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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
------------------------
Date of Report: SEPTEMBER 8, 1995
------------------------
EXIDE CORPORATION
(Exact name of Registrant as specified in its charter)
------------------------
DELAWARE 1-11263 23-0552730
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
1400 NORTH WOODWARD AVENUE
BLOOMFIELD HILLS, MICHIGAN 48304
(810) 258-0080
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 31, 1995, the Registrant acquired Schuylkill Holdings,
Inc. ("SHI") through a merger and purchased all of its stock options
and subordinated notes from various holders and the secured debt of its
operating subsidiary, Schuylkill Metals Corporation, the owner of two
lead smelters which the Registrant intends to continue to operate, from
Heller Financial, Inc. ("Heller"). The Registrant paid $2 million in
cash for SHI's stock, options and notes; for the secured debt, it
issued 593,210 shares of its common stock and a contingent note the
value of which will be based on market lead prices. The Registrant and
Heller also entered into an agreement to share certain tax liabilities
of SHI and the Registrant agreed to provide Heller certain registration
rights as to such common stock. The information contained under the
heading "Plan of Distribution" in the prospectus included in the
Registrant's Form S-3 registration statement filed on August 31, 1995
(No. 33-62295) is hereby incorporated herein by reference. The cash
portion of the consideration paid by the Registrant was borrowed under
its Credit Agreement with a group of lenders led by Bankers Trust
Company, Bank of America and Bank of Montreal.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Pages 29 through 34 and F-2 through F-12 (inclusive) of the
prospectus, which is part of the Registrant's Registration Statement on
Form S-4 filed with the Commission on August 21, 1995 (File No. 33-
61961), are incorporated herein by reference.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HEREUNTO DULY AUTHORIZED ON SEPTEMBER 8, 1995.
EXIDE CORPORATION
/s/ James M. Diasio
By_______________________________
James M. Diasio
Corporate Controller
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EXIDE CORPORATION
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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2.1 Agreement and Plan of Merger, dated as of August 9, 1995, by and
among the Registrant, E/S Acquisition, Inc. and SHI, without
schedules.
2.2 Purchase Agreement, dated as of August 31, 1995, between the
Registrant and Heller.
2.3 Contingent Note made by the Registrant to Heller, dated as of
August 31, 1995.
2.4 Tax Matters Agreement, dated as of August 31, 1995, between the
Registrant and Heller.
23 Consent of Deloitte & Touche LLP.
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
dated as
of August 9, 1995
by and among
EXIDE CORPORATION,
E/S ACQUISITION, INC.
and
SCHUYLKILL HOLDINGS, INC.
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TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
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<C> <C> <S> <C>
RECITALS......................................................... 1
I. THE MERGER................................................... 1
1.1. Merger................................................ 1
1.1.1. Merger........................................ 1
1.1.2. Effective Time................................ 2
1.1.3. Effect of the Merger.......................... 2
1.1.4. Consummation of the Merger.................... 2
1.1.5. Certificate of Incorporation and
By-laws....................................... 3
1.1.6. Directors and Officers........................ 3
II. TERMS OF THE TRANSACTION..................................... 3
2.1. Conversion of Stock in the Merger..................... 3
2.2. Exchange of Certificates.............................. 5
2.2.1. Exchange Agent................................ 5
2.2.2. Notice of Exchange............................ 5
2.2.3. Right to the Stock Consideration.............. 6
2.3. Dissenters' Rights.................................... 6
2.4. Closing of the Company's Transfer Books............... 8
2.5. Outstanding Shares of Company Common Stock and
Company Preferred Stock............................... 8
2.6. Buy-Out of the Company's Optionees.................... 8
2.7. Transactions Undertaken in Conjunction with the
Merger................................................ 8
III. REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER
SUB.......................................................... 9
3.1. Corporate Organization................................ 9
3.2. Authority............................................. 10
3.3. Consents and Approvals; No Violation.................. 11
3.4. Vote Required......................................... 12
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
COMPANY SUBSIDIARY........................................... 12
4.1. Corporate Organization................................ 12
4.2. Authority............................................. 13
4.3. Capitalization........................................ 14
4.4. Consent and Approvals; No Violation................... 16
4.5. Reports and Financial Statements...................... 17
4.6. Equipment and Accounts Receivable..................... 18
4.7. Contracts............................................. 18
4.8. Leases................................................ 20
4.9. Employment and Severance Agreements................... 20
4.10. Taxes................................................. 20
4.11. Employee Benefit Plans................................ 22
4.12. Absence of Certain Changes or Events.................. 23
4.13. Litigation............................................ 24
4.14. Compliance with Laws and Orders....................... 24
</TABLE>
<PAGE>
TABLE OF CONTENTS
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(Continued)
<TABLE>
Page
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<C> <C> <S> <C>
4.15. Fees.................................................. 25
4.16. Company Action........................................ 25
4.17. Environmental Matters................................. 25
4.18. Labor Relations....................................... 30
V. COVENANTS OF THE COMPANY AND COMPANY SUBSIDIARY................... 30
5.1. Acquisition Proposals.................................. 30
5.2. Interim Operations of the Company and Company
Subsidiary............................................. 31
5.2.1. Conduct of Business............................ 32
5.2.2. Certificate of Incorporation and By-laws....... 32
5.2.3. Capital Stock; Options......................... 32
5.2.4. Dividends...................................... 33
5.2.5. Employee Plans, Compensation, Etc.............. 33
5.2.6. Representations and Covenants.................. 34
5.2.7. Other Actions.................................. 34
5.2.8. Access and Information......................... 34
5.3. Certain Filings, Consents and Arrangements............. 35
5.4. Additional Agreements.................................. 36
5.5. Publicity.............................................. 36
5.6. Stockholders' Meetings................................. 36
5.7. Employee Matters....................................... 37
5.7.1. Continuation of Certain Benefits............... 37
5.7.2 Benefits of Certain Employees.................. 37
5.8. Indemnification........................................ 38
5.8.1. Continuing Indemnification..................... 38
5.8.2. Indemnification by Successors or
Assigns........................................ 39
5.8.3. Intended Third-Party Beneficiaries............. 39
5.8.4. Procedure for Seeking Indemnification.......... 40
VI. CONDITIONS.................................................... 41
6.1. Conditions to Each Party's Obligations to
Effect the Merger...................................... 41
6.2. Conditions to Obligation of the Company to
Effect the Merger...................................... 43
6.3. Conditions to Obligation of Acquiror to Effect
the Merger............................................. 44
VII. MISCELLANEOUS................................................. 45
7.1. Termination............................................ 45
7.2. Non-Survival of Representations, Warranties and
Agreements............................................. 47
7.3. Waiver and Amendment................................... 47
7.4. Entire Agreement....................................... 47
7.5. Applicable Law; Consent to Jurisdiction................ 47
7.6. Certain Definitions; Headings.......................... 48
</TABLE>
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<PAGE>
TABLE OF CONTENTS
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(Continued)
Page
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<TABLE>
<C> <C> <S> <C>
7.7. Notices................................................ 49
7.8. Counterparts........................................... 50
7.9. Parties in Interest; Assignment........................ 50
7.10. Costs and Expenses..................................... 51
7.11. Enforcement of the Agreement........................... 51
7.12. Severability........................................... 51
7.13. Acquiror Guarantee..................................... 52
</TABLE>
APPENDIX A - SCHEDULES TO THE AGREEMENT
Schedule 2.1
Schedule 2.6
Schedule 2.7.1
Schedule 4.3
Schedule 4.4
Schedule 4.6
Schedule 4.7
Schedule 4.8
Schedule 4.9
Schedule 4.10
Schedule 4.11
Schedule 4.12
Schedule 4.13
Schedule 4.14
Schedule 4.17
Schedule 4.18
Schedule 5.2.5
Schedule 5.7.1
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TABLE OF DEFINITIONS
Term Section
Accounts Receivable 4.6.
Agreement Introduction
Acquiring Employer 5.8.2.
Acquiror Introduction
Acquisition Transactions 5.1.
affiliate 7.6.
Business of the Company 7.6(a)
Cancelled Contracts 4.7.
CERCLA 4.17.
Certificate 2.2.1.
Closing Date 1.1.4.
Collective Bargaining Agreement 4.18.
Commission 5.1.
Common Stock Consideration 2.1.
Company Introduction
Company Common Stock 2.1.
Company Employee Plans 4.11.
Company Preferred Stock 2.1.
Company Subsidiary 2.7.
Company Subsidiary Common Stock 4.3.
Company's Retirement Plan 5.7.1
Consent 6.1(b)
Constituent Corporations 1.1.2.
Continuing Contracts 4.7.
control 7.6.
controlled by 7.6.
Delaware Certificate of Merger 1.1.2.
Dissenting Shares 2.3.
DGCL 1.1.1.
Effective Time 1.1.2.
Environmental Law 4.17.
Equipment 4.6.
ERISA 4.11.
Exchange Act 3.3.
Exchange Agent 2.2.1.
Governmental Entity 3.3.
Hazardous Substance 4.17.
Heller 2.7.
HRS Act 3.3.
IRS 4.11.
Indemnitees 5.8.1.
Material Adverse Effect 7.6.
Material Contracts 4.7.
Material Leases 4.8.
Merger 1.1.1.
Merger Sub Introduction
Options 2.6.
Optionees 2.6.
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Term Section
PBGC 4.11.
PCBs 4.17.
person 7.6.
Preferred Stock Consideration 2.1.
Purchase Agreement 2.7.
RCRA 4.17.
Real Property 4.17.
SMC Credit Guarantees 6.3.
Stock Consideration 2.1.
Subsidiary 7.6.
Surviving Corporation 1.1.3.
To the knowledge of the Company or
Company Subsidiary 4.17.
Under common control with 7.6.
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AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER, dated as of this 9th day of August,
1995 (this "Agreement"), is made by and among Exide Corporation, a Delaware
corporation ("Acquiror"), E/S Acquisition, Inc., a Delaware corporation and an
indirect wholly-owned subsidiary of Acquiror ("Merger Sub"), and Schuylkill
Holdings, Inc., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Acquiror and the
Company have each determined that it is in the best interests of Acquiror and
the Company and their respective stockholders to merge Merger Sub with and into
the Company upon the terms and subject to the conditions set forth herein;
WHEREAS, the respective Boards of Directors of Acquiror, Merger Sub
and the Company have each approved the merger of Merger Sub with and into the
Company, upon the terms and subject to the conditions set forth herein; and
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, the parties hereto
hereby agree as follows:
I. THE MERGER
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1.1. Merger.
------
1.1.1. Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.1.2), Merger Sub
shall be merged into the Company and the separate corporate existence of
Merger Sub shall thereupon cease (the "Merger") in accordance with the
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applicable provisions of the Delaware General Corporation Law ("DGCL").
1.1.2. Effective Time. As soon as practicable following fulfillment
or waiver of the conditions specified in Article VI, and provided that this
Agreement has not been terminated or abandoned pursuant to Section 7.1,
Merger Sub and the Company (the "Constituent Corporations") shall cause a
certificate of merger complying with the requirements of Section 252 of the
DGCL (the "Delaware Certificate of Merger") to be filed with the Secretary
of State of the State of Delaware. The Merger shall become effective at
the time and date at which the Delaware Certificate of Merger is filed with
the Secretary of State of the State of Delaware (the "Effective Time").
1.1.3. Effect of the Merger. The Merger shall have the effects
specified in the DGCL. Without limiting the generality of the foregoing,
the Company shall be the surviving corporation in the Merger (sometimes
hereinafter referred to as the "Surviving Corporation") and shall continue
to be governed by the laws of the State of Delaware, and the separate
corporate existence of the Company and all of its property, rights,
privileges, powers and franchises, and all its debts, liabilities and
duties as a corporation organized under the State of Delaware, shall
continue unaffected by the Merger.
1.1.4. Consummation of the Merger. The closing of the Merger (the
"Closing Date") shall take place (a) at the
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principal executive offices of the Acquiror as promptly as practicable
after the later of (i) the day of (and immediately following) the receipt
of approval of the Merger by the Company's stockholders and (ii) the day on
which the last of the conditions set forth in Article VI is satisfied or
duly waived or (b) at such other time and place and on such other date as
Acquiror and the Company may agree.
1.1.5. Certificate of Incorporation and By-laws. The Certificate of
Incorporation and By-laws of the Company in effect at the Effective Time
shall be the Certificate of Incorporation and By-laws of the Surviving
Corporation, until duly amended in accordance with their terms and the
DGCL.
1.1.6. Directors and Officers. At the Effective Time, the directors
and officers of Merger Sub shall become the directors and officers of the
Surviving Corporation.
II. TERMS OF THE TRANSACTION
------------------------
2.1. Conversion of Stock in the Merger. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any share of
the common stock, $.01 par value, of the Company ("Company Common Stock") or of
cumulative 12.5% preferred stock, $.01 par value ("Company Preferred Stock"):
(a) The Company Common Stock and Company Preferred Stock which is
held by the Company as treasury stock (or held by a subsidiary of the Company),
and the Company Common Stock and Company Preferred Stock owned by any of
its subsidiaries shall be
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cancelled and retired, without any conversion thereof, and no payment shall
be made with respect thereto;
(b) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than any shares cancelled
pursuant to Section 2.1(a) and any Dissenting Shares (as defined in Section
2.3)) shall be converted into the right to receive, upon surrender of the
certificate formerly representing such share of Company Common Stock, cash in an
amount equal to $.07849 per share (the "Common Stock Consideration"). Each
share of Company Preferred Stock issued and outstanding immediately prior to the
Effective Time (other than any shares cancelled pursuant to Section 2.1(a) and
any Dissenting Shares (as defined in Section 2.3)) shall be converted into the
right to receive, upon surrender of the certificate formerly representing such
share of Company Preferred Stock, cash in an amount equal to $3.94666 per share
(the "Preferred Stock Consideration", the Common Stock Consideration and the
Preferred Stock Consideration jointly referred to as the "Stock Consideration").
No interest shall be paid or accrued on the Stock Consideration. Schedule 2.1
sets forth a true and complete list of the Common Stock Consideration to be paid
to each of the holders of Company Common Stock and the Preferred Stock
Consideration to be paid to each of the holders of Company Preferred Stock.
(c) Each share of Merger Sub common stock ("Merger Sub Common
Stock"), par value $.01 per share, issued and outstanding immediately prior
to the Effective Time shall be converted into
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and exchangeable for one share of common stock, par value $.01 per share,
of the Surviving Corporation.
2.2. Exchange of Certificates.
------------------------
2.2.1. Exchange Agent. Acquiror, the Surviving Corporation or
Acquiror's designee shall act as exchange agent (the "Exchange Agent") in
connection with the Merger. Except as set forth herein, from and after the
Effective Time each holder of a certificate representing outstanding shares
of Company Common Stock and Company Preferred Stock that is entitled to the
Stock Consideration (each such certificate, a "Certificate") shall be
entitled to receive in exchange therefor, upon surrender thereof to the
Exchange Agent, the Stock Consideration for each share of Company Common
Stock or Company Preferred Stock so represented by the Certificate
surrendered by such holder.
2.2.2. Notice of Exchange. Promptly after the Effective Time, the
Exchange Agent shall mail and/or make available to each record holder of a
Certificate a notice and letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Exchange
Agent) advising such holder of the effectiveness of the Merger and the
procedures to be used in effecting the surrender of the Certificates for
exchange therefor. Upon surrender to the Exchange Agent of a Certificate,
together with such letter of transmittal duly executed and completed in
accordance with the instructions
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thereon, and such other documents as may reasonably be requested, the
Exchange Agent shall promptly deliver the Stock Consideration for each
share of Company Common Stock or Company Preferred Stock so represented by
the Certificate surrendered by such holder thereof, and such Certificate
shall forthwith be cancelled.
2.2.3. Right to the Stock Consideration. Until surrendered and
exchanged in accordance with this Section 2.2, each Certificate shall,
after the Effective Time, represent solely the right to receive the Stock
Consideration multiplied by the number of shares of Company Common Stock or
Company Preferred Stock evidenced by such Certificate. From and after the
Effective Time, Acquiror shall be entitled to treat any Certificates that
have not yet been surrendered for exchange as evidencing only the ownership
of the aggregate Stock Consideration into which the shares of Company
Common Stock or Company Preferred Stock represented by such Certificates
shall have been converted, notwithstanding any failure to surrender such
Certificates. Acquiror shall not be liable to any holder of shares of
Company Common Stock or Company Preferred Stock for any Stock Consideration
(or dividends, distributions or interest with respect thereto) delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
2.3. Dissenters' Rights. Notwithstanding any provision of this Agreement
to the contrary, any shares of Company Common
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Stock or Company Preferred Stock outstanding immediately prior to the Effective
Time held by a holder who has demanded and perfected the right ("Dissenting
Shares"), if any, for appraisal of those shares in accordance with the DGCL and
as of the Effective Time has not withdrawn or lost such right to such appraisal
shall not be converted into or represent a right to receive the Stock
Consideration, but the holder of such shares shall only be entitled to such
rights as are granted by the DGCL. If a holder of shares of Company Common
Stock or Company Preferred Stock who demands appraisal of those shares under the
DGCL shall effectively withdraw or lose (through failure to perfect or
otherwise) the right to appraisal, then, as of the Effective Time or the
occurrence of such event, whichever last occurs, those shares shall be converted
into and represent only the right to receive the Stock Consideration as provided
in Section 2.1 upon the surrender of the Certificate representing those shares.
The Company shall give Acquiror notice of any written demands for appraisal of
any shares of Company Common Stock or Company Preferred Stock, attempted
withdrawals of such demands and any other instruments served pursuant to the
DGCL received by the Company relating to stockholders' rights of appraisal. The
Company shall not, except with the prior written consent of Acquiror,
voluntarily make any payment with respect to any demands for appraisals of any
shares of Company Common Stock or Company Preferred Stock, offer to settle or
settle any such demands or approve any withdrawal of any such demands.
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2.4. Closing of the Company's Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed, and no transfer of shares
of Company Common Stock or Company Preferred Stock shall thereafter be made.
If, after the Effective Time, any Certificates are presented to the Surviving
Corporation, they shall be cancelled, retired and exchanged as provided in
Section 2.1.
2.5. Outstanding Shares of Company Common Stock and Company Preferred
Stock. From and after the Effective Time, the holders of certificates
evidencing ownership of shares of Company Common Stock or Company Preferred
Stock outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such shares except as otherwise provided herein or by
applicable law.
2.6. Buy-Out of the Company's Optionees. Prior to the Effective Time, the
Company shall take all such actions as are necessary to repurchase all of the
outstanding stock options ("Options") to purchase shares of Company Common Stock
and provide for the termination of these Options effective immediately prior to
the Effective Time. The Company shall obtain the written agreement of each
person holding such an Option ("Optionees") that the payment of the amount set
forth on Schedule 2.6 shall satisfy the Company's obligation to such Optionee.
Schedule 2.6 contains a complete and accurate list of the Optionees.
2.7. Transactions Undertaken in Conjunction with the Merger. In
conjunction with the Effective Time of the Merger and
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the conversion, but prior to the Effective Time, Acquiror shall have (i)
purchased from Heller Financial, Inc. ("Heller"), all of the indebtedness of
Schuylkill Metals Corporation, a wholly owned subsidiary of Company ("Company
Subsidiary"), to Heller, such purchase to be made pursuant to an agreement (the
"Purchase Agreement") entered into as of even date herewith; (2) loaned
$1,797,200 to Company to pay its creditors, debtholders and Optionees the
amounts shown on Schedule 2.7.1; and (3) capitalized Merger Sub with $202,800
which shall be paid to the stockholders of Company at or after the Effective
Time.
III. REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUB
---------------------------------------------------------
Each of Acquiror and Merger Sub hereby represents and warrants to the
Company and Company Subsidiary that:
3.1. Corporate Organization. Each of Acquiror and Merger Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and is duly qualified to do business as a foreign
corporation in each jurisdiction in which its ownership or lease of property or
the nature of the business conducted by it makes such qualification necessary,
except for such jurisdictions in which the failure to be so qualified would not
have a Material Adverse Effect (as defined herein) on Acquiror. Each of
Acquiror and Merger Sub has the requisite corporate power and authority to own,
lease and operate its properties and assets and to carry on its business as it
is now being conducted. Each of Acquiror and Merger Sub has heretofore
delivered to the Company true and complete copies of
9
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its Certificate of Incorporation and By-laws. Except for organizational
activities, and except for activities in connection with this Agreement, Merger
Sub has not conducted any business or engaged in any transactions.
3.2. Authority. Each of Acquiror and Merger Sub has the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and, subject to the fulfillment or waiver at or prior to the
Effective Time of the conditions set forth in Sections 6.1 and 6.3, the
consummation of the transactions contemplated hereby have been duly approved by
the Board of Directors of each of Acquiror and Merger Sub, respectively, and no
other corporate proceedings on the part of Acquiror or Merger Sub are necessary
to authorize this Agreement or to consummate the transactions so contemplated,
subject only to the approval of the sole stockholder of Merger Sub with respect
to the Merger. This Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of, each of Acquiror and Merger Sub,
enforceable against Acquiror and Merger Sub in accordance with its terms, except
as enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought.
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3.3. Consents and Approvals; No Violation. Except for the amendment to
Acquiror's credit agreement, which is described in Section 6.3(d), neither the
execution and delivery of this Agreement by each of Acquiror and Merger Sub, nor
the consummation by each of Acquiror and Merger Sub of the transactions
contemplated hereby (a) conflicts with or results in any breach of any provision
of its Certificate of Incorporation or By-laws, (b) violates, conflicts with,
constitutes a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or results in the termination of, or
accelerates the performance required by, or results in the creation of any lien
or other encumbrance upon any of the properties or assets of Acquiror or Merger
Sub under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Acquiror or Merger Sub is a party or to which
they or any of their respective properties or assets are subject, except for
such violations, conflicts, breaches, defaults, terminations, accelerations or
creations of liens or other encumbrances, which, individually or in the
aggregate, would not have a Material Adverse Effect on Acquiror or (c) require
any consent, approval, authorization or permit of or from, or filing with or
notification to, any court, governmental authority or other regulatory or
administrative agency or commission, domestic or foreign ("Governmental
Entity"), or other third party except (i) filings pursuant to the Securities
Exchange Act of 1934 ("Exchange Act"), (ii) filings
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under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 as amended (the
"HSR Act"), (iii) the filing of a certificate of merger pursuant to the DGCL,
(iv) consents, approvals, authorizations, permits, filings or notifications
which, if not obtained or made would not, individually or in the aggregate, have
a Material Adverse Effect on Acquiror or (v) third party consents, approvals,
authorizations, permits, filings or notifications which if not obtained or made
would not, individually or in the aggregate, have a Material Adverse Effect on
Acquiror.
3.4. Vote Required. No vote of holders of capital stock of Acquiror is
necessary to approve this Agreement or the transactions contemplated hereby.
The affirmative vote of Acquiror, as the sole holder of capital stock of Merger
Sub, is the only vote of the holders of Merger Sub capital stock necessary to
approve this Agreement and the transactions contemplated hereby.
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND COMPANY SUBSIDIARY
The Company and Company Subsidiary hereby represent and warrant to Acquiror
and Merger Sub that:
4.1. Corporate Organization. The Company and Company Subsidiary are
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware and are duly qualified to do business as a foreign
corporation in each jurisdiction in which their ownership or lease of property
or the nature of the business conducted by it makes such qualification
12
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necessary, except for such jurisdictions in which the failure to be so qualified
would not have a Material Adverse Effect on the Company or Company Subsidiary.
The Company and Company Subsidiary have the requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
their business as it is now being conducted. The Company and Company Subsidiary
have heretofore delivered to Acquiror true and complete copies of its
Certificate of Incorporation and By-laws.
4.2. Authority. The Company has the requisite corporate power and
authority to execute and deliver this Agreement and the Company and Company
Subsidiary to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and, subject to the fulfillment or
waiver at or prior to the Effective Time of the conditions set forth in Sections
6.1 and 6.2, the consummation of the transactions contemplated hereby have been
duly approved by the Board of Directors of the Company, and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions so contemplated, subject only to approval by
the stockholders of the Company Common Stock and Company Preferred Stock with
respect to the Merger. All actions to be taken by the Company Subsidiary in
connection with the transactions contemplated by this Agreement have been duly
authorized by the Board of Directors of the Company Subsidiary. This Agreement
has been duly executed and delivered by, and constitutes a valid and binding
obligation of, the Company, enforceable against the Company in accordance with
its terms,
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except as enforceability hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought.
4.3. Capitalization. (a) As of the date hereof, the authorized capital
stock of the Company consists of 1,200,000 shares of Company Common Stock and
60,000 shares of Company Preferred Stock. As of the date hereof and at the
Effective Time of the Merger, 1,075,268 shares of Company Common Stock and
30,000 shares of Company Preferred Stock are, and will be, issued and
outstanding and no shares of Company Common Stock or Company Preferred Stock
are, or will be, held in treasury or reserved for issuance upon exercise of
outstanding employee stock options. All shares of capital stock of the Company
outstanding are duly authorized, validly issued, fully paid and nonassessable
and are not subject to preemptive rights. Except as set forth in this Section
4.3 or in Schedule 4.3, there are no shares of capital stock of the Company
authorized, issued or outstanding and there are no outstanding subscriptions,
options, warrants, rights, convertible securities or any other agreements or
commitments of any character relating to the issued or unissued capital stock or
other securities of the Company obligating the Company to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock of the Company or obligating
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the Company to grant, extend or enter into any subscription, option, warrant,
right, convertible security or other similar agreement or commitment. Except as
set forth in Schedule 4.3, there are no voting trusts or other agreements or
understandings to which the Company is a party with respect to the voting of the
capital stock of the Company. Neither the Company nor the Company Subsidiary
owns any equity or partnership interest in any other entity.
(b) The Company Subsidiary is the only subsidiary of the Company and
has no subsidiaries. The Company Subsidiary is a Delaware corporation engaged
in the business of owning and operating secondary lead smelters. As of the date
hereof, the authorized capital stock of Company Subsidiary consists of 1,000
shares of Common Stock, par value $.10 per share ("Company Subsidiary Common
Stock"). Except as set forth in Schedule 4.3, as of the date hereof and at the
Effective Time of the Merger, 1,000 shares of Company Subsidiary Common Stock
are, and will be, issued and outstanding, and held by the Company free and clear
of all liens, security interests and any other encumbrances, and no shares of
Company Subsidiary Common Stock are, or will be, held in treasury or reserved
for issuance upon exercise of outstanding employee stock options. All shares of
capital stock of the Company Subsidiary outstanding are duly authorized, validly
issued, fully paid and nonassessable and are not subject to preemptive rights.
Except as set forth in this Section 4.3(b) or in Schedule 4.3, there are no
shares of capital stock of the Company Subsidiary authorized, issued or
outstanding and there
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are no outstanding subscriptions, options, warrants, rights, convertible
securities or any other agreements or commitments of any character relating to
the issued or unissued capital stock or other securities of the Company
Subsidiary obligating the Company Subsidiary to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital stock of the
Company Subsidiary or obligating the Company Subsidiary to grant, extend or
enter into any subscription, option, warrant, right, convertible security or
other similar agreement or commitment. Except as set forth in Schedule 4.3,
there are no voting trusts or other agreements or understandings to which the
Company Subsidiary is a party with respect to the voting of the capital stock of
the Company Subsidiary.
4.4. Consent and Approvals; No Violation. Except as set forth in Schedule
4.4 and except as required under the Cancelled Contracts (as hereinafter
defined), neither the execution and delivery of this Agreement by the Company or
Company Subsidiary nor the consummation by the Company of the transactions
contemplated hereby (a) conflicts with or results in any breach of any provision
of its Certificate of Incorporation or By-laws, (b) violates, conflicts with,
constitutes a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or results in the termination of, or
accelerates the performance required by, or results in the creation of any lien
or other encumbrance upon any of the properties or assets of the Company or
Company Subsidiary under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture,
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deed of trust, license, lease, agreement or other instrument or obligation to
which the Company or Company Subsidiary is a party or to which they or any of
their respective properties or assets are subject, except for such violations,
conflicts, breaches, defaults, terminations, accelerations or creations of liens
or other encumbrances, which individually or in the aggregate, would not have a
Material Adverse Effect on the Company or Company Subsidiary or (c) require any
consent, approval, authorization or permit of or from, or filing with or
notification to, any Governmental Entity, or other third party, except (i)
filings under the HSR Act, (ii) filing a certificate of merger pursuant to the
DGCL, (iii) consents, approvals, authorizations, permits, filings or
notifications which, if not obtained or made would not, individually or in the
aggregate, have a Material Adverse Effect on the Company or Company Subsidiary,
(iv) third party consents, approvals, authorizations, permits, filings or
notifications which if not obtained or made would not, individually or in the
aggregate, have a Material Adverse Effect on the Company or Company Subsidiary,
or (v) approval from all creditors, debtholders and stockholders of the Company
and Company Subsidiary and all Optionees of the Company.
4.5. Reports and Financial Statements. The audited financial statements
of the Company and the Company Subsidiary for the year ended December 31, 1993
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be indicated therein or in the
notes thereto) and fairly present the financial position of
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the Company and the Company Subsidiary as at December 31, 1993. The unaudited
financial statements of the Company and the Company Subsidiary for the year
ended December 31, 1994 have been prepared in accordance with the Company's
historical accounting practices. Since January 1, 1995, the Company and the
Company Subsidiary have filed all required forms, reports and documents required
to be filed with each Governmental Entity or self-regulatory organization which
is charged with regulating or supervising any business conducted by the Company
or Company Subsidiary other than any such forms, reports and documents which if
not filed would not have a Material Adverse Effect on the Company or Company
Subsidiary.
4.6. Equipment and Accounts Receivable. Except as set forth on Schedule
4.6 hereto, the Company Subsidiary has good and marketable title to all tangible
personal property of the Company Subsidiary ("Equipment") free and clear of all
mortgages, liens, charges, security interests and any other encumbrances. All
of the accounts and notes receivable of the Company Subsidiary ("Accounts
Receivable") have arisen from bona fide transactions in the ordinary course of
business and are valid, due and owing from third parties. Except as set forth
on Schedule 4.6, the Company Subsidiary owns all Accounts Receivable free and
clear of liens, charges, security interests and any other encumbrances.
4.7. Contracts. Schedule 4.7 sets forth a true and complete list of the
material contracts (except for those Employment Contracts listed on Schedule
4.9) related to the Business of the Company or Company Subsidiary ("Material
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Contracts") as of the date hereof. For purposes of this Agreement, the term
Material Contracts shall mean all contracts of the Company and the Company
Subsidiary (i) to be cancelled in connection with the effectiveness of the
Merger ("Cancelled Contracts") and (ii) contracts for an amount in excess of
$10,000 or for a period of time in excess of nine months ("Continuing
Contracts"), however, the term shall not include purchase orders. Each of the
Material Contracts is in full force and effect, unamended, and the Company or
Company Subsidiary is entitled to the full benefit and advantage of each such
Material Contract in accordance with the terms thereof. Except as set forth on
Schedule 4.7, neither the Company nor Company Subsidiary is in default under any
Continuing Contract, which default is reasonably likely to have, either
individually or in the aggregate, a Material Adverse Effect on the Company or
Company Subsidiary, and there has not occurred any event that with the lapse of
time or the giving of notice or both would constitute such a default. Except as
set forth on Schedule 4.7, none of the Continuing Contracts requires the consent
from or delivery of notice to any person in connection with the transactions
contemplated hereby. The copies of the Material Contracts and other contracts
and written materials that have been made available to Acquiror under this and
other sections of this Agreement are copies of the true contracts and other
written materials of the Company or Company Subsidiary as the case may be.
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4.8. Leases. Schedule 4.8 sets forth a true and complete list of the
existing material leases related to the Business of the Company or Company
Subsidiary (the "Material Leases") as of the date hereof. For purposes of this
Agreement, the term Material Leases shall mean leases with an aggregate value in
excess of $10,000 or for a period of time in excess of nine months. Each of the
Material Leases is in full force and effect, unamended, and the Company or
Company Subsidiary is entitled to the full benefit and advantage of each such
Material Lease in accordance with the terms thereof. Except as disclosed on
Schedule 4.8, none of the Material Leases requires the consent from or delivery
of notice to any person in connection with its transfer to Acquiror or the
transactions contemplated hereby.
4.9. Employment and Severance Agreements. Except as set forth on Schedule
4.9 hereto, there are no employment, severance or termination agreements which
the Company or Company Subsidiary is a party. Except for this Agreement and
those agreements described on Schedule 4.9 hereto (true and complete copies of
which agreements have been delivered to Acquiror), neither the Company nor
Company Subsidiary is a party to, or bound by, any employment agreement or any
other arrangement or understanding with any person that provides for the payment
of any consideration by the Company or Company Subsidiary to such person as a
result of the consummation of any of the transactions contemplated by this
Agreement.
4.10. Taxes. The Company and Company Subsidiary have prepared in good
faith and duly and timely filed, or caused to be
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duly and timely filed, all federal, state, local and foreign income, franchise,
sales and other tax returns or reports required to be filed by them on or before
the date hereof, except where the failure to file would not have a Material
Adverse Effect on the Company or Company Subsidiary. Except as set forth in
Schedule 4.10, the Company or Company Subsidiary have paid, or has made adequate
provision or set up an adequate accrual or reserve for the payment of all taxes,
interest and penalties shown to be owing on all such returns or reports. Except
as set forth in Schedule 4.10, the Company or Company Subsidiary are not a party
to any action or proceeding, nor is any such action or proceeding threatened, by
any Governmental Entity for the assessment or collection of any taxes, and no
deficiency notices or reports have been received by the Company or Company
Subsidiary in respect of any material deficiencies for any tax, assessment, or
government charges. The Company and Company Subsidiary have paid, or has made
adequate provision or set up an adequate accrual or reserve for the payment of,
all taxes, interest, additions to tax, and penalties due with respect to
completed and settled examinations or concluded litigation relating to the
Company or Company Subsidiary. Except as set forth in Schedule 4.10, the
Company and Company Subsidiary have not executed an extension or waiver of any
statute of limitations on the assessment or collection of any tax due that would
have a Material Adverse Effect on the Company or Company Subsidiary, which
extension or waiver is still in effect.
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4.11. Employee Benefit Plans. Except as set forth on Schedule 4.11, all
employee benefit, welfare, bonus, deferred compensation, pension, profit
sharing, stock option, employee stock ownership, consulting, severance, or
fringe benefit plans, formal or informal, written or oral, and all trust
agreements related thereto, relating to any present or former directors,
officers or employees of Company or Company Subsidiary ("Company Employee
Plans") have been maintained, operated, and administered in substantial
compliance with their terms and currently comply, and have at all relevant times
complied, in all material respects with the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), the Code, to the extent applicable, and any
other applicable laws. With respect to each Company Employee Plan which is a
pension plan (as defined in Section 3(2) of ERISA), except as set forth in
Schedule 4.11: (a) each pension plan as amended (and any trust relating
thereto) intended to be a qualified plan under Section 401(a) of the Code either
has been determined by the Internal Revenue Service ("IRS") to be so qualified
or is the subject of a pending application for such determination that was
timely filed, (b) there is no accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived, and no
waiver of the minimum funding standards of such sections has been requested from
the IRS, (c) no reportable event described in Section 4043 of ERISA has
occurred, (d) no defined benefit plan has been terminated, nor has the Pension
Benefit Guaranty Corporation ("PBGC") instituted proceedings to terminate a
defined benefit
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plan or to appoint a trustee or administrator of a defined benefit plan, and no
circumstances exist that constitute grounds under Section 4042 of ERISA
entitling the PBGC to institute any such proceedings, (e) no pension plan is a
"multi-employer plan" within the meaning of Section 3(37) of ERISA and (f) as of
the last day of the most recent plan year which ended prior to the date hereof
and for which an actuarial valuation has been issued by the plan's actuary, with
respect to each defined benefit plan which is a "single-employer plan" (within
the meaning of Section 4001(a)(15) of ERISA) the actuarially determined present
value of all "benefit liabilities" (within the meaning of Section 4001(a)(16) of
ERISA), as determined on the basis of the actuarial assumptions contained in the
plan's most recent actuarial valuation, did not exceed the then current value of
the assets of the plan and there has been no material change in the financial
condition of the plan since the last day of the most recent plan year. No
liability under subtitle C or D of Title IV of ERISA has been incurred by
Company or Company Subsidiary with respect to any "single-employer plan",
formerly maintained by any of them or by any entity which is considered one
employer with Company under Section 4001 of ERISA or Section 414 of the Code.
4.12. Absence of Certain Changes or Events. Except as set forth on
Schedule 4.12, since January 1, 1995, the Company and Company Subsidiary have
conducted their business only in the ordinary course and there has not been any
change in the financial condition, results of operations or business of the
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<PAGE>
Company or Company Subsidiary that has had or would have a Material Adverse
Effect on the Company or Company Subsidiary.
4.13. Litigation. Except as set forth in Schedule 4.13, there is no
legal, administrative, arbitral or other suit, action, investigation or
proceeding pending, or, to the knowledge of the Company or Company Subsidiary,
threatened against or affecting the Company or Company Subsidiary which is
reasonably expected to result in a Material Adverse Effect on the Company, nor
is there any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator, outstanding against the Company or Company Subsidiary
having, or which, insofar as reasonably can be foreseen, in the future would
have, any such Material Adverse Effect.
4.14. Compliance with Laws and Orders. Except for environmental matters
which are addressed in Section 4.18 and those items set forth on Schedule 4.14,
the Business of the Company and Company Subsidiary have not been, and are not
being, conducted in violation of any law, ordinance, regulation, judgment,
order, decree, license or permit of any Governmental Entity, except for possible
violations which individually or in the aggregate do not, and, insofar as
reasonably can be foreseen, in the future shall not, have a Material Adverse
Effect on Acquiror. Except as set forth in Schedule 4.14, no investigation or
review by any Governmental Entity with respect to the Company or Company
Subsidiary is pending or, to the knowledge of the Company or Company Subsidiary,
threatened, nor has any Governmental Entity indicated an intention to conduct
the same in
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<PAGE>
each case other than those the outcome of which shall not have a Material
Adverse Effect on the Company or Company Subsidiary.
4.15. Fees. Neither the Company nor Company Subsidiary has paid or become
obligated to pay any fee or commission to any broker, finder or intermediary in
connection with the transactions contemplated by this Agreement.
4.16. Company Action. The Board of Directors of the Company (at a meeting
duly called and held) has by the requisite vote of all directors present (a)
determined that the Merger is advisable and in the best interests of the Company
and its stockholders, (b) approved this Agreement and, subject to the
fulfillment or waiver at or prior to the Effective Time of the conditions set
forth in Sections 6.1 and 6.3, the transactions contemplated hereby, including
the Merger, (c) directed that the Agreement be submitted for consideration by
the Company's stockholders and (d) approved this Agreement and the Merger for
purposes of Section 252 of the DGCL.
4.17. Environmental Matters. (a) Except as set forth on Schedule 4.17 or
as would not individually or in the aggregate have a Material Adverse Effect on
the Company or Company Subsidiary,
(i) the Company and Company Subsidiary are and have been in compliance
with all applicable Environmental Laws (as hereinafter defined),
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(ii) the Real Property (as hereinafter defined) does not contain any
Hazardous Substance (as hereinafter defined) in violation of any applicable
Environmental Law,
(iii) the Company or Company Subsidiary has not received any written
notices, demand letters or written requests for information from any
Governmental Entity or any third party indicating that the Company or
Company Subsidiary may be in violation of, or liable under, any
Environmental Law,
(iv) there are no civil, criminal or administrative actions, suits,
demands, claims, hearings, investigations or proceedings pending or
threatened against the Company or Company Subsidiary with respect to the
Company or Company Subsidiary or the Real Property relating to any
violation, or alleged violation, of any Environmental Law,
(v) no reports have been filed, or are required to be filed, by the
Company or Company Subsidiary concerning the release of any Hazardous
Substance or the threatened or actual violation of any Environmental Law on
or at the Real Property,
(vi) to the knowledge of the Company and Company Subsidiary, there are
no underground storage tanks on, in or under any of the Real Property and
no underground storage tanks have been closed or removed from any Real
Property while such Real Property was owned or operated by the Company or
Company Subsidiary, and
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(vii) to the knowledge of the Company and Company Subsidiary, the
Company has not incurred, and none of the Real Property is presently
subject to, any liabilities (fixed or, to the knowledge of the Company or
Company Subsidiary, contingent) relating to any suit, settlement, court
order, administrative order, judgment or claim asserted or arising under
any Environmental Law.
(b) For purposes of this Section 4.17, the following terms shall have
the indicated meaning:
"Real Property" means all real property presently or formerly owned or
operated by the Company on which facilities are or were located and all
real property (including property held as trustee or in any other fiduciary
capacity) over which the Company currently or formerly has exercised
dominion, management or control.
"Environmental Law" means any applicable federal, state or local
statute, law, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction,
directive, requirement or agreement with any Governmental Entity, now
existing, relating to: (a) the protection, preservation or restoration of
the environment, (including, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, surface land, subsurface land,
plant and animal life or any other natural resource), or to human health or
safety, or (b) the exposure to, or the use, storage, recycling, treatment,
generation, transportation,
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processing, handling, labeling, production, release or disposal of
Hazardous Substances, in each case as amended. The term Environmental Law
includes, without limitation, (x) the following statutes, each as amended:
(i) the federal Clean Air Act;
(ii) the federal Clean Water Act;
(iii) the federal Resource Conservation and Recovery Act of 1976
("RCRA");
(iv) the federal Comprehensive Environmental Response
Compensation and Liability Act of 1980 ("CERCLA");
(v) the federal Toxic Substances Control Act;
(vi) the federal Occupational Safety and Health Act of 1970;
(vii) the federal Safe Drinking Water Act;
(viii) the Federal Insecticide, Fungicide and Rodenticide Act;
(ix) Louisiana Hazardous Waste Control Law;
(x) Louisiana Air Control Law;
(xi) Louisiana Water Control Law;
(xii) Louisiana Solid Waste Control Law;
(xiii) Missouri Clean Water Law;
(xiv) Missouri Air Conservation Law;
(xv) The Abandoned or Uncontrolled Sites Act;
(xvi) Missouri Hazardous Waste Management Law;
(xvii) Missouri Hazardous Substances in the Workplace Law;
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(xviii) Missouri solid waste management law;
(xix) Missouri underground storage tank law;
and (y) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as negligence,
nuisance, trespass and strict liability) that may impose liability or
obligations for injuries or damages due to, or threatened as a result of,
the presence of or exposure to any Hazardous Substance.
"Hazardous Substance" means any substance, whether liquid, solid or
gas, listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, under any applicable Environmental Law, whether
by type or by quantity. Hazardous Substance includes, without limitation,
(i) any "hazardous substance" as defined in CERCLA, (ii) any "hazardous
waste" as defined in RCRA, and (iii) any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste, special
waste or petroleum or any derivative or by-product thereof, radon,
radioactive material, friable asbestos, asbestos containing material
releasing friable asbestos, urea formaldehyde foam insulation, lead and
polychlorinated biphenyls ("PCBs").
(c) For purposes of this Section 4.17, "to the knowledge of the
Company or Company Subsidiary" shall mean to the knowledge of Kent Hudson,
Glen Hasse and Earl Cornette.
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(d) There are no permits or licenses required under any Environmental
Law in respect of the Real Property presently operated by the Company or
Company Subsidiary.
(e) The Company and Company Subsidiary have not received written
notice that any part of the Real Property has been or is listed as a site
containing Hazardous Substances pursuant to any Environmental Law.
4.18. Labor Relations. Except as set forth in Schedule 4.18, neither
Company nor Company Subsidiary is a party to or bound by any collective
bargaining agreement ("Collective Bargaining Agreements") respecting its
employees, nor is there pending, or to the best knowledge of the Company
threatened, any strike, walkout or other work stoppage or labor organizational
effort, and neither the Company nor Company Subsidiary has received any union
grievances, complaints, or claims, the liability for which would have a Material
Adverse Effect on the Company or Company Subsidiary.
V. COVENANTS OF THE COMPANY AND COMPANY SUBSIDIARY
-----------------------------------------------
5.1. Acquisition Proposals. The Company shall not, directly or
indirectly, and shall instruct and otherwise use its best efforts to cause its
officers, directors, employees, agents or advisors or other representatives or
consultants not to, directly or indirectly, (i) encourage, solicit or initiate
any proposals or offers from any person relating to any acquisition or purchase
of all or a material amount of the assets of, or any securities of, or any
merger, consolidation or business
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combination with the Company (such transactions are referred to herein as
"Acquisition Transactions") or (ii) except as the Board of Directors of the
Company deems necessary, on the advice of outside counsel, in the exercise of
its fiduciary obligations under applicable law, participate in any discussions
or negotiations regarding, or furnish to any other person any information with
respect to, an Acquisition Transaction; provided, however, that nothing
contained in this Section 5.1 shall restrict or prohibit any disclosure that, in
the opinion of the Board of Directors of the Company on advice of outside
counsel, is otherwise required under applicable law. The Company shall promptly
notify the other party orally and in writing of any proposal or offer regarding
an Acquisition Transaction or any inquiries with respect thereto. Such written
notification shall include the identity of the person making such inquiry or
Acquisition Transaction proposal or offer and such other information with
respect thereto as is reasonably necessary to apprise the other party of the
material terms of such Acquisition Transaction proposal or offer and all other
material information relating thereto. The Company shall give Acquiror
contemporaneous written notice upon engaging in discussions or negotiations
with, or providing any information regarding the Company to any such person
regarding a possible Acquisition Transaction.
5.2. Interim Operations of the Company and Company Subsidiary. During the
period from the date of this Agreement to the Effective Time, except as
contemplated by this Agreement, as
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required by law or as otherwise approved by Acquiror (which shall not be
unreasonably withheld):
5.2.1. Conduct of Business. The Company and Company Subsidiary shall
conduct their business only in, and not take any action except in, the
ordinary course of business. The Company and Company Subsidiary shall use
reasonable efforts to preserve intact the business organization of the
Company and Company Subsidiary, to keep available the services of its
present key officers and employees and to preserve the goodwill of those
having business relationships with the Company and Company Subsidiary.
5.2.2. Certificate of Incorporation and By-laws. Except as
contemplated by this Agreement, neither the Company nor the Company
Subsidiary shall make any change or amendment to its Certificate of
Incorporation or By-laws.
5.2.3. Capital Stock; Options. Neither the Company nor Company
Subsidiary shall issue, pledge or sell any shares of its capital stock or
that of its subsidiary or any other securities or issue any subscriptions,
options, warrants, rights, convertible securities or enter into any
agreements or commitments of any character relating to the issued or
unissued capital stock or other securities of the Company or Company
Subsidiary obligating the Company or Company Subsidiary to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares of
capital stock of the Company or Company Subsidiary or obligating the
Company or Company Subsidiary to grant, extend or enter into
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any subscription, option, warrant, right, convertible security or other
similar agreement or commitment or enter into any arrangement or contract
with respect to the purchase or voting of shares of its capital stock, or
adjust, split, combine or reclassify any of its capital stock or other
securities or make any other changes in its capital structures; nor shall
the Company or Company Subsidiary make any grant under any incentive stock
option plan.
5.2.4. Dividends. Neither the Company nor Company Subsidiary shall
declare, set aside, pay or make any dividend or other distribution or
payment (whether in cash, stock or property) with respect to, or purchase
or redeem, any shares of their capital stock.
5.2.5. Employee Plans, Compensation, Etc. Except as set forth on
Schedule 5.2.5, neither the Company nor Company Subsidiary shall adopt or
amend any bonus, profit sharing, compensation, severance, termination,
stock option, pension, retirement, deferred compensation, employment or
other employee benefit agreements, trusts, plans, funds, employee stock
ownership, consulting, severance or fringe benefit plan, formal or
informal, written or oral, or other arrangements for the benefit or welfare
of any director, officer or employee, or (except for increases in the
ordinary course of business) increase the compensation or fringe benefits
of any director, officer or employee or pay any benefit not required by any
existing plan or arrangement
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<PAGE>
or take any action or grant any benefit not required under the terms of any
existing agreements, trusts, plans, funds or other such arrangements or
enter into any contract, agreement, commitment or arrangement to do any of
the foregoing.
5.2.6. Representations and Covenants. Neither the Company nor the
Company Subsidiary shall take any action, or knowingly omit to take any
action, that would, or that would reasonably be expected to, result in (i)
any of the representations and warranties of the Company set forth in
Article IV becoming untrue or (ii) any of the conditions to closing set
forth in Sections 6.1 or 6.3 not being satisfied.
5.2.7. Other Actions. Neither the Company nor the Company Subsidiary
shall take any action that would materially adversely affect its ability to
perform its obligations under this Agreement.
5.2.8. Access and Information. Upon reasonable notice, the Company
and Company Subsidiary shall afford to the Acquiror and their
representatives (including, without limitation, directors, officers and
employees of the other party hereto and its affiliates, and counsel,
accountants and other professionals retained by it) such access during
normal business hours throughout the period prior to the Effective Time to
the books, records (including, without limitation, tax returns and work
papers of independent auditors), properties, personnel and to such other
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information as Acquiror reasonably requests; provided, however, that
neither the Company nor the Company Subsidiary shall be required to provide
access to any such information if the providing of such access (i) would
violate a binding contractual obligation, (ii) would, as advised by outside
counsel, be reasonably likely to result in the loss or impairment of any
privilege with respect to such information or (iii) would be precluded by
any law, ordinance, regulation, judgment, order, decree, license or permit
of any Governmental Entity.
5.3. Certain Filings, Consents and Arrangements. Acquiror and the Company
shall (a) promptly file all notices, applications and reports required to be
filed with the Governmental Entities between the date of this Agreement and the
Effective Time with respect to the Merger and the other transactions
contemplated by this Agreement, (b) cooperate with one another (i) in promptly
determining whether any other filings are required to be made or consents,
approvals, licenses, registrations, permits or authorizations are required to be
obtained under any other applicable 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 consents, approvals,
licenses, registrations, permits or authorizations and (c) deliver to the other
parties to this Agreement copies of all such reports and filings promptly after
they are filed.
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5.4. Additional Agreements. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its best efforts to take
promptly, or cause to be taken, all actions and to do promptly, or cause to be
done, all things required hereunder or necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including using its best efforts to
obtain all necessary actions or non-actions, extensions, waivers, consents and
approvals from all applicable Governmental Entities, effecting all necessary
filings (including, without limitation, making all filings under any securities
laws) and obtaining any required contractual consents.
5.5. Publicity. The initial press release announcing this Agreement and
all other press releases relating to the Acquisition Transactions contemplated
by this Agreement shall be jointly prepared and issued.
5.6. Stockholders' Meetings.
----------------------
(a) The Company shall take all action necessary, in accordance with
applicable law and its Certificate of Incorporation and By-laws, to obtain
approval by its stockholders of the Merger and adopt this Agreement promptly;
provided, however, that such recommendation may be withdrawn, modified or
amended to the extent the Board of Directors of the Company deems it necessary,
upon advice of outside counsel, in the exercise of its fiduciary obligations
under applicable law, in which event the Board of Directors of the Company shall
not be obligated to submit the Agreement for consideration by the Company's
36
<PAGE>
stockholders, and shall immediately notify Acquiror of such determination.
(b) Acquiror shall take all necessary action to approve the Merger in
its capacity as the sole stockholder of Merger Sub.
5.7. Employee Matters.
----------------
5.7.1. Continuation of Certain Benefits. Through December 31, 1995
Acquiror shall continue each and every employee benefit plan (including,
without limitation, the Company's Pension Plan For The Benefit of Employees
of Schuylkill Metals Corporation (the "Company's Retirement Plan") and any
employee benefit plan within the meaning of Section 3(3) of ERISA),
program, practice, arrangement or policy which is disclosed in Schedule
5.7.1 and which provides employee benefits to employees, former employees
or retirees (including, without limitation, directors and officers) of the
Company or the Company Subsidiary. Amounts accrued through December 31,
1995, in accordance with the terms and provisions of the Company
Subsidiary's management bonus plan shall be paid to employees of the
Company Subsidiary in accordance with its historical practices in January
1996.
5.7.2 Benefits of Certain Employees. For any employee of the Company
or the Company Subsidiary who is retained by Acquiror or any entity under
common control with the Acquiror, including, at and after the Effective
Time, the Company and a Company Subsidiary (collectively, "Acquiring
Employer"):
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(i) Acquiring Employer shall recognize such employee's service
with the Company and the Company Subsidiary for purposes of
determining vesting under, eligibility to participate in, and
eligibility to retire under each and every employee benefit plan
(including, without limitation, any employee benefit plan within the
meaning of Section 3(3) of ERISA), practice, policy, program and
arrangement listed on Schedule 5.7.1 which provides employee benefits
to employees, former employees or retirees (including, without
limitation, directors and officers) of Acquiring Employer.
(ii) The rate at which each employee covered under the Company
Retirement Plan (or any successor thereto) accrues benefits thereunder
shall not be reduced before December 31, 1995.
5.8. Indemnification.
---------------
5.8.1. Continuing Indemnification. From and after the Effective
Time, Acquiror shall assume and honor any and all obligations of the
Company immediately prior to the Effective Time with respect to the
indemnification of any director or officer (whether elected or appointed)
of the Company or Company Subsidiary (collectively, the "Indemnitees")
arising out of the Company's Certificate of Incorporation or By-Laws or the
Company Subsidiary's Certificate of Incorporation or its By-Laws as if such
obligations were pursuant to a valid and binding contract or
38
<PAGE>
arrangement between Acquiror and such Indemnitees. Notwithstanding any
other provision of the Agreement, this Section 5.8 shall survive the
Effective Time.
5.8.2. Indemnification by Successors or Assigns. In the event
Acquiror or any of its successors or assigns (i) reorganizes or
consolidates with or merges into or enters into another business
combination transaction with any other person or entity and is not the
resulting, continuing or surviving corporation or entity of such
consolidation, merger or transaction, or (ii) liquidates, dissolves or
transfers all or substantially all of its properties and assets to any
person or entity, then, and in each case, proper provision shall be made so
that the successors and assigns of Acquiror assume the obligations set
forth in this Section 5.8.
5.8.3. Intended Third-Party Beneficiaries. Notwithstanding any other
provision of this Agreement, this Section 5.8 shall be construed as an
agreement, as to which the Indemnitees are intended to be third-party
beneficiaries, between Acquiror and the Indemnitees, as unaffiliated third
parties, and is not subject to any limitations to which Acquiror may be
subject in indemnifying its own directors, officers, employees, agents and
other persons who serve at the request of Acquiror.
5.8.4. Procedure for Seeking Indemnification. Any Indemnitee wishing
to claim indemnification under Section 5.8, upon learning of any such
claim, action, suit or
39
<PAGE>
proceeding, shall promptly notify the Acquiror thereof, but the failure to
so notify shall not relieve Acquiror of any liability it may have to such
Indemnitee if such failure does not materially prejudice the Acquiror. In
the event of any such claim, action, suit or proceeding (whether arising
before or after the Effective Time) as to which Acquiror agrees that
indemnification under this Section 5.8 is applicable, (i) Acquiror shall
have the right to assume the defense thereof, and neither Acquiror nor the
Surviving Corporation shall be liable to such Indemnitees for any legal
expenses of other counsel or any other expenses subsequently incurred by
such Indemnitees in connection with the defense thereof, except that if
Acquiror elects not to assume such defense or counsel for the Indemnitees
advises that there are issues which raise conflicts of interest between
Acquiror or the Surviving Corporation shall pay the reasonable fees and
expenses of such counsel for the Indemnitees as statements therefor are
received; provided, however, that Acquiror and the Surviving Corporation
shall be obligated pursuant to this paragraph 5.8.5. to pay for only one
firm of counsel for all Indemnitees in any jurisdiction with respect to a
matter unless the use of one counsel for such Indemnitees would present
such counsel with a conflict of interest and (ii) the Indemnitees will
cooperate in the defense of any such matter. Neither Acquiror nor the
Surviving Corporation shall be liable for settlement of any claim, action
or proceeding hereunder
40
<PAGE>
unless such settlement is effected with its prior written consent; and
provided further however that neither Acquiror nor the Surviving
Corporation shall have any obligation hereunder to any Indemnitee when and
if a court of competent jurisdiction shall ultimately determine, and such
determination shall have become final and nonappealable, that the
indemnification of such Indemnitee in the manner contemplated hereby is
prohibited by applicable law.
VI. CONDITIONS
----------
6.1. Conditions to Each Party's Obligations to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) The Merger shall have been approved and adopted by the requisite
votes of the holders of the Company's Common Stock.
(b) All authorizations, consents, orders or approvals of, and all
expirations of waiting periods imposed by, any Governmental Entity or other
third party (collectively, "Consent") which are necessary for the consummation
of the Merger (other than immaterial Consents, the failure to obtain which would
not have a Material Adverse Effect on Acquiror and the Company taken as a whole)
shall have been obtained or shall have occurred and shall be in full force and
effect at the Effective Time.
(c) No temporary restraining order, preliminary or permanent
injunction or other order by any federal or state court
41
<PAGE>
in the United States which prevents the consummation of the Merger shall have
been issued and remain in effect.
(d) The Acquiror, with the cooperation of the Company and Company
Subsidiary, shall have effected the assignment and transfer of all operating
permits, registrations, licenses and approvals relating to the Businesses of the
Company and Company Subsidiary, including, without limitation, all environmental
permits, registrations, licenses and approvals.
(e) The Acquiror, with the cooperation of the Company and Company
Subsidiary, shall have prepared and filed all documents required under the HSR
Act and the waiting period thereunder shall have expired.
(f) The Company and Company Subsidiary shall have released Heller, the
holders of the $6,752,233 Senior Subordinated Five Year Promissory Note and the
$500,000 Senior Subordinated Six Month Promissory Note of the Company and the
holders of the $5,000,000 Junior Subordinated Promissory Note of the Company
(the "Debtholders") and the Company shall have released its stockholders and
Optionees, from all obligations relating to their status as Debtholders,
stockholders and Optionees, respectively, including, without limitation, all
guarantees or other undertakings of Heller in connection with Company
Subsidiary's contract with Engitec Impianti SpA and lending arrangements with
Interbanca and the four letters of credit secured by Heller's guarantee (letter
of credit to the Louisiana Department of Environmental Quality for $178,762;
letter of credit to the Louisiana Department of Environmental
42
<PAGE>
Quality for $43,121; letter of credit to the Missouri Department of Natural
Resources for $645,877; and letter of credit to Reliance for $450,000)
(collectively, the "SMC Credit Guarantees"); provided, however, that the
stockholders, Debtholders and Optionees shall release the Company and Company
Subsidiary from any and all obligations other than the obligation to the
Stockholders to receive payment in accordance with the terms of the Agreement.
In addition, the Company shall have settled, and shall have been released from,
any continuing obligation to any third-party relating to management fees.
6.2. Conditions to Obligation of the Company to Effect the Merger. The
obligation of the Company to effect the Merger shall be subject to the
fulfillment or waiver at or prior to the Effective Time of the additional
following conditions:
(a) Acquiror shall have performed in all material respects its
covenants contained in this Agreement required to be performed at or prior to
the Effective Time.
(b) The representations and warranties of Acquiror contained in this
Agreement shall be true in all material respects when made, and as of the
Effective Time as if made at and as of such time, except as expressly
contemplated or permitted by this Agreement and except for representations and
warranties relating to a time or times other than the Effective Time which were
or shall be true in all material respects at such time or times.
43
<PAGE>
(c) Acquiror shall have capitalized Merger Sub with the $202,800
needed to pay the stockholders of the Company promptly after the Effective Time.
(d) Acquiror shall have purchased all of the indebtedness of the
Company Subsidiary to Heller in accordance with the terms of the Purchase
Agreement.
(e) Acquiror shall have made a loan of $1,797,200 in cash to Company.
Such amount loaned to Company shall have been used by Company to make payments
due to its debtholders and optionees in connection with the Merger.
(f) Acquiror shall have furnished the Company a Certificate dated of
the Closing Date, signed by the Chief Financial Officer of Acquiror that, to the
best of his knowledge and belief after due inquiry, the conditions set forth in
Sections 6.2(a), 6.2(b), 6.2(c), 6.2(d) and 6.2(e) have been satisfied.
6.3. Conditions to Obligation of Acquiror to Effect the Merger. The
obligation of Acquiror to effect the Merger shall be subject to the fulfillment
or waiver at or prior to the Effective Time of the additional following
conditions:
(a) The Company and Company Subsidiary shall have performed in all
material respects its covenants contained in this Agreement required to be
performed at or prior to the Effective Time.
(b) The representations and warranties of the Company contained in
this Agreement shall be true in all material
44
<PAGE>
respects when made and as of the Effective Time as if made on and as of such
time, except as expressly contemplated or permitted by this Agreement and except
for representations and warranties relating to a time or times other than the
Effective Time which were or shall be true in all material respects at such time
or times.
(c) The Company Subsidiary shall have distributed to Company its net
intercompany receivables from the Company.
(d) The Acquiror's credit agreement with a group of lenders led by
Bankers Trust Company shall have been amended to permit the transactions
contemplated by this Agreement and the Purchase Agreement.
(e) The Company shall have furnished Acquiror a Certificate dated as
of Closing Date, signed by the President or Chief Executive Officer and the
Chief Financial Officer of the Company that, to the best of their knowledge and
belief after due inquiry, the conditions set forth in Sections 6.3(a), 6.3(b),
6.3(c) and 6.3(d) have been satisfied.
VII. MISCELLANEOUS
-------------
7.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval by the stockholders of the
Company and/or the stockholders of Acquiror:
(a) by mutual consent of the of Acquiror and the Board of Directors
of the Company;
45
<PAGE>
(b) by either Acquiror or the Company if the Merger shall not have
been consummated on or before December 31, 1995 (provided the terminating party
is not otherwise in material breach of its obligations under this Agreement);
(c) by Acquiror or the Company, if its Board of Directors so
determines by vote of a majority of the members of its entire Board, in the
event of (i) a breach by the other party of any representation or warranty
contained herein, which breach has not been cured within thirty (30) days after
the giving of written notice to the breaching party of such breach and which
breaches, individually or in the aggregate, would cause the conditions set forth
in Section 6.2(b) or 6.3(b), as the case may be, not to be met if the date of
the Board action described above were the Closing Date or (ii) a material breach
by the other party of any of the covenants or agreements contained herein, which
breach has not been cured within thirty (30) days after the giving of written
notice to the breaching party of such breach;
(d) by the Company if any of the conditions specified in Sections 6.1
and 6.2 have not been met or waived by the Company at such time as such
condition can no longer be satisfied; or
(e) by Acquiror if any of the conditions specified in Sections 6.1
and 6.3 have not been met or waived by Acquiror at such time as such condition
can no longer be satisfied.
7.2. Non-Survival of Representations, Warranties and Agreements. The
representations, warranties and covenants in this Agreement shall terminate at
the Effective Time or the
46
<PAGE>
earlier termination of this Agreement pursuant to Section 7.1, as the case may
be; provided, however, that if the Merger is consummated, Section 5.7, Section
5.8, and this Section 7.2 shall survive the Effective Time to the extent
contemplated by such Sections; provided further, that Section 7.10 hereof shall
in all events survive any termination of this Agreement.
7.3. Waiver and Amendment. Any provision of this Agreement may be waived
at any time by the party which is, or whose stockholders are, entitled to the
benefits thereof, and this Agreement may be amended or supplemented at any time,
provided that no amendment shall be made after any stockholder approval of the
Merger which reduces or changes the form of the Stock Consideration without
further stockholder approval. No such waiver, amendment or supplement shall be
effective unless in a writing which makes express reference to this Section 7.3
and is signed by the party or parties sought to be bound thereby.
7.4. Entire Agreement. This Agreement contains the entire agreement
between Acquiror and the Company with respect to the Merger and the other
transactions contemplated hereby, and supersedes all prior agreements among the
parties with respect to such matters.
7.5. Applicable Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of Michigan.
47
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7.6. Certain Definitions; Headings.
-----------------------------
(a) For purposes of this Agreement, the term:
(i) "affiliate" shall have the meaning ascribed to it in Rule 12b-2
of the General Rules and Regulations under the Exchange Act;
(ii) "Business of the Company" means the ownership and operation of
secondary lead smelters;
(iii) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of stock,
as trustee or executor, by contract or credit arrangement or otherwise;
(iv) "person" means an individual, corporation, partnership,
association, trust or unincorporated organization; and
(v) "Material Adverse Effect" on the Company, Company Subsidiary or
Acquiror, as the case may be, means a material adverse effect (other than
as a result of generally accepted accounting principles or as a result of
events or circumstances disclosed by Company or Company Subsidiary, as the
case may be, in any Schedule to this Agreement) that would (x) materially
and adversely affect (i) the ability of the Company, Company Subsidiary or
Acquiror, as the case may be, to consummate the transactions contemplated
hereby or (ii) the business or financial condition of the Company and
48
<PAGE>
the Company Subsidiary taken as a whole on the one hand, and the Acquiror
on the other, or (y) substantially impair the results of operations, as
computed on an annual basis, of the Company, and the Company Subsidiary
taken as a whole on the one hand, and the Acquiror on the other.
(vi) "subsidiary" of any person means, except where the context
otherwise requires, any corporation, partnership, trust or similar entity
of which the Acquiror or any other person, as the case may be (either alone
or through or together with any other subsidiary), owns, directly or
indirectly, more than 50% of the stock or other equity interests, the
holders of which are generally entitled to vote for the election of the
board of directors or other governing body of such corporation.
(b) The descriptive headings contained in this Agreement are for
convenience and reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(c) Unless the context of this Agreement expressly indicates
otherwise, (i) any singular term in this Agreement shall include the plural and
any plural term shall include the singular and (ii) the term section or schedule
shall mean a section or schedule of or to this Agreement.
7.7. Notices. All notices, consents, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given or delivered if delivered personally, telexed with receipt
acknowledged, mailed by
49
<PAGE>
registered or certified mail return receipt requested, sent by facsimile with
confirmation of receipt, or delivered by a recognized commercial courier
addressed as follows:
If to the Company to: Schuylkill Holdings, Inc.
2400 Brooklawn Drive
P.O. Box 74040
Baton Rouge, LA 70874
With copy to: Jones, Day, Reavis & Pogue
901 Lakeside Avenue
North Point
Cleveland, Ohio 44114
Attention: Mary Lynn Durham, Esq.
If to Acquiror to: Exide Corporation
1400 North Woodward Ave., Suite 130
Troy, Michigan 48304
Attention:
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section 7.7.
7.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute but one agreement.
7.9. Parties in Interest; Assignment. This Agreement is not intended to
nor shall it confer upon any person other than the parties hereto and the
persons referred to in Section 5.8.
7.10. Costs and Expenses. Except as otherwise specifically provided
herein all legal and other costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
7.11. Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any
50
<PAGE>
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties hereto shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
7.12. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party hereto. Upon any such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated by this Agreement are consummated to the
extent possible.
7.13. Acquiror Guarantee. Acquiror hereby guarantees to the Company and
to any third party beneficiaries permitted by this Agreement, both as to payment
and performance, all obligations of Merger Sub or the Surviving Corporation
provided in this Agreement or undertaken pursuant hereto.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement as of the date first above written.
ATTEST: SCHUYLKILL HOLDINGS, INC.
By By E. B. Cornette
------------------------ -----------------------------------
Its: Chairman
-----------------------------
EXIDE CORPORATION
By John M. Wursta By Alan E. Gauthier
------------------------ -----------------------------------
Its: Executive Vice President
-----------------------------
E/S ACQUISITION, INC.
By John M. Wursta By Alan E. Gauthier
------------------------ -----------------------------------
Its: Vice President
-----------------------------
52
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APPENDIX A
List of Schedules
-----------------
Schedule 2.1
Schedule 2.6
Schedule 2.7.1
Schedule 4.3
Schedule 4.4
Schedule 4.6
Schedule 4.7
Schedule 4.8
Schedule 4.9
Schedule 4.10
Schedule 4.11
Schedule 4.12
Schedule 4.13
Schedule 4.14
Schedule 4.17
Schedule 4.18
Schedule 5.2.5
Schedule 5.7.1
53
[The schedules to the Agreement and Plan of Merger, this Exhibit 2.1, have been
omitted from this filing, but will be furnished supplementally to the Commission
upon request. Such schedules provide information on amounts paid to each stock,
option and debt holder of SHI, exceptions to certain of SHI's representations,
warranties and covenants and information on certain employee benefit plans.]
<PAGE>
Exhibit 2.2
PURCHASE AGREEMENT
------------------
THIS PURCHASE AGREEMENT, dated as of August 9, 1995 (this
"Agreement"), is made and entered into by and between Exide Corporation, a
Delaware corporation (the "Company"), and Heller Financial, Inc., a Delaware
corporation ("Heller").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, subject to the satisfaction of the conditions precedent
described herein, the Company wishes to acquire, and Heller wishes to sell,
certain debt and other obligations owed to Heller by Schuylkill Holdings, Inc.
and Schuylkill Metals Corporation (collectively, "Schuylkill") as more
particularly described hereinafter; and
WHEREAS, as consideration for the acquisition of such debt and other
obligations, the Company shall issue and sell to Heller common stock of the
Company ("Common Stock") and shall provide certain other consideration, all as
more particularly set forth below;
NOW, THEREFORE, in consideration of premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE 1.
THE TRANSACTION
---------------
1.1. The Company's Consideration.
(A) At Closing (as hereinafter defined), the Company (i) will issue
and sell to Heller, and Heller will purchase from the Company, that number of
shares of Common Stock set forth in Section 1.1(b) below (collectively, the
"Securities") and (ii) will issue to Heller, and Heller will purchase from the
Company, the Contingent Note (as hereinafter defined).
(B) The Securities shall be composed of that number of whole shares
of Common Stock equal to the result derived from dividing the Preliminary
Consideration (as hereinafter defined)
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<PAGE>
by forty-five (45). For purposes of this Agreement, "Preliminary Consideration"
shall mean the sum of:
(i) twenty three million dollars ($23,000,000); plus (minus)
(ii) the increase (decrease) from October 31, 1994 to June 30, 1995
of Schuylkill's accounts receivable plus inventory less accounts payable
(including checks outstanding which have not cleared Bank of America
Illinois) ("Working Capital"); plus
(iii) an amount equal to the aggregate amount actually spent by
Schuylkill from and including May 31, 1995 to and including June 30, 1995
in respect of capital expenditures on the projects listed on Exhibit A to
this Agreement; plus
(iv) the amount of all cash held in Schuylkill's bank accounts as of
the Closing Date.
(C) The Company will thereafter pay to Heller the 'make-whole'
amounts as and when due pursuant to the provisions of Article 3 of this
Agreement (collectively, the "Make-Whole Amounts").
1.2. Heller's Consideration.
(A) At the Closing, in consideration for the delivery of the
Securities, the agreement of the Company to pay the Make-Whole Amounts and the
delivery of the Contingent Note, Heller will transfer and assign to the Company
all of its right, title and interest in those certain credit, collateral and
related documents more particularly described on Exhibit B hereto (collectively,
the "Assigned Agreements").
(B) Heller will thereafter pay to the Company, as and when due, those
amounts required to be paid pursuant to the Tax Matters Agreement (as
hereinafter defined).
1.3. Closing. Subject to the operation of the termination provisions
set forth in Section 6.14 of this Agreement, the closing of this transaction
(the "Closing") will take place at the offices of McDermott, Will & Emery, 227
West Monroe, Chicago, at 10:00 a.m. on August 31, 1995 or, if later, the date on
which all of the conditions precedent to closing set forth in Section 1.4 hereof
have been satisfied or at such other time and place as may be mutually agreed by
the parties. The effective date of the Closing shall be referred to herein as
the "Closing Date."
-2-
<PAGE>
1.4. Conditions Precedent to Closing. The obligations of the parties
hereunder are subject to the fulfillment, prior to or at Closing, as the case
may be, of each of the following conditions:
(A) Registration Rights. At Closing, the Company and Heller will
enter into a registration and related rights agreement relating to the
Securities in a form mutually acceptable to the parties hereto.
(B) Contingent Note. At Closing, the Company will deliver to Heller
an unsecured contingent promissory note in a form mutually acceptable to the
parties hereto (the "Contingent Note"). The value of the Contingent Note will
be determined so that if actual lead prices for the four and one-half years
after Closing average between 26.3 cents per pound and 32.5 cents per pound
(rounded to the nearest 1/10 of one cent), the value of the Contingent Note will
range from $182,420 to $9,942,860 and shall otherwise be as indicated in the
table attached to such Note (with all such prices being determined on the basis
of the London Metal Exchange ("LME") average monthly settlement price as quoted
in Platt's Metals Week). If the average lead price is less than 26.3 cents per
pound, the Contingent Note will have no value. If the average lead price is
greater than 32.5 cents per pound, the value of the Contingent Note will
increase by $118,575 for every 1/10th of one cent increase in the average price
of lead. The principal amount of the Contingent Note shall be determined after
deducting any amounts that the Company shall be entitled to setoff pursuant to
the Tax Matters Agreement. The Contingent Note shall be payable thirty (30)
days after four and one-half years following the Closing Date and the interest
thereon shall be calculated retroactively in connection with each payment. The
applicable interest rate for any quarterly period shall be calculated by
dividing the sum of the applicable LIBOR rate for the three months in such
period by three. The applicable LIBOR rate for any month shall be the three
month LIBOR rate on the last business day of such month as published in The Wall
Street Journal. Interest on the Contingent Note shall be compounded quarterly.
(C) Tax Matters Agreement. At the Closing, the Company and Heller
shall enter into an agreement in a form mutually acceptable to the parties
hereto (the "Tax Matters Agreement"), providing for the payment of the
contingent tax liabilities (the "Tax Liabilities") of Schuylkill relating to the
1988 and 1989 tax audits and to any tax liabilities arising from the
amortization of certain non-competition agreements entered into in 1988 and
1990. The Tax Matters Agreement shall provide, among other things, for the
allocation of the Tax Liabilities as follows: The Company and Heller shall
share such Tax Liabilities equally up to a total of $1,000,000. Heller's
contractual obligation relating to the Tax Liabilities shall terminate four and
one-half years after the Closing Date. The Company shall pay any Tax
Liabilities in excess of such $1,000,000 amount. If any such Tax Liabilities
shall exceed $1,000,000 the Company shall be entitled to setoff up to $500,000
of the amounts paid by the Company in excess of $1,000,000 against any payments
that it may be obligated to make to Heller under the Contingent Note. The
-3-
<PAGE>
Tax Matters Agreement shall also provide that Heller shall pay to the Company
interest at the rate of six percent (6%) per annum, up to a maximum aggregate
amount of $30,000, on the cash amount of the Tax Liabilities that Heller
actually pays, such interest to be payable by Heller to the Company at the time
that Heller is otherwise required to pay its share of the Tax Liabilities to the
Company.
(D) Assignment. At the Closing, Heller will assign to the Company
the Assigned Agreements pursuant to an assignment agreement and related
assignment instruments, all in forms mutually acceptable to the parties hereto.
(E) Agency Agreement. On or prior to the Closing, Heller shall have
entered into account and other agreements with Morgan Stanley & Co.
Incorporated, as agent for Heller ("Morgan Stanley"), with respect to the
ownership, deposit, and control over the Securities, in a form mutually
acceptable to the parties hereto (the "Agency Agreement").
(F) Certificates. At the Closing, the Company will deliver to Morgan
Stanley certificates evidencing all of the Securities and registered in the name
of Heller.
(G) Termination Agreements. At the Closing, Heller and Schuylkill
shall have entered into agreements mutually acceptable to Heller and Schuylkill
pursuant to which, among other things, Schuylkill shall have consented to the
transactions contemplated by this Agreement and Heller and Schuylkill (including
their respective affiliates, officers and directors) shall have released each
other to the extent set forth therein from further obligations to each other
under the Assigned Agreements.
(H) Merger. On the Closing Date, Schuylkill Holdings, Inc. shall
have merged into the Company or a wholly-owned subsidiary of the Company
pursuant to a merger agreement (the "Merger Agreement") and related
documentation that shall be mutually acceptable to Schuylkill, Heller and the
Company.
(I) Termination of Heller Guaranty Obligations. The Company shall
have made arrangements acceptable to Heller pursuant to which Heller has been
fully released from all obligations (including without limitation all
outstanding letters of credit) of Schuylkill to third parties (including, for
example, Engitec Impianti S.A.) that have been guaranteed by Heller.
(J) Amendment to Company Credit Agreement. The Company's credit
agreement with a group of lenders led by Bankers Trust Company shall have been
amended to permit the transactions contemplated by this Agreement, including the
merger under the Merger Agreement.
-4-
<PAGE>
(K) Other Closing Documents. Each of the Company and Heller shall
have received such other closing certificates and opinions of counsel as they
shall have reasonably requested and as shall be customary in transactions of
this type and otherwise reasonably related to the transactions contemplated by
this Agreement and by the Merger Agreement.
Each of the Company and Heller shall, to the extent it has control
thereof, use its reasonable best efforts to cause each of the foregoing
conditions precedent to be satisfied as soon as practicable but in no event
later than December 29, 1995.
1.5. Working Capital Adjustment. Within thirty (30) days following
the Closing Date, the Company shall provide to Heller a true and correct balance
sheet of Schuylkill as of the Closing Date prepared in accordance with the
historical accounting practices of Schuylkill. Within sixty (60) days following
the Closing Date, an adjustment shall be made as follows: either (i) the
Company shall pay to Heller, in immediately available funds wired to Heller in
accordance with the wire instructions set forth below, the amount by which
Schuylkill's actual Working Capital on the Closing Date increased from its
Working Capital on June 30, 1995 (the "June 30 Working Capital") or,
alternatively, (ii) Heller shall pay to the Company, in immediately available
funds wired to the Company in accordance with the wire instructions set forth
below, the amount by which actual Working Capital on the Closing Date decreased
from the June 30 Working Capital, provided that Heller shall be required to make
any such payment only as and to the extent that Heller has received or receives
sufficient proceeds therefor from the sale of the Securities.
1.6. Capital Expenditure Adjustment.Within thirty (30) days following
the Closing Date, the Company shall provide to Heller a true and correct
schedule in reasonable detail and dated as of the Closing Date showing the
actual aggregate amounts spent by Schuylkill from and after June 30, 1995 to and
including the Closing Date in respect of capital expenditures on the projects
listed on Exhibit A to this Agreement. In addition to any adjustment required
by Section 1.5 hereof, within sixty (60) days following the Closing Date, the
Company shall also pay to Heller, in immediately available funds wired to Heller
in accordance with the wire instructions set forth below, such actual aggregate
amounts, if any, as have been disclosed on such schedule.
ARTICLE 2.
SALE OF SECURITIES
------------------
2.1. Sales. Morgan Stanley will sell the Securities as agent for
Heller pursuant to the Agency Agreement.
-5-
<PAGE>
2.2. Repurchase. If Morgan Stanley fails for any reason to sell all
the Securities within one year following the Closing Date (the "Repurchase
Date"), the Company or Morgan Stanley will repurchase from Heller the Securities
that have not been sold by Morgan Stanley at a price per share equal to the
closing price for one share of Common Stock on the New York Stock Exchange on
the first business day one year after the Closing Date. Such repurchase shall
occur within 10 days of the Repurchase Date and shall not affect any obligations
that the Company otherwise shall have to Heller pursuant to Article 3 of this
Agreement.
ARTICLE 3.
MAKE-WHOLE PROVISIONS
---------------------
3.1. Quarterly Cumulative Make-Whole. For a period of twelve (12)
months following the last business day of the month in which the Closing Date
occurs, at the end of each three-month period commencing on the last business
day of the third full calendar month following the Closing Date (each, a "Three
Month Period"), the Company and Heller shall calculate the Quarterly Cumulative
Make-Whole Amount (as hereinafter defined). Ten days, at the latest, after the
calculation of the Cumulative Quarterly Make-Whole Amount, the Company shall
wire transfer the Quarterly Cumulative Make-Whole Amount, if any, to Heller.
(A) For purposes of this Agreement, the "Quarterly Cumulative Make-
Whole Amount" shall mean the dollar amount resulting from the sum of (i) the Net
Proceeds (as hereinafter defined) and (ii) the Interest (as hereinafter
defined); provided, however, that if the sum of the Net Proceeds and the
Interest is a negative amount, the Quarterly Cumulative Make-Whole Amount shall
be equal to zero.
(B) For purposes of this Agreement, "Net Proceeds" shall mean the
remainder of (x) the product of the number of Securities sold by Morgan Stanley
for the benefit of Heller pursuant to the Agency Agreement from the Closing Date
through the end of the then current Three Month Period multiplied by $45 minus
(y) the net proceeds from sales of Securities made by Morgan Stanley for the
benefit of Heller pursuant to the Agency Agreement from the Closing Date through
the end of the then current Three Month Period after deducting underwriting
discounts, sales commissions and other fees and expenses, if any.
(C) For purposes of this Agreement, "Interest" shall mean the product
of (w) the aggregate number of shares of the Securities sold by Morgan Stanley
for the benefit of Heller pursuant to the Agency Agreement from the Closing Date
through the end of the Three-Month Period as of which the calculation is being
made (collectively, the "Sold Shares") multiplied by (x)
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<PAGE>
$45 multiplied by (y) the result of dividing the Weighted Average Number of Days
(as hereinafter defined) by three hundred sixty five (365) multiplied by (z)
eighteen one-hundredths (0.18).
(D) For purposes of this Agreement, "Weighted Average Number of Days"
for any given period of time shall mean the result derived by dividing X by Y
where: X equals the sum of the products derived by multiplying each of the Sold
Shares by the number of days that such Sold Share was owned by Heller during the
given period prior to its sale; and Y equals the total number of Sold Shares
during the given period. (By way of illustration of the foregoing, if there are
10,000 Sold Shares held for 7 days during a given period prior to their sale and
100,000 Sold Shares held for 30 days during a given period prior to their sale,
then the Weighted Average Number of Days equals 70,000 plus 3,000,000 divided by
110,000, which equals 27.91.)
3.2. Final Make-Whole. Notwithstanding Section 3.1 above, (a) the
Three-Month Make-Whole Amount to be paid in the fourth Three-Month Period shall
be the greater of (i) such Three-Month Make-Whole Amount calculated pursuant to
Section 3.1 above and (ii) One Million Dollars ($1,000,000) less the sum of the
Three-Month Make-Whole Amounts paid in the first, second and third Three-Month
Periods and (b) the Final Make-Whole shall apply to all shares of the Securities
that are purchased pursuant to Section 2.2 hereof (regardless of when actually
purchased).
3.3. Prepayment. Notwithstanding Sections 3.1 and 3.2 above, if all
or substantially all of the Securities are sold prior to the end of a period of
one (1) year following the Closing Date, the Three-Month Make-Whole Amount due
in such Three-Month Period (the "Prepaid Amount") shall be the greater of (i)
such Three-Month Make-Whole Amount calculated pursuant to Section 3.1 above and
(ii) One Million Dollars ($1,000,000) less the sum of the Three-Month Make-Whole
Amounts previously paid, if any. Upon payment of the Prepaid Amount, the
provisions of this Article 3 shall terminate.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to Heller, as of the date
hereof and as of the Closing as follows:
4.1. Authority. The Company has full legal right, power and
authority, without the consent of any other person, to execute and deliver this
Agreement, and to carry out the transactions contemplated hereby. All actions
required to be taken by the Company to authorize
-7-
<PAGE>
the execution, delivery and performance of this Agreement and all transactions
contemplated hereby have been duly and properly taken.
4.2. No Violation. The execution, delivery and performance of this
Agreement by the Company have been duly authorized by all requisite corporate
action and will not violate any provision of law, any order of any court or
other agency of government, the Certificate of Incorporation or Bylaws of the
Company, or any provision of any indenture, agreement or other instrument to
which it or any of its properties or assets is bound, or conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any such indenture, agreement or other instrument, result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of the Company.
4.3. Validity. This Agreement has been duly executed and delivered
and is the lawful, valid and legally binding obligation of the Company,
enforceable in accordance with its terms.
4.4. Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business and in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse
effect on its proposed business or properties.
4.5. Securities. All of the Securities issued pursuant to the terms
of this Agreement will have been, at the time of issuance, duly authorized,
validly issued, fully paid and nonassessable.
4.6. Sophisticated Buyer. The Company is a sophisticated buyer with
respect to the Assigned Agreements, has adequate information concerning the
business and financial condition of Schuylkill to make an informed decision
regarding the purchase of the Assigned Agreements and has independently and
without reliance upon Heller, and based on such information as the Company has
deemed appropriate, made its own analysis and decision to enter into this
Agreement. The Company acknowledges that Heller has not made and does not make
any representation or warranty with respect to the Assigned Agreements, whether
express or implied, except as expressly set forth in Section 5.3 hereof. The
Company acknowledges that the sale of the Assigned Agreements by Heller to the
Company is irrevocable, and that the Company shall have no recourse to Heller
except with respect to breaches of representations, warranties, covenants and
agreements expressly set forth in this Agreement. The Company acknowledges that
the consideration paid pursuant to this Agreement for the purchase of the
Assigned Agreements may differ both in kind and amount from any payments or
distributions that may be
-8-
<PAGE>
ultimately received with respect thereto. The Company acknowledges that it is
assuming the risk of full or partial loss which is inherent with the credit, and
all collateral and collectability risks associated therewith, including the risk
that Schuylkill may become the subject of a proceeding under Chapter 11 of Title
11 of the United State Code, as amended. The Company acknowledges that the
Assigned Agreements may be amended by Heller at Heller's discretion prior to the
Closing Date, provided that Heller shall provide the Company with copies of any
such amendments.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
OF HELLER
---------
Heller hereby represents and warrants to the Company as of the date
hereof and as of the Closing as follows:
5.1. Authority. Heller has full legal right, power and authority,
without the consent of any other person, to execute and deliver this Agreement
and to carry out the transactions contemplated hereby. All corporate and other
actions required to be taken by Heller to authorize the execution, delivery and
performance of this Agreement and all transactions contemplated hereby have been
duly and properly taken.
5.2. Validity. This Agreement has been duly executed and delivered
by Heller and is the lawful, valid and legally binding obligation of Heller,
enforceable in accordance with its terms.
5.3. Assigned Agreements. Heller is the sole legal and beneficial
owner of the Assigned Agreements, all of which Assigned Agreements are in full
force and effect; provided, however, that payment and various other defaults
have occurred and are continuing under the Assigned Agreements. Heller has the
authority to transfer and assign the Assigned Agreements to the Company. The
transfer and assignment of the Assigned Agreements will not violate any
provision of law, any order of any court or other agency of government, the
Certificate of Incorporation or Bylaws of Heller, or any provision of the
Assigned Agreements.
ARTICLE 6.
MISCELLANEOUS
-------------
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<PAGE>
6.1. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
(A) "business day" means any day except a Saturday, Sunday or other
day on which commercial banks in the City of Chicago, Illinois are authorized by
law to close.
(B) "person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture, or
other entity of whatever nature.
6.2. Expenses. The Company will pay (i) all fees and disbursements
of counsel for the Company and fees and expenses for independent certified
public accountants retained by the Company and (ii) the reasonable fees and
expenses of outside counsel to Heller in connection with the preparation and/or
negotiation of this Agreement, the other agreements and instruments contemplated
by this Agreement and all of the transactions contemplated by this Agreement.
6.3. Headings. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
any provisions hereof.
6.4. Wire Transfers. All payments to Heller pursuant to this
Agreement shall be made by wire transfer according to the following instructions
(or according to such other instructions as the Company may be otherwise advised
in writing by Heller at least five (5) days prior to any payment):
The First National Bank of Chicago
Chicago, Illinois
ABA Routing Number 071000013
Credit Account of Heller Financial, Inc.-PMO
Account Number 0020982
Reference: Schuylkill
All payments to the Company pursuant to this Agreement shall be made by
wire transfer according to the following instructions (or according to such
other instructions as Heller may be otherwise advised in writing by the Company
at least five (5) days prior to any payment):
Corestates Bank
ABA Routing Number 031000011
Credit Account of Exide Corporation
-10-
<PAGE>
Account Number 81250286
Reference: Heller Financial
6.5. Remedies. Each of the Company and Heller acknowledges and
agrees that in the event of any breach of this Agreement by it, the other party
hereto would be irreparably harmed and could not be made whole by monetary
damages. Each of the Company and Heller accordingly agrees (i) to waive the
defense in any action for specific performance that a remedy at law would be
adequate, and (ii) that each of the Company and Heller, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled to
compel specific performance of this Agreement.
6.6. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matters contained herein and therein, and there are no restrictions, promises,
representations, warranties, covenants, or undertakings with respect to the
subject matters hereof, other than those expressly set forth or referred to
herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties hereto with respect to the subject matter
hereof.
6.7. Notices. Any notice, request, instruction or other document to
be given hereunder by any party hereto to another party hereto shall be in
writing and shall be deemed given upon the earlier of delivery thereof, if by
hand or upon receipt if sent by certified or registered mail, postage prepaid,
return receipt requested, or on the second next business day after deposit if
sent by a recognized overnight delivery service or upon transmission if sent by
telecopy or facsimile transmission (with request of assurance of receipt in a
manner customary for communications of such type), to Heller at 500 West Monroe
Street, Chicago, Illinois 60661, Telecopy (312) 441-7173, Attention: Project
Management Organization, Schuylkill Account Manager, or to the Company at 645
Penn Street, Reading, Pennsylvania 19612, Telecopy (610) 378-0232, Attention:
Chief Financial Officer, or to such other address as the party to whom notice is
to be given may provide in a written notice to the other party.
6.8. Applicable Law. The laws of the State of Illinois shall govern
the interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under applicable principles of
conflicts of laws.
6.9. Severability. The invalidity or unenforceability of any
provisions of this Agreement in any jurisdiction shall not affect the validity,
legality or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this Agreement,
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
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<PAGE>
6.10. Successors, Assigns, Transferees. The provisions of this
Agreement shall be binding upon and accrue to the benefit of the parties hereto
and their respective heirs, successors, and assigns, provided that neither party
to this Agreement may transfer its rights or obligations under this Agreement
without the prior written consent of the other party to this Agreement.
6.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same Agreement.
6.12. Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
6.13. Recapitalization, etc. Prior to Closing, in the event that any
capital stock or other securities are issued in respect of, in exchange for, or
in substitution of, any Securities by reason of any reorganization,
recapitalization, reclassification, merger, consolidation, spin-off, partial or
complete liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the Securities or any other change in capital
structure of the Company, appropriate adjustments shall be made in the
provisions of this Agreement so as to fairly and equitably preserve, as far as
practicable, the original rights of Heller under this Agreement.
6.14 Termination. This Agreement may be terminated at any time prior
to the Closing Date:
(A) by mutual consent of the Company and Heller;
(B) by either the Company or Heller if the Closing shall not have
occurred on or before December 29, 1995 providing that the terminating party is
not otherwise in material breach of its obligations under this Agreement;
(C) by either the Company or Heller if any of the conditions
precedent specified in Section 1.4 of this Agreement have not been met or waived
by the Company or Heller, as the case may be, at such time as such condition can
no longer be satisfied, provided that the terminating party, to the extent it
had control thereof, had used its reasonable best efforts to cause such
condition precedent to be satisfied.
[signature pages follow]
-12-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
EXIDE CORPORATION:
/s/ Alan E. Gauthier
By:_________________________________
Alan E. Gauthier
Name:_______________________________
Executive Vice President
Its:________________________________
HELLER FINANCIAL, INC.:
/s/ Brad Ament
By:_________________________________
Brad Ament
Name:_______________________________
Assistant Vice President
Its:________________________________
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<PAGE>
EXHIBIT A
CAPITAL EXPENDITURES
--------------------
(1) ENGITEC SYSTEM
(2) NEW BATON ROUGE LANDFILL AND CLOSURE COSTS
(3) OTHER ENVIRONMENTAL ITEMS
B.R. and C.H. Building enclosure improvements
B.R. & C.H. bag house upgrades
Ground water remediation, B.R. and C.H. storm water runoff
-14-
<PAGE>
EXHIBIT B
ASSIGNED AGREEMENTS
-------------------
Revolving and Term Loan Agreement dated as of November 9, 1990 among Schuylkill
Holdings, Inc., Schuylkill Metals Corporation and Heller Financial, Inc., as
Agent and as Lender, as amended by that certain First Amendment to Revolving and
Term Loan Credit Agreement dated as of May 1, 1992 and that certain Second
Amendment to Revolving and Term Loan Credit Agreement and Affirmation of Loan
Documents dated as of August 30, 1993 (collectively, the "Revolving Loan
Agreement")
All of the Loan Documents (as defined in the Revolving Loan Agreement),
including without limitation the Capital Appreciation Rights Agreement, to which
Heller is a party.
Amended and Restated Term Loan Credit Agreement dated as of May 1, 1992 among
Schuylkill Holdings, Inc., Schuylkill Metals Corporation and Heller Financial,
Inc. as Agent and as Lender, as amended by that certain First Amendment to
Amended and Restated Term Loan Credit Agreement dated as of August 30, 1993 (the
"Term Loan Agreement")/
All of the Loan Documents (as defined in the Term Loan Agreement) to which
Heller is a party.
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<PAGE>
Exhibit 2.3
August 31, 1995
Chicago, Illinois
CONTINGENT NOTE
FOR VALUE RECEIVED, the undersigned, EXIDE CORPORATION, a Delaware
corporation ("Exide"), promises to pay to the order of HELLER FINANCIAL, INC., a
Delaware corporation ("Heller"), the principal sum specified below with interest
thereon as further specified below. This Contingent Note shall be payable on
March 31, 2000 and interest thereon shall be calculated retroactively in
connection with such payment. All payments of principal and interest under this
Contingent Note shall be made in lawful money of the United States of America in
immediately available funds at the offices of Heller located at 500 West Monroe
Street, Chicago, Illinois 60661, or at such other place as may be designated by
Heller to Exide in writing.
This is the Contingent Note referred to in that certain Purchase Agreement
dated as of the date hereof and made by and between Exide and Heller.
Exide further promises to pay to the order of Heller interest from the date
hereof on the aggregate unpaid principal amount hereof from time to time
outstanding at a rate per annum equal to the average LIBOR Rate (as hereinafter
defined). Interest shall be calculated on the basis of a year consisting of 360
days and paid for actual days elapsed. Interest on this Contingent Note shall
be compounded quarterly.
The principal amount of this Contingent Note shall be determined so that if
actual lead prices for the four and one-half years after the date hereof average
between 26.3 cents per pound and 32.5 cents per pound (rounded to the nearest
one-tenth of one cent), the principal of this Contingent Note will be determined
in accordance with Attachment A hereto (with all such prices being determined
the basis of the London Metal Exchange average monthly settlement price for lead
as quoted in Platt's Metals Week). If the average lead price is less than 26.3
cents per pound, nothing will be due and payable hereunder. If the average lead
price is greater than 32.5 cents per pound, the principal of this Contingent
Note will increase over the applicable amount set forth on Attachment A) by
$118,575 for every one-tenth of one cent increase in the average price of lead.
The principal amount of this Contingent Note on which interest shall be
determined will be reduced by any amounts Exide shall be entitled to setoff
pursuant to the Tax Matters Agreement between Exide and Heller dated as of even
date herewith.
The average LIBOR Rate for any three-month period shall be the sum of the
applicable LIBOR Rate for the three months in such period divided by three. For
purposes of this Contingent Note, the applicable "LIBOR Rate" for any month
shall be the three month LIBOR Rate on the last business day of such month as
published in The Wall Street Journal.
<PAGE>
All parties hereto, whether as makers, endorsers or otherwise, severally
waive presentment, demand, protest and notice of dishonor in connection with
this Contingent Note.
Neither this Contingent Note nor the obligations of Exide hereunder may be
assigned or otherwise transferred without the prior written consent of Heller.
Heller may assign this Contingent Note and its rights hereunder to any person
without the consent of Exide.
This Contingent Note is made under and governed by the laws of the State of
Illinois (without regard to the conflicts of laws principles thereof).
EXIDE CORPORATION
/s/ Alan E. Gauthier
By:_____________________________
Alan E. Gauthier
Name:___________________________
Executive Vice President
Its:____________________________
Authorized Officer
<PAGE>
ATTACHMENT A
Value of Value of Value of
LME Price Contingent LME Price Contingent LME Price Contingent
(in cents) Note (in cents) Note (in cents) Note
26.30 $162,420 28.40 $5,081,285 30.50 $7,571,360
26.40 $419,570 28.50 $5,199,860 30.60 $7,689,935
26.50 $656,720 28.60 $5,318,435 30.70 $7,808,510
26.60 $893,870 28.70 $5,437,010 30.80 $7,927,085
26.70 $1,131,020 28.80 $5,555,585 30.90 $8,045,660
26.80 $1,368,170 28.90 $5,674,160 31.00 $8,164,235
26.90 $1,605,320 29.00 $5,792,735 31.10 $8,282,810
27.00 $1,842,470 29.10 $5,911,310 31.20 $8,401,385
27.10 $2,079,620 29.20 $6,029,885 31.30 $8,519,960
27.20 $2,316,770 29.30 $6,148,460 31.40 $8,638,535
27.30 $2,553,920 29.40 $6,267,035 31.50 $8,757,110
27.40 $2,791,070 29.50 $6,385,610 31.60 $8,875,685
27.50 $3,028,220 29.60 $6,504,185 31.70 $8,994,260
27.60 $3,265,370 29.70 $6,622,760 31.80 $9,112,835
27.70 $3,502,520 29.80 $6,741,335 31.90 $9,231,410
27.80 $3,739,670 29.90 $6,859,910 32.00 $9,349,985
27.90 $3,976,820 30.00 $6,978,485 32.10 $9,468,560
28.00 $4,213,970 30.10 $7,097,060 32.20 $9,587,135
28.10 $4,451,120 30.20 $7,215,635 32.30 $9,705,710
28.20 $4,688,270 30.30 $7,334,210 32.40 $9,824,285
28.30 $4,925,420 30.40 $7,452,785 32.50 $9,942,860
<PAGE>
Exhibit 2.4
TAX MATTERS AGREEMENT
This Tax Matters Agreement (this "Agreement") is dated as of August 31,
1995 and is made by and between Exide Corporation, a Delaware corporation
("Exide"), and Heller Financial, Inc., a Delaware corporation ("Heller").
WITNESSETH:
WHEREAS, Exide and Heller have entered into that certain Purchase Agreement
dated as of August 9, 1995 (the "Purchase Agreement"), the effectiveness of
which is expressly conditioned upon, among other things, the execution of this
Agreement; and
WHEREAS, contemporaneously with the closing of the transactions
contemplated by the Purchase Agreement, Exide has acquired by a merger
transaction (the "Merger") all of the issued and outstanding capital stock of
Schuylkill Holdings, Inc. (which, collectively with its wholly-owned subsidiary,
Schuylkill Metals, Inc., shall be hereinafter referred to as "Schuylkill"); and
WHEREAS, Exide and Heller desire hereby to set forth their agreement to
share the payment of certain contingent tax liabilities of Schuylkill if and to
the extent that such liabilities may become payable subsequent to the effective
time of the Merger;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and conditions contained herein, the parties hereto agree as follows:
1. Definitions.
1.1 For purposes of this Agreement, the following terms shall have the
indicated meanings:
"Contingent Note" means that certain Contingent Note dated as of the date
hereof and made by Exide in favor of Heller, as such Contingent Note may be
amended from time to time.
"Contingent Tax Liabilities" owed at any given time means the contingent
federal and state tax liabilities (including interest and penalties, if any) of
Schuylkill relating to its 1988 and 1989 tax audits that have become due and
payable as of such time and to any tax liabilities (including interest and
penalties, if any) relating to its 1990, 1991 and 1992 tax years that have
become due and payable as of such time from the amortization by Schuylkill of
certain non-competition agreements entered into by Schuylkill in 1988 and 1990.
1.2 Capitalized terms used but not otherwise defined in this Agreement
shall have the respective meanings given to such terms in the Purchase
Agreement, as it may be amended from time to time.
<PAGE>
2. Allocation of Contingent Tax Liabilities.
2.1 Exide and Heller agree that, for a period of four and one-half (4-1/2)
years from the date of this Agreement (the "Allocation Period"), Exide and
Heller shall allocate between them the Contingent Tax Liabilities that have
become due and payable during the Allocation Period as follows: Exide and
Heller shall share the Contingent Tax Liabilities equally up to a total of
$1,000,000. Exide shall pay any Contingent Tax Liabilities in excess of such
$1,000,000 amount. If the Contingent Tax Liabilities shall exceed $1,000,000
during the Allocation Period, Exide shall be entitled to set-off up to $500,000
of the amounts paid by Exide in excess of $1,000,000 against any payments that
it may be obligated to make to Heller under the Contingent Note. Heller shall
pay to Exide interest at the rate of six percent (6%) per annum, up to a maximum
aggregate amount of $30,000, on the cash amount of the Contingent Tax
Liabilities that Heller actually pays, such interest to accrue from the date of
this Agreement and to be payable by Heller to Exide at the time that Heller is
otherwise required to pay its share of the Contingent Tax Liabilities to Exide.
Heller shall in no event be liable for any Contingent Tax Liabilities that
become due and payable after the end of the Allocation Period. For purposes of
this Agreement, payments of Contingent Tax Liabilities by Schuylkill shall be
deemed to have been made by Exide.
2.2 Exide shall notify Heller after it (or Schuylkill) has made any
payments in respect of the Contingent Tax Liabilities and shall provide Heller
with such evidence of the payment by Exide (or Schuylkill) of the Contingent Tax
Liabilities as Heller may reasonably request and showing Heller's share of such
payments determined in accordance with the provisions of this Agreement, as well
as with documentation (including without limitation tax returns, Internal
Revenue Service examination reports and closing agreements) demonstrating in
reasonable detail how the Contingent Tax Liabilities were determined. After
Exide has provided all of the foregoing materials to Heller, Heller shall
promptly (and in any event within 15 business days) pay to Exide such amounts as
shall then be due pursuant to the terms of this Agreement.
3. Wire Transfers. All payments to Exide pursuant to this Agreement
shall be made by wire transfer according to the following instructions (or
according to such other instructions as Heller may be otherwise advised in
writing by Exide at least five (5) days prior to any payment):
Corestates Bank
ABA Routing Number 031000011
Credit Account of Exide Corporation
Account Number 81250286
Reference: Heller Financial
<PAGE>
4. Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto in respect of the subject matters contained
herein, and there are no restrictions, promises, representations, warranties,
covenants, or undertakings with respect to the subject matters hereof, other
than those expressly set forth or referred to herein. This Agreement supersedes
all prior agreements and understandings between the parties hereto with respect
to the subject matter hereof.
5. Notices. Any notice, request, instruction or other document to be
given hereunder by any party hereto to another party hereto shall be in writing
and shall be deemed given upon the earlier of delivery thereof, if by hand or
upon receipt if sent by certified or registered mail, postage prepaid, return
receipt requested, or on the second next business day after deposit if sent by a
recognized overnight delivery service or upon transmission if sent by telecopy
or facsimile transmission (with request of assurance of receipt in a manner
customary for communications of such type), to Heller at 500 West Monroe Street,
Chicago, Illinois 60661, Telecopy (312) 441-7173, Attention: Project Management
Organization, Schuylkill Account Manager, or to Exide at 645 Penn Street,
Reading, Pennsylvania 19612, Telecopy (610) 378-0232, Attention: Chief Financial
Officer, or to such other address as the party to whom notice is to be given may
provide in a written notice to the other party.
6. Applicable Law. The laws of the State of Illinois shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under applicable principles of
conflicts of laws.
7. Severability. The invalidity or unenforceability of any provisions of
this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of this Agreement, including any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.
8. Successors, Assigns, Transferees. The provisions of this Agreement
shall be binding upon and accrue to the benefit of the parties hereto and their
respective heirs, successors, and assigns, provided that neither party to this
Agreement may transfer its rights or obligations under this Agreement without
the prior written consent of the other party to this Agreement.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same Agreement.
[signature pages follow]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
EXIDE CORPORATION:
By: /s/ Alan E. Gauthier
-----------------------------
Name: Alan E. Gauthier
----------------------------
Its: Executive Vice President
----------------------------
HELLER FINANCIAL, INC.:
By: /s/ Brad Ament
-----------------------------
Name: Brad Ament
----------------------------
Its: Assistant Vice President
----------------------------
<PAGE>
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Form 8-K of Exide
Corporation of our report on the financial statements of Schuylkill Holdings,
Inc. dated April 25, 1995 (which expresses an unqualified opinion and includes
an explanatory paragraph regarding the ability of the Company to continue as a
going concern) appearing in the Registration Statement No. 33-61961 of Exide
Corporation on Form S-4.
/s/ DELOITTE & TOUCHE LLP
____________________________________
Deloitte & Touche LLP
New Orleans, Louisiana
September 8, 1995
