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EXHIBIT 1
STOCK PURCHASE AGREEMENT
Please see attached.
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STOCK PURCHASE AGREEMENT
WITH RESPECT TO PACIFIC DUNLOP GNB CORPORATION
Dated as May 9, 2000
between
Pacific Dunlop Holdings (USA) Inc., as Seller;
and
Exide Corporation, as Buyer.
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TABLE OF CONTENTS
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ARTICLE 1.DEFINITIONS.............................................................................................1
Section 1.1. Definitions............................................................................1
ARTICLE 2.PURCHASE AND SALE.......................................................................................7
Section 2.1. Purchase and Sale of Shares............................................................7
Section 2.2. Purchase Price.........................................................................7
ARTICLE 3.CLOSING.................................................................................................8
Section 3.1. Closing................................................................................8
Section 3.2. Documents to be Delivered to Buyer.....................................................8
Section 3.3. Documents to be Delivered to Seller....................................................9
Section 3.4. Form of Documents......................................................................9
ARTICLE 4.REPRESENTATIONS AND WARRANTIES REGARDING SELLER........................................................10
Section 4.1. Organization..........................................................................10
Section 4.2. Power and Authority...................................................................10
Section 4.3. Agreement Binding.....................................................................10
Section 4.4. Absence of Conflicts..................................................................10
Section 4.5. No Litigation.........................................................................11
Section 4.6. Title to Shares.......................................................................11
Section 4.7. No Advisor............................................................................11
Section 4.8. Investment Representation.............................................................11
ARTICLE 5.REPRESENTATIONS AND WARRANTIES REGARDING PDGNB AND/OR ITS SUBSIDIARIES.................................11
Section 5.1. Organization..........................................................................11
Section 5.2. Capitalization........................................................................12
Section 5.3. Subsidiaries and Investments..........................................................12
Section 5.4. Absence of Conflicts..................................................................13
Section 5.5. No Litigation.........................................................................13
Section 5.6. No Violation..........................................................................13
Section 5.7. Operations Since June 30, 1999........................................................13
Section 5.8. Taxes.................................................................................15
Section 5.9. Title to Assets.......................................................................18
Section 5.10. Real Property.........................................................................18
Section 5.11. Personal Property.....................................................................19
Section 5.12. Personal Property Leases..............................................................19
Section 5.13. Governmental Permits..................................................................19
Section 5.14. Intellectual Property.................................................................20
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Section 5.15. Employee Agreements and Plans.........................................................20
Section 5.16. Employee Relations....................................................................23
Section 5.17. Commercial Contracts..................................................................24
Section 5.18. Status of Contracts...................................................................25
Section 5.19. Environmental Matters.................................................................25
Section 5.20. Insurance.............................................................................27
Section 5.21. Product Warranties....................................................................27
Section 5.22. Bank Accounts.........................................................................28
Section 5.23. Accounts and Records..................................................................28
Section 5.24. No Misrepresentation..................................................................28
Section 5.25. Sufficiency of Assets.................................................................28
Section 5.26. Powers of Attorney....................................................................28
ARTICLE 6.REPRESENTATIONS AND WARRANTIES OF BUYER................................................................28
Section 6.1. Organization..........................................................................28
Section 6.2. Power and Authority...................................................................28
Section 6.3. Agreement Binding.....................................................................29
Section 6.4. Absence of Conflicts..................................................................29
Section 6.5. Investment Representation.............................................................29
Section 6.6. No Advisor............................................................................29
Section 6.7. Capitalization........................................................................30
Section 6.8. SEC Reports...........................................................................30
Section 6.9. Undisclosed Liabilities...............................................................30
Section 6.10. Litigation............................................................................30
Section 6.11. No Misrepresentation..................................................................31
ARTICLE 7.ACTIONS PRIOR TO THE CLOSING DATE......................................................................31
Section 7.1. Preserve Accuracy of Representations and Warranties...................................31
Section 7.2. Approvals.............................................................................31
Section 7.3. Operations Prior to the Closing Date..................................................31
Section 7.4. Antitrust Law Compliance..............................................................32
Section 7.5. Intercompany Agreements...............................................................32
Section 7.6. Tax Sharing Agreement.................................................................32
Section 7.7. Notification of Changes...............................................................32
Section 7.8. General...............................................................................32
Section 7.9. Preservation of Business..............................................................32
ARTICLE 8. CONDITIONS TO CLOSING.................................................................................33
Section 8.1. Conditions to the Obligations of the Buyer............................................33
Section 8.2. Conditions to the Obligations of Seller...............................................34
ARTICLE 9.TERMINATION............................................................................................35
Section 9.1. Termination...........................................................................35
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Section 9.2. Notice of Termination.................................................................36
Section 9.3. Effect of Termination.................................................................36
ARTICLE 10.EXCLUSIVITY OF REMEDY.................................................................................36
Section 10.1. Indemnification by Seller.............................................................36
Section 10.2. Indemnification by Buyer..............................................................36
Section 10.3. Exclusivity of Remedy.................................................................36
ARTICLE 11.ADDITIONAL AGREEMENTS OF THE PARTIES..................................................................37
Section 11.1. Taxes.................................................................................37
Section 11.2. Proceeds of Environmental Remediation Rights..........................................40
Section 11.3. Employee Benefit Plan Reports.........................................................40
Section 11.4. Insurance Matters.....................................................................40
ARTICLE 12.GENERAL PROVISIONS....................................................................................41
Section 12.1. Notices...............................................................................41
Section 12.2. Confidential Information..............................................................42
Section 12.3. No Public Announcement................................................................42
Section 12.4. Entire Agreement; Amendments..........................................................43
Section 12.5. Successors and Assigns................................................................43
Section 12.6. Interpretation........................................................................43
Section 12.7. Waivers...............................................................................44
Section 12.8. Expenses..............................................................................44
Section 12.9. Partial Invalidity....................................................................44
Section 12.10. Execution in Counterparts.............................................................44
Section 12.11. Governing Law.........................................................................44
Section 12.12. Further Assurances and Cooperation....................................................44
Section 12.13. No Reliance...........................................................................45
Section 12.14. Disclosure Schedules..................................................................45
Section 12.15. Name Change...........................................................................45
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SCHEDULES
1.1 Permitted Encumbrances
5.1 Organization
5.3 Subsidiaries and Investments
5.4 Absence of Conflicts
5.5 No Litigation
5.6 No Violation
5.7(A) Operations Since June 30, 1999
5.7(B) Operations Since June 30, 1999
5.8(D) Taxes
5.8(E) Taxes
5.8(L) Taxes
5.8(M) Taxes
5.8(N) Taxes
5.8(O) Taxes
5.8(P) Taxes
5.8(Q) Taxes
5.8(R) Taxes
5.9 Title to Assets
5.10(A) Owned Real Property
5.10(B) Leased Real Property
5.11 Personal Property
5.12 Personal Property Leases
5.13(A) Governmental Permits
5.13(B) Governmental Permits
5.14(A) Intellectual Property
5.14(B) Intellectual Property
5.14(C) Intellectual Property
5.15(A) Employee Agreements and Plans
5.15(B) Employee Agreements and Plans
5.15(C) Employee Agreements and Plans
5.15(E) Employee Agreements and Plans
5.15(F) Employee Agreements and Plans
5.15(G) Employee Agreements and Plan
5.15(I) Employee Agreements and Plans
5.16(A) Employee Relations
5.16(B) Employee Relations
5.17 Commercial Contracts
5.18 Status of Contracts
5.19(A) Environmental Matters
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5.19(B) Environmental Matters
5.19(C) Environmental Matters
5.19(D) Environmental Matters
5.19(E) Environmental Matters
5.19(F) Environmental Matters
5.19(G) Environmental Matters
5.19(J) Environmental Matters
5.20 Insurance
5.21 Product Warranties
5.22 Bank Accounts
6.4 Absence of Conflicts
7.3(B) Operations Prior to Closing Date
7.5 Intercompany Agreements
EXHIBITS
A Terms of Standstill Agreement
B Terms of Registration Rights Agreement
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of May 9, 2000 (the
"AGREEMENT") is executed by and between PACIFIC DUNLOP HOLDINGS (USA) INC., a
corporation incorporated under the laws of the State of Delaware ("SELLER") and
Exide Corporation, a corporation incorporated under the laws of the State of
Delaware ("BUYER").
WHEREAS, Seller owns all of the outstanding shares of capital stock of
Pacific Dunlop GNB Corporation, a Delaware corporation ("PDGNB"); and
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer, all of the outstanding shares of capital stock of PDGNB all on
the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth Seller and Buyer agree as follows:
ARTICLE 1.
DEFINITIONS
Section 1.1. DEFINITIONS. In this Agreement, the following terms have
the meanings specified or referred to in this Section 1.1 and shall be equally
applicable to both the singular and plural forms. Any agreement referred to
below shall mean such agreement as amended, supplemented and modified from time
to time to the extent permitted by the applicable provisions thereof and by this
Agreement.
"ACTION" means any lawsuit, arbitration, or regulatory,
governmental or other proceeding or investigation whether at law or in equity.
"ADJOINING PROPERTIES" shall mean all sites or locations other
than the Real Property or the PRP Sites to which Contaminants have migrated from
the Real Property through air, soil, surface water or groundwater.
"AFFILIATE" means, with respect to any Person, any other Person
which directly or indirectly controls, is controlled by or is under common
control with such Person.
"AFFILIATED GROUP" means an affiliated group as defined in Section
1504 of the Code (or any analogous combined, consolidated or unitary group
defined under state, local or foreign income Tax law) of which PDGNB, any of its
Subsidiaries or any of their Affiliates is or has been a member.
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"AGREEMENT" has the meaning specified in the first paragraph of
this Agreement.
"BUSINESS" means (i) the manufacturing, production and marketing
of starting-lighting-ignition automotive and specialty batteries and supplying
original equipment manufacturers and replacement market customers with batteries
for passenger cars, light and heavy-duty trucks, golf carts, motorcycles, garden
tractors and marine use and related activities; (ii) the manufacturing,
production and marketing of batteries and allied products, parts and service for
industrial applications; and (iii) battery recycling, lead smelting and
refining, and oxide manufacturing; in each case, as conducted by PDGNB or a
Subsidiary immediately prior to the Closing Date.
"BUSINESS DAY" means a day other than Saturday, Sunday or a day on
which United States national banks are closed.
"BUYER" has the meaning specified in the first paragraph of this
Agreement.
"BUYER ANCILLARY AGREEMENTS" means all agreements, instruments and
documents being or required to be executed and delivered by Buyer under this
Agreement.
"BUYER SEC DOCUMENTS" has the meaning specified in Section 6.8.
"BUYER SHARES" has the meaning specified in Section 2.2(b).
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ss.ss. 9601 et seq., as currently
amended, and any regulations promulgated thereunder.
"CLEAN AIR ACT" means the Clean Air Act, 42 U.S.C. ss. 7401 et
seq., as currently amended, and any regulations promulgated thereunder.
"CLEAN WATER ACT" means the Federal Water Pollution Control Act,
33 U.S.C. ss.ss. 1251 et seq., as currently amended, and any regulations
promulgated thereunder.
"CLOSING" has the meaning specified in Section 3.1.
"CLOSING DATE" has the meaning specified in Section 3.1.
"CODE" means the Internal Revenue Code of 1986, as currently
amended.
"CONFIDENTIAL INFORMATION" has the meaning specified in Section
12.2.
"CONTAMINANT" means (i) oil or other petroleum products, (ii)
"hazardous wastes," as defined by RCRA, (iii) "hazardous substances," as defined
by CERCLA, (iv) "toxic substances" regulated by TSCA, including, without
limitation, polychlorinated biphenyls and asbestos;
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(v) "hazardous materials," as defined by the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1802, (vi) radioactive materials, including those subject
to the Atomic Energy Act, 42 U.S.C. Section 2011 et seq., and (vii) any other
pollutant, chemical, or substance whose presence creates a hazard to human
health or the environment, or a violation of any Environmental Law.
"COORDINATING AGREEMENT" means that certain Coordinating Agreement
dated of even date herewith between Buyer and Seller.
"COURT ORDER" means any judgment, order, award or decree of any
foreign, federal, state, or local court, tribunal or governmental agency and any
award in any arbitration proceeding.
"DB PLAN" has the meaning specified in Section 5.15(b).
"DISCLOSURE SCHEDULES" means the Disclosure Schedules attached to
and made a part of this Agreement, as modified pursuant to Section 5.7 of the
Coordinating Agreement.
"ELECTION CORPORATION" has the meaning specified in Section
11.1(g).
"EMPLOYEE PLAN" has the meaning specified in Section 5.15(b).
"ENCUMBRANCE" means any lien, charge, security interest, mortgage,
pledge, power of sale, easement, encroachment, covenant, restriction on transfer
or other restriction on or defect in title or other encumbrances.
"ENVIRONMENTAL LAW" means all Requirements of Law relating to
pollution or the regulation and protection of human health or the environment,
including, without limitation, those regarding or relating to emissions,
discharges, Releases or threatened Releases of Contaminants or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of Contaminants.
"EPCRA" means the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C. ss.ss. 11001 et seq., as currently amended, and any
regulations promulgated thereunder.
"ERISA" has the meaning specified in Section 5.15(b).
"EXCHANGE ACT" has the meaning specified in Section 6.8.
"EXPENSES" means any and all reasonable expenses incurred in
connection with investigating, defending or asserting any Action or overtly
threatened Action (including court filing fees, court costs, arbitration fees or
costs, witness fees, and reasonable fees and disbursements of legal counsel,
investigators, expert witnesses, accountants and other professionals).
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"FINAL CLOSING DATE BALANCE SHEET" has the meaning specified in
the Coordinating Agreement.
"FINANCIAL STATEMENTS" has the meaning specified in the
Coordinating Agreement.
"GNB" means GNB Technologies Inc. and GNB Industrial Battery
Company.
"GOVERNMENTAL BODY" means any foreign, United States, state, or
local governmental authority, agency, or regulatory body.
"GOVERNMENTAL PERMITS" has the meaning specified in Section
5.13(a).
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"INTELLECTUAL PROPERTY" has the meaning specified in Section
5.14(a).
"INTERCOMPANY AGREEMENTS" means agreements between PDGNB or a
Subsidiary and an Affiliate of PDGNB other than PDGNB and any Subsidiary.
"INTERIM PERIOD" has the meaning specified in Section 11.1(b).
"INSURANCE POLICY" has the meaning specified in Section 11.4.
"INSURED CLAIMS" has the meaning specified in Section 11.4.
"IRS" means the Internal Revenue Service.
"JUNE 30, 1999 BALANCE SHEET" has the meaning specified in the
Coordinating Agreement, including the notes to such balance sheet.
"KNOWLEDGE OF THE SELLER" or similar phrases means matters
actually known to: Thomas Minner, Thomas Smith, Tom O'Hare, Mitchell Bregman,
Malli Rao, Andy Savage. Barbara Hatcher or John Bondy.
"KNOWLEDGE OF THE SELLER REGARDING ENVIRONMENTAL MATTERS" or
similar phrases means matters actually known to Jerry Cooper, Larry Eagan, Steve
Emmons, Barbara Hatcher, Richard Thompson, Thomas Minner and Dave Wesley.
"LEASED REAL PROPERTY" has the meaning specified in Section
5.10(b).
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"LOSSES" means losses, obligations, liabilities, settlement
payments, awards, judgments, fines, assessments, penalties, and damages.
"MARCH 31, 2000 BALANCE SHEET" has the meaning specified in the
Coordinating Agreement, including the notes to such balance sheet.
"MATERIAL ADVERSE EFFECT" means any event, occurrence or condition
(other than as a result of general economic conditions or events or conditions
affecting the automotive and industrial battery industry as a whole) which has,
or could reasonably be expected to have, a material adverse effect on the
financial condition, assets, results of operations, Business, or operations of
the Subsidiaries, taken as a whole.
"MULTIEMPLOYER PLAN" has the meaning specified in Section 5.15(b).
"OSHA" means the Occupational Safety and Health Act, 29
U.S.C.ss.ss.651 et seq., as currently amended, and all similar foreign, state or
local statutes and ordinances, and any regulations promulgated thereunder.
"OWNED REAL PROPERTY" has the meaning specified in Section
5.10(a).
"PDGNB" has the meaning specified in the second paragraph of this
Agreement.
"PDGNB AGREEMENTS" has the meaning specified in Section 5.18.
"PENSION PLAN" has the meaning specified in Section 5.15(b).
"PERMITTED ENCUMBRANCES" means the Encumbrances specifically set
forth on Schedule 1.1 hereto.
"PERSON" means any individual, corporation, partnership, limited
liability company or corporation, joint venture, association, joint-stock
company, trust, unincorporated organization or Governmental Body.
"PRE-CLOSING PERIOD" has the meaning specified in Section 11.1(b).
"PRP SITES" shall mean all sites identified on Schedule 5.19(J)
(as such Schedule is updated by Seller from time to time in its sole discretion
prior to the Closing Date) and all other sites (other than the Real Property and
the Adjoining Properties) with respect to which PDGNB, a Subsidiary, or any of
their successors or assignees have or may have liability under any Environmental
Law.
"PURCHASE PRICE" has the meaning specified in Section 2.2.
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"RCRA" means the Resource Conservation and Recovery Act, 42 U.S.C.
ss.ss. 6901 et seq., as currently amended, and any regulations promulgated
thereunder.
"REAL PROPERTY" has the meaning specified in Section 5.10(b).
"REGISTRATION RIGHTS AGREEMENT" has the meaning specified in
Section 8.1(i).
"RELEASE" includes any and all spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing, and any other means by which a substance may be introduced
into or travel through the environment.
"REMEDIAL ACTION" shall include all actions required by a Court
Order or otherwise by a Governmental Body to (i) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any other way address
Contaminants, (ii) prevent or minimize a Release or threatened Release of
Contaminants, or (iii) any other actions, including removal, remedial or other
response actions as defined in Section 9601 of the Comprehensive Environmental
Response, Compensation and Liability Act.
"REQUIREMENTS OF LAW" means any foreign, federal, state or local
law, statute, regulation, code or ordinance of any Governmental Body currently
in effect.
"ROW AGREEMENTS" has the meaning specified in the Coordinating
Agreement.
"ROW BUSINESS ALLOCATION" means the cash portion of the Purchase
Price (for this purpose, as such term is defined in the Coordinating Agreement)
allocated to each of the ROW Agreements as initially prepared by Buyer and as
agreed to by Seller. Buyer shall deliver such allocation calculation to Seller
by June 5, 2000. If Seller objects to Buyer's allocation, Buyer and Seller shall
work in good faith to promptly resolve such disagreement, and to the extent that
the parties cannot resolve such disagreement, the disagreement shall be
submitted to a mutually agreed independent appraiser for determination of the
allocation in accordance with applicable law, which determination shall be
binding on both Seller and Buyer. The costs of such dispute resolution shall be
borne equally by both Buyer and Seller.
"SAVANNA SITES" mean all PRP Sites and the Owned Real Property
located in Savanna, Illinois and Tampa, Florida more fully described at items 2
and 4 of Schedule 5.10(A) of the Disclosure Schedules that contain an "R-C"
notation at the top of each page.
"SECTION 338(h)(10) ELECTION" has the meaning specified in Section
11.1(g).
"SELLER" has the meaning specified in the first paragraph of this
Agreement.
"SELLER ANCILLARY AGREEMENTS" means all agreements, instruments
and documents being or required to be executed and delivered by the Seller under
this Agreement.
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"SHARES" has the meaning specified in Section 2.1.
"SHORT PERIOD" has the meaning specified in Section 11.1(b).
"STANDSTILL AGREEMENT" has the meaning specified in Section
8.1(i).
"SUBSIDIARY" has the meaning specified in Section 5.3.
"TAX" (and, with correlative meaning, "TAXES" and "TAXABLE") means
any federal, state, county, local or foreign income, alternative or add-on
minimum, gross income, gross receipts, capital gains, capital, property, sales,
use, transfer, license, excise, premium, lease, estimated, environmental,
registration, value added, stamp, real property, franchise, employment, payroll,
wage, withholding or minimum tax, ad valorem, or customs duty and any other
similar taxes or governmental charges, fees, levies, assessments or liabilities
of any kind whatsoever, whether computed on a separate or consolidated, unitary
or combined basis or in any other manner, and includes any interest, penalty or
fine, or addition to tax imposed by any Governmental Body.
"TAX RETURN" means any return, report or similar statement
required to be filed with respect to any Taxes (including any attached
schedules), including, without limitation, any information return, claim for
refund, amended return and declaration of estimated Tax.
"TSCA" means the Toxic Substance Control Act of 1976, 15
U.S.C.ss.ss.2601 et seq., as currently amended, and any regulations promulgated
thereunder.
"WELFARE PLAN" has the meaning specified in Section 5.15(b).
ARTICLE 2.
PURCHASE AND SALE
Section 2.1. PURCHASE AND SALE OF SHARES. On the terms and subject to
the conditions of this Agreement, on the Closing Date, Seller shall sell,
transfer, assign, convey and deliver to Buyer, and Buyer shall purchase from
Seller, two thousand, one hundred and forty (2,140) shares of common stock of
PDGNB and sixty-six thousand, two hundred and seventy-three (66,273) shares of
Series A Cumulative Redeemable Preferred Stock of PDGNB, constituting all of the
issued and outstanding shares of capital stock of PDGNB (collectively, the
"Shares").
Section 2.2. PURCHASE PRICE. The consideration for the Shares (the
"PURCHASE PRICE") shall be:
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(a) Three Hundred and Thirty-Three Million United States Dollars
(US $333,000,000) less the ROW Business Allocation; and
(b) Four Million (4,000,000) shares of the Buyer's Common Stock,
par value $.01 per share, such number to be equitably adjusted to reflect any
stock dividend, stock split or similar action between the date hereof and the
Closing (the "BUYER SHARES"); and
At the Closing, Buyer shall pay the cash portion of the Purchase Price
to Seller by wire transfer of immediately available funds to such bank account
as Seller shall direct in writing at least three business days prior to the
Closing. After Closing, the cash portion of the Purchase Price shall be adjusted
pursuant to the Coordinating Agreement.
ARTICLE 3.
CLOSING
Section 3.1. CLOSING. The closing of the purchase and sale of the
Shares (the "CLOSING") shall be consummated at 10:00 a.m. local time on the last
business day of the month in which the last of the conditions specified in
Article 8 is satisfied or waived, at the offices of Gardner, Carton & Douglas at
321 North Clark Street, in Chicago, Illinois, or at such other time or place as
shall be agreed upon by Seller and Buyer. Notwithstanding the foregoing, if the
date upon which the last of the conditions specified in Article 8 is satisfied
or waived is five (5) or fewer Business Days before the last day of the month,
then the Closing shall be consummated on the fifth (5th) Business Day following
the date upon which the last of such conditions was satisfied or waived, or such
other date as may be agreed upon by Buyer and Seller. The time and date on which
the Closing is actually held is referred to herein as the "CLOSING DATE." The
Closing shall be effective as of the close of business on the Closing Date.
Section 3.2. DOCUMENTS TO BE DELIVERED TO BUYER. At the Closing, Seller
shall deliver to Buyer:
(a) certificates representing the Shares free and clear of all
Encumbrances, which certificates shall be duly endorsed to Buyer or accompanied
by duly executed stock powers in form satisfactory to Buyer;
(b) a copy of the certificate of incorporation of Seller and PDGNB
and each Subsidiary, each certified as of a recent date by the Secretary of
State of Delaware;
(c) a certificate of good standing of Seller and PDGNB and each
Subsidiary, each issued as of a recent date by the Secretary of State of
Delaware;
(d) a closing certificate of Seller in a form reasonably
satisfactory to Buyer;
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(e) a certificate of the secretary or an assistant secretary of
Seller in a form reasonably satisfactory to Buyer, dated the Closing Date,
certifying as to: (i) Seller's and the Subsidiaries' bylaws; (ii) the
resolutions of Seller's board of directors, authorizing the execution and
performance of this Agreement, the Seller Ancillary Agreements, and the
transactions contemplated hereby; and (iii) incumbency and signatures of its
officers executing this Agreement and any Seller Ancillary Agreement;
(f) a certification, dated not more than 30 days prior to the
Closing Date, issued by PDGNB pursuant to Treasury Regulation Section 1.897-2(h)
that the stock of PDGNB is not a "United States real property interest" as
defined in Section 897 of the Code;
(g) resignations of each of the directors and officers of PDGNB
and the Subsidiaries effective as of the Closing Date; and
(h) such other certificates and documents as Buyer or its counsel
may reasonably request.
Section 3.3. DOCUMENTS TO BE DELIVERED TO SELLER. At the Closing, Buyer
shall deliver to Seller:
(a) a copy of the certificate of incorporation of Buyer, certified
as of a recent date by the Secretary of State of Delaware;
(b) a certificate of good standing of Buyer, issued as of a recent
date by the Secretary of State of Delaware;
(c) a closing certificate of Buyer in a form reasonably
satisfactory to Seller;
(d) a certificate of the secretary or an assistant secretary of
Buyer in a form reasonably satisfactory to Seller dated the Closing Date,
certifying as to: (i) Buyer's bylaws, (ii) the resolutions of Buyer's board of
directors, authorizing the execution and performance of this Agreement, the
Buyer Ancillary Agreements, and the transactions contemplated hereby; and (iii)
incumbency and signatures of its officers executing this Agreement and any Buyer
Ancillary Agreement;
(e) certificates registered in the name of Seller representing the
Buyer Shares, free and clear of all Encumbrances except those imposed under
applicable securities laws and under the Standstill Agreement and the
Registration Rights Agreement; and
(f) such other certificates and documents as Seller or its counsel
may reasonably request.
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Section 3.4. FORM OF DOCUMENTS. The documents and instruments referred
to in Sections 3.2 and 3.3 shall be satisfactory as to form to counsel for the
party to whom they are delivered.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES REGARDING SELLER
Seller represents and warrants to Buyer as follows:
Section 4.1. ORGANIZATION. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Section 4.2. POWER AND AUTHORITY. Seller has the full corporate power
and authority to execute and deliver this Agreement and the Seller Ancillary
Agreements and to perform its obligations hereunder and thereunder. Seller's
execution, delivery and performance of this Agreement and the Seller Ancillary
Agreements has been duly authorized and approved by all necessary corporate
action.
Section 4.3. AGREEMENT BINDING. This Agreement has been, and the Seller
Ancillary Agreements will be, duly executed and delivered by Seller and,
assuming due authorization, execution, and delivery by Buyer, is and will be the
legal, valid and binding obligations of Seller enforceable against Seller in
accordance with their respective terms, subject to general principles of equity
and except as enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws of general application relating to creditors' rights generally.
Section 4.4. ABSENCE OF CONFLICTS. The execution, delivery and
performance of this Agreement and the Seller Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby, will not:
(a) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event creating
rights of acceleration, termination or cancellation, or result in the
termination of or result in the creation or imposition of any Encumbrance upon
the Shares or any assets of PDGNB under, (i) any term or provision of the
certificate of incorporation or bylaws of Seller or any Affiliate of Seller;
(ii) any note, instrument, contract, agreement, mortgage, indenture, lease,
license, or franchise to which Seller or any Affiliate of Seller is a party or
by which it or any of its assets is bound; (iii) any Court Order; or (iv) any
Requirements of Law; except for any of the foregoing which, individually or in
the aggregate is or are not likely to have a Material Adverse Effect or hinder
or impair the consummation of the transactions contemplated hereby; or
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(b) require the approval, consent, authorization or act of, or the
making by Seller or any Affiliate of Seller of any declaration, notification,
filing or registration with any Person, except for: (i) any of the foregoing
which, individually or in the aggregate, if not taken, is or are not likely to
have a Material Adverse Effect, or materially hinder or impair the consummation
of the transactions contemplated hereby; and (ii) the filing required under the
HSR Act.
Section 4.5. NO LITIGATION. There is no Action pending or, to the
Knowledge of Seller, threatened which questions the legality or propriety of the
transactions contemplated by this Agreement or the Seller Ancillary Agreements
or which would impair the consummation of the transactions contemplated hereby
or thereby.
Section 4.6. TITLE TO SHARES. Seller has good, valid and marketable
title to the Shares, free and clear of all Encumbrances, and has full right and
power to vote and dispose of such Shares as contemplated herein. The Seller is
not a party to any option, warrant, purchase right, or other contract or
commitment that could require the Seller to sell, transfer, or otherwise dispose
of any of the Shares (other than this Agreement). The Seller is not a party to
any voting trust, proxy, or other agreement or understanding with respect to the
voting of any of the Shares.
Section 4.7. NO ADVISOR. Neither Seller nor any of its Affiliates nor
any Person acting on its or their behalf, has retained any advisor, broker,
investment banker or financial advisor in connection with this Agreement or any
transaction contemplated hereby for which Buyer or PDGNB or any Subsidiary may
be liable.
Section 4.8. INVESTMENT REPRESENTATION. Seller is acquiring the
Buyer Shares for investment and not with a view to the distribution thereof or
dividing all or any part of its interest therein with any other Person.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES REGARDING PDGNB AND/OR
ITS SUBSIDIARIES
Seller represents and warrants to Buyer as follows:
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Section 5.1. ORGANIZATION. PDGNB and each of its Subsidiaries are
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware. Seller has delivered to Buyer complete and
correct copies of PDGNB's and each of its Subsidiaries' certificate of
incorporation and bylaws and amendments thereto as in effect on the date hereof,
together with the minute books of PDGNB and each of its Subsidiaries. Such
certificates of incorporation and bylaws are in full force and effect. Neither
PDGNB nor any of its Subsidiaries is in violation of any provision of its
certificate of incorporation or bylaws. Each of PDGNB and its Subsidiaries is
duly qualified or licensed to do business and is in good standing as a foreign
corporation in each of the jurisdictions specified in Schedule 5.1. Neither
PDGNB nor any of its Subsidiaries is required to be qualified or licensed to do
business as a foreign corporation in any jurisdiction other than those specified
in Schedule 5.1, except for those jurisdictions where the failure to so qualify
is not likely to have a Material Adverse Effect or hinder or impair the ability
of Seller to consummate the transactions contemplated by this Agreement or the
Seller Ancillary Agreements. PDGNB does not have, and has not had, at any time
prior to the date hereof, any operations, employees, or assets (other than the
Shares). Each of the Subsidiaries has all requisite corporate power and
authority to own or hold under lease its properties and assets and to carry on
its business as currently conducted and to operate the properties and assets now
being operated by it.
Section 5.2. CAPITALIZATION. The authorized capital of PDGNB consists
of ten thousand (10,000) shares of common stock, par value $.0l and seventy
thousand (70,000) shares of Series A Cumulative Redeemable Preferred Stock, par
value $.0l. There are two thousand, one hundred and forty (2,140) shares of the
common stock of PDGNB issued and outstanding and sixty-six thousand, two-hundred
and seventy-three (66,273) shares of Series A Cumulative Redeemable Preferred
Stock of PDGNB issued and outstanding, all of which constitute the Shares. All
of the Shares are owned by Seller. The Shares have been duly authorized and
validly issued, are fully paid and non-assessable, and have not been issued in
violation of any preemptive or other rights under applicable law, PDGNB's
certificate of incorporation, or the terms of any subscription, option, warrant,
right, agreement, commitment or Court Order to which PDGNB is a party, or by
which it is bound. Neither PDGNB nor any of its Subsidiaries has any outstanding
subscriptions, options, warrants, rights, agreements or other commitments
granting to any Person any interest in or right to acquire any of their
securities, including, without limitation, the Shares, or any interest therein.
Neither PDGNB nor any of its Subsidiaries has issued any security convertible
into, or exchangeable for, the Shares or other capital shares, and there is no
voting trust or other agreement or understanding to which PDGNB or Seller is a
party or by which either of them is bound with respect to the voting of the
Shares. Neither PDGNB nor any of its Subsidiaries is under any obligation,
whether contingent or otherwise, to issue or repurchase any of its capital
shares or to share or make any dividend or distribution payments based on its
revenues, profits or net income. All of the outstanding shares of capital stock
of each Subsidiary of PDGNB are indirectly owned by Seller.
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Section 5.3. SUBSIDIARIES AND INVESTMENTS.
(a) PDGNB has no subsidiaries except as described on Schedule 5.3
(individually, a "SUBSIDIARY" and collectively, the "SUBSIDIARIES"). Except for
PDGNB's investment in the Subsidiaries and GNB Technologies Inc.'s investment in
Compagnie Francaise d'Electro-Chime, neither PDGNB nor any Subsidiary owns,
directly or indirectly, any stocks, bonds or securities or any equity or other
proprietary interest in any Person.
(b) The shares of capital stock of each Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable, and have not
been issued in violation of any preemptive or other rights under applicable law,
such Subsidiary's certificate of incorporation, or the terms of any
subscription, option, warrant, right, agreement, commitment or Court Order.
There are no outstanding subscriptions, options, warrants, rights, agreements or
other commitments granting to any Person any interest in or right to acquire any
securities of any Subsidiary or any interest therein. No Subsidiary has issued
any security convertible into, or exchangeable for, the capital shares of such
Subsidiary, and there is no voting trust or other agreement or understanding
with respect to the shares of any Subsidiary. No Subsidiary is under any
obligation, whether contingent or otherwise, to issue or repurchase any of its
capital shares or to share or make any dividend or distribution payments based
on its revenues, profits or net income.
Section 5.4. ABSENCE OF CONFLICTS. Except as set forth in Schedule 5.4,
the execution, delivery, and performance of this Agreement and the Seller
Ancillary Agreements, and the consummation of the transactions contemplated
hereby and thereby, will not:
(a) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event creating
rights of acceleration, termination or cancellation, or result in the
termination of, or result in the creation or imposition of any Encumbrance upon
the shares or any assets of the Subsidiaries under: (i) any term or provision of
the certificate of incorporation or bylaws of PDGNB or any Subsidiary, (ii) any
note, instrument, contract, agreement, mortgage, indenture, lease, license, or
franchise to which PDGNB or any Subsidiary is a party or by which any of them,
or any of their assets, are bound; (iii) any Court Order; or (iv) any
Requirements of Law; except for any of the foregoing which, individually or in
the aggregate, is or are not likely to have a Material Adverse Effect or hinder
or impair the consummation of the transactions contemplated hereby and thereby;
or
(b) require the approval, consent, authorization or act of, or the
making by PDGNB or any Subsidiary of any declaration, notification, filing or
registration with any Person, except, for any of the foregoing which,
individually or in the aggregate, is or are not likely to have a Material
Adverse Effect or materially hinder or impair the consummation of the
transactions contemplated hereby and thereby.
Section 5.5. NO LITIGATION. Except as set forth in Schedule 5.5: (a)
there is no Action pending or, to the Knowledge of Seller, threatened against
PDGNB or any Subsidiary or any of PDGNB's or any Subsidiary's assets; and (b)
neither PDGNB nor any Subsidiary nor any of PDGNB's
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or any Subsidiary's assets is subject to any currently pending Court Order.
Except as set forth in Schedule 5.5, to the Knowledge of Seller, there is no
Action pending or threatened against any officer or director of PDGNB or any
Subsidiary arising out of his or her service as an officer or director of PDGNB
or a Subsidiary.
Section 5.6. NO VIOLATION. Except as set forth in Schedule 5.6: (a) The
Subsidiaries have complied and are in compliance with all Court Orders and
Requirements of Law which are applicable to their businesses, and (b) PDGNB has
complied and is in compliance with all Court Orders and Requirements of Law
which are applicable to PDGNB, except, in either case, for such Requirements of
Law as to which noncompliance is not likely to have a Material Adverse Effect.
Section 5.7. OPERATIONS SINCE JUNE 30, 1999.
(a) Except as set forth in Schedule 5.7(A) or except as reflected
in the March 31, 2000 Balance Sheet, since June 30, 1999, there has been no
material adverse change in the business, operations, assets, financial condition
or results of operations of PDGNB and the Subsidiaries taken as a whole.
(b) Except as set forth in Schedule 5.7(B), or except as reflected
in the March 31, 2000 Balance Sheet, since June 30, 1999, PDGNB and the
Subsidiaries have conducted their businesses only in the ordinary course.
Specifically, since June 30, 1999, except as set forth in Schedule 5.7(B), PDGNB
and the Subsidiaries, taken collectively, have not:
(i) made any material change in operations;
(ii) made any capital expenditure or entered into any
contract or commitment therefor in excess of the
capital expenditures disclosed in the "Fiscal Year 2000
Open Sanction Summary" attached to Schedule 5.7(B).
(iii) sold, leased (as lessor), assigned, transferred or
otherwise disposed of, or imposed or suffered to be
imposed any Encumbrance on, any assets, except for
inventory and other personal or real property, sold,
leased or otherwise disposed of for fair value in the
ordinary course of business consistent with past
practice and except for Permitted Encumbrances;
(iv) canceled any debts owed to or claims held (including
the settlement of any Action) other than in the
ordinary course of business consistent with past
practice;
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(v) created, incurred or assumed, or agreed to create,
incur or assume, any indebtedness for borrowed money or
entered into, as lessee, any capitalized lease
obligations (as defined in Statement of Financial
Accounting Standards No. 13) or guaranteed any such
indebtedness or leases of others or made any loans
other than in the ordinary course of business
consistent with past practice;
(vi) written off as uncollectible or accelerated or delayed
collection of notes or accounts receivable in advance
of or beyond their regular due dates or the dates when
the same would have been collected other than in the
ordinary course of business consistent with past
practice;
(vii) delayed or accelerated payment of any accounts payable
or other liabilities beyond or in advance of their due
date or the date when such liabilities would have been
paid other than in the ordinary course of business
consistent with past practice;
(viii) made any distribution of assets (including payments of
cash) to any of its Affiliates (not including PDGNB or
any Subsidiary) other than pursuant to agreements
entered into in the ordinary course of business
consistent with past practice or declared or paid any
dividends (provided that Seller shall have the right to
remove and retain all cash held by PDGNB or any
Subsidiary), or redeemed, reclassified or purchased or
otherwise acquired any shares of its capital stock or
authorized or issued any shares of its capital stock or
any option, warrant or other right to purchase or
acquire any such shares;
(ix) entered into or, except as set forth in Schedule
5.15(A), amended any employment, severance or similar
agreement or arrangement or made any increases in the
wages, bonuses, and benefits of its employees (other
than any increases made in the ordinary course of
business consistent with past practice);
(x) waived any rights or settled any claims, except for
such waivers or settlements granted or entered into in
the ordinary course of business;
(xi) made any change in any method of accounting;
(xii) suffered or incurred any damage, destruction, fire,
explosion, accident, flood or other casualty loss or
act of God (whether or not covered by insurance) to any
material operating asset or group of operating assets;
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<PAGE> 23
(xiii) entered into or amended any purchase or sale contract
outside the ordinary course of business;
(xiv) suffered any amendment, termination, suspension or
revocation of, any Governmental Permit;
(xv) adopted any Employee Plan or amended or modified any
already existing Employee Plan;
(xvi) amended their respective certificates of incorporation
or bylaws;
(xvii) manufactured inventory in excess of its expected needs;
or
(xviii) where applicable, agreed to do any of the foregoing.
Section 5.8. Taxes.
(a) PDGNB and each of the Subsidiaries and their Affiliates, or
their respective shareholders have accurately prepared and timely filed
(including all extensions) all Tax Returns and each Affiliated Group has timely
filed all income Tax Returns required to be filed with respect to each taxable
period during which PDGNB or any of its Subsidiaries or any of their Affiliates
was a member of the Affiliated Group.
(b) All such Tax Returns have been prepared in compliance with
applicable Requirements of Law and are true and correct and properly reflect the
Taxes due for the periods covered thereby.
(c) All Taxes due and payable by PDGNB or the Subsidiaries and
their Affiliates and each Affiliated Group have been properly paid.
(d) Except as disclosed in Schedule 5.8(D), none of PDGNB, any of
the Subsidiaries or their affiliates or any Affiliated Group or their
shareholders has waived any law or regulation fixing, or consented to the
extension of, any period of time for assessment of any Taxes which waiver or
consent is currently in effect nor been requested or been granted an extension
of time for filing any Tax Return which has not yet been filed.
(e) Except as disclosed in Schedule 5.8(E), there are no material
elections, consents or agreements with tax authorities other than those
reflected on tax forms filed by PDGNB, any of the Subsidiaries or their
shareholders with tax authorities.
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<PAGE> 24
(f) There are no outstanding balances of deferred gain or loss
accounts related to deferred intercompany transactions with respect to PDGNB or
the Subsidiaries under Sections 1.1502-13 or 1.1502-14 of the Treasury
Regulations and no excess loss accounts as described in Treasury Regulation
Section 1.1502-19 and 1.1502-32 (or any corresponding or similar provision or
administrative rule of federal, state, local or foreign income tax law) with
respect to PDGNB and the Subsidiaries.
(g) Other than the Tax Sharing Agreement with the Pacific Dunlop
Investments (USA) Inc. consolidated group, neither PDGNB nor any of the
Subsidiaries is (or ever has been) a party to any tax sharing or tax allocation
agreement, and has not assumed the tax liability of any other person under
contract or agreed to indemnify any other Person with respect to Taxes.
(h) There are no Encumbrances on any of the assets of PDGNB or any
of the Subsidiaries with respect to Taxes, other than liens for Taxes which are
not yet due and payable or for Taxes that are being contested in good faith
through appropriate proceedings and for which appropriate reserves have been
established.
(i) The pre-Closing Date disposition of the stock of New Enpak,
Inc. and Pacific Chloride, Inc. and any contribution to capital or settlement of
intercompany debt of PDGNB or any Subsidiary prior to the Closing will have no
Tax impact on PDGNB or the Subsidiaries and will not result in any Tax liability
being imposed on PDGNB or any Subsidiary or an accrual of Tax liability on the
Final Closing Date Balance Sheet.
(j) The method of allocating income and deductions to PDGNB and
the Subsidiaries complies with the principles set forth in Section 482 of the
Code.
(k) Buyer is not required to withhold tax on the purchase of the
PDGNB stock by reason of Section 1445 of the Code. Seller is not a "foreign
person" (as that term is defined in Section 1445 of the Code). Prior to the date
of Closing, Seller will deliver to Buyer an affidavit dated as of the Closing
and sworn under penalty of perjury, setting forth the names, addresses and
federal tax identification numbers of Seller, PDGNB, an each Subsidiary stating
that Seller, PDGNB, and each Subsidiary are not foreign persons within the
meaning of Section 1445 of the Internal Revenue Code.
(l) Except as set forth on Schedule 5.8(L), no deficiency or
proposed adjustment (which has not settled or otherwise resolved) for (A) any
amount of Tax has been proposed, asserted or assessed by any taxing authority
against PDGNB, its Subsidiaries or their Affiliates or (B) any material amount
of Tax has been proposed, asserted or assessed by any taxing authority against
any Affiliated Group with respect to a taxable period during which PDGNB or any
of its Subsidiaries or any of their Affiliates was a member of the Affiliated
Group.
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(m) Except as set forth on Schedule 5.8(M), there is no action,
suit, taxing authority proceeding or audit now in progress, pending or, to the
Knowledge of Seller, threatened against or with respect to PDGNB, its
Subsidiaries or their Affiliates or against or with respect to any Affiliated
Group with respect to any income Taxes for a taxable period during which PDGNB
or any of its Subsidiaries or any of their Affiliates was a member of the
Affiliated Group.
(n) Except as set forth on Schedule 5.8(N), no claim has ever been
made by a taxing authority in a jurisdiction where PDGNB, its Subsidiaries or
their Affiliates, respectively, do not file Tax Returns that such entity is or
may be subject to Taxes assessed by such jurisdiction.
(o) Except as set forth on Schedule 5.8(O), PDGNB, its
Subsidiaries and their Affiliates will not be required (A) as a result of a
change in method of accounting for a taxable period ending on or prior to the
Closing Date, to include any adjustment in taxable income for any taxable period
(or portion thereof) ending after the Closing Date, (B) as a result of any
"closing agreement," as described in Section 7121 of the Code (or any
corresponding provision of state, local or foreign income Tax law), to include
any item of income in, or exclude any item of deduction from, taxable income for
any taxable period (or portion thereof) ending after the Closing Date, (C) as a
result of any deferred intercompany gain described in Treasury Regulation
Sections 1.1502-13 or former Treasury Regulations Section 1.1502-14 or any
excess loss account described in Treasury Regulation Sections 1.1502-19 and
1.1502-32 (or any corresponding or similar provision or administrative rule of
federal, state, local or foreign income tax law), to include any item of income
in taxable income for any taxable period (or portion thereof) ending after the
Closing Date or (D) any installment sale made or prepaid income attributable to
a taxable period ending on or prior to the Closing Date.
(p) Except as set forth on Schedule 5.8(P), PDGNB, its
Subsidiaries and their Affiliates have not made any payments, and are not and
will not become obligated (under any contract entered into on or before the
Closing Date) to make any payments, that will be non-deductible under Section
280G of the Code (or any corresponding provision of state, local of foreign
income Tax law).
(q) Except as set forth on Schedule 5.8(Q), PDGNB, its
Subsidiaries and their Affiliates have no obligation or liability for the
payment of Taxes of any other Person, including, but not limited to the
following, a liability of PDGNB, its Subsidiaries or their Affiliates for the
payment of any Tax arising (A) as a result of being (or ceasing to be) a member
of any Affiliated Group (or being included (or required to be included) in any
Tax Return relating thereto), (B) as a result from any expressed or implied
obligation to indemnify another person, and (C) as a result from PDGNB, its
Subsidiaries or their Affiliates succeeding to the Tax liability of any other
person as a successor, transferee or otherwise.
(r) Except as set forth on Schedule 5.8(R), neither PDGNB nor any
of its Subsidiaries or any of their Affiliates has made any election under
Section 341(f) of the Code (or any corresponding provision of state, local or
foreign income Tax law).
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Section 5.9. TITLE TO ASSETS. The Subsidiaries are the exclusive and
absolute owners of and have good title to, or a valid leasehold interest to, all
of the personal property in the United States, Canada, and Japan reflected in
the June 30, 1999 Balance Sheet (other than the property in the United States,
Canada, and Japan disposed of since the date of the June 30, 1999 Balance Sheet
in the ordinary course of business consistent with past practice for fair value)
in the amounts and categories reflected therein, and all personal property in
the United States, Canada, and Japan acquired after the date of the June 30,
1999 Balance Sheet, free and clear of all Encumbrances, except for: (a)
Permitted Encumbrances; (b) the lien of current taxes not yet due and payable,
and (c) other exceptions disclosed in Schedule 5.9. Except as disclosed in
Schedule 5.9, the personal property that is utilized in the operation of the
Subsidiaries' business is usable in the ordinary course of the Subsidiaries'
business and conforms to all applicable statutes, ordinances and regulations
relating to its construction, use and operation, except where such nonconformity
is not likely to have a Material Adverse Effect.
Section 5.10. REAL PROPERTY.
(a) Schedule 5.10(A) contains a complete and accurate list,
including a brief description of each parcel of real property currently owned by
each Subsidiary (the "OWNED REAL PROPERTY") and a brief description of each
option held by each Subsidiary to acquire any real property.
(b) Schedule 5.10(B) sets forth a complete and accurate list,
including a brief description of the material terms of all material leases,
subleases or similar agreements providing for the use of real property under
which each Subsidiary is lessee or sublessee of, or holds or operates, any real
property owned by any third Person (the "LEASED REAL PROPERTY"). The Owned Real
Property and the Leased Real Property are collectively referred to herein as the
"REAL PROPERTY."
(c) Each Subsidiary is the exclusive and absolute owner and has
good and marketable title to the Owned Real Property owned by it and a good and
valid leasehold interest in all of the Leased Real Property leased by it, free
and clear of all Encumbrances except for Permitted Encumbrances. The occupation,
possession and use of the Leased Real Property by each Subsidiary has not been
disturbed and, to the Knowledge of Seller, no claim has been asserted or
threatened which is adverse to the rights of such Subsidiary to the continued
occupation, possession and use of the Leased Real Property, as currently
utilized.
(d) With respect to each such parcel of Owned Real Property,
except as disclosed on Schedule 5.10(A): (i) there are no outstanding options or
rights of first refusal of third parties with respect to the purchase, lease or
use of any such property or any portion thereof or any interest therein (other
than the right of Buyer pursuant to this Agreement); and (ii) the current use of
the Owned Real Property does not violate in any material respect any instrument
of record or agreement affecting such Owned Real Property.
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Section 5.11. PERSONAL PROPERTY. Schedule 5.11 contains a list of all
machinery, equipment, and vehicles owned by the Subsidiaries having an original
cost of one-hundred thousand United States dollars (US$100,000) or more.
Section 5.12. PERSONAL PROPERTY LEASES. Schedule 5.12 contains a brief
description of each lease or other agreement or right under which each
Subsidiary is lessee of, or holds or operates, any machinery, equipment, or
vehicle owned by a third Person, except those which are terminable by such
Subsidiary without cost or penalty on 30 days' or less notice or which provide
for annual rentals of less than one-hundred thousand United States dollars (US$
100,000).
Section 5.13. GOVERNMENTAL PERMITS.
(a) Except as disclosed in Schedule 5.13(A), each Subsidiary owns,
holds or possesses all material licenses, certificates, franchises, permits,
privileges, immunities, approvals and other authorizations from a Governmental
Body which are necessary to entitle each Subsidiary to own or lease, operate and
use its assets and conduct its operations substantially as currently operated
(herein collectively called "GOVERNMENTAL PERMITS"). Notwithstanding the
foregoing, Governmental Permits required under Environmental Laws are addressed
solely in Section 5.19(b).
(b) Except as set forth in Schedule 5.13(B): (i) each Subsidiary
has fulfilled and performed its obligations under each of the Governmental
Permits, except for such nonfulfillment or nonperformance which is not likely to
have a Material Adverse Effect; and (ii) no written notice of cancellation,
revocation, suspension, or default or of any dispute concerning any Governmental
Permit has been received by any Subsidiary and, to the Knowledge of Seller,
there is no basis for the issuance of such notice except as a result of the
consummation of the transactions contemplated hereby or except as is not likely
to have a Material Adverse Effect.
Section 5.14. INTELLECTUAL PROPERTY.
(a) Except as set forth on Schedule 5.14(A) there are no material
patents, patent applications, trademarks or trademark registrations, service
marks or service mark registrations, trade names, Internet domain names,
corporate names, or any applications to register any of the foregoing,
copyrights, licenses to or from any Person with respect to any of the foregoing,
used by each Subsidiary or otherwise relating to the business substantially as
currently conducted by each Subsidiary (collectively, the "INTELLECTUAL
PROPERTY").
(b) Each item constituting part of the Intellectual Property owned
by PDGNB or any of its Subsidiaries has been, to the extent indicated in
Schedule 5.14(B), duly registered, filed or issued, as the case may be, as is
indicated in Schedule 5.14(B), and such registrations, filings and issuances
remain in full force and effect.
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(c) Except as set forth on Schedule 5.14(C), PDGNB and the
Subsidiaries own and possess all right, title and interest in and to the
Intellectual Property, and PDGNB and the Subsidiaries have not received written
notice of any claim by any Person contesting the validity, enforceability, use
or ownership of any Intellectual Property, patent disclosures or inventions or
asserting that any Subsidiary is infringing the intellectual property of others.
Schedule 5.14(C) sets forth all technology (including Intellectual Property)
owned by third parties and used by PDGNB and the Subsidiaries. To the Knowledge
of Seller, except as set forth in Schedule 5.14(C), no Person is infringing the
rights of any Subsidiary with respect to any Intellectual Property. PDGNB and
each Subsidiary uses all reasonable efforts to protect its trade secrets.
Section 5.15. EMPLOYEE AGREEMENTS AND PLANS.
(a) Except as described in Schedule 5.15(A), neither PDGNB nor any
Subsidiary is a party to or bound by any collective bargaining agreement,
employment agreement, severance agreement, consulting, independent contractor or
service agreement, deferred compensation agreement, confidentiality agreement or
covenant not to compete which is material to its business.
(b) For purposes of this Agreement, (i) "ERISA" means the Employee
Retirement Income Security Act of 1974, as currently amended, and any
regulations promulgated thereunder, (ii) the term "EMPLOYEE PLAN" includes any
written pension, retirement, savings, disability, medical, dental, health, life
(including, without limitation, any individual life insurance policy under which
an employee of PDGNB or any Subsidiary is the named insured and as to which
PDGNB or any Subsidiary makes premium payments, whether or not PDGNB or any
Subsidiary is the owner, beneficiary or both of such policy), incentive,
severance pay, death benefit, group insurance, profit-sharing, deferred
compensation, stock option, stock purchase, bonus, capital accumulation plan,
vacation pay, trust, contract, agreement, or policy (including, without
limitation, any pension plan as defined in Section 3(2) of ERISA ("PENSION
PLAN"), and any written welfare plan as defined in Section 3(1) of ERISA
("WELFARE PLAN")), whether or not any of the foregoing is funded or insured,
which provides benefits to current or former employees of PDGNB or any
Subsidiary, and to which PDGNB or any Subsidiary is a party or by which it (or
any of its rights, properties or assets) is bound, and (iii) the term "DB PLAN"
includes any Pension Plan that is subject to the pension benefit insurance
provisions of Title IV of ERISA, or that is subject to Section 412 of the Code
or Part 3 of Subtitle B of Title I of ERISA, and (iv) the term "MULTIEMPLOYER
PLAN" includes any Pension Plan described at Section 4001(a)(3) of ERISA. Except
as described in Schedule 5.15(B), (i) neither PDGNB nor any Subsidiary maintains
and none of them is required to contribute to any Employee Plan on behalf of its
employees; (ii) no current or former employees of PDGNB or any Subsidiary are
covered under any Employee Plan; and (iii) each Employee Plan that is intended
to be qualified under Section 401(a) of the Code has received a favorable
determination letter of the IRS stating that the plan meets the requirements of
the Code and that the trust associated with the plan is tax-exempt under Section
50 1(a) of the Code and to the Knowledge of Seller, there is no reason why any
such Employee Plan would no longer meet such requirements as currently in
effect.
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(c) Except as disclosed on Schedule 5.15(C), neither PDGNB nor any
Subsidiary sponsors, contributes to, or has any actual or potential liability or
obligation under, any Multiemployer Plan or DB Plan, and neither PDGNB nor any
Subsidiary is a guarantor of benefits under the Multiemployer Plan or DB Plan of
any other company. PDGNB or a Subsidiary is a guarantor of benefits if such
company could be liable either under a contractual guarantee or under a
provision of law such as Section 4062(a) of ERISA.
(d) Each Welfare Plan which is a group health plan (within the
meaning of Section 5000(b)( 1) of the Code) complies in all material respects
with, and has been maintained and operated in all material respects in
accordance with, each of the health care continuation requirements of Section
162(k) of the Code as in effect for years beginning prior to 1989, Section 4980B
of the Code for years beginning after December 31, 1988, and Part 6 of Title I,
Subtitle B of ERISA.
(e) Except as disclosed in Schedule 5.15(E), neither PDGNB nor any
Subsidiary has any liabilities for post-retirement welfare benefits, including
retiree medical benefits.
(f) (i) Each Employee Plan, the administrator and fiduciaries of
each Employee Plan, PDGNB and each Subsidiary have complied with the applicable
requirements of ERISA (including, but not limited to, the fiduciary
responsibilities imposed by Part 4 of Title I, Subtitle B of ERISA), the Code
and any other applicable Requirements of Law governing each Employee Plan,
except for such noncompliance as is not likely to have a Material Adverse Effect
and (ii) each Employee Plan has at all times been properly administered in
accordance with all such Requirements of Law, except for such impropriety as is
not likely to have a Material Adverse Effect. Except as disclosed on Schedule
5.15(F), each Employee Plan has been maintained and administered in substantial
compliance with its terms.
(g) Except as disclosed on Schedule 5.15(G), neither PDGNB nor any
Subsidiary is delinquent as to contributions or payments to or in respect of any
Employee Plan as to which PDGNB or any Subsidiary is obligated to make
contributions or payments, nor has PDGNB or any Subsidiary failed to pay any
assessments made with respect to any such Employee Plan. All contributions,
accruals and payments with respect to Employee Plans that are required to be
made by PDGNB or any Subsidiary with respect to periods ending on or before the
Closing Date (including periods from the first day of the then-current plan or
policy year to and including the Closing Date) have been made or will be accrued
before the Closing Date by PDGNB or any Subsidiary in accordance with the
appropriate actuarial valuation report, plan documents, trust documents,
insurance contracts or arrangements or Requirements of Law. None of the Employee
Plans has any material unfunded liabilities which are not reflected in the
Financial Statements.
(h) With respect to each Employee Plan, there has not occurred,
nor is any person contractually bound to enter into, any non-exempt "prohibited
transaction" within the meaning of Section 4975 of the Code or Section 406 of
ERISA.
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(i) Neither PDGNB nor any Subsidiary has any liability under any
"employee pension benefit plan" (within the meaning of Section 3(2) of ERISA)
subject to Title IV of ERISA, maintained by PDGNB or any Subsidiary and covering
current or former employees of PDGNB or any Subsidiary, that has been terminated
and no employee pension benefit plan maintained by PDGNB or any Subsidiary has
been the subject of a "reportable event" (within the meaning of Section 4043 of
ERISA) as to which notices would be required to be filed with the Pension
Benefit Guaranty Corporation, other than events reportable on Form 5310 of the
IRS. Except as disclosed in Schedule 5.15(I), neither PDGNB nor any Subsidiary
has withdrawn from any Multiemployer Plan or taken any action to do so. No
action has been taken to terminate a DB Plan that would result in any current or
future liability.
(j) No proceeding by the Pension Benefit Guaranty Corporation to
terminate any Pension Plan in accordance with Subtitle 1 of Title IV of ERISA
has been instituted or, to the Knowledge of Seller, threatened.
(k) Neither PDGNB nor any Subsidiary would incur more than Three
Hundred Thousand Dollars (U.S.$300,000) of withdrawal liability in the event of
the complete withdrawal by PDGNB or any Subsidiary (or by any other employer,
assuming that PDGNB or any Subsidiary were required to satisfy the liability as
guarantor or indemnitor of benefits) from all Multiemployer Plans, and could
incur (directly or indirectly) no more than Three Hundred Thousand Dollars
(U.S.$300,000) of liability under Multiemployer Plans as described in Seller's
contracts with Transervice Logistics, Inc., taking into account all provisions
of the Multiemployer Plans and related collective bargaining agreements that
apply either now or as of the Closing to determine the withdrawal liability.
Assuming a seven percent (7%) interest rate for purposes of calculating the
liabilities associated with the GNB Pension Plan, the funded current liability
percentage of the GNB Pension Plan, determined as of June 30, 1999 by the Plan's
actuary under Code Section 4.12(1)(8), is not less than ninety-two percent
(92%).
(l) Prior to the Closing, with respect to each Employee Plan,
PDGNB and each Subsidiary has provided Buyer or its representative a true and
complete copy of the plan documents, a summary plan description, (and, if
applicable, related trust documents) and all amendments thereto and written
interpretations thereof together with (i) the three most recent annual reports
prepared in connection with each such Employee Plan (Form 5500 including, if
applicable, Schedule B thereto); (ii) the most recent IRS determination letter
with respect to each Employee Plan designed to qualify under Code Section
401(a); (iii) all trust documents, insurance contracts or other funding
arrangements; (iv) an actuarial study of any post-employment life or medical
benefits provided, if any; and (v) the most recent actuarial report for each DB
Plan. Benefits under any Employee Plan are as represented in such documents and
have not been increased or modified (whether orally or in writing) subsequent to
the dates of such documents.
(m) No Person will become entitled to any bonus or payment from
PDGNB or any Subsidiary by virtue of this Agreement or the consummation of the
transactions contemplated hereby,
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which bonus or payment (i) is not adequately reflected and reserved on the June
30, 1999 Balance Sheet, or (ii) would constitute an "excess parachute payment"
as described in Section 280G of the Code.
(n) Except as previously disclosed above, neither PDGNB nor any of
its Subsidiaries has any actual or potential material liability to the Pension
Benefit Guaranty Corporation, the IRS or the Department of Labor or with respect
to any multiemployer plan or other Pension Plan currently or previously
maintained by members of the controlled group of companies (as defined in
Section 414 of the Code) that includes PDGNB or any of its Subsidiaries and no
condition exists that presents a material risk to PDGNB or any of its
Subsidiaries of incurring such a liability.
Section 5.16. EMPLOYEE RELATIONS.
(a) Except as set forth in Schedule 5.16(A): (i) Each Subsidiary
is in compliance with all applicable Requirements of Law with respect to labor
and employment, including employment practices, employment verifications, terms
and conditions of employment and wages, overtime pay, and hours, and OSHA except
for such noncompliance as is not likely to have a Material Adverse Effect; (ii)
neither PDGNB nor any Subsidiary has engaged in any unfair labor practice or
illegally discriminated with regard to any aspect of employment on the basis of
any legally prohibited category or classification; and (iii) with respect to
employees and former employees who rendered services to, or participated in
conduct or activities in connection with any Subsidiary, neither PDGNB nor any
Subsidiary is liable for any arrears of wages, salaries or other payments.
(b) Except as set forth in Schedule 5.16(B), there are no: (i)
unfair labor practice charges or complaints pending or, to the Knowledge of
Seller, threatened against PDGNB or any Subsidiary before the National Labor
Relations Board; (ii) discrimination charges pending or, to the Knowledge of
Seller, threatened against PDGNB or any Subsidiary before any federal, state or
local agency or authority; (iii) complaints, charges or citations pending or, to
the Knowledge of Seller, threatened against PDGNB or any Subsidiary under OSHA;
(iv) to the Knowledge of Seller, labor strike, stoppage, attempt to organize an
unrepresented bargaining unit, attempt to decertify the recognized union or
material controversies pending or threatened between PDGNB or any Subsidiary and
its employees or any labor union or organization representing or claiming to
represent such employees' interests; or (v) collective bargaining agreement
currently being negotiated by PDGNB or any Subsidiary with respect to its
employees.
Section 5.17. COMMERCIAL CONTRACTS. Except as set forth in Schedule
5.17, neither PDGNB nor any Subsidiary is a party to or bound by:
(a) any consignment, distributor, dealer, manufacturer's
representative, sales agency, advertising representative or advertising or
public relations contract or agreement which is reasonably anticipated by PDGNB
or any Subsidiary to involve the payment of more than one-hundred thousand
United States dollars (US$100,000) per year;
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(b) any contract, agreement or commitment regarding the sale or
other disposition of products or services, or for the purchase of raw materials,
products or services which is reasonably anticipated by PDGNB or any Subsidiary
to involve the receipt or payment of more than one-hundred thousand United
States dollars (US$100,000) per year;
(c) any guarantee or indemnification agreement for the benefit of
any Person made or given outside of the ordinary course of business;
(d) any Tax sharing or Tax allocation agreement;
(e) any contract, agreement or commitment which provides for the
incurrence of indebtedness for borrowed money or capitalized lease obligations;
(f) any partnership or joint venture agreement;
(g) any material license of software or other intellectual
property;
(h) any agreement, contract or commitment relating to capital
expenditures of an amount or value in excess of one hundred thousand United
States dollars (US$100,000);
(i) any agreement that restricts or purports to restrict the
business activity of PDGNB or any Subsidiary or limits the ability of PDGNB or
any Subsidiary to engage in any line of business or compete with any Person; or
(j) any agreement that was not entered into in the ordinary course
of business consistent with past practice and that involves annual payments in
excess of one hundred thousand United States dollars ($100,000).
Section 5.18. STATUS OF CONTRACTS. Except as set forth in Schedule 5.18
hereto: (a) each of the leases, contracts and other agreements listed in
Schedules 5.10(B), 5.12, 5.14, 5.15 and 5.17 (collectively, the "PDGNB
AGREEMENTS") constitutes a legal, valid and binding obligation of PDGNB or one
of its Subsidiaries (subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general application relating to or affecting
creditors' rights and to general equity principles) and is in full force and
effect; and (b) PDGNB or any Subsidiary (as the case may be) is not, nor, to the
Knowledge of Seller, alleged to be, in material breach of, or material default
under, any of the PDGNB Agreements nor, to the Knowledge of Seller, is any other
party thereto in such breach or default and, to the Knowledge of the Seller, no
event has occurred which the notice or lapse of time would constitute such a
breach or default or permit termination, modification or acceleration of any of
the PDGNB Agreements.
Section 5.19. ENVIRONMENTAL MATTERS. Notwithstanding any other
provision of this Agreement, this Section 5.19 contains the only representations
or warranties of Seller with respect
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to Environmental Law or environmental matters, and no other statement in this
Agreement or in any Seller Ancillary Agreement or in any other document or
information delivered or given to or received by or on behalf of Buyer in
connection with the transactions contemplated by this Agreement shall be deemed
to be a representation or warranty relating to Environmental Law or
environmental matters.
(a) Except as set forth in Schedule 5.19(A), PDGNB and each
Subsidiary is in compliance with all applicable Environmental Laws except for
such noncompliance as is not likely to have a Material Adverse Effect.
(b) Except as set forth on Schedule 5.19(B), each Subsidiary owns,
holds or possesses all material Governmental Permits required under
Environmental Laws necessary for the occupation and use of the Real Property and
the operation of its business substantially as currently conducted. All
Governmental Permits required under Environmental Laws that are currently owned,
held, or possessed by each Subsidiary are listed in Schedule 5.19(B). Except as
set forth on Schedule 5.19(B), the Subsidiaries are in compliance, and have for
the past three (3) years complied, with all Governmental Permits except for such
noncompliance as is not likely to have a Material Adverse Effect. Seller shall
make commercially reasonable efforts to transfer or cause to be transferred to
Buyer all such Governmental Permits at the Closing, including (i) giving notice
to federal, state or local regulatory agencies with respect to the change in
ownership or control or responsible officials at the Real Property, (ii)
completing and submitting notices of termination, and (iii) to the extent not
transferred by the Closing Date, shall cooperate fully with Buyer in obtaining
the transfer of such Governmental Permits as promptly thereafter as possible.
(c) Except as set forth in Schedule 5.19(C), neither PDGNB nor any
Subsidiary is subject to any pending or, to the Knowledge of Seller Regarding
Environmental Matters, threatened investigation by, order from, claim by,
statutory request for information from, or continuing agreement with any Person
respecting: (i) any violation of Environmental Law or Governmental Permits, (ii)
any Remedial Action, or (iii) any claim of Losses and Expenses, in each case
arising from the Release or threatened Release of a Contaminant or the presence
of any Contaminant on, in, at or beneath the Real Property or the migration of
any Contaminant onto or from the Real Property.
(d) Except as set forth in Schedule 5.19(D), neither PDGNB nor any
Subsidiary is subject to any pending or, to the Knowledge of Seller Regarding
Environmental Matters, threatened judicial or administrative investigation,
proceeding, order, notice of violation, judgment, decree or settlement with any
continuing obligation alleging or relating to a violation of or liability under
any Environmental Law or Governmental Permits.
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(e) Except as set forth in Schedule 5.19(E):
(i) Neither PDGNB nor any Subsidiary has reported a Release
pursuant to Section 103(a) of CERCLA or Section 304 of EPCRA,
or any analogous state or local law;
(ii) Neither PDGNB nor any Subsidiary has filed a notice
pursuant to Section 103(c) of CERCLA;
(iii) Neither PDGNB nor any Subsidiary has filed a notice
pursuant to Section 3010 of RCRA, indicating the generation of
any hazardous waste, as that term is defined under 40 CFR Part
261 or any state analog thereto; or
(iv) To the Knowledge of Seller Regarding Environmental
Matters, there has not been any disposal by any Subsidiary or
Release of any Contaminants on, at, in, or beneath any Real
Property.
(f) Except as set forth in Schedule 5.19(F), neither PDGNB nor any
Subsidiary has received written notice under CERCLA or any other Environmental
Law to the effect that it is or may be liable to any Person as a result of the
generation, storage, transportation, Release, arrangement for disposal or
disposal of any Contaminants on, at or, in any Real Property.
(g) Except as set forth in Schedule 5.19(G), to the Knowledge of
Seller Regarding Environmental Matters, there are no underground storage tanks
(whether active or abandoned) located at, in, or beneath the Real Property.
(h) Except as disclosed in the Schedules to Section 5.19, to the
Knowledge of Seller Regarding Environmental Matters, as of the Closing Date
there is no condition existing on the premises constituting the Owned Real
Property or Leased Real Property that will give rise to any liability of PDGNB
or any Subsidiary under any Environmental Law.
(i) Seller has made available to Buyer true and correct copies of
all material environmental audits and consultant's reports relating to the past
and current operations, properties and facilities of PDGNB and each Subsidiary,
or any of their respective predecessors, which are in its possession or under
its reasonable control.
(j) To the Knowledge of Seller Regarding Environmental Matters,
the sites identified on Schedule 5.19(J) constitute, and as such Schedule is
updated by Seller from time to time in its sole discretion prior to the Closing
Date, will constitute all PRP Sites as of the Closing Date. Notwithstanding any
other provision of this Agreement, no representations and warranties are made or
shall be deemed to apply to the Savanna Sites other than: (i) the representation
and warranty contained in the first sentence of this Section 5.19(j), and (ii)
the representations and warranties
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contained in Sections 5.10(a), (c), and (d)(i) as applied to the Owned Real
Property included in the Savanna Sites.
Section 5.20. INSURANCE. Seller has, and at all times has had, valid
insurance coverage in respect of the Business against all risks normally insured
against by persons in the same industry, underwritten by one or more
well-established and reputable insurers or adequately capitalized Affiliates.
Schedule 5.20 contains a list of all insurance policies (specifying (i) the
insurer, (ii) the amount of the coverage, (iii) the type of insurance, (iv) the
policy number and (v) any currently pending claims thereunder) maintained by or
on behalf of any Subsidiary on its properties, assets, business or personnel. No
Subsidiary has failed to give any notice or present any claim under any
insurance policy in due and timely fashion. All premiums due under the policies
listed on Schedule 5.20 have been paid or accrued for on the Financial
Statements and all such policies are in full force and effect and no notice of
disallowance of any claim under any insurance policy, whether or not currently
in effect, has been received by PDGNB or any Subsidiary. Other than (i) claims
properly made against PDGNB or any Subsidiary in the ordinary course of business
pursuant to insurance programs written on a retrospective rating basis, (ii)
claims made as a result of premium audits relating to expired insurance
policies, (iii) deductible claims relating to losses that are incurred but not
reported, or losses that are known but not finally resolved, neither PDGNB nor
any Subsidiary has any liability for or exposure to any premium expenses for
expired policies and there are no current claims by PDGNB or any Subsidiary
under any such policy as to which coverage has been questioned, denied or
disputed by the underwriters of such policies.
Section 5.21. PRODUCT WARRANTIES. Each Subsidiary's unexpired, express
product warranties with respect to products that it manufactures or sells or
that it has heretofore manufactured or sold are described in Schedule 5.21.
Except as set forth in Schedule 5.21, no Subsidiary has received written notice
of any claim, and to the Knowledge of Seller there are no threatened claims
against any Subsidiary, based on any product warranty (except claims outstanding
as of June 30, 1999, not exceeding two hundred thousand United States dollars
(US$200,000) in the aggregate).
Section 5.22. BANK ACCOUNTS. Schedule 5.22 sets forth a list of all
accounts, borrowing resolutions and deposit boxes maintained by PDGNB and each
Subsidiary at any bank or other financial institution and the names of the
persons authorized to effect transactions in such accounts and pursuant to such
resolutions and with access to such boxes.
Section 5.23. ACCOUNTS AND RECORDS. All the accounts, books, ledgers
and financial and other material records of the Business have been maintained
accurately and in accordance with generally accepted accounting practices.
Section 5.24. NO MISREPRESENTATION. To the Knowledge of Seller, the
representations and warranties of Seller contained in this Agreement, the
Disclosure Schedules attached hereto, and the certificates and other instruments
delivered by Seller pursuant hereto, do not contain any untrue
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statement of a material fact or omit to state a material fact necessary to make
the statements contained herein or therein not misleading.
Section 5.25. SUFFICIENCY OF ASSETS. PDGNB and the Subsidiaries own or
lease or have the right to use all Real Property, buildings, machinery,
equipment, intellectual property and other assets necessary for the conduct of
the Business.
Section 5.26. POWERS OF ATTORNEY. As of Closing, there will not be any
outstanding powers of attorney executed on behalf of PDGNB or any Subsidiary
other than with respect to the filing of taxes, customs and similar matters and
intellectual property registrations.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows.
Section 6.1. ORGANIZATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Buyer is duly qualified to do business and is in good standing as a foreign
corporation in each of the jurisdictions in which Buyer's operations require
that it qualify to transact business as a foreign corporation, except for those
jurisdictions where the failure to so qualify is not likely to have a material
adverse effect on Buyer's business or financial condition or the ability of
Buyer to lawfully consummate the transactions contemplated by this Agreement in
all material respects.
Section 6.2. POWER AND AUTHORITY. Buyer has the full corporate power
and authority to execute and deliver this Agreement and the Buyer Ancillary
Agreements, to perform its obligations hereunder and thereunder, and to own and
lease its property and conduct its operations as currently conducted. Buyer's
execution, delivery and performance of this Agreement has been duly authorized
and approved by all necessary corporate action.
Section 6.3. AGREEMENT BINDING. This Agreement has been and the Buyer
Ancillary Agreements will be duly executed and delivered by Buyer, and assuming
due authorization, execution and delivery by Seller, is and will be the legal,
valid and binding obligations of Buyer enforceable in accordance with their
respective terms, subject to general principles of equity and except as
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws of general
application relating to creditors' rights generally.
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Section 6.4. ABSENCE OF CONFLICTS. Except as described in Schedule 6.4,
the execution, delivery and performance of this Agreement and the Buyer
Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby, will not:
(a) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event creating
rights of acceleration, termination or cancellation, result in termination of or
result in the creation or imposition of any Encumbrance under: (i) any term or
provision of the certificate of incorporation or bylaws of Buyer, (ii) any note,
instrument, contract, agreement, mortgage, indenture, lease, license, franchise,
permit or other commitment to which Buyer is a party or by which it or any of
its assets are bound, (iii) any Court Order, or (iv) any Requirements of Law;
except in each case, for any of the foregoing which, individually or in the
aggregate, is or are not likely to have a material adverse effect on Buyer or
its business taken as a whole or hinder or impair the consummation of the
transactions contemplated hereby; or
(b) require the approval, consent, authorization or act of, or the
making by Buyer of any declaration, notification, filing or registration with,
any Person, except in each case, for: (i) any of the foregoing which,
individually or in the aggregate, if not taken, is or are not likely to have a
material adverse effect on the financial condition of Buyer or materially hinder
or impair the consummation of the transactions contemplated hereby; and (ii) the
filing required under the HSR Act.
Section 6.5. INVESTMENT REPRESENTATION. Buyer is acquiring the Shares
for investment and not with a view to the distribution thereof or dividing all
or any part of its interest therein with any other Person.
Section 6.6. NO ADVISOR. Neither Buyer nor any Person acting on its
behalf has retained any advisor, broker, investment banker or financial advisor
in connection with this Agreement or any transaction contemplated hereby for
which Seller may be liable.
Section 6.7. CAPITALIZATION. The authorized capital stock of Buyer
consists of (i) 60,000,000 shares of common stock, par value $0.01 per share, of
which 21,496,747 shares were issued and outstanding on May 5, 2000 and (ii)
5,000,000 shares of preferred stock, par value $0.01 per share, none of which
were issued or outstanding as of May 5, 2000. The issued and outstanding shares
of Buyer's capital stock have been duly authorized and validly issued and are
fully paid and non-assessable, with no personal liability attaching to the
ownership thereof. The Buyer Shares have been duly authorized and, at the
Closing will be validly issued, fully paid, nonassessable and not subject to
preemptive or any other similar rights of others, and be free and clear of all
Encumbrances except for those referred to in Section 3.3(e) and have no personal
liability attaching to the ownership thereof.
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Section 6.8. SEC REPORTS. Except for the matters referred to in Buyer's
Form 10-Q for the quarter ended January 2, 2000, the annual report on Form 10-K
of Buyer for the fiscal year ended March 31, 1999, as filed under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and all other reports and
proxy statements filed or required to be filed by Buyer subsequent to such
report (collectively, the "Buyer SEC Documents"), have been duly and timely
filed by Buyer and as of their respective dates (or if amended prior to the date
of this Agreement, then on the date of such last amendment) complied in all
material respects with all requirements under the Exchange Act and the rules and
regulations promulgated thereunder and contained no untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements made, in light of the circumstances in which they were made, not
misleading and the financial statements of Buyer included in the Buyer SEC
Documents complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP (except, in the case of
interim financial statements, as permitted by Forms 10-Q or 8-K of the SEC)
consistently applied during the periods involved (except as may be indicated in
the notes thereto) and fairly presented, in all material respects, the financial
position of Buyer as of the dates thereof and the results of operations and cash
flows for the periods then ended (subject, in the case of interim financial
statements, to normal year-end adjustments, other adjustments discussed therein
(if any) and lack of footnote disclosures). Buyer believes it is currently
eligible under the Securities Act to use a Registration Statement on Form S-3 to
register resales of its common stock.
Section 6.9. UNDISCLOSED LIABILITIES. Except (i) to the extent
disclosed in the Buyer SEC Documents and (ii) for liabilities and obligations
incurred in the ordinary course of business consistent with past practice, since
March 31, 1999, neither Buyer nor any of its subsidiaries has incurred any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, that have, or would be reasonably likely to have, individually or in
the aggregate, a material adverse effect on Buyer and its subsidiaries, taken as
a whole.
Section 6.10. LITIGATION. Except as disclosed in the Buyer SEC
Documents or in Schedule 6.4, no Action is pending or, to the knowledge of
Buyer, threatened against Buyer or any of its subsidiaries or any of their
respective officers, directors or employees (in their capacity as such) before
any court, arbitration board or tribunal or administrative or other governmental
agency, nor is Buyer aware of any such threatened Action, which either
individually or in the aggregate, is reasonably likely to have a material
adverse effect on Buyer and its subsidiaries, taken as a whole, or would prevent
Buyer from consummating the transactions contemplated by this Agreement.
Section 6.11. NO MISREPRESENTATION. To the knowledge of Buyer, the
representations and warranties of Buyer contained in this Agreement, Schedule
6.4 and the certificates and other instruments delivered by Buyer pursuant
hereto do not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made not misleading.
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ARTICLE 7.
ACTIONS PRIOR TO THE CLOSING DATE
Buyer and Seller covenant and agree to take the following actions
between the date hereof and the Closing Date:
Section 7.1. PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES. Buyer
and Seller shall, and Seller shall cause PDGNB and each Subsidiary to, refrain
from taking any action that would render any representation or warranty
contained in this Agreement inaccurate as of the Closing Date. Buyer and Seller
shall promptly notify the other of any Action, investigation, or other
proceeding, that shall be instituted or threatened against such party or, in the
case of Seller, against PDGNB or any Subsidiary, to restrain, prohibit or
otherwise challenge the legality of any transaction contemplated by this
Agreement.
Section 7.2. APPROVALS. During the period prior to the Closing Date,
Buyer and Seller shall, and Seller shall cause PDGNB and each Subsidiary to, act
diligently and reasonably, and shall cooperate with each other, to secure any
consents and approvals of any Governmental Body or other Person required to be
obtained in order to effect the consummation of the transactions contemplated by
this Agreement and preserve for the benefit of PDGNB and the Subsidiaries their
rights under permits and agreements.
Section 7.3. OPERATIONS PRIOR TO THE CLOSING DATE.
(a) During the period prior to the Closing Date, Seller shall
cause each Subsidiary to operate and carry on its operations only in the
ordinary course and substantially as operated prior to the date hereof.
(b) Notwithstanding Section 7.3(a), except as set forth in
Schedule 7.3(B), as expressly contemplated by this Agreement, or with the
express prior consent of Buyer, Seller shall not take, and shall cause PDGNB and
the Subsidiaries not to take, any of the actions set forth in Section 5.7(b);
provided, however, notwithstanding anything to the contrary herein, Seller shall
not make any capital expenditure in excess of Two Hundred and Fifty Thousand
United States Dollars ($250,000) (other than those identified as being committed
in the "Fiscal Year 2000 Open Sanction Summary" attached to Schedule 5.7(b))
without the prior written approval of Buyer.
Section 7.4. ANTITRUST LAW COMPLIANCE. Buyer and Seller shall each file
or cause to be filed with the Federal Trade Commission and the United States
Department of Justice any notifications required to be filed under the HSR Act
with respect to the transactions contemplated hereby and by the Coordinating
Agreement, and Buyer and Seller shall bear the costs and expenses of their
respective filings and shall pay their respective filing fees in connection
therewith. Buyer and Seller shall use their respective reasonable best efforts
to make such filings promptly (and in any event
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within three (3) business days) following the date hereof, to respond to any
requests for additional information made by either of such agencies and to cause
the waiting periods under the HSR Act to terminate or expire at the earliest
possible date. Each party warrants that all such filings by it will be, as of
the date filed, true and accurate and in accordance with the requirements of the
HSR Act and any rules and regulations promulgated thereunder. Buyer and Seller
agree to make available to each other such information as each of them may
reasonably request relative to the business, assets and property of either of
them or of PDGNB or any Subsidiary as may be required of each of them to file
any additional information requested by the above-referenced federal agencies
under the HSR Act and any rules and regulations promulgated thereunder.
Section 7.5. INTERCOMPANY AGREEMENTS. All of the Intercompany
Agreements and intercompany accounts payable and receivable, except for those
set forth on Schedule 7.5, shall be terminated or canceled at the Closing.
Section 7.6. TAX SHARING AGREEMENT. All Tax Sharing, allocation or
similar agreements with respect to or including PDGNB and the Subsidiaries shall
be terminated as of the Closing. Upon termination, neither PDGNB nor any of the
Subsidiaries shall be bound thereby or have any further liability thereunder and
will be released from any claims thereunder.
Section 7.7. NOTIFICATION OF CHANGES. Each of Seller and Buyer shall
promptly notify the other of any event that causes any representation or
warranty given by such party in Articles 4, 5 or 6 to become untrue.
Section 7.8. GENERAL. Each of the parties will use its reasonable best
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth below).
Section 7.9. PRESERVATION OF BUSINESS. Each of the parties shall, and
Seller shall cause PDGNB and the Subsidiaries to, use reasonable best efforts to
keep their businesses and properties substantially intact, including their
present operations, physical facilities, working conditions, and relationships
with lessors, licensors, suppliers, customers and employees.
ARTICLE 8.
CONDITIONS TO CLOSING
Section 8.1. CONDITIONS TO THE OBLIGATIONS OF THE BUYER. The
obligations of Buyer under this Agreement shall, at the option of Buyer, be
subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions:
(a) No Misrepresentation or Breach of Covenants and Warranties.
Seller shall have complied in all material respects with its covenants and
agreements herein and in the
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Coordinating Agreement; each of the representations and warranties of Seller
(including those with respect to PDGNB and the Subsidiaries) contained in this
Agreement and each of the Seller Ancillary Agreements shall be true and correct
in all material respects on the Closing Date as though made on the Closing Date
(except with respect to those representations and warranties that speak as to a
particular date or time, which only need be true and correct as of such date or
time), except for changes therein specifically permitted by this Agreement or
resulting from any transaction expressly consented to in writing by Buyer; and
there shall have been delivered to Buyer a closing certificate in a form
reasonably satisfactory to Buyer to such effect, dated the Closing Date, signed
by the President or a Vice President of Seller.
(b) Closing Documents. Buyer shall have received from Seller the
agreements and closing documents contemplated by Section 3.2.
(c) Necessary Approvals. Seller and Buyer shall have received all
approvals and actions of or by all Governmental Bodies and any other Person
which are necessary to consummate the transactions contemplated hereby and by
the ROW Agreements and preserve for the benefit of PDGNB and the Subsidiaries
their rights under the PDGNB Agreements which are material to the operation of
the Business.
(d) No Suit. No Action by any Governmental Body shall be pending
or threatened questioning the legality of this Agreement or the consummation of
the transactions contemplated hereby in whole or in part.
(e) No Restraint. The waiting period under the HSR Act shall have
expired or been terminated and no Court Order shall have been issued and be in
effect which restrains or prohibits any material transaction contemplated
hereby.
(f) ROW Agreements. The transactions contemplated by the ROW
Agreements shall have closed simultaneously with the Closing.
(g) No Material Adverse Change. On the Closing Date, there shall
not be a Material Adverse Effect.
(h) Coordinating Agreement. All conditions to Buyer's obligations
set forth in Sections 5.5, 5.6 and 5.7(a) of the Coordinating Agreement shall
have been satisfied.
(i) Standstill and Registration Rights. The parties shall have
entered into a Standstill Agreement reasonably satisfactory to them
substantially on the terms as set forth in Exhibit A hereto (the "Standstill
Agreement") and a Registration Rights Agreement reasonably satisfactory to them
substantially on the terms as set forth in Exhibit B hereto (the "Registration
Rights Agreement").
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Notwithstanding the failure of any one or more of the foregoing
conditions, Buyer may, at its option, proceed with the Closing without
satisfaction, in whole or in part, of any one or more of such conditions and
without written waiver; provided however, that in so proceeding with the
Closing, and notwithstanding any other provision of this Agreement, Buyer shall
be deemed to have waived any such failure and any rights or remedies it may have
against Seller by reason of such failure.
Section 8.2. CONDITIONS TO THE OBLIGATIONS OF SELLER. The obligations
of Seller under this Agreement shall, at the option of Seller, be subject to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions:
(a) No Misrepresentation or Breach of Covenants and Warranties.
Buyer shall have complied in all material respects with its covenants and
agreements herein; each of the representations and warranties of Buyer contained
in this Agreement shall be true and correct in all material respects on the
Closing Date as though made on the Closing Date (except with respect to those
representations and warranties that speak as to a particular date or time, which
only need be true and correct as of such date or time), except for changes
therein specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by Seller; and there shall have
been delivered to Seller a closing certificate in a form reasonably satisfactory
to Seller to such effect, dated the Closing Date and signed by the President or
a Vice President of Buyer.
(b) Closing Documents. Seller shall have received from Buyer the
agreements and closing documents contemplated by Section 3.3.
(c) Payment of Purchase Price. Buyer shall have tendered payment
of the cash portion of the Purchase Price.
(d) Listing of Buyer Shares. The Buyer Shares shall have been
approved for listing on the New York Stock Exchange, subject to official notice
of issuance.
(e) Necessary Approvals. Seller and Buyer shall have received all
approvals and actions of or by all Governmental Bodies and any other Person
which are necessary to consummate the transactions contemplated hereby and by
the ROW Agreements and preserve for the benefit of Buyer its rights under
agreements which are material to the operation of its businesses.
(f) No Suit. No Action by any Governmental Body shall be pending
or threatened questioning the legality of this Agreement or the consummation of
the transactions contemplated hereby in whole or in part.
(g) No Restraint. The waiting period under the HSR Act shall have
expired or been terminated, and no Court Order shall have been issued and be in
effect which restrains or prohibits any material transaction contemplated
hereby.
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(h) ROW Agreements. The transactions contemplated by the ROW
Agreements shall have closed simultaneously with the Closing.
(i) Standstill and Registration Rights. The parties shall have
entered into the Standstill Agreement and the Registration Rights Agreement.
(j) No Material Adverse Change. On the Closing Date, there shall
have been no event, occurrence or condition (other than as a result of general
economic conditions or events affecting the automotive and industrial battery
business as a whole) which has, or could reasonably be expected to have, a
material adverse effect on the financial condition, assets, results or
operations, businesses, or operations of Buyer taken as a whole.
(k) Coordinating Agreement. All conditions to Seller's obligations
set forth in Sections 5.5 and 5.7(b) of the Coordinating Agreement shall have
been satisfied.
Notwithstanding the failure of any one or more of the foregoing
conditions, Seller may, at its option, proceed with the Closing without
satisfaction, in whole or in part, of any one or more of such conditions and
without written waiver; provided however, that in so proceeding with the
Closing, and notwithstanding any other provision of this Agreement, Seller shall
be deemed to have waived any such failure and any rights or remedies it may have
against Buyer by reason of such failure.
ARTICLE 9.
TERMINATION
Section 9.1. TERMINATION. Anything contained in this Agreement to the
contrary notwithstanding, this Agreement may be terminated at any time prior to
the Closing Date:
(a) by the mutual written consent of Buyer and Seller;
(b) by Buyer or Seller if the Closing shall not have occurred on
or before December 31, 2000 unless: (i) all conditions to Closing have
previously been satisfied or waived, and (ii) the Closing has not then occurred
solely because the date for Closing specified in Section 3.1 has not yet
occurred and unless such failure to close is due primarily to the breach by the
party seeking termination of its agreements, representations or warranties
contained herein;
(c) by Buyer in the event of any breaches in any material respect
by Seller of Seller's agreements, covenants, representations or warranties
contained herein, and which Seller has failed to remedy or cure within twenty
one (21) days after receipt of notice from Buyer requesting that such breaches
be remedied or cured;
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(d) by Seller in the event of any breaches in any material respect
by Buyer of Buyer's agreements, covenants, representations or warranties
contained herein, which Buyer has failed to remedy or cure within twenty one
(21) days after receipt of notice from Seller requesting that such breaches be
remedied or cured; or
(e) by Buyer or Seller if any court shall have issued a Court
Order or if any Governmental Body shall have issued a decree or ruling or taken
any other action permanently restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby.
Section 9.2. NOTICE OF TERMINATION. Any party desiring to terminate
this Agreement pursuant to Section 9.1 shall give written notice of such
termination to the other party to this Agreement.
Section 9.3. EFFECT OF TERMINATION. In the event that this Agreement
shall be terminated pursuant to this Article 9, all further obligations of the
parties under this Agreement (other than Sections 12.2, 12.8, and 12.11 of this
Agreement and Sections 5.2, 5.3 and 5.4 of the Coordinating Agreement) shall be
terminated without further liability of any party to the other, provided that
nothing herein shall relieve either party from liability for its willful breach
of this Agreement.
ARTICLE 10.
EXCLUSIVITY OF REMEDY
Section 10.1. INDEMNIFICATION BY SELLER. Seller's sole and exclusive
indemnification obligations under this Agreement are set forth in the
Coordinating Agreement.
Section 10.2. INDEMNIFICATION BY BUYER. Buyer's sole and exclusive
indemnification obligations under this Agreement are set forth in the
Coordinating Agreement.
Section 10.3. EXCLUSIVITY OF REMEDY. With respect to any breach by
either party of its representations, warranties, covenants, or agreements in
this Agreement, the respective Buyer or Seller Ancillary Agreements, or the ROW
Agreements and the transactions contemplated hereby and thereby, the sole and
exclusive remedy of the other party (in contract, tort, for contribution, under
Requirements of Law, or otherwise) shall be the indemnification provided in the
Coordinating Agreement. In view of this exclusivity of remedy provision, Buyer
and Seller covenant and agree for themselves and their respective Affiliates
that they will not bring, maintain, join or prosecute any Action or other
proceeding against the other or its Affiliates for breach of this Agreement or
indemnity therefor except as provided in the Coordinating Agreement.
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ARTICLE 11.
ADDITIONAL AGREEMENTS OF THE PARTIES
Section 11.1. TAXES.
(a) Neither Buyer nor Seller shall request a Tax audit of PDGNB or
the Subsidiaries and Buyer shall not, without the prior written consent of
Seller, extend any statute of limitations with respect to PDGNB or Subsidiary
Taxes arising prior to the Closing. Notwithstanding the provisions of Section
4.4 of the Coordinating Agreement, Seller shall have the sole right to control
any Tax audit or administrative or court proceeding involving PDGNB or the
Subsidiaries relating to periods ending at the time of or before the Closing for
which indemnification may be claimed from Seller under the Coordinating
Agreement, and to employ counsel of its choice at its expense, and neither Buyer
nor any of its Affiliates may settle any Tax claim for any taxable year or
period ending at or before the time of the Closing (or for the portion of any
taxable year or period ending on the Closing) without the prior written consent
of Seller, which consent may not be unreasonably withheld; provided that Seller
shall not enter into any settlement of any Tax claim, if such settlement shall
have adverse Tax consequences to Buyer, its subsidiaries or its Affiliates
(other than an adverse Tax consequence to which Seller has a duty to indemnify
Buyer pursuant to Section 4.1 of the Coordinating Agreement), without first
obtaining written approval of such settlement agreement from PDGNB and Buyer.
(b) For all taxable periods ending on or before the Closing Date,
Seller shall cause PDGNB and the Subsidiaries to join in Seller's consolidated
federal income tax return and in jurisdictions requiring separate reporting from
Seller, to file separate company state and local income tax returns. All such
Tax Returns shall be prepared and filed in a manner that is consistent with
prior practice, except as required by a change in applicable law. Buyer shall
have the right to review and comment on any such Tax Returns prepared by Seller.
In the event of any disagreement between the Seller and Buyer with respect to
any item on such Tax Returns, the Seller and Buyer shall work in good faith to
promptly resolve such disagreement, and to the extent that the parties cannot
resolve such disagreement, the disagreement shall be submitted to a mutually
agreed third-party independent accountant for resolution, which resolution shall
be binding on both Seller and Buyer. The costs of such dispute resolution shall
be borne equally by both Seller and Buyer. Except to the extent reflected as a
liability on the Final Closing Date Balance Sheet, Seller shall pay all Taxes
that may be due after the Closing Date and are allocable to the period prior to
and including the Closing Date. In order appropriately to apportion any of these
Taxes relating to a period that includes (but that would not, but for this
section, close on) the Closing Date, the parties hereto will, to the extent
permitted by applicable law, elect with the relevant taxing authorities to treat
for all purposes the Closing Date as the last day of a taxable period of PDGNB
and the Subsidiaries, and such period shall be treated as a "SHORT PERIOD" and a
"PRE-CLOSING PERIOD" for purposes of this Agreement; provided, that, the Buyer
shall not consent to any such election to the extent such election would result
in any material adverse Tax consequences to Buyer, its Affiliates, PDGNB or any
of the Subsidiaries. In any case where applicable law does not permit the
Closing Date to be treated as the last
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day of a Short Period, then for purposes of this Agreement, the portion of such
Taxes that is attributable to the operations of PDGNB or any Subsidiary for the
portion of such Tax Period beginning before and ending on and including the
Closing Date (the "Interim Period"), shall be (i) in the case of Taxes that are
not based on income or gross receipts, the total amount of such Taxes for the
period in question multiplied by a fraction, the numerator of which is the
number of days in the Interim Period, and the denominator of which is the total
number of days in the entire period in question, and (ii) in the case of Taxes
that are based on income or gross receipts, the Taxes that would be due with
respect to the Interim Period, if such Interim Period were a Short Period. Buyer
shall cause PDGNB and the Subsidiaries to furnish information to the Seller as
reasonably requested by Seller to allow Seller to satisfy its obligations under
this section in accordance with past custom and practice. Buyer shall cause
PDGNB and the Subsidiaries to file income tax returns, or shall include PDGNB
and the Subsidiaries in its combined or consolidated income tax returns, for all
periods other than periods ending on or before the Closing Date. PDGNB and the
Subsidiaries and Buyer shall consult and cooperate as to any elections to be
made on returns of PDGNB and the Subsidiaries for periods ending on or before
the Closing Date.
(c) Except to the extent reflected as a liability on the Final
Closing Date Balance Sheet, Seller shall be liable for and shall pay all Taxes
(whether assessed or unassessed) applicable to the sale of Shares or the
operations of PDGNB or any Subsidiary through the Closing Date and all Taxes
attributable to the Interim Period described in Section 11.1(b). Buyer shall be
liable for and shall pay: (i) subject to Section 4.1(a)(viii) of the
Coordinating Agreement, all Taxes reflected as a liability on the Final Closing
Date Balance Sheet; and (ii) all Taxes (whether assessed or unassessed)
applicable to the operation of PDGNB or the Subsidiaries attributed to all
periods beginning after the Closing Date.
(d) Notwithstanding Section 11.1(c), any Tax attributable to the
sale, transfer or delivery of the purchased Shares or the underlying assets of
PDGNB or any Subsidiary shall be borne and paid by Seller. Buyer and Seller
agree to timely sign and deliver such certificates or forms as may be necessary
or appropriate to establish an exemption from (or otherwise reduce), or file Tax
Returns with respect to, such Taxes.
(e) After the Closing, Seller and Buyer shall (and shall cause
their respective Affiliates to):
(i) make available to the other and to any taxing authority as
reasonably requested all information, records, and documents
relating to PDGNB or the Subsidiaries and preserve the same
until the expiration of any applicable statute of limitations
or extensions thereof;
(ii) provide timely notices to the other in writing of any
pending or threatened Tax audits or assessments relating to
PDGNB or the Subsidiaries for taxable periods for which the
other may have a liability under this Section 11.1;
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(iii) furnish the other with copies of all correspondence
received from any taxing authority in connection with any Tax
audit or information request with respect to any taxable
period for which the other may have liability under this
Section; and
(iv) Buyer and Seller further agree, upon request, to use
their reasonable best efforts to obtain any certificate or
other document from any governmental authority or any other
Person as may be necessary to mitigate, reduce or eliminate
any Tax that could be imposed (including, without limitation,
with respect to the transactions contemplated thereby).
(f) After the Closing, Buyer shall (and shall cause its Affiliates
to) pay to Seller any refunds of or credits for Taxes (net of any Taxes owed
resulting from such refund or credit) relating to PDGNB or the Subsidiaries for
periods ending on or before the Closing Date, excluding any Tax refund realized
as a result of the carryback of a post-Closing loss or credit, provided that no
payment shall be due to Seller resulting from refunds reflected on the Final
Closing Date Balance Sheet or otherwise taken into account in calculating the
adjustment to the Purchase Price in the Coordinating Agreement.
(g) Seller, at the request of Buyer, will join with Buyer to make
an election under Code Section 338(h)(10) (and any corresponding provisions of
state, local or foreign law) (collectively, a "SECTION 338(H)(10) ELECTION")
with respect to the purchase and sale of the PDGNB and the Subsidiaries (each
such entity for which a Section 338(h)(10) Election is made, an "ELECTION
CORPORATION," and collectively, the "ELECTION CORPORATIONS"). Buyer will be
responsible for preparing and timely filing any forms used to make a Section
338(h)(10) Election. Seller and its Affiliates shall sign on a timely basis all
forms used to make a Section 338(h)(10) Election requiring its signature, which
forms shall be provided to Seller at least 30 days prior to the required filing
date. Promptly after the Closing Date, Seller shall provide to Buyer any
information (including Tax elections made by or on behalf of PDGNB and the
Subsidiaries) reasonably requested by the Buyer in connection with its filing of
a Section 338(h)(10) Election. Within 60 days after the Closing Date, the
purchase price, the Election Corporation's liabilities and other relevant items
shall be allocated among the Election Corporation's assets as determined by
Buyer and as reasonably acceptable to Seller, which allocation shall be binding
upon Seller. The Buyer and Seller shall file any Tax Returns and any other
governmental filings on a basis consistent with such allocation of fair market
value.
(h) If Buyer does not make a Section 338(h)(10) Election pursuant
to Section 11.2(g) above, Seller intends to and Buyer agrees that, upon the sale
of the Shares, Seller will make an election under Treasury Regulation Section
1.1502-20(g)(1) to retain all net operating loss carryovers and related
alternative minimum tax carryovers attributable to PDGNB and Subsidiaries.
Seller will prepare the election and provide Buyer with a copy of the election
statement. Buyer agrees to attach a copy of the election statement to its tax
return as required by Treasury Regulation
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Section 1.1502-20(g)(4)(iii), to support Seller in its election to retain the
losses of PDGNB and Subsidiaries.
(i) The Tax Returns prepared by any party pursuant to Section 11.1
shall be prepared in a manner consistent with past returns and in compliance
with applicable law. Notwithstanding any obligations or rights set forth in this
Section 11.1, Buyer shall retain any rights to indemnification as set forth in
Section 4.1 of the Coordinating Agreement.
Section 11.2. PROCEEDS OF ENVIRONMENTAL REMEDIATION RIGHTS. Buyer
shall, and shall cause PDGNB and the Subsidiaries to, promptly remit to Seller
any and all proceeds received by Buyer, PDGNB, the Subsidiaries or any of their
Affiliates after the Closing Date from insurance companies or the former owner
of the assets of the Subsidiaries to the extent they represent reimbursement for
environmental remediation occurring on or prior to the Closing Date. Nothing in
this Agreement shall be deemed to transfer any rights whatsoever to Buyer with
respect to any policies (or claims or proceeds from claims pursuant thereto),
including but not limited to, any primary, excess or umbrella comprehensive or
general liability policies, issued prior to Closing, to Pacific Chloride, Inc.
or any predecessors or successors of that corporation.
Section 11.3. EMPLOYEE BENEFIT PLAN REPORTS. Seller agrees to correct
any failure to include an accountant's report (if required) with any of the
Forms 5500 for the Seller's cafeteria plan for the most recent three plan years,
and to bear all of the costs of such corrections, including penalties under
ERISA.
Section 11.4. INSURANCE MATTERS.
(a) Seller agrees that with respect to any occurrence-based
policies as to which PDGNB or any of the Subsidiaries are named insured or named
as additional insured parties (the "INSURANCE POLICIES"), it shall fully
cooperate with Buyer (at Buyer's expense) in taking all steps necessary to file
and process any insurance claims for any claims made after the Closing Date that
relate to any acts, events or occurrences prior to the Closing Date relating to
the Business (the "INSURED CLAIMS") that are insured under such policies. To the
extent that any proceeds relating to the Insured Claims are received by Seller
or any of Seller's Affiliates, Seller agrees to pay over such proceeds promptly
to Buyer.
(b) Buyer agrees that it shall pay any retrospective premium
charge or liability owed by Seller under the terms of such Insurance Policies
(including amounts owed under premium audits), subject to the following
conditions (i) Buyer shall only be obligated to pay such portion of a
retrospective premium charge or liability to the extent it exclusively relates
to the Business, (ii) Buyer shall have the right, upon reasonable request made
to Seller, to audit any retrospective premium policies and charges thereunder,
and to object to any proposed charge on the basis of such audit (in which case
any dispute between Seller and Buyer (not including any dispute between Buyer
and any insurer) shall be resolved by binding arbitration) and (iii) Buyer shall
not be required to pay
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any retrospective charge or liability with respect to any Insurance Policies to
the extent the overall maximum premium owed by all of the insured parties
thereon has previously been paid.
(c) Buyer acknowledges and agrees that none of Buyer, PDGNB or any
Subsidiary will have, after the Closing Date, any rights under, and will not
assert claims against, any insurance policies insuring or naming Pacific
Chloride, Inc., or any of its predecessors or successors, as an insured or
additional insured, nor will Buyer, PDGNB or any Subsidiary assert rights to any
settlements of claims under such policies.
ARTICLE 12.
GENERAL PROVISIONS
Section 12.1. NOTICES. Any notice, request, instruction or other
document to be given hereunder shall be in writing and: (a) delivered
personally; (b) sent by Federal Express or other similarly reputable overnight
courier; or (c) transmitted by facsimile, according to the instructions set
forth below. Such notices shall be sent to the following addresses and/or
facsimile numbers and shall be deemed given: (x) if delivered personally, at the
time delivered; (y) if sent by Federal Express or other similarly reputable
overnight courier, at the time sent, or (z) if transmitted by facsimile, at the
time when receipt is confirmed by the sending facsimile machine.
If to Seller, to:
Pacific Dunlop Holdings (USA) Inc.
6121 Lakeside Drive, Suite 200
Reno, Nevada 89511
United States of America
Attention: President
Facsimile: 702-824-4626
with a copy to:
Gardner, Carton & Douglas
321 N. Clark Street
Suite 3400
Chicago, Illinois 60610
United States of America
Attention: Mr. Robert J. Wilczek
Facsimile: 312-644-3381
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If to Buyer, to:
Exide Corporation
2901 Hubbard Road
Ann Arbor, MI 48105
Attention: General Counsel
Facsimile: (734) 827-2575
United States of America
with a copy to:
Kirkland & Ellis
200 E. Randolph Drive
Chicago, Illinois 60601
Attention: Mr. Carter W. Emerson, P.C.
Facsimile: 312-861-2200
or to such other address as such party may indicate by a notice delivered to the
other parties hereto in accordance with the provisions of this Section 12.1.
Section 12.2. CONFIDENTIAL INFORMATION. Each party agrees that it will
treat in confidence all documents, materials and other information which it
shall have obtained regarding any of the other parties during the course of the
negotiations leading to the consummation of the transactions contemplated hereby
(whether obtained before or after the date of this Agreement), the investigation
provided for herein and the preparation of this Agreement and other related
documents ("CONFIDENTIAL INFORMATION"), and, in the event the transactions
contemplated hereby shall not be consummated, each party will return to the
other party all copies of nonpublic Confidential Information which have been
furnished in connection therewith. Confidential Information shall not be
communicated to any third Person (other than the parties' respective counsel,
accountants, financial advisors, or environmental consultants). No party shall
use any Confidential Information in any manner whatsoever except solely for the
purpose of evaluating the proposed transaction. Notwithstanding the foregoing,
after the Closing, Buyer may use or disclose any Confidential Information
related to PDGNB and the Subsidiaries. The Seller shall not at any time after
the Closing disclose any Confidential Information relating to PDGNB or the
Subsidiaries. The obligation of each party to treat Confidential Information in
confidence shall not apply to any Confidential Information which (i) is or
becomes available to such party from a source other than such party, (ii) is or
becomes available to the public other than as a result of disclosure by such
party or its agents, (iii) is required to be disclosed under applicable law or
judicial process, but only to the extent it must be disclosed, or (iv) as to
which such party reasonably deems disclosure necessary to obtain any of the
consents or approvals contemplated hereby.
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Section 12.3. NO PUBLIC ANNOUNCEMENT. Neither Buyer nor Seller shall,
without the approval of the other party, issue any press release or other public
announcement concerning the transactions contemplated by this Agreement.
Notwithstanding the foregoing, either party may issue a press release or other
public announcement concerning the transactions contemplated by this Agreement
to the extent that such party shall be so obligated by law, or to comply with
accounting, Securities and Exchange Commission, New York Stock Exchange and
Australian Stock Exchange disclosure obligations, provided that such party shall
be obligated to give the other party prior notice of such press release or other
public announcement if prior notice is commercially feasible.
Section 12.4. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, the
Coordinating Agreement, and the Exhibits and Schedules referred to herein and
therein and the Buyer Ancillary Agreements and the Seller Ancillary Agreements
contain the entire understanding of the parties hereto with regard to the
subject matter contained herein or therein, and supersede all prior written or
oral agreements, understandings or letters of intent between or among any of the
parties hereto. This Agreement shall not be amended, modified or supplemented
except by a written instrument signed by an authorized representative of each of
the parties hereto.
Section 12.5. SUCCESSORS AND ASSIGNS.
(a) The rights of each party under this Agreement and the
Coordinating Agreement shall not be assignable without the written consent of
the other party; provided, however, that no such assignment shall relieve the
assigning party from any of its duties or obligations under this Agreement or
the Coordinating Agreement.
(b) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their successors and permitted assigns. Nothing in
this Agreement, expressed or implied, is intended or shall be construed to
confer upon any Person other than the parties and successors and assigns
permitted by this Section 12.5 any right, remedy, benefit or claim under or by
reason of this Agreement.
Section 12.6. INTERPRETATION.
(a) Article titles and headings to sections herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement. The Schedules and
Exhibits referred to herein shall be construed with and as an integral part of
this Agreement to the same extent as if they were set forth herein.
(b) This Agreement and the Schedules and Exhibits hereto have been
mutually prepared, negotiated and drafted by each of the parties hereto and
thereto. The parties agree that the terms of this Agreement shall be construed
and interpreted against each party in the same manner and that no such
provisions shall be construed or interpreted more strictly against one party on
the
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assumption that an instrument is to be construed more strictly against the
party which drafted the agreement.
Section 12.7. WAIVERS. Any term or provision of this Agreement may be
waived, or the time for its performance may be extended, pursuant to a written
action by the party or parties entitled to the benefit thereof. Any such waiver
shall be validly and sufficiently authorized for purposes of this Agreement if,
as to any party, it is authorized in writing by an authorized representative of
such party. Subject to Sections 8.1 and 8.2, the failure of any party hereto to
enforce at any time any provision of this Agreement shall not be construed to be
a waiver of such provision, nor in any way to affect the validity of this
Agreement or any part hereof or the right of any party thereafter to enforce
each and every such provision. No waiver of any breach of this Agreement shall
be held to constitute a waiver of any other or subsequent breach.
Section 12.8. EXPENSES. Subject to the provisions of the Coordinating
Agreement, regardless of whether the transactions provided for in this Agreement
are consummated, each party hereto will pay its own costs and expenses incident
to the negotiation, preparation and performance of this Agreement, including the
fees, expenses and disbursements of its counsel, financial advisors, and
accountants. PDGNB and the Subsidiaries have not borne and will not bear any
such costs or expenses.
Section 12.9. PARTIAL INVALIDITY. Wherever possible, each provision
hereof shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such provision shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating
the remainder of such invalid, illegal or unenforceable provision or provisions
or any other provisions hereof, unless such a construction would be
unreasonable.
Section 12.10. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in one or more counterparts, each of which shall be considered an
original instrument, and shall become binding when one or more counterparts have
been signed by each of the parties hereto and delivered to each of Seller and
Buyer.
Section 12.11. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Illinois, without
giving effect to any choice of laws provisions which may direct the application
of the laws of another jurisdiction.
Section 12.12. FURTHER ASSURANCES AND COOPERATION.
(a) From and after the date of this Agreement, upon the request of
either Seller or Buyer or any of their respective Affiliates, the other party
and its Affiliates shall execute and
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deliver such instruments, documents or other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement.
(b) After the Closing, on reasonable advance notice, Buyer shall
cause PDGNB and the Subsidiaries to provide Seller, Seller's Affiliates, and any
advisor retained by Seller or its Affiliates with reasonable access to the
management and properties, and books, records, and documents (which were in
existence on the Closing) of PDGNB and the Subsidiaries during normal business
hours and in a manner which does not unreasonably interfere with the business of
PDGNB and the Subsidiaries for any reasonable purpose including, but not limited
to, the fulfillment of Seller's responsibilities under Section 4.1(a) of the
Coordinating Agreement, the enforcement of Seller's and its Affiliates' rights
under Article 2 of the Coordinating Agreement and clause (iii) of Section 4.2(a)
of the Coordinating Agreement. As reasonably necessary, Seller, Seller's
Affiliates, and any advisor retained by Seller or its Affiliates shall be
entitled to make copies of such books, records, and documents at their expense.
If Buyer shall desire at any time to dispose of any such books, records, or
documents, Buyer shall, prior to such disposition, give Seller a reasonable
opportunity to segregate and remove such books, records, and documents as Seller
may select. The obligations of Buyer pursuant to this Section 12.12(b) shall
survive the Closing indefinitely.
Section 12.13. NO RELIANCE. The provisions of this Agreement are
intended for the sole benefit of Buyer and Seller and shall not inure to the
benefit of any other Person, other than successors and permitted assigns of
Buyer and Seller, whether as third party or otherwise.
Section 12.14. DISCLOSURE SCHEDULES. The Disclosure Schedules are
hereby incorporated by reference into and made a part of this Agreement. The
inclusion of any item in the Disclosure Schedules is intended to qualify the
representations and warranties contained in this Agreement and to set forth
other information required by this Agreement. Disclosure of information in any
one of the Disclosure Schedules shall be deemed to be a disclosure with respect
to every section of this Agreement, notwithstanding the presence or absence of a
cross-reference to Disclosure Schedules under other Sections of this Agreement
if the meaning of such disclosure in the context of such other section is
reasonably ascertainable. Disclosure of information in the Disclosure Schedules
shall not be deemed to be an admission by Seller that such information is
material for purposes of this Agreement. Summaries or extracts of any documents,
instruments, or other agreements contained in the Disclosure Schedules are for
the convenience of reference only and are qualified in their entirety by
reference to the applicable document, instrument or other agreement so
summarized or extracted from.
Section 12.15. NAME CHANGE. Prior to Closing, Seller shall have the
right to change the name of PDGNB to eliminate the words "Pacific Dunlop."
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed the day and year first above written.
SELLER:
PACIFIC DUNLOP HOLDINGS (USA) INC.
By: /s/ Stephen C. Geerling
------------------------------------
Name: Stephen C. Geerling
----------------------------------
Title: Vice President-Finance
---------------------------------
BUYER:
EXIDE CORPORATION
By: /s/ Robert A. Lutz
------------------------------------
Name: Robert A. Lutz
----------------------------------
Title: Chairman, President & CEO
---------------------------------
<PAGE> 55
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
<PAGE> 56
Schedule 6.4
Absence of Conflicts
Buyer is a party to an Agreement Not to Compete dated June 10, 1991 with Yuasa
Battery (America), Inc. ("Yuasa"). Yuasa may claim that the transactions
contemplated in the Agreement and the Coordinating Agreement could violate such
agreement, which claim Buyer would contest. Buyer will not claim that any of the
conditions to closing in Section 8.1 are not satisfied because of such agreement
or any claim with respect to such agreement other than as contemplated by
Section 8.1(e).
<PAGE> 57
Exhibit A
STANDSTILL AGREEMENT
SUMMARY OF TERMS
1. Voting. Until the third anniversary of the Closing, Seller will vote
its Buyer shares at all Buyer shareholder meetings in the same proportion as the
vote by other Buyer shareholders.
2. Standstill. Until the third anniversary of the Closing, Seller will
not: acquire or state that it wishes to acquire or offer or agree to acquire,
directly or indirectly, beneficial ownership of any Buyer securities; solicit,
assist or encourage anyone to solicit consents or proxies to vote Buyer
securities or otherwise seek to advise, assist, encourage or influence the
voting of Buyer securities or proposals by its shareholders; make statements or
proposals to Buyer's directors, officers, employees or representatives or
publicly regarding any business combination, change in control, recapitalization
or other extraordinary transaction involving Buyer or amendment of its charter
or bylaws or encourage or assist anyone else to do so; form or participate in
any "group" with respect to Buyer's shares; execute any written consent with
respect to Buyer's shares; alone or in concert with others, seek, encourage,
support or assist any effort to influence or control the management, Board,
business, policies, affairs or actions of Buyer; or take any action which might
require public announcement of any of the foregoing or disclose any intention
inconsistent with the foregoing. The foregoing will not be deemed to have been
breached by any representative of Seller or its Affiliates serving on the Board
of Directors of Buyer.
3. Transfer. Except for dispositions pursuant to Rule 144, until the
third anniversary of the Closing, Seller will not directly or indirectly dispose
of its Buyer shares without Buyer's prior written consent except in a registered
broad-based public offering, pursuant to a tender or exchange offer approved by
Buyer's Board, or to any person who would beneficially own less than 5% of
Buyer's shares, provided that Seller shall first offer to sell any shares to
Buyer. Buyer shall have 10 business days to accept any such offer from Seller
and 20 business days from the date of the offer to close any purchase pursuant
to the offer.
<PAGE> 58
Exhibit B
REGISTRATION RIGHTS AGREEMENT
SUMMARY OF TERMS
1. Demand Registrations. So long as Seller beneficially owns more than
5% of Buyers' outstanding shares, Seller can require Buyer to use reasonable
efforts to cause such shares (but no less than 2% of outstanding Buyer shares)
to be registered under the Securities Act of 1933 for sale in an underwritten
public offering. Seller may have two such demand registrations.
2. Underwriters. Seller may select the lead underwriters for any demand
offering, but they must be reasonably satisfactory to Buyer.
3. Deferral. Buyer may defer any demand registration for up to 180 days
if Buyer's Board determines it would be detrimental to Buyer or it would be
within six months after any underwritten equity offering by Buyer.
4. Piggyback Rights. Seller may include its Buyer shares (but initially
no less than 2% of the outstanding Buyer shares) in Buyer's registration of its
shares (if on an appropriate form), provided that in the first such offering in
which Seller wishes to participate Buyer's own shares will be sold first if the
lead underwriters advise that including all shares otherwise to be sold would
adversely affect the offering and thereafter any such underwriter cutback will
be proportionate.
5. Expenses. Buyer will pay all of its expenses in complying with the
above, except for registration fees, underwriting commission and transfer taxes
relating to Seller's Buyer shares, which will be borne by Seller.
6. Indemnification. Seller's indemnification obligation shall be
limited to information provided by it for inclusion in a registration statement
and Buyer's indemnification of Seller shall cover all other information.
