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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 1, 1998
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NOBLE INTERNATIONAL, LTD.
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(Exact name of registrant as specified in its charter)
Michigan 001-13581 38-3139487
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
33 Bloomfield Hills Parkway, Suite 155, Bloomfield Hills, Michigan 48304
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (248) 433-3093
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N/A
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Centrifugal Coaters, Inc.
On October 1, 1998, Noble International, Ltd. (the "Company")
consummated the acquisition, through its wholly-owned subsidiary Noble Canada
Holdings II, Ltd., a Nova Scotia corporation ("NCH"), and NCH's wholly-owned
subsidiary Noble Canada II, Inc., an Ontario corporation ("Noble Canada"), of
all of the outstanding capital stock of Centrifugal Coaters, Inc., an Ontario
corporation ("CCI"). The selling shareholders of CCI included Wrayter
Investments, Inc., an entity controlled by Fraser Wray, the president and chief
executive officer of Tiercon Holdings, Inc., which was acquired by the Company
in July 1998. Prior to its acquisition by the Company, Tiercon Holdings, Inc.
was a wholly-owned subsidiary of Wrayter Investments, Inc.
The aggregate consideration paid for the acquisition of CCI (the "CCI
Acquisition") consisted of $881,661 in cash and 57,938 shares of Noble Canada's
Class C Exchangeable Non-Voting Preferred Shares, which are exchangeable for
57,938 shares of the Company's common stock, no par value ("Common Stock"). The
cash portion of the CCI Acquisition purchase price was funded by the Company's
existing revolving line of credit facility with Comerica Bank.
The Company intends to continue CCI's historic line of business as a
Tier II supplier of a broad range of value-added services to the automotive
industry. The majority of CCI's coating programs are plastic parts for exterior
use such as door handles, mirror housings, rocker panels, body moldings, grills
and spoilers. CCI currently operates four facilities located in Oakville,
Ontario, Canada. In addition, CCI has broken ground on a new approximately
150,000 square foot, state-of-the-art coating facility strategically located
adjacent to Tiercon Plastics, a plastic injection molding company acquired by
the Company in July 1998 as part of the acquisition of Tiercon Holdings, Inc.
CCI's paint lines have the flexibility to adapt to new substrates and finishes
as they are developed. Each paint line is designed with unique features to
accommodate specific products, including custom conveyors, robots and racking
systems. CCI currently employs approximately 150 people.
H&H Steel Processing Company, Inc.
Also on October 1, 1998, the Company completed the acquisition, through
it wholly-owned subsidiary Utilase Blank Welding Technologies, Inc., a Michigan
corporation ("UBWT"), of substantially all of the assets and the assumption of
certain specified liabilities of H&H Steel Processing Company, Inc., an Ohio
corporation ("H&H"), from Terry Hill and Robert G. Kreiling, the shareholders of
H&H. Concurrently with the October 1, 1998 closing of the acquisition of the
assets of H&H (the "H&H Acquisition"), UBWT changed its name to H&H Steel
Processing, Inc. ("HHSP").
The purchase price for the H&H Acquisition consisted of: (i)
$11,079,591.52 in cash; (ii) plus an amount equal to expenditures by H&H for
property plant and equipment at its North Vernon, Indiana plant between July 31,
1998 and October 1, 1998 (to be determined by reference to a closing balance
sheet prepared within 60 days of the closing, but estimated to be
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approximately $669,494.80); (iii) plus $1,500,000 in cash representing H&H's
actual cash expenditure for the purchase of a 50% partnership interest in
Precision Blanking Limited (which resulted in H&H holding 100% of the
partnership, the assets of which included $1,150,000 in cash at October 1,
1998); and (iv) the assumption of certain specified liabilities aggregating
approximately $2,900,000 million. In addition, HHSP will pay to H&H a
performance premium based upon annual sales for fiscal years 1999 through 2003
equal to a minimum of $500,000 (payable at the rate of $100,000 per annum) and
an aggregate maximum of $2,000,000. The cash portion of the H&H Acquisition
purchase price was funded by the Company's existing revolving line of credit
facility with Comerica Bank.
The Company intends to continue H&H's historic line of business as a
flat rolled steel processor capable of blanking, slitting, shearing, and
warehousing material to exacting specifications. H&H's proprietary "light" die
technology, which was acquired by the Company as part of the H&H Acquisition,
provides a substantial competitive advantages by saving customers both time and
money. The H&H Acquisition included five processing facilities in Indiana and
Ohio aggregating over 400,000 square feet and housing 11 blanking lines, five
slitting lines, and one cut to length line. In connection with the H&H
Acquisition, the Company hired 165 persons who had been employed by H&H.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
The financial statements required by Rule 3-05 of Regulation S-X in
connection with both the CCI Acquisition and the H&H Acquisition will be
provided by an amendment to this report filed on or before December 15, 1998.
(b) Pro forma financial information.
The pro forma financial information required by Rule 11-01 of Regulation
S-X with regard to both the CCI Acquisition and the H&H Acquisition will be
provided by an amendment to this report filed on or before December 15, 1998.
(c) Exhibits.
2.1 Stock Purchase Agreement among Noble International, Ltd., Noble
Canada II, Inc., Centrifugal Coaters, Inc., Wrayter Investments, Inc., Roynat,
Inc., Crosbie & Company, Inc., First Ontario Labour Sponsored Investment Fund,
Ltd., 659730 Ontario, Inc. and Robert J. Blake, Jr. dated September 8, 1998.
2.2 Share Exchange Agreement among Noble International, Ltd., Noble
Canada Holdings II, Limited, Noble Canada II, Inc., Wrayter Investments, Inc.
and Robert Blake, Jr. dated October 1, 1998.
2.3 First Amendment to Registration Rights Agreement among Noble
International, Ltd., Wrayter Investments, Inc. and Robert Blake, Jr. dated
October 1, 1998.
2.4 Asset Purchase Agreement by and among Noble International, Ltd.,
Utilase Blank Welding Technologies, Inc., H&H Steel Processing Company, Inc.,
Terry Hill and Robert G. Kreiling dated September 30, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NOBLE INTERNATIONAL, LTD.,
A Michigan Corporation
(Registrant)
Date: October 16, 1998 By: /s/ MICHAEL C. AZAR
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Michael C. Azar,
Secretary and General Counsel
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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2.1 Stock Purchase Agreement among Noble International, Ltd., Noble
Canada II, Inc., Centrifugal Coaters, Inc., Wrayter Investments,
Inc., Roynat, Inc., Crosbie & Company, Inc., First Ontario Labour
Sponsored Investment Fund, Ltd., 659730 Ontario, Inc. and Robert
J. Blake, Jr. dated September 8, 1998.
2.2 Share Exchange Agreement among Noble International, Ltd., Noble
Canada Holdings II, Limited, Noble Canada II, Inc., Wrayter
Investments, Inc. and Robert Blake, Jr. dated October 1, 1998.
2.3 First Amendment to Registration Rights Agreement among Noble
International, Ltd., Wrayter Investments, Inc. and Robert Blake,
Jr. dated October 1, 1998.
2.4 Asset Purchase Agreement by and among Noble International, Ltd.,
Utilase Blank Welding Technologies, Inc., H&H Steel Processing
Company, Inc., Terry Hill and Robert G. Kreiling dated September
30, 1998.
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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of September 8, 1998, among Noble International, Ltd., a corporation
incorporated under the laws of the State of Michigan ("Noble"), Noble Canada II,
Inc., a corporation incorporated under the laws of the Province of Ontario,
Canada ("Acquisition"), Centrifugal Coaters Inc., a corporation incorporated
under the laws of the Province of Ontario, Canada ("CCI"), and the shareholders
of CCI (collectively, the "Sellers"): Wrayter Investments Inc. ("Wrayter"),
RoyNat Inc. ("RoyNat"), First Ontario Labour Sponsored Investment Fund Ltd.
("First Ontario"), Crosbie & Company, Inc. ("Crosbie") and 659730 Ontario Inc.
("Blake Corp.").
WHEREAS, Sellers together own all of the issued and outstanding capital
stock of CCI (collectively, the "CCI Shares");
WHEREAS, Sellers wish to sell the CCI Shares to Acquisition and
Acquisition wishes to purchase the CCI Shares from Sellers;
WHEREAS, Acquisition is a Subsidiary (as defined below) of Noble Canada
Holdings II, Limited ("Holdings"), a corporation incorporated under the laws of
Nova Scotia and a wholly owned subsidiary of Noble;
WHEREAS, the respective Boards of Directors of Noble, Acquisition, CCI
and each of the Sellers have approved the transactions contemplated by this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements set forth herein, and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Certain terms are used in this Agreement as specifically defined herein.
1.1 Definitions of Certain Terms. The following terms shall have the
meanings set forth below:
"Acquisition Transaction" has the meaning ascribed thereto in
section 5.1 hereof.
"CCI Material Adverse Effect" shall mean an effect that does or
would reasonably be expected to have a material adverse effect on the
financial condition or results of operations of CCI, taken as a whole.
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"Charter Documents" has the meaning ascribed thereto in section
3.1 hereof.
"Closing" has the meaning ascribed thereto in section 2.7 hereof.
"Closing Date" has the meaning ascribed thereto in section 2.7
hereof.
"Director" has the meaning ascribed thereto in section 6.2.8
hereof.
"Exchangeable Shares" has the meaning ascribed thereto in section
2.3 hereof.
"Exchangeable Share Provisions" has the meaning ascribed thereto
in section 2.5 hereof.
"Holdings" has the meaning ascribed thereto in the Recitals to
this Agreement.
"Liens" has the meaning ascribed thereto in section 2.1 hereof.
"Losses" has the meaning ascribed thereto in section 7.1 hereof.
"Noble Common Shares" means common shares of the capital stock of
Noble International, Ltd.
"Noble Material Adverse Effect" shall mean an effect that does or
would reasonably be expected to have a material adverse effect on the
financial condition or results of operations of Noble and its
Subsidiaries, taken as a whole.
"OBCA" means the Ontario Business Corporations Act, as amended.
"Registration Rights Agreement" has the meaning ascribed thereto
in section 2.5 hereof.
"Securities Act" has the meaning ascribed thereto in section 4.2
hereof.
"SEC Reports" has the meaning ascribed thereto in section 4.3
hereof.
"Share Exchange Agreement" has the meaning ascribed thereto in
section 2.3 hereof.
"Support Agreement" has the meaning ascribed thereto in section
2.4 hereof.
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"Subsidiary" shall mean, with respect to any corporation,
association or other business entity, any other corporation,
association, or other business entity a majority (by number of votes) of
the shares of capital stock (or other voting interests) of which is
owned directly or indirectly by such corporation. and shall include any
such other corporation, association or other business entity.
"Tax" means any federal, provincial, state or local tax or any
foreign tax (including, without limitation, any net income, gross
income, profits, premium, estimated, excise, sales, value added, goods
and services, use, occupancy, gross receipts, franchise, license, ad
valorem, severance, capital levy, capital tax, production, stamp,
transfer, withholding, employment, unemployment, payroll or property
tax, customs duty, or any other governmental charge or assessment),
together with any interest, addition to tax, or penalty.
"Tax Act" means the Income Tax Act (Canada), as amended.
"Tax Return" means any return, amended return, declaration,
report, estimate, information return, closing agreement, or statement
required or permitted to be filed under the laws of any jurisdiction in
respect of any Tax.
ARTICLE 2
SALE AND PURCHASE OF STOCK
2.1 Sale and Purchase of CCI Shares. Upon the terms and subject to the
conditions set forth in this Agreement, Sellers shall sell, transfer, assign and
deliver to Acquisition, and Acquisition shall purchase from Sellers, all of
Sellers' right, title and interest in and to the CCI Shares, together with all
rights associated with such CCI Shares, free and clear of all liens,
encumbrances, security interests, mortgages, pledges, charges, agreements,
rights, options, warrants, restrictions and claims of any kind whatsoever,
whether legal or equitable (collectively, "Liens").
2.2. Consideration. In consideration for the sale by Sellers of the CCI
Shares, Acquisition shall pay the following consideration at the Closing (as
defined below):
(a) to First Ontario, CDN$202,717, by certified check or wire
transfer of immediately available funds;
(b) to RoyNat, CDN$202,717, by certified check or wire transfer
of immediately available funds;
(c) to Crosbie, CDN$537,207, by certified check or wire transfer
of immediately available funds;
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(d) to Wrayter, Acquisition shall issue 56,238 Exchangeable
Shares;
(e) to Blake Corp., CDN$405,434, by certified check or wire
transfer of immediately available funds; and
(f) to Robert Blake, Jr., an individual ("Blake Jr."),
Acquisition shall issue 1,700 Exchangeable Shares.
2.3 Share Exchange Agreement. At the Closing (as defined below),
Wrayter, Blake Jr., Noble, Acquisition and Holdings shall enter into a share
exchange agreement substantially in the form attached as Exhibit A (the "Share
Exchange Agreement") and Acquisition shall create a class of preferred shares of
Acquisition designated as "Class C Exchangeable Non-Voting Preferred Shares"
(the "Exchangeable Shares") that will have the rights, privileges and
restrictions, and be subject to the conditions, set forth in Schedule A of the
Share Exchange Agreement (the "Exchangeable Share Provisions").
2.4 Support Agreement. Prior to the Closing, Noble, Holdings and
Acquisition shall execute and deliver the Support Agreement (the "Support
Agreement") in substantially the form set forth as Exhibit B.
2.5 Registration Rights Agreement. At Closing, Wrayter, Blake Jr. and
Noble shall execute and deliver the First Amendment to Registration Rights
Agreement (the "Registration Rights Amendment") in substantially the form set
forth as Exhibit C, which shall amend that Registration Rights Agreement dated
as of July 24, 1998 between Noble and Wrayter.
2.6 Closing and Closing Date. The execution and delivery of the
documents required to effectuate the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Gowling, Strathy & Henderson,
Toronto, Ontario on September 28, 1998 (the "Closing Date") or at such other
place and at such time as the parties hereto may agree.
2.7 Contemporaneous Transactions. The parties hereby agree that each of
the transactions contemplated by this Agreement that is in fact consummated
shall, to the extent permitted by applicable law and not otherwise provided for
herein, be deemed consummated substantially contemporaneously with any other
transaction that is in fact consummated pursuant to this Agreement.
2.8 Tax Filings. Wrayter agrees that it will elect, and Noble agrees
that it will cause Acquisition to elect, jointly under subsection 85(1) of the
Tax Act, in the prescribed form and within the prescribed time for purposes of
the Tax Act, that the proceeds of disposition of the CCI Shares held by Wrayter,
and Acquisition's cost of acquiring such CCI Shares shall be such amount as is
directed by Wrayter, within the various limitations provided in subsection 85(1)
of the Tax Act. The aforementioned
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parties hereby agree to file such election as required by the Tax Act and the
regulations thereunder so that the election will have full force and effect for
purposes of the Tax Act.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
In order to induce Noble and Acquisition to enter into this Agreement,
Sellers hereby jointly and severally except as otherwise indicated, represent
and warrant as follows, provided, however, that of the representations and
warranties set forth in this Article 3: (a) each of First Ontario, RoyNat and
Crosbie makes only the representations and warranties set forth in Sections
3.3(b), 3.23, 3.24 and 3.25; and (b) Blake Corp. makes all of the following
representations and warranties only to the extent of the knowledge of Robert
Blake, Sr. after reasonable inquiry as has been conducted or will be conducted
prior to Closing (provided that: as to (1) any state of facts which existed as
of May 31, 1997, and (2) the representations and warranties contained in
Sections 3,3(b), 3.23, 3.24 and 3.25, Blake Corp. shall be deemed to have
knowledge of such state of facts or representations and warranties, as the case
may be).
3.1 Due Organization, Authorization and Good Standing of CCI. CCI is a
corporation duly organized, validly existing and in good standing under the OBCA
and each Subsidiary of CCI is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation as
listed in Section 3.1 of the disclosure schedule prepared by CCI and provided to
Noble concurrently with the execution of this Agreement, as amended or
supplemented in accordance with Section 5.6 (the "CCI Disclosure Schedule"). CCI
has the requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement to consummate all transactions contemplated
hereby. The execution, delivery and performance by CCI of this Agreement, and
the consummation by CCI of the transactions contemplated hereby, have been duly
and validly authorized and approved by all necessary corporate action in respect
thereof on the part of CCI. This Agreement constitutes the valid and binding
obligation of CCI, enforceable in accordance with its terms. Each of CCI and its
Subsidiaries has full corporate power and authority to carry on its business as
now conducted and to own or lease and to operate its properties and assets where
such properties and assets are now owned, leased or operated by it and where
such business is now conducted by it. Each of CCI and its Subsidiaries is duly
qualified to do business and is in good standing as a foreign corporation and
licensed or qualified to transact business in the jurisdictions set forth in
Section 3.1 of the CCI Disclosure Schedule, which are the only jurisdictions
where such qualification is required by reason of the nature of the business
conducted by it or the properties or assets owned, operated or leased by it,
other than such failures to be so licensed or qualified that in the aggregate
would not have a CCI Material Adverse Effect. True, complete and correct copies
of the charter, By-laws and other analogous organizational
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documents (the "Charter Documents") of CCI and each of its Subsidiaries as in
effect on the date hereof have heretofore been delivered to Noble.
3.2 No Violation or Approval. Each of the Sellers individually
represents and warrants that, except as set forth in Section 3.2 of the CCI
Disclosure Schedule, the execution, delivery and performance by CCI and such
Seller of this Agreement and the consummation of the transactions contemplated
hereby will not result in a breach or violation of, or a default under, or the
acceleration of any payment obligation pursuant to, any law, rule or regulation
applicable to CCI, its Subsidiaries or such Seller, as the case may be, or of
any material agreement or instrument to which any of them is a party or by which
any of them or any of their properties are bound, or any order, judgment or
decree of any court or any governmental agency or body having jurisdiction over
any of them or their properties or in a breach or a default under any of their
Charter Documents. No consent, approval, order or authorization of, declaration
or filing with, any governmental authority or entity or other party is required
to be obtained or made by CCI or such Seller in connection with the execution
and delivery of this Agreement or the consummation by CCI or such Seller of the
transactions contemplated hereby other than (i) any applicable notification
requirement under the Investment Canada Act; and (ii) with respect to CCI and
its Subsidiaries, such failures to obtain or make such other consents,
approvals, orders, authorizations, declarations or filings that in the aggregate
would not have a CCI Material Adverse Effect.
3.3 Capital Stock and Title to Shares.
(a) The authorized capital stock of CCI consists of: an unlimited
number of Class M Common Shares, of which 1,000 shares are outstanding;
an unlimited number of Class X Common Shares, of which 20,000 shares are
outstanding; 3,500,000 Class X Special Shares, of which 3,500,000 shares
are outstanding; an unlimited number of Class Y Common Shares, of which
60,000 shares are outstanding; and an unlimited number of Class Z Common
Shares, of which 20,000 shares are outstanding. Other than as set forth
in Section 3.3 of the CCI Disclosure Schedule, CCI has not issued or
obligated itself to issue, any shares of capital stock or any
outstanding options, warrants, rights, other agreements or commitments
obligating it to issue or sell shares of its capital stock or any
securities or obligations convertible into, or exchangeable for, any
shares of its capital stock. No CCI common shares are held as treasury
stock or by any Subsidiary of CCI, and no preference shares of CCI are
outstanding. All of the outstanding CCI Shares have been validly issued,
fully paid and nonassessable and free of preemptive rights. None of the
outstanding CCI Shares, options, warrants and other securities has been
issued in violation of the preemptive rights of any security holder of
CCI. None of the holders of outstanding CCI Shares is subject to
personal liability solely by reason of being such a holder. Neither CCI
nor any of its Subsidiaries has any outstanding options, warrants,
rights, other agreements or commitments obligating it to issue
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or sell shares of its capital stock or any securities or obligations
convertible into, or exchangeable for, any shares of its capital stock.
Neither CCI nor any of its Subsidiaries has outstanding any bonds,
debentures, notes or other indebtedness the holders of which have the
right to vote (or that are convertible or exercisable into securities
having the right to vote) with holders of CCI Shares on any matter.
There are no shareholders of CCI other than the Sellers.
(b) Each of the Sellers individually represents and warrants that
such Seller is the legal and equitable owner of the CCI Shares listed
adjacent to its name in Section 3.3 of the CCI Disclosure Schedule, free
and clear of all Liens, and that upon consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof,
Acquisition will acquire valid and marketable title to the CCI Shares
transferred by such Seller, free and clear of all Liens.
3.4 Subsidiaries. Except for the equity investments set forth in Section
3.4 of the CCI Disclosure Schedule, CCI does not own, directly or indirectly,
any capital stock, any partnership or equity or other ownership interest in, or
any security issued by, any other corporation, organization, association, entity
or business enterprise, and Section 3.4 of the CCI Disclosure Schedule indicates
which such equity investments are Subsidiaries of CCI and which are minority
ownership interests. Except as set forth in Section 3.4 of the CCI Disclosure
Schedule, CCI owns, directly or indirectly, all of the outstanding shares of
each of the entities listed thereon and identified as Subsidiaries of CCI
(except for directors' qualifying shares or such shares as may be required by
local laws to be owned by residents of the jurisdiction of incorporation) free
and clear of all Liens. All shares of capital stock owned by CCI in any of its
Subsidiaries are duly authorized, validly issued, fully paid and nonassessable.
3.5 Financial Statements and Accounting. At least seven (7) days before
Closing, CCI will furnish Acquisition and/or Noble with true and complete copies
of the following financial statements (collectively, the "Financial
Statements"): (i) consolidated financial statements for the fiscal years ended
May 31, 1998, respectively, audited by Ernst & Young; and (ii) unaudited
statements of income and cash flows for the fiscal quarter ended August 31, 1998
and the accompanying balance sheet as of August 31, 1998, each prepared from the
books and records of CCI and its consolidated Subsidiaries. The Financial
Statements present fairly, in all material respects, the consolidated financial
position of CCI and the results of its operations and its cash flows as of the
respective dates and for the periods presented therein in conformity with
generally accepted accounting principles in Canada as in effect on the
applicable dates of such financial statements ("Canadian GAAP") and applied on a
consistent basis, except as noted therein and except that in the case of the
unaudited financial statements, no notes are included and such unaudited
financial statements may be subject to normal, recurring adjustments that would
be made in the course of an audit and that would not be material. Except as and
to the extent reflected or reserved
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against in the balance sheet as of August 31, 1998 included in the Financial
Statements or as set forth in Section 3.5 of the CCI Disclosure Schedule, CCI
and its Subsidiaries, taken as a whole, do not have any material liabilities or
obligations of any nature. CCI maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of
consolidated financial statements in conformity with Canadian GAAP and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.6 Absence of Changes; Operations in the Ordinary Course. Except as set
forth in Section 3.6 of the CCI Disclosure Schedule, since May 31, 1998, neither
CCI nor any of its Subsidiaries has undergone any adverse change in its
financial condition, or suffered any damage, destruction or loss (whether or not
covered by insurance) that adversely affects its financial condition, the
condition of its assets or the ability to conduct its business other than such
changes in financial condition, damage, destruction or loss as in the aggregate
would not have a CCI Material Adverse Effect; and since May 31, 1998, except as
set forth in Section 3.6 of the CCI Disclosure Schedule, there has been no
adverse change in the condition of the business of CCI or any of its
Subsidiaries, whether as a result of any change as to accounts receivable,
inventory or other assets, any loss of competitive position, any natural
disaster, accident, strike, sabotage, or confiscation of property, or any other
event or condition directly affecting or relating to CCI, whether or not related
to any of the foregoing, except for such changes as would not in the aggregate
have a CCI Material Adverse Effect and except as set forth in Section 3.6 of the
CCI Disclosure Schedule, CCI and each of its Subsidiaries has operated its
business in the ordinary course, consistent in all material respects with past
practice. Without limiting the generality of the foregoing, since May 31, 1998,
neither CCI nor any of its Subsidiaries has:
(a) amended the terms of any outstanding indebtedness or incurred
any indebtedness for borrowed money that has not been repaid in full, or
issued or sold any of its debt or equity securities, except in the
ordinary course of business consistent with past practice;
(b) subjected to any Lien or lease any of its properties,
tangible or intangible, except in the ordinary course of business
consistent with past practice;
(c) forgiven or canceled any debts owed to CCI or any of its
Subsidiaries or claims of CCI or any of its Subsidiaries, or waived any
rights, except in the ordinary course of business consistent with past
practice;
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(d) incurred any liability or obligation (whether absolute,
accrued, contingent or otherwise) or made any payment in respect of (i)
any acquisition or disposition of any assets or properties in any
transaction with any officer, director, shareholder or employee of CCI
or any of its Subsidiaries, or any relative by blood or marriage or any
"Affiliate" (as such term is used in the Tax Act) or any other person
not at arms-length (as such term is used under the Tax Act) of or with
CCI or other or any of its Subsidiaries, (ii) except as set forth in
Section 3.6 of the CCI Disclosure Schedule, any other transaction with
any such affiliate or associate of CCI or any of its Subsidiaries, other
than salaries paid to officers, or (iii) any declaration, setting aside
or payment of dividends or other distributions in respect of, or
purchases or redemptions (directly or indirectly) of, any shares of its
capital stock;
(e) entered into or publicly announced an intention to enter into
any agreement (including, without limitation, an agreement in principle)
with respect to, any acquisition of a material amount of assets or
securities or any release or relinquishment of any material contract
rights not in the ordinary course of business;
(f) made any capital expenditures other than in the ordinary
course of business consistent with past practice or as necessary to
maintain existing assets in good repair;
(g) committed any act or omission that constitutes a material
breach or default by CCI or any of its Subsidiaries under any material
contract or material license to which CCI or any of its Subsidiaries is
a party or by which any of them or their respective properties is bound;
(h) made any investment or commitment to make such an investment
in real estate or in any real estate development project;
(i) except as disclosed in the Financial Statements or in Section
3.6 of the CCI Disclosure Schedule: (i) granted to any officer or
employee any increase in compensation in any form (including without
limitation any increase in value of any benefits) in excess of the
amount thereof in effect as of May 31, 1998 other than increases in base
salary or hourly wages of employees other than officers of CCI in the
ordinary course of business in amounts consistent with past practice, of
any severance or termination pay, or entered into any employment
agreement with any employee that is not terminable by the employer,
without cause and without penalty, upon notice of 30 days or less, (ii)
adopted or amended any bonus, profit-sharing, compensation, stock
option, pension, retirement, deferred compensation or other plan,
agreement, trust, fund or arrangement for the benefit of employees
(whether or not legally binding), (iii) hired any employee who shall
have total expected annual compensation in excess of US$100,000, or (iv)
paid or incurred any obligation to pay any bonus
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or fee to any employee (including any officer) of CCI or any of its
Subsidiaries or in connection with the transactions contemplated by this
Agreement; or
(j) agreed in writing or otherwise to do any of the foregoing.
3.7 Assets and Liabilities.
(a) Section 3.7(a) of the CCI Disclosure Schedule contains a
true and complete list of all material furniture, fixtures
and other fixed assets used in connection with or related
to the Business, other than the leased personal property
described in Section 3.9 thereof (the "Leased Personal
Property").
(b) Section 3.7(b) of the CCI Disclosure Schedule contains a
true and complete list of all equipment, machinery, tools,
dies, jigs, patterns, molds, engineering and office
equipment and vehicles used in connection with the
operation of or related to the Business, other than the
Leased Personal Property.
(c) Section 3.7(c) of the CCI Disclosure Schedule contains a
true and complete list of all material third party
warranties and claims for warranties relating to the
Business, its assets or the Leased Personal Property.
(d) The assets listed in Sections 3.7(a), (b) and (c) of the
CCI Disclosure Schedule, along with the Leased Personal
Property and the Real Property as defined below,
constitute all of the assets that are used in connection
with the operation of, or that are related to, the
Business. All of the tangible assets (other than cash and
cash equivalents) and all of the Leased Personal Property
are located at the Real Property.
(e) Section 3.17 of the CCI Disclosure Schedule, as described
below, identifies all material contracts of CCI and its
Subsidiaries (collectively, the "Contracts").
(f) Section 3.7(f) of the CCI Disclosure Schedule identifies
all current short-term and long-term debts and liabilities
of CCI and each of its Subsidiaries (collectively, the
"Liabilities"). The Liabilities represent all of the
indebtedness of CCI and its Subsidiaries to all persons or
entities. CCI and each of its Subsidiaries have complied
in all material respects with the provisions of each note,
bill or other instrument establishing or creating any
indebtedness of CCI or its Subsidiaries and are not in
default under any such instrument.
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3.8 Taxes.
(a) For each of its taxation or taxable years or periods ending
on or prior to the date hereof: (i) all Tax Returns that are required to
have been filed by or with respect to CCI or any of its Subsidiaries
have been duly and timely filed and are correct and complete in all
material respects; (ii) all Taxes with respect to or required to have
been paid by CCI or any of its Subsidiaries or for which CCI or any of
its Subsidiaries is or may otherwise be liable (including without
limitation all Consolidated Taxes), whether or not shown on any Tax
Return, have been paid in full if due or accrued for in accordance with
Canadian GAAP in the Financial Statements through the date thereof and
in the books and records of CCI or the relevant Subsidiary in respect of
subsequent periods; and (iii) all Taxes other than those described in
clause (ii) with respect to or required to have been paid by CCI or any
of its Subsidiaries or for which CCI or any of its Subsidiaries is or
may otherwise be liable, whether or not shown on any Tax Return, have
been paid in full if due or accrued for in accordance with Canadian GAAP
in the Financial Statements through the date thereof and in the books
and records of CCI or the relevant Subsidiary in respect of subsequent
periods except for such amounts the nonpayment of which, in the
aggregate, would not result in a CCI Material Adverse Effect.
(b) Except as set forth in Section 3.8 of the CCI Disclosure
Schedule, (i) there are no assessments, reassessments, audits,
proceedings, or litigation in respect of Taxes relating to CCI or any of
its Subsidiaries pending, in progress, or to CCI's knowledge,
threatened, (ii) there are no liens in respect of Taxes upon any
property or assets of CCI or any of its Subsidiaries other than liens
for Taxes that are not yet due and payable, and (iii) neither CCI nor
any of its Subsidiaries has consented to any extension of any statute of
limitations pertaining to Taxes.
(c) CCI and each of its Subsidiaries has collected or withheld
all amounts required to be collected or withheld by it on account of
Taxes or otherwise, and has remitted the same to the appropriate
governmental authority in the manner and within the time required under
any applicable legislation or, if it is not yet due, has set it aside in
appropriate accounts for payment when due.
(d) The liability for Taxes under the Tax Act and all applicable
provincial Tax laws as to each of CCI and its Subsidiaries has been
assessed by Revenue Canada and the Ministry of Revenue or other
applicable taxing authority in each such province, respectively, for all
taxation years up to and including the most recently concluded taxation
year. True and complete copies of the federal and provincial Tax Returns
for CCI and each Subsidiary for the most recently ended taxation year
and copies of all assessments and
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reassessments relating to the most recent taxation year for which the
same are available have been provided to Noble.
(e) There are no circumstances that exist and would result, or
that have existed and resulted, in section 80 of the Tax Act applying to
CCI or any of its Subsidiaries.
3.9 Properties. CCI and each of its Subsidiaries has good and
marketable title to all real property and all tangible personal property
reflected in the August 31, 1998 balance sheet included in the Financial
Statements or acquired since such date (except for property disposed of since
such date in the ordinary course of business consistent with past practice), and
valid leasehold interests in all real and tangible personal properties leased by
it, in each case free and clear of Liens, easements or title imperfections
except (i) Liens for current Taxes not yet due and payable, (ii) encumbrances
and easements that do not materially detract from the value or interfere with
the use by CCI or any of its Subsidiaries, as the case may be, of the properties
affected thereby, (iii) Liens reflected in the Financial Statements, (iv) Liens
of customers on property purchased by CCI in connection with its performance of
contracts to provide products or services to such customers and which in the
aggregate would not have a CCI Material Adverse Effect, and (v) Liens set forth
in Section 3.9 of the CCI Disclosure Schedule. Section 3.9 of the CCI Disclosure
Schedule lists all material leases of real and/or personal property to which CCI
or any of its Subsidiaries is a party or which property is used or leased by CCI
or any of its Subsidiaries. CCI or its Subsidiary, as owner or lessee thereof,
enjoys peaceful and undisturbed possession of all of the real property which it
owns or leases and of the tangible personal property under all material leases.
With regard to all real property owned or used by CCI and its Subsidiaries (the
"Real Property"), except as described in Section 3.9 of the CCI Disclosure
Schedule:
(a) CCI has received all approvals of governmental authorities,
including all licenses and permits required in connection with the
ownership or[ownership or] operation of such building or real property,
such building or real property has been operated and maintained in
accordance with applicable laws, rules and regulations and CCI has not
received any notice, written or oral, of any violation of any applicable
laws, rules or regulations;
(b) the Real Property is supplied with all utilities and other
services necessary and adequate for the operation of such Real Property,
in accordance with all applicable laws, ordinances, rules and
regulations and are provided from adjoining public lands dedicated to
providing such services or permanent, irrevocable, appurtenant easements
benefiting the property;
(c) the Real Property abuts on and has direct vehicular access to
a public road or has access to a public road through a permanent,
irrevocable, appurtenant easement benefiting the property;
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(d) each building and other improvement is located solely on the
Real Property, does not encroach onto adjoining land or onto any portion
of property burdened by any easement, and there are no improvements
located on adjoining land which encroach onto the Real Property;
(e) none of the buildings or other improvements or property
violate any applicable setback requirements, zoning laws and ordinances,
none are subject to "permitted non-conforming use" or "permitted
non-conforming structure" classifications, and none are located within
any flood plain or subject to any similar type restriction for which any
permits or licenses necessary to its use has not been obtained;
(f) CCI has not received any notices or orders from any
governmental body, or any board of fire underwriters or similar fire and
safety rating body, and no such notice or order is or has been
threatened, concerning any violations of laws, municipal ordinances,
fire regulations, insurance regulations, labour regulations or of any
other governmental, administrative or regulatory body or other
requirements of law which affect the Real Property or the facilities
owned or[owned or] leased by the Company; and
(g) the Real Property and all of the structures and structural
components located thereon are in good condition and repair and are free
from material defect.
3.10 Customers, Distributors and Suppliers. Except as set forth in
Section 3.10 of the CCI Disclosure Schedule, neither CCI nor any of its
Subsidiaries has received notice from any person or entity with which it has an
existing agreement, oral or written, for the purchase or distribution of
products or services from CCI or any of its Subsidiaries that it intends to
reduce significantly such purchases or terminate such agreement, whether as a
result of the transactions contemplated hereby or otherwise, other than such
reductions and actions as in the aggregate would not have a CCI Material Adverse
Effect.
3.11 Operations in Conformity With Law, etc. Neither CCI nor any of its
Subsidiaries has been or is in violation of, or in default under, any law, rule,
regulation, order, judgment or decree relating in any manner or applicable to
the business or assets of CCI or any of its Subsidiaries or any of their
respective employees, except for such violations or defaults that in the
aggregate would not have a CCI Material Adverse Effect. Neither CCI or any of
its Subsidiaries, nor, to the knowledge of CCI or any of its Subsidiaries, any
of their respective officers, employees or agents has (a) directly or indirectly
given or agreed to give any illegal gift, contribution, payment or similar
benefit to any supplier, customer, governmental official or employee or other
person who was, is or may be in a position to help or hinder CCI or any of its
Subsidiaries (or assist in
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connection with any actual or proposed transaction) or made or agreed to make
any illegal contribution, or reimbursed any illegal political gift or
contribution made by any other person, to any candidate for Canadian or United
States Federal, provincial, state or local, or foreign public office
(collectively, a "Restricted Activity") that (i) would subject CCI or any of its
Subsidiaries to any damage or penalty in any civil, criminal or governmental
litigation or proceeding that would have, in the aggregate, a CCI Material
Adverse Effect, (ii) if such Restricted Activity had occurred after the Closing
Date, would subject Noble to any damage or penalty in any civil, criminal or
governmental litigation or proceeding that would have, in the aggregate, a CCI
Material Adverse Effect, or (iii) if such Restricted Activities were to cease as
of the date hereof, such cessation would have a CCI Material Adverse Effect.
3.12 Litigation. Except as set forth in Section 3.12 of the CCI
Disclosure Schedule, there are no actions, claims, suits, investigations or
proceedings pending or to CCI's knowledge threatened against CCI or any of its
Subsidiaries pertaining to the business or assets of CCI or any of its
Subsidiaries that, in the aggregate, if adversely determined, would have a CCI
Material Adverse Effect or that question the validity of this Agreement or any
action taken or to be taken pursuant to or in connection with the provisions of
this Agreement, nor to the knowledge of CCI or its subsidiaries is there any
basis for any such action, claim, suit, proceeding or investigation. There are
no judgments, orders, decrees, citations, fines or penalties heretofore assessed
(and not discharged or otherwise satisfied) against CCI or any of its
Subsidiaries under any Canadian or United States Federal, provincial, state or
local, or foreign law except for such judgments, orders, decrees, citations,
fines or penalties that in the aggregate would not have a CCI Material Adverse
Effect.
3.13 Employee Matters; Benefit Plans.
(a) All plans, agreements, policies and arrangements (including
those sponsored by the Federal or any provincial government of Canada),
whether or not reduced to writing and whether or not legally binding, to
which CCI or any of its Subsidiaries contributes or is obligated to
contribute, or under which CCI or any of its Subsidiaries has or may
have any liability for premiums or benefits, and which benefits any
active, former or retired employee, outside director, consultant or
other independent contractor who provides or provided services to or for
the benefit of CCI and its Subsidiaries, are listed in Section 3.13 of
the CCI Disclosure Schedule (the "Plans"). CCI has delivered to Noble a
true, correct and complete copy of each written Plan (or a written
summary of the material terms of any Plan that has not been reduced to
writing) any related trust agreement and annuity or insurance contract,
if any, each Plan's most recent annual report filed with any tax or
governmental authority, if any, and all summary plan descriptions,
employee handbooks, or other similar employee communications with
respect to the Plans.
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(b) Each Plan has been maintained and administered in material
compliance with its terms and with the requirements prescribed by any
and all applicable statutes, orders, rules and regulations, and is, to
the extent required by applicable law or contract, fully funded without
having any deficit or unfunded actuarial liability; all required
employer contributions under any such Plans have been made and the
applicable funds have been funded in accordance with the terms thereof
and no past service funding liabilities exist thereunder; and all
material contributions, reserves or premium payments required to be made
as of the date hereof to the Plans have been made or provided for.
(c) Each Plan that is required or intended to be qualified under
applicable law or registered or approved by a government agency or
authority has been so qualified, registered or approved by the
appropriate governmental agency or authority, and nothing has occurred
since the date of the last qualification, registration or approval to
cause the appropriate governmental agency or authority to revoke, or
otherwise adversely affect, such qualification, registration or
approval.
(d) Except as set forth in Section 3.13 of the CCI Disclosure
Schedule, there are no pending or, to CCI's knowledge, anticipated
claims against or otherwise involving any of the Plans and no suit,
action or other litigation (excluding claims for benefits incurred in
the ordinary course of Plan activities) has been brought against or with
respect to any such Plan.
(e) Except as set forth in Section 3.13 of the CCI Disclosure
Schedule, there has been no withdrawal of assets by CCI or its
Subsidiaries from any of the Plans, other than refunds of contributions
or payments of expenses permitted by applicable law.
(f) Except as set forth in Section 3.13 of The CCI Disclosure
Schedule, neither CCI nor any of its Subsidiaries has any obligations
for retiree health and life benefits under any Plan, and there are no
restrictions on the rights of CCI or any of its Subsidiaries to amend or
terminate any such Plan without incurring any liability thereunder.
3.14 Labour Relations. Section 3.14 of the CCI Disclosure Schedule
lists, as of the date hereof, all employees of CCI and its Subsidiaries,
together with their respective positions, years of employment and rates of
remuneration. There is no existing dispute or controversy between CCI or any of
its Subsidiaries and any of CCI's or such Subsidiary's employees that would have
a CCI Material Adverse Effect. Neither CCI nor any of its Subsidiaries is a
party to any collective bargaining agreement with respect to any of its
employees, none of such employees is represented by a labour union and, to CCI's
knowledge, there is no labour union organizing activity by or among such
employees. There are no outstanding proceedings before or orders of any labour
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relations, occupational health and safety, human rights or other similar body or
tribunal concerning employees of CCI or any of its Subsidiaries that could have
a CCI Material Adverse Effect.
3.15 Licenses, etc. CCI and each of its Subsidiaries has all
governmental and regulatory licenses and permits, permits, approvals, consents,
certificates, registrations and other authorizations (collectively,
"Authorizations") necessary for the conduct of its business as presently
conducted except where the failure to obtain or maintain such licenses and
permits would not, in the aggregate, have a CCI Material Adverse Effect. All
such Authorizations are in full force and effect, and no violations have been
recorded in respect thereof. Neither CCI nor any of its Subsidiaries is in
violation of any such Authorization, and no proceeding or investigation is
pending or, to CCI"s or any of its Subsidiaries" knowledge, threatened that
would have the effect, directly or indirectly, of revoking or limiting in any
way any such Authorizations. Section 3.15 of the CCI Disclosure Schedule
contains a true and complete list of all Authorizations.
3.16 Environmental Matters. Except as disclosed at Section 3.16 of the
CCI Disclosure Schedule: CCI and each of its Subsidiaries is and has at all
times been in compliance in all material respects with all applicable Canadian
and United States federal, provincial, state and local, and foreign laws,
regulations, by-laws, ordinances, orders, directives and decisions and policies,
instructions, guidelines and similar guidance of any ministry, department or
administrative or regulatory agency relating to environmental, natural resources
or health and safety matters or the manufacture, processing, distribution, use,
treatment, storage, disposal, discharges, packing, transport, handling,
containment, clean-up or other remediation of Hazardous Substances
(collectively, "Environmental Laws"); and there is no suit, claim, action,
investigation or proceeding pending or threatened against CCI or any of its
Subsidiaries or, to CCI's and each Subsidiary's knowledge, any basis therefor,
in respect of (i) noncompliance by CCI or any of its Subsidiaries with any
Environmental Laws, (ii) personal injury, wrongful death, other tortious
conduct, or relating to materials, commodities or products held, used, sold,
transferred, manufactured or disposed of by or on behalf of CCI or any of its
Subsidiaries, containing or incorporating any hazardous or toxic materials,
commodities or Hazardous Substances, or (iii) the presence or release or
threatened release into the environment of any pollutant, contaminant,
deleterious or toxic or hazardous material, substance or waste, chemical waste,
deleterious, toxic or hazardous material or substance, whether solid, liquid or
gas (each a "Hazardous Substance"), whether generated by CCI or any of its
Subsidiaries or located at or about a site leased or otherwise used by CCI or
any of its Subsidiaries or heretofore owned, leased or otherwise used by CCI or
any of its Subsidiaries or any predecessor entity. To CCI's and each
Subsidiary's knowledge, there have been no Hazardous Substances of or generated
by CCI or any Subsidiary that have been disposed of or come to rest at any site
that has been included in any published United States Federal, state or local
"superfund" site list or any other list of hazardous or toxic waste sites
published by any governmental authority in Canada or the United States.
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Except as disclosed at Section 3.16 of the CCI Disclosure Schedule, to CCI's and
each Subsidiary's knowledge, there are and have been no underground storage
tanks located on, no polychlorinated biphenyls ("PCBs") or PCB-containing
equipment used or stored on, and no Hazardous Substances, stored on, any site,
leased or otherwise, used by CCI or any Subsidiary. Except as disclosed at
Section 3.16 of the CCI Disclosure Schedule, to CCI's and each Subsidiary's
knowledge, there have been no emissions or releases or threatened emissions or
releases of Hazardous Substances on, upon, into or, from or to any site leased
or otherwise used by CCI or any of its Subsidiaries or heretofore owned, leased
or otherwise used by CCI or any of its Subsidiaries or any predecessor entity.
CCI has delivered to Acquisition true and complete copies of all audits,
evaluations, assessments, studies, tests, reports and minutes of meetings
dealing with environmental and/or health and safety matters relating to any of
CCI, the Subsidiaries or their respective businesses or assets which are or with
reasonable effort could be within the possession or control of CCI.
3.17 Contractual obligations, etc. Section 3.17 of the CCI Disclosure
Schedule contains a true and complete list of all contracts, agreements, deeds,
mortgages, leases (whether or not capitalized), licenses, instruments,
commitments, sales orders, purchase orders, quotations, bids, undertakings,
arrangements or understandings, written or oral (each, a "Contract") to which or
by which CCI or any of its Subsidiaries is a party or otherwise bound or to
which or by which any of CCI's or its Subsidiaries' assets are subject of the
types described below and in effect on the date hereof (Contracts of the type
described below, collectively, the "Contractual obligations").
(a) All Contracts relating to noncompetition;
(b) All Contracts to which any employee is a party;
(c) All Contracts relating to the provision of consulting
services that involve liabilities or obligations of CCI or any of its
Subsidiaries in excess of CDN$150,000 or that have a term extending more
than one year after the Closing Date;
(d) All Contracts (including without limitation options) to sell
(other than sales of products) or lease (as lessor) any property or
asset owned or leased by CCI or any of its Subsidiaries, other than
property or assets having individual values less than CDN$50,000 and an
aggregate value less than CDN$300,000;
(e) All Contracts pursuant to which CCI or any of its
Subsidiaries possesses or uses (including as lessee) any properties or
assets in its business the loss of use of which would have a CCI
Material Adverse Effect, or pursuant to which CCI pays, accrues expenses
of or incurs charges of at least CDN$50,000 per annum;
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(f) All Contracts for the sale of products or provision of
services by CCI or any of its Subsidiaries that individually involve
products or services having a value of at least CDN$250,000 or that have
a term extending more than one year after the Closing Date;
(g) All Contracts with suppliers or providers of goods or
services (other than cleaning, trash removal, facilities maintenance or
repair, or similar services and other than agent or representation
agreements terminable upon no more than one year's notice) to CCI or any
of its Subsidiaries, including without limitation purchase orders, that
individually involve liabilities in excess of CDN$100,000; and
(h) Each other Contract (other than Contracts of the type
described in (a) through (g) of this Section 3.17) that involves
liabilities or obligations of CCI or any of its Subsidiaries in excess
of CDN$150,000 or that has a term extending more than one year after the
Closing Date.
CCI shall make available to Noble upon request a true and complete copy of each
of the Contractual Obligations referred to in (a) through (h) except as
otherwise provided in Section 3.18 below. Other than defaults resulting from
claims, penalties or causes of action disclosed in Section 3.12 or Section 3.17
of the CCI Disclosure Schedule, neither CCI nor any of its Subsidiaries nor, to
the knowledge of CCI or its Subsidiaries, any other party is in default under or
in breach or violation of, nor has an event occurred that (with or without
notice, lapse of time or both) would constitute a default by CCI or any of its
Subsidiaries or to CCI's knowledge by any other party, under any Contractual
Obligations which defaults, in the aggregate, have a CCI Material Adverse
Effect.
3.18 Affiliated Transactions. Except for Contracts described in Section
3.17 of the CCI Disclosure Schedule, none of the directors, officers,
shareholders or employees of CCI or any of its Subsidiaries, or any relative by
blood or marriage or any Affiliate of, or person not dealing at arms length with
any of the foregoing, is currently a party to any Contractual Obligation.
3.19 Patents, Trademarks, etc. Section 3.19 of the CCI Disclosure
Schedule contains a complete and correct list of all patents, patent
applications, trade names, trademarks, trademark applications, service marks,
copyrights and copyright applications owned or used by CCI or any of its
Subsidiaries. CCI and each of its Subsidiaries owns, or pursuant to license
agreements possesses adequate rights to use, all patents, trade names,
trademarks, copyrights, inventions, processes, designs, formulas, trade secrets,
know-how and other intellectual property and proprietary rights (collectively,
the "Intellectual Property Rights") used in or necessary in all material
respects for the conduct of its business with no known conflict with or
infringement of the asserted rights of others. With respect to any such
Intellectual Property Right owned by CCI or any of its Subsidiaries, CCI or such
Subsidiary is the sole and
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exclusive owner of, with all right, title and interest in and to, free and clear
of any Lien, such Intellectual Property Right and CCI and its Subsidiaries have
sole and exclusive rights (and except as reflected in the Financial Statements,
are not contractually obligated to pay any compensation to any third party in
respect thereof) to the use thereof. To the best of CCI's knowledge (i) all
inventions, processes, designs, formulas, trade secrets, knowhow and other
intellectual property that are material and have not been patented or
copyrighted have been kept confidential and (ii) no third party is currently
infringing or has infringed the rights of CCI or any of its Subsidiaries under
any patent, trade name, trademark or copyright owned by CCI or any of its
Subsidiaries.
3.20 Insurance. Section 3.20 of the CCI Disclosure Schedule contains a
summary description of all insurance policies maintained by CCI or its
Subsidiaries, all of which policies are in full force and effect. Such insurance
policies maintained by CCI insure against all normal risk and peril as is
customary in the CCI's industry. No state of facts exists nor has any event
occurred which forms the basis for any present claim against CCI not fully
covered by insurance and reported to the insurers in accordance with the terms
and conditions of the insurance contract(s). No insurer has reserved its rights
or refused to indemnify or defend CCI as the result of any present claims.
3.21 Customer Warranty Coverage. Section 3.21 of the CCI Disclosure
Schedule contains a description of all warranty coverages (including terms of
such coverages, expiration dates, and estimated amounts of liability) extended
by CCI or any of its Subsidiaries for repair or replacement of defective
products or service to its customers as of the date indicated thereon. The
estimated liability for warranty claims is fairly reflected in the Financial
Statements.
3.22. Certain Agreements. Except as set forth in Section 3.22 of the CCI
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby or by the Share
Exchange Agreement will (i) result in any payment (including, without
limitation, severance, unemployment compensation, parachute payment, bonus or
otherwise) becoming due to any director, employee or independent contractor of
CCI or its Subsidiaries, from CCI or any of its Subsidiaries under any Plan,
agreement or otherwise, (ii) except as contemplated by the Employment
Agreements, increase any benefits otherwise payable under any Plan or agreement,
or (iii) result in the acceleration of the time of payment or vesting of any
such benefits.
3.23 Brokers, Finders, etc. Each of the Sellers individually represents
and warrants that all negotiations relating to this Agreement and the
transactions contemplated hereby have been carried on without the intervention
of any person acting on behalf of such Seller in such manner as to give rise to
any valid claim against such Seller, CCI, Acquisition or Noble for any brokerage
or finder's commission, fee or similar compensation.
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3.24 Authority of Sellers. Each of the Sellers individually represents
and warrants that: (a) it has, and at the Closing Date will have, all requisite
power and authority (i) to enter into this Agreement and all other instruments
and agreements contemplated hereby to which it is contemplated to be a party,
and (ii) to carry out and perform its respective obligations hereunder and
pursuant to all instruments and agreements contemplated hereby to which it is
contemplated to be a party; (b) it has, and at the Closing Date will have, all
requisite power and authority to sell and transfer to Acquisition, as provided
herein, the CCI Shares which it purports to own; (c) this Agreement is, and all
agreements and instruments contemplated hereby to which it is a party, when
executed and delivered in accordance with the terms hereof will be, valid and
binding obligations of such Seller, enforceable in accordance with their
respective terms.
3.25 Residency of Sellers. Each of the Sellers individually represents
and warrants that it is not a non-resident of Canada for the purposes of the Tax
Act.
3.26 Value and Gross Revenue Thresholds.
(a) For the purposes of this section 3.26, the "Relevant Date" in
respect of an entity means the last day of such entity's most recently
completed fiscal year or, if such entity has not completed a fiscal
year, the Closing Date.
(b) As at the Relevant Date, the aggregate value of the assets of
CCI and each of its affiliates (as such term is used under the
Competition Act (Canada)) as at the time of closing, as stated in the
records of each such entity used to prepare its financial statements
(without deducting any amount for liabilities or encumbrances),
determined in accordance with accounting principles normally used by
such entities and that are generally accepted for the type of business
carried on by such entities, was less than CDN$200 million.
(c) For the 12 months ended on the Relevant Date, the aggregate
gross revenues from sales generated from the assets of CCI and each of
its affiliates as at the time of closing, as stated in the records of
each such entity used to prepare its financial statements (including all
amounts accruing from the sale or lease of goods and all amounts
accruing from the rendering of services, without deducting any expenses
or other amounts incurred or provided for in relation to the sale or
lease of goods or the rendering of services), determined in accordance
with accounting principles that are normally used by such entities and
that are generally accepted for the type of business carried on by such
entities, was less than CDN$200 million.
(d) Since the date of its most recently completed fiscal year,
none of CCI or any of its affiliates as at the time of closing has been
a party to or otherwise been affected by any transaction or event, such
as an acquisition or
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re-evaluation of assets for reporting purposes, which would increase the
value of the assets or gross revenues above the thresholds described in
subsections (b) and (c) above.
3.27 Disclosure; Provision of Information. This Agreement, including the
Exhibits hereto and the CCI Disclosure Schedule, the certificates delivered or
to be delivered in connection herewith, taken as a whole, do not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements herein or therein not misleading, and with regard to all
copies of executed documents, such copies are true and accurate representations
of the original executed documents now in effect.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF NOBLE AND ACQUISITION
Noble and Acquisition jointly and severally represent and warrant to the
Sellers as follows in Section 4.1:
4.1 Due Organization, Authorization and Good Standing of Noble,
Acquisition and Holdings. Noble is a corporation duly organized, validly
existing and in good standing under the laws of the State of Michigan.
Acquisition is a corporation duly organized, validly existing and in good
standing under the laws of the Province of Ontario. Holdings is a corporation
duly organized, validly existing and in good standing under the laws of the
Province of Nova Scotia. Each other Subsidiary of Noble is a corporation or
limited partnership duly organized or formed, validly existing and in good
standing under the laws of the jurisdiction of its organization or formation.
Each of Noble, Acquisition and Holdings has the requisite corporate power and
authority to execute, deliver and perform its respective obligations under this
Agreement and to consummate all transactions contemplated hereby, as the case
may be. The execution, delivery and performance of this Agreement by each of
Noble and Acquisition, and the consummation of the transactions contemplated
hereby by Noble, Acquisition and Holdings, have been duly and validly authorized
and approved by all necessary corporate action in respect thereof on the part of
each of them. This Agreement constitutes the valid and binding obligation of
each of Noble and Acquisition, enforceable in accordance with its terms.
Noble and Acquisition jointly and severally represent and warrant to
Wrayter as follows in Sections 4.2 through 4.6:
4.2 Capital Stock. The authorized capital stock of Noble consists of (i)
20,000,000 shares of common stock, no par value, of which, as of July 24, 1998,
approximately 7,156,825 shares were outstanding; and (ii) 150,000 shares of
preferred stock, $100 par value per share, of which, as of the date hereof,
5,250 shares are outstanding.
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Upon issuance of the Noble Common Shares in exchange for the Exchangeable Shares
as provided in the Share Exchange Agreement and Schedule A thereto, such shares
shall be validly issued, fully paid and nonassessable, free of preemptive rights
and free of all Liens other than such as arise under applicable securities laws.
The Noble Common Shares to be issued pursuant to the Share Exchange Agreement
and Schedule A thereto will be issued in full compliance with all Canadian
provincial securities laws and the United States Securities Act of 1933 (the
"Securities Act") and the rules and regulations promulgated thereunder and all
other relevant securities or blue sky laws of any state or other jurisdiction.
No class of capital stock of Noble is entitled to preemptive rights.
The authorized capital stock of Acquisition consists of an unlimited
number of common shares and 35,360 Exchangeable Shares, of which, as of the date
hereof: 1,000 common shares are outstanding and are owned by Holdings and no
Exchangeable Shares are outstanding. Any Exchangeable Shares issued pursuant to
this Agreement will be, validly issued, fully paid and nonassessable, and free
of preemptive rights. The Exchangeable Shares to be issued pursuant to this
Agreement will be issued in full compliance with all applicable Canadian
provincial securities laws and the rules and regulations promulgated thereunder.
4.3 SEC Reports. Noble has filed all proxy statements, reports and other
documents required to be filed by it under the Exchange Act through June 1,
1998, and Noble has made available to CCI copies of Noble's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, and all final proxy
statements and reports filed by Noble under the Exchange Act after such date,
each as filed with the SEC (collectively, the "SEC Reports").
4.4 Absence of Changes. From March 31, 1998 to the date of this
Agreement, except as set forth in the SEC Reports (copies of which have all been
provided by Noble to CCI), neither Noble nor any of its Subsidiaries has
undergone any adverse change in its financial condition, or suffered any damage,
destruction or loss (whether or not covered by insurance) that adversely affects
its financial condition, the condition of its assets or the ability to conduct
its business other than such changes in condition, damage, destruction or loss
as in the aggregate would not have an Noble Material Adverse Effect; and from
March 31, 1998 to the date of this Agreement, except as set forth in the SEC
Reports, there has been no adverse change in the condition of the business of
Noble or any of its Subsidiaries, whether as a result of any change as to
accounts receivable, inventory or other assets, any loss of competitive
position, any natural disaster, accident, strike, sabotage, or confiscation of
property, or any other event or condition directly affecting or relating to
Noble, whether or not related to any of the foregoing (including without
limitation labour disputes, environmental audits or disclosures, and
intellectual property disputes), except for such changes as would not in the
aggregate have an Noble Material Adverse Effect.
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4.5 Value and Gross Revenue Thresholds; Investor Status.
(a) For the purposes of this section 4.5, the "Relevant Date" in
respect of an entity means the last day of such entity's most recently
completed fiscal year or, if such entity has not completed a fiscal
year, the Closing Date.
(b) As at the Relevant Date, the aggregate value of the assets of
Acquisition and each of its affiliates (as such term is used under the
Competition Act (Canada)) as at the time of closing, as stated in the
records of each such entity used to prepare its financial statements
(without deducting any amount for liabilities or encumbrances),
determined in accordance with accounting principles normally used by
such entities and that are generally accepted for the type of business
carried on by such entities, was less than CDN$200 million.
(c) For the 12 months ended on the Relevant Date, the aggregate
gross revenues from sales generated from the assets of Acquisition and
each of its affiliates as at the time of closing, as stated in the
records of each such entity used to prepare its financial statements
(including all amounts accruing from the sale or lease of goods and all
amounts accruing from the rendering of services, without deducting any
expenses or other amounts incurred or provided for in relation to the
sale or lease of goods or the rendering of services), determined in
accordance with accounting principles that are normally used by such
entities and that are generally accepted for the type of business
carried on by such entities, was less than CDN$200 million.
(d) Since the date of its most recently completed fiscal year,
none of Acquisition or any of its affiliates as at the time of closing
has been a party to or otherwise been affected by any transaction or
event, such as an acquisition or re-evaluation of assets for reporting
purposes, which would increase the value of the assets or gross revenues
above the thresholds described in subsections (b) and (c) above.
(e) Acquisition is a "WTO Investor" for the purposes of the
Investment Canada Act.
4.6 Disclosure. This Agreement, including the Exhibits hereto and the
certificates delivered or to be delivered in connection herewith and the SEC
Reports referenced hereby, taken as a whole, do not contain any untrue statement
of material fact or omit to state a material fact necessary to make the
statements herein or therein not misleading.
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ARTICLE 5
CERTAIN COVENANTS
5.1 Exclusivity; Acquisition Proposals. Unless and until this Agreement
shall have been terminated by either party pursuant to Section 8.1 hereof,
except as required by law, CCI and Sellers shall not (and each shall use its
best efforts to ensure that none of its officers, directors, agents,
representatives or affiliates) take, directly or indirectly, any of the
following actions with any party other than Acquisition and its designees or
agents: (i) solicit, encourage, initiate or participate in any negotiations,
inquiries or discussions with respect to any offer or proposal to acquire any
of CCI's business, assets or capital shares whether by arrangement,
amalgamation, merger, consolidation, other business combination, purchase of
assets, tender or exchange offer or otherwise (each of the foregoing an
"Acquisition Transaction"); (ii) disclose any information not customarily
disclosed to any person concerning CCI's business or properties or afford to
any person or entity access to CCI's properties, books or records, except in
the ordinary course of business consistent with past practice and as required
pursuant to a governmental request for information; (iii) enter into or execute
any agreement relating to an Acquisition Transaction, plan of reorganization,
or other agreement calling for the sale of any of CCI's business and
properties; or (iv) make or authorize any public statement, recommendation or
solicitation with respect to any Acquisition Transaction or any offer or
proposal relating to an Acquisition Transaction other than with respect to this
Agreement.
5.2 Notification of Certain Matters. Between the date hereof and the
Closing Date, each party shall give prompt notice in writing to the other
parties of: (i) any information that indicates that any of its representations
or warranties contained herein was not true and correct as of the date hereof or
will not be true and correct at and as of the Closing Date with the same force
and effect as if made at and as of the Closing Date (except for changes
permitted or contemplated by this Agreement); (ii) the occurrence of any event
that will result, or has a reasonable prospect of resulting, in the failure of
any condition specified in ARTICLE 6 hereof to be satisfied and; (iii) any
notice or other communication from any third party alleging that the consent of
such third party is or may be required in connection with the transactions
contemplated by this Agreement or that such transactions otherwise may violate
the rights of or confer remedies upon such third party.
5.3 Other Limitations on Conduct of Business Prior to Closing. CCI and
Wrayter hereby covenant and agree with Noble that, prior to Closing, unless the
prior written consent of Noble shall have been obtained, and except as otherwise
contemplated herein, CCI's business shall be operated, only in the usual,
regular and ordinary course of business consistent with past practices Sellers
and CCI hereby covenant and agree with Noble that, prior to Closing. Sellers
hereby covenant and agree with Noble that, prior to Closing, unless the prior
written consent of Noble shall have been obtained, and except as otherwise
contemplated herein: (i) they will use their reasonable efforts to preserve
intact CCI's business organization and assets and maintain their rights and
franchises; (ii) they will not authorize for issuance, issue or obligate CCI or
Sellers to issue any shares of its capital stock or any options, warrants or
rights, or enter into any other agreements or commitments obligating it to issue
or
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sell shares of its capital stock or any securities or obligations convertible
into, or exchangeable for, any shares of its capital stock; and (iii) they will
take no action that would (a) materially adversely affect the ability of Noble,
Sellers, Acquisition or CCI to obtain any necessary approvals of any third
parties or any governmental authorities required for the transactions
contemplated hereby or materially increase the period of time necessary to
obtain such approvals, or (b) materially adversely affect Sellers', Noble's,
Acquisition's or CCI's ability to perform their respective covenants and
agreements under this Agreement.
5.4 Access to Information. CCI and Wrayter shall, subject to applicable
law, afford Noble and its accountants, counsel and other representatives
reasonable access during the period prior to the Closing Date to the following
information relating to CCI: (a) all financial statements, properties, books,
contracts, commitments and records, and (b) all other information concerning the
business, properties and personnel of such entities, as Noble may reasonably
request. No information or knowledge obtained after the date hereof in any
investigation pursuant to this Section 5.4 shall affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the transactions contemplated herein.
5.5 Further Assurances. Subject to the terms and conditions herein
provided, and subject to its fiduciary obligations under law, each of the
parties agrees to use all reasonable efforts to take, or cause to be taken, all
actions 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 contemplated by this Agreement, including without limitation
the taking of all reasonable actions necessary to satisfy each condition
precedent set forth in ARTICLE 6, to comply promptly with all legal requirements
that may be imposed on any of them with respect to this Agreement or to procure
any consent, approval, order or authorization of, or any exemption by, any
governmental entity, or other third party, required to be obtained or made in
connection with this Agreement or the taking of any action contemplated hereby.
5.6 Amendments to CCI Disclosure Schedule. The parties agree that CCI
may amend and/or supplement any part of the CCI Disclosure Schedule in its
discretion at any time after the date of this Agreement through and including
the date (the "Schedule Cutoff") seven (7) days prior to the Closing Date and
such amendments and supplements shall be deemed part of this Agreement as of the
date hereof. Notwithstanding anything to the contrary in this Section 5.6, no
amendments or supplements may be made to the CCI Disclosure Schedule after the
Schedule Cutoff without the written consent of Noble and Acquisition.
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ARTICLE 6
CONDITIONS PRECEDENT
6.1 Conditions Precedent to CCI's and Sellers' Obligation to Close. The
obligations of CCI and Sellers to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, prior to or substantially
contemporaneously with the Closing, of the following conditions, compliance with
which, or the occurrence of which may be waived in whole or in part by CCI and
Sellers in writing.
6.1.1 Representations; Covenants; Certificate. The
representations and warranties of Noble and Acquisition contained in
ARTICLE 4 hereof (except for clause (i) of the first sentence of Section
4.2 to the extent it refers to the number of issued and outstanding
shares of Noble Common Shares) shall be true in all material respects as
of the date of this Agreement and as of the Closing Date with the same
effect as though made as of the Closing Date; Noble and Acquisition
shall in all material respects have performed and complied with all
their respective obligations and covenants required by this Agreement to
be performed or complied with prior to Closing; and each of Noble and
Acquisition shall have delivered to CCI and Sellers a certificate, dated
the Closing Date and signed by the President or a Vice President of such
company, as its respective obligations and covenants hereunder.
6.1.2 Opinion of Counsel for Noble and Acquisition. Sellers shall
have received from each of Jaffe, Raitt, Heuer & Weiss, Professional
Corporation, counsel for Noble and Acquisition, a legal opinion, dated
the Closing Date, with respect to legal matters related to this
Agreement and the transactions contemplated hereby and in form and
substance reasonably acceptable to CCI and Sellers.
6.1.3 Injunctions. No temporary restraining order, preliminary or
permanent injunction or other order by any Canadian or United States
Federal or provincial or state court or governmental body prohibiting
the consummation of the transactions contemplated by this Agreement
shall have been issued and shall not have expired or been withdrawn or
reversed.
6.1.4 Closing Documents. Noble, Acquisition and Holdings shall
have executed and delivered to Sellers and/or CCI, as the case may be,
or shall execute and deliver at Closing, all documents contemplated
hereby and shall deliver at Closing all of the Exchangeable Shares
required to be delivered to Wrayter and Blake Jr. hereunder.
6.1.5 Payment of Indebtedness to RoyNat and First Ontario. Noble,
Acquisition and CCI shall, prior to Closing, cause full payment to be
made to each of RoyNat and First Ontario, respectively, under those
certain Absolute Assignments of Security and Indebtedness among
Acquisition, CCI and RoyNat and First Ontario, respectively, dated as of
the date hereof, to be paid by certified check or by wire transfer of
immediately available funds.
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6.1.6 Indemnification of Blake Corp. on Leases. At Closing,
Acquisition will agree to indemnify Blake Corp. from all liability from
and after the date of Closing which arises from Blake Corp.'s guarantee
of certain leases of property used by CCI, said indemnity to be
reasonably acceptable in form and substance to Blake Corp.
6.1.7 Consummation of Letter of Robert Blake, Sr. Noble, CCI,
Robert Blake, Sr. and Blake Corp. shall have consummated, prior to or
concurrent with the Closing, all of the transactions set forth in that
letter of Robert Blake, Sr. dated 8 September 1998, a copy of which is
attached hereto as Exhibit D.
6.2 Conditions Precedent to Obligations of Noble and Acquisition. The
obligations of Noble and Acquisition to effect the transactions contemplated by
this Agreement shall be subject to the satisfaction, prior to or substantially
contemporaneously with Closing, of the following conditions, compliance with
which, or the occurrence of which, may be waived in whole or in part by Noble
and Acquisition in writing:
6.2.1 Due Diligence. The results of the due diligence
investigation of CCI by Noble and Acquisition shall be satisfactory to
Noble and Acquisition in their sole discretion.
6.2.2 Representations; Covenants; Certificate. The
representations and warranties of Sellers contained in ARTICLE 3 hereof
shall be true in all material respects as of the date of this Agreement
and the Closing Date with the same effect as though made as of the
Closing Date; CCI and Sellers shall in all material respects have
performed and complied with all their respective obligations and
covenants required by this Agreement to be performed or complied with
prior to Closing; and each of the Sellers shall have delivered to Noble
certificates, dated the Closing Date and signed by its respective
President or a Vice President, confirming all representations and
warranties made by such Seller in this Agreement.
6.2.3 Opinion of Counsel for CCI and Sellers. Noble and
Acquisition shall have received from (i) Gowling, Strathy & Henderson,
counsel for CCI and Wrayter, (ii) Keyser Mason Ball, counsel for Blake
Corp., and (iii) counsel for Crosbie, legal opinions, each dated the
Closing Date, with respect to legal matters related to this Agreement
and the transactions contemplated hereby and in form and substance
reasonably acceptable to Noble and Acquisition.
6.2.4 Required Consents. Consents and waivers required from any
governmental authority with respect to the consummation of this
Agreement and the transactions contemplated hereby shall have been
filed, occurred, or been obtained, other than such consents, the failure
to obtain which would not have
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any CCI or Noble Material Adverse Effect or any material adverse effect
on the consummation of this Agreement.
6.2.5 Pre-Closing Documents. Sellers and CCI shall have delivered
to Acquisition, prior to the Closing Date: (i) a certified copy of each
of the Charter Documents of CCI, dated the Closing Date; (ii) a
Certificate of Status for CCI from the Province of Ontario, dated not
earlier than five (5) days prior to the Closing Date; (iii) a certified
copy of the resolutions of the board of directors of CCI authorizing the
execution of this Agreement and all other documents and instruments
contemplated hereby, and the performance of all acts required to be
performed by CCI hereunder; (iv) certified copies of the Charter
Documents of each of the Sellers other than First Ontario and RoyNat,
dated the Closing Date; (v) Certificates of Status for each of the
Sellers from the Province of Ontario, dated not earlier than five (5)
days prior to the Closing Date; (vi) certified copies of the resolutions
of the board of directors of each of the Sellers authorizing the
execution of this Agreement and all other documents and instruments
contemplated hereby, and the performance of all acts required to be
performed by such Seller hereunder (or, in the case of First Ontario and
RoyNat, certified copies of resolutions of the boards of directors
appointing the President and Director of Merchant Banking of First
Ontario and RoyNat, respectively); and (vii) a certificate of the
Secretary or Assistant Secretary of CCI and each of the Sellers,
respectively, other than First Ontario and RoyNat, dated the Closing
Date as to the incumbency and signature of the officer or officers
signing this Agreement on behalf of CCI or such Seller, as the case may
be, and all other documents and instruments required to be executed and
delivered by CCI or such Seller hereunder, together with satisfactory
evidence of the incumbency and signature of each such Secretary or
Assistant Secretary.
6.2.6 Closing Documents. CCI and each of the Sellers shall each
have executed and delivered to Noble or Acquisition, as the case may be,
or shall execute and deliver at Closing, all documents contemplated
hereby and shall deliver at Closing all of the CCI Shares required to be
delivered to Acquisition hereunder.
6.2.8 No Action Under Competition Act. Neither the Director of
Investigation and Research (the "Director") appointed under the
Competition Act (Canada) nor any of his representatives shall have
advised Noble, Acquisition or CCI, or any of their representatives, that
the Director intends to commence an inquiry or make an application under
the Competition Act (Canada) in respect of any transaction contemplated
by this Agreement.
6.2.9 Cancellation of Class M Shares Held by Blake Jr. At least
seven (7) days before Closing, Blake Jr. shall have agreed in writing to
the cancellation or waiver of 1,000 Class M Common Shares of CCI which
Blake Jr. owns or
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would otherwise be entitled to own, in consideration solely of the
Exchangeable Shares to be delivered to him pursuant to Section 2.2(f),
said writing to incorporate the representations and warranties given in
Article 4 hereof.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification of Noble and Acquisition. Each of the Sellers,
individually, agrees to indemnify and hold Noble and Acquisition, their
Subsidiaries, officers, directors, successors and assigns, harmless from and
against any and all claims, demands, proceedings, damages, liabilities, losses,
costs or expenses (including without limitation, all legal and other
professional fees and disbursements, interest, penalties and amount paid in
settlement) ("Losses") which any of them may incur, suffer or become liable for,
directly or indirectly, as a result of or in connection with:
(a) Any and all monetary damages or deficiency resulting from any
misrepresentation, breach of warranty, and/or nonfulfillment of any
agreement or covenant on the part of such Seller, under this Agreement
or resulting from any misrepresentation or omission from any
certificate, schedule, list, or other instrument to be furnished by such
Seller to Noble and Acquisition under this Agreement; and
(b) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs, and expenses including reasonable
attorneys fees, incident to any of the foregoing;
provided, however, that within sixty (60) days after learning of the assertion
of any claim against which Noble and/or Acquisition claim indemnification
hereunder, Noble and/or Acquisition, as the case may be, shall notify such
Seller and afford it the opportunity to assume the defense or monetary
settlement thereof at such Seller's own expense with counsel of such Seller's
choosing, and Noble and/or Acquisition, as the case may be, shall have
cooperated fully to make available to such Seller all pertinent information
under their control or in their possession. Noble and Acquisition shall have the
right to join in the defense of any such claim with counsel of their own
choosing and at their own expense.
7.2 Indemnification of Sellers.
(a) Acquisition hereby agrees to indemnify and hold Sellers,
their successors and permitted assigns harmless from and against any and
all liability, loss, cost or expense which Sellers may suffer or become
liable for as a result or in connection with:
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(i) Any and all liabilities, obligations and claims, which
arise from the operation of the business of CCI after the Closing
Date, other than to the extent resulting from any malfeasance,
misfeasance, negligence, or actions of Sellers or any matter
referred to in Section 7.1; and
(ii) Any and all monetary damages or deficiency resulting
from any misrepresentation, breach of warranty, and/or
nonfulfillment of any agreement or covenant on the part of
Acquisition under this Agreement or resulting from any
misrepresentation or omission from any certificate, schedule,
list, or other instrument to be furnished by Acquisition to
Sellers under this Agreement.
(b) Noble hereby agrees to indemnify and hold Sellers, their
successors and permitted assigns harmless from and against any and all
liability, loss, cost or expense which Sellers may suffer or become
liable for as a result or in connection with any and all monetary
damages or deficiency resulting from any misrepresentation, breach of
warranty, and/or nonfulfillment of any agreement or covenant on the part
of Noble under this Agreement or resulting from any misrepresentation or
omission from any certificate, schedule, list, or other instrument to be
furnished by Noble to Sellers under this Agreement.
(c) With regard to the indemnification provisions of subsections
(a) and (b) above, within sixty (60) days after learning of the
assertion of any claim against which a Seller claim indemnification
hereunder, such Seller shall notify Acquisition and/or Noble, as the
case may be, and afford Acquisition and/or Noble the opportunity to
assume the defense or monetary settlement thereof at their own expense
with counsel of their choosing, and such Seller shall have cooperated
fully to make available to Acquisition and/or Noble all pertinent
information under its control or in its possession. Sellers shall have
the right to join in the defense of any such claim with counsel of their
own choosing and at Sellers' own expense.
7.3 Failure to Provide Timely Notice. Notwithstanding the notice
requirements provided in Sections 7.1 and 7.2, the right to indemnification
under this Agreement shall not be affected by any failure to give or any delay
in giving such notice unless, and then only to the extent that, the rights and
remedies of the party to whom such notice was to have been given shall have been
prejudiced.
7.4 Minimization of Indemnities. The parties hereto shall each use
reasonable efforts to minimize the obligation of the other to indemnify under
this Agreement, by, among other reasonable things and without limiting the
generality of the foregoing, taking such reasonable remedial action as it
believes may minimize such obligation and seeking to the maximum extent possible
reimbursement from insurance carriers under applicable insurance policies
covering any such liability.
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7.5 Assignment of Claims. The parties agree that upon satisfaction of
the obligation to indemnify hereunder, and in consideration thereof, to assign
to the party making such payment or giving such credit, any and all claims,
causes of action and demands of whatever kind and nature which such indemnified
party may have against any person, firm or other entity giving rise to such
indemnified loss, and to reasonably cooperate in any efforts to recover
therefrom.
7.6 Acquisition's Right to Settle Claims. After Closing, notwithstanding
anything herein contained to the contrary, in the event that, in order to
protect CCI and its business and assets after acquisition of the CCI Shares by
Acquisition hereunder, Acquisition shall desire to cause CCI to settle any
claims or actions, the defense of which Sellers would otherwise be entitled to
assume pursuant to the provisions hereof, Acquisition shall be entitled to cause
CCI to so settle such claim or action, after first giving Sellers not less than
ten (10) days prior written notice of such claim or action and the proposed
settlement, and the terms of such settlement shall be binding upon Sellers so
long as they are commercially reasonable.
ARTICLE 8
MISCELLANEOUS
8.1 Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and abandoned at any time
before Closing as herein provided:
(a) By the mutual consent of Noble, on one hand, and all of the
Sellers, on the other hand;
(b) By either Noble, on one hand, or all of the Sellers, on the
other hand, if there has been a material breach on the part of the
other(s) of any representation, warranty, covenant or agreement
contained herein that cannot be or has not been cured within ten days
after written notice of such breach to the breaching party(ies);
(c) By all of the Sellers, if the Closing shall not have occurred
by October 10, 1998 other than as a result of the failure of CCI or
Sellers to satisfy their respective obligations hereunder.
(d) By Noble, if the Closing shall not have occurred by October
10, 1998 other than as a result of the failure of Noble, Acquisition or
Holdings to satisfy their respective obligations hereunder.
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In the event of termination and abandonment under this Section 8.1, this
Agreement shall forthwith become null and void and there shall be no liability
on the part of any of the parties hereto or any of their respective officers and
directors; provided, however, that the provisions of ARTICLE 7, Section 8.3, and
Section 8.4 hereof, and the respective provisions referenced therein, shall
survive any termination of this Agreement as provided therein and in the event
of a termination pursuant to Section 8.1(b) the breaching party(ies) shall be
liable for all out-of-pocket costs and expenses incurred in connection with the
transactions contemplated hereby.
8.2 Amendments and Supplements. At any time before Closing, this
Agreement, the Share Exchange Agreement and the Registration Rights Agreement
may be amended or supplemented by a written instrument signed by all of the
parties to each such agreement and approved by their respective Boards of
Directors.
8.3 Survival of Representations and Warranties. All representations and
warranties made by the parties hereunder, including but not limited to the
representations and warranties in ARTICLE 3, ARTICLE 4 and Section 8.7 shall
survive the Closing and shall remain in full force and effect for a period of
two (2) years following the actual Closing Date.
8.4 Expenses. Whether or not Closing takes place, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses.
8.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic substantive laws of the Province of Ontario and the
federal laws of Canada applicable therein.
8.6 Notice. All notices and other communications required or permitted
hereunder shall be in writing (including any facsimile transmission or similar
writing), and shall be sent either by telecopy, hand delivery, or reputable
overnight courier, addressed as follows or to such other address or addresses of
which the respective party shall have notified the other party. Each such notice
or other communication shall be effective (i) if given by telecopy, when such
telecopy is transmitted and the appropriate answer back is received, (ii) if
given by reputable overnight courier, one business day after being delivered to
such courier or (iii) if given by any other means, when received at the address
specified in this Section.
(a) if to Noble at:
Noble International, Ltd.
33 Bloomfield Hills Parkway, Suite 155
Bloomfield Hills, Michigan 48304
Fax: (248) 594-9501
Attention: Michael C. Azar
32
<PAGE> 33
(b) if to Holdings at:
Noble Canada Holdings II, Limited
c/o Noble International, Ltd.
33 Bloomfield Hills Parkway, Suite 155
Bloomfield Hills, Michigan 48304
Fax: (248) 594-9501
Attention: Michael C. Azar
(c) if to the Corporation at:
Noble Canada, Inc.
c/o Noble International, Ltd.
33 Bloomfield Hills Parkway, Suite 155
Bloomfield Hills, Michigan 48304
Fax: (248) 594-9501
Attention: Michael C. Azar
and in all of the above cases, with required additional
copies to:
Jaffe, Raitt, Heuer & Weiss, Professional Corporation
One Woodward Avenue, Suite 2400
Detroit, Michigan 48226
Fax: (313) 961-8358
Attention: Peter Sugar
(d) if to Sellers:
Wrayter Investments Inc.
c/o R. Douglas S. Hunter
Gowling, Strathy & Henderson
Commerce Court West, Ste. 4900
Toronto, Ontario M5L 1J3
RoyNat Inc.
Attn: Mr. Robert Roy
40 King Street West, 26th Floor
Toronto, Ontario M5H 1H1
First Ontario Labour Sponsored Investment Fund Ltd.
Attn: Mr. Ken Delaney
234 Eglington Avenue East, Suite 310
Toronto, Ontario M4P 1K5
33
<PAGE> 34
Crosbie & Company Inc.
One First Canadian Place, 9th Floor
Toronto, Ontario M5X 1A4
Attn: Mr. Allan H.T. Crosbie
659730 Ontario Inc.
268 Lakeshore Road East, Box 1508
Oakville, Ontario L6J 7S4
Attn: Mr. Robert Blake, Sr.
with copies to:
Gowling, Strathy & Henderson (for Wrayter)
Commerce Court West, Ste. 4900
Toronto, Ontario M5L 1J3
Fax: (416) 862-7661
Attention: R. Douglas S. Hunter
Keyser, Mason & Ball (for Blake Corp.)
201 City Centre Drive, Suite 701
Mississauga, Ontario L5B 2T4
Fax:
Attention: John Ball
Smith Lyons (for RoyNat and First Ontario)
40 King Street West, Suite 5800
Toronto, Ontario M5H 3Z7
Attn: Andrew Brands
(e) if to CCI:
c/o Noble International, Ltd.
33 Bloomfield Hills Parkway, Suite 155
Bloomfield Hills, Michigan 48304
Fax: (248) 594-9501
Attention: Michael C. Azar
and
c/o Gowling, Strathy & Henderson
Commerce Court West, Ste. 4900
Toronto, Ontario M5L 1J3
Fax: (416) 862-7661
Attention: R. Douglas S. Hunter
34
<PAGE> 35
8.6 Counterparts. This Agreement and any amendments or supplements
thereto may be executed in counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
8.7 Whole Agreement. Each of the Sellers acknowledges and agrees, one
with the other, that this Agreement constitutes the only agreement with respect
to the sale of the CCI Shares and none of the Sellers nor any of their
shareholders, officers or directors or any affiliates or associates thereof is
receiving any consideration for the CCI Shares other than the consideration
recited in Section 2.2 and 6.1.7 hereof.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
35
<PAGE> 36
STOCK PURCHASE AGREEMENT - CENTRIFUGAL COATERS INC.
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be duly executed as of the date first above written.
NOBLE CCI
- ----- ---
NOBLE INTERNATIONAL, LTD. CENTRIFUGAL COATERS INC.
By: /s/ MICHAEL C. AZAR By: /s/ FRASER WRAY
----------------------------- -----------------------------
Its: Vice President Its: President
----------------------------- -----------------------------
ACQUISITION
- -----------
NOBLE CANADA II, INC.
By: /s/ MICHAEL C. AZAR
-----------------------------
Its: President
-----------------------------
SELLERS
-------
WRAYTER INVESTMENTS INC. FIRST ONTARIO LABOUR
SPONSORED INVESTMENT FUND LTD.
By: /s/ FRASER WRAY By: /s/ KEN DELANEY
----------------------------- -----------------------------
Its: President Its: President
----------------------------- -----------------------------
ROYNAT INC. CROSBIE & COMPANY INC.
By: /s/ ROB ROY By: /s/ ALAN CROSBIE
----------------------------- -----------------------------
Its: President Its: President
----------------------------- -----------------------------
659730 ONTARIO INC.
By: /s/ ROBERT BLAKE
-----------------------------
Its: President
-----------------------------
36
<PAGE> 37
STOCK PURCHASE AGREEMENT
CENTRIFUGAL COATERS INC.
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Share Exchange Agreement, with Exchangeable Share Provisions
Exhibit B Support Agreement
Exhibit C Registration Rights Amendment
Exhibit D Letter of Robert Blake, Sr.
SCHEDULES
Schedule 3.1 Incorporations and jurisdictions
Schedule 3.2 Approvals and violations in connection with sale
Schedule 3.3 Stockholders and related rights
Schedule 3.4 Subsidiaries
Schedule 3.5 Financial matters
Schedule 3.6 Changes and exemptions to financial covenants
Schedule 3.7(a) Fixed assets (non-leased)
Schedule 3.7(b) Equipment and machinery
Schedule 3.7(c) Warranties
Schedule 3.7(f) Liabilities
Schedule 3.8 Tax matters
Schedule 3.9 Properties, liens and leases
Schedule 3.10 Notices from customers, distributors and suppliers
Schedule 3.12 Litigation
Schedule 3.13 Employee matters and benefit plans
Schedule 3.14 Labour relations
Schedule 3.15 Licenses and authorizations
Schedule 3.17 Contractual obligations
Schedule 3.19 Intellectual property
Schedule 3.20 Insurance
Schedule 3.21 Customer warranties
Schedule 3.22 Certain agreements
37
<PAGE> 1
EXHIBIT 2.2
SHARE EXCHANGE AGREEMENT
MEMORANDUM OF AGREEMENT made as of October 1, 1998.
A M O N G:
NOBLE INTERNATIONAL, LTD.,
a Michigan corporation ("Parent"),
- and -
NOBLE CANADA HOLDINGS II LIMITED,
a Nova Scotia corporation ("Holdings"),
- and -
NOBLE CANADA II, INC.,
an Ontario corporation (the "Corporation"),
- and -
WRAYTER INVESTMENTS INC.,
an Ontario corporation ("Wrayter")
- and -
ROBERT BLAKE, JR.,
an individual ("Blake Jr.") (Wrayter and Blake Jr. together
being the "Sellers")
WHEREAS pursuant to a certain stock purchase agreement dated as of
September 8, 1998 ("Purchase Agreement") among Centrifugal Coaters Inc. ("CCI"),
Parent, the Corporation, Wrayter, Crosbie & Company Inc. ("Crosbie"), 659730
Ontario Inc. ("Blake Corp."), Blake Jr., RoyNat Inc. ("RoyNat"), and First
Ontario Labour Sponsored Investment Fund Ltd. ("First Ontario"), the
shareholders of CCI agreed to sell to the Corporation, and the Corporation
agreed to purchase from such shareholders, all of the outstanding shares in the
capital of CCI in consideration of certain cash payments to RoyNat, First
Ontario, Crosbie and Blake Corp., and of the issuance by the Corporation to the
Sellers of a total of 57,938 Class C Exchangeable Non-Voting Preferred Shares of
the Corporation ("Exchangeable Shares");
AND WHEREAS the parties to the Purchase Agreement agreed that at the
Closing (as defined in the Purchase Agreement), Parent, the Corporation and
Sellers would execute and deliver a share exchange agreement in substantially
the form set forth in Exhibit A to the Purchase Agreement;
Share Exchange Agreement (CCI), Page 1
<PAGE> 2
NOW THEREFORE in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
------------------------------
1.1 DEFINITIONS. In this Agreement, the following terms shall have the
following meanings:
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession by another Person, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that first mentioned Person, whether through the ownership of voting
securities, by contract or otherwise.
"AMEX" means the American Stock Exchange.
"BOARD OF DIRECTORS" means the Board of Directors of the Corporation.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a legal
holiday on which banks are not open for business in Toronto, Ontario or Detroit,
Michigan.
"CALL RIGHTS" means collectively the Liquidation Call Right, the
Retraction Call Right and the Redemption Call Right.
"CURRENT MARKET PRICE" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"DEFAULT EVENT" means any failure of the Corporation to perform any of
its obligations pursuant to the Exchangeable Share Provisions including, without
limitation, its obligation to redeem any Retracted Shares as a result of the
operation of section 4.5 of the Exchangeable Share Provisions.
"EXCHANGE RIGHT" has the meaning ascribed thereto in section 2.1 hereof.
"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges,
restrictions and conditions set forth in the provisions attaching to the
Exchangeable Shares.
"EXCHANGEABLE SHARES" has the meaning ascribed thereto in the recitals
hereto.
"HOLDERS" means the registered holders from time to time of Exchangeable
Shares including, without limitation, the Sellers, but excluding Parent and its
Affiliates.
Share Exchange Agreement (CCI), Page 2
<PAGE> 3
"LIEN" means any lien, pledge, adverse claim, security interest,
mortgage, restriction, claim, charge or other encumbrance of any kind or nature
whatsoever.
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"OBCA" means the Ontario Business Corporations Act, as amended.
"OFFICER'S CERTIFICATE" means, with respect to Parent, Holdings or the
Corporation, as the case may be, a certificate signed by any one of the Chairman
of the Board, the President, any Vice-President or any other senior officer of
such Company, as the case may be.
"PARENT SHARES" means the shares of common stock, no par value, in the
capital of Parent.
"PERSON" includes an individual, partnership, corporation, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"PURCHASE AGREEMENT" has the meaning ascribed thereto in the recitals
hereto.
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"RETRACTED SHARES" has the meaning ascribed thereto in section 2.6
hereof.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"SUPPORT AGREEMENT" means the support agreement made as of even date
herewith among the Corporation, Holdings and Parent.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC. The division of this
Agreement into articles, sections and paragraphs and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
1.3 NUMBER, GENDER, ETC. In this Agreement, words importing the singular
number only shall include the plural and vice versa, and words importing the use
of any gender shall include all genders.
1.4 DATE FOR ANY ACTION. If any date on which any action is required to
be taken under this Agreement is not a Business Day, such action shall be
required to be taken on the next succeeding Business Day.
1.5 WITHHOLDING OF TAX. All amounts required to be paid, deposited or
delivered hereunder shall be paid, deposited or delivered after deduction of any
amount required by applicable law to be deducted or withheld on account of tax
and the deduction of such amounts
Share Exchange Agreement (CCI), Page 3
<PAGE> 4
and remittance to the applicable tax authorities shall, to the extent thereof,
satisfy such requirement to pay, deposit or deliver hereunder.
ARTICLE 2
EXCHANGE RIGHT AND EARLY EXCHANGE RIGHTS
----------------------------------------
2.1 GRANT AND OWNERSHIP OF THE EXCHANGE RIGHT. Parent hereby grants to
the Holders the right (the "Exchange Right"), upon the occurrence and during the
continuance of a Default Event, to require Parent to purchase from each Holder
all or any part of the Exchangeable Shares held by such Holder, all in
accordance with the provisions of this Agreement. Parent hereby acknowledges
receipt from the Holders of good and valuable consideration (and the adequacy
thereof) for the grant of the Exchange Right by Parent to the Holders.
2.2 LEGENDED SHARE CERTIFICATES. The Corporation shall cause each
certificate representing Exchangeable Shares to bear an appropriate legend
notifying the Holders of the right to exercise the Exchange Right in respect of
the Exchangeable Shares held by a Holder.
2.3 PURCHASE PRICE. The purchase price payable by Parent for each
Exchangeable Share to be purchased by Parent under the Exchange Right shall be
an amount per share equal to the Current Market Price, determined on the date
the Exchange Right is exercised pursuant to section 2.4 (the "Exchange Date"),
which shall be satisfied in full by the Corporation causing to be delivered to
each Holder one Parent Share, or, at a Holder?s election, US $11.50 in cash
("Cash Compensation"); provided that, in the event that a Holder elects to
receive Cash Compensation in lieu of all or part of the Parent Shares to which
such Holder is entitled pursuant to this section, Corporation may elect, at its
sole discretion, to cause to be delivered to such Holder for each Exchangeable
Share one Parent Share instead of the Cash Compensation elected by such Holder.
2.4 EXERCISE OF THE EXCHANGE RIGHT. Subject to the terms and conditions
herein set forth, a Holder shall be entitled, upon the occurrence and during the
continuance of a Default Event, to exercise the Exchange Right with respect to
all or any part of the Exchangeable Shares registered in the name of such Holder
on the books of the Corporation. To exercise the Exchange Right, the Holder
shall deliver to Parent, in person, by courier or by certified or registered
mail, at its principal office or at such other place as Parent may from time to
time designate by written notice to the Holders, the certificates representing
the Exchangeable Shares that such Holder desires Parent to purchase pursuant to
the Exchange Right, duly endorsed in blank, and accompanied by such other
documents and instruments as Parent may reasonably require together with:
(a) a duly completed form of notice of exercise of the Exchange
Right, contained on the reverse of or attached to the Exchangeable Share
certificates, stating (i) that the Holder thereby exercises the Exchange
Right so as to require Parent to purchase from the Holder the number of
Exchangeable Shares specified therein, (ii) that such Holder has good
title to and owns all such Exchangeable Shares to be acquired by Parent
free and clear of all Liens, (iii) the names in which the certificates
representing Parent Shares issuable in connection with the exercise of
the Exchange Right are to be issued, and (iv) the names and addresses of
the Persons to whom such new certificates should be delivered;
Share Exchange Agreement (CCI), Page 4
<PAGE> 5
(b) payment (or evidence satisfactory to Parent of payment) of
the taxes (if any) payable as contemplated by section 2.7 hereof; and
(c) a certificate or certificates of such Holder satisfactory to
Parent attesting to such Holder's accredited investor status and
investment intent.
If only a part of the Exchangeable Shares represented by any certificate
or certificates delivered to Parent are to be purchased by Parent under the
Exchange Right, a new certificate for the balance of such Exchangeable Shares
shall be issued to the Holder at the expense of the Corporation.
2.5 DELIVERY OF PARENT SHARES: EFFECT OF EXERCISE. Promptly after
receipt of the certificates, duly endorsed in blank, representing the
Exchangeable Shares in respect of which the Exchange Right was exercised
pursuant to section 2.4 hereof (together with such documents and instruments of
transfer and a duly completed form of notice of exercise of the Exchange Right
(and payment of taxes, if any, or evidence thereof in accordance with section
2.4 hereof)), Parent shall notify the Corporation of its receipt of the same
and, subject to section 1.5, Parent shall promptly thereafter deliver or cause
to be delivered to the Holder of such Exchangeable Shares (or to such other
Persons, if any, properly designated by such Holder) (i) the certificates for
the number of Parent Shares issuable in connection with the exercise of the
Exchange Right, which shares shall be duly issued as fully paid and
non-assessable and shall be free and clear of any Liens placed thereon by Parent
or the Corporation, if applicable, or (ii) the corresponding Cash Compensation,
as provided in this Agreement. Immediately upon the exercise of the Exchange
Right, as provided in section 2.4 hereof, the closing of the transaction of
purchase and sale contemplated by the Exchange Right shall be deemed to have
occurred, and the Holder of such Exchangeable Shares shall be deemed to have
transferred to Parent all of its right, title and interest in and to such
Exchangeable Shares free and clear of all Liens and shall cease to be a holder
of such Exchangeable Shares and shall not be entitled to exercise any of the
rights of a holder in respect thereof, other than the right to receive the
purchase price therefor, unless the requisite number of Parent Shares or Cash
Compensation, as the case may be, is not allotted, issued and/or delivered by
Parent to such Holder (or to such other Persons, if any, properly designated by
such Holder) within five Business Days of the Exchange Date, in which case the
rights of the Holder shall remain unaffected until such Parent Shares or Cash
Compensation are so allotted, issued and/or delivered by Parent and any such
cheque or property is so delivered and paid. Concurrently with such Holder
ceasing to be a holder of Exchangeable Shares, the Holder shall be considered
and deemed for all purposes to be a holder of Parent Shares delivered to such
Holder, if any, pursuant to the Exchange Right. The Board of Directors shall
sanction or approve any transfer of Exchangeable Shares made pursuant to an
exercise of the Exchange Right pursuant to the provisions hereof and such
sanction or approval shall be effective as at the closing of the transaction of
purchase and sale of Exchangeable Shares as provided in this section 2.5.
2.6 STAMP OR OTHER TRANSFER TAXES. Upon any sale of Exchangeable Shares
to Parent pursuant to the Exchange Right, the share certificate or certificates
representing Parent Shares to be delivered in connection with the payment of the
purchase price therefor shall be issued in the name of the Holder of the
Exchangeable Shares so sold or in such names as such Holder may otherwise direct
in writing without charge to the Holder, provided, however, that such Holder (a)
shall pay
Share Exchange Agreement (CCI), Page 5
<PAGE> 6
(and neither Parent nor the Corporation shall be required to pay) any
documentary, stamp, transfer or other similar taxes that may be payable in
respect of any transfer involved in the issuance or delivery of such shares to a
Person other than such Holder or (b) shall establish to the satisfaction of
Parent and the Corporation that such taxes, if any, have been paid.
2.7 NOTICE OF DEFAULT EVENT. Immediately upon the occurrence of a
Default Event, the Corporation and Parent shall give written notice thereof to
the Holders. Such notice shall describe the event that has occurred and shall
specify that, pursuant to this Agreement, the Holders are currently entitled, or
may become entitled at a later date, to exercise the Exchange Right.
2.8 QUALIFICATION OF PARENT SHARES. Parent shall use all reasonable
efforts to obtain all orders required from the applicable Canadian securities
authorities to permit the issuance of the Parent Shares upon any exchange of the
Exchangeable Shares for Parent Shares without registration or qualification
with, or approval of, or the filing of any document including any prospectus or
similar document, or the taking of any proceeding with, or the obtaining of any
order, ruling or consent from, any governmental or regulatory authority under
any Canadian federal or provincial law or regulation or pursuant to the rules
and regulations of any regulatory authority in Canada or the fulfilment of any
other legal requirement before such Parent Shares may be issued and delivered by
the Corporation or Parent to the holder thereof.
ARTICLE 3
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
--------------------------------------
3.1 AMENDMENTS, MODIFICATIONS, ETC. Except as provided for in section
3.2 hereof, this Agreement may not be amended or modified except by an agreement
in writing executed by the Corporation, Holdings, Parent and the Sellers. Any
amendment or modification of this Agreement by the Corporation, Holdings, Parent
and the Sellers shall bind the Sellers, and the Corporation, Holdings, Parent
and the Sellers shall be entitled to rely on such amendment or modification for
all purposes.
3.2 CHANGES IN THE CAPITAL OF PARENT OR THE CORPORATION. Notwithstanding
section 3.1 hereof, at all times after the occurrence of any Capital
Reorganization (as such term is defined in the Exchangeable Share Provisions),
this Agreement shall forthwith be deemed to have been amended and modified as
necessary in order that it shall apply with full force and effect to all new
securities into which Parent Shares or the Exchangeable Shares or both are so
changed and the parties hereto shall execute and deliver an agreement giving
effect to and evidencing such necessary amendments and modifications.
ARTICLE 4
TRANSFERS OF EXCHANGEABLE SHARES
--------------------------------
4.1 APPROVAL OF THE BOARD OF DIRECTORS. Except for any transfers of
Exchangeable Shares to Parent or any of its Affiliates pursuant to the
provisions hereof or the Exchangeable Share Provisions, the Holders of
Exchangeable Shares shall not be entitled to transfer any Exchangeable Shares
except as explicitly permitted pursuant to the articles of incorporation of the
Corporation. Parent and the Board of Directors shall not sanction any transfer
of Exchangeable Shares (other
Share Exchange Agreement (CCI), Page 6
<PAGE> 7
than to Parent or any of its Affiliates pursuant to the provisions hereof or the
Exchangeable Share Provisions) unless, as a condition precedent to any such
transfer of Exchangeable Shares, the transferee, if it is not a party to this
Agreement, executes and delivers an agreement in form and containing terms
satisfactory to Parent and the Corporation, acting reasonably, whereby the
transferee shall become a party hereto and shall agree to be bound by the
provisions hereof as if the transferee was an original party hereto, and
thereupon the transferee shall have the same rights, and shall be subject to the
same obligations, as the transferor hereunder.
ARTICLE 5
PARENT DISCLOSURE MATERIALS TO BE PROVIDED TO SELLERS
-----------------------------------------------------
5.1 DISCLOSURE MATERIALS TO BE SENT BY PARENT TO THE SELLERS. Parent
covenants and agrees with the Holders to send to the Holders at the address of
such Sellers set forth in section 7.3 hereof (or, in the absence of such an
address, at the address of the Holders as shown at the relevant time on the
register of shareholders maintained by the Corporation or otherwise to such
address that may be communicated by such Holder to Parent) all materials that
Parent is required, pursuant to the provisions of the United States Securities
Exchange Act of 1934, as amended, to send from time to time during the term of
this Agreement to holders of Parent Shares resident in the United States
including, without limitation, copies of its annual reports and all proxy
solicitation materials. Upon the request of a Holder, Parent shall send to such
Holder a copy of its quarterly reports.
ARTICLE 6
TERMINATION
-----------
6.1 TERM.
(a) This Agreement, including the Exchange Right, shall come into
force and effect as at and from the date hereof and shall remain in
force and effect until the earliest to occur of the following events, at
which time this Agreement shall terminate:
(i) no outstanding Exchangeable Shares are held by the
Holder;
(ii) the Holder, the Corporation, Holdings and Parent
agree in writing to terminate this Agreement; or
(iii) October 1, 2001.
(b) Notwithstanding anything herein to the contrary, the
provisions of this Agreement shall no longer be applicable to any Person
(including, without limitation, any Seller) that ceases to be a
registered holder of Exchangeable Shares and such Person shall, upon
ceasing to be a registered holder of Exchangeable Shares, be deemed to
have ceased to be a party to this Agreement until, if applicable, such
time as such Person subsequently becomes a party to this Agreement by
executing an agreement referred to in section 4.1 hereof.
Share Exchange Agreement (CCI), Page 7
<PAGE> 8
ARTICLE 7
GENERAL
-------
7.1 SEVERABILITY. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality or enforceability of
the remainder of this Agreement shall not in any way be affected or impaired
thereby and this Agreement shall be carried out as nearly as possible in
accordance with its original terms and conditions; provided, however, that if
the provision or provisions so held to be invalid, in the reasonable judgment of
the parties, is or are so fundamental to the intent of the parties and the
operation of this Agreement that the enforcement of the other provisions hereof,
in the absence of such invalid provision or provisions, would damage irreparably
the intent of the parties in entering into this Agreement, the parties shall
agree (i) to terminate this Agreement, or (ii) to amend or otherwise modify this
Agreement so as to carry out the intent and purposes hereof and the transactions
contemplated hereby.
7.2 BINDING AGREEMENT. Subject to the provisions of Article 7 hereof,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns and, where
applicable, their respective heirs and personal representatives.
7.3 NOTICES TO PARTIES. All notices and other communications between the
parties hereunder shall be in writing and shall be deemed to have been given if
delivered personally or by overnight or registered mail to the parties at the
following addresses (or at such other address for such party as shall be
specified in like notice):
(a) if to Parent at:
Noble International, Ltd.
33 Bloomfield Hills Parkway, Suite 155
Bloomfield Hills, Michigan 48304
Fax: (248) 594-9501
Attention: Michael C. Azar
(b) if to Holdings at:
Noble Canada Holdings II Limited
33 Bloomfield Hills Parkway, Suite 155
Bloomfield Hills, Michigan 48304
Fax: (248) 594-9501
Attention: Michael C. Azar
Share Exchange Agreement (CCI), Page 8
<PAGE> 9
(c) if to the Corporation at:
Noble Canada II, Inc.
33 Bloomfield Hills Parkway, Suite 155
Bloomfield Hills, Michigan 48304
Fax: (248) 594-9501
Attention: Michael C. Azar
and in all of the above cases, with required additional
copies to:
Jaffe, Raitt, Heuer & Weiss, Professional Corporation
One Woodward Avenue, Suite 2400
Detroit, Michigan 48226
Fax: (313) 961-8358
Attention: Peter Sugar
(d) if to Sellers:
Wrayter Investments, Inc.
c/o R. Douglas S. Hunter
Gowling, Strathy & Henderson
Commerce Court West, Ste. 4900
Toronto, Ontario M5L 1J3
Robert Blake, Jr.
c/o Centrifugal Coaters Inc.
Any notice or other communication given personally shall be deemed to
have been given and received upon delivery thereof unless such day is not a
Business Day or unless such notice or communication was not given during the
normal business hours of the recipient on such day in which case it shall be
deemed to have been given and received upon the immediately following Business
Day.
7.4 RISK OF PAYMENTS BY POST. Whenever payments are to be made or
documents are to be sent to any party, the making of such payment or sending of
such document sent through the post shall be at the risk of the party making the
payment or sending the document.
7.5 COUNTERPARTS. This Agreement and any amendments or supplements
thereto may be executed in counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
7.6 JURISDICTION. This Agreement shall be construed and enforced in
accordance with the laws of the State of Michigan applicable therein.
7.7 ATTORNMENT. Any action brought against Parent or any of its
Subsidiaries shall be brought exclusively in the Michigan or U.S. Federal Courts
located closest to Bloomfield Hills, Michigan.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
Share Exchange Agreement (CCI), Page 9
<PAGE> 10
SHARE EXCHANGE AGREEMENT (CCI)
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Share Exchange
Agreement to be duly executed as of the date first above written.
NOBLE INTERNATIONAL, LTD. NOBLE CANADA II, INC.
by /s/ MICHAEL C. AZAR C.S. by /s/ MICHAEL C. AZAR C.S.
--------------------------- ---------------------------
Name: Michael C. Azar Name: Michael C. Azar
Title: Vice President Title: President
NOBLE CANADA HOLDINGS II LIMITED
by /s/ MICHAEL C. AZAR C.S.
---------------------------
Name: Michael C. Azar
Title: President
WRAYTER INVESTMENTS INC.
by /s/ FRASER WRAY C.S. by /s/ ROBERT BLAKE, JR.
--------------------------- ---------------------------
Name: Fraser Wray ROBERT BLAKE, JR.
Title: President
Share Exchange Agreement (CCI), Page 10
<PAGE> 1
EXHIBIT 2.3
FIRST AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT
THIS FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT dated as of
October 1, 1998 (this "Amendment") is made by and among NOBLE INTERNATIONAL
LTD., a Michigan corporation (the "Company"), WRAYTER INVESTMENTS INC., an
Ontario corporation ("Wrayter") and Robert Blake, Jr., an individual ("Blake
Jr.") (Wrayter and Blake Jr. each being a "Securityholder" and together, the
"Securityholders").
RECITALS
A. The Company and Wrayter are parties to that certain Registration
Rights Agreement dated as of July 24, 1998 (the "Registration Rights
Agreement").
B. Pursuant to a certain Share Exchange Agreement (the "Exchange
Agreement") entered into on October 1, 1998 by and between the Company, Noble
Canada Holdings II Limited, Noble Canada II, Inc., Wrayter and Blake Jr., the
Securityholders own, or have the right to acquire, shares of the common stock,
no par value, of the Company (the "Common Stock").
C. Subject to the restrictions set forth in the Exchange Agreement, upon
the exercise of their right to exchange, the parties hereby amend the
Registration Rights Agreement to provide the Securityholders with the
registration rights set forth therein, as amended by this Amendment.
NOW, THEREFORE, the parties hereto agree as follows:
1. Blake Jr. is hereby added as a Securityholder under the Registration
Rights Agreement and is made a party thereto.
2. The Registration Rights Agreement is hereby amended as follows:
(a) The definition of "SECURITYHOLDER" in Section 1.1 of the
Registration Rights Agreement is deleted in its entirety and is replaced
with the following:
"SECURITYHOLDER" means Wrayter Investments Inc. and Robert
Blake, Jr., collectively.
(b) In Section 2.1(a) of the Registration Rights Agreement, the
phrase "at any time and from time to time following the first
anniversary of the execution and delivery of the Exchange Agreement" is
deleted and is replaced with the following:
"at any time and from time to time following July 24,
1999".
First Amendment to Registration Rights Agreement (CCI), Page 1
<PAGE> 2
(c) In Section 2.1(a)(ii) of the Registration Rights Agreement,
the phrase "all administrative, filing and professional costs" is
deleted and is replaced with the following:
"all Registration Expenses".
(d) Section 3.9(b) of the Registration Rights Agreement is hereby
deleted in its entirety.
(e) Section 4.8(b) of the Registration Rights Agreement is hereby
deleted in its entirety and is replaced with the following:
"(b) Neither this Agreement nor any term or provision
hereof may be amended or waived except by an instrument in
writing signed by all of the parties hereto."
3. All other provisions of the Registration Rights Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Agreement as of the date first above written.
NOBLE INTERNATIONAL, LTD. WRAYTER INVESTMENTS INC.
By: /s/ MICHAEL C. AZAR By: /s/ FRASER WRAY
------------------------------ ----------------------------
Its: Vice President Its: President
------------------------------ ----------------------------
/s/ ROBERT BLAKE, JR.
- ------------------------------------
ROBERT BLAKE, JR.
First Amendment to Registration Rights Agreement (CCI), Page 2
<PAGE> 1
EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
Dated September 30, 1998
By and Among
Noble International, Ltd.
Utilase Blank Welding Technologies, Inc.
and
H & H Steel Processing Company, Inc.,
Terry Hill
and
Robert G. Kreiling
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. PURCHASE OF ASSETS................................................... 1
1.1. ASSETS TO BE PURCHASED............................................... 1
1.2. LIABILITIES ASSUMED.................................................. 3
1.3. PURCHASE PRICE....................................................... 4
1.4. CLOSING.............................................................. 7
1.5. INSTRUMENTS OF TRANSFER TO PURCHASER AT THE CLOSING.................. 8
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................ 8
2.1. DISCLOSURE SCHEDULE.................................................. 8
2.2. CORPORATE ORGANIZATION............................................... 9
2.3. AUTHORIZATION........................................................ 9
2.4. NON-CONTRAVENTION.................................................... 9
2.5. CONSENTS AND APPROVALS............................................... 10
2.6. FINANCIAL STATEMENTS................................................. 10
2.7. ABSENCE OF UNDISCLOSED LIABILITIES................................... 11
2.8. ABSENCE OF CERTAIN CHANGES........................................... 11
2.9. REAL PROPERTIES...................................................... 12
2.10. MACHINERY, EQUIPMENT, VEHICLES AND PERSONAL PROPERTY................. 13
2.11. INVENTORIES.......................................................... 13
2.12. RECEIVABLES AND PAYABLES............................................. 14
2.13. INTELLECTUAL PROPERTY RIGHTS......................................... 14
2.14. LITIGATION........................................................... 15
2.15. TAX MATTERS.......................................................... 15
2.16. INSURANCE............................................................ 16
2.17. BENEFIT PLANS........................................................ 17
2.18. BANK ACCOUNTS........................................................ 20
2.20. ORDERS, COMMITMENTS AND RETURNS...................................... 22
2.21. LABOR MATTERS........................................................ 22
2.22. DEALERS AND SUPPLIERS................................................ 22
2.23. PERMITS AND OTHER OPERATING RIGHTS................................... 23
2.24. COMPLIANCE WITH LAW.................................................. 23
2.25. ASSETS OF BUSINESS................................................... 23
2.26. ENVIRONMENTAL AND SAFETY MATTERS..................................... 23
2.27. TRANSACTIONS WITH CERTAIN PERSONS.................................... 26
2.28. BROKERS.............................................................. 26
2.29. CUSTOMERS............................................................ 26
2.30. ABSENCE OF CERTAIN BUSINESS PRACTICES................................ 26
2.31. DISCLOSURE........................................................... 27
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS (continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
3. REPRESENTATIONS AND WARRANTIES OF NOBLE AND THE PURCHASER............ 27
3.1. CORPORATE ORGANIZATION............................................... 27
3.2. AUTHORIZATION........................................................ 28
3.3. NON-CONTRAVENTION.................................................... 28
3.4. CONSENTS AND APPROVALS............................................... 28
3.5. BROKERS.............................................................. 29
3.6. LEGAL PROCEEDINGS.................................................... 29
3.7. CERTAIN OTHER MATTERS................................................ 29
4. COVENANTS............................................................ 29
4.1. COMPANY'S AGREEMENTS AS TO SPECIFIED MATTERS......................... 29
4.2. NO COMPANY SOLICITATION OF ALTERNATE TRANSACTION..................... 32
4.3. FULL ACCESS TO NOBLE AND PURCHASER................................... 32
4.5. FILINGS; CONSENTS; REMOVAL OF OBJECTIONS............................. 34
4.6. FURTHER ASSURANCES; COOPERATION; NOTIFICATION........................ 34
4.7. SUPPLEMENTS TO DISCLOSURE SCHEDULE................................... 35
4.8. PUBLIC ANNOUNCEMENTS................................................. 35
4.9. TAX MATTERS.......................................................... 35
4.10. BULK TRANSFERS....................................................... 37
4.11. EMPLOYEE BENEFITS.................................................... 37
4.12. COMPETITIVE ACTIVITIES............................................... 39
4.13. NAME CHANGE.......................................................... 40
4.14. PHASE II REPORTS..................................................... 40
5. CONDITIONS TO OBLIGATIONS OF NOBLE AND THE PURCHASER................. 40
5.1. REPRESENTATIONS AND WARRANTIES TRUE.................................. 40
5.2. PERFORMANCE.......................................................... 40
5.3. REQUIRED APPROVALS AND CONSENTS...................................... 41
5.4. ADVERSE CHANGES...................................................... 41
5.5. NO PROCEEDING OR LITIGATION.......................................... 41
5.6. OPINION OF COMPANY COUNSEL........................................... 41
5.7. LEGISLATION.......................................................... 41
5.8. ACCEPTANCE BY COUNSEL TO NOBLE AND THE PURCHASER.................... 41
5.9. CERTIFICATES......................................................... 42
5.10. DOCUMENTATION FOR CONVEYANCE OF THE ASSETS........................... 42
5.11. CINCINNATI LEASE..................................................... 42
6. CONDITIONS TO OBLIGATIONS OF COMPANY AND SHAREHOLDERS................ 42
6.1. REPRESENTATIONS AND WARRANTIES TRUE.................................. 42
6.2. PERFORMANCE.......................................................... 42
6.3. CORPORATE APPROVALS.................................................. 43
6.4. NO PROCEEDING OR LITIGATION.......................................... 43
6.5. CERTIFICATES......................................................... 43
</TABLE>
ii
<PAGE> 4
TABLE OF CONTENTS (continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
6.6. OPINION OF PURCHASER COUNSEL......................................... 43
6.7. PAYMENT OF CONSIDERATION............................................. 43
6.8. ACCEPTANCE BY COUNSEL................................................ 43
6.9. CINCINNATI LEASE..................................................... 43
7. TERMINATION AND ABANDONMENT.......................................... 44
7.1. METHODS OF TERMINATION............................................... 44
7.2. PROCEDURE UPON TERMINATION........................................... 44
7.3. EFFECT OF TERMINATION................................................ 44
8. SURVIVAL AND INDEMNIFICATION......................................... 45
8.1. SURVIVAL............................................................. 45
8.2. INDEMNIFICATION BY NOBLE AND THE PURCHASER........................... 45
8.3. INDEMNIFICATION BY THE COMPANY AND THE SHAREHOLDER................... 46
8.4. CLAIMS FOR INDEMNIFICATION........................................... 46
8.5 BASKET AMOUNT........................................................ 47
8.6. RIGHT OF SET-OFF..................................................... 48
8.7. LIMIT ON DAMAGES..................................................... 48
9. MISCELLANEOUS PROVISIONS............................................. 48
9.1. EXPENSES............................................................. 48
9.2. AMENDMENT AND MODIFICATION........................................... 49
9.3. WAIVER OF COMPLIANCE; CONSENTS....................................... 49
9.4. NO THIRD PARTY BENEFICIARIES......................................... 49
9.5. NOTICES.............................................................. 49
9.6. ASSIGNMENT........................................................... 51
9.7. GOVERNING LAW........................................................ 51
9.8. COUNTERPARTS......................................................... 51
9.9. HEADINGS............................................................. 51
9.10. ENTIRE AGREEMENT..................................................... 51
9.11. INJUNCTIVE RELIEF.................................................... 52
9.12. CERTAIN DEFINITIONS.................................................. 52
</TABLE>
iii
<PAGE> 5
LIST OF EXHIBITS
Name of Exhibit Number of Exhibit
- --------------- -----------------
* Assets Exhibit 1.1(a)
* Excluded Assets Exhibit 1.1(b)
** Liabilities Undertaking Exhibit 1.2
* Allocation of Purchase Price Among the Assets Exhibit 1.3(e)
** Performance Premium Agreement Exhibit 1.3(f)
** Bill of Sale Exhibit 1.4(a)
* Disclosure Schedule Exhibit 2
* Listing of Employees to be Hired Exhibit 4.12
** Opinion of Company's Counsel Exhibit 5.7
** Cincinnati Lease Exhibit 5.11
** Opinion of Purchaser's Counsel Exhibit 6.6
- -------------------
* To be attached as exhibits to and delivered upon execution of the Asset
Purchase Agreement.
** To be executed and delivered at Closing on the Asset Purchase Agreement.
iv
<PAGE> 6
LIST OF DEFINED TERMS
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
A
Accounts Receivable....................................................... 14
Acquisition Proposals..................................................... 32
Affiliate................................................................. 12
Affiliated Organization................................................... 17
Agreement................................................................. 51
Assets.................................................................... 3
Associate................................................................. 12
Assumed Contracts......................................................... 4
Assumed Liabilities....................................................... 3
Authorities............................................................... 10
Authority................................................................. 10
B
Basic Purchase Price...................................................... 4
C
Closing................................................................... 7
Closing Balance Sheet..................................................... 5
Closing Date.............................................................. 7
Company................................................................... 1
Compensation Plans........................................................ 19
Consent................................................................... 10
Consents.................................................................. 10
D
Disclose.................................................................. 33
Disclosure Schedule....................................................... 9
E
Environmental and Occupational Safety and Health Law...................... 25
Environmental Claim....................................................... 25
Environmentally Regulated Materials....................................... 26
ERISA..................................................................... 17
Expiration Date........................................................... 45
F
Final Basic Purchase Price................................................ 5
</TABLE>
v
<PAGE> 7
LIST OF DEFINED TERMS (continued)
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
G
GAAP...................................................................... 11
I
Indemnified Party......................................................... 46
Indemnifying Party........................................................ 47
Information............................................................... 33
Intellectual Property Rights.............................................. 15
Inventory................................................................. 14
L
Latest Unaudited Balance Sheet............................................ 11
Law....................................................................... 10
Laws...................................................................... 10
Liabilities............................................................... 11
Liabilities Undertaking................................................... 3
Liability................................................................. 11
Lien...................................................................... 13
M
Material Adverse Effect................................................... 52
N
Noble..................................................................... 1
P
PBGC...................................................................... 18
Pension Plan.............................................................. 17
Performance Premium Agreement............................................. 7
Permitted Liens........................................................... 13
Proceeding................................................................ 47
Promissory Note........................................................... 5
Properties................................................................ 24
Purchase Price............................................................ 4
Purchaser................................................................. 1
R
Restrictive Period........................................................ 39
Retained Liabilities...................................................... 3
S
Shareholders.............................................................. 1
</TABLE>
vi
<PAGE> 8
LIST OF DEFINED TERMS (continued)
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
T
Tax....................................................................... 16
Tax Return................................................................ 16
Tax Returns............................................................... 16
Taxes..................................................................... 16
Termination Date.......................................................... 8
Transferred Employee...................................................... 37
W
Welfare Plan.............................................................. 18
</TABLE>
viii
<PAGE> 9
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, is entered into this 30th day of September,
1998 by and among Noble International, Ltd., a Michigan corporation ("Noble"),
Utilase Blank Welding Technologies, Inc., a Michigan, corporation (the
"Purchaser"), H & H Steel Processing Company, Inc., an Ohio corporation (the
"Company"), and Terry Hill and Robert G. Kreiling (the "Shareholders").
A. The Company is engaged in processing of flat rolled steel including
blanking, slitting and shearing.
B. The parties hereto wish to provide for the terms and condition upon
which the Purchaser will acquire certain assets and assume certain
specified liabilities of the Company.
C. The parties hereto wish to make certain representations,
warranties, covenants and agreements in connection with the purchase of
assets and assumption of liabilities and also to prescribe various
conditions to such transaction.
Accordingly, and in consideration of the representations, warranties,
covenants, agreements and conditions herein contained, the parties hereto agree
as follows:
1. PURCHASE OF ASSETS
1.1. ASSETS TO BE PURCHASED
(a) Upon satisfaction of all conditions to the obligations of the parties
contained herein (other than such conditions as will have been waived
in accordance with the terms hereof), the Company will sell, transfer,
convey, assign and deliver to the Purchaser, and the Purchaser will
purchase (and Noble will cause the Purchaser to so purchase) from the
Company, at the Closing (as hereinafter defined), all of the business,
assets, properties, goodwill and rights of the Company, whether
tangible or intangible, real, personal or mixed, wheresoever located
and whether or not carried or reflected on the books and records of
Company or any subsidiary or affiliate of the Company including,
without limitation:
(i) real property that is owned by the Company or in which it has
any right or interest (excluding the real property located at
238 West Mitchell Avenue, Cincinnati, Ohio);
(ii) all rights of the Company in the personal property that is
owned or leased by the Company or in which it has any right or
interest;
(iii) franchises;
1
<PAGE> 10
(iv) all right, title and interest in and to the use of the
Company's corporate names and any derivatives or combinations
thereof as used by the Company;
(v) all of the Company's Intellectual Property Rights (as
hereinafter defined), including the goodwill associated
therewith, rights to use, licenses and sublicenses in respect
thereto and the rights thereunder, royalties and remedies
against infringement thereof (including past infringements),
and rights of protection of interest therein;
(vi) rights under or pursuant to licenses by or to the Company;
(vii) inventory (materials, work in process, finished goods),
equipment, machinery, furniture, fixtures, motor vehicles and
supplies;
(viii) accounts receivables;
(ix) prepaid expenses;
(x) all of the Company's rights with respect to insurance policies
(if, and to the extent, assignable), contracts, purchase
orders, customers, lists of customers and suppliers, sales
representative agreements, and all favorable business
relationships, causes of action, judgments, claims and demands
of whatever nature;
(xi) all credit balances of or inuring to the Company, under any
state unemployment compensation plan or fund;
(xii) all of the Company's rights with respect to obligations of the
present and former officers and employees and of individuals
and corporations;
(xiii) all of the Company's rights with respect to partnership or
joint venture agreements or arrangements;
(xiv) files, papers and records relating to the Company's business
and assets; and
(xv) the assets as reflected on the Latest Unaudited Balance Sheet
(as hereinafter defined), with only such dispositions of such
assets reflected on the Latest Unaudited Balance Sheet as will
have occurred in the ordinary course of business of the Company
between the date thereof and the Closing and which are
permitted by the terms hereof.
(xvi) the trusts or other funding vehicles relating to the
Transferred Plans (as hereinafter defined) described in Section
4.11(g).
All of the foregoing are sometimes collectively referred to herein as
the "Assets" and are more fully described on Exhibit 1.1(a) hereto.
2
<PAGE> 11
(b) Notwithstanding the foregoing, the Company will not sell, transfer,
convey, assign or deliver to the Purchaser, and the Purchaser will not
purchase from the Company, the following assets:
(i) the consideration delivered to the Company pursuant to this
Agreement (as hereinafter defined) for the Assets;
(ii) the minute books, corporate seal and stock records of the
Company (subject to delivery of complete copies thereof to
Purchaser in connection with its due diligence investigation);
(iii) shares of the capital stock of the Company, including shares
held by the Company as treasury shares;
(iv) cash, money and deposits with financial institutions (except for
cash, money and deposits with financial institutions related to
Precision Blanking Limited as provided in Exhibit 1.1(a)); and
(v) the assets specifically described on Exhibit 1.1(b) hereto.
1.2. LIABILITIES ASSUMED.
Upon satisfaction of all conditions to the obligations of the parties
contained herein (other than such conditions as will have been made in
accordance with the terms hereof), the Purchaser will assume the
liabilities of the Company (the "Assumed Liabilities" ) as set forth on
Exhibit 1.2 (the "Liabilities Undertaking"). Except for the Assumed
Liabilities, the Purchaser has not agreed to pay, will not be required to
assume and will have no liability or obligation, direct or indirect,
absolute or contingent, with respect to any other liability or obligation
of the Company or any affiliates or associates or of any other person (the
"Retained Liabilities"), including without limitation:
(a) any debt, liability or obligation of the Company, the Shareholders or
any of their affiliates or associates, direct or indirect, known or
unknown, fixed, contingent or otherwise, that (i) is unrelated to the
Assets; (ii) is unrelated to the business of the Company; or (iii)
relates to the Assets and is based upon or arises from any act,
omission, transaction, circumstance, sale of goods or services, state
of facts or other condition occurring or existing on or before the
Closing Date (as hereinafter defined), whether or not then known, due
or payable, except to the extent that the same was expressly assumed
by Noble or the Purchaser pursuant to the terms of the Liabilities
Undertaking;
(b) any obligation for Taxes (as hereinafter defined) related to any of
the Assets for any Tax period or portion thereof ending on or before
the applicable Closing Date for purchase of such Assets and any
obligation for other Taxes of the Company or its officers, directors,
shareholders, or other agents or affiliates;
(c) Environmental Claims (as hereinafter defined) not identified in the
Phase II Reports (as hereinafter defined) in an amount not to exceed
Five Hundred Thousand Dollars ($500,000); and
3
<PAGE> 12
(d) any liability of Company to any of the Company's employees, whether
pursuant to agreements between such employees and the Company or
otherwise other than liabilities arising after the Closing Date under
any employment agreement which is an Assumed Contract.
At the Closing, the Company will convey, transfer and assign, and the
Purchaser will accept and assume, those contracts, agreements, obligations
and commitments specifically listed on the Liabilities Undertaking to be
assumed by the Purchaser (the "Assumed Contracts").
1.3. PURCHASE PRICE.
(a) The total consideration to be paid by the Purchaser to the Company for
the Assets (the "Purchase Price") will be an amount equal to:
(i) Eleven Million Seventy Nine Thousand Five Hundred Ninety One
Dollars and Fifty Two Cents ($11,079,591.52);
(ii) Plus, an amount equal to the actual cash expenditures for
property, plant and equipment of the Company relating to the
North Vernon Plant between July 31, 1998 and the Closing, as
shown in the Closing Balance Sheet (determined as set forth in
Section 1.3(c) below);
(iii) Plus, an amount equal to the Company's actual cash expenditure,
up to a maximum of One Million Five Hundred Thousand Dollars
($1,500,000), for the purchase of a fifty percent (50%)
partnership interest in Precision Blanking Limited from AKS
Processing, Inc.;
(iv) Plus, an amount equal to a minimum of Five Hundred Thousand
Dollars ($500,000) and a maximum of Two Million Dollars
($2,000,000) payable in accordance with the Performance Premium
Agreement referred to in Section 1.3(f) below and as set forth
on Exhibit 1.3(f) hereto; and
(v) In addition, the Purchaser will assume the Assumed Liabilities
as of the Closing Date, pursuant to the terms of the Liabilities
Undertaking referenced in Section 1.2 hereof (subparagraphs (i)
- (v), collectively the "Basic Purchase Price").
(b) At the Closing, the Purchaser will:
(i) Pay the Company, by federal wire transfer, immediately available
funds of (A) Five Million Two Hundred Seventy Thousand Three
Hundred Eighty Two Dollars and Eighty Cents ($5,270,382.80) to a
bank account of the Company pursuant to written instructions
given to the Purchaser at least 72 hours prior to the Closing,
plus (B) Five Million Six Hundred Sixty Eight Thousand Two
Hundred Eight One Dollars and Fifty Two Cents
4
<PAGE> 13
$(5,668,281.52) to The Provident Bank in satisfaction of the
Company's obligations pursuant to written instructions given to
the Purchaser at least 72 hours prior to the Closing;
(ii) Pay the Company, by federal wire transfer, immediately available
funds of Six Hundred Sixty Nine Thousand Four Hundred Ninety
Four Dollars and Eighty Cents ($669,494.80) representing an
estimated payment of the amount payable pursuant to Section
1.3(a)(ii) hereof;
(iii) Pay the Company, by federal wire transfer, immediately available
funds of One Million Five Hundred Thousand Dollars ($1,500,000)
representing the Company's actual cash expenditure for the
purchase of a fifty percent (50%) partnership interest in
Precision Blanking Limited pursuant to Section 1.3(a) hereof;
(iv) Execute and deliver to the Company the Performance Premium
Agreement;
(v) Execute and deliver to the Company the Liabilities Undertaking;
and
(vi) Execute and deliver the Cincinnati Lease (as hereinafter
defined).
(c) The Basic Purchase Price set forth in Section 1.3(a) hereof will be
subject to adjustment after the Closing Date (as hereinafter defined)
as follows:
(i) Purchaser will prepare and deliver to the Company within sixty
(60) days following the Closing Date (or as soon thereafter as
practicable) a balance sheet for the Company as of the opening
of business on the Closing Date (the "Closing Balance Sheet").
The Closing Balance Sheet will be used to determine the amount
of Assumed Liabilities as well as any adjustments pursuant to
Sections 1.3(a)(ii), 1.3(a)(iii) and 1.3(d) hereof as of the
Closing, for purposes of determining the final Basic Purchase
Price (the "Final Basic Purchase Price").
(ii) The Closing Balance Sheet will be prepared in accordance with
GAAP (as defined herein). The Company and the Purchaser will
provide each other with full cooperation in connection with the
preparation of the Closing Balance Sheet. Further, the Company
shall provide to the Purchaser, in connection with the
preparation of the Closing Balance Sheet, supporting
documentation for all expenditures related to Sections
1.3(a)(ii) and 1.3(a)(iii) hereof.
(iii) Within 30 days after the delivery of the Closing Balance Sheet,
the Company will notify the Purchaser as to whether it disagrees
with any of the amounts included in the Closing Balance Sheet.
If such notice is not given, the Closing Balance Sheet will be
final and conclusive for all
5
<PAGE> 14
purposes. If the parties are unable to resolve their differences
within 60 days of their receipt of the Closing Balance Sheet,
the Purchaser and the Company agree to retain a national
accounting firm, other than the independent auditors used by
Noble or the Company, to arbitrate the dispute and render a
decision within 30 days of such retention, which decision will
be final and binding for all purposes. Any award pursuant to
this Section 1.3(c)(iii) may be entered in and enforced by any
court having jurisdiction over the matter. The Purchaser and the
Company will each pay one-half of the costs of services rendered
by said accounting firm.
(iv) Within five days after the expiration of the 30-day period for
giving notice of disagreement with the Closing Date Balance
Sheet or, if such notice is given, within five days after the
resolution of disputes, if any, pursuant to subsection
1.3(c)(iii) above, the Final Basic Purchase Price will be
determined and the Purchaser or the Company, as appropriate,
will by wire transfer in immediately available funds make
payment to the other of any appropriate amounts, such that after
such payments, and taking into account amounts previously
received by the Company pursuant to Section 1.3(b) hereof, the
Purchaser will have paid the Company the Final Basic Purchase
Price.
(d) The amount of Accounts Receivable (as defined herein) assigned and
conveyed to Purchaser hereunder, and as set forth on Exhibit 1.1(a)
hereof, shall be no less than One Million Five Hundred Thousand
Dollars ($1,500,000). In the event that the amount of Accounts
Receivable transferred, assigned and conveyed to Purchaser at Closing
is less than One Million Five Hundred Thousand Dollars ($1,500,000),
then Purchaser shall be entitled to offset the amount of such
difference from the cash portion of the Final Basic Purchase Price. In
the event any of the Accounts Receivable transferred hereunder are not
collected within ninety (90) days of the Closing, the Purchaser shall
also be entitled, in its sole discretion, to offset the amount of such
uncollected Accounts Receivable as of such date against the Final
Basic Purchase Price, and any such Accounts Receivable shall be
transferred back to the Company. Subsequent to the adjustment of the
Final Basic Purchase Price, as described above, and the reassignment
of delinquent Accounts Receivable described above, Purchaser shall
then be obligated to immediately remit to the Seller any and all
payments received by Purchaser for Accounts Receivable reassigned to
the Company.
(e) The Purchase Price will be allocated among the Assets in the manner
required by Section 1060 of the Internal Revenue Code of 1986, as
amended (the "Code"). In making such allocation, the allocations set
forth in Exhibit 1.3(e), attached hereto will apply, subject to
adjustment after the Closing based upon the Closing Balance Sheet. In
preparing Exhibit 1.3(e), the Company will cooperate fully with the
Purchaser in determining the values of the Assets and the resulting
allocation of the Purchase Price among the various assets; it being
understood that
6
<PAGE> 15
such determination will be binding on the Purchaser and the Company
only for the purposes of U.S. Federal, state and local taxation. The
Company and the Purchaser will file all Tax Returns (as defined
herein) and tax reports (including IRS Form 8594) in accordance with
and based upon such allocation and will take no position in any Tax
Return, tax proceeding or tax audit which is inconsistent with such
allocation.
(f) As part of the Purchase Price, at the Closing the Purchaser shall
deliver to the Company, as provided herein, a performance premium
agreement (the "Performance Premium Agreement") pertaining to the
sales targets established with regard to the Assets acquired by
Purchaser. Said Performance Premium Agreement is attached hereto
as Exhibit 1.3(f) and incorporated herein by reference. As
provided in Exhibit 1.3(f) hereto, following the payment of
additional amounts to the Company by Purchaser thereunder, the
additional Purchase Price will be allocated to the Assets in
accordance with Section 1060 of the Code, and the rules of Regs.
Section 1.1060-1T(f)(2) and (3) promulgated thereunder.
(g) Within five (5) days of delivery by the Company to Noble and the
Purchaser of written evidence of satisfaction of one or more of
the Liens (as hereinafter defined) in the aggregate amount of One
Hundred Forty Thousand Nine Hundred Twenty Seven Dollars and
Twenty Cents ($140,927.20) identified in the Disclosure Schedule
pertaining to Section 2.9, Noble and the Purchaser shall make an
additional payment toward the Final Basic Purchase Price in the
amount of the Lien or Liens released.
1.4. CLOSING.
Unless this Agreement will have been terminated and the transactions
contemplated herein will have been abandoned pursuant to Section 7 hereof,
a closing (the "Closing") will be held on October 1, 1998 (the "Closing
Date"); provided, however, that if any of the conditions provided for in
Sections 5 and 6 hereof will not have been satisfied or waived by such
date, then the party to this Agreement which is unable to satisfy such
condition or conditions, despite the best efforts of such party, will be
entitled to postpone the Closing by notice to the other parties until such
condition or conditions will have been satisfied (which such notifying
party will seek to cause to happen at the earliest practicable date) or
waived, but in no event will the Closing occur later than the "Termination
Date" which will be October 31, 1998, unless the parties hereto will agree
in writing to extend the date of such Closing. The parties will use their
best efforts to complete the Closing by October 1, 1998. The Closing will
be held at the offices of Graydon, Head & Ritchey, 1900 Fifth Third Center,
511 Walnut Street, Cincinnati, Ohio 45202, or such other place as the
parties may agree, at 11:00 a.m., local time or such other time as the
parties may agree, at which time and place the documents and instruments
necessary or appropriate to effect the transactions contemplated herein
will be exchanged by the parties.
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1.5. INSTRUMENTS OF TRANSFER TO PURCHASER AT THE CLOSING.
At the Closing, the Company will deliver to the Purchaser:
(a) Such bills of sale, endorsements, assignments, deeds and other good
and sufficient instruments of conveyance and transfer, in form and
substance reasonably satisfactory to the Purchaser and its counsel, as
will be required to vest in the Purchaser title to the Assets,
including without limitation:
(i) General bills of sale and deeds vesting in the Purchaser good
and marketable title to all of the Assets in the form included
in Exhibit 1.5 hereto;
(ii) Appropriate endorsements and assignments of the contracts,
licenses, agreements, permits, plans, commitments and other
binding arrangements included in the Assets;
(iii) Specific bills of sale, endorsements and assignments
transferring to the Purchaser the Intellectual Property Rights;
and
(iv) Such written consents, agreements and other instruments as the
Purchaser will reasonably request to enable it to use the name
"H & H Steel Processing" and all other trade names of the
Company, and all other variations or combinations thereof as
used by the Company; and
(b) All data relating to the assets, property, goodwill and business of
the Company. Simultaneously with such delivery, the Company will take
all actions necessary to put the Purchaser in actual possession and
operating control of the Assets.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser and Noble, as
of the date hereof, as follows:
2.1. DISCLOSURE SCHEDULE.
The disclosure schedule attached as Exhibit 2 hereto (the "Disclosure
Schedule") is divided into sections which correspond to the subsections of
this Section 2. The Disclosure Schedule is true, complete and correct, and
at Closing, shall be true, complete and correct. Nothing in the Disclosure
Schedule will be deemed adequate to disclose an exception to a
representation or warranty made herein, unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes the
relevant facts in reasonable detail. Without limiting the generality of the
foregoing, the mere listing (or inclusion of a copy) of a document or other
item will not be deemed adequate to disclose an exception to a
representation or warranty made herein (unless the representation or
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<PAGE> 17
warranty has to do with the existence of the document or other item
itself). Disclosures in any subsection thereof will not constitute
disclosure for purposes of any other subsection and any other section or
subsection of this Agreement or any exhibit to or other writing which is
designated herein as being part of this Agreement.
2.2. CORPORATE ORGANIZATION.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio, has full corporate power and
authority to carry on its business as it is now being conducted and to own,
lease and operate its properties and assets, is duly qualified or licensed
to do business as a foreign corporation in good standing in every other
jurisdiction in which the character or location of the properties and
assets owned, leased or operated by it or the conduct of its business
requires such qualification or licensing, except in such jurisdictions in
which the failure to be so qualified or licensed and in good standing would
not, individually or in the aggregate, have a Material Adverse Effect (as
hereinafter defined) on the Company; and has heretofore delivered to the
Purchaser true, complete and correct copies of its articles of
incorporation and code of regulations, as presently in effect. The
Disclosure Schedule contains a list of all jurisdictions in which the
Company is qualified or licensed to do business. The Company has no
subsidiaries.
2.3. AUTHORIZATION.
The Company has full corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated herein. The Board
of Directors of the Company has taken all action required by law, the
Company's articles of incorporation and code of regulations and otherwise
to authorize the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein. This Agreement
has been duly and validly executed and delivered by the Company and no
other corporate action is necessary. This Agreement has been duly and
validly executed by the Shareholders. This Agreement is a valid and binding
legal obligation of the Company and the Shareholders enforceable against
them in accordance with its terms.
2.4. NON-CONTRAVENTION.
Except as set forth in the Disclosure Schedule, neither the execution,
delivery and performance of this Agreement, nor the consummation of the
transactions contemplated herein will: (i) violate or be in conflict with
any provision of the articles of incorporation or code of regulations of
the Company; or (ii) except for such violations, conflicts, defaults,
accelerations, terminations, cancellations, impositions of fees or
penalties, mortgages, pledges, liens, security interests, encumbrances,
restrictions, changes or other events which could not reasonably be
expected to, individually or in the aggregate, have a Material Adverse
Effect, (A) be in conflict with, or constitute a default, however defined
(or an event which, with the giving of due notice or lapse of time, or
both, would constitute such a default), under, or cause or permit the
acceleration of the maturity of, or give rise to any right of termination,
cancellation, imposition of fees or penalties under,
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any debt, note, bond, lease, mortgage, indenture, license, obligation,
contract, commitment, franchise, permit, instrument or other agreement or
obligation to which the Company is a party or by which the Company or any
of the Assets is or may be bound (unless with respect to which defaults or
other rights, requisite waivers or consents will have been obtained at or
prior to the Closing) or (B) result in the creation or imposition of any
mortgage, pledge, lien, security interest, encumbrance, restriction,
adverse claim or charge of any kind, upon the Assets under any debt,
obligation, contract, agreement or commitment to which the Company is a
party or by which the Company or any of the Assets is or may be bound; or
(iii) violate any applicable statute, treaty, law, judgment, writ,
injunction, decision, decree, order, regulation, ordinance or other similar
authoritative matters (sometimes hereinafter separately referred to as a
"Law" and sometimes collectively as "Laws") of any federal, state or local
governmental or quasi-governmental, administrative, regulatory or judicial
court, department, commission, agency, board, bureau, instrumentality or
other governmental authority (hereinafter sometimes separately referred to
as an "Authority" and sometimes collectively as "Authorities").
2.5. CONSENTS AND APPROVALS.
Except as set forth in the Disclosure Schedule, and with respect to the
Company, no consent, approval, order or authorization of or from, or
registration, notification, declaration or filing with (hereinafter
sometimes separately referred to as a "Consent" and sometimes collectively
as "Consents") any individual or entity, including without limitation any
Authority, is required in connection with the execution, delivery or
performance of this Agreement by the Company or the consummation by the
Company of the transactions contemplated herein except where the failure to
obtain such Consent would not prevent or delay consummation of the
transactions contemplated herein, or otherwise prevent or delay the Company
from performing its obligations under this Agreement, and would not have a
Material Adverse Effect.
2.6. FINANCIAL STATEMENTS.
The Disclosure Schedule contains true and complete copies of the audited
balance sheets of the Company as of December 31, 1997, 1996 and 1995 and
the related audited statements of operations, shareholders' equity and cash
flows for each of the respective fiscal years then ended as well as the
unaudited balance sheet of the Company as of June 30, 1998. The unaudited
balance sheet as of June 30, 1998 is referred to herein as the "Latest
Unaudited Balance Sheet." Except as disclosed therein, the foregoing
financial statements (i) are in accordance with the books and records of
the Company and have been prepared in conformity with generally accepted
accounting principles ("GAAP") consistently applied for all periods , and
(ii) fairly present the financial position of the Company as of the
respective dates thereof, and the results of operations, and changes in
shareholders' equity and changes in cash flow for the periods then ended,
all in accordance with GAAP consistently applied for all periods.
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2.7. ABSENCE OF UNDISCLOSED LIABILITIES.
The Company does not have any liabilities, obligations or claims of any
kind whatsoever which are required to be set forth in financial statements
prepared in accordance with GAAP, whether secured or unsecured, accrued or
unaccrued, fixed or contingent, matured or unmatured, direct or indirect,
contingent or otherwise and whether due or to become due (referred to
herein individually as a "Liability" and collectively as "Liabilities"),
other than: (a) Assumed Liabilities; (b) Liabilities that are reserved for
or disclosed in the Latest Unaudited Balance Sheet; (c) Liabilities that
are set forth on the Disclosure Schedule; (d) Liabilities incurred by the
Company in the ordinary course of business after the date of the Latest
Unaudited Balance Sheet (none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement or violation of Law); or (e) Liabilities for
Assumed Contracts (other than any express executory obligations that might
arise due to any default or other failure of performance by the Company
prior to the Closing Date).
2.8. ABSENCE OF CERTAIN CHANGES.
Since the date of the Latest Unaudited Balance Sheet, the Company has owned
and operated its assets, properties and business in the ordinary course of
business and consistent with past practice. Without limiting the generality
of the foregoing and except as set forth on the Disclosure Schedule or in
the ordinary course of business, the Company has not, since the Latest
Unaudited Balance Sheet:
(a) suffered any Material Adverse Effect or experienced any event or
failed to take any action which reasonably could be expected to result
in such a Material Adverse Effect;
(b) suffered any loss, damage, destruction or other casualty (whether or
not covered by insurance) or suffered any loss of officers, employees,
dealers, distributors, independent contractors, customers, or
suppliers which had or may reasonably be expected to result in a
Material Adverse Effect;
(c) incurred any indebtedness for borrowed money in excess of $25,000;
(d) mortgaged, pledged, or subjected to any lien, lease, security interest
or other charge or encumbrance any of the Assets;
(e) acquired or disposed of any assets or properties;
(f) forgiven or canceled any debts or claims, or waived any rights in
excess of $25,000;
(g) entered into any material transaction;
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(h) granted to any officer or salaried employee or any other employee or
consultant or independent contractor any increase in compensation in
any form or paid any severance or termination pay;
(i) entered into any commitment for capital expenditures for additions to
plant, property or equipment involving more than $25,000;
(j) written down the value of any inventory (including write-downs by
reason of shrinkage or mark-down) or written off as uncollectable any
notes or accounts receivable, except for immaterial write-downs and
write-offs in the ordinary course of business and consistent with past
practices;
(k) disposed of or permitted to lapse any rights to the use of any patent,
trademark, trade name or copyright, or disposed of or disclosed to any
person other than representatives of the Purchaser any trade secrets,
formula, process or know-how not theretofore a matter of public
knowledge, other than in the ordinary course of business consistent
with past practice it being understood that the ordinary course of
business includes obtaining confidentiality assurances from such
persons;
(l) made any change in any method of financial or tax accounting or
financial or tax accounting practice;
(m) suffered any adverse change in its relationship with any material
customer, including the loss of any such material customer or a
contract with any such material customer;
(n) purchased, leased or otherwise acquired any property or obtained any
services from, or sold, leased or otherwise disposed of any property
or furnished any services to, or otherwise dealt with, in the ordinary
course of business or otherwise, (i) any shareholder of Company or
(ii) any "Affiliate" or "Associate" (as defined in Rule 405 under the
Securities Act of 1933, as amended) of Company or any shareholder of
the Company (except with respect to compensation in the ordinary
course of business for services rendered as a director, officer or
employee of Company); or
(o) agreed, whether in writing or otherwise, to take any action described
in this subsection.
2.9 REAL PROPERTIES.
Except as set forth in the Disclosure Schedule, the Company has good and
marketable fee simple record title in and to all of the real property
assets and fixtures included in the Assets. Except as set forth in the
Disclosure Schedule, to the best knowledge of the Company none of the real
property assets or fixtures owned by the Company is subject to any
mortgage, pledge, lien, security interest, encumbrance, claim, easement,
right-of-way, tenancy, covenant, encroachment, restriction or charge of any
kind or nature (whether or
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not of record) ("Lien"), except the following (herein called "Permitted
Liens"): (i) Liens securing specified liabilities or obligations shown on
the Latest Unaudited Balance Sheet with respect to which no breach,
violation or default exists; (ii) mechanics', carriers', workers' and other
similar Liens arising in the ordinary course of business; (iii) minor
imperfections of title which do not materially impair the existing use of
such real property assets or fixtures; (iv) Liens for current Taxes not yet
due and payable or being contested in good faith by appropriate
proceedings; and (v) recorded real estate covenants, conditions,
restrictions, easements, building or land use restrictions, and other
encumbrances, which do not in any material respect, individually or in the
aggregate, diminish the value of, or interfere with the current use of,
such real property. Except as set forth in the Disclosure Schedule, to the
best knowledge of the Company, all real properties owned by the Company are
free from structural defects, in good operating condition and repair.
Except as set forth in the Disclosure Schedule, to the best knowledge of
the Company each such real property and its present use conform in all
respects to all occupational, safety or health, zoning, planning,
subdivision, platting and similar Laws, and there is, to the knowledge of
Company, no such Law contemplated that would affect adversely the right of
Company to own or lease and operate and use such real properties. Except as
set forth in the Disclosure Schedule, to the best knowledge of the Company
all public utilities necessary for the current use and operation of any
facilities on the aforesaid real properties are available for use or access
at such properties and there is no legal or physical impairment to free
ingress or egress from any of such facilities or real properties. The
Company is not a foreign person and is not controlled by a foreign person,
as the term foreign person is defined in Section 1445(f)(3) of the Code.
2.10. MACHINERY, EQUIPMENT, VEHICLES AND PERSONAL PROPERTY.
Except as set forth in the Disclosure Schedule, the Company has good and
marketable right, title and interest in and to, or a leasehold interest in
and to, the machinery, equipment, vehicles and other personal property
included in the Assets. Except as set forth in the Disclosure Schedule, all
of such leasehold interests relating to machinery, equipment, vehicles and
other personal property are valid and in full force and effect and
enforceable in accordance with their terms and there does not exist any
material violation, breach or default thereof or thereunder. Except as set
forth in the Disclosure Schedule, none of such machinery, equipment,
vehicles or other personal property is subject to any mortgage, pledge,
lien or security interest of any kind or nature (whether or not of record)
except Permitted Liens. Except as set forth in the Disclosure Schedule, the
machinery, equipment, vehicles and other personal property of the Company
are in good operating condition and repair, normal wear and tear excepted.
2.11. INVENTORIES.
Except as set forth in the Disclosure Schedule, all inventory as of the
date of the Latest Unaudited Balance Sheet is, and as of the Closing Date
will be, valued at the lower of cost or market. Except as set forth on the
Disclosure Schedule, all inventory of the Company (the "Inventory"): (i)
are of a quality and quantity usable in the ordinary course
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of business, and the present quantities of Inventory of the Company are
reasonable; and (ii) meet in the aggregate the stricter of industry or
Company specifications applicable to such Inventory.
2.12. RECEIVABLES AND PAYABLES.
(a) Except as set forth on the Disclosure Schedule, (i) the Company has
good right, title and interest in and to all its accounts and notes
receivable and trade notes and trade accounts constituting the Assets
(the "Accounts Receivable"); (ii) none of such Accounts Receivable is
subject to any Lien; (iii) except to the extent of applicable reserves
shown in the Latest Unaudited Balance Sheet, all of the Accounts
Receivable owing to the Company constitute valid and enforceable
claims arising from bona fide transactions in the ordinary course of
business, and there are no claims, refusals to pay or other rights of
set-off against any thereof; (iv) no account or note debtor whose
account or note balance exceeds the amount set forth in the Disclosure
Schedule at the date set forth therein was delinquent in payment by
more than ninety (90) days; (v) the aging schedule of the Accounts
Receivable as of June 30, 1998 previously furnished to the Purchaser
is complete and accurate; and (vi) there is no reason why any Account
Receivable will not be collected in accordance with its terms, other
than for such accounts and notes which are not in excess of the
reserves established therefor and reflected in the Latest Unaudited
Balance Sheet.
(b) Except as set forth on the Disclosure Schedule, all accounts payable
and notes payable by the Company to be assumed by the Purchaser
pursuant to Section 1.2 arose in bona fide transactions in the
ordinary course of business and no such account payable or note
payable is delinquent by more than ninety (90) days in its payment.
2.13. INTELLECTUAL PROPERTY RIGHTS.
The Company owns or has the unrestricted right to use all intellectual
property rights, including without limitation the patents, patent
applications, patent rights, registered and unregistered trademarks,
trademark applications, trade names, service marks, service mark
applications, logos, copyrights, computer programs and other computer
software, inventions, know-how, trade secrets, technology, proprietary
processes and formulae (collectively, "Intellectual Property Rights")
necessary or required for use in connection with the Assets and for the
conduct of the business of the Company as presently conducted, free and
clear of all Liens. All Intellectual Property Rights are listed or
described on the Disclosure Schedule. Except as set forth on the Disclosure
Schedule, to the best knowledge of the Company the use of all Intellectual
Property Rights necessary or required for the conduct of the business of
the Company as presently conducted does not and will not infringe or
violate or allegedly infringe or violate the intellectual property rights
of any person or entity. Except as described on the Disclosure Schedule,
the Company (i) does not own or use any Intellectual Property Rights
pursuant to any written license agreement; and (ii) has not granted any
person or entity any rights, pursuant to written license agreement or
otherwise, to use the Intellectual Property Rights.
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2.14. LITIGATION.
Except as set forth in the Disclosure Schedule, to the best knowledge of
the Company there is no action, suit, proceeding at law or in equity by any
person or entity, or any arbitration or any administrative or other
proceeding by or before (or any investigation by) any Authority, pending or
threatened, against the Company or any of the Assets, or which questions or
challenges the validity of this Agreement or any action taken or to be
taken by the parties hereto pursuant to this Agreement or in connection
with the transactions contemplated herein, and there does not exist any
valid basis for any such action, proceeding or investigation. The Company
is not subject to any judgment, order or decree entered in any lawsuit or
proceeding to which it is a party which may have a Material Adverse Effect
on the Company.
2.15. TAX MATTERS.
For all purposes of this Agreement, the term "Taxes" means all federal,
state, local, foreign and other net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, real or personal property, windfall profits,
customs, duties or other taxes, together with any interest and any
penalties, additions to tax or additional amounts with respect thereto, and
the term "Tax" means any one of the foregoing Taxes. In addition, the term
"Tax Returns" means all returns, declarations, reports, statements and
other documents required to be filed with any Authority in respect of
Taxes, and the term "Tax Return" means any one of the foregoing Tax
Returns. Except as otherwise set forth in the Disclosure Schedule, the
Company hereby represents and warrants the following with respect to the
Company.
(a) Liability for Taxes. The Company shall be responsible for and shall
pay all Taxes attributable to or arising from the business and
operations of the Company conducted on and through the Closing Date
and shall be responsible for its own income and franchise Taxes, if
any, arising from the transactions contemplated by this Agreement. The
Company hereby acknowledges that, in preparing the Closing Balance
Sheet, all real property Taxes, personal property Taxes and similar ad
valorem obligations levied with respect to any of the Assets for
assessment periods which include the Closing Date will be
appropriately apportioned.
(b) Filing of Tax Returns. There have been properly completed and duly
filed on a timely basis all Tax Returns required to be filed on or
prior to the date hereof by the Company with respect to Taxes of the
Company. All such Tax Returns were correct and complete in all
material respects.
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(c) Payment of Taxes. With respect to all amounts in respect of Taxes
imposed upon the Company with respect to all taxable periods or
portions of periods ending on or before the Closing Date, all
applicable Tax Laws and agreements have been fully complied with, and
all such amounts of Taxes shown on its Tax Returns on or before the
date hereof have been duly paid and there are no liens for such Taxes
upon any property or assets of the Company.
(d) Audits and Extensions. Section 2.15(d) of the Disclosure Schedule
lists all federal income Tax Returns filed with respect to the Company
for taxable periods ended on or after December 31, 1994 and indicates
those federal income Tax Returns that have been audited and those
federal income Tax Returns that currently are the subject of an audit,
and except to the extent shown therein, all deficiencies asserted as a
result of such completed examinations have been paid or finally
settled and no issue has been raised by the Internal Revenue Service
in any such examination which, by application of similar principles,
reasonably could be expected to result in a proposed deficiency for
any other period not so examined. Except as set forth in the
Disclosure Schedule, all deficiencies and assessments of Taxes of the
Company resulting from an examination of any Tax Returns by any
Authority have been paid and to the best knowledge of the Company
there are no pending examinations currently being made by any
Authority nor has there been any written or oral notification to
Company of any intention to make an examination of any Taxes by any
Authority. Except as set forth in the Disclosure Schedule, there are
no outstanding agreements or waivers extending the statutory period of
limitations applicable to any Tax Return for any period.
(e) Independent Contractors and Employees. For purposes of computing Taxes
and the filing of Tax Returns to the best knowledge of the Company,
the Company has not failed to treat as "employees" any individual
providing services to the Company who would be classified as an
"employee" under the applicable rules or regulations of any Authority
with respect to such classification.
(f) The representations and warranties set forth in subsections (a), (b),
(c), (d) and (e) of this Section are not applicable to the extent the
Assets cannot be made subject to Tax liens and the Purchaser cannot be
made subject to liability for Taxes or other obligations or losses
relating to the matters constituting breaches of such representations
and warranties.
2.16. INSURANCE.
The Disclosure Schedule contains an accurate and complete list of all
policies of fire and other casualty, general liability, theft, life,
workers' compensation, health, directors and officers, business
interruption and other forms of insurance owned or held by the Company,
specifying the insurer, the policy number, the term of the coverage and, in
the case of any "claims made" coverage, the same information as to
predecessor policies for the previous five years. All present policies are
in full force and effect and all premiums with respect thereto have been
paid. The Company has not been denied any form of insurance and no policy
of insurance has been revoked or rescinded during the past five years,
except as described on the Disclosure Schedule.
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2.17. BENEFIT PLANS.
Except as set forth in the Disclosure Schedule:
(a) Neither the Company nor any other "person" within the meaning of
Section 7701(a)(1) of the Code, that together with the Company is
considered a single employer pursuant to Sections 414(b), (c), (m) or
(o) of the Code or Sections 3(5) or 4001(b)(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (an
"Affiliated Organization") sponsors, maintains, contributes to, is
required to contribute to or has or could have any liability of any
nature, whether fixed or contingent, with respect to, any "employee
pension benefit plan" ("Pension Plan") as such term is defined in
Section 3(2) of ERISA, including without limitation, any such plan
that is excluded from coverage by Section 4(b)(5) of ERISA or is a
"Multi-employer Plan" within the meaning of Section 3(37) or
4001(a)(3) of ERISA. To the best knowledge of the Company, each such
Pension Plan has been operated in accordance with its terms and in
compliance with the applicable provisions of ERISA, the Code and all
other applicable Law. All Pension Plans which the Company operates as
plans that are qualified under the provisions of Section 401(a) of the
Code satisfy in form and operation the requirements of Section 401(a)
and all other sections of the Code incorporated therein, except that
such Pension Plans have not been amended to comply with any changes in
the law for which the Section 401(b) remedial amendment period expires
as of the end of the plan year beginning in 1999 pursuant to IRS Rev.
Proc. 98-14.
(b) Neither the Company, nor any Affiliated Organization, has or could
have any liability of any nature, whether fixed or contingent, to any
Pension Plan, the Pension Benefit Guaranty Corporation ("PBGC") or any
other person, arising directly or indirectly under Title IV of ERISA.
No "reportable event," within the meaning of Section 4043(b) of ERISA,
has occurred with respect to any Pension Plan. Neither the Company nor
any Affiliated Organization has been a party to a sale of assets to
which Section 4204 of ERISA applied with respect to which it could
incur any withdrawal liability (including any contingent or secondary
withdrawal liability) to any Multi-employer Plan. Neither the Company
nor any Affiliated Organization has incurred any withdrawal liability
within the meaning of Section 4201 of ERISA or suffered or otherwise
caused a "complete withdrawal" or "partial withdrawal," as such terms
are defined respectively in Sections 4203 and 4205 of ERISA, with
respect to a Multi-employer Plan, and nothing has occurred that is
reasonably likely to result in such a complete or partial withdrawal.
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(c) Neither the Company, nor any Affiliated Organization, sponsors,
maintains, contributes to, is required to contribute to or has or
could have any liability of any nature, whether fixed or contingent,
with respect to, any "employee welfare benefit plan" ("Welfare Plan")
as such term is defined in Section 3(1) of ERISA, whether insured or
otherwise. To the best knowledge of the Company, each Welfare Plan has
been operated in accordance with its terms and in compliance with the
applicable provisions of ERISA, the Code and all other applicable Law.
Neither the Company nor any Affiliated Organization has established or
contributed to, is required to contribute to or has or could have any
liability of any nature, whether fixed or contingent, with respect to
any "voluntary employees' beneficiary association" within the meaning
of Section 501(c)(9) of the Code, "welfare benefit fund" within the
meaning of Section 419 of the Code, "qualified asset account" within
the meaning of Section 419 of the Code, "qualified asset account"
within the meaning of Section 419A of the Code or "multiple employer
welfare arrangement" within the meaning of Section 3(40) or ERISA.
Neither the Company nor any Affiliated Organization maintains,
contributes to or has or could have any liability of any nature,
whether fixed or contingent, with respect to medical, health, life or
other welfare benefits for present or future terminated employees or
their spouses or dependents other than as required by Part 6 of
Subtitle B of Title I of ERISA or any comparable state law.
(d) Neither the Company nor any Affiliated Organization is a party to,
maintains, contributes to, is required to contribute to or has or
could have any liability of any nature, whether fixed or contingent,
with respect to, any bonus plan, incentive plan, stock plan or any
other current or deferred compensation, separation, retention,
severance or similar agreement, arrangement or policy ("Compensation
Plans").
(e) There are no facts or circumstances which could, directly or
indirectly, subject the Company or any Affiliated Organization to any
(1) excise tax or other liability under Chapters 43, 46 or 47 of
Subtitle D of the Code, (2) penalty tax or other liability under
Chapter 68 of Subtitle F of the Code or (3) civil penalty arising
under Section 502 of ERISA. The Company does not and could not have
any liability arising directly or indirectly in connection with any
failure of the Company or any Affiliated Organization to comply with
Section 4980B of the Code or Part 6 of Subtitle B of Title I of ERISA.
(f) The Company and each Affiliated Organization has made adequate
provisions for reserves or accruals in accordance with generally
accepted accounting principles to meet contribution benefit or funding
obligations arising under applicable Law or the terms of any Pension
Plan or Welfare Plan or Compensation Plan or related agreement. There
will be no change on or before Closing in the operation of any Pension
Plan, Welfare Plan or Compensation Plan or any documents with respect
thereto which will result in an increase in the benefit liabilities
under such plans, except as may be required by law.
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(g) The Company and each Affiliated Organization has timely complied with
all reporting and disclosure obligations with respect to the Pension
Plans, Welfare Plans and Compensation Plans imposed by Title I of
ERISA or other applicable Law.
(h) There are no pending or, to the Company's knowledge, threatened
audits, investigations, claims, suits, grievances or other
proceedings, and there are no facts that could give rise thereto,
involving, directly or indirectly, any Pension Plan, Welfare Plan, or
Compensation Plan, or any rights or benefits thereunder, other than
the ordinary and usual claims for benefits by participants, dependents
or beneficiaries.
(i) The transactions contemplated herein will not and do not result in the
acceleration of accrual, vesting, funding or payment of any
contribution or benefit under any Pension Plan, Welfare Plan or
Compensation Plan.
(j) The Company has delivered to Purchaser, true and complete copies of:
(i) all Pension, Welfare and Compensation Plans and related trust
agreements or other agreements or contracts evidencing any funding
vehicle with respect thereto; (ii) the three most recent annual
reports on Treasury Form 5500, including all schedules and attachments
thereto, with respect to any Plan for which such a report is required;
(iii) the three most recent actuarial reports with respect to any
Pension Plan that is a "defined benefit plan" within the meaning of
Section 414(j) of the Code; (iv) the form of summary plan description,
including any summary of material modifications thereto or other
modifications communicated to participants, currently in effect with
respect to each Pension, Welfare or Compensation Plan for which such
is required; (v) the most recent determination letter with respect to
each Pension Plan intended to qualify under Section 401(a) of the
Code; (vi) a copy of the notice required under ERISA Section 204(h)
for any Pension Plan for which benefit accruals have been frozen;
(vii) all professional opinions, material internal memoranda, material
correspondence with regulatory authorities and administrative
policies, manual, interpretations and the like with respect to each
Pension Plan, Welfare Plan or Compensation Plan; and (viii) complete
and accurate employment records showing for each Transferred Employee
(as defined herein), the following: name, address, Social Security
number, date of birth, date of hire, rate of pay, marital status, and
citizenship or immigration status.
(k) In connection with the termination of any Pension Plan and without
limiting the applicability of the foregoing representations to such
Pension Plan: (i) nothing done or omitted to be done has or could
subject the Company or any Affiliated Organization to any liability,
loss, cost, charge, expense or expenditure of any nature or result in
the imposition of any Lien in favor of the PBGC or any other person;
(ii) the Company has received a determination letter from the Internal
Revenue Service, based on complete and accurate disclosure by the
Company,
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that such termination did not adversely affect the qualified status of
such Pension Plan under Section 401(a) of the Code or the tax exempt
status of its related trust under Section 501(a) of the Code; (iii)
all notices and other filings required to be submitted to the PBGC
were submitted in a timely manner and were complete and accurate and
no distributions were made until receipt of PBGC approval in the form
of a notice of sufficiency or by lapse of any applicable time period
without notice of PBGC objection, as the case may be; (iv) all
participants, beneficiaries of deceased participants, alternate payees
and other interested Parties received all notices and disclosures
required by applicable Law in a timely manner and all such notices and
disclosures were complete and accurate and satisfied the requirements
imposed by all applicable Laws; (v) no portion of the assets of the
Plan reverted to the Company or any Affiliated Organization; (vi) the
selection of annuity contracts and the process employed in connection
therewith satisfied all applicable Laws, including without limitation
ERISA, and each and all of the issuers of such contracts have fully
satisfied all of its or their obligations thereunder and (vii) the
termination in all respects satisfied all applicable Laws.
(l) No action or omission of the Company or any director, officer,
employee or agent thereof in any way restricts, impairs or prohibits
the Purchaser or any successor of the Purchaser from amending or
terminating any Pension Plan, Welfare Plan or Compensation Plan in
accordance with the express terms of any such plan and applicable law.
(m) Nothing has occurred or failed to occur with respect to any Pension
Plan, Welfare Plan or Compensation Plan which could result in any
liability to the Purchaser or any successor of the Purchaser other
than a liability expressly assumed pursuant to this Agreement.
2.18. BANK ACCOUNTS.
The Disclosure Schedule sets forth the names of all financial institutions,
investment banking and brokerage houses, and other similar institutions at
which the Company maintains accounts, deposits, safe deposit boxes of any
nature, and the names of all persons authorized to draw thereon or make
withdrawals therefrom.
2.19. CONTRACTS AND COMMITMENTS; NO DEFAULT.
(a) Except as set forth in the Disclosure Schedule, the Company:
(i) has no written contract, commitment, agreement or arrangement
with any person or, to the Company's knowledge, any oral
contract, commitment, agreement or arrangement which (A)
requires payments individually in excess of $10,000 annually or
in excess of $50,000 over its term (including without limitation
periods covered by any option to extend or renew by either
party) and (B) is not terminable on thirty (30) days' or less
notice without cost or other Liability;
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(ii) does not pay any person or entity cash remuneration at the
annual rate (including without limitation guaranteed bonuses) of
more than $50,000 for services rendered;
(iii) is not restricted by agreement from carrying on its businesses
or any part thereof anywhere in the world or from competing in
any line of business with any person or entity;
(iv) is not subject to any obligation or requirement to provide funds
to or make any investment (in the form of a loan, capital
contribution or otherwise) in any person or entity;
(v) is not party to any agreement, contract, commitment or loan to
which any of its directors, officers or shareholders or any
Affiliate or Associate (or former Affiliate or Associate)
thereof is a party;
(vi) is not subject to any outstanding sales or purchase contracts,
commitments or proposals which is anticipated to result in any
loss upon completion or performance thereof;
(vii) is not party to any purchase or sale contract or agreement that
calls for aggregate purchases or sales in excess over the course
of such contract or agreement of $10,000 or which continues for
a period of more than twelve months (including without
limitation periods covered by any option to renew or extend by
either party) which is not terminable on sixty (60) days' or
less notice without cost or other Liability at or any time after
the Closing; and
(viii) has no distributorship, dealer, manufacturer's representative,
franchise or similar sales contract relating to the payment of a
commission.
(b) True and complete copies (or summaries, in the case of oral items) of
all items disclosed pursuant to Section 2.19 have been made available
to the Purchaser for review. Except as set forth in the Disclosure
Schedule, all such items are valid and enforceable by and against the
Company in accordance with their respective terms; the Company is not
in breach, violation or default, however defined, in the performance
of any of its obligations thereunder, and no facts and circumstances
exist which, whether with the giving of due notice, lapse of time, or
both, would constitute such a breach, violation or default thereunder
or thereof; and to the best knowledge of the Company, no other parties
thereto are in breach, violation or default, however defined,
thereunder or thereof, and no facts or circumstances exist which,
whether with the giving of due notice, lapse of time, or both, would
constitute such a breach, violation or default thereunder or thereof.
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2.20. ORDERS, COMMITMENTS AND RETURNS.
Except as set forth in the Disclosure Schedule, all accepted and
unfulfilled orders for the sale of products and the performance of services
entered into by the Company and all outstanding contracts or commitments
for the purchase of supplies, materials and services were made in bona fide
transactions in the ordinary course of business. Except as set forth in the
Disclosure Schedule, to the best knowledge of the Company there are no
claims against the Company to return products by reason of alleged
over-shipments, defective products or otherwise, or of products in the
hands of customers, retailers or distributors under an understanding that
such products would be returnable.
2.21. LABOR MATTERS.
Except as set forth in the Disclosure Schedule: (i) the Company is and has
been in material compliance with all applicable Laws respecting employment
and employment practices, terms and conditions of employment and wages and
hours, including without limitation any such Laws respecting employment
discrimination and occupational safety and health requirements, and has not
and is not engaged in any unfair labor practice; (ii) there is no unfair
labor practice complaint against the Company pending or, to the best
knowledge of the Company, threatened before the National Labor Relations
Board or any other comparable Authority; (iii) there is no labor strike,
dispute, slowdown or stoppage by Company employees actually pending or, to
the best knowledge of the Company, threatened against or directly affecting
the Company; (iv) no labor representation question exists respecting the
employees of the Company and there is not pending or, to the best knowledge
of the Company, threatened any activity intended or likely to result in a
labor representation vote respecting the employees of the Company; (v) no
grievance or any arbitration proceeding arising out of or under collective
bargaining agreements is pending and no claims therefor exist or have been
threatened; (vi) no collective bargaining agreement is binding and in force
against the Company or currently being negotiated by the Company; (vii) the
Company has not experienced any significant work stoppage by Company
employees; (viii) the Company is not delinquent in payments to any persons
for any wages, salaries, commissions, bonuses or other direct or indirect
compensation owed by the Company for any services performed by them or
amounts required to be reimbursed to such persons, including without
limitation any amounts due under any Pension Plan, Welfare Plan or
Compensation Plan; (ix) upon termination of the employment of any person,
none of the Company, the Purchaser, Noble or any subsidiary of Noble will,
by reason of anything done by or on behalf of the Company at or prior to or
as of the Closing Date, be liable to any of such persons for so-called
"severance pay" or any other payments; and (x) within the twelve month
period prior to the date hereof there has not been any expression of
intention to the Company by any officer or key employee to terminate such
employment.
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2.22. DEALERS AND SUPPLIERS.
Except as set forth in the Disclosure Schedule, there has not been in the
twelve month period prior to the date hereof any material adverse change in
the business relationship of the Company with any dealer or supplier to the
Company.
2.23. PERMITS AND OTHER OPERATING RIGHTS.
Except as set forth in the Disclosure Schedule, the Company does not
require the Consent of any Authority to permit the Company to operate in
the manner in which it presently is being operated, and the Company
possesses all permits and other authorizations from all Authorities
presently required or necessary to permit it to operate its business in the
manner in which it presently is conducted. The Company is not restricted by
agreement from carrying on its business or any part thereof anywhere in the
world or from competing in any line of business with any person or entity.
2.24. COMPLIANCE WITH LAW.
Except as set forth in the Disclosure Schedule, and without limiting the
scope of any other representations or warranties contained in this
Agreement, but without intending to duplicate the scope of such other
representations and warranties, the assets, properties, businesses and
operations of the Company are and have been in compliance in all material
respects with all Laws applicable to the ownership and conduct of its
assets, properties, businesses and operations. There are no outstanding and
unsatisfied deficiency reports, plans of correction, notices of
noncompliance or work orders relating to any such Authorities, and no such
discussions with any such Authorities are scheduled or pending.
2.25. ASSETS OF BUSINESS.
The Assets constitute all of the assets held for use or used primarily in
connection with the business of the Company and are sufficient to conduct
such businesses as presently conducted.
2.26. ENVIRONMENTAL AND SAFETY MATTERS.
Except as set forth on the Disclosure Schedule:
(a) To the best knowledge of the Company, neither the Company, any former
subsidiary of the Company, nor any previous owner, tenant, occupant or
user of any property owned or leased by or to the Company or by or to
any former subsidiary as of the date hereof and which property is
included in the Assets (the "Properties") engaged in or permitted,
direct or indirect operations or activities upon, or any use or
occupancy of the Properties, or any portion thereof, for the purpose
of or in any way involving the handling, manufacture, treatment,
storage,
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use, generation, emission, release, discharge, refining, dumping or
disposal of any Environmentally Regulated Materials (as hereinafter
defined) (whether accidental or intentional, direct or indirect) on,
under, in or about the Properties in violation of Environmental Laws,
or transported any Environmentally Regulated Materials to, from or
across the Properties in violation of Environmental Laws, nor are any
Environmentally Regulated Materials presently constructed, deposited,
stored, placed or otherwise located on, under, in or about the
Properties in violation of Environmental Laws, nor have any
Environmentally Regulated Materials migrated from the Properties upon
or beneath other properties, nor have any Environmentally Regulated
Materials migrated or threatened to migrate from other properties
upon, about or beneath the Properties. To the best knowledge of the
Company, the Properties do not contain in violation of Environmental
Laws, any: (i) underground or aboveground storage tanks; (ii)
asbestos; (iii) equipment using PCBs; (iv) underground injection
wells; or (v) septic tanks in which process waste water or any
Environmentally Regulated Materials have been disposed.
(b) To the best knowledge of the Company:
(i) no violation or noncompliance with Environmental and
Occupational Safety and Health Laws has occurred with respect to
the Properties or operations conducted thereon; the Company has
obtained all permits, licenses and authorizations required by,
and the Company and the Properties are in compliance, in all
material respects, with all Environmental and Occupational
Safety and Health Laws including, without limitation, all
applicable restrictions, conditions, standards, limitations,
prohibitions, requirements and obligations contained in the
Environmental and Occupational Safety and Health Laws or
contained in any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder;
(ii) no enforcement, investigation, cleanup, removal, remediation or
response or other governmental or regulatory actions have been,
or could have been at any time in the past, asserted or
threatened with respect to operations conducted on the
Properties or the Properties themselves or against the Company
or any subsidiary or former subsidiary with respect to or in any
way regarding the Properties pursuant to any Environmental and
Occupational Safety and Health Laws; and
(iii) no claims or settlements with respect to the Properties or the
operations thereon, or against the Company or any subsidiary or
former subsidiaries with respect to the Properties or operations
conducted thereon, relating to or arising out of Environmental
and Occupational Safety and Health Laws or Environmentally
Regulated Materials, have been made or been
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threatened by any third party, including any Authority, nor to
the best knowledge of the Company, does there exist any
reasonable basis for any such claim (any such enforcement,
investigation, cleanup, removal, remediation or response, other
governmental or regulatory action, claim or settlement is herein
referred to as an "Environmental Claim").
(c) To the best knowledge of the Company, with regard to the Company and
the Properties, there are no past or present events, conditions,
circumstances, activities, practices, incidents, actions or plans
which may interfere with or prevent compliance or continued compliance
with Environmental and Occupational Health and Safety Laws, as in
effect on the Closing Date.
(d) The term "Environmental and Occupational Safety and Health Law" as
used in this Agreement means any Law, that (i) regulates, creates
standards for or imposes liability or standards of conduct concerning
any element, compound, pollutant, contaminant, or toxic or hazardous
substance, material or waste, or any mixture thereof, or relates in
any way to emissions or releases into the environment or ambient
environmental conditions, or conduct affecting such matters, or (ii)
is designed to provide safe and healthful working conditions or reduce
occupational safety and health hazards. Such laws shall include, but
not be limited to, the National Environmental Policy Act, 42 U.S.C.
Section 4321 et seq., the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., the Federal Water Pollution Control Act, 33 U.S.C. Section 1251
et seq., the Federal Clean Air Act, 42 U.S.C. Section 7401 et seq.,
the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., the
Emergency Planning and Community Right to Know Act, 42 U.S.C. Section
11011, the Hazard Communication Act, 29 U.S.C. Section 651 et seq.,
the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.,
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
Section 136, and any caselaw interpretations, amendments or
restatements thereof, or similar enactments thereto, as is now or at
any time hereafter may be in effect, as well as their international,
state and local counterparts.
(e) The term "Environmentally Regulated Materials" as used in this
Agreement means any element, compound, pollutant, contaminant,
substance, material or waste, or any mixture thereof, designated,
listed, referenced, regulated or identified pursuant to any
Environmental and Occupational Safety and Health Law.
(f) Notwithstanding any provision in this Agreement to the contrary, all
representations and warranties of the Company pertaining or related to
Environmental Law, Environmentally Regulated Materials, Environmental
Claims, pollution, contamination or other environmental matters are
contained solely and exclusively in this Section 2.26.
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2.27. TRANSACTIONS WITH CERTAIN PERSONS.
Except as set forth in the Disclosure Schedule, during the past three years
the Company has not, directly or indirectly, purchased, leased or otherwise
acquired any property or obtained any services from, or sold, leased or
otherwise disposed of any property or furnished any services to, or
otherwise dealt with, in the ordinary course of business or otherwise, (i)
any shareholder of the Company or (ii) any Affiliate or Associate of the
Company or any shareholder of the Company (except with respect to
compensation in the ordinary course of business for services rendered as a
director, officer or employee of the Company). As of the date hereof, the
Company does not owe any amount to, or have any agreement or contract with
or commitment to, any of its shareholders, directors, officers, employees
or consultants or any Affiliate or Associate thereof (other than
compensation for current services not yet due and payable and reimbursement
of expenses arising in the ordinary course of business), and none of such
persons owes any amount to the Company.
2.28. BROKERS.
Neither the Company nor any of its directors, officers or employees has
employed any broker, finder, or financial advisor or incurred any liability
for any brokerage fee or commission, finder's fee or financial advisory
fee, in connection with the transactions contemplated hereby, nor is there
any basis known to the Company for any such fee or commission to be claimed
by any person or entity.
2.29. CUSTOMERS.
Except as set forth on the Disclosure Schedule, there has not been in the
12-month period prior to the date hereof any significant dispute with any
customer of the Company nor any set of circumstances which is reasonably
anticipated to have a material effect on the relationship between the
Company and such customer.
2.30. ABSENCE OF CERTAIN BUSINESS PRACTICES.
Neither the Company, nor any officer, director, shareholder, employee or
agent of the Company, nor any other person acting on their behalf, has,
directly or indirectly, within the past three years given or agreed to give
any gift or similar benefit to any customer, supplier, governmental
employee or other person who is or may be in a position to help or hinder
the business of the Company (or assist the Company in connection with any
actual or proposed transaction) which (i) might subject the Company or
Purchaser to any damage or penalty in any civil, criminal or governmental
litigation proceeding, (ii) if not given in the past, might have had a
Material Adverse Effect on the assets, business or operations of the
Company as reflected in the financial statements described in Section 2.6,
or (iii) if not continued in the future, might have a Material Adverse
Effect on the Company's assets, business, operations or prospects or which
might subject the Company or Purchaser to suit or penalty in any private or
governmental litigation or proceeding.
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2.31. DISCLOSURE.
No representation or warranties by the Company in this Agreement and no
statement contained in any document (including, without limitation, the
financial statements referred to herein and the Disclosure Schedule),
certificate, exhibit or other writing furnished or to be furnished to
Purchaser or Noble pursuant to the provisions of this Agreement, contains
or will contain, any untrue statement of material fact or omit or will omit
to state any material fact necessary in order to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading, and all of the foregoing completely and correctly present the
information required or purported to be set forth herein or therein. There
is no material fact as of the date hereof which has not been disclosed in
writing to the Purchaser related to the Company, the Assets or the
Company's operations, properties, financial condition or prospects which
has a Material Adverse Effect or, in the future may have a Material Adverse
Effect on the Company or the Assets other than any Material Adverse Effect
that (i) arises predominately by reason of a general deterioration in the
economy or in the flat rolled steel industry after the date hereof, or (ii)
arises predominantly out of either the disclosure of the fact that it is
Noble or the Purchaser that is the prospective acquiror of the Company's
business or out of any action taken by Noble or the Purchaser after the
date hereof; and does not arise out of or relate to any act or omission by
the Company. The representations and warranties contained in this Section 2
or elsewhere in this Agreement or any document delivered pursuant hereto
will not be affected or deemed waived by reason of the fact that the
Purchaser or Noble their respective representatives knew (other than as a
result of the Disclosure Schedule or other writing delivered to the
Purchasers on the Closing Date) or should have known that any such
representation or warranty is or might be inaccurate in any respect.
3. REPRESENTATIONS AND WARRANTIES OF NOBLE AND THE PURCHASER
Noble and the Purchaser, jointly and severally, represent and warrant to
the Company as of the date hereof as follows:
3.1. CORPORATE ORGANIZATION.
Each of Noble and the Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Michigan. Each
of Noble and the Purchaser is qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the nature of
the activities conducted by it or the character of the property owned,
leased or operated by it make such qualification necessary or appropriate,
except for those jurisdictions where the failure to be so qualified has not
and could not reasonably be expected to have a Material Adverse Effect on
the ability of Noble or the Purchaser, as the case may be, to fulfill its
obligations under this Agreement.
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3.2. AUTHORIZATION.
Each of Noble and the Purchaser has full corporate power and authority to
enter into this Agreement and to carry out the transactions contemplated
herein. The Boards of Directors of Noble and the Purchaser have taken all
action required by law, their respective articles of incorporation and
bylaws or otherwise to authorize the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein
and no action of the stockholders of Noble is required. This Agreement is
the valid and binding legal obligation of Noble and the Purchaser
enforceable against them in accordance with its terms.
3.3. NON-CONTRAVENTION.
Neither the execution, delivery and performance of this Agreement nor the
consummation of the transactions contemplated herein will: (i) violate any
provision of the articles of incorporation or bylaws of Noble or the
Purchaser; or (ii) except for such violations, conflicts, defaults,
accelerations, terminations, cancellations, impositions of fees or
penalties, mortgages, pledges, liens, security interests, encumbrances,
restrictions and charges which would not, individually or in the aggregate,
have a Material Adverse Effect on Noble or the Purchaser, (A) violate, be
in conflict with, or constitute a default, however defined (or an event
which, with the giving of due notice or lapse of time, or both, would
constitute such a default), under, or cause or permit the acceleration of
the maturity of, or give rise to, any right of termination, cancellation,
imposition of fees or penalties under, any debt, note, bond, lease,
mortgage, indenture, license, obligation, contract, commitment, franchise,
permit, instrument or other agreement or obligation to which Noble or the
Purchaser is a party or by which they or any of their properties or assets
is or may be bound (unless with respect to which defaults or other rights,
requisite waivers or consents will have been obtained at or prior to the
Closing) or (B) result in the creation or imposition of any mortgage,
pledge, lien, security interest, encumbrance, restriction, adverse claim or
charge of any kind, upon any property or assets of Noble or the Purchaser
under any debt, obligation, contract, agreement or commitment to which
Noble or the Purchaser is a party or by which Noble or the Purchaser or any
of their assets or properties is or may be bound; or (iii) violate any Law.
3.4. CONSENTS AND APPROVALS.
No Consent is required by any person or entity, including without
limitation any Authority, in connection with the execution, delivery and
performance by Noble and the Purchaser of this Agreement, or the
consummation of the transactions contemplated herein, other than any
Consent which, if not made or obtained, will not, individually or in the
aggregate, have a Material Adverse Effect on the business of Noble or the
Purchaser.
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3.5. BROKERS.
Neither Noble, the Purchaser nor any of their directors, officers or key
employees have employed any broker, finder or financial advisor, or
incurred any liability for any brokerage fee or commission, finder's fee or
financial advisory fee, in connection with the transactions contemplated
hereby, nor is there any basis known to Noble or the Purchaser for any such
fee or commission to be claimed by any person or entity.
3.6. LEGAL PROCEEDINGS.
There are no actions, suits or proceedings instituted, pending or to the
knowledge of Noble or the Purchaser, threatened against Noble or the
Purchaser, or against any of their affiliates or against any property,
asset, interest or right of any of them, either individually or in the
aggregate, that would prevent or delay consummation of the transactions
contemplated by this Agreement or otherwise prevent Noble or the Purchaser
from performing their respective obligations under this Agreement. Neither
Noble nor the Purchaser is subject to any judgment, order, writ, injunction
or decree that would prevent or delay consummation of the transactions
contemplated by this Agreement or otherwise prevent Noble or the Purchaser
from performing their respective obligations under this Agreement.
3.7. CERTAIN OTHER MATTERS.
No stockholder of Noble owns, directly or indirectly, 50% or more of the
outstanding voting securities of Noble within the meaning of the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the "HSR
Act"). No person or entity has the power to designate one-half or more of
the directors of Noble within the meaning of the HSR Act. No person or
entity has a combination of ownership of voting securities or Noble and
contractual rights which together allow such person or entity to designate
one-half or more of the directors of Noble within the meaning of the HSR
Act. Noble is not controlled, as defined by Section 801.1(b)(l)(i) and (2)
of the rules promulgated under the HSR Act, by any person or persons.
Neither Noble's net sales for the year ended December 31, 1997 nor Noble's
total assets as of December 31, 1997 exceeded $100 million.
4. COVENANTS
4.1. COMPANY'S AGREEMENTS AS TO SPECIFIED MATTERS.
Except as specifically set forth on the Disclosure Schedule and except as
may be otherwise agreed in writing by Noble or the Purchaser, from the date
hereof until the Closing, the Company will conduct its business and
operations according to its ordinary and usual course of business, to
preserve substantially intact the business organizations of
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the Company and to preserve the Company's current relationships with
customers, employees, suppliers and other persons with which it has
significant business relations. Without limiting the generality of the
foregoing, and, except as otherwise expressly provided in this Agreement or
in the ordinary course of business, prior to the Closing Date, without the
prior written consent of the Purchaser, the Company will not:
(a) Amend its articles of incorporation or code of regulations;
(b) Borrow or agree to borrow any funds;
(c) Incur, assume, suffer or become subject to, whether directly or by way
of guarantee or otherwise, any claims, obligations, liabilities or
loss contingencies which, individually or in the aggregate, are
material to the conduct of the businesses of the Company or the
Assets, or have or would have a Material Adverse Effect on the
financial condition of the Company or the condition of the Assets;
(d) Pay, discharge or satisfy any claims, liabilities or obligations
except in the ordinary course of business;
(e) Permit or allow any of the Assets to be subjected to any Lien, except
Permitted Liens;
(f) Write down the value of any Inventory or write off as uncollectable
any Accounts Receivable;
(g) Cancel or amend any debts, waive any claims or rights or sell,
transfer or otherwise dispose of any properties or assets, other than
(i) Inventory in the ordinary course of business or (ii) for such
debts, claims, rights, properties or assets which, individually or in
the aggregate, are not material to the conduct of its business;
(h) License, sell, transfer, pledge, modify, disclose, dispose of or
permit to lapse any right to the use of any Intellectual Property
Rights;
(i) (i) Terminate, enter into, adopt, institute or otherwise become
subject to or amend in any material respect any collective bargaining
agreement or employment or similar agreement or arrangement with any
of the directors, officers or employees of the Company; (ii)
terminate, enter into, adopt, institute or otherwise become subject to
or amend in any material respect any Compensation Plan of the Company;
(iii) contribute, set aside for contribution or authorize the
contribution of any amounts for any such Compensation Plan except as
required (and not discretionary) by the terms of such Compensation
Plan; or (iv) grant or become obligated to grant any general increase
in the compensation of any directors, officers or employees of the
Company (including without limitation any such increase pursuant to
any Compensation Plan);
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(j) Make or enter into any commitment for capital expenditures for
additions to property, plant or equipment of the Company individually
in excess of $25,000.00;
(k) (i) Declare, pay or set aside for payment any dividend or other
distribution in respect of its capital stock or other securities
(including without limitation distributions in redemption or
liquidation) or redeem, purchase or otherwise acquire any shares of
its capital stock or other securities; (ii) issue, grant or sell any
shares of its capital stock or equity securities of any class, or any
options, warrants, conversion or other rights to purchase or acquire
any such shares or equity securities or any securities convertible
into or exchangeable for such shares or equity securities; (iii)
become a party to any merger, exchange, reorganization,
recapitalization, liquidation, dissolution or other similar corporate
transaction; or (iv) organize any new subsidiary, acquire any capital
stock or other equity securities or other ownership interest in, or
assets of, any person or entity or otherwise make any investment by
purchase of stock or securities, contributions to capital, property
transfer or purchase of any properties or assets of any person or
entity;
(l) Pay, lend or advance any amounts to, or sell, transfer or lease any
properties or assets to, or enter into any agreement or arrangement
with, any director, officer or employee of the Company;
(m) Terminate, enter into or amend in any material respect any item
identified in Section 2.19 of the Disclosure Schedule, or take any
action or omit to take any action which will cause a breach, violation
or default (however defined) under any such items;
(n) Take any action that can be reasonably anticipated to have a Material
Adverse Effect on Company or that could cause any representation or
warranty set forth in Section 2 hereof to be untrue or any condition
to the Closing not to be satisfied;
(o) Accelerate billings, shipments to customers, payments from customers,
orders from suppliers or payment of accounts payable or adjust the
level of inventory, except in the ordinary course of business
consistent with past practices;
(p) Acquire any of the business or assets of any other person, firm,
association or corporation;
(q) Do any act or omit to do any act, or permit any act or omission to
act, which could cause a breach or default by Company under any of
Company's contracts, agreements, commitments or obligations;
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(r) Enter into or amend any other agreements, commitments or contracts
which, individually or in the aggregate, are material to Company,
except agreements for the purchase and sale of goods or services in
the ordinary course of business, consistent with past practice and not
in excess of current requirements; or
(s) Agree, whether in writing or otherwise, to take any action described
in this subsection.
4.2. NO COMPANY SOLICITATION OF ALTERNATE TRANSACTION.
The Company will not, and will ensure that, the Company's directors,
officers and employees, independent contractors, consultants, counsel,
accountants, investment advisors and other representatives and agents will
not, directly or indirectly, solicit, initiate or encourage discussions or
negotiations with, provide any nonpublic information to, or enter into any
agreement with, any third party concerning (or concerning the business of
the Company in connection with) any tender offer (including a self tender
offer), spin-off, exchange offer, merger, consolidation, sale of
substantial assets or of a significant amount of assets, sale of
securities, acquisition of the Company's securities, liquidation,
dissolution or similar transactions involving the Company (such proposals,
announcements or transactions being called herein "Acquisition Proposals").
The Company shall promptly inform Purchaser of any inquiry (including the
terms thereof and the identity of the third party making such inquiry)
which it may receive in respect of an Acquisition Proposal and furnish to
Purchaser a copy of any such written inquiry.
4.3. FULL ACCESS TO NOBLE AND PURCHASER.
Throughout the period prior to the Closing, the Company will afford to
Noble and the Purchaser and their directors, officers, employees, counsel,
accountants, investment advisors and other authorized representatives and
agents reasonable access to the facilities, properties, books and records
of the Company in order that Noble and the Purchaser may make such
investigations as it will desire to make of the affairs of the Company.
Such access shall be afforded by the Company upon receipt of reasonable
advance notice and during normal business hours. The Company will furnish
such additional financial and operating data and other information as Noble
or the Purchaser will, from time to time, reasonably request, including
without limitation access to the working papers of its independent
certified public accountants; provided, however, that any such
investigation shall not affect or otherwise diminish or obviate in any
respect any of the representations and warranties of the Company herein.
4.4. CONFIDENTIALITY.
(a) Any information regarding the Company obtained from or on behalf of
the Company, other than as specifically excepted from the definition
of confidential information in the Confidentiality Agreement dated May
19, 1998 by and between the Company and Noble (the "Confidentiality
Agreement"), shall be subject to the
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terms of the Confidentiality Agreement, provided, however, that any
such information regarding the Company and the transactions
contemplated hereby that is subject to the terms of the
Confidentiality Agreement may be disclosed by Noble or the Purchaser
to their respective directors, officers, employees, investment
advisors, accountants, counsel and other authorized representatives
and agents, provided in each case that such recipient agrees to keep
such information confidential to the extent required under the
Confidentiality Agreement.
(b) The Company agrees that it will not use, or permit the use of, any of
the information relating to Noble or the Purchaser furnished to it in
connection with the transactions contemplated herein ("Information")
in a manner or for a purpose detrimental to Noble or the Purchaser or
otherwise than in connection with the transaction, and that it will
not disclose, divulge, provide or make accessible (collectively,
"Disclose"), or permit the Disclosure of any of the Information to any
person or entity, other than its directors, officers, employees,
investment advisors, accountants, counsel and other authorized
representatives and agents, except as may be required by judicial or
administrative process or, in the opinion of such its counsel, by
other requirements of Law; provided, however, that prior to any
Disclosure of any Information permitted hereunder, the Company will
first obtain the recipients' undertaking to comply with the provisions
of this subsection with respect to such information. The term
"Information" as used herein will not include any information relating
to a party which the party disclosing such information can show: (i)
to have been in its possession prior to its receipt from another party
hereto; (ii) to be now or to later become generally available to the
public through no fault of the disclosing party; (iii) to have been
available to the public at the time of its receipt by the disclosing
party; (iv) to have been received separately by the disclosing party
in an unrestricted manner from a person entitled to disclose such
information; or (v) to have been developed independently by the
disclosing party without regard to any information received in
connection with this transaction. The Company will be deemed to have
satisfied its obligations to hold the Information confidential if it
exercises the same care as it takes with respect to its own similar
information.
(c) Each party hereto also agrees to promptly return to the party from
whom it originally received confidential information subject to this
Section 4.4 all original and duplicate copies of written materials
containing Information should the transactions contemplated herein not
occur. The provisions of this subsection shall survive termination or
cancellation of this Agreement.
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4.5. FILINGS; CONSENTS; REMOVAL OF OBJECTIONS.
Subject to the terms and conditions herein provided, the parties hereto
will use their best efforts to take or cause to be taken all actions and do
or cause to be done all things necessary, proper or advisable under
applicable Laws to consummate and make effective, as soon as reasonably
practicable, the transactions contemplated hereby, including without
limitation obtaining all Consents of any person or entity, whether private
or governmental, required in connection with the consummation of the
transactions contemplated herein. In furtherance, and not in limitation of
the foregoing, it is the intent of the parties to consummate the
transactions contemplated herein at the earliest practicable time, and they
respectively agree to exert their best efforts to that end, including
without limitation: (i) the removal or satisfaction, if possible, of any
objections to the validity or legality of the transactions contemplated
herein; and (ii) the satisfaction of the conditions to consummation of the
transactions contemplated hereby.
4.6. FURTHER ASSURANCES; COOPERATION; NOTIFICATION.
(a) Each party hereto will, before, at and after the Closing, execute and
deliver such instruments and take such other actions as the other
party or parties, as the case may be, may reasonably require in order
to carry out the intent of this Agreement. Without limiting the
generality of the foregoing, at any time after the Closing, at the
request of the Purchaser and without further consideration, the
Company will execute and deliver such instruments of sale, transfer,
conveyance, assignment and confirmation and take such action as the
Purchaser may reasonably deem necessary or desirable in order to more
effectively transfer, convey and assign to the Purchaser, and to
confirm the Purchaser's title to, all of the Assets, to put the
Purchaser in actual possession and operating control thereof and to
assist the Purchaser in exercising all rights with respect thereto.
(b) Prior to the Closing, the Company will cooperate with Noble and the
Purchaser to promptly develop plans for the management of the business
after the Closing, including without limitation plans relating to
productivity, marketing, operations and improvements, and the Company
will further cooperate with Noble and the Purchaser to provide for the
implementation of such plans as soon as practicable after the Closing.
Subject to applicable Law, prior to the Closing the Company will
confer on a regular and reasonable basis with one or more
representatives of Noble or the Purchaser to report on material
operational matters and the general status of ongoing operations.
(c) At all times from the date hereof until the Closing, each party will
promptly notify the other in writing of the occurrence of any event
which it reasonably believes will or may result in a failure by such
party to satisfy the conditions specified in Section 5 and Section 6
hereof.
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4.7. SUPPLEMENTS TO DISCLOSURE SCHEDULE.
At least 48 hours prior to the Closing, the Company will supplement or
amend the Disclosure Schedule with respect to any event or development
which, if existing or occurring at or prior to the date of this Agreement,
would have been required to be set forth or described in the Disclosure
Schedule or which is necessary to correct any information in the Disclosure
Schedule or in any representation and warranty of the Company which has
been rendered inaccurate by reason of such event or development. For
purposes of determining the accuracy as of the date hereof of the
representations and warranties of the Company contained in Section 2 hereof
in order to determine the fulfillment of the conditions set forth in
Section 5.1 and to determine whether a material breach has occurred
pursuant to Section 7.1(b), the Disclosure Schedule will be deemed to
exclude any information contained in any supplement or amendment hereto
delivered after the delivery of the Disclosure Schedule, provided that if
the Closing will take place the Disclosure Schedule, as so amended, will be
deemed the Disclosure Schedule hereunder for all purposes.
4.8. PUBLIC ANNOUNCEMENTS.
None of the parties hereto will make any public announcement with respect
to the transactions contemplated herein without the prior consent of the
other parties, which consent will not be unreasonably withheld or delayed;
provided, however, that any of the parties hereto may at any time make any
announcements which are required by applicable Law so long as the party so
required to make an announcement promptly upon learning of such requirement
notifies the other parties of such requirement and discusses with the other
parties in good faith the exact proposed wording of any such announcement.
4.9. TAX MATTERS.
(a) Transactional Taxes. In addition to and without limiting those
representations and warranties set forth in Section 2.15 of this
Agreement, in the event that any sales or use Tax, or any Tax in the
nature of a sales or use tax, or any transactional Tax is payable or
assessed relative to the transactions contemplated herein, the Company
will pay all such Taxes and will not collect any part thereof from the
Purchaser. The parties hereto will cooperate to make any necessary
filings with state and local taxing Authorities and to furnish any
required supplemental information with respect to any state and local
Tax liabilities resulting from the consummation of the transactions
contemplated herein.
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(b) Tax Liability; Post-Closing Tax Return Filings; No Distributions. In
addition to and without limiting those representations and warranties
set forth in Section 2.15 of this Agreement, the Company will pay all
Taxes arising from or relating to the transactions contemplated by
this Agreement, including without limitation Tax on any income or
gains arising from the sale of the Assets. The Company will cause to
be prepared and filed all Federal and state income Tax Returns for the
Company reflecting all activities of the Company through and including
the Closing Date. Irrespective of any prior practice, no dividend or
other distribution of property of the Company will be made by the
Company on or before the Closing Date without the express written
consent of the Purchaser.
(c) Cooperation and Records Retention. The Company and the Purchaser will
(i) each provide the other with such assistance as may reasonably be
requested by any of them in connection with the preparation of any Tax
Return, audit or other examination by any taxing Authority or judicial
or administrative proceedings relating to liability for Taxes, (ii)
each retain and provide the other with any records or other
information which may be relevant to such Tax Return, audit or
examination, proceeding or determination, and (iii) each provide the
other with any final determination of such audit or examination,
proceeding or determination that affects any amount required to be
shown on any Tax Return of the other for any period. Without limiting
the generality of the foregoing, the Company and the Purchaser will
retain, until the applicable statutes of limitations (including all
extensions) have expired, copies of all Tax Returns, supporting work
schedules and other records or information which may be relevant to
such Tax Returns for all Tax periods or portions thereof ending on or
before the Closings and will not destroy or otherwise dispose of any
such records without first providing the other party with a reasonable
opportunity to review and copy the same.
(d) Section 461(h) Liabilities. Pursuant to Section 1.2 hereof, Purchaser
is expressly assuming certain liabilities of the Seller which have not
matured into a deduction under Section 461(h) of the Code (the
"Section 461(h) Liabilities"). The Seller and Purchaser agree that,
pursuant to Regs. Section 1.461-4(d)(5) and 1.461-4(g)(1)(ii)(C), the
Seller will be entitled to claim a deduction for the Section 461(h)
Liabilities assumed by the Purchaser.
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4.10. BULK TRANSFERS.
The Company has requested that the Purchaser waive, and the Purchaser
hereby agrees to waive, the requirements of the Uniform Commercial Code
concerning bulk transfers, as in effect in the various states in which the
Company has assets, including without limitation the requirement of notice
to creditors. It is expressly agreed by the parties hereto that the
obligation to indemnify Noble and the Purchaser under Section 8.3 includes
any claims by creditors of the Company against Noble or the Purchaser
arising, directly or indirectly, in connection with such request and
waiver.
4.11. EMPLOYEE BENEFITS.
(a) On or as soon as administratively practicable after the Closing Date,
the Purchaser will extend offers of immediate employment to employees
of the Company listed on Exhibit 4.11 hereto. Except as otherwise
expressly provided in this Agreement, the terms and conditions of each
such offer and of any continuing employment will be determined by the
Purchaser in its sole discretion and any resulting employment
relationship will be at will. Any employee of the Company who accepts
such an employment offer and reports for work on the date directed by
the Purchaser will be sometimes hereinafter referred to as a
"Transferred Employee." The Company hereby authorizes Noble and the
Purchaser to enter into discussions with any of such employees listed
on Exhibit 4.11 concerning the future employment of such individual by
the Purchaser; provided, however, that (i) such discussions will not
be commenced prior to the giving of notice by the Company to the
employees of the transactions contemplated by this Agreement; (ii) all
such discussions will be conducted in such a manner as not to
interfere unreasonably with the business operations of the Company;
and (iii) Noble and the Purchaser shall not in any way obligate the
Company with respect to such employment.
(b) Purchaser shall grant to each Transferred Employee credit for his or
her service with the Company prior to the date such Transferred
Employee is actively at work with Purchaser for purposes of
eligibility, vesting and retirement eligibility under any of
Purchaser's benefit plans that are maintained or adopted by the
Purchaser for the benefit of the Transferred Employees.
(c) The Company shall be responsible for providing any notice to the
employees of the Company and their authorized representatives required
by the Workers Adjustment and Retraining Notification Act, 29 U.S.C.
Section 2101 et seq. ("WARN"), or any state plant closing or
notification law, as a result of any employment actions taken at any
time prior to or at the Closing and the Purchaser shall be responsible
for providing any notice to employees of the Company and its
authorized representatives required by WARN or any state plant closing
or notification law, as a result of any employment actions taken at
any time after the Closing. The Company will not furlough, layoff or
terminate the employment of
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any employees of the Company, other than "for cause," as set forth at
29 U.S.C. Section 2101(a)(6), at any time prior to the Closing without
the prior consent of the Purchaser. The Company shall indemnify the
Purchaser from and against, any Losses which may be incurred by the
Purchaser as a result of the Company's failure to provide any notice
required by this Section 4.11(c) and the Purchaser shall indemnify the
Company from and against any losses which may be incurred by it as a
result of the Purchaser's failure to provide any notice required by
this Section 4.11(c). Upon request, the Company will promptly provide
to the Purchaser complete information regarding all layoffs,
terminations, furloughs and firings that have occurred since January
1, 1998 and any other information that the Purchaser may reasonably
request to permit the Purchaser to comply with WARN or any state plant
closing or notification law.
(d) The Company will not, for a period of three (3) years after the
Closing Date, take any action, other than with the written consent of
the Purchaser, which could be reasonably foreseen to induce any
Transferred Employee, while still employed by Noble, the Purchaser or
any subsidiary of Noble , to enter into the employ of the Company or
any affiliate of the Company.
(e) Except for the Transferred Plans listed on Exhibit 4.11(g) and the
liabilities associated therewith as disclosed in Section 1.2 and in
the Disclosure Schedule pertaining to Section 2.17, Noble and the
Purchaser hereby specifically disclaim any assumption of, or liability
with respect to, any employee benefit plan, policy, practice or
agreement to which the Company is a party or under which any of the
Company's employees or former employees are covered.
(f) With respect to each Transferred Employee, or as otherwise required by
law, in connection with any "group health plan" (as such terms are
defined in Section 4980B of the Code) maintained by the Company or any
of its affiliates, as between the Purchaser and Noble, on the one
hand, and the Company, on the other hand, the Purchaser and Noble are
responsible for providing group health plan continuation coverage in
accordance with Section 4980B of the Code and Part 6 of Subtitle B of
Title I of ERISA and will indemnify, defend and hold harmless the
Company from and against any liability, expense, cost, tax or
obligation of any nature with respect to such Transferred Employees
arising in connection with group health plan coverage required under
Section 4980B of the Code or Part 6 of Subtitle B of Title I of ERISA.
(g) Effective as of the Closing Date, Purchaser will be substituted for
the Company as sponsor, administrator and named fiduciary of the
Pension Plans of the Company which are listed on Exhibit 4.11(g) (the
"Transferred Plans"), and not later than the Closing Date, the Company
will prepare and the Company and the Purchaser will cause to be
authorized and executed an amendment to the Transferred Plans
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effecting such substitution. Except with respect to duties,
obligations or liabilities as to which the Company is obligated to
indemnify the Purchaser pursuant to Section 8.3 on and after the
Closing Date, the Purchaser is responsible for all powers, duties,
rights, privileges, obligations and liabilities arising under or
relating to the Transferred Plans. Following the Closing Date, the
Company and the Purchaser will, each at its own expense, cooperate to
make all required governmental filings with respect to the Transferred
Plans, including, without limitation, the Form 5500 Annual Report for
the plan year that includes the Closing Date and any PBGC Reportable
Event notices.
4.12. COMPETITIVE ACTIVITIES.
The Company and the Shareholders agree that, for a period of five (5) years
after the Closing Date with respect to the Company and Terry Hill and for a
period of one (1) year after the Closing Date with respect to Robert G.
Kreiling, neither they, nor any of their subsidiaries or affiliates will,
directly or indirectly, engage in any commercial activity anywhere in the
world that is competitive with the current business of the Company nor will
the Company or Shareholder, or their subsidiaries or affiliates,
participate in the management or operation of, or become an investor in
(other than with respect to passive investments held in an investment
portfolio by the Company or the Shareholders, or any of their subsidiaries
or affiliates; provided, however, that neither the Company or the
Shareholders, nor any of their subsidiaries or affiliates, exercises
control over the operations, management or any other activities of such
entity), any venture or enterprise of whatever kind, the business of which
is competitive with the current business of the Company transferred to
Purchaser hereunder anywhere in the world. In addition, during the period
commencing on the first anniversary of the Closing Date and ending on the
second anniversary of the Closing Date, Robert G. Kreiling will not engage
in a business utilizing light dye technology for configured blanks which
technology is the same as or similar to the light dye technology currently
used by the Company or utilize or manufacture pnuematic or hydraulic
presses similar to those currently used in the Company's business. In
addition, during a period of five (5) years after the Closing Date with
respect to the Company and Terry Hill and for a period of two (2) years
after the Closing Date with respect to Robert G. Kreiling, neither the
Company or the Shareholders, nor any of their subsidiaries or affiliates,
will, either directly or indirectly, alone or with others, solicit or
assist anyone else in the solicitation of, any (a) employee of Noble or the
Purchaser, or their subsidiaries or affiliates, to terminate his or her
employment with Noble or the Purchaser, or their subsidiaries or
affiliates, as the case may be, or become employed by the Company or the
Shareholders, or any of their subsidiaries or affiliates, or any business
enterprise with which they may then be associated, affiliated or connected
or (b) customer of Noble or the Purchaser, or their subsidiaries or
affiliates, to change in any adverse respect its relationship with Noble or
the Purchaser, or their subsidiaries or affiliates.
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4.13. NAME CHANGE.
Within 48 hours after the Closing the Company shall change its corporate
name to one which does not include "H & H Steel Processing" or any
derivation thereof.
4.14 PHASE II REPORTS.
Noble and the Purchaser shall obtain Phase II Environmental Site Assessment
reports ("Phase II Reports"), from an environmental consulting firm
approved by Comerica Bank and reasonably acceptable to the Company, and
performed in accordance with the guidelines required by Comerica Bank, on
the Properties located in North Vernon, Middletown, Muncie and Sharonville.
Noble and the Purchaser shall then cause to be performed all remediation
work required by the Phase II Reports (the "Remediation"). The cost of both
the Phase II Reports and the Remediation shall be borne by Noble and the
Purchaser. Noble and the Purchaser shall provide copies of the Phase II
Reports to the Company.
5. CONDITIONS TO OBLIGATIONS OF NOBLE AND THE PURCHASER
Notwithstanding any other provision of this Agreement to the contrary, the
obligation of Noble and the Purchaser to effect the transactions
contemplated herein will be subject to the satisfaction or waiver at or
prior to the Closing of each of the following conditions:
5.1. REPRESENTATIONS AND WARRANTIES TRUE.
The representations and warranties of the Company and Shareholder contained
in this Agreement, including without limitation in the Disclosure Schedule
initially delivered to the Purchaser as Exhibit 2 (and not, solely for
these purposes, including any changes or additions delivered to the
Purchaser pursuant to Section 4.7), will be in all material respects true,
complete and accurate as of the date when made and at and as of the Closing
as though such representations and warranties were made at and as of such
time, except for changes specifically permitted or contemplated by this
Agreement, and except insofar as the representations and warranties relate
expressly and solely to a particular date or period, in which case they
will be true and correct in all material respects at the Closing with
respect to such date or period.
5.2. PERFORMANCE.
The Company will have performed and complied in all material respects with
all agreements, covenants, obligations and conditions required by this
Agreement to be performed or complied with by the Company on or prior to
the Closing.
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5.3. REQUIRED APPROVALS AND CONSENTS.
(a) All action required by law and otherwise to be taken by the Board of
Directors and Shareholder of the Company to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will have been duly and validly
taken.
(b) All Consents of or from all Authorities required hereunder to
consummate the transactions contemplated herein, will have been
delivered, made or obtained, and the Purchaser will have received
copies thereof.
5.4. ADVERSE CHANGES.
No change, circumstance or event which constitutes or has resulted in, or
that is reasonably likely to result in, a Material Adverse Effect will have
occurred in the business, financial condition, prospects, assets or
operations of the Company since December 31, 1997.
5.5. NO PROCEEDING OR LITIGATION.
No suit, action, investigation, inquiry or other proceeding by any
Authority or other person or entity will have been instituted or threatened
which delays or questions the validity or legality of the transactions
contemplated hereby or which, if successfully asserted, would individually
or in the aggregate, otherwise have a Material Adverse Effect on the Assets
or on the business, financial condition, prospects, or operations of the
Company.
5.6. OPINION OF COMPANY COUNSEL.
Noble and the Purchaser will have received an opinion from Graydon, Head &
Ritchey, counsel to the Company, dated the Closing Date, substantially in
the form and substance set forth as Exhibit 5.7 hereto.
5.7. LEGISLATION.
No Law will have been enacted which prohibits, restricts or delays the
consummation of the transactions contemplated hereby or any of the
conditions to the consummation of such transaction.
5.8. ACCEPTANCE BY COUNSEL TO NOBLE AND THE PURCHASER.
The form and substance of all legal matters contemplated hereby and of all
papers delivered hereunder will be reasonably acceptable to Noble and the
Purchaser.
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5.9. CERTIFICATES.
Noble and the Purchaser will have received such certificates of Company's
officers, in a form and substance reasonably satisfactory to Noble and the
Purchaser, dated the Closing Date, to evidence compliance with the
conditions set forth in this Section 5 and such other matters as may be
reasonably requested by Noble and the Purchaser.
5.10. DOCUMENTATION FOR CONVEYANCE OF THE ASSETS.
The Purchaser will have received, in a form and substance reasonably
satisfactory to Noble and the Purchaser, dated the Closing Date, all of the
Bills of Sale, deeds, assignments and other conveyance and transfer
documentation necessary to vest title in the Assets in the Purchaser.
5.11 CINCINNATI LEASE.
The Company shall have executed and delivered to the Purchaser a lease for
the Company's real property located in Cincinnati, Ohio, which property is
not part of the Assets, in the form attached hereto as Exhibit 5.11 (the
"Cincinnati Lease").
6. CONDITIONS TO OBLIGATIONS OF COMPANY AND SHAREHOLDERS.
Notwithstanding anything in this Agreement to the contrary, the obligation
of the Company to effect the transactions contemplated herein will be
subject to the satisfaction or waiver at or prior to the Closing of each of
the following conditions:
6.1. REPRESENTATIONS AND WARRANTIES TRUE.
The representations and warranties of Noble and the Purchaser contained in
this Agreement will be in all material respects true, complete and accurate
as of the date when made and at and as of the Closing, as though such
representations and warranties were made at and as of such time, except for
changes specifically permitted or contemplated in this Agreement, and
except insofar as the representations and warranties relate expressly and
solely to a particular date or period, in which case they will be true and
correct in all material respects at the Closing with respect to such date
or period.
6.2. PERFORMANCE.
Noble and the Purchaser will have performed and complied in all material
respects with all agreements, covenants, obligations and conditions
required by this Agreement to be performed or complied with by the
Purchaser at or prior to the Closing.
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6.3. CORPORATE APPROVALS.
All Consents listed in Section 2.5 to the Disclosure Schedule will have
been delivered, made or obtained. All action required to be taken by the
Boards of Directors of Noble and the Purchaser to authorize the execution,
delivery and performance of this Agreement by Noble and the Purchaser and
the consummation of the transactions contemplated hereby will have been
duly and validly taken.
6.4. NO PROCEEDING OR LITIGATION.
No suit, action, investigation, inquiry or other proceeding by any
Authority or other person or entity will have been instituted or threatened
which delays or questions the validity or legality of the transactions
contemplated hereby or which, if successfully asserted, would individually
or in the aggregate, otherwise have a Material Adverse Effect on Noble's
business, financial condition, prospects, assets or operations.
6.5. CERTIFICATES.
Noble and the Purchaser will have furnished the Company with such
certificates of Noble and the Purchaser's officers, in a form and substance
reasonably acceptable to Company, dated the Closing Date, to evidence
compliance with the conditions set forth in this Section 6 and such other
matters as may be reasonably requested by the Company.
6.6. OPINION OF PURCHASER COUNSEL.
Noble and the Purchaser will have delivered to the Company an opinion from
Oppenheimer Wolff & Donnelly LLP, counsel to Noble and the Purchaser, dated
the Closing Date, substantially in the form and substance set forth as
Exhibit 6.6 herein.
6.7. PAYMENT OF CONSIDERATION.
The Company will have received satisfactory evidence that the wire transfer
required by Section 1.3(b)(i) hereof, the duly executed Performance Premium
Agreement required by Section 1.3(b)(iv) hereof, the duly executed
Liabilities Undertaking required by Section 1.3(b)(v) hereof and the duly
executed Cincinnati Lease required by Section 1.3(b)(vi) have each been
delivered.
6.8. ACCEPTANCE BY COUNSEL.
The form and substance of all legal matters contemplated hereby and of all
papers delivered hereunder will be reasonably acceptable to the Company.
6.9. CINCINNATI LEASE.
The Purchaser shall have delivered the Cincinnati Lease.
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7. TERMINATION AND ABANDONMENT.
7.1. METHODS OF TERMINATION.
This Agreement may be terminated and the transactions contemplated herein
may be abandoned at any time, but not later than the Closing:
(a) By mutual written consent of Noble, the Purchaser and the Company; or
(b) By Noble and the Purchaser on or after the Termination Date or such
later date as may be established pursuant to Section 1 hereof, if any
of the conditions provided for in Section 5 of this Agreement will not
have been satisfied or waived in writing by the Purchaser prior to
such date; or
(c) By the Company on or after the Termination Date or such later date as
may be established pursuant to Section 1 hereof, if any of the
conditions provided for in Section 6 of this Agreement will not have
been satisfied or waived in writing by the Company prior to such date;
or
(d) By any party if the Closing will not have occurred on or before
October 31, 1998.
7.2. PROCEDURE UPON TERMINATION.
In the event of termination and abandonment pursuant to Section 7.1(a),
written notice thereof will forthwith be given to the other party or
parties, and the provisions of this Agreement will terminate, and the
transactions contemplated herein will be abandoned, without further action
by any party hereto.
7.3. EFFECT OF TERMINATION.
If this Agreement is terminated as provided herein: (i) each party will,
upon request, redeliver all documents, work papers and other material of
any other party (and all copies thereof) relating to the transactions
contemplated herein, whether so obtained before or after the execution
hereof, to the party furnishing the same; (ii) the confidentiality
obligations of Section 4.4 will continue to be applicable; and (iii) except
as provided in this subsection, no party will have any liability for a
breach of any representation, warranty, agreement, covenant or other
provision of this Agreement, unless such breach was due to a willful or bad
faith action or omission of such party or any representative, agent,
employee or independent contractor thereof.
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8. SURVIVAL AND INDEMNIFICATION.
8.1. SURVIVAL.
All representations and warranties of the parties contained in this
Agreement will survive the Final Closing Date for a period of two (2)
years, except that: (i) the representations and warranties set forth in
Sections 2.9 (except for the last four sentences), 2.10 (except for the
last sentence), 2.12(a) and 2.13 will survive without limitation as to
time; (ii) the representations and warranties set forth in Sections 2.15,
2.17, 2.21 and 2.26 and, to the extent the representations and warranties
in Section 2.5 and 2.24 relate to Taxes, environmental matters and employee
benefits, will survive until the expiration of the applicable statute of
limitations; and (iii) the Company will have no liability whatsoever as a
result of any matter which is fully and accurately disclosed in the
Disclosure Schedule delivered to Noble and the Purchaser prior to the
Closing Date, including any supplements pursuant to Section 4.7. The
covenants and agreements contained herein and in the exhibits hereto will
survive the Closing Date without limitation as to time unless the covenant
or agreement specifies the term, in which case such covenant or agreement
will survive until the expiration of such specified term and will thereupon
expire. The respective expiration dates for the survival of the
representations and warranties and the covenants will be referred to herein
as the relevant "Expiration Date." The right to indemnification or any
other remedy based on representations, warranties, covenants and
obligations in this Agreement will not be affected by any investigation
conducted with respect to, or any knowledge acquired (or capable of being
acquired) at any time, whether before or after the execution and delivery
of this Agreement and Closing Date, with respect to the accuracy or
inaccuracy of or compliance with, any such representation, warranty,
covenant or obligation. The waiver of any condition based on the accuracy
of any representation or warranty, or on the performance of or compliance
with any covenant or obligation, will not affect the right to
indemnification or any other remedy based on such representations,
warranties, covenants and obligations.
8.2. INDEMNIFICATION BY NOBLE AND THE PURCHASER.
Noble and the Purchaser, jointly and severally, agree to indemnify the
Company from and against any and all loss, liability or damage suffered or
incurred by it by reason of (i) any untrue representation of, or breach of
warranty by, Noble or the Purchaser in any part of this Agreement; (ii) any
nonfulfillment of any covenant, agreement or undertaking of Noble or the
Purchaser in any part of this Agreement which by its terms is to remain in
effect after any Closing and has not been specifically waived in writing at
such Closing by the party or parties hereof entitled to the benefits
thereof; (iii) any Environmental Claim in excess of Five Hundred Thousand
Dollars ($500,000) not identified in the Phase II Reports; and (iv) any
Environmental Claims arising out of or related to items identified in the
Phase II Reports.
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8.3. INDEMNIFICATION BY THE COMPANY AND THE SHAREHOLDER.
The Company and each of the Shareholders jointly and severally (subject to
Section 8.7) agree to indemnify Noble and the Purchaser from and against:
(a) any and all loss, liability or damage suffered or incurred by Noble or
the Purchaser by reason of any untrue representation of, or breach of
warranty by the Company or the Shareholders in this Agreement;
(b) any and all loss, liability or damage suffered or incurred by it by
reason of any nonfulfillment of any covenant, agreement or undertaking
of the Company or the Shareholders in this Agreement which by its
terms is to remain in effect after any Closing and has not been
specifically waived in writing at such Closing by the party or parties
hereto entitled to the benefits thereof;
(c) any Retained Liabilities;
(d) any obligation for Taxes of the Company or the Shareholders for any
period (or portion thereof) prior to the Closing Date or, if with
respect to the Deferred Real Estate, the applicable Subsequent Closing
Date;
(e) the failure of the Company to comply with the requirements of the
Uniform Commercial Code concerning bulk transfers, as in effect in the
various states in which the Company has assets, including, without
limitation, the requirement of notice to creditors;
(f) the failure of the Company to obtain any clearance certificate or
similar document required by any taxing Authority in order to relieve
Noble and the Purchaser of any obligation to withhold any portion of
the Purchase Price or in order to avoid any successor liability for
Taxes;
(g) any liability, expense, cost, tax or obligation of any nature with
respect to such current or former employee or other individual arising
in connection with group health plan coverage required under Section
4980B of the Code or Part 6 of Subtitle B of Title I of ERISA; and
(h) any and all actions, suits, proceedings, claims, demands, assessments,
judgments, costs and expenses, including, without limitation, legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing the indemnification rights of
Noble or the Purchaser pursuant to this Section 8.3.
8.4. CLAIMS FOR INDEMNIFICATION.
Whenever any claim will arise for indemnification hereunder, the party
seeking indemnification (the "Indemnified Party") will promptly notify the
party from whom
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indemnification is sought (the "Indemnifying Party") of the claim and, when
known, all of the facts constituting the basis for such claim. The failure
so to notify the Indemnifying Party will not relieve the Indemnifying Party
of any liability that it may have to the Indemnified Party except to the
extent the Indemnifying Party demonstrates that the defense of such action
is prejudiced thereby. In the case of any such claim for indemnification
hereunder resulting from or in connection with any claim or legal
proceedings of a third party (a "Proceeding"), the Indemnifying Party will
be entitled to participate in such legal proceedings and, to the extent
that it will wish (unless the Indemnifying Party is also a party to such
Proceeding and the Indemnified Party determines in good faith that joint
representation would be inappropriate or the Indemnifying Party fails to
provide reasonable assurance to the Indemnified Party of its financial
capacity to defend such Proceeding and provide indemnification with respect
thereto), to control the defense thereof with counsel reasonably
satisfactory to the Indemnified Party and, after notice from Indemnifying
Party to the Indemnified Party of its election so to control the defense
thereof, the Indemnifying Party will not be liable to such Indemnified
Party under this Section for any fees of other counsel or any other
expenses with respect to the defense of such Proceeding, in each case
subsequently incurred by the Indemnified Party in connection with the
defense thereof, other than reasonable costs of investigation. If an
Indemnifying Party controls the defense of such a Proceeding, (i) no
compromise or settlement thereof may be effected by the Indemnifying Party
without the Indemnified Party's consent unless (A) there is no finding or
admission of any violation of Law or any violation of the rights of any
person and no effect on any other claims that may be made against the
Indemnified Party and (B) the sole relief provided is monetary damages that
are paid in full by the Indemnifying Party and (ii) the Indemnifying Party
will have no liability with respect to any compromise or settlement thereof
effected without its consent. If notice is given to an Indemnifying Party
of the commencement of any Proceeding and it does not, within twenty (20)
days after the Indemnified Party's notice is given, give notice to the
Indemnified Party of its election to assume the defense thereof, the
Indemnifying Party will be bound by any determination made in such action
or any compromise or settlement thereof effected by the Indemnified Party.
Notwithstanding the foregoing, if an Indemnified Party determines in good
faith that there is a reasonable probability that a Proceeding may
adversely effect it or its affiliates other than as a result of monetary
damages, or the Proceeding involves Taxes, such Indemnified Party may, by
notice to the Indemnifying Party, assume the exclusive right to defend,
compromise or settle such Proceeding, but the Indemnifying Party will not
be bound by any determination of a Proceeding so defended or any compromise
or settlement thereof effected without its consent (which will not be
unreasonably withheld). The remedies provided herein shall be cumulative
and shall not preclude assertion by any party of any rights or the seeking
of any other remedies against any other party.
8.5 BASKET AMOUNT.
Notwithstanding anything in Section 8.2 or 8.3 to the contrary, neither the
Company nor Noble and the Purchaser shall be entitled to any
indemnification under either of such sections if the aggregate amount of
all claims thereunder is less than $150,000; provided,
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however, that the foregoing shall not apply to claims for indemnification
related to Environmental Claims or claims for breach of the representations
and warranties set forth in Section 2.26 (including the matters set forth
in the Disclosure Schedule pertaining thereto).
8.6. RIGHT OF SET-OFF.
Upon notice to the Company specifying in reasonable detail the basis
therefor, the Purchaser may set off any amount to which it may be entitled
under this Section 8 against amounts otherwise payable under the
Performance Premium Agreement. The exercise of such right of set-off by
Purchaser will not constitute an event of default under the Performance
Premium Agreement. Neither the exercise of, nor the failure to exercise,
such right of set-off will constitute an election of remedies nor limit
Purchaser in any manner in the enforcement of any other remedies that may
be available to it.
8.7. LIMIT ON DAMAGES.
The aggregate amount payable to Noble or the Purchaser hereunder, whether
as a result of a breach by the Company or the Shareholders of any
representation, warranty or covenant, other than those set forth in Section
2.26, or any claim for indemnification under Section 8.3 hereof, shall not
exceed an amount equal to: (i) One Million Five Hundred thousand Dollars
($1,500,000) with respect to the Company (the "Maximum Liability Amount");
(ii) One Million Three Hundred Fifty Thousand Dollars ($1,350,000) with
respect to Terry Hill; and (iii) One Hundred Fifty Thousand Dollars
($150,000) with respect to Robert G. Kreiling; provided, however, that the
aggregate amount of indemnification payable to Noble and the Purchaser by
the Company and the Shareholders collectively shall not exceed the Maximum
Liability Amount. Notwithstanding the foregoing, the Maximum Liability
Amount shall not apply to Environmental Claims or claims for breach of the
representations and warranties set forth in Section 2.26 (including the
matters set forth in the Disclosure Schedule pertaining thereto).
9. MISCELLANEOUS PROVISIONS.
9.1. EXPENSES.
Noble, the Purchaser and the Company will each bear their own costs and
expenses relating to the transactions contemplated hereby, including
without limitation, fees and expenses of legal counsel, accountants,
investment bankers, brokers or finders, printers, copiers, consultants or
other representatives for the services used, hired or connected with the
transactions contemplated hereby. Notwithstanding the foregoing, the
Company may accrue, and there may be included in the Assumed Liabilities,
up to Fifty Thousand Dollars ($50,000) in costs and expenses in connection
with the transactions contemplated hereby. Noble, the Purchaser and the
Company will each pay any commission or finder's fee or similar amount
incurred by them by agreement or otherwise for retaining or consulting any
broker, finder or investment banker in connection with the transactions
contemplated by this Agreement.
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9.2. AMENDMENT AND MODIFICATION.
Subject to applicable Law, this Agreement may be amended or modified by
the parties hereto at any time prior to the Closings with respect to any
of the terms contained herein; provided, however, that all such
amendments and modifications must be in writing duly executed by all of
the parties hereto.
9.3. WAIVER OF COMPLIANCE; CONSENTS.
Any failure of a party to comply with any obligation, covenant,
agreement or condition herein may be expressly waived in writing by the
party entitled hereby to such compliance, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement
or condition will not operate as a waiver of, or estoppel with respect
to, any subsequent or other failure. No single or partial exercise of a
right or remedy will preclude any other or further exercise thereof or
of any other right or remedy hereunder. Whenever this Agreement requires
or permits the consent by or on behalf of a party, such consent will be
given in writing in the same manner as for waivers of compliance.
9.4. NO THIRD PARTY BENEFICIARIES.
Nothing in this Agreement will entitle any person or entity (other than
a party hereto and his, her or its respective successors and assigns
permitted hereby) to any claim, cause of action, remedy or right of any
kind.
9.5. NOTICES.
All notices, requests, demands and other communications required or
permitted hereunder will be made in writing and will be deemed to have
been duly given and effective: (i) on the date of delivery, if delivered
personally; (ii) on the earlier of the fourth (4th) day after mailing or
the date of the return receipt acknowledgment, if mailed, postage
prepaid, by certified or registered mail, return receipt requested; or
(iii) upon confirmation of transmission, if sent by facsimile, telecopy,
telegraph, telex or other similar telegraphic communications equipment:
If to Company or Shareholders:
To: c/o Terry Hill
5841 Besinger Place
Indianapolis, IN 46237
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With a copy to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, OH 45202
Attn: Richard G. Schmalzl, Esq.
Fax: (513) 651-3836
or to such other person or address as the Company will furnish to the other
parties hereto in writing in accordance with this subsection.
If to Noble or the Purchaser:
To: Noble International, Ltd.
33 Bloomfield Hills Parkway
Suite 155
Bloomfield Hills, MI 48304
Attn: Michael C. Azar, Esq.
Fax: (248) 594-9501
With a copy to:
Oppenheimer Wolff & Donnelly LLP
500 Newport Center Drive
Suite 700
Newport Beach, CA 92660
Attn: Teresa Tormey Fineman, Esq.
Fax: (949) 719-6020
or to such other person or address as the Purchaser will furnish to the
other parties hereto in writing in accordance with this subsection.
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9.6. ASSIGNMENT.
This Agreement and all of the provisions hereof will be binding upon and
inure to the benefit of the parties hereto and their respective successors
and permitted assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder will be assigned (whether voluntarily,
involuntarily, by operation of law or otherwise) by any of the parties
hereto without the prior written consent of the other parties, provided,
however, that Noble may assign its rights (but not its obligations) under
this Agreement, in whole or in any part, and from time to time, to a
wholly-owned, direct or indirect, subsidiary of Noble.
9.7. GOVERNING LAW.
This Agreement and the legal relations among the parties hereto will be
governed by and construed in accordance with the internal substantive laws
of the State of Michigan (without regard to the laws of conflict that might
otherwise apply) as to all matters, including without limitation matters of
validity, construction, effect, performance and remedies.
9.8. COUNTERPARTS.
This Agreement may be executed simultaneously in one or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
9.9. HEADINGS.
The table of contents and the headings of the sections and subsections of
this Agreement are inserted for convenience only and will not constitute a
part hereof.
9.10. ENTIRE AGREEMENT.
This Agreement, the Disclosure Schedule and the exhibits and other writings
referred to in this Agreement (including, without limitation, the
Confidentiality Agreement) or in the Disclosure Schedule or any such
exhibit or other writing are part of this Agreement, together they embody
the entire agreement and understanding of the parties hereto in respect of
the transactions contemplated by this Agreement and together they are
referred to as this "Agreement" or the "Agreement." There are no
restrictions, promises, warranties, agreements, covenants or undertakings,
other than those expressly set forth or referred to in this Agreement. This
Agreement supersedes all prior agreements and understandings between the
parties, whether written or oral, with respect to the transaction or
transactions contemplated by this Agreement, including, but not limited to,
the letter of intent dated August 21, 1998. Provisions of this Agreement
will be interpreted to be valid and enforceable under applicable Law to the
extent that such interpretation does not materially alter this Agreement;
provided, however, that if any such provision will become invalid or
unenforceable under applicable Law such provision will be stricken to the
extent necessary and the remainder of such provisions and the remainder of
this Agreement will continue in full force and effect.
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9.11. INJUNCTIVE RELIEF.
It is expressly agreed among the parties hereto that monetary damages would
be inadequate to compensate a party hereto for any breach by any other
party of its covenants and agreements in Sections 4.2 and 4.4 hereof.
Accordingly, the parties agree and acknowledge that any such violation or
threatened violation will cause irreparable injury to the other and that,
in addition to any other remedies which may be available, such party will
be entitled to injunctive relief against the threatened breach of Sections
4.2 and 4.4 hereof or the continuation of any such breach without the
necessity or proving actual damages and may seek to specifically enforce
the terms thereof.
9.12. CERTAIN DEFINITIONS.
For purposes of this Agreement, the term "Material Adverse Effect" means an
event, change or occurrence which has a material negative impact on the
condition (financial or otherwise), businesses, results of operations or
prospects of the Company or Noble, the Purchaser and Noble's subsidiaries,
taken as a whole, as the case may be (and going concern value, in the case
of the Company), or the ability of the Company, Noble or the Purchaser as
the case may be, to consummate the transactions contemplated hereby, other
than any such event, change or occurrence resulting or arising from (i)
general economic conditions; (ii) the loss of any customer as a result of
the announcement or consummation of the transactions contemplated hereby;
or (iii) the establishment by General Motors of a Regional Steel Service
Center in the geographic area where the Company currently conducts
business.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"NOBLE" "COMPANY"
NOBLE INTERNATIONAL, LTD. H & H STEEL PROCESSING COMPANY, INC.
By: /s/ RICHARD V. BALGENORTH By: /s/ DOMINIC SARNO
------------------------------- -------------------------------
Its: Chief Financial Officer Its: President
------------------------------- -------------------------------
"PURCHASER" "SHAREHOLDERS"
UTILASE BLANK WELDING
TECHNOLOGIES, INC.
/s/ TERRY HILL
-----------------------------------
TERRY HILL
By: /s/ CHRISTOPHER L. MORIN
--------------------------------
Its: Chief Executive Officer /s/ ROBERT G. KREILING
-------------------------------- -----------------------------------
ROBERT G. KREILING
53
