THE SECURITIES REPRESENTED BY THIS CONVERSION
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR
APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"),
AND SHALL NOT BE SOLD OR TRANSFERRED (WHETHER OR NOT
FOR CONSIDERATION) BY THE HOLDER EXCEPT UPON THE
ISSUANCE TO THE CORPORATION OF A FAVORABLE OPINION
OF ITS COUNSEL AND/OR SUBMISSION TO THE CORPORATION
OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
COUNSEL FOR THE CORPORATION, TO THE EFFECT THAT ANY
SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT
AND THE STATE ACTS.
CONVERSION AGREEMENT
This Conversion Agreement (the "Agreement") is entered into effective
as of the thirty-first (31st) day of December, 1996, by and among DCT COMPONENT
SYSTEMS, INC., a Michigan corporation, whose address is 34660 Centaur, Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000 (the "Corporation"), NOBLE INTERNATIONAL, LTD., a
Michigan corporation, whose address is 00 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000 ("Noble"), and XXXXXXX X. REASON, as Trustee of
the XXXXXXX X. REASON REVOCABLE LIVING TRUST DATED APRIL 9, 1979, whose address
is 0000 Xxxxx Xxxxx Xxxx., Xxx. X-0, Xxxxxxxx Xxxxx, Xxxxxxx 00000 ("Reason").
W I T N E S S E T H:
WHEREAS, Reason is currently the holder of Ten Thousand (10,000) Shares
of Preferred Stock of the Corporation ("Corporation Stock"); and
WHEREAS, Reason received such Corporation Stock in consideration of (i)
the satisfaction of certain debt owed by the Corporation to RJR Investment, an
assumed name of Reason, pursuant to a Promissory Note dated February 11, 1993,
as amended; (ii) the agreement of the Corporation to grant Reason a right to put
the Corporation Stock to the Corporation pursuant to a Put Agreement; and (iii)
the agreement of the Corporation to provide for the conversion of the
Corporation Stock into preferred stock of Noble upon the completion of an
initial public offering by Noble; and
WHEREAS, Noble intends to have, and is currently preparing for, an
initial public offering of Noble capital stock on or about June 30, 1997; and
WHEREAS, the parties desire to memorialize their agreement regarding
the right of Reason to convert the Corporation Stock to preferred stock of Noble
upon the satisfaction of certain terms and conditions.
NOW, THEREFORE, the parties hereto covenant and agree as follows:
Section 1. Conversion.
(a) Reason shall have the right, at any time after the
completion of an initial public offering by Noble, to convert all, but not less
than all, of the Corporation Stock then owned by Reason to the same number of
fully paid and nonassessable shares of Noble Preferred Stock having One Hundred
Dollars ($100.00) par value (the "Noble Stock") as provided herein.
(b) An "initial public offering" by Noble shall mean an
initial public offering whereby Noble files a registration statement on Form
X-0, X-0 or S-3 under the Securities Act of 1933, as amended (the "Act"), or a
similar document pursuant to any other statute then in effect corresponding to
said Act, relating to an underwritten public offering of Noble common stock,
warrants, convertible securities or any other similar equity securities of
Noble, and such initial public offering becomes effective pursuant to an order
issued by the Securities and Exchange Commission (hereinafter referred to as
"IPO").
(c) Reason may exercise the conversion right provided in this
Section 1 by giving written notice (the "Conversion Notice") to the Corporation
and Noble of the exercise of such right and stating the name or names in which
the stock certificate or stock certificates for the shares of Noble Stock are to
be issued and the address to which such certificates shall be delivered. The
Conversion Notice shall be accompanied by the actual Stock Certificates for the
Corporation Stock which is to be converted into Noble Stock. The number of
shares of Noble Stock that shall be issuable upon conversion shall equal the
number of shares of Corporation Stock then owned by Reason.
(d) The conversion shall be deemed to have been effected on
the date the Conversion Notice is given (the "Conversion Date"). Within ten (10)
business days after receipt of the Conversion Notice, the Corporation shall
cancel the Corporation Stock and shall issue a check or cash in payment to
Reason of all dividends accrued and unpaid on the Corporation Stock up to and
including the Conversion Date. Simultaneously, Noble shall issue and deliver by
hand against a signed receipt therefor or by United States registered mail,
return receipt requested, to the address designated by Reason in the Conversion
Notice, a stock certificate or stock certificates of Noble representing the
number of shares of Noble Stock to which Reason is entitled.
(e) Noble agrees to notify Reason in writing of the completion
of the IPO within ten (10) days of such completion.
Section 2. Corporation Disposition.
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(a) (i) In case of any capital reorganization, any
reclassification of the stock of the Corporation (other than a change in par
value or from par value to no par value or from no par value to par value or as
a result of a stock dividend or subdivision, split up or combination of shares),
or the consolidation or merger of the Corporation with or into another person or
entity (other than a consolidation or merger in which the Corporation is the
continuing corporation and which does not result in any change in the
Corporation Stock) or of the sale, exchange, lease, transfer, or other
disposition of all or substantially all of the properties and assets of the
Corporation as an entirety or the participation by the Corporation in share
exchange as the corporation the stock of which is to be acquired, the
Corporation Stock then owned by Reason shall (effective on the opening of the
business on the date after the effective date of such reorganization,
reclassification, consolidation, merger, sale, or exchange, lease, transfer or
other disposition or share exchange) be convertible into the kind and number of
shares of stock or other securities or property of the Corporation or of the
corporation resulting from such consolidation or surviving such merger or to
which such properties and assets shall have been sold, exchanged, leased,
transferred, or otherwise disposed or which was the corporation whose securities
were exchanged for those of the Corporation to which Reason (at the close of
business on the date immediately preceding the effective date of such
reorganization, reclassification, consolidation, merger, sale, exchange, lease,
transfer, or other disposition or share exchange) upon conversion of the
Corporation Stock would have been entitled upon such reorganization,
reclassification, consolidation, merger, sale, exchange, lease, transfer, or
other disposition or share exchange. The shares of capital stock so received
shall be deemed to be Corporation Stock for purposes of this Agreement.
(ii) The Corporation will use its best efforts to insure
that the capital stock so received has the same relative rights, preferences and
limitations as the Corporation Stock.
(iii) The provisions of this Section 2(a) shall similarly
apply to successive reorganizations, reclassifications, consolidations, mergers,
sales, exchanges, leases, transfers, or other dispositions or other share
exchanges.
(b) Notice of Adjustment Events. In the event the Corporation
shall propose to take any action of the types described in Section 2(a)(i)
hereof, the Corporation shall give notice to Reason, which notice shall specify
the record date, if any, with respect to any such action and the date on which
such action is to take place. Such notice shall be given on or prior to the
earlier of thirty (30) days prior to the record date or the date on which such
action shall be taken. Failure to give notice in accordance with this Section
2(b) shall not render such action ultra xxxxx, illegal, or invalid.
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Section 3. Taxes. Noble shall pay all documentary, stamp or
other transactional taxes and charges attributable to the issuance
or delivery of shares of Noble Stock upon conversion.
Section 4. Reservation of Shares.
(a) Noble shall at all times reserve and keep available, free
from preemptive rights, unissued Noble Stock sufficient to effect the conversion
of the Corporation Stock to Noble Stock.
(b) Noble agrees that as long as Reason owns Corporation
Stock, Noble will not amend its Articles of Incorporation to change the rights
and privileges associated with the preferred stock of Noble or create any
preferences or other classes of Stock, if the result of which would reduce or
eliminate the rights and privileges now associated with the preferred stock of
Noble, which rights and privileges the parties acknowledge and agree are, and
will remain during the term of this Agreement, the same as those applicable to
the Corporation Stock.
(c) Noble covenants that all shares of Noble Stock that are
issued upon the exercise of the conversion right will be fully paid,
nonassessable, and free from all taxes, liens, and charges in respect of the
issue thereof.
(d) Noble shall not be required to issue any fraction of a
share but shall make adjustment thereof in cash on the basis of the par value of
the Noble Stock.
Section 5. Notices. All notices and other communication given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered or mailed if delivered personally, by facsimile
transmission with originals mailed by first class mail, mailed by registered
mail (postage prepaid, return receipt requested) or delivered by a nationally
recognized courier service to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice, except that
notices of changes of address shall be effective upon receipt):
If to the Corporation:
DCT Component Systems, Inc.
00000 Xxxxxxx
Xxxxxxx Xxxxxxxx, Xxxxxxxx 00000
If to Noble:
Noble International, Ltd.
00 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
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In either case, with a copy to:
Xxxxxxx Xxxx, Esq.
c/o Noble International, Ltd.
00 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
If to the Reason:
Xxxxxxx X. Reason, as Trustee
0000 Xxxxx Xxxxx Xxxx., Xxx. X-0
Xxxxxxxx Xxxxx, Xxxxxxx 00000
With a copy to:
Xxxxx X. Xxxxx, Esq.
Stone, Biber & X'Xxxxx, P.C.
0000 Xxxx Xxxxxx Xx., Xxxxx 000
Xxxx, Xxxxxxxx 00000
Section 6. Governing Law. This Conversion Agreement shall be
governed by and construed and enforced in accordance with the laws
of the State of Michigan.
Section 7. Successors and Assigns. All of the provisions of this
Conversion Agreement shall be binding upon the Corporation and Noble and their
successors and assigns and Reason, his heirs, personal representatives,
guardians, and assigns.
Section 8. Breach of Agreement. In the event the Corporation and/or
Noble fails or refuses to honor its obligations hereunder, Reason shall have the
right to demand specific performance of the Corporation's and/or Noble's
obligations hereunder and to bring suit in any court of competent jurisdiction
to enforce such right. The right to specific performance shall be in addition to
any other remedies available to the Reason.
Section 9. No Waiver.
(a) No failure or delay by Reason to insist upon the strict
performance of any term of this Agreement or to exercise any right, power, or
remedy upon a default hereunder shall constitute a waiver of any such term or of
any such breach, or preclude Reason from exercising any right, power, or remedy
at any later time or times.
(b) The failure of Reason to give notice of any failure or
breach of the Corporation and/or Noble under this Agreement shall not constitute
a waiver of any right or remedy in respect of such continuing failure or breach
or any subsequent failure or breach.
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Section 10. Reorganizations. Noble covenants and agrees that it will
not merge or consolidate with or into or sell or otherwise transfer all or
substantially all of its assets to any other corporation or entity unless at the
time of or prior to such transaction such other corporation or other entity
shall expressly assume all of the liabilities and obligations of Noble under
this Conversion Agreement and (without limiting the generality of the foregoing)
shall expressly agree that Reason shall thereafter have the right to receive
upon the exercise of this Conversion Agreement, the number and kind of shares of
preferred stock and other securities and property receivable upon such
transaction by a holder of the number and kind of shares which would have been
receivable upon the exercise of this Conversion Agreement immediately prior to
such transaction.
Section 11. Acknowledgement of Reason. Reason agrees that in the event
he exercises his conversion rights hereunder, simultaneously with such exercise,
Reason will provide to Noble an acknowledgement to the effect that he is
converting the Corporation Stock to Noble Stock for investment purposes and not
for resale and he agrees that he will not sell the Noble Stock unless the Noble
Stock is registered under the Act or State Acts or the sale is exempt from
registration in the reasonable opinion of legal counsel for Noble.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
WITNESSES: "CORPORATION"
DCT COMPONENT SYSTEMS, INC.,
a Michigan corporation
/s/ Xxxxx Xxxxx Xxxx
------------------------ -------------------------------
By: Xxxxx Xxxxx Xxxx
________________________ Its: President
"NOBLE"
NOBLE INTERNATIONAL, LTD., a
Michigan corporation
/s/ Xxxxxx X. Xxxxxxxxxxx
------------------------ -------------------------------
By: Xxxxxx X. Xxxxxxxxxxx
________________________ Its: President
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"REASON"
/s/ Xxxxxxx X. Reason
------------------------ -------------------------------
Xxxxxxx X. Reason, as Trustee
________________________ of the Xxxxxxx X. Reason
Revocable Living Trust dated
April 9, 1979
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