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STOCK PURCHASE AGREEMENT
DATED AS OF THE 7TH DAY OF APRIL, 1997
BY AND AMONG
NOBLE INTERNATIONAL, LTD.,
UTILASE, INC.
AND
THE SHAREHOLDERS OF UTILASE, INC.
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TABLE OF CONTENTS
Page
ARTICLE I. SALE AND PURCHASE OF SHARES.......................................2
SECTION 1.1 Sale and Purchase of the Shares.............................2
SECTION 1.2 Purchase Price............................................. 2
SECTION 1.3 Allocation of Purchase Price................................2
SECTION 1.4 Method of Payment...........................................2
SECTION 1.5 Delivery of the Shares......................................3
SECTION 1.6. Escrow of Noble Shares......................................3
SECTION 1.7. Restrictions Applicable to Escrow Shares....................3
ARTICLE II. CONDUCT PRIOR TO CLOSING.........................................3
SECTION 2.1. Conduct of the Company's Business Prior to the Closing Date.3
SECTION 2.2. Forbearance by the Company..................................4
SECTION 2.3. Conduct of Noble's Business Prior to the Closing Date.......5
SECTION 2.4. Cooperation of Noble and the Company........................5
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................6
SECTION 3.1. Recitals True...............................................6
SECTION 3.2. Capital Stock...............................................6
SECTION 3.3. Due Organization............................................6
SECTION 3.4. Authority...................................................6
SECTION 3.5. Subsidiaries; Significant Investments.......................6
SECTION 3.6. Approvals...................................................6
SECTION 3.7. No Violations...............................................7
SECTION 3.8. Consents and Approvals......................................7
SECTION 3.9. Financial Information.......................................7
SECTION 3.10. Absence of Undisclosed Liabilities and Certain
Changes or Events..........................................7
SECTION 3.11. Taxes.......................................................8
SECTION 3.12. Absence of Claims...........................................8
SECTION 3.13. Agreements..................................................8
SECTION 3.14. Labor Matters...............................................9
SECTION 3.15. Employee Benefit Plans......................................9
SECTION 3.16. Properties.................................................10
SECTION 3.17. Compliance with Laws.......................................10
SECTION 3.18. Fees.......................................................10
SECTION 3.19. Environmental Matters......................................10
SECTION 3.20. Material Interests of Certain Persons......................12
SECTION 3.21. Insurance..................................................12
(i)
SECTION 3.22. Corporate Documents........................................12
SECTION 3.23. Company Action.............................................12
SECTION 3.24. Manufacturing Processes and Trade Secrets..................12
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF NOBLE.........................13
SECTION 4.1. Recitals True..............................................13
SECTION 4.2. Capital Stock..............................................13
SECTION 4.3. Due Organization...........................................13
SECTION 4.4. Authority..................................................13
SECTION 4.5. Subsidiaries; Significant Investment.......................13
SECTION 4.6. Approvals..................................................13
SECTION 4.7. No Violations..............................................13
SECTION 4.8. Consents and Approvals.....................................14
SECTION 4.9. Financial Information......................................14
SECTION 4.10. Absence of Undisclosed Liabilities and Certain
Changes or Events.........................................14
SECTION 4.11. Taxes......................................................14
SECTION 4.12. Absence of Claims..........................................15
SECTION 4.13. Agreements.................................................15
SECTION 4.14. Labor Matters..............................................16
SECTION 4.15. Employee Benefit Agreements................................16
SECTION 4.16. Properties.................................................16
SECTION 4.17. Compliance with Laws.......................................17
SECTION 4.18. Fees.......................................................17
SECTION 4.19. Environmental Matters......................................17
SECTION 4.20. Insurance..................................................18
SECTION 4.21. Corporate Documents........................................18
ARTICLE V. ADDITIONAL AGREEMENTS............................................18
SECTION 5.1. Interim Financing..........................................18
SECTION 5.2. Access and Information.....................................19
SECTION 5.3. Certain Filings, Consents and Arrangements.................19
SECTION 5.4. Additional Agreements......................................19
SECTION 5.5. Regulatory Matters.........................................20
SECTION 5.6. Benefit Agreements and Certain Contracts...................20
SECTION 5.7. Certain Claims.............................................20
SECTION 5.8. DCT Release................................................21
SECTION 5.9. Financial Statements.......................................21
SECTION 5.10 Code Section 338(h)(10) Election...........................21
ARTICLE VI. CONDITIONS TO CONSUMMATION......................................22
(ii)
SECTION 6.1. Conditions to All Parties' Obligations.....................22
SECTION 6.2. Conditions to the Obligations of Noble.....................23
SECTION 6.3. Conditions to the Obligations of the Company
and the Shareholders.......................................23
ARTICLE VII. INDEMNIFICATION.................................................24
SECTION 7.1. Survival of Representations and Warranties.................24
SECTION 7.2. Indemnity of the Shareholders..............................24
SECTION 7.3. Noble's Indemnity..........................................25
SECTION 7.4. Claims for Indemnification.................................26
SECTION 7.5. Notice of Claim for Indemnification........................27
SECTION 7.6. Undertakings...............................................27
ARTICLE VIII. TERMINATION.....................................................27
SECTION 8.1. Termination................................................27
SECTION 8.2. Effect of Termination......................................28
ARTICLE IX. CLOSING..........................................................29
SECTION 9.1. Closing....................................................29
ARTICLE X. OTHER MATTERS....................................................29
SECTION 10.1. Certain Definitions; Interpretation........................29
SECTION 10.2. Survival...................................................30
SECTION 10.3. Waiver.....................................................30
SECTION 10.4. Counterparts...............................................30
SECTION 10.5. Governing Law..............................................30
SECTION 10.6. Expenses...................................................30
SECTION 10.7. Notices....................................................30
SECTION 10.8. Entire Agreement; Etc......................................31
SECTION 10.9. Arbitration................................................31
SECTION 10.10. Rules Governing the Issuance and Holding of Notes and
Escrow Shares..............................................32
SECTION 10.11. Assignment.................................................33
(iii)
EXHIBITS
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EXHIBIT A -- Form of Notes
EXHIBIT B -- Purchase Price Allocation
EXHIBIT C -- Escrow Agreement
EXHIBIT D -- Non-Compete Agreement
EXHIBIT E -- Non-Compete Agreement
EXHIBIT F -- Non-Compete Agreement
EXHIBIT G -- Employment Agreement
(iv)
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of the 7th day of April, 1997 (this
"Agreement"), by and among Noble International, Ltd. ("Noble"), Utilase, Inc.
(the "Company"), DCT, Inc. ("DCT") and Xxxx X. Xxxxxxx ("Xxxxxxx," and together
with DCT, the "Shareholders").
RECITALS:
X. Xxxxx. Noble is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Michigan, with its principal
executive offices located in Bloomfield Hills, Michigan. As of the date hereof,
Noble has 60,000 authorized shares of common stock, without par value, of which
11,550 shares were outstanding as of the date hereof, and 150,000 authorized
shares of preferred stock, without par value. There are no shares of preferred
stock outstanding as of the date hereof, and Noble has no other class of capital
stock authorized. The number of shares of Noble outstanding is subject to change
prior to the Closing Date (as hereinafter defined) as described in subparagraph
D of these Recitals.
B. The Company. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Michigan, with its
principal executive offices located in Detroit, Michigan. As of the date hereof,
the Company has 50,000 authorized shares of common stock, without par value
("Company Common Stock"), of which 1,053 shares were outstanding as of the date
hereof, 1,000 of which were held by DCT and 53 of which were held by Xxxxxxx.
The Company has no other class of capital stock authorized or issued.
C. Options, Etc. Neither the Company nor any of its subsidiaries has any
shares of its capital stock held in treasury or reserved for issuance, any
outstanding option, call or commitment relating to shares of its capital stock
or any outstanding securities, obligations or agreements convertible into or
exchangeable for, or giving any person any right (including, without limitation,
preemptive rights) to subscribe for or acquire from it, any shares of its
capital stock nor any obligations, contingent or otherwise to repurchase, redeem
or otherwise acquire any of its equity securities nor to provide funds to make
any investment in, or provide any guarantee with respect to the obligations of,
any person, except as set forth in the Company Disclosure Letter (as defined in
Article III).
X. Xxxxx Options, Etc. Neither Noble nor any of its subsidiaries has any
shares of its capital stock reserved for issuance, any outstanding option, call
or commitment relating to shares of its capital stock or any outstanding
securities, obligations or agreements convertible into or exchangeable for, or
giving any person any right (including, without limitation, preemptive rights)
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to subscribe for or acquire from it, any shares of its capital stock except as
set forth in the Noble Disclosure Letter (as defined in Article IV).
E. Board Approvals. The respective Boards of Directors of DCT, Noble and
the Company have duly approved this Agreement and have duly authorized its
execution and delivery.
F. Employment Agreement. The Company and Xxxxxxx have entered into the
Employment Agreement attached hereto as Exhibit G (the "Employment Agreement").
In consideration of their mutual promises and obligations hereunder, the
parties hereto adopt and make this Agreement and prescribe the terms and
conditions hereof and the manner and basis of carrying it into effect, which
shall be as follows:
ARTICLE I. SALE AND PURCHASE OF SHARES
SECTION 1.1 Sale and Purchase of the Shares. Subject to the conditions
set forth in this Agreement and on the basis of and reliance upon the
representations, warranties and agreements set forth in this Agreement, on the
Closing Date (as defined in Section 9.1) the Shareholders shall sell their
shares of Company Common Stock (the "Shares") to Noble free and clear of all
liens and encumbrances of any nature whatsoever and Noble shall purchase the
Shares from the Shareholders.
SECTION 1.2 Purchase Price. At the Closing (as defined in Section 9.1),
Noble shall deliver the following to the Shareholders as consideration for the
Shares ("the Purchase Price"):
(a) an amount equal to (i) $8,200,000; and
(b) the Series A Subordinated Promissory Notes (the "Series A Notes"),
the Series B Subordinated Promissory Notes (the Series B Notes"), the Series C
Subordinated Promissory Notes (the "Series C Notes"), and the Series D
Subordinated Promissory Notes (the "Series D Notes" and, together with the
Series A Notes, Series B Notes and Series C Notes, the "Notes"), in
substantially the form of Exhibit A hereto with an aggregate principal amount
equal to $10,134,554.
SECTION 1.3 Allocation of Purchase Price. The Purchase Price shall be
allocated between the Shareholders as set forth in Exhibit B.
SECTION 1.4 Method of Payment. The payment by Noble to the Shareholders
pursuant to Section 1.2(a) shall be made by wire transfer of immediately
available funds to the Shareholders' designated account (or accounts) according
to irrevocable written instructions which the Shareholders shall provide to
Noble no later than five days prior to the Closing Date.
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SECTION 1.5 Delivery of the Shares. On the Closing Date, the
Shareholders shall deliver to Noble certificates representing the shares, each
of which certificates shall be endorsed in blank or accompanied by stock powers
duly executed in blank to permit transfer of the shares to Noble.
SECTION 1.6. Escrow of Noble Shares. Upon the execution of this
Agreement, a certificate representing 506 shares of Noble Common Stock (the
"Escrow Shares"), which Escrow Shares shall be equitably adjusted to reflect
fully the effect of any reclassification, stock split, reverse split, stock
dividend or other reorganization or other like change with respect to Noble
Common Stock, occurring after the date hereof and prior to the date such Escrow
Shares are released from escrow, as described below, shall be delivered by Noble
to Jaffe, Raitt, Heuer & Xxxxx, as escrow agent (the "Escrow Agent") under an
Escrow Agreement in the form attached hereto as Exhibit C (the "Escrow
Agreement"). The Escrow Shares shall be held in escrow under the Escrow
Agreement and shall be distributed to the Company if this Agreement is
terminated as described in Section 8.2(iv) and as of the date hereof, Noble and
the Company shall execute a Registration Rights Agreement and a Shareholders'
Agreement relating to such Escrow Shares. If this Agreement is not terminated
and the Purchase is consummated, the Escrow Shares shall be returned to Noble at
the Closing Date.
SECTION 1.7. Restrictions Applicable to Escrow Shares. The Company and
the Shareholders acknowledge that the Escrow Shares and the Notes issued and
delivered by Noble pursuant to this Agreement have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and even if so
registered, may be subject to restrictions on resale under federal and state
securities laws or under this Agreement generally. As used in this Agreement,
the term "Unregistered Securities" shall mean all Escrow Shares and Notes issued
hereunder which have not been registered for resale under the Securities Act.
ARTICLE II. CONDUCT PRIOR TO CLOSING
SECTION 2.1. Conduct of the Company's Business Prior to the Closing
Date. Except as expressly provided in this Agreement, during the period from the
date of this Agreement to the Closing Date, the Company shall, and shall cause
each of its subsidiaries to, (i) conduct its business in the usual, regular and
ordinary course of business consistent with past practice, (ii) use its best
efforts to maintain and preserve intact its business organization, properties,
leases, employees and advantageous business relationships and retain the
services of its officers and key employees, (iii) take no action which would
adversely affect or delay the ability of the Company, Noble or any subsidiary
thereof to obtain any necessary approvals, consents or waivers of any
governmental authority required for the transactions contemplated hereby or to
perform its covenants and agreements on a timely basis under this Agreement and
(iv) take no action that is reasonably likely to have a Material Adverse Effect
(as defined in Section 9.1 hereof) on the Company.
3
SECTION 2.2. Forbearance by the Company. Except as contemplated by the
Interim Financing Transaction (defined in Section 5.1), during the period from
the date of this Agreement to the Closing Date, the Company shall not, and shall
not permit any of its subsidiaries, without the prior written consent of Noble,
to:
(a) other than as consistent with past practice, make any loan or
advance or incur any indebtedness for borrowed money, assume, guarantee, endorse
or otherwise as an accommodation become responsible for the obligations of any
other person;
(b) other than as contemplated hereby, adjust, split, combine or
reclassify any capital stock; make, declare or pay any dividend or make any
other distribution on, or directly or indirectly redeem, purchase or otherwise
acquire, any shares of its capital stock or any securities or obligations
convertible into or exchangeable for any shares of its capital stock, or grant
any stock appreciation rights or grant, sell or issue to any individual,
corporation or other person any right or option to acquire, or securities
evidencing a right to convert into or acquire, any shares of its capital stock,
except as consistent with past practice;
(c) other than in the ordinary course of business, sell, transfer,
mortgage, encumber or otherwise dispose of any of its properties, leases or
assets to any person, or cancel, release or assign any indebtedness of any such
person, except pursuant to contracts or agreements in force as of the date of
this Agreement;
(d) make any capital expenditures, other than capital expenditures made
in the ordinary course of business;
(e) increase in any material manner the compensation or fringe benefits
of any of its employees or directors, or create or institute, or make any
payments pursuant to, any severance plan or package, or pay any pension or
retirement allowance not required by any existing plan or agreement to any such
employees or directors, or become a party to, amend or commit itself to or fund
or otherwise establish any trust or account related to any Employee Agreement
(as defined in Section 3.15), with or for the benefit of any employee, other
than general increases in compensation in the ordinary course of business or any
amendment required by applicable law, or voluntarily accelerate the vesting of
any compensation or benefit;
(f) other than in the ordinary course of business, make any investment
either by contributions to capital, property transfers, or purchase of any
property or assets of any person;
(g) other than with respect to the acceptance of purchase orders, enter
into or terminate any contract or agreement, or make any change in any of its
leases or contracts, other than with respect to those involving aggregate
payments of less than, or the provision of goods or services with a market value
of less than, $25,000;
4
(h) settle any claim, action or proceeding involving any liability of
the Company or any of its subsidiaries for money damages in excess of $200,000,
in excess of amounts covered by insurance, if any, or material restrictions upon
the operations of the Company or any of its subsidiaries, provided however, that
the Company and/or DCT has the right to settle claims of the Company with
respect to USX Corporation, Olympic Steel, Inc., Xxxx Xxxxxxxxxx or TWB, Inc.,
subject to the provisions of Section 5.7 hereof;
(i) enter into any new material activities or lines of business, or
cease to conduct any material activities or lines of business that it conducts
on the date hereof, or conduct any material business activity not consistent
with past practice;
(j) agree to, or make any commitment to, take any of the actions
prohibited by this Section 2.2 or any action which would make any of the
representations or warranties of the Company contained in this Agreement
incorrect or prevent the Company from performing or cause the Company not to
perform its covenants hereunder;
(k) pay management and other fees, charges and expenses to DCT in excess
of $40,000 per month, which includes all services provided to the Company by DCT
and its affiliates, other than those provided pursuant to separate purchase
orders.
SECTION 2.3. Conduct of Noble's Business Prior to the Closing Date.
Except as expressly provided in this Agreement, during the period from the date
of this Agreement to the Closing Date, Noble shall, and shall cause each of its
subsidiaries to, (i) conduct its business in the usual, regular and ordinary
course of business consistent with past practice, (ii) take no action outside of
the ordinary course of business which would adversely affect or delay the
ability of the Company, Noble or any subsidiary thereof to obtain any necessary
approvals, consents or waivers of any governmental authority required for the
transactions contemplated hereby or to perform its covenants and agreements on a
timely basis under this Agreement and (iii) take no action that is reasonably
likely to have a Material Adverse Effect on Noble.
SECTION 2.4. Cooperation of Noble and the Company. Noble and the
Company shall, and shall cause each of their subsidiaries to, cooperate with the
other party in completing the transactions contemplated hereby and shall not
take, cause to be taken or agree to make any commitment to take any action (i)
that is reasonably likely to have a Material Adverse Effect on Noble or the
Company, as applicable, or (ii) that is inconsistent with or prohibited by
Sections 2.2 or 2.3, as applicable.
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ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company and each of the Shareholders, jointly and severally,
represent and warrant to Noble that, except as specifically disclosed in a
letter (the "Company Disclosure Letter") of the Company delivered to Noble upon
the execution of this Agreement (and making specific reference to the Section of
this Agreement for which an exception is taken or for which information is
required):
SECTION 3.1. Recitals True. The facts set forth in the Recitals of this
Agreement with respect to the Company are true and correct.
SECTION 3.2. Capital Stock. All outstanding shares of capital stock of
the Company and its subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable and are not subject to any preemptive rights
and are owned free and clear of all security interests, liens, claims, pledges,
agreements, limitations on voting rights, charges or other encumbrances.
SECTION 3.3. Due Organization. Each subsidiary of the Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the state of its incorporation.
SECTION 3.4. Authority. Each of the Company and its subsidiaries has
the power and authority, and is duly qualified in all jurisdictions (except for
such qualifications the absence of which, in the aggregate, would not have a
Material Adverse Effect on Company) where such qualification is required, to
carry on its business as it is now being conducted and to own all its properties
and assets, and it has all federal, state, local, and foreign governmental
authorizations necessary for it to own or lease its properties and assets and to
carry on its business as it is now being conducted.
SECTION 3.5. Subsidiaries; Significant Investments. The only
subsidiaries of the Company are set forth in the Company Disclosure Letter. All
of the shares of capital stock of each subsidiary of the Company are owned
directly and of record by the Company or a wholly-owned subsidiary of the
Company, in each such case free and clear of all liens, claims, encumbrances and
restrictions on transfer ("Liens") and there are no options with respect to any
such capital stock. None of the Company or any of such subsidiaries owns any
equity securities, any security convertible or exchangeable into an equity
security or any rights to acquire any equity security except those of its
subsidiaries as listed in the Company Disclosure Letter.
SECTION 3.6. Approvals. This Agreement and the transactions
contemplated herein have been duly authorized by all necessary corporate action
of the Company. Subject to receipt of the required approvals, consents or
waivers of governmental authorities referred to in Section 6.1(a), this
Agreement is a valid and binding agreement of the Company enforceable against it
in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, fraudulent transfer,
6
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors, rights and to general equity principles.
SECTION 3.7. No Violations. The execution, delivery and performance of
this Agreement by the Company do not, and the consummation of the transactions
contemplated hereby by the Company and each of its subsidiaries will not,
constitute (a) a breach or violation of, or a default under, any law, rule or
regulation or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of the Company or any subsidiary of the
Company or to which the Company or any of its subsidiaries (or any of their
respective properties) is subject, or enable any person to enjoin the
transactions contemplated hereby, (b) a breach or violation of, or a default
under, the articles of incorporation or by-laws or similar organizational
documents of the Company or any subsidiary of the Company or (c) a breach or
violation of, or a default under (or an event which with due notice or lapse of
time or both would constitute a default under), or result in the termination of,
accelerate the performance required by, or result in the creation of any lien,
pledge, security interest, charge or other encumbrance upon any of the
properties or assets of the Company or any subsidiary of the Company under, any
of the terms, conditions or provisions of any note, bond, indenture, deed of
trust, loan agreement or other agreement, instrument or obligation to which the
Company or any subsidiary of the Company is a party, or to which any of their
respective properties or assets may be bound or affected, which in the case of
(a), (b) or (c) above, would have a Material Adverse Effect on the Company.
SECTION 3.8. Consents and Approvals. Except for any filings under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), if required, and the consent of the General Retirement System of the City
of Detroit (the "GRS"), no consents or approvals of or filings or registrations
with any court, administrative agency or commission or other governmental
authority or instrumentality or with any third party are necessary in connection
with (i) the execution and delivery by the Company of this Agreement and (ii)
the consummation by the Company of the transactions contemplated hereby, the
absence of which would have Material Adverse Effect on the Company.
SECTION 3.9. Financial Information. The information provided by the
Company to Noble and its auditors in connection with the preparation of the 1995
and 1996 financial statements of the Company is complete, true and accurate.
SECTION 3.10. Absence of Undisclosed Liabilities and Certain Changes or
Events. Since December 31, 1996, the Company and its subsidiaries have
conducted their business only in the ordinary course of business consistent with
past practice and have not incurred any material liability, except in the
ordinary course of their business consistent with past practice. Since December
31, 1996, there has not been any change in the condition (financial or other),
properties, business, results of operations or prospects of the Company or its
subsidiaries which, individually or in the aggregate, has had, or is reasonably
likely to have, a Material Adverse Effect on the Company.
7
SECTION 3.11. Taxes. All federal, state, local, and foreign tax returns
required to be filed by or on behalf of the Company or any of its subsidiaries
have been timely filed or requests for extensions have been timely filed and any
such extension shall have been granted and not have expired, and all such filed
returns are complete and accurate in all respects. All taxes shown on such
returns have been paid in full or adequate provision has been made for any such
taxes on the Company's balance sheet (in accordance with generally accepted
accounting principles). There is no audit examination, deficiency, or refund
litigation with respect to any taxes of the Company or any of its subsidiaries
that could result in a determination. All taxes, interest, additions, and
penalties due with respect to completed and settled examinations or concluded
litigation relating to it have been paid in full or adequate provision has been
made for any such taxes on the Company's 1995 balance sheet (in accordance with
generally accepted accounting principles). The Company has not executed an
extension or waiver of any statute of limitations on the assessment or
collection of any material tax due that is currently in effect.
SECTION 3.12. Absence of Claims. Except as set forth in the Company
Disclosure Letter, as of the date hereof, no material litigation, proceeding or
controversy before any court or governmental agency is pending, and there is no
pending material claim, action or proceeding against the Company or any of its
subsidiaries, and, to the Company's actual knowledge, without inquiry, no such
litigation, proceeding, controversy, claim or action has been threatened or is
contemplated.
SECTION 3.13. Agreements.
(a) Except as set forth in the Company Disclosure Letter, neither the
Company nor any of its subsidiaries is a party to an oral or written (i)
consulting agreement involving the payment of more than $100,000 per annum, (ii)
agreement with any executive officer or other key employee of the Company or any
of its subsidiaries the benefits of which are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction involving the
Company or any of its subsidiaries of the nature contemplated by this Agreement
and which provides for the payment of in excess of $100,000, (iii) agreement
with respect to any executive officer of the Company or any of its subsidiaries
providing any term of employment or compensation guarantee extending for a
period longer than one year and for the payment of in excess of $100,000 per
annum, (iv) agreement or plan, including any stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement, (v) material agreement containing covenants that limit the ability of
the Company or any of its subsidiaries to compete in any line of business or
with any person, or that involve any restriction on the geographic area in
which, or method by which, the Company (including any successor thereof) or any
of its subsidiaries may carry on its business (other than as may be required by
law or any regulatory agency) or (vi) agreement containing provisions under
which the Company or any of its subsidiaries is obligated to pay in excess of
$100,000 per annum.
8
(b) Neither the Company nor any of its subsidiaries is in default under
any provision of any note, bond, indenture, mortgage, deed of trust, loan
agreement or other agreement to which it is a party or by which it is bound or
to which any of its respective properties or assets is subject, which would have
a Material Adverse Effect on the Company.
SECTION 3.14. Labor Matters. Neither the Company nor any of its
subsidiaries is a party to, or is bound by, any collective bargaining agreement,
contract, or other agreement or understanding with a labor union or labor
organization, nor is the Company or any of its subsidiaries the subject of any
proceeding asserting that it has committed an unfair labor practice or seeking
to compel it or any such subsidiary to bargain with any labor organization as to
wages and conditions of employment, nor is there any strike, other labor dispute
or organizational effort involving the Company or any of its subsidiaries
pending or threatened.
SECTION 3.15. Employee Benefit Plans.
(a) All of the Company's pension, retirement, stock option, stock
purchase, stock ownership, savings, stock appreciation right, profit sharing,
deferred compensation, consulting, bonus, group insurance, severance and other
benefit plans, contracts, agreements, arrangements, including, but not limited
to, "employee benefit plans", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), incentive and
welfare policies, contracts, plans and arrangements and all trust agreements
related thereto in respect to any directors, officers, or other employees of the
Company or any of its subsidiaries (hereinafter referred to collectively as the
"Employee Plans") comply in all material respects with all applicable
requirements of ERISA, the Code and other applicable laws. All of the Employee
Plans which are intended to meet the requirements of Section 401(a) of the Code
have been determined by the Internal Revenue Service to be "qualified" within
the meaning of the Code, and there are no facts known to the Company which would
adversely affect the qualified status of any of the Employee Plans.
(b) There is no accumulated funding deficiency, within the meaning of
ERISA or the Code, in connection with the Employee Plans and no reportable
event, as defined in ERISA, has occurred in connection with the Employee Plans.
The Employee Plans have not, nor has any trustee or administrator of the
Employee Plans, engaged in any prohibited transaction as defined in ERISA or the
Code. The Company is not contributing to, and has not contributed to, any
multi-employer plan, as defined in ERISA.
(c) The Company Disclosure Letter describes any past Employee Plans that
have been terminated within the past 12 months and the status of such plans, the
distribution or retention of monies with respect to said plans, and any further
obligations of such plans or the Company in connection therewith. Any past
Employee Plans that have been terminated were terminated in compliance with
ERISA, the Code and other applicable laws, and there is no basis for further
liability or obligation of the Company pursuant to any past Employee Plans.
9
SECTION 3.16. Properties. Except as disclosed in the Company Disclosure
Letter, the Company and its subsidiaries (a) have good, clear and marketable
title to all the properties and assets which are material to the Company's
business on a consolidated basis, free and clear of all Liens except (i)
statutory Liens securing payments not yet due, (ii) Liens on assets of
subsidiaries of the Company incurred in the ordinary course of their business
and (iii) such imperfections or irregularities of title or Liens as do not
affect the use of the properties or assets subject thereto or affected thereby
or otherwise materially impair business operations at such properties, in either
case in such a manner as to have a Material Adverse Effect on the Company, and
(b) are collectively the lessee of all leasehold estates which are material to
the Company's business on a consolidated basis and is in possession of the
properties purported to be leased thereunder.
SECTION 3.17. Compliance with Laws. The Company and each of its
subsidiaries has all permits, licenses, certificates of authority, orders and
approvals of, and has made all filings, applications and registrations with,
federal, state, local and foreign governmental or regulatory bodies that are
required in order to permit it to carry on its business as it is presently
conducted, the absence of which would have a Material Adverse Effect; all such
permits, licenses, certificates of authority, orders and approvals are in full
force and effect, and, to the Company's actual knowledge, without inquiry, no
suspension or cancellation of any of them is threatened.
SECTION 3.18. Fees. Neither the Company nor any of its subsidiaries has
employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions, or finder's fees, and no broker or
finder has acted directly or indirectly for the Company or any subsidiary of the
Company, in connection with the Agreement or the transactions contemplated
hereby.
SECTION 3.19. Environmental Matters.
(a) Except as set forth in the Company Disclosure Letter, with respect
to the Company and each of its subsidiaries:
(i) To the Company's actual knowledge, without inquiry, each
of the Company and its subsidiaries are in substantial
compliance with all Environmental Laws (as defined
below);
(ii) There is no material suit, claim, action, demand,
executive or administrative order, directive,
investigation or proceeding pending or, to the Company's
actual knowledge, without inquiry, threatened, before
any court, governmental agency or board or other forum
against it or any of its subsidiaries (A) for alleged
noncompliance (including by any predecessor) with, or
liability under, any Environmental Law or (B) relating
to the presence of or release into the environment of
any Hazardous Material (as defined below) or oil,
whether or not occurring at or on a site owned, leased
or operated by it or any of its subsidiaries;
10
(iii) To the Company's actual knowledge, without inquiry, the
properties currently owned by the Company or any of its
subsidiaries (including, without limitation, soil,
groundwater or surface water on, under or adjacent to
the properties, and buildings thereon) do not contain
any Hazardous Material (as defined below) other than as
permitted under applicable Environmental Law;
(iv) Neither the Company nor any of its subsidiaries has
received any notice, demand letter, executive or
administrative order, directive or request for
information from any Federal, state, local or foreign
governmental entity or any third party indicating that
it may be in material violation of, or liable under, any
Environmental Law;
(v) To the Company's actual knowledge, without inquiry,
there are no underground storage tanks on, in or under
any properties and the Company has not removed any
underground storage tanks from any properties which are
leased by the Company or any of its subsidiaries; and
(vi) To the Company's actual knowledge, without inquiry,
during the period of its or any of its subsidiaries,
ownership or operation of any of their respective
current properties, there has been no material
contamination by or release of Hazardous Material or oil
in, on, under or affecting such properties.
(b) The following definitions apply for purposes of this Section: (i)
"Environmental Law" means (A) any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, legal doctrine, order, directive, executive or administrative order,
judgment, decree, injunction, requirement or agreement with any governmental
entity, (x) relating to the protection, preservation or restoration of the
environment (which includes, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, structures, soil, surface land,
subsurface land, plant and animal life or any other natural resource), or to
human health or safety, or (y) the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of, Hazardous Materials, in each case as amended
and as now in effect, including all current Environmental Laws. The term
Environmental Law includes, without limitation, the federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the federal Water Pollution Control Act of
1972, the federal Clean Air Act, the federal Clean Water Act, the federal
Resource Conservation and Recovery Act of 1976 (including the Hazardous and
Solid Waste Amendments thereto), the federal Solid Waste Disposal and the
federal Toxic Substances Control Act, the Federal insecticide, Fungicide and
Rodenticide Act, the Federal Occupational Safety and Health Act of 1970, the
Federal Hazardous Materials Transportation Act, or any so called "Superfund" or
"Superlien" law, each as amended and as now in effect; and (ii) "Hazardous
Material" means any substance in any concentration which is or could be
detrimental to human health or safety or to the environment, currently listed,
defined, designated or classified as hazardous, toxic, radioactive or dangerous,
or otherwise regulated, under any Environmental Law,
11
whether by type or by quantity, including any substance containing any such
substance as a component. Hazardous Material includes, without limitation, any
toxic waste, pollutant, contaminant, hazardous substance, toxic substance ,
hazardous waste, special waste, industrial substance, oil or petroleum or any
derivative or by-product thereof, radon, radioactive material, asbestos,
asbestos-containing material, urea formaldehyde foam insulation, lead and
polychlorinated biphenyl.
SECTION 3.20. Material Interests of Certain Persons. Except as
disclosed in the Company's Disclosure Letter, no officer, director or affiliate
(as that term is defined in the Securities Exchange Act of 1934, as amended) of
the Company has any material interest in any material contract or property (real
or personal), tangible or intangible, used in or pertaining to the business of
the Company or any of its subsidiaries.
SECTION 3.21. Insurance. The Company and its subsidiaries are presently
insured, and since December 31, 1995, have been insured, for reasonable amounts
with financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by the Company and its subsidiaries are in full force and effect, the
Company and its subsidiaries are not in material default thereunder and, to the
knowledge of the Company, all material claims thereunder have been filed in due
and timely fashion. In the judgment of the Company's management, such insurance
coverage is adequate and will be available in the future under terms and
conditions substantially similar to those in effect on the date hereof.
SECTION 3.22. Corporate Documents. The Company has delivered to Noble
true and complete copies of (i) its articles of incorporation and by-laws and
(ii) the charter and by-laws of each subsidiary of the Company. Neither the
Company nor any of its subsidiaries are in violation of any provision of its
articles of incorporation or bylaws.
SECTION 3.23. Company Action. The Board of Directors of the Company and
DCT have adopted resolutions approving this Agreement and recommending that this
Agreement be approved by the shareholders of the Company.
SECTION 3.24. Manufacturing Processes and Trade Secrets. Subject to the
Patlex license previously disclosed to Noble, to the actual knowledge of the
Company, without inquiry, the Company owns and has the legal right to use all of
the manufacturing processes, trade secrets and knowhow used by it in connection
with its business as presently conducted, free and clear of all liens, security
interests, licenses, royalties or claims, including any claims for infringement
of proprietary rights of others, except insofar as any failure of the foregoing
representations and warranties, taken as a whole, do not have a Material Adverse
Effect on the Company.
12
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF XXXXX
Xxxxx represents and warrants to the Company that, except as
specifically disclosed in a letter (the "Noble Disclosure Letter") of Noble
delivered to the Company upon the execution of this Agreement (and making
specific references to the section of this Agreement for which an exception is
taken):
SECTION 4.1. Recitals True. The facts set forth in the Recitals of this
Agreement with respect to Noble are true and correct.
SECTION 4.2. Capital Stock. All outstanding shares of capital stock of
Noble and its subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable.
SECTION 4.3. Due Organization. Each subsidiary of Noble is a
corporation or banking organization duly incorporated, validly existing and in
good standing under the laws of the state of its incorporation.
SECTION 4.4. Authority. Each of Noble and its subsidiaries has the
power and authority, and is duly qualified in all jurisdictions (except for such
qualifications the absence of which, in the aggregate, would not have a Material
Adverse Effect on Noble) where such qualification is required, to carry on its
business as it is now being conducted and to own all its properties and assets,
and it has all federal, state, local, and foreign governmental authorizations
necessary for it to own or lease its properties and assets and to carry on its
business as it is now being conducted.
SECTION 4.5. Subsidiaries; Significant Investments. The only
subsidiaries of Noble are set forth in the Disclosure Letter. All of the shares
of capital stock of each subsidiary of Noble are owned directly and of record by
Noble or a wholly-owned subsidiary of Noble, in each such case free and clear of
all Liens and there are no options or similar rights with respect to any such
capital stock. None of Noble or any of such subsidiaries owns any equity
securities, any security convertible or exchangeable into an equity security or
any rights to acquire any equity security except those of its subsidiaries as
listed in the Noble Disclosure Letter.
SECTION 4.6. Approvals. This Agreement and the transactions
contemplated herein have been duly authorized by all necessary corporate action
of Noble. Subject to receipt of the required approvals, consents or waivers of
governmental authorities referred to in Section 6.1(a), this Agreement is a
valid and binding agreement of Noble enforceable against Noble in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors, rights and to general equity principles.
SECTION 4.7. No Violations. The execution, delivery and performance of
this Agreement by Noble does not, and the consummation of the transactions
contemplated hereby by
13
Noble and each of its subsidiaries will not, constitute (a) a breach or
violation of, or a default under, any law, rule or regulation or any judgment,
decree, order, governmental permit or license, or agreement, indenture or
instrument of Noble or any subsidiary of Noble or to which Noble or any of its
subsidiaries (or any of their respective properties) is subject, or enable any
person to enjoin the transactions contemplated hereby, (b) a breach or violation
of, or a default under, the articles of incorporation or by-laws or similar
organizational documents of Noble or any subsidiary of Noble or (c) a breach or
violation of, or a default under (or an event which with due notice or lapse of
time or both would constitute a default under), or result in the termination of,
accelerate the performance required by, or result in the creation of any lien,
pledge, security interest, charge or other encumbrance upon any of the
properties or assets of Noble or any subsidiary of Noble under, any of the
terms, conditions or provisions of any note, bond, indenture, deed of trust,
loan agreement or other agreement, instrument or obligation to which Noble or
any subsidiary of Noble is a party, or to which any of their respective
properties or assets may be bound or affected, which in the case of (a), (b) or
(c) above, would have a Material Adverse Effect on Noble.
SECTION 4.8. Consents and Approvals. Except for filings under the HSR
Act, if required, no consents or approvals of or filings or registrations with
any regulatory agencies or with any third party are necessary in connection with
(i) the execution and delivery by Noble of this Agreement and (ii) the
consummation by Noble of the transactions contemplated hereby, the absence of
which would have a Material Adverse Effect on Noble.
SECTION 4.9. Financial Information. The consolidated balance sheets of
Noble and its subsidiaries at December 31, 1995 and 1996 and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for the years then ended, and the notes thereto, copies of which have been
furnished to the Company, (i) are correct and complete in all material respects,
(ii) have been prepared in accordance with generally accepted accounting
principles, subject to consistency and materiality provisions, consistently
applied and (iii) present fairly, in all material respects, the consolidated
financial position of Noble and its subsidiaries at those dates and the
consolidated results of its operations and cash flows for the years then ended.
SECTION 4.10. Absence of Undisclosed Liabilities and Certain Changes or
Events. Since December 31, 1996, Noble and its subsidiaries have conducted
their business only in the ordinary course of business consistent with past
practice and have not incurred any material liability, except in the ordinary
course of their business consistent with past practice. Since December 31, 1996,
there has not been any change in the condition (financial or other), properties,
business, results of operations or prospects of Noble or its subsidiaries which,
individually or in the aggregate, has had, or is reasonably likely to have, a
Material Adverse Effect on Noble.
SECTION 4.11. Taxes. All federal, state, local, and foreign tax returns
required to be filed by or on behalf of Noble or any of its subsidiaries have
been timely filed or requests for extensions have been timely filed and any such
extension shall have been granted and not have expired, and all such filed
returns are complete and accurate in all respects. All taxes shown on such
returns have been paid in full or adequate provision has been made for any such
taxes on Noble's 1995 balance
14
sheet (in accordance with generally accepted accounting principles). There is no
audit examination, deficiency, or refund litigation with respect to any taxes of
Noble or any of its subsidiaries that could result in a determination. All
taxes, interest, additions, and penalties due with respect to completed and
settled examinations or concluded litigation relating to it have been paid in
full or adequate provision has been made for any such taxes on Noble's balance
sheet (in accordance with generally accepted accounting principles). Noble has
not executed an extension or waiver of any statute of limitations on the
assessment or collection of any material tax due that is currently in effect.
SECTION 4.12. Absence of Claims. As of the date hereof, no material
litigation, proceeding or controversy before any court or governmental agency is
pending, and there is no pending material claim, action or proceeding against
Noble or any of its subsidiaries, and, to Noble's actual knowledge, without
inquiry, no such litigation, proceeding, controversy, claim or action has been
threatened or is contemplated, which in any case is reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect on Noble or
to hinder or delay consummation of the transactions contemplated hereby.
SECTION 4.13. Agreements.
(a) Except as set forth in the Noble Disclosure Letter, neither the
Noble nor any of its subsidiaries is a party to an oral or written (i)
consulting agreement (other than data processing, software programming and
licensing contracts entered into in the ordinary course of business) involving
the payment of more than $100,000 per annum, (ii) agreement with any executive
officer or other key employee of Noble or any of its subsidiaries the benefits
of which are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving Noble or any of its subsidiaries of the
nature contemplated by this Agreement and which provides for the payment of in
excess of $100,000, (iii) agreement with respect to any executive officer of
Noble or any of its subsidiaries providing any term of employment or
compensation guarantee extending for a period longer than one year and for the
payment of in excess of $100,000 per annum, (iv) agreement or plan, including
any stock option plan, stock appreciation rights plan, restricted stock plan or
stock purchase plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement, (v) material agreement containing covenants that
limit the ability of Noble or any of its subsidiaries to compete in any line of
business or with any person, or that involve any restriction on the geographic
area in which, or method by which, Noble (including any successor thereof) or
any of its subsidiaries may carry on its business (other than as may be required
by law or any regulatory agency) or (vi) agreement containing provisions under
which Noble or any of its subsidiaries is obligated to pay in excess of $100,000
per annum.
(b) Neither Noble nor any of its subsidiaries is in default under or in
violation of any provision of any note, bond, indenture, mortgage, deed of
trust, loan agreement or other agreement to which it is a party or by which it
is bound or to which any of its respective properties or assets is subject,
which would have a Material Adverse Effect on Noble.
15
SECTION 4.14. Labor Matters. Neither Noble or any of its subsidiaries
is a party to, or is bound by, any collective bargaining agreement, contract, or
other agreement or understanding with a labor union or labor organization, nor
is Noble or any of its subsidiaries the subject of any proceeding asserting that
it has committed an unfair labor practice or seeking to compel it or any such
subsidiary to bargain with any labor organization as to wages and conditions of
employment, nor is there any strike, other labor dispute or organizational
effort involving Noble or any of its subsidiaries pending or threatened.
SECTION 4.15. Employee Benefit Agreements.
(a) All of Noble's pension, retirement, stock option, stock purchase,
stock ownership, savings, stock appreciation right, profit sharing, deferred
compensation, consulting, bonus, group insurance, severance and other benefit
plans, contracts, agreements, arrangements, including, but not limited to,
"employee benefit plans", as defined under ERISA, incentive and welfare
policies, contracts, plans and arrangements and all trust agreements related
thereto in respect to any present directors, officers, or other employees of
Noble or any of its subsidiaries (hereinafter referred to collectively as the
"Noble Employee Plans") comply in all material respects with all applicable
requirements of ERISA, the Code and other applicable laws. All of the Noble
Employee Plans which are intended to meet the requirements of Section 401(a) of
the Code have been determined by the Internal Revenue Service to be "qualified"
within the meaning of the Code, and there are no facts known to Noble which
would adversely affect the qualified status of any of the Noble Employee Plans.
(b) There is no accumulated funding deficiency, within the meaning of
ERISA or the Code, in connection with the Noble Employee Plans and no reportable
event, as defined in ERISA, has occurred in connection with the Noble Employee
Plans. The Noble Employee Plans have not, nor has any trustee or administrator
of the Noble Employee Plans, engaged in any prohibited transaction as defined in
ERISA or the Code. Noble is not contributing to, and has not contributed to, any
multi-employer plan, as defined in ERISA.
(c) Noble Disclosure Letter describes any past Noble Employee Plans that
have been terminated within the past 12 months and the status of such plans, the
distribution or retention of monies with respect to said plans, and any further
obligations of such plans or Noble in connection therewith. Any past Noble
Employee Plans that have been terminated were terminated in compliance with
ERISA, the Code and other applicable laws, and there is no basis for further
liability or obligation of Noble pursuant to any past Noble Employee Plans.
SECTION 4.16. Properties. Except as disclosed in the Noble Disclosure
Letter, Noble and its subsidiaries (a) have good, clear and marketable title to
all the properties and assets which are material to Noble's business on a
consolidated basis, free and clear of all Liens except (i) statutory Liens
securing payments not yet due, (ii) Liens on assets of subsidiaries of Noble
incurred in the ordinary course of their business and (iii) such imperfections
or irregularities of title or Liens as do not affect the use of the properties
or assets subject thereto or affected thereby or otherwise
16
materially impair business operations at such properties, in either case in such
a manner as to have a Material Adverse Effect on Noble, and (b) are collectively
the lessee of all leasehold estates which are material to Noble's business on a
consolidated basis and is in possession of the properties purported to be leased
thereunder.
SECTION 4.17. Compliance with Laws. Noble and each of its subsidiaries
has all permits, licenses, certificates of authority, orders and approvals of,
and has made all filings, applications and registrations with, federal, state,
local and foreign governmental or regulatory bodies that are required in order
to permit it to carry on its business as it is presently conducted, the absence
of which would have a Material Adverse Effect; all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect,
and, to Noble's actual knowledge, without inquiry, no suspension or cancellation
of any of them is threatened.
SECTION 4.18. Fees. Neither Noble nor any of its subsidiaries has
employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions, or finder's fees, and no broker or
finder has acted directly or indirectly for Noble or any subsidiary of Noble, in
connection with the Agreement or the transactions contemplated hereby.
SECTION 4.19. Environmental Matters.
(a) With respect to Noble and each of its subsidiaries:
(i) To Noble's actual knowledge, without inquiry, each of
Noble and its subsidiaries, are in substantial compliance
with all Environmental Laws (as defined below);
(ii) There is no material suit, claim, action, demand,
executive or administrative order, directive,
investigation or proceeding pending or to Noble's actual
knowledge, without inquiry, threatened, before any court,
governmental agency or board or other forum against it or
any of its subsidiaries (A) for alleged noncompliance
(including by any predecessor) with, or liability under,
any Environmental Law or (B) relating to the presence of
or release into the environment of any Hazardous Material
(as defined below) or oil, whether or not occurring at or
on a site owned, leased or operated by it or any of its
subsidiaries;
(iii) To Noble's actual knowledge, without inquiry, the
properties currently owned by Noble or any of its
subsidiaries (including, without limitation, soil,
groundwater or surface water on, under or adjacent to the
properties, and buildings thereon) do not contain any
Hazardous Material (as defined below) other than as
permitted under applicable Environmental Law;
17
(iv) Neither Noble nor any of its subsidiaries has received
any notice, demand letter, executive or administrative
order, directive or request for information from any
Federal, state, local or foreign governmental entity or
any third party indicating that it may be in material
violation of, or liable under, any Environmental Law;
(v) To Noble's actual knowledge, without inquiry, there are
no underground storage tanks on, in or under any
properties and Noble has not removed any underground
storage tanks from any properties which are owned or
leased by Noble or any of its subsidiaries; and
(vi) To Noble's actual knowledge, without inquiry, during the
period of its or any of its subsidiaries, ownership or
operation of any of their respective current properties
there has been no material contamination by or release of
Hazardous Material or oil in, on, under or affecting such
properties.
(b) The following definitions apply for purposes of this Section: (iii)
"Environmental Law" has the meaning set forth in Section 3.19(b); and (iv)
"Hazardous Material" has the meaning set forth in Section 3.19(b).
SECTION 4.20. Insurance. Noble and its subsidiaries are presently
insured, and since December 31, 1995, have been insured, for reasonable amounts
with financially sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured. All of the insurance policies and bonds
maintained by Noble and its subsidiaries are in full force and effect, Noble and
its subsidiaries are not in material default thereunder and, to the knowledge of
Noble, all material claims thereunder have been filed in due and timely fashion.
In the judgment of Noble's management, such insurance coverage is adequate and
will be available in the future under terms and conditions substantially similar
to those in effect on the date hereof.
SECTION 4.21. Corporate Documents. Noble has delivered to the Company
true and complete copies of (i) its articles of incorporation and by-laws and
(ii) the charter and by-laws of each subsidiary of Noble. Neither Noble nor any
of its subsidiaries are in violation of any provision of its articles of
incorporation or bylaws.
ARTICLE V. ADDITIONAL AGREEMENTS
SECTION 5.1. Interim Financing. The Company shall use its best efforts
to complete the financing transaction (the "Interim Financing Transaction")
described in the commitment letter addressed to the Company and Xx. Xxxxxx X.
Xxxxxxxxxxx dated March 26, 1997, from Comerica Bank, and if the Company
proceeds with the Interim Financing Transaction, Xxxxxx X. Xxxxxxxxxxx
18
and Noble shall take all action required of each of them as specified in the
terms of such commitment letter, to complete such Interim Financing Transaction.
SECTION 5.2. Access and Information. Upon reasonable notice, each of
the Company and Noble shall (and shall cause its subsidiaries to) afford to the
other party and its representatives (including, without limitation, directors,
officers and employees of the other party and its affiliates, and counsel,
accountants and other advisors retained by the other party and its affiliates)
such access during normal business hours throughout the period prior to the
Closing Date, to the books, records, properties, personnel and to such other
information as such party may reasonably request; provided, however, that no
investigation pursuant to this Section 5.2 shall affect or be deemed to modify
any representation or warranty made herein. The Company and Noble will not, and
each will cause its representatives not to, use any information obtained
pursuant to this Section 5.2 for any purpose unrelated to the consummation of
the transactions contemplated by this Agreement. Subject to the requirements of
law, the Company and Noble will keep confidential, and will cause its
representatives to keep confidential, all information and documents obtained
pursuant to this Section 5.2 unless such information (i) was already known to
the Company or Noble, as the case may be, or an affiliate of the Company or
Noble, (ii) becomes available to the Company or Noble, as the case may be, or an
affiliate of the Company or Noble, as the case may be, from other sources not
known by such party to be bound by a confidentiality agreement, (iii) is
disclosed with the prior written approval of the Company or Noble, as the case
may be, or (iv) is or becomes readily ascertainable from published information
or trade sources. In the event that this Agreement is terminated or the
transactions contemplated by this Agreement shall otherwise fail to be
consummated, each party shall promptly cause all copies of documents or extracts
thereof containing information and data as to another party hereto (or an
affiliate of any party hereto) to be returned to the party which furnished the
same.
SECTION 5.3. Certain Filings, Consents and Arrangements. Noble and the
Company shall, and Noble and the Company shall cause their respective
subsidiaries to, (a) as soon as practicable make any filings and applications
required to be filed in order to obtain all approvals, consents and waivers of
governmental authorities necessary or appropriate for the consummation of the
transactions contemplated hereby including, if applicable, any filings under the
HSR Act, (b) cooperate with one another (i) in promptly determining what filings
are required to be made or approvals, consents or waivers are required to be
obtained under any relevant federal, state or foreign law or regulation and (ii)
in promptly making any such filings, furnishing information required in
connection therewith and seeking timely to obtain any such approvals, consents
or waivers and (c) deliver to the other copies of the publicly available
portions of all such filings and applications promptly after they are filed.
SECTION 5.4. Additional Agreements. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable efforts
to take promptly, or cause to be taken promptly, all actions and to do promptly,
or cause to be done promptly, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
19
transactions contemplated by this Agreement as soon as practicable, including
using efforts to obtain all necessary actions or non-actions, extensions,
waivers, consents and approvals from all applicable governmental entities,
effecting all necessary registrations, applications and filings (including,
without limitation, filings under any applicable state securities laws) and
obtaining any required contractual consents and regulatory approvals.
SECTION 5.5. Regulatory Matters. To the extent that any notices to,
filings with or authorizations, consents or approvals from any governmental
entities are necessary or advisable in connection with such transactions, Noble
and the Company shall give any such notices, make any such filings and use their
respective best efforts to obtain any such authorizations, consents and
approvals. If the HSR Act is applicable to such transactions, Noble and the
Company shall make all filings and provide all documents and information to
governmental entities which are required by said Act and use their respective
best efforts to obtain an early termination of the applicable waiting period
under said Act.
SECTION 5.6. Benefit Agreements and Certain Contracts.
(a) Noble hereby agrees that after the Closing Date, the Company will
continue to pay, in accordance with their terms as in effect on the date hereof,
without offset, deduction, counterclaim, interruption or deferment (other than
as required by applicable law) all amounts due and payable under the terms of
all written employment contracts, agreements, plans, policies and commitments of
the Company and its subsidiaries with or with respect to its current or former
employees, officers and directors to the extent such amounts are vested on or
prior to the date of this Agreement or will become vested as a result of the
transactions contemplated hereby. Noble shall cause the Company to provide its
employees with employee benefit plans providing welfare benefits substantially
comparable in the aggregate to those provided to employees generally by the
Company as of the date of this Agreement. Such welfare benefit plans shall (i)
recognize expenses and claims that were incurred by the Company's employees in
the year in which the Closing Date occurs and recognized for purposes of
computing deductible amounts and copayments under the Company's plans as of the
Closing Date and (ii) provide coverage for pre-existing health conditions to the
extent covered under the applicable plans or programs of the Company as of the
Closing Date. In addition, employees of the Company shall continue to receive
credit for their prior service with the Company and its Subsidiaries for
eligibility and vesting purposes and for vacation accrual purposes.
SECTION 5.7. Certain Claims. Noble and the Company acknowledge that the
Company is the plaintiff and/or has certain claims against USX Corporation,
Olympic Steel, Inc. TWB, Inc. and Xxxx Xxxxxxxxxx, in which the Company is
seeking or may seek recovery of damages (the "Claims"). Noble agrees that DCT,
may proceed with such Claims on behalf of the Company, with the right to control
all aspects of such Claims, except that Noble shall have the right to consent to
any settlement, which consent shall not be unreasonably withheld, of such
Claims, and that any recovery of cash and/or property attributable to the
settlement or judicial resolution of said Claims will be divided equally between
Noble and DCT, after the reimbursement of all legal and other out-of-pocket
expenses incurred by DCT in connection with the Claims and the settlement or
other
20
resolution thereof. Noble agrees that any cash recovery by Noble hereunder
shall be placed in a sinking fund or other similar account acceptable to DCT, to
be applied towards the payment of the Notes. Noble expressly acknowledges and
agrees that DCT has no obligation to pursue said Claims following the Closing
Date and DCT may elect not to pursue such Claims at any time and for any reason
or no reason. If DCT elects to abandon such Claims, at Noble's election, DCT
shall assign the Claims to Noble and Noble shall reimburse DCT for any costs and
expenses incurred by DCT prior to such assignment from any proceeds recovered by
Noble from the Claims, net of Noble's costs and expenses. If Noble does not
consent to a settlement of the Claims proposed by DCT, Noble shall then proceed
with such Claims, with the right to control all aspects of such Claims and any
recovery of cash and/or property attributable to the settlement or judicial
resolution of such Claims will be divided equally between Noble and DCT, after
the reimbursement of DCT's and Noble's expenses incurred in connection with the
resolution of such Claims, and Noble shall use it best efforts to pursue such
Claims.
Notwithstanding the foregoing, any commitment for future business
arising out of the settlement or other resolution of the Claims shall inure to
the benefit of Noble only.
SECTION 5.8. DCT Release. Noble agrees to take all reasonable actions
necessary to obtain the release of DCT with respect to any and all guarantees or
other similar credit enhancements which DCT has provided in connection with any
existing financing arrangements involving the Company, and Noble shall provide
evidence of such releases to DCT.
SECTION 5.9. Financial Statements. The Company shall prepare and
deliver to Noble combined and combining interim (i) quarterly financial
statements (including a Balance Sheet, Income Statement, Statement of Cash Flow
and Statement of Equity) as at and for the periods ended March 31, 1997, and
(ii) monthly financial statements as at and for the monthly periods ending more
than thirty (30) days prior to the Closing Date. Such interim Company financial
statements shall be prepared in accordance with GAAP, applied on a consistent
basis for the periods involved, and shall present fairly, in all material
respects, the combined and combining financial positions of the Company and its
subsidiaries as of the dates indicated therein, and the combined and combining
results of operations and cash flows of the Company and its subsidiaries for the
periods then ended; provided, however, such interim Company financial statements
are subject to normal year-end adjustments and may lack footnotes and other
presentation items.
SECTION 5.10. Code Section 338(h)(10) Election. If requested by Noble
to do so, the Shareholders shall join with Noble in making an election under
Internal Revenue Code Section 338(h)(10) to treat the purchase and sale of the
Shares for federal and state income tax purposes as a deemed sale of the
Company's assets. Noble represents that it is qualified to make the election
under Section 338(h)(10) of the Code. The Shareholders and Noble shall, as soon
as practicable after the Closing Date, exchange completed and executed copies of
Internal Revenue Service Form 8023, required Schedules thereto, and any similar
state forms. The sale of Company assets shall be deemed to be for consideration
equal to: (i) the Purchase Price plus (ii) all liabilities of the Company (the
"Asset Purchase Price"), followed by a deemed liquidation of the Company. In
connection with the
21
deemed sale of assets by the Company, the parties agree to the following
allocation of the Asset Purchase Price and covenant to use such allocation for
all purposes relating hereto:
Cash and Cash Equivalents face value
Tangible Personal Property tax basis for federal income tax purposes
Intangible Personal Property tax basis for federal income tax purposes
Goodwill remainder
ARTICLE VI. CONDITIONS TO CONSUMMATION
SECTION 6.1. Conditions to All Parties' Obligations. The respective
obligations of Noble, the Company and the Shareholders to effect the
transactions contemplated hereby shall be subject to the satisfaction or waiver
prior to the Closing Date of the following conditions:
(a) Noble, the Company and each of their respective subsidiaries shall
have procured, if necessary or advisable, any necessary approvals, consents or
waivers with respect to the Agreement and the transactions contemplated hereby,
including approvals, consents or waivers from any federal, state, county, city,
municipal, regional or local governmental authority within the United States,
and all applicable statutory waiting periods under the HSR Act, if applicable,
shall have expired or otherwise been terminated; and the parties shall have
procured all other regulatory approvals, consents or waivers of governmental
authorities or other persons that are necessary or appropriate for the
consummation of the transactions contemplated by the Agreement including,
without limitation the consent of the GRS; provided, however, that, absent the
written consent thereto by Noble, no approval, consent or waiver referred to in
this Section 6.1(a) shall be deemed to have been received if it shall include
any condition or requirement that, individually or in the aggregate, (i) would
result in a Material Adverse Effect on Noble, or (ii) imposes any requirement
upon Noble, the Company or their respective subsidiaries to (x) dispose of any
asset which is material to Noble or the Company, or (y) materially restrict or
curtail the current business operations or activities of Noble or the Company.
(b) All other requirements prescribed by law which are necessary to the
consummation of the transactions contemplated by this Agreement shall have been
satisfied.
(c) No party hereto shall be subject to any order, decree or injunction
of a court or agency of competent jurisdiction which enjoins or prohibits the
consummation of the transactions contemplated by this Agreement, and no
litigation or proceeding shall be pending against Noble or the Company or any of
their subsidiaries brought by any governmental agency seeking to prevent
consummation of the transactions contemplated hereby.
22
(d) No statute, rule, regulation, order, injunction or decree shall have
been enacted, entered, promulgated, interpreted, applied or enforced by any
governmental authority which prohibits, restricts or makes illegal consummation
of any transaction contemplated by this Agreement.
SECTION 6.2. Conditions to the Obligations of Noble. The obligations of
Noble to effect the transactions contemplated by this Agreement shall be subject
to the satisfaction or waiver prior to the Closing Date of the following
additional conditions:
(a) Each of the representations and warranties of the Company and the
Shareholders contained in this Agreement shall have been true on the date hereof
and shall be true in all material respects on the Closing Date as if made on
such date (or on the date when made in the case of any representation or
warranty which specifically relates to an earlier date); the Company shall have
performed, in all material respects, each of its covenants and agreements
contained in this Agreement; and Noble shall have received a certificate signed
by the Chief Executive Officer or President of the Company, dated the Closing
Date, to the foregoing effect.
(b) The Company shall not have experienced any event, change or
occurrence that has had a material adverse effect upon the financial condition
of the Company and its subsidiaries taken as a whole.
(c) Each of Xxxxx Xxxxxx Xxxxxxxxx, III, Xxxxxxx X. Xxxx and DCT shall
have entered into the Non-Compete Agreements attached hereto as Exhibits D, E
and F, respectively.
(d) The GRS shall have discharged any and all liens on the Company's
common stock and assets and shall have consented to the transactions
contemplated by this Agreement.
(e) The Company and Xxxxxxx shall have entered into the Employment
Agreement.
SECTION 6.3. Conditions to the Obligations of the Company and the
Shareholders. The obligation of the Company and the Shareholders to effect the
transactions contemplated by this Agreement shall be subject to the satisfaction
or waiver prior to the Closing Date of the following additional conditions:
(a) Each of the representations and warranties of Noble contained in
this Agreement shall have been true on the date hereof and shall be true in all
material respects on the Closing Date as if made on such date (or on the date
when made in the case of any representation or warranty which specifically
relates to an earlier date); Noble and, as applicable, Xxxxxx X. Xxxxxxxxxxx,
shall have performed, in all material respects, each of their respective
covenants and agreements contained in this Agreement; and the Company shall have
received certificates signed by the Chief Executive Officer of Noble, dated the
Closing Date, to the foregoing effect.
23
(b) Noble shall not have experienced any event, change or occurrence
that has had a material adverse effect upon the financial condition of Noble and
its subsidiaries taken as a whole.
(c) Noble shall have, prior to the Closing Date, completed its firm
commitment underwritten initial public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
the offer and sale of Noble's common stock at an aggregate offering price to the
public of not less than $10,000,000, with Prime Charter, Ltd., (the "IPO") and
shall have received the proceeds from such IPO.
(d) The Non-Compete Agreements, in the forms attached hereto as Exhibits
D, E and F shall have been executed by Noble and each of the other parties
thereto.
ARTICLE VII. INDEMNIFICATION
SECTION 7.1. Survival of Representations and Warranties. The
representations and warranties made by the Company and the Shareholders and the
representations and warranties made by Noble in this Agreement shall be deemed
to be continuing and shall survive for a period of one year from the Closing
Date, unless a specific claim in writing with respect to any such representation
or warranty shall have been made, or an action at law or in equity shall have
been commenced or filed, prior to such expiration date; provided, however, that
the representations and warranties of the Company and the Shareholders and the
representations and warranties of Noble, respectively, set forth in:
(a) Sections 3.2 and 3.16(a) and 4.2 and 4.16(a) shall survive
indefinitely;
(b) Sections 3.11 and 4.11 shall survive for the applicable statute of
limitations under which claims may be asserted; and
(c) Section 3.24 shall survive for a period of two years from the
Closing Date.
Nothing in this Section 7.1 shall terminate or affect the obligations
and indemnities of the parties with respect to covenants and agreements
contained or referenced in this Agreement that are to be performed by their
specific terms, in whole or in part, after the Closing Date or the above
referenced expiration dates.
SECTION 7.2. Indemnity of the Shareholders.
(a) Subject to the limitations as to threshold and dollar amount
provided in this Section 7.2, the Shareholders shall jointly and severally
indemnify, defend, save, and hold harmless Noble and its successors and assigns,
and Noble's employees, representatives, officers, directors and agents from and
against any and all costs, losses, liabilities, claims and expenses, including
reasonable legal fees and costs of investigation ("Indemnified Damages"),
arising out of or resulting from any breach
24
of or inaccuracy in any representation or warranty made by the Company or the
Shareholders in this Agreement.
(b) If the aggregated value of the claims by Noble against the
Shareholders (the "Noble's Aggregated Value") does not exceed $1,000,000, Noble
shall not be entitled to any reimbursement for such claims. If the Noble's
Aggregated Value shall exceed $1,000,000, Noble shall be entitled to receive an
amount (the "Indemnity Payments") equal to the difference between the Noble's
Aggregated Value and $1,000,000. Any liability of the Shareholders pursuant to
this Article VII shall be satisfied by such parties solely by means of a
set-off, first from Noble's obligation under each of the outstanding Series A
Notes pro rata on a dollar-for-dollar basis, then, with respect to the Series B
Notes and in descending order thereafter through the Series D Notes until the
Indemnity Payments are fully satisfied. Under no circumstances will the
Shareholders be required under this Article VII to provide any indemnification
in any form other than as described above.
(c) Notwithstanding the foregoing, the Shareholders shall not be liable
for any Indemnified Damages in excess of the aggregate principal amount of the
Notes outstanding at the time of the claim.
(d) No damages shall be asserted by Noble which arise out of facts,
circumstances or conditions which are disclosed in this Agreement or any Exhibit
or Schedule to this Agreement or of which Noble had actual knowledge on or
before the Closing Date.
SECTION 7.3. Noble's Indemnity.
(a) Notwithstanding the provisions of Section 10.10, Noble shall
indemnify, defend, save and hold harmless the Shareholders and their successors
and assigns, and, as applicable, their employees, representatives, officers,
directors, and agents, from and against any and all Indemnified Damages arising
out of or resulting from (i) any breach of or inaccuracy in any representation
or warranty made by the Noble in this Agreement, and (ii) activities or actions
with respect to the operation of the Company's business, which activities or
actions occur on a date after the Closing Date.
(b) If the aggregated value of the claims by the Shareholders against
Noble ("Shareholders' Aggregated Value") does not exceed $1,000,000, the
Shareholders shall not be entitled to any reimbursement for such claims. If the
Shareholders' Aggregated Value shall exceed $1,000,000, the Shareholders shall
be entitled to receive Indemnity Payments equal to the difference between the
Shareholders' Aggregated Value and $1,000,000. Noble shall pay any amounts owed
to the Shareholders pursuant to this Article VII in immediately available funds.
(c) Notwithstanding the foregoing, Noble shall not be liable for any
Indemnified Damages in excess of the aggregate principal amount of the Notes
outstanding at the time of the claim.
25
(d) No damages shall be asserted by the Shareholders which arise out of
facts, circumstances or conditions which are disclosed in this Agreement or any
Exhibit or Schedule to this Agreement or of which the Shareholders had actual
knowledge on or before the Closing Date.
SECTION 7.4. Claims for Indemnification.
(a) Whenever any claim for indemnification shall arise under this
Article VII, the party asserting such claim (the "Indemnified Party") shall
notify the other party or parties (collectively, the "Indemnifying Party") of
the claim and, when known, the facts constituting the basis for such claim. In
the event of any claim for indemnification under this Agreement resulting from
or in connection with legal proceedings by a third party, such notice shall also
specify, if known, the amount or an estimate of the amount of the liability
arising from such proceedings.
(b) If any lawsuit is filed or instituted against the Indemnified Party
asserting any claim for which the Indemnifying Party may be responsible under
this Agreement, written notice of such lawsuit shall be given to the
Indemnifying Party as promptly as practicable and if the Indemnifying Party
shall acknowledge in writing that the Indemnifying Party shall be responsible
and liable for payment of all costs, losses, liabilities, claims and expenses in
connection with such lawsuit, then the Indemnifying Party shall be entitled, if
the Indemnifying Party so elects (subject to the Indemnified Party's written
consent which may be withheld by the Indemnified Party to the extent that the
Indemnified Party's rights under any other contested matter may be prejudiced by
the Indemnified Party's lack of control over such lawsuit), to take control of
the defense and investigation of such lawsuit and to employ and engage attorneys
of their own choice to handle and defend the same, at the Indemnifying Party's
cost, risk, and expense. The Indemnified Party shall cooperate in all reasonable
respects, at the Indemnifying Party's cost, risk, and expense, with the
Indemnifying Party and such attorneys in the investigation, trial, and defense
of such lawsuit and any appeal arising therefrom; provided, however, that the
Indemnified Party may, at its own cost, participate in any such investigation,
trial, and defense of any such lawsuit and any appeal arising from such lawsuit.
(c) The Indemnifying Party shall not, without the prior written consent
of the Indemnified Party, consent to a settlement of, or the entry of any
judgment arising from, any such claim or legal proceeding. If the Indemnifying
Party does not assume the defense of any such claim or litigation resulting from
such claim in accordance with the terms of this Section 7.4, the Indemnified
Party may defend against such claim or litigation in such manner as it may deem
appropriate, including settling such claim or litigation, after giving notice of
the same to the Indemnifying Party, on such terms as the Indemnified Party may
deem appropriate. If the Indemnifying Party seeks to question the manner in
which the Indemnified Party defended such claim or litigation or the amount of
or nature of any such settlement, the Indemnifying Party shall have the burden
to prove by a preponderance of the evidence that the Indemnified Party did not
defend such claim in a reasonably prudent manner.
26
(d) In the event that the Indemnifying Party shall be obligated to
indemnify the Indemnified Party pursuant to this Section 7.4, the Indemnifying
Party shall, upon payment of such indemnity in full, be subrogated to all rights
of the Indemnified Party with respect to the Indemnified Damages to which such
indemnification relates.
(e) All indemnification or reimbursement payments required pursuant to
this Agreement shall be made net of all tax and insurance benefits actually
received by the party to be indemnified or reimbursed. In the event that any
claim for indemnification asserted under this Article VII is, or may be, the
subject of any insurance coverage or other right to indemnification or
contribution from any third person, the Indemnified Parties expressly agree that
they shall promptly notify the applicable insurance carrier of any such claim or
loss and tender defense thereof to such carrier, and shall also promptly notify
any potential third party indemnitor or contributor which may be liable for any
portion of such losses or claims. The Indemnified Parties agree to pursue, at
the cost and expense of the Indemnifying Party, such claims diligently and to
reasonably cooperate, at the cost and expense of the Indemnifying Party, with
each applicable insurance carrier and third party indemnitor or contributor.
SECTION 7.5. Notice of Claim for Indemnification. No claim for
indemnification under this Article VII shall be valid unless notice of such
claim is delivered to the Indemnifying Party within the period during which the
representation or warranty upon which such claim is based survives pursuant to
Section 7.1. Any such notice shall set forth in reasonable detail, to the extent
known by the person giving such notice, the facts on which such claim is based
and the estimated amount of the claim resulting therefrom.
SECTION 7.6. Undertakings. Prior to the assertion of any claims for
indemnification under this Article VII, the Indemnified Party shall utilize all
reasonable efforts, consistent with normal practices and policies and good
commercial practice, to mitigate such Indemnified Damages.
ARTICLE VIII. TERMINATION
SECTION 8.1. Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual consent of each of the Boards of Directors of Noble and
the Company and the Shareholders; or
(b) (i) by Noble if on the Closing Date any of the conditions specified
in Section 6.1 or Section 6.2 have not been satisfied or waived by Noble, but
only if Noble has used its best efforts and acted in good faith in attempting to
satisfy all such conditions and Noble is not then in breach or default in any
material respect of this Agreement; or (ii) by the Company and the Shareholders
if on the Closing Date any of the conditions specified in Section 6.1 or Section
6.3 have not been
27
satisfied or waived by the Company and the Shareholders, but only if they have
used their its best efforts and acted in good faith in attempting to satisfy all
such conditions and if the Company and the Shareholders are not then in breach
or default in any material respect of this Agreement; or
(c) by the Board of Directors of Noble if (i) there has been a material
breach or default by the Company and the Shareholders of any representation or
warranty or in the observance of their convenants and agreements contained in
this Agreement of which notice has been given in writing by Noble and which has
not been cured within thirty (30) business days of receipt of such notice; or
(ii) the Closing Date has not occurred prior to December 31, 1997, or such other
date as shall be mutually acceptable to Noble, the Company and the Shareholders,
without fault on the part of Noble; or
(d) by the Board of Directors of the Company and the Shareholders if (i)
there has been a material breach or default by Noble of any representation or
warranty or in the observance of its covenants and agreements contained in this
Agreement of which notice has been given in writing by the Company and the
Shareholders and which has not been cured within thirty (30) business days of
receipt of such notice; or (ii) the Closing Date has not occurred prior to
December 31, 1997, or such other date as shall be mutually acceptable to Noble,
the Company and the Shareholders without fault on the part of the Company; or
(e) by the Board of Directors of either Noble or the Company or by the
Shareholders if any regulatory agency has denied approval for the transactions
contemplated hereby and, if such denial is appealable, neither Noble, the
Company nor the Shareholders have filed a petition seeking review of such order
of denial or taken other similar action under applicable law, within thirty (30)
days after the issuance or entry by the governmental agency of such order of
denial.
SECTION 8.2. Effect of Termination. In the event of the termination of
this Agreement as provided in Section 8.1, written notice thereof shall
forthwith be given to the other party or parties specifying the provision hereof
pursuant to which such termination is made, and this Agreement shall forthwith
become null and void, and there shall be no liability on the part of Noble, the
Company and the Shareholders, or any of the officers or directors of Noble or
the Company except (i) for fraud or willful and material breach of this
Agreement, (ii) that the Escrow Shares shall be delivered to the Company, unless
this Agreement is terminated as a result of (A) (x) a material breach or default
by the Company and the Shareholders of any representations and warranties of the
Company and the Shareholders contained herein or in the observance of their
covenants contained herein, which has not been cured within the period provided
for cure, or (y) the failure to satisfy Section 6.2 (c) or (d), if Noble was
without fault in connection therewith, or (B) the Company having experienced any
event, change or occurrence that has had a material adverse effect upon the
financial condition of the Company and its subsidiaries taken as a whole; and if
this Agreement is terminated as a result of either (A) or (B) above, the Escrow
Shares shall be returned to Noble and the Company shall reimburse Noble for fees
paid by Noble to Xxxxx Xxxxxxxx solely with respect to the audit of the
Company's 1995 and 1996 financial statements, (iii) that the Company shall use
its best effort
28
to refinance the Interim Financing Transaction and obtain releases for Noble and
Xx. Xxxxxxxxxxx, and (iv) that Sections 5.2, 8.2, 10.2 and 10.6 hereof shall
survive any termination of this Agreement.
ARTICLE IX. CLOSING
SECTION 9.1. Closing. On the closing date of Noble's IPO, subject to
the fulfillment of the conditions precedent specified herein, the transactions
contemplated by this Agreement shall be consummated at the offices of Xxxxxx
Xxxxxxx PLLC, 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx
00000-0000, at 10:00 a.m. (the "Closing Date" or the "Closing"), or such other
date or dates or such other place as is mutually agreed to in writing by the
parties to this Agreement.
ARTICLE X. OTHER MATTERS
SECTION 10.1. Certain Definitions; Interpretation. As used in this
Agreement, the following terms shall have the meanings indicated:
"material" means material with respect to the entity in question and its
respective subsidiaries, taken as a whole.
"Material Adverse Effect", with respect to a person, means any
condition, event, change or occurrence that is reasonably likely to have
a material adverse effect upon (A) the condition (financial or other),
properties, assets, business, results of operations or prospects of such
person and its subsidiaries, taken as a whole, or (B) the ability of
such person to perform its obligations under, and to consummate the
transactions contemplated by, this Agreement.
"person" includes an individual, corporation, partnership, association,
trust or unincorporated organization.
"subsidiary", with respect to a person, means any other person
controlled by such person.
When a reference is made in this Agreement to Sections or Exhibits, such
reference shall be to a Section of, or Exhibit to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for ease of reference only and shall not affect the meaning or
interpretation of this Agreement. Whenever the words "include", "includes", or
"including" are used in this Agreement, they shall be deemed followed by the
words "without limitation". Any
29
singular term in this Agreement shall be deemed to include the plural, and any
plural term the singular.
SECTION 10.2. Survival. Only those agreements and covenants of the
parties that are by their terms applicable in whole or in part after the Closing
Date shall survive the Closing Date. All other representations, warranties,
agreements and covenants shall be deemed to be conditions of the Agreement and
shall not survive the Closing Date.
SECTION 10.3. Waiver. Prior to the Closing Date, any provision of this
Agreement may be: (i) waived by the party benefitted by the provision; or (ii)
amended or modified at any time (including the structure of the transaction) by
an agreement in writing between the parties hereto.
SECTION 10.4. Counterparts. This Agreement may be executed and
delivered in counterparts each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the same
instrument.
SECTION 10.5. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Michigan.
SECTION 10.6. Expenses. Noble shall pay all HSR Act filing fees related
to the filings by each party to this Agreement or the "ultimate parent entity"
of each such party (as that term is defined under the HSR Act). Except as
otherwise provided in this Agreement, each of the parties shall bear its own
expenses and the fees and expenses of its counsel (provided that fees of counsel
to the Company and counsel to DCT relating to this Agreement shall be paid by
DCT) and other agents in connection with the transactions contemplated by this
Agreement, regardless of whether or not the transactions contemplated by this
Agreement are consummated.
SECTION 10.7. Notices. All notices, requests, acknowledgments and other
communications hereunder to a party shall be in writing and shall be deemed to
have been duly given when delivered by hand, telecopy, telegram, telex or
facsimile (confirmed in writing) to such party at its address set forth below or
such other address as such party may specify by notice to the other party
hereto.
30
If to the Company, to:
Utilase, Inc.
00000 Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxx Xxxxxxxxx, III
with copies to:
Xxxxxx Xxxxxxx PLLC
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to Noble, to:
Noble International, Ltd.
00 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxx
with copies to:
Jaffe, Raitt, Heuer & Xxxxx
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Sugar, Esq.
SECTION 10.8. Entire Agreement; Etc. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made. All terms and provisions of the Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Except as to Section 5.6 and Article VII (which may only
be enforced by any person who is not a party to this Agreement after the Closing
Date), nothing in this Agreement is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 10.9. Arbitration. In the event that Noble, the Company and the
Shareholders cannot agree as to any disputes arising under this Agreement, the
unresolved matter shall be resolved by arbitration if a request for arbitration,
as provided herein, is given. Arbitration shall be initiated by either party
making a written demand on the other party and simultaneously filing copies of
the demand, together with the required fees, with the Detroit Regional Office of
the American Arbitration Association ("AAA"). Within fifteen (15) days after
receipt of such demand, each party
31
shall designate one arbitrator. These two arbitrators shall, within fifteen (15)
days after their appointment, select a third arbitrator, who shall be
experienced in the subject matter of the claim for which indemnification is
being sought. In the event that the first two arbitrators are unable to agree
upon the third arbitrator, then the arbitrators, shall apply to the AAA to
designate and appoint a person who meets these criteria as the third arbitrator.
In the event the party upon whom the original arbitration demand was served
shall fail to designate its arbitrator, the arbitrator designated by the party
requesting arbitration shall act as the sole arbitrator and shall be deemed to
be the single, mutually approved arbitrator to resolve the matter. Final
arbitration of the dispute shall occur within six (6) months of the giving of
the notice of arbitration. The place of arbitration shall be Troy, Michigan.
Arbitration shall be conducted under the auspices of the AAA, and the AAA Rules
shall govern all proceedings unless otherwise provided herein. In the case of
conflict between the AAA Rules and this Agreement, the provisions of this
Agreement shall govern. The arbitrators' sole power shall be to interpret the
provisions of this Agreement, and they shall have no power to change or modify
any provision of this Agreement. The parties shall have the right to discovery
in accordance with the Federal Rules of Civil Procedure except that discovery
may commence immediately upon the service of the demand for arbitration and
except that discovery shall be limited to document requests and depositions of
not more than two (2) people per party, and must occur within three (3) months
of the date of such service of notice of the complaining party. A party's
unreasonable refusal to cooperate in discovery shall be deemed to be a refusal
to proceed with arbitration, and, until the arbitration panel is complete, the
parties may enforce their rights (including the right of discovery) in the
circuit courts of the State of Michigan. Such enforcement in the courts shall
not constitute a waiver of a party's right to arbitration. Upon the completion
of the appointment of the arbitration panel, the arbitrators shall have the
power to enforce the parties discovery rights. It is expressly agreed that
material subject to discovery shall include written documents that must be
created from information that currently exists only in machine-readable form.
The parties expressly covenant and agree to be bound by the decision of
the arbitration panel and accept any such decision as the final determination of
the matter in dispute. A judgment of any Michigan Circuit Court may be rendered
upon any award made pursuant to this Agreement.
SECTION 10.10. Rules Governing the Issuance and Holding of Notes and
Escrow Shares. The Unregistered Securities are being issued by Noble to the
Company hereunder in reliance upon the following representations, warranties and
agreements of the Company.
(a) The Company acknowledges that the Unregistered Securities issuable
pursuant to this Agreement will not have been registered under the Securities
Act or under applicable state securities laws.
(b) All Unregistered Securities deliverable pursuant to this Agreement
are being acquired solely for investment purposes, and not as a nominee or agent
for others or with a view to or for sale in connection with any distribution,
and neither the Company nor any Shareholder has any present
32
intention of selling, granting a participation in or otherwise distributing such
shares or any portion thereof.
(c) The Company and the Shareholders agree that they shall not make a
disposition of any Unregistered Securities issued pursuant to this Agreement
unless such securities have been registered, or are sold in accordance with an
exemption from registration under Rule 145, 144 or 144A under the Securities
Act, or unless an exemption from the registration requirements of the Securities
Act and applicable state securities laws (other than under Rule 145,144 or 144A)
is available and until Noble shall have received an opinion of counsel
reasonably satisfactory to Noble to the effect that such exemption from the
registration requirements of the Securities Act is valid and available.
(d) The Company and the Shareholders acknowledge that their investment
in Unregistered Securities is a speculative investment with limited liquidity
and subject to the risk of loss. The Company and the Shareholders represent and
warrant to Noble that they are able to fend for themselves in the transactions
contemplated by this Agreement, have such knowledge and expertise in financial
and business matters as to be capable of evaluating the merits and risks of
their investment and have the ability to bear the economic risks (including the
risk of loss) of its investment.
(e) The Company and the Shareholders represent and warrant they have had
the opportunity to ask questions of Noble concerning its business and to obtain
any information which it considered necessary to verify the accuracy of or to
amplify upon Noble's disclosures, and have had all questions which have been
asked by it answered by Noble.
SECTION 10.11. Assignment. This Agreement may not be assigned by any
party hereto without the written consent of the other parties, except that Noble
may assign all or any of its rights hereunder to any wholly-owned subsidiary of
Noble provided that no such assignment shall relieve the assigning party of its
obligations hereunder, including its obligations with respect to the payment of
the Purchase Price and the Notes.
[This space intentionally left blank.]
33
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
NOBLE INTERNATIONAL, LTD.
By: /s/ Xxxxxx X. Xxxxxxxxxxx
_______________________________
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Chief Executive Officer
UNDERTAKING
The undersigned, Xxxxxx X. Xxxxxxxxxxx, does hereby expressly join in
and agree to be bound by Section 5.1 of the Agreement and further agrees that
any notice to the undersigned may be effected by delivery of same to Noble as
provided in the Agreement.
/s/ Xxxxxx X. Xxxxxxxxxxx
_____________________________________
XXXXXX X. XXXXXXXXXXX
34
UTILASE, INC.
By: /s/ Xxxxx Xxxxxx Xxxxxxxxx III
____________________________________
Name: Xxxxx Xxxxxx Xxxxxxxxx III
Title: President
DCT, INC.
By: /s/ Xxxxx Xxxxxx Xxxxxxxxx III
____________________________________
Name: Xxxxx Xxxxxx Xxxxxxxxx III
Title: Chief Executive Officer
/s/ Xxxx X. Xxxxxxx
_______________________________________
Xxxx X. Xxxxxxx
35
