrable Securities to be distributed by such under-
writers, shall be a party to such underwriting agreement and the
representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such under-
writers shall also be made to and for the benefit of such Holder
and the conditions precedent to the obligations of such Holder
under such underwriting agreement shall be satisfactory to such
Holder.
5.2 Incidental Underwritten Offerings. If the Company at
any time proposes to register any of its securities under the
Securities Act for sale for its own account and such securities
are to be distributed by or through one or more underwriters, the
Company will use its good faith reasonable efforts, if required
by a Holder pursuant to Section 3, to arrange for such under-
writers to include the Registrable Securities to be offered and
sold by such Holder among those to be distributed by such under-
writers. Such Holder shall be a party to the underwriting
agreement between the Company and such underwriters and the
representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such under-
writers shall also be made to and for the benefit of such Holder
and the conditions precedent to the obligations of such Holder
under such underwriting agreement shall be satisfactory to such
Holder.
-8-
<PAGE> 101
5.3 Limitations. If the Company determines that the number
of shares of Common Stock to be registered pursuant to Section 3
or Section 5.2 should be limited due to market conditions or
based on other reasonable considerations, the applicable regis-
tration statement shall cover only Common Stock to be sold by the
Company plus such number of Registrable Securities of Holders as
the Company may reasonably determine may be sold without
adversely affecting the sale of Common Stock by the Company.
6. Preparation; Reasonable Investigation. In connection
with the preparation and filing of each registration statement
registering Registrable Securities under the Securities Act, the
Company will give each Holder and its underwriters, if any, and
their respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement,
each prospectus contained therein or filed with the Commission,
and each amendment thereof or supplement thereto, and will give
each of them such reasonable access to its books and records and
such reasonable opportunities to discuss the business of the
Company with its officers and the independent certified public
accountants who have certified its financial statements as shall
be necessary to conduct a reasonable investigation within the
meaning of the Securities Act.
7. INDEMNIFICATIONS
7.1 Indemnification by the Company. In the event of any
registration of any Registrable Securities under the Securities
Act pursuant to Sections 2 or 3, the Company will, and hereby
does, indemnify and hold harmless each Holder of such Registrable
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<PAGE> 102
Securities, its directors and officers, each other person who
participates on behalf of such Holder as an underwriter, broker
or dealer in the offering or sale of such securities and each
other person, if any, who controls such Holder or any such
participating person within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or
several, to which such Holder or any such director or officer or
participating or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (a) any untrue statement
or allegedly untrue statement of any material fact contained in
any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or (b) any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not mislead-
ing; and the Company will reimburse such Holder and each such
director, officer, participating person and controlling person
for any legal or any other expenses reasonably incurred by them
in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding, provided that the
Company shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or allegedly untrue statement or
omission or alleged omission made in such registration statement,
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any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company
through an instrument duly executed by such Holder specifically
stating that it is for use in the preparation thereof. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Holder or any such
director, officer, participating person or controlling person and
shall survive the transfer of such securities by such Holder.
7.2 Indemnification by the Holder. The Company may require,
as a condition to including any Registrable Securities in any
registration statement filed pursuant to the provisions of this
Exhibit D, that the Company shall have received an undertaking
satisfactory to it from each Holder seeking registration, to
indemnify and hold harmless (in the same manner and to the same
extent as set forth in Section 7.1) the Company, each director of
the Company, each officer of the Company who shall sign such
registration statement and each other person, if any, who
controls the Company within the meaning of the Securities Act,
with respect to any statement in or omission from such regis-
tration statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, if
such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company
through an instrument duly executed by such Holder specifically
stating that it is for use in the preparation of such registra-
tion statement, preliminary prospectus, final prospectus, summary
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<PAGE> 104
prospectus, amendment or supplement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling person and shall survive the
transfer of such securities by such Holder.
7.3 Notices of Claim, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraphs of this Section 7, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding paragraphs of this Section #7, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice.
In case any such action is brought against an indemnified party, the
indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified
to the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof. No indemnifying party will consent to entry of any judgment
or enter into any settlement
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which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
7.4 Other Indemnification. Indemnification similar to that
specified in the preceding paragraphs of this Section 7 (with
appropriate modifications) shall be given by the Company and any
Holder seeking registration of Registrable Securities with
respect to any required registration or other qualification of
such Registrable Securities under any Federal or state law or
regulation of governmental authority other than the Securities
Act.
8. Assignment of Registration Rights. The rights and
obligations set forth in this Exhibit D may be assigned by a
Holder to a transferee or assignee of not less than 100,000
shares, adjusted for stock dividends, stock splits and other pro
rata adjustments, of Registrable Securities provided such
transfer or assignment is made in accordance with the provisions
of Section 13.9 of the Stock Purchase Agreement.
9. Rights Granted to Other Investors. From and after the
date of the Stock Purchase Agreement, the Company may not grant
to any other investor in the Company demand rights of registra-
tion unless (i) such rights are limited to shares of Common
Stock, and (ii) each Holder of Registrable Securities is given
enforceable rights to participate in registrations requested by
such investors on a pro rata basis with all of the holders of
Common Stock entitled to inclusion in any such registration.
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<PAGE> 106
10. Notices. All notices, demands, requests, consents,
approvals or other communications (collectively "Notices")
required or permitted to be given hereunder or which are given
with respect to this Exhibit D shall be in writing and shall be
delivered or sent as provided in Paragraph 13.1 of the Stock
Purchase Agreement of which this Exhibit D is a part.
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<PAGE> 107
EXHIBIT B
STOCK EXCHANGE AGREEMENT
AND
PLAN OF REORGANIZATION
AMONG
EXCEL INDUSTRIES, INC.
AND
FORD MOTOR COMPANY
AND
MODULAR CONCEPTS, INC.
Dated as of August 19, 1986
<PAGE> 108
TABLE OF CONTENTS
<TABLE>
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Recitals ............................................... 1
SECTION 1. EXCHANGE OF STOCK........................... 1
Section 1.1. Transfer of MCI Stock................ 1
Section 1.2. Transfer of Excel Stock.............. 2
Section 1.3. Closing Date......................... 2
SECTION 2. REPRESENTATIONS AND WARRANTIES............. 2
Section 2.1. Representations and Warranties
of Ford.............................. 2
2.1(a) Due Organization and Corporate
Authority of Ford.................... 2
2.1(b) Due Organization and Corporate
Authority of MCI..................... 2
2.1(c) Capitalization of MCI................ 3
2.1(d) Marketable Title and
Condition of Assets.................. 4
2.1(e) Books and Records of MCI............. 5
2.1(f) Authorization........................ 5
2.1(g) Absence of Conflicts................. 6
2.1(h) Consents............................. 6
2.1(i) Due Execution........................ 7
2.1(j) Financial Statements of MCI.......... 7
2.1(k) Absence of Undisclosed Liabilities... 8
2.1(l) Inventory............................ 8
2.1(m) Leases............................... 8
2.1(n) Contracts............................ 9
2.1(o) Absence of Changes in Business....... 9
2.1(p) Patents and Trademarks............... 11
2.1(q) Taxes................................ 12
2.1(r) Product Warranties................... 12
2.1(s) MCI Disclosure Exhibit............... 13
2.1(s)1 Land; Facilities..................... 13
2.1(s)2 Patents and Trademarks............... 13
2.1(s)3 Noncompetition Agreements............ 13
2.1(s)4 Material Contracts................... 13
2.1(s)5 Material Obligations................. 14
2.1(s)6 Business-Related Agreements.......... 14
2.1(s)7 Capital Commitments.................. 14
2.1(s)8 Machinery and Equipment.............. 14
2.1(s)9 Government Authorizations............ 14
2.1(s)10 Employees............................ 14
2.1(s)11 Employment Contracts................. 15
2.1(s)12 Investment Interests................. 15
</TABLE>
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<TABLE>
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2.1(s)13 Product Warranty..................... 15
2.1(s)14 Insurance............................ 15
2.1(s)15 Bank Accounts........................ 15
2.1(t) Compliance With Environmental,
Health, Safety and Similar Laws...... 15
2.1(u) Compliance With Other Laws;
Governmental Authorizations
and Regulations...................... 16
2.1(v) Litigation and Related Matters....... 17
2.1(w) Brokers and Finders.................. 18
2.1(x) Powers of Attorney................... 18
2.1(y) Employee Relations Matters........... 18
2.1(y)1 Employee Organizations............... 18
2.1(y)2 ERISA. .............................. 18
(A) Pension Benefit Plans Generally.. 18
(B) ERISA Title IV Considerations.... 19
(C) Common-Control Enterprises....... 19
(D) Prohibited Transactions.......... 19
(E) Employee Benefit Plan Claims
Liability......................... 19
(F) Reports and Disclosure........... 19
2.1(y)3 OSHA, NLRA and Related Matters....... 19
2.1(y)4 Worker's Compensation................ 20
2.1(z) No Omission of Material Facts........ 20
2.1(aa) Documents True and Complete.......... 20
2.1(bb) Incorporation of Investment
Representations...................... 21
Section 2.2. Representations and Warranties
of Excel............................. 21
2.2(a) Valid Issuance of Shares............. 21
2.2(b) Authorization........................ 21
2.2(c) Absence of Conflicts................. 22
2.2(d) Consents............................. 22
2.2(e) Due Execution........................ 23
2.2(f) Incorporation of Other
Representations and Warranties....... 23
2.2(g) No Omission of Material Facts........ 23
2.2(h) Securities Representations and
Warranties of Excel.................. 23
2.2(h)1 Acquired for Own Account............. 23
2.2(h)2 No Agreement to Sell MCI Shares...... 23
2.2(h)3 No Registration...................... 23
2.2(h)4 Restricted Securities................ 24
2.2(h)5 Availability of Records; Risk
Factors.............................. 24
Section 2.3. Survival of Representations
and Warranties....................... 24
</TABLE>
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<TABLE>
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SECTION 3. COVENANTS OF FORD AND MCI PENDING CLOSING... 25
Section 3.1. Operation of Business................ 25
3.1(a) Business in Ordinary Course.......... 25
3.1(b) Maintain Properties.................. 25
3.1(c) Maintain Corporate Books............. 25
3.1(d) No Breach............................ 26
3.1(e) Indebtedness......................... 26
3.1(f) No Amendments........................ 26
3.1(g) Taxes................................ 26
3.1(h) No Disposition or Encumbrance........ 26
3.1(i) No Acquisitions...................... 27
3.1(j) No Securities Issuances.............. 27
3.1(k) Dividends; Repurchases............... 27
3.1(l) Contracts............................ 27
3.1(m) Due Compliance....................... 27
3.1(n) No Waivers of Rights................. 28
3.1(o) Capital Commitments.................. 28
Section 3.2. Full Access; Cooperation in Opera-
tional Matters and Preparation of
Necessary Financial Statements....... 28
Section 3.3. Minimum Net Worth.................... 29
Section 3.4. Advice of Change..................... 29
Section 3.5. Release of Liability In Connection
With Industrial Revenue Bonds........ 30
Section 3.6. Transfer of Contract Rights,
Properties, Technology, Licenses
and Proprietary Rights............... 30
SECTION 4. CONDITIONS OF CLOSING........................ 30
Section 4.1. Conditions Precedent to Ford's
Obligation........................... 30
4.1(a) Accuracy of Representations and War-
ranties; Compliance with Covenants... 31
4.1(b) Certificates of Corporate Officers... 31
4.1(c) Legal Opinions....................... 31
4.1(d) No Material Change................... 31
4.1(e) Reporting Requirements;
No Court Order....................... 32
4.1(f) Indiana and Other States' Laws....... 33
4.1(g) No Governmental Change............... 33
4.1(h) Satisfaction of Conditions Precedent
and Closing of Transactions Contem-
plated by the Stock Purchase
Agreement............................ 33
</TABLE>
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<TABLE>
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4.1(i) Percentage Equity.................... 34
4.1(j) Assumption or Indemnification With
Respect to Guaranty of Lease......... 34
Section 4.2. Conditions Precedent to
Excel's Obligation................... 34
4.2(a) Accuracy of Representations and
Warranties; Compliance With
Covenants............................ 34
4.2(b) Certificates of Corporate Officers... 35
4.2(c) Legal Opinions....................... 35
4.2(d) No Material Change................... 36
4.2(e) Reporting Requirements;
No Court Order....................... 36
4.2(f) Indiana and Other States' Laws....... 37
4.2(g) No Governmental Change............... 37
4.2(h) Satisfaction of Conditions Precedent
and Closing of Transactions Contem-
plated by the Stock Purchase
Agreement............................ 37
4.2(i) Release of Liability Under Loan
Agreement and Bonds.................. 37
4.2(j) Transfer and Assignment of Patent
License and Other Contract Rights,
Properties, Technology, Licenses
and Proprietary Rights............... 38
4.2(k) Resignations of Officers and
Directors............................ 38
SECTION 5. CLOSING..................................... 38
Section 5.1. Obligations of Ford.................. 38
5.1(a) MCI Shares........................... 39
5.1(b) Related Agreements................... 39
5.1(c) Officers' Certificates and
Legal Opinions....................... 39
Section 5.2. Obligations of Excel................. 39
5.2(a) Excel Shares......................... 39
5.2(b) Related Agreements................... 39
5.2(c) Officers' Certificates and
Legal Opinion........................ 39
SECTION 6. INDEMNIFICATION............................. 39
Section 6.1. Indemnification by Ford.............. 39
Section 6.2. Indemnification by Excel............. 41
</TABLE>
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<TABLE>
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SECTION 7. CONDUCT SUBSEQUENT TO CLOSING ................ 42
Section 7.1. Non-Compete Agreements of Ford;
Agreement of Ford Relating to Business
Opportunities Outside of the
Non-Compete Area..................... 42
Section 7.2. Records.............................. 43
Section 7.3. Cooperation.......................... 43
Section 7.4. Post-Closing Adjustments............. 44
Section 7.5. Tax Reimbursement.................... 44
Section 7.6. Preservation of Tax Exempt Status
of Bonds............................. 45
Section 7.7. Continuation of Employment........... 45
SECTION 8. MISCELLANEOUS................................ 46
Section 8.1. HSR Act Filings...................... 46
Section 8.2. Assignments.......................... 46
Section 8.3. Successors and Assigns............... 46
Section 8.4. Bulk Sales........................... 46
Section 8.5. Expenses............................. 47
Section 8.6. Notices.............................. 47
Section 8.7. Modifications and Amendments......... 48
Section 8.8. Waivers and Extensions............... 48
Section 8.9. Third Parties........................ 48
Section 8.10. Governing Law........................ 48
Section 8.11. Titles and Headings.................. 49
Section 8.12. Counterparts......................... 49
Section 8.13. Entire Agreement..................... 49
Section 8.14. Termination.......................... 49
</TABLE>
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<PAGE> 113
Schedule of Exhibits
Exhibit A(1) Unaudited Balance Sheets of MCI
as of December 31, 1984 and 1985,
together with the related state-
ments of income and retained
earnings for the years ending
on those dates
Exhibit A(2) Unaudited Interim Balance Sheet
of MCI as of June 30, 1986,
together with the related
unaudited interim statements
of income and retained earnings
for the six-month period
ending on that date
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STOCK EXCHANGE AGREEMENT
AND
PLAN OF REORGANIZATION
This Stock Exchange Agreement and Plan of Reorganization
("Agreement"), dated as of August , 1986, by and among Excel
Industries, Inc., an Indiana corporation ("Excel"), Ford Motor
Company, a Delaware corporation ("Ford") and Modular Concepts,
Inc., a Delaware corporation and a wholly-owned subsidiary of Ford
("MCI"),
R E C I T A L S
A. Based upon the representations and warranties herein con-
tained, Excel desires to carry out a reorganization by acquiring
from Ford, and Ford desires to transfer to Excel, all of the shares
of stock of MCI in exchange for 672,269 shares of authorized but
unissued shares of Excel common stock.
B. Concurrently with the execution of this Agreement, Excel
and Ford are executing a Stock Purchase Agreement (the "Stock
Purchase Agreement") which, and the transactions contemplated by
which, including without limitation the making of an issuer tender
offer and the entering into of a Purchase and Supply Agreement (the
"Supply Contract") and a Shareholders Agreement (the "Shareholders
Agreement"), are interdependent with this Agreement and the trans-
actions contemplated by this Agreement.
NOW, THEREFORE, for valuable consideration, the parties hereto
agree as follows:
SECTION 1. EXCHANGE OF STOCK
Section 1.1. Transfer of MCI Stock. Subject to the terms and
conditions of this Agreement, Excel agrees to acquire, and Ford
<PAGE> 115
agrees to transfer to Excel, at the closing of the transactions
contemplated herein (the "Closing") ten (10) shares of MCI' s common
stock (the "MCI Shares") representing all of the issued and out-
standing stock of MCI.
Section 1.2. Transfer of Excel Stock. Subject to the terms
and conditions of this Agreement, in consideration for the transfer
to Excel of the MCI Shares, Ford agrees to acquire and Excel agrees
to transfer to Ford at the Closing, 672,269 shares of Excel's
common stock (the "Excel Shares").
Section 1.3. Closing Date. The Closing shall take place at the
offices of Ford at such time and on such date (the "Closing Date")
as Ford and Excel shall mutually agree upon provided that the
Closing shall take place as soon as practicable after all of the
conditions set forth in Section 5 have been satisfied or waived in
writing by Ford and all of the conditions set forth in Section 6
have been satisfied or waived in writing by Excel.
SECTION 2. REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of Ford. Ford and
MCI, and each of them, represent and warrant to Excel as follows:
2.1(a) Due Organization and Corporate Authority of Ford.
Ford is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requi-
site corporate power to carry on its business as now conducted.
2.1(b) Due Organization and Corporate Authority of MCI. MCI
is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware and has the
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<PAGE> 116
requisite power to carry on its business as now being conducted and
to own and operate the properties and assets now owned and operated
by it. MCI is duly qualified to do business and is in good
standing as a foreign corporation in the Commonwealth of Kentucky
and is not required to be qualified or licensed to do business as a
foreign corporation in any other jurisdiction except such juris-
dictions, if any, in which the failure to be so qualified or
licensed will not have a material adverse effect on the conduct of
its business or the ownership of its properties.
2.1(c) Capitalization of MCI. The authorized capital stock of
MCI consists of 10,000 shares of common stock with a par value of
$1.00, of which 10 shares are validly issued and outstanding, fully
paid and non-assessable. Except as set forth in the preceding
sentence, MCI does not have any shares of its capital stock issued
or outstanding, and there are no outstanding (i) securities or
obligations of MCI convertible into or exchangeable for such shares;
(ii) warrants, rights or options to subscribe for or purchase from
MCI such shares or any such convertible or exchangeable securities
or obligations; or (iii) obligations of MCI to issue any such
shares, any such convertible or exchangeable securities or obliga-
tions or any such warrants, rights or options. No shares of MCI
common stock have been reserved for issuance pursuant to an employee
stock option plan or otherwise. All issued and outstanding shares
of MCI are owned by Ford free and clear of any liens, claims,
charges, restrictions, equities or encumbrances of any kind whatso-
ever and are freely transferable.
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<PAGE> 117
2.1(d) Marketable Title and Condition of Assets. Except as
specifically provided in the "MCI Disclosure Exhibit" (as defined
and provided in Section 2.1(s) hereof), MCI has, or will have at
the Closing Date, good and marketable title to all the land, build-
ings, machinery and equipment used in its business, including
without limitation those reflected on the June 30, 1986 balance
sheet referred to in Section 2.1(j) herein (except as since sold or
otherwise disposed of in the ordinary course of business or as
otherwise specifically permitted by this Agreement) free and clear
of any and all Liens. For purposes of this Agreement, a "Lien"
shall mean any lien, encroachment, easement, encumbrance, mortgage,
hypothecation, pledge, conditional sales contract, equity, charge,
hire or hire purchase agreement, or other similar conflicting
ownership or security interest in favor of any third party created
by, through or under MCI or Excel, as the case may be, except for
(a) any lien for state or local property taxes not yet due and
payable and (b) such easements, rights of way and other imperfec-
tions of title, if any, as do not, individually or in the aggre-
gate, materially affect the operations of MCI or Excel, as the case
may be, as a whole. The buildings, machinery and equipment used by
MCI that are necessary to the operation of its business are in good
operating condition and repair, subject only to ordinary wear and
tear. To the best knowledge of Ford and MCI, neither MCI nor any
of the property owned or leased by it is in violation of any
applicable ordinance, regulation or building, zoning, environmental
or other law in respect thereof except such violations, if any, the
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<PAGE> 118
existence of which in the aggregate does not and will not mater-
ially and adversely affect the property, business, financial
condition or prospects of MCI as currently operated.
2.1(e) Books and Records of MCI. MCI keeps and maintains
full and complete books, accounts and records which accurately
account for and reflect the assets, properties, liabilities, obli-
gations, affairs and results of the conduct and operation of its
business and maintains internal accounting controls which provide
reasonable assurance that (i) transactions are executed with
management's authorization; (ii) transactions are recorded as
necessary to permit preparation of MCI's financial statements and
to maintain accountability for the assets of MCI; (iii) access to
the assets of MCI is permitted only in accordance with management's
authorization; and (iv) the reported accountability of the assets
of MCI is compared with existing assets at reasonable intervals.
The minute book of MCI contains a record, accurate and complete in
all material respects, of all meetings and consents of the stock-
holders and Board of Directors (and all committees thereof) of MCI
heretofore held and of the issuance of its issued and outstanding
capital stock. Such books and records, and all other necessary
documents, records, deeds, agreements and the like relating to
MCI's affairs are in its possession and under its control.
2.1(f) Authorization. The execution, delivery and perform-
ance of this Agreement and each of the agreements contemplated
hereby have been, or prior to Closing will be, duly authorized by
all necessary actions on the part of Ford and MCI, including all
stockholder approvals required by law.
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<PAGE> 119
2.1(g) Absence of Conflicts. The execution, delivery and
performance of this Agreement and each of the agreements contem-
plated hereby are not prohibited by, and do not materially violate
any provision or result in the material breach of (i) the Certi-
ficate of Incorporation or By-Laws of Ford or MCI; (ii) any con-
tract, indenture, agreement, lease or license to which Ford or MCI
is a party or by which Ford or MCI or any of MCI's assets are
bound; (iii) any obligation, loan or guaranty to which MCI or Ford
is a party or by which Ford or MCI is bound; or (iv) any applicable
law, rule, regulation, order, writ or decree of any court or any
other governmental authority. Also, such execution, delivery and
performance will not result in the creation or imposition of any
Lien on any of the assets of MCI.
2.1(h) Consents. No consent, approval, authorization or
order of, and no filing with or notification to, any governmental
authority or other person or entity (including, without limitation,
persons and entities having contractual relationships with Ford or
MCI) is required to be made or obtained by Ford in connection with
the execution, delivery and performance of this Agreement, or the
agreements contemplated hereby, which, if not made or obtained
would have a material adverse effect upon the performance of Ford
or MCI hereunder, other than the filings, if any, required to be
made in connection with the transactions contemplated herein under
the Hart-Scott-Rodino Antitrust Improvement Act of 1976 (the "HSR
Act"), Indiana law and the Securities Act of 1933, as amended, and
the regulations promulgated thereunder.
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<PAGE> 120
2.1(i) Due Execution. This Agreement has been duly executed
and delivered by Ford and MCI and assuming due authorization,
execution and delivery by Excel, constitutes the legal, valid and
binding obligation of Ford and MCI.
2.1(j) Financial Statements of MCI. Exhibit A(1) to this
Agreement sets forth the unaudited balance sheets of MCI as of
December 31, 1984 and 1985, together with the related statements of
income and retained earnings for the years ending on those dates.
Exhibits A(2) to this Agreement sets forth an unaudited interim
balance sheet of MCI as of June 30, 1986, together with the related
unaudited interim statements of income and retained earnings for
the six-month period ending on that date. The financial statements
in Exhibits A(1) and A(2) are hereinafter referred to as the "MCI
Financial Statements." The MCI Financial Statements have been pre-
pared in accordance with generally accepted accounting principles
consistently applied by MCI throughout the periods indicated and
fairly present (i) the financial position of MCI as of the respec-
tive dates of the balance sheets included in the MCI Financial
Statements; and (ii) the results of MCI's operations for the
respective periods indicated. No uncollectible accounts receivable
are reflected on the MCI Financial Statements without provision for
an adequate reserve for uncollectible amounts. Any inventory
reflected on the MCI Financial Statements represents only good and
saleable items priced at the lower of cost (first in, first out
method) or market value with adequate provision for obsolescence,
shrinkage, excess quantities, defective materials and deteriora-
tion. There is no liability of any nature or in any amount that
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<PAGE> 121
should properly be reflected or reserved against in a balance sheet
prepared in conformity with generally accepted accounting prin-
ciples applied on a basis consistent with that of the preceding
period which is not fully reflected or reserved against in the MCI
Financial Statements. All properties material to the present
operations of MCI are reflected in the balance sheet of MCI as of
June 30, 1986 or will be reflected on the "Closing Date Balance
Sheet" (as defined in Section 7.4) in the manner and to the extent
required by generally accepted accounting principles.
2.1(k) Absence of Undisclosed Liabilities. As of December
31, 1985 and June 30, 1986, MCI did not have any material liabil-
ities or obligations of any nature, whether absolute, accrued,
contingent or otherwise and whether due or to become due, that
under generally accepted accounting principles should have been
reflected in the MCI Financial Statements dated, respectively, as
of such dates, but were not so reflected.
2.1(l) Inventory. All inventory acquired or produced by MCI
since June 30, 1986 has been acquired or produced in the ordinary
course of business and consists solely of good and saleable items.
2.1(m) Leases. All leases of real and personal property
material to the conduct of and relating to MCI's business are in
full force and effect and are valid and enforceable in accordance
with their respective terms. There is not under any such lease any
existing default in any material respect or any condition nor has
there occurred any event which, with notice or lapse of time or
both, would constitute such a default thereunder. MCI has the
right to quiet enjoyment of all real estate leases for the full
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term of each such lease and the leasehold interest of MCI in such
real property is not subject to any Lien.
2.1(n) Contracts. Each material contract to which MCI is a
party and which is related to its business (i) constitutes a valid
and binding obligation of the parties thereto and is in full force
and effect; and (ii) will continue in full force and effect in each
case without breaching the terms thereof or resulting in the for-
feiture or impairment of any rights thereunder and without the
consent, approval or act of, or the making of any filing with, any
other party. MCI has fulfilled and performed its obligations under
each such contract and is not, nor alleged to be, in material
breach or default under any such contract.
2.1(o) Absence of Changes in Business. Except as specifi-
cally set forth in the MCI Disclosure Exhibit or the June 30, 1986
financial statements, there has not been, since December 31, 1985,
any:
2.1(o)1 transaction by MCI other than in the ordinary
course of business as conducted on that date;
2.1(o)2 destruction, damage to or loss of any asset of MCI
(whether or not covered by insurance) that mater-
ially and adversely affects the financial condi-
tion, business or prospects of MCI;
2.1(o)3 loss of a major customer, material order or other
material adverse change in the financial condition,
business or prospects of MCI;
2.1(o)4 change in accounting methods or practices (includ-
ing, without limitation, any change in depreciation
or amortization policies or rates) by MCI;
2.1(o)5 declaration, setting aside or payment of a dividend
or other distribution in respect of the capital
stock of MCI, or any direct or indirect redemption,
purchase or other acquisition by MCI of any of its
shares of capital stock;
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2.1(o)6 issuance or sale by MCI of any stock, bonds or
other corporate securities and neither Ford nor MCI
has granted any option, warrant or other right to
subscribe for or to purchase any capital stock of
MCI;
2.1(o)7 incurrence by MCI of any indebtedness, or
acceptance of any other liability or obligation
other than in the ordinary course of business;
2.1(o)8 action taken that has resulted or reasonably would
be expected to result in any asset of MCI being
mortgaged, pledged or subjected to any Lien;
2.1(o)9 sale, transfer or other disposition of any material
asset of MCI;
2.1(o)10 action taken by MCI that has resulted or will
result in it becoming a party to any joint venture,
consortium or partnership arrangement or agreement;
2.1(o)11 increase in the salary or other compensation pay-
able or to become payable by MCI to its officers,
directors or employees, or the declaration, payment
or commitment or obligation of any kind for pay-
ment, by MCI, for a bonus, increased benefit under
any insurance, pension or employee benefit plan or
other additional compensation to any such person,
other than normal merit increases pursuant to the
general practices of MCI in effect immediately
prior to December 31, 1985;
2.1(o)12 material amendment or termination of any material
contract, agreement or license to which MCI is a
party other than in the ordinary course of
business;
2.1(o)13 entry by MCI or commitment by MCI to enter into any
transaction not in the ordinary course of business
of MCI other than this Agreement;
2.1(o)14 agreement by MCI to do any of the things described
in the preceding clauses (1) through (13);
2.1(o)15 resignation or termination of employment of any of
MCI's key officers or employees or any impending or
threatened resignation or resignations or termina-
tion or terminations of employment that would have
a material adverse effect on MCI's operations (pre-
sent or prospective) or business (present or pro-
spective);
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2.1(o)16 labor trouble or any impending or threatened labor
trouble affecting or which might affect the opera-
tions of MCI; or
2.1(o)17 shortage or difficulty in MCI's ability to obtain
raw materials.
2.1(p) Patents and Trademarks. Except as specifically set
forth in the MCI Disclosure Exhibit (i) neither MCI or Ford owns
any patent relating to any product that MCI manufactures or sells
nor has any license under any patent been issued to MCI or Ford
relating to any such product and, to the best knowledge of Ford,
there is no patent which would cover any of such products or any
process or component used in the manufacture of any of them; and
(ii) MCI does not own any registered trademarks or trade names, nor
has any license to use any trademark or trade name been issued to
MCI, nor does MCI use any registered trademark or trade name in its
business or operations. All of the patents and registered trade-
marks and trade names listed in the MCI Disclosure Exhibit pursuant
to Subsection 2.1(s)2 below have been validly issued and are owned
by MCI, and MCI has the exclusive right to use all such patents and
registered trademarks and trade names in its business and opera-
tions. To the best knowledge of Ford and MCI, MCI owns all propri-
etary rights necessary to manufacture and sell its products and to
conduct its business and operations and, except as disclosed pur-
suant to Subsection 2.1(s)2, has not infringed any patent, copy-
right, trade name or other proprietary right of any other person,
and no claim of any such infringement has been made by any other
person. To the best knowledge of Ford and MCI, except as disclosed
pursuant to Subsection 2.1(s)2, the manufacture, marketing or use
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of the products manufactured by MCI will not infringe the propri-
etary rights of any other person. To Ford's knowledge, no person
is infringing any patent, copyright, trade name or other propri-
etary right of MCI.
2.1(q) Taxes. All tax and information returns required to
have been filed by MCI or by Ford on behalf of MCI with the United
States of America and with all states and municipalities and with
all foreign jurisdictions have been duly filed, and each such
return correctly reflects the income, franchise or other tax
liabilities and all other information required to be reported
thereon, and all income, franchise and other taxes due by MCI as
reflected on said returns have been paid or accrued. The pro-
visions for taxes due reflected on MCI's June 30, 1986 balance
sheet are sufficient for all unpaid federal, state, local and
foreign taxes, whether or not disputed, in respect of its business
and operations for the period then ended and all prior periods.
There are no questions relating to any of the returns which if
determined adversely to MCI would result in the assertion of any
deficiencies for taxes, or interest or penalties in connection
therewith. MCI has not incurred any tax liability as a result of
any transaction not in the ordinary course of business. There is
no claim or assessment pending or, to the knowledge of each of MCI
or Ford, its officers and directors, threatened against MCI for any
alleged deficiency in any taxes.
2.1(r) Product Warranties. Except as specifically set forth
in the MCI Disclosure Exhibit, MCI has not made any express product
warranty with respect to any product that it manufactures or sells.
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Neither Ford nor MCI has received any notice of any material claim
based on any product warranty. MCI does not know of any material
claim (actual or threatened) based on any product warranty of which
neither Ford nor MCI has received notice.
2.1(s) MCI Disclosure Exhibit. Ford has heretofore furnished
to Excel a disclosure exhibit (the "MCI Disclosure Exhibit") which
specifically sets forth all the exceptions to the representations
and warranties of Ford contained herein and which contains, without
limitation, the following information as of the date hereof:
2.1(s)1 Land; Facilities. (a) In the case of real estate
owned by MCI, a description of the property and
copy of the deed, title abstract or insurance and
any variances granted, and, except as set forth in
this subsection, there are no easements, right-of-
way agreements, licenses, subleases, occupancy
agreements or like agreements with respect to the
real estate which is described; and (b) in the case
of any property which is leased by MCI, a copy or
brief description of each lease. Each such lease
is valid and in full force, and there does not
exist any default or condition nor has there
occurred any or event which, with notice or lapse
of time or both, would constitute a default under
the lease.
2.1(s)2 Patents and Trademarks. (a) A list of any patent,
trademark, trade name, service mark, brand name or
copyright in which MCI holds any right, license or
interest; and (b) a list of any patent, trademark,
trade name, service mark, brand name or copyright
belonging to any other person, firm or corporation
on which MCI has infringed or is now infringing.
2.1(s)3 Noncompetition Agreements. A list of each agree-
ment restricting the freedom of MCI or any employee
or officer of MCI to compete in any line of
business with any person or entity.
2.1(s)4 Material Contracts. A list of each contract, agree-
ment, lease and license relating to MCI's business
pursuant to which MCI would be, or reasonably might
be expected to be, obligated to make payments or
deliver goods or services at any time subsequent to
the date which is five working days prior to the
date of execution of this Agreement in an aggregate
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amount exceeding $50,000. All of MCI's sales are
to Ford.
2.1(s)5 Material Obligations. A list of all obligations
(including overdrafts) of MCI for borrowed money
having an outstanding balance to any single creditor
in excess of $25,000 (each such obligation here-
inafter called a "Material Obligation"), and a list
of all guarantees of MCI under which the liability
of MCI might exceed $25,000. Such list sets forth,
with respect to each Material Obligation or guar-
anty, the name of the lender or creditor, the
general terms and conditions thereof, including
rates of interest and other financial fees incurred
in connection therewith, the maturity date thereof,
the operating or financial restrictions imposed and
any security interest granted in connection there-
with.
2.1(s)6 Business-Related Agreements. A list and brief
description of each material contract, agreement or
other instrument of any type or kind to which MCI is
a party and relating to its business, excluding any
contract or agreement listed pursuant to another
subsection of this Section 2.1(s), including without
limitation manufacturer's representative, sales,
agency, independent contractor or advertising
contracts.
2.1(s)7 Capital Commitments. A list of all outstanding pro-
posals and commitments by MCI to make a capital
expenditure, capital addition or capital improvement
involving an amount in excess of $10,000 each,
including an estimate of the dollar amount of each
such proposal or commitment.
2.1(s)8 Machinery and Equipment. A list of all machinery and
equipment owned, leased or used by MCI having a
replacement value in excess of $25,000, specifying
the location thereof and stating with respect to any
leased machinery or equipment the date of the lease,
name of the lessor, the expiration date thereof and
any option to renew the lease, any options to pur-
chase the machinery or equipment, and annual rentals
payable.
2.1(s)9 Government Authorizations. A list of all government
licenses, permits, authorizations and approvals
issued or granted to MCI in connection with its
business.
2.1(s)10 Employees. A list of the names and current salaries
of all current employees of MCI.
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2.1(s)11 Employment Contracts. A description or copy of all
employment contracts, collective bargaining agree-
ments, bonus, profit-sharing, stock, option and
pension agreements (with related financial state-
ments and funding documents), or other agreements or
arrangements providing for employee remuneration or
benefits to which MCI is a party or by which MCI is
bound, and an estimate of the current cost to MCI of
each. There have been no claims of defaults and, to
the best knowledge of MCI, its officers and/or
directors, there are no facts or circumstances which
if continued, or on notice, would result in a
default under these contracts and arrangements.
2.1(s)12 Investment Interests. A list and brief description
of any investment or ownership of MCI, direct or
indirect, in any corporation, partnership, associ-
ation or other business organization.
2.1(s)13 Product Warranty. A list of (a) all products cur-
rently manufactured or sold by MCI, (b) all products
of MCI which are proposed or under development for
manufacture or sale or both and (c) all product
warranties, express or implied, which MCI makes,
disclaims or excludes with respect to any product
which it manufactures or sells.
2.1(s)14 Insurance. A list and brief description of all
insurance policies maintained by MCI, or by Ford for
MCI, including carriers, policy numbers, the nature
of coverage, limits, deductibles, premiums,
expiration dates and the loss experience with
respect to each type of coverage.
2.1(s)15 Bank Accounts. A list of the name of each bank in
which MCI has an account or safe deposit box and the
names of all persons authorized to draw thereon or
have access thereto.
2.1(t) Compliance With Environmental, Health, Safety and
Similar Laws. Except as specifically set forth in the MCI Dis-
closure Exhibit, (i) the operations of MCI do not violate any
applicable environmental, health and safety or other similar law or
requirement of or agreement with any governmental authority having
jurisdiction; (ii) MCI's current method of operation in the conduct
of its business will not violate any building, environmental,
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health and safety or other similar laws, requirements or regula-
tions currently enacted but that have future effective date;
(iii) MCI is not subject to any order, writ, ruling, injunction,
judgment or stipulation issued by any court or governmental author-
ity which materially affects, or might reasonably be expected to
materially affect, MCI's business; and (iv) MCI is not now using,
nor has it used at any time in the past, any land, buildings or
facilities owned by or leased to MCI for the disposal, storage,
treatment, processing or other handling of hazardous waste or
contaminants.
2.1(u) Compliance With Other Laws; Governmental Authoriza-
tions and Regulations. Except as specifically set forth in the MCI
Disclosure Exhibit as an exception to Subsection 2.1(t) above,
(i) MCI has complied with and is in material compliance with all
federal, state, local and foreign statutes, laws, ordinances, regu-
lations, rules, judgments, orders or decrees applicable to it and
its assets, businesses and operations, and there does not exist any
valid basis for any claim of default under or violation of any such
statute, law, ordinance, regulation, rule, judgment, order or
decree except such defaults or violations or such basis for any
claims of such defaults or violations, if any, the existence of
which MCI has no knowledge or which in the aggregate do not and
will not materially affect the property, operations, financial
condition or prospects of MCI; (ii) all governmental licenses,
permits and other authorizations which have been issued to MCI are
valid, and neither Ford nor MCI has received any notice that any
governmental authority intends to cancel, terminate or not renew
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any such license, permit or other governmental authorization;
(iii) MCI holds all licenses, permits and other governmental
authorizations the absence of which could have a material adverse
effect on its business; and (iv) to the best knowledge of each of
MCI and Ford, MCI has complied in all material respects with all
applicable laws, rules and regulations relating to prices, wages,
hours, discrimination in employment and collective bargaining and
all applicable laws, rules and regulations relating to the payment
and withholding of taxes, has withheld all amounts required by law
or agreement to be withheld from the wages or salaries of
employees, and is not liable for any arrears of wages or any taxes
or penalties for failure to comply with any of the foregoing.
2.1(v) Litiqation and Related Matters. Except as specifi-
cally set forth in the MCI Disclosure Exhibit, there are no
actions, suits or proceedings pending, or to the knowledge of each
of MCI and Ford, its officers and directors, threatened against
MCI, before or by any federal, state, municipal or other govern-
mental authority, and there are no such actions, suits or pro-
ceedings pending, or to the knowledge of each of MCI and Ford, its
officers and directors, threatened that would affect the trans-
actions contemplated by this Agreement or the Stock Purchase Agree-
ment. Except as specifically set forth in the MCI Disclosure
Exhibit, MCI is not a party to any actions, suits, proceedings or
litigation, whether civil or criminal, nor to the knowledge of each
of MCI and Ford, its officers and directors, is any such action,
suit proceeding or litigation threatened by or against MCI.
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2.1(w) Brokers and Finders. Neither Ford nor MCI has
employed any broker, agent or finder or incurred any liability for
any brokerage fee, agent's commission or finder's fee in connection
with the transactions contemplated hereby.
2.1(x) Powers of Attorney. Except as specifically set forth
in the MCI Disclosure Exhibit, MCI does not have any powers of
attorney or similar authorizations outstanding, other than those
issued in the ordinary course of business with respect to customs,
insurance, tax, foreign corporation qualification, patent, copy-
right and trademark applications, and federal and state securities
laws.
2.1(y) Employee Relations Matters.
2.1(y)1 Employee Organizations. Except as specifically set
forth in the MCI Disclosure Exhibit, there are no
labor unions or other organizations representing or
attempting to represent any MCI employee and no
agreements, plans, programs, documents or letters
of understanding currently in effect between MCI
and any union or other employee organization
affecting wages, hours or other terms and condi-
tions of employment. In the opinion of Ford, MCI's
relations with its employees are satisfactory.
2.1(y)2 ERISA.
(A) Pension Benefit Plans Generally. MCI does not
sponsor, maintain or contribute to any plan, program,
fund or arrangement which constitutes an "employee
pension benefit plan" nor has MCI any obligation to
contribute to or accrue or pay benefits under any
deferred compensation or retirement funding arrange-
ment on behalf of any employee or employees (such as,
for example, and without limitation any individual
retirement account or authority, any "excess benefit
plan" (within the meaning of section 3(36) of the
Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) of to any non-qualified deferred
compensation arrangement. For the purposes of this
Agreement, the term "employee pension benefit plan"
shall have the same meaning as is given that term at
section 3(2) of ERISA. MCI has not, since May 31,
1984, sponsored, maintained or contributed to any
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employee pension benefit plan, nor is MCI required to
contribute to any retirement plan pursuant to the
provisions of any collective bargaining agreement
establishing the terms and conditions of employment
of any of MCI's employees.
(B) ERISA Title IV Considerations. MCI is not now,
and cannot become, liable to the Pension Benefit
Guaranty Corporation or to any multiemployer employee
pension benefit plan under the provisions of Title IV
of ERISA.
(C) Common-Control Enterprises. MCI has not at any
time subsequent to May 31, 1984, formed, with any
other entity, a group of trades or businesses under
common control within the meaning of section 414(c)
of the Code.
(D) Prohibited Transactions. MCI has not engaged in
any transaction with respect to the assets of any
employee benefit plan by reason of which MCI is or
could be subject to (i) the excise taxes imposed by
section 4975(a) of the Code or (ii) civil liability
under section 502(i) of ERISA.
(E) Employee Benefit Plan Claims Liability. MCI has
no knowledge of any action, claim or demand of any
kind brought or threatened by any potential claimant
or representative of such claimant under any employee
benefit plan where MCI can be (i) liable directly on
such action, claim or demand; (ii) liable over to
another party in connection with such action, claim
or demand; or (iii) obligated to indemnify any
person, group of persons or entity with respect to
such action, claim or demand.
(F) Reports and Disclosure. MCI has filed or caused
to be filed a timely basis every return, report,
statement, notice, declaration and other document
required by any government agency, federal, state and
local (including without limitation the Internal
Revenue Service, the Department of Labor and the
Pension Benefit Guaranty Corporation) with respect to
each employee benefit plan sponsored or maintained by
MCI. MCI is in substantial compliance with all dis-
closures to employees and beneficiaries required
under ERISA, including without limitation timely
distribution of summary plan descriptions and summary
annual reports.
2.1(y)3 OSHA, NLRA and Related Matters. There are no pend-
ing, or to the knowledge of either MCI or Ford, its
officers and directors, threatened or unasserted
charges, claims, settlement agreements or citations,
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directly or indirectly involving or affecting MCI nor,
to the best knowledge of each of MCI and Ford, is there any
reasonable basis for the same under (i) the Occupational
Safety and Health Act of 1970, as amended; (ii) the National
Labor Relations Act of 1935, as amended; (iii) the Civil
Rights Act of 1964, as amended; or (iv) any other similar
federal, state or local laws.
2.1(y)4 Worker's Compensation. Except as specifically set
forth in the MCI Disclosure Exhibit, there are no
worker's compensation claims involving MCI's
employees either being paid on a continuing basis or
being controverted in litigation, and to the know-
ledge of each of MCI and Ford, its officers and/or
directors, no threatened worker's compensation claims
involving MCI's employees.
2.1(z) No Omission of Material Facts. The statements,
representations and warranties of Ford contained herein and in the
MCI Disclosure Exhibit are true and correct in all material
respects; to the best knowledge of each of MCI and Ford, none of
the other information or documents furnished or to be furnished to
Excel pursuant to this Agreement is false or misleading in any
material respect; and this Agreement does not omit any material
fact which is required to be stated herein or which is necessary in
order to make the statements contained herein not misleading.
2.1(aa) Documents True and Complete. Ford has delivered to
Excel true and complete copies of the documents listed in connec-
tion with the MCI Disclosure Exhibit in Subsections 2.1(s)1 through
2.1(s)15 and other documents referred to in this Agreement,
including without limitation, the documents described below:
2.1(aa)1 Certificate of Incorporation and By-Laws of MCI,
as amended to the date hereof;
2.1(aa)2 All leases referred to in Subsections 2.1(s)1 and
2.1(s)8;
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2.1(aa)3 All the Material Contracts and all the documents
evidencing the Material Obligations, referred to
in Subsections 2.1(s)4 and 2.1(s)5 hereof; and
2.1(aa)4 All documents evidencing the employment contracts,
collective bargaining agreements and employee
benefit plans referred to in Subsection 2.1(s)11
hereof.
2.1(aa)5 True and complete copies of all policies of insur-
ance in effect on the date hereof.
2.1(bb) Incorporation of Investment Representations. The
investment representations of Ford set forth in Section 5.7 of the
Stock Purchase Agreement are incorporated herein by reference and
shall constitute the representations and warranties of Ford in the
same manner as if set forth in full herein.
Section 2.2. Representations and Warranties of Excel. Excel
represents and warrants to Ford as follows with respect to Excel:
2.2(a) Valid Issuance of Shares. The Excel Shares, when
issued, sold and delivered in accordance with the terms hereof,
will be newly issued and will be duly and validly issued, fully
paid and non-assessable and to the knowledge of Excel, its officers
and directors, and based in part upon the representations of Ford
in this Agreement, will be issued in compliance with all applicable
federal and state securities laws.
2.2(b) Authorization. The execution, delivery and perform-
ance of this Agreement and each of the agreements contemplated
hereby have been, or prior to Closing will be, duly authorized by
all necessary actions on the part of Excel, including all stock-
holder approvals required by law or by the Articles of Incorpora-
tion or Code of By-Laws of Excel.
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2.2(c) Absence of Conflicts. The execution, delivery and
performance of this Agreement and each of the agreements contem-
plated hereby are not prohibited by, and do not materially violate
any provision or result in the material breach of (i) the Articles
of Incorporation or By-Laws of Excel; (ii) any contract, indenture,
agreement, lease or license to which Excel or any of its subsidi-
aries is a party or by which Excel, its subsidiaries or any of its
or their assets are bound; (iii) any obligation, loan or guaranty
to which Excel is a party or by which Excel is bound; or (iv) any
applicable law, rule, regulation, order, writ or decree of any
court or any other governmental authority. Also, such execution,
delivery and performance will not result in the creation or imposi-
tion of any Lien on any of the assets of Excel or any of its
subsidiaries.
2.2(d) Consents. No consent, approval, authorization or
order of, and no filing with or notification to, any governmental
authority or other person or entity (including, without limitation,
persons and entities having contractual relationships with Excel)
is required to be made or obtained by Excel in connection with the
execution, delivery and performance of this Agreement, or the
agreements contemplated hereby, which, if not made or obtained
would have a material adverse effect upon the performance of Excel
hereunder, other than the filings, if any, required to be made in
connection with the transactions contemplated herein under the HSR
Act, Indiana law, the Securities Act of 1933, as amended and the
regulations promulgated thereunder.
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2.2(e) Due Execution. This Agreement has been duly executed
and delivered by Excel and assuming due authorization, execution
and delivery by Ford and MCI, constitutes the legal, valid and
binding obligation of Excel.
2.2(f) Incorporation of Other Representations and Warran-
ties. The representations and warranties of Excel set forth in
Sections 4.1, 4.2, 4.4, 4.9 and 4.10 through 4.18, inclusive, of
the Stock Purchase Agreement are incorporated herein by reference
and shall constitute the representations and warranties of Excel in
the same manner as if set forth fully herein.
2.2(g) No Omission of Material Facts. The statements,
representations and warranties of Excel contained herein and in the
"Excel Disclosure Exhibit" (as defined in Section 4.11 of the Stock
Purchase Agreement) are true and correct in all material respects,
and this Agreement does not omit any material fact which is
required to be stated herein or which is necessary in order to make
the statements contained herein not misleading.
2.2(h) Securities Representations and Warranties of Excel.
2.2(h)1 Acquired for Own Account. The MCI Shares to be
acquired by Excel pursuant to this Agreement are
being acquired for investment for its own account,
not as a nominee or agent, and not with a view to
the sale or distribution of any part thereof, and
Excel has no present intention of selling, grant-
ing participation in or otherwise distributing the
same, but subject, nevertheless, to any require-
ment of law that the disposition of its property
shall at all times be within its control.
2.2(h)2 No Agreement to Sell MCI Shares. Excel represents
that it does not have any contract, undertaking,
agreement or arrangement with any person to sell,
transfer or grant participations to such person or
to any third person, with respect to any of the
MCI Shares.
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2.2(h)3 No Registration. Excel understands that the MCI
Shares to be acquired by it pursuant to this
Agreement will not be registered under the
Securities Act of 1933 (the "1933 Act") or
applicable state securities laws on the ground
that the issuance and sale provided for in this
Agreement are exempt from the registration
requirements under the 1933 Act and applicable
state law, and that Ford's reliance on such
exemptions is predicated on Excel's representa-
tions set forth herein.
2.2(h)4 Restricted Securities. Excel acknowledges that
the MCI Shares are "restricted securities" which
must be held until subsequently registered under
the 1933 Act or an exemption from registration is
available and further acknowledges that Ford has
informed Excel of such fact in writing prior to
the date hereof.
2.2(h)5 Availability of Records; Risk Factors. Excel
confirms that (i) all documents, records and books
pertaining to MCI, its businesses or any other
matter which have been requested by Excel have
been made available to Excel; (ii) it understands
and has fully considered the risk factors involved
in the transactions contemplated herein and the
limitations on transferability pertaining to the
MCI Shares; (iii) it is aware of the business
affairs and financial condition of MCI and has
acquired sufficient information about MCI to reach
an informed and knowledgeable decision to acquire
the MCI Shares; (iv) it has had ample opportunity
to ask questions of Ford and to seek tax or legal
advice prior to acquiring the MCI Shares; and
(v) it has the capacity to protect its own inter-
ests in connection with the purchase of the MCI
Shares by reason of Excel's business and financial
experience, provided, however, that nothing con-
tained in this Section 2.2(h)(5) shall in any way
modify or limit the effect of any of the repre-
sentations, warranties or covenants of Ford or MCI
set forth in this Agreement.
Section 2.3. Survival of Representations and Warranties. All
representations and warranties made by the parties to this Agree-
ment shall survive the Closing and any investigations made by or on
behalf of the parties. All statements as to factual matters con-
tained in the MCI Disclosure Exhibit and the Excel Disclosure
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Exhibit and any other certificate or instrument delivered by or on
behalf of Excel or Ford pursuant hereto or in connection with the
transactions contemplated hereby shall be deemed to be representa-
tions and warranties by Excel or Ford hereunder as of the date of
such Exhibit, certificate or instrument.
SECTION 3. COVENANTS OF FORD AND MCI PENDING CLOSING
Section 3.1. Operation of Business. From and after the date
hereof and to the Closing Date, Ford and MCI shall have complied
and Ford shall have caused MCI to comply with the following pro-
visions:
3.1(a) Business in Ordinary Course. MCI shall have operated
its business substantially as now operated and only in the ordinary
course, and it shall have used its best efforts to preserve intact
its present business and to maintain the goodwill and reputation
associated with its business. It shall have maintained its
corporate existence and powers and its qualification or license as
a foreign corporation in Kentucky.
3.1(b) Maintain Properties. MCI shall have maintained all
of the assets material to its business in good operating condition
and repair, reasonable wear and tear and damage by unavoidable
casualty excepted.
3.1(c) Maintain Corporate Books. MCI shall have maintained
its books, accounts and records in the usual, regular and ordinary
manner and in conformity with the accounting principles and prac-
tices used in the preparation of MCI's December 31, 1985 balance
sheet, applied consistently therewith.
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3.1(d) No Breach. MCI shall not have performed or omitted
to perform any act that would constitute a breach or might reason-
ably be considered to constitute a breach of any of the representa-
tions of Ford and MCI set forth in Section 2.1 hereof if the same
were made immediately after any such act or omission.
3.1(e) Indebtedness. MCI shall not have created, incurred,
assumed or otherwise become liable with respect to any indebtedness
for borrowed money other than indebtedness for borrowed money
incurred in the ordinary course of business pursuant to existing
loan agreements or lines of credit (whether or not evidenced by
written agreement), and it shall not have promised, assured or
guaranteed the payment, discharge or fulfillment of any undertaking
or promise made by any other person, firm or corporation.
3.1(f) No Amendments. MCI shall not have amended its
Certificate of Incorporation or By-Laws.
3.1(g) Taxes. Except for taxes contested in good faith, MCI
shall have paid all taxes upon its assets as they become due. It
shall have timely prepared and filed all tax and other returns and
reports which are required to be filed in respect of such taxes.
It shall have withheld all required taxes and other amounts due
from all wages paid by it prior to the Closing Date and from other
payments made prior to such date to any party with respect to which
withholding of taxes or other amounts may be required.
3.1(h) No Disposition or Encumbrance. MCI shall not have
sold, leased or disposed of, or made any contract for the sale,
lease or disposition of, or subjected to Lien, except for purchase
money mortgages or their equivalent, any of its assets other than
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in the ordinary course of business, and in no event assets (other
than finished goods inventories) having a book value as of December
31, 1985 in excess of $100,000.
3.1(i) No Acquisitions. MCI shall not have merged or con-
solidated with any other corporation, or acquired any stock of,
except in the ordinary course of business, any business, property
or assets of any other person, firm, association, corporation or
other business organization.
3.1(j) No Securities Issuances. MCI shall not have issued
any shares of any of its capital stock, or entered into any
contract, or granted any option, warrant or other right, calling
for the issuance of any such shares, nor shall it have created or
issued any securities convertible into any such shares or conver-
tible into securities in turn so convertible, or entered into any
contract, or granted any option, warrant or other right, calling
for the issuance of any such convertible securities.
3.1(k) Dividends; Repurchases. MCI shall not have declared
any dividends on its capital stock, and it shall not have redeemed,
repurchased or otherwise acquired any shares of its capital stock.
3.1(l) Contracts. Except with the written consent of Excel,
MCI shall not have entered into or assumed any contract, covenant,
agreement, lease, license, sublicense or commitment that would be
required to be set forth in the MCI Disclosure Exhibit if made or
entered into prior to the date hereof.
3.1(m) Due Compliance. MCI shall have complied in all
material respects with all currently effective laws applicable to
it and to the conduct of its business.
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3.1(n) No Waivers of Rights. MCI shall not have amended,
terminated or waived any right material to its business.
3.1(o) Capital Commitments. Except as specifically set
forth in the MCI Disclosure Exhibit, MCI shall not have made or
committed to make any capital expenditures, capital additions or
capital improvements in an amount in excess of $50,000, or in the
aggregate in the excess of $50,000.
Section 3.2. Full Access; Cooperation in Operational Matters
and Preparation of Necessary Financial Statements. During the
period from the date hereof until the Closing Date, Excel and its
authorized representatives (including accountants, engineers
appraisers and attorneys) shall have full access during normal
business hours to all properties, assets, contracts, documents, tax
returns and other books and records in Ford's or MCI's possession
or under its control relating to MCI's business, and will permit
Excel and its authorized representatives to make such copies of
such books and records as in each case may be necessary to allow
Excel to conduct a complete examination and investigation of MCI's
business subject to any restrictions imposed by any confidentiality
agreement of which MCI is a party. Any such examination and
inspection shall be done upon reasonable notice, at reasonable
times, at the expense of Excel, and in such a manner as not to
interfere unreasonably with the operation of MCI's business. MCI
shall also furnish or cause to be furnished to Excel such financial
and operating data and such other information relating to MCI's
business as Excel reasonably may request from time to time as will
enable Excel to achieve smooth administrative transition (for
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example, with respect to data processing) at the time of Closing
and to anticipate operational needs after Closing (for example,
determination of tooling to be used). Further, MCI shall consider
causing implementation of such operational changes as may be
reasonably requested by Excel, provided any such changes do not, in
MCI's opinion, adversely affect the present operations of MCI's
business. Ford shall also request its accountants to prepare any
audited financial statements Excel may be required to file with the
Securities and Exchange Commission as a result of the transactions
contemplated by this Agreement and the Stock Purchase Agreement and
shall pay one-half of the cost and expense incurred in connection
with the preparation of such financial statements. The other one-
half of such cost and expense shall be paid by Excel.
Section 3.3. Minimum Net Worth. As of the Closing Date, MCI
shall have a minimum net worth of not less than $10,000,000. The
term "minimum net worth," as used herein, shall mean MCI's net
worth less all items of goodwill, preoperating, deferred or
development expenses, patents, trademarks, licenses, tax refund
allocations (including those made pursuant to Section 7.4 hereof)
or similar accounts.
Section 3.4. Advice of Change. From the date hereof to the
Closing Date, MCI will promptly advise Excel by a certificate
signed by a corporate officer of MCI of (i) any event that occurs
prior to the date of Closing that would have required disclosure in
the MCI Disclosure Exhibit if it had occurred prior to the date
hereof, and (ii) any change that is materially adverse to MCI's
business.
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Section 3.5. Release of Liability In Connection With Industrial
Development Revenue Bonds. Ford will make good faith reasonable
efforts to effectuate, as of or prior to the Closing Date, the full
release and discharge of MCI under or in connection with the Indus-
trial Development Revenue Bonds (Modular Concepts, Inc. Project)
Series A in the original principal amount of $2,300,000 issued by
the City of Fulton, Kentucky (the "Bonds") except for certain
ongoing indemnification obligations as specified in Section 4.2(i)
below.
Section 3.6. Transfer of Contract Rights, Properties, Tech-
nology, Licenses and Proprietary Rights. Ford will transfer and
make available to Excel, as of the time of Closing, all contract
rights and properties material to the present operations of MCI and
all technology, licenses and other proprietary rights relating to
the manufacture of modular framed glass parts, whether now held by
Ford or MCI or any other subsidiary or affiliated entity of Ford,
including without limitation all rights granted to Ford under the
license agreement dated August 30, 1978 between Ford and Donnelly
Mirrors, Inc. (the "Donnelly License") and excluding only informa-
tion which Ford is prohibited from disclosing under the Technology
Transfer Agreement effective the 20th day of April, 1983 between
Ford and Donnelly Mirrors, Inc.
SECTION 4. CONDITIONS OF CLOSING
Section 4.1. Conditions Precedent to Ford's Obligation. The
obligation of Ford to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction at or prior to
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the Closing Date of the following conditions (any one or more of
which may be waived in whole or in part by Ford):
4.1(a) Accuracy of Representations and Warranties; Compli-
ance with Covenants. The representations and warranties of Excel
set forth in this Agreement (including, without limitation, those
contained in the Excel Disclosure Exhibit) shall be true and
correct in all material respects on the date hereof and as though
made anew as of the Closing Date, except with respect to (i) the
effect of transactions expressly permitted by this Agreement;
(ii) changes in laws, statutes, rules or regulations after the date
of this Agreement; and (iii) transactions that have been consented
to by Ford. In addition, all transactions contemplated herein to
be performed by Excel on or before the Closing Date and all coven-
ants to be complied with by Excel pursuant hereto or pursuant to
the Stock Purchase Agreement on or before the Closing Date shall
have been performed and complied with.
4.1(b) Certificates of Corporate Officers. Excel shall have
delivered to Ford (i) a certificate, dated as of the Closing Date
and signed by its President as to the matters set forth in Section
4.1(a) hereof, and (ii) a certificate of the corporate Secretary of
Excel, dated as of the Closing Date, containing the respective
resolutions of the Board of Directors' and Shareholders' Meetings
of Excel, if necessary, approving the issuance of the Excel Shares
to Ford as contemplated herein.
4.1(c) Legal Opinion. Ford shall have received an opinion,
dated as of the Closing Date, in form and substance reasonably
satisfactory to Ford, from Sommer & Barnard, the legal counsel to
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Excel, as to the matters set forth in Sections 2.2(a), 2.2(b),
2.2(c)(i) and 2.2(e), and to the best of their knowledge, the
matters set forth in Sections 2.2(c)(ii), (iii) and (iv), 2.2(d)
and, to the extent required by the Stock Purchase Agreement 2.2(f).
Such opinion of counsel may rely on opinions of other counsel as to
matters governed by laws other than Federal laws and the laws of
the State of Indiana provided that such counsel shall state in his
opinion that such opinion of other counsel is satisfactory in scope
and form to him and that, in his opinion, Ford and he are justified
in relying thereon.
4.1(d) No Material Change. The business and assets of Excel
and its subsidiaries shall not have suffered any material and
adverse affect as the result of fire, explosion, flood, accident,
act of God, taking of property by any governmental authority or any
other casualty or similar event (whether or not covered by insur-
ance).
4.1(e) Reporting Requirements; No Court Order. Any mandatory
waiting period under the HSR Act shall have expired and all reviews
and approvals from governmental authorities shall have been
obtained. No court shall have entered and maintained in effect an
injunction or other similar order against consummation of any of the
transactions contemplated herein; no action, proceeding or investi-
gation shall have been instituted or commenced by any governmental
body or authority and remain pending, with a view to restraining or
prohibiting the transactions contemplated herein; and no govern-
mental body or authority shall have notified any party to this
Agreement that consummation of the transactions contemplated herein
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would constitute a violation of applicable law or that such body or
authority intends to commence proceedings to restrain the consum-
mation of the transactions contemplated herein, unless such notice
shall have been withdrawn in writing prior to the Closing Date.
4.1(f) Indiana and Other States' Laws. The parties shall
have completed all filings with the offices of the State of Indiana
or such other state or states Excel or Ford may have deemed reason-
ably necessary or appropriate and received all necessary or appro-
priate approvals, authorizations or other consents or, in the event
no approval, authorization or consent is required, the waiting
period required thereunder, including any extension thereof shall
have expired without any substantial opposition from the respective
competent authority.
4.1(g) No Governmental Change. No change shall have occurred
or been announced or proposed after the date hereof and prior to
the Closing Date in the laws, rules, regulations or policies of any
governmental authority in any jurisdiction in which any assets of
Excel are located or in which its business is conducted or to which
any of its assets or business are subject, which might reasonably
be expected to materially and adversely affect its assets or its
business.
4.1(h) Satisfaction of Conditions Precedent and Closing of
Transactions Contemplated by the Stock Purchase Agreement. Each of
the conditions precedent to the respective obligations of Ford and
Excel to consummate the transactions contemplated by the Stock
Purchase Agreement shall have been satisfied or duly waived, and to
the extent practicable, the transactions contemplated by the Stock
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Purchase Agreement shall be closed concurrently with the trans-
actions contemplated by this Agreement.
4.1(i) Percentage Equity. The Excel Shares acquired by Ford
pursuant to this Agreement and the shares of common stock of Excel
acquired pursuant to the Stock Purchase Agreement shall represent
not less than 40% of the issued and outstanding common stock of
Excel and each of the Excel Shares shall be validly issued, fully
paid and non-assessable.
4.1(j) Assumption or Indemnification With Respect to Guaranty
of Lease. Excel shall have executed and delivered such documents as
are reasonable and appropriate either to assume Ford's obligations
under the Guaranty dated October 1, 1984 (the "Guaranty") executed
in consideration of the Lease Agreement dated August 1, 1984 by and
between Fulton Industrial Development Authority and MCI (the "Lease
Agreement") or to indemnify and hold Ford harmless from and against
any liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses under the Guaranty.
Section 4.2. Conditions Precedent to Excel's Obligation. The
obligation of Excel to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction at or prior to
the Closing Date of the following conditions (any one or more of
which may be waived in whole or in part by Excel):
4.2(a) Accuracy of Representations and Warranties; Compli-
ance With Covenants. The representations and warranties of Ford and
MCI set forth in this Agreement shall be true and correct in all
material respects on the date hereof and as though made anew as of
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the Closing Date, except with respect to (i) the effect of trans-
actions expressly permitted by this Agreement; (ii) changes in
laws, statutes, rules or regulations after the date of this Agree-
ment; and (iii) transactions that have been consented to by Excel.
In addition, all transactions contemplated herein to be performed
by Ford or MCI on or before the Closing Date and all covenants to
be complied with by Ford and MCI on or before the Closing Date,
including specifically but without limitation the covenant set
forth in Section 3.3, shall have been performed and complied with.
4.2(b) Certificates of Corporate Officers. Ford shall cause
MCI to deliver to Excel (i) a certificate, dated as of the Closing
Date and signed by the Chairman of the Board of MCI, as to the
matters relating to MCI set forth in Section 4.2(a) hereof, and
(ii) a certificate of the corporate Secretary of MCI, dated as of
the Closing Date, (A) which certifies the By-Laws of MCI as amended
to the date thereof, and (B) which provides a list of officers of
MCI.
4.2(c) Legal Opinions. Ford shall have delivered to Excel
an opinion of the Associate General Counsel and Secretary of Ford,
dated as of the Closing Date, in form and substance reasonably
satisfactory to Excel, as to the matters relating to Ford set forth
in Sections 2.1(a), 2.1(e), 2.1(f), 2.1(g), 2.1(h) and 2.2(i).
Ford shall have delivered to Excel an opinion of the Vice President
- - General Counsel of MCI, dated as of the Closing Date, in form and
substance reasonably satisfactory to Excel, as to matters set forth
in Sections 2.1(b), 2.1(c), 2.1(e), 2.1(f), 2.1(g), 2.1(h), the
second sentence of 2.1(s)1, 2.1(s)2, 2.1(t), 2.1(u) and 2.1(v).
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Each opinion of counsel may rely on opinions of other counsel as to
matters governed by laws other than Federal laws and the laws of
jurisdictions where such counsel is admitted to practice, provided
that such counsel shall state in his opinion that such opinion of
other counsel is satisfactory in scope and form to him and that, in
his opinion, Excel and he are justified in relying thereon.
4.2(d) No Material Change. The business and assets of MCI
shall not have suffered any material and adverse effect as the
result of fire, explosion, flood, accident, act of God, taking of
property by any governmental authority or any other casualty or
similar event (whether or not covered by insurance).
4.2(e) Reporting Requirements; No Court Order. Any mandatory
waiting period under the HSR Act shall have expired and all reviews
and approvals from governmental authorities shall have been
obtained. No court shall have entered and maintained in effect an
injunction or other similar order against consummation of any of
the transactions contemplated herein; no action, proceeding or
investigation shall have been instituted or commenced by any
governmental body or authority and remain pending, with a view to
restraining or prohibiting the transactions contemplated herein;
and no governmental body or authority shall have notified any party
to this Agreement that consummation of the transactions contem-
plated herein would constitute a violation of applicable law or
that such body or authority intends to commence proceedings to
restrain the consummation of the transactions contemplated herein,
unless such notice shall have been withdrawn in writing prior to
the Closing Date.
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4.2(f) Indiana and Other States' Laws. The parties shall
have completed all filings with the offices of the State of Indiana
or such other state or states Excel or Ford may have deemed reason-
ably necessary or appropriate and received all necessary or appro-
priate approvals, authorizations or other consents or, in the event
no approval, authorization or consent is required, the waiting
period required thereunder, including any extension thereof shall
have expired without any substantial opposition from the respective
competent authority.
4.2(g) No Governmental Change. No change shall have
occurred or been announced or proposed after the date hereof and
prior to the Closing Date in the laws, rules, regulations or
policies of any governmental authority in any jurisdiction in which
any assets of MCI are located or in which its business is conducted
or to which any of its assets or business are subject, which might
reasonably be expected to materially and adversely affect its
assets or its business.
4.2(h) Satisfaction of Conditions Precedent and Closing of
Transactions Contemplated by the Stock Purchase Agreement. Each of
the conditions precedent to the respective obligations of Excel and
Ford to consummate the transactions contemplated by the Stock
Purchase Agreement shall have been satisfied or duly waived, and to
the extent practicable, the transactions contemplated by the Stock
Purchase Agreement shall be closed concurrently with the trans-
actions contemplated by this Agreement.
4.2(i) Release of Liability Under Loan Agreement and Bonds.
MCI and the assets of MCI shall be fully released and discharged
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from any obligation, liability or Lien or the possibility of any
future obligations, liabilities or Liens under the Loan Agreement
by and between the City of Fulton, Kentucky and MCI dated as of
December 1, 1984 (the "Loan Agreement") or under the Bonds or any
other agreement or document executed in connection with or per-
taining to the Bonds provided, however, that MCI shall remain
obligated to protect, indemnify and save harmless the City of
Fulton from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses covered by
Section 7.3(a) and Section 7.3(c) of the Loan Agreement and arising
out of events occurring after the Closing Date.
4.2(j) Transfer and Assignment of Patent License and Other
Contract Rights, Properties, Technology, Licenses and Proprietary
Rights. Ford shall have executed and delivered all such documents
and taken such other actions as are reasonable and appropriate to
transfer and assign to Excel the Donnelly License and transfer and
make available to Excel all other contract rights, properties,
technology, licenses and proprietary rights to be transferred and
made available pursuant to Section 3.6 above.
4.2(k) Resignations of Officers and Directors. To the
extent requested by Excel, the current officers and directors of
MCI shall have submitted their letters of resignation effective as
of the Closing Date.
SECTION 5. CLOSING
Section 5.1. Obligations of Ford. At the Closing, Ford shall
deliver to Excel the following:
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5.1(a) MCI Shares. Certificates representing all of the
issued and outstanding stock of MCI, being 10 shares of common
stock duly endorsed by Ford.
5.1(b) Related Agreements. All agreements and documents to
be delivered pursuant to the Stock Purchase Agreement duly executed
by Ford.
5.1(c) Officers' Certificates and Legal Opinions. An
original of (i) the documents delivered pursuant to Subsection
2.1(bb)1, certified by the Secretary of State of Delaware; (ii) the
certificates required by Section 4.2(b) hereof; and (iii) the legal
opinions required by Section 4.2(c) hereof.
Section 5.2. Obligations of Excel. At the Closing, Excel shall
deliver to Ford the following:
5.2(a) Excel Shares. A duly executed certificate or certif-
icates representing 672,269 shares of common stock of Excel. Such
certificate or certificates shall bear the legends set forth in
Section 3 of the Stock Purchase Agreement.
5.2(b) Related Agreements. All agreements and documents to
be delivered pursuant to the Stock Purchase Agreement duly executed
by Excel.
5.2(c) Officers' Certificates and Legal Opinion. An original
of (i) the certificates required by Section 4.1(b) hereof and (ii)
the legal opinion required by Section 4.1(c) hereof.
SECTION 6. INDEMNIFICATION
Section 6.1. Indemnification by Ford. From and after the
Closing Date, Ford shall indemnify and hold harmless Excel and MCI
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against all claims, damages, losses, costs, expenses (including,
without limitation, reasonably incurred attorneys' fees), actions
and liabilities arising out of or as a proximate result of (i) any
breach of any representation, warranty, covenant or obligation of
Ford or MCI contained herein; (ii) any treatment, storage, disposal
or the arranging therefor, by MCI which occurred prior to Closing,
of any hazardous or toxic substance (including any constituent
thereof); or the existence on the real estate leased by MCI of any
hazardous or toxic substance (including any constituent thereof) as
a result of (x) any such treatment, storage or disposal by MCI
which occurred prior to Closing, or (y) any failure to fully
satisfy the Condition Precedent set forth in Section 3.02(c) of the
Lease Agreement; or any discharge into the environment, by MCI
which occurred prior to Closing, of any hazardous or toxic sub-
stance (including any constituent thereof); including without
limitation claims of natural resource damage, personal injury,
property damage or response or remedial costs, whether at common
law or under any domestic or foreign law, including without
limitation the Comprehensive Environmental Response Compensation
and Liability Act, the Resource Conservation and Recovery Act, the
Toxic Substance Control Act, and any state statute or municipal
ordinance creating liability for the treatment, storage or dis-
posal, or the arranging therefor, or the existence on property, of
hazardous or toxic substances; (iii) any workers compensation
claims of current or former employees of MCI relating to occur-
rences prior to Closing, including without limitation the claims
set forth in Section 2.1(y)(4) of the MCI Disclosure Exhibit; or
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(iv) any other liabilities or obligations of MCI relating to the
business, affairs and operations of MCI on or before the Closing Date to the
extent such other liabilities and obligations are not reflected or reserved
against on the "Closing Date Balance Sheet" to be prepared pursuant to Section
7.4 of this Agreement and to the extent such liabilities and obligations in the
aggregate exceed $25,000. Further, Ford shall indemnify Excel and MCI for any
losses resulting from the operations in the ordinary course of business of MCI
after the Closing Date through December 31, 1986 up to an aggregate
indemnification not to exceed the operating losses of MCI during the months of
May through July, inclusive, 1986.
Section 6.2. Indemnification by Excel. From and after the Closing
Date, Excel shall indemnify and hold harmless Ford against all claims, damages,
losses, costs, expenses (including, without limitation, reasonably incurred
attorneys' fees), actions and liabilities arising out of or as a proximate
result of (i) any breach of any representation, warranty, covenant or
obligation of Excel contained herein; or (ii) Excel's or any of Excel's
subsidiaries' treatment, storage, disposal or the arranging therefor, or the
existence on Excel's or any of Excel's subsidiaries' property, of any hazardous
or toxic substance (including any constituent thereof) or Excel's discharge
into the environment of any hazardous or toxic substance, (including any
constituent thereof) including without limitation claims of natural resource
damage, personal injury, property damage or response or remedial costs, whether
at common law or under any domestic or foreign law, including without
limitation the Comprehensive Environmental Response Compensation and
Liability Act, the Resource
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Conservation and Recovery Act, the Toxic Substance Control Act, and
any state statute or municipal ordinance creating liability for the
treatment, storage or disposal, or the arranging therefor, or the
existence on property, of hazardous or toxic substances; provided,
however, that this indemnification and hold harmless provision
shall not apply to any decrease in the value of any Excel common
stock owned by Ford.
SECTION 7. CONDUCT SUBSEQUENT TO CLOSING
Section 7.1. Non-Compete Agreements of Ford; Agreement of Ford
Relating to Business Opportunities Outside of the Non-Compete Area.
Neither Ford nor any direct or indirect subsidiary of Ford (for
purposes of this Section 7.1, the term "Ford" shall include any
such direct or indirect subsidiary) shall for a period of eight
years after the Closing Date, directly or indirectly, compete with
Excel anywhere in the United States or Canada in the business of
manufacturing or marketing (other than marketing in the after-
market) modular framed glass parts using reaction injection molding
or poly vinyl chloride technology for cars and trucks (including
vans) provided, however, that the provisions of this Section 7.1
shall not preclude Ford from acquiring control of an entity which
has as a portion of its business the manufacture or marketing of
such modular framed glass parts in the United States or Canada (the
"Competing Business") but which is primarily engaged in other lines
of business provided further, however, that in the event Ford
acquires such an entity during such period, then, upon written
demand by Excel, Ford shall use its good faith reasonable efforts
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to dispose of the Competing Business as soon as practicable. Ford
hereby expressly acknowledges and agrees that the geographic scope
and duration of the restrictive covenant set forth herein is in all
respects fair and reasonable. Ford further agrees that in the
event any court in the enforcement of such restrictive covenant
determines that any part of the restrictive covenant is in any way
unreasonable, such determination will not serve to invalidate any
other provisions of such restrictive covenant. Rather, the remain-
ing provisions of such restrictive covenant not ruled invalid or
those determined by the court to be valid will remain in full force
and effect. With respect to business opportunities throughout the
world other than the United States and Canada which involve the
manufacture or marketing of such modular framed glass parts and
concerning which Ford has some rights or ability to control or have
input as to sourcing, Ford hereby agrees to devote its reasonable
good faith efforts to afford Excel the opportunity to participate
in the manufacture and marketing of such parts.
Section 7.2. Records. After the Closing, Excel shall retain
all records delivered to it by Ford or MCI pursuant to this Agree-
ment, for a period of 10 years after the date of Closing; and
thereafter, with respect to any such records it might wish to
dispose of, offer to deliver such records to Ford or to any person
designated by Ford in writing to accept or decline receipt of such
records.
Section 7.3. Cooperation. Ford and Excel shall cooperate with
each other in every reasonable way, including without limitation,
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executing and delivering such further documents as may be reason-
ably required to complete the exchange of stock in an orderly
manner with the minimum interruption to the business of MCI and
Excel reasonably possible under the circumstances. The parties
recognize that there may be disputes which arise concerning various
aspects of this Agreement. The parties agree to make every effort
to resolve such disputes amicably by attending meetings, cooper-
ating to provide information and engaging the assistance of inde-
pendent consultants as necessary.
Section 7.4. Post-Closing Adjustments. Within 60 days follow-
ing the Closing, Excel and Ford shall cause to be prepared an
audited balance sheet of MCI as of the time of Closing (the "Closing
Date Balance Sheet"). In the event that the Closing Date Balance
Sheet reflects that the minimum net worth (as defined in Section
3.3) of MCI as at the Closing Date was less than $10,000,000, Ford
shall pay to MCI an amount sufficient to raise the minimum net worth
of MCI to $10,000,000.
Section 7.5. Tax Reimbursement. If any amount of net operating
loss, net capital loss, investment credit, foreign tax credit,
charitable contribution or any similar item reported by MCI on a
Ford consolidated return shall be carried to a year in which MCI
was not part of the Ford affiliated group (a "separate return
year"), MCI or Excel shall reimburse Ford for an amount which after
the payment of any income or other taxes on this reimbursement
shall be equal to the reduction in MCI's or Excel's Federal income
tax liability, as the case may be, which results from the fact that
such item was carried to a separate return year. If any amount of
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<PAGE> 158
net operating loss, net capital loss, investment credit, foreign
tax credit or any similar item reported by MCI on an Excel consoli-
dated return shall be carried to a year in which MCI was not part
of the Excel affiliated group (a "separate return year"), Ford
shall reimburse MCI or Excel for an amount which after the payment
of any income or other taxes on this reimbursement shall be equal
to the reduction in Ford's Federal income tax liability, as the
case may be, which results from the fact that such item was carried
back to a separate return year.
Section 7.6. Preservation of Tax Exempt Status of Bonds. To
the extent reasonably requested by Ford, Excel and MCI shall file
all reports and execute such documents as may be reasonable and
necessary to preserve the tax exempt status of the Bonds. Further,
Excel and MCI shall refrain from making any capital expenditures
prior to December 1, 1987 in the County of Fulton which, together
with the capital expenditures made prior to the Closing Date, would
cause the aggregate of all capital expenditures applicable in
determining the tax exempt status of the Bonds to exceed the
$10,000,000 limit set forth in Section 103(b)(6)(D) of the Internal
Revenue Code of 1954, as amended. Ford hereby represents and
warrants that the aggregate of all such capital expenditures
through June 30, 1986 were $5,784,000.
Section 7.7. Continuation of Employment. After Closing, it is
Excel's intent as sole shareholder of MCI to cause MCI to continue
employment, compensation and employee benefits at levels comparable
to those currently in effect at MCI.
-45-
<PAGE> 159
SECTION 8. MISCELLANEOUS
Section 8.1. HSR Act Filings. In connection with the issuance
of the Excel Shares to Ford pursuant to the provisions of this
Agreement, Excel and Ford shall file, or cause to be filed, all
reports and documents as may be necessary to comply with the HSR
Act and applicable rules and regulations. The parties shall
cooperate with and assist one another as may reasonably be
requested in connection with the preparation and submissions of
such filings.
Section 8.2. Assignments. This Agreement and the rights,
duties and obligations hereunder may not be assigned or delegated
by either party without the prior written consent of the other
party; provided, however, that Ford may assign its rights hereunder
to a majority-owned subsidiary of Ford in which event Ford shall
remain liable on all of its duties and obligations hereunder. Any
other assignment or delegation of rights, duties or obligations
hereunder made without the prior written consent of the other party
hereto shall be void and of no effect.
Section 8.3. Successors and Assigns. This Agreement and the
provisions hereof shall be binding upon and shall inure to the
benefit of each of the parties and their respective permitted
successors and assigns.
Section 8.4. Bulk Sales. To the extent they may lawfully do
so, the parties waive compliance with the provisions of the bulk
sales law of any state if and to the extent applicable to the
transactions contemplated herein.
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<PAGE> 160
Section 8.5. Expenses. Except as otherwise specifically pro-
vided in this Agreement, each party shall bear and pay its own
expenses and taxes incurred in connection with the transacticns
contemplated by this Agreement.
Section 8.6. Notices. All notices, demands, requests, con-
sents, approvals or other communications (collectively "Notices")
required or permitted to be given hereunder or which are given with
respect to this Agreement shall be in writing and shall be
personally delivered or deposited in the United States mail,
registered or certified, return receipt requested, postage prepaid,
addressed as set forth below, or such other address as such party
shall have specified most recently by written notice. Notice shall
be deemed given on the date of delivery if personally delivered.
Notice mailed as provided herein shall be deemed given on the third
business day following the date so mailed:
To Ford:
Ford Motor Company
Glass Division
300 Renaissance Center
P.O. Box 43343
Detroit, Michigan 48243
Attention: General Manager
with a copy to:
Ford Motor Company
The American Road
Dearborn, Michigan 48121
Attention: Secretary
To Excel:
Excel Industries, Inc.
1120 North Main Street
Elkhart, Indiana 46514
Attention: Chief Executive Officer
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<PAGE> 161
with a copy to:
Sommer & Barnard
54 Monument Circle, 9th Floor
Indianapolis, Indiana 46204
Attention: James K. Sommer, Esq.
Section 8.7. Modifications and Amendments. No amendment, modi-
fication, waiver or termination of this Agreement shall be binding
unless executed in writing by the parties hereto.
Section 8.8. Waivers and Extensions. Either party to this
Agreement may waive any right, breach or default which any such
party has the right to waive, provided that such waiver will not be
effective against the waiving party unless it is in writing, is
signed by such party and specifically refers to this Agreement.
Waivers may be made in advance or after the right waived has arisen
or the breach or default waived has occurred and may be condi-
tional. No waiver of any breach of any agreement or provision
herein contained shall be deemed a waiver of any proceeding or
succeeding breach thereof or of any other agreement or provision
herein contained. No extension of time for performance of any
obligations or acts shall be deemed an extension of the time for
performance of any other obligations or acts.
Section 8.9. Third Parties. Nothing contained herein shall be
deemed to confer upon any person or entity, other than the parties
hereto and their respective successors and assigns, any right or
remedy under or by reason of this Agreement.
Section 8.10. Governing Law. This Agreement shall be governed
by, interpreted under and construed and enforced in accordance with
the internal laws, and not the laws pertaining to conflicts or
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<PAGE> 162
choice of laws, of the State of Indiana applicable to agreements
made and to be performed wholly within the State of Indiana.
Section 8.11. Titles and Headings. Titles and headings of the
Sections of this Agreement are for convenience only and shall not
affect the construction of any provision of this Agreement.
Section 8.12. Counterparts This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute but one and the same instru-
ment.
Section 8.13. Entire Agreement. This Agreement and the Stock
Purchase Agreement executed concurrently herewith, including the
exhibits thereto, the MCI Disclosure Exhibit and the Excel Dis-
closure Exhibit, the Supply Contract and the Shareholders Agreement
constitute the entire agreement of the parties and supersedes all
prior and contemporaneous agreements, undertakings, covenants,
representations and warranties, negotiations and discussions
between the parties, whether oral or written, with respect to the
subject matter hereof; provided, however, that any supply agree-
ments or purchase orders in effect between Ford and either MCI or
Excel shall remain in effect pursuant to their terms.
Section 8.14. Termination. This Agreement shall terminate and
shall be of no further force or effect:
(a) Upon mutual agreement of the parties; or
(b) Upon notice given by any party to the other parties
in the event the Closing has not occurred on or before
December 31, 1986.
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<PAGE> 163
No termination of this Agreement shall release, or be construed as
releasing, any party hereto from any liability or damage to any
other party hereto arising out of, in connection with or otherwise
relating to, directly or indirectly, such party's material breach,
such party's material default or sucy party's failure in perform-
ance of any of its material covenants, agreements, duties or
obligations arising hereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
FORD MOTOR COMPANY EXCEL INDUSTRIES, INC.
By: /s/ D. E. SIDDALL By: /s/ JAMES J. LOHMAN
----------------------- -----------------------
D. E. Siddall James J. Lohman
-------------------------- --------------------------
Printed Printed
President and Chief
General Manager, Glass Div. Executive Officer
--------------------------- --------------------------
Title Title
MODULAR CONCEPTS, INC.
By: /s/ D. E. SIDDALL
---------------------
D. E. Siddall
------------------------
Printed
Chairman of the Board
Title
-50-
<PAGE> 164
Modular Concepts, Inc.
Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
Assets December 31, 1985 December 31, 1984
----------------- -----------------
(000) (000)
<S> <C> <C>
Current Assets
. Cash and Cash Items $ 328 $ 26
. Receivables 969 2
. Inventories 746 0
-------- ------
Total Current Assets $ 2,043 $ 28
Property
. Land, Plant & Equipment at Cost $ 4,084 $ 577
. Less Accumulated Depreciation 171 2
-------- ------
Net Property $ 3,913 $ 575
-------- ------
Total Assets $ 5,956 $ 603
-------- ------
-------- ------
<CAPTION>
Liabilities & Stockholders' Equity
<S> <C> <C>
Current Liability
. Accounts Payable
-Trade $ 1,531 $ 225
-Other 22 2
-------- ------
Total $ 1,553 $ 227
. Long Term Debt Payable
Within One Year 32 30
. Accrued Liabilities 43 2
-------- ------
Total Current Liabilites $ 1,628 $ 259
. Long-Term Debt 7,158 585
Stockholders' Equity
. Capital Stock
- Common Stock, Par Value $1.00 $ 0 $ 0
- Capital in Excess of Par Value
of Stock 1,000 0
- Earnings/(Losses) Retained for
use in the Business* (3,830) (241)
-------- ------
Total Stockholders' Equity $ (2,830) $ (241)
-------- ------
Total Liabilities & Shareholders' $ 5,956 $ 603
-------- ------
-------- ------
</TABLE>
- -----------
* Excludes deferred tax assets reported by Modular Concepts, Inc.
<PAGE> 165
Modular Concepts, Inc.
Statement of Income and Retained Earnings
(Unaudited)
<TABLE>
<CAPTION>
Income December 31, 1985 December 31, 1984
- ------ ----------------- -----------------
<S> <C> <C>
(000) (000)
Sales $ 905 $ 0
Costs and Expenses 4,337 (235)
------- ------
Operating Income/(Loss) (3,432) (235)
Interest Income/(Expense) (157) (6)
------- ------
Income Before Income Taxes (3,589) $ (241)
Provision for Income Taxes* 0 0
------- ------
Net Income $(3,589) $ (241)
------- ------
------- ------
Retained Earnings
- -----------------
Balance at Beginning of Year $ (241) $ 0
Net Income/(Loss) (3,589) (241)
------- ------
Balance at End of Year $(3,830) $ (241)
------- ------
------- ------
</TABLE>
- ----------------
* Excludes deferred tax assets reported by Modular Concepts, Inc.
<PAGE> 166
Modular Concepts, Inc. EXHIBIT A (1)
Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
Assets June 30, 1986
- ------ -------------
<S> <C>
Current Assets (000)
. Cash and Cash Items $ (184)
. Receivables 4,229
. Inventories 1,159
-------
Total Current Assets $ 5,204
Property
. Land, Plant & Equipment at Cost $ 5,784
. Less Accumulated Depreciation 428
-------
Net Property $ 5,356
-------
Total Assets $10,560
-------
-------
Liabilities & Stockholders' Equity
- ----------------------------------
Current Liability
. Accounts Payable
- Trade $ 2,663
- Other 40
-------
Total $ 2,703
. Long-Term Debt Payable
Within One Year 33
. Accrued Liabilities 38
-------
Total Current Liabilities $ 2,774
. Long-Term Debt 12,216
Stockholders' Equity
. Capital Stock
- Common Stock, Par Value $1.00 $ 0
- Capital in Excess of Par Value
of Stock 2,300
- Earnings/(Losses) Retained for
use in the Business* (6,730)
-------
Total Stockholders' Equity $(4,430)
-------
Total Liabilities & Shareholders' $10,560
-------
-------
</TABLE>
- ---------------
* Excludes deferred tax assets reported by Modular Concepts, Inc.
<PAGE> 167
EXHIBIT A (2)
Modular Concepts, Inc.
Statement of Income and Retained Earnings
(Unaudited)
<TABLE>
<CAPTION>
Income June 30, 1986
- ------ -------------
<S> <C>
(000)
Sales $ 7,542
Costs and Expenses 9,991
--------
Operating Income/(Loss) (2,449)
Interest Income/(Expense) (451)
--------
Income Before Income Taxes (2,900)
Provision for Income Taxes* 0
--------
Net Income $ (2,900)
--------
--------
Retained Earnings
- -----------------
Balance at Beginning of Year $ (3,830)
Net Income/(Loss) (2,900)
--------
Balance at End of Year $ (6,730)
--------
--------
</TABLE>
- -----------
* Excludes deferred tax assets reported by Modular Concepts, Inc.
<PAGE> 168
AUTOMOTIVE COMPONENTS GROUP EXHIBIT C
[LOGO]
Ford Motor Company
The American Road
Room 944
Dearborn, Michigan 48121
Telephone: (313) 322-9211
Fax: (313) 337-1764
NEWS
IMMEDIATE RELEASE
Contact: Della DiPietro, Ford (313) 323-8539
Joseph A. Robinson, Excel (219) 264-2131
Bill Schall, Wm. Schall Assoc. (312) 642-1081
FORD TO SELL ITS EQUITY IN EXCEL
ELKHART, Ind., Jan. 13 -- Ford Motor Company (NYSE:F) and Ford Motor
Company Fund plan to sell all their shares of common stock of Excel Industries,
Inc., (ASE:EXC) ending Ford's minority ownership of the company that designs
and manufactures automotive window systems.
In a joint statement today, Ford and Excel officials said that the
disposition of shares would not impact the customer-supplier relationship
between the two companies.
Ford and Ford Fund, a non-profit charitable organization, own 2,557,128
shares of Excel common stock, or approximately 24 percent of the total shares
outstanding. These shares, which were acquired in 1986, are expected to be
sold in a secondary public offering. The offering will be made only by means
of a prospectus to be included in a registration statement to be filed with
U.S. Securities and Exchange Commision.
Oscar B. Marx III, Ford vice president - Automotive Components Group,
said that the disposition is no more than a redeployment of Ford resources.
"Our Equity in Excel gave us a foothold in the new technologies Excel products
represented at the time," Mr. Marx said.
James J. Lohman, chief executive of Excel, said that Ford's investment
in the window and door systems supplier has served both companies well.
"Ford's early acceptance of the advantages of modular automotive glass helped
Excel pioneer a new strategic niche," Lohman said. "Ford assured Excel a
reliable market for automotive framed glass and growth for the new RIM modular
window technology Excel had developed."
<PAGE> 169
-2-
Lohman said that although Ford's investment was beneficial, its
importance is diminished by Excel's current purchase and supply contracts.
Excel now provides OEM or replacement modular windows for Mazda, Nissan,
Chrysler, Mitsubishi and General Motors, as well as Ford.
Lohman said that the sale of Ford's holding would not dilute per-share
earnings. "Because of the new equity we sold in 1992 and 1993, Ford's original
40 percent ownership has been reduced to about 24 percent of Excel's
outstanding shares. These shares have been included in the computation of
per-share earnings since 1986 and will have no dilutive impact on future
results, " Excel's chief executive said.
Excel Industries is the leading independent designer, manufacturer and
supplier of window and door systems to the combined automobile, light truck and
van, bus, heavy truck and recreational vehicle markets in North America.
1/13/94
###
<PAGE> 170
SHAREHOLDERS AGREEMENT
This SHAREHOLDERS AGREEMENT, made as of October 7, 1986,
by and among Ford Motor Company, a Delaware corporation, with
offices at The American Road, Dearborn, Michigan ("Ford"), Excel
Industries, Inc., an Indiana corporation, with offices at 1120 N.
Main Street, Elkhart, Indiana ("Excel") and James J. Lohman,
Gerald G. Fellows, Robert J. Kennedy, Ralph R. Whitney, Jr., John
D. Burt, James E. Crawford, William M. Gude, James O.
Futterknecht, Jr., Louis R. Csokasy and Terrance L. Lindberg
(collectively, the "Excel Shareholders").
R E C I T A L S
A. Ford and Excel are parties to a Stock Purchase Agreement
and a Stock Exchange Agreement and Plan of Reorganization, both
dated and effective August 19, 1986 (collectively the "Related
Agreements"), pursuant to which Ford will acquire approximately
40% of the issued and outstanding common stock of Excel and
obtain certain rights regarding the management of Excel.
B. The Excel Shareholders and Ford have agreed on how they
will vote their respective shares of Excel common stock on
certain matters and have agreed to grant certain rights of first
refusal in accordance with the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual undertakings
contained herein, the parties do hereby agree as follows:
1. Shareholders Meetings. At any annual or special meeting
of the shareholders of Excel:
<PAGE> 171
(a) Ford agrees to vote its shares of common stock of
Excel (the "Ford Shares") in favor of all directors nominated by
the Board of Directors of Excel, so long as at least two of the
nominees are individuals proposed by Ford for election to the
Board of Directors.
(b) The Excel Shareholders agree to vote the Share-
holders' Shares (as defined in Section 2(b) hereof) in favor of
all directors nominated by the Board of Directors of Excel, so
long as at least two of the nominees are individuals proposed by
Ford for election to the Board of Directors.
(c) The parties agree to vote their respective shares of
Excel common stock against the appointment by Excel as its
independent public accountants and auditors any firm of certified
public accountants that is not one of the current "Big Eight"
public accounting firms, or a successor to any such firm.
(d) In the event any of the following transactions is
approved and recommended by the Board of Directors of Excel as
provided in the Stock Purchase Agreement and submitted to the
holders of Excel common stock for approval, the parties agree to
vote their respective shares of Excel common stock in favor of
any such transaction:
(i) Any acquisition or any expansion or change of the
business of Excel involving an expenditure or appropria-
tion of assets of more than 20% of Excel's previous
quarter-end net worth, or $8,000,000, whichever is
greater;
(ii) Any liquidation or sale of all or a portion (with
sales greater than 10% of the previous year's sales or
assets with a book value greater than 20% of the previous
quarter-end net worth, or $8,000,000, whichever is
greater) of Excel's business;
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<PAGE> 172
(iii) Any borrowing of money or other financing arrange-
ments whereby Excel incurs obligations through a single
transaction or a series of related transactions for
amounts in excess of 20% of the previous quarter-end net
worth, or $8,000,000, whichever is greater;
(iv) Any recommendation to modify or modification of
Excel's Articles of Incorporation or Code of By-Laws;
(v) Any merger or consolidation of Excel with or into
any other corporation;
(vi) Any issuance of shares of Excel common stock or
other equity interests in Excel or rights to acquire such
common stock or other equity interests (except any shares
issued as stock dividends or in a stock split, for options
to purchase Excel common stock granted pursuant to Excel's
Incentive Stock Option Plan, and the issuance of shares
upon the exercise of any such options); or
(vii) Any transaction which provides for any restric-
tions on the declaration of dividends not required by law
(except for all such restrictions in effect on the date
hereof).
2. Representations and Warranties.
(a) Each party hereto represents and warrants to the
other parties that:
(i) such party has the full legal right, power and
authority to enter into this Agreement and to perform
fully his or its obligations hereunder;
(ii) such party has duly executed this Agreement and,
when this Agreement has been delivered by such party, it
shall constitute the valid and legally binding obligation
of such party enforceable in accordance with its terms;
(iii) the execution, delivery or performance of this
Agreement by such party will not conflict with or result
in any violation of or a default under any provision of
the Certificate or Articles of Incorporation or By-Laws of
such party, if such party is a corporation, or of any
mortgage, indenture, lease, agreement or other instrument,
permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation
applicable to such party; and
(iv) no consent, approval, order or authorization of,
or registration, declaration or filing with, any govern-
mental authority is required on the part of such party in
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<PAGE> 173
connection with the execution and delivery of this Agree-
ment, except for filings and consents to be made under
Sections 4.7 and 5.5 of the Stock Purchase Agreement.
(b) The Excel Shareholders each individually represents
and warrants that on the date hereof he owns and controls the
voting rights of the number of shares of common stock of Excel
which appear after his name:
<TABLE>
<CAPTION>
Number of Shares of
Excel Shareholder Excel Common Stock
----------------- -------------------
<S> <C>
James J. Lohman................ 400,000
Gerald G. Fellows.............. 66,201
Robert J. Kennedy.............. 224,793
Ralph R. Whitney, Jr........... 109,433
John D. Burt................... 101,362
James E. Crawford.............. 16,056
William M. Gude................ 112,642
James O. Futterknecht, Jr...... 111,975
Louis R. Csokasy............... 13,196
Terrance L. Lindberg........... 7,210
---------
Total................. 1,162,868
</TABLE>
All of the shares of Excel common stock collectively owned by the
Excel Shareholders at any time shall be referred to herein as the
"Shareholders' Shares."
3. Right of First Refusal. While this Agreement remains in
effect and subject to the provisions of the Stock Purchase
Agreement (a) each of the Excel Shareholders grants to Ford a
right of first refusal to purchase any shares of Excel common
stock which such Excel Shareholder may offer for sale, except for
(i) a public sale on any stock exchange on which Excel common
stock is traded; (ii) a sale in a public offering pursuant to an
effective Registration Statement under the Securities Act of
1933, as amended, and any applicable state law; or (iii) a sale
to Excel in the Tender Offer (as defined in the Stock Purchase
-4-
<PAGE> 174
Agreement); and (b) Ford grants to Excel a right of first refusal
to purchase any shares of Excel common stock that Ford may offer
for sale, except for (i) a public sale on any stock exchange on
which Excel common stock is traded; or (ii) a sale in a public
offering pursuant to an effective Registration Statement under
the Securities Act of 1933, as amended, and any applicable state
law.
4. Procedure for Right of First Refusal. The rights of
first refusal granted pursuant to Section 3 above shall be
governed by the following provisions:
(a) A party granting a right of first refusal pursuant
hereto shall not sell his or its shares (except as permitted by
Section 3) unless he or it shall have received a written bona
fide offer subject to no material conditions (a "bona fide
offer") to purchase any of the shares of Excel common stock he or
it owns from a third party which is not an affiliate of Ford.
Upon receipt of a bona fide offer, the party which proposes to
sell his or its shares (the "Selling Shareholder") shall afford
the party to whom the right of first refusal has been granted (or
its designees) the right of first refusal, as provided below, to
acquire all (but not less than all) of the shares (the "Offered
Shares") covered by the bona fide offer on terms no less favor-
able to the Selling Shareholder than those offered by the third
party.
(b) If the Selling Shareholder proposes to sell pursuant
to a bona fide offer, he or it shall give written notice (an
"Offer Notice") to that effect to Excel and each of the other
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<PAGE> 175
parties hereto, which contains a complete and correct description
of the bona fide offer setting forth all the terms thereof and
the name of the offeror. Prior to the Offer Notice, the Selling
Shareholder may give a notice to Excel or Ford, as the case may
be (a "Preliminary Notice") to the effect that he or it may
implement the right of first refusal procedures of this Agreement
specifying the approximate number of shares of Excel common stock
he or it may wish to sell. A Preliminary Notice shall not in any
way bind a Selling Shareholder to sell his or its shares.
(c) The right of first refusal shall be exercised by the
party to whom the right of first refusal is granted (the
"Purchaser"), only as follows:
(i) If Excel is the Purchaser, the Board of Directors
of Excel shall determine whether it wishes to exercise the
right of first refusal (by a majority vote of the
Directors not designated by Ford) and shall notify Ford in
writing of its determination within ninety (90) days after
the Offer Notice is given (reduced by the number of days
by which the giving of such Offer Notice was preceded by a
related Preliminary Notice, but not reduced below sixty
(60) days). If Ford is the Purchaser, Ford shall notify
the Selling Shareholder in writing of its determination
whether it wishes to exercise the right of first refusal
within ninety (90) days after the Offer Notice is given
(reduced by the number of days by which the giving of such
Offer Notice was preceded by a related Preliminary Notice,
but not reduced below sixty (60) days).
(ii) If the Purchaser determines to exercise the right
of first refusal, it may do so by notifying the Selling
Shareholder in writing of such determination, the total
consideration offered by it for the Offered Shares in
accordance with subdivision (iii) of this subsection 4(c)
and the method it will use to pay for such shares.
(iii) The Purchaser shall offer to pay for the Offered
Shares on terms no less favorable to the Selling Share-
holder as those offered by the third party in the bona
fide offer; provided that the offered payment must include
cash at least equal to the amount of cash consideration
provided for in the bona fide offer.
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<PAGE> 176
(iv) If the payment offered is on identical terms as
those offered by the third party or if the Purchaser and
the Selling Shareholder agree that the payment offered is
on terms no less favorable to the Selling Shareholder as
those offered by the third party in the bona fide offer,
the Offered Shares shall be purchased at a closing under
subsection 4(d).
(d) The closing of the purchase of Offered Shares pur-
suant to this Section 4 shall be held at a mutually acceptable
place no later than ninety (90) days after the written notice of
exercise is given by the Purchaser, or on such earlier date as
mutually agreeable, subject to obtaining any necessary govern-
mental or third party approvals. The Selling Shareholder, the
Purchaser, and Excel shall act with diligence to obtain any such
approvals within a reasonable period of time and such closing
shall, in such event, be held promptly upon obtaining such
approvals. At such closing, the Purchaser shall tender the
payment for the Offered Shares, the Selling Shareholder shall
transfer to the Purchaser the Offered Shares being so purchased,
free and clear of any liens, encumbrances and adverse claims, and
the parties shall execute such documents as may be necessary to
effectuate the sale.
(e) If the party to whom the right of first refusal is
granted elects not to exercise the right of first refusal, or if
the period for the exercise of such right expires without a
timely and proper notice in accordance with Section 4(c) above,
the Selling Shareholder may sell the Offered Shares, provided
that:
(i) such sale must be made upon the terms set forth
and to the third party named in the Offer Notice;
-7-
<PAGE> 177
(ii) such sale must be made within one hundred twenty
(120) days after notice of the non-exercise of the right
of first refusal is given or the date on which such right
expired unexercised; and
(iii) the Selling Shareholder and the transferee shall
provide and execute such documents, including opinions of
counsel, as Excel shall reasonably request to demonstrate
that such transfer may be effected without registration of
the Offered Shares under the Securities Act of 1933, as
amended.
Each Selling Shareholder shall be relieved of any further obliga-
tions under this Agreement with respect to the shares sold
pursuant to this Agreement.
5. Legends on Certificates. All of the stock certificates
held by Ford and the Excel Shareholders shall bear legends
referring to the restrictions provided for under this Agreement
as follows:
"The shares represented by this certificate are
subject to certain restrictions on transfer
(except for (i) a public sale on any stock
exchange on which Excel common stock is traded,
or (ii) a sale in a public offering pursuant to
an effective Registration Statement under the
Securities Act of 1933, as amended, and any
applicable state law) and other conditions, as
specified in a certain Shareholders Agreement,
a complete and correct copy of which is avail-
able for inspection at the principal office of
Excel Industries, Inc. and will be furnished to
the owner of such shares upon written request
and without charge."
Each Excel Shareholder agrees to deliver to Excel his stock
certificate(s) representing shares of Excel common stock owned by
him so that the legend set forth above may be placed on such
stock certificate(s), and Excel shall cause the legend set forth
above to be placed on the stock certificate(s) to be delivered to
Ford pursuant to the Related Agreements. Any holder of Excel
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<PAGE> 178
common stock may require Excel to remove such legend from his or
its certificate(s) upon termination of this Agreement or a sale
permitted under Section 3(a)(i) or (ii) above provided that such
person provides Excel an opinion of counsel, satisfactory to
Excel and in which counsel to Excel concurs, to the effect that
such legend may be so removed.
6. Term. This Agreement shall terminate at such time as
Ford owns less than 10% of the total issued and outstanding
common stock of Excel or Ford acquires greater than 50% of the
total issued and outstanding common stock of Excel in accordance
with the Stock Purchase Agreement; provided, however, that this
Agreement shall not terminate in the event that (i) Ford acquires
greater than 50% of the total issued and outstanding common stock
of Excel under Section 7.2(a)(iv) of the Stock Purchase
Agreement; (ii) Excel exercises its option to purchase Excel
common stock from Ford under Section 7.2(d) or (e) of the Stock
Purchase Agreement; and (iii) as a result of such exercise by
Excel, Ford no longer owns greater than 50% of the issued and
outstanding common stock of Excel.
7. Assignment. As used herein, the term "Ford" shall
include Ford Motor Company or its permitted successors or assigns
and the term "Excel" shall include Excel Industries, Inc. or its
permitted successors or assigns. Ford and Excel may assign their
respective rights and obligations under this Agreement only to
such person who shall also be assigned and assume the rights and
obligations of the Related Agreements in accordance with the
respective terms of such agreements. This Agreement shall be
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binding upon and inure to the benefit of the parties hereto and
their respective successors, permitted assigns, heirs, estates
and legal representatives.
8. Remedies. The parties hereto stipulate that the remedies
at law in the event of a default by a party in performing its
obligations hereunder are not and will not be adequate and that,
to the extent permitted by applicable law, the provisions of this
Agreement may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an
injunction against a violation of any of the provisions hereof or
otherwise. No course of dealing and no delay on the part of any
party hereto in exercising any right, power or remedy shall
operate as a waiver thereof or otherwise prejudice such party's
rights, powers or remedies. No right, power or remedy conferred
by this Agreement upon any party shall be exclusive of any other
right, power or remedy referred to herein or now or hereafter
available at law, in equity, by statute, or otherwise.
9. Amendment and Modification. This Agreement or any term
hereof may be changed, waived, discharged or terminated only by
an instrument in writing, signed by the party or parties against
whom such change, waiver, discharge or termination is sought to
be enforced.
10. Third Parties. Nothing contained herein shall be deemed
to confer upon any person or entity, other than the parties
hereto and their respective heirs, successors and assigns, any
right or remedy under or by reason of this Agreement.
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11. Notices. All notices, consents, requests or other com-
munications required or permitted herein shall be in writing and
shall be delivered, personally or by certified or registered
mail, telex, facsimile transmission or by means of air freight
service, with a receipt requested.
If to Excel: 1120 N. Main Street
Elkhart, Indiana 46514
Attention: Chief Executive
Officer
if to Ford: Glass Division
300 Renaissance Center
P.O. Box 43343
Detroit, Michigan 48243
Attention: General Manager
if to Gerald G. Fellows: O.F. Mossberg & Sons, Inc.
7 Grasso Avenue
North Haven, Connecticut 06473
if to Robert J. Kennedy or Hammond, Kennedy & Company, Inc.
Ralph R. Whitney, Jr.: 230 Park Avenue
New York, New York 10169
if to James J. Lohman,
John D. Burt, James E. Crawford,
William M. Gude, James O. Excel Industries, Inc.
Futterknecht, Jr., Louis R. 1120 N. Main Street
Csokasy, or Terrance L. Lindberg: Elkhart, Indiana 46514
Any notice delivered personally, or sent by telex, facsimile transmission or
telegraph shall be deemed to have been given on the date sent. Any other
notice shall be deemed to have been given on the date received as reflected
in the return receipt or air freight receipt.
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana.
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13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
EXCEL INDUSTRIES, INC. FORD MOTOR COMPANY
By: /s/ JAMES J. LOHMAN By: /s/ D.E. SIDDALL
- ----------------------------- -----------------------------------
President D.E. Siddall
- ----------------------------- General Manager, Glass Division
Printed, Title ------------------------------------
Printed, Title
/s/ JAMES J. LOHMAN
- ----------------------------- /s/ GERALD G. FELLOWS
James J. Lohman -----------------------------------
Gerald G. Fellows
/s/ ROBERT J. KENNEDY
- ----------------------------- /s/ RALPH R. WHITNEY, JR.
Robert J. Kennedy -----------------------------------
Ralph R. Whitney, Jr.
/s/ JOHN D. BURT
- ----------------------------- /s/ JAMES E. CRAWFORD
John D. Burt -----------------------------------
James E. Crawford
/s/ WILLIAM M. GUDE
- ----------------------------- /s/ JAMES O. FUTTERKNECHT, JR.
William M. Gude -----------------------------------
James O. Futterknecht, Jr.
- ----------------------------- /s/ TERRANCE L. LINDBERG
Louis R. Csokasy -----------------------------------
Terrance L. Lindberg
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13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
EXCEL INDUSTRIES, INC. FORD MOTOR COMPANY
By: By:
-------------------- ----------------------------
- ----------------------- -------------------------------
Printed, Title Printed, Title
- ----------------------- -------------------------------
James J. Lohman Gerald G. Fellows
- ----------------------- -------------------------------
Robert J. Kennedy Ralph R. Whitney, Jr.
- ----------------------- -------------------------------
John D. Burt James E. Crawford
- ----------------------- -------------------------------
William M. Gude James O. Futterknecht, Jr.
/s/ LOUIS R. CSOKASY
- ----------------------- -------------------------------
Louis R. Csokasy Terrance L. Lindberg
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EXHIBIT E
ACKNOWLEDGEMENT AND
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ACKNOWLEDGEMENT AND ASSIGNMENT AND ASSUMPTION AGREEMENT is dated
January 11, 1994 and is entered into between FORD MOTOR COMPANY, a Delaware
corporation ("Ford"), and FORD MOTOR COMPANY FUND, a Michigan nonprofit
corporation (the "Fund").
WHEREAS, Ford and Excel Industries, Inc., an Indiana corporation
("Excel"), are parties to a Stock Purchase Agreement dated as of August 19,
1986 (the "Stock Purchase Agreement") pursuant to which, among other things,
Ford acquired 2,557,128 shares of common stock of Excel and Excel granted to
Ford certain demand registration rights for such shares;
WHEREAS, Ford, Excel and certain other persons are parties to a
Shareholders Agreement dated as of October 7, 1986 (the "Shareholders
Agreement") which provides, among other things, for how Ford's shares of Excel
common stock shall be voted on certain matters and for the grant by Ford to
Excel of a right of first refusal to purchase any such shares that Ford may
offer for sale other than in a public offering;
WHEREAS, contemporaneously herewith Ford is contributing 1,047,201 of
shares of common stock of Excel to the Fund (the "Contributed Shares");
WHEREAS, the parties hereto desire to hereby provide for the assignment
to the Fund of certain rights of Ford in respect of the Contributed Shares and
for the assumption by the Fund of certain obligations of Ford in respect of
such shares; and
WHEREAS, pursuant to a Waiver and Consent Agreement dated as of January
7, 1994 between Excel and Ford, Excel has consented to such assignment.
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the parties hereby agree as follows:
Section 1. The Fund hereby accepts the contribution from Ford of the
Contributed Shares and hereby acknowledges receipt of the stock certificates
representing such shares, together with appropriate stock powers.
Section 2. Pursuant to Section 13.10 of the Stock Purchase Agreement,
Ford hereby assigns to the Fund its registration rights under Section 9 of the
Stock Purchase Agreement in respect of the Contributed Shares, it being
understood that Ford shall retain such registration rights in respect of the
shares of Excel that Ford has retained.
Section 3. The Fund hereby assumes all of Ford's duties and obligations
in respect of the Contributed Shares under the Stock Purchase Agreement and
the Shareholder Agreement (copies of which have been provided to the Fund).
Section 4. The Fund acknowledges that the Contributed Shares have not
been registered under the Securities Act of 1933 and represents and warrants
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to and agrees with Ford that it is accepting the Contributed Shares for its
own account and not with a current view to or for sale in connection with any
distribution of such shares, other than pursuant to an effective registration
statement under the Securities Act of 1933 or an available exemption from
registration thereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
FORD MOTOR COMPANY FUND FORD MOTOR COMPANY
By: /S/ FRANK V. J. DARIN By: /s/ JOHN M. RINTAMAKI
---------------------------- -------------------------
Name: Frank V. J. Darin Name: John M. Rintamaki
Title: Vice President Title: Secretary
