JPE INC
8-K, 1997-01-06
MOTOR VEHICLE SUPPLIES & NEW PARTS
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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):
                                December 23, 1996
                                -----------------
       

                         Commission file number 0-22580
                         ------------------------------


                                    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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<PAGE>


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.


<PAGE>


                                   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
                                    --------------------
                                    James J. Fahrner
                                    Vice President, Chief Financial Officer
                                      and Treasurer


<PAGE>

                                 EXHIBIT INDEX
                                 --------------

EXHIBIT  
NUMBER      DESCRIPTION  
- ------      -----------     

  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



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