Exhibit 2.6
PURCHASE PRICE ADJUSTMENT AGREEMENT
THIS AGREEMENT made the 23rd day of September, 2004,
BETWEEN:
CELESTICA INTERNATIONAL INC.,
a corporation existing under the laws of the
Province of Ontario,
(hereinafter referred to as "Celestica
International"),
- and -
CELESTICA CORPORATION,
a corporation existing under the laws of the State of
Delaware,
(hereinafter referred to as "Celestica US"),
- and -
CELESTICA (THAILAND) LIMITED,
a corporation existing under the laws of the
Republic of Thailand,
(hereinafter referred to as "Celestica Thai"),
- and -
CELESTICA ELECTRONICS (SHANGHAI)
CO. LTD.,
a limited liability company existing under the laws
of the People's Republic of China,
(hereinafter referred to as "Celestica Shanghai"),
- and -
CELESTICA SUZHOU TECHNOLOGY LTD.,
a limited liability company existing under the laws
of the People's Republic of China,
(hereinafter referred to as "Celestica Suzhou"),
- and -
- 2 -
CELESTICA INC.,
a corporation existing under the laws of the
Province of Ontario,
(hereinafter referred to as "Celestica Parent"),
- and -
C&D POWER SYSTEMS (CANADA) ULC,
an unlimited liability company existing under the
laws of the Province of Nova Scotia,
(hereinafter referred to as "C&D Canada"),
- and -
C&D TECHNOLOGIES, INC.,
a corporation existing under the laws of the State of
Delaware,
(hereinafter referred to as "C&D US"),
- and -
DYNAMO ACQUISITION CORP.,
a corporation existing under the laws of the State of
Delaware,
(hereinafter referred to as "C&D Dynamo"),
- and -
DATEL ELECTRONIC TECHNOLOGY (SHANGHAI) CO., LTD.,
a limited liability company existing under the laws
of the People's Republic of China,
(hereinafter referred to as "Datel Shanghai").
WHEREAS Celestica International, Celestica Parent, C&D Canada
and C&D US have entered into a share purchase agreement dated September 23, 2004
(the "Canadian Purchase Agreement") pursuant to which Celestica International
has agreed to sell to C&D Canada, and C&D Canada has agreed to purchase from
Celestica International, all of the issued and outstanding common shares of
Dynamo Power Systems (Canada) ULC ("Dynamo Canada");
- 3 -
AND WHEREAS Celestica US, Celestica Parent and C&D US have
entered into an LLC interest purchase agreement dated September 23, 2004 (the
"US Purchase Agreement") pursuant to which Celestica US has agreed to sell to
C&D US, and C&D US has agreed to purchase from Celestica US, all of the limited
liability interests in Dynamo Power System (USA ) LLC ("Dynamo US");
AND WHEREAS, to the extent permitted by law, Celestica US and
C&D US intend to treat the US Purchase Agreement for tax purposes as a purchase
and sale of the assets contributed under the US Drop Down Agreement and have
agreed to co-operate in the preparation of a Form 8594 to that end;
AND WHEREAS Celestica International, Celestica US, Celestica
Thai, Celestica Parent, C&D Dynamo and C&D US have entered into an asset
purchase agreement dated September 23, 2004 (the "Asian Purchase Agreement")
pursuant to which each of Celestica International, Celestica US and Celestica
Thai has agreed to sell to C&D Dynamo, and C&D Dynamo has agreed to purchase
from each of Celestica International, Celestica US and Celestica Thai, certain
of their respective assets as more particularly described in the Asian Purchase
Agreement;
AND WHEREAS Celestica Shanghai, Celestica Parent, Datel
Shanghai and C&D US have entered into an asset purchase agreement dated
September 23, 2004 (the "Shanghai Purchase Agreement") pursuant to which
Celestica Shanghai has agreed to sell to Datel Shanghai, and Datel Shanghai has
agreed to purchase from Celestica Shanghai, certain of its assets as more
particularly described in the Shanghai Purchase Agreement;
AND WHEREAS Celestica Suzhou, Celestica Parent, C&D Dynamo and
C&D US have entered into an inventory purchase agreement dated September 23,
2004 (the "Suzhou Purchase Agreement") pursuant to which Celestica Suzhou has
agreed to sell to C&D Dynamo, and C&D Dynamo has agreed to purchase from
Celestica Suzhou, certain of its assets as more particularly described in the
Suzhou Purchase Agreement;
AND WHEREAS the parties desire to set out the manner in which
the Aggregate Purchase Price (as hereinafter defined) payable under the Canadian
Purchase Agreement, the US Purchase Agreement, the Asian Purchase Agreement, the
Shanghai Purchase Agreement and the Suzhou Purchase Agreement (each a "Purchase
Agreement" and collectively, the "Purchase Agreements"), is adjusted and
allocated;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration
of the respective covenants, agreements, representations, warranties and
indemnities herein contained and for other good and valuable consideration (the
receipt and sufficiency of which are acknowledged by each party), the parties
covenant and agree as follows:
- 4 -
ARTICLE 1
INTERPRETATION
1.1 Definitions
For the purpose of this Agreement, unless the context
otherwise requires, the following terms shall have the respective meanings set
out below and grammatical variations of such terms shall have corresponding
meanings:
"Adjustment Amount" has the meaning ascribed thereto in Section 2.3(a).
"Aggregate Net Asset Value" means the aggregate of the Closing Date Net
Asset Values.
"Aggregate Purchase Price" means the aggregate of the Canadian Purchase
Price, the US Purchase Price, the Asian Purchase Price, the Shanghai
Purchase Price and the Suzhou Purchase Price.
"Arbitrator" has the meaning set out in Section 2.2(c).
"Asset Transaction Purchase Prices" means, collectively, the Asian
Purchase Price, the Shanghai Purchase Price and the US Purchase Price.
"Asian Purchase Agreement" has the meaning set out in the third recital
hereto.
"Asian Purchase Price" has the meaning attributed to the term "Purchase
Price" in the Asian Purchase Agreement.
"Audited Closing Date Statements" has the meaning set out in Section
2.1.
"Business Day" means any day, other than a Saturday or a Sunday, on
which banks are open for business in Xxxxxxx, Xxxxxxx.
"C&D Auditors" means PricewaterhouseCoopers LLP, auditors of C&D US.
"Canadian Drop-Down Agreement" has the meaning attributed to that term
in the Canadian Purchase Agreement.
"Canadian Purchase Agreement" has the meaning set out in the first
recital hereto.
"Canadian Purchase Price" has the meaning attributed to the term
"Purchase Price" in the Canadian Purchase Agreement.
"Celestica 2003 Financial Statements" has the meaning set out in
Section 2.1.
"Closing Date" has the meaning attributed to that term in the Canadian
Share Purchase Agreement.
"Closing Date Net Asset Values" has the meaning set out in Section 2.1.
- 5 -
"Entity Level Allocation" has the meaning set out in Section 2.3(c).
"Purchase Agreements" has the meaning set out in the sixth recital
hereto.
"Purchase Price" means any of the Canadian Purchase Price, the US
Purchase Price, the Asian Purchase Price, the Shanghai Purchase Price
or the Suzhou Purchase Price.
"Shanghai Purchase Agreement" has the meaning set out in the fourth
recital hereto.
"Shanghai Purchase Price" has the meaning attributed to the term
"Purchase Price" in the Shanghai Purchase Agreement.
"Suzhou Purchase Agreement" has the meaning set forth in the fifth
recital hereto.
"Suzhou Purchase Price" has the meaning attributed to the term
"Purchase Price" in the Suzhou Purchase Agreement.
"Suzhou Transaction" means the transaction of purchase and sale of the
Purchased Inventory (as such term is defined in the Suzhou Purchase
Agreement) on the terms and conditions set out in the Suzhou Purchase
Agreement.
"Transactions" means, collectively, the transactions of purchase and
sale of assets and assumption of liabilities contemplated by the
Canadian Drop-Down Agreement, the US Purchase Agreement, the Asian
Purchase Agreement, the Shanghai Purchase Agreement and the Suzhou
Purchase Agreement.
"US Drop-Down Agreement" has the meaning attributed to that term in the
US Purchase Agreement.
"US Purchase Agreement" has the meaning set out in the second recital
hereto.
"US Purchase Price" has the meaning attributed to the term "Purchase
Price" in the US Purchase Agreement.
1.2 Currency
Unless otherwise indicated, all dollar amounts referred to in
this Agreement are expressed in the lawful currency of the United States of
America.
1.3 Sections and Headings
The division of this Agreement into sections and the insertion
of headings are for convenience of reference only and shall not affect the
interpretation of this Agreement. Unless otherwise indicated, any reference in
this Agreement to a section, subsection or clause refers to the specified
section, subsection or clause of this Agreement.
- 6 -
1.4 Number, Gender and Persons
In this Agreement, words importing the singular number only
shall include the plural and vice versa, words importing gender shall include
all genders and words importing persons shall include individuals, corporations,
partnerships, associations, trusts, unincorporated organizations, governmental
bodies and other legal or business entities.
1.5 Accounting Principles
Any reference in this Agreement to generally accepted
accounting principles refers to generally accepted accounting principles as
approved from time to time by the Canadian Institute of Chartered Accountants or
any successor institute.
1.6 Entire Agreement
This Agreement constitutes, together with the Purchase
Agreements, the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether written or oral. There are no conditions, covenants,
agreements, representations, warranties or other provisions, express or implied,
collateral, statutory or otherwise, relating to the subject matter hereof except
as herein provided.
1.7 Time of Essence
Time shall be of the essence of this Agreement.
1.8 Applicable Law
This Agreement shall be construed, interpreted and enforced in
accordance with, and the respective rights and obligations of the parties shall
be governed by, the laws of the State of New York without regard to conflicts of
law principles, and each party hereby irrevocably and unconditionally submits to
the non-exclusive jurisdiction of the Federal District Court for the Southern
District of New York and, if such court does not accept jurisdiction, of the
courts of the State of New York sitting in the Borough of Manhattan in The City
of New York, and all courts competent to hear appeals therefrom.
1.9 Severability
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct.
1.10 Successors and Assigns
This Agreement shall enure to the benefit of and shall be
binding on and enforceable by the parties and, where the context so permits,
their respective successors and permitted assigns. No party may assign any of
- 7 -
its rights or obligations hereunder, without the prior written consent of the
other parties, provided that the Purchaser shall have the right to assign its
rights hereunder to any of its Affiliates. No such assignment shall, however,
relieve the Purchaser of any of its obligations hereunder. The Vendor may, with
the prior written consent of the Purchaser (which consent shall not be
unreasonably withheld), at any time prior to the Time of Closing, and assign its
rights and obligations under this Agreement to any Affiliate of the Vendor,
provided that notwithstanding any such assignment and assumption the Vendor
shall remain liable for all its obligations hereunder). Each of the parties
acknowledges that there are no third party beneficiaries of this Agreement.
1.11 Calculation of Time
Unless otherwise specified, time periods within or following
which any payment is to be made or act is to be done shall be calculated by
excluding the day on which the period commences and including the day on which
the period ends. When the last day of any such time period is not a Business
Day, such time period shall be extended to the next Business Day following the
day on which it would otherwise end.
1.12 Amendment and Waivers
No amendment or waiver of any provision of this Agreement
shall be binding on any party unless consented to in writing by such party. No
waiver of any provision of this Agreement shall constitute a waiver of any other
provision, nor shall any waiver constitute a continuing waiver unless otherwise
expressly provided.
ARTICLE 2
ADJUSTMENT OF PURCHASE PRICES
2.1 Preparation and Delivery of Audited Closing Date Statements
Within 90 days following the Closing Date, C&D US shall
deliver to the Celestica Parent separate net asset value statements for each of
the Transactions (collectively, the "Audited Closing Date Statements"), which
statements shall have been audited by the C&D Auditors. Each of the Audited
Closing Date Statements shall set out the asset value of the assets transferred
(or, in the case of the Suzhou Transaction, the value of the Purchased Inventory
described in the Suzhou Purchase Agreement) less liabilities assumed (if any) in
each Transaction as at the Closing Date (collectively, the "Closing Date Net
Asset Values"). The Audited Closing Date Statements shall be prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the audited consolidated
financial statements of Celestica Parent for the financial year ended December
31, 2003 (the "Celestica 2003 Financial Statements"). The preparation of the
Audited Closing Date Statements shall include physical inventory counts at those
locations deemed appropriate by the C&D Auditors, applying generally accepted
accounting standards on a basis consistent with those used in the audit of the
Celestica 2003 Financial Statements, and may include (but not be limited to)
inventory of Dynamo Canada or Dynamo US, as applicable, and/or inventory that
comprised the assets acquired under any or all of the Asian Purchase Agreement
or the Shanghai Purchase Agreement or to be acquired under the Suzhou Purchase
Agreement, as applicable, located at the manufacturing sites of Celestica
International, Celestica US, Celestica Thai, Celestica Shanghai or Celestica
- 8 -
Suzhou, as applicable, and end-user customer hubs. In order to prepare the
Audited Closing Date Statement for the Suzhou Transaction, Celestica Parent will
enable the C&D Auditors to have access to all working papers, schedules and
other documentation used or prepared by Celestica Suzhou that would reasonably
be required by the C&D Auditors to prepare such Audited Closing Date Statement.
2.2 Approval of Audited Closing Date Statements
(a) Celestica Parent shall have a period of 30 days from the date on which
it receives the Audited Closing Date Statements in which to review the same. For
the purpose of such review, C&D US shall direct the C&D Auditors to permit
Celestica Parent and its authorized representatives to examine all working
papers, schedules and other documentation used or prepared by C&D US or the C&D
Auditors in connection with the preparation of the Audited Closing Date
Statements. If no objection to the Audited Closing Date Statements is made by
Celestica Parent to C&D US within such 30-day period, the Audited Closing Date
Statements shall be deemed to be have been approved on the last day of such
30-day period.
(b) If Celestica Parent objects to any of the Audited Closing Date
Statements within such 30-day period by giving written notice to such effect to
C&D US, which notice shall set out in reasonable detail the nature of such
objection, the parties shall attempt, in good faith, to resolve the matters in
dispute within 15 days from the date Celestica Parent gives such notice to C&D
US. If all matters in dispute are resolved by the parties within such 15-day
period (or such longer period as may be mutually agreed by the parties), the
Audited Closing Date Statements shall be modified by the parties to the extent
required to give effect to such resolution and shall be deemed to have been
approved by the parties as of the date of such resolution.
(c) If the parties cannot resolve all matters in dispute within the period
referred to in Section 2.2(b), all unresolved matters shall be submitted to a
senior partner in the Toronto office of Deloitte & Touche LLP who shall be
designated by Deloitte & Touche LLP (the "Arbitrator") for resolution as soon as
practicable, and the parties shall give the Arbitrator access to all materials
and information reasonably requested by the Arbitrator for such purpose. The
rules and procedures to be followed in the arbitration proceedings shall be
determined by the Arbitrator in his or her discretion. The Arbitrator's
determination of all such matters shall be final and binding on all parties
hereto and shall not be subject to appeal by any party. The fees and expenses of
the Arbitrator in acting under this Agreement shall be borne equally by
Celestica Parent and C&D US. The Audited Closing Date Statements shall be
modified to the extent required to give effect to the Arbitrator's determination
and shall be deemed to have been approved by the parties hereto, as so modified,
as of the date of such determination.
2.3 Adjustment of Purchase Prices
(a) If the Aggregate Net Asset Value as reflected on the Audited Closing
Date Statements approved or deemed approved pursuant to Section 2.2, as the case
may be, is equal to or greater than $18 million, there shall be no adjustment to
the Aggregate Purchase Price. If the Aggregate Net Asset Value as reflected on
the Audited Closing Date Statements approved pursuant to Section 2.2 is less
than $18 million, the Aggregate Purchase Price shall be decreased by an amount
equal to the amount by which $18 millon exceeds the Aggregate Net Asset Value
- 9 -
(the "Adjustment Amount"). In the event that such a reduction in the Aggregate
Purchase Price occurs, C&D US and Celestica Parent shall agree to use their
respective commercially reasonable efforts to agree on the manner in which the
Adjustment Amount is to be allocated among the Asset Transaction Purchase
Prices, within 15 Business Days after the Audited Closing Date Statements are
deemed to have been approved in accordance with Section 2.2.
(b) In the event that no net adjustment is required to be made to the
Aggregate Purchase Price pursuant to Section 2.3(a), but pursuant to the Audited
Closing Date Statements adjustments would be required to be made to two or more
of Asset Transaction Purchase Prices, C&D US and Celestica Parent shall agree to
use their respective commercially reasonable efforts to agree on such
adjustments within the 15-Business Day period referred to in Section 2.3(a).
(c) If pursuant to the Audited Closing Date Statements adjustments are
required to be made to the allocation to particular asset classes in respect of
the Purchase Price of any Transaction (any such allocation an "Entity Level
Allocation"), C&D US and Celestica Parent shall agree to use their respective
commercially reasonable efforts to agree on such Entity Level Allocation within
the 15-Business Day period referred to in Section 2.3(a), which Entity Level
Allocation will be made after giving effect to any adjustments made pursuant to
Section 2.3(a) and 2.3(b).
(d) In the event that the parties are unable to reach an agreement with
respect to any of the matters referred to in Section 2.3(a), (b) or (c) within
the 15-Business Day period referred, to in Section 2.3(a), any such unresolved
matters shall be submitted to the Arbitrator for resolution as soon as
practicable on the terms and conditions of arbitration set out in Section
2.2(c), in which event the allocation of the Adjustment Amount as between the
Purchase Prices, the adjustment of two or more Asset Transaction Purchase Prices
or any Entity Level Allocation shall be determined in accordance with the
Arbitrator's determination.
(e) Once an agreement is reached or a determination is made as to the
allocation of the Adjustment Amount between Asset Transaction Purchase Prices
or, in the event that there is no Adjustment Amount, as to any adjustments to or
among any of the Asset Transaction Purchase Prices, the relevant parties shall
make payments required to be made by them under the relevant Purchase Agreements
within two Business Days of the date of any such agreement or determination.
ARTICLE 3
GENERAL
3.1 Notices
Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given
upon receipt if (i) delivered in person, (ii) transmitted by facsimile or
similar means of recorded electronic communication with receipt confirmed, or
(iii) sent by registered mail or courier, charges prepaid, addressed as follows:
- 10 -
(a) if to Celestica Canada, Celestica US, Celestica Thai, Celestica
Shanghai, Celestica Suzhou or Celestica Parent:
c/o Celestica Inc.
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX X0X 0X0
Attention: Senior Vice-President and Chief Legal Officer
Facsimile No.: 000-000-0000
with a copy to:
Senior Vice-President, Corporate Development
Facsimile No.: 000-000-0000
(b) if to C&D Canada, C&D US, C&D Dynamo or Datel Shanghai:
c/o C&D Technologies, Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Vice-President, General Counsel
Facsimile No.: 000-000-0000
with a copy to:
Attention: Vice-President, Corporate Development
Facsimile No.: 000-000-0000
Any party may at any time change its address for service from time to time by
giving notice to the other parties in accordance with this Section 3.1.
- 11 -
3.2 Counterparts
This Agreement may be executed by facsimile transmission and
in any number of counterparts, each of which shall constitute an original and
all of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF this Agreement has been executed by the
parties.
CELESTICA INTERNATIONAL INC.
by: /s/ Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Authorized Signatory
CELESTICA CORPORATION
by /s/ Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Authorized Signatory
CELESTICA (THAILAND) LIMITED
by /s/ Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Authorized Signatory
CELESTICA ELECTRONICS
(SHANGHAI) CO. LTD.
by /s/ Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Authorized Signatory
- 12 -
CELESTICA SUZHOU
TECHNOLOGY LTD.
by /s/ Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Authorized Signatory
CELESTICA INC.
by /s/ Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Senior Vice-President,
Corporate Development
C&D POWER SYSTEMS (CANADA)
ULC
by /s/ Xxxxxxx X. Xxxxxxx, Xx.
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Director
C&D TECHNOLOGIES, INC.
by /s/ Xxxxxxx X. Xxxxxxx, Xx.
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Vice President and CFO
- 13 -
DYNAMO ACQUISITION CORP.
by /s/ Xxxxxxx X. Xxxxxxx, Xx.
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Director
DATEL ELECTRONIC TECHNOLOGY
(SHANGHAI) CO.,
LTD.
by /s/ Xxxxxxx X. Xxxxxxx, Xx.
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Director
