July ___, 2008 DELIVERED PRIVATE AND CONFIDENTIAL
July
___,
2008
DELIVERED
PRIVATE
AND CONFIDENTIAL
2172945
Ontario Limited
c/o
Black
Ice
Capital Corp.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Suite
504
Toronto,
Ontario
M2P
2G2
Attention:
▇▇▇▇
▇▇▇▇▇▇▇▇
Dear
Sirs:
Re: Share
Purchase Agreement - Disclosure Letter
This
letter is being delivered to you in connection with the Share and Asset Purchase
Agreement (the “Agreement”),
dated
July
___,
2008,
between Wolverine Tube Canada Limited Partnership (the “Vendor”),
2172945
Ontario Limited (the “Purchaser”),
Copper Investments Holding Inc., Wolverine Tube, Inc. and Black Ice Capital
Corp.
This
letter, together with its sections, form one document which is the Disclosure
Letter referred to in the Agreement.
Capitalized
terms used in this Disclosure Letter have the meanings given to such terms
in
the Agreement unless they are defined in this Disclosure Letter. References
to
articles, section numbers or schedules are references to the relevant articles,
sections or schedules of the Agreement.
The
purpose of this Disclosure Letter is to set forth information called for
under
the representations and warranties and other sections in the Agreement.
The
Parties acknowledge and agree that disclosure of the information contained
in
this Disclosure Letter does not constitute or imply and shall not be construed
as:
|
(a)
|
any
representation, warranty, covenant or agreement which is not expressly
set
out in the Agreement;
|
|
(b)
|
an
admission of any liability or obligation of the Vendor;
|
|
(c)
|
an
admission that the information is
material;
|
|
(d)
|
a
standard of materiality, a standard for what is or is not in the
ordinary
course of business, or any other standard contrary to any contained
in the
Agreement; or
|
|
(e)
|
an
expansion of
the scope or effect of any of the representations, warranties and
covenants set out in the Agreement.
|
Disclosure
of any information in this Disclosure Letter that is not strictly required
under
the Agreement has been made for informational purposes only and does imply
disclosure of all matters of a similar nature.
This
Disclosure Letter and all information contained in it is Confidential
Information and is subject to the obligations of the parties pursuant to
the
Confidentiality Agreement.
[The
remainder of this page is intentionally left blank.]
-2-
All
of
the information contained in this Disclosure Letter is provided as of the
date
of this Disclosure Letter. The
titles and headings in this Disclosure Letter are for convenient reference
only
and are not to affect the interpretation of the Agreement or this Disclosure
Letter.
Yours
truly,
|
WOLVERINE
TUBE CANADA LIMITED
PARTNERSHIP, by
its general partner, 3072453 Nova Scotia
Company
|
||
| |
|
|
| By: | /s/ | |
|
Authorized
Signing Officer
|
||
-3-
Accepted,
acknowledged and agreed to on July
___,
2008.
|
2172945
ONTARIO LIMITED
|
|
|
By:
|
|
|
Authorized
Signing Officer
|
|
-4-
Section 1.1
Permitted
Liens
|
PERSONAL
PROPERTY SECURITY ACT (PPSA) REGISTRATIONS AGAINST WOLVERINE
(ONTARIO)
|
||||||
|
Secured
Party
|
File
Number
|
Registration
Number
|
Registration
Date
|
Expiry/
Maturity
Date
|
Collateral
Classification
|
Collateral
Description
|
|
CIT
Business Credit Canada Inc., as Agent
|
645488937
|
20080527
1113 1862 1890
|
05/27/2008
|
7
Years
|
I
/
E / A / O / MVI
|
|
|
Xerox
Canada Ltd.
|
646484121
|
20080627
1623 1793 4837
|
06/27/2008
|
3
Years
|
E,
O, NFMD Unspecified
|
|
|
Secured
Party
|
Registration
|
Inscription
|
Date
|
Date
extrême D'effet
|
Collateral
Classification
|
Biens
|
|
1
ENREGISTREUR RESEAU 32 CAMERA
|
||||||
|
3
DISQUE DVR 250GB
|
||||||
|
1
UPS 1KVA AVEC 8 PRISES
|
||||||
|
6
BOITE PVC
|
||||||
|
12
BOITIER EXT. MURAL CHAUFFE
|
||||||
|
25
CABLE BX2
|
||||||
|
6
TRANSFO WIRE
|
||||||
|
2400
CABLE CATEGORIE 5E EXT
|
||||||
|
Protectron
Inc.
|
Reservation
of ownership (instalment sale)
|
▇▇-▇▇▇▇▇▇▇-▇▇▇▇
|
12/27/2006
|
12/21/2010
|
2400
CABLE 2 CONDUCTEURS 18GA
|
|
|
500
QUINCAILLERIE
|
||||||
|
5
SWITCH 16 PORTS
|
||||||
|
4
CAMERA COULEUR
|
||||||
|
4
LENTILLE 1/3
|
||||||
|
4
BOITIER EXT
|
||||||
|
6
UNITE ALIMENTATION 3A 12V
|
||||||
|
1
UNITE ALIMENTATION
|
||||||
|
3A
12V CA
|
||||||
|
2400
CABLE JKT
|
-5-
|
Secured
Party
|
Registration
|
Inscription
|
Date
|
Date
extrême D'effet
|
Collateral
Classification
|
Biens
|
|
95
QUINCAILLERIE
|
||||||
|
4
SUPPORT POUR BOITIER
|
||||||
|
8
CONNECTEUR POUR SEAL TIGHT
|
||||||
|
4
BOITE EXT PR PRI
|
||||||
|
4
CABLE SEAL TIGHT 1/2POUCE
|
||||||
|
25
DET. DE MOUVEMENT EXT.
|
||||||
|
1
PABBEAU EVO
|
||||||
|
1
CLAVIER LCD
|
||||||
|
1
KIT ACCESOIRES, BATTERIE 7, TRANSFO
|
||||||
|
2
MODULE EXP.8 ZONE
|
||||||
|
5
MOD.4 ZONE
|
||||||
|
4
MODULE 4 SORTIE
|
||||||
|
5
BOITE JONCTION
|
||||||
|
1
CONVERTISSEUR PANNEAU A ORDINATEUR
|
||||||
|
1
LOGICIEL POUR ACCES DIGIPLEX
|
||||||
|
1
BOITIER SUPRA
|
||||||
|
▇▇▇▇▇▇▇▇▇/4036411/4036413
|
Plus
see
Schedule “A” attached.
-6-
Conflicts
None.
-7-
Required
Authorizations
None.
-8-
Section 3.1(e)
Third
Party Consents
None.
-9-
Ordinary
Course
Termination
of Exeon Inc. Metal Supply and Hedging Agreement.
Purchase
of redraw tube from a supplier in China (Hailaing).
▇▇▇▇
was
transferred from Corporation to Wolverine as of May 25, 2008.
Intercompany
accounts adjusted prior to Closing.
Some
or
all of the cash advanced by Wolverine to Corporation during Interim Period
was
repaid.
$80,851.62
paid to CIT Business Credit Canada Inc. for payment of legal fees.
US$9,836.36
paid to ▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇.
A
dividend in the amount of $789,917 was declared and paid as set out in step
1 of
Schedule 2.6(c).
-10-
Section 3.1(n)
Authorizations
Jurisdictions
Parent
-
Nova Scotia
Corporation
- Ontario
Material
Authorizations
Ministry
of Finance - Retail Sales Tax - Vendor Permit 1185-0833
-11-
Section 3.1(p)
Non-Owned
Assets
|
1.
|
Maintenance,
repair and operating supplies inventory on consignment from Motion
Industries (Canada) Inc.
|
|
2.
|
The
software and hardware in the list attached to Section 3.1(w) of
this
Disclosure Letter
|
|
3.
|
The
software and hardware provided by Wolverine Tube, Inc. as set out
in the
Transitional Services Agreement
|
|
4.
|
Etna
lubricant consignment inventory
|
-12-
Section 3.1(q)
No
Options, etc.
See
Section 3.1(l) of this Disclosure Letter and Section 5.1 of the
Agreement.
Canadian
Receivables Sale Agreement dated April 4, 2006, among DEJ 98 Finance, LLC,
the
Corporation, The CIT Group Business Credit Inc. and Wachovia Bank, National
Association, as amended, and subject to the Canadian Receivables Sale
Termination and Reassignment Agreement dated as of May 25, 2008 among DEJ
98
Finance, LLC, the Corporation, The CIT Group Business Credit Inc. and Wachovia
Bank, National Association.
-13-
Section 3.1(s)
Real
Property
Part
North Half Lot 4 Concession 2; designated parts 1, 2, 3 & 4 33R8179 subject
to and together with 760454 & 805524London/London township.
-14-
Section 3.1(t)
Material
Contracts
The
Corporation is a party to or is bound by a Material Contract with each of
the
following Persons.
|
Shell
Energy North America (Canada) Inc.
|
41
|
Fabrication
A. St. Pierre
|
||
|
2
|
Union
Gas Limited
|
42
|
Fairview
Fittings & Manufacturing Ltd.
|
|
|
3
|
Intergry
Energy Services of Canada Corp.
|
43
|
Flakt-Coiltech
|
|
|
4
|
Canaplus
|
44
|
Giant
Factories
|
|
|
5
|
Ac
EMCO Distribution Group
|
45
|
Global
Heat Transfer
|
|
|
6
|
Octo
Group
|
46
|
Hi
Mill Manufacturing
|
|
|
7
|
Wolseley
Canada Inc.
|
47
|
IISCO
Corporation
|
|
|
8
|
Carrier
Canada
|
48
|
Intergris
Metals Inc.
|
|
|
9
|
Corix
Water Products
|
49
|
Kamco
Products
|
|
|
10
|
Crowle
Fittings
|
50
|
KOAX
Corporation
|
|
|
11
|
Lennox
Industries Canada Ltd.
|
51
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc.
|
|
|
12
|
Home
Hardware
|
52
|
Linderme
Tube Co.
|
|
|
13
|
Rona
Inc.
|
53
|
L
& M Precision Products
|
|
|
14
|
United
Refrigeration
|
54
|
L
& M Radiators Inc.
|
|
|
15
|
Canadian
Tire Corporation
|
55
|
Madok
Manufacturing Ltd.
|
|
|
16
|
▇▇▇▇’▇
Canada
|
56
|
▇▇▇▇▇▇-Key
▇▇▇▇▇
|
|
|
17
|
The
Trane Company
|
57
|
Mecar
Metal Inc.
|
|
|
18
|
▇▇▇▇▇▇▇
Manufacturing Company
|
58
|
Namasco
Limited
|
|
|
19
|
Spancan
|
59
|
Packless
Industries
|
|
|
20
|
Accuflex
|
60
|
▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇
|
|
|
21
|
Alberta
Custom Tee Ltd.
|
61
|
▇▇▇▇▇▇▇
& Thermo
|
|
|
22
|
▇▇▇▇▇▇▇▇▇
▇▇▇▇ Inc.
|
62
|
Profab
Inc.
|
|
|
23
|
Arrow
Hose & Tubing
|
63
|
Pyroil/Noma
|
|
|
24
|
A.S.B
Heating
|
64
|
QBD
Cooling Systems Inc.
|
|
|
25
|
Assemblage
Paro
|
65
|
Rapid
Refrigeration
|
|
|
26
|
Boreale
(Tressages Boreale)
|
66
|
▇▇▇▇▇▇-▇▇▇▇▇▇
Roofing Ltd.
|
|
|
27
|
Bow
Metallics
|
67
|
Sigma
Corporation
|
|
|
28
|
Brass
Craft Canada
|
68
|
Siant/Fin
Ltd./Ltee.
|
|
|
29
|
▇▇▇▇-O-Matic
Corp. of Canada
|
69
|
Small
Tube Products
|
|
|
30
|
Cambridge
Brass
|
70
|
Spinco
Metal Products
|
|
|
31
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇ & Copper Co.
|
71
|
Stamford
Metal Products Ltd.
|
|
|
32
|
Canadian
Distribution Centre
|
72
|
Stamford
Metals Products Ltd. (Cap Tub)
|
|
|
33
|
Canadian
Tubular elements Ltd.
|
73
|
Temspec
Inc.
|
|
|
34
|
CCI
Thermal Technologies Ltd/
|
74
|
▇▇▇▇▇▇
Metal Industries Ltd.
|
|
|
35
|
Cancoil
Thermal Corporation
|
75
|
Thermo
Concepts Inc.
|
|
|
36
|
Cello
Products
|
76
|
Thermofin
|
|
|
37
|
Cintube
Products
|
77
|
Thermo
200 Inc.
|
|
|
38
|
▇▇▇▇
Brothers Canada Ltd.
|
▇▇
|
▇▇▇▇▇▇▇▇▇▇
|
|
|
39
|
Elkhart
Products Corporation
|
79
|
Tri-Went
Industries Ltd (Canada)
|
|
|
40
|
Engineered
Air
|
80
|
Tri-Went
Industries Ltd. (Knoxville, TN)
|
-15-
|
81
|
Turbotec
Products Inc.
|
|
||
|
82
|
Tyco
Thermal Controls
|
|
||
|
83
|
Unified
Alloys
|
|
||
|
84
|
Vemar
Ces Inc.
|
|
||
|
85
|
Ventrol
air Handling systems Inc.
|
|
||
|
86
|
Vimetal
|
|
||
|
87.
|
▇▇
▇▇▇▇ Company.
|
|||
|
88.
|
▇▇▇▇▇▇▇▇▇
Logistics Inc.
|
-16-
Section 3.1(w)
Software
The
software listed in the attached list of software and hardware.
-17-
-
-
Financial
Statements
See
attached Financial Statements and Interim Financial Statements
-18-
Section 3.1(z)
Environmental
Matters
|
1.
|
Below
is a list setting out the contaminants located in the ground or
in the
ground water under any of the owned properties listed in the
Section 3.1(s) of this Disclosure
Letter.
|
Sodium
Dichromate
|
2.
|
Below
is a list setting out any Environmental Actions relating to the
Corporation pending or, to the knowledge of the Vendor, threatened
in
writing against the Vendor.
|
None
|
3.
|
Below
is a list setting out any requirements of any Governmental Entity
since
January
1, 2002
that the Corporation alter any of the owned properties listed in
Section 3.1(s) of the Disclosure Letter or perform any environmental
closure, decommissioning, rehabilitation, restoration or post-remedial
investigations, on, about or in connection with any real
property.
|
None
|
4.
|
Below
is a list setting out any third party consultant reports prepared
or
obtained at the request of the Corporation since January
1, 2002
that assess compliance by the Business with the Environmental
Laws.
|
▇▇▇▇▇▇
Associates Ltd. Report on Environmental Monitoring - Removal of
Varsolâ
Impacted
Soil dated January 10, 2007
-19-
Employees
No
unfair
labour practice complaints are pending.
No
agreements relating to length of notice or severance payments required to
terminate any employee, other than such as results by Law from the employment
of
an employee without an agreement as to notice or severance.
-20-
Section 3.1(bb)
Employee
Plans
|
1.
|
Sun
Life Assurance Company of Canada - Drugs, extended health, Dental,
Vision,
Out of Province coverage, etc.
|
|
2.
|
Sun
Life Assurance Company of Canada - Long Term Disability/Extended
Health
|
|
3.
|
American
Home Assurance Company - Accidental
|
|
4.
|
Profit
Sharing Retirement Plan, London
Operations
|
|
5.
|
Incentive
Plans - Marketing Incentive Plan, Customer Service Representative
Incentive Plan, Corporate Incentive and Plant Improvement Incentive
Plan,
Annual Performance Incentive Plan, 2006 Sales Incentive
Plan
|
|
6.
|
Policy:
Separation of Salaried Employees
|
-21-
Insurance
Policies
|
Type
of Policy
|
Name
of Insurer
|
Coverage
Allowance
|
Expiration
Date
|
Annual
Premium
|
Pending
Material Claims
|
|
Fiduciary
|
American
Home Assurance Company
|
$2,000,000
|
April
1, 2009
|
$12,780
|
none
|
|
Automobile
|
Aviva
Ins. Co. of Canada
|
$2,000,000
liability Actual Cash Value Physical Damage
|
April
1, 2009
|
$1,731
|
none
|
|
Commercial
|
Aviva
Ins. Co. of Canada
|
$2,000,000
per Occurrence
$2,000,000
Aggregate
|
April
1, 2009
|
$67,318
|
none
|
|
Property
|
Allianz
Global Risks US Insurance Company
|
Replacement
value policy
|
October
1, 2008
|
$66,689
|
none
|
-22-
Litigation
|
1.
|
Litigation:
|
|
County
of Middlesex (London)
|
Case
No.
|
48939/04
|
|
Plaintiff:
|
Wolverine
Tube (Canada) Inc.
|
|
|
Defendant:
|
Not
available
|
|
|
Date:
|
2004
|
|
|
Belleville,
Ontario
|
Case
No.
|
CV-08-0132-SR
|
|
Plaintiff:
|
▇▇▇▇
▇▇▇▇▇▇
|
|
|
Defendants:
|
Wolverine
Tube (Canada) Inc.,
Kamco
Products and Whitfields
Plumbing
& Heating
|
|
|
Ottawa,
Ontario
|
Date:
|
2008
|
|
|
Case
No.
|
CV-08-0131-00
|
|
Plaintiff:
|
▇▇▇▇
▇▇▇▇▇▇
|
|
|
Defendants:
|
Kamco
Products, a division of Granby Steel Tanks and Wolverine Tube
(Canada)
Inc.
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ c.o.b.
Musclow
Heating & Air
|
|
|
|
Conditioning
and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Fuels Ltd.
|
|
|
Waterdown,
Ontario
|
Plaintiff:
|
DiCecca
|
|
Defendants:
|
Wolverine
Tube (Canada) Inc.,
|
|
|
|
Sandwell
Fuels Limited and
|
|
|
Kamco
Products
|
||
|
Date:
|
2005
|
|
|
Toronto,
Ontario
|
Case
No.
|
07-CV-329501PD2
|
|
Plaintiff:
|
Peel
Standard Condominium Corporation No. 661
|
|
|
Defendants:
|
Enerzone
Inc., Network Mechanical Inc., Tridel Corporation, Delterra
Inc., Skymark
West Inc., York International Ltd. and Wolverine Tube (Canada)
Inc.
|
|
|
Province
of Québec
|
Case
No.
|
▇▇▇-▇▇-▇▇▇▇▇▇-▇▇▇
|
|
Plaintiff:
|
Wolverine
Tube (Canada) Inc.
|
|
|
Defendant:
|
Atelier
Marines et Industriels ▇ ▇ ▇▇▇▇
Inc.
|
|
2.
|
One
pending Workers’ Safety and Insurance Board claim, second appeal
|
-23-
Section 3.1(ee)
Customers
and Suppliers
The
following is a list of the Corporation’s ten largest customers and the ten
largest suppliers by dollar amount as at December 31, 2007.
Customers
1. Emco
Limited - London, Ontario
2. Elkhart
Products Corp. - Elkhart, Indiana
3. Small
Tube Products - Altoona, Pennsylvania
4. Noble
Plumbing & Supplies Inc. - Concord, Ontario
5. Wolseley
Canada Inc. - Laval, Québec
6. Wolseley
Canada Inc. - Calgary, Alberta
7. Canaplus
Limited Partnership - Edmonton, Alberta
8. RONA,
Inc. - Boucherville, Québec
9. Bow
Metallics Inc. - Dorchester, Ontario
10. Wolseley
Canada Inc. - Laval, Québec
Suppliers
1. Noranda
Sales Corporation Toronto
2. American
Iron Metal Montreal
3. Coopers
Iron & Metal Toronto
4. Québec
Meal Recycle Laval
6. Boni
Metal Canada Montreal
7. Triple
M
Metal Brampton
8. Red
Kite
Management (USA) Inc.
9. London
Salvage London
10. ▇▇▇▇▇▇▇▇▇▇
International
-24-
Section 3.2(c)
Conflicts
There
is
a conflict with ▇▇▇▇▇▇▇▇▇’s Amended and Restated Credit Agreement unless
Wachovia Bank, National Association consents to the transaction.
-25-
Section
3.2(d)
Required
Authorizations
None
-26-
Section
3.2(e)
Third
Party Consents
Wachovia
Bank, National Association
-27-
Section 5.1
Water
Based Degreasing System - capital expenditure
-28-
|
Exhibit
|
|||||||
|
Effective
Date Balance Sheet
|
|||||||
|
WOLVERINE
TUBE (CANADA) INC
|
|||||||
|
NET
ASSET POSITION
|
|||||||
|
as
at May 25, 2008
|
|||||||
|
(Unaudited,
Non-GAAP)
|
|||||||
|
(in
thousands, CDN $)
|
||||||||||
|
NOTE
|
||||||||||
|
CURRENT
ASSETS
|
||||||||||
|
Cash
|
▇▇▇▇▇
cash
|
1
|
$
|
1
|
||||||
|
Accounts
Receivable
|
trade
|
31,433
|
||||||||
|
|
other
|
1,522
|
||||||||
|
Inventory
|
excl
MRO
|
14,378
|
||||||||
|
MRO
|
4,148
|
|||||||||
|
Other
Current Assets
|
prepaids
|
4,257
|
||||||||
|
$
|
55,739
|
|||||||||
|
CURRENT
LIABILITIES
|
||||||||||
|
Accounts
Payable
|
trade
|
2
|
$
|
5,276
|
||||||
|
Accruals
|
3
|
5,446
|
||||||||
|
10,722
|
||||||||||
|
Net
Working Capital
|
45,017
|
|||||||||
|
NBV
of Capital Assets
|
11,238
|
|||||||||
|
Long
Term Post Retirement Benefits
|
4
|
(8,000
|
)
|
|||||||
|
Net
Asset Position
|
$
|
48,255
|
|
NOTES
|
|||||||
|
1
|
Exludes
cash at Canada Corp.
|
||||||
|
2
|
Includes
Shawnee payable of $1,777,043 (U.S.)
|
||||||
|
3
|
Includes
payroll liabilities, reorg fees, tax accruals
|
||||||
|
4
|
Per
agreement
|
||||||
-30-