Mike Kojaian
C. Michael Kojaian
1400 North Woodward Avenue
Suite 250
Bloomfield Hills, Michigan 48304
May 27, 1999
Mr. Heinz C. Prechter
One Heritage Place
Suite 400
Southgate, Michigan 48195
Re: JPE, Inc. Put
Dear Heinz:
1. Background. As you are aware, Kojaian Holdings LLC, a Michigan limited
liability company (100% owned by Mike Kojaian ("Mike") and C. Michael Kojaian
("Michael")), and ASC Holdings LLC, a Michigan limited liability company (100%
owned by you), have entered into an Investment Agreement dated April 28, 1999
(the "Investment Agreement") to purchase a controlling number of Common Shares
and Preferred Shares of JPE. This letter agreement reflects our agreement in
connection with Kojaian Holdings LLC's participation as part of Buyer in
connection with the Transaction. All capitalized terms not defined in this
letter agreement shall have the meanings set forth in the Investment Agreement.
2. The Dott Acquisition. It is contemplated that following the consummation
of the Transaction, all of the outstanding shares of capital stock or all of the
assets of Dott Industries, Inc., a Michigan corporation ("Dott"), would be
purchased (the "Dott Acquisition") by one or more of the JPE Companies or one
half by ASC Holdings LLC (and one-half of Kojaian Holdings LLC) (the
"Purchaser") for an aggregate purchase price of no less than $28-$30 million
(the "Purchase Price"). In the event the Dott Acquisition is structured as an
acquisition of stock or a merger, the Purchase Price would be no less than $28
to $30 million, less the amount of the existing indebtedness of Dott, and at the
closing, the Purchaser would arrange financing to pay off all existing
indebtedness of Dott, including indebtedness of Dott to its shareholders. In the
event the transaction is structured as an asset purchase, the aggregate Purchase
Price would be no less than $28 to $30 million, and Dott would use a portion of
the Purchase Price to pay off all existing indebtedness.
3. The Put. As a condition precedent to Kojaian Holdings LLC's
participation in the Transaction as part of Buyer, Michael, Mike, ASC Holdings
LLC, and you (in your individual capacity) agreed that if the Dott Acquisition
is not consummated (for any reason whatsover) on or before June 30, 1999 (the
"Trigger Date"), Michael and/or Mike shall have the right to require you
(through ASC Holdings LLC or otherwise) to purchase all of the Subscribed Shares
then owned by Kojaian Holdings LLC (the "Put Shares") for 50% of the
Subscription Price, plus interest beginning on the Closing Date and ending on
the consummation of the purchase of the Put Shares calculated at the prime rate
of interest announced by Comerica Bank as its prime rate (the "Put"). Michael
and/or Mike may exercise the Put at any time beginning on the Trigger Date and
ending on the thirtieth day following the Trigger Date (the "Put Exercise
Period"), by written notice to you at the address set forth above in the manner
provided for in the Investment Agreement (the "Put Notice") (except that
personal delivery shall be valid and shall be considered to have been delivered
the date of delivery and the copy shall be sent (only) to: David L. Treadwell).
If no Put Notice is given during the Put Exercise Period, the Put shall expire.
4. The Closing of the Put. Subject to paragraph 3, the purchase of the Put
Shares shall take place at a closing, at such date as may be mutually agreed by
the parties, but in no event later than fifteen days after the delivery of the
Put Notice or, if a longer time is required under applicable Law, within three
business days after the earliest date permissible under applicable Law. Such
closing shall occur at Michael's primary place of business, or at any other
place the parties agree. At such closing, (a) the Purchasers shall pay for the
Put Shares as provided above by wire transfer of cash, and (b) Kojaian Holdings
LLC shall deliver the certificates representing all of the Put Shares, duly
endorsed in blank (or accompanied by assignments separate from certificate, duly
endorsed in blank).
5. No Waiver. No waiver of any breach of any provision of this letter
agreement shall be deemed a waiver of any preceding or succeeding breach or of
any other provision of this letter agreement. No extension of time for
performance of any obligations or acts under this letter agreement shall be
deemed an extension of the time for performance of any other obligations or acts
under this letter agreement.
6. Successors and Assigns. This letter agreement shall bind and inure to
the benefit of the parties and their successors and assigns; provided that
neither party may assign this letter agreement without the prior written consent
of the other.
7. Severability. The provisions of this letter agreement shall be deemed
severable, and if any provision or part of this letter agreement is held
illegal, void or invalid under applicable Law, such provision or part may be
construed or deemed changed by a court of competent jurisdiction to the extent
reasonably necessary to make the provision or part, as so construed or changed,
legal, valid and binding. If any provision of this letter agreement is held
illegal, void or invalid in its entirety, the remaining provisions of this
letter agreement shall not in any way be affected or impaired but shall remain
binding in accordance with their terms.
8. Entire Agreement; Amendment. This letter agreement contains the entire
agreement of the parties with respect to the Put. This letter agreement may be
altered or amended only by an instrument in writing, duly executed by each
party.
9. Cost of Litigation. If any party breaches this letter agreement and if
counsel is employed to enforce this letter agreement, the successful party shall
be entitled to Fees and Costs associated with such enforcement.
10. Interpretation. This letter agreement is being entered into among
competent and experienced business persons, represented by counsel, and have
been reviewed by the parties and their counsel. Therefore, any ambiguous
language in this letter agreement shall not necessarily be construed against any
particular party as the drafter of such language.
11. Counterparts. This letter agreement may be executed in counterparts (by
facsimile transmission or otherwise), each of which when so executed shall be
deemed an original, but both of such counterparts together shall constitute one
and the same instrument.
12. Applicable Law; Venue. This letter agreement shall be construed in
accordance with and governed by the laws of the State of Michigan without regard
to principles of conflicts of law. The parties acknowledge that the United
States District Court for the Eastern District of Michigan or the Circuit Court
for the County of Oakland shall have exclusive jurisdiction over any case or
controversy arising out of or relating to this letter agreement and that all
litigation arising out of or relating to this letter agreement shall be
commenced in the United States District Court for the Eastern District of
Michigan or in the Oakland County Circuit Court.
13. Expenses. Except as otherwise provided in this letter agreement, each
party shall bear his or its own expenses in connection with this letter
agreement and the Put, including costs and expenses of his or its respective
attorneys, accountants, consultants and other professionals. Notwithstanding the
foregoing, the Purchasers shall pay (a) all costs, filing fees and expenses
incurred in connection with meeting the requirements of Hart-Scott-Rodino, and
(b) any applicable transfer or other Taxes imposed on the parties due to the
consummation of the Put.
Sincerely,
Mike Kojaian
C. Michael Kojaian
Accepted and agreed to on May ___, 1999:
By:
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Heinz C. Prechter