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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
December 23, 1996
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Commission file number 0-22580
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JPE, INC.
(Exact name of registrant as specified in its charter)
Michigan
(State or other jurisdiction of Incorporation)
900 Victors Way, Suite 140,
Ann Arbor, MI 48108
(Address of principal executive offices, including zip code)
38-2958730
(IRS Employer Identification No.)
(313) 662-2323
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
On December 23, 1996 (the "Closing Date"), JPE Canada Inc. (the "Company"), a
wholly-owned subsidiary of JPE, Inc. (the "Registrant"), acquired substantially
all of the assets used in the business of Pebra Inc. ("Pebra") from Pebra
pursuant to an Agreement of Purchase and Sale (such Agreement is filed as an
exhibit to this report). Total consideration of $29.9 million consisted of cash.
A portion ($912 thousand) of the consideration has been placed in an escrow
account pending the audit of the inventory as of the Closing Date. The final
purchase price will be increased or decreased based on the changes in the
inventory of Pebra from the estimated inventory value used for purposes of
calculating the purchase price for closing. Funds used to finance the
transaction were provided by the Bank of Nova Scotia pursuant to a Loan
Agreement with the Company.
Pebra was a privately-held corporation, primarily engaged in manufacturing
plastic injection-molded fascias, rocker panels and body-side moldings for the
original equipment automotive and light truck industries. The Company intends to
continue to use the purchased assets in conducting substantially the same
business. Prior to the acquisition, there were no relationships between Pebra
and the Company, any of the Company's affiliates, any director or officer of the
Company, or any associates of any of the Company's officers or directors.
ITEM 7 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(A) and (B) Financial Statements, Pro Forma Financial Information
The Financial Statements and Pro Forma Financial Information of the business
acquired as described in Item 2 above and required by this Item are not filed
herewith because they are currently unavailable to the Company. The Company
intends to file such Financial Statements and Pro Forma Financial Information
under cover of Form 8-K/A, as soon as practicable, but not later than March 7,
1997.
(C) Exhibits
2. Agreement of Purchase and Sale dated November 15, 1996 among JPE Canada
Inc. and Pebra Inc., and Indices to Schedules and Exhibits to such Agreement.
Registrant agrees to furnish supplementally a copy of any omitted schedule or
exhibit to the Commission upon request.
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SIGNATURES
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.
JPE, INC.
Date: January 6, 1997 /s/ James J. Fahrner
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James J. Fahrner
Vice President, Chief Financial Officer
and Treasurer
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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2 Agreement of Purchase and Sale
dated November 15, 1996 between
JPE Canada Inc. and Pebra Inc., and
Indices to Schedules and Exhibits
AGREEMENT OF PURCHASE AND SALE
For good and valuable consideration and subject to the terms and provisions of
this agreement, JPE, Inc. ("JPE"), a Michigan corporation, in trust for 1203462
Ontario Inc. (hereinafter referred to as the "Purchaser"), and without personal
liability of JPE, hereby agrees to purchase from Pebra Inc. (hereinafter
sometimes referred to as the "Vendor") and the Vendor agrees to sell to the
Purchaser, all of the Vendor's right, title and interest in the assets more
particularly described as follows (the "Purchased Assets"):
Parcel 1 - Inventory of Pebra Inc. (but which inventory does not include spare
parts for the facility currently operated by Pebra Inc. at 775 Neal Drive and
774 O'Brien Drive, Peterborough, Ontario);
Parcel 2 - Accounts receivable of Pebra Inc., which are not more than 90 days
old on the Closing Date (as hereinafter defined);
Parcel 3 - Tax receivables of Pebra Inc.;
Parcel 4 - The equipment of Pebra Inc. and which equipment includes the spare
parts for the facility currently operated by Pebra Inc. at 775 Neal Drive and
774 O'Brien Drive, Peterborough, Ontario (the "Equipment") together with the
real property and other tangible and intangible personal property of Pebra Inc.,
including the "Kitchener Property" and the "Peterborough Property" as more
particularly described in Schedule A and the Vesting Order, as hereinafter
defined (and which Parcel 4 does not include the capital stock of Pebra U.S.
Incorporated and Polytech Coatings Ltd.); and
Parcel 5 - All prepaid expenses of Pebra Inc. as at the Closing Date
ARTICLE 1
OFFER AND ACCEPTANCE
APPROVAL OF AGREEMENT OF PURCHASE AND SALE
BY ONTARIO COURT OF JUSTICE (GENERAL DIVISION)
1.1 The transaction of purchase and sale contemplated herein shall be subject to
the approval of the Ontario Court of Justice (General Division) in accordance
with section 2.4.
ABILITY OF VENDOR TO ACCEPT OFFER
1.2 This offer is open for acceptance, by the Vendor, until 2:00 p.m. (Toronto
time) on the 15th day of November, 1996 at which time, if not accepted, it shall
become null and void. The expression "this agreement" as used herein shall mean
the agreement of purchase and sale resulting from the acceptance, if any, by the
Vendor of this offer.
ARTICLE 2
PURCHASE AND SALE
PURCHASE PRICE
2.1 The purchase price payable to the Vendor by the Purchaser for the Purchased
Assets (such amount being hereinafter referred to as the "Purchase Price") shall
be an aggregate amount calculated by adding together the following amounts:
(a) as to Parcel 1 - the book value thereof (before any allowance or reserves
for obsolete, slow moving or excess inventory) minus $1,100,000.00;
(b) as to Parcel 2 - the book value thereof;
(c) as to Parcel 3 - the book value thereof;
(d) as to Parcel 4 - $14,500,000.00; and
(e) as to Parcel 5 - $300,000.00,
in Canadian funds and subject strictly to the adjustments and calculations and
verification procedures provided for herein. The Purchase Price shall be payable
by cash or certified cheque on closing of the transfer of the Purchased Assets
subject to the provisions hereof, including the provisions of Article 6 relating
to a holdback with respect to a portion of the Purchase Price.
CLOSING DATE
2.2 Subject to the terms hereof, the closing of the purchase and sale of the
Purchased Assets shall occur on the 20th day of December, 1996 or such other
date as the parties may agree to, in writing (the "Closing Date") at Toronto,
Ontario at the offices of:
Messrs. Miller Thomson
Suite 2500
20 Queen Street West
Toronto, Ontario
M5H 3S1
In this agreement, the term "Time of Closing" shall mean the time on the Closing
Date at which the all conditions in section 3 of the Vesting Order (as
hereinafter defined) have been satisfied.
TAXES
2.3 The Purchaser shall be liable for and shall pay all sales and transfer
taxes, GST and other federal taxes and all other taxes, duties or other like
charges payable upon and in connection with the conveyance and transfer of the
Purchased Assets by the Vendor to the Purchaser unless the Purchaser or this
transaction is exempt under the relevant taxing statute and the Purchaser
complies with all requirements as to certification, filing or otherwise to
validly qualify for such exemption. Where necessary, the Vendor agrees to
execute and deliver such elections or other documents required to permit the
Purchaser to claim any available exemption. The Vendor and the Purchaser each
agree to execute (on or before December 13, 1996) an agreement allocating the
portion of the Purchase Price attributable to Parcel 4 (and, if necessary,
Parcel 5) amongst the appropriate assets.
CCAA PROCEEDINGS WITH RESPECT TO PEBRA INC./VESTING ORDER
2.4 It is expressly acknowledged and agreed that, as set out in section 3.1,
Pebra Inc. is currently operating pursuant to a Court Order pursuant to the
Companies' Creditors Arrangement Act (the "CCAA"). It is further expressly
agreed that the transaction of purchase and sale contemplated in this agreement
shall be completed, on the Closing Date, pursuant to a Court Order approving the
said transaction (the "Vesting Order") in the form annexed as Schedule B. It is
expressly acknowledged and agreed that the form of the Vesting Order annexed as
Schedule B contains legal descriptions of the Kitchener Property and the
Peterborough Property.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
VENDOR'S REPRESENTATIONS AND WARRANTIES
3.1 The Vendor represents and warrants to the Purchaser that:
(a) The Vendor is not a non-resident of Canada within the meaning of section
116 of the Income Tax Act (Canada).
(b) The Vendor is registered for purposes of GST legislation.
(c) Pebra Inc. was granted an Order pursuant to the CCAA by The Honourable Mr.
Justice Houlden, of the Ontario Court of Justice (General Division) on
September 20, 1996.
(d) All amounts for unremitted source deductions, Canada Pension Plan premiums,
unemployment insurance premiums and accrued vacation pay (other than
vacation pay entitlement that would be reduced by a scheduled plant closure
in December, 1996) pertaining to employees of Pebra Inc. have been paid or
will be remitted or otherwise satisfactorily provided for to the
satisfaction of the Purchaser on or before the Closing Date, to the extent
that such have priority over the right or interest of the Vendor, or any of
the Secured Creditors of the Vendor identified in Schedule C, in or to any
of the Purchased Assets.
PURCHASER'S REPRESENTATIONS AND WARRANTIES
3.2 The Purchaser represents and warrants to the Vendor that:
(a) The Purchaser will be, by the Closing Date, a corporation incorporated,
organized and subsisting under the laws of Ontario.
(b) The Purchaser will have, by the Closing Date, good and sufficient power,
capacity, authority and right to enter into this agreement.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
3.3 The representations and warranties of the Purchaser and the Vendor set forth
in this Article shall be true at the Time of Closing and shall survive the final
completion of the purchase and sale of the Purchased Assets herein provided for
and, notwithstanding such completion, shall continue in full force and effect
for the benefit of the parties for a period of six (6) months from the Closing
Date.
ARTICLE 4
COVENANTS
TAXES
4.1 The Purchaser does not assume and shall not be liable for any taxes under
the Income Tax Act (Canada) or any other taxes or other amounts whatsoever which
may be or become payable by the Vendor from or arising as a consequence of the
operation of any aspect of the business carried on by Pebra Inc. (the
"Business") and using the Purchased Assets, by the Vendor and/or by any third
parties who have entered into arrangements with the Vendor with respect to the
operation of such Business, prior to the Closing Date.
COVENANTS OF THE VENDOR
4.2 The Vendor shall ensure that the representations and warranties of the
Vendor as set forth herein are true and correct at the Time of Closing.
4.3 At the Time of Closing, the Vendor shall deliver to the Purchaser such deeds
of conveyance, bills of sale, assignments and instruments as are contemplated by
the Vesting Order so as to convey to the Purchaser all of the right, title and
interest of the Vendor in and to the Purchased Assets.
4.4 On the Closing Date, the Vendor shall use reasonable efforts to deliver to
the Purchaser copies of engineering drawings, process sheets, cost documents
formulae, recipes for compounds, computer software and technical information of
any kind in the possession of the Vendor pertaining to the Purchased Assets.
4.5 Between the date of the acceptance of this agreement by the Vendor and the
Time of Closing, the Vendor shall allow representatives of the Purchaser to have
access to each of the premises from which Pebra Inc. carries on its Business
(the "Premises") for purposes of allowing the Purchaser to conduct such
investigations as the Purchaser shall determine as necessary to determine the
adequacy of the Purchased Assets for the business to be carried on by the
Purchaser after the Closing Date. The Purchaser shall be entitled to, and the
Vendor shall provide to the Purchaser, access in accordance with this section
unless and until this agreement is terminated in accordance with the terms of
this agreement. The Vendor shall provide the Purchaser and its authorized
representatives access at the Premises to all books and records concerning the
Business so as to enable the Purchaser to conduct a thorough investigation of
the ownership, operations, and financial and physical condition of the Business
including any of the Purchased Assets. The Vendor shall make available for
discussions with the Purchaser and its authorized representatives the persons
responsible for managing the Business and, to the extent reasonably possible,
the auditors, environmental consultants, engineers and other similar consultants
who have provided services to or with respect to the Business and it is
expressly acknowledged that the Purchaser shall be permitted access to the
customers of the Business for purposes of conducting the investigation
contemplated by this section 4.5. Until the Time of Closing or the termination
of this agreement in accordance with its terms, the Vendor shall co-operate with
the Purchaser in the conduct of the Purchaser's investigations and due diligence
pursuant to this agreement and the Vendor shall comply with all reasonable
requests by the Purchaser for information related to the information or
documents to be provided or made available to the Purchaser under this agreement
to the extent such information or documents are in its possession or control.
The Purchaser and its representatives shall be permitted to enter upon the
Premises during usual business hours, to carry out such reasonable tests, audits
and inspections as it deems necessary or advisable, provided that such tests,
audits and inspections are carried out in a commercially reasonable manner.
Subject to the provisions hereof, including the provisions of section 5.1, the
Purchaser shall not be entitled to rescind this agreement, or to any reduction
in the Purchase Price, arising out of any investigation or access pursuant to
this section 4.5.
4.6 It is expressly acknowledged and agreed that the Purchaser shall not assume
any management care and control over any assets of Pebra Inc., including any of
the Purchased Assets, for purposes of any Federal or Provincial environmental
legislation of any kind, as a result of any steps taken by the Purchaser
pursuant to any rights of access which it enjoys hereunder or the investigations
it or its representatives conduct pursuant to the provisions of this agreement.
4.7 Between the date of this agreement and the Time of Closing, the Vendor shall
maintain all of the contracts which are included in the Purchased Assets,
including all contracts of insurance.
4.8 The Vendor agrees to cooperate in all respects with the Purchaser with
respect to the Hart Scott Rodino Antitrust Improvements Act filing contemplated
pursuant to section 5.1 (k), including making an appropriate filing in its own
name.
COVENANTS OF THE PURCHASER
4.9 The Purchaser shall ensure that the representation and warranties of the
Purchaser set forth herein are true and correct at the Time of Closing.
4.10 The Purchaser shall not enter into agreements with the Ministry of
Environment and Energy before the Closing Date, without prior written consent of
Pebra, which may not be unreasonably withheld.
4.11 The Purchaser agrees to offer employment to substantially all of the
employees of Pebra Inc., on or immediately after the Closing Date, on the same
terms and conditions as they are employed immediately prior to the Closing Date.
4.12 JPE agrees to file, and diligently pursue, the Hart Scott Rodino Antitrust
Improvements Ave filing and approval contemplated pursuant to section 5.1 (k).
4.13 The Purchaser shall pay the Purchase Price on the Closing Date in
accordance with and subject strictly to the terms hereof, including all terms
which establish conditions of closing for the benefit of the Purchaser.
ARTICLE 5
CONDITIONS
CONDITIONS FOR THE BENEFIT OF THE PURCHASER
5.1 The sale of the Purchased Assets by the Vendor and the purchase of the
Purchased Assets by the Purchaser is subject to the following conditions which
are for the exclusive benefit of the Purchaser (provided that where, in this
section 5.1, a specific date is stipulated for satisfaction of a condition, the
Purchaser shall be deemed to have waived the condition if the Purchaser has not
delivered written notice to the Vendor by the date in question to the effect
that the condition has not been satisfied in which event the Vendor may elect to
rescind this agreement):
(a) The representations and warranties of the Vendor set forth herein shall be
true and correct at the Time of Closing Date with the same force and effect
as if made at and as of such time.
(b) All of the terms, covenants and conditions of this agreement to be
performed or complied with by the Vendor or otherwise at or prior to the
Time of Closing shall have been performed or complied with and all reports
to the Purchaser contemplated herein shall have been delivered and all
other conditions herein for the benefit of the Purchaser shall have been
satisfied in accordance with their terms.
(c) No substantial damage by fire or other hazard to the Purchased Assets shall
have occurred from the date hereof to the Time of Closing.
(d) On the Closing Date, the Vesting Order shall have been issued by the
Ontario Court of Justice (General Division) and no appeal shall have been
commenced within the applicable time period prior to the Time of Closing.
(e) At the Time of Closing, the Purchaser shall have satisfied itself, acting
reasonably, with respect to the fact that Pebra has fully discharged all of
its indebtedness to each of the Secured Creditors identified in Schedule C
or that the transfer of the Purchased Assets pursuant to the Vesting Order
has been completed free of the interests of such creditors (other than: (i)
any such creditors who actually appear at the hearing at which the Vesting
Order is given and which creditors consent to the granting of such Vesting
Order; or (ii) any of Municipal Financial Leasing Corporation, AT&T Capital
Canada Inc., Xerox Canada Ltd., Newcourt Financial Ltd., Newcourt Credit
Group Inc. and GMAC Leaseco Ltd., each of which creditors is, to the
knowledge of the Purchaser, a party to one or more leases with Pebra Inc.
and the interest of Pebra Inc. in such leases will be transferred to the
Purchaser pursuant to the transaction of purchase and sale contemplated
herein). The security interests of the parties referred to in section 5.1
(e) (ii) are hereinafter sometimes referred to as the "Permitted Security
Interests").
(f) The Purchaser shall have entered into a new Collective Agreement with the
National Automobile, Aerospace, Transportation and General Workers Union of
Canada (CAW - Canada) and its Locals 1524 and 1987 (the "Union") with
respect to the business to be carried on by the Purchaser following
completion of the transaction of purchase and sale contemplated herein, on
terms satisfactory to the Purchaser in its sole and unfettered discretion.
(g) On or before November 18, 1996, the Purchaser and General Motors
Corporation shall have entered into an extension of the term sheet dated
October 4, 1996 executed by the Purchaser and General Motors Corporation,
and the Purchaser shall have notified the Vendor of the entering into of
such extension agreement.
(h) On or before December 13, 1996, the Purchaser shall have obtained a letter
of commitment with respect to the terms whereby the Purchaser's bank shall
advance the funds necessary to fund the Purchase Price, it being expressly
acknowledged and agreed that the Purchaser shall be entitled to determine
its agreement to such financing terms in its sole and unfettered
discretion.
(i) On or before December 20, 1996, the Purchaser shall be satisfied as to the
advancement of the funds necessary to fund the Purchase Price, it being
expressly acknowledged and agreed that the Purchaser shall be entitled to
determine its agreement to such financing terms in its sole and unfettered
discretion.
(j) The Purchaser (or JPE) shall have entered into, and shall have completed
the transactions provided for in, an agreement whereby the Purchaser shall
acquire title to all world-wide intellectual property rights relating to
the "Blow-Out Vent Valve", U.S. Patent No. 5,484,278 and the
"Self-Contained Gas Injection", U.S. Patent No. 08/195,508, as determined
by the Purchaser and which are not owned by Pebra, on terms substantially
similar to a non-binding letter of intent with Pebra GmbH Paul Braun iK to
purchase the said intellectual property on the Closing Date.
(k) The Purchaser shall have received U.S. governmental approvals necessary for
the completion of the transactions contemplated by this agreement, as
required pursuant to the Hart Scott Rodino Antitrust Improvements Act
(U.S.A.) or the 30-day waiting period under such Act having expired without
comment.
(l) On or before December 15, 1996, the Purchaser shall have satisfied itself
with the status of all of the Purchased Assets vis a vis the Phase I and II
and compliance environmental investigation currently being conducted by
Conestoga-Rovers & Associates Ltd. ("CRA"). The Purchaser confirms that the
odour problem identified as caused by emissions from the paint-line at the
Peterborough facility shall not be considered to be a condition that needs
to be satisfied prior to Closing under this section 5.1 (k) and that
(except for matters currently being investigated by CRA) the Purchaser is
not aware, as at the 14th of November, 1996 of any environmental matter
which would enable the Purchaser to invoke this condition.
(m) Notwithstanding any other provisions hereof, at the Time of Closing, no
material adverse change shall have occurred with respect to the Business of
Pebra or the prospects thereof or any of the Purchased Assets since the
date of this agreement, as determined by the Purchaser in its sole and
unfettered discretion.
(n) On or before November 22, 1996, the Purchaser shall have satisfied itself
with any interests, claims, encumbrances or rights (the "Interests")
affecting any aspect of any of the real or personal property which are
included in the Purchased Assets and which Interests cannot reasonably be
said to be expunged as a result of the Vesting Order.
5.2 Subject to section 5.1, in case any condition provided for herein for the
benefit of the Purchaser, including any term, condition, obligation or covenant
of the Vendor to be performed or complied with prior to the Time of Closing
shall not have been satisfied, performed or complied with prior to the Time of
Closing the Purchaser shall, at its sole option, either:
(a) rescind this agreement by notice in writing to the Vendor and in such event
the Purchaser shall be released from all obligations hereunder and, unless
the Purchaser can show that the condition for which the Purchaser has
rescinded this agreement was reasonably capable of being performed or
caused to be performed by the Vendor, the Vendor shall also be released
from all obligations hereunder; or
(b) in writing waive compliance with any of such terms, conditions, obligations
or covenants in whole or in part if it sees fit to do so without prejudice
to any of its rights of rescission in the event of non-performance of, or
non-compliance with, any other term, condition, obligation or covenant in
whole or in part.
CONDITIONS FOR THE BENEFIT OF THE VENDOR
5.3 The sale of the Purchased Assets by the Vendor and the purchase of the
Purchased Assets by the Purchaser is subject to the following conditions which
are for the exclusive benefit of the Vendor:
(a) The representations and warranties of the Purchaser set forth herein shall
be true and correct on the Closing Date with the same force and effect as
if made at and as of such time.
(b) All of the terms, covenants and conditions of this agreement to be
performed and or complied with by the Purchaser at or prior to the Time of
Closing shall have been performed or complied with.
(c) On the Closing Date, the Vesting Order shall have been issued by the
Ontario Court of Justice (General Division) and no appeal shall have been
commenced within the applicable time period prior to the Time of Closing.
5.4 In case any term, condition, obligation or covenant of the Purchaser to be
performed or complied with prior to the Time of Closing shall not have been
performed or complied with prior to the Time of Closing, the Vendor shall, at
its sole option, either:
(a) rescind this agreement by notice in writing to the Purchaser and in such
event the Vendor shall be released from all obligations hereunder and,
unless the Vendor can show that the condition for which the Vendor has
rescinded this agreement was reasonably capable of being performed or
caused to be performed by the Purchaser, the Purchaser shall also be
released from all obligations hereunder; or
(b) in writing waive compliance with any of such terms, conditions, obligations
or covenants in whole or in part if it sees fit to do so without prejudice
to any of its rights of rescission in the event of non-performance of, or
non-compliance with, any other term, condition, obligation or covenant in
whole or in part.
ARTICLE 6
CLOSING ARRANGEMENTS
RISK OF LOSS
6.1 Until the transfer of property in, and title to, each of the Purchased
Assets to the Purchaser as provided for herein, each of the Purchased Assets
shall remain at the risk of the Vendor which shall maintain the policies of
insurance in respect of loss or damage to, or any other casualty in respect of,
the Purchased Assets. In the event of any loss, damage or claim in respect of
any risk for which insurance is to be carried as aforesaid arising before the
Time of Closing, the Purchaser, as a condition of closing, shall be entitled to
be satisfied that the insurers recognize the claim of the Purchaser for payment
in accordance with the terms of the policies. If any damage or destruction
occurs to the Purchased Assets on or before the Time of Closing or in the event
that any or all of the Purchased Assets are appropriated, expropriated or seized
by governmental or other lawful authority, the Purchaser shall have the option,
exercisable by notice in writing given within five (5) business days of the
Purchaser receiving notice in writing from the Vendor of such destruction,
damage, expropriation, appropriation or seizure:
(a) to complete the purchase without reduction of the Purchase Price, in which
event all proceeds of insurance or compensation shall be payable to the
Purchaser and all right and claim of the Vendor to any such amounts not
paid by the Closing Date shall be assigned to the Purchaser, or
(b) of cancelling this agreement insofar as the Purchased Assets in question,
or any or all of the Purchased Assets are concerned, and not completing the
purchase with respect to such Purchased Assets in which case all
obligations of the Purchaser with respect to such Purchased Assets shall
terminate forthwith upon the Purchaser giving notice as required herein.
FURTHER ASSURANCES RE CONVEYANCE OF PURCHASED ASSETS
6.2 The Vendor hereby covenants and agrees that it will at the request of the
Purchaser at any time or times on or before the Closing Date do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered all such reasonable further acts, deeds, assignments, transfers,
conveyances, consents, assurances and other documents and take all such other
action as may be required for the better assigning, transferring, granting and
assisting in transferring to the Purchaser all of the Vendor's right, title to
and interest in and possession of the Purchased Assets.
AS IS/WHERE IS
6.3 Each of the Purchased Assets is sold on an "as is, where is" basis. The
Purchaser has either inspected and/or shall, by the Time of Closing, have
inspected the Purchased Assets and title to the Purchased Assets to its
satisfaction and no representation, warranty or condition is expressed nor can
be implied as to description, fitness for purpose, merchantability, quantity,
condition or quality thereof or in respect of any matter or thing whatsoever and
the Purchaser shall be deemed to have relied entirely on his own investigation
and inspection. Without limiting the generality of the foregoing, no condition,
warranty or representation provided for or implied by the Sale of Goods Act
(Ontario) has been or will be given by the Vendor and the Purchaser expressly
waives all such express or implied conditions, warranties and representations.
TENDER OF DOCUMENTS
6.4 Any tender of documents or money hereunder may be made upon the Vendor or
the Purchaser or their respective solicitors at the Time of Closing. Money may
be tendered by cheque certified by a Canadian chartered bank.
VERIFICATION OF ACCOUNTS RECEIVABLE AT CLOSING DATE
6.5 At the Time of Closing, the Purchaser shall have satisfied itself as to the
value of the accounts receivable comprising Parcel 2 of the Purchased Assets, by
means of having obtained written verification from General Motors Corporation as
to the amount of such accounts receivable which are validly due and owing, at
that date, by General Motors Corporation and/or General Motors of Canada
Limited. The Purchaser shall seek such confirmation three (3) business days
prior to the Closing Date with the intention that such figures would be updated
on the Closing Date.
PHYSICAL INVENTORY COUNT - NOVEMBER 16TH AND 17TH, 1996
6.6 It is expressly acknowledged and agreed that the Vendor shall cause a
physical count of the raw material inventory and finished goods inventory of the
Vendor to be counted over the days November 16th, 1996 and November 17th, 1996.
The Vendor shall cause that inventory count to be carried out by representatives
of the Vendor and observed and monitored by representatives of the Purchaser,
Price Waterhouse Limited (the monitor of Pebra Inc. under its CCAA proceedings)
and General Motors Corporation and Pebra's principal lender. The Vendor
thereafter shall cause the inventory counted in accordance with this section 6.6
to be valued as quickly as possible and the Vendor shall cause the results of
that inventory count and valuation to be delivered to the Purchaser by no later
than November 27, 1996.
MONITORING OF INVENTORY BETWEEN NOVEMBER 17TH, 1996 AND THE CLOSING DATE
6.7 The Vendor shall request Price Waterhouse Limited and representatives of
General Motors Corporation to communicate with the Purchaser, on a regular
basis, as to the purchases and sales of the Vendor between November 17th, 1996
and the Closing Date.
HOLDBACK WITH RESPECT TO INVENTORY
6.8 It is expressly acknowledge and agreed that an amount equal to 10% of the
Purchase Price which is attributable to Parcel 1 (inventory) and which is
otherwise payable by the Purchaser to the Vendor on the Closing Date in
accordance with the provisions hereof, shall instead be placed in escrow, on the
Closing Date (or, if necessary, on the next business day following the Closing
Date) in accordance with an escrow agreement in the form annexed hereto as
Schedule D (the "Escrow Agreement"). The Vendor and the Purchaser each agree to
execute the Escrow Agreement on the Closing Date and the Purchaser agrees to
instruct the Purchaser's Solicitors to execute the Escrow Agreement on the
Closing Date. In this agreement the term "Escrow Agent" shall mean Miller
Thomson, as referred to in the Escrow Agreement and the term "Escrow Funds"
shall have the meaning attributed thereto in the Escrow Agreement.
AUDIT/FINAL ADJUSTMENTS TO PURCHASE PRICE WITH RESPECT TO INVENTORY
6.9 Forthwith after the Closing and as of the Closing Date, the Purchaser shall
cause a physical count and valuation to be conducted of the inventory of the
Vendor described in Parcel 1 (the "Closing Inventory"). The auditors of the
Vendor, Price Waterhouse, the auditors of the Purchaser, Coopers & Lybrand, and
representatives of General Motors Corporation (BBK) and representatives of The
Bank of Nova Scotia will be permitted to attend and observe at the inventory
count and carry out such procedures as they deem appropriate. This count and
valuation shall be conducted by employees of the Purchaser who were formerly
employees of the Vendor and who are knowledgeable of the inventory and its
costing. The inventory shall be valued at its cost in a manner consistent with
the audited financial statements as at December 31, 1995. The count and
valuation will be conducted and completed as quickly as possible after the
Closing Date. Upon completion of the Closing Inventory, the Vendor will cause
its auditors, Price Waterhouse, to conduct an audit of the Closing Inventory
(the "Closing Audit") and issue a report (the "Report") stating whether or not
the Closing Inventory is valued at cost in a manner consistent with the audited
financial statements as at December 31, 1995 but prior to any provisions or
reserves. The Vendor will cause Price Waterhouse to complete The Closing Audit
and deliver copies of the Report to the Vendor and the Purchaser within fifteen
(15) days following completion of the Closing Audit. The Vendor will cause Price
Waterhouse to provide access to its working papers to Coopers & Lybrand and BBK
to review the Closing Audit. The Purchaser will cause Coopers & Lybrand and
General Motors Corporation will cause BBK to advise the Purchaser and General
Motors Corporation respectively of any objections to the values contained in the
Closing Inventory with fifteen (15) days of receiving the Report. Any objection
shall be accompanied by a letter from Coopers & Lybrand or BBK, as the case may
be, specifying in reasonable detail the basis for their objections. If the
parties are unable to agree to a resolution of the differences within fifteen
(15) days after the delivery of such objection, the Closing Audit will be
submitted to the Toronto office of Deloitte & Touche (the "Arbitrator") for a
final and binding determination. In the event that Deloitte & Touche are unable
to accept the appointment, the Vendor, the Purchaser and General Motors
Corporation shall appoint a mutually agreeable substitute. The Arbitrator's fees
and expenses shall be allocated based upon the relative difference between the
respective positions of the parties as submitted to the Arbitrator and the final
determination of the Arbitrator. The Purchaser shall make available to Price
Waterhouse, to Coopers & Lybrand, to BBK, and if necessary, the Arbitrator, the
books and records utilized in conducting the Closing Inventory together with the
employees working on the Closing Inventory.
6.10 The "Final Purchase Price" shall be the Purchase Price adjusted upwards or
downwards, dollar for dollar, by the difference between the values with respect
to the inventory of the Vendor reflected in the Closing Audit (as finally agreed
upon by the Vendor and the Purchaser or as determined by the Arbitrator) and the
values with respect to the inventory of the Vendor otherwise used to calculate
the Purchase Price, in accordance with this agreement, on the Closing Date.
6.11 Immediately upon final determination of the Final Purchase Price, the
Purchaser and the Vendor shall jointly notify the Escrow Agent of the amount of
any final adjustment in accordance with the notice of provisions of the Escrow
Agreement. If an amount is due to the Purchaser as a refund of excess Purchase
Price previously paid, the Escrow Agent shall pay that amount to the Purchaser
from the Escrow Funds pursuant to the Escrow Agreement. If the amount due to the
Vendor is less than the balance of the Escrow Funds, the remaining balance of
the Escrow Funds shall be paid by the Escrow Agent to the Purchaser. If an
amount is due to the Vendor in excess of the Escrow Funds, such amount shall be
paid to the Vendor by the Purchaser. All amounts contemplated by this section
6.11 shall be made by wire transfer of immediately available funds within five
(5) business days after final determination of the Final Purchase Price.
Notwithstanding the foregoing, if a portion of the holdback is not the subject
matter of a dispute referred to in section 6.09, such portion shall be released
upon any of the Vendor, the Purchaser or General Motors Corporation sending a
copy of the Report and Coopers & Lybrand and BBK's objection, if any, to the
Report to the Escrow Agent.
6.12 At the Time of Closing, the Vendor shall have instructed Price Waterhouse,
in a binding, irrevocable manner, as determined by the Purchaser, to carry out
the work contemplated by section 6.9 and the Purchaser shall be satisfied that
Price Waterhouse is in a position to carry out such work in accordance with the
terms of this agreement.
ASSUMPTION OF UNION PENSION PLAN
6.13 It is expressly acknowledged and agreed that, in the event that the
transaction of purchase and sale contemplated herein is completed on the Closing
Date, in accordance with the terms hereof, the Purchaser shall assume the
pension plan currently registered by the Vendor with the Pension Commission of
Ontario for employees of the Vendor who are members of the Union, being the plan
registered as number 0694570.
ARTICLE 7
GENERAL
HEADINGS
7.1 The division of this agreement into Articles and sections and the insertion
of headings are for the convenience of reference only and shall not affect the
construction or interpretation of this agreement. The terms "this agreement",
"hereof", "hereunder" and similar expressions refer to the agreement of purchase
of sale resulting from the acceptance by the Vendor of this offer to purchase
and not to any particular Article, section or other portion hereof and include
any agreement or instrument supplemental or ancillary hereto. The terms
"Article" or "section" followed by a number refer to the specified Article or
section of this agreement, unless the context specifically otherwise requires.
NUMBER AND GENDER
7.2 In this agreement words importing the singular number only shall include the
plural and vice versa, words importing the neuter gender shall include the
masculine and feminine genders and vice versa and words importing persons shall
include individuals, partnerships, associations, trusts, unincorporated
organizations and corporations and vice versa.
TIME OF THE ESSENCE
7.3 Time shall be of the essence of this agreement. The term "business day" as
used in this agreement shall mean a day which is not a Saturday, Sunday, or
statutory holiday in the Province of Ontario.
LEGAL FEES
7.4 Each of the parties hereto shall pay their respective legal and accounting
costs and expenses incurred in connection with the preparation, execution and
delivery of this agreement and all documents and instruments executed pursuant
hereto and any other costs and expenses whatsoever and howsoever incurred.
BENEFIT OF THE AGREEMENT
7.5 This agreement shall enure to the benefit of and be binding upon the
respective heirs, executors, administrators, successors and permitted assigns of
the parties hereto.
ENTIRE AGREEMENT
7.6 This agreement sets forth the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior
understandings and communications between the parties hereto and any persons who
have in the past or who are now representing either of the parties hereto, oral
or written. Each party hereto acknowledges and represents that this agreement is
entered into after full investigation and that no party is relying upon any
statement or representation made by any other which is not embodied in this
agreement. Each party hereto acknowledges that it shall have no right to rely
upon any amendment, promise, modification, statement or representation made or
occurring subsequent to the execution of this agreement unless the same is in
writing and executed by each of the parties hereto.
WAIVER
7.7 The failure of either party to this agreement to enforce at any time any of
the provisions of this agreement or any of its rights in respect thereto or to
insist upon strict adherence to any term of this agreement shall not be
considered to be a waiver of such provision, right or term or in any way to
affect the validity of this agreement or deprive the applicable party of the
right thereafter to insist upon strict adherence to that term or any other term
of this agreement. The exercise by any party to this agreement of any of its
rights provided by this agreement shall not preclude or prejudice such party
from exercising any other right it may have under this agreement, irrespective
of any previous action or proceeding taken by it hereunder. Any waiver by any
party hereto of the performance of any of the provisions of this agreement shall
be effective only if in writing and signed by a duly authorized representative
of such party.
ASSIGNMENT
7.8 This agreement may not be assigned by either party hereto without the
express written consent of the other party hereto and which consent may not be
unreasonably withheld.
NOTICES
7.9 Any notice to be given by either party hereto to the other party shall be in
writing and may be given by personal delivery or by telefax addressed as
follows:
(a) to Purchaser:
900 Victors Way
Suite 140
Ann Arbor, Michigan 48108
Attention: Donna Bacon
Vice-President
Telefax No.: (313) 662-0133
with a copy to the Purchaser's solicitors:
Miller Thomson
Barristers & Solicitors
20 Queen Street West
Box 27, Suite 2700
Toronto, Ontario M5H 3S1
Attention: Jeffrey C. Carhart
Telefax No.: (416) 595-8695
(b) to Vendor:
c/o Dale & Lessmann
Barristers & Solicitors
Suite 200
Commercial Union Tower
Toronto-Dominion Centre
Toronto, Ontario M5K 1E7
Attention: David E. Clark
Telefax No.: (416) 863-1009
and shall be deemed to have been received by the party to whom it was addressed
on the second (2nd) business day following delivery or transmission by telefax,
provided that either of the parties may change the address designated from time
to time, by notice in writing to the other party. As used herein, the term
"Purchaser's Solicitors" shall mean the firm designated above or such alternate
firms as may designated by the Purchaser in accordance with this section 7.10.
GOVERNING LAW
7.10 This agreement and the rights, obligations and relations of the parties
hereto shall be governed by and construed in accordance with the domestic laws
of the Province of Ontario. The parties hereto agree that the Courts of Ontario
shall have jurisdiction to entertain any action or other legal proceedings based
on any provisions of this agreement. Each party hereto does hereby attorn to the
jurisdiction of the Courts of the Province of Ontario. The parties agree that
the United Nations Convention on Contracts for the International Sale of Goods
does not apply to this agreement and is strictly excluded.
SCHEDULES
7.11 The following are the Schedules annexed hereto and incorporated by
reference and deemed to be part hereof:
Schedule A - Real Property of Pebra Inc. and other tangible and intangible
personal property of Pebra not comprising Equipment
Schedule B - Vesting Order Approving Sale of Assets
Schedule C - Secured Creditors of Pebra Inc.
Schedule D - Escrow Agreement
EXECUTION
7.12 This agreement may be validly executed and delivered by telefax. The Vendor
and the Purchaser agree to exchange originally executed copies of the agreement
on or before the Closing Date, in the event that execution of this agreement is
initially completed by telefax.
IN WITNESS WHEREOF JPE, on behalf of the Purchaser, has executed this
agreement this 15th day of November, 1996.
JPE, INC
Per: /s/ John Psarouthakis
- --------------------------
Dr. John Psarouthakis
Chairman, President & C.E.O.
Subject to the terms hereof, the Vendor hereby accepts and agrees to this offer
to purchase set out herein this 15th day of November, 1996.
PEBRA INC.
Per: /s/ David Clark
- --------------------
David Clark
Director
<PAGE>
INDEX TO SCHEDULES
Schedule A - Real Property of Pebra Inc. and other tangible and intangible
personal property of Pebra not comprising Equipment
Schedule B - Vesting Order Approving Sale of Assets
Schedule C - Secured Creditors of Pebra Inc.
Schedule D - Escrow Agreement