OFFER TO PURCHASR
NORTHPORT INDUSTREES, INC.
c/o P. 0. Box 1227
Spur 000 xxx Xxxxxxxx Xxxx
Xxx Xxx, Xxxxx
00000
DATE: AUGUST 14,1998
TO: XXXX XXXXXXXXXXX
XXXX XXX GUMMIWARENFABRIK GmbH
GECAMCO INTERNATIONAL INC.
GECAMCO ASSOCIATES INC.
XXXX XXXXXXXXX
(individually, a "Shareholder" and, collectively, the
"Shareholders")
NORTHPORT INDUSTRIES, INC. (the "Purchaser") seeks to acquire all of the
shares in the capital stock of JOH RUBBER INC. (the "Corporation"), upon the
following terms:
1. The Purchaser offers to purchase from each of the Shareholders all,
but not less than all of their respective shares in the capital stock of the
Corporation (the '?urchased Shares"), currently held by the Shareholders.
2. The purchase price (the "Purchaseprice) shall be paid at Closing by
the issuance of 193,767 restricted Common shares in the capital stock of the
Purchaser (with attributes as contained in Schedule "A" attached hereto (the
"Northport Shares")) to each of the Shareholders in an apportionment based on
the Shareholders' respective ownership of the Purchased Shares as set out in
section 3, and based on a share price equal to the arithmetical average of the
closing price of the Northport Shares on the NASDAQ Exchange on each of the
five (5) trading days preceding the second day preceding the Closing (the
"Market Value" (the current fisted value of the Northport Shares on the NASDAQ
Exchange, as of the above date being US$6.00 per share).
3. The Purchase Price shall be apportioned to the Purchased Shares as
follows:
(a) for each Special share of the Corporation, the equivalent
amount of Northport Shares calculated using the Market Value on the basis
of each Special share of the Corporation having a value of CAN$1.00 Dollar for
each share; and
(b) the remainder of the Northport Shares, to be divided
equally amongst each of the Common shares of the Corporation.
4. This Offer is open for acceptance by at least a majority of the
Shareholders for a period of ton (10) days from the date hereof, failing,
which this Offer shall be automatically withdrawn by the Purchaser without
further obligation of the parties to consummate the transactions. In the event
that this Offer is accepted by a majority of the Shareholders (the "Control
Shareholders") and not all of the Shareholders, then the Control Shareholders
shall immediately initiate the provisions of the unanimous shareholders
agreement between the Shareholders dated as of the 3 1 st day of March, 1992
(the "Shareholders Agreement") by causing the Corporation to offer the Control
Shareholders' shares to the other Shareholders pursuant to section 5.3 of the
Shareholders Agreement and by invoking the provisions of section 5.6(b) of the
Shareholders Agreement to cause the other Shareholders to sell their shares
pursuant to this Offer. In the event that the Control Shareholders fail to
initiate the provisions of the Shareholders Agreement within ten (10) days of
acceptance of this offer, or in the event that the other Shareholders purchase
the shares of the Control Shareholders pursuant to section 5.3 of the
Shareholders Agreement, then this offer shall be automatically withdrawn by
the Purchaser without further obligation of the parties to consummate the
transactions.
5. The Purchaser's obligation to consummate the transactions contemplated
pursuant to the provisions of this Offer is subject to the satisfaction, prior
to or at the Closing, of each of the following conditions:
(a) the Shareholders shall have performed, complied with and
fulfilled all of the provisions of Shareholders Agreement with respect to the
sale of the Purchased Shares;
(b) each of the representations and warranties of Shareholders
contained in this Offer shall be true and correct in all respects at and as of
the Closing with the same force and effect as if made at and as of the day of
Closing;
(c) the Shareholders shall have performed, complied with and
fulfilled or caused the Corporation to perform, comply with and fulfill, all
of the covenants, agreements, obligations and conditions required by this
Offer to be performed, complied with or fulfilled by Shareholders or the
Corporation prior to or at the Closing;
(d) the consurnmation of the transactions will result in the
Purchaser acquiring all of, and not less than all of, the shares in the
capital of the Corporation;
(e) neither Shareholders nor the Corporation shall be subject to any
order, decree or injunction of a court or agency of competent jurisdiction
which would impose material limitations on the ability of Purchaser to
exercise full rights of ownership of the Purchased Shares or the assets of the
Corporation and no action, suit, proceeding, or investigation shall be pending
or, to the best knowledge of Shareholders and the Corporation, threatened
which, in the opinion of counsel to Purchaser, is reasonably likely to result
in any such order, decree or injunction; and
(f) Shareholders and the Corporation shall have obtained all
consents and authorizations of governmental authorities and other third
parties required to effect the transactions contemplated by this Offer.
6. The Shareholders, jointly and severally covenant, represent and
warrant to the Purchaser as follows:
(a) the Shareholders have the authority to transfer the Purchased
Shares;
(b) the Purchased Shares are now and will be, at the time of Closing,
beneficially owned by the Shareholders with a good and marketable title, free
and clear of all liens, charges, security interests, adverse claims, pledges
and other encumbrances whatsoever;
(c) the Corporation is a corporation duly organized, validly
existing, and in good standing under the laws of the Province of Ontario, and
holds all licenses, registrations, authorizations and qualifications in
connection therewith;
(d) the Corporation does not directly or indirectly own any equity or
similar interest in any corporation, partnership, joint venture or other
business association or entity other than Gecamex Technologies Inc., in which
corporation, the Corporation is the beneficial owner of 289,203 Common shares
and which shares of Gecamex Technologies Inc., the Corporation shall continue
to own, unencumbered as at the Closing;
(e) the Corporation has prepared and filed or will prepare and file
on time with all appropriate governmental authorities all tax returns and
other documents that are required to be filed in respect of any taxes for all
fiscal periods ending on or prior to the Closing and all returns or other
documents which have been filed are correct and complete in all material
respects;
(f) the Corporation has paid, in full, all taxes due and payable with
respect to fiscal periods ending before the Closing, including all
installments due and payable in respect of taxes for its current year;
(g) there are no actions, suits, causes of action, disputes, claims,
investigations, or legal, grievance, arbitration, administrative or other
proceedings in progress, pending or, to the best knowledge of Shareholders,
threatened by or against Shareholders or the Corporation, or with respect to
the consummation of the transactions contemplated by this Offer;
(h) the Corporation is not a party to any of the following:
(i) any indenture, mortgage, note, guaranty, letter of credit,
installment obligation, agreement, or other instrument relating to the
borrowing of money or the guaranteeing of any obligation, including any
obligation for the borrowing of money;
(ii) any agreements, commitments and other arrangements, to which
the Corporation is a party, other than the Shareholders Agreement;
(i) the Corporation has been operated in the ordinary course and the
Corporation has not:
(i) sold or in any way transferred or otherwise disposed of
any of its assets or property;
(ii) incurred any obligation or liability, absolute, accrued,
contingent, or otherwise, whether due or to become due;
(iii) made or suffered any material adverse change in its
financial condition or its assets;
(iv) mortgaged, pledged or subjected to hen, charge, security
interest, or any other encumbrance or restriction any of its assets;
(v) sold, transferred or disposed of any of its assets;
(vi) declared, set aside or paid any dividend or other
distributions, payments or other transfers of any cash or other property;
(j) the Corporation owns all of the assets purported to be owned by it
free and clear of all mortgages, hens, pledges, charges, security interests,
encumbrances, easements, encroachments, rights of third parties, or other
interests of any kind or character;
(k) no person, firm or corporation has now or will have at the time
of Closing any agreement or option or right or privilege capable of becoming
an agreement or option from the Shareholders or the Corporation in respect of
the Purchased Shares;
(l) the Shareholders are now and shall be, at the time of Closing,
not non-residents within the meaning of the Income Tax Act (Canada) or,
alternatively, the Shareholders shall each comply with the provisions of
Section 116 of the Income Tax Act (Canada) by providing a certificate pursuant
to such section to the Purchaser on the closing; and
(m) that following the Closing of the transaction herein
contemplated, the Shareholders will have no finther claims against the
Corporation and shall have provided a release to the Purchaser in the form of
the release attached as Schedule "B".
7. The representations and warranties of the Shareholders contained in this
Offer or contained in any closing document given pursuant hereto shall not
merge on the Closing, shall survive the completion of the transaction and
shall continue in full force and effect.
8. The closing of the transactions herein contained (the "Closing") shall be
completed at the offices of the solicitors for the Purchaser, within thirty
(30) days of the acceptance (or deemed acceptance by the terms of the
Shareholders Agreement) of this Offer by all of the Shareholders, or such date
as the individual Shareholders and the Purchaser may agree.
9. At or before the Closing, the Shareholders shall deliver to tLe Purchaser
the following:
(a) share certificates, documents or titles or other evidence of
ownership representing the Purchased Shares duly endorsed for transfer and
such executed transfer documents necessary to convey title of the Purchased
Shares to the Purchaser.
(b) resignations of each of the directors and officers of the
Corporation;
(c) releases from each of the Shareholders for any claims any of them
have against the Corporation, in a form of the release attached hereto as
Schedule "B"
10. At or before the Closing, the Purchaser shall deliver to the Shareholders
the shares in the capital stock of the Purchaser representing the payment of
the Purchase Price as required herein.
11. Time shall be of the essence of this Offer.
12. This Offer, once accepted, shall be binding upon and shall enure to the
benefit of the parties hereto and their respective successors and lawful
assigns except that none of the parties hereto may assign this Offer or any of
their rights or obligations hereunder unless the prior written consent of the
other party hereto is first obtained.
13. The Purchaser and each of the Shareholders shall each bear their
respective costs and expenses.
14. This Offer and its acceptance may be executed in any number of
counterparts and all such counterparts taken together shall be deemed to
constitute one and the same instrument. A facsimile signature shall be
accepted as an original execution hereon.
NORTHPORT INDUSTRIES, INC.
Per:/s/Xxxxxx Xxxxxxxx
I have authority to bind the
Corporation.
THE UNDERSIGNED accept the above Offer as of the date hereinafter
provided.
Dated this day of 1998.
/s/Xxxx Xxxxxxxxxxx
Dated this day of 1998.
XXXX XXXX XXXXXXXXXXXXXXXX
GmbH
Per:
I have authority to bind the
Corporation.
Dated this day of 1998.
GECAMCO INTERNATIONAL INC.
Per:
I have authority to bind the
Corporation.
Dated this day of ,1998.
GECAMCO ASSOCIATES INC.
Per: Xxxx Xxxxxxxxxxx
I have auth to bind the Corporation.
Dated this day of 1998.
XXXX XXXXXXXXX
SCHEDULE "B"
RELEASE
TO: NORTHPORT INDUSTRIES, INC.
IN CONSIDERATION of the sum of One Dollar ($1.00) now paid by you to the
undersigned, (the receipt and sufficiency of which is hereby acimowledged by
the undersigned) and of other good and valuable consideration, the undersigned
hereby releases and forever discharges you from all actions, causes of action,
debts, contracts, claims and demands whatsoever which the undersigned,
howsoever now has or hereinafter can, shall or may have, for any cause, matter
or thing whatsoever existing up to the date of execution hereof, and in
particular, without in any way limiting the generality of the foregoing, in
respect of any and all claims arising as a result of the undersigned being a
shareholder of JOH RUBBER INC.
This Release shall not apply to any matters arising as an obligation to
the Vendors pursuant to the Agreement between you and the undersigned in
respect to the purchase of shares in JOH RUBBER INC.
This Release shall enure to the benefit of your heirs, executors,
administrators and assigns, and shall be binding upon each of the undersigned,
their respective heirs, executors, administrators, successors and assigns.
IN WITNESS WHEREOF this Release has been executed this day of 1998.
SIGNED, SEALED AND DEIJVERED in the presence of.
