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EXHIBIT 10.6
SHAREHOLDER AGREEMENT
The Parties to this agreement are Robert Burch, John Colaianne, Lawrence
R. Garon, Jay J. Hansen, Hilsel Investment Company Limited Partnership, Donald
Holton, Lawrence S. Lax, Steve Lord, Robert H. Orley, Gregg L. Orley, David T.
Provost, Anton Rizzardi, Thomas L. Saeli and Rex E. Schlaybaugh, Jr.
(individually a "Shareholder" and collectively the "Shareholders").
This agreement applies to all shares of the common stock in BMG-MI, Inc.,
a Michigan corporation (the "Corporation") that a Shareholder now owns or later
acquires (the "Shares").
1. Restriction on Transfer. A Shareholder may not transfer any Shares
without first complying with the provisions of this Agreement.
"Shareholder" includes a Shareholder's representative, executor or legal
guardian as necessary.
"transfer" is any sale, exchange or other disposition or encumbrance of a
Shareholder's Shares, whether absolute or as security, whether for a
valuable consideration or as a gift, whether voluntary or involuntary,
except that a "transfer" shall not be deemed to include a transfer of a
Shareholder's shares to a living trust of which Shareholder serves as the
sole trustee or a transfer pursuant to the Shareholder's last will and
testament, provided that the transferee shall execute a copy of this
Agreement as a condition precedent to the transfer of any Share on the
books of the Corporation and to recognition as a shareholder for any
purpose.
2. Restrictions on Transfer by Shareholder.
Except with the prior written consent of sixty percent (60%) in interest
of the Shares of the other Shareholders or in connection with a transaction
contemplated by paragraph 1 or paragraph 4 of this Agreement, a Shareholder
shall not transfer any of his Shares. Each of the certificates representing
the Shares shall contain the following legends:
ON THE FACE OF
THE CERTIFICATE: THIS CERTIFICATE IS SUBJECT TO TRANSFER RESTRICTIONS NOTED ON
THE REVERSE SIDE HEREOF.
ON THE BACK OF
THE CERTIFICATE: THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND VOTING AGREEMENTS
CONTAINED IN A CERTAIN SHAREHOLDER AGREEMENT, DATED
, 1995, BY AND BETWEEN CERTAIN SHAREHOLDERS OF THE ISSUER.
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3. Redemption Upon Death. Upon the death of a Shareholder, the other
Shareholders may, subject to the provisions of this paragraph 3, purchase the
Shares of that Shareholder. Such election shall be in writing within thirty
(30) days of the date of death, and specify the number of shares to be
purchased. If the purchase election is exercised, the purchase shall be in
such proportions as the Shareholders (excluding the Shareholder whose shares
are being purchased ("Selling Shareholders")) shall agree upon jointly in
writing, or in the event that they fail to agree, then such purchase shall be
proportionate to the relative number of Shares in the Corporation held by each
Shareholder electing to participate in the purchase. The purchase price shall
be determined and payable as provided in paragraph 4.
4. Purchase Price. If a purchase price cannot be agreed upon by the
purchasing Shareholders and the Selling Shareholder within thirty (30) days of
the date of death, Selwyn Isakow or in the event Selwyn Isakow is no longer a
Shareholder or is considered the Selling Shareholder, a majority in number of
the purchasing Shareholders shall select an appraiser experienced in the
appraisal of companies which are engaged in the business of the Corporation to
appraise the Corporation as of the date of death. The appraisal shall be the
higher value of the Corporation (i) as a going concern, or (ii) on a
liquidation basis. The purchase price for the Shares to be purchased shall be
the pro rata portion of the value of the Corporation. The purchase price shall
be payable against receipt of the certificates representing the Shares, duly
endorsed for transfer not later than one hundred eighty (180) days subsequent
to death, as follows: (1) the lesser of twenty percent (20%) of the purchase
price or the original cost basis of the Shares shall be paid in cash, and (2)
the remaining unpaid balance, if any, by delivery of each purchasing
Shareholder's promissory note. The promissory note shall (i) be unsecured,
(ii) have a five-year term providing for annual payments of principal equal to
20% of the face amount, (iii) bear interest, payable quarterly, at the variable
interest rate announced from time to time by NBD Bank as its prime rate, (iv)
permit pre-payment in whole or in part, without penalty, at any time, (v) be
non-negotiable, and (vi) entitle the holder to declare the unpaid principal
amount and all interest accrued thereon immediately due and payable, after
customary notice and grace periods, upon the failure to pay any installment
when due.
5. Majority's Ability to Sell Corporation.
(A) All of the Shareholders agree to execute and deliver
to Selwyn Isakow an irrevocable proxy in the form of attachment
"A". Except as specifically provided in paragraph 5(B), Selwyn
Isakow may vote such proxies as he and he alone determines
appropriate and shall not be liable to any Shareholder in
connection with any matter with respect to which he votes the
Shares pursuant to such proxies.
(B) If the holders of the Shares having a majority in
interest of the Shares determine that it is in the best
interests of all of the Shareholders, taken as a whole, to sell
all or substantially all of the assets of the Corporation or to
cause the Corporation to merge or consolidate with or into
another corporation (the "Transaction"), Selwyn Isakow shall
exercise the proxies
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provided to him pursuant to paragraph 5(A) consistent with the
decision of a majority in interest of the Shares, provided,
however, such holders notify him in writing at least one (1)
business day prior to the date on which he is to vote or execute
a consent with respect to a Transaction, otherwise he shall be
entitled to vote such Shares as he and he alone determines
appropriate, as provided in subparagraph (A).
6. Miscellaneous. This Agreement shall be binding upon the parties and
their successors and assigns and may be specifically enforced. This Agreement
shall be governed by Michigan law. Each stock certificate representing Shares
shall bear an appropriate legend referring to this Agreement. If there exist
the requisite consents to a transfer, the transferees shall execute a copy of
this Agreement as a condition precedent to the registration of his ownership of
Shares on the books of the Corporation and to it recognition as a shareholder
for any purpose.
7. Notices. All notices or communications permitted or required hereunder
shall be given by express mail, certified mail or by personal service, with all
postage or fees prepaid addressed to the applicable party as follows:
For each of:
John Colaianne, Lawrence R. Garon, Jay J. Hansen, Hilsel Investment
Company Limited Partnership, Lawrence S. Lax, Steve Lord, Anton Rizzardi,
Robert H. Orley, Gregg L. Orley, and Thomas L. Saeli:
The Oxford Investment Group, Inc.
2000 N. Woodward Avenue, Ste. 130
Bloomfield Hills, Michigan 48304
David T. Provost
The Bank of Bloomfield Hills
505 N. Woodward Avenue, Ste. 1300
Bloomfield Hills, Michigan 48304
Robert Burch
The Bank of Bloomfield Hills
505 N. Woodward Avenue, Ste. 1300
Bloomfield Hills, Michigan 48304
Donald Holton
319 Neapolitan Way
Naples, Florida 33940
Rex E. Schlaybaugh, Jr.
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Dykema Gossett PLLC
1577 North Woodward Ave., Suite 300
Bloomfield Hills, MI 48304-2820
8. Additional Capital Contributions. The Shareholders understand that
additional paid in capital may be necessary for the Corporation's business. If
the Board of Directors determines to issue additional capital stock, warrants,
options or convertible securities, the Shareholders agree among themselves to
exercise the opportunity to purchase such additional securities in proportion
to their ownership interest existing at that time. Securities not purchased by
any Shareholder shall be offered to the other Shareholders in proportion to
their relative ownership interests not taking into account the interest of the
Shareholder who refused to purchase additional securities.
9. Complete Agreement. This Agreement contains the entire understanding
of the parties with respect to transactions contemplated by this Agreement. No
representations, inducement, agreement, amendment, promise or understanding
will have any force or effect unless the same is in writing and validly
executed by the parties hereto.
Effective: , 1995
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Robert Burch
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John Colaianne
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Lawrence R. Garon
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Jay J. Hansen
Hilsel Investment Company
Limited Partnership
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By: Tridec Management, Inc.,
General Partner
By:
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Selwyn Isakow, President
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Donald Holton
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Lawrence S. Lax
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Steve Lord
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Robert H. Orley
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Gregg L. Orley
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David T. Provost
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Anton Rizzardi
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Thomas L. Salei
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Rex E. Schlaybaugh, Jr.
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EXHIBIT A
IRREVOCABLE PROXY
I appoint Selwyn Isakow, my proxy, to vote all of my shares of common
stock of BMG-MI, Inc. that are entitled to vote at any meeting of the
Shareholders of BMG-MI, Inc. This proxy concerns all matters that may properly
come before any such meeting, and any adjournment thereof.
Date: , 1995
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Certificate No.__
Number of Shares __
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