Exhibit 10.2
================================================================================
AGREEMENT NOT TO COMPETE
by and between
EC ACQUISITION, INC.
and
YUASA BATTERY (AMERICA), INC.
-----------------
JUNE 10, 1991
-----------------
================================================================================
EXHIBIT G TO ASSET PURCHASE AGREEMENT
AGREEMENT NOT TO COMPETE
------------------------
THIS AGREEMENT NOT TO COMPETE (the "Agreement") is made and entered into as
of the 10th day of June, 1991 by and between EC ACQUISITION, INC., a Delaware
corporation ("ECA"), and YUASA BATTERY (AMERICA) CORPORATION, a California
corporation ("Purchaser").
WHEREAS, Exide Corporation, a Delaware corporation and an indirect,
wholly-owned subsidiary of ECA ("Seller") and Purchaser have entered into that
certain Asset Purchase Agreement dated as of June 10, 1991 (the "Purchase
Agreement") pursuant to which Seller has agreed to sell, and Purchaser has
agreed to purchase from Seller, the Division (as such term is defined in the
Purchase Agreement);
WHEREAS, pursuant to Sections 11.3 and 12.3 of the Purchase Agreement, it
is a condition precedent to the consummation of the transactions contemplated
thereby that ECA and Purchaser execute and deliver this Agreement; and
WHEREAS, ECA hereby acknowledges that it shall derive substantial benefit
from the consummation of the transactions contemplated in the Purchase
Agreement, and that Purchaser would not consummate the Purchase Agreement
without first receiving a fully-executed original of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
1. Non-Competition.
---------------
(a) For a period commencing on the date hereof and terminating on the
tenth (10th) anniversary of the date hereof (the "Non-Compete Period"), ECA
shall not, and shall cause any Affiliate (as hereinafter defined) not to,
directly or indirectly (a) engage in any activity which constitutes or would
constitute Business (as hereinafter defined) or (b) own, manage, control,
operate, participate in or with, or be connected with the ownership, management,
operation or control of, any person or entity which engages in any activity
which constitutes or would constitute Business, provided, however, that (i)
--------
Seller may engage in any activity constituting Business which is solely and
exclusively related to the manufacture or sale of batteries used
-1-
to operate motorized wheelchairs; and (ii) the provisions of Clause (b) of this
Section 1 shall not apply if (A) the entity referred to therein is an Affiliate
of Yuasa Battery Co., Ltd.; (B) Purchaser and Seller shall agree at any time
that Seller, or any Affiliate thereof, shall be a distributor for Purchaser with
respect to any products manufactured thereby; or (C) the ownership referred to
therein constitutes the ownership of securities comprising not more that 5% of
the total issued and outstanding voting securities of such entity or affiliated
group of entities (including in such amount any securities which are
exchangeable for or convertible into voting securities of such entity). The
provisions of this Section 1 shall not apply to Seller's ownership interest in
Battronics (as defined herein) in accordance with the terms of Section 4 hereof.
For purposes of this Agreement, the term "Affiliate" shall mean any person
directly or indirectly controlled by ECA including, without limitation, General
Battery Corporation, a Delaware corporation ("GBC"), EC Merger, Inc., a Delaware
corporation ("ECM"), and Seller.
(i) the term "Business" shall mean the design, research and
development, manufacture, marketing, sale and distribution of (A) Products (as
defined in Sub-clause (ii) below) manufactured by Purchaser as a result of the
foregoing activities, to the extent such activities were conducted by Seller
immediately prior to the Closing (as defined in the Purchase Agreement); (B)
Products derived directly from research and development acquired from Seller at
the Closing; and (C) Products developed directly from the Products described in
Sub-clauses (A) and (B) above; and
(ii) the term "Products" shall mean any batteries, battery products or
battery chargers for any and all industrial uses including, without limitation,
electric vehicle batteries and battery products, (other than golf cart batteries
manufactured at Yuasa's plant in Sumter, South Carolina), but excluding
automotive, motorcycle, garden tractor and marine use SLI batteries and battery
products.
2. Non-Disclosure and Non-Solicitation. The parties further agree that,
-----------------------------------
during the Non-Compete Period, ECA shall not, and shall cause its Affiliates not
to, directly or indirectly, without the prior written consent of Purchaser, (a)
disclose or reveal to any person any information constituting any Intellectual
Property Rights or Proprietary Rights (as such terms are defined in the Purchase
Agreement), except (i) as required by law, or in legal or administrative
proceedings, or (ii) as otherwise agreed in writing between the parties or any
Affiliates thereof; (b) solicit, encourage or persuade any person who is an
employee of Purchaser to terminate his or her employment with
-2-
Purchaser, or discourage any person from becoming an employee of Purchaser; or
(c) solicit, encourage or persuade any person having any business relationship
with Purchaser exclusively in connection with the Business, including without
limitation any customer, supplier, distributor or independent contractor of
Purchaser, to terminate such business relationship.
3. Applicable Territories. The parties hereby agree that the provisions
----------------------
of this Agreement shall apply in each of the following geographical regions
(each of such regions being hereinafter referred to as a "Territory"): (a) each
of the states of the United States, and (b) each of the countries set forth on
Exhibit A attached hereto and hereby incorporated herein.
4. Special Provisions Relating to Canada, Mexico, New Zealand and South
--------------------------------------------------------------------
Africa.
------
(a) The parties acknowledge that Seller owns a 50% interest in the
shares of common stock of Battronics, Inc., a corporation organized and existing
under the laws of Canada ("Battronics"), which is engaged in the assembly and
sale of industrial batteries and/or industrial battery products. In order to
set forth the relative rights and obligations or each of Seller and Purchaser
with respect to Battronics, the parties have entered into, all as of even date
herewith, (i) that certain Agreement, by and among Seller, Purchaser and
Battronics; (ii) that certain License and Technical Assistance Agreement, by and
between Battronics and Purchaser (the "Industrial License"); and (iii) that
certain License and Technical Assistance Agreement, by and between Battronics
and Seller (the "Automotive License"). As a result of such agreements, Seller
shall, from and after the date hereof, no longer be obligated to provide
intellectual property rights, technical assistance or make any other form of
investment in or contribution to Battronics with respect to its industrial
battery operations. Accordingly, the parties hereby agree that it shall not be
a violation of the terms of this Agreement for Seller to maintain its ownership
of its existing interest in Battronics, provided, that it shall be a material
--------
violation of Seller's obligations hereunder if Seller shall (A) make any
additional capital contribution, investment, financial accommodation, extension
of credit or loan to, or become a surety or guarantor for the benefit of,
Battronics or (B) provide technical assistance, information not generally in
the public domain, additional personnel, or any other information or means,
where the effect of any of such actions would result in enabling Battronics to
compete more effectively with Purchaser with respect to the Business in Canada.
-3-
(b) The parties further acknowledge that Seller is the licensor to
companies operating in Mexico, New Zealand and South Africa of certain
intellectual property rights pertaining to the Business which are intended to be
assigned to Purchaser under the Purchase Agreement but which, due to
governmental restrictions in the aforementioned countries, are not able to be
transferred as of the Closing Date (as defined in the Purchase Agreement) (such
licenses being hereinafter referred to as the "Deferred Licenses"). ECA agrees
to cause Seller to use its best efforts to effectuate the transfer of such
Deferred Licenses as quickly after the date hereof as practicable. Until such
time as Seller shall be able to transfer such Deferred Licenses, ECA shall cause
Seller (i) to perform its obligations thereunder in accordance with the terms
thereof and in compliance with all applicable laws, rules and regulations; and
(ii) to collect for Purchaser's benefit, and remit to Purchaser, any royalties
or other compensation collected by Seller pursuant to such Deferred Licenses.
(c) ECA further acknowledges and agrees that the provisions of this
Section 4 constitute a limited exception to this Agreement in respect of
existing arrangements of Seller, and that any investment or other activity
prohibited with respect to any other person or entity in Canada, Mexico, New
Zealand or South africa by ECA or its Affiliates will be a violation of this
Agreement.
5. Prohibition on Merger or Dissolution. ECA hereby agrees that, for so
------------------------------------
long as this Agreement is in full force and effect, it shall not merge,
dissolve or otherwise terminate its corporate identity, whether by contract or
by operation of law, nor divest itself of its controlling interest in any
Affiliate, unless and until the successor or successors of ECA or such Affiliate
agrees with Purchaser in writing to be bound by all of the terms and conditions
hereunder to which ECA and its Affiliates are bound.
6. The Non-Compete Payment. In consideration for ECA performing its
-----------------------
obligations hereunder, at the Closing (as defined in the Purchase Agreement)
Purchaser shall pay to ECA the sum of Twenty Million Dollars ($20,000,000).
7. Execution of Consents by ECM, GBC and Seller. ECA agrees to cause
--------------------------------------------
ECM, GBC and Seller to execute and deliver the consents in the form attached
hereto as Appendices A, B and C, respectively.
8. Representations and Warranties. Each party hereto hereby represents
-------------------------------
and warrants to the other party hereto as follows:
-4-
(a) Such party is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation, and has
all requisite corporate power and authority to carry on its business as it is
now being conducted.
(b) such party has all requisite corporate power and authority to
enter into, execute and deliver this Agreement, and to perform the obligations
required to be performed by it hereunder. The Board of Directors and, if
required, the shareholders, of such party have taken all action required by law,
its Certificate of Incorporation, its Bylaws or otherwise to be taken by it to
authorize the execution, delivery and performance of this Agreement and the
obligations to be performed by it hereunder, and this Agreement is the valid and
binding agreement of such party, enforceable against such party, in accordance
with its terms, except as (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) Neither the execution and delivery of this Agreement nor the
performance of any obligation created hereby will (i) violate any provision of
the Certificate of Incorporation or Bylaws of such party, (ii) result in the
breach of any material contract to which such party is a signatory or by which
such party, or any of its assets or properties, are bound (except where the
other party or parties to any such contract shall have consented in writing to
such breach), or (iii) violate or conflict with any governmental or regulatory
authorization or any statute, law, judgment, decree, order, regulation or rule
of any court or governmental authority by which such party, or any of its assets
or properties, are bound.
(d) No consent, approval of authorization of, or declaration, filing
or registration with, any person or governmental or regulatory authority or
agency is necessary to the execution, delivery or performance of this Agreement
by such party.
9. Remedies; Equitable Relief. ECA specifically acknowledges that the
--------------------------
remedy at law for any breach of its covenants contained herein may be
inadequate, and that Purchaser shall be entitled to temporary and permanent
injunctive relief, specific performance or any other equitable remedy available
to Purchaser against it without the necessity of proving actual damage resulting
from any breach hereof. The specific remedies
-5-
set forth above shall be cumulative and non-exclusive, and shall be in addition
to any other remedy, in equity or at law, to which Purchaser may otherwise be
entitled.
10. Burden and Benefit. This Agreement shall inure to the benefit of, and
------------------
be binding upon, the respective successors and assigns of the parties hereto.
11. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be delivered personally, sent by
certified mail, postage prepaid, return receipt requested, or sent by telex,
telecopier or other electronic facsimile transmission, addressed as follows (or
to such other address or addressee as the party to be notified shall have given
notice of as herein provided):
(a) if to Purchaser, to:
Yuasa Battery (America), Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
President
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy, which shall not constitute notice, to:
▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: W. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇., Esq.
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to ECA, to:
EC Acquisition, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
-6-
with a copy, which shall not constitute notice, to:
▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Vice President, Secretary and
General Counsel
EC Acquisition, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Any such notice or other communication will be deemed to have been given only as
follows: (a) if sent by telex, when the telex is transmitted and the
appropriate answer back is received; or (b) if sent by any other means or
personally delivered, upon delivery against receipt therefor.
12. Governing Law. This Agreement will be governed by, and construed and
-------------
interpreted in accordance with, the internal laws of the State of New York,
without giving effect to the principles of conflicts of law applied thereby.
13. Severability. The convenants contained herein shall be construed to
------------
be a series of separate convenants, one for each Territory specified herein.
Except for the Territory covered, each such separate covenant shall be deemed
identical to the terms contained in this Agreement in every other respect. In
the event that a court of competent jurisdiction deems any term, provision or
Territory of this Agreement to be invalid, illegal or unenforceable for any
reason, such term, provision or Territory shall be amended or eliminated to
conform to applicable law so as to be valid and enforceable, or, if it cannot
be so amended or eliminated without materially altering the intention of the
parties expressed herein, the invalidity or unenforceability of such term or
provision shall in no way affect to the maximum extent permissible by law the
validity or enforceability of any other term, provision or Territory of this
Agreement, or the validity or enforceability of the remaining separate covenants
hereunder.
14. Entire Agreement. This Agreement incorporates the complete and
----------------
entire agreement among the parties hereto with reference to the subject matter
hereof, and there are no other agreements, understandings, representations or
warranties, express or implied, oral or written, relating thereto between the
parties. No modification or amendment of this Agreement shall be
-7-
binding upon the parties unless executed in writing by each of the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EC ACQUISITION, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇
---------------------------
Name:
Title:
------------------------
YUASA BATTERY (AMERICA), INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
-8-
APPENDIX C
----------
CONSENT
The undersigned, General Battery Corporation, a Delaware corporation and
wholly-owned subsidiary of Exide Corporation, which is a wholly-owned subsidiary
of Exide Corporation, which is a wholly-owned subsidiary of EC Acquisition, Inc.
("ECA"), hereby consents to be bound by and subject to all of the terms and
provisions set forth in that certain Agreement Not to Compete, dated as of June
10, 1991, by and between ECA and Yuasa Battery (America), Inc., a Delaware
corporation ("Purchaser"), as fully as if the undersigned had been a signatory
thereto as of such date. This Consent is delivered in consideration of
Purchaser entering into that certain Asset Purchase Agreement, dated as of even
date herewith, by and between Purchaser and Exide Corporation, a Delaware
corporation and wholly-owned subsidiary of the undersigned, and the undersigned
acknowledges and agrees that Purchaser would not have entered into said Asset
Purchase Agreement, which is of direct, material benefit to the undersigned,
without the execution, delivery and performance by the undersigned of this
Consent.
Entered into as of this 10th day of June, 1991.
GENERAL BATTERY CORP.
-----------------------------
By: [SIGNATURE APPEARS HERE]
--------------------------
Name:
------------------------
Title:
----------------------
APPENDIX A
----------
CONSENT
The undersigned, EC Merger, Inc., a Delaware corporation and wholly-owned
subsidiary of EC Acquisition, Inc. ("ECA"), hereby consents to be bound by and
subject to all of the terms and provisions set forth in that certain Agreement
Not to Compete, dated as of June 10, 1991, by and between ECA and Yuasa Battery
(America), Inc., a Delaware corporation ("Purchaser"), as fully as if the
undersigned had been a signatory thereto as of such date. This Consent is
delivered in consideration of Purchaser entering into that certain Asset
Purchase Agreement, dated as of even date herewith, by and between Purchaser and
Exide Corporation, a Delaware corporation and wholly-owned subsidiary of the
undersigned, and the undersigned acknowledges and agrees that Purchaser would
not have entered into said Asset Purchase Agreement, which is of direct,
material benefit to the undersigned, without the execution, delivery and
performance by the undersigned of this Consent.
Entered into as of this 10th day of June, 1991.
EC MERGER, INC.
-------------------------------
By: [SIGNATURE APPEARS HERE]
----------------------------
Name:
-------------------------
Title:
------------------------
APPENDIX B
----------
CONSENT
The undersigned, Exide Corporation, a Delaware corporation and wholly-owned
subsidiary of EC Merger, Inc., which is a wholly-owned subsidiary of EC
Acquisition, Inc. ("ECA"), hereby consents to be bound by and subject to all of
the terms and provisions set forth in that certain Agreement Not to Compete,
dated as of June 10, 1991, by and between ECA and Yuasa Battery (America), Inc.,
a Delaware corporation ("Purchaser"), as fully as if the undersigned had been a
signatory thereto as of such date. This Consent is delivered in consideration of
Purchaser entering into that certain Asset Purchase Agreement, dated as of even
date herewith, by and between Purchaser and Exide Corporation, a Delaware
corporation and wholly-owned subsidiary of the undersigned, and the undersigned
acknowledges and agrees that Purchase Agreement, which is of direct, material
benefit to the undersigned, without the execution, delivery and performance by
the undersigned or this Consent.
Entered into as of this 10th day of June, 1991.
EXIDE CORPORATION
-----------------------------------
By: /s/ [SIGNATURE APPEARS HERE]
--------------------------------
Name:
------------------------------
Title:
-----------------------------
EXHIBIT A
TERRITORIES OTHER THAN THE UNITED STATES OF AMERICA
---------------------------------------------------
Afghanistan Comoros Islands
Albania Congo
Algeria ▇▇▇▇ Islands
American Samoa Costa Rica
Andorra Cuba
Angola Cyprus
Anguilla Czechoslovakia
Antigua and Barbuda Denmark
Argentina Djibouti
Aruba Dominica
Australia Dominican Republic
Austria Ecuador
Azores Egypt
Bahamas El Salvador
Bahrain Equatorial Guinea
Bangladesh Ethiopia
Barbados Faeroe Islands
Belgium Falkland Islands
Belize Federal Rep. of Germany
Benin Fiji
Bermuda Finland
Bhutan France
Bolivia French Guiana
Botswana French Polynesia
Brazil Gabon
British Indian Ocean Gambia
Territory Ghana
Brunei Gibraltar
Bulgaria Great Britain
Burkina Faso Greece
Burma Greenland
Burundi Grenada
Cameroon Guadeloupe
Canada Guam
Cape Verde Guatemala
Cayman Islands Guinea
Central African Republic Guinea-Bissau
Chad Guyana
Channel Islands Haiti
Chile Honduras
People's Rep. of China Hong Kong
Colombia Hungary
Iceland New Caledonia
India New Zealand
Indonesia Nicaragua
Iran Niger
Iraq Nigeria
Ireland Niue Island
Isle of Man Norfolk Island
Israel Northern Marianas
Italy Norway
Ivory Coast Oman
Jamaica Pacific Trust Territory
Japan Pakistan
Jordan Panama
Kampuchea Papua New Guinea
Kenya Paraguay
Kiribati Peru
Korea (South) Philippines
Korea (North) Pitcairn Island
Kuwait Poland
Laos Portugal
Lebanon Puerto Rico
Lesotho Qatar
Liberia Reunion
Libya Romania
Liechtenstein Rwanda
Luxembourg St. ▇▇▇▇▇▇▇▇▇▇▇ & Nevis
Macao St. Helena Island Group
Madagascar St. ▇▇▇▇▇
▇▇▇▇▇▇▇ Islands St. Pierre & Miquelon
Malawi St. ▇▇▇▇▇▇▇ and
Malaysia the Grenadines
Maldives San Marino
Mali Sao Tome & Principe
Malta Saudi Arabia
▇▇▇▇▇▇▇▇ Islands Senegal
Martinique Seychelles
Mauritius Sierra Leone
Mexico Singapore
Micronesia Federation Solomon Islands
Midway Island Somalia
Monaco South Africa
Mongolia Spain
Montserrat Sri Lanka
Morocco Sudan
Mozambique Suriname
Namibia Swaziland
Nauru Sweden
Nepal Switzerland
Netherlands Syria
Netherlands Antilles Taiwan
Tanzania
Thailand
Togo
Tokelau
Tonga
Trinidad and Tobago
Tunisia
Turkey
Turks and Caicos Islands
Tuvalu
Uganda
Union of Soviet Socialist
Republics
United Arab Emirates
Uruguay
Vanuatu
Venezuela
Virgin Islands
Wake Island
Wallis and Futuna Islands
Western Samoa
Yemen
Yugoslavia
Zaire
Zambia
Zimbabwe