<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
and
SCHEDULE 13D
Under the Securities Exchange Act of 1934
----------------
DURAKON INDUSTRIES, INC.
(Name of Subject Company)
----------------
LITTLEJOHN PARTNERS IV, L.P.
LPIV ACQUISITION CORP.
LPIV, LLC
(Bidders)
----------------
Common Stock, Without Par Value
(Title of Class of Securities)
266334 10 1
(CUSIP Number of Class of Securities)
----------------
Mr. Angus C. Littlejohn, Jr.
Mr. Michael I. Klein
LPIV Acquisition Corp.
c/o Littlejohn Partners IV, L.P.
115 East Putnam Avenue
Greenwich, Connecticut 06830
(203) 861-4005
(Name, Address And Telephone Number of Persons Authorized to
Receive Notices And Communications on Behalf of Bidders)
copies to:
James D. Epstein, Esq.
Pepper Hamilton LLP
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, Pennsylvania 19103
(215) 981-4000
----------------
June 17, 1999
(Date of Event Which Requires Filing Statement on Schedule 13D)
----------------
Calculation of Filing Fee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee**
$101,297,000 $20,260
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
* For purposes of calculating amount of filing fee only. The amount assumes
the purchase of 6,125,200 shares of common stock, without par value, of the
Company (the "Shares"), at a price per Share of $16.00 in cash. Such number
of shares represents all the Shares outstanding as of June 17, 1999. The
amount also includes the amount paid to holders of Company stock options in
connection with the transaction.
** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of
the Securities Exchange Act of 1934, as amended, equals 1/50th of one
percent of the value of the aggregate Shares purchased.
[_] Check box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
<TABLE>
<C> <S>
Amount Previously Paid: None
Filing Party: Not Applicable
Form or Registration No.: Not Applicable
Date Filed: Not Applicable
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
1.NAMES OF REPORTING PERSONS
Littlejohn Partners IV, L.P.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
52-2177030
- --------------------------------------------------------------------------------
2.CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP
(a)
[_]
(b)
[X]
- --------------------------------------------------------------------------------
3.SEC USE ONLY
- --------------------------------------------------------------------------------
4.SOURCES OF FUNDS
OO--Partnership Contributions
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f)
[_]
- --------------------------------------------------------------------------------
6.CITIZEN OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7.AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,971,286* (Common Stock)
- --------------------------------------------------------------------------------
8.CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[_]
- --------------------------------------------------------------------------------
9.PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
32%**
- --------------------------------------------------------------------------------
10.TYPE OF REPORTING PERSON
HC and PN
2
<PAGE>
1.NAMES OF REPORTING PERSONS
LPIV Acquisition Corp.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
38-3475004
- --------------------------------------------------------------------------------
2.CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP
(a)
[_]
(b)
[X]
- --------------------------------------------------------------------------------
3.SEC USE ONLY
- --------------------------------------------------------------------------------
4.SOURCES OF FUNDS
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f)
[_]
- --------------------------------------------------------------------------------
6.CITIZEN OR PLACE OF ORGANIZATION
Michigan
- --------------------------------------------------------------------------------
7.AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,971,286* (Common Stock)
- --------------------------------------------------------------------------------
8.CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[_]
- --------------------------------------------------------------------------------
9.PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
32%**
- --------------------------------------------------------------------------------
10.TYPE OF REPORTING PERSON
CO
3
<PAGE>
1.NAMES OF REPORTING PERSONS
LPIV, LLC
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
52-2176785
- -------------------------------------------------------------------------------
2.CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP
(a)
[_]
(b)
[X]
- -------------------------------------------------------------------------------
3.SEC USE ONLY
- -------------------------------------------------------------------------------
4.SOURCES OF FUNDS
BK
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f)
[_]
- -------------------------------------------------------------------------------
6.CITIZEN OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
7.AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,971,286* (Common Stock)
- -------------------------------------------------------------------------------
8.CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[_]
- -------------------------------------------------------------------------------
9.PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
32%**
- -------------------------------------------------------------------------------
10.TYPE OF REPORTING PERSON
CO
- --------
* On June 17, 1999, Littlejohn Partners IV, L.P. (the "Parent") and LPIV
Acquisition Corp., a wholly owned subsidiary of the Parent (the
"Purchaser"), entered into Stock Tender and Voting Agreements (the
"Shareholder Agreements") with certain shareholders (the "Shareholders") of
Durakon Industries, Inc. (the "Company"), who beneficially own 1,971,286
Shares in the aggregate, or approximately 32% of the Shares outstanding as
of June 17, 1999. Under the Shareholder Agreements, each Shareholder has
agreed to validly tender the Shares beneficially owned by it, as well as
any Shares subsequently acquired by it, into the Offer (as defined below),
and not to withdraw such Shares from the Offer. The Purchaser's right to
purchase the Shares subject to the Shareholder Agreements is reflected in
Rows 7 and 9 of each of the tables above. Pursuant to the Shareholder
Agreements, each Shareholder has also delivered an irrevocable proxy to the
Parent and certain of the Parent's affiliates to vote the Shares subject to
the Shareholder Agreements in favor of the Merger (as defined in the Offer
to Purchase), the adoption by the Company of the Agreement and Plan of
Merger dated as of June 17, 1999 among the Purchaser, the Parent and the
Company (the "Merger Agreement"), and the approval of the terms thereof and
each of the other transactions contemplated by the Merger Agreement, and
have agreed to vote against (a) any action or agreement that would result
in a breach of any covenant or any representation or warranty or any other
obligation or agreement of the Company under or pursuant to the Merger
Agreement and (b) any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger or the Offer. The
Merger Agreement and the Shareholder Agreements are described more fully in
Section 12 ("The Merger Agreement and The Shareholder Agreements") of the
Offer to Purchase dated June 25, 1999 (the "Offer to Purchase"), filed as
Exhibit (a)(1) hereto.
** Based on a representation of the Company in the Merger Agreement.
4
<PAGE>
This Schedule 14D-1 Tender Offer Statement and Schedule 13D (this
"Statement") relates to the offer by LPIV Acquisition Corp., a Michigan
corporation (the "Purchaser") and a wholly owned subsidiary of Littlejohn
Partners IV, L.P., a Delaware limited partnership (the "Parent"), to purchase
all issued and outstanding shares of common stock, without par value (the
"Shares"), of Durakon Industries, Inc., a Michigan corporation (the
"Company"), at $16.00 per Share (the "Offer Price"), net to the seller in
cash, without interest, upon the terms and subject to the conditions set forth
in the Offer to Purchase and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer"). Copies of the Offer to Purchase and the Letter of Transmittal
are annexed hereto as Exhibits (a)(1) and (a)(2), respectively.
Item 1. Security and Subject Company.
(a) The name of the subject company is Durakon Industries, Inc., a Michigan
corporation, which has its principal executive offices at 2101 N. Lapeer Road,
Lapeer, Michigan 48846.
(b) The information set forth in the Introduction of the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of The Shares;
Dividends on The Shares") of the Offer to Purchase is incorporated herein by
reference.
Item 2. Identity and Background.
(a)-(d) and (g) This Statement is being filed by the Purchaser, a Michigan
corporation, LPIV, LLC, a Delaware limited liability company ("LPIV"), and the
Parent, a Delaware limited partnership, for purposes of Schedule 14D-1 and
Schedule 13D. In addition, information is being provided by Littlejohn
Associates, LLC, a Delaware limited liability company and the general partner
of the Parent (together with the Purchaser, LPIV and the Parent, the
"Applicable Persons"), as required by Schedule 14D-1; however, such
information contained herein shall not imply that Littlejohn Associates, LLC
is a Bidder for purposes of Schedule 14D-1. LPIV is a wholly owned subsidiary
of the Purchaser. Information concerning the principal business and the
address of the principal offices of the Applicable Persons is set forth in
Section 9 ("Certain Information Concerning the Purchaser and the Parent") of
the Offer to Purchase and is incorporated herein by reference. The names,
business addresses, present principal occupations or employment, material
occupations, positions, offices or employments during the last five years and
citizenship of the directors and executive officers of the Applicable Persons
are set forth in Schedule I ("Directors and Executive Officers of the Parent
and the Purchaser") to the Offer to Purchase and are incorporated herein by
reference.
(e) and (f) The information set forth in Section 9 ("Certain Information
Concerning the Purchaser and the Parent") and Section 16 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a) and (b) The information set forth in the Introduction, Section 8
("Certain Information Concerning the Company"), Section 11 ("Contacts with the
Company; Background of the Offer"), Section 12 ("The Merger Agreement and The
Shareholder Agreements") and Section 13 ("Purpose of the Offer; Plans for the
Company") of the Offer to Purchase is incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a) and (b) The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
5
<PAGE>
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(e) The information set forth in the Introduction, Section 13 ("Purpose
of the Offer; Plans for the Company") of the Offer to Purchase is incorporated
herein by reference.
(f) and (g) The information set forth in the Introduction, Section 7
("Effect of the Offer on the Market for the Shares; Stock Quotation; Exchange
Act Registration; Margin Regulations") and Section 13 ("Purpose of the Offer;
Plans for the Company") of the Offer to Purchase is incorporated herein by
reference.
Item 6. Interest in Securities of the Subject Company.
(a) and (b) The information set forth in the Introduction, Section 9
("Certain Information Concerning the Purchaser and the Parent"), Section 12
("The Merger Agreement and The Shareholder Agreements") and Section 13
("Purpose of the Offer; Plans for the Company") of the Offer to Purchase is
incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
to the Subject Company's Securities.
The information set forth in the Introduction, Section 9 ("Certain
Information Concerning the Purchaser and the Parent"), Section 11 ("Contacts
with the Company; Background of the Offer"), Section 12 ("The Merger Agreement
and The Shareholder Agreements") and Section 13 ("Purpose of the Offer; Plans
for the Company") of the Offer to Purchase is incorporated herein by
reference.
Item 8. Persons Retained, Employed or to Be Compensated.
The information set forth in the Introduction and in Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
Item 9. Financial Statements of Certain Bidders.
The information set forth in Section 9 ("Certain Information Concerning the
Purchaser and the Parent") of the Offer to Purchase is incorporated herein by
reference.
The incorporation by reference of the above-mentioned financial information
does not constitute an admission that such information is material to a
decision by a security holder of the Company as to whether to sell, tender or
hold Shares being sought in the Offer.
Item 10. Additional Information.
(a) The information set forth in Section 11 ("Contacts with the Company;
Background of the Offer"), Section 12 ("The Merger Agreement and The
Shareholder Agreements") and Section 13 ("Purpose of the Offer; Plans for the
Company") of the Offer to Purchase is incorporated herein by reference.
(b) - (c), (e) The information set forth in Section 16 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Effect of the Offer on the
Market for the Shares; Stock Quotation; Exchange Act Registration; Margin
Regulations") of the Offer to Purchase is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal, the Merger Agreement and the Shareholder Agreements, copies of
which are attached hereto as Exhibits (a)(1), (a)(2), (c)(1) and (c)(2),
respectively, is incorporated herein by reference.
6
<PAGE>
Item 11. Material to Be Filed as Exhibits.
(a)(1)Offer to Purchase dated June 25, 1999.
(a)(2)Letter of Transmittal.
(a)(3)Notice of Guaranteed Delivery.
(a)(4)Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5)Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6)Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7)Form of Summary Advertisement dated June 25, 1999.
(a)(8)Text of Press Release dated June 18, 1999 issued by the Company.
(b)(1) Commitment Letter, dated June 14, 1999, from BankBoston, N.A. and
BancBoston Robertson Stephens Inc. to LPIV Acquisition Corp.
(c)(1) Agreement and Plan of Merger dated as of June 17, 1999 among the
Parent, the Purchaser and the Company.
(c)(2) Confidentiality Agreement, dated February 5, 1999, between
Littlejohn & Co., LLC, an affiliate of the Parent, and the Company,
and countersigned by Littlejohn & Co., LLC on February 8, 1999.
(c)(3) Stock Tender and Voting Agreement with David Aronow
(c)(4) Stock Tender and Voting Agreement with Phillip Wm. Fisher
(c)(5) Stock Tender and Voting Agreement with Richard J. Jacob
(c)(6) Stock Tender and Voting Agreement with Robert M. Teeter
(c)(7) Stock Tender and Voting Agreement with David W. Wright
(c)(8) Stock Tender and Voting Agreement with Max M. Fisher Revocable
Trust, u/a/d August 13, 1988
(c)(9) Stock Tender and Voting Agreement with Martinique Charitable
Remainder Unitrust
(c)(10) Stock Tender and Voting Agreement with Wolverine Investors
(c)(11) Stock Tender and Voting Agreement with 1990 Bronx Trust #1
(c)(12) Stock Tender and Voting Agreement with 1990 Des Moines Trust #1
(d)None.
(e)Not applicable.
(f)None.
7
<PAGE>
SIGNATURE
After due 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.
Dated: June 25, 1999
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, LLC, its
general partner
By: /s/ Angus C. Littlejohn, Jr.
----------------------------------
Name: Angus C. Littlejohn, Jr.
Title: Manager
LPIV ACQUISITION CORP.
By: /s/ Michael I. Klein
----------------------------------
Name: Michael I. Klein
Title: President
LPIV, LLC
By: /s/ Angus C. Littlejohn, Jr.
----------------------------------
Name: Angus C. Littlejohn, Jr.
Title: Manager
8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Exhibit Name Number
- -------------------------------------------------------------------------------
<C> <S> <C>
(a)(1) Offer to Purchase dated June 25, 1999.
- -------------------------------------------------------------------------------
(a)(2) Letter of Transmittal.
- -------------------------------------------------------------------------------
(a)(3) Notice of Guaranteed Delivery.
- -------------------------------------------------------------------------------
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
- -------------------------------------------------------------------------------
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
- -------------------------------------------------------------------------------
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
- -------------------------------------------------------------------------------
(a)(7) Form of Summary Advertisement dated June 25, 1999.
- -------------------------------------------------------------------------------
(a)(8) Text of Press Release dated June 18, 1999 issued by the
Company.
- -------------------------------------------------------------------------------
(b)(1) Commitment Letter, dated June 14, 1999, from BankBoston,
N.A. and BancBoston Robertson Stephens Inc. to LPIV
Acquisition Corp.
- -------------------------------------------------------------------------------
(c)(1) Agreement and Plan of Merger dated as of June 17, 1999 among
the Parent, the Purchaser and the Company.
- -------------------------------------------------------------------------------
(c)(2) Confidentiality Agreement, dated February 5, 1999, between
Littlejohn & Co., LLC, an affiliate of the Parent, and the
Company, and countersigned by Littlejohn & Co., LLC on
February 8, 1999.
- -------------------------------------------------------------------------------
(c)(3) Stock Tender and Voting Agreement with David Aronow
- -------------------------------------------------------------------------------
(c)(4) Stock Tender and Voting Agreement with Phillip Wm. Fisher
- -------------------------------------------------------------------------------
(c)(5) Stock Tender and Voting Agreement with Richard J. Jacob
- -------------------------------------------------------------------------------
(c)(6) Stock Tender and Voting Agreement with Robert M. Teeter
- -------------------------------------------------------------------------------
(c)(7) Stock Tender and Voting Agreement with David W. Wright
- -------------------------------------------------------------------------------
(c)(8) Stock Tender and Voting Agreement with Max M. Fisher
Revocable Trust, u/a/d August 13, 1988
- -------------------------------------------------------------------------------
(c)(9) Stock Tender and Voting Agreement with Martinique Charitable
Remainder Unitrust
- -------------------------------------------------------------------------------
(c)(10) Stock Tender and Voting Agreement with Wolverine Investors
- -------------------------------------------------------------------------------
(c)(11) Stock Tender and Voting Agreement with 1990 Bronx Trust #1
- -------------------------------------------------------------------------------
(c)(12) Stock Tender and Voting Agreement with 1990 Des Moines Trust
#1
- -------------------------------------------------------------------------------
(d) None.
- -------------------------------------------------------------------------------
(e) Not applicable.
- -------------------------------------------------------------------------------
(f) None.
</TABLE>
<PAGE>
Exhibit (a)(1)
Offer to Purchase dated June 25, 1999.
<PAGE>
Offer to Purchase For Cash
All Issued and Outstanding Shares of Common Stock
of
Durakon Industries, Inc.
at
$16.00 Net per Share
by
LPIV Acquisition Corp.
a wholly owned subsidiary of
Littlejohn Partners IV, L.P.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of June 17, 1999 among Littlejohn Partners IV, L.P. (the "Parent"), LPIV
Acquisition Corp. (the "Purchaser") and Durakon Industries, Inc. (the
"Company"). The Board of Directors of the Company has unanimously approved and
found advisable the Merger Agreement, the Offer and the Merger referred to
herein, unanimously determined that the terms of the Offer and the Merger are
fair to, and in the best interests of, the shareholders of the Company and
unanimously recommends that shareholders of the Company accept the Offer and
tender their Shares (as defined herein).
The Offer is conditioned upon, among other things, there having been validly
tendered and not withdrawn prior to the expiration of the Offer at least 90%
of the outstanding Shares at the time of acceptance for payment. See Sections
1 and 15 below for additional terms and conditions of the Offer.
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Shares should either (i) complete and sign the Letter of Transmittal or a
facsimile copy thereof in accordance with the instructions in the Letter of
Transmittal, have such shareholder's signature thereon guaranteed if required
by Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of
Transmittal or such facsimile, or, in the case of a book-entry transfer
effected pursuant to the procedure set forth in Section 2, an Agent's Message
(as defined herein), and any other required documents, to the Depositary (as
defined herein) and either deliver the certificates for such Shares to the
Depositary along with the Letter of Transmittal or facsimile or deliver such
Shares pursuant to the procedure for book-entry transfer set forth in Section
2 or (ii) request such shareholder's broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for such shareholder. A
shareholder having Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if such shareholder
desires to tender such Shares.
Any shareholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply in
a timely manner with the procedure for book-entry transfer, or who cannot
deliver all required documents to the Depositary prior to the expiration of
the Offer, may tender such Shares by following the procedure for guaranteed
delivery set forth in Section 2.
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or
any other tender offer materials may be directed to Georgeson Shareholder
Communications Inc., who is acting as the Information Agent, at its address
and telephone numbers set forth on the back cover of this Offer to Purchase.
Additional copies of this Offer to Purchase, the Letter of Transmittal, the
Notice of Guaranteed Delivery and other related materials may be obtained from
the Information Agent or from brokers, dealers, commercial banks, trust
companies and other nominees.
The Information Agent for the Offer is:
[LOGO OF GEORGESON SHAREHOLDER COMMUNICATIONS INC. APPEARS HERE]
June 25, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
INTRODUCTION............................................................. 1
THE TENDER OFFER......................................................... 3
1. Terms of the Offer............................................. 3
2. Procedure for Tendering Shares................................. 4
3. Withdrawal Rights.............................................. 7
4. Acceptance for Payment and Payment............................. 7
5. Certain Federal Income Tax Consequences........................ 8
6. Price Range of The Shares; Dividends on The Shares............. 10
7. Effect of the Offer on the Market for the Shares; Stock
Quotation; Exchange Act Registration; Margin Regulations....... 10
8. Certain Information Concerning the Company..................... 12
9. Certain Information Concerning the Purchaser and the Parent.... 13
10. Source and Amount of Funds..................................... 14
11. Contacts with the Company; Background of the Offer............. 15
12. The Merger Agreement and the Shareholder Agreements............ 18
13. Purpose of the Offer; Plans for the Company.................... 27
14. Dividends and Distributions.................................... 28
15. Certain Conditions of the Offer................................ 28
16. Certain Legal Matters.......................................... 29
17. Fees and Expenses.............................................. 30
18. Miscellaneous.................................................. 31
SCHEDULE I--Directors and Executive Officers of the Purchaser
and the Parent........................................................... 32
</TABLE>
i
<PAGE>
To the Holders of Common Stock
of Durakon Industries, Inc.:
INTRODUCTION
LPIV Acquisition Corp., a Michigan corporation (the "Purchaser") and a
wholly owned subsidiary of Littlejohn Partners IV, L.P., a Delaware limited
partnership (the "Parent"), hereby offers to purchase all issued and
outstanding shares of common stock, without par value (the "Shares"), of
Durakon Industries, Inc., a Michigan corporation (the "Company"), at $16.00
per Share (the "Offer Price"), net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which, together with any
amendments or supplements hereto or thereto, collectively constitute the
"Offer").
Tendering shareholders whose Shares are registered in their own name and who
tender Shares directly to the Depositary (as defined below) will not be
obligated to pay brokerage fees or commissions to the Purchaser or the
Depositary or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
Shareholders who hold their Shares through a bank or broker should check with
such institution as to whether they charge any service fees. The Purchaser
will pay the fees and expenses of BankBoston, N.A., which is acting as the
Depositary (the "Depositary"), and Georgeson Shareholder Communications Inc.,
which is acting as Information Agent (the "Information Agent"), in connection
with the Offer. See Section 17.
The Offer is conditioned upon, among other things, there having been validly
tendered and not withdrawn prior to the expiration of the Offer at least 90%
of the outstanding Shares at the time of acceptance for payment (the "Minimum
Tender Condition").
The Board of Directors of the Company has unanimously approved and found
advisable the Merger Agreement, the Offer and the Merger referred to herein,
unanimously determined that the terms of the Offer and the Merger are fair to,
and in the best interests of, the shareholders of the Company and unanimously
recommends that the shareholders of the Company accept the Offer and tender
their Shares.
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of June 17, 1999 (the "Merger Agreement") among the Parent, the Purchaser
and the Company. Following the satisfaction or waiver of certain conditions,
including approval by shareholders of the Company, if such approval is
required by applicable law, the Purchaser will be merged with and into the
Company, with the Company surviving the merger (as such, the "Surviving
Corporation") as a wholly owned subsidiary of the Parent (the "Merger"). At
the effective time of the Merger (the "Effective Time"), each outstanding
Share (other than Shares owned by the Company or by the Parent, the Purchaser
or any other direct or indirect wholly owned subsidiary of the Parent or the
Company) will be converted into the right to receive the Offer Price in cash,
without interest (the "Merger Consideration"). See Section 12.
In the event the Purchaser acquires 90% or more of the outstanding Shares
pursuant to the Offer or otherwise, the Purchaser would be able to effect the
Merger pursuant to the short-form merger provisions of the Michigan Business
Corporation Act ("MBCA"), without prior notice to, or any action by, any other
shareholder of the Company. In such event, the Purchaser is required to effect
the Merger without prior notice to, or any action by, any other shareholder of
the Company, promptly after its acceptance for payment of Shares tendered into
the Offer. In the Merger Agreement, the Parent, the Purchaser and the Company
have agreed that the Purchaser may extend the Offer for one or more periods
not to exceed 30 days in the aggregate without the prior written consent of
the Company. If immediately after the expiration of the Offer at least a
majority of the outstanding Shares on a fully-diluted basis have been tendered
in the Offer and not withdrawn, but the Minimum Tender Condition has not been
satisfied, then the parties have agreed that the Purchaser will not purchase
any Shares pursuant to the Offer and, instead, the Company will promptly
convene a special meeting of the shareholders of the Company for the purpose
of considering the Merger and taking action on the Merger Agreement and the
transactions contemplated thereby (the "Transactions"). The Company has
agreed, as soon
1
<PAGE>
as practicable after the execution of the Merger Agreement, to file a proxy
statement relating to the Merger with the Securities and Exchange Commission
(the "Commission"). See Section 12.
The Purchaser and the Parent have entered into Stock Tender and Voting
Agreements each dated as of June 17, 1999 (the "Shareholder Agreements") with
certain shareholders of the Company (the "Shareholders"), including all of its
directors, who own 1,971,286 outstanding Shares in the aggregate on the date
of the Merger Agreement, representing approximately 32% of the outstanding
Shares. Under the Shareholder Agreements, each Shareholder agreed, among other
things, to validly tender the Shares beneficially owned by it, as well as any
Shares subsequently acquired by it. In addition, each Shareholder agreed to
vote its Shares in favor of the Merger, the adoption by the Company of the
Merger Agreement and the approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement, and agreed to vote against
(a) any action or agreement that would result in a breach of any covenant or
any representation or warranty or any other obligation or agreement of the
Company under or pursuant to the Merger Agreement and (b) any action or
agreement that would impede, interfere with, delay, postpone or attempt to
discourage the Merger or the Offer. Each Shareholder also agreed, without
limiting the foregoing, to consult with the Parent and vote all Shares
beneficially owned by it in such manner as is determined by the Parent to be
in compliance with the provisions of the Shareholder Agreements. The
Shareholder Agreements are more fully described in Section 12. Pursuant to the
Shareholder Agreements, each Shareholder has delivered to the Parent,
contemporaneously with the execution of its Shareholder Agreement, an
irrevocable proxy (each an "Irrevocable Proxy") pursuant to which each
Shareholder irrevocably appointed Angus C. Littlejohn, Jr., Michael I. Klein
and Littlejohn Partners IV, L.P. as its proxies and attorneys-in-fact to
exercise the proxy to vote the Shares in the foregoing manner at any time
until the earlier to occur of the valid termination of the Merger Agreement or
the Effective Time.
Lazard Freres & Co. LLC ("Lazard Freres"), investment banker to the Company,
has delivered to the Board of Directors of the Company its written opinion
dated June 17, 1999 that, as of such date and based upon and subject to the
matters set forth therein, the consideration to be received by the
shareholders of the Company (other then the Purchaser and its affiliates) in
the Offer and the Merger is fair to such shareholders from a financial point
of view. Such opinion is set forth in full as an exhibit to the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-
9"), which is being mailed to shareholders of the Company concurrently
herewith. J.I. Harris & Associates also acted as the Company's investment
banker in connection with the Offer and Merger.
The Company has represented and warranted to the Purchaser that, as of June
17, 1999, there were 6,125,200 Shares issued and outstanding, and 468,000
Shares reserved for issuance upon exercise of outstanding options to purchase
Shares granted under the Company Stock Option Plans (as defined in the Merger
Agreement) or otherwise (the "Company Stock Options"). As provided in the
Merger Agreement, all outstanding Company Stock Options on the effective date
of the Merger will become fully vested and will be canceled. The holders of
such Company Stock Options will be entitled to receive from the Company a cash
payment equal to the product of (i) the number of Shares previously subject to
such option and (ii) the excess, if any, of the Merger Consideration over the
exercise price per Share previously subject to such option.
As of June 17, 1999, the Minimum Tender Condition would be satisfied if the
Purchaser acquired 5,512,680 Shares. On such date, 3,062,601 Shares would
constitute a majority of the Shares issued and outstanding.
The Merger Agreement and the Shareholder Agreements are more fully described
in Section 12. Certain Federal income tax consequences of the sale of Shares
pursuant to the Offer and the exchange of Shares for the Merger Consideration
pursuant to the Merger are described in Section 5.
This Offer to Purchase and the related Letter of Transmittal contain
important information which should be read before any decision is made with
respect to the Offer.
2
<PAGE>
THE TENDER OFFER
1. Terms of the Offer
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the Purchaser will accept for payment and pay, as promptly as
practicable after the Expiration Date, for all Shares validly tendered prior
to the Expiration Date and not theretofore properly withdrawn in accordance
with Section 3. The term "Expiration Date" means 12:00 Midnight, New York City
time, on Friday, July 23, 1999, unless and until (i) the Purchaser, in its
sole discretion (but subject to the terms of the Merger Agreement), or (ii)
the Purchaser and the Company, shall have extended the period of time during
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by the Purchaser,
or by the Purchaser and the Company, shall expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Tender Condition. See Section 15. If such conditions are not satisfied
prior to the Expiration Date, the Purchaser reserves the right (but shall not
be obligated), subject to the terms of the Merger Agreement, to (i) decline to
purchase any of the Shares tendered and terminate the Offer, (ii) waive any of
the conditions to the Offer, to the extent permitted by applicable law, and,
subject to complying with applicable rules and regulations of the Commission,
purchase all Shares validly tendered or (iii) extend the Offer and, subject to
the right of shareholders to withdraw Shares until the Expiration Date, retain
the Shares tendered during the period or periods for which the Offer is
extended.
Subject to the Merger Agreement, including the restrictions discussed below,
and the applicable rules and regulations of the Commission, the Purchaser
reserves the right, in its sole discretion, at any time and from time to time,
and regardless of whether any of the events set forth in Section 15 have
occurred or been determined by the Purchaser to have occurred, to (a) subject
to the limitation described below, extend the period of time during which the
Offer is open, and thereby delay acceptance for payment of any Shares, by
giving oral or written notice of such extension and delay to the Depositary or
(b) waive any condition or amend the Offer in any other respect by giving oral
or written notice of such waiver or amendment to the Depositary. During any
such extension, all Shares previously tendered and not properly withdrawn will
remain subject to the Offer, subject to the right of a tendering shareholder
to withdraw such shareholder's Shares. See Section 3. Under no circumstances
will interest be paid on the purchase price for tendered Shares, whether or
not the Purchaser exercises its right to extend the Offer. In the Merger
Agreement, the Parent, the Purchaser and the Company have agreed that the
Purchaser may extend the Offer for one or more periods not to exceed 30 days
in the aggregate without the prior written consent of the Company. In
addition, the Purchaser has agreed in the Merger Agreement that it will not,
without the express written consent of the Company, (i) reduce the maximum
number of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) add
to or modify the conditions set forth in Section 15, (iv) extend the Offer,
except as provided above, or (v) change the form of consideration payable in
the Offer.
The rights reserved by the Purchaser in the two preceding paragraphs are in
addition to the Purchaser's rights pursuant to Section 15. There can be no
assurance that the Purchaser will exercise its right to extend the Offer. Any
extension, amendment, delay, waiver or termination will be followed as
promptly as practicable by public announcement. In the case of an extension,
Rule 14e-1(d) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires that the announcement be issued no later than the
earlier of (i) 9:00 a.m., New York City time, on the next business day after
the previously scheduled Expiration Date, or (ii) the first opening of the
Nasdaq National Market of the Nasdaq Stock Market ("Nasdaq") on the next
business day after the previously scheduled Expiration Date, in accordance
with the public announcement requirements of Rule 14e-1 under the Exchange
Act. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under
the Exchange Act, which require that any material change in the information
published, sent or given to shareholders in connection with the Offer be
promptly disseminated to shareholders in a manner reasonably designed to
inform shareholders of such change), and without limiting the manner in which
the Purchaser may choose to make any
3
<PAGE>
public announcement, the Purchaser will not have any obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones News Service. As used in this Offer to
Purchase, "business day" has the meaning set forth in Rule 14d-1 under the
Exchange Act.
If the Offer is extended, or if the Purchaser (whether before or after its
acceptance for payment of Shares) is delayed in its acceptance for payment of
or payment for Shares or is unable to pay for Shares pursuant to the Offer for
any reason, then, without prejudice to the Purchaser's rights under the Offer,
the Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in Section 3. However, the ability
of the Purchaser to delay the payment for Shares that the Purchaser has
accepted for payment is limited by Rule 14e-1 under the Exchange Act, which
requires that a bidder pay the consideration offered or return the securities
deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend
the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under
the Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in the percentage of
securities sought or any dealer solicitation fee, will depend upon the facts
and circumstances then existing, including the relative materiality of the
changed terms or information. With respect to a change in price or a change in
the percentage of securities sought, a minimum period of 10 business days is
generally required to allow for adequate dissemination of such information to
shareholders.
Consummation of the Offer is conditioned upon satisfaction of the Minimum
Tender Condition and the other conditions set forth in Section 15. Subject to
the terms and conditions contained in the Merger Agreement, the Purchaser
reserves the right (but shall not be obligated) to waive any or all such
conditions.
The Company has provided the Purchaser with the Company's shareholder lists
and security position listings for the purpose of disseminating the Offer to
holders of the Shares. This Offer to Purchase, the related Letter of
Transmittal and other relevant materials will be mailed to record holders of
Shares and furnished to brokers, dealers, commercial banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on the
shareholder lists or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
2. Procedure for Tendering Shares
Valid Tender. For a shareholder validly to tender Shares pursuant to the
Offer, either (i) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees or, in
the case of a book-entry transfer, an Agent's Message (as defined below), and
any other documents required by the Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase, and either certificates for tendered Shares must be
received by the Depositary at one of such addresses or such Shares must be
delivered pursuant to the procedure for book-entry transfer set forth below
(and a Book-Entry Confirmation (as defined below) received by the Depositary),
in each case prior to the Expiration Date, or (ii) the tendering shareholder
must comply with the guaranteed delivery procedure set forth below.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
the Book-Entry Transfer Facility's system may make book-entry delivery of
Shares by causing the Book-Entry Transfer Facility to transfer such Shares
into the Depositary's account in accordance with the Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer into the Depositary's account at
the Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile
thereof),
4
<PAGE>
properly completed and duly executed, with any required signature guarantees,
or an Agent's Message, and any other required documents, must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration
Date, or the tendering shareholder must comply with the guaranteed delivery
procedure described below. The confirmation of a book- entry transfer of
Shares into the Depositary's account at the Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation."
Delivery of documents to the Book-Entry Transfer Facility in accordance with
the Book-Entry Transfer Facility's procedures does not constitute delivery to
the Depositary.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
The method of delivery of Shares, the Letter of Transmittal and all other
required documents, including delivery through the Book-Entry Transfer
Facility, is at the election and risk of the tendering shareholder. Shares
will be deemed delivered only when actually received by the Depositary. If
delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
ensure timely delivery.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal if (i) the Letter of Transmittal is signed by the registered
holder of Shares (which, for purposes of this Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on
a security position listing as the owner of the Shares) tendered therewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on
the Letter of Transmittal or (ii) such Shares are tendered for the account of
a firm that is a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (each, an "Eligible Institution"). In all
other cases, all signatures on the Letter of Transmittal must be guaranteed by
an Eligible Institution. See Instructions 1 and 5 to the Letter of
Transmittal. If the certificates for Shares are registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made or certificates for Shares not tendered or not accepted for payment
are to be issued to a person other than the registered holder of the
certificates surrendered, the tendered certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as
described above. See Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for Shares are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such shareholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Purchaser is received by the
Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and any other documents
required by the Letter of Transmittal, are received by the Depositary
within three trading days after the date of execution of such Notice of
Guaranteed Delivery. A "trading day," for purposes of the preceding
sentence, is any day on which the Nasdaq National Market is open for
business.
5
<PAGE>
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares (or a timely
Book-Entry Confirmation of a transfer of such Shares as described in Section
2), (ii) a Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees or, in the case of a
book-entry transfer, an Agent's Message, and (iii) any other documents
required by the Letter of Transmittal. Accordingly, tendering shareholders may
be paid at different times depending upon when certificates for Shares or
Book-Entry Confirmations are actually received by the Depositary. Under no
circumstances will interest be paid by the Purchaser on the purchase price of
the Shares, regardless of any extension of the Offer or any delay in making
such payment.
The valid tender of Shares pursuant to one of the procedures described above
will constitute a binding agreement between the tendering shareholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
Appointment. By executing a Letter of Transmittal as set forth above
(including through delivery of an Agent's Message), the tendering shareholder
will irrevocably appoint designees of the Purchaser as such shareholder's
attorneys-in-fact and proxies in the manner set forth in the Letter of
Transmittal, each with full power of substitution, to the full extent of such
shareholder's rights with respect to the Shares tendered by such shareholder
and accepted for payment by the Purchaser and with respect to any and all
other Shares or other securities or rights issued or issuable in respect of
such Shares on or after the date hereof. All such proxies shall be considered
irrevocable and coupled with an interest in the tendered Shares. Such
appointment will be effective when, and only to the extent that, the Purchaser
accepts for payment Shares tendered by such shareholder as provided herein.
Upon such acceptance for payment, all prior powers of attorney and proxies
given by such shareholder with respect to such Shares or other securities or
rights will, without further action, be revoked and no subsequent powers of
attorney and proxies may be given (and, if given, will not be deemed
effective). The designees of the Purchaser will thereby be empowered to
exercise all voting and other rights with respect to such Shares or other
securities or rights in respect of any annual, special or adjourned meeting of
the Company's shareholders, or otherwise, as they in their sole discretion
deem proper. The Purchaser reserves the right to require that, in order for
Shares to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Shares, the Purchaser must be able to exercise
full voting and other rights with respect to such Shares and other securities
or rights, including voting at any meeting of shareholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which
determination will be final and binding. The Purchaser reserves the absolute
right to reject any or all tenders determined by it not to be in proper form
or the acceptance for payment of or payment for which may, in the opinion of
the Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right to waive any defect or irregularity in any tender with respect to any
particular Shares, whether or not similar defects or irregularities are waived
in the case of other Shares. No tender of Shares will be deemed to have been
validly made until all defects or irregularities relating thereto have been
cured or waived. None of the Purchaser, the Parent, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter
of Transmittal and the instructions thereto) will be final and binding on all
parties.
Backup Withholding. In order to avoid "backup withholding" of Federal income
tax on payments of cash pursuant to the Offer, a shareholder surrendering
Shares in the Offer must provide the Depositary with such shareholder's
correct taxpayer identification number ("TIN") on a Substitute Form W-9 and
certify under penalty of perjury that such TIN is correct and that such
shareholder is not subject to backup withholding. Certain
6
<PAGE>
shareholders (including, among others, all corporations and certain foreign
individuals and entities) are not subject to backup withholding. If a
shareholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may
impose a penalty on such shareholder and payment of cash to such shareholder
pursuant to the Offer may be subject to backup withholding of 31%. All
shareholders surrendering Shares pursuant to the Offer should complete and
sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification
necessary to avoid backup withholding (unless an applicable exemption exists
and is proved in a manner satisfactory to the Purchaser and the Depositary).
Noncorporate foreign shareholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See
Instruction 9 to the Letter of Transmittal.
3. Withdrawal Rights
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant
to the procedures set forth below at any time prior to the Expiration Date
and, unless theretofore accepted for payment and paid for by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after August 23,
1999.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase and must
specify the name of the person having tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder of the
Shares to be withdrawn, if different from the name of the person who tendered
the Shares. If certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution, the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been tendered pursuant
to the procedures for book-entry delivery set forth in Section 2, any notice
of withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with the Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by again following
one of the procedures described in Section 2 at any time prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, the Parent, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
4. Acceptance for Payment and Payment
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and pay, as promptly as
practicable after the Expiration Date, for all Shares validly tendered prior
to the Expiration Date and not properly withdrawn in accordance with Section
3. Any determination concerning the satisfaction of such terms and conditions
will be within the discretion of the Purchaser, and such determination will be
final and binding on all tendering shareholders. See Sections 1 and 15. The
Purchaser expressly reserves the right, in its sole discretion, to delay
acceptance for payment of or payment for Shares in order to comply in whole or
in part with any applicable law. Any such delays will be effected in
compliance with Rule 14e-1(c) under the Exchange Act (relating to the
Purchaser's obligation to pay for or return tendered Shares promptly after the
termination or withdrawal of the Offer).
7
<PAGE>
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
for such Shares (or timely Book-Entry Confirmation of a transfer of such
Shares as described in Section 2), (ii) a Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
(iii) any other documents required by the Letter of Transmittal. The per Share
consideration paid to any shareholder pursuant to the Offer will be the
highest per Share consideration paid to any other shareholder pursuant to the
Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to the Purchaser and
not properly withdrawn as, if and when the Purchaser gives oral or written
notice to the Depositary of the Purchaser's acceptance for payment of such
Shares. Upon the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering shareholders whose Shares have been
accepted for payment. Under no circumstances will interest be paid by the
Purchaser on the purchase price of the Shares, regardless of any extension of
the Offer or any delay in making such payment.
Upon the deposit of funds with the Depositary for the purpose of making
payments to tendering shareholders, the Purchaser's obligation to make such
payment shall be satisfied and tendering shareholders must thereafter look
solely to the Depositary for payment of amounts owed to them by reason of the
acceptance for payment of Shares pursuant to the Offer. The Purchaser will pay
stock transfer taxes with respect to the transfer and sale to it or its order
pursuant to the Offer, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, as well as any charges and expenses of the Depositary
and the Information Agent.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange
Act, which requires that a tender offeror pay the consideration offered or
return the tendered securities promptly after the termination or withdrawal of
a tender offer), the Depositary may, nevertheless, on behalf of the Purchaser,
retain tendered Shares, and such Shares may not be withdrawn except to the
extent tendering shareholders are entitled to exercise, and duly exercise,
withdrawal rights as described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer because of an
invalid tender or otherwise, the certificates for such Shares will be
returned, and if certificates are submitted for more Shares than are tendered,
new certificates for the Shares not tendered will be sent, in each case
without expense, to the tendering shareholder (or, in the case of Shares
delivered by book-entry transfer of such Shares into the Depositary's account
at the Book-Entry Transfer Facility pursuant to the procedure set forth in
Section 2, such Shares will be credited to an account maintained at the Book-
Entry Transfer Facility), as promptly as practicable after the expiration or
termination of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to the Parent, or to one or more direct or indirect
wholly owned subsidiaries of the Parent, the right to purchase Shares tendered
pursuant to the Offer. Any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering shareholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
5. Certain Federal Income Tax Consequences
Sales of Shares pursuant to the Offer (and the receipt of cash by
shareholders of the Company pursuant to the Merger) will be taxable
transactions for Federal income tax purposes under the Internal Revenue Code
of 1986, as amended (the "Code"), and may also be taxable transactions under
applicable state, local, foreign and other tax laws. Generally, for federal
income tax purposes, a tendering shareholder will generally recognize gain
8
<PAGE>
or loss equal to the difference between the amount of cash received by the
shareholder pursuant to the Offer (or pursuant to the Merger) and the
aggregate tax basis in the Shares tendered by the shareholder and purchased
pursuant to the Offer (or converted pursuant to the Merger). Gain or loss will
be calculated separately for each block of Shares tendered and purchased
pursuant to the Offer (or converted pursuant to the Merger).
If tendered Shares are held by a tendering shareholder as capital assets,
gain or loss recognized by the tendering shareholder will be capital gain or
loss, which will be long-term capital gain or loss if the tendering
shareholder's holding period for the Shares exceeds one year. Long-term
capital gains recognized by a tendering individual shareholder will generally
be taxed at a maximum federal income tax rate of 20%. The ability to deduct
capital losses is subject to limitations.
A shareholder (other than certain exempt shareholders including, among
others, all corporations) that tenders Shares may be subject to 31% backup
withholding unless the shareholder provides its TIN and certifies that such
number is correct or properly certifies that it is awaiting a TIN and
certifies as to no loss of exemption from backup withholding and otherwise
complies with the applicable requirements of the backup withholding rules. A
shareholder that does not furnish its correct TIN or that does not otherwise
establish a basis for an exemption from backup withholding may be subject to a
penalty imposed by the IRS. Each shareholder should complete and sign the
Substitute Form W-9 included as part of the Letter of Transmittal so as to
provide the information and certification necessary to avoid backup
withholding (unless an applicable exemption exists and is proved in a manner
satisfactory to the Purchaser and the Depositary).
If backup withholding applies to a shareholder, the Depositary is required
to withhold 31% from payments to such shareholder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be
credited against the Federal income tax liability of the person subject to the
backup withholding, provided that the required information is given to the
IRS. If backup withholding results in an overpayment of tax, a refund can be
obtained by the shareholder upon filing an income tax return.
The foregoing discussion is included for general information only and may
not be applicable with respect to Shares received as compensation or with
respect to holders of Shares who are subject to special tax treatment under
the Code, such as non-U.S. persons, life insurance companies, tax-exempt
organizations and financial institutions, and may not apply to a holder of
Shares in light of its individual circumstances, such as persons who hold
their Shares as a hedge or as part of a hedging, straddle, conversion or other
risk reduction transaction. Shareholders are urged to consult their own tax
advisors to determine the particular tax consequences to them (including the
application and effect of any state, local or foreign income and other tax
laws) of the Offer and the Merger.
9
<PAGE>
6. Price Range of the Shares; Dividends on the Shares
The Shares are traded on Nasdaq and prices reflecting such trading are
published by the National Association of Securities Dealers, Inc. under the
symbol "DRKN." The following table sets forth, for each of the periods
indicated, the high and low sales prices per Share as reported in publicly
available sources for the periods indicated.
<TABLE>
<CAPTION>
Sales Price
---------------
High Low
------- -------
<S> <C> <C>
1997
First Quarter............................................ $15 $10 3/4
Second Quarter........................................... 11 1/2 9 1/4
Third Quarter............................................ 10 8 1/2
Fourth Quarter........................................... 9 3/4 7 3/4
1998
First Quarter............................................ 9 1/4 7
Second Quarter........................................... 11 1/4 9 1/4
Third Quarter............................................ 13 9
Fourth Quarter........................................... 11 1/2 9 1/2
1999
First Quarter............................................ 12 3/4 8 7/8
Second Quarter (through June 24, 1999)................... 15 7/8 10 7/8
</TABLE>
On June 16, 1999, the last full day of trading before the public
announcement of the execution of the Merger Agreement, the reported closing
sale price of the Shares on the Nasdaq National Market was $12 1/16 per Share.
On June 24, 1999, the last full day of trading before the commencement of the
Offer, the reported last sale price of the Shares on the Nasdaq National
Market was $15 17/32 per Share.
Shareholders are urged to obtain current market quotations for the Shares.
Since its inception, the Company has not declared or paid any dividends on
shares of its capital stock.
7. Effect of the Offer on the Market for the Shares; Stock Quotation; Exchange
Act Registration; Margin Regulations
The Purchaser intends to seek to cause the Company to terminate the
registration of the Shares under the Exchange Act as soon after the completion
of the Offer as the requirements for such termination are met. If registration
of the Shares is not terminated prior to the Merger, the registration of the
Shares under the Exchange Act will be terminated following the consummation of
the Merger.
Market for the Common Shares. The purchase of Shares pursuant to the Offer
will reduce the number of holders of Shares and the number of Shares that
might otherwise trade publicly and could adversely affect the liquidity and
market value of the remaining Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of Nasdaq for continued designation
for the Nasdaq National Market. To maintain such designation, a security must
substantially meet one of two maintenance standards. The first maintenance
standard requires that (i) there be 750,000 publicly held shares, (ii) the
publicly held shares have a market value of $5 million, (iii) the issuer have
net tangible assets of at least $4 million, (iv) there be 400 shareholders of
round lots, (v) the minimum bid price per share be $1.00 and (vi) there be at
least two registered and active market makers. The second maintenance standard
requires that (i) the issuer have either (A) a market capitalization of $50
million or (B) total assets and total revenue of $50 million each for the most
recently completed fiscal year or two of the last three most recently
completed fiscal years, (ii) there be 1,100,000 shares publicly held, (iii)
the publicly held
10
<PAGE>
shares have a market value of $15 million, (iv) the minimum bid price per
share be $5.00, (v) there be 400 shareholders of round lots and (vi) there be
at least four registered and active market makers.
If these standards for continued designation for the Nasdaq National Market
are not met, the Shares might nevertheless continue to be included in the
Nasdaq SmallCap Market. Continued inclusion in the Nasdaq SmallCap Market,
however, would require that (i) there be 300 round lot holders, (ii) there be
at least 500,000 publicly held shares, (iii) the publicly held shares have a
market value of at least $1 million, (iv) there be two registered and active
market makers, of which one may be entering stabilizing bids and (v) the
issuer have either (A) net tangible assets of at least $2 million, (B) market
capitalization of at least $35 million or (C) net income of $500,000 in the
most recently completed fiscal year or in two of the last three most recently
completed fiscal years. Shares held directly or indirectly by directors,
officers or beneficial owners of more than 10% of the Shares are not
considered as being publicly held for the purpose of determining whether
either of the Nasdaq listing criteria were met. According to the Company, as
of June 17, 1999, there were approximately 298 holders of record of Shares and
6,125,200 Shares outstanding.
If the purchase of Shares pursuant to the Offer causes the Shares to no
longer meet the requirements for continued inclusion in the Nasdaq National
Market or the Nasdaq SmallCap Market as a result of a reduction in the number
or market value of publicly held Shares or the number of round lot holders or
otherwise, as the case may be, the market for Shares could be adversely
affected. It is possible that the Shares would continue to trade in the over-
the-counter market and that price quotations would be reported by other
sources. The extent of the public market for the Shares and the availability
of such quotations, however, would depend upon the number of holders of Shares
remaining at such time, the interests in maintaining a market in Shares on the
part of securities firms, the possible termination of registration of the
Shares under the Exchange Act, as described below, and other factors.
Exchange Act Registration. Registration of the Shares under the Exchange Act
may be terminated upon application of the Company to the Commission if the
Shares are neither listed on a national securities exchange nor held by 500 or
more holders of record. Termination of registration of the Shares under the
Exchange Act would, subject to Section 15(d) of the Exchange Act,
substantially reduce the information required to be furnished by the Company
to its shareholders and to the Commission and would make certain provisions of
the Exchange Act no longer applicable to the Company, such as the shortswing
profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy or information statement pursuant to Section
14(a) or (c) of the Exchange Act in connection with shareholders' meetings and
the related requirement of furnishing an annual report to shareholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions. Furthermore, the ability of "affiliates" of the Company
and persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act
of 1933, as amended, may be impaired or eliminated. The Purchaser intends to
seek to cause the Company to apply for termination of registration of the
Shares under the Exchange Act as soon after the completion of the Offer as the
requirements for such termination are met.
If registration of the Shares is not terminated prior to the Merger, then
trading of the Shares will cease to be reported on Nasdaq and the registration
of the Shares under the Exchange Act will be terminated following the
consummation of the Merger.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Shares. Depending
upon factors similar to those described above regarding listing and market
quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers. If registration of Shares under the
Exchange Act were terminated, the Shares would no longer be "margin
securities" or be eligible for Nasdaq reporting.
11
<PAGE>
8. Certain Information Concerning the Company
General. The Company is a Michigan corporation with its principal executive
offices at 2101 N. Lapeer Road, Lapeer, Michigan 48846, telephone no. (810)
664-0850. According to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 (the "Annual Report"), the Company operates in
two segments, the vehicle accessories segment in which it manufactures one-
piece, seamless pickup truck bedliners, and the towing and recovery segments,
in which it manufactures and distributes rollback carriers and tow trucks for
use in the vehicle transportation, towing and recovery industry.
Selected Financial Information. Set forth below is certain selected
consolidated financial information with respect to the Company excerpted or
derived from the information contained in the Annual Report, as well as from
the information contained in the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1999, which are incorporated herein by reference.
More comprehensive financial information is included in such reports and other
documents filed by the Company with the Commission, and the following summary
is qualified in its entirety by reference to such reports and such other
documents and all the financial information (including any related notes)
contained therein. Such reports and other documents should be available for
inspection and copies thereof should be obtainable in the manner set forth
below under "Available Information."
Durakon Industries , Inc.
Selected Consolidated Financial Information
(in thousands)
<TABLE>
<CAPTION>
Three Months
Ended March 31, Year Ended December 31,
--------------- --------------------------
1999 1998 1998 1997 1996
------- ------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales......................... $45,321 $46,068 $192,358 $179,908 $183,628
Operating income.................. 2,708 2,332 12,354 735 13,133
Net income........................ 1,754 1,361 7,909 1,103 8,904
</TABLE>
<TABLE>
<CAPTION>
At March 31, At December 31,
------------ ---------------
1999 1998 1997
------------ ------- -------
(unaudited)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working Capital................................. $44,303 $41,767 $31,681
Total assets.................................... 89,144 87,768 83,092
Long-Term Obligations........................... 771 801 554
Total shareholders' equity...................... 70,754 68,903 62,286
</TABLE>
Available Information. The Company is subject to the reporting requirements
of the Exchange Act and, in accordance therewith, is required to file reports
and other information with the Commission relating to its business, financial
condition and other matters. Certain information as of particular dates
concerning the Company's directors and officers, their remuneration, the
principal holders of the Company's securities and any material interest of
such persons in transactions with the Company is required to be disclosed in
proxy statements distributed to the Company's shareholders and filed with the
Commission. Such reports, proxy statements and other information should be
available for inspection at the public reference facilities of the Commission
located at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located in the Northwestern Atrium Center, 500 West
Madison Street (Suite 1400), Chicago, Illinois 60661 and Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies should be obtainable, by
mail, upon payment of the Commission's customary charges, by writing to the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission also maintains a World Wide Web site on the internet at
http://www.sec.gov that contains reports and certain other information
regarding registrants that file electronically with the Commission. Such
information should also be on file at The Nasdaq Stock Market, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
12
<PAGE>
Company Information. Except as otherwise stated in the next paragraph, the
information concerning the Company contained herein has been taken from or
based upon publicly available documents on file with the Commission and other
publicly available information. Although the Purchaser and the Parent do not
have any knowledge that any such information is untrue, neither the Purchaser
nor the Parent takes any responsibility for the accuracy or completeness of
such information or for any failure by the Company to disclose events that may
have occurred and may affect the significance or accuracy of any such
information.
The Company prepared a Confidential Memorandum which was used to solicit
potential purchasers, including the Parent. The Confidential Memorandum
contained certain information about the Company which is not publicly
available, including certain financial forecasts for the Company for 1999,
2000 and 2001. These forecasts included the following information (in
millions): Net sales--$203.2, $223.2 and $285.8, respectively; EBIT--$12.9,
$16.9 and $28.9, respectively; capital expenditures--$9.3, $8.1 and $5.4,
respectively; and stockholders' equity--$74.0, $84.1 and $100.1, respectively.
The forecasts included in the Confidential Memorandum are dated January 1999
and no updates or modifications were made available to the Parent.
Accordingly, these forecasts do not reflect the Company's actual performance
during 1999, changes in the Company's business or in the economy in general
since the forecasts were prepared, or prospective changes in the Company's
business or in the economy in general resulting from events which have
occurred since the forecasts were prepared. The forecasts were not prepared
with a view to complying with the published guidelines of the Commission
regarding projections or with the AICPA Guide for Prospective Financial
Statements and are included in this Offer to Purchase only because they were
furnished to the Parent. The forecasts necessarily reflect numerous
assumptions with respect to industry performance, general business and
economic conditions and other matters, many of which are inherently uncertain
or beyond the Company's control. One cannot predict whether the assumptions
made in preparing the forecasts will be accurate, and actual results may be
materially higher or lower than those contained in the forecasts. The
inclusion of this information should not be regarded as an indication that the
Parent, the Purchaser, the Company, or anyone who received this information
considered it a reliable predictor of future events, and this information
should not be relied on as such. None of the Parent, the Purchaser, the
Company, or any other person or entity assumes any responsibility for the
validity, reasonableness, accuracy or completeness of the forecasts and the
Company has made no representation to the Parent or the Purchaser regarding
the forecasts as described above.
9. Certain Information Concerning the Purchaser and the Parent
The Purchaser, a Michigan corporation and a wholly owned subsidiary of the
Parent was organized in June 1999 to facilitate the Parent's acquisition of
control of, and the entire equity interest in, the Company upon the successful
completion of the Merger. The principal offices of the Purchaser are located
at 115 East Putnam Avenue, Greenwich, Connecticut 06830, telephone no. (203)
861-4005. All outstanding shares of capital stock of the Purchaser are owned
by the Parent. The Purchaser does not have any significant assets or
liabilities and has not engaged in activities other than those incidental to
its formation and capitalization, its execution of the Merger Agreement and
preparation of the Offer and the Merger. Because the Purchaser is newly formed
and has minimal assets and capitalization, no meaningful financial information
regarding the Purchaser is available.
LPIV, LLC, a Delaware limited liability company ("LPIV"), and a wholly owned
subsidiary of the Purchaser, was organized in June 1999 to facilitate the
Parent's acquisition of control of, and the entire equity interest in, the
Company upon the successful completion of the Merger. The principal offices of
LPIV are located at 115 East Putnam Avenue, Greenwich, Connecticut 06830. LPIV
does not have any significant assets or liabilities and has not engaged in
activities other than those incidental to its formation and capitalization and
its preparation for the Merger and the Offer. Because LPIV is newly formed and
is a non-operating subsidiary with minimal assets and capitalization, no
meaningful financial information regarding LPIV is available.
The Parent, a Delaware limited partnership, was organized in June 1999 as an
investment partnership to acquire the stock and operate the business of the
Company upon the successful completion of the Merger. The Parent has not
conducted any operations to date. The Parent is a Delaware limited partnership
with its principal office located at 115 East Putnam Avenue, Greenwich,
Connecticut 06830. The Parent's general partner is Littlejohn Associates, LLC,
a Delaware limited liability company with its principal office located at 115
East Putnam Avenue, Greenwich, Connecticut 06830.
13
<PAGE>
Neither the Parent, LPIV nor the Purchaser are subject to the reporting
requirements of the Exchange Act and, therefore, they do not file reports or
other information with the Commission relating to their business, financial
condition or other matters.
On the date that the Purchaser accepts the Shares for payment the Parent
will have equity capital of approximately $25 million. In addition, LPIV will
have available to it approximately $77 million under the Credit Facilities as
defined and described in more detail in Section 10, and the Company will have
at least $15 million of cash on hand. Neither the Parent, LPIV nor the
Purchaser have any liabilities, other than accrued transaction expenses. The
consolidated unaudited balance sheet of the Parent as of June 17, 1999,
adjusted to reflect the contribution of committed equity capital, is as
follows:
Littlejohn Partners IV, L.P.
Consolidated Adjusted Balance Sheet
(in thousands)
<TABLE>
<CAPTION>
At June 17, 1999
----------------
(Unaudited)
<S> <C>
ASSETS:
Cash......................................................... $25,000
Total assets................................................. $25,000
LIABILITIES AND PARTNERS' EQUITY:
Accrued transaction expenses................................. $1,000
Partners' equity............................................. $24,000
Total liabilities and partners' equity....................... $25,000
=======
</TABLE>
Except as described in this Offer to Purchase, neither the Parent, LPIV nor
the Purchaser (together, the "Purchasing Entities") nor, to the best knowledge
of the Purchasing Entities, any of the persons listed in Schedule I (or any
associate or majority owned subsidiary of the Purchasing Entities or any of
the persons so listed), beneficially owns any equity security of the Company,
and none of the Purchasing Entities or, to the best knowledge of the
Purchasing Entities, any of the other persons referred to above, or any of the
respective directors, executive officers or subsidiaries of any of the
foregoing, has effected any transaction in any equity security of the Company
during the past 60 days.
Except as described in this Offer to Purchase, (i) there have not been any
contacts, transactions or negotiations between the Purchasing Entities, any of
their respective subsidiaries or, to the best knowledge of the Purchasing
Entities, any of the persons listed in Schedule I, on the one hand, and the
Company or any of its directors, officers or affiliates, on the other hand,
that are required to be disclosed pursuant to the rules and regulations of the
Commission and (ii) none of the Purchasing Entities or, to the best knowledge
of the Purchasing Entities, any of the persons listed in Schedule I has any
contract, arrangement, understanding or relationship with any person with
respect to any securities of the Company.
Except as described in this Offer to Purchase, during the last five years,
none of the Purchasing Entities or, to the best knowledge of the Purchasing
Entities, any of the persons listed in Schedule I (i) has been convicted in a
criminal proceeding (excluding traffic violations and 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 activities subject to, Federal or state securities laws or finding
any violation of such laws. The name, business address, present principal
occupation or employment, five year employment history and citizenship of each
of the directors and executive officers of the Purchaser, LPIV and the Parent
are set forth in Schedule I.
10. Source and Amount of Funds
The Parent estimates that the total amount of funds required by the
Purchaser to acquire the tendered Shares pursuant to the Offer, to consummate
the Merger under the Merger Agreement, to refinance any indebtedness of the
Company which may become payable as a result of the Offer and the Merger, to
pay holders of Company Stock Options in connection with the Offer and Merger
and to pay estimated fees and expenses related to the Offer and the Merger
will be approximately $108 million. The Purchaser expects to obtain all funds
needed to consummate the Offer and the Merger through contributions or
advances made by the Parent, through
14
<PAGE>
distributions from LPIV, and from cash on hand at the Company. On the date
that the Purchaser accepts the Shares for payment, the Parent will have
approximately $25 million of cash from capital contributions of its partners,
substantially all of which will be available as a capital contribution or
other advance to the Purchaser to fund the Offer and the Merger. The Purchaser
will also have at least $15 million in cash available to it from the Company
at the Effective Time. LPIV expects to obtain funds for its distribution to
the Purchaser pursuant to a Credit Agreement to be entered into in accordance
with a financing commitment letter (the "Commitment Letter") dated June 14,
1999 from BankBoston, N.A., as administrative agent (the "Agent") for several
lenders (the "Lenders"), and BancBoston Robertson Stephens Inc., as arranger
and syndication manager. BancBoston Investments Inc., an affiliate of the
Agent, will own approximately 10% of all outstanding limited partnership
interests of the Parent as of the date that Parent accepts for payment the
Shares pursuant to the Offer.
Pursuant to the Commitment Letter, the Agent has committed to provide (i) a
term loan facility of up to $20 million (the "Term A Facility") and a separate
term loan facility of up to $27 million (the "Term B Facility"), each to
finance the acquisition of Shares pursuant to the Offer and the Merger (the
"Purchase"), to refinance indebtedness, if any, of the Company and its
subsidiaries (the "Refinancing"), and to pay related fees and expenses, and
(ii) a revolving credit facility in the maximum aggregate amount of $30
million (the "Revolving Credit Facility" and, together with the Term A and
Term B Facilities, the "Credit Facilities"), to provide working capital to,
and for other general corporate purposes of, LPIV and its affiliates
(including, without limitation, the Company and its subsidiaries) and to
finance the Purchase and the Refinancing (including related fees and
expenses). The Commitment Letter provides for a closing fee equal to 1.75% of
the aggregate amount of the Credit Facilities, plus a facility fee with
respect to unused amounts under the Revolving Credit Facility based on the Net
Funded Debt to EBITDA ratio (as those terms are defined in the Commitment
Letter) of the Company and its subsidiaries.
The Commitment Letter is subject to customary conditions. Obligations under
the Credit Facilities will be jointly and severally guaranteed by all domestic
operating subsidiaries of the Company and its subsidiaries, and will be
secured by a security interest in substantially all tangible and intangible
assets (including all intellectual property and rights to payments and related
intangibles) of the Company and its subsidiaries, except any and all fixed
assets of the Company's Mexican subsidiary, Durakon Mexicana, S.A. de C.V.
("Duramex"). The Company and its subsidiaries will pledge all of the
outstanding capital stock of their domestic subsidiaries to the Lenders. The
Company will also pledge to the Lenders the capital stock owned by it of
Duramex.
The Term A Facility will have a final maturity of December 31, 2004 and will
be due and payable in consecutive quarterly installments based upon an
amortization schedule set forth in the Commitment Letter. The Term B Facility
will have a final maturity of December 31, 2006 and will be due and payable in
consecutive quarterly installments based upon an amortization schedule set
forth in the Commitment Letter. The Revolving Credit Facility will be due and
payable on December 31, 2004. The Credit Facilities will bear interest, at the
Parent's option, at (i) the Alternate Base Rate plus the Applicable Margin (as
such terms are defined in the Commitment Letter) or (ii) LIBOR plus the
Applicable Margin.
The Commitment Letter also includes an obligation on the part of the Company
to indemnify the Lender against certain liabilities. The foregoing summary of
the Commitment Letter is qualified in its entirety by references to the text
of the Commitment Letter, which is filed with the Commission as an exhibit to
the Tender Offer Statement on Schedule 14D-1 (the "Tender Offer Statement")
filed by the Parent, LPIV and the Purchaser.
It is currently anticipated that the indebtedness incurred in connection
with the Offer and the Merger will be repaid from current funds, and
additional funds generated internally by the Company and its subsidiaries
after the Merger, and through other sources that may be available from time to
time.
11. Contacts with the Company; Background of the Offer
On February 4, 1999, the Parent was contacted by Lazard Freres which
indicated that it, together with J.I. Harris & Associates (together with
Lazard Freres, the "Investment Bankers"), had been retained by the Company to,
among other things, solicit offers to acquire the Company. Lazard Freres
inquired whether
15
<PAGE>
the Parent would be interested in acquiring the Company. On February 5, 1999,
the Parent entered into a confidentiality agreement with the Company, which is
described in Section 12 and a copy of which has been filed as an exhibit to
the Tender Offer Statement (the "Confidentiality Agreement").
Based on the preliminary due diligence information provided by the Company
(including through Lazard Freres), on February 25, 1999, the Parent advised
Lazard Freres that the Parent might be interested, subject to further due
diligence, in acquiring the Company at a price between $15.50 and $17.50 per
share. Based on this preliminary indication of interest, the Parent was
invited by the Investment Bankers to participate in a more formal bidding
process along with certain others who had expressed interest in acquiring the
Company.
From March 22, 1999 to April 23, 1999, the Parent continued to perform due
diligence of the Company, including reviewing information that was made
available through the Company's outside counsel and accountants, and worked
with its counsel to structure a possible transaction. During this time, the
Parent also engaged in discussions regarding a possible transaction with
potential sources of bank financing, including BankBoston, N.A.
On April 23, 1999, the Parent submitted a non-binding proposal to acquire
100% of the Shares at $16.50 per share. The Parent indicated that it expected
to be able to proceed with a two-step transaction involving a tender offer to
be followed by a second step merger, the Company's preferred transaction
structure. The proposal also included a memorandum prepared by the Parent's
counsel outlining conceptual comments to the draft Merger Agreement which had
been submitted to all potential bidders for the Company, and the requirement
that directors, officers and selected shareholders of the Company sign the
Shareholder Agreements and grant an irrevocable proxy to the Parent, all in
support of the proposed transaction.
The Parent indicated that its proposal was subject to final due diligence by
it and its financing sources, which it advised the Company it expected could
be completed within approximately 30 days, assuming the full cooperation of
the Company and its advisors. To induce the Parent to proceed, the Parent
required that the Company, and all persons acting on behalf of the Company,
cease any further discussions with any other person or entity involving an
alternative transaction, and that the Company grant to the Parent a 30-day
exclusivity period, subject to the ability of the Board of Directors of the
Company to respond in accordance with its fiduciary duties under the MBCA if
it received an unsolicited proposal involving a competing transaction where
the price per share exceeded $16.50. During the next several days,
representatives of the Parent and Lazard Freres had telephone conversations
regarding the terms and conditions of the Parent's proposal. A representative
of Lazard Freres requested that the Parent submit detailed comments to the
draft Merger Agreement so that the Company could better evaluate the Parent's
proposal. On April 29, 1999, counsel for the Parent submitted a mark-up of the
draft Merger Agreement to counsel for the Company. On May 3, 1999, the Company
agreed to permit the Parent to proceed with its final due diligence and
granted the Parent a 30-day exclusivity period.
During the exclusivity period, representatives of the Parent, its
professional advisors, including its attorneys and accountants, and its
environmental, benefits and insurance consultants, and representatives of
BankBoston, N.A., met at various times with representatives of the Company,
both in person and on the telephone, and reviewed various contracts,
agreements and other documents made available by the Company at a data room
established at the offices of the Company's counsel. Representatives of the
Parent and of the Parent's environmental consultants also toured selected
facilities operated by the Company. During the exclusivity period,
representatives of the Parent and its counsel, worked with representatives of
BankBoston, N.A. to structure the financing arrangements, including
negotiating a term sheet and commitment letter for the financing arrangements.
Additionally, during this period, counsel for the Company and counsel for the
Parent worked with one another to negotiate the Merger Agreement, and the form
of the Shareholder Agreement, including the form of Irrevocable Proxy.
16
<PAGE>
On May 27, 1999, a conference call was held among representatives of the
Parent and its counsel, and a representative of Lazard Freres and counsel for
the Company, at which time the status of the due diligence and the financing
was discussed. During this call the Parent advised that it was in final
negotiations with BankBoston, N.A. on the terms of the debt financing for the
transaction, but that the bank was having difficulty with a two-step
transaction in which there was a delay in effecting the second step merger.
The parties discussed the issues in the Merger Agreement which still required
resolution.
During this call, the Parent also outlined a series of items which both the
Parent and BankBoston, N.A. still required as part of their due diligence,
noting that representatives of the Company were cooperating fully, but that it
was taking more time than expected to finalize certain items. Accordingly, the
Parent requested a one-week extension of the exclusivity period. A
representative of Lazard Freres indicated that he would take the request back
to the Company. Thereafter, on June 3, 1999, the Company entered into a one
week extension of the exclusivity period until June 10, 1999.
From June 1 to June 7, 1999, representatives of both parties worked with one
another to complete the due diligence. In addition, representatives of the
Parent and its counsel worked with representatives of BankBoston, N.A. and its
counsel negotiating the term sheet and commitment letter for the bank
financing. On June 7, 1999, representatives of the Parent and its counsel met
in New York to discuss the status of the due diligence. During that meeting,
several issues were discussed regarding the Company's results of operations,
capital requirements, including the capital requirements of Duramex, and
financial condition.
Accordingly, on June 7, 1999, a representative of the Parent telephoned
Lazard Freres and indicated that the results of their due diligence had
revealed issues which, in the judgment of the Parent, precluded the Parent
from paying a $16.50 purchase price, but that they were prepared to come to
Detroit, along with the Parent's counsel, to meet with representatives of the
Company to determine if the parties could agree on a price for the Shares.
After several conversations between representatives of Lazard Freres and the
Parent, a meeting was arranged for June 9, 1999, in Detroit.
On June 9, 1999, representatives of the Company, a representative of each of
the Investment Bankers, and representatives of the Parent, met in Detroit.
Also present at the meeting were counsel to the Parent and counsel to the
Company. During this meeting, the participants discussed the matters which
gave rise to the concerns previously expressed by the Parent. During the
meeting, a representative of the Parent indicated that they were prepared to
move forward with the transaction, but at a price of $15.40 per share. The
Company representatives indicated that they did not agree with the Parent that
a reduction from $16.50 to $15.40 per Share was warranted. After further
discussions, a representative of the Company agreed to recommend, subject to
finalizing the terms of the Merger Agreement and the Shareholder Agreements, a
$16.00 per Share purchase price. A representative of the Company also agreed
to extend the exclusivity period through the close of business on Monday, June
14, 1999.
On June 10, 1999, counsel for the Company and the Parent met to discuss the
terms of the Merger Agreement and the Shareholder Agreements. During that
meeting, counsel for the Company inquired into the status of the Parent's
financing and was advised that a term sheet and commitment letter from
BankBoston, N.A. would be available for review by the Board of Directors of
the Company, which was scheduled to meet on June 14, 1999 to consider the
proposed transaction. At this meeting, and during subsequent conversations
between
17
<PAGE>
representatives of the Company and the Parent, the terms of the Merger
Agreement and the Shareholder Agreements were negotiated. From June 10 to June
14, representatives of the Parent and the Company continued to evaluate the
due diligence issues surrounding the capital requirements of Duramex and its
impact upon the Company.
On June 14, 1999, the Board of Directors of the Company met to consider the
transaction. On June 14, 1999, the Parent provided the Company with the term
sheet and commitment letter it received from BankBoston, N.A. From June 14 to
June 17, 1999, representatives of the Company and the Parent worked with one
another and finalized the outstanding due diligence issues, as well as the
terms of the Merger Agreement, the Shareholder Agreements and the BankBoston,
N.A. term sheet and commitment letter. On June 17, 1999, the Company extended
the exclusivity period through the end of that day and its Board of Directors
unanimously approved the Offer and the Merger, and unanimously approved the
transaction documents, including the Merger Agreement and the Shareholder
Agreements. The transaction documents were executed on June 17, 1999, and the
transaction was publicly announced on June 18, 1999, prior to the opening of
trading on the Nasdaq National Market. On June 25, 1999, the Parent and the
Purchaser filed its Tender Offer Statement, and the Company filed its Schedule
14D-9, with the Commission, and the Offer was commenced.
12. The Merger Agreement and the Shareholder Agreements
The following is a summary of certain provisions of the Merger Agreement and
the Shareholder Agreements. This summary is qualified in its entirety by
reference to the Merger Agreement and the Shareholder Agreements which are
incorporated by reference and copies of which have been filed with the
Commission as exhibits to the Tender Offer Statement. The Merger Agreement and
the Shareholder Agreements may be examined and copies may be obtained at the
places set forth in Section 8 of this Offer to Purchase under "Available
Information."
(a) The Merger Agreement
The Offer. The Merger Agreement provides that if none of the events set
forth in Section 15 shall have occurred or is existing, the Purchaser will
commence the Offer as promptly as reasonably practicable after the date of the
Merger Agreement, but in no event later than five business days after the date
thereof. The obligation of the Purchaser to accept for payment and pay for
Shares tendered pursuant to the Offer is subject to the Minimum Tender
Condition and the other conditions set forth in Section 15. Pursuant to the
Merger Agreement, the Purchaser expressly reserves the right to waive any such
condition, to increase the price per Share payable in the Offer, and to make
any other changes in the terms and conditions of the Offer; provided, however,
that, without the prior written consent of the Company, no change may be made
(i) which decreases the price per Share payable in the Offer, (ii) which
changes the form of consideration payable in the Offer, (iii) which, except as
set forth in the next succeeding sentence, extends the period that the Offer
is outstanding, (iv) which reduces the maximum number of Shares to be
purchased in the Offer or (v) which imposes conditions other than those set
forth in Section 15. The Merger Agreement, however, provides that
notwithstanding anything to the contrary contained therein, without the
consent of the Company, the Parent and the Purchaser may extend the Offer for
one or more periods not to exceed 30 days in the aggregate.
Company Action. The Merger Agreement provides that, subject to the
conditions thereof, the Company has approved of and consented to the Offer.
The Board of Directors of the Company, at meetings duly called and held on
June 14, 1999 and June 17, 1999, has unanimously (i) determined that the
Merger Agreement and the Shareholder Agreements, and the Transactions,
including, without limitation, the Offer, the Merger and the tender of the
Shares pursuant to the Shareholder Agreements, are fair to and in the best
interests of the shareholders of the Company, (ii) approved and adopted the
Merger Agreement and the Shareholders Agreement, and the Transactions,
including, without limitation, the Offer, the Merger and the tender of the
Shares pursuant to the Shareholder Agreements, (iii) taken all action to
render the provisions of Section 775 through 784 of the
18
<PAGE>
MBCA inapplicable to the Offer, the Merger and the Shareholder Agreements, and
(iv) recommended that the shareholders of the Company accept the Offer and
approve and adopt the Merger Agreement and the Transactions, including,
without limitation, the Merger.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with the MBCA, at the Effective
Time, the Purchaser will be merged with and into the Company. As a result of
the Merger, the separate corporate existence of the Purchaser will cease and
the Company will continue as the Surviving Corporation, and shall continue to
be governed by the laws of the State of Michigan. The Merger Agreement
provides that the Parent, the Purchaser and the Company shall use their
reasonable best efforts to consummate the Merger as soon as practicable.
Pursuant to the Merger Agreement, at the Effective Time, each Share issued
and outstanding immediately prior to the Effective Time (other than any Shares
held by the Purchaser, the Parent or any direct or indirect wholly owned
subsidiary of the Parent or the Company, which will be canceled and retired
without any conversion thereof and no payment or distribution shall be made
with respect thereto) shall be canceled and shall be converted automatically
into the right to receive an amount equal to the Merger Consideration,
payable, without interest, to the holder of such Shares, upon surrender in
accordance with the Merger Agreement, of the certificate that formerly
evidenced such Shares. In addition, at the Effective Time, each share of
common stock, without par value, of the Purchaser issued and outstanding
immediately prior to the Effective Time will be converted into and exchanged
for one validly issued, fully paid and nonassessable share of Common Stock,
without par value, of the Surviving Corporation.
The Merger Agreement provides that, each outstanding option to purchase
Shares granted under the Company Stock Option Plans (as defined in the Merger
Agreement) or otherwise will be canceled at the Effective Time, and each
holder of a canceled option (whether issued pursuant to a Company Stock Option
Plan or otherwise) will be entitled to receive, at the Effective Time or as
soon as practicable thereafter, from the Company, in consideration for the
cancellation of such option, an amount in cash equal to the product of (i) the
number of Shares previously subject to such option and (ii) the excess, if
any, of the Merger Consideration over the exercise price per Share previously
subject to such option.
The Merger Agreement provides that the Articles of Incorporation of the
Purchaser, as in effect immediately prior to the Effective Time, will be the
Articles of Incorporation of the Surviving Corporation, and that the By-Laws
of the Purchaser, as in effect immediately prior to the Effective Time, will
be the By-Laws of the Surviving Corporation, in each case, until amended in
accordance with applicable law. The Merger Agreement also provides that the
directors of the Purchaser immediately prior to the Effective Time will be the
initial directors of the Surviving Corporation and that the officers of the
Purchaser immediately prior to the Effective Time will be the initial officers
of the Surviving Corporation, in each case until their respective successors
are duly elected or appointed and qualified.
Special Shareholders' Meeting. If immediately after the expiration of the
Offer at least a majority of the outstanding shares on a fully-diluted basis
have been tendered in the Offer and not withdrawn, but the Minimum Tender
Condition has not been satisfied, then the parties have agreed that the
Purchaser will not purchase any shares pursuant to the Offer and, instead, the
Company will promptly, in accordance with applicable law and its Articles of
Incorporation and Bylaws, (i) duly call, give notice of, convene and hold a
special meeting of its shareholders as soon as practicable following the
expiration of the Offer for the purpose of considering and taking action on
the Merger Agreement and the Transactions (the "Special Shareholders'
Meeting") and (ii) subject to certain provisions of the Merger Agreement, (a)
include in the proxy statement to be prepared in connection with such meeting
(the "Proxy Statement") the unanimous recommendation of the Board of Directors
of the Company that the shareholders of the Company approve and adopt the
Merger Agreement and the Transactions, including without limitation, the
Merger and (b) use its best efforts to obtain such approval and adoption.
19
<PAGE>
Proxy Statement. The Merger Agreement provides that, as soon as practicable
following the date of the Merger Agreement, the Company will file the Proxy
Statement with the Commission under the Exchange Act, and, if Shares have not
been purchased in the Offer but the parties are obligated to proceed with the
Merger, the Company will use its best efforts to have the Proxy Statement
cleared by the Commission. The parties will cooperate with one another in this
endeavor.
Access to Information; Confidentiality. Pursuant to the Merger Agreement,
from the date of the Merger Agreement to the Effective Time, the Company will,
and will cause the Subsidiaries and the officers, directors, employees,
auditors and other agents of the Company and the Subsidiaries to, afford the
officers, employees and agents of the Parent and the Purchaser access at all
reasonable times to the officers, employees, agents, properties, offices,
plants and other facilities, books and records of the Company and each
Subsidiary, will instruct its independent auditors to make available its
accountants' work papers to the officers, employees or agents of the Parent
and the Purchaser, and will furnish the Parent and the Purchaser with all
financial, operating and other data and information as the Parent or the
Purchaser, through its officers, employees or agents, may reasonably request.
All information obtained by the Parent or the Purchaser pursuant to the above
sentence will be kept confidential in accordance with the Confidentiality
Agreement between the Parent and the Company, a copy of which is filed with
the Commission as an exhibit to the Tender Offer Statement.
Representations and Warranties. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to the Parent and
the Purchaser with respect to, among other things, its organization and
qualification, the Company's wholly owned subsidiaries (the "Subsidiaries"),
capitalization, authority, required filings and consents, compliance with law,
financial statements, the absence of certain changes or events concerning the
Company or any of the Subsidiaries since December 31, 1998, the absence of
litigation, employee benefit plans, labor matters, information in the Tender
Offer Statement, this Offer to Purchase and such other documents, together
with all supplements and amendments thereto (collectively, the "Offer
Documents"), the Schedule 14D-9 and the Proxy Statement, real property
matters, intellectual property matters, taxes, environmental matters, material
contracts, brokers and counsel, Year 2000 compliance and the capitalization
and certain other matters concerning Duramex. The Parent and the Purchaser
have made customary representations and warranties to the Company with respect
to, among other things, its organization, authority, no conflicts, required
filings and consents, financing for the Offer, information in the Offer
Documents and the proxy statement, and brokers.
Conduct of Business by the Company. Pursuant to the Merger Agreement, the
Company has agreed that, from the date of the Merger Agreement to the
Effective Time, unless the Parent shall otherwise agree in writing, the
business of the Company and the Subsidiaries will be conducted only in, and
the Company and the Subsidiaries will not take any action except in, the
ordinary course of business and in a manner consistent with past practice; and
the Company will use its best efforts to preserve substantially intact the
business organization of the Company and the Subsidiaries, to keep available
the services of the current officers, employees and consultants of the Company
and the Subsidiaries and to preserve the current relationships of the Company
and the Subsidiaries with customers, suppliers and other persons with which
the Company or any Subsidiary has significant business relationships.
Pursuant to the Merger Agreement, neither the Company nor any Subsidiary
will, from the date of the Merger Agreement to the Effective Time, directly or
indirectly do, or propose to do, any of the following without the prior
written consent of the Parent: (i) amend or otherwise its Articles of
Incorporation or Bylaws or equivalent organizational documents; (ii) issue,
sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale,
pledge, disposition, grant or encumbrance of (a) any shares of capital stock
of any class of the Company, any Subsidiary, Duramex or any options, warrants,
convertible securities or other rights of any kind to acquire any shares of
such capital stock, or any other ownership interest (including, without
limitation, any phantom interest), of the Company, any Subsidiary or Duramex
(except for the issuance of a maximum of 468,000 Shares issuable pursuant to
stock options outstanding on the date of the Merger Agreement) or (b) any
assets of the Company, any Subsidiary, except for sales in the ordinary course
of business and in a manner
20
<PAGE>
consistent with past practice; (iii)(a) declare, set aside, make or pay any
dividend or other distribution, payable in cash, stock, property or otherwise,
with respect to any of its capital stock, or (b) make any capital contribution
with respect to any Subsidiary or Duramex; (iv) reclassify, combine, split,
subdivide or redeem, purchase or otherwise acquire, directly or indirectly,
any of its capital stock; (v)(a) except as expressly provided pursuant to the
Merger Agreement, take any of the actions described in (b)(2), (b)(3), (b)(4),
(b)(6) and (b)(7) of this subsection (v) as they relate to the GMT-805 project
being undertaken by the Company and Duramex or (b)(1) acquire (including,
without limitation, by merger, consolidation, or acquisition of stock or
assets or any other business combination) another entity or any assets, (2)
incur indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, pledge in respect of or otherwise as an accommodation
become responsible for the obligations of any person, or make loans or
advances, except in the ordinary course of business consistent with past
practice, but in no event shall there be more than $1,300,000 of indebtedness
outstanding at any one time, (3) enter into any contract or agreement other
than (A) agreements specifically provided for in the Merger Agreement (which
shall only be entered into following consultation with the Parent) or (B)
contracts or agreements entered into in the ordinary course of business
consistent with past practice and which require payments by the Company or the
Subsidiaries in an aggregate amount of less than $100,000, (4) terminate,
cancel or permit any change in, or agree to any change in, any Material
Contract (as defined in the Merger Agreement), except in the ordinary course
of business consistent with past practice, (5) terminate, cancel or permit any
change in, or agree to any change in, any Affiliate Contract, Broker Agreement
or Attorney Engagement (as defined in the Merger Agreement), (6) authorize any
single capital expenditure which is above specified dollar thresholds, or (7)
enter into or amend any contract, agreement, commitment or arrangement with
respect to any matter set forth in this subparagraph (v); (vi) increase the
compensation of, or grant any severance or termination pay to, directors,
officers and employees (except for normal compensation increases consistent
with past practice for employees who are not officers); (vii) change
accounting policies or practices; (viii) make any tax election or settle or
compromise any material federal, state, local or foreign income tax liability;
(ix) pay, discharge or satisfy any claim, liability or obligation; or (x)
announce an intention, enter into any formal or informal agreement, or
otherwise make a commitment to do any of the foregoing.
No Solicitation of Transactions. Pursuant to the Merger Agreement, neither
the Company nor any Subsidiary shall, directly or indirectly, through any
officer, director, agent or otherwise, solicit, initiate or encourage the
submission of any proposal or offer from any person relating to the
acquisition or purchase of all or any material portion of the assets of, or
any equity interest in, the Company or any Subsidiary or any merger,
consolidation, business combination, reorganization, recapitalization or
similar transaction involving the Company or any subsidiary (each a "Competing
Transaction") or participate in any discussions or negotiations regarding, or
furnish to any other person any information with respect, or otherwise
cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other person to do or seek any of the
foregoing. The Company and each of the Subsidiaries will cease and cause to be
terminated any existing activities, discussions or negotiations by or on its
behalf with any other person conducted prior to the execution of the Merger
Agreement with respect to any Competing Transaction and will promptly notify
the Parent following receipt of any request by any person relating to any
possible Competing Transaction or information concerning the Company. Pursuant
to the Merger Agreement, the Company provided the Parent with the name of each
person to whom any confidential documents or information concerning the
Company or any of the Subsidiaries was disclosed by or on behalf of the
Company since January 1, 1998 for the purpose of discussing a possible change
in control transaction involving the Company (a "Potential Buyer"). The
Company will promptly request that each such Potential Buyer either return all
of such confidential documents and information, and all copies thereof, to the
Company or deliver a written certification of such destruction to the Company.
The Company shall use its best efforts to cause each such Potential Buyer to
comply with such request and shall notify the Parent promptly following
compliance by each Potential Buyer with such request. The Company agrees that
it will not disclose any of the terms of the Merger Agreement or the matters
referred to therein to any other prospective acquiror of the Company until the
Effective Time or earlier if the Merger Agreement is terminated in accordance
with its terms, except to the extent such disclosure is required by law or the
regulations of Nasdaq. Nothing contained in the Merger Agreement shall
prohibit the Board of Directors of the Company from furnishing information to,
or entering into discussions or negotiations with, any person in connection
with
21
<PAGE>
an unsolicited (from the date of the Merger Agreement) proposal involving a
fully-financed Competing Transaction which is made in writing by such person
and which, if consummated, would provide consideration per Share to the
shareholders of the Company in excess of the Offer Price (a "Superior
Proposal"), if, and only to the extent that, the Board of Directors of the
Company determines in good faith, based upon the written advice of its
counsel, that such action is required for the Board of Directors of the
Company to comply with its fiduciary duties to shareholders under the MBCA.
Employee Benefits Matters. The Merger Agreement provides that for a period
of one year from the Effective Time, the Parent shall, or shall cause the
Company or the Surviving Corporation to, maintain the Plans (as defined in the
Merger Agreement) (other than the Company Stock Option Plans) which the
Company maintains for the benefit of, or which are open to, a majority of the
employees of the Company on the terms in effect on the date of the Merger
Agreement, or such other plans, arrangements or programs as will provide
employees with benefits that in the aggregate are substantially equivalent to
those provided under the Plans (other than the Company Stock Option Plans) as
in effect on the date of the Merger Agreement. In addition, the Parent shall,
or shall cause the Company or the Surviving Corporation to, assume and agree
to perform certain Change of Control Agreements in the same manner and to the
same extent that the Company is required to perform such agreements.
Directors' and Officers' Indemnification and Insurance. The Merger Agreement
provides that the Articles of Incorporation and Bylaws of the Surviving
Corporation must contain provisions no less favorable with respect to
indemnification than are set forth in the Bylaws of the Company and these
provisions may not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would adversely affect
the rights thereunder of individuals who at the Effective Time, were
directors, officers, employees, fiduciaries or agents of the Company, unless
such modification shall be required by law.
The Merger Agreement provides that the Company agrees to indemnify and hold
harmless, and, after the Effective Time, the Surviving Corporation agrees to
indemnify and hold harmless, each present and former director, officer,
employee, fiduciary and agent of the Company and each Subsidiary
(collectively, the "Indemnified Parties") against any costs and expenses
(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and settlement amounts paid in connection with any claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time), whether civil, criminal, administrative or investigative,
arising out of or pertaining to any action or omission in their capacity as an
officer, director, employee, fiduciary or agent, whether occurring before or
after the Effective Time, for a period of six years after the date of the
Merger Agreement. In the event of such claim, action, suit, proceeding or
investigation, (a) the Company or the Surviving Corporation, as the case may
be, shall pay the reasonable fees and expenses of counsel selected by the
Indemnified Parties, which counsel shall be reasonably satisfactory to the
Company or the Surviving Corporation, promptly after statements therefor are
received and (b) the Company and the Surviving Corporation will cooperate in
the defense of any such matter ; provided, however, that neither the Company
nor the Surviving Corporation shall be liable for any settlement effected
without its written consent (which consent will not be unreasonably withheld);
provided further that neither the Company nor the Surviving Corporation shall
be obligated to pay the fees and expenses of more than one counsel for all
Indemnified Parties in any single action except to the extent that two or more
of such Indemnified Parties shall have conflicting interests in the outcome of
the action; and provided further that, in the event that any claim for
indemnification is asserted or made within such six-year period, all rights to
indemnification in respect of such claim shall continue until the disposition
of such claim.
The Merger Agreement provides that the Surviving Corporation shall use its
best efforts to maintain in effect for six years from the Effective Time, if
available, the current directors' and officers' liability insurance policies
maintained by the Company (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms
and conditions which are not materially less favorable) with respect to
matters occurring on or prior to the Effective Time; provided, however, that
in no event shall the Surviving Corporation be required to expend more than an
amount per year equal to 250% of current annual premiums
22
<PAGE>
paid by the Company for such insurance. The Merger Agreement requires that any
successor corporation or assignee of the Company or the Surviving Corporation
assume these insurance and indemnification obligations.
Waiver. The Merger Agreement provides that, at any time prior to the
Effective Time, any party thereto may (i) extend the time for the performance
of any of the obligation or other act of any other party thereto, (ii) waive
any inaccuracy in the representations and warranties contained therein or in
any document delivered pursuant thereto and (iii) waive compliance with any
agreement or condition contained therein. Any such extension or waiver shall
be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
Conditions to the Merger If Offer Conditions Have Been Satisfied or
Waived. The Merger Agreement provides that if the conditions set forth in
Section 15 have been satisfied or, where permitted, waived, the respective
obligations of each party to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(i) the Merger Agreement and the Transactions, including, without limitation,
the Merger, shall have been approved and adopted by the affirmative vote of
the shareholders of the Company (unless the vote of shareholders is not
required by the MBCA); (ii) no governmental authority, agency or commission
shall have enacted, issued promulgated, enforced or entered any law, rule,
regulation executive order, decree, injunction or other order which is then in
effect and has the effect of making the acquisition of Shares by the Parent or
the Purchaser or any affiliate of either of them or the consummation of the
Merger illegal or otherwise restricting, preventing or prohibiting the
consummation of the Transactions; and (iii) the Purchaser shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer; provided,
however, that this condition shall only be applicable to the obligations of
the Parent and the Purchaser if the Purchaser's failure to purchase such
Shares is not in breach of the Merger Agreement or the terms of the Offer.
Conditions to the Merger If Offer Conditions Have Not Been Satisfied or
Waived. The Merger Agreement provides that if the conditions set forth in
Section 15 have not been satisfied or, where permitted, waived, the respective
obligations of the Parent and the Purchaser, on the one hand, and the Company,
on the other hand, to effect the Merger shall be subject to the satisfaction,
or, where permitted, waived, at or prior to the Effective Time of the
conditions set forth in subsections (a) and (b) below:
(a) Conditions Applicable to the Parent and the Purchaser: (1) the Merger
Agreement and the Transactions, including, without limitation, the Merger,
shall have been approved and adopted by the affirmative vote of the
shareholders of the Company (unless the vote of shareholders is not
required by the MBCA); (2) no governmental authority, agency or commission
shall have enacted, issued promulgated, enforced or entered any law, rule,
regulation executive order, decree, injunction or other order which is then
in effect and has the effect of making the acquisition of Shares by the
Parent or the Purchaser or any affiliate of either of them or the
consummation of the Merger illegal or otherwise restricting, preventing or
prohibiting the consummation of the Transactions; (3) there shall not have
occurred any Material Adverse Effect, which, although further defined in
the Merger agreement, is generally a change, other than a change to the
design, specifications or scope of the Company's for the GMT-805 project
being undertaken by the Company and Duramex, that adversely affect, or may
be reasonably likely to adversely affect, the business (operational,
financial or otherwise) of the Company and its subsidiaries by an amount
equal to at least $5 Million; (4) the Company shall have taken or caused to
be taken all such action so that each outstanding option to purchase Shares
issued by the Company other than pursuant to the Company's 1996 Stock
Option Plan shall be automatically canceled as of the Effective Time and
the holders of each such option shall only be entitled to receive from the
Company, at the Effective Time or as soon as practicable thereafter, an
amount in cash equal to the Spread (as defined in the Merger Agreement), if
any, in exchange for the cancellation of each such option; (5) no
misstatement in or omission from any representation of, or beach of
warranty by, the Company in the Merger Agreement, as a result of which
there may reasonably be expected to occur a material adverse effect with
respect to the Company, and the President of the Company shall have
delivered a certificate to such effect in form and substance reasonably
satisfactory to the Parent; (6) the Company shall have performed in all
material respects all of its obligations, and shall have complied in all
material respects with all of its material agreements and covenants, to be
performed or complied with
23
<PAGE>
by it under the Merger Agreement, and the President of the Company shall
have delivered a certificate to such effect in form and substance
reasonably satisfactory to the Parent; and (7) the Company's consolidated
cash balance, as computed in accordance with generally accepted accounting
principles, as of the expiration of the Effective Time, shall be less than
$15 million, determined after subtracting an amount equal to the then-
outstanding accounts payable (excluding inter-company accounts payable)
incurred by the Company, any Subsidiary and/or Duramex relating to certain
expenditures permitted to be made pursuant to the Merger Agreement in
connection with the GMT-805 project.
(b) Conditions Applicable to the Company: (1) the Merger Agreement and
the Transactions, including, without limitation, the Merger, shall have
been approved and adopted by the affirmative vote of the shareholders of
the Company (unless the vote of shareholders is not required by the MBCA);
(2) no governmental authority, agency or commission shall have enacted,
issued promulgated, enforced or entered any law, rule, regulation executive
order, decree, injunction or other order which is then in effect and has
the effect of making the acquisition of Shares by the Parent or the
Purchaser or any affiliate of either of them or the consummation of the
Merger illegal or otherwise restricting, preventing or prohibiting the
consummation of the Transactions; (3) no misstatement in or omission from
any representation of, or breach of warranty by, the Parent or the
Purchaser in the Merger Agreement, as a result of which there may
reasonably be expected to occur a material adverse effect with respect to
the Parent or the Purchaser, and the President of the Parent shall have
delivered a certificate to such effect in form and substance reasonably
satisfactory to the Company; and (4) the Parent and the Purchaser shall
have performed in all material respects all of their obligations, and shall
have complied in all material respects with all of their material
agreements and covenants, to be performed or complied with by them under
the Merger Agreement, and the President of the Parent shall have delivered
a certificate to such effect in form and substance reasonably satisfactory
to the Company.
Termination. The Merger Agreement provides that it may be terminated and the
Merger and the other Transactions may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite approval and adoption of the
Merger Agreement and the transactions contemplated thereby by the shareholders
of the Company:
(i) By mutual written consent duly authorized by (a) the Boards of
Directors of the Purchaser and the Company and (b) the general partner of
the Parent; or
(ii) By the Parent, the Purchaser or the Company if (a) the Effective
Time shall not have occurred on or before November 30, 1999; provided,
however, that the right to terminate the Merger Agreement under this
section shall not be available to any party whose failure to fulfill any
obligation under the Merger Agreement has been the cause of, or resulted
in, the failure of the Effective Time to occur on or before such date or
(b) any court of competent jurisdiction in the United States or other
governmental authority shall have issued an order, decree, ruling or taken
any other action restraining, enjoining or otherwise prohibiting the Offer
or the Merger and such order, decree, ruling or other action shall have
become final and nonappealable; or
(iii) By the Parent, upon approval of its Board of Directors, if (a) due
to an occurrence or circumstance that would result in a failure to satisfy
any of the conditions set forth in Section 15 other than the Minimum Tender
Condition, the Purchaser shall have (1) failed to commence the Offer within
60 days following the date of the Merger Agreement, (2) terminated the
Offer without having accepted any Shares for payment thereunder or (3)
failed to pay for Shares pursuant to the Offer within 90 days following the
commencement of the Offer; provided, however, that the Minimum Tender
Condition shall have been satisfied and such action or inaction under (1),
(2) or (3) shall not have been caused by or resulted from the failure of
the Parent or the Purchaser to perform in any material respect any material
covenant or agreement of either of them contained in the Merger Agreement
or the material breach by the Parent or the Purchaser of any material
representation or warranty of either of them contained in this Agreement or
(b) prior to the purchase of Shares pursuant to the Offer, the Board of
Directors of the Company or any committee thereof shall have withdrawn or
modified in a manner adverse to the Purchaser or the Parent or, after
receipt of a proposal involving a Competing Transaction, upon the request
of the Parent, shall not have promptly publicly
24
<PAGE>
reaffirmed, its approval or recommendation of the Offer, the Merger
Agreement, the Merger, the Shareholder Agreements or any other Transaction,
or shall have recommended another merger, consolidation, business
combination, recapitalization, reorganization or similar transaction
involving, or acquisition of, the Company or its assets, or another tender
offer or exchange offer for Shares, or shall have resolved to do any of the
foregoing; or
(iv) By the Parent, upon approval of its Board of Directors, if the
Company shall have materially breached its obligations discussed under "No
Solicitation of Transactions" above; or
(v) By the Company, upon approval of the Board of Directors of the
Company, if due to an occurrence or circumstance that would result in a
failure to satisfy any condition set forth in Section 15 other than the
Minimum Tender Condition, the Purchaser shall have (a) failed to commence
the Offer within 60 days following the date of the Merger Agreement, (b)
terminated the Offer without having accepted any Shares for payment
thereunder or (c) failed to pay for Shares pursuant to the Offer within 90
days following the commencement of the Offer; provided, however, that the
Minimum Tender Condition shall have been satisfied and such action or
inaction under (a), (b) and (c) shall not have been caused by or resulted
from the failure of the Company to perform in any material respect any
material covenant or agreement of it contained in the Merger Agreement or
the material breach by the Company of any material representation or
warranty of it contained in the Merger Agreement; or
(vi) By the Company or the Parent, prior to the purchase of Shares
pursuant to the Offer, if the Board of Directors of the Company, in full
compliance with the provisions discussed in "No Solicitation of
Transactions" above, shall have approved the execution by the Company of a
definitive agreement relating to a Superior Proposal; provided, however,
the Company shall not be entitled to terminate the Merger Agreement
pursuant to this section (vi) unless, at least three (3) business days
prior to such termination, the Company shall have first provided to the
Parent (a) notice of its intention to terminate the Merger Agreement as of
a particular effective date, (b) copies of the definitive documents
relating to the Superior Proposal that the Board of Directors of the
Company has resolved to approve and (c) the right to increase the price to
be paid for the Shares purchased pursuant to the Offer and the Merger to an
amount per Share equal to the amount per Share to be received by the
shareholders of the Company pursuant to the Superior Proposal (the "Higher
Price"); and provided, further, that if, prior to the effective date of
such termination as set forth in the notice from the Company referred to
above, the Parent notifies the Company of its agreement to pay the Higher
Price, the Merger Agreement shall not terminate; or
(vii) By either the Parent or the Company at any time after the
expiration of the Offer if, immediately after expiration of the Offer, less
than a majority of the outstanding Shares on a fully-diluted basis have
been tendered into the Offer, and not withdrawn.
Effect of Termination. In the event of the termination of the Merger
Agreement pursuant to the foregoing, the Merger Agreement will then become
void, and there will be no liability on the part of any party thereto, except
as set forth in Sections 8.03 (Fees and Expenses) and 9.01 (Non-Survival of
Representations and Warranties) of the Merger Agreement. This, however, will
not relieve any party from liability for any breach of the Merger Agreement.
Fees and Expenses. The Merger Agreement provides that in the event that (a)
any person shall have commenced a tender or exchange offer for 25% or more (or
which, assuming the maximum amount of securities which could be purchased,
would result in any person beneficially owning 25% or more) of the then
outstanding Shares or otherwise publicly announced a Competing Transaction for
the direct or indirect acquisition of the Company or all or substantially all
of its assets and (1) the Board of Directors of the Company does not recommend
against the Competing Transaction, (2) the Offer shall have remained open for
at least 20 business days, (3) the Minimum Tender Condition shall not have
been satisfied and (4) the Merger Agreement shall have been terminated; or (b)
the Merger Agreement is terminated pursuant to clauses (iii)(b), (iv) or (vi)
under "Termination" above; then, in any such event, the Company shall pay the
Parent promptly (but in no event later than one business day after the first
of such events shall have occurred) a fee of $3,545,389 and shall reimburse
the Parent promptly for all out-of-pocket expenses incurred by it, up to a
maximum of $500,000, in connection
25
<PAGE>
with its due diligence investigation, dealings with financing sources and in
the negotiation, execution and delivery of the Merger Agreement and any debt
financing arrangements relating to the Offer or the Merger, such expenses to
include, without limitation, attorneys', accountants' and other consultants'
fees and disbursements, bank fees, and travel costs. Such amounts shall be
payable in immediately available funds.
The Merger Agreement provides that all costs and expenses incurred in
connection with the Merger Agreement and the Transactions shall be paid by the
party incurring such expenses, whether or not any Transaction is consummated.
(b) The Shareholder Agreements.
Each of the Shareholders of the Company listed on Schedule I to the Merger
Agreement, including all directors of the Company, has entered into a
Shareholder Agreement with the Parent and the Purchaser.
Agreement to Tender. Pursuant to the Shareholder Agreements, each
Shareholder will tender all Shares beneficially owned by it pursuant to the
Offer within 10 business days of commencement of the Offer.
Voting and Irrevocable Proxy. Pursuant to the Shareholder Agreements, each
Shareholder will (i) vote all Shares beneficially owned by it in favor of the
Merger, (ii) vote all Shares beneficially owned by it against any action or
agreement that would result in a breach of any covenant or any representation
or warranty or any other obligation or agreement of the Company under or
pursuant to the Merger Agreement, (iii) vote all Shares beneficially owned by
it against any action or agreement that would impede, interfere with, delay,
postpone or attempt to discourage the Merger or the Offer, and (iv) without
limiting the foregoing, consult with the Parent and vote all Shares
beneficially owned by it in such manner as is determined by the Parent to be
in compliance with this paragraph. Pursuant to the Shareholder Agreements,
each Shareholder will deliver to the Parent contemporaneously with the
execution of the Shareholder Agreement an Irrevocable Proxy pursuant to which
each Shareholder irrevocably appoints and constitutes Angus C. Littlejohn,
Jr., Michael I. Klein and the Parent to exercise the proxy to vote the Shares
in the foregoing manner at any time until the earlier to occur of the valid
termination of the Merger Agreement or the Effective Time.
Termination. The Shareholder Agreements provide that they will terminate on
the earliest to occur of (a) the date on which the Purchaser accepts for
payment the Shares tendered in the Offer, so long as the Shares are so
tendered and not withdrawn, (b) the Effective Time and (c) the date of the
termination of the Merger Agreement in accordance with its terms. The
Purchaser shall not purchase the Shares subject to the Shareholder Agreements
pursuant to the Offer unless the Purchaser purchases pursuant to the Offer
that number of Shares such that the Minimum Tender Condition is satisfied.
Certain Covenants of Shareholder. Pursuant to the Shareholder Agreements,
each Shareholder agrees not to: (a) sell, transfer, pledge, encumber, assign
or otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of the Shares; (b) grant
any proxies, deposit any Shares into a voting trust or enter into a voting
agreement with respect to any Shares; or (c) directly or indirectly through
any agent or otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any person (other than the Parent or the Purchaser)
relating to any Competing Transaction, or participate in any discussions or
negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or assist or participate
in, facilitate or encourage, any effort or attempt by any person (other than
the Parent and the Purchaser) to do or seek any of the foregoing. Pursuant to
the Shareholder Agreements, each Shareholder has agreed to cease and cause to
be terminated any existing activities, discussions or negotiations by or on
its behalf with any person (other than the Parent and the Purchaser) conducted
prior to entering such agreement with respect to any Competing Transaction and
agreed to promptly notify the Parent following receipt of any request by any
person (other than the Parent or the Purchaser) relating to any possible
Competing Transaction or information concerning the Company. The Shareholder
Agreements provide that the Shareholder may, solely in his capacity as a
member of the Board of Directors of the Company, furnish information to, or
enter into
26
<PAGE>
discussions or negotiations with, any person in connection with an unsolicited
proposal involving a fully-financed Competing Transaction which is made in
writing by such person and which, if consummated, would provide consideration
per share of Common Stock to the shareholders of the Company in excess of the
Offer Price if, and only to the extent that, the Board of Directors of the
Company determines in good faith, based upon the written advice of its
counsel, that such action is required for the Board of Directors of the
Company to comply with its fiduciary duties to shareholders under the MBCA.
(c) Appraisal Rights
Holders of Shares do not have appraisal rights as a result of the Offer or
the Merger under the MBCA.
(d) Rule 13e-3
The Commission has adopted Rule 13e-3 under the Exchange Act that is
applicable to certain "going private" transactions and that may under certain
circumstances be applicable to the Merger following the purchase of Shares
pursuant to the Offer in which the Purchaser seeks to acquire any remaining
Shares. Rule 13e-3 should not be applicable to the Merger if the Merger is
consummated within one year after the expiration or termination of the Offer
and the price paid in the Merger is not less than the price per Share paid
pursuant to the Offer. However, in the event that the Purchaser is deemed to
have acquired control of the Company pursuant to the Offer and if the Merger
is consummated more than one year after completion of the Offer or an
alternative acquisition transaction is effected whereby shareholders of the
Company receive consideration less than that paid pursuant to the Offer, in
either case at a time when the Shares are still registered under the Exchange
Act, the Purchaser may be required to comply with Rule 13e-3 under the
Exchange Act. If applicable, Rule 13e-3 would require, among other things,
that certain financial information concerning the Company and certain
information relating to the fairness of the Merger or such alternative
transaction and the consideration offered to minority shareholders in the
Merger or such alternative transaction, be filed with the Commission and
disclosed to shareholders prior to consummation of the Merger or such
alternative transaction. The purchase of a substantial number of Shares
pursuant to the Offer may result in the Company being able to terminate its
Exchange Act registration. See Section 7. If such registration were
terminated, Rule 13e-3 would be inapplicable to any such future Merger or such
alternative transaction.
13. Purpose of the Offer; Plans for the Company
Purpose of the Offer. The purpose of the Offer and the Merger is to enable
the Parent to acquire control of, and the entire equity interest in, the
Company. The Offer, as the first step in the acquisition of the Company, is
intended to facilitate the acquisition of all the Shares. The Parent will
consummate the Merger as soon as practicable following the consummation of the
Offer. The purpose of the Merger is to acquire all Shares not purchased
pursuant to the Offer or otherwise.
Plans for the Company. It is expected that, initially following the Merger,
the business and operations of the Company and its subsidiaries will continue
without substantial change. The Parent intends to conduct a detailed review of
the Company and its subsidiaries and their assets, corporate structure,
operations, properties, policies, management and personnel and to consider,
subject to the terms of the Merger Agreement, what, if any, changes would be
desirable in light of the circumstances then existing. The Parent reserves the
right to take such actions and make such changes as it deems desirable. Such
changes could include changes in the Company's business, corporate structure,
capitalization, dividend policy, Board of Directors or management or
personnel.
Except as otherwise described in this Offer to Purchase, the Purchaser and
the Parent have no current, definite plans or proposals that would relate to,
or result in, any extraordinary corporate transaction involving the Company,
such as a merger, reorganization or liquidation involving the Company or any
of its subsidiaries, a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries, any change in the Company's capitalization
or dividend policy or any other material change in the Company's business,
corporate structure, present Board of Directors or management or personnel.
27
<PAGE>
The Merger Agreement provides that the directors of the Purchaser, at the
effective time of the Merger, will be the initial directors of the Company
after the Merger. For the potential effects of the Offer and the Merger on the
listing of the Shares on Nasdaq and their registration under the Exchange Act,
see Section 7.
14. Dividends and Distributions
The Merger Agreement provides that, prior to the Effective Time, without the
prior written consent of the Parent, neither the Company nor any subsidiary of
the Company will directly or indirectly do, or propose to do, any of the
following: (i) issue, sell, pledge, dispose of, grant, encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of (a) any
shares of capital stock of any class of the Company, any Subsidiary, Duramex
or any options, warrants, convertible securities or other rights of any kind
to acquire any shares of such capital stock, or any other ownership interest
(including, without limitation, any phantom interest), of the Company, any
Subsidiary or Duramex (except for the issuance of a maximum of 468,000 Shares
issuable pursuant to stock options outstanding on the date of the Merger
Agreement) or (b) any assets of the Company, any Subsidiary, except for sales
in the ordinary course of business and in a manner consistent with past
practice; or (ii)(a) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to
any of its capital stock, or (b) make any capital contribution with respect to
any Subsidiary or Duramex.
15. Certain Conditions of the Offer
Notwithstanding any other term of the Offer or the Merger Agreement, the
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares after the termination or withdrawal of the Offer), to
pay for any Shares tendered pursuant to the Offer if (i) the Minimum Tender
Condition shall not have been satisfied, (ii) at any time on or after the date
of the Merger Agreement and prior to the acceptance of such Shares for
payment, any of the following conditions exist:
(a) there shall have been entered any order, preliminary or permanent
injunction, decree, judgment or ruling in any action or proceeding before
any court or governmental, administrative or regulatory authority or
agency, which makes illegal or otherwise directly or indirectly restrains
or prohibits or makes materially more costly the making of the Offer, the
acceptance for payment of, or payment for, any Shares by the Parent, the
Purchaser or any other affiliate of the Parent, or the consummation of any
other transaction contemplated by the Merger Agreement;
(b) there shall have occurred any Material Adverse Effect (as defined in
the Merger Agreement) with respect to the Company;
(c) (i) the Board of Directors of the Company or any committee thereof
(x) shall have withdrawn or modified in a manner adverse to the Parent or
the Purchaser the approval or recommendation of the Offer, the Merger, the
Shareholder Agreements or the Merger Agreement, (y) shall have failed to
reaffirm such approval or recommendation upon request by the Parent given
after the Company's receipt of a proposal involving a Competing Transaction
(as defined in the Merger Agreement) or (z) shall have approved or
recommended any takeover proposal or any other acquisition of Shares other
than the Offer and the Merger, or (ii) the Board of Directors of the
Company or any committee thereof shall have resolved to do any of the
foregoing;
(d) there shall have been any misstatement in or omission from any
representation of, or there shall have occurred any breach of warranty by,
the Company in the Merger Agreement as a result of which, individually or
in the aggregate, there may reasonably be expected to occur a Material
Adverse Effect with respect to the Company;
(e) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any material agreement
or material covenant of the Company to be performed or complied with by it
under the Agreement;
(f) the Merger Agreement shall been terminated in accordance with its
terms;
28
<PAGE>
(g) the Company shall not have taken or caused to be taken all such
action so that each outstanding option to purchase Shares issued by the
Company other than pursuant to the Company's 1996 Stock Option Plan shall
be automatically canceled as of the Effective Time and the holders of each
such option shall only be entitled to receive from the Company, at the
Effective Time or as soon as practicable thereafter, an amount in cash
equal to the product of (i) the number of Shares previously subject to such
option and (ii) the excess, if any, of the Merger Consideration over the
exercise price per Share previously subject to such option, in exchange for
the cancellation of each such option;
(h) the Purchaser and the Company shall have agreed that the Purchaser
shall terminate the Offer or postpone the acceptance for payment of or
payment for Shares thereunder which, in the sole judgment of the Purchaser,
in any such case, and regardless of the circumstances (including any action
or inaction by the Parent or any of its affiliates) giving rise to any such
condition, makes it inadvisable to proceed with such acceptance for payment
or payment; or
(i) the Company's consolidated cash balance, as computed in accordance
with generally accepted accounting principles, as of the expiration of the
Offer, shall be less than $15 million, determined after subtracting an
amount equal to the then-outstanding accounts payable (excluding inter-
company accounts payable) incurred by the Company, any Subsidiary and/or
Duramex relating to certain expenditures permitted to be made pursuant to
the Merger Agreement in connection with the GMT-805 project;
or (iii) immediately after the expiration of the Offer, the President of the
Company shall not have delivered a certificate in form and substance
reasonably satisfactory to Parent to the effect that the condition described
above does not exist.
The Merger Agreement provides that the foregoing conditions are for the sole
benefit of the Purchaser and the Parent and may be asserted by the Purchaser
or the Parent regardless of the circumstances giving rise to any such
condition or may be waived by the Purchaser or the Parent in whole or in part
at any time and from time to time in their sole discretion. The Merger
Agreement provides that the failure by the Parent or the Purchaser at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any
such right, the waiver of any such right with respect to particular facts and
other circumstances shall not be deemed a waiver with respect to any other
facts and circumstances, and each such right shall be deemed an ongoing right
that may be asserted at any time and from time to time.
16. Certain Legal Matters
Based on a review of publicly available filings made by the Company with the
Commission and other publicly available information concerning the Company,
neither the Purchaser nor the Parent is aware of any license or regulatory
permit that appears to be material to the business of the Company and its
subsidiaries, taken as a whole, that might be adversely affected by the
Purchaser's acquisition of Shares as contemplated herein or of any approval or
other action, except as otherwise described in this Section 16, by any
governmental, administrative or regulatory agency or authority, domestic,
foreign or supernational, that would be required for the acquisition or
ownership of Shares by the Purchaser as contemplated herein. Should any such
approval or other action be required, the Purchaser and the Parent currently
contemplate that such approval or other action will be sought, except as
described below under "State Takeover Laws." While, except as otherwise
expressly described in this Section 16, the Purchaser does not presently
intend to delay the acceptance for payment of or payment for Shares tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that failure to obtain
any such approval or other action might not result in consequences adverse to
the Company's business or that certain parts of the Company's business might
not have to be disposed of if such approvals were not obtained or such other
actions were not taken or in order to obtain any such approval or other
action. If certain types of adverse action are taken with respect to the
matters discussed below, the Purchaser could, subject to the terms and
conditions of the Merger Agreement, decline to accept for payment or pay for
any Shares tendered. See Section 15 for certain conditions to the Offer.
29
<PAGE>
State Takeover Laws. The Company is incorporated under the laws of the State
of Michigan. No Michigan takeover statute or similar statute or regulation,
including, without limitation, Sections 775 to 784 and Sections 790 to 799 of
the MBCA which the Company has taken all action to render inapplicable to the
Transactions, imposes restrictions materially adversely affecting (or
materially delaying) the consummation of the Offer or the Merger or would, as
a result of the Offer, the Merger, the Transactions or the acquisition of
securities of the Company by the Parent or the Purchaser, (A) restrict or
impair the ability of the Parent to vote, or otherwise to exercise the rights
of a shareholder with respect to, securities of the Company or the Surviving
Corporation that may be acquired or controlled by the Parent or (B) entitle
any shareholder to acquire securities of the Company or the Surviving
Corporation on a basis not available to the Parent.
A number of states throughout the United States have enacted takeover
statutes that purport, in varying degrees, to be applicable to attempts to
acquire securities of corporations that are incorporated or have assets,
shareholders, executive offices or places of business in such states. In Edgar
v. MITE Corp., the Supreme Court of the United States held that the Illinois
Business Takeover Act, which involved state securities laws that made the
takeover of certain corporations more difficult, imposed a substantial burden
on interstate commerce and therefore was unconstitutional. In CTS Corp. v.
Dynamics Corp. of America, however, the Supreme Court of the United States
held that a state may, as a matter of corporate law, and, in particular, those
laws concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without prior
approval of the remaining shareholders; provided that such laws were
applicable only under certain conditions. Subsequently, a number of Federal
courts ruled that various state takeover statutes were unconstitutional
insofar as they apply to corporations incorporated outside the state of
enactment.
Based on information supplied by the Company and its own review, the Parent
and the Purchaser do not believe that any other state takeover statutes
purport to apply to the Offer or the Merger. Neither the Purchaser nor the
Parent has currently complied with any state takeover statute or regulation.
The Purchaser reserves the right to challenge the applicability or validity of
any state law purportedly applicable to the Offer or the Merger and nothing in
this Offer to Purchase or any action taken in connection with the Offer or the
Merger is intended as a waiver of such right. If it is asserted that any state
takeover statute is applicable to the Offer or the Merger and an appropriate
court does not determine that it is inapplicable or invalid as applied to the
Offer or the Merger, the Purchaser might be required to file certain
information with, or to receive approvals from, the relevant state
authorities, and the Purchaser might be unable to accept for payment or pay
for Shares tendered pursuant to the Offer, or be delayed in consummating the
Offer or the Merger. In such case, the Purchaser may not be obligated to
accept for payment or pay for any Shares tendered pursuant to the Offer. See
Section 15.
Antitrust. Neither the Offer nor the Merger are subject to the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended. However, filings with,
notifications to, and authorizations and approvals of certain antitrust
authorities in jurisdictions other than the United States may be required.
There can be no assurance that any authorizations, approvals or decisions
required by such authorities will be granted or that such authorities will not
challenge the Offer or the Merger. The Parent and the Company believe,
however, that the failure to obtain such authorizations and approvals would
not be material.
At any time before or after the Purchaser's purchase of Shares pursuant to
the Offer, an antitrust enforcement agency in jurisdictions other than the
United States could take such action under the applicable antitrust laws, if
any, as it deems necessary or desirable in the public interest. Private
parties may also be able to bring legal action under such antitrust laws under
certain circumstances. There can be no assurance that a challenge to the Offer
on such antitrust grounds will not be made or, if such a challenge is made, of
the results thereof.
17. Fees and Expenses
The Purchaser has retained Georgeson Shareholder Communications Inc. to act
as the Information Agent and BankBoston, N.A. to serve as the Depositary in
connection with the Offer. The Information Agent and the Depositary each will
receive reasonable and customary compensation for their services, be
reimbursed for certain
30
<PAGE>
reasonable out-of-pocket expenses and be indemnified against certain
liabilities and expenses in connection therewith, including certain
liabilities under the Federal securities laws.
Neither the Purchaser nor the Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent) in
connection with the solicitation of tenders of Shares pursuant to the Offer.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
the Purchaser upon request for customary mailing and handling expenses
incurred by them in forwarding material to their customers.
18. Miscellaneous
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. Neither the Purchaser nor the Parent is aware of any
jurisdiction in which the making of the Offer or the tender of Shares in
connection therewith would not be in compliance with the laws of such
jurisdiction. To the extent the Purchaser or the Parent becomes aware of any
state law that would limit the class of offerees in the Offer, the Purchaser
will amend the Offer and, depending on the timing of such amendment, if any,
will extend the Offer to provide adequate dissemination of such information to
holders of Shares prior to the expiration of the Offer. In any jurisdiction
where securities or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser or the Parent not contained herein
or in the Letter of Transmittal and, if given or made, such information or
representation must not be relied upon as having been authorized.
The Purchaser or the Parent has filed with the Commission the Tender Offer
Statement pursuant to Rule 14d-3 under the Exchange Act, furnishing certain
additional information with respect to the Offer. In addition, the Company has
filed with the Commission the Schedule 14D-9 pursuant to Rule 14d-9 under the
Exchange Act setting forth its recommendation with respect to the Offer and
the reasons for such recommendation and furnishing certain additional related
information. Such Schedules and any amendments thereto, including exhibits,
should be available for inspection and copies should be obtainable in the
manner set forth in Sections 8 and 9 (except that they will not be available
at the regional offices of the Commission).
LPIV ACQUISITION CORP.
June 25, 1999
31
<PAGE>
SCHEDULE I
Directors and Executive Officers of the Purchaser and the Parent
1. General. LPIV, LLC, a Delaware limited liability company, is a wholly
owned subsidiary of LPIV Acquisition Corp., a Michigan corporation, which is a
wholly owned subsidiary of Littlejohn Partners IV, L.P., a Delaware limited
partnership. The general partner of Littlejohn Partners IV, L.P., is
Littlejohn Associates, LLC, a Delaware limited liability company. Information
with regard to the directors and executive officers of LPIV, LLC, Littlejohn
Associates, LLC and LPIV Acquisition Corp. is set forth in items 2, 3 and 4
below, respectively. The principal address and current business address for
each of the entities described in this Item 1 is c/o Littlejohn Partners IV,
L.P., 115 East Putnam Avenue, Greenwich, Connecticut 06830.
2. Executive Officers of LPIV, LLC. LPIV, LLC is a member-managed limited
liability corporation. Its sole member is LPIV Acquisition Corp. The name,
business address, present principal occupation or employment and five-year
employment history of each of the executive officers of LPIV, LLC are set
forth below. Unless otherwise indicated, the business address of each such
director and each such executive officer is L.P., 115 East Putnam Avenue,
Greenwich, Connecticut 06830. All executive officers listed below are citizens
of the United States.
<TABLE>
<CAPTION>
POSITION WITH LPIV, LLC
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS 5-YEAR EMPLOYMENT HISTORY
- ------------------------- -----------------------------------
<S> <C>
Angus C. Littlejohn, Jr. ........... Chairman. Chief Executive Officer of
Littlejohn & Co. ("Littlejohn") (1996 to
present). General Partner in charge of
operations at Joseph Littlejohn & Levy
(1987 to 1996).
Michael I. Klein.................... President. President of Littlejohn (1996 to
present). Founder and principal of Trinad
Partners, Inc., a merchant banking firm
which acquired S&S Industries, Inc. (1994
to 1996). Executive officer and director of
S&S Industries, Inc., a manufacturer of
components for brassieres (1995 to 1998).
Harry E. Weyher, III................ Vice President, Treasurer and Secretary.
Executive Vice President and Chief
Financial Officer of Littlejohn (1996 to
present). Chief Financial Officer of Gerald
Metals, Inc., an international metals
trading and processing firm (1990 to 1996).
</TABLE>
3. Managers of Littlejohn Associates, LLC. Littlejohn Associates, LLC, the
general partner of Littlejohn Partners IV L.P., is a manager-managed limited
liability corporation. The managers of Littlejohn Associates, LLC are listed
below and the business address, present principal occupation or employment and
five-year employment history of each such managers are set forth above in
Section 2 of this Schedule I, except as set forth below. All managers listed
below are citizens of the United States.
<TABLE>
<CAPTION>
POSITION WITH LITTLEJOHN ASSOCIATES, LLC
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS 5-YEAR EMPLOYMENT HISTORY
- ------------------------- -----------------------------------------
<S> <C>
Angus C. Littlejohn, Jr. ........... Manager
Michael I. Klein.................... Manager
Harry E. Weyher, III................ Manager
Edmund J. Feeley.................... Manager. Managing Director of Littlejohn
(from 1998 to present). President and Chief
Operating Officer of Fleer Corp. (1996 to
1998). Senior Vice President of The
Timberland Co. (1993 to 1996).
</TABLE>
32
<PAGE>
4. Directors and Executive Officers of LPIV Acquisition Corp. The name of
each of the directors and executive officers of the Purchaser are set forth
below. The business address, present principal occupation or employment and
five-year employment history of such individuals are set forth above in
Section 2 of this Schedule I. All directors and executive officers listed
below are citizens of the United States.
<TABLE>
<CAPTION>
POSITION WITH LPIV ACQUISITION CORP.
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND BUSINESS ADDRESS 5-YEAR EMPLOYMENT HISTORY
- ------------------------- ------------------------------------
<S> <C>
Angus C. Littlejohn, Jr. .............. Chairman and Director.
Michael I. Klein....................... President and Director.
Harry E. Weyher, III................... Vice President, Treasurer and Secretary.
</TABLE>
33
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each shareholder of the
Company or such shareholder's broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
BankBoston, N.A.
By First Class Mail: By Hand: By Overnight, Certified
or Express Mail:
BankBoston, N.A. Securities Transfer &
ATTN: Corporate Actions Reporting Services, Inc. BankBoston, N.A.
P.O. Box 8029 c/o Boston Equiserve LP ATTN: Corporate Actions
Boston, MA 02266-8029 100 William Street, Galleria 150 Royall Street
New York, NY 10038 Canton, MA 02021
By Facsimile Transmission:
(For Eligible Institutions only)
(781) 575-2233/2232
For Information or Confirmation:
(781) 575-3120
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or
any other tender offer materials may be directed to the Information Agent at
the address and telephone numbers listed below. You may also contact your
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
[LOGO OF GEORGESON SHAREHOLDER COMMUNICATIONS INC. APPEARS HERE]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect (212) 440-9800
All Others Call Toll Free (800) 223-2064
<PAGE>
Exhibit (a)(2)
Letter of Transmittal
<PAGE>
Letter of Transmittal
To Tender Shares of Common Stock
of
Durakon Industries, Inc.
Pursuant to the Offer to Purchase
Dated June 25, 1999
by
LPIV Acquisition Corp.
a wholly owned subsidiary of
Littlejohn Partners IV, L.P.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
BankBoston, N.A.
By First Class By Hand: By Overnight,
Mail: Certified or
Securities Express Mail:
BankBoston, N.A. Transfer &
ATTN: Corporate Reporting BankBoston, N.A.
Actions Services, Inc. ATTN: Corporate
P.O. Box 8029 c/o Boston Actions
Boston, MA 02266- EquiServe LP 150 Royall Street
8029 100 William Canton, MA 02021
Street, Galleria
New York, NY 10038
By Facsimile Transmission:
(For Eligible Institutions only)
(781) 575-2233/2232
For Information or Confirmation:
(781) 575-3120
Delivery of this Letter of Transmittal to an address other than as set forth
above or transmission of instructions via facsimile transmission other than as
set forth above will not constitute a valid delivery. You must sign this
Letter of Transmittal where indicated and complete the Substitute Form W-9
provided below.
The instructions set forth in this Letter of Transmittal should be read
carefully before this Letter of Transmittal is completed.
This Letter of Transmittal is to be completed by shareholders either if
certificates for Shares (as defined below) are to be forwarded herewith or,
unless an Agent's Message (as defined below) is utilized, if delivery of
Shares is to be made by book-entry transfer to an account maintained by the
Depositary at The Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in Section 2 of the Offer to
Purchase. Shareholders who deliver Shares by book-entry transfer are referred
to herein as "Book-Entry Shareholders" and other shareholders are referred to
herein as "Certificate Shareholders."
Shareholders whose certificates for Shares (the "Share Certificates") are
not immediately available or who cannot deliver either the Share Certificates
for, or a Book-Entry Confirmation (as defined below) with respect to, their
Shares and all other documents required hereby to the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) must tender
their Shares in accordance with the guaranteed delivery procedure set forth in
Section 2 of the Offer to Purchase. See Instruction 2. Delivery of documents
to the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedures does not constitute delivery to the Depositary.
1
<PAGE>
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name(s) & Address(es) of
Registered Holder(s)
(Please Fill In, If Blank,
Exactly as Name(s) Appear(s) Share Certificate(s) Tendered
on Certificate(s)) (Attach Additional List If Necessary)
- ---------------------------------------------------------------------------------
Total Number
Share of Shares Number
Certificate Represented by of Shares
Number(s)* Certificate(s)* Tendered**
--------------------------------------------------
<S> <C> <C> <C>
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Total Shares
- ---------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-Entry Shareholders.
** Unless otherwise indicated, it will be assumed that all Shares evidenced
by each Share Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
[_]Check here if Shares are being tendered by book-entry transfer made to an
account maintained by the Depositary with the Book-Entry Transfer Facility
and complete the following (only participants in the Book-Entry Transfer
Facility may deliver Shares by book-entry transfer):
Name of Tendering Institution: ______________________________________________
The Depository Trust Company
Account Number ___________________ Transaction Code Number __________________
[_]Check here if Shares are being tendered pursuant to a Notice of Guaranteed
Delivery previously sent to the Depositary and complete the following
please include a photocopy of such Notice of Guaranteed Delivery:
Name(s) of Registered Holder(s): ____________________________________________
Window Ticket Number (if any):_______________________________________________
Date of Execution of Notice of Guaranteed Delivery: _________________________
Name of Institution that Guaranteed Delivery: _______________________________
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to LPIV Acquisition Corp., a Michigan
corporation (the "Purchaser"), and a wholly owned subsidiary of Littlejohn
Partners IV, L.P., a Delaware limited partnership (the "Parent"), the above-
described shares of common stock, without par value (the "Shares"), of Durakon
Industries, Inc., a Michigan corporation (the "Company"), upon the Purchaser's
offer to purchase all issued and outstanding Shares at a price of $16.00 per
Share, net to the seller in cash, without interest, in accordance with the
terms and subject to the conditions set forth in the Purchaser's Offer to
Purchase dated June 25, 1999 (the "Offer to Purchase"), and this Letter of
Transmittal (which, together with any amendments or supplements thereto or
hereto, collectively constitute the "Offer"), receipt of which is hereby
acknowledged.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), (i) the Purchaser will accept for payment and pay, as promptly
as practicable after the Expiration Date, for all Shares validly tendered
herewith prior to the Expiration Date and not properly withdrawn in accordance
with the terms of the Offer, and (ii) the undersigned hereby sells, assigns
and transfers to, or upon the order of, the Purchaser all right, title and
interest in and to all the Shares that are being tendered hereby and any and
all non-cash dividends, distributions (including, without limitation,
distribution of additional Shares) or rights declared, paid or distributed in
respect of such Shares on or after June 17, 1999 (collectively,
"Distributions"), and irrevocably constitutes and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares and all Distributions, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (a) deliver such Share Certificates and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by the Book-Entry Transfer Facility, together, in any such case, with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Purchaser, (b) present such Shares and all Distributions for transfer on
the Company's books and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints Angus C. Littlejohn, Jr. and Michael I. Klein as proxies of the
undersigned, each with full power of substitution, to the full extent of the
undersigned's rights with respect to the Shares tendered by the undersigned
and accepted for payment by the Purchaser (and any and all Distributions). All
such proxies shall be considered coupled with an interest in the tendered
Shares. This appointment will be effective if, when, and only to the extent
that, the Purchaser accepts such Shares for payment pursuant to the Offer.
Upon such acceptance for payment, all prior proxies given by the undersigned
with respect to such Shares (and such other Shares and securities) will,
without further action, be revoked, and no subsequent proxies may be given nor
any subsequent written consent executed by the undersigned (and, if given or
executed, will not be deemed to be effective) with respect thereto. The
designees of the Purchaser named above will, with respect to the Shares and
other securities for which the appointment is effective, be empowered to
exercise all voting and other rights of the undersigned as they in their sole
discretion may deem proper at any annual or special meeting of the
shareholders of the Company or any adjournment or postponement thereof, by
written consent in lieu of any such meeting or otherwise, and the Purchaser
reserves the right to require that, in order for Shares or other securities to
be deemed validly tendered, immediately upon the Purchaser's acceptance for
payment of such Shares, the Purchaser must be able to exercise full voting
rights with respect to such Shares.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Shares
(and all Distributions) and, when the same are accepted for payment by the
Purchaser, the Purchaser will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances,
and that the same will not be subject to any adverse claim. The undersigned
will, upon request, execute and deliver any additional documents deemed by the
Depositary or the
3
<PAGE>
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of the tendered Shares (and all Distributions). In addition, the
undersigned shall promptly remit and transfer to the Depositary for the
account of the Purchaser any and all Distributions in respect of the Shares
tendered hereby, accompanied by appropriate documentation of transfer, and,
pending such remittance and transfer or appropriate assurance thereof, the
Purchaser shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the tendered Shares
or deduct from such purchase price, the amount or value of such Distribution
as determined by the Purchaser in its sole discretion.
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
of the procedures described in Section 2 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions of
the Offer, including, without limitation, the undersigned's representation and
warranty that the undersigned owns the Shares being tendered.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates
for Shares not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any certificates
for Shares not tendered or accepted for payment (and accompanying documents,
as appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered." In the event that both the Special Delivery
Instructions and the Special Payment Instructions are completed, please issue
the check for the purchase price and/or return any certificates for Shares not
tendered or accepted for payment (and any accompanying documents, as
appropriate) in the name of, and deliver such check and/or return such
certificates (and any accompanying documents, as appropriate) to, the person
or persons so indicated. Please credit any Shares tendered herewith by book-
entry transfer that are not accepted for payment by crediting the account at
the Book-Entry Transfer Facility. The undersigned recognizes that the
Purchaser has no obligation pursuant to the Special Payment Instructions to
transfer any Shares from the name of the registered holder(s) thereof if the
Purchaser does not accept for payment any of the Shares so tendered.
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if
certificates for Shares not
tendered or not accepted for
payment and/or the check for the
purchase price of Shares accepted
for payment are to be issued in
the name of someone other than the
undersigned.
Issue check and/or certificate(s)
to:
Name ______________________________
(Please Print)
Address ___________________________
___________________________________
(Include Zip Code)
___________________________________
(Tax Identification or Social Security Number)
(See Substitute Form W-9 on Reverse Side)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if
certificates for Shares not
tendered or not accepted for
payment and/or the check for the
purchase price of Shares accepted
for payment are to be sent to
someone other than the
undersigned, or to the undersigned
at an address other than that
shown under "Description of Shares
Tendered."
Mail check and/or certificate(s)
to:
Name ______________________________
(Please Print)
Address ___________________________
___________________________________
(Include Zip Code)
___________________________________
(Tax Identification or Social Security Number)
(See Substitute Form W-9 on Reverse Side)
5
<PAGE>
SIGN HERE
(ALSO SIGN AND COMPLETE SUBSTITUTE FORM W-9 BELOW)
X ______________________________________________________________________________
X ______________________________________________________________________________
(Signature(s) of Shareholder(s))
Dated:_____________, 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians, attorneys-
in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, please provide the following information and see
Instruction 5.)
Name(s) ________________________________________________________________________
__________________________________________________________________________
(Please Print)
Capacity (full title) __________________________________________________________
Address ________________________________________________________________________
__________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number _________________________________________________
Tax Identification or Social Security Number ___________________________________
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature ___________________________________________________________
Name and Title _________________________________________________________________
(Please Print)
Name of Firm ___________________________________________________________________
Address ________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number _________________________________________________
Dated:_____________, 1999
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal if (i) this Letter of Transmittal is signed by the
registered holder of Shares (which, for purposes of this Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on
a security position listing as the owner of the Shares) tendered herewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on
this Letter of Transmittal or (ii) such Shares are tendered for the account of
a firm that is a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (each, an "Eligible Institution"). In all
other cases, all signatures on this Letter of Transmittal must be guaranteed
by an Eligible Institution. See Instruction 5. If the certificates for Shares
are registered in the name of a person other than the signer of this Letter of
Transmittal, or if payment is to be made or certificates for Shares not
tendered or not accepted for payment are to be issued to a person other than
the registered holder of the certificates surrendered, the tendered
certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered holders or
owners appear on the certificates, with the signatures on the certificates or
stock powers guaranteed as described above. See Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
shareholders either if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined below) is utilized, if delivery of Shares is to be
made pursuant to the procedures for book-entry transfer set forth in Section 2
of the Offer to Purchase. For a shareholder validly to tender Shares pursuant
to the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
any other documents required by the Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth herein prior to the
Expiration Date and either (i) certificates for tendered Shares must be
received by the Depositary at one of such addresses prior to the Expiration
Date or (ii) Shares must be delivered pursuant to the procedures for book-
entry transfer set forth herein and a Book-Entry Confirmation (as defined in
the Offer to Purchase) must be received by the Depositary prior to the
Expiration Date, or (b) the tendering shareholder must comply with the
guaranteed delivery procedures set forth below and in Section 2 of the Offer
to Purchase.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of this Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
If certificates are forwarded to the Depositary in multiple deliveries, a
properly completed and duly executed Letter of Transmittal must accompany each
such delivery. If a shareholder desires to tender Shares pursuant to the Offer
and such shareholder's Share Certificates are not immediately available or the
procedure for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Depositary prior to
the Expiration Date, such shareholder's tender may be effected if all the
following conditions are met: (a) such tender is made by or through an
Eligible Institution; (b) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Purchaser is
received by the Depositary, as provided in Section 2 of the Offer to Purchase,
prior to the Expiration Date; and (c) the Share Certificates for all tendered
Shares, in proper form for transfer (or a Book-Entry Confirmation with respect
to such Shares), together with a properly completed and duly executed Letter
of Transmittal (or facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and any other
documents required by this Letter of Transmittal, are received by the
Depositary within three trading days after the date of execution of the Notice
of Guaranteed Delivery as provided in Section 2 of the Offer to Purchase. A
"trading day," for purposes of the preceding sentence, is any day on with the
Nasdaq National Market is open for business.
7
<PAGE>
The method of delivery of Shares, this Letter of Transmittal and all other
required documents, including delivery through the Book-Entry Transfer
Facility, is at the election and risk of the tendering shareholder. Shares
will be deemed delivered only when actually received by the Depositary. If
delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering shareholders, by execution
of this Letter of Transmittal (or facsimile thereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate schedule attached hereto.
4. Partial Tenders. (Applicable to Certificate Shareholders Only). If fewer
than all the Share Certificates submitted are to be tendered, fill in the
number of Shares that are to be tendered in the box entitled "Number of Shares
Tendered." In any such case, new Share Certificates for the remainder of the
Shares that were evidenced by the old Share Certificates will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the acceptance for payment
of, and payment for, the Shares tendered herewith. All Shares represented by
Share Certificates delivered to the Depositary will be deemed to have been
tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or accepted for payment are to be issued
to, a person other than the registered holder(s). Signatures on such
certificates and stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered holder(s) appear on the
certificates. Signatures on such certificates and stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Purchaser of such person's authority so to
act must be submitted.
6. Stock Transfer Taxes. Except as provided in this Instruction 6, the
Purchaser will pay stock transfer taxes with respect to the transfer and sale
of Shares to the Purchaser or its order pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or if certificates for Shares
not tendered or accepted for payment are to be registered in the name of, any
person(s) other than the registered holder(s), or if tendered
8
<PAGE>
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such person) payable on
account of the transfer to such person will be deducted from the purchase
price unless satisfactory evidence of the payment of such taxes or exemption
therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. Special Payment and Delivery Instructions. If a check is to be issued in
the name of and/or certificates for Shares not tendered or not accepted for
payment are to be returned to, a person other than the signer of this Letter
of Transmittal or if a check is to be sent and/or such certificates are to be
returned to a person other than the signer of this Letter of Transmittal or to
an address other than that shown above, the appropriate boxes on this Letter
of Transmittal must be completed.
8. Waiver of Conditions. The Purchaser reserves the absolute right in its
sole discretion to waive any of the specified conditions of the Offer, in
whole or in part, in the case of any Shares tendered.
9. 31% Backup Withholding; Substitute Form W-9. In order to avoid "backup
withholding" of Federal income tax on payments of cash pursuant to the Offer,
a shareholder surrendering Shares in the Offer must provide the Depositary
with such shareholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalty of perjury that such TIN is
correct and that such shareholder is not subject to backup withholding.
Certain shareholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding. If a
shareholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may
impose a penalty on such shareholder and payment of cash to such shareholder
pursuant to the Offer may be subject to backup withholding of 31%. All
shareholders surrendering Shares pursuant to the Offer should complete and
sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification
necessary to avoid backup withholding (unless an applicable exemption exists
and is proved in a manner satisfactory to the Purchaser and the Depositary).
Noncorporate foreign shareholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
If backup withholding applies to a shareholder, the Depositary is required
to withhold 31% from payments to such shareholder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be
credited against the Federal income tax liability of the person subject to the
backup withholding, provided that the required information is given to the
IRS. If backup withholding results in an overpayment of tax, a refund can be
obtained by the shareholder upon filing an income tax return.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
shareholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
shareholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN
is provided to the Depositary. However, such amounts will be refunded to such
shareholder if a TIN is provided to the Depositary within 60 days.
The shareholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
9
<PAGE>
10. Requests for Assistance or Additional Copies. Requests for additional
copies of the Offer to Purchase, this Letter of Transmittal, the Notice of
Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 and questions or requests for
assistance may be directed to the Information Agent at its address set forth
below.
11. Lost, Destroyed or Stolen Certificates. If any certificate representing
Shares has been lost, destroyed or stolen, the shareholder should promptly
notify the Company's stock transfer agent, American Stock Transfer & Trust
Company, at 1-800-937-5449. The shareholder will then be instructed as to the
steps that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
Important: This Letter of Transmittal (or a facsimile hereof), properly
completed and duly executed, together with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and all other
required documents, must be received by the Depositary on or prior to the
Expiration Date and either certificates for tendered Shares must be received
by the Depositary or Shares must be delivered pursuant to the procedures for
book-entry transfer, or the Notice of Guaranteed Delivery must be received by
the Depositary, in each case on or prior to the Expiration Date, or the
tendering shareholder must comply with the procedures for guaranteed delivery.
10
<PAGE>
PAYOR'S NAME: BANKBOSTON, N.A., AS DEPOSITARY
- --------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR
TAXPAYER IDENTIFICATION NUMBER ---------------
IN THE BOX AT RIGHT AND CERTIFY Social
BY SIGNING AND DATING BELOW. security
number
SUBSTITUTE OR
---------------
Form W-9 Employer
identification
Department of number
the Treasury
Internal
Revenue Service
----------------------------------------------------
PART 2--CERTIFICATION--Under penalties of perjury,
I certify that:
Payor's Request for
Taxpayer Identification (1) The number shown on this form is my correct
Number Taxpayer Identification Number (or I am
waiting for a number to be issued for me) and
(2) I am not subject to backup withholding
because: (a) I am exempt from backup
withholding, or (b) I have not been notified
by the Internal Revenue Service (the "IRS")
that I am subject to backup withholding as a
result of a failure to report all interest or
dividends, or (c) the IRS has notified me that
I am no longer subject to backup withholding.
-----------------------------------------------------
Certification Instructions--You
must cross out item (2) above if
you have been notified by the
IRS that you are currently
subject to backup withholding
because of underreporting
interest or dividends on your
tax returns. However, if after
being notified by the IRS that
you were subject to backup
withholding you received another
notification from the IRS
stating that you are no longer PART 3 --
subject to backup withholding, Awaiting
do not cross out such item (2). TIN [_]
Signature ________ Date __, 1999
- --------------------------------------------------------------------------------
Note: Failure to complete and return this Form may result in backup
withholding of 31% of any payments made to you pursuant to the Offer.
Please review the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional details.
You must complete the following certificate if you
checked the box in Part 3 of Substitute Form W-9.
11
<PAGE>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalty of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all reportable payments made to me will be withheld,
but that such amounts will be refunded to me if I then provide a Taxpayer
Identification Number within sixty (60) days.
Signature: ________________________ Date: _____________________________
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone numbers below. Requests for additional
copies of the Offer to Purchase, the related Letter of Transmittal and all
other tender offer materials may be directed to the Information Agent. Copies
will be furnished promptly at the Purchaser's expense. No fees or commissions
will be paid to any broker or dealer or any other person (other than the
Information Agent) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
[LOGO OF GEORGESON SHAREHOLDER COMMUNICATIONS INC. APPEARS HERE]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect (212) 440-9800
All Others Call Toll Free (800) 223-2064
12
<PAGE>
Exhibit (a)(3)
Notice of Guaranteed Delivery
<PAGE>
Notice of Guaranteed Delivery
for
Tender of Shares of Common Stock
of
Durakon Industries, Inc.
to
LPIV Acquisition Corp.
a wholly owned subsidiary of
Littlejohn Partners IV, L.P.
(Not to Be Used for Signature Guarantees)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER IS EXTENDED.
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer
(as defined below) if certificates representing shares of common stock,
without par value (the "Shares"), of Durakon Industries Inc., a Michigan
corporation (the "Company"), are not immediately available or if the
procedures for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Depositary prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase). This
form may be delivered by hand or transmitted by facsimile transmission or
mailed to the Depositary and must include a guarantee by an Eligible
Institution (as defined in Section 2 of the Offer to Purchase). See Section 2
of the Offer to Purchase.
The Depositary for the Offer is:
BankBoston, N.A.
By First Class Mail: By Hand: By Overnight,
Certified or Express
BankBoston, N.A. Securities Transfer Mail:
ATTN: Corporate & Reporting
Actions Services, Inc. BankBoston, N.A.
P.O. Box 8029 ATTN: Corporate
Boston, MA 02266-8029 c/o Boston EquiServe LP Actions
100 William Street, 150 Royall Street
Galleria Canton, MA 02021
New York, NY 10038
By Facsimile Transmission:
(For Eligible Institutions only)
(781) 575-2233/2232
For Information or Confirmation:
(781) 575-3120
Delivery of this instrument to an address, or transmission of instructions
via a facsimile number, other than as set forth above, will not constitute a
valid delivery.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter of
Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to LPIV Acquisition Corp., a Michigan
corporation (the "Purchaser"), and a wholly owned subsidiary of Littlejohn
Partners IV, L.P., a Delaware limited partnership, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated June
25, 1999 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"), receipt of which is hereby
acknowledged, the number of Shares set forth below pursuant to the
guaranteed delivery procedures set forth in Section 2 of the Offer to
Purchase.
Number of Shares: __________________________________________________________
Name(s) of Record Holder(s): _______________________________________________
(Please Print)
Certificate Nos. (if available): ___________________________________________
Address(es): _______________________________________________________________
(Zip Code)
Area Code and Tel. No.: ____________________________________________________
Check box if Shares will be tendered by book-entry transfer: [_]
The Depository Trust Company Account Number: _______________________________
Signature(s): ______________________________________________________________
Dated: _____________________________________________________________________
2
<PAGE>
GUARANTEE
(Not To Be Used For Signature Guarantee)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program
or the Stock Exchange Medallion Program, hereby guarantees to deliver to
the Depositary either the certificates representing the Shares tendered
hereby, in proper form for transfer, or a Book-Entry Confirmation (as
defined in Section 2 of the Offer to Purchase) of a transfer of such
Shares, in any such case together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or, in the case of a book entry Transfer, an Agent's
Message (as defined in the Offer to Purchase), and any other documents
required by the Letter of Transmittal, within three trading days after the
date hereof. A "trading day," for purposes of the preceding sentence, is
any day on which the Nasdaq National Market is open for business.
The Eligible Institution that completes this form must communicate this
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown
herein. Failure to do so could result in a financial loss to such Eligible
Institution.
Name of Firm: ______________________________________________________________
(Authorized signature)
Address: ___________________________________________________________________
(Zip Code)
Title: _____________________________________________________________________
Area Code and Tel. No.: ____________________________________________________
Dated: _________, 1999
NOTE: Do not send certificates for shares with this notice. Share
Certificates should be sent with your Letter of Transmittal.
3
<PAGE>
Exhibit (a)(4)
Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
<PAGE>
Offer to Purchase For Cash
All Issued and Outstanding Shares of Common Stock
of
Durakon Industries, Inc.
at
$16.00 Net per Share
by
LPIV Acquisition Corp.
a wholly owned subsidiary of
Littlejohn Partners IV, L.P.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER IS EXTENDED.
June 25, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by LPIV Acquisition Corp., a Michigan corporation
(the "Purchaser") and a wholly owned subsidiary of Littlejohn Partners IV,
L.P., a Delaware limited partnership (the "Parent"), to act as Information
Agent in connection with the Purchaser's offer to purchase all issued and
outstanding shares of common stock, without par value (the "Shares"), of
Durakon Industries, Inc., a Michigan corporation (the "Company"), at $16.00
per Share (the "Offer Price"), net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in the Offer to
Purchase dated June 25, 1999 (the "Offer to Purchase"), and the related Letter
of Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer") enclosed herewith.
Please furnish copies of the enclosed materials to those of your clients for
whom you hold Shares registered in your name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase, dated June 25, 1999;
2. Letter of Transmittal to be used by shareholders of the Company
accepting the Offer;
3. The letter to shareholders of the Company from the Chairman and Chief
Executive Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9;
4. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with
space provided for obtaining such client's instructions with regard to the
Offer;
5. Notice of Guaranteed Delivery;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
<PAGE>
We urge you to contact your clients promptly. Please note that the Offer and
withdrawal rights will expire at 12:00 Midnight, New York City time, on
Friday, July 23, 1999, unless the Offer is extended.
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of June 17, 1999 (the "Merger Agreement") among the Parent, the Purchaser
and the Company. Following the satisfaction or waiver of certain conditions,
including approval by shareholders of the Company, if such approval is
required by applicable law, the Purchaser will be merged with and into the
Company, with the Company surviving the merger (as such, the "Surviving
Corporation") as a wholly owned subsidiary of the Parent (the "Merger"). At
the effective time of the Merger (the "Effective Time"), each outstanding
Share (other than Shares owned by the Company or by the Parent, the Purchaser
or any other direct or indirect wholly owned subsidiary of the Parent or the
Company) will be converted into the right to receive the Offer Price in cash,
without interest (the "Merger Consideration"). See Section 12 of the Offer to
Purchase.
In the event the Purchaser acquires 90% or more of the outstanding Shares at
the time of acceptance for payment pursuant to the Offer or otherwise, the
Purchaser would be able to effect the Merger pursuant to the short-form merger
provisions of the Michigan Business Corporation Act, without prior notice to,
or any action by, any other shareholder of the Company. In such event, the
Purchaser is required to effect the Merger without prior notice to, or any
action by, any other shareholder of the Company, promptly after its acceptance
for payment of Shares tendered into the Offer. In the Merger Agreement, the
Parent, the Purchaser and the Company have agreed that the Purchaser may
extend the Offer for one or more periods not to exceed 30 days in the
aggregate without the prior written consent of the Company. If immediately
after the expiration of the Offer at least a majority of the outstanding
Shares on a fully-diluted basis have been tendered in the Offer and not
withdrawn, but the Minimum Tender Condition has not been satisfied, then the
parties have agreed that the Purchaser will not purchase any Shares pursuant
to the Offer and, instead, the Company will promptly convene a special meeting
of the shareholders of the Company for the purpose of considering and taking
action on the Merger Agreement and the transactions contemplated thereby. The
Company has agreed, as soon as practicable after the execution of the Merger
Agreement, to file a proxy statement relating to the Merger with the
Securities and Exchange Commission.
The Purchaser and the Parent have entered into Stock Tender and Voting
Agreements each dated as of June 17, 1999 (the "Shareholder Agreements") with
certain shareholders of the Company (the "Shareholders"), including all of its
directors, who own 1,971,286 outstanding Shares in the aggregate on the date
of the Merger Agreement, representing approximately 32% of the outstanding
Shares. Under the Shareholder Agreements, each Shareholder agreed, among other
things, to validly tender the Shares beneficially owned by it, as well as any
Shares subsequently acquired by it. In addition, each Shareholder agreed to
vote its Shares in favor of the Merger, the adoption by the Company of the
Merger Agreement and the approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement, and agreed to vote against
(a) any action or agreement that would result in a breach of any covenant or
any representation or warranty or any other obligation or agreement of the
Company under or pursuant to the Merger Agreement and (b) any action or
agreement that would impede, interfere with, delay, postpone or attempt to
discourage the Merger or the Offer. Each Shareholder also agreed, without
limiting the foregoing, to consult with the Parent and vote all Shares
beneficially owned by it in such manner as is determined by the Parent to be
in compliance with the provisions of the Shareholder Agreements. The
Shareholder Agreements are more fully described in Section 12 of the Offer to
Purchase. Pursuant to the Shareholder Agreements, each Shareholder has
delivered to the Parent, contemporaneously with the execution of its
Shareholder Agreement, an irrevocable proxy pursuant to which each Shareholder
irrevocably appointed Angus C. Littlejohn, Jr., Michael I. Klein and
Littlejohn Partners IV, L.P. as its proxies and attorneys-in-fact to exercise
the proxy to vote the Shares in the foregoing manner at any time until the
earlier to occur of the valid termination of the Merger Agreement or the
Effective Time.
The Offer is conditioned upon, among other things, there having been validly
tendered and not withdrawn prior to the expiration of the Offer at least 90%
of the outstanding Shares at the time of acceptance for payment.
2
<PAGE>
The Board of Directors of the Company has unanimously approved and found
advisable the Merger Agreement, the Offer and the Merger, unanimously
determined that the terms of the Offer and the Merger are fair to, and in the
best interests of, the shareholders of the Company and unanimously recommends
that shareholders of the Company accept the Offer and tender their Shares.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the Purchaser will accept for payment and pay, as promptly as
practicable after the Expiration Date, for all Shares validly tendered prior
to the Expiration Date and not theretofore properly withdrawn in accordance
with Section 3 of the Offer to Purchase. The term "Expiration Date" means
12:00 Midnight, New York City time, on Friday, July 23, 1999, unless and until
(i) the Purchaser, in its sole discretion (but subject to the terms of the
Merger Agreement), or (ii) the Purchaser and the Company, shall have extended
the period of time during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as
so extended by the Purchaser, or by the Purchaser and the Company, shall
expire. For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares validly tendered to the
Purchaser and not properly withdrawn as, if and when the Purchaser gives oral
or written notice to the Depositary of the Purchaser's acceptance for payment
of such Shares.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by BankBoston, N.A. (the "Depositary")
of (i) certificates for such Shares (or a timely Book-Entry Confirmation of a
transfer of such Shares as described in Section 2 of the Offer to Purchase),
(ii) a Letter of Transmittal (or facsimile thereof), properly completed and
duly executed, together with any required signature guarantees, or, in the
case of a book-entry transfer, effected pursuant to the procedure set forth in
Section 2 of the Offer to Purchase, an Agent's Message (as defined in the
Offer to Purchase), and (iii) any other documents required by the Letter of
Transmittal. Accordingly, tendering shareholders may be paid at different
times depending upon when certificates for Shares or Book-Entry Confirmations
with respect to Shares are actually received by the Depositary. Under no
circumstances will interest be paid by the Purchaser on the purchase price of
the Shares, regardless of any extension of the Offer or any delay in making
such payment.
If a shareholder desires to tender Shares pursuant to the Offer and such
shareholder's certificates for Shares are not immediately available or the
procedure for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Depositary prior to
the Expiration Date, such shareholder's tender may be effected by following
the guaranteed delivery procedures specified in Section 2 of the Offer to
Purchase.
Neither the Purchaser nor the Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent and the
Depositary as described in the Offer to Purchase) in connection with the
solicitation of tenders of Shares pursuant to the Offer. However, you will be
reimbursed upon request for customary mailing and handling expenses incurred
by you in forwarding the enclosed offering materials to your customers.
The Purchaser will pay stock transfer taxes with respect to the transfer and
sale of Shares to it or its order pursuant to the Offer, except as otherwise
provided in Instruction 6 to the Letter of Transmittal.
Questions and requests for assistance or for additional copies of the
enclosed material may be directed to the Information Agent at the address and
telephone numbers set forth on the back cover of the enclosed Offer to
Purchase.
Very truly yours,
Georgeson Shareholder Communications
Inc.
Nothing contained herein or in the enclosed documents shall render you or
any other person the agent of the Purchaser, the Parent, the Depositary, the
Information Agent or any affiliate thereof or authorize you or any other
person to give any information or use any document or make any statements on
behalf of any of them with respect to the Offer other than the enclosed
documents and the statements contained therein.
3
<PAGE>
EXHIBIT (a)(5)
Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
<PAGE>
Offer to Purchase For Cash
All Issued and Outstanding Shares of Common Stock
of
Durakon Industries, Inc.
at
$16.00 Net per Share
by
LPIV Acquisition Corp.
a wholly owned subsidiary of
Littlejohn Partners IV, L.P.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER IS EXTENDED.
June 25, 1999
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated June 25, 1999
(the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") relating to an offer by LPIV Acquisition Corp., a Michigan
corporation (the "Purchaser") and a wholly owned subsidiary of Littlejohn
Partners IV, L.P., a Delaware limited partnership (the "Parent"), to purchase
all issued and outstanding shares of common stock, without par value (the
"Shares"), of Durakon Industries, Inc., a Michigan corporation (the
"Company"), at $16.00 per Share (the "Offer Price"), net to the seller in
cash, without interest, upon the terms and subject to the conditions set forth
in the Offer. Also enclosed is the Letter to Shareholders of the Company from
the Chairman and Chief Executive Officer of the Company accompanied by the
Company's Solicitation/Recommendation Statement on Schedule 14D-9.
We are the holder of record of Shares held by us for your account. A tender
of such Shares can be made only by us as the holder of record and pursuant to
your instructions. The Letter of Transmittal is furnished to you for your
information only and cannot be used to tender Shares held by us for your
account.
We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is invited to the following:
1. The tender price is $16.00 per Share, net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer.
2. The Offer is being made for all issued and outstanding Shares.
3. The Offer is being made pursuant to the Agreement and Plan of Merger
dated as of June 17, 1999 (the "Merger Agreement") among the Parent, the
Purchaser and the Company. Following the satisfaction or waiver of certain
conditions, including approval by shareholders of the Company, if such
approval is required by applicable law, the Purchaser will be merged with and
into the Company, with the Company surviving the merger (as such, the
"Surviving Corporation") as a wholly owned subsidiary of the Parent (the
"Merger"). At the effective time of the Merger (the "Effective Time"), each
outstanding Share (other than Shares owned by the Company or by the Parent,
the Purchaser or any other direct or indirect wholly owned subsidiary of the
Parent or the Company) will be converted into the right to receive the Offer
Price in cash, without interest (the "Merger Consideration").
<PAGE>
4. In the event the Purchaser acquires 90% or more of the outstanding Shares
at the time of acceptance for payment pursuant to the Offer or otherwise, the
Purchaser would be able to effect the Merger pursuant to the short-form merger
provisions of the Michigan Business Corporation Act, without prior notice to,
or any action by, any other shareholder of the Company. In such event, the
Purchaser is required to effect the Merger without prior notice to, or any
action by, any other shareholder of the Company, promptly after its acceptance
for payment of Shares tendered into the Offer. In the Merger Agreement, the
Parent, the Purchaser and the Company have agreed that the Purchaser may
extend the Offer for one or more periods not to exceed 30 days in the
aggregate without the prior written consent of the Company. If immediately
after the expiration of the Offer at least a majority of the outstanding
Shares on a fully-diluted basis have been tendered in the Offer and not
withdrawn, but the Minimum Tender Condition has not been satisfied, then the
parties have agreed that the Purchaser will not purchase any Shares pursuant
to the Offer and, instead, the Company will promptly convene a special meeting
of the shareholders of the Company for the purpose of considering and taking
action on the Merger Agreement and the transactions contemplated thereby. The
Company has agreed, as soon as practicable after the execution of the Merger
Agreement, to file a proxy statement relating to the Merger with the
Securities and Exchange Commission.
5. The Purchaser and the Parent have entered into Stock Tender and Voting
Agreements each dated as of June 17, 1999 (the "Shareholder Agreements") with
certain shareholders of the Company (the "Shareholders"), including all of its
directors, who own 1,971,286 outstanding Shares in the aggregate on the date
of the Merger Agreement, representing approximately 32% of the outstanding
Shares. Under the Shareholder Agreements, each Shareholder agrees, among other
things, to validly tender the Shares beneficially owned by it, as well as any
Shares subsequently acquired by it. In addition, each Shareholder agreed to
vote its Shares in favor of the Merger, the adoption by the Company of the
Merger Agreement and the approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement, and agreed to vote against
(a) any action or agreement that would result in a breach of any covenant or
any representation or warranty or any other obligation or agreement of the
Company under or pursuant to the Merger Agreement and (b) any action or
agreement that would impede, interfere with, delay, postpone or attempt to
discourage the Merger or the Offer. Each Shareholder also agreed, without
limiting the foregoing, to consult with the Parent and vote all Shares
beneficially owned by it in such manner as is determined by the Parent to be
in compliance with the provisions of the Shareholder Agreements. The
Shareholder Agreements are more fully described in Section 12 of the Offer to
Purchase. Pursuant to the Shareholder Agreements, each Shareholder has
delivered to the Parent, contemporaneously with the execution of its
Shareholder Agreement, an irrevocable proxy pursuant to which each Shareholder
irrevocably appointed Angus C. Littlejohn, Jr., Michael I. Klein and
Littlejohn Partners IV, L.P. as its proxies and attorneys-in-fact to exercise
the proxy to vote the Shares in the foregoing manner at any time until the
earlier to occur of the valid termination of the Merger Agreement or the
Effective Time.
6. The Offer is conditioned upon, among other things, there having been
validly tendered and not withdrawn prior to the expiration of the Offer at
least 90% of the outstanding Shares at the time of acceptance for payment.
7. The Board of Directors of the Company has unanimously approved and found
advisable the Merger Agreement, the Offer and the Merger, unanimously
determined that the terms of the Offer and the Merger are fair to, and in the
best interests of, the shareholders of the Company and unanimously recommends
that shareholders of the Company accept the Offer and tender their Shares.
8. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on Friday, July 23, 1999, unless the Offer is extended by the
Purchaser. Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of
any such extension or amendment), the Purchaser will accept for payment and
pay, as promptly as practicable after the Expiration Date, for all Shares
validly tendered prior to the Expiration Date and not theretofore properly
withdrawn in accordance with Section 3 of the Offer to Purchase. The term
"Expiration Date" means 12:00 Midnight, New York City time, on Friday, July
23, 1999, unless and until (i) the Purchaser, in its sole discretion (but
subject to the terms of the Merger
2
<PAGE>
Agreement), or (ii) the Purchaser and the Company, shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as
so extended by the Purchaser, or by the Purchaser and the Company, shall
expire. For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares validly tendered to the
Purchaser and not properly withdrawn as, if and when the Purchaser gives oral
or written notice to the Depositary of the Purchaser's acceptance for payment
of such Shares. In all cases, payment for Shares accepted for payment pursuant
to the Offer will be made only after timely receipt by BankBoston, N.A. (the
"Depository") of (i) certificates for such shares (or a timely Book-Entry
Confirmation of a transfer of such Shares as described in Section 2 of the
Offer to Purchase), (ii) a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees, or, in the case of a book-entry transfer effected pursuant to the
procedure set forth in Section 2 of the Offer to Purchase, an Agent's Message
(as defined in the Offer to Purchase), and (iii) any other documents required
by the Letter of Transmittal. Accordingly, tendering shareholders may be paid
at different times depending upon when certificates for Shares or Book-Entry
Confirmations with respect to Shares are actually received by the Depositary.
Under no circumstances will interest be paid by the Purchaser on the purchase
price of the Shares, regardless of any extension of the Offer or any delay in
making such payment.
9. The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer, except
as otherwise provided in Instruction 6 of the Letter of Transmittal.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. Neither the
Purchaser nor the Parent is aware of any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the laws
of such jurisdiction. To the extent the Purchaser or the Parent becomes aware
of any state law that would limit the class of offerees in the Offer, the
Purchaser will amend the Offer and, depending on the timing of such amendment,
if any, will extend the Offer to provide adequate dissemination of such
information to holders of Shares prior to the expiration of the Offer. In any
jurisdiction where securities or other laws require the offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
the Purchaser by one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
If you wish to have us tender any of or all your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction
form set forth below. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified below.
Your instructions to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the expiration of the Offer.
3
<PAGE>
Instructions with Respect to the Offer to Purchase
All Issued and Outstanding Shares of Common Stock
of
Durakon Industries, Inc.
The undersigned acknowledges receipt of your letter enclosing the Offer to
Purchase, dated June 25, 1999, of LPIV Acquisition Corp., a Michigan
corporation and a wholly owned subsidiary of Littlejohn Partners IV, L.P., a
Delaware limited partnership, and the related Letter of Transmittal, relating
to shares of common stock, without par value (the "Shares"), of Durakon
Industries, Inc., a Michigan corporation.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned on the terms and conditions set
forth in such Offer to Purchase and the related Letter of Transmittal.
NUMBER OF SHARES TO BE TENDERED* SIGN HERE
SHARES: _____________________________ _____________________________________
Dated: , 1999 _____________________________________
Signature(s)
_____________________________________
_____________________________________
_____________________________________
Please print name(s)
_____________________________________
_____________________________________
Address
_____________________________________
Area Code and Telephone Number
_____________________________________
Tax Identification or Social
Security Number
- --------
*Unless otherwise indicated, it will be assumed that all your Shares are to be
tendered.
<PAGE>
Exhibit (a)(6)
Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer:
- ----------------------------------- -----------------------------------
<TABLE>
<CAPTION>
Give the name and
SOCIAL SECURITY
For this type of account: number of--
- ---------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on
the account(2)
3. Husband and wife (joint The actual owner
account) of the account
or, if joint
funds, either
person(2)
4. Custodian account of a The minor(3)
minor
(Uniform Gift to Minors
Act)
5. Adult and minor (joint The adult or, if
account) the minor is
only
contributor, the
minor(2)
6. Account in the name of The ward, minor,
guardian or committee or incompetent
for a designated ward, person(4)
minor, or incompetent
person
7.a. The usual revocable The grantor-
savings trust account trustee(2)
(grantor is also
trustee)
b. So-called trust account The actual
that is not a legal or owner(2)
valid trust under State
law
8. Sole proprietorship The owner(5)
account
- ---------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Give the name and
EMPLOYER
IDENTIFICATION
For this type of account: number of--
---
<S> <C>
9. A valid trust, estate, The legal entity
or pension trust (Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title.)(1)
10. Corporate account The corporation
11. Religious, charitable, The organization
or educational
organization account
12. Partnership account The partnership
held in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public
Department of entity
Agriculture in the name
of a public entity
(such as a State or
local government,
school district, or
prison) that receives
agricultural program
payments
---
</TABLE>
(1) List first and circle the name of the legal trust, estate, or pension
trust.
(2) List first and circle the name of the person whose number you furnish.
(3) Circle the minor's name and furnish the minor's social security number.
(4) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(5) Show the name of the owner.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a TIN or you don't know your number, obtain Internal Revenue
Service Form SS-5, Application for a Social Security Number Card, or Form SS-
4, Application for Employer Identification Number, at your local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization, or any agency or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
. A middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT
TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED INTERNAL REVENUE FORM W-8
(CERTIFICATE OF FOREIGN STATUS).
Privacy Act Notice.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due
to reasonable cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect To Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
Exhibit (a)(7)
Form of Summary Advertisement
dated June 25, 1999.
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell Shares. The Offer is being made solely by the Offer to Purchase
and the related Letter of Transmittal and is being made to all holders of
Shares. The Purchaser is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with any such state statute.
If, after such good faith effort, the Purchaser cannot comply with such state
statute, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) any holders of Shares in such state. In any jurisdiction whose
securities, "blue sky" or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed made on behalf of the Purchaser by
or one or more registered brokers or dealers that are licensed under the laws of
such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Durakon Industries, Inc.
at
$16.00 Net Per Share
by
LPIV Acquisition Corp.
a wholly owned subsidiary of
Littlejohn Partners IV, L.P.
LPIV Acquisition Corp., a Michigan corporation (the "Purchaser") and a
wholly owned subsidiary of Littlejohn Partners IV, L.P., a Delaware limited
partnership (the "Parent"), is offering to purchase all issued and outstanding
shares of common stock, without par value (the "Shares"), of Durakon Industries,
Inc., a Michigan corporation (the "Company"), at $16.00 per Share (the "Offer
Price"), net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase and in the related Letter
of Transmittal (which, together with any amendments or supplements hereto or
thereto, collectively constitute the "Offer").
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JULY 23, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
<PAGE>
The Offer is conditioned upon, among other things, there having been
validly tendered and not withdrawn prior to the expiration of the Offer at least
90% of the outstanding Shares at the time of acceptance for payment (the
"Minimum Tender Condition").
The Board of Directors of the Company has unanimously approved and
found advisable the Merger Agreement, the Offer and the Merger, unanimously
determined that the terms of the Offer and the Merger are fair to, and in the
best interests of, the shareholders of the Company, and unanimously recommends
that the shareholders of the Company accept the Offer and tender their Shares.
The Offer is being made pursuant to the Agreement and Plan of Merger
dated as of June 17, 1999 (the "Merger Agreement") among the Parent, the
Purchaser and the Company. Following the satisfaction or waiver of certain
conditions, including approval by shareholders of the Company, if such approval
is required by applicable law, the Purchaser will be merged with and into the
Company, with the Company surviving the merger (as such, the "Surviving
Corporation") as a wholly owned subsidiary of the Parent (the "Merger"). At the
effective time of the Merger (the "Effective Time"), each outstanding Share
(other than Shares owned by the Company or by the Parent, the Purchaser or any
other direct or indirect wholly owned subsidiary of the Parent or the Company)
will be converted into the right to receive the Offer Price in cash, without
interest (the "Merger Consideration"). The Merger Agreement is more fully
described in the Offer to Purchase.
In the event the Purchaser acquires 90% or more of the outstanding
Shares at the time of acceptance for payment pursuant to the Offer or otherwise,
the Purchaser would be able to effect the Merger pursuant to the short-form
merger provisions of the Michigan Business Corporation Act ("MBCA"), without
prior notice to, or any action by, any other shareholder of the Company. In such
event, the Purchaser is required to effect the Merger without prior notice to,
or any action by, any other shareholder of the Company, promptly after its
acceptance for payment of Shares tendered into the Offer. In the Merger
Agreement, the Parent, the Purchaser and the Company have agreed that the
Purchaser may extend the Offer for one or more periods not to exceed 30 days in
the aggregate without the prior written consent of the Company. If immediately
after the expiration of the Offer at least a majority of the outstanding Shares
on a fully-diluted basis have been tendered in the Offer and not withdrawn, but
the Minimum Tender Condition has not been satisfied, then the parties have
agreed that the Purchaser will not purchase any Shares pursuant to the Offer
and, instead, the Company will promptly convene a special meeting of the
shareholders of the Company for the purpose of considering and taking action on
the Merger Agreement and the transactions contemplated thereby. The Company has
agreed, as soon as practicable after the execution of the Merger Agreement, to
file a proxy statement relating to the Merger with the Securities and Exchange
Commission (the "Commission").
<PAGE>
The Purchaser and the Parent have entered into Stock Tender and Voting
Agreements each dated as of June 17, 1999 (the "Shareholder Agreements") with
certain shareholders of the Company (the "Shareholders"), including all of its
directors, who own 1,971,286 outstanding Shares in the aggregate on the date of
the Merger Agreement, representing approximately 32% of the outstanding Shares
on the date of the Merger Agreement. Under the Shareholder Agreements, each
Shareholder agreed, among other things, to validly tender the Shares
beneficially owned by it, as well as any Shares subsequently acquired by it. In
addition, each Shareholder agreed to vote its Shares in favor of the Merger, the
adoption by the Company of the Merger Agreement and the approval of the terms
thereof and each of the other transactions contemplated by the Merger Agreement,
and agreed to vote against (a) any action or agreement that would result in a
breach of any covenant or any representation or warranty or any other obligation
or agreement of the Company under or pursuant to the Merger Agreement and (b)
any action or agreement that would impede, interfere with, delay, postpone or
attempt to discourage the Merger or the Offer. Each Shareholder also agreed,
without limiting the foregoing, to consult with the Parent and vote all Shares
beneficially owned by it in such manner as is determined by the Parent to be in
compliance with the provisions of the Shareholder Agreements. Pursuant to the
Shareholder Agreements, each Shareholder has delivered to the Parent,
contemporaneously with the execution of its Shareholder Agreement, an
irrevocable proxy pursuant to which each Shareholder irrevocably appointed Angus
C. Littlejohn, Jr., Michael I. Klein and Littlejohn Partners IV, L.P. as its
proxies and attorneys-in-fact to exercise the proxy to vote the Shares in the
foregoing manner at any time until the earlier to occur of the valid termination
of the Merger Agreement or the Effective Time. The Shareholder Agreements are
more fully described in the Offer to Purchase.
Upon the terms and subject to the conditions of the Offer (including,
if the Offer is extended or amended, the terms and conditions of such extension
or amendment), the Purchaser will accept for payment and pay, as promptly as
practicable after the Expiration Date, for all Shares validly tendered prior to
the Expiration Date and not theretofore properly withdrawn in accordance with
Section 3. The term "Expiration Date" means 12:00 Midnight, New York City time,
on Friday, July 23, 1999, unless and until (i) the Purchaser, in its sole
discretion (but subject to the terms of the Merger Agreement), or (ii) the
Purchaser and the Company, shall have extended the period of time during which
the Offer is open, in which event the term "Expiration Date" shall mean the
latest time and date at which the Offer, as so extended by the Purchaser, or by
the Purchaser and the Company, shall expire.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares validly tendered to the
Purchaser and not properly withdrawn as, if and when the Purchaser gives oral or
written notice to BankBoston, N.A. (the "Depositary") of the Purchaser's
acceptance for payment of such Shares. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment pursuant to the
Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering shareholders for the purpose
of receiving payment from the Purchaser and transmitting payment to tendering
shareholders whose Shares have been accepted for payment. Under no circumstances
will interest be paid by the Purchaser on the purchase price of the Shares,
regardless of any extension of the Offer or any delay in making such payment.
<PAGE>
In all cases, payment for Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or timely Book-Entry Confirmation of a transfer of
such Shares as described in Section 2), (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (iii) any other documents required by the Letter of Transmittal.
Subject to the Merger Agreement, including the restrictions discussed
below, and the applicable rules and regulations of the Securities and Exchange
Commission, the Purchaser reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether any of the conditions to
the Merger set forth in the Merger Agreement have occurred or been determined by
the Purchaser to have occurred, to (a) subject to the limitation described
below, extend the period of time during which the Offer is open, and thereby
delay acceptance for payment of any Shares, by giving oral or written notice of
such extension and delay to the Depositary, or (b) waive any condition or amend
the Offer in any other respect by giving oral or written notice of such waiver
or amendment to the Depositary. During any such extension, all Shares previously
tendered and not properly withdrawn will remain subject to the Offer, subject to
the right of a tendering shareholder to withdraw such shareholder's Shares. In
the Merger Agreement, the Parent, the Purchaser and the Company have agreed that
the Purchaser may extend the Offer for one or more periods not to exceed 30 days
in the aggregate without the prior written consent of the Company. In addition,
the Purchaser has agreed in the Merger Agreement that it will not, without the
express written consent of the Company, (i) reduce the maximum number of Shares
subject to the Offer, (ii) reduce the Offer Price, (iii) add to or modify the
conditions to the Merger set forth in the Merger Agreement, (iv) extend the
Offer, except as provided above, or (v) change the form of consideration payable
in the Offer.
The rights reserved by the Purchaser in the preceding paragraph are in
addition to the Purchaser's rights pursuant to Section 15 of the Offer to
Purchase. There can be no assurance that the Purchaser will exercise its right
to extend the Offer. Any extension, amendment, delay, waiver or termination will
be followed as promptly as practicable by public announcement, such announcement
to be issued no later than the earlier of (i) 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date, or (ii)
the first opening of the Nasdaq National Market of the Nasdaq Stock Market on
the next business day after the previously scheduled Expiration Date. If the
Offer is extended, or if the Purchaser (whether before or after its
acceptance for payment of Shares) is delayed in its acceptance for payment of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for
any reason, then, without prejudice to the Purchaser's rights under the Offer,
the Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described below and in the Offer to Purchase.
<PAGE>
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn pursuant to the
procedures set forth below at any time prior to the Expiration Date and, unless
theretofore accepted for payment and paid for by the Purchaser pursuant to the
Offer, may also be withdrawn at any time after August 23, 1999. For a withdrawal
to be effective, a written or facsimile transmission notice of withdrawal must
be timely received by the Depositary at one of its addresses set forth on the
back cover of the Offer to Purchase and must specify the name of the person
having tendered the Shares to be withdrawn, the number of Shares to be withdrawn
and the name of the registered holder of the Shares to be withdrawn, if
different from the name of the person who tendered the Shares. If certificates
for Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to the Depositary and,
unless such Shares have been tendered by an Eligible Institution, the signature
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been tendered pursuant to the procedures for book-entry delivery set
forth in Section 2 of the Offer to Purchase, any notice of withdrawal must also
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares and otherwise comply with the
Book-Entry Transfer Facility's procedures. Withdrawals of tenders of Shares may
not be rescinded, and any Shares properly withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by again following one of the procedures described in Section 2 of
the Offer to Purchase at any time prior to the Expiration Date. All questions as
to the form and validity (including time of receipt) of notices of withdrawal
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. None of the Purchaser, the Parent, the Depositary,
the Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification
The Company has provided the Purchaser with the Company's shareholder
lists and security position listings for the purpose of disseminating the Offer
to holders of the Shares. The Offer to Purchase, the related Letter of
Transmittal and other relevant materials will be mailed to record holders of
Shares and furnished to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
shareholder lists or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Offer to Purchase and the related Letter of Transmittal contain
important information that should be read before any decision is made with
respect to the Offer.
<PAGE>
Questions and requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or any
other tender offer materials may be directed to the Information Agent at the
address and telephone numbers listed below. You may also contact your broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
[LOGO OF GEORGESON SHAREHOLDER COMMUNICATIONS INC. APPEARS HERE]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect (212) 440-9800
All Others Call Toll Free (800) 223-2064
June 25, 1999
<PAGE>
Exhibit (a)(8)
Text of Press Release dated June 18, 1999
issued by the Company.
<PAGE>
FOR IMMEDIATE RELEASE
FRIDAY, JUNE 18, 1999
DURAKON INDUSTRIES SIGNS AGREEMENT TO BE
ACQUIRED BY LITTLEJOHN
Lapeer, Mich., June 18, 1999 -- Durakon Industries, Inc. (Nasdaq: DRKN)
announced today that it has entered into a definitive agreement pursuant to
which all of the outstanding shares of common stock of Durakon will be acquired
by a partnership formed by Littlejohn & Co. LLC. Under the agreement, which has
been approved unanimously by Durakon's board of directors, Littlejohn will
commence a tender offer for all outstanding shares of common stock of Durakon
for $16 per share in cash. The tender offer will be followed by a merger in
which any shares not acquired by Littlejohn in the tender offer will be acquired
for the same amount of cash. Certain shareholders of the Company owning
approximately 32% of Durakon's shares have agreed to tender their shares and to
vote in favor of the merger.
The tender offer will commence no later than Friday, June 25, 1999, and will be
conditioned on 90 percent of the outstanding shares of Durakon being tendered as
well as other customary conditions. If at least a majority, but less than 90
percent, of the outstanding shares are tendered, Littlejohn will not purchase
shares in the tender offer. Instead, the parties have agreed to proceed with a
cash merger.
Lazard Freres & Co., LLC, and J.I. Harris & Associates have acted as investment
bankers and financial advisors, respectively, to Durakon in connection with the
transaction.
Littlejohn & Co. LLC is a private investment fund located in Greenwich,
Connecticut. Durakon Industries Inc. is the world's leading producer and
marketer of pickup truck bedliners, and is a leader in the production and
marketing of rollback car carriers and wheel-lift towing vehicles. Durakon's
world headquarters and a major manufacturing facility are in Lapeer, Michigan.
Other manufacturing plants are in Greencastle, Pennsylvania; Clinton, Tennessee;
and Lerma, Mexico. Durakon's common stock is traded on the Nasdaq Stock Market
under the ticker symbol DRKN.
For more information on Durakon Industries via facsimile at no additional cost,
simply dial 1-800-PRO-INFO and enter company code 221 or the ticker symbol DRKN.
<PAGE>
Exhibit (b)(1)
Commitment Letter, dated June 14, 1999,
from BankBoston, N.A. and BancBoston
Robertson Stephens Inc. to LPIV Acquisition Corp.
<PAGE>
BANKBOSTON, N.A.
BANCBOSTON ROBERTSON STEPHENS INC.
100 Federal Street
Boston, Massachusetts 02110
June 14, 1999
LITTLEJOHN PARTNERS IV, L.P.
115 East Putnam Avenue
Greenwich, Connecticut 06830
Re: Credit Facilities Commitment Letter
-----------------------------------
Ladies and Gentlemen:
You have informed us that you intend to form one or more limited liability
companies (collectively, the "Company") to merge with Durakon Industries, Inc.,
-------
a Michigan corporation ("Durakon Inc." and, together with its subsidiaries, the
------------
"Acquired Business" and, after giving effect to the merger, the "Durakon
----------------- -------
Group"). You would like to have available to the Durakon Group senior secured
- -----
bank credit facilities of up to $77,000,000 (the "Credit Facilities") in order
-----------------
to finance the acquisition of the Acquired Business, including transaction costs
and expenses, as well as capital expenditures, working capital and other general
business purposes of the Acquired Business. You have requested that (a)
BankBoston, N.A. (the "Bank") act as the exclusive administrative agent for the
----
Credit Facilities and commit to provide the full $77,000,000 principal amount of
the Credit Facilities and (b) BancBoston Robertson Stephens Inc. ("BRS") agree
---
to structure and syndicate the Credit Facilities as exclusive adviser and
arranger.
1. Commitment. In connection with the foregoing, the Bank is pleased to
----------
advise you of the Bank's commitment to provide the full $77,000,000 principal
amount of the Credit Facilities upon the terms and subject to the conditions set
forth or referred to in this commitment letter, including the Summary of
Proposed Terms and Conditions attached hereto as Exhibit A (the "Term Sheet"
----------
and, together with this letter, the "Commitment Letter"). Those matters which
-----------------
are not covered by or made clear in the Commitment Letter are subject to future
mutual agreement of the parties.
2. Syndication. The Bank will act as the exclusive administrative agent for
-----------
the Credit Facilities and BRS will act as the exclusive arranger, adviser and
syndication manager for
<PAGE>
Littlejohn Partners IV, L.P. -2- June 14, 1999
the Credit Facilities and, in such capacities, each of the Bank and BRS will
perform the duties and exercise the authority customarily associated with such
roles. No additional agents, co-agents, arrangers or syndication managers will
be appointed, unless you and each of the Bank and BRS so agree. Prior to or
after the execution of definitive documentation for the Credit Facilities, the
Bank reserves the right to syndicate all or a portion of its commitment
hereunder to one or more financial institutions after consultation with you and
BRS. Upon the acceptance by the Bank of the written commitment of any lender to
provide a portion of the Credit Facilities, the Bank shall be released from a
portion of its commitment hereunder in an aggregate amount equal to the
commitment of such lender.
BRS will manage all aspects of the syndication, including the selection of
lenders, the determination of when BRS will approach potential lenders, titles
for the lenders and the final allocations of the commitments among the lenders,
the selection, title and allocations of such lenders to be subject to your
consent, which consent will not unreasonably be withheld. You agree to assist
BRS actively in achieving a timely syndication that is reasonably satisfactory
to BRS, such assistance to include, among other things, (a) direct contact
during the syndication between the senior officers, representatives and advisors
of you and Durakon Inc. and its subsidiaries, on the one hand, and prospective
lenders, on the other hand, at such times and places as BRS may reasonably
request, (b) providing to BRS all financial and other information with respect
to the Durakon Inc. and its subsidiaries and the transactions contemplated by
this Commitment Letter that BRS may reasonably request, including but not
limited to financial projections (the "Projections") relating to the foregoing,
-----------
and (c) assistance in the preparation of a confidential information memorandum
and other marketing materials to be used in connection with the syndication.
You agree that, prior to and during the syndication of the Credit
Facilities, you will not permit any offering, placement or arrangement of any
competing issues of debt securities or commercial bank facilities of the Durakon
Group.
The Bank and BRS shall be entitled, with your consent (which shall not be
unreasonably withheld), to change the structure, terms or amount of any portion
of the Credit Facilities if the Bank and BRS determine that such changes are
advisable in order to ensure a successful syndication or an optimal credit
structure for the Credit Facilities so long as the aggregate amount of the
Credit Facilities shall not be reduced.
3. Conditions. The commitment of the Bank and the agreement of BRS
----------
hereunder are conditioned upon (a) all information (other than the Projections)
concerning the Acquired Business and the transactions contemplated by this
Commitment Letter that has been or will be made available to the Bank or BRS by
you or Durakon Inc. and its subsidiaries or any of your or their representatives
in connection with the transactions contemplated by this Commitment
<PAGE>
Littlejohn Partners IV, L.P. -3- June 14, 1999
Letter, when taken as a whole, is or will be at the closing complete and correct
in all material respects and does not or will not at the closing contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein not materially misleading in
light of the circumstances under which such statements are made and (b) the
Projections that have been or will be made available to the Bank and BRS by you
or Durakon Inc. and its subsidiaries or any of your or their representatives in
connection with the transactions contemplated by this Commitment Letter have
been and will be prepared in good faith based upon reasonable assumptions. You
agree to supplement the information and projections referred to in clauses (a)
and (b) above from time to time until completion of the syndication so that the
statements in the preceding clauses remain correct. The statements set forth in
this paragraph shall be superseded by the definitive documentation with respect
to the Credit Facilities upon the execution and delivery thereof.
The commitment of the Bank and the agreements of BRS hereunder are also
conditioned upon the factors set forth in the Term Sheet, as well as the absence
of (i) any material misstatements in or omissions from the materials that have
previously been furnished by you or by Durakon Inc. and its subsidiaries to the
Bank or BRS and (ii) any material adverse change in governmental regulation or
policy affecting the Bank, BRS, the other lenders, Durakon Inc., its
subsidiaries, the Acquired Business or the proposed Credit Facilities which, in
each case described in this clause (ii), in the reasonable judgment of the Bank
or BRS, makes it impracticable or inadvisable to proceed with the transactions
contemplated hereby or the proposed syndication of the Credit Facilities.
In addition, the commitment of the Bank and the agreements of BRS hereunder
are subject to the negotiation, execution and delivery of definitive
documentation in customary form with respect to the Credit Facilities reasonably
satisfactory to the Bank and its counsel. Such documentation shall contain such
indemnities, covenants, representations and warranties, events of default,
conditions, definitions and other terms and conditions as shall be customary for
transactions of this type and reasonably satisfactory to the Bank, the other
lenders, you, the Durakon Group and your and their respective counsel.
Furthermore, all documents relating to the transactions being financed with the
proceeds of the Credit Facilities must be in form and substance reasonably
satisfactory to the Bank, you, Durakon Group, the other lenders and your and
their respective counsel. If, in the course of documenting the transaction and
the Bank's continued analysis of financial and other information relating to the
development of financial and operating covenants, the Bank discovers that any of
the conditions stated in the Commitment Letter will in its reasonable judgment
not be met, the Bank reserves the right to terminate any commitment, and BRS
reserves the right to terminate any obligation, it may have hereunder with
respect to the proposed Credit Facilities.
4. Fees, Indemnification and Reimbursement. As consideration for the Bank's
---------------------------------------
commitment hereunder and BRS's agreement to structure, arrange and syndicate the
Credit
<PAGE>
Littlejohn Partners IV, L.P. -4- June 14, 1999
Facilities and to provide advisory services in connection therewith, you agree
that the Durakon Group will pay to the Bank and BRS the respective fees as set
forth in this Commitment Letter and in the Fee Letter dated the date hereof and
delivered herewith (the "Fee Letter"). You agree that no lender will receive any
----------
compensation of any kind for its participation in the Credit Facilities, except
as expressly provided for in the Fee Letter.
Whether or not the transactions contemplated hereby are consummated, you
agree to indemnify and hold harmless the Bank, BRS and their respective
directors, officers, employees, affiliates, agents, attorneys, accountants,
consultants and each other entity, if any, who controls the Bank or BRS and to
hold such persons and entities harmless from and against all losses, claims,
damages, liabilities and expenses, joint or several, which any such person or
entity may incur arising out of or in connection with this Commitment Letter,
the Fee Letter, the Credit Facilities, the use of proceeds of the extensions of
credit thereunder or any related transaction or any claim, litigation,
investigation or proceeding relating to any of the foregoing, regardless of
whether any of such indemnified parties is a party thereto, and to reimburse
each of such indemnified parties upon demand for any legal or other expenses
incurred in connection with any of the foregoing; provided, however, that the
-------- -------
foregoing indemnity will not, as to any proposed indemnified party, apply to
losses, claims, damages, liabilities or related expenses to the extent resulting
from the willful misconduct or gross negligence of such party. No indemnified
party shall be liable for any indirect or consequential damages in connection
with its activities related to the Credit Facilities.
In addition, whether or not the transactions contemplated hereby are
consummated, you agree to reimburse the Bank and BRS from time to time on demand
for reasonable out-of-pocket expenses (including, but not limited to, reasonable
expenses of our due diligence investigation, reasonable syndication expenses,
reasonable travel expenses and reasonable fees, disbursements and charges of
counsel), in each case incurred in connection with the Credit Facilities and the
preparation of this Commitment Letter, the Fee Letter and the definitive
documentation for the Credit Facilities.
5. Confidentiality. The terms set forth in this Commitment Letter are
---------------
confidential and, without the prior consent of each party hereto, may not be
disclosed to any person, except for disclosure in confidence to your
accountants, attorneys and other advisors, to the seller in connection with the
acquisition of the Acquired Business and the seller's attorneys and other
advisors, and to each of the Bank's and BRS's attorneys and other advisors for
purposes related to the transactions contemplated hereby, or where disclosure is
required by law or by any subpoena or similar legal process, or in connection
with the syndication of the Credit Facilities. Any information given by you or
Durakon Inc. or its subsidiaries or your or their respective agents to the
representatives of the Bank or BRS which is not publicly available shall be
maintained in confidence by the Bank and BRS, except that any of such
information may be made available to
<PAGE>
Littlejohn Partners IV, L.P. -5- June 14, 1999
any director, officer, partner, employee or other agent of the Bank, BRS or
their affiliates, and may be disclosed where disclosure is required by law or by
any subpoena or similar legal process, or in connection with the syndication of
the Credit Facilities. In the event of any such subpoena or other legal
proceeding, the Bank and BRS will endeavor to give you notice thereof before
responding thereto.
6. Termination. This Commitment Letter and the Fee Letter set forth the
-----------
proposal of the Bank and BRS with respect to the Credit Facilities and shall be
considered withdrawn if the Bank and BRS have not received the enclosed copy of
this Commitment Letter and Fee Letter signed by you by 5:00 p.m. on the third
business day after the date of this letter. If for any reason the Borrower (as
defined in the Term Sheet), the Durakon Group, the proposed group of lenders and
the Bank have not been able to agree to definitive terms and conditions and
enter into a definitive agreement with respect to the Credit Facilities on or
before December 1, 1999, this proposal shall be considered terminated; provided,
--------
however, that the compensation, indemnification and reimbursement provisions
- -------
contained herein and in the Fee Letter shall remain in full force and effect
notwithstanding the termination of this Commitment Letter or our commitment
hereunder.
7. General. This Commitment Letter may not be amended, and no provision
-------
hereof shall be waived or modified, except by an instrument in writing signed by
the Bank, BRS and you. This Commitment Letter and the Fee Letter are the only
agreements between you, on one hand, and BRS and the Bank, on the other hand,
with respect to the Credit Facilities and set forth the entire understanding of
the parties with respect thereto. This Commitment Letter and the commitment of
the Bank and the agreements of BRS hereunder shall not be assignable by you or
the Borrower or the Durakon Group without the prior written consent of the Bank
and BRS. This Commitment Letter is solely for the benefit of the parties hereto
and shall not confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto. The headings in this Commitment Letter are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof. This Commitment Letter may be executed in any number of
counterparts, which together shall constitute one agreement, and delivery of an
executed signature page by facsimile transmission shall be effective as delivery
of a manually executed counterpart. This Commitment Letter shall be governed by
and construed in accordance with the laws (other than the conflict of laws
rules) of The Commonwealth of Massachusetts.
<PAGE>
Littlejohn Partners IV, L.P. -6- June 14, 1999
If the foregoing is in accordance with your understanding of our agreement,
please sign a counterpart of this letter in the space indicated below and return
it to the Bank and BRS. The Bank and BRS are pleased to have the opportunity to
assist you in connection with this proposed financing transaction.
Very truly yours,
BANKBOSTON, N.A.
By /s/ Kenneth S. Struglia
-------------------------
Vice President
BANCBOSTON ROBERTSON STEPHENS INC.
By /s/ Thad D. Johnson
-------------------------
Vice President
The foregoing is agreed to:
LITTLEJOHN PARTNERS IV, L.P.
By its General Partner,
Littlejohn Associates, L.L.C.
By /s/ Angus C. Littlejohn, Jr.
-----------------------------
Title: Manager
Dated: June 14, 1999
<PAGE>
EXHIBIT A
=========================
Durakon Group
=========================
Outline of Terms and Conditions
$77,000,000 Senior Secured Credit Facilities
June 14, 1999
- --------------------------------------------------------------------------------
The terms and conditions presented in this Term Sheet are subject to
satisfactory negotiation, review and execution of documentation acceptable to
BankBoston, N.A., BancBoston Robertson Stephens Inc. and their counsel.
- --------------------------------------------------------------------------------
================================================================================
Borrower: A limited liability company formed by an investor group and
controlled indirectly by Littlejohn Partners IV, L.P.
("Littlejohn"), which, when the acquisition has closed, will
be owned entirely by the survivors of Durakon Industries,
Inc., a Michigan corporation, and its subsidiaries (each
member of such surviving group being referred to herein
individually and collectively as the "Durakon Group").
Facilities: $77,000,000 aggregate senior secured credit facilities
consisting of:
(i) $30,000,000 Revolving Credit Facility (the "Revolver");
(ii) $20,000,000 Term Loan A ("Term A"); and
(iii) $27,000,000 Term Loan B ("Term B" and, together with
Term A, the "Term Loans").
The Revolver, Term A and Term B are referred to herein as the
"Credit Facilities" or "Facilities."
Purpose: Amounts drawn on the Closing Date under the Revolver, Term A
and Term B will be used, in conjunction with the equity
contribution described herein, to finance the acquisition of
the Durakon Group, to refinance existing indebtedness, and to
pay transaction expenses. Thereafter, the Revolver will be
available to fund on-going working capital and general
corporate needs, including capital expenditures (excluding
85% of capital expenditures related to the Duramex subsidiary
of the Durakon Group, which will be financed by a third
party).
Guarantors: All entities included in the Durakon Group, excluding the
Borrower and excluding foreign subsidiaries, shall provide
unlimited and unconditional guarantees of all obligations
under the Facilities.
- --------------------------------------------------------------------------------
BankBoston, N.A. -1- CONFIDENTIAL
BancBoston Robertson Stephens Inc.
<PAGE>
June 14, 1999 Durakon Industries, Inc.
Outline of Terms and Conditions
- --------------------------------------------------------------------------------
Administrative
Agent: BankBoston, N.A. ("BankBoston" or the "Agent").
Arranger: BancBoston Robertson Stephens Inc. ("BRS") will underwrite
the full amount of Facilities as Arranger and will syndicate
the Facilities to a group of lenders acceptable to the
Borrower and the Agent such that the Agent will ultimately
hold approximately $20 million of the Facilities.
Closing Date: Targeted to occur on or before September 30, 1999
("Closing").
Final Maturity: Revolver -- December 31, 2004
Term A -- December 31, 2004
Term B -- December 31, 2006.
Security: First priority security interest in and lien on substantially
all tangible and intangible assets (including all
intellectual property and rights to payment(s) and related
intangibles) of the Borrower and Guarantors, excluding
any/all fixed assets of Duramex which are pledged to a third
party and except that the security interests in equipment
subject to permitted purchase money security interests and
equipment leases shall be junior to such interests. The
Borrower and Guarantors will pledge all of the capital stock
of their subsidiaries (other than non-US subsidiaries, of
which 65% of the capital stock will be pledged). Duramex will
pledge its capital stock to the maximum extent possible, and
in a minimum amount of 60%, due to restrictions (if any) in
the joint venture agreement of the Durakon Group with
Consorcio Larmo S.A. de C.V. All intercompany loans from the
Borrower or any Guarantor to Duramex shall be documented in
the form of a Promissory Note with such Note pledged to the
Agent as security for the Credit Facilities.
Availability: Revolver - Amounts under the Revolver may be drawn, repaid
and reborrowed, subject to availability under the Borrowing
Base, which shall be equal to the sum of: (i) 85% of eligible
accounts receivable; plus (ii) 60% of eligible inventory. The
Borrowing Base will be reported monthly, or at more frequent
intervals as determined by the Agent in its reasonable
discretion. The initial amount drawn under the Revolver as of
the Closing shall not exceed $22.0 million.
Term A - Drawn in full at Closing.
Term B - Drawn in full at Closing.
- --------------------------------------------------------------------------------
BankBoston, N.A. -2- CONFIDENTIAL
BancBoston Robertson Stephens Inc.
<PAGE>
June 14, 1999 Durakon Industries, Inc.
Outline of Terms and Conditions
- --------------------------------------------------------------------------------
Amounts of Term A and Term B that are repaid may not be
reborrowed.
Amortization: Revolver - No amortization, bullet at maturity.
Term A & Term B - Quarterly payments in arrears based on the
following annual amortization schedule.
($ in millions)
----------------------------------------------------
Year Term A Term B Total
---- ------ ------ -----
1999 $0.000 $0.000 $0.000
2000 $2.000 $0.270 $2.270
2001 $3.000 $0.270 $3.270
2002 $4.000 $0.270 $4.270
2003 $5.000 $0.270 $5.270
2004 $6.000 $0.270 $6.270
------
2005 $8.000 $8.000
2006 $17.650 $17.650
------- -------
Total $20.000 $27.000 $47.000
----------------------------------------------------
Interest Rate: Outstanding amounts under the Facilities shall accrue
interest at the Borrower's option at the Alternate Base Rate
or LIBOR, plus the Applicable Margin. Alternate Base Rate
shall mean a floating rate equal to the higher of (i)
BankBoston's Base Rate and (ii) the Federal Funds Effective
Rate plus 2%. The Applicable Margin for each of the
Facilities will be determined as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Level Leverage Revolver & Term A Unused Fee Term B
(Funded Debt/EBITDA) LIBOR+ Base+ LIBOR+ Base+
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
I Greater than 4.00x 3.25% 1.25% 0.500% 3.75% 1.75%
II 3.50x Less than or equal to x Less than or equal to 4.00x 3.00% 1.00% 0.500% 3.50% 1.50%
III 3.00x Less than or equal to x Less than 3.50x 2.75% 0.75% 0.500% 3.25% 1.25%
IV 2.50x Less than or equal to x Less than 3.00x 2.50% 0.50% 0.375% 3.25% 1.25%
V Less than or equal to 2.50x 2.25% 0.25% 0.375% 3.25% 1.25%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
For purposes of calculating the Applicable Margin, the
Leverage Ratio is defined as the ratio of Total Funded Debt
--------------
divided by EBITDA, calculated on a rolling four-quarter
basis. Total Funded Debt and EBITDA shall be determined on a
consolidated basis in accordance with GAAP.
- --------------------------------------------------------------------------------
BankBoston, N.A. -3- CONFIDENTIAL
BancBoston Robertson Stephens Inc.
<PAGE>
June 14, 1999 Durakon Industries, Inc.
Outline of Terms and Conditions
- --------------------------------------------------------------------------------
Pricing will be set at Level II until the Agent's receipt of
the Durakon Group's March 31, 2000 compliance certificate.
Overdue principal, interest and fees will bear interest at 2%
over the rate otherwise applicable thereto.
Interest Periods: LIBOR may be selected for interest periods of 1, 2, 3 or 6
months, as available.
Interest Payments: Interest on Base Rate loans will be due and payable quarterly
in arrears. Interest on LIBOR loans will be due and payable
at the earliest of the end of each applicable interest period
or quarterly. The effective date of any change in the
Applicable Margin due to a change in the Durakon Group's
Leverage will be the third business day following the receipt
by the Agent and the Lenders of the Durakon Group's quarterly
financial information.
Unused Fee: An Unused Fee will be payable quarterly in arrears based on
the average daily unused commitment under the Revolver as set
forth in the table above.
Up Front Fee &
Agent's Fee: Per the Fee Letter.
Mandatory
Prepayments: Subject to certain exceptions to be determined, unless Total
Funded Debt/EBITDA (computed on a trailing four-quarter basis
after giving pro forma effect to the relevant event) is less
than 2.25x, the Borrower will be required to make mandatory
prepayments of the Term Loans equal to:
* 75% of Excess Cash Flow, computed on the basis of the Durakon
Group's annual audited financial statements. Excess Cash Flow
shall mean, for any fiscal year of the Durakon Group,
consolidated earnings before interest, taxes, depreciation
and amortization and any other non-cash charges, minus the
sum of actual cash taxes paid plus capital expenditures plus
scheduled debt service payments (including total interest,
actual and scheduled repayments of any money borrowed or
capital lease obligations), for such fiscal year, determined
in accordance with GAAP; to the extent Total Funded
Debt/EBITDA is less than 3.00x then the percentage of Excess
Cash Flow will decrease to 50%.
- --------------------------------------------------------------------------------
BankBoston, N.A. -4- CONFIDENTIAL
BancBoston Robertson Stephens Inc.
<PAGE>
June 14, 1999 Durakon Industries, Inc.
Outline of Terms and Conditions
- --------------------------------------------------------------------------------
* 100% of the net proceeds received from the sale of or
disposition of all or any part of the assets (net of any
reasonable transaction expenses) of the Borrower or any
Guarantor excluding any permitted reinvestment in similar
assets in amounts and for period to be determined (other than
in the ordinary course of business or for consideration
pertaining to sales not in the ordinary course of business
not to exceed in any fiscal year of the Durakon Group an
aggregate amount to be determined).
* 100% of the net proceeds received from the issuance of debt
or equity (excluding any fixed asset financing entered into
by Duramex, and excluding any equity issued in connection
with incentive compensation and benefit plans) in excess of
$5 million by the Borrower or any Guarantor, except to the
extent issued to a seller of a business acquired by the
Durakon Group.
Mandatory prepayments shall be applied pro rata to repay,
without penalty or premium, the Term A and Term B, and within
each tranche pro-rata as to remaining installments as of such
date.
Voluntary Prepayments
and Commitment
Reductions: Voluntary prepayments of the Term Loans and voluntary
reductions of the Revolver commitment shall be permitted in
whole or in part, without premium or penalty, and subject to
payment of standard Eurodollar breakage costs, if any.
Financial
Covenants: To be tested quarterly commencing September 30, 1999 (or, if
later, the first fiscal quarter ending date after the
Closing), on a consolidated, rolling four-quarter basis
including, but not limited to, the following:
* Maximum Total Funded Debt to EBITDA [Covenant levels to
-----------------------------------
be mutually determined];
* Minimum Fixed Charge Coverage Ratio [Covenant levels to
-----------------------------------
be mutually determined];
* Minimum EBITDA/Interest Ratio [Covenant levels to be
-----------------------------
mutually determined];
- --------------------------------------------------------------------------------
BankBoston, N.A. -5- CONFIDENTIAL
BancBoston Robertson Stephens Inc.
<PAGE>
June 14, 1999 Durakon Industries, Inc.
Outline of Terms and Conditions
- --------------------------------------------------------------------------------
* Maximum Capital Expenditures [Covenant levels to be
----------------------------
mutually determined].
Other Covenants and
Requirements: Usual and customary for transactions of this nature, and
subject to limitations and exceptions to be mutually agreed,
including, but not limited to, limitations on additional
indebtedness, liens, investments, mergers and consolidations,
asset sales, transactions with affiliates, negative pledges,
restricted payments, distributions and dividends. The
Borrower and the Guarantors will agree to usual and customary
requirements/provisions for transactions of this nature
including financial reporting, covenant compliance reporting,
events of default, assignment and acceptance, indemnification
of Agent and Arranger, and all syndication matters including
market flex for syndication.
The Durakon Group's Duramex subsidiary will be permitted to
incur up to $10.0 million of indebtedness to a third party
lender, so long as the terms and conditions of such
indebtedness are acceptable to the Agent. During the period
between the closing date of the Facilities and the date such
Duramex financing is closed, the Durakon Group may not
provide any intercompany loans or other investments to
Duramex. After such financing is closed, the Durakon Group
shall be permitted to provide intercompany loans to Duramex
up to $4.0 million outstanding at any time.
Financial
Reporting: The Durakon Group will agree to provide the following
reports:
Annual Financial Statements prepared on a
consolidated/combined basis in accordance with GAAP for the
current and prior fiscal year, all certified by a nationally
recognized firm of certified public accountants and
accompanied by an unqualified opinion of such firm on the
annual financial statements, accompanied by covenant
compliance calculations and a representation by the Chief
Financial Officer(s) of the Durakon Group that no Event of
Default shall have occurred or be continuing, all submitted
to the Agent and Lenders within 105 days of the end of each
fiscal year.
Quarterly Financial Statements prepared on a consolidated
basis in accordance with GAAP for the current and prior
fiscal year, accompanied by covenant compliance calculations
and a representation by the Chief
- --------------------------------------------------------------------------------
BankBoston, N.A. -6- CONFIDENTIAL
BancBoston Robertson Stephens Inc.
<PAGE>
June 14, 1999 Durakon Industries, Inc.
Outline of Terms and Conditions
- --------------------------------------------------------------------------------
Financial Officer(s) of the Durakon Group that no Event or
Default shall have occurred or be continuing, all submitted
to the Agent and Lenders within 45 days of the end of each
fiscal quarter.
Monthly Financial Statements prepared on a consolidated basis
in accordance with GAAP for the current and prior fiscal
year, accompanied by an accounts receivable aging report, an
inventory designation and a borrowing base certificate signed
by the Chief Financial Officer(s) of the Durakon Group, all
submitted to the Agent and Lenders within 30 days of the end
of each month.
Conditions
Precedent: In addition to the usual and customary conditions to lending
in transactions of this type, including:
* The transactions contemplated by the Agreement and Plan
of Merger among Littlejohn, LPIV Acquisition Corp. and
Durakon Industries, Inc. in the form of the draft
bearing the time stamp "JUN-14-1999 22:30 HMS&C 96%",
including without limitation the consummation of the
merger of LPIV Acquisition Corp. and Durakon Industries,
Inc., shall have occurred in accordance with the terms
and conditions of such Agreement and Plan of Merger, and
no such term or condition shall have been modified,
terminated or waived, expressly or by implication.
* Evidence that affiliates and associates of Littlejohn
have invested at least $25.0 million in the equity
securities of the Durakon Group.
* Pro forma EBITDA for the twelve-month period most
recently ended is at least $18,500,000.
* At Closing, the ratio of Total Senior Debt to pro forma
EBITDA for the twelve-month period most recently ended,
on a consolidated basis, shall not exceed 3.60:1, and
the ratio of funded debt divided by the sum of debt plus
equity shall not exceed 75%.
* The Agent shall have received a pro forma closing
balance sheet which, when taken as a whole, is not
materially adverse in the reasonable judgment of the
Agent and Arranger as compared to the attached projected
closing balance sheet.
- --------------------------------------------------------------------------------
BankBoston, N.A. -7- CONFIDENTIAL
BancBoston Robertson Stephens Inc.
<PAGE>
June 14, 1999 Durakon Industries, Inc.
Outline of Terms and Conditions
- --------------------------------------------------------------------------------
* The absence of any material adverse change, in the
reasonable judgment of the Agent and Arranger, shall
have occurred in the business, assets, financial
condition, income or prospects of the Acquired Business
taken as a whole since the most recent audited financial
statements provided to the Agent or in the ability of
the Durakon Group to operate in accordance with the
financial covenants mutually determined as provided
above.
* The absence of any material adverse change or material
disruption in the financial, banking or capital markets
which, in the reasonable judgment of the Agent or
Arranger would have a material adverse impact on the
syndication of the Facilities.
* The absence of any Default or Event of Default under the
loan documentation.
* The absence of any default under any material contract
or agreement of Durakon Industries, Inc. or any
subsidiary which default, individually or in the
aggregate with other defaults under such contracts or
agreements, is reasonably likely to have a material
adverse impact on the business, assets or financial
condition of the Acquired Business taken as a whole.
* Accuracy of representations and warranties in all
material respects.
* There being no order or injunction or other pending
litigation in which there is a reasonable possibility of
a decision which would materially adversely affect the
ability of the Durakon Group to perform under the loan
documents or the Agent's or Lender's rights in respect
thereof or their ability to exercise such rights.
* Other conditions precedent specific to the transaction
and typical of facilities of this type, including the
Agent's receipt of satisfactory corporate or limited
liability company approval of the Durakon acquisition
and the financing as well as opinions of counsel
satisfactory to the Agent as to, among other matters,
valid corporate or limited liability company existence
and authority, legality, validity and binding effect of
all loan, guaranty and security documents, perfection of
security interests and the absence of any
- --------------------------------------------------------------------------------
BankBoston, N.A. -8- CONFIDENTIAL
BancBoston Robertson Stephens Inc.
<PAGE>
June 14, 1999 Durakon Industries, Inc.
Outline of Terms and Conditions
- --------------------------------------------------------------------------------
violation of law or regulation or conflict with any
existing contracts.
Documentation: The Credit Facilities are subject to negotiation, execution
and delivery of a definitive credit agreement and related
security documents, guarantees and any other documents as
shall be reasonably requested by the Agent. The credit
agreement and related security agreements will contain
customary conditions precedent, covenants, representations,
events of default and other provisions appropriate for
transactions of this size, type and purpose and acceptable to
the parties and their respective counsel.
Events of Default: Usual and customary, including (without limitation)
nonpayment, breach of covenant or agreement,
misrepresentation, insolvency, bankruptcy, ERISA, judgments,
Change of Control and cross defaults. No grace periods on
principal payments, other notice or grace periods and
thresholds to be agreed upon.
Assignment and
Participations: Usual and customary for transactions of this type and size.
Each lender may assign all or a portion of its loans and
commitments under the Facilities, or sell participations
therein to another person(s); provided that assignments shall
be in a minimum amount of $5 million, and that after making
an assignment and so long as such assignment does not
represent all of a lender's commitments under the Facilities,
such lender shall maintain commitments of at least $5
million. All assignments shall be subject to certain
conditions, including, but not limited to, the approval of
the Borrower (so long as no Default or Event of Default
exists) and the Agent, such approvals not to be unreasonably
withheld.
Syndication
Matters: BankBoston will act as the exclusive administrative agent for
the Facilities and BRS will act as the exclusive arranger,
adviser and syndication manager for the Facilities and, in
such capacities, each of BankBoston and BRS will perform the
duties and exercise the authority customarily associated with
such roles. No additional agents, co-agents, arrangers or
syndication managers will be appointed, unless Littlejohn and
each of BankBoston and BRS so agree.
Prior to or after the execution of definitive documentation
for the Facilities, BankBoston reserves the right to
syndicate all or a portion of its commitment to one or more
financial institutions after consultation with
- --------------------------------------------------------------------------------
BankBoston, N.A. -9- CONFIDENTIAL
BancBoston Robertson Stephens Inc.
<PAGE>
June 14, 1999 Durakon Industries, Inc.
Outline of Terms and Conditions
- --------------------------------------------------------------------------------
Littlejohn; provided that in the event that BankBoston's
share of the commitments shall be reduced to less than 10% of
the commitments then at the request of the Borrower
BankBoston will relinquish the role of Agent. Upon acceptance
by BankBoston of the written commitment of any Lender to
provide a portion of the Facilities, BankBoston shall be
released from a portion of its commitment in an aggregate
amount equal to the commitment of such Lender.
BRS will manage all aspects of the syndication, including the
selection of Lenders, the determination of when BRS will
approach potential Lenders and the final allocations among
the Lenders. Littlejohn agrees to assist BRS actively in
achieving a timely syndication that is reasonably
satisfactory to BRS, such assistance to include, among other
things, (a) direct contact during the syndication between
senior officers, representatives and advisors of Littlejohn
and the Acquired Business, on the one hand, and prospective
Lenders, on the other hand, at such times and places as BRS
may reasonably request, (b) providing to BRS all financial
and other information with respect to the Acquired Business
and the transactions contemplated hereby that BRS may
reasonably request, including but not limited to financial
projections relating to the foregoing, and (c) assistance in
the preparation of a confidential information memorandum and
other marketing materials to be used in connection with the
syndication.
Littlejohn and the Borrower agree that, prior to and during
the syndication of the Facilities, except for the debt to be
raised at the Duramex subsidiary, they will not permit any
offering, placement or arrangement of any competing issues of
debt securities or commercial bank facility(ies) of the
Acquired Business. BankBoston and BRS shall be entitled,
after consultation with Littlejohn, to change the pricing
(limited to 75 basis points), structure, terms or amount of
any portion of the Facilities if BankBoston and BRS determine
that such changes are advisable in order to ensure a
successful syndication or an optimal credit structure for the
Facilities so long as the aggregate amount of the Facilities
shall not be reduced.
Expenses and
Indemnification: The Borrower and Guarantors will pay the Agent's and
Arranger's reasonable legal, due diligence, and other
out-of-pocket expenses incurred in connection with the
negotiation, preparation and execution of the documentation
and the establishment of the syndicate, regardless of
- --------------------------------------------------------------------------------
BankBoston, N.A. -10- CONFIDENTIAL
BancBoston Robertson Stephens Inc.
<PAGE>
June 14, 1999 Durakon Industries, Inc.
Outline of Terms and Conditions
- --------------------------------------------------------------------------------
whether the Facilities close. The Borrower and the Guarantors
jointly and severally shall indemnify the Agent, the Arranger
and the Lenders (and all respective affiliates) against all
losses, liabilities, claims, damages or expense relating to
their loans, the loan documents or the Borrower's use of loan
proceeds, including but not limited to attorneys and other
professional fees and settlement costs, excluding those
arising from the indemnified party's own bad faith, gross
negligence or willful misconduct.
Governing Law: Commonwealth of Massachusetts.
- --------------------------------------------------------------------------------
BankBoston, N.A. -11- CONFIDENTIAL
BancBoston Robertson Stephens Inc.
<PAGE>
EXHIBIT (c)(1)
Agreement and Plan of Merger dated as of June 17, 1999 among the Parent,
the Purchaser and the Company.
<PAGE>
================================================================================
AGREEMENT AND PLAN OF MERGER
among
LITTLEJOHN PARTNERS IV, L.P.,
LPIV ACQUISITION CORP.
and
DURAKON INDUSTRIES, INC.
Dated as of June 17, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I.....................................................................2
SECTION 1.01. The Offer.............................................2
---------
SECTION 1.02. Company Action........................................3
--------------
ARTICLE II....................................................................4
SECTION 2.01. The Merger............................................4
----------
SECTION 2.02. Effective Time; Closing...............................4
-----------------------
SECTION 2.03. Effect of the Merger..................................4
--------------------
SECTION 2.04. Articles of Incorporation; Bylaws.....................5
---------------------------------
SECTION 2.05. Directors and Officers................................5
----------------------
SECTION 2.06. Conversion of Securities..............................5
------------------------
SECTION 2.07. Employee and Director Stock Options...................5
-----------------------------------
SECTION 2.08. Surrender of Shares; Stock Transfer Books.............6
-----------------------------------------
ARTICLE III...................................................................7
SECTION 3.01. Organization and Qualification; Subsidiaries..........7
--------------------------------------------
SECTION 3.02. Articles of Incorporation and Bylaws..................8
------------------------------------
SECTION 3.03. Capitalization........................................8
--------------
SECTION 3.04. Authority Relative to this Agreement..................9
------------------------------------
SECTION 3.05. No Conflict; Required Filings and Consents............9
------------------------------------------
SECTION 3.06. Compliance...........................................10
----------
SECTION 3.07. SEC Filings; Financial Statements....................10
---------------------------------
SECTION 3.08. Absence of Certain Changes or Events.................11
------------------------------------
SECTION 3.09. Absence of Litigation................................12
---------------------
SECTION 3.10. Employee Benefit Plans...............................12
----------------------
SECTION 3.11. Labor Matters........................................14
-------------
SECTION 3.12. Offer Documents; Schedule 14D-9; Proxy Statement.....14
------------------------------------------------
SECTION 3.13. Tangible Property; Real Property and Leases..........15
-------------------------------------------
SECTION 3.14. Trademarks, Patents and Copyrights...................16
----------------------------------
SECTION 3.15. Taxes................................................16
-----
SECTION 3.16. Environmental Matters................................17
---------------------
SECTION 3.17. Material Contracts...................................17
------------------
SECTION 3.18. Brokers and Counsel..................................18
-------------------
SECTION 3.19. Mexican Operations...................................18
------------------
SECTION 3.20. Year 2000 Compliance.................................18
--------------------
ARTICLE IV...................................................................19
SECTION 4.01. Corporate Organization...............................19
----------------------
SECTION 4.02. Authority Relative to This Agreement.................19
------------------------------------
SECTION 4.03. No Conflict; Required Filings and Consents...........19
------------------------------------------
SECTION 4.04. Financing............................................20
---------
SECTION 4.05. Offer Documents; Proxy Statement.....................20
--------------------------------
SECTION 4.06. Brokers..............................................20
-------
ARTICLE V....................................................................21
SECTION 5.01. Conduct of Business by the Company Pending the
----------------------------------------------
Merger.............................................21
------
<PAGE>
ARTICLE VI...................................................................23
SECTION 6.01. Special Shareholders' Meeting........................23
-----------------------------
SECTION 6.02. Proxy Statement......................................23
---------------
SECTION 6.03. Access to Information; Confidentiality...............24
--------------------------------------
SECTION 6.04. No Solicitation of Transactions......................24
-------------------------------
SECTION 6.05. Employee Benefits Matters; Employment Agreements.....25
------------------------------------------------
SECTION 6.06. Directors' and Officers' Indemnification and
--------------------------------------------
Insurance..........................................25
---------
SECTION 6.07. Notification of Certain Matters......................26
-------------------------------
SECTION 6.08. Further Action; Reasonable Best Efforts..............27
---------------------------------------
SECTION 6.09. Public Announcements.................................27
--------------------
SECTION 6.10. Confidentiality Agreement............................27
-------------------------
SECTION 6.11 Financial Statements.................................27
--------------------
SECTION 6.12 SEC Reports..........................................27
-----------
SECTION 6.13. Cancellation of Shares...............................27
----------------------
SECTION 6.14. Issuance of Shares Upon Exercise of Stock Options....27
-------------------------------------------------
ARTICLE VII..................................................................28
SECTION 7.01. Conditions to the Merger If Offer Conditions Have
-------------------------------------------------
Been Satisfied or Waived...........................28
------------------------
SECTION 7.02. Conditions to the Merger if the Conditions to the
-------------------------------------------------
Offer are not Satisfied or Waived..................28
---------------------------------
ARTICLE VIII.................................................................30
SECTION 8.01. Termination..........................................30
-----------
SECTION 8.02. Effect of Termination................................32
---------------------
SECTION 8.03. Fees and Expenses....................................32
-----------------
SECTION 8.04. Amendment............................................33
---------
SECTION 8.05. Waiver...............................................33
------
ARTICLE IX...................................................................33
SECTION 9.01. Non-Survival of Representations, Warranties and
-----------------------------------------------
Agreements.........................................33
----------
SECTION 9.02. Notices..............................................33
-------
SECTION 9.03. Certain Definitions..................................35
-------------------
SECTION 9.04. Severability.........................................35
------------
SECTION 9.05. Entire Agreement, Assignment.........................36
----------------------------
SECTION 9.06. Parties in Interest..................................36
-------------------
SECTION 9.07. Specific Performance.................................36
--------------------
SECTION 9.08. Governing Law........................................36
-------------
SECTION 9.09. Headings.............................................36
--------
SECTION 9.10. Counterparts; Facsimile..............................36
-----------------------
ANNEX A Conditions to the Offer
-----------------------
SCHEDULE I Listing of Shareholders
-----------------------
EXHIBIT A Form of Certificate of Merger
-----------------------------
ii
<PAGE>
Glossary of Defined Terms
Location of
Defined Term Definition
------------ ----------
affiliate.................................................... ss. 9.03(a)
Affiliate Contract........................................... ss. 3.17
Agreement.................................................... Preamble
Attorney Engagement.......................................... ss. 3.18
beneficial owner............................................. ss. 9.03(b)
Blue Sky Laws................................................ ss. 3.05(b)
Board ...................................................... Recitals
Broker Agreements............................................ ss. 3.18
business day................................................. ss. 9.03(c)
Certificate of Merger........................................ ss. 2.02
Certificates................................................. ss. 2.08(b)
Code ....................................................... ss. 3.10(a)
Company .................................................... Preamble
Competing Proposal........................................... ss. 8.03(a)(i)
Competing Transaction........................................ ss. 6.04
Confidentiality Agreement.................................... ss. 6.03(b)
control .................................................... ss. 9.03(d)
control by................................................... ss. 9.03(d)
Disclosure Schedule.......................................... ss. 3.01
Effective Time............................................... ss. 2.02
Environmental Law............................................ ss. 3.16(a)
ERISA .................................................... ss. 3.10(a)
Exchange Act................................................. ss. 1.02(b)
Fee ......................................................... ss. 8.03(a)
GAAP .................................................... ss. 3.07(b)
Hazardous Substances......................................... ss. 3.16(a)
Higher Price................................................. ss. 8.01(f)
Indemnified Parties.......................................... ss. 6.06(b)
IRS ........................................................ ss. 3.10(a)
Lazard, Freres............................................... ss. 1.02(a)
Material Adverse Effect...................................... ss. 3.01
Material Contract............................................ ss. 3.17
Merger .................................................... Recitals
Merger Consideration......................................... ss. 2.06(a)
Michigan Law................................................. Recitals
Minimum Tender Condition..................................... ss. 1.01(a)
1998 Balance Sheet........................................... ss. 3.07(c)
Offer ....................................................... Recitals
Offer Documents.............................................. ss. 1.01(b)
Offer to Purchase............................................ ss. 1.01(b)
Parent ...................................................... Preamble
Paying Agent................................................. ss. 2.08(a)
<PAGE>
Per Share Amount............................................. Recitals
person ..................................................... ss. 9.03(e)
Plans ....................................................... ss. 3.10(a)
Potential Buyer.............................................. ss. 6.04
Proprietary Rights........................................... ss. 3.14
Proxy Statement.............................................. ss. 3.12
Purchaser.................................................... Preamble
Schedule 14D-1............................................... ss. 1.01(b)
Schedule 14D-9............................................... ss. 1.02(b)
SEC ........................................................ ss. 1.01(b)
SEC Reports.................................................. ss. 3.07(a)
Securities Act............................................... ss. 3.07(a)
Shareholder Agreements....................................... Recitals
Shareholders................................................. Recitals
Shares .................................................... Recitals
Special Shareholders' Meeting................................ ss. 6.01
Spread .................................................... ss. 2.07
Stock Option Plans........................................... ss. 2.07
Subsidiary................................................... ss. 3.01
subsidiary................................................... ss. 9.03(f)
Superior Proposal............................................ ss. 6.04
Surviving Corporation........................................ ss. 2.01
Transactions................................................. ss. 3.04
under common control with.................................... ss. 9.03(d)
WARN .................................................... ss. 3.10(f)
Year 2000 Compliant.......................................... ss. 3.20
ii
<PAGE>
AGREEMENT AND PLAN OF MERGER, dated as of June 17, 1999 (this
"Agreement"), among LITTLEJOHN PARTNERS IV, L.P., a limited partnership
---------
organized under the laws of Delaware ("Parent"), LPIV ACQUISITION CORP., a
------
Michigan corporation and a wholly owned subsidiary of Parent ("Purchaser"), and
---------
DURAKON INDUSTRIES, INC., a Michigan corporation (the "Company").
-------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Boards of Directors of Purchaser and the Company,
and the general partner of Parent, have each unanimously determined that it is
in the best interests of their respective equity holders for Parent to acquire
the Company upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, it is proposed
that Purchaser shall make a cash tender offer (the "Offer") to acquire all the
-----
issued and outstanding shares of common stock, without par value, of the Company
(the "Shares") for U.S. $16.00 per Share (such amount, or any greater amount per
------
Share paid pursuant to the Offer, being hereinafter referred to as the "Per
---
Share Amount") net to the seller in cash, upon the terms and subject to the
- ------------
conditions of this Agreement and the Offer;
WHEREAS, the Board of Directors of the Company (the "Board"),
-----
including all the disinterested directors on the Board, has unanimously approved
the making of the Offer and resolved and agreed to recommend that holders of
Shares tender their Shares pursuant to the Offer;
WHEREAS, also in furtherance of such acquisition, the Boards
of Directors of Purchaser and the Company, and the general partner of Parent,
have each unanimously approved the merger (the "Merger") of Purchaser with and
------
into the Company in accordance with the Business Corporation Act of the State of
Michigan ("Michigan Law") following the consummation of the Offer and upon the
------------
terms and subject to the conditions set forth herein;
WHEREAS, to induce Parent and Purchaser to enter into this
Agreement, Parent has required that Purchaser and each of the shareholders of
the Company listed on Schedule I attached hereto (the "Shareholders") enter into
------------
a Stock Tender, Voting Agreement and Irrevocable Proxy, dated today's date (the
"Shareholder Agreements"), pursuant to which each Shareholder agrees, among
----------------------
other things, to validly tender its Shares into, and not to withdraw its Shares
from, the Offer, and to vote its Shares in favor of the Merger, in each case
subject to the terms and conditions set forth therein; and
WHEREAS, also in furtherance of such acquisition, the Boards
of Directors of Purchaser and Company, and the general partner of Parent, have
each unanimously approved the execution, delivery and performance of the
Shareholder Agreements in accordance with applicable Law.
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
---------
SECTION 1.01. The Offer. (a) Provided that this Agreement
---------
shall not have been terminated in accordance with Section 8.01 and none of the
events set forth in Annex A hereto shall have occurred or be existing, Purchaser
shall commence the Offer as promptly as reasonably practicable after the date
hereof, but in no event later than five business days after the date hereof. The
obligation of Purchaser to accept for payment and pay for Shares tendered
pursuant to the Offer shall be subject to the condition (the "Minimum Tender
--------------
Condition") that at least the number of Shares that combined with the Shares
- ---------
already owned by Parent, Purchaser or any of their affiliates shall constitute
at least 90% of the then outstanding Shares on the date that Shares may be
accepted for payment by Purchaser shall have been validly tendered and not
withdrawn prior to the expiration of the Offer and also shall be subject to the
satisfaction of the other conditions set forth in Annex A hereto. Purchaser
expressly reserves the right to waive any such condition, to increase the price
per Share payable in the Offer, and to make any other changes in the terms and
conditions of the Offer; provided, however, that, without the prior written
-------- -------
consent of the Company, no change may be made (i) which decreases the price per
Share payable in the Offer, (ii) which changes the form of consideration to be
paid in the Offer, (iii) which, except as set forth in the next succeeding
sentence, extends the period that the Offer is outstanding, (iv) which reduces
the maximum number of Shares to be purchased in the Offer or (v) which imposes
conditions to the Offer in addition to those set forth in Annex A hereto.
Notwithstanding anything to the contrary contained herein, without the consent
of the Company, Parent and Purchaser may extend the expiration date for the
Offer for one or more periods not to exceed thirty (30) days in the aggregate.
The Per Share Amount shall, subject to applicable withholding of taxes, be paid
net to the seller in cash, upon the terms and subject to the conditions of the
Offer. Subject to the terms and conditions of the Offer (including, without
limitation, the Minimum Tender Condition), Purchaser shall pay, as promptly as
practicable after expiration of the Offer, for all Shares validly tendered into
and not withdrawn from, the Offer.
(b) As soon as reasonably practicable on the date of
commencement of the Offer, Purchaser shall file with the Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 (together with
---
all amendments and supplements thereto, the "Schedule 14D-1") with respect to
--------------
the Offer and the other Transactions (as hereinafter defined), which shall have
been provided to the Company and to which the Company shall not have reasonably
objected. The Schedule 14D-1 shall contain or shall incorporate by reference an
offer to purchase (the "Offer to Purchase") and forms of the related letter of
-----------------
transmittal and any related summary advertisement (the Schedule 14D-1, the Offer
to Purchase and such other documents, together with all supplements and
amendments thereto, being referred to herein collectively as
2
<PAGE>
the "Offer Documents"). Each of Parent, Purchaser and the Company agree to
---------------
correct promptly any information provided by it for use in the Offer Documents
which shall have become false or misleading, and Parent and Purchaser further
agree to take all steps necessary to cause the Schedule 14D-1 as so corrected to
be filed with the SEC and the other Offer Documents as so corrected to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws.
SECTION 1.02. Company Action. (a) The Company hereby approves
--------------
of and consents to the Offer and represents and warrants that (i) the Board, at
meetings duly called and held on June 14, 1999, and June 17, 1999, has
unanimously (A) determined that this Agreement, the Shareholder Agreements and
the transactions contemplated hereby and thereby, including, without limitation,
each of the Offer, the Merger and the tender of Shares pursuant to the
Shareholder Agreements, are fair to and in the best interests of the
shareholders of the Company, (B) approved and adopted this Agreement and the
transactions, including, without limitation, the Offer, the Merger and the
tender of Shares pursuant to the Shareholder Agreements, contemplated hereby and
thereby, (C) taken all action to render the provisions of Section 775 through
Section 784 of the Michigan Law inapplicable to the Offer, the Merger and the
Shareholder Agreements, so that none of Parent, Purchaser or any of their
affiliates shall become an "interested shareholder" thereunder, and to opt out
of Section 790 through Section 799 of the Michigan Law in order to render the
provisions thereof restricting voting rights of "control shares" inapplicable to
Shares acquired by Parent or Purchaser pursuant to the Offer, the Merger and the
Shareholder Agreements, and (D) recommended that the shareholders of the Company
accept the Offer and approve and adopt this Agreement and the transactions,
including, without limitation, the Merger, contemplated hereby, and (ii) Lazard
Freres & Co. LLC ("Lazard Freres") has delivered to the Board an opinion to the
-------------
effect that the consideration to be received by the holders of Shares (other
than Purchaser and its affiliates) pursuant to each of the Offer and the Merger
is fair to such holders of Shares from a financial point of view. Subject only
to the provisions of Sections 6.04 and 8.01(d) below, the Company hereby
consents to the inclusion in the Offer Documents of the recommendation of the
Board described in the immediately preceding sentence.
(b) As soon as reasonably practicable on the date of
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing, subject
--------------
only to the provisions of Sections 6.04 and 8.01(d) below, the recommendation of
the Board described in Section 1.02(a) and shall disseminate the Schedule 14D-9
to the extent required by Rule 14d-9 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and any other applicable federal
-----------------
securities laws. Each of the Company, Parent and Purchaser agree to correct
promptly any information provided by it for use in the Schedule 14D-9 which
shall have become false or misleading, and the Company further agrees to take
all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with
the SEC and disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Prior to the Company's filing of
the Schedule 14D-9, such Schedule shall have been provided to Purchaser and
Parent and shall not have been reasonably objected to.
3
<PAGE>
(c) The Company shall promptly furnish Purchaser with mailing
labels containing the names and addresses of all record holders of Shares and
with security position listings of Shares held in stock depositories, each as of
a recent date, together with all other available listings and computer files
containing names, addresses and security position listings of record holders and
beneficial owners of Shares. The Company shall furnish Purchaser with such
additional information, including, without limitation, updated listings and
computer files of shareholders, mailing labels and security position listings,
and such other assistance as Parent, Purchaser or their agents may reasonably
request. Subject to the requirements of applicable law, and except for such
steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer or the Merger, Parent and Purchaser
shall hold in confidence the information contained in such labels, listings and
files, shall use such information only in connection with the Offer and the
Merger and, if this Agreement shall be terminated in accordance with Section
8.01, shall deliver to the Company, or certify to the Company destruction of,
all copies of such information then in their possession.
ARTICLE II
THE MERGER
----------
SECTION 2.01. The Merger. Upon the terms and subject to the
----------
conditions set forth in Article VII, and in accordance with Michigan Law, at the
Effective Time (as hereinafter defined), Purchaser shall be merged with and into
the Company. As a result of the Merger, the separate corporate existence of
Purchaser shall cease and the Company shall continue as the surviving
corporation of the Merger (the "Surviving Corporation"), and shall continue to
---------------------
be governed by the laws of the State of Michigan.
SECTION 2.02. Effective Time; Closing. As promptly as
-----------------------
practicable after the satisfaction or, if permissible, waiver of the conditions
set forth in Article VII, the parties hereto shall cause the Merger to be
consummated by filing a certificate of merger in substantially the form of
Exhibit A hereto, or in such other form as the parties shall otherwise agree
(the "Certificate of Merger"), with the Michigan Department of Consumer and
---------------------
Industry Services, in such form as is required by, and executed in accordance
with the relevant provisions of, Michigan Law (the date and time of such filings
being, collectively, the "Effective Time"). Prior to such filing, a closing
--------------
shall be held at the offices of Honigman Miller Schwartz and Cohn, 2290 First
National Building, Detroit, Michigan 48226, or such other place as the parties
shall agree, for the purpose of confirming the satisfaction or waiver, as the
case may be, of the conditions set forth in Article VII. If Shares are accepted
for payment under the Offer, the Certificate of Merger shall be filed that same
day.
SECTION 2.03. Effect of the Merger. At the Effective Time, the
--------------------
effect of the Merger shall be as provided in the applicable provisions of
Michigan Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers and
franchises of the Company and Purchaser shall vest in the Surviving
4
<PAGE>
Corporation, and all debts, liabilities, obligations, restrictions, disabilities
and duties of the Company and Purchaser shall become the debts, liabilities,
obligations, restrictions, disabilities and duties of the Surviving Corporation.
SECTION 2.04. Articles of Incorporation; Bylaws. (a) The
---------------------------------
Articles of Incorporation of Purchaser, as in effect immediately prior to the
Effective Time, shall be the Articles of Incorporation of the Surviving
Corporation until thereafter amended as provided by applicable law and such
Articles of Incorporation; provided, however, that, at the Effective Time,
-------- -------
Article I of the Articles of Incorporation of the Surviving Corporation shall be
amended to read as follows: "The name of the corporation is Durakon Industries,
Inc. "
(b) The Bylaws of Purchaser, as in effect immediately prior to
the Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended as provided by law, the Articles of Incorporation of the
Surviving Corporation and such Bylaws.
SECTION 2.05. Directors and Officers. The directors of
----------------------
Purchaser immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation, each to hold office in accordance with the
Articles of Incorporation and Bylaws of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified.
SECTION 2.06. Conversion of Securities. At the Effective Time,
------------------------
by virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the Shares:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be cancelled pursuant to
Section 2.06(b)) shall be cancelled and shall be converted
automatically into the right to receive an amount equal to the Per
Share Amount in cash (the "Merger Consideration"), payable, without
--------------------
interest, to the holder of such Share, upon surrender, in the manner
provided in Section 2.08, of the certificate that formerly evidenced
such Share;
(b) Each Share owned by Purchaser, Parent or any direct or
indirect wholly owned subsidiary of Parent or of the Company
immediately prior to the Effective Time shall be cancelled and retired
without any conversion thereof and no payment or distribution shall be
made with respect thereto; and
(c) Each share of common stock, without par value, of
Purchaser issued and outstanding immediately prior to the Effective
Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of Common Stock, without par value,
of the Surviving Corporation.
SECTION 2.07. Employee and Director Stock Options. In
-----------------------------------
accordance with the terms of the Company's Stock Option Plans listed on Section
3.03 of the Disclosure Schedule (as
5
<PAGE>
defined below) (the "Stock Option Plans"), each outstanding option to purchase
------------------
Shares granted under the Stock Option Plans shall, immediately prior to the
Effective Time, become exercisable regardless of the vesting schedule contained
in any stock option agreement or in any of the Stock Option Plans. Each
outstanding option to purchase Shares granted under the Stock Option Plans or
otherwise shall be cancelled at the Effective Time, and each holder of a
cancelled option (whether issued pursuant to a Stock Option Plan or otherwise)
shall be entitled to receive, at the Effective Time or as soon as practicable
thereafter, from the Company, in consideration for the cancellation of such
option, an amount in cash equal to the product of (i) the number of Shares
previously subject to such option and (ii) the excess, if any, of the Merger
Consideration over the exercise price per Share previously subject to such
option (the "Spread"). With respect to each such option issued by the Company
------
other than pursuant to its 1996 Stock Option Plan, the Company shall take, or
cause to be taken, prior to the expiration date of the Offer, all such action so
that each such option shall be automatically cancelled as of the Effective Time
and the holders of each such option shall only be entitled to receive from the
Company, at the Effective Time or as soon as practicable thereafter, an amount
in cash equal to the Spread, if any, in exchange for the cancellation of each
such option.
SECTION 2.08. Surrender of Shares; Stock Transfer Books. (a)
-----------------------------------------
Prior to the Effective Time, Purchaser shall designate a bank or trust company
to act as agent (the "Paying Agent") for the holders of Shares in connection
with the Merger to receive the funds to which holders of Shares shall become
entitled pursuant to Section 2.06(a), and at the Effective Time Purchaser shall
deposit with such Paying Agent an amount sufficient to pay the aggregate Merger
Consideration. Such funds shall be invested by the Paying Agent as directed by
the Surviving Corporation, provided that such investments shall be in
obligations of or guaranteed by the United States of America or of any agency
thereof and backed by the full faith and credit of the United States of America
or in commercial paper obligations rated A-1 or P-1 or better by Moody's
Investors Service, Inc. or Standard & Poor's Corporation, respectively.
(b) Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each person who was, at the Effective
Time, a holder of record of Shares entitled to receive the Merger Consideration
pursuant to Section 2.06(a) a form of letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only upon proper
------------
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may be required
pursuant to such instructions, the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration for each Share formerly
evidenced by such Certificate, and such Certificate shall then be cancelled. No
interest shall accrue or be paid on the Merger Consideration payable upon the
surrender of any Certificate for the benefit of the holder of such Certificate.
If payment of the Merger Consideration is to be made to a person other than the
person in whose name the surrendered Certificate is registered on the stock
transfer books of the Company, it shall be a condition of payment that the
Certificate so surrendered shall be endorsed properly or otherwise be in proper
form for transfer and that the person requesting such payment
6
<PAGE>
shall have paid all transfer and other taxes required by reason of the payment
of the Merger Consideration to a person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such taxes either have been paid or are not
applicable. In the event any certificate representing Shares shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such certificate to be lost, stolen or destroyed, the Paying
Agent will issue in exchange for such lost, stolen or destroyed certificate the
Merger Consideration deliverable in respect thereof as determined in accordance
with this Article II; provided, however, the person to whom the Merger
-------- -------
Consideration is paid shall, as a condition precedent to the payment thereof,
give the Surviving Corporation a bond in such sum as it may direct or otherwise
indemnify the Surviving Corporation in a manner satisfactory to it against any
claim that may be made against the Surviving Corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
(c) At any time following the sixth month after the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any funds which had been made available to the
Paying Agent and not disbursed to holders of Shares (including, without
limitation, all interest and other income received by the Paying Agent in
respect of all funds made available to it) and, thereafter, such holders shall
be entitled to look only to the Surviving Corporation (subject to abandoned
property, escheat and other similar laws) only as general creditors thereof with
respect to any Merger Consideration that may be payable upon due surrender of
the Certificates held by them. Notwithstanding the foregoing, neither the
Surviving Corporation nor the Paying Agent shall be liable to any holder of a
Share for any Merger Consideration delivered in respect of such Share to a
public official pursuant to any abandoned property, escheat or other similar
law.
(d) At the close of business on the day of the Effective
Time, the stock transfer books of the Company shall be closed and, thereafter,
there shall be no further registration of transfers of Shares on the records of
the Company. From and after the Effective Time, the holders of Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided herein or by
applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to Parent and Purchaser
that:
SECTION 3.01. Organization and Qualification; Subsidiaries.
--------------------------------------------
Each of the Company and each subsidiary of the Company other than Durakon
Mexicana, S.A. de C.V. (a "Subsidiary"), is a corporation duly organized,
----------
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its
7
<PAGE>
business as it is now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority and
governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect (as defined below). The Company and each Subsidiary is
duly qualified or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except for such failures to be so qualified or licensed
and in good standing that would not, individually or in the aggregate, have a
Material Adverse Effect. When used in connection with the Company or any
Subsidiary, the term "Material Adverse Effect" means any change(s), event(s),
-----------------------
condition(s), development(s) or effect(s), other than a change affecting the
design, specifications or scope of the Company's GMT805 project, that adversely
affects, or may be reasonably likely to adversely affect, individually or in the
aggregate, the business, operations, results of operations, properties,
condition, financial condition, cash flows, assets or liabilities (including,
without limitation, contingent liabilities) of the Company and the Subsidiaries
taken as a whole or the value of the Shares, in any case, by an amount equal to
at least $5,000,000. A true and complete list of all the Subsidiaries (which for
purposes of this sentence only shall include Durakon Mexicana, S.A. de C.V.),
together with the jurisdiction of incorporation of each Subsidiary and the
percentage of the outstanding capital stock (calculated on a fully-diluted
basis) of each Subsidiary owned by the Company and each other Subsidiary, is set
forth in Section 3.01 of the Disclosure Schedule, which has been delivered prior
to the date of this Agreement by the Company to Parent (the "Disclosure
----------
Schedule"). Except as disclosed in such Section 3.01, the Company does not
- --------
directly or indirectly own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity or similar
interest in, any corporation, partnership, joint venture or other business
association or entity.
SECTION 3.02. Articles of Incorporation and Bylaws. The
------------------------------------
Company has heretofore furnished to Parent a complete and correct copy of the
Articles of Incorporation and the Bylaws or equivalent organizational documents,
each as amended to date, of the Company and each Subsidiary. Such Articles of
Incorporation, Bylaws and equivalent organization documents are in full force
and effect. Neither the Company nor any Subsidiary is in violation of any
provision of its Articles of Incorporation, Bylaws or equivalent organizational
documents.
SECTION 3.03. Capitalization. The authorized capital stock of
--------------
the Company consists of 100,000 shares of preferred stock (none of which is
issued and outstanding) and 15,000,000 Shares. As of the date hereof, (i)
6,125,200 Shares are issued and outstanding, all of which are validly issued,
fully paid and nonassessable, (ii) no Shares are held by the Subsidiaries or in
the Company's treasury, and (iii) 468,000 Shares are reserved for issuance
pursuant to stock options granted pursuant to the Company's Stock Option Plans
or otherwise. Except as set forth in this Section 3.03 or Section 3.03 of the
Disclosure Schedule, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character relating to the issued or unissued
capital stock of the Company, any Subsidiary or Durakon Mexicana, S.A. de C.V.,
or obligating the Company, any Subsidiary or Durakon Mexicana, S.A. de C.V., to
issue or sell any shares of capital stock of, or other equity interests in, the
Company, any
8
<PAGE>
Subsidiary or Durakon Mexicana, S.A. de C.V., Section 3.03 of the Disclosure
Schedule accurately and completely sets forth, with respect to each option
granted by the Company, any Subsidiary or Durakon Mexicana, S.A., de C.V.,
whether pursuant a Stock Option Plan or otherwise, the name of the optionee, the
number and type of securities subject to such option, and the exercise price of
such option. All Shares subject to issuance as aforesaid, upon issuance on the
terms and conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and nonassessable.
Except as set forth in Section 3.03 of the Disclosure Schedule, there are no
outstanding obligations of the Company, any Subsidiary or Durakon Mexicana, S.A.
de C.V., to repurchase, redeem or otherwise acquire any Shares or any capital
stock of the Company, any Subsidiary or Durakon Mexicana, S.A. de C.V., or to
provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any Subsidiary or any other person, including
Durakon Mexicana, S.A. de C.V. Each outstanding share of capital stock of each
Subsidiary and Durakon Mexicana, S.A. de C.V. is duly authorized, validly
issued, fully paid and nonassessable and, except as set forth in Section 3.03 of
the Disclosure Schedule is owned free and clear of all liens and encumbrances.
SECTION 3.04. Authority Relative to this Agreement. The
------------------------------------
Company has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions, including, without limitation, the Merger, contemplated hereby
(the "Transactions"). The execution and delivery of this Agreement by the
------------
Company and the consummation by the Company of the Transactions have been duly
and validly authorized by all necessary corporate action and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the Transactions (other than, with respect to the Merger, the
approval and adoption of this Agreement by the affirmative vote of the holders
of a majority of the outstanding Shares as required by Michigan Law and the
Company's Articles of Incorporation, and the filing and recordation of the
Certificate of Merger as required by Michigan Law). This Agreement has been duly
and validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by Parent and Purchaser, constitutes a
legal, valid and binding obligation of the Company.
SECTION 3.05. No Conflict; Required Filings and Consents.
------------------------------------------
Except as set forth in Section 3.05 of the Disclosure Schedule, (a) the
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Articles of Incorporation or Bylaws or equivalent organizational
documents of the Company or any Subsidiary, (ii) conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to the Company or
any Subsidiary or by which any property or asset of the Company or any
Subsidiary is bound or subject or (iii) result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or other
encumbrance of any nature on any property or asset of the Company or any
Subsidiary pursuant to, any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any property or asset of the Company or any Subsidiary is bound or
subject.
9
<PAGE>
(b) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not,
require any consent, approval, authorization or permit of, or filing with, or
notification to, any governmental or regulatory authority, domestic or foreign,
except (i) for applicable requirements, if any, of the Exchange Act, state
securities or "blue sky" laws ("Blue Sky Laws") and state takeover laws, and the
-------------
filing and recordation of the Certificate of Merger as required by Michigan Law,
and (ii) where failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or delay
consummation of the Offer or the Merger, or otherwise prevent the Company from
performing its obligations under this Agreement, or would not, individually or
in the aggregate, have a Material Adverse Effect.
SECTION 3.06. Compliance. Except as set forth in Section 3.06
----------
of the Disclosure Schedule, neither the Company nor any Subsidiary is, in any
material respect, in conflict with, or in default or violation of, (i) any law,
rule, regulation, order, judgment or decree applicable to the Company or any
Subsidiary or by which any property or asset of the Company or any Subsidiary is
bound or subject or (ii) any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any property or asset of the Company or any Subsidiary is bound or
subject.
SECTION 3.07. SEC Filings; Financial Statements. (a) The
---------------------------------
Company has filed all forms, reports and documents required to be filed by it
with the SEC in the past three years, and has heretofore delivered to Parent, in
the form filed with the SEC, (i) its Annual Reports on Form 10-K for the fiscal
years ended December 31, 1996, 1997 and 1998, respectively, (ii) its Quarterly
Reports on Form 10-Q for the periods ended (x) March 31, June 30 and September
30 in 1997 and in 1998, and (y) March 31, 1999, (iii) all proxy statements
relating to the Company's meetings of shareholders (whether annual or special)
held in the past three years and (iv) all other forms, reports and other
registration statements (other than Quarterly Reports on Form 10-Q not referred
to in clause (ii) above) filed by the Company with the SEC in the past three
years (the forms, reports and other documents referred to in clauses (i), (ii),
(iii) and (iv) above being referred to herein, collectively, as the "SEC
---
Reports"). The most recent SEC Report filed by the Company is its Quarterly
- -------
Report on Form 10-Q for the period ended March 31, 1999. The SEC Reports (i)
were prepared in accordance with the requirements of the Securities Act of 1933,
as amended (the "Securities Act"), and the Exchange Act, as the case may be, and
--------------
the rules and regulations promulgated thereunder and (ii) did not, at the time
they were filed, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading. No Subsidiary is required to file any form,
report or other document with the SEC.
(b) Each of the consolidated financial statements
(including, in each case, any notes thereto) contained in the SEC Reports was
prepared from the books and records of the Company in accordance with generally
accepted accounting principles applied on a consistent basis ("GAAP") throughout
----
the periods indicated (except as may be indicated in the notes
10
<PAGE>
thereto) and each fairly presents the consolidated financial position, results
of operations and changes in shareholders' equity and cash flows of the Company
and the consolidated Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (subject, in the case of unaudited
financial statements, to normal and recurring year-end audit adjustments which
are consistent with prior year adjustments and were not and are not expected,
individually or in the aggregate, to be significant).
(c) Except as and to the extent set forth on the
consolidated balance sheet of the Company and the consolidated Subsidiaries as
at December 31, 1998 including the notes thereto (the "1998 Balance Sheet"), or
------------------
in Section 3.07 of the Disclosure Schedule, neither the Company nor any
Subsidiary has any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise) which would be required to be reflected on a
balance sheet, or in the notes thereto, prepared in accordance with GAAP, except
for liabilities and obligations incurred in the ordinary course of business
consistent with past practice since December 31, 1998.
SECTION 3.08. Absence of Certain Changes or Events. Since
------------------------------------
December 31, 1998, except as set forth in Section 3.08 of the Disclosure
Schedule or as contemplated by this Agreement or disclosed in any SEC Report
filed since December 31, 1998 and prior to the date of this Agreement, the
Company and the Subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice and, since
December 31, 1998, there has not been (i) any Material Adverse Effect with
respect to the Company, (ii) any damage, destruction or loss (whether or not
covered by insurance) with respect to any property or asset of the Company or
any Subsidiary and having, individually or in the aggregate, a Material Adverse
Effect with respect to the Company, (iii) any material change by the Company in
its accounting methods, principles or practices, (iv) any revaluation by the
Company of any asset (including, without limitation, any writing down of the
value of inventory or writing off of notes or accounts receivable), other than
in the ordinary course of business consistent with past practice, (v) any
failure by the Company to revalue any asset in accordance with GAAP consistent
with past practice, (vi) any entry by the Company or any Subsidiary into any
commitment or transaction material to the Company and the Subsidiaries taken as
a whole, (vii) any declaration, setting aside or payment of any dividend or
distribution in respect of any capital stock of the Company or any redemption,
purchase or other acquisition of any of its securities or any securities of any
Subsidiary or of Durakon Mexican S.A. de C.V., (viii) other than as set forth in
any contract (as in effect on the date hereof) referred to in Section 3.10, any
increase in or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option (including,
without limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan, or any other increase in the compensation payable or to become
payable to any officers or key employees of the Company or any Subsidiary,
except customary increases in compensation to employees generally incurred in
the ordinary course of business consistent with past practice, (ix) any entering
into, renewal, modification or extension of, any contract, arrangement or
agreement with any affiliate of the Company, or (x) any entering into, renewal,
modification or extension of, any contract, arrangement or agreement with any
other party having, individually or in the aggregate, a Material Adverse Effect
with respect to the Company.
11
<PAGE>
SECTION 3.09. Absence of Litigation. Except as set forth in
---------------------
Section 3.09 of the Disclosure Schedule or as disclosed in the SEC Reports filed
prior to the date of this Agreement, there is no claim, action, proceeding or
investigation pending or, to the knowledge of the Company, threatened against
the Company or any Subsidiary, or any property or asset of the Company or any
Subsidiary, before any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign, which (i) the amount in
controversy is or could reasonably be expected to be at least $50,000, (ii)
seeks to, or is reasonably likely to, delay or prevent the consummation of any
Transaction or (iii) which, if adversely determined against the Company would
limit, in any material respect, the Company's ability to conduct its business as
currently conducted. As of the date hereof, except as set forth in Section 3.09
of the Disclosure Schedule, neither the Company nor any Subsidiary nor any
property or asset of the Company or any Subsidiary is subject to any order,
writ, judgment, injunction, decree, determination or award. Except as set forth
in Section 3.09 of the Disclosure Schedule, the Company and each Subsidiary has
notified its insurance companies, in accordance with the terms and conditions of
its insurance policies, of any pending or threatened litigation, and no
insurance company has denied coverage, reserved its rights to deny coverage or
otherwise advised the Company or any of its Subsidiaries of any defenses
available to such insurance company to deny coverage for any such pending or
threatened litigation.
SECTION 3.10. Employee Benefit Plans. (a) Section 3.10 of the
----------------------
Disclosure Schedule contains a true and complete list of (i) all employee
benefit plans (within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) and all bonus, stock option,
-----
stock purchase, restricted stock, incentive, deferred compensation, retiree
medical or life insurance, supplemental retirement, severance or other benefit
plans, programs or arrangements, and all employment, termination, severance or
other contracts or agreements to which the Company or any Subsidiary is a party,
with respect to which the Company or any Subsidiary has any obligation or which
are maintained, contributed to or sponsored by the Company or any Subsidiary for
the benefit of any current or former employee, officer or director of the
Company or any Subsidiary and (ii) each employee benefit plan for which the
Company or any Subsidiary could incur any liability under Title IV of ERISA, or
in respect of which the Company or any Subsidiary remains secondarily liable
under Section 4204 of ERISA (collectively, the "Plans"). No Plan is a "defined
-----
benefit plan" within the meaning of Section 3(35) of ERISA and no Plan is
subject to Title IV of ERISA. Each Plan is in writing and the Company has
previously furnished Parent with a true and complete copy of each Plan and a
true and complete copy of each material document prepared in connection with
each such Plan, including, without limitation, (i) a copy of each trust or other
funding arrangement, (ii) each summary plan description and summary of material
modifications, (iii) the most recently filed Internal Revenue Service ("IRS")
---
Form 5500, (iv) the most recently received IRS determination letter for each
such Plan, and (v) the most recently prepared financial statement in connection
with each such Plan. Except as set forth in Section 3.10 of the Disclosure
Schedule, neither the Company nor any Subsidiary has any express or implied
commitment (i) to create, incur liability with respect to or cause to exist any
other employee benefit plan, program or arrangement, (ii) to enter into any
contract or agreement to provide compensation or benefits to any individual or
(iii) to modify, change or terminate any Plan, other than with respect to a
12
<PAGE>
modification, change or termination required by ERISA or the Internal Revenue
Code of 1986, as amended (the "Code").
----
(b) Except as disclosed in Section 3.10 of the Disclosure
Schedule, none of the Plans (i) provides for the payment of separation,
severance, termination or similar-type benefits to any person, (ii) obligates
the Company or any Subsidiary to pay separation, severance, termination or other
benefits as a result of any Transaction or (iii) obligates the Company or any
Subsidiary to make any payment or provide any benefit that could be subject to a
tax under Section 4999 of the Code. None of the Plans provides for or promises
retiree medical, disability or life insurance benefits to any current or former
employee, officer or director of the Company or any Subsidiary.
(c) Except as set forth in Section 3.10 of the Disclosure
Schedule, each Plan which is intended to be qualified under Section 401(a) or
401(k) of the Code has received a favorable determination letter from the IRS
that such Plan is so qualified, and each trust established in connection with
any Plan which is intended to be exempt from federal income taxation under
Section 501(a) of the Code has received a determination letter from the IRS that
such trust is so exempt. To the knowledge of the Company, no fact or event has
occurred since the date of any such determination letter from the IRS that could
adversely affect the qualified status of any such Plan or the exempt status of
any such trust. Each trust maintained or contributed to by the Company or any
Subsidiary which is intended to be qualified as a voluntary employees'
beneficiary association exempt from federal income taxation under Sections
501(a) and 501(c)(9) of the Code has received a favorable determination letter
from the IRS that it is so qualified and so exempt, and, to the knowledge of the
Company, no fact or event has occurred since the date of such determination by
the IRS that could adversely affect such qualified or exempt status.
(d) There has been no prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any
Plan. Neither the Company nor any Subsidiary is currently liable or has
previously incurred any liability for any tax or penalty arising under Section
4971, 4972, 4979, 4980 or 4980B of the Code or Section 502(c) of ERISA, and no
fact or event exists which could give rise to any such liability. Neither the
Company nor any Subsidiary has incurred any liability under, arising out of or
by operation of Title IV of ERISA, including, without limitation, any liability
in connection with (i) the termination or reorganization of any employee pension
benefit plan subject to Title IV of ERISA or (ii) the withdrawal from any
Multiemployer Plan or Multiple Employer Plan, and no fact or event exists which
could give rise to any such liability.
(e) To the knowledge of the Company, each Plan is now and
has been operated in all respects in accordance with the requirements of all
applicable laws, including, without limitation, ERISA and the Code, and the
Company and each Subsidiary have performed all obligations required to be
performed by them under, are not in any respect in default under or in violation
of, and have no knowledge of any default or violation by any party to, any Plan.
All contributions, premiums or payments required to be made with respect to any
Plan have been timely made ,are fully deductible for income tax purposes and no
such deduction previously
13
<PAGE>
claimed has been challenged by any government entity. The 1998 Balance Sheet
reflects an accrual of all amounts of employer contributions and premiums
accrued but unpaid with respect to the Plans.
(f) The Company and the Subsidiaries have not incurred
any liability under, and have complied in all respects with, the Worker
Adjustment Retraining Notification Act and the regulations promulgated
thereunder ("WARN") and do not reasonably expect to incur any such liability as
----
a result of actions taken or not taken prior to the Effective Time. Section
3.10(f) of the Disclosure Schedule lists (i) all the employees terminated or
laid off by the Company or any Subsidiary during the 90 days prior to the date
hereof and (ii) all the employees of the Company or any Subsidiary who have
experienced a reduction in hours of work of more than 50% during any month
during the 90 days prior to the date hereof and describes all notices given by
the Company and the Subsidiaries in connection with WARN. The Company will, by
written notice to Parent and Purchaser, update Section 3.10(f) of the Disclosure
Schedule to include any such terminations, layoffs and reductions in hours from
the date hereof through the Effective Time and will provide Parent and Purchaser
with any related information which they may reasonably request.
SECTION 3.11. Labor Matters. Except as set forth in Section
-------------
3.11 of the Disclosure Schedule, (i) there are no controversies pending or, to
the knowledge of the Company, threatened between the Company or any Subsidiary,
on the one hand, and any of their respective employees (including former
employees), on the other hand; (ii) neither the Company nor any Subsidiary is a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or any Subsidiary, nor, to the
knowledge of the Company, are there any activities or proceedings of any labor
union to organize any such employees; (iii) neither the Company nor any
Subsidiary has breached or otherwise failed to comply with any provision of any
such agreement or contract and there are no grievances outstanding against the
Company or any Subsidiary under any such agreement or contract; (iv) there are
no unfair labor practice complaints pending or, to the knowledge of the Company,
threatened against the Company or any Subsidiary before the National Labor
Relations Board or any current union representation questions involving
employees of the Company or any Subsidiary; and (v) there is no strike,
slowdown, work stoppage or lockout, or, to the knowledge of the Company, threat
thereof, by or with respect to any employees of the Company or any Subsidiary.
Section 3.11 of the Disclosure Letter sets forth an accurate and complete list
of all agreements or arrangements with employees, consultants (excluding
attorneys and investment banking firms) and agents of the Company or any
Subsidiary, including (without limitation, employment, consulting, severance,
stay-bonus, termination or other agreements or arrangements) where the total
compensation to any such employee, consultant or agent under any such agreement
or arrangement (or series of related agreements or arrangements) exceeds
$100,000 in any year.
SECTION 3.12. Offer Documents; Schedule 14D-9; Proxy
--------------------------------------
Statement. Neither the Schedule 14D-9 nor any information supplied by the
- ---------
Company for inclusion in the Offer Documents shall, at the respective times the
Schedule 14D-9, the Offer Documents, or any amendments or supplements thereto
are filed with the SEC or are first published, sent or given to
14
<PAGE>
shareholders of the Company, as the case may be, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they are made, not misleading. The proxy statement to
be sent to the shareholders of the Company in connection with the Special
Shareholders' Meeting (as defined in Section 6.01 hereof (such proxy statement,
as amended or supplemented, being referred to herein as the "Proxy Statement")
---------------
shall not, at the date the Proxy Statement (or any amendment or supplement
thereto) is first mailed to shareholders of the Company, at the time of the
Special Shareholders' Meeting, and at the Effective Time, be false or misleading
with respect to any material fact, or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they are made, not misleading or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Special Shareholders' Meeting which shall
have become false or misleading. The Schedule 14D-9 and the Proxy Statement
shall comply in all material respects as to form with the requirements of the
Exchange Act and the rules and regulations thereunder.
SECTION 3.13. Tangible Property; Real Property and Leases. (a)
-------------------------------------------
The Company and the Subsidiaries have good and marketable title to all their
tangible properties and assets, free and clear of all liens and encumbrances,
with only such exceptions as are set forth in Section 3.13 of the Disclosure
Schedule, and subject to (i) liens for taxes, assessments or governmental
charges, (ii) liens incident to construction, common carriers, and public
warehouse storage, which are either not delinquent or are being contested in
good faith by the Company by appropriate proceedings and as to which adequate
reserves have been established on the 1998 Balance Sheet, (iii) liens or
deposits in connection with workers' compensation, unemployment, or other
insurance, social security laws, or to secure customs' duties, public or
statutory obligations in lieu of surety, stay or appeal bonds, or to secure
performance of contracts or bids (other than contracts for the payment of money
borrowed), or deposits required by law or governmental regulations or by any
court order, decree, judgment or rule as condition to the transaction of
business or the exercise of any right, privilege or license or (iv) other liens
or deposits of a like nature made in the ordinary course of business.
(b) No parcel of real property owned or leased by the
Company is subject to any governmental decree or order to be sold nor is being
condemned, expropriated or otherwise taken by any public authority with or
without payment of compensation therefor, nor, to the knowledge of the Company,
has any such condemnation, expropriation or taking been proposed or threatened.
(c) All leases of real property leased for the use or
benefit of the Company or any Subsidiary to which the Company or any Subsidiary
is a party requiring rental payments in excess of U.S. $100,000 during the
period of the lease and all amendments and modifications thereto are in full
force and effect and have not been modified or amended, and there exists no
default under any such lease by the Company or any Subsidiary, nor any event
which with notice or lapse of time or both would constitute a default thereunder
by the Company or any Subsidiary, nor, to the knowledge of the Company, does
there exist any default, or any event which with notice or lapse of time or both
would constitute a default thereunder, by any other party to any
15
<PAGE>
such lease. Section 3.13 of the Disclosure Schedule sets forth an accurate and
complete list of each of the leases and other documents described in the
immediately preceding sentence, and accurate and complete copies of each such
lease and other documents have been provided to the Parent.
SECTION 3.14. Trademarks, Patents and Copyrights. Except as
----------------------------------
set forth in Section 3.14 of the Disclosure Schedule, the Company and the
Subsidiaries own or possess adequate licenses or other valid rights to use all
patents, patent rights, trademarks, trademark rights, trade names, trade dress,
trade name rights, copyrights, servicemarks, trade secrets, applications for
trademarks and for servicemarks, mask works, know-how and other proprietary
rights and information (collectively, "Proprietary Rights") used or held for use
------------------
in connection with the business of the Company and the Subsidiaries as conducted
since December 31, 1994, as currently conducted or as contemplated to be
conducted, and the Company is unaware of any assertion or claim challenging the
validity of any of such Proprietary Rights. Except as set forth in Section 3.14
of the Disclosure Schedule, the conduct of the business of the Company and the
Subsidiaries did not, does not and will not conflict in any way with any
Proprietary Rights of any third party that, individually or in the aggregate,
could have a Material Adverse Effect with respect to the Company. Except as set
forth in Section 3.14 of the Disclosure Schedule, there are no infringements of
any Propriety Rights owned by or licensed by or to the Company or any
Subsidiary. Except as set forth in Section 3.14 of the Disclosure Schedule,
neither the Company nor any Subsidiary has licensed or otherwise permitted the
use by any third party of any Proprietary Rights.
SECTION 3.15. Taxes. The Company and the Subsidiaries have
-----
filed all federal, state, local and foreign tax returns and reports (as defined
below) required to be filed by them and have paid and discharged all taxes (as
defined below), other than such payments as are being contested in good faith by
appropriate proceedings and as to which adequate reserves are set forth on the
1998 Balance Sheet. Neither the IRS nor any other taxing authority or agency,
domestic or foreign, is now asserting or, to the knowledge of the Company,
threatening to assert against the Company or any Subsidiary any deficiency or
claim for additional taxes or interest thereon or penalties in connection
therewith. To the knowledge of the Company's management, no tax return or
taxable period of the Company is under examination by any taxing authority, and
Company has not received written notice of any pending audit by any taxing
authority. The Company is not a party to any agreement or contract which would
result in payment of any "excess parachute payment" within the meaning of
Section 280G of the Code. The Company has not been and is not a United States
real property holding company (as defined in Section 897(c)(2) of the Code)
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code).
Neither the Company nor any Subsidiary has granted any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment of,
any federal, state, county, municipal or foreign income tax which is currently
in effect. The accruals and reserves for taxes reflected in the 1998 Balance
Sheet are adequate to cover all taxes accruable through such date (including
interest and penalties, if any, thereon) in accordance with GAAP. Neither the
Company nor any Subsidiary has made an election under Section 341(f) of the Code
or agreed to have Section 341(f)(2) of the Code apply to any disposition of a
subsection (f) asset owned by the Company or any of the Subsidiaries. For
purposes of this Agreement, "taxes" shall
16
<PAGE>
mean all taxes or other like assessments including, without limitation, income,
withholding, gross receipts, excise, real or personal property, asset, sales,
use, license, payroll, transaction, capital, net worth and franchise taxes
imposed by or payable to any federal, state, county, local or foreign
government, taxing authority, subdivision or agency thereof, including interest,
penalties, additions to tax or additional amounts thereto. For purposes of this
Agreement, "tax return" shall mean any report, return, declaration or other
information required to be supplied to a taxing authority in connection with
taxes.
SECTION 3.16. Environmental Matters. (a) For purposes of this
---------------------
Agreement, the following terms shall have the following meanings: (i) "Hazardous
---------
Substances" means (A) any asbestos or asbestos-containing material, petroleum
- ----------
and petroleum products, including crude oil and any fractions thereof, natural
gas, natural gas liquids, synthetic gas, polychlorinated biphenyls or radon; (B)
any pollutant or contaminant; or (C) any substance with respect to which a
federal, state or local agency requires environmental investigation, monitoring,
reporting or remediation; and (ii) "Environmental Law" means any federal, state
-----------------
or local law relating to (A) releases or threatened releases of Hazardous
Substances or materials containing Hazardous Substances; (B) the manufacture,
handling, transport, use, treatment, storage or disposal of Hazardous Substances
or materials containing Hazardous Substances; or (C) otherwise relating to
pollution of the environment or the protection of human health.
(b) Except as described in Section 3.16 of the Disclosure
Schedule: (i) neither the Company, nor its operations, have violated any
applicable Environmental Law; (ii) the Company has all material permits and
licenses required under any applicable Environmental Law; (iii) the soils,
surface and ground waters at the properties owned or leased by the Company are
not contaminated with any Hazardous Substance; (iv) the Company has not received
any written notice of violation of liability under any Environmental Law which
liability remains unresolved; (v) true, correct and complete copies of all
environmental surveys, reports, assessments and similar materials which were
prepared by or on behalf of the Company, any of its Subsidiaries or any
affiliate of either the Company or any Subsidiary, have been made available to
Parent; and (vi) neither the Company nor any Subsidiary has contractually
assumed any liability of any other person involving Hazardous Substances or
Environmental Laws.
(c) Notwithstanding anything in this Agreement to the
contrary, this Section 3.16 is exclusive as to all matters related to or arising
from Environmental Laws, Hazardous Substances, pollution, contamination,
exposure to or the presence of any Hazardous Substances and any conditions
attributed to any of the foregoing.
SECTION 3.17. Material Contracts. Each contract or agreement
------------------
to which the Company or any of the Subsidiaries is a party that is material to
the Company or any Subsidiary (a "Material Contract"), or that is between the
-----------------
Company or any Subsidiary, on the one hand, and any director, officer or
affiliate of the Company, on the other hand (an "Affiliate Contract") is in full
------------------
force and effect and is enforceable against the parties thereto (including the
Company and the Subsidiaries) in accordance with its terms and no condition or
state of facts exists that, with notice or the passage of time, or both, would
constitute a material default by the Company or any Subsidiary or, to the
knowledge of the Company, any third party under such Material Contracts.
17
<PAGE>
The Company or the applicable Subsidiary and, to the knowledge of the Company,
any third party thereto, has duly complied in all material respects with the
provision of each Material Contract to which it is a party. An accurate and
complete list of each Material Contracts and each Affiliate Contract is set
forth in Section 3.17 of the Disclosure Schedule, and accurate and complete
copies of each Material Contract and each Affiliate Contract have been provided
to the Parent. The term Material Contract shall include the Principal Agreement,
dated January 14, 1993, by and between the Company and Consorcio Larmo, S.A. de
C.V., and any agreement, lease, contract, note, mortgage, indenture, arrangement
or other obligation (or any series of related agreements, lease, contracts,
notes, mortgages, indentures, arrangements or other obligations) entered into by
the Company or any of its Subsidiaries (i) of a nature which would be required
to be included as an Exhibit in a registration statement filed with the
Commission under the Securities Act of 1933, as amended, pursuant to Item
601(b)(10) of Regulation S-K (other than this Agreement), (ii) which involves
the leasing or rental of any significant portion of the real property currently
utilized by the Company or any of the Subsidiaries, (iii) under which the
Company or any Subsidiary has incurred or may incur indebtedness for borrowed
money, (iv) under which the Company or any Subsidiary is leasing any equipment
or other tangible personal property, and (v) which requires the Company or any
of its Subsidiaries to expend funds in excess of $100,000 in any one-year period
and which is not terminable at will by the Company or its Subsidiary.
SECTION 3.18. Brokers and Counsel. No broker, finder or
-------------------
investment banker (other than Lazard Freres and J. I. Harris & Associates) is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of the
Company. The Company has heretofore furnished to Parent a complete and correct
copy of all agreements among the Company or any of its Subsidiaries, on the one
hand, and Lazard Freres, J. I. Harris and Associates (the "Broker Agreements")
-----------------
or Honigman Miller Schwartz and Cohn on the other hand (the "Attorney
--------
Engagement") pursuant to which such firms would be entitled to any payment
- ----------
relating to the Transactions.
SECTION 3.19. Mexican Operations. Neither the Company nor any
------------------
of its directors or officers has any reason to believe that General Motors
Corporation intends to terminate, or modify in any respect which is materially
adverse to the Company or its subsidiary, Durakon Mexicana, S.A. de C.V., the
project known as GMT805.
SECTION 3.20. Year 2000 Compliance. All computer software and
--------------------
computerized systems owned or used by the Company, or licensed by the Company,
as licensor or as licensee, other than any shrinkwrap software available to
retail customers, is "Year 2000 Compliant" (as hereinafter defined), except as
-------------------
disclosed in Section 3.20 of the Disclosure Schedule. For purposes of this
Agreement, "Year 2000 Compliant" shall mean (i) all such software and systems
shall operate in 4-digit year format and, in all material respects, without
errors in the recognition, calculation and processing of date data relating to
century recognition, leap years, single and multi-century formulae, date values
and interfaces of date-related functionalities; (ii) all date processing shall
be conducted in a four-digit year format and all date sorting that includes a
"year field" or "year category" shall be based upon a four-digit year format;
and (iii) any date arithmetic programs or calculators in the software shall
operate in all
18
<PAGE>
material respects in accordance with the related user documentation in the Year
2000, and the years following, without degrading functionality or performance.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
------------------------------------------------------
Parent and Purchaser hereby, jointly and severally, represent
and warrant to the Company that:
SECTION 4.01. Organization. Purchaser is a corporation, and
------------
Parent is a limited partnership, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing or in good
standing or to have such power, authority and governmental approvals would not,
individually or in the aggregate, have a material adverse effect on the business
or operations of Parent and Purchaser and their respective subsidiaries, taken
as a whole.
SECTION 4.02. Authority Relative to This Agreement. Each of
------------------------------------
Parent and Purchaser has all necessary power and authority (corporate or
partnership as applicable) to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the Transactions. The execution and
delivery of this Agreement by Parent and Purchaser and the consummation by
Parent and Purchaser of the Transactions have been duly and validly authorized
by all necessary action (corporate or partnership as applicable) and no other
proceedings on the part of Parent or Purchaser are necessary to authorize this
Agreement or to consummate the Transactions (other than with respect to the
Merger, the filing and recordation of the Certificate of Merger as required by
Michigan Law). This Agreement has been duly and validly executed and delivered
by Parent and Purchaser and, assuming the due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of
each of Parent and Purchaser enforceable against each of Parent and Purchaser in
accordance with its terms.
SECTION 4.03. No Conflict; Required Filings and Consents. (a)
-------------------------------------------
The execution and delivery of this Agreement by Parent and Purchaser do not, and
the performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the Articles of Incorporation or Bylaws of Purchaser or the
Certificate of Limited Partnership of Parent, (ii) conflict with or violate any
law, rule, regulation, order, judgement or decree applicable to Parent or
Purchaser or by which any property or asset of either of them is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of Parent or Purchaser pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which
19
<PAGE>
Parent or Purchaser is a party or by which Parent or Purchaser or any property
or asset of either of them is bound or subject.
(b) The execution and delivery of this Agreement by
Parent and Purchaser do not, and the performance of this Agreement by Parent and
Purchaser will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except (i) for applicable requirements, if any, of the
Exchange Act, Blue Sky Laws and state takeover laws and filing and recordation
of the Certificate of Merger as required by Michigan Law and (ii) where failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay consummation of the Offer
or the Merger, or otherwise prevent Parent or Purchaser from performing their
respective obligations under this Agreement.
(c) Parent and Purchaser have less than $10 million of
assets for purposes of determining whether any pre-merger filing under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, is required,
and no individual or entity owns 50% or more of the equity of Parent.
SECTION 4.04. Financing. Parent has, or has commitments to
---------
obtain, sufficient funds to permit Purchaser to acquire all the outstanding
Shares in the Offer and the Merger, evidence of which has been provided to the
Company.
SECTION 4.05. Offer Documents; Proxy Statement. The Offer
--------------------------------
Documents will not, at the time the Offer Documents are filed with the SEC or
are first published, sent or given to shareholders of the Company, as the case
may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they are
made, not misleading. The information supplied by Parent for inclusion in the
Proxy Statement will not, on the date the Proxy Statement (or any amendment or
supplement thereto) is first mailed to shareholders of the Company, at the time
of the Special Shareholders' Meeting, if applicable, and at the Effective Time,
contain any statement which, at such time and in light of the circumstances
under which it is made, is false or misleading with respect to any material
fact, or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein not false or misleading or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Special Shareholders' Meeting which shall
have become false or misleading. Notwithstanding the foregoing, Parent and
Purchaser make no representation or warranty with respect to any information
supplied by the Company or any of its representatives which is contained in any
of the foregoing documents or the Offer Documents. The Offer Documents shall
comply in all material respects as to form with the requirements of the Exchange
Act and the rules and regulations thereunder.
SECTION 4.06. Brokers. No broker, finder or investment banker
-------
is entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of Parent or
Purchaser.
20
<PAGE>
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
--------------------------------------
SECTION 5.01. Conduct of Business by the Company Pending the
----------------------------------------------
Merger. The Company covenants and agrees that, between the date of this
- ------
Agreement and the Effective Time, unless Parent shall otherwise agree in
writing, the businesses of the Company and the Subsidiaries shall be conducted
only in, and the Company and the Subsidiaries shall not take any action except
in, the ordinary course of business and in a manner consistent with past
practice; and the Company shall use its best efforts to preserve substantially
intact the business organization of the Company and the Subsidiaries, to keep
available the services of the current officers, employees and consultants of the
Company and the Subsidiaries and to preserve the current relationships of the
Company and the Subsidiaries with customers, suppliers and other persons with
which the Company or any Subsidiary has significant business relations. By way
of amplification and not limitation, except as contemplated by this Agreement or
by Section 5.01 of the Disclosure Schedule, neither the Company nor any
Subsidiary shall, between the date of this Agreement and the Effective Time,
directly or indirectly do, or propose to do, any of the following without the
prior written consent of Parent:
(a) amend or otherwise change its Articles of Incorporation or
Bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or
authorize the issuance, sale, pledge, disposition, grant or encumbrance
of (i) any shares of capital stock of any class of the Company or any
Subsidiary (which for purposes of this Section 5.01(b)(i) only shall
include Durakon Mexicana, S.A. de C.V.), or any options, warrants,
convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest
(including, without limitation, any phantom interest), of the Company
or any Subsidiary (except for the issuance of a maximum of 468,000
Shares issuable pursuant to stock options outstanding on the date
hereof) or (ii) any assets of the Company or any Subsidiary, except for
sales in the ordinary course of business and in a manner consistent
with past practice;
(c) (i) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock, or (ii) make any capital
contribution with respect to any Subsidiary (which for purposes of this
Section 5.01(c)(ii) only shall include Durakon Mexicana, S.A. de C.V.);
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) except as set forth in Section 5.01(e) of the
Disclosure Schedule, take any of the actions described in (ii)(B),
(ii)(C), (ii)(D), (ii)(F) and (ii)(G) of this subsection (e) as they
relate to the GMT805 project, or (ii) (A) acquire (including, without
21
<PAGE>
limitation, by merger, consolidation, or acquisition of stock or assets
or any other business combination) any corporation, partnership, other
business organization or any division thereof or any assets; (B) incur
any indebtedness for borrowed money or issue any debt securities or
assume, guarantee or endorse, pledge in respect of or otherwise as an
accommodation become responsible for the obligations of any person, or
make any loans or advances, except in the ordinary course of business
and consistent with past practice, but in no event shall there be more
than $1,300,000 of indebtedness outstanding at any one time; (C) enter
into any contract or agreement other than (1) a license agreement with
Dynamic Manufacturing, Inc. (which shall only be entered into following
consultation with Parent) or (2) contracts or agreements entered into
in the ordinary course of business, consistent with past practice and
which require payments by the Company or the Subsidiaries in an
aggregate amount of less than U.S. $100,000; (D) terminate, cancel or
permit any change in, or agree to any change in, any Material Contract,
except in the ordinary course of business consistent with past
practice; (E) terminate, cancel or permit any change in, or agree to
any change in, any Affiliate Contract, Broker Agreement or Attorney
Engagement; (F) authorize any single capital expenditure which is in
excess of U.S. $250,000 or capital expenditures which are, in the
aggregate, in excess of U.S. $1,000,000 for the Company and the
Subsidiaries taken as a whole; or (G) enter into or amend any contract,
agreement, commitment or arrangement with respect to any matter set
forth in this Section 5.01(e);
(f) increase the compensation payable or to become payable to
its officers or employees, except for normal increases consistent with
past practices in salaries or wages of employees of the Company or any
Subsidiary who are not officers of the Company, or grant any severance
or termination pay to, or enter into any employment, severance,
termination, stay-bonus or similar agreement with, any director,
officer or other employee of the Company or any Subsidiary, or
establish, adopt, enter into or amend any collective bargaining, bonus,
profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or arrangement
for the benefit of any director, officer or employee;
(g) take any action, other than reasonable and usual actions
in the ordinary course of business and consistent with past practice,
with respect to accounting policies or procedures (including, without
limitation, procedures with respect to the payment of accounts payable
and collection of accounts receivable);
(h) make any tax election or settle or compromise any material
federal, state, local or foreign income tax liability;
(i) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business and consistent with past practice, of
liabilities reflected or reserved against in the 1998 Balance Sheet or
22
<PAGE>
subsequently incurred in the ordinary course of business and consistent
with past practice or incurred in connection with the Transactions; or
(j) announce an intention, enter into any formal or informal
agreement, or otherwise make a commitment, to do any of the foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
SECTION 6.01. Special Shareholders' Meeting. The Company,
-----------------------------
acting through the Board, shall, in accordance with applicable law and the
Company's Articles of Incorporation and Bylaws, unless not required under
applicable "short-form" merger provisions of Michigan Law, (i) duly call, give
notice of, convene and hold a special meeting of its shareholders as soon as
practicable following the expiration of the Offer for the purpose of considering
and taking action on this Agreement and the transactions contemplated hereby
(the "Special Shareholders' Meeting") and (ii) subject to the provisions of
-----------------------------
Sections 6.04 and 8.01 below, (A) include in the Proxy Statement the unanimous
recommendation of the Board that the shareholders of the Company approve and
adopt this Agreement and the Transactions, including, without limitation, the
Merger and (B) use its best efforts to obtain such approval and adoption;
provided, however, if, immediately after the expiration of the Offer, less than
- -------- -------
a majority of the outstanding Shares on a fully-diluted basis have been tendered
into the Offer, and not withdrawn, then the Special Shareholders' Meeting shall
not be held and the Company shall not be required to (i) call, give notice of or
convene the Special Shareholders' Meeting, (ii) recommend in the Proxy Statement
that the shareholders of the Company approve and adopt this Agreement and the
Transactions, or (iii) use its best efforts to obtain such approval and
adoption. At the Special Shareholders' Meeting (or by consent if a shareholders
meeting is not required), Parent and Purchaser shall cause all Shares then owned
by them and their subsidiaries to be voted in favor of the approval and adoption
of this Agreement and the Transactions, including, without limitation, the
Merger.
SECTION 6.02. Proxy Statement. As soon as practicable
---------------
following the date of this Agreement, the Company shall file the Proxy Statement
with the SEC under the Exchange Act, unless not required under applicable
"short-form" merger provisions of Michigan Law, and shall use its best efforts
to have the Proxy Statement cleared by the SEC. Parent, Purchaser and the
Company shall cooperate with each other in the preparation of the Proxy
Statement, and the Company shall notify Parent promptly of the receipt of any
comments of the SEC with respect to the Proxy Statement and of any requests by
the SEC for any amendment or supplement thereto or for additional information
and shall provide to Parent promptly copies of all correspondence between the
Company or any representative of the Company and the SEC. The Company shall give
Parent and its counsel the opportunity to review the Proxy Statement prior to
its being filed with the SEC and shall give Parent and its counsel the
opportunity to review all amendments and supplements to the Proxy Statement and
all responses to requests for additional information and replies to comments
prior to their being filed with, or sent to, the SEC. Each of the Company,
Parent and Purchaser agrees to use its best efforts, after consultation with the
other parties hereto,
23
<PAGE>
to respond promptly to all such comments of and requests by the SEC and to cause
the Proxy Statement and all required amendments and supplements thereto to be
mailed to the holders of Shares entitled to vote at the Special Shareholders'
Meeting at the earliest practicable time.
SECTION 6.03. Access to Information; Confidentiality. (a) From
--------------------------------------
the date hereof to the Effective Time, the Company shall, and shall cause the
Subsidiaries and the officers, directors, employees, auditors and agents of the
Company and the Subsidiaries to, afford the officers, employees and agents of
Parent and Purchaser access at all reasonable times to the officers, employees,
agents, properties, offices, plants and other facilities, books and records of
the Company and each Subsidiary, shall instruct its independent auditors to make
available its accountants' work papers to the officers, employees and agents of
Parent and Purchaser, and shall furnish Parent and Purchaser with all financial,
operating and other data and information as Parent or Purchaser, through its
officers, employees or agents, may reasonably request.
(b) All information obtained by Parent or Purchaser
pursuant to this Section 6.04 shall be kept confidential, by Purchaser, by
Parent and by any other party which is to be afforded access pursuant to Section
6.03(a), in accordance with the confidentiality agreement, dated February 5,
1999 (the "Confidentiality Agreement"), between Littlejohn Co., LLC and the
-------------------------
Company and countersigned by Littlejohn & Co., LLC on February 8, 1999.
SECTION 6.04. No Solicitation of Transactions. Neither the
-------------------------------
Company nor any Subsidiary shall, directly or indirectly, through any officer,
director, agent or otherwise, solicit, initiate or encourage the submission of
any proposal or offer from any person relating to any acquisition or purchase of
all or any material portion of the assets of, or any equity interest in, the
Company or any Subsidiary or any merger, consolidation, business combination,
reorganization, recapitalization or similar transaction involving the Company or
any Subsidiary (each a "Competing Transaction") or participate in any
---------------------
discussions or negotiations regarding, or furnish to any other person any
information with respect to, or otherwise cooperate in any way with, or assist
or participate in, facilitate or encourage, any effort or attempt by any other
person to do or seek any of the foregoing. The Company and each of its
Subsidiaries will cease and cause to be terminated any existing activities,
discussions or negotiations by or on its behalf with any other person conducted
heretofore with respect to any Competing Transaction and will promptly notify
Parent following receipt of any request by any person relating to any possible
Competing Transaction or information concerning the Company. Section 6.04 of the
Disclosure Schedule accurately and completely sets forth the name of each person
to whom any confidential documents or information concerning the Company or any
of its Subsidiaries was disclosed by or on behalf of the Company since January
1, 1998 for the purpose of discussing a possible change in control transaction
involving the Company (a "Potential Buyer"). The Company will promptly request
---------------
that each such Potential Buyer either return all of such confidential documents
and information, and all copies thereof, to the Company or deliver a written
certification of such destruction to the Company. The Company shall use its best
efforts to cause each such Potential Buyer to comply with such request and shall
notify Parent promptly following compliance by each Potential Buyer with such
request. The Company agrees that it will not disclose any of the terms of this
Agreement or the matters referred to herein to any other prospective acquiror of
the Company until the Closing Date or earlier if this Agreement is terminated in
accordance with its
24
<PAGE>
terms, except to the extent such disclosure is required by law or the
regulations of the Nasdaq Stock Market. Nothing contained in this Section 6.04
shall prohibit the Board from furnishing information to, or entering into
discussions or negotiations with, any person in connection with an unsolicited
(from the date of this Agreement) proposal involving a fully-financed Competing
Transaction which is made in writing by such person and which, if consummated,
would provide consideration per Share to the shareholders of the Company in
excess of the Per Share Amount (a "Superior Proposal"), if, and only to the
-----------------
extent that, the Board determines in good faith, based upon the written advice
of Honigman Miller Schwartz and Cohn, that such action is required for the Board
to comply with its fiduciary duties to shareholders under Michigan Law.
SECTION 6.05. Employee Benefits Matters; Employment
-------------------------------------
Agreements. For a period of one year from the Effective Time, Parent shall, or
- ----------
shall cause the Company or the Surviving Corporation to, maintain the Plans
(other than the Stock Option Plans) which the Company maintains for the benefit
of, or which are open to, a majority of the employees of the Company on the
terms in effect on the date hereof, or such other plans, arrangements or
programs as will provide employees with benefits that in the aggregate are
substantially equivalent to those provided under the Plans (other than the Stock
Option Plans) as in effect on the date hereof. In addition, Parent shall, or
shall cause the Surviving Corporation to, assume and agree to perform those
Change of Control Agreements listed in Schedule 6.05 of the Disclosure Schedule
in the same manner and to the same extent that the Company is required to
perform such agreements.
SECTION 6.06. Directors' and Officers' Indemnification and
--------------------------------------------
Insurance.
- ---------
(a) The Articles of Incorporation and Bylaws of the
Surviving Corporation shall contain provisions no less favorable with respect to
indemnification than are set forth in Article VII of the Bylaws of the Company,
which provisions shall not be amended, repealed or otherwise modified for a
period of six years from the Effective Time in any manner that would affect
adversely the rights thereunder of individuals who at the Effective Time were
directors, officers, employees, fiduciaries or agents of the Company, unless
such modification shall be required by law. Any determinations made pursuant to
Section 564(a) of Michigan Law with respect to the appropriateness of
indemnification shall be made in good faith.
(b) The Company shall indemnify and hold harmless, and,
after the Effective Time, the Surviving Corporation shall indemnify and hold
harmless, each present and former director, officer, employee, fiduciary and
agent of the Company and each Subsidiary (collectively, the "Indemnified
-----------
Parties") against all costs and expenses (including reasonable attorneys' fees),
- -------
judgments, fines, losses, claims, damages, liabilities and settlement amounts
paid in connection with any claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), whether civil, criminal,
administrative or investigative, arising out of or pertaining to any action or
omission in their capacity as an officer, director, employee, fiduciary or
agent, whether occurring before or after the Effective Time, for a period of six
years after the date hereof. In the event of any such claim, action, suit,
proceeding or investigation, (i) the Company or the Surviving Corporation, as
the case may be, shall pay the reasonable fees and expenses of counsel selected
by the Indemnified Parties, which counsel shall
25
<PAGE>
be reasonably satisfactory to the Company or the Surviving Corporation, promptly
after statements therefor are received and (ii) the Company and the Surviving
Corporation shall cooperate in the defense of any such matter; provided,
--------
however, that neither the Company nor the Surviving Corporation shall be liable
- -------
for any settlement effected without its written consent (which consent shall not
be unreasonably withheld); provided further that neither the Company nor the
-------- -------
Surviving Corporation shall be obligated pursuant to this Section 6.06(b) to pay
the fees and expenses of more than one counsel for all Indemnified Parties in
any single action except to the extent that two or more of such Indemnified
Parties shall have conflicting interests in the outcome of such action; and
provided further that, in the event that any claim for indemnification is
- --------
asserted or made within such six-year period, all rights to indemnification in
respect of such claim shall continue until the disposition of such claim.
(c) Prior to the Effective Time the Company shall, and
after the Effective Time the Surviving Corporation shall, make reasonable
advances to the Indemnified Parties to cover expenses for which such Indemnified
Parties would otherwise be entitled to indemnification pursuant to this Section
6.06, subject to receipt of an undertaking by the Indemnified Parties to
reimburse the Company for all such amounts advanced if it is subsequently
determined that the Company is not required to indemnify such Indemnified Party.
(d) The Surviving Corporation shall use its best efforts
to maintain in effect for six years from the Effective Time, if available, the
current directors' and officers' liability insurance policies maintained by the
Company (provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions which are
not materially less favorable) with respect to matters occurring on or prior to
the Effective Time; provided, however, that in no event shall the Surviving
--------
Corporation be required to expend pursuant to this Section 6.06(d) more than an
amount per year equal to 250% of current annual premiums paid by the Company for
such insurance.
(e) In the event the Company or the Surviving Corporation
or any of their respective successors or assigns (i) consolidates with or merges
into any other person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) transfers all or substantially
all of its properties and assets to any person, then, and in each such case,
proper provision shall be made so that the successors and assigns of the Company
or the Surviving Corporation, as the case may be, or at Parent's option, Parent,
shall assume the obligations set forth in this Section 6.06.
SECTION 6.07. Notification of Certain Matters. The Company
-------------------------------
shall give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (i) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which causes any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect and (ii) any
failure of the Company, Parent or Purchaser, as the case may be, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder.
26
<PAGE>
SECTION 6.08. Further Action; Reasonable Best Efforts. Upon
---------------------------------------
the terms and subject to the conditions hereof (including, without limitation,
Section 6.04), each of the parties hereto shall use its reasonable best efforts
to take, or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the Transactions, including,
without limitation, using its reasonable best efforts to obtain all licenses,
permits (including, without limitation, environmental permits), consents,
approvals, authorizations, qualifications and orders of governmental authorities
and parties to contracts with the Company and the Subsidiaries as are necessary
for the consummation of the Transactions and to fulfill the conditions to the
Offer and the Merger. In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of each party to this Agreement shall use
their reasonable best efforts to take all such action.
SECTION 6.09. Public Announcements. Parent and the Company
--------------------
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or any Transaction
and shall not issue any such press release or make any such public statement
prior to such consultation, except as may be required by law or any listing
agreement with a national securities exchange or The Nasdaq Stock Market to
which Parent or the Company is a party.
SECTION 6.10. Confidentiality Agreement. Upon the acceptance
-------------------------
for payment of Shares pursuant to the Offer, the Confidentiality Agreement shall
be deemed to have terminated without further action by the parties thereto.
SECTION 6.11. Financial Statements. As soon as they are made
--------------------
available to senior management of the Company, the Company shall make available
to Parent copies of all internally generated monthly, quarterly and annual
financial statements, consisting of consolidated balance sheets, and statements
of income and of cash flows.
SECTION 6.12. SEC Reports. The Company shall timely file all
-----------
quarterly, annual and other reports and information required to be filed by it
with the SEC under the Exchange Act for all periods through and including the
Closing Date and, promptly after making such filing, shall provide Parent with
an accurate and complete copy thereof. The delivery to Parent of copies of any
such reports and information shall constitute a representation and warranty by
the Company to Parent that such report or information was prepared in accordance
with the requirements of the Exchange Act and did not, at the time it was filed,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances in which they were made, not misleading.
SECTION 6.13. Cancellation of Shares. The Company shall cause
----------------------
to be cancelled all Shares held by the Company.
SECTION 6.14. Issuance of Shares Upon Exercise of Stock
-----------------------------------------
Options. From and after the date upon which Purchaser accepts for payment Shares
- -------
tendered pursuant to the Offer,
27
<PAGE>
the Company shall not issue any Shares upon exercise of any outstanding options
to purchase Shares.
ARTICLE VII
CONDITIONS TO THE MERGER
------------------------
SECTION 7.01. Conditions to the Merger If Offer Conditions
--------------------------------------------
Have Been Satisfied or Waived. If the conditions to the Offer set forth on Annex
- -----------------------------
A have been satisfied or, where permitted, waived, the respective obligations of
each party to effect the Merger shall be subject to the satisfaction at or prior
to the Effective Time of the following conditions:
(a) Shareholder Approval. This Agreement and the Transactions,
--------------------
including, without limitation, the Merger, shall have been approved and
adopted by the affirmative vote of the shareholders of the Company
(unless the vote of the shareholders is not required by Michigan Law);
(b) No Order. No foreign, United States or state governmental
--------
authority or other agency or commission or foreign, United States or
state court of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, executive
order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is then in effect and has the effect of
making the acquisition of Shares by Parent or Purchaser or any
affiliate of either of them or the consummation of the Merger illegal
or otherwise restricting, preventing or prohibiting consummation of the
Transactions; and
(c) Offer. Purchaser or its permitted assignee shall have
-----
purchased all Shares validly tendered and not withdrawn pursuant to the
Offer; provided, however, that this condition shall only be applicable
-------- -------
to the obligations of Parent or Purchaser if Purchaser's failure to
purchase such Shares is not in breach of this Agreement or the terms of
the Offer.
SECTION 7.02. Conditions to the Merger if the Conditions to
---------------------------------------------
the Offer are not Satisfied or Waived. If the conditions to the Offer set forth
- -------------------------------------
on Annex A have not been satisfied or, where permitted, waived, the respective
obligations of Parent and Purchaser, on the one hand, and the Company, on the
other hand, shall be subject to the satisfaction, or, where permitted, waived,
at or prior to the Effective Time of the conditions set forth in subsections (a)
and (b), respectively, of this Section 7.02.
(a) Conditions Applicable to Parent and Purchaser. The
---------------------------------------------
respective obligations of Parent and Purchaser shall be subject to the
satisfaction, or, where permitted, waiver, at or prior to the Effective
Time of the following conditions:
28
<PAGE>
(i) Shareholder Approval. This Agreement and the
--------------------
Transactions, including, without limitation, the Merger, shall
have been approved and adopted by the affirmative vote of the
shareholders of the Company (unless the vote of the
shareholders is not required by Michigan Law);
(ii) No Order. No foreign, United States or state
--------
governmental authority or other agency or commission or
foreign, United States or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced
or entered any law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or
permanent) which is then in effect and has the effect of
making the acquisition of Shares by Parent or Purchaser or any
affiliate of either of them or the consummation of the Merger
illegal or otherwise restricting, preventing or prohibiting
consummation of the Transactions;
(iii) there shall not have occurred any Material
Adverse Effect with respect to the Company;
(iv) the Company shall have taken or caused to be
taken all such action so that each outstanding option to
purchase Shares issued by the Company other than pursuant to
the Company's 1996 Stock Option Plan shall be automatically
cancelled as of the Effective Time and the holders of each
such option shall only be entitled to receive from the
Company, at the Effective Time or as soon as practicable
thereafter, an amount in cash equal to the Spread, if any, in
exchange for the cancellation of each such option;
(v) there shall not have been any misstatement in or
omission from any representation of, or there shall not have
occurred any breach of warranty by, the Company in the
Agreement, as a result of which, individually or in the
aggregate, there is, or may reasonably be expected to occur, a
Material Adverse Effect with respect to the Company, and the
President of the Company shall have delivered a certificate to
such effect in form and substance reasonably satisfactory to
Parent;
(vi) the Company shall have performed in all material
respects all of its obligations, and shall have complied in
all material respects with all of its material agreements and
material covenants, to be performed or complied with by it
under this Agreement, and the President of the Company shall
have delivered a certificate to such effect in form and
substance reasonably satisfactory to Parent; and
(vii) the Company's consolidated cash balance, as
computed in accordance with GAAP, immediately prior to the
Effective Time, shall be no less than $15 million, determined
after subtracting an amount equal to the then-outstanding
accounts payable (excluding inter-company accounts payable)
incurred by the Company, any Subsidiary and/or Durakon
Mexicana, S.A. de
29
<PAGE>
C.V. relating to the GMT-805 expenditures listed in Section
5.01(e) of the Disclosure Schedule, and the President of the
Company shall have delivered a certificate to such effect in
form and substance reasonably satisfactory to Parent.
(b) Conditions Applicable to the Company. The obligations of
------------------------------------
the Company shall be subject to the satisfaction, or, where permitted,
waiver, at or prior to the Effective Time of the following conditions:
(i) Shareholder Approval. This Agreement and the
--------------------
Transactions, including, without limitation, the Merger, shall
have been approved and adopted by the affirmative vote of the
shareholders of the Company (unless the vote of the
shareholders is not required by Michigan Law);
(ii) No Order. No foreign, United States or state
--------
governmental authority or other agency or commission or
foreign, United States or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced
or entered any law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or
permanent) which is then in effect and has the effect of
making the acquisition of Shares by Parent or Purchaser or any
affiliate of either of them or the consummation of the Merger
illegal or otherwise restricting, preventing or prohibiting
consummation of the Transactions;
(iii) there shall not have been any misstatement in
or omission from any representation of, or there shall not
have occurred any breach of warranty by, Parent or Purchaser
in the Agreement, as a result of which, individually or in the
aggregate, there is, or may reasonably be expected to occur, a
Material Adverse Effect with respect to Parent and Purchaser
taken as a whole, and the President of Parent shall have
delivered a certificate to such effect in form and substance
reasonably satisfactory to the Company; and
(iv) Parent and Purchaser shall have performed in all
material respects all of their obligations, and shall have
complied in all material respects with all of their material
agreements and material covenants, to be performed or complied
with by them under this Agreement, and the President of Parent
shall have delivered a certificate to such effect in form and
substance reasonably satisfactory to the Company.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
SECTION 8.01. Termination. This Agreement may be terminated
-----------
and the Merger and the other Transactions may be abandoned at any time prior to
the Effective Time, notwithstanding any requisite approval and adoption of this
Agreement and the transactions contemplated hereby by the shareholders of the
Company:
30
<PAGE>
(a) By mutual written consent duly authorized by (x) the
Boards of Directors of Purchaser and the Company and (y) the general
partner of Parent; or
(b) By Parent, Purchaser or the Company if (i) the Effective
Time shall not have occurred on or before November 30, 1999; provided,
--------
however, that the right to terminate this Agreement under this Section
-------
8.01(b) shall not be available to any party whose failure to fulfill
any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Effective Time to occur on or before such date
or (ii) any court of competent jurisdiction in the United States or
other governmental authority shall have issued an order, decree, ruling
or taken any other action restraining, enjoining or otherwise
prohibiting the Offer or the Merger and such order, decree, ruling or
other action shall have become final and nonappealable; or
(c) By Parent, upon approval of its Board of Directors, if (i)
due to an occurrence or circumstance that would result in a failure to
satisfy any condition set forth in Annex A hereto other than the
Minimum Tender Condition, Purchaser shall have (A) failed to commence
the Offer within 60 days following the date of this Agreement, (B)
terminated the Offer without having accepted any Shares for payment
thereunder or (C) failed to pay for Shares pursuant to the Offer within
90 days following the commencement of the Offer; provided, however,
that the Minimum Tender Condition shall have been satisfied and such
action or inaction under (A), (B) or (C) shall not have been caused by
or resulted from the failure of Parent or Purchaser to perform in any
material respect any material covenant or agreement of either of them
contained in this Agreement or the material breach by Parent or
Purchaser of any material representation or warranty of either of them
contained in this Agreement; or (ii) prior to the purchase of Shares
pursuant to the Offer, the Board or any committee thereof shall have
withdrawn or modified in a manner adverse to Purchaser or Parent or,
after receipt of a proposal involving a Competing Transaction, upon the
request of Parent, shall not have promptly publicly reaffirmed, its
approval or recommendation of the Offer, this Agreement, the Merger,
the Shareholder Agreements or any other Transaction, or shall have
recommended another merger, consolidation, business combination,
recapitalization, reorganization or similar transaction involving, or
acquisition of, the Company or its assets, or another tender offer or
exchange offer for Shares, or shall have resolved to do any of the
foregoing; or
(d) By the Parent, upon approval of its Board of Directors, if
the Company shall have materially breached its obligations under
Section 6.04 above; or
(e) By the Company, upon approval of the Board, if due to an
occurrence or circumstance that would result in a failure to satisfy
any condition set forth in Annex A hereto other than the Minimum Tender
Condition, Purchaser shall have (A) failed to commence the Offer within
60 days following the date of this Agreement, (B) terminated the Offer
without having accepted any Shares for payment thereunder or (C) failed
to pay for Shares pursuant to the Offer within 90 days following the
commencement of the
31
<PAGE>
Offer; provided, however, that the Minimum Tender Condition shall have
-------- -------
been satisfied and such action or inaction under (A), (B), and (C)
shall not have been caused by or resulted from the failure of the
Company to perform in any material respect any material covenant or
agreement of it contained in this Agreement or the material breach by
the Company of any material representation or warranty of it contained
in this Agreement; or
(f) by the Company or Parent, prior to the purchase of Shares
pursuant to the Offer, if the Board, in full compliance with the
provisions of Section 6.04 above, shall have approved the execution by
the Company of a definitive agreement relating to a Superior Proposal;
provided, however, the Company shall not be entitled to terminate this
Agreement pursuant to this Section 8.01(f) unless, at least three (3)
business days prior to such termination, the Company shall have first
provided to Parent (i) notice of its intention to terminate the
Agreement as of a particular effective date, (ii) copies of the
definitive documents relating to the Superior Proposal that the Board
has resolved to approve, (iii) the right to increase the price to be
paid for the Shares purchased pursuant to the Offer the Merger to an
amount per Share equal to the amount per Share to be received by the
shareholders of the Company pursuant to the Superior Proposal (the
"Higher Price"), and (iv) the amount of the Higher Price; and provided,
------------- --------
further, that if, prior to the effective date of such termination as
-------
set forth in the notice from the Company referred to above, Parent
notifies the Company of its agreement to pay the Higher Price, the
Agreement shall not terminate; or
(g) by either Parent or the Company, at any time after the
expiration of the Offer if, immediately after expiration of the Offer,
less than a majority of the outstanding Shares on a fully-diluted basis
have been tendered into the Offer, and not withdrawn.
SECTION 8.02. Effect of Termination. In the event of the
---------------------
termination of this Agreement pursuant to Section 8.01, this Agreement shall
forthwith become void, and there shall be no liability on the part of any party
hereto, except as set forth in Sections 8.03 and 9.01, and nothing herein shall
relieve any party from liability for any breach hereof.
SECTION 8.03. Fees and Expenses. (a) In the event that
-----------------
(i) any person shall have commenced a tender or exchange offer
for 25% or more (or which, assuming the maximum amount of securities
which could be purchased, would result in any person beneficially
owning 25% or more) of the then outstanding Shares or otherwise
publicly announced a Competing Transaction for the direct or indirect
acquisition of the Company or all or substantially all of its assets
and (w) the Board does not recommend against the Competing Transaction,
(x) the Offer shall have remained open for at least 20 business days,
(y) the Minimum Tender Condition shall not have been satisfied and (z)
this Agreement shall have been terminated pursuant to Section 8.01; or
(ii) this Agreement is terminated (x) pursuant to Section
8.01(c)(ii) or (y) pursuant to Section 8.01(d) or (z) pursuant to
Section 8.01(f);
32
<PAGE>
then, in any such event, the Company shall pay Parent promptly (but in no event
later than one business day after the first of such events shall have occurred)
a fee of U.S.$3,545,389 (the "Fee"), and shall reimburse Parent promptly for all
---
out-of-pocket expenses incurred by it, up to a maximum of $500,000, in
connection with its due diligence investigation, dealings with financing sources
and in the negotiation, execution and delivery of this Agreement and any debt
financing arrangements relating to the Offer or the Merger, such expenses to
include, without limitation, attorneys', accountants' and other consultants'
fees and disbursements, bank fees, and travel costs. Such amounts shall be
payable in immediately available funds.
(b) All costs and expenses incurred in connection with this Agreement
and the Transactions shall be paid by the party incurring such expenses, whether
or not any Transaction is consummated.
SECTION 8.04. Amendment. Subject to Section 6.03, this
---------
Agreement may be amended by the parties hereto by action taken by or on behalf
of their respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after the approval and adoption of this Agreement and
- -------- -------
the transactions contemplated hereby by the shareholders of the Company, no
amendment may be made which would reduce the amount or change the type of
consideration into which each Share shall be converted upon consummation of the
Merger. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
SECTION 8.05. Waiver. At any time prior to the Effective Time,
------
any party hereto may (i) extend the time for the performance of any obligation
or other act of any other party hereto, (ii) waive any inaccuracy in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any agreement or condition
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
------------------
SECTION 9.01. Non-Survival of Representations, Warranties and
-----------------------------------------------
Agreements. The representations, warranties and agreements in this Agreement
- ----------
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.01, as the case may be, except that the agreements set
forth in Articles II and IX and in Section 6.06 shall survive the Effective Time
indefinitely and those set forth in Section 8.03 and Article IX shall survive
termination indefinitely.
SECTION 9.02. Notices. All notices, requests, claims, demands
-------
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
facsimile, by United States express mail (postage prepaid, return receipt
requested) or by overnight courier guaranteeing next business
33
<PAGE>
day delivery to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 9.02):
if to Parent or Purchaser:
Littlejohn Partners IV, L.P.,
c/o Littlejohn & Co., LLC
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. Angus Littlejohn or Mr. Michael Klein
Facsimile: (203) 861-4009
Telephone: (203) 861-4005
with a copy to:
Pepper Hamilton LLP
3000 Two Logan Square
Philadelphia, PA 19103-2799
Attention: James D. Epstein
Facsimile: (215) 981-4750
Telephone: (215) 981-4368
if to the Company:
Durakon Industries, Inc.
2101 N. Lapeer Road
Lapeer, Michigan 48846
Attention: President
Facsimile: (810) 664-3957
Telephone: (810) 664-0850
with a copy to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, Michigan 48226
Attn: Donald J. Kunz
Fax: (313) 465-7455
Telephone: (313) 465-7454
34
<PAGE>
SECTION 9.03. Certain Definitions. For purposes of this
-------------------
Agreement, the term:
(a) "affiliate" of a specified person means a person who
---------
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such specified person;
(b) "beneficial owner" with respect to any Shares means a
----------------
person who shall be deemed to be the beneficial owner of such Shares
(i) which such person or any of its affiliates or associates (as such
term is defined in Rule 12b-2 promulgated under the Exchange Act)
beneficially owns, directly or indirectly, (ii) which such person or
any of its affiliates or associates has, directly or indirectly, (A)
the right to acquire (whether such right is exercisable immediately or
subject only to the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of consideration
rights, exchange rights, warrants or options, or otherwise, or (B) the
right to vote pursuant to any agreement, arrangement or understanding
or (iii) which are beneficially owned, directly or indirectly, by any
other persons with whom such person or any of its affiliates or
associates or person with whom such person or any of its affiliates or
associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any Shares;
(c) "business day" means any day on which the principal
------------
offices of the SEC in Washington, D.C. are open to accept filings, or,
in the case of determining a date when any payment is due, any day on
which banks are not required or authorized to close in the City of New
York;
(d) "control" (including the terms "controlled by" and "under
------- ------------- -----
common control with") means the possession, directly or indirectly or
-------------------
as trustee or executor, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise;
(e) "person" means an individual, corporation, partnership,
------
limited partnership, syndicate, person (including, without limitation,
a "person" as defined in Section 13(d)(3) of the Exchange Act), trust,
association or entity or government, political subdivision, agency or
instrumentality of a government; and
(f) "subsidiary" or "subsidiaries" of the Company, the
---------- ------------
Surviving Corporation, Parent or any other person means an affiliate
controlled by such person, directly or indirectly, through one or more
intermediaries.
SECTION 9.04. Severability. If any term or other provision of
------------
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the Transactions is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is
35
<PAGE>
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 9.05. Entire Agreement, Assignment. This Agreement
----------------------------
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes, except as set forth in Sections 6.03(b) and 6.10,
all prior agreements and undertakings, both written and oral, among the parties,
or any of them, with respect to the subject matter hereof; provided, however,
the third full paragraph of page 3 of the Confidentiality Agreement shall not be
deemed to reduce or modify the Company's obligations with respect to any
representation or warranty made pursuant to this Agreement. This Agreement shall
not be assigned by operation of law or otherwise, except that Parent and
Purchaser may assign all or any of their rights and obligations hereunder to any
affiliate of Parent provided that no such assignment shall relieve the assigning
party of its obligations hereunder if such assignee does not perform such
obligations.
SECTION 9.06. Parties in Interest. This Agreement shall be
-------------------
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, other than Section 6.06 (which is intended to be for
the benefit of the persons covered thereby and may be enforced by such persons).
SECTION 9.07. Specific Performance. The parties hereto agree
--------------------
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.
SECTION 9.08. Governing Law. The Merger and the rights of the
-------------
shareholders of the Company, this Agreement shall be governed by, and construed
in accordance with, the laws of the State of Michigan regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws.
SECTION 9.09. Headings. The descriptive headings contained in
--------
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 9.10. Counterparts; Facsimile. This Agreement may be
-----------------------
executed in one or more counterparts (including by facsimile signature), each of
which shall be an original and all of which, when taken together, shall be one
and the same agreement.
36
<PAGE>
IN WITNESS WHEREOF, Parent, Purchaser and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, L.L.C.,
Attest: its General Partner
/s/ Michael Klein By: /s/ A. Littlejohn
- --------------------------- ---------------------------
Name: Michael Klein Name: A. Littlejohn
Title: Member
LPIV ACQUISITION CORP.
Attest:
/s/ A. Littlejohn By: /s/ Michael Klein
- --------------------------- ---------------------------
Name: A. Littlejohn Name: Michael Klein
Title: President
DURAKON INDUSTRIES, INC.
Attest:
/s/ James C. Smith By: /s/ David W. Wright
- --------------------------- ---------------------------
Name: James C. Smith Name: David W. Wright
Title: President/CEO
37
<PAGE>
ANNEX A
-------
Conditions to the Offer
-----------------------
Notwithstanding any other provision of the Offer, Purchaser
shall not be required to accept for payment or pay for any Shares tendered
pursuant to the Offer, and may terminate or amend the Offer and may postpone the
acceptance for payment of and payment for Shares tendered, if (i) the Minimum
Tender Condition shall not have been satisfied, (ii) at any time on or after the
date of this Agreement, and prior to the acceptance for payment of Shares, any
of the following conditions shall exist:
(a) there shall have been entered any order, preliminary or
permanent injunction, decree, judgment or ruling in any action or
proceeding before any court or governmental, administrative or
regulatory authority or agency, which makes illegal or otherwise
directly or indirectly restrains or prohibits or makes materially more
costly the making of the Offer, the acceptance for payment of, or
payment for, any Shares by Parent, Purchaser or any other affiliate of
Parent, or the consummation of any other Transaction;
(b) there shall have occurred any Material Adverse Effect with
respect to the Company;
(c) (i) the Board or any committee thereof (x) shall have
withdrawn or modified in a manner adverse to Parent or Purchaser the
approval or recommendation of the Offer, the Merger, the Shareholder
Agreements or the Agreement, (y) shall have failed to reaffirm such
approval or recommendation upon request by Parent given after the
Company's receipt of a proposal involving a Competing Transaction or
(z) shall have approved or recommended any takeover proposal or any
other acquisition of Shares other than the Offer and the Merger, or
(ii) the Board or any committee thereof shall have resolved to do any
of the foregoing;
(d) there shall have been any misstatement in or omission from
any representation of, or there shall have occurred any breach of
warranty by, the Company in the Agreement as a result of which,
individually or in the aggregate, there is, or may reasonably be
expected to occur, a Material Adverse Effect with respect to the
Company;
(e) the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any
material agreement or material covenant of the Company to be performed
or complied with by it under the Agreement;
(f) the Agreement shall have been terminated in accordance
with its terms;
38
<PAGE>
(g) the Company shall not have taken or caused to be taken all
such action so that each outstanding option to purchase Shares issued
by the Company other than pursuant to the Company's 1996 Stock Option
Plan shall be automatically cancelled as of the Effective Time and the
holders of each such option shall only be entitled to receive from the
Company, at the Effective Time or as soon as practicable thereafter, an
amount in cash equal to the Spread, if any, in exchange for the
cancellation of each such option;
(h) Purchaser and the Company shall have agreed that Purchaser
shall terminate the Offer or postpone the acceptance for payment of or
payment for Shares thereunder which, in the sole judgment of Purchaser,
in any such case, and regardless of the circumstances (including any
action or inaction by Parent or any of its affiliates) giving rise to
any such condition, makes it inadvisable to proceed with such
acceptance for payment or payment; or
(i) the Company's consolidated cash balance, as computed in
accordance with GAAP, as of the expiration of the Offer, shall be less
than $15 million, determined after subtracting an amount equal to the
then-outstanding accounts payable (excluding inter-company accounts
payable) incurred by the Company, any Subsidiary, and/or Durakon
Mexican, S.A. de C.V. relating to the GMT-805 expenditures listed in
Section 5.01(e) of the Disclosure Schedule;
or (iii) immediately after the expiration of the Offer, the President of the
Company shall not have delivered a certificate in form and substance reasonably
satisfactory to Parent to the effect that the condition described in subsection
(ii)(i) above does not exist.
The foregoing conditions are for the sole benefit of Purchaser
and Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by Purchaser or
Parent in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances; and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
39
<PAGE>
Schedule I
List of Shareholders
--------------------
David Aronow
Phillip Wm. Fisher
Richard J. Jacob
Robert M. Teeter
David W. Wright
Max M. Fisher Revocable Trust, u/a/d August 13, 1988, by Max M. Fisher, Trustee
Martinque Charitable Remainder Unitrust, by Marjorie S. Fisher, Trustee
Wolverine Investors, by Newton Minow, Trustee
1990 Bronx Trust #1, by Daniel R. Tisch, Trustee
1990 Des Moines Trust #1, by Daniel R. Tisch, Trustee
<PAGE>
Exhibit (c)(2)
Confidentiality Agreement, dated February 5, 1999, between Littlejohn & Co.,
LLC, an affiliate of the Parent, and the Company, and countersigned by
Littlejohn & Co., LLC on February 8, 1999.
<PAGE>
[LAZARD FRERES & CO. LLC LETTERHEAD]
February 5, 1999
PERSONAL AND CONFIDENTIAL
- -------------------------
Littlejohn & Co.
115 E. Putnam Ave.
Greenwich, CT 06830
Attention: Angus C. Littlejohn
Dear Sir:
You have requested certain non-public information regarding Durakon
Industries, Inc. (the "Company") in connection with the possible sale of the
Company, which transaction may take the form of a merger or the sale of assets
or equity securities or other interests (the "Transaction"). As a condition to
furnishing such information to you, we, on behalf of the Company, are requiring
that you agree, as set forth below, to treat confidentially such information and
any other information that we or the Company furnish to you, whether furnished
before or after the date of this letter (collectively, the "Evaluation
Material").
You agree not to use any of the Evaluation Material in any way for any
purpose other than in connection with the purposes for which such material has
been provided to you. You agree that the Evaluation Material will not be used
for competitive purposes or to obtain any commercial advantage with respect to
the Company, and that such information will be kept confidential by you;
provided, however, that any of such information may be disclosed to such of your
directors, officers, employees, representatives, affiliates (as defined in Rule
405 under the Securities Act of 1933, "Affiliates") and other agents
(collectively, the "Agents") who need to know such information (it being
understood that such Agents shall be informed by you of the confidential nature
of such information, shall be directed by you to treat such information
confidentially and shall be informed that by receiving such information they are
agreeing
<PAGE>
to be bound by this agreement). You agree to be responsible for any breach of
this agreement by you or your Agents.
In the event that you or your Agents should be requested or required (by
oral questions, interrogatories, requests for information or documents subpoena,
Civil Investigative Demand or similar process) to disclose any information
supplied to you in the course of your dealing with the Company, it is agreed
that you will provide Lazard Freres and the Company with prompt notice of any
such request, so that the Company may seek an appropriate protective order
and/or waive your compliance with the provisions of this agreement. It is
further agreed that if, in the absence of a protective order or the receipt of a
waiver hereunder, you are nonetheless, in the opinion of counsel, compelled to
disclose information concerning the Company to any tribunal, or else to be
liable for contempt or suffer other censure or penalty, you or your Agents may
disclose such information to such tribunal without liability hereunder,
provided, however, that you give the Company advance written notice of the
information to be disclosed as far in advance of its disclosure as is practical
and, at the Company's request, seek to obtain assurances that it will be
accorded confidential treatment.
Upon our request, you will promptly deliver to us the Evaluation Material
and will promptly destroy all memoranda, notes, and other writings prepared by
you or your Agents based thereon.
The term "Evaluation Material" does not include information which (i)
becomes generally available to the public other than as a result of a disclosure
by you or your Agents, (ii) was available to you on a non-confidential basis
prior to its disclosure to you by the Company, or (iii) becomes available to you
on a non-confidential basis from a source other than the Company, provided that
such source is not known to you to be bound by a confidentially agreement with
the Company.
Without the Company's prior written consent you will not, and you will
direct your Agents not to, disclose to any person either the fact that
discussions or negotiations are taking place concerning a possible transaction
relating to the Company, or any of the terms, conditions or other facts with
respect to any such possible transaction, including the timing or status
thereof. The term "person" as used in this letter shall be broadly interpreted
to include, without limitation, any corporation, company, partnership or
individual.
You acknowledge that you are (i) aware that the United States securities
laws prohibit any person who has material nonpublic information about a company
from purchasing or selling securities of such company, or from communicating
such information to any other person under circumstances in which it is
reasonably foreseeable that such person is likely to purchase or sell such
securities and (ii) familiar with the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder and agree that you will neither
use, nor cause any third party to use, any Evaluation Material in
-2-
<PAGE>
contravention of such Act or any such rules and regulations, including Rules
10b-5 and 14e-3.
It is understood that Lazard Freres will arrange for appropriate contacts
for due diligence and all other proposals, and any communications regarding a
possible transaction or requests for information will be submitted exclusively
to Lazard Freres.
You agree that unless and until a final agreement regarding a Transaction
has been executed by you and us, we are not under any legal obligation and shall
have no liability to you or any of your Agents of any nature whatsoever with
respect to any Transaction by virtue of this Agreement or otherwise (other than
with respect to the confidentiality and other matters set forth herein). You
also acknowledge and agree that (i) we may conduct the process that may or may
not result in a Transaction in such manner as we, in our sole discretion, may
determine (including, without limitation, negotiating and entering into a final
acquisition agreement with any party without notice to you) and (ii) we reserve
the right to change (in our sole discretion, at any time and without notice to
you) the procedures relating to our and your consideration of any Transaction
(including, without limitation, terminating all further discussions with you and
requesting that you return or destroy the Evaluation Material as described
above).
Although you understand that we have endeavored to include in the
Evaluation Material information known to us which we believe to be relevant for
the purpose of your investigation, you understand that neither Lazard Freres nor
the Company makes any representation or warranty as to the accuracy or
completeness of the Evaluation Material or any other information which we or the
Company shall furnish to you orally or in writing. You agree that neither Lazard
Freres nor the Company shall have any liability to you or your Agents resulting
from the use of the Evaluation Material by you or such Agents.
Without the prior written consent of the Company, you shall not, nor shall
you permit your Affiliates to: (a) acquire, offer to acquire, or agree to
acquire, directly or indirectly, by purchase or otherwise, any voting securities
or direct or indirect rights or options to acquire any voting securities of the
Company; (b) except at the specific written request of the Company, propose to
enter into any merger or business combination involving the Company or to
purchase a material portion of the assets of the Company; (c) make, or in any
way participate, directly or indirectly, in any "solicitation" of "proxies" to
vote (as such terms are used in the proxy rules of the Securities Exchange Act
of 1934), or seek to advise or influence any person or entity with respect to
the voting of, any voting securities of the Company; (d) form, join or in any
way participate in a "group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934) with respect to any voting securities of the
Company; (e) otherwise act, alone or in concert with others, to seek to control
or influence the management, board of directors or policies of the Company; or
(f) take any action for the purpose of requiring the Company to make a public
announcement regarding the possibility of a business combination or merger with
you.
-3-
<PAGE>
It is further understood and agreed that no failure or delay by the Company
in exercising any right, power or privilege hereunder shall operate as a waiver
hereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder. You agree that money damages would not be a sufficient remedy for any
breach of this agreement by you or your Agents, and that in addition to all
other remedies the Company shall be entitled to specific performance and
injunctive or other equitable relief as a remedy for any such breach, and you
further agree to waive, and to use your best efforts to cause your Agents to
waive, any requirement for the securing or posting of any bond in connection
with such remedy.
You acknowledge and agree that this letter agreement is being entered into
for the benefit of the Company and may be enforced by the Company as if it were
a party hereto.
This letter agreement shall be governed and construed in accordance with
the laws of the State of New York without giving effect to the conflicts of laws
principles thereof.
If you are in agreement with the foregoing, please sign and return one copy
of this letter which will constitute our agreement with respect to the subject
matter of this letter.
Very truly yours,
LAZARD FRERES & CO. LLC,
On behalf of Durakon Industries, Inc.
By: /s/ Jeffrey A. Golman
---------------------------------
Jeffrey A. Golman
Managing Director
CONFIRMED AND AGREED TO:
By: /s/ Angus C. Littlejohn, III
------------------------------
Angus C. Littlejohn, III
Chairman
Date: 2/8/99
----------------------------
-4-
<PAGE>
Exhibit (c)(3)
Stock Tender and Voting Agreement with David Aronow
<PAGE>
STOCK TENDER AND VOTING AGREEMENT
---------------------------------
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of June
---------
17, 1999 by and among David Aronow ("Shareholder"), Littlejohn Partners IV,
-----------
L.P., a Delaware limited partnership ("Parent"), and LPIV Acquisition Corp., a
------
Michigan corporation and a wholly-owned subsidiary of Parent ("Purchaser").
---------
W I T N E S S E T H:
-------------------
WHEREAS, concurrently herewith, Parent, Purchaser and Durakon
Industries, Inc., a Michigan corporation ("Company"), are entering into an
-------
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
----------------
pursuant to which Purchaser agrees to make a tender offer (the "Offer") for all
-----
outstanding shares of common stock, without par value (the "Common Stock"), of
------------
the Company, at $16.00 per share (the "Offer Price"), in cash, and/or by a
-----------
merger (the "Merger") of Purchaser with the Company;
------
WHEREAS, Shareholder beneficially owns (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act")), as of the date hereof, 10,000 shares of Common Stock (the "Existing
- --- --------
Shares", together with any shares of Common Stock beneficial ownership of which
- ------
is acquired by Shareholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that Shareholder agree, and
Shareholder has agreed, to enter into this Agreement; and
WHEREAS, Parent and Purchaser have entered into the Merger Agreement
in reliance on Shareholder's representations, warranties, covenants and
agreements hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
-----------------------------------------------
1.1 Tender. Shareholder agrees to validly tender all Shares
------
beneficially owned by it pursuant to the Offer within ten business days of
commencement of the Offer, and not withdraw any such Shares, except to the
extent that the tender of shares (excluding Shares acquired after the date
hereof) pursuant to the Offer would subject Shareholder to liability under
Section 16(b) of the Exchange Act.
1.2 Voting. Shareholder hereby agrees that, during the time
------
this Agreement is in effect, at any meeting of the shareholders of Company,
however called, and in any action by consent of the stockholders of Company,
Shareholder shall: (a) vote all Shares
<PAGE>
beneficially owned by it in favor of the Merger; (b) vote all Shares
beneficially owned by it against any action or agreement that would result in a
breach of any covenant or any representation or warranty or any other obligation
or agreement of the Company under or pursuant to the Merger Agreement; (c) vote
all Shares beneficially owned by it against any action or agreement that would
impede, interfere with, delay, postpone or attempt to discourage the Merger or
the Offer including, but not limited to, (i) any corporate transaction not
entered into in the ordinary course of business (other than the Merger),
including, but not limited to, a merger, other business combination,
reorganization, consolidation, recapitalization, dissolution or liquidation
involving Company, (ii) a sale or transfer of a material amount of assets of
Company or any of its subsidiaries, (iii) any change in the board of directors
of Company, (iv) any material change in the capitalization of the Company, (v)
any change in the charter, by-laws or other organizational or constitutive
documents of the Company, or (v) any other material change in the corporate
structure or business of the Company; and (d) without limiting the foregoing,
consult with Parent and vote all Shares beneficially owned by it in such manner
as is determined by Parent to be in compliance with the provisions of this
Section 1.2. Shareholder acknowledges receipt and review of a copy of the Merger
Agreement.
1.3 Irrevocable Proxy. Contemporaneously with the execution of
-----------------
this Agreement: (i) Shareholder shall deliver to Parent a proxy in the form
attached hereto as Exhibit A, which shall be irrevocable to the fullest extent
permitted by law (the "Proxy"), with respect to all Shares owned of record by
-----
Shareholder; and (ii) Shareholder shall cause to be delivered to Parent
additional Proxies executed on behalf of each record owner of any Shares owned
beneficially (but not owned of record) by Shareholder.
2. Representations and Warranties of Shareholder. Shareholder
---------------------------------------------
represents and warrants to Parent and Purchaser as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares
-------------------
are all of the Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder does not have any rights to acquire any
additional shares of Common Stock other than pursuant to options issued under
the Stock Option Plans (as defined in the Merger Agreement). Shareholder
currently has with respect to the Existing Shares, and at Closing will have with
respect to the Shares, good, valid and marketable title, free and clear of all
liens, encumbrances, restrictions, options, warrants, rights to purchase, voting
agreements or voting trusts, and claims of every kind (other than the
encumbrances created by this Agreement and other than restrictions on transfer
under applicable Federal and State securities laws).
2.2 Power; Binding Agreement. Shareholder has the full legal
------------------------
capacity, right, power and authority to enter into and perform all of
Shareholder's obligations under this Agreement. The execution and delivery of
this Agreement by Shareholder will not violate any agreement, contract or
arrangement to which Shareholder is a party or is bound, including, without
limitation, any voting agreement, shareholders agreement or voting trust. This
-2-
<PAGE>
Agreement has been duly executed and delivered by Shareholder and constitutes a
legal, valid and binding agreement of Shareholder, enforceable in accordance
with its terms. Neither the execution or delivery of this Agreement nor the
consummation by Shareholder of the transactions contemplated hereby will (a)
other than filings required under the federal or state securities laws, require
any consent or approval of or filing with any governmental or other regulatory
body, or (b) constitute a violation of, conflict with or constitute a default
under (i) any law, rule or regulation applicable to Shareholder, or (ii) any
order, judgment or decree to which Shareholder is bound.
2.3 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Shareholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Parent and Purchaser. Parent
------------------------------------------------------
and Purchaser, jointly and severally, represent and warrant to Shareholder as
follows:
3.1 Authority. Each of Parent and Purchaser has full legal
---------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by Parent and
Purchaser will not violate the charter, by-laws or other organizational or
constitutive documents of Parent or Purchaser, or any other agreement, contract
or arrangement to which Parent or Purchaser is a party or is bound. This
Agreement has been duly executed and delivered by each of Parent and Purchaser
and constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Parent or Purchaser of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Parent or Purchaser, or (ii) any order, judgment or decree to
which Parent or Purchaser is bound.
3.2 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fee from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of
-----------
Sections 5, 6 and 19 which shall survive any termination of this Agreement),
shall terminate on the earliest to occur of (a) the date on which Purchaser
accepts for payment the Shares tendered in the Offer, so long as the Shares are
so tendered and not withdrawn, (b) the Effective Time (as defined in the Merger
Agreement), and (c) the date of termination of the Merger Agreement in
accordance with its terms. Purchaser shall not purchase the Shares pursuant to
the Offer unless Purchaser
-3-
<PAGE>
purchases pursuant to the Offer that number of shares of Common Stock such that
the Minimum Tender Condition (as defined in the Merger Agreement) is satisfied.
5. Expenses. Except as provided in Section 19, each party hereto
--------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers. The provisions of this Section 5 shall survive the
Closing hereunder.
6. Confidentiality. Shareholder recognizes that successful
---------------
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to these matters. In this connection, pending
public disclosure, Shareholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal counsel and advisors
of Shareholder or the Company, if any) not a party to this Agreement, without
prior written consent of Parent, except for filings required pursuant to the
Exchange Act, and the rules and regulations thereunder or disclosures
Shareholder's legal counsel advises in writing are necessary in order to fulfill
Shareholder's obligations imposed by law, in which event Shareholder shall give
prompt prior notice of such disclosure to Parent and cooperate with Parent in
obtaining a protective order or in limiting such disclosure.
7. Certain Covenants of Shareholder.
--------------------------------
7.1 Except in accordance with the provisions of this Agreement,
Shareholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) Shareholder shall not, directly or indirectly through
any agent or otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Parent or Purchaser) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in, the Company or any subsidiary of the Company, or any
merger, consolidation, business combination, reorganization, recapitalization or
similar transaction involving the Company or any subsidiary of the Company (each
a "Competing Transaction"), or participate in any discussions or negotiations
---------------------
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any person (other than Parent and Purchaser)
to do or seek any of the foregoing. Shareholder will cease and cause to be
terminated any existing activities, discussions or negotiations by or on its
behalf with any person (other than Parent and Purchaser) conducted heretofore
with respect to any Competing
-4-
<PAGE>
Transaction and will promptly notify Parent following receipt of any request by
any person (other than Parent or Purchaser) relating to any possible Competing
Transaction or information concerning the Company. Nothing contained herein
shall prohibit Shareholder, solely in his capacity as a member of the board of
directors of the Company (the "Board"), from furnishing information to, or
-----
entering into discussions or negotiations with, any person (other than Parent
and Purchaser) in connection with an unsolicited proposal involving a fully-
financed Competing Transaction which is made in writing by such person (other
than Parent and Purchaser) and which, if consummated, would provide
consideration per share of Common Stock to the shareholders of the Company in
excess of the Offer Price if, and only to the extent that, the Board determines
in good faith, based upon the written advice of Honigman Miller Schwartz and
Cohn, that such action is required for the Board to comply with its fiduciary
duties to shareholders under Michigan law.
7.2 Shareholder agrees, while this Agreement is in effect, to
notify Parent promptly of the number of any shares of Common Stock beneficial
ownership of which is acquired by Shareholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the
-------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), Shareholder shall cause the Company to provide for each
certificate representing Shares beneficially owned by Shareholder to bear a
legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF THE STOCK TENDER AND VOTING AGREEMENT, AND IS SUBJECT TO
THE IRREVOCABLE PROXY REFERRED TO THEREIN, EACH DATED AS OF JUNE 17, 1999,
AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND COPIES OF WHICH ARE
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Shareholder shall cause the Company to
require that the transfer agent for its Common Stock shall make a notation in
its records prohibiting the transfer of any of the Shares, except in accordance
with the terms and conditions of this Agreement.
9. Survival of Representations and Warranties. Except as expressly
------------------------------------------
set forth herein, one of the representations, warranties, covenants and
agreements made by Shareholder, Parent or Purchaser in this Agreement shall
survive the Closing hereunder.
10. Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing, shall be given by hand delivery, U.S.
Express Mail (return receipt
-5-
<PAGE>
requested), overnight courier guaranteeing next business day delivery, or
facsimile, and shall be deemed duly given when received, addressed as follows:
If to Parent or Purchaser:
Littlejohn Partners IV, L.P.
c/o Littlejohn & Co. LLC
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. Angus Littlejohn or Mr. Michael Klein
Telephone: (203) 861-4005
Facsimile: (203) 861-4009
With copies to:
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esq.
Telephone: (215) 981-4368
Facsimile: (215) 981-4750
If to Shareholder:
1891 Trombly
Detroit, MI 48211
Telephone: (313) 871-2680
Facsimile: (313) 871-9145
With copies to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attention: Donald J. Kunz, Esq.
Telephone: (313) 465-7454
Facsimile: (313) 465-7455
11. Entire Agreement; Amendment. This Agreement, together with the
---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with respect
to such subject matter. This Agreement may not
-6-
<PAGE>
be modified, amended, altered or supplemented except by an agreement in writing
executed by the party against whom such modification, amendment, alteration or
supplement is sought to be enforced.
12. Assigns. This Agreement shall be binding upon and inure to the
-------
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Purchaser may assign, any or all of its rights and obligations hereunder to
Parent or any direct or indirect wholly-owned subsidiary of Parent without the
consent of Shareholder or Company, but no such transfer shall relieve Purchaser
of its obligations under this Agreement if such subsidiary does not perform the
obligations of Purchaser hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
---------------------------------------------------
expressly set forth below, this Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In addition, each of Shareholder, Purchaser and Parent hereby agree that any
dispute arising out of this Agreement, the Offer or the Merger shall be heard in
the United States District Court for the Eastern District of Michigan and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement, the Offer or the Merger may be
given to any other party hereto by certified mail, return receipt requested, at
the respective addresses set forth in Section 12 above.
14. Injunctive Relief. The parties agree that in the event of a
-----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
16. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so
-7-
<PAGE>
broad as to be unenforceable, such provision shall be interpreted to be only so
broad as is enforceable.
17. Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced
--------------
by any party to this Agreement to enforce or recover damages for any breach of
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this
Section 19 shall survive the Closing hereunder.
-8-
<PAGE>
20. Amendment and Modification. This Agreement may be amended,
--------------------------
modified and supplemented only by a written document executed by Parent,
Purchaser and Shareholder.
IN WITNESS WHEREOF, Parent and Purchaser have caused this Agreement to
be executed by their duly authorized officers, and Shareholder has duly
executed this Agreement, as of the date and year first above written.
/s/ David Aronow
_____________________________
David Aronow
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, L.L.C.
its General Partner
/s/ Angus C. Littlejohn, Jr.
By: _________________________
Title: Manager
LPIV ACQUISITION CORP.
/s/ Michael I. Klein
By: _____________________________
Title: President
-9-
<PAGE>
EXHIBIT A
Form of Irrevocable Proxy
-------------------------
The undersigned shareholder of Durakon Industries, Inc., a Michigan
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Angus C. Littlejohn, Jr., Michael I. Klein, and
Littlejohn Partners IV, L.P., a Delaware limited partnership ("Parent"), and
each of them, the attorneys and proxies of the undersigned with full power of
substitution and resubstitution, to the full extent of the undersigned's rights
with respect to (i) the issued and outstanding shares of capital stock of the
Company owned of record by the undersigned as of the date of this proxy, which
shares are specified on the final page of this proxy and (ii) any and all other
shares of capital stock of the Company which the undersigned may acquire after
the date hereof (the shares of the capital stock of the Company referred to in
(clauses (i) and (ii) of the immediately preceding sentence are collectively
referred to as the "Shares") Upon the execution hereof, all prior proxies given
------
by the undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted
in connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, between Parent and the undersigned (the "Stock Tender Agreement"), and
----------------------
is granted in consideration of Parent entering into the Agreement and Plan of
Merger, dated as of the date hereof, among Parent, LPIV Acquisition Corp. and
the Company (the "Merger Agreement"). Capitalized terms used but not otherwise
----------------
defined in this proxy have the meanings ascribed to such terms in the Merger
Agreement.
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Merger Agreement pursuant to Section 8.01
thereof or the Effective Time at any meeting of the shareholders of the Company,
however called, or in any written action by consent of shareholders of the
Company: (a) in favor of the Merger; (b) against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of the Company under or pursuant to the Merger
Agreement; or (c) against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger or the Offer
including, but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but not
limited to, a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Company, (ii) a sale or
transfer of a material amount of assets of Company or any of its subsidiaries,
(iii) any change in the board of directors of Company, (iv) any material change
in the capitalization of the Company, (v) any change in the charter, by-laws or
other organizational or constitutive documents of the Company, or (v) any other
material change in the corporate structure or business of the Company.
-10-
<PAGE>
This proxy shall be binding upon the heirs, successors and assigns of
the undersigned (including any transferee of any of the Shares).
Any term or provision of this proxy which is invalid or unenforceable,
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this proxy or affecting the
validity or enforceability of any of the terms or provisions of this proxy in
any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
This proxy shall terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
Dated: _____________ __, 1999
___________________________
David Aronow
Number of shares of Common Stock owned of record as of the date of this proxy:
____________
-11-
<PAGE>
Exhibit (c)(4)
Stock Tender and Voting Agreement with Phillip Wm. Fisher
<PAGE>
STOCK TENDER AND VOTING AGREEMENT
---------------------------------
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of June
---------
17, 1999 by and among Phillip Wm. Fisher ("Shareholder"), Littlejohn Partners
-----------
IV, L.P., a Delaware limited partnership ("Parent"), and LPIV Acquisition Corp.,
------
a Michigan corporation and a wholly-owned subsidiary of Parent ("Purchaser").
---------
W I T N E S S E T H:
-------------------
WHEREAS, concurrently herewith, Parent, Purchaser and Durakon
Industries, Inc., a Michigan corporation ("Company"), are entering into an
-------
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
----------------
pursuant to which Purchaser agrees to make a tender offer (the "Offer") for all
-----
outstanding shares of common stock, without par value (the "Common Stock"), of
------------
the Company, at $16.00 per share (the "Offer Price"), in cash, and/or by a
-----------
merger (the "Merger") of Purchaser with the Company;
------
WHEREAS, Shareholder beneficially owns (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act")), as of the date hereof, zero (0) shares of Common Stock (the "Existing
- --- --------
Shares", together with any shares of Common Stock beneficial ownership of which
- ------
is acquired by Shareholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that Shareholder agree, and
Shareholder has agreed, to enter into this Agreement; and
WHEREAS, Parent and Purchaser have entered into the Merger Agreement
in reliance on Shareholder's representations, warranties, covenants and
agreements hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
-----------------------------------------------
1.1 Tender. Shareholder agrees to validly tender all Shares
------
beneficially owned by it pursuant to the Offer within ten business days of
commencement of the Offer, and not withdraw any such Shares, except to the
extent that the tender of shares (excluding Shares acquired after the date
hereof) pursuant to the Offer would subject Shareholder to liability under
Section 16(b) of the Exchange Act.
1.2 Voting. Shareholder hereby agrees that, during the time
------
this Agreement is in effect, at any meeting of the shareholders of Company,
however called, and in any action by consent of the stockholders of Company,
Shareholder shall: (a) vote all Shares
<PAGE>
beneficially owned by it in favor of the Merger; (b) vote all Shares
beneficially owned by it against any action or agreement that would result in a
breach of any covenant or any representation or warranty or any other obligation
or agreement of the Company under or pursuant to the Merger Agreement; (c) vote
all Shares beneficially owned by it against any action or agreement that would
impede, interfere with, delay, postpone or attempt to discourage the Merger or
the Offer including, but not limited to, (i) any corporate transaction not
entered into in the ordinary course of business (other than the Merger),
including, but not limited to, a merger, other business combination,
reorganization, consolidation, recapitalization, dissolution or liquidation
involving Company, (ii) a sale or transfer of a material amount of assets of
Company or any of its subsidiaries, (iii) any change in the board of directors
of Company, (iv) any material change in the capitalization of the Company, (v)
any change in the charter, by-laws or other organizational or constitutive
documents of the Company, or (v) any other material change in the corporate
structure or business of the Company; and (d) without limiting the foregoing,
consult with Parent and vote all Shares beneficially owned by it in such manner
as is determined by Parent to be in compliance with the provisions of this
Section 1.2. Shareholder acknowledges receipt and review of a copy of the Merger
Agreement.
1.3 Irrevocable Proxy. Contemporaneously with the execution of
-----------------
this Agreement: (i) Shareholder shall deliver to Parent a proxy in the form
attached hereto as Exhibit A, which shall be irrevocable to the fullest extent
permitted by law (the "Proxy"), with respect to all Shares owned of record by
-----
Shareholder; and (ii) Shareholder shall cause to be delivered to Parent
additional Proxies executed on behalf of each record owner of any Shares owned
beneficially (but not owned of record) by Shareholder.
2. Representations and Warranties of Shareholder. Shareholder
---------------------------------------------
represents and warrants to Parent and Purchaser as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares
-------------------
are all of the Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder does not have any rights to acquire any
additional shares of Common Stock. Shareholder currently has with respect to the
Existing Shares, and at Closing will have with respect to the Shares, good,
valid and marketable title, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase, voting agreements or voting
trusts, and claims of every kind (other than the encumbrances created by this
Agreement and other than restrictions on transfer under applicable Federal and
State securities laws).
2.2 Power; Binding Agreement. Shareholder has the full legal
------------------------
capacity, right, power and authority to enter into and perform all of
Shareholder's obligations under this Agreement. The execution and delivery of
this Agreement by Shareholder will not violate any agreement, contract or
arrangement to which Shareholder is a party or is bound, including, without
limitation, any voting agreement, shareholders agreement or voting trust. This
Agreement has been duly executed and delivered by Shareholder and constitutes a
legal, valid
-2-
<PAGE>
and binding agreement of Shareholder, enforceable in accordance with its terms.
Neither the execution or delivery of this Agreement nor the consummation by
Shareholder of the transactions contemplated hereby will (a) other than filings
required under the federal or state securities laws, require any consent or
approval of or filing with any governmental or other regulatory body, or (b)
constitute a violation of, conflict with or constitute a default under (i) any
law, rule or regulation applicable to Shareholder, or (ii) any order, judgment
or decree to which Shareholder is bound.
2.3 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Shareholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Parent and Purchaser. Parent
------------------------------------------------------
and Purchaser, jointly and severally, represent and warrant to Shareholder as
follows:
3.1 Authority. Each of Parent and Purchaser has full legal
---------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by Parent and
Purchaser will not violate the charter, by-laws or other organizational or
constitutive documents of Parent or Purchaser, or any other agreement, contract
or arrangement to which Parent or Purchaser is a party or is bound. This
Agreement has been duly executed and delivered by each of Parent and Purchaser
and constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Parent or Purchaser of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Parent or Purchaser, or (ii) any order, judgment or decree to
which Parent or Purchaser is bound.
3.2 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fee from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of
-----------
Sections 5, 6 and 19 which shall survive any termination of this Agreement),
shall terminate on the earliest to occur of (a) the date on which Purchaser
accepts for payment the Shares tendered in the Offer, so long as the Shares are
so tendered and not withdrawn, (b) the Effective Time (as defined in the Merger
Agreement), and (c) the date of termination of the Merger Agreement in
accordance with its terms. Purchaser shall not purchase the Shares pursuant to
the Offer unless Purchaser purchases pursuant to the Offer that number of shares
of Common Stock such that the Minimum Tender Condition (as defined in the Merger
Agreement) is satisfied.
-3-
<PAGE>
5. Expenses. Except as provided in Section 19, each party hereto
--------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers. The provisions of this Section 5 shall survive the
Closing hereunder.
6. Confidentiality. Shareholder recognizes that successful
---------------
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to these matters. In this connection, pending
public disclosure, Shareholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal counsel and advisors
of Shareholder or the Company, if any) not a party to this Agreement, without
prior written consent of Parent, except for filings required pursuant to the
Exchange Act, and the rules and regulations thereunder or disclosures
Shareholder's legal counsel advises in writing are necessary in order to fulfill
Shareholder's obligations imposed by law, in which event Shareholder shall give
prompt prior notice of such disclosure to Parent and cooperate with Parent in
obtaining a protective order or in limiting such disclosure.
7. Certain Covenants of Shareholder.
--------------------------------
7.1 Except in accordance with the provisions of this Agreement,
Shareholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) Shareholder shall not, directly or indirectly through
any agent or otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Parent or Purchaser) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in, the Company or any subsidiary of the Company, or any
merger, consolidation, business combination, reorganization, recapitalization or
similar transaction involving the Company or any subsidiary of the Company (each
a "Competing Transaction"), or participate in any discussions or negotiations
----------------------
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any person (other than Parent and Purchaser)
to do or seek any of the foregoing. Shareholder will cease and cause to be
terminated any existing activities, discussions or negotiations by or on its
behalf with any person (other than Parent and Purchaser) conducted heretofore
with respect to any Competing Transaction and will promptly notify Parent
following receipt of any request by any person (other than Parent or Purchaser)
relating to any possible Competing Transaction or information concerning the
Company. Nothing contained herein shall prohibit Shareholder, solely in his
-4-
<PAGE>
capacity as a member of the board of directors of the Company (the "Board"),
-----
from furnishing information to, or entering into discussions or negotiations
with, any person (other than Parent and Purchaser) in connection with an
unsolicited proposal involving a fully-financed Competing Transaction which is
made in writing by such person (other than Parent and Purchaser) and which, if
consummated, would provide consideration per share of Common Stock to the
shareholders of the Company in excess of the Offer Price if, and only to the
extent that, the Board determines in good faith, based upon the written advice
of Honigman Miller Schwartz and Cohn, that such action is required for the Board
to comply with its fiduciary duties to shareholders under Michigan law.
7.2 Shareholder agrees, while this Agreement is in effect, to
notify Parent promptly of the number of any shares of Common Stock beneficial
ownership of which is acquired by Shareholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the
-------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), Shareholder shall cause the Company to provide for each
certificate representing Shares beneficially owned by Shareholder to bear a
legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF THE STOCK TENDER AND VOTING AGREEMENT, AND IS SUBJECT TO
THE IRREVOCABLE PROXY REFERRED TO THEREIN, EACH DATED AS OF JUNE 17, 1999,
AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND COPIES OF WHICH ARE
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Shareholder shall cause the Company to
require that the transfer agent for its Common Stock shall make a notation in
its records prohibiting the transfer of any of the Shares, except in accordance
with the terms and conditions of this Agreement.
9. Survival of Representations and Warranties. Except as expressly
------------------------------------------
set forth herein, one of the representations, warranties, covenants and
agreements made by Shareholder, Parent or Purchaser in this Agreement shall
survive the Closing hereunder.
10. Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing, shall be given by hand delivery, U.S.
Express Mail (return receipt requested), overnight courier guaranteeing next
business day delivery, or facsimile, and shall be deemed duly given when
received, addressed as follows:
-5-
<PAGE>
If to Parent or Purchaser:
Littlejohn Partners IV, L.P.
c/o Littlejohn & Co. LLC
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. Angus Littlejohn or Mr. Michael Klein
Telephone: (203) 861-4005
Facsimile: (203) 861-4009
With copies to:
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esq.
Telephone: (215) 981-4368
Facsimile: (215) 981-4750
If to Shareholder:
c/o The Fisher Group
2700 Fisher Building
Detroit, MI 48202
Telephone: (313) 871-8000
Facsimile: (313) 871-0350
With copies to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attention: Donald J. Kunz, Esq.
Telephone: (313) 465-7454
Facsimile: (313) 465-7455
11. Entire Agreement; Amendment. This Agreement, together with the
---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with respect
to such subject matter. This Agreement may not be modified, amended, altered or
supplemented except by an agreement in writing executed by
-6-
<PAGE>
the party against whom such modification, amendment, alteration or supplement is
sought to be enforced.
12. Assigns. This Agreement shall be binding upon and inure to the
-------
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Purchaser may assign, any or all of its rights and obligations hereunder to
Parent or any direct or indirect wholly-owned subsidiary of Parent without the
consent of Shareholder or Company, but no such transfer shall relieve Purchaser
of its obligations under this Agreement if such subsidiary does not perform the
obligations of Purchaser hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
---------------------------------------------------
expressly set forth below, this Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In addition, each of Shareholder, Purchaser and Parent hereby agree that any
dispute arising out of this Agreement, the Offer or the Merger shall be heard in
the United States District Court for the Eastern District of Michigan and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement, the Offer or the Merger may be
given to any other party hereto by certified mail, return receipt requested, at
the respective addresses set forth in Section 12 above.
14. Injunctive Relief. The parties agree that in the event of a
-----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
16. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
-7-
<PAGE>
17. Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced
--------------
by any party to this Agreement to enforce or recover damages for any breach of
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this
Section 19 shall survive the Closing hereunder.
-8-
<PAGE>
20. Amendment and Modification. This Agreement may be amended,
--------------------------
modified and supplemented only by a written document executed by Parent,
Purchaser and Shareholder.
IN WITNESS WHEREOF, Parent and Purchaser have caused this Agreement to
be executed by their duly authorized officers, and Shareholder has duly
executed this Agreement, as of the date and year first above written.
/s/ Phillip Wm. Fisher
_____________________________
Phillip Wm. Fisher
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, L.L.C.
its General Partner
/s/ Angus C. Littlejohn, Jr.
By: ____________________________
Title: Manager
LPIV ACQUISITION CORP.
/s/ Michael I. Klein
By: _____________________________
Title: President
-9-
<PAGE>
EXHIBIT A
Form of Irrevocable Proxy
-------------------------
The undersigned shareholder of Durakon Industries, Inc., a Michigan
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Angus C. Littlejohn, Jr., Michael I. Klein, and
Littlejohn Partners IV, L.P., a Delaware limited partnership ("Parent"), and
each of them, the attorneys and proxies of the undersigned with full power of
substitution and resubstitution, to the full extent of the undersigned's rights
with respect to (i) the issued and outstanding shares of capital stock of the
Company owned of record by the undersigned as of the date of this proxy, which
shares are specified on the final page of this proxy and (ii) any and all other
shares of capital stock of the Company which the undersigned may acquire after
the date hereof (the shares of the capital stock of the Company referred to in
(clauses (i) and (ii) of the immediately preceding sentence are collectively
referred to as the "Shares") Upon the execution hereof, all prior proxies given
------
by the undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted
in connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, between Parent and the undersigned (the "Stock Tender Agreement"), and
----------------------
is granted in consideration of Parent entering into the Agreement and Plan of
Merger, dated as of the date hereof, among Parent, LPIV Acquisition Corp. and
the Company (the "Merger Agreement"). Capitalized terms used but not otherwise
----------------
defined in this proxy have the meanings ascribed to such terms in the Merger
Agreement.
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Merger Agreement pursuant to Section 8.01
thereof or the Effective Time at any meeting of the shareholders of the Company,
however called, or in any written action by consent of shareholders of the
Company: (a) in favor of the Merger; (b) against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of the Company under or pursuant to the Merger
Agreement; or (c) against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger or the Offer
including, but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but not
limited to, a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Company, (ii) a sale or
transfer of a material amount of assets of Company or any of its subsidiaries,
(iii) any change in the board of directors of Company, (iv) any material change
in the capitalization of the Company, (v) any change in the charter, by-laws or
other organizational or constitutive documents of the Company, or (v) any other
material change in the corporate structure or business of the Company.
-10-
<PAGE>
This proxy shall be binding upon the heirs, successors and assigns of
the undersigned (including any transferee of any of the Shares).
Any term or provision of this proxy which is invalid or unenforceable,
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this proxy or affecting the
validity or enforceability of any of the terms or provisions of this proxy in
any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
This proxy shall terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
Dated: _____________ __, 1999
___________________________
Phillip Wm. Fisher
Number of shares of Common Stock owned of record as of the date of this proxy:
____________
-11-
<PAGE>
Exhibit (c)(5)
Stock Tender and Voting Agreement with Richard J. Jacob
<PAGE>
STOCK TENDER AND VOTING AGREEMENT
---------------------------------
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of June
---------
17, 1999 by and among Richard J. Jacob ("Shareholder"), Littlejohn Partners IV,
-----------
L.P., a Delaware limited partnership ("Parent"), and LPIV Acquisition Corp., a
------
Michigan corporation and a wholly-owned subsidiary of Parent ("Purchaser").
---------
W I T N E S S E T H:
-------------------
WHEREAS, concurrently herewith, Parent, Purchaser and Durakon
Industries, Inc., a Michigan corporation ("Company"), are entering into an
-------
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
----------------
pursuant to which Purchaser agrees to make a tender offer (the "Offer") for all
-----
outstanding shares of common stock, without par value (the "Common Stock"), of
------------
the Company, at $16.00 per share (the "Offer Price"), in cash, and/or by a
-----------
merger (the "Merger") of Purchaser with the Company;
------
WHEREAS, Shareholder beneficially owns (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act")), as of the date hereof, 34,500 shares of Common Stock (the "Existing
- --- --------
Shares", together with any shares of Common Stock beneficial ownership of which
- ------
is acquired by Shareholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that Shareholder agree, and
Shareholder has agreed, to enter into this Agreement; and
WHEREAS, Parent and Purchaser have entered into the Merger Agreement
in reliance on Shareholder's representations, warranties, covenants and
agreements hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
-----------------------------------------------
1.1 Tender. Shareholder agrees to validly tender all Shares
------
beneficially owned by it pursuant to the Offer within ten business days of
commencement of the Offer, and not withdraw any such Shares, except to the
extent that the tender of shares (excluding Shares acquired after the date
hereof) pursuant to the Offer would subject Shareholder to liability under
Section 16(b) of the Exchange Act.
1.2 Voting. Shareholder hereby agrees that, during the time
------
this Agreement is in effect, at any meeting of the shareholders of Company,
however called, and in any action by consent of the stockholders of Company,
Shareholder shall: (a) vote all Shares
<PAGE>
beneficially owned by it in favor of the Merger; (b) vote all Shares
beneficially owned by it against any action or agreement that would result in a
breach of any covenant or any representation or warranty or any other obligation
or agreement of the Company under or pursuant to the Merger Agreement; (c) vote
all Shares beneficially owned by it against any action or agreement that would
impede, interfere with, delay, postpone or attempt to discourage the Merger or
the Offer including, but not limited to, (i) any corporate transaction not
entered into in the ordinary course of business (other than the Merger),
including, but not limited to, a merger, other business combination,
reorganization, consolidation, recapitalization, dissolution or liquidation
involving Company, (ii) a sale or transfer of a material amount of assets of
Company or any of its subsidiaries, (iii) any change in the board of directors
of Company, (iv) any material change in the capitalization of the Company, (v)
any change in the charter, by-laws or other organizational or constitutive
documents of the Company, or (v) any other material change in the corporate
structure or business of the Company; and (d) without limiting the foregoing,
consult with Parent and vote all Shares beneficially owned by it in such manner
as is determined by Parent to be in compliance with the provisions of this
Section 1.2. Shareholder acknowledges receipt and review of a copy of the Merger
Agreement.
1.3 Irrevocable Proxy. Contemporaneously with the execution of this
-----------------
Agreement: (i) Shareholder shall deliver to Parent a proxy in the form attached
hereto as Exhibit A, which shall be irrevocable to the fullest extent permitted
by law (the "Proxy"), with respect to all Shares owned of record by Shareholder;
-----
and (ii) Shareholder shall cause to be delivered to Parent additional Proxies
executed on behalf of each record owner of any Shares owned beneficially (but
not owned of record) by Shareholder.
2. Representations and Warranties of Shareholder. Shareholder represents
---------------------------------------------
and warrants to Parent and Purchaser as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares are
-------------------
all of the Shares currently beneficially owned by Shareholder. On the Closing
Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder does not have any rights to acquire
any additional shares of Common Stock. Shareholder currently has with respect
to the Existing Shares, and at Closing will have with respect to the Shares,
good, valid and marketable title, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase, voting agreements or voting
trusts, and claims of every kind (other than the encumbrances created by this
Agreement and other than restrictions on transfer under applicable Federal and
State securities laws).
2.2 Power; Binding Agreement. Shareholder has the full legal
------------------------
capacity, right, power and authority to enter into and perform all of
Shareholder's obligations under this Agreement. The execution and delivery of
this Agreement by Shareholder will not violate any agreement, contract or
arrangement to which Shareholder is a party or is bound, including, without
limitation, any voting agreement, shareholders agreement or voting trust. This
Agreement has been duly executed and delivered by Shareholder and constitutes a
legal, valid
-2-
<PAGE>
and binding agreement of Shareholder, enforceable in accordance with its terms.
Neither the execution or delivery of this Agreement nor the consummation by
Shareholder of the transactions contemplated hereby will (a) other than filings
required under the federal or state securities laws, require any consent or
approval of or filing with any governmental or other regulatory body, or (b)
constitute a violation of, conflict with or constitute a default under (i) any
law, rule or regulation applicable to Shareholder, or (ii) any order, judgment
or decree to which Shareholder is bound.
2.3 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Shareholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Parent and Purchaser. Parent and
------------------------------------------------------
Purchaser, jointly and severally, represent and warrant to Shareholder as
follows:
3.1 Authority. Each of Parent and Purchaser has full legal right,
---------
power and authority to enter into and perform all of its obligations under this
Agreement. The execution and delivery of this Agreement by Parent and Purchaser
will not violate the charter, by-laws or other organizational or constitutive
documents of Parent or Purchaser, or any other agreement, contract or
arrangement to which Parent or Purchaser is a party or is bound. This Agreement
has been duly executed and delivered by each of Parent and Purchaser and
constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Parent or Purchaser of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Parent or Purchaser, or (ii) any order, judgment or decree to
which Parent or Purchaser is bound.
3.2 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fee from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of Sections 5,
-----------
6 and 19 which shall survive any termination of this Agreement), shall terminate
on the earliest to occur of (a) the date on which Purchaser accepts for payment
the Shares tendered in the Offer, so long as the Shares are so tendered and not
withdrawn, (b) the Effective Time (as defined in the Merger Agreement), and (c)
the date of termination of the Merger Agreement in accordance with its terms.
Purchaser shall not purchase the Shares pursuant to the Offer unless Purchaser
purchases pursuant to the Offer that number of shares of Common Stock such that
the Minimum Tender Condition (as defined in the Merger Agreement) is satisfied.
-3-
<PAGE>
5. Expenses. Except as provided in Section 19, each party hereto
--------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers. The provisions of this Section 5 shall survive the
Closing hereunder.
6. Confidentiality. Shareholder recognizes that successful
---------------
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to these matters. In this connection, pending
public disclosure, Shareholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal counsel and advisors
of Shareholder or the Company, if any) not a party to this Agreement, without
prior written consent of Parent, except for filings required pursuant to the
Exchange Act, and the rules and regulations thereunder or disclosures
Shareholder's legal counsel advises in writing are necessary in order to fulfill
Shareholder's obligations imposed by law, in which event Shareholder shall give
prompt prior notice of such disclosure to Parent and cooperate with Parent in
obtaining a protective order or in limiting such disclosure.
7. Certain Covenants of Shareholder.
--------------------------------
7.1 Except in accordance with the provisions of this Agreement,
Shareholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) Shareholder shall not, directly or indirectly through
any agent or otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Parent or Purchaser) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in, the Company or any subsidiary of the Company, or any
merger, consolidation, business combination, reorganization, recapitalization or
similar transaction involving the Company or any subsidiary of the Company (each
a "Competing Transaction"), or participate in any discussions or negotiations
----------------------
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any person (other than Parent and Purchaser)
to do or seek any of the foregoing. Shareholder will cease and cause to be
terminated any existing activities, discussions or negotiations by or on its
behalf with any person (other than Parent and Purchaser) conducted heretofore
with respect to any Competing Transaction and will promptly notify Parent
following receipt of any request by any person (other than Parent or Purchaser)
relating to any possible Competing Transaction or information concerning the
Company. Nothing contained herein shall prohibit Shareholder, solely in his
-4-
<PAGE>
capacity as a member of the board of directors of the Company (the "Board"),
-----
from furnishing information to, or entering into discussions or negotiations
with, any person (other than Parent and Purchaser) in connection with an
unsolicited proposal involving a fully-financed Competing Transaction which is
made in writing by such person (other than Parent and Purchaser) and which, if
consummated, would provide consideration per share of Common Stock to the
shareholders of the Company in excess of the Offer Price if, and only to the
extent that, the Board determines in good faith, based upon the written advice
of Honigman Miller Schwartz and Cohn, that such action is required for the Board
to comply with its fiduciary duties to shareholders under Michigan law.
7.2 Shareholder agrees, while this Agreement is in effect, to notify
Parent promptly of the number of any shares of Common Stock beneficial ownership
of which is acquired by Shareholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the
-------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), Shareholder shall cause the Company to provide for each
certificate representing Shares beneficially owned by Shareholder to bear a
legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF THE STOCK TENDER AND VOTING AGREEMENT, AND IS SUBJECT TO
THE IRREVOCABLE PROXY REFERRED TO THEREIN, EACH DATED AS OF JUNE 17, 1999,
AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND COPIES OF WHICH ARE
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Shareholder shall cause the Company to
require that the transfer agent for its Common Stock shall make a notation in
its records prohibiting the transfer of any of the Shares, except in accordance
with the terms and conditions of this Agreement.
9. Survival of Representations and Warranties. Except as expressly set
------------------------------------------
forth herein, one of the representations, warranties, covenants and agreements
made by Shareholder, Parent or Purchaser in this Agreement shall survive the
Closing hereunder.
10. Notices. All notices or other communications required or permitted
-------
hereunder shall be in writing, shall be given by hand delivery, U.S. Express
Mail (return receipt requested), overnight courier guaranteeing next business
day delivery, or facsimile, and shall be deemed duly given when received,
addressed as follows:
If to Parent or Purchaser:
-5-
<PAGE>
Littlejohn Partners IV, L.P.
c/o Littlejohn & Co. LLC
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. Angus Littlejohn or Mr. Michael Klein
Telephone: (203) 861-4005
Facsimile: (203) 861-4009
With copies to:
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esq.
Telephone: (215) 981-4368
Facsimile: (215) 981-4750
If to Shareholder:
c/o Richard Jacobs & Associates
333 W. First Street, Suite 424
Dayton, OH 45402
Telephone: (937) 223-0500
Facsimile: (937) 223-3136
With copies to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attention: Donald J. Kunz, Esq.
Telephone: (313) 465-7454
Facsimile: (313) 465-7455
11. Entire Agreement; Amendment. This Agreement, together with the
---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with respect
to such subject matter. This Agreement may not be modified, amended, altered or
supplemented except by an agreement in writing executed by the party against
whom such modification, amendment, alteration or supplement is sought to be
enforced.
-6-
<PAGE>
12. Assigns. This Agreement shall be binding upon and inure to the
-------
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Purchaser may assign, any or all of its rights and obligations hereunder to
Parent or any direct or indirect wholly-owned subsidiary of Parent without the
consent of Shareholder or Company, but no such transfer shall relieve Purchaser
of its obligations under this Agreement if such subsidiary does not perform the
obligations of Purchaser hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
---------------------------------------------------
expressly set forth below, this Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In addition, each of Shareholder, Purchaser and Parent hereby agree that any
dispute arising out of this Agreement, the Offer or the Merger shall be heard in
the United States District Court for the Eastern District of Michigan and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement, the Offer or the Merger may be
given to any other party hereto by certified mail, return receipt requested, at
the respective addresses set forth in Section 12 above.
14. Injunctive Relief. The parties agree that in the event of a
-----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
16. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
-7-
<PAGE>
17. Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced
--------------
by any party to this Agreement to enforce or recover damages for any breach of
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this
Section 19 shall survive the Closing hereunder.
-8-
<PAGE>
20. Amendment and Modification. This Agreement may be amended,
--------------------------
modified and supplemented only by a written document executed by Parent,
Purchaser and Shareholder.
IN WITNESS WHEREOF, Parent and Purchaser have caused this Agreement to
be executed by their duly authorized officers, and Shareholder has duly
executed this Agreement, as of the date and year first above written.
/s/ Richard J. Jacob
_____________________________
Richard J. Jacob
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, L.L.C.
its General Partner
/s/ Angus C. Littlejohn, Jr.
By: ____________________________
Title: Manager
LPIV ACQUISITION CORP.
/s/ Michael I. Klein
By: _____________________________
Title: President
-9-
<PAGE>
EXHIBIT A
Form of Irrevocable Proxy
-------------------------
The undersigned shareholder of Durakon Industries, Inc., a Michigan
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Angus C. Littlejohn, Jr., Michael I. Klein, and
Littlejohn Partners IV, L.P., a Delaware limited partnership ("Parent"), and
each of them, the attorneys and proxies of the undersigned with full power of
substitution and resubstitution, to the full extent of the undersigned's rights
with respect to (i) the issued and outstanding shares of capital stock of the
Company owned of record by the undersigned as of the date of this proxy, which
shares are specified on the final page of this proxy and (ii) any and all other
shares of capital stock of the Company which the undersigned may acquire after
the date hereof (the shares of the capital stock of the Company referred to in
(clauses (i) and (ii) of the immediately preceding sentence are collectively
referred to as the "Shares") Upon the execution hereof, all prior proxies given
------
by the undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted
in connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, between Parent and the undersigned (the "Stock Tender Agreement"), and
----------------------
is granted in consideration of Parent entering into the Agreement and Plan of
Merger, dated as of the date hereof, among Parent, LPIV Acquisition Corp. and
the Company (the "Merger Agreement"). Capitalized terms used but not otherwise
----------------
defined in this proxy have the meanings ascribed to such terms in the Merger
Agreement.
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Merger Agreement pursuant to Section 8.01
thereof or the Effective Time at any meeting of the shareholders of the Company,
however called, or in any written action by consent of shareholders of the
Company: (a) in favor of the Merger; (b) against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of the Company under or pursuant to the Merger
Agreement; or (c) against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger or the Offer
including, but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but not
limited to, a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Company, (ii) a sale or
transfer of a material amount of assets of Company or any of its subsidiaries,
(iii) any change in the board of directors of Company, (iv) any material change
in the capitalization of the Company, (v) any change in the charter, by-laws or
other organizational or constitutive documents of the Company, or (v) any other
material change in the corporate structure or business of the Company.
-10-
<PAGE>
This proxy shall be binding upon the heirs, successors and assigns of
the undersigned (including any transferee of any of the Shares).
Any term or provision of this proxy which is invalid or unenforceable,
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this proxy or affecting the
validity or enforceability of any of the terms or provisions of this proxy in
any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
This proxy shall terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
Dated: _____________ __, 1999
___________________________
Richard J. Jacob
Number of shares of Common Stock owned of record as of the date of this proxy:
____________
-11-
<PAGE>
Exhibit (c)(6)
Stock Tender and Voting Agreement with Robert M. Teeter
<PAGE>
STOCK TENDER AND VOTING AGREEMENT
---------------------------------
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of June
---------
17, 1999 by and among Robert M. Teeter ("Shareholder"), Littlejohn Partners IV,
-----------
L.P., a Delaware limited partnership ("Parent"), and LPIV Acquisition Corp., a
------
Michigan corporation and a wholly-owned subsidiary of Parent ("Purchaser").
---------
W I T N E S S E T H:
-------------------
WHEREAS, concurrently herewith, Parent, Purchaser and Durakon
Industries, Inc., a Michigan corporation ("Company"), are entering into an
-------
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
----------------
pursuant to which Purchaser agrees to make a tender offer (the "Offer") for all
-----
outstanding shares of common stock, without par value (the "Common Stock"), of
------------
the Company, at $16.00 per share (the "Offer Price"), in cash, and/or by a
-----------
merger (the "Merger") of Purchaser with the Company;
------
WHEREAS, Shareholder beneficially owns (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act")), as of the date hereof, 104,000 shares of Common Stock (the "Existing
- --- --------
Shares", together with any shares of Common Stock beneficial ownership of which
- ------
is acquired by Shareholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that Shareholder agree, and
Shareholder has agreed, to enter into this Agreement; and
WHEREAS, Parent and Purchaser have entered into the Merger Agreement
in reliance on Shareholder's representations, warranties, covenants and
agreements hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
-----------------------------------------------
1.1 Tender. Shareholder agrees to validly tender all Shares
------
beneficially owned by it pursuant to the Offer within ten business days of
commencement of the Offer, and not withdraw any such Shares, except to the
extent that the tender of shares (excluding Shares acquired after the date
hereof) pursuant to the Offer would subject Shareholder to liability under
Section 16(b) of the Exchange Act.
1.2 Voting. Shareholder hereby agrees that, during the time this
------
Agreement is in effect, at any meeting of the shareholders of Company, however
called, and in any action by consent of the stockholders of Company, Shareholder
shall: (a) vote all Shares
<PAGE>
beneficially owned by it in favor of the Merger; (b) vote all Shares
beneficially owned by it against any action or agreement that would result in a
breach of any covenant or any representation or warranty or any other obligation
or agreement of the Company under or pursuant to the Merger Agreement; (c) vote
all Shares beneficially owned by it against any action or agreement that would
impede, interfere with, delay, postpone or attempt to discourage the Merger or
the Offer including, but not limited to, (i) any corporate transaction not
entered into in the ordinary course of business (other than the Merger),
including, but not limited to, a merger, other business combination,
reorganization, consolidation, recapitalization, dissolution or liquidation
involving Company, (ii) a sale or transfer of a material amount of assets of
Company or any of its subsidiaries, (iii) any change in the board of directors
of Company, (iv) any material change in the capitalization of the Company, (v)
any change in the charter, by-laws or other organizational or constitutive
documents of the Company, or (v) any other material change in the corporate
structure or business of the Company; and (d) without limiting the foregoing,
consult with Parent and vote all Shares beneficially owned by it in such manner
as is determined by Parent to be in compliance with the provisions of this
Section 1.2. Shareholder acknowledges receipt and review of a copy of the Merger
Agreement.
1.3 Irrevocable Proxy. Contemporaneously with the execution of this
-----------------
Agreement: (i) Shareholder shall deliver to Parent a proxy in the form attached
hereto as Exhibit A, which shall be irrevocable to the fullest extent permitted
by law (the "Proxy"), with respect to all Shares owned of record by Shareholder;
-----
and (ii) Shareholder shall cause to be delivered to Parent additional Proxies
executed on behalf of each record owner of any Shares owned beneficially (but
not owned of record) by Shareholder.
2. Representations and Warranties of Shareholder. Shareholder
---------------------------------------------
represents and warrants to Parent and Purchaser as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares are
-------------------
all of the Shares currently beneficially owned by Shareholder. On the Closing
Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder does not have any rights to acquire
any additional shares of Common Stock other than pursuant to options issued
under the Stock Option Plans (as defined in the Merger Agreement). Shareholder
currently has with respect to the Existing Shares, and at Closing will have with
respect to the Shares, good, valid and marketable title, free and clear of all
liens, encumbrances, restrictions, options, warrants, rights to purchase, voting
agreements or voting trusts, and claims of every kind (other than the
encumbrances created by this Agreement and other than restrictions on transfer
under applicable Federal and State securities laws).
2.2 Power; Binding Agreement. Shareholder has the full legal
------------------------
capacity, right, power and authority to enter into and perform all of
Shareholder's obligations under this Agreement. The execution and delivery of
this Agreement by Shareholder will not violate any agreement, contract or
arrangement to which Shareholder is a party or is bound, including, without
limitation, any voting agreement, shareholders agreement or voting trust. This
-2-
<PAGE>
Agreement has been duly executed and delivered by Shareholder and constitutes a
legal, valid and binding agreement of Shareholder, enforceable in accordance
with its terms. Neither the execution or delivery of this Agreement nor the
consummation by Shareholder of the transactions contemplated hereby will (a)
other than filings required under the federal or state securities laws, require
any consent or approval of or filing with any governmental or other regulatory
body, or (b) constitute a violation of, conflict with or constitute a default
under (i) any law, rule or regulation applicable to Shareholder, or (ii) any
order, judgment or decree to which Shareholder is bound.
2.3 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Shareholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Parent and Purchaser. Parent
------------------------------------------------------
and Purchaser, jointly and severally, represent and warrant to Shareholder as
follows:
3.1 Authority. Each of Parent and Purchaser has full legal right,
---------
power and authority to enter into and perform all of its obligations under this
Agreement. The execution and delivery of this Agreement by Parent and Purchaser
will not violate the charter, by-laws or other organizational or constitutive
documents of Parent or Purchaser, or any other agreement, contract or
arrangement to which Parent or Purchaser is a party or is bound. This Agreement
has been duly executed and delivered by each of Parent and Purchaser and
constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Parent or Purchaser of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Parent or Purchaser, or (ii) any order, judgment or decree to
which Parent or Purchaser is bound.
3.2 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fee from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of
-----------
Sections 5, 6 and 19 which shall survive any termination of this Agreement),
shall terminate on the earliest to occur of (a) the date on which Purchaser
accepts for payment the Shares tendered in the Offer, so long as the Shares are
so tendered and not withdrawn, (b) the Effective Time (as defined in the Merger
Agreement), and (c) the date of termination of the Merger Agreement in
accordance with its terms. Purchaser shall not purchase the Shares pursuant to
the Offer unless Purchaser
-3-
<PAGE>
purchases pursuant to the Offer that number of shares of Common Stock such that
the Minimum Tender Condition (as defined in the Merger Agreement) is satisfied.
5. Expenses. Except as provided in Section 19, each party hereto
--------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers. The provisions of this Section 5 shall survive the
Closing hereunder.
6. Confidentiality. Shareholder recognizes that successful
---------------
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to these matters. In this connection, pending
public disclosure, Shareholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal counsel and advisors
of Shareholder or the Company, if any) not a party to this Agreement, without
prior written consent of Parent, except for filings required pursuant to the
Exchange Act, and the rules and regulations thereunder or disclosures
Shareholder's legal counsel advises in writing are necessary in order to fulfill
Shareholder's obligations imposed by law, in which event Shareholder shall give
prompt prior notice of such disclosure to Parent and cooperate with Parent in
obtaining a protective order or in limiting such disclosure.
7. Certain Covenants of Shareholder.
--------------------------------
7.1 Except in accordance with the provisions of this Agreement,
Shareholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) Shareholder shall not, directly or indirectly through
any agent or otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Parent or Purchaser) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in, the Company or any subsidiary of the Company, or any
merger, consolidation, business combination, reorganization, recapitalization or
similar transaction involving the Company or any subsidiary of the Company (each
a "Competing Transaction"), or participate in any discussions or negotiations
----------------------
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any person (other than Parent and Purchaser)
to do or seek any of the foregoing. Shareholder will cease and cause to be
terminated any existing activities, discussions or negotiations by or on its
behalf with any person (other than Parent and Purchaser) conducted heretofore
with respect to any Competing
-4-
<PAGE>
Transaction and will promptly notify Parent following receipt of any request by
any person (other than Parent or Purchaser) relating to any possible Competing
Transaction or information concerning the Company. Nothing contained herein
shall prohibit Shareholder, solely in his capacity as a member of the board of
directors of the Company (the "Board"), from furnishing information to, or
-----
entering into discussions or negotiations with, any person (other than Parent
and Purchaser) in connection with an unsolicited proposal involving a fully-
financed Competing Transaction which is made in writing by such person (other
than Parent and Purchaser) and which, if consummated, would provide
consideration per share of Common Stock to the shareholders of the Company in
excess of the Offer Price if, and only to the extent that, the Board determines
in good faith, based upon the written advice of Honigman Miller Schwartz and
Cohn, that such action is required for the Board to comply with its fiduciary
duties to shareholders under Michigan law.
7.2 Shareholder agrees, while this Agreement is in effect, to
notify Parent promptly of the number of any shares of Common Stock beneficial
ownership of which is acquired by Shareholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the
-------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), Shareholder shall cause the Company to provide for each
certificate representing Shares beneficially owned by Shareholder to bear a
legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF THE STOCK TENDER AND VOTING AGREEMENT, AND IS SUBJECT TO
THE IRREVOCABLE PROXY REFERRED TO THEREIN, EACH DATED AS OF JUNE 17, 1999,
AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND COPIES OF WHICH ARE
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Shareholder shall cause the Company to
require that the transfer agent for its Common Stock shall make a notation in
its records prohibiting the transfer of any of the Shares, except in accordance
with the terms and conditions of this Agreement.
9. Survival of Representations and Warranties. Except as expressly
------------------------------------------
set forth herein, one of the representations, warranties, covenants and
agreements made by Shareholder, Parent or Purchaser in this Agreement shall
survive the Closing hereunder.
10. Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing, shall be given by hand delivery, U.S.
Express Mail (return receipt
-5-
<PAGE>
requested), overnight courier guaranteeing next business day delivery, or
facsimile, and shall be deemed duly given when received, addressed as follows:
If to Parent or Purchaser:
Littlejohn Partners IV, L.P.
c/o Littlejohn & Co. LLC
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. Angus Littlejohn or Mr. Michael Klein
Telephone: (203) 861-4005
Facsimile: (203) 861-4009
With copies to:
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esq.
Telephone: (215) 981-4368
Facsimile: (215) 981-4750
If to Shareholder:
c/o Coldwater Corporation
2001 Commonwealth Blvd.
Ann Arbor, MI 48105
Telephone: (734) 668-2621
Facsimile: (734) 668-6249
With copies to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attention: Donald J. Kunz, Esq.
Telephone: (313) 465-7454
Facsimile: (313) 465-7455
11. Entire Agreement; Amendment. This Agreement, together with the
---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and
-6-
<PAGE>
understandings among the parties with respect to such subject matter. This
Agreement may not be modified, amended, altered or supplemented except by an
agreement in writing executed by the party against whom such modification,
amendment, alteration or supplement is sought to be enforced.
12. Assigns. This Agreement shall be binding upon and inure to the
-------
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Purchaser may assign, any or all of its rights and obligations hereunder to
Parent or any direct or indirect wholly-owned subsidiary of Parent without the
consent of Shareholder or Company, but no such transfer shall relieve Purchaser
of its obligations under this Agreement if such subsidiary does not perform the
obligations of Purchaser hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
---------------------------------------------------
expressly set forth below, this Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In addition, each of Shareholder, Purchaser and Parent hereby agree that any
dispute arising out of this Agreement, the Offer or the Merger shall be heard in
the United States District Court for the Eastern District of Michigan and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement, the Offer or the Merger may be
given to any other party hereto by certified mail, return receipt requested, at
the respective addresses set forth in Section 12 above.
14. Injunctive Relief. The parties agree that in the event of a
-----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
16. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so
-7-
<PAGE>
broad as to be unenforceable, such provision shall be interpreted to be only so
broad as is enforceable.
17. Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced
--------------
by any party to this Agreement to enforce or recover damages for any breach of
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this
Section 19 shall survive the Closing hereunder.
-8-
<PAGE>
20. Amendment and Modification. This Agreement may be amended,
--------------------------
modified and supplemented only by a written document executed by Parent,
Purchaser and Shareholder.
IN WITNESS WHEREOF, Parent and Purchaser have caused this Agreement to
be executed by their duly authorized officers, and Shareholder has duly
executed this Agreement, as of the date and year first above written.
/s/ Robert M. Teeter
-------------------------------
Robert M. Teeter
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, L.L.C.
its General Partner
By: /s/ Angus C. Littlejohn, Jr.
-------------------------
Title: Manager
LPIV ACQUISITION CORP.
By: /s/ Michael I. Klein
----------------------------
Title: President
-9-
<PAGE>
EXHIBIT A
Form of Irrevocable Proxy
-------------------------
The undersigned shareholder of Durakon Industries, Inc., a Michigan
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Angus C. Littlejohn, Jr., Michael I. Klein, and
Littlejohn Partners IV, L.P., a Delaware limited partnership ("Parent"), and
each of them, the attorneys and proxies of the undersigned with full power of
substitution and resubstitution, to the full extent of the undersigned's rights
with respect to (i) the issued and outstanding shares of capital stock of the
Company owned of record by the undersigned as of the date of this proxy, which
shares are specified on the final page of this proxy and (ii) any and all other
shares of capital stock of the Company which the undersigned may acquire after
the date hereof (the shares of the capital stock of the Company referred to in
(clauses (i) and (ii) of the immediately preceding sentence are collectively
referred to as the "Shares") Upon the execution hereof, all prior proxies given
------
by the undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted
in connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, between Parent and the undersigned (the "Stock Tender Agreement"), and
----------------------
is granted in consideration of Parent entering into the Agreement and Plan of
Merger, dated as of the date hereof, among Parent, LPIV Acquisition Corp. and
the Company (the "Merger Agreement"). Capitalized terms used but not otherwise
----------------
defined in this proxy have the meanings ascribed to such terms in the Merger
Agreement.
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Merger Agreement pursuant to Section 8.01
thereof or the Effective Time at any meeting of the shareholders of the Company,
however called, or in any written action by consent of shareholders of the
Company: (a) in favor of the Merger; (b) against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of the Company under or pursuant to the Merger
Agreement; or (c) against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger or the Offer
including, but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but not
limited to, a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Company, (ii) a sale or
transfer of a material amount of assets of Company or any of its subsidiaries,
(iii) any change in the board of directors of Company, (iv) any material change
in the capitalization of the Company, (v) any change in the charter, by-laws or
other organizational or constitutive documents of the Company, or (v) any other
material change in the corporate structure or business of the Company.
-10-
<PAGE>
This proxy shall be binding upon the heirs, successors and assigns of
the undersigned (including any transferee of any of the Shares).
Any term or provision of this proxy which is invalid or unenforceable,
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this proxy or affecting the
validity or enforceability of any of the terms or provisions of this proxy in
any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
This proxy shall terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
Dated: _____________ __, 1999
- ------------------------------
Robert M. Teeter
Number of shares of Common Stock owned of record as of the date of this proxy:
____________
-11-
<PAGE>
Exhibit (c)(7)
Stock Tender and Voting Agreement with David W. Wright
<PAGE>
STOCK TENDER AND VOTING AGREEMENT
---------------------------------
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of June
---------
17, 1999 by and among David W. Wright ("Shareholder"), Littlejohn Partners IV,
-----------
L.P., a Delaware limited partnership ("Parent"), and LPIV Acquisition Corp., a
------
Michigan corporation and a wholly-owned subsidiary of Parent ("Purchaser").
---------
W I T N E S S E T H:
-------------------
WHEREAS, concurrently herewith, Parent, Purchaser and Durakon
Industries, Inc., a Michigan corporation ("Company"), are entering into an
-------
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
----------------
pursuant to which Purchaser agrees to make a tender offer (the "Offer") for all
-----
outstanding shares of common stock, without par value (the "Common Stock"), of
------------
the Company, at $16.00 per share (the "Offer Price"), in cash, and/or by a
-----------
merger (the "Merger") of Purchaser with the Company;
------
WHEREAS, Shareholder beneficially owns (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act"), as of the date hereof, 223,500 shares of Common Stock (the "Existing
- --- --------
Shares", together with any shares of Common Stock beneficial ownership of which
- ------
is acquired by Shareholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that Shareholder agree, and
Shareholder has agreed, to enter into this Agreement; and
WHEREAS, Parent and Purchaser have entered into the Merger Agreement
in reliance on Shareholder's representations, warranties, covenants and
agreements hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
-----------------------------------------------
1.1 Tender. Shareholder agrees to validly tender all Shares
------
beneficially owned by it pursuant to the Offer within ten business days of
commencement of the Offer, and not withdraw any such Shares, except to the
extent that the tender of shares (excluding Shares acquired after the date
hereof) pursuant to the Offer would subject Shareholder to liability under
Section 16(b) of the Exchange Act.
1.2 Voting. Shareholder hereby agrees that, during the time
------
this Agreement is in effect, at any meeting of the shareholders of Company,
however called, and in any action by consent of the stockholders of Company,
Shareholder shall: (a) vote all Shares
<PAGE>
beneficially owned by it in favor of the Merger; (b) vote all Shares
beneficially owned by it against any action or agreement that would result in a
breach of any covenant or any representation or warranty or any other obligation
or agreement of the Company under or pursuant to the Merger Agreement; (c) vote
all Shares beneficially owned by it against any action or agreement that would
impede, interfere with, delay, postpone or attempt to discourage the Merger or
the Offer including, but not limited to, (i) any corporate transaction not
entered into in the ordinary course of business (other than the Merger),
including, but not limited to, a merger, other business combination,
reorganization, consolidation, recapitalization, dissolution or liquidation
involving Company, (ii) a sale or transfer of a material amount of assets of
Company or any of its subsidiaries, (iii) any change in the board of directors
of Company, (iv) any material change in the capitalization of the Company, (v)
any change in the charter, by-laws or other organizational or constitutive
documents of the Company, or (v) any other material change in the corporate
structure or business of the Company; and (d) without limiting the foregoing,
consult with Parent and vote all Shares beneficially owned by it in such manner
as is determined by Parent to be in compliance with the provisions of this
Section 1.2. Shareholder acknowledges receipt and review of a copy of the Merger
Agreement.
1.3 Irrevocable Proxy. Contemporaneously with the execution of
-----------------
this Agreement: (i) Shareholder shall deliver to Parent a proxy in the form
attached hereto as Exhibit A, which shall be irrevocable to the fullest extent
permitted by law (the "Proxy"), with respect to all Shares owned of record by
-----
Shareholder; and (ii) Shareholder shall cause to be delivered to Parent
additional Proxies executed on behalf of each record owner of any Shares owned
beneficially (but not owned of record) by Shareholder.
2. Representations and Warranties of Shareholder. Shareholder
---------------------------------------------
represents and warrants to Parent and Purchaser as follows:
2.1 Ownership of Shares. On the date hereof the Existing
Shares are all of the Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder does not have any rights to acquire any
additional shares of Common Stock other than pursuant to options issued under
the Stock Option Plans (as defined in the Merger Agreement). Shareholder
currently has with respect to the Existing Shares, and at Closing will have with
respect to the Shares, good, valid and marketable title, free and clear of all
liens, encumbrances, restrictions, options, warrants, rights to purchase, voting
agreements or voting trusts, and claims of every kind (other than the
encumbrances created by this Agreement and other than restrictions on transfer
under applicable Federal and State securities laws).
2.2 Power; Binding Agreement. Shareholder has the full legal
------------------------
capacity, right, power and authority to enter into and perform all of
Shareholder's obligations under this Agreement. The execution and delivery of
this Agreement by Shareholder will not violate any agreement, contract or
arrangement to which Shareholder is a party or is bound, including, without
limitation, any voting agreement, shareholders agreement or voting trust. This
-2-
<PAGE>
Agreement has been duly executed and delivered by Shareholder and constitutes a
legal, valid and binding agreement of Shareholder, enforceable in accordance
with its terms. Neither the execution or delivery of this Agreement nor the
consummation by Shareholder of the transactions contemplated hereby will (a)
other than filings required under the federal or state securities laws, require
any consent or approval of or filing with any governmental or other regulatory
body, or (b) constitute a violation of, conflict with or constitute a default
under (i) any law, rule or regulation applicable to Shareholder, or (ii) any
order, judgment or decree to which Shareholder is bound.
2.3 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Shareholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Parent and Purchaser. Parent
------------------------------------------------------
and Purchaser, jointly and severally, represent and warrant to Shareholder as
follows:
3.1 Authority. Each of Parent and Purchaser has full legal
---------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by Parent and
Purchaser will not violate the charter, by-laws or other organizational or
constitutive documents of Parent or Purchaser, or any other agreement, contract
or arrangement to which Parent or Purchaser is a party or is bound. This
Agreement has been duly executed and delivered by each of Parent and Purchaser
and constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Parent or Purchaser of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Parent or Purchaser, or (ii) any order, judgment or decree to
which Parent or Purchaser is bound.
3.2 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fee from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of
-----------
Sections 5, 6 and 19 which shall survive any termination of this Agreement),
shall terminate on the earliest to occur of (a) the date on which Purchaser
accepts for payment the Shares tendered in the Offer, so long as the Shares are
so tendered and not withdrawn, (b) the Effective Time (as defined in the Merger
Agreement), and (c) the date of termination of the Merger Agreement in
accordance with its terms. Purchaser shall not purchase the Shares pursuant to
the Offer unless Purchaser
-3-
<PAGE>
purchases pursuant to the Offer that number of shares of Common Stock such that
the Minimum Tender Condition (as defined in the Merger Agreement) is satisfied.
5. Expenses. Except as provided in Section 19, each party hereto
--------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers. The provisions of this Section 5 shall survive the
Closing hereunder.
6. Confidentiality. Shareholder recognizes that successful
---------------
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to these matters. In this connection, pending
public disclosure, Shareholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal counsel and advisors
of Shareholder or the Company, if any) not a party to this Agreement, without
prior written consent of Parent, except for filings required pursuant to the
Exchange Act, and the rules and regulations thereunder or disclosures
Shareholder's legal counsel advises in writing are necessary in order to fulfill
Shareholder's obligations imposed by law, in which event Shareholder shall give
prompt prior notice of such disclosure to Parent and cooperate with Parent in
obtaining a protective order or in limiting such disclosure.
7. Certain Covenants of Shareholder.
--------------------------------
7.1 Except in accordance with the provisions of this Agreement,
Shareholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) Shareholder shall not, directly or indirectly through
any agent or otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Parent or Purchaser) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in, the Company or any subsidiary of the Company, or any
merger, consolidation, business combination, reorganization, recapitalization or
similar transaction involving the Company or any subsidiary of the Company (each
a "Competing Transaction"), or participate in any discussions or negotiations
----------------------
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any person (other than Parent and Purchaser)
to do or seek any of the foregoing. Shareholder will cease and cause to be
terminated any existing activities, discussions or negotiations by or on its
behalf with any person (other than Parent and Purchaser) conducted heretofore
with respect to any Competing
-4-
<PAGE>
Transaction and will promptly notify Parent following receipt of any request by
any person (other than Parent or Purchaser) relating to any possible Competing
Transaction or information concerning the Company. Nothing contained herein
shall prohibit Shareholder, solely in his capacity as a member of the board of
directors of the Company (the "Board"),furnishing information to, or entering
-----
into discussions or negotiations with, any person (other than Parent and
Purchaser) in connection with an unsolicited proposal involving a fully-financed
Competing Transaction which is made in writing by such person (other than Parent
and Purchaser) and which, if consummated, would provide consideration per share
of Common Stock to the shareholders of the Company in excess of the Offer Price
if, and only to the extent that, the Board determines in good faith, based upon
the written advice of Honigman Miller Schwartz and Cohn, that such action is
required for the Board to comply with its fiduciary duties to shareholders under
Michigan law.
7.2 Shareholder agrees, while this Agreement is in effect, to
notify Parent promptly of the number of any shares of Common Stock beneficial
ownership of which is acquired by Shareholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the
-------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), Shareholder shall cause the Company to provide for each
certificate representing Shares beneficially owned by Shareholder to bear a
legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF THE STOCK TENDER AND VOTING AGREEMENT, AND IS SUBJECT TO
THE IRREVOCABLE PROXY REFERRED TO THEREIN, EACH DATED AS OF JUNE 17, 1999,
AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND COPIES OF WHICH ARE
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Shareholder shall cause the Company to
require that the transfer agent for its Common Stock shall make a notation in
its records prohibiting the transfer of any of the Shares, except in accordance
with the terms and conditions of this Agreement.
9. Survival of Representations and Warranties. Except as expressly
------------------------------------------
set forth herein, one of the representations, warranties, covenants and
agreements made by Shareholder, Parent or Purchaser in this Agreement shall
survive the Closing hereunder.
10. Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing, shall be given by hand delivery, U.S.
Express Mail (return receipt
-5-
<PAGE>
requested), overnight courier guaranteeing next business day delivery, or
facsimile, and shall be deemed duly given when received, addressed as follows:
If to Parent or Purchaser:
Littlejohn Partners IV, L.P.
c/o Littlejohn & Co. LLC
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. Angus Littlejohn or Mr. Michael Klein
Telephone: (203) 861-4005
Facsimile: (203) 861-4009
With copies to:
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esq.
Telephone: (215) 981-4368
Facsimile: (215) 981-4750
If to Shareholder:
c/o Durakon Industries, Inc.
2101 N. Lapeer Road
Lapeer, MI 48446
Telephone: (810) 664-0850
Facsimile: (810) 664-3957
With copies to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attention: Donald J. Kunz, Esq.
Telephone: (313) 465-7454
Facsimile: (313) 465-7455
11. Entire Agreement; Amendment. This Agreement, together with the
---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and
-6-
<PAGE>
understandings among the parties with respect to such subject matter. This
Agreement may not be modified, amended, altered or supplemented except by an
agreement in writing executed by the party against whom such modification,
amendment, alteration or supplement is sought to be enforced.
12. Assigns. This Agreement shall be binding upon and inure to the
-------
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Purchaser may assign, any or all of its rights and obligations hereunder to
Parent or any direct or indirect wholly-owned subsidiary of Parent without the
consent of Shareholder or Company, but no such transfer shall relieve Purchaser
of its obligations under this Agreement if such subsidiary does not perform the
obligations of Purchaser hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
---------------------------------------------------
expressly set forth below, this Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In addition, each of Shareholder, Purchaser and Parent hereby agree that any
dispute arising out of this Agreement, the Offer or the Merger shall be heard in
the United States District Court for the Eastern District of Michigan and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement, the Offer or the Merger may be
given to any other party hereto by certified mail, return receipt requested, at
the respective addresses set forth in Section 12 above.
14. Injunctive Relief. The parties agree that in the event of a
-----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
16. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so
-7-
<PAGE>
broad as to be unenforceable, such provision shall be interpreted to be only
so broad as is enforceable.
17. Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced
--------------
by any party to this Agreement to enforce or recover damages for any breach of
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this
Section 19 shall survive the Closing hereunder.
-8-
<PAGE>
20. Amendment and Modification. This Agreement may be amended,
--------------------------
modified and supplemented only by a written document executed by Parent,
Purchaser and Shareholder.
IN WITNESS WHEREOF, Parent and Purchaser have caused this Agreement to
be executed by their duly authorized officers, and Shareholder has duly
executed this Agreement, as of the date and year first above written.
/s/ David W. Wright
_____________________________
David W. Wright
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, L.L.C.
its General Partner
/s/ Angus C. Littlejohn, Jr.
By: ____________________________
Title: Manager
LPIV ACQUISITION CORP.
/s/ Michael I. Klein
By: _____________________________
Title: President
-9-
<PAGE>
EXHIBIT A
Form of Irrevocable Proxy
-------------------------
The undersigned shareholder of Durakon Industries, Inc., a Michigan
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Angus C. Littlejohn, Jr., Michael I. Klein, and
Littlejohn Partners IV, L.P., a Delaware limited partnership ("Parent"), and
each of them, the attorneys and proxies of the undersigned with full power of
substitution and resubstitution, to the full extent of the undersigned's rights
with respect to (i) the issued and outstanding shares of capital stock of the
Company owned of record by the undersigned as of the date of this proxy, which
shares are specified on the final page of this proxy and (ii) any and all other
shares of capital stock of the Company which the undersigned may acquire after
the date hereof (the shares of the capital stock of the Company referred to in
(clauses (i) and (ii) of the immediately preceding sentence are collectively
referred to as the "Shares") Upon the execution hereof, all prior proxies given
------
by the undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted
in connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, between Parent and the undersigned (the "Stock Tender Agreement"), and
----------------------
is granted in consideration of Parent entering into the Agreement and Plan of
Merger, dated as of the date hereof, among Parent, LPIV Acquisition Corp. and
the Company (the "Merger Agreement"). Capitalized terms used but not otherwise
-----------------
defined in this proxy have the meanings ascribed to such terms in the Merger
Agreement.
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Merger Agreement pursuant to Section 8.01
thereof or the Effective Time at any meeting of the shareholders of the Company,
however called, or in any written action by consent of shareholders of the
Company: (a) in favor of the Merger; (b) against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of the Company under or pursuant to the Merger
Agreement; or (c) against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger or the Offer
including, but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but not
limited to, a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Company, (ii) a sale or
transfer of a material amount of assets of Company or any of its subsidiaries,
(iii) any change in the board of directors of Company, (iv) any material change
in the capitalization of the Company, (v) any change in the charter, by-laws or
other organizational or constitutive documents of the Company, or (v) any other
material change in the corporate structure or business of the Company.
-10-
<PAGE>
This proxy shall be binding upon the heirs, successors and assigns of
the undersigned (including any transferee of any of the Shares).
Any term or provision of this proxy which is invalid or unenforceable,
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this proxy or affecting the
validity or enforceability of any of the terms or provisions of this proxy in
any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
This proxy shall terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
Dated: ----------------, 1999
- ---------------------------
David W. Wright
Number of shares of Common Stock owned of record as of the date of this proxy:
- ------------
-11-
<PAGE>
Exhibit (c)(8)
Stock Tender and Voting Agreement with
Max M. Fisher Revocable Trust, u/a/d August 13, 1988
<PAGE>
STOCK TENDER AND VOTING AGREEMENT
---------------------------------
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of June
---------
17, 1999 by and among Max M. Fisher Revocable Trust u/a/d August 13, 1998
("Shareholder"), Littlejohn Partners IV, L.P., a Delaware limited partnership
- -------------
("Parent"), and LPIV Acquisition Corp., a Michigan corporation and a wholly-
- --------
owned subsidiary of Parent ("Purchaser").
---------
W I T N E S S E T H:
-------------------
WHEREAS, concurrently herewith, Parent, Purchaser and Durakon
Industries, Inc., a Michigan corporation ("Company"), are entering into an
-------
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
----------------
pursuant to which Purchaser agrees to make a tender offer (the "Offer") for all
-----
outstanding shares of common stock, without par value (the "Common Stock"), of
------------
the Company, at $16.00 per share (the "Offer Price"), in cash, and/or by a
-----------
merger (the "Merger") of Purchaser with the Company;
------
WHEREAS, Shareholder beneficially owns (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act")), as of the date hereof, 279,286 shares of Common Stock (the "Existing
- --- --------
Shares", together with any shares of Common Stock beneficial ownership of which
- ------
is acquired by Shareholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that Shareholder agree, and
Shareholder has agreed, to enter into this Agreement; and
WHEREAS, Parent and Purchaser have entered into the Merger Agreement
in reliance on Shareholder's representations, warranties, covenants and
agreements hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
-----------------------------------------------
1.1 Tender. Shareholder agrees to validly tender all Shares
------
beneficially owned by it pursuant to the Offer within ten business days of
commencement of the Offer, and not withdraw any such Shares, except to the
extent that the tender of shares (excluding Shares acquired after the date
hereof) pursuant to the Offer would subject Shareholder to liability under
Section 16(b) of the Exchange Act.
1.2 Voting. Shareholder hereby agrees that, during the time
------
this Agreement is in effect, at any meeting of the shareholders of Company,
however called, and in
<PAGE>
any action by consent of the stockholders of Company, Shareholder
shall: (a) vote all Shares beneficially owned by it in favor of the Merger; (b)
vote all Shares beneficially owned by it against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of the Company under or pursuant to the Merger
Agreement; (c) vote all Shares beneficially owned by it against any action or
agreement that would impede, interfere with, delay, postpone or attempt to
discourage the Merger or the Offer including, but not limited to, (i) any
corporate transaction not entered into in the ordinary course of business (other
than the Merger), including, but not limited to, a merger, other business
combination, reorganization, consolidation, recapitalization, dissolution or
liquidation involving Company, (ii) a sale or transfer of a material amount of
assets of Company or any of its subsidiaries, (iii) any change in the board of
directors of Company, (iv) any material change in the capitalization of the
Company, (v) any change in the charter, by-laws or other organizational or
constitutive documents of the Company, or (v) any other material change in the
corporate structure or business of the Company; and (d) without limiting the
foregoing, consult with Parent and vote all Shares beneficially owned by it in
such manner as is determined by Parent to be in compliance with the provisions
of this Section 1.2. Shareholder acknowledges receipt and review of a copy of
the Merger Agreement.
1.3 Irrevocable Proxy. Contemporaneously with the execution of
-----------------
this Agreement: (i) Shareholder shall deliver to Parent a proxy in the form
attached hereto as Exhibit A, which shall be irrevocable to the fullest extent
permitted by law (the "Proxy"), with respect to all Shares owned of record by
-----
Shareholder; and (ii) Shareholder shall cause to be delivered to Parent
additional Proxies executed on behalf of each record owner of any Shares owned
beneficially (but not owned of record) by Shareholder.
2. Representations and Warranties of Shareholder. Shareholder
---------------------------------------------
represents and warrants to Parent and Purchaser as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares
-------------------
are all of the Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder does not have any rights to acquire any
additional shares of Common Stock. Shareholder currently has with respect to the
Existing Shares, and at Closing will have with respect to the Shares, good,
valid and marketable title, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase, voting agreements or voting
trusts, and claims of every kind (other than the encumbrances created by this
Agreement and other than restrictions on transfer under applicable Federal and
State securities laws).
2.2 Power; Binding Agreement. Shareholder has the full legal
------------------------
capacity, right, power and authority to enter into and perform all of
Shareholder's obligations under this Agreement. The execution and delivery of
this Agreement by Shareholder will not violate the trust or other organizational
or constitutive documents of Shareholder or any other agreement, contract or
arrangement to which Shareholder is a party or is bound, including, without
-2-
<PAGE>
limitation, any voting agreement, shareholders agreement or voting trust. This
Agreement has been duly executed and delivered by Shareholder and constitutes a
legal, valid and binding agreement of Shareholder, enforceable in accordance
with its terms. Neither the execution or delivery of this Agreement nor the
consummation by Shareholder of the transactions contemplated hereby will (a)
other than filings required under the federal or state securities laws, require
any consent or approval of or filing with any governmental or other regulatory
body, or (b) constitute a violation of, conflict with or constitute a default
under (i) any law, rule or regulation applicable to Shareholder, or (ii) any
order, judgment or decree to which Shareholder is bound.
2.3 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Shareholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Parent and Purchaser. Parent
------------------------------------------------------
and Purchaser, jointly and severally, represent and warrant to Shareholder as
follows:
3.1 Authority. Each of Parent and Purchaser has full legal
---------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by Parent and
Purchaser will not violate the charter, by-laws or other organizational or
constitutive documents of Parent or Purchaser, or any other agreement, contract
or arrangement to which Parent or Purchaser is a party or is bound. This
Agreement has been duly executed and delivered by each of Parent and Purchaser
and constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Parent or Purchaser of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Parent or Purchaser, or (ii) any order, judgment or decree to
which Parent or Purchaser is bound.
3.2 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fee from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of
-----------
Sections 5, 6 and 19 which shall survive any termination of this Agreement),
shall terminate on the earliest to occur of (a) the date on which Purchaser
accepts for payment the Shares tendered in the Offer, so long as the Shares are
so tendered and not withdrawn, (b) the Effective Time (as defined in the Merger
Agreement), and (c) the date of termination of the Merger Agreement in
accordance with
-3-
<PAGE>
its terms. Purchaser shall not purchase the Shares pursuant to the Offer unless
Purchaser purchases pursuant to the Offer that number of shares of Common Stock
such that the Minimum Tender Condition (as defined in the Merger Agreement) is
satisfied.
5. Expenses. Except as provided in Section 19, each party hereto
--------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers. The provisions of this Section 5 shall survive the
Closing hereunder.
6. Confidentiality. Shareholder recognizes that successful
---------------
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to these matters. In this connection, pending
public disclosure, Shareholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal counsel and advisors
of Shareholder or the Company, if any) not a party to this Agreement, without
prior written consent of Parent, except for filings required pursuant to the
Exchange Act, and the rules and regulations thereunder or disclosures
Shareholder's legal counsel advises in writing are necessary in order to fulfill
Shareholder's obligations imposed by law, in which event Shareholder shall give
prompt prior notice of such disclosure to Parent and cooperate with Parent in
obtaining a protective order or in limiting such disclosure.
7. Certain Covenants of Shareholder.
--------------------------------
7.1 Except in accordance with the provisions of this Agreement,
Shareholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) Shareholder shall not, directly or indirectly through
any agent or otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Parent or Purchaser) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in, the Company or any subsidiary of the Company, or any
merger, consolidation, business combination, reorganization, recapitalization or
similar transaction involving the Company or any subsidiary of the Company (each
a "Competing Transaction"), or participate in any discussions or negotiations
---------------------
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any person (other than Parent and Purchaser)
to do or seek any of the foregoing. Shareholder will cease and cause to be
terminated any existing activities, discussions or negotiations by or on its
behalf with any person
-4-
<PAGE>
(other than Parent and Purchaser) conducted heretofore with respect to any
Competing Transaction and will promptly notify Parent following receipt of any
request by any person (other than Parent or Purchaser) relating to any possible
Competing Transaction or information concerning the Company. Nothing contained
herein shall prohibit Shareholder, solely in his capacity as a member of the
board of directors of the Company (the "Board"), from furnishing information to,
-----
or entering into discussions or negotiations with, any person (other than Parent
and Purchaser) in connection with an unsolicited proposal involving a fully-
financed Competing Transaction which is made in writing by such person (other
than Parent and Purchaser) and which, if consummated, would provide
consideration per share of Common Stock to the shareholders of the Company in
excess of the Offer Price if, and only to the extent that, the Board determines
in good faith, based upon the written advice of Honigman Miller Schwartz and
Cohn, that such action is required for the Board to comply with its fiduciary
duties to shareholders under Michigan law.
7.2 Shareholder agrees, while this Agreement is in effect, to
notify Parent promptly of the number of any shares of Common Stock beneficial
ownership of which is acquired by Shareholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the
-------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), Shareholder shall cause the Company to provide for each
certificate representing Shares beneficially owned by Shareholder to bear a
legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF THE STOCK TENDER AND VOTING AGREEMENT, AND IS SUBJECT TO
THE IRREVOCABLE PROXY REFERRED TO THEREIN, EACH DATED AS OF JUNE 17, 1999,
AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND COPIES OF WHICH ARE
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Shareholder shall cause the Company to
require that the transfer agent for its Common Stock shall make a notation in
its records prohibiting the transfer of any of the Shares, except in accordance
with the terms and conditions of this Agreement.
9. Survival of Representations and Warranties. Except as expressly
------------------------------------------
set forth herein, one of the representations, warranties, covenants and
agreements made by Shareholder, Parent or Purchaser in this Agreement shall
survive the Closing hereunder.
10. Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing, shall be given by hand delivery, U.S.
Express Mail (return receipt
-5-
<PAGE>
requested), overnight courier guaranteeing next business day delivery, or
facsimile, and shall be deemed duly given when received, addressed as follows:
If to Parent or Purchaser:
Littlejohn Partners IV, L.P.
c/o Littlejohn & Co. LLC
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. Angus Littlejohn or Mr. Michael Klein
Telephone: (203) 861-4005
Facsimile: (203) 861-4009
With copies to:
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esq.
Telephone: (215) 981-4368
Facsimile: (215) 981-4750
If to Shareholder:
c/o The Fisher Group
2700 Fisher Building
Detroit, MI 48202
Telephone: (313) 871-8000
Facsimile: (313) 871-0350
With copies to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attention: Donald J. Kunz, Esq.
Telephone: (313) 465-7454
Facsimile: (313) 465-7455
11. Entire Agreement; Amendment. This Agreement, together with the
---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and
-6-
<PAGE>
understandings among the parties with respect to such subject matter. This
Agreement may not be modified, amended, altered or supplemented except by an
agreement in writing executed by the party against whom such modification,
amendment, alteration or supplement is sought to be enforced.
12. Assigns. This Agreement shall be binding upon and inure to the
-------
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Purchaser may assign, any or all of its rights and obligations hereunder to
Parent or any direct or indirect wholly-owned subsidiary of Parent without the
consent of Shareholder or Company, but no such transfer shall relieve Purchaser
of its obligations under this Agreement if such subsidiary does not perform the
obligations of Purchaser hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
---------------------------------------------------
expressly set forth below, this Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In addition, each of Shareholder, Purchaser and Parent hereby agree that any
dispute arising out of this Agreement, the Offer or the Merger shall be heard in
the United States District Court for the Eastern District of Michigan and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement, the Offer or the Merger may be
given to any other party hereto by certified mail, return receipt requested, at
the respective addresses set forth in Section 12 above.
14. Injunctive Relief. The parties agree that in the event of a
-----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
16. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so
-7-
<PAGE>
broad as to be unenforceable, such provision shall be interpreted to be only so
broad as is enforceable.
17. Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced
--------------
by any party to this Agreement to enforce or recover damages for any breach of
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this
Section 19 shall survive the Closing hereunder.
-8-
<PAGE>
20. Amendment and Modification. This Agreement may be amended,
--------------------------
modified and supplemented only by a written document executed by Parent,
Purchaser and Shareholder.
IN WITNESS WHEREOF, Shareholder, Parent and Purchaser have caused this
Agreement to be executed by their duly authorized officers as of the date and
year first above written.
Max M. Fisher Revocable Trust
u/a/d August 13, 1998
/s/ Max M. Fisher
By:___________________________
Max M. Fisher, Trustee
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, L.L.C.
its General Partner
/s/ Angus C. Littlejohn, Jr.
By: ____________________________
Title: Manager
LPIV ACQUISITION CORP.
/s/ Michael I. Klein
By: _____________________________
Title: President
-9-
<PAGE>
EXHIBIT A
Form of Irrevocable Proxy
-------------------------
The undersigned shareholder of Durakon Industries, Inc., a Michigan
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Angus C. Littlejohn, Jr., Michael I. Klein, and
Littlejohn Partners IV, L.P., a Delaware limited partnership ("Parent"), and
each of them, the attorneys and proxies of the undersigned with full power of
substitution and resubstitution, to the full extent of the undersigned's rights
with respect to (i) the issued and outstanding shares of capital stock of the
Company owned of record by the undersigned as of the date of this proxy, which
shares are specified on the final page of this proxy and (ii) any and all other
shares of capital stock of the Company which the undersigned may acquire after
the date hereof (the shares of the capital stock of the Company referred to in
(clauses (i) and (ii) of the immediately preceding sentence are collectively
referred to as the "Shares") Upon the execution hereof, all prior proxies given
------
by the undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted
in connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, between Parent and the undersigned (the "Stock Tender Agreement"), and
----------------------
is granted in consideration of Parent entering into the Agreement and Plan of
Merger, dated as of the date hereof, among Parent, LPIV Acquisition Corp. and
the Company (the "Merger Agreement"). Capitalized terms used but not otherwise
----------------
defined in this proxy have the meanings ascribed to such terms in the Merger
Agreement.
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Merger Agreement pursuant to Section 8.01
thereof or the Effective Time at any meeting of the shareholders of the Company,
however called, or in any written action by consent of shareholders of the
Company: (a) in favor of the Merger; (b) against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of the Company under or pursuant to the Merger
Agreement; or (c) against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger or the Offer
including, but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but not
limited to, a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Company, (ii) a sale or
transfer of a material amount of assets of Company or any of its subsidiaries,
(iii) any change in the board of directors of Company, (iv) any material change
in the capitalization of the Company, (v) any change in the charter, by-laws or
other organizational or constitutive documents of the Company, or (v) any other
material change in the corporate structure or business of the Company.
-10-
<PAGE>
This proxy shall be binding upon the heirs, successors and assigns of
the undersigned (including any transferee of any of the Shares).
Any term or provision of this proxy which is invalid or unenforceable,
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this proxy or affecting the
validity or enforceability of any of the terms or provisions of this proxy in
any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
This proxy shall terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
Dated: _____________ __, 1999
Max M. Fisher Revocable Trust
u/a/d August 13, 1998
By:___________________________
Max M. Fisher, Trustee
Number of shares of Common Stock owned of record as of the date of this proxy:
____________
-11-
<PAGE>
Exhibit (c)(9)
Stock Tender and Voting Agreement with Martinique Charitable Remainder Unitrust
<PAGE>
STOCK TENDER AND VOTING AGREEMENT
---------------------------------
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of June
---------
17, 1999 by and among Martinique Charitible Remainder Unitrust ("Shareholder"),
-----------
Littlejohn Partners IV, L.P., a Delaware limited partnership ("Parent"), and
------
LPIV Acquisition Corp., a Michigan corporation and a wholly-owned subsidiary of
Parent ("Purchaser").
---------
W I T N E S S E T H:
-------------------
WHEREAS, concurrently herewith, Parent, Purchaser and Durakon
Industries, Inc., a Michigan corporation ("Company"), are entering into an
-------
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
----------------
pursuant to which Purchaser agrees to make a tender offer (the "Offer") for all
-----
outstanding shares of common stock, without par value (the "Common Stock"), of
------------
the Company, at $16.00 per share (the "Offer Price"), in cash, and/or by a
-----------
merger (the "Merger") of Purchaser with the Company;
------
WHEREAS, Shareholder beneficially owns (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act")), as of the date hereof, 1,488,000 shares of Common Stock (the "Existing
- --- --------
Shares", together with any shares of Common Stock beneficial ownership of which
- ------
is acquired by Shareholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that Shareholder agree, and
Shareholder has agreed, to enter into this Agreement; and
WHEREAS, Parent and Purchaser have entered into the Merger Agreement
in reliance on Shareholder's representations, warranties, covenants and
agreements hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
-----------------------------------------------
1.1 Tender. Shareholder agrees to validly tender all Shares
------
beneficially owned by it pursuant to the Offer within ten business days of
commencement of the Offer, and not withdraw any such Shares, except to the
extent that the tender of shares (excluding Shares acquired after the date
hereof) pursuant to the Offer would subject Shareholder to liability under
Section 16(b) of the Exchange Act.
1.2 Voting. Shareholder hereby agrees that, during the time
------
this Agreement is in effect, at any meeting of the shareholders of Company,
however called, and in any action by consent of the stockholders of Company,
Shareholder shall: (a) vote all Shares
<PAGE>
beneficially owned by it in favor of the Merger; (b) vote all Shares
beneficially owned by it against any action or agreement that would result in a
breach of any covenant or any representation or warranty or any other obligation
or agreement of the Company under or pursuant to the Merger Agreement; (c) vote
all Shares beneficially owned by it against any action or agreement that would
impede, interfere with, delay, postpone or attempt to discourage the Merger or
the Offer including, but not limited to, (i) any corporate transaction not
entered into in the ordinary course of business (other than the Merger),
including, but not limited to, a merger, other business combination,
reorganization, consolidation, recapitalization, dissolution or liquidation
involving Company, (ii) a sale or transfer of a material amount of assets of
Company or any of its subsidiaries, (iii) any change in the board of directors
of Company, (iv) any material change in the capitalization of the Company, (v)
any change in the charter, by-laws or other organizational or constitutive
documents of the Company, or (v) any other material change in the corporate
structure or business of the Company; and (d) without limiting the foregoing,
consult with Parent and vote all Shares beneficially owned by it in such manner
as is determined by Parent to be in compliance with the provisions of this
Section 1.2. Shareholder acknowledges receipt and review of a copy of the Merger
Agreement.
1.3 Irrevocable Proxy. Contemporaneously with the execution of
-----------------
this Agreement: (i) Shareholder shall deliver to Parent a proxy in the form
attached hereto as Exhibit A, which shall be irrevocable to the fullest extent
permitted by law (the "Proxy"), with respect to all Shares owned of record by
-----
Shareholder; and (ii) Shareholder shall cause to be delivered to Parent
additional Proxies executed on behalf of each record owner of any Shares owned
beneficially (but not owned of record) by Shareholder.
2. Representations and Warranties of Shareholder. Shareholder
---------------------------------------------
represents and warrants to Parent and Purchaser as follows:
2.1 Ownership of Shares. On the date hereof the Existing
-------------------
Shares are all of the Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder does not have any rights to acquire any
additional shares of Common Stock. Shareholder currently has with respect to the
Existing Shares, and at Closing will have with respect to the Shares, good,
valid and marketable title, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase, voting agreements or voting
trusts, and claims of every kind (other than the encumbrances created by this
Agreement and other than restrictions on transfer under applicable Federal and
State securities laws).
2.2 Power; Binding Agreement. Shareholder has the full legal
------------------------
capacity, right, power and authority to enter into and perform all of
Shareholder's obligations under this Agreement. The execution and delivery of
this Agreement by Shareholder will not violate any agreement, contract or
arrangement to which Shareholder is a party or is bound, including, without
limitation, any voting agreement, shareholders agreement or voting trust. This
Agreement has been duly executed and delivered by Shareholder and constitutes a
legal, valid
-2-
<PAGE>
and binding agreement of Shareholder, enforceable in accordance with its terms.
Neither the execution or delivery of this Agreement nor the consummation by
Shareholder of the transactions contemplated hereby will (a) other than filings
required under the federal or state securities laws, require any consent or
approval of or filing with any governmental or other regulatory body, or (b)
constitute a violation of, conflict with or constitute a default under (i) any
law, rule or regulation applicable to Shareholder, or (ii) any order, judgment
or decree to which Shareholder is bound.
2.3 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Shareholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Parent and Purchaser. Parent
------------------------------------------------------
and Purchaser, jointly and severally, represent and warrant to Shareholder as
follows:
3.1 Authority. Each of Parent and Purchaser has full legal
---------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by Parent and
Purchaser will not violate the charter, by-laws or other organizational or
constitutive documents of Parent or Purchaser, or any other agreement, contract
or arrangement to which Parent or Purchaser is a party or is bound. This
Agreement has been duly executed and delivered by each of Parent and Purchaser
and constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Parent or Purchaser of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Parent or Purchaser, or (ii) any order, judgment or decree to
which Parent or Purchaser is bound.
3.2 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fee from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of
-----------
Sections 5, 6 and 19 which shall survive any termination of this Agreement),
shall terminate on the earliest to occur of (a) the date on which Purchaser
accepts for payment the Shares tendered in the Offer, so long as the Shares are
so tendered and not withdrawn, (b) the Effective Time (as defined in the Merger
Agreement), and (c) the date of termination of the Merger Agreement in
accordance with its terms. Purchaser shall not purchase the Shares pursuant to
the Offer unless Purchaser purchases pursuant to the Offer that number of shares
of Common Stock such that the Minimum Tender Condition (as defined in the Merger
Agreement) is satisfied.
-3-
<PAGE>
5. Expenses. Except as provided in Section 19, each party hereto
--------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers. The provisions of this Section 5 shall survive the
Closing hereunder.
6. Confidentiality. Shareholder recognizes that successful
---------------
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to these matters. In this connection, pending
public disclosure, Shareholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal counsel and advisors
of Shareholder or the Company, if any) not a party to this Agreement, without
prior written consent of Parent, except for filings required pursuant to the
Exchange Act, and the rules and regulations thereunder or disclosures
Shareholder's legal counsel advises in writing are necessary in order to fulfill
Shareholder's obligations imposed by law, in which event Shareholder shall give
prompt prior notice of such disclosure to Parent and cooperate with Parent in
obtaining a protective order or in limiting such disclosure.
7. Certain Covenants of Shareholder.
--------------------------------
7.1 Except in accordance with the provisions of this Agreement,
Shareholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) Shareholder shall not, directly or indirectly through
any agent or otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Parent or Purchaser) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in, the Company or any subsidiary of the Company, or any
merger, consolidation, business combination, reorganization, recapitalization or
similar transaction involving the Company or any subsidiary of the Company (each
a "Competing Transaction"), or participate in any discussions or negotiations
----------------------
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any person (other than Parent and Purchaser)
to do or seek any of the foregoing. Shareholder will cease and cause to be
terminated any existing activities, discussions or negotiations by or on its
behalf with any person (other than Parent and Purchaser) conducted heretofore
with respect to any Competing Transaction and will promptly notify Parent
following receipt of any request by any person (other than Parent or Purchaser)
relating to any possible Competing Transaction or information concerning the
Company. Nothing contained herein shall prohibit Shareholder, solely in his
-4-
<PAGE>
capacity as a member of the board of directors of the Company (the "Board"),
-----
from furnishing information to, or entering into discussions or negotiations
with, any person (other than Parent and Purchaser) in connection with an
unsolicited proposal involving a fully-financed Competing Transaction which is
made in writing by such person (other than Parent and Purchaser) and which, if
consummated, would provide consideration per share of Common Stock to the
shareholders of the Company in excess of the Offer Price if, and only to the
extent that, the Board determines in good faith, based upon the written advice
of Honigman Miller Schwartz and Cohn, that such action is required for the Board
to comply with its fiduciary duties to shareholders under Michigan law.
7.2 Shareholder agrees, while this Agreement is in effect, to
notify Parent promptly of the number of any shares of Common Stock beneficial
ownership of which is acquired by Shareholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the
-------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), Shareholder shall cause the Company to provide for each
certificate representing Shares beneficially owned by Shareholder to bear a
legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
EXCHANGED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE TERMS AND CONDITIONS OF THE STOCK TENDER
AND VOTING AGREEMENT, AND IS SUBJECT TO THE IRREVOCABLE PROXY
REFERRED TO THEREIN, EACH DATED AS OF JUNE 17, 1999, AS SUCH
AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND COPIES OF
WHICH ARE ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Shareholder shall cause the Company to
require that the transfer agent for its Common Stock shall make a notation in
its records prohibiting the transfer of any of the Shares, except in accordance
with the terms and conditions of this Agreement.
9. Survival of Representations and Warranties. Except as expressly
------------------------------------------
set forth herein, one of the representations, warranties, covenants and
agreements made by Shareholder, Parent or Purchaser in this Agreement shall
survive the Closing hereunder.
10. Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing, shall be given by hand delivery, U.S.
Express Mail (return receipt requested), overnight courier guaranteeing next
business day delivery, or facsimile, and shall be deemed duly given when
received, addressed as follows:
-5-
<PAGE>
If to Parent or Purchaser:
Littlejohn Partners IV, L.P.
c/o Littlejohn & Co. LLC
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. Angus Littlejohn or Mr. Michael Klein
Telephone: (203) 861-4005
Facsimile: (203) 861-4009
With copies to:
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esq.
Telephone: (215) 981-4368
Facsimile: (215) 981-4750
If to Shareholder:
c/o The Fisher Group
2700 Fisher Building
Detroit, MI 48202
Telephone: (313) 871-8000
Facsimile: (313) 871-0350
With copies to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attention: Donald J. Kunz, Esq.
Telephone: (313) 465-7454
Facsimile: (313) 465-7455
11. Entire Agreement; Amendment. This Agreement, together with the
---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with respect
to such subject matter. This Agreement may not be modified, amended, altered or
supplemented except by an agreement in writing executed by
-6-
<PAGE>
the party against whom such modification, amendment, alteration or supplement is
sought to be enforced.
12. Assigns. This Agreement shall be binding upon and inure to the
-------
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Purchaser may assign, any or all of its rights and obligations hereunder to
Parent or any direct or indirect wholly-owned subsidiary of Parent without the
consent of Shareholder or Company, but no such transfer shall relieve Purchaser
of its obligations under this Agreement if such subsidiary does not perform the
obligations of Purchaser hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
---------------------------------------------------
expressly set forth below, this Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In addition, each of Shareholder, Purchaser and Parent hereby agree that any
dispute arising out of this Agreement, the Offer or the Merger shall be heard in
the United States District Court for the Eastern District of Michigan and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement, the Offer or the Merger may be
given to any other party hereto by certified mail, return receipt requested, at
the respective addresses set forth in Section 12 above.
14. Injunctive Relief. The parties agree that in the event of a
-----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
16. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
-7-
<PAGE>
17. Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced
--------------
by any party to this Agreement to enforce or recover damages for any breach of
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this
Section 19 shall survive the Closing hereunder.
-8-
<PAGE>
20. Amendment and Modification. This Agreement may be amended,
--------------------------
modified and supplemented only by a written document executed by Parent,
Purchaser and Shareholder.
IN WITNESS WHEREOF, Shareholder, Parent and Purchaser have caused this
Agreement to be executed by their duly authorized officers as of the date and
year first above written.
Martinique Charitible Remainder Unitrust
/s/ Marjorie S. Fisher
By: _____________________________
Marjorie S. Fisher, Trustee
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, L.L.C.
its General Partner
/s/ Angus C. Littlejohn, Jr.
By: ____________________________
Title: Manager
LPIV ACQUISITION CORP.
/s/ Michael I. Klein
By: _____________________________
Title: President
-9-
<PAGE>
EXHIBIT A
Form of Irrevocable Proxy
-------------------------
The undersigned shareholder of Durakon Industries, Inc., a Michigan
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Angus C. Littlejohn, Jr., Michael I. Klein, and
Littlejohn Partners IV, L.P., a Delaware limited partnership ("Parent"), and
each of them, the attorneys and proxies of the undersigned with full power of
substitution and resubstitution, to the full extent of the undersigned's rights
with respect to (i) the issued and outstanding shares of capital stock of the
Company owned of record by the undersigned as of the date of this proxy, which
shares are specified on the final page of this proxy and (ii) any and all other
shares of capital stock of the Company which the undersigned may acquire after
the date hereof (the shares of the capital stock of the Company referred to in
(clauses (i) and (ii) of the immediately preceding sentence are collectively
referred to as the "Shares") Upon the execution hereof, all prior proxies given
------
by the undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted
in connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, between Parent and the undersigned (the "Stock Tender Agreement"), and
----------------------
is granted in consideration of Parent entering into the Agreement and Plan of
Merger, dated as of the date hereof, among Parent, LPIV Acquisition Corp. and
the Company (the "Merger Agreement"). Capitalized terms used but not otherwise
----------------
defined in this proxy have the meanings ascribed to such terms in the Merger
Agreement.
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Merger Agreement pursuant to Section 8.01
thereof or the Effective Time at any meeting of the shareholders of the Company,
however called, or in any written action by consent of shareholders of the
Company: (a) in favor of the Merger; (b) against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of the Company under or pursuant to the Merger
Agreement; or (c) against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger or the Offer
including, but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but not
limited to, a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Company, (ii) a sale or
transfer of a material amount of assets of Company or any of its subsidiaries,
(iii) any change in the board of directors of Company, (iv) any material change
in the capitalization of the Company, (v) any change in the charter, by-laws or
other organizational or constitutive documents of the Company, or (v) any other
material change in the corporate structure or business of the Company.
-10-
<PAGE>
This proxy shall be binding upon the heirs, successors and assigns of
the undersigned (including any transferee of any of the Shares).
Any term or provision of this proxy which is invalid or unenforceable,
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this proxy or affecting the
validity or enforceability of any of the terms or provisions of this proxy in
any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
This proxy shall terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
Dated: _____________ __, 1999
Martinique Charitible Remainder Unitrust
By:_______________________________
Marjorie S. Fisher, Trustee
Number of shares of Common Stock owned of record as of the date of this proxy:
____________
-11-
<PAGE>
Exhibit (c)(10)
Stock Tender and Voting Agreement with Wolverine Investors
<PAGE>
STOCK TENDER AND VOTING AGREEMENT
---------------------------------
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of June
---------
17, 1999 by and among Wolverine Investors ("Shareholder"), Littlejohn Partners
-----------
IV, L.P., a Delaware limited partnership ("Parent"), and LPIV Acquisition Corp.,
------
a Michigan corporation and a wholly-owned subsidiary of Parent ("Purchaser").
---------
W I T N E S S E T H:
-------------------
WHEREAS, concurrently herewith, Parent, Purchaser and Durakon
Industries, Inc., a Michigan corporation ("Company"), are entering into an
-------
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
----------------
pursuant to which Purchaser agrees to make a tender offer (the "Offer") for all
-----
outstanding shares of common stock, without par value (the "Common Stock"), of
------------
the Company, at $16.00 per share (the "Offer Price"), in cash, and/or by a
-----------
merger (the "Merger") of Purchaser with the Company;
------
WHEREAS, Shareholder beneficially owns (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act")), as of the date hereof, 100,000 shares of Common Stock (the "Existing
- --- --------
Shares", together with any shares of Common Stock beneficial ownership of which
- ------
is acquired by Shareholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that Shareholder agree, and
Shareholder has agreed, to enter into this Agreement; and
WHEREAS, Parent and Purchaser have entered into the Merger Agreement
in reliance on Shareholder's representations, warranties, covenants and
agreements hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
-----------------------------------------------
1.1 Tender. Shareholder agrees to validly tender all Shares
------
beneficially owned by it pursuant to the Offer within ten business days of
commencement of the Offer, and not withdraw any such Shares, except to the
extent that the tender of shares (excluding Shares acquired after the date
hereof) pursuant to the Offer would subject Shareholder to liability under
Section 16(b) of the Exchange Act.
1.2 Voting. Shareholder hereby agrees that, during the time
------
this Agreement is in effect, at any meeting of the shareholders of Company,
however called, and in any action by consent of the stockholders of Company,
Shareholder shall: (a) vote all Shares
<PAGE>
beneficially owned by it in favor of the Merger; (b) vote all Shares
beneficially owned by it against any action or agreement that would result in a
breach of any covenant or any representation or warranty or any other obligation
or agreement of the Company under or pursuant to the Merger Agreement; (c) vote
all Shares beneficially owned by it against any action or agreement that would
impede, interfere with, delay, postpone or attempt to discourage the Merger or
the Offer including, but not limited to, (i) any corporate transaction not
entered into in the ordinary course of business (other than the Merger),
including, but not limited to, a merger, other business combination,
reorganization, consolidation, recapitalization, dissolution or liquidation
involving Company, (ii) a sale or transfer of a material amount of assets of
Company or any of its subsidiaries, (iii) any change in the board of directors
of Company, (iv) any material change in the capitalization of the Company, (v)
any change in the charter, by-laws or other organizational or constitutive
documents of the Company, or (v) any other material change in the corporate
structure or business of the Company; and (d) without limiting the foregoing,
consult with Parent and vote all Shares beneficially owned by it in such manner
as is determined by Parent to be in compliance with the provisions of this
Section 1.2. Shareholder acknowledges receipt and review of a copy of the Merger
Agreement.
1.3 Irrevocable Proxy. Contemporaneously with the execution of
-----------------
this Agreement: (i) Shareholder shall deliver to Parent a proxy in the form
attached hereto as Exhibit A, which shall be irrevocable to the fullest extent
permitted by law (the "Proxy"), with respect to all Shares owned of record by
-----
Shareholder; and (ii) Shareholder shall cause to be delivered to Parent
additional Proxies executed on behalf of each record owner of any Shares owned
beneficially (but not owned of record) by Shareholder.
2. Representations and Warranties of Shareholder. Shareholder
---------------------------------------------
represents and warrants to Parent and Purchaser as follows:
2.1 Ownership of Shares. On the date hereof the Existing
-------------------
Shares are all of the Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder does not have any rights to acquire any
additional shares of Common Stock. Shareholder currently has with respect to the
Existing Shares, and at Closing will have with respect to the Shares, good,
valid and marketable title, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase, voting agreements or voting
trusts, and claims of every kind (other than the encumbrances created by this
Agreement and other than restrictions on transfer under applicable Federal and
State securities laws).
2.2 Power; Binding Agreement. Shareholder has the full legal
------------------------
capacity, right, power and authority to enter into and perform all of
Shareholder's obligations under this Agreement. The execution and delivery of
this Agreement by Shareholder will not violate any of its organizational or
constitutive documents or any other agreement, contract or arrangement to which
Shareholder is a party or is bound, including, without limitation, any voting
agreement, shareholders agreement or voting trust. This Agreement has been duly
executed and delivered by
-2-
<PAGE>
Shareholder and constitutes a legal, valid and binding agreement of Shareholder,
enforceable in accordance with its terms. Neither the execution or delivery of
this Agreement nor the consummation by Shareholder of the transactions
contemplated hereby will (a) other than filings required under the federal or
state securities laws, require any consent or approval of or filing with any
governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Shareholder, or (ii) any order, judgment or decree to which
Shareholder is bound.
2.3 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Shareholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Parent and Purchaser. Parent
------------------------------------------------------
and Purchaser, jointly and severally, represent and warrant to Shareholder as
follows:
3.1 Authority. Each of Parent and Purchaser has full legal
---------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by Parent and
Purchaser will not violate the charter, by-laws or other organizational or
constitutive documents of Parent or Purchaser, or any other agreement, contract
or arrangement to which Parent or Purchaser is a party or is bound. This
Agreement has been duly executed and delivered by each of Parent and Purchaser
and constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Parent or Purchaser of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Parent or Purchaser, or (ii) any order, judgment or decree to
which Parent or Purchaser is bound.
3.2 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fee from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of
-----------
Sections 5, 6 and 19 which shall survive any termination of this Agreement),
shall terminate on the earliest to occur of (a) the date on which Purchaser
accepts for payment the Shares tendered in the Offer, so long as the Shares are
so tendered and not withdrawn, (b) the Effective Time (as defined in the Merger
Agreement), and (c) the date of termination of the Merger Agreement in
accordance with its terms. Purchaser shall not purchase the Shares pursuant to
the Offer unless Purchaser purchases pursuant to the Offer that number of shares
of Common Stock such that the Minimum Tender Condition (as defined in the Merger
Agreement) is satisfied.
-3-
<PAGE>
5. Expenses. Except as provided in Section 19, each party hereto
--------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers. The provisions of this Section 5 shall survive the
Closing hereunder.
6. Confidentiality. Shareholder recognizes that successful
---------------
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to these matters. In this connection, pending
public disclosure, Shareholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal counsel and advisors
of Shareholder or the Company, if any) not a party to this Agreement, without
prior written consent of Parent, except for filings required pursuant to the
Exchange Act, and the rules and regulations thereunder or disclosures
Shareholder's legal counsel advises in writing are necessary in order to fulfill
Shareholder's obligations imposed by law, in which event Shareholder shall give
prompt prior notice of such disclosure to Parent and cooperate with Parent in
obtaining a protective order or in limiting such disclosure.
7. Certain Covenants of Shareholder.
--------------------------------
7.1 Except in accordance with the provisions of this Agreement,
Shareholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) Shareholder shall not, directly or indirectly through
any agent or otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Parent or Purchaser) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in, the Company or any subsidiary of the Company, or any
merger, consolidation, business combination, reorganization, recapitalization or
similar transaction involving the Company or any subsidiary of the Company (each
a "Competing Transaction"), or participate in any discussions or negotiations
----------------------
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any person (other than Parent and Purchaser)
to do or seek any of the foregoing. Shareholder will cease and cause to be
terminated any existing activities, discussions or negotiations by or on its
behalf with any person (other than Parent and Purchaser) conducted heretofore
with respect to any Competing Transaction and will promptly notify Parent
following receipt of any request by any person (other than Parent or Purchaser)
relating to any possible Competing Transaction or information concerning the
Company. Nothing contained herein shall prohibit Shareholder, solely in his
-4-
<PAGE>
capacity as a member of the board of directors of the Company (the "Board"),
-----
from furnishing information to, or entering into discussions or negotiations
with, any person (other than Parent and Purchaser) in connection with an
unsolicited proposal involving a fully-financed Competing Transaction which is
made in writing by such person (other than Parent and Purchaser) and which, if
consummated, would provide consideration per share of Common Stock to the
shareholders of the Company in excess of the Offer Price if, and only to the
extent that, the Board determines in good faith, based upon the written advice
of Honigman Miller Schwartz and Cohn, that such action is required for the Board
to comply with its fiduciary duties to shareholders under Michigan law.
7.2 Shareholder agrees, while this Agreement is in effect, to
notify Parent promptly of the number of any shares of Common Stock beneficial
ownership of which is acquired by Shareholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the
-------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), Shareholder shall cause the Company to provide for each
certificate representing Shares beneficially owned by Shareholder to bear a
legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
EXCHANGED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE TERMS AND CONDITIONS OF THE STOCK TENDER
AND VOTING AGREEMENT, AND IS SUBJECT TO THE IRREVOCABLE PROXY
REFERRED TO THEREIN, EACH DATED AS OF JUNE 17, 1999, AS SUCH
AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND COPIES OF
WHICH ARE ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Shareholder shall cause the Company to
require that the transfer agent for its Common Stock shall make a notation in
its records prohibiting the transfer of any of the Shares, except in accordance
with the terms and conditions of this Agreement.
9. Survival of Representations and Warranties. Except as expressly
------------------------------------------
set forth herein, one of the representations, warranties, covenants and
agreements made by Shareholder, Parent or Purchaser in this Agreement shall
survive the Closing hereunder.
10. Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing, shall be given by hand delivery, U.S.
Express Mail (return receipt requested), overnight courier guaranteeing next
business day delivery, or facsimile, and shall be deemed duly given when
received, addressed as follows:
-5-
<PAGE>
If to Parent or Purchaser:
Littlejohn Partners IV, L.P.
c/o Littlejohn & Co. LLC
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. Angus Littlejohn or Mr. Michael Klein
Telephone: (203) 861-4005
Facsimile: (203) 861-4009
With copies to:
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esq.
Telephone: (215) 981-4368
Facsimile: (215) 981-4750
If to Shareholder:
c/o Newton Minow
One First National Plaza
Chicago, IL 60603
Telephone: (312) 853-7555
Facsimile: (312) 853-7036
With copies to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attention: Donald J. Kunz, Esq.
Telephone: (313) 465-7454
Facsimile: (313) 465-7455
11. Entire Agreement; Amendment. This Agreement, together with the
---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with respect
to such subject matter. This Agreement may not be modified, amended, altered or
supplemented except by an agreement in writing executed by
-6-
<PAGE>
the party against whom such modification, amendment, alteration or supplement is
sought to be enforced.
12. Assigns. This Agreement shall be binding upon and inure to the
-------
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Purchaser may assign, any or all of its rights and obligations hereunder to
Parent or any direct or indirect wholly-owned subsidiary of Parent without the
consent of Shareholder or Company, but no such transfer shall relieve Purchaser
of its obligations under this Agreement if such subsidiary does not perform the
obligations of Purchaser hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
---------------------------------------------------
expressly set forth below, this Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In addition, each of Shareholder, Purchaser and Parent hereby agree that any
dispute arising out of this Agreement, the Offer or the Merger shall be heard in
the United States District Court for the Eastern District of Michigan and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement, the Offer or the Merger may be
given to any other party hereto by certified mail, return receipt requested, at
the respective addresses set forth in Section 12 above.
14. Injunctive Relief. The parties agree that in the event of a
-----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
16. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
-7-
<PAGE>
17. Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced
--------------
by any party to this Agreement to enforce or recover damages for any breach of
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this
Section 19 shall survive the Closing hereunder.
-8-
<PAGE>
20. Amendment and Modification. This Agreement may be amended,
--------------------------
modified and supplemented only by a written document executed by Parent,
Purchaser and Shareholder.
IN WITNESS WHEREOF, Shareholder, Parent and Purchaser have caused this
Agreement to be executed by their duly authorized officers as of the date and
year first above written.
Wolverine Investors
/s/ Newton Minow
By: _____________________________
Newton Minow, Trustee
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, L.L.C.
its General Partner
/s/ Angus C. Littlejohn, Jr.
By: ____________________________
Title: Manager
LPIV ACQUISITION CORP.
/s/ Michael I. Klein
By: ________________________________
Title: President
-9-
<PAGE>
EXHIBIT A
Form of Irrevocable Proxy
-------------------------
The undersigned shareholder of Durakon Industries, Inc., a Michigan
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Angus C. Littlejohn, Jr., Michael I. Klein, and
Littlejohn Partners IV, L.P., a Delaware limited partnership ("Parent"), and
each of them, the attorneys and proxies of the undersigned with full power of
substitution and resubstitution, to the full extent of the undersigned's rights
with respect to (i) the issued and outstanding shares of capital stock of the
Company owned of record by the undersigned as of the date of this proxy, which
shares are specified on the final page of this proxy and (ii) any and all other
shares of capital stock of the Company which the undersigned may acquire after
the date hereof (the shares of the capital stock of the Company referred to in
(clauses (i) and (ii) of the immediately preceding sentence are collectively
referred to as the "Shares") Upon the execution hereof, all prior proxies given
------
by the undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted
in connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, between Parent and the undersigned (the "Stock Tender Agreement"), and
----------------------
is granted in consideration of Parent entering into the Agreement and Plan of
Merger, dated as of the date hereof, among Parent, LPIV Acquisition Corp. and
the Company (the "Merger Agreement"). Capitalized terms used but not otherwise
----------------
defined in this proxy have the meanings ascribed to such terms in the Merger
Agreement.
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Merger Agreement pursuant to Section 8.01
thereof or the Effective Time at any meeting of the shareholders of the Company,
however called, or in any written action by consent of shareholders of the
Company: (a) in favor of the Merger; (b) against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of the Company under or pursuant to the Merger
Agreement; or (c) against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger or the Offer
including, but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but not
limited to, a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Company, (ii) a sale or
transfer of a material amount of assets of Company or any of its subsidiaries,
(iii) any change in the board of directors of Company, (iv) any material change
in the capitalization of the Company, (v) any change in the charter, by-laws or
other organizational or constitutive documents of the Company, or (v) any other
material change in the corporate structure or business of the Company.
-10-
<PAGE>
This proxy shall be binding upon the heirs, successors and assigns of
the undersigned (including any transferee of any of the Shares).
Any term or provision of this proxy which is invalid or unenforceable,
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this proxy or affecting the
validity or enforceability of any of the terms or provisions of this proxy in
any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
This proxy shall terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
Wolverine Investors
By: _____________________________
Newton Minow, Trustee
Dated: _____________ __, 1999
Number of shares of Common Stock owned of record as of the date of this proxy:
____________
-11-
<PAGE>
Exhibit (c)(11)
Stock Tender and Voting Agreement with 1990 Bronx Trust #1
<PAGE>
STOCK TENDER AND VOTING AGREEMENT
---------------------------------
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of June
---------
17, 1999 by and among 1990 Bronx Trust #1 ("Shareholder"), Littlejohn Partners
-----------
IV, L.P., a Delaware limited partnership ("Parent"), and LPIV Acquisition Corp.,
------
a Michigan corporation and a wholly-owned subsidiary of Parent ("Purchaser").
---------
W I T N E S S E T H:
-------------------
WHEREAS, concurrently herewith, Parent, Purchaser and Durakon
Industries, Inc., a Michigan corporation ("Company"), are entering into an
-------
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
----------------
pursuant to which Purchaser agrees to make a tender offer (the "Offer") for all
-----
outstanding shares of common stock, without par value (the "Common Stock"), of
------------
the Company, at $16.00 per share (the "Offer Price"), in cash, and/or by a
-----------
merger (the "Merger") of Purchaser with the Company;
------
WHEREAS, Shareholder beneficially owns (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act")), as of the date hereof, 21,000 shares of Common Stock (the "Existing
- --- --------
Shares", together with any shares of Common Stock beneficial ownership of which
- ------
is acquired by Shareholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that Shareholder agree, and
Shareholder has agreed, to enter into this Agreement; and
WHEREAS, Parent and Purchaser have entered into the Merger Agreement
in reliance on Shareholder's representations, warranties, covenants and
agreements hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
-----------------------------------------------
1.1 Tender. Shareholder agrees to validly tender all Shares
------
beneficially owned by it pursuant to the Offer within ten business days of
commencement of the Offer, and not withdraw any such Shares, except to the
extent that the tender of shares (excluding Shares acquired after the date
hereof) pursuant to the Offer would subject Shareholder to liability under
Section 16(b) of the Exchange Act.
1.2 Voting. Shareholder hereby agrees that, during the time
this Agreement is in effect, at any meeting of the shareholders of Company,
however called, and in any action by consent of the stockholders of Company,
Shareholder shall: (a) vote all Shares
<PAGE>
beneficially owned by it in favor of the Merger; (b) vote all Shares
beneficially owned by it against any action or agreement that would result in a
breach of any covenant or any representation or warranty or any other obligation
or agreement of the Company under or pursuant to the Merger Agreement; (c) vote
all Shares beneficially owned by it against any action or agreement that would
impede, interfere with, delay, postpone or attempt to discourage the Merger or
the Offer including, but not limited to, (i) any corporate transaction not
entered into in the ordinary course of business (other than the Merger),
including, but not limited to, a merger, other business combination,
reorganization, consolidation, recapitalization, dissolution or liquidation
involving Company, (ii) a sale or transfer of a material amount of assets of
Company or any of its subsidiaries, (iii) any change in the board of directors
of Company, (iv) any material change in the capitalization of the Company, (v)
any change in the charter, by-laws or other organizational or constitutive
documents of the Company, or (v) any other material change in the corporate
structure or business of the Company; and (d) without limiting the foregoing,
consult with Parent and vote all Shares beneficially owned by it in such manner
as is determined by Parent to be in compliance with the provisions of this
Section 1.2. Shareholder acknowledges receipt and review of a copy of the Merger
Agreement.
1.3 Irrevocable Proxy. Contemporaneously with the execution of
-----------------
this Agreement: (i) Shareholder shall deliver to Parent a proxy in the form
attached hereto as Exhibit A, which shall be irrevocable to the fullest extent
permitted by law (the "Proxy"), with respect to all Shares owned of record by
Shareholder; and (ii) Shareholder shall cause to be delivered to Parent
additional Proxies executed on behalf of each record owner of any Shares owned
beneficially (but not owned of record) by Shareholder.
2. Representations and Warranties of Shareholder. Shareholder
---------------------------------------------
represents and warrants to Parent and Purchaser as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares
-------------------
are all of the Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder does not have any rights to acquire any
additional shares of Common Stock. Shareholder currently has with respect to the
Existing Shares, and at Closing will have with respect to the Shares, good,
valid and marketable title, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase, voting agreements or voting
trusts, and claims of every kind (other than the encumbrances created by this
Agreement and other than restrictions on transfer under applicable Federal and
State securities laws).
2.2 Power; Binding Agreement. Shareholder has the full legal
------------------------
capacity, right, power and authority to enter into and perform all of
Shareholder's obligations under this Agreement. The execution and delivery of
this Agreement by Shareholder will not violate any of its organizational or
constitutive documents or any other agreement, contract or arrangement to which
Shareholder is a party or is bound, including, without limitation, any voting
agreement, shareholders agreement or voting trust. This Agreement has been duly
executed and delivered by
-2-
<PAGE>
Shareholder and constitutes a legal, valid and binding agreement of Shareholder,
enforceable in accordance with its terms. Neither the execution or delivery of
this Agreement nor the consummation by Shareholder of the transactions
contemplated hereby will (a) other than filings required under the federal or
state securities laws, require any consent or approval of or filing with any
governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Shareholder, or (ii) any order, judgment or decree to which
Shareholder is bound.
2.3 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Shareholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Parent and Purchaser. Parent
------------------------------------------------------
and Purchaser, jointly and severally, represent and warrant to Shareholder as
follows:
3.1 Authority. Each of Parent and Purchaser has full legal
---------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by Parent and
Purchaser will not violate the charter, by-laws or other organizational or
constitutive documents of Parent or Purchaser, or any other agreement, contract
or arrangement to which Parent or Purchaser is a party or is bound. This
Agreement has been duly executed and delivered by each of Parent and Purchaser
and constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Parent or Purchaser of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Parent or Purchaser, or (ii) any order, judgment or decree to
which Parent or Purchaser is bound.
3.2 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fee from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of
-----------
Sections 5, 6 and 19 which shall survive any termination of this Agreement),
shall terminate on the earliest to occur of (a) the date on which Purchaser
accepts for payment the Shares tendered in the Offer, so long as the Shares are
so tendered and not withdrawn, (b) the Effective Time (as defined in the Merger
Agreement), and (c) the date of termination of the Merger Agreement in
accordance with its terms. Purchaser shall not purchase the Shares pursuant to
the Offer unless Purchaser purchases pursuant to the Offer that number of shares
of Common Stock such that the Minimum Tender Condition (as defined in the Merger
Agreement) is satisfied.
-3-
<PAGE>
5. Expenses. Except as provided in Section 19, each party hereto
--------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers. The provisions of this Section 5 shall survive the
Closing hereunder.
6. Confidentiality. Shareholder recognizes that successful
---------------
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to these matters. In this connection, pending
public disclosure, Shareholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal counsel and advisors
of Shareholder or the Company, if any) not a party to this Agreement, without
prior written consent of Parent, except for filings required pursuant to the
Exchange Act, and the rules and regulations thereunder or disclosures
Shareholder's legal counsel advises in writing are necessary in order to fulfill
Shareholder's obligations imposed by law, in which event Shareholder shall give
prompt prior notice of such disclosure to Parent and cooperate with Parent in
obtaining a protective order or in limiting such disclosure.
7. Certain Covenants of Shareholder.
--------------------------------
7.1 Except in accordance with the provisions of this Agreement,
Shareholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) Shareholder shall not, directly or indirectly through
any agent or otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Parent or Purchaser) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in, the Company or any subsidiary of the Company, or any
merger, consolidation, business combination, reorganization, recapitalization or
similar transaction involving the Company or any subsidiary of the Company (each
a "Competing Transaction"), or participate in any discussions or negotiations
---------------------
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any person (other than Parent and Purchaser)
to do or seek any of the foregoing. Shareholder will cease and cause to be
terminated any existing activities, discussions or negotiations by or on its
behalf with any person (other than Parent and Purchaser) conducted heretofore
with respect to any Competing Transaction and will promptly notify Parent
following receipt of any request by any person (other than Parent or Purchaser)
relating to any possible Competing Transaction or information concerning the
Company. Nothing contained herein shall prohibit Shareholder, solely in his
-4-
<PAGE>
capacity as a member of the board of directors of the Company (the "Board"),
-----
from furnishing information to, or entering into discussions or negotiations
with, any person (other than Parent and Purchaser) in connection with an
unsolicited proposal involving a fully-financed Competing Transaction which is
made in writing by such person (other than Parent and Purchaser) and which, if
consummated, would provide consideration per share of Common Stock to the
shareholders of the Company in excess of the Offer Price if, and only to the
extent that, the Board determines in good faith, based upon the written advice
of Honigman Miller Schwartz and Cohn, that such action is required for the Board
to comply with its fiduciary duties to shareholders under Michigan law.
7.2 Shareholder agrees, while this Agreement is in effect, to
notify Parent promptly of the number of any shares of Common Stock beneficial
ownership of which is acquired by Shareholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the
-------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), Shareholder shall cause the Company to provide for each
certificate representing Shares beneficially owned by Shareholder to bear a
legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF THE STOCK TENDER AND VOTING AGREEMENT, AND IS SUBJECT TO
THE IRREVOCABLE PROXY REFERRED TO THEREIN, EACH DATED AS OF JUNE 17, 1999,
AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO TIME, AND COPIES OF WHICH ARE
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Shareholder shall cause the Company to
require that the transfer agent for its Common Stock shall make a notation in
its records prohibiting the transfer of any of the Shares, except in accordance
with the terms and conditions of this Agreement.
9. Survival of Representations and Warranties. Except as expressly
------------------------------------------
set forth herein, one of the representations, warranties, covenants and
agreements made by Shareholder, Parent or Purchaser in this Agreement shall
survive the Closing hereunder.
10. Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing, shall be given by hand delivery, U.S.
Express Mail (return receipt requested), overnight courier guaranteeing next
business day delivery, or facsimile, and shall be deemed duly given when
received, addressed as follows:
-5-
<PAGE>
If to Parent or Purchaser:
Littlejohn Partners IV, L.P.
c/o Littlejohn & Co. LLC
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. Angus Littlejohn or Mr. Michael Klein
Telephone: (203) 861-4005
Facsimile: (203) 861-4009
With copies to:
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esq.
Telephone: (215) 981-4368
Facsimile: (215) 981-4750
If to Shareholder:
c/o Daniel R. Tisch
Mentor Partners, L.P.
500 Park Avenue
New York, NY 10022
Telephone: (212) 935-6655
Facsimile: (212) 826-8928
With copies to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attention: Donald J. Kunz, Esq.
Telephone: (313) 465-7454
Facsimile: (313) 465-7455
11. Entire Agreement; Amendment. This Agreement, together with the
---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with respect
to such subject matter. This Agreement may not be modified, amended, altered or
supplemented except by an agreement in writing executed by
-6-
<PAGE>
the party against whom such modification, amendment, alteration or supplement is
sought to be enforced.
12. Assigns. This Agreement shall be binding upon and inure to the
-------
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Purchaser may assign, any or all of its rights and obligations hereunder to
Parent or any direct or indirect wholly-owned subsidiary of Parent without the
consent of Shareholder or Company, but no such transfer shall relieve Purchaser
of its obligations under this Agreement if such subsidiary does not perform the
obligations of Purchaser hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
---------------------------------------------------
expressly set forth below, this Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In addition, each of Shareholder, Purchaser and Parent hereby agree that any
dispute arising out of this Agreement, the Offer or the Merger shall be heard in
the United States District Court for the Eastern District of Michigan and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement, the Offer or the Merger may be
given to any other party hereto by certified mail, return receipt requested, at
the respective addresses set forth in Section 12 above.
14. Injunctive Relief. The parties agree that in the event of a
-----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
16. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
-7-
<PAGE>
17. Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced
--------------
by any party to this Agreement to enforce or recover damages for any breach of
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this
Section 19 shall survive the Closing hereunder.
-8-
<PAGE>
20. Amendment and Modification. This Agreement may be amended,
--------------------------
modified and supplemented only by a written document executed by Parent,
Purchaser and Shareholder.
IN WITNESS WHEREOF, Shareholder, Parent and Purchaser have caused this
Agreement to be executed by their duly authorized officers as of the date and
year first above written.
1990 Bronx Trust #1
/s/ Daniel R. Tisch
By: _____________________________
Daniel R. Tisch, Trustee
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, L.L.C.
its General Partner
/s/ Angus C. Littlejohn, Jr.
By: ____________________________
Title: Manager
LPIV ACQUISITION CORP.
/s/ Michael I. Klein
By: ________________________________
Title: President
-9-
<PAGE>
EXHIBIT A
Form of Irrevocable Proxy
-------------------------
The undersigned shareholder of Durakon Industries, Inc., a Michigan
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Angus C. Littlejohn, Jr., Michael I. Klein, and
Littlejohn Partners IV, L.P., a Delaware limited partnership ("Parent"), and
each of them, the attorneys and proxies of the undersigned with full power of
substitution and resubstitution, to the full extent of the undersigned's rights
with respect to (i) the issued and outstanding shares of capital stock of the
Company owned of record by the undersigned as of the date of this proxy, which
shares are specified on the final page of this proxy and (ii) any and all other
shares of capital stock of the Company which the undersigned may acquire after
the date hereof (the shares of the capital stock of the Company referred to in
(clauses (i) and (ii) of the immediately preceding sentence are collectively
referred to as the "Shares") Upon the execution hereof, all prior proxies given
------
by the undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted
in connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, between Parent and the undersigned (the "Stock Tender Agreement"), and
----------------------
is granted in consideration of Parent entering into the Agreement and Plan of
Merger, dated as of the date hereof, among Parent, LPIV Acquisition Corp. and
the Company (the "Merger Agreement"). Capitalized terms used but not otherwise
----------------
defined in this proxy have the meanings ascribed to such terms in the Merger
Agreement.
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Merger Agreement pursuant to Section 8.01
thereof or the Effective Time at any meeting of the shareholders of the Company,
however called, or in any written action by consent of shareholders of the
Company: (a) in favor of the Merger; (b) against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of the Company under or pursuant to the Merger
Agreement; or (c) against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger or the Offer
including, but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but not
limited to, a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Company, (ii) a sale or
transfer of a material amount of assets of Company or any of its subsidiaries,
(iii) any change in the board of directors of Company, (iv) any material change
in the capitalization of the Company, (v) any change in the charter, by-laws or
other organizational or constitutive documents of the Company, or (v) any other
material change in the corporate structure or business of the Company.
-10-
<PAGE>
This proxy shall be binding upon the heirs, successors and assigns of
the undersigned (including any transferee of any of the Shares).
Any term or provision of this proxy which is invalid or unenforceable,
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this proxy or affecting the
validity or enforceability of any of the terms or provisions of this proxy in
any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
This proxy shall terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
1990 Bronx Trust #1
By: _____________________________
Daniel R. Tisch, Trustee
Dated: _____________ __, 1999
Number of shares of Common Stock owned of record as of the date of this proxy:
____________
-11-
<PAGE>
Exhibit (c)(12)
Stock Tender and Voting Agreement with 1990 Des Moines Trust #1
<PAGE>
STOCK TENDER AND VOTING AGREEMENT
---------------------------------
STOCK TENDER AND VOTING AGREEMENT (this "Agreement"), dated as of June
---------
17, 1999 by and among 1990 Des Moines Trust #1 ("Shareholder"), Littlejohn
-----------
Partners IV, L.P., a Delaware limited partnership ("Parent"), and LPIV
------
Acquisition Corp., a Michigan corporation and a wholly-owned subsidiary of
Parent ("Purchaser").
---------
W I T N E S S E T H:
-------------------
WHEREAS, concurrently herewith, Parent, Purchaser and Durakon
Industries, Inc., a Michigan corporation ("Company"), are entering into an
-------
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
----------------
pursuant to which Purchaser agrees to make a tender offer (the "Offer") for all
-----
outstanding shares of common stock, without par value (the "Common Stock"), of
------------
the Company, at $16.00 per share (the "Offer Price"), in cash, and/or by a
-----------
merger (the "Merger") of Purchaser with the Company;
------
WHEREAS, Shareholder beneficially owns (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act")), as of the date hereof, 21,000 shares of Common Stock (the "Existing
- --- --------
Shares", together with any shares of Common Stock beneficial ownership of which
- ------
is acquired by Shareholder after the date hereof and prior to the termination
hereof, hereinafter collectively referred to as the "Shares");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that Shareholder agree, and
Shareholder has agreed, to enter into this Agreement; and
WHEREAS, Parent and Purchaser have entered into the Merger Agreement
in reliance on Shareholder's representations, warranties, covenants and
agreements hereunder;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other, good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Agreement to Tender and Vote; Irrevocable Proxy.
-----------------------------------------------
1.1 Tender. Shareholder agrees to validly tender all Shares
------
beneficially owned by it pursuant to the Offer within ten business days of
commencement of the Offer, and not withdraw any such Shares, except to the
extent that the tender of shares (excluding Shares acquired after the date
hereof) pursuant to the Offer would subject Shareholder to liability under
Section 16(b) of the Exchange Act.
1.2 Voting. Shareholder hereby agrees that, during the time
------
this Agreement is in effect, at any meeting of the shareholders of Company,
however called, and in any action by consent of the stockholders of Company,
Shareholder shall: (a) vote all Shares
<PAGE>
beneficially owned by it in favor of the Merger; (b) vote all Shares
beneficially owned by it against any action or agreement that would result in a
breach of any covenant or any representation or warranty or any other obligation
or agreement of the Company under or pursuant to the Merger Agreement; (c) vote
all Shares beneficially owned by it against any action or agreement that would
impede, interfere with, delay, postpone or attempt to discourage the Merger or
the Offer including, but not limited to, (i) any corporate transaction not
entered into in the ordinary course of business (other than the Merger),
including, but not limited to, a merger, other business combination,
reorganization, consolidation, recapitalization, dissolution or liquidation
involving Company, (ii) a sale or transfer of a material amount of assets of
Company or any of its subsidiaries, (iii) any change in the board of directors
of Company, (iv) any material change in the capitalization of the Company, (v)
any change in the charter, by-laws or other organizational or constitutive
documents of the Company, or (v) any other material change in the corporate
structure or business of the Company; and (d) without limiting the foregoing,
consult with Parent and vote all Shares beneficially owned by it in such manner
as is determined by Parent to be in compliance with the provisions of this
Section 1.2. Shareholder acknowledges receipt and review of a copy of the Merger
Agreement.
1.3 Irrevocable Proxy. Contemporaneously with the execution of
-----------------
this Agreement: (i) Shareholder shall deliver to Parent a proxy in the form
attached hereto as Exhibit A, which shall be irrevocable to the fullest extent
permitted by law (the "Proxy"), with respect to all Shares owned of record by
-----
Shareholder; and (ii) Shareholder shall cause to be delivered to Parent
additional Proxies executed on behalf of each record owner of any Shares owned
beneficially (but not owned of record) by Shareholder.
2. Representations and Warranties of Shareholder. Shareholder
---------------------------------------------
represents and warrants to Parent and Purchaser as follows:
2.1 Ownership of Shares. On the date hereof the Existing
-------------------
Shares are all of the Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder does not have any rights to acquire any
additional shares of Common Stock. Shareholder currently has with respect to the
Existing Shares, and at Closing will have with respect to the Shares, good,
valid and marketable title, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase, voting agreements or voting
trusts, and claims of every kind (other than the encumbrances created by this
Agreement and other than restrictions on transfer under applicable Federal and
State securities laws).
2.2 Power; Binding Agreement. Shareholder has the full legal
------------------------
capacity, right, power and authority to enter into and perform all of
Shareholder's obligations under this Agreement. The execution and delivery of
this Agreement by Shareholder will not violate any of its organizational or
constitutive documents or any other agreement, contract or arrangement to which
Shareholder is a party or is bound, including, without limitation, any voting
agreement, shareholders agreement or voting trust. This Agreement has been duly
executed and delivered by
-2-
<PAGE>
Shareholder and constitutes a legal, valid and binding agreement of Shareholder,
enforceable in accordance with its terms. Neither the execution or delivery of
this Agreement nor the consummation by Shareholder of the transactions
contemplated hereby will (a) other than filings required under the federal or
state securities laws, require any consent or approval of or filing with any
governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Shareholder, or (ii) any order, judgment or decree to which
Shareholder is bound.
2.3 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fees from Shareholder in connection with this Agreement
or the transactions contemplated hereby exclusive of any commission or finder's
fees referred to in the Merger Agreement.
3. Representations and Warranties of Parent and Purchaser. Parent
------------------------------------------------------
and Purchaser, jointly and severally, represent and warrant to Shareholder as
follows:
3.1 Authority. Each of Parent and Purchaser has full legal
---------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by Parent and
Purchaser will not violate the charter, by-laws or other organizational or
constitutive documents of Parent or Purchaser, or any other agreement, contract
or arrangement to which Parent or Purchaser is a party or is bound. This
Agreement has been duly executed and delivered by each of Parent and Purchaser
and constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms. Neither the execution of this
Agreement nor the consummation by Parent or Purchaser of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body, or (b) constitute a violation of,
conflict with or constitute a default under (i) any law, rule or regulation
applicable to Parent or Purchaser, or (ii) any order, judgment or decree to
which Parent or Purchaser is bound.
3.2 Finder's Fees. No person is, or will be, entitled to any
-------------
commission or finder's fee from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby exclusive of any commission or
finder's fees referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of
-----------
Sections 5, 6 and 19 which shall survive any termination of this Agreement),
shall terminate on the earliest to occur of (a) the date on which Purchaser
accepts for payment the Shares tendered in the Offer, so long as the Shares are
so tendered and not withdrawn, (b) the Effective Time (as defined in the Merger
Agreement), and (c) the date of termination of the Merger Agreement in
accordance with its terms. Purchaser shall not purchase the Shares pursuant to
the Offer unless Purchaser purchases pursuant to the Offer that number of shares
of Common Stock such that the Minimum Tender Condition (as defined in the Merger
Agreement) is satisfied.
-3-
<PAGE>
5. Expenses. Except as provided in Section 19, each party hereto
--------
will pay all of its expenses in connection with the transactions contemplated by
this Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers. The provisions of this Section 5 shall survive the
Closing hereunder.
6. Confidentiality. Shareholder recognizes that successful
---------------
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to these matters. In this connection, pending
public disclosure, Shareholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal counsel and advisors
of Shareholder or the Company, if any) not a party to this Agreement, without
prior written consent of Parent, except for filings required pursuant to the
Exchange Act, and the rules and regulations thereunder or disclosures
Shareholder's legal counsel advises in writing are necessary in order to fulfill
Shareholder's obligations imposed by law, in which event Shareholder shall give
prompt prior notice of such disclosure to Parent and cooperate with Parent in
obtaining a protective order or in limiting such disclosure.
7. Certain Covenants of Shareholder.
--------------------------------
7.1 Except in accordance with the provisions of this Agreement,
Shareholder agrees, while this Agreement is in effect, not to, directly or
indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) Shareholder shall not, directly or indirectly through
any agent or otherwise, solicit, initiate or encourage the submission of any
proposal or offer from any person (other than Parent or Purchaser) relating to
any acquisition or purchase of all or any material portion of the assets of, or
any equity interest in, the Company or any subsidiary of the Company, or any
merger, consolidation, business combination, reorganization, recapitalization or
similar transaction involving the Company or any subsidiary of the Company (each
a "Competing Transaction"), or participate in any discussions or negotiations
----------------------
regarding, or furnish to any other person any information with respect to, or
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any person (other than Parent and Purchaser)
to do or seek any of the foregoing. Shareholder will cease and cause to be
terminated any existing activities, discussions or negotiations by or on its
behalf with any person (other than Parent and Purchaser) conducted heretofore
with respect to any Competing Transaction and will promptly notify Parent
following receipt of any request by any person (other than Parent or Purchaser)
relating to any possible Competing Transaction or information concerning the
Company. Nothing contained herein shall prohibit Shareholder, solely in his
-4-
<PAGE>
capacity as a member of the board of directors of the Company (the "Board"),
-----
from furnishing information to, or entering into discussions or negotiations
with, any person (other than Parent and Purchaser) in connection with an
unsolicited proposal involving a fully-financed Competing Transaction which is
made in writing by such person (other than Parent and Purchaser) and which, if
consummated, would provide consideration per share of Common Stock to the
shareholders of the Company in excess of the Offer Price if, and only to the
extent that, the Board determines in good faith, based upon the written advice
of Honigman Miller Schwartz and Cohn, that such action is required for the Board
to comply with its fiduciary duties to shareholders under Michigan law.
7.2 Shareholder agrees, while this Agreement is in effect, to
notify Parent promptly of the number of any shares of Common Stock beneficial
ownership of which is acquired by Shareholder after the date hereof.
8. Legend and Stop Transfer Instructions. Immediately after the
-------------------------------------
execution of this Agreement (and from time to time prior to the termination of
this Agreement), Shareholder shall cause the Company to provide for each
certificate representing Shares beneficially owned by Shareholder to bear a
legend in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
EXCHANGED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT
IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THE STOCK
TENDER AND VOTING AGREEMENT, AND IS SUBJECT TO THE
IRREVOCABLE PROXY REFERRED TO THEREIN, EACH DATED AS OF
JUNE 17, 1999, AS SUCH AGREEMENT MAY BE AMENDED FROM TIME
TO TIME, AND COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE ISSUER.
Immediately after the execution of this Agreement (and from time to time prior
to the termination of this Agreement), Shareholder shall cause the Company to
require that the transfer agent for its Common Stock shall make a notation in
its records prohibiting the transfer of any of the Shares, except in accordance
with the terms and conditions of this Agreement.
9. Survival of Representations and Warranties. Except as expressly
------------------------------------------
set forth herein, one of the representations, warranties, covenants and
agreements made by Shareholder, Parent or Purchaser in this Agreement shall
survive the Closing hereunder.
10. Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing, shall be given by hand delivery, U.S.
Express Mail (return receipt requested), overnight courier guaranteeing next
business day delivery, or facsimile, and shall be deemed duly given when
received, addressed as follows:
-5-
<PAGE>
If to Parent or Purchaser:
Littlejohn Partners IV, L.P.
c/o Littlejohn & Co. LLC
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. Angus Littlejohn or Mr. Michael Klein
Telephone: (203) 861-4005
Facsimile: (203) 861-4009
With copies to:
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esq.
Telephone: (215) 981-4368
Facsimile: (215) 981-4750
If to Shareholder:
c/o Daniel R. Tisch
Mentor Partners, L.P.
500 Park Avenue
New York, NY 10022
Telephone: (212) 935-6655
Facsimile: (212) 826-8928
With copies to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attention: Donald J. Kunz, Esq.
Telephone: (313) 465-7454
Facsimile: (313) 465-7455
11. Entire Agreement; Amendment. This Agreement, together with the
---------------------------
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with respect
to such subject matter. This Agreement may not be modified, amended, altered or
supplemented except by an agreement in writing executed by
-6-
<PAGE>
the party against whom such modification, amendment, alteration or supplement is
sought to be enforced.
12. Assigns. This Agreement shall be binding upon and inure to the
-------
benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
Purchaser may assign, any or all of its rights and obligations hereunder to
Parent or any direct or indirect wholly-owned subsidiary of Parent without the
consent of Shareholder or Company, but no such transfer shall relieve Purchaser
of its obligations under this Agreement if such subsidiary does not perform the
obligations of Purchaser hereunder.
13. Governing Law; Jurisdiction; and Consent to Service. Except as
---------------------------------------------------
expressly set forth below, this Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In addition, each of Shareholder, Purchaser and Parent hereby agree that any
dispute arising out of this Agreement, the Offer or the Merger shall be heard in
the United States District Court for the Eastern District of Michigan and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement, the Offer or the Merger may be
given to any other party hereto by certified mail, return receipt requested, at
the respective addresses set forth in Section 12 above.
14. Injunctive Relief. The parties agree that in the event of a
-----------------
breach of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party shall be entitled
to obtain in any court of competent jurisdiction a decree of specific
performance or to enjoin the continuing breach of such provision, in each case
without the requirement that a bond be posted, as well as to obtain damages for
breach of this Agreement. By seeking or obtaining such relief, the aggrieved
party will not be precluded from seeking or obtaining any other relief to which
it may be entitled.
15. Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts (including by facsimile signature), each
of which shall be deemed to be an original and all of which together shall
constitute one and the same documents.
16. Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
-7-
<PAGE>
17. Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. Third Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
19. Legal Expenses. In the event any legal proceeding is commenced
--------------
by any party to this Agreement to enforce or recover damages for any breach of
the provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees. The provisions of this
Section 19 shall survive the Closing hereunder.
-8-
<PAGE>
20. Amendment and Modification. This Agreement may be amended,
--------------------------
modified and supplemented only by a written document executed by Parent,
Purchaser and Shareholder.
IN WITNESS WHEREOF, Shareholder, Parent and Purchaser have caused this
Agreement to be executed by their duly authorized officers as of the date and
year first above written.
1990 Des Moines Trust #1
/s/ Daniel R. Tisch
By: _____________________________
Daniel R. Tisch, Trustee
LITTLEJOHN PARTNERS IV, L.P.
By: Littlejohn Associates, L.L.C.
its General Partner
/s/ Angus C. Littlejohn, Jr.
By: ____________________________
Title: Manager
LPIV ACQUISITION CORP.
/s/ Michael I. Klein
By: ________________________________
Title: President
-9-
<PAGE>
EXHIBIT A
Form of Irrevocable Proxy
-------------------------
The undersigned shareholder of Durakon Industries, Inc., a Michigan
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Angus C. Littlejohn, Jr., Michael I. Klein, and
Littlejohn Partners IV, L.P., a Delaware limited partnership ("Parent"), and
each of them, the attorneys and proxies of the undersigned with full power of
substitution and resubstitution, to the full extent of the undersigned's rights
with respect to (i) the issued and outstanding shares of capital stock of the
Company owned of record by the undersigned as of the date of this proxy, which
shares are specified on the final page of this proxy and (ii) any and all other
shares of capital stock of the Company which the undersigned may acquire after
the date hereof (the shares of the capital stock of the Company referred to in
(clauses (i) and (ii) of the immediately preceding sentence are collectively
referred to as the "Shares") Upon the execution hereof, all prior proxies given
------
by the undersigned with respect to any of the Shares are hereby revoked, and no
subsequent proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted
in connection with a Stock Tender and Voting Agreement, dated as of the date
hereof, between Parent and the undersigned (the "Stock Tender Agreement"), and
----------------------
is granted in consideration of Parent entering into the Agreement and Plan of
Merger, dated as of the date hereof, among Parent, LPIV Acquisition Corp. and
the Company (the "Merger Agreement"). Capitalized terms used but not otherwise
----------------
defined in this proxy have the meanings ascribed to such terms in the Merger
Agreement.
The attorneys and proxies named above will be empowered, and may
exercise this proxy, to vote the Shares at any time until the earlier to occur
of the valid termination of the Merger Agreement pursuant to Section 8.01
thereof or the Effective Time at any meeting of the shareholders of the Company,
however called, or in any written action by consent of shareholders of the
Company: (a) in favor of the Merger; (b) against any action or agreement that
would result in a breach of any covenant or any representation or warranty or
any other obligation or agreement of the Company under or pursuant to the Merger
Agreement; or (c) against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger or the Offer
including, but not limited to, (i) any corporate transaction not entered into in
the ordinary course of business (other than the Merger), including, but not
limited to, a merger, other business combination, reorganization, consolidation,
recapitalization, dissolution or liquidation involving Company, (ii) a sale or
transfer of a material amount of assets of Company or any of its subsidiaries,
(iii) any change in the board of directors of Company, (iv) any material change
in the capitalization of the Company, (v) any change in the charter, by-laws or
other organizational or constitutive documents of the Company, or (v) any other
material change in the corporate structure or business of the Company.
-10-
<PAGE>
This proxy shall be binding upon the heirs, successors and assigns of
the undersigned (including any transferee of any of the Shares).
Any term or provision of this proxy which is invalid or unenforceable,
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this proxy or affecting the
validity or enforceability of any of the terms or provisions of this proxy in
any other jurisdiction. If any provision of this proxy is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
This proxy shall terminate immediately upon the earlier of the valid
termination of the Merger Agreement pursuant to Section 8.01 thereof or the
Effective Time.
1990 Des Moines Trust #1
By: _____________________________
Daniel R. Tisch, Trustee
Dated: _____________ __, 1999
Number of shares of Common Stock owned of record as of the date of this proxy:
____________
-11-
