UNITED STATES OF AMERICA
In the matter of
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission ("Commission"), having initiated an investigation of the acquisition by Quexco Incorporated ("Quexco") of certain assets of Pacific Dunlop Limited ("Pacific Dunlop"), and it now appearing that Quexco, hereinafter sometimes referred to as "proposed respondent," is willing to enter into an agreement containing an order to divest certain assets and providing for other relief:
IT IS HEREBY AGREED by and between proposed respondent, by its duly authorized officers and attorneys, and counsel for the Commission that:1. Proposed respondent Quexco Incorporated is a corporation organized, existing and doing business under and by virtue of the laws of Delaware, with its office and principal place of business at 2777 Stemmons Freeway, Suite 1800, Dallas, Texas, 75207.
2. Proposed respondent admits all the jurisdictional facts set forth in the draft of complaint here attached.
3. Proposed respondent waives:
5. This agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this agreement is accepted by the Commission it, together with the draft of complaint contemplated thereby, will be placed on the public record for a period of sixty (60) days and information in respect thereto publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify the proposed respondent, in which event it will take such action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision, in disposition of the proceeding.
6. This agreement is for settlement purposes only and does not constitute an admission by proposed respondent that the law has been violated as alleged in the draft of complaint here attached, or that the facts as alleged in the draft complaint, other than jurisdictional facts, are true.
7. This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of § 2.34 of the Commission's Rules, the Commission may, without further notice to the proposed respondent, (1) issue its complaint corresponding in form and substance with the draft of complaint here attached and its decision containing the following Order to divest in disposition of the proceeding and (2) make information public with respect thereto. When so entered, the Order shall have the same force and effect and may be altered, modified or set aside in the same manner and within the same time provided by statute for other orders. The Order shall become final upon service. Delivery by the U.S. Postal Service of the complaint and decision containing the agreed-to Order to proposed respondent's address as stated in this agreement shall constitute service. Proposed respondent waives any right it may have to any other manner of service. The complaint may be used in construing the terms of the Order, and no agreement, understanding, representation, or interpretation not contained in the Order or the agreement may be used to vary or contradict the terms of the Order.
8. By signing this agreement, proposed respondent represents that it can accomplish the full relief contemplated by this agreement.
9. Proposed respondent has read the proposed complaint and Order contemplated hereby. Proposed respondent understands that once the Order has been issued, it will be required to file one or more compliance reports showing how it is complying or has complied with the Order. Proposed respondent agrees to comply with the terms of the proposed Order from the date it signs this agreement containing consent order. Proposed respondent agrees that if it divests the Vernon Plant Assets pursuant to Paragraph II of the Order prior to the time the Order becomes final, it will include and enforce a provision in the divestiture agreement with Gopher Resource ("Gopher Resource Agreement") requiring the transaction to be rescinded, and the Vernon Plant Assets returned to the proposed respondent, should the Commission not make the Order final or should the Commission notify the proposed respondent that Gopher Resource is not an acceptable acquirer, or that the Gopher Resource Agreement is not an acceptable manner of divestiture. Proposed respondent further understands that it may be liable for civil penalties in the amount provided by law for each violation of the Order after it becomes final.
IT IS ORDERED that, as used in this Order, the following definitions shall apply:A. "Quexco Incorporated" or "Quexco" means Quexco Incorporated, its directors, officers, employees, agents and representatives, predecessors, successors, and assigns; its subsidiaries, divisions, groups and affiliates controlled by Quexco Incorporated (including, but not limited to, RSR Corporation), and the respective directors, officers, employees, agents, and representatives, successors, and assigns of each.
B. "RSR Corporation" or "RSR" means RSR Corporation, a corporation organized, existing and doing business under and by virtue of the laws of Delaware, with its office and principal place of business at 2777 Stemmons Freeway, Suite 1800, Dallas, Texas, 75207.
C. "Respondent" means Quexco.
D. "Pacific Dunlop GNB" or "GNB" means Pacific Dunlop GNB Corporation, a corporation organized, existing and doing business under and by virtue of the laws of Delaware with its office and principal place of business located at 375 Northridge Road, #100, Atlanta, Georgia, 30350.
E. "Commission" means the Federal Trade Commission.
F. "Acquisition" means the acquisition by Quexco, described in the Stock Purchase Agreement, dated as of July 5, 1998, between Quexco and Pacific Dunlop Holdings (USA) Inc., a Delaware corporation, pursuant to which Respondent agreed to acquire GNB.
G. "Secondary Lead Products" means lead recovered from scrap sources, such as scrap or spent lead-acid type batteries.
H. "Vernon Plant Assets" means GNB's lead smelter located in Vernon, California, and all tangible and intangible assets used in operating said smelter as an ongoing business engaged in lead recycling, lead smelting and refining operations, provided, however, that the Vernon Plant Assets shall not include, in the case of the Gopher Resource Agreement defined in subparagraph J of this Paragraph I, those assets specifically excluded in Section 1.02 of the Gopher Resource Agreement.
I. "Gopher Resource" means Gopher Resource Corporation, a corporation organized, existing and doing business under and by virtue of the laws of the State of Minnesota with its office and principal place of business at 3385 South Highway 149, Eagan, Minnesota 55121, and its subsidiaries, divisions, groups, and affiliates.
J. "Gopher Resource Agreement" means the Asset Purchase Agreement between GNB Technologies Inc. and Gopher Resource Corporation entered into on or about December 7, 1998, including Exhibits A through D thereto, the Agreement With Respect to NL-GNB Agreement, and the Amendment to Asset Purchase Agreement Between GNB Technologies Inc. and Golden State Resource, LLC, dated April 5, 1999, including Exhibits E (Agreement between Golden State Resource, LLC, and Pacific Dunlop Investments, Inc.) and F (Guaranty by Pacific Dunlop Limited in favor of Golden State Resource, LLC) to the Asset Purchase Agreement attached to the Amendment.
IT IS FURTHER ORDERED that:A. Respondent shall divest, absolutely and in good faith, at no minimum price, the Vernon Plant Assets as an ongoing business.
B. The divestiture shall be made no later than ten (10) days after the date on which this Order becomes final to Gopher Resource, in accordance with the Gopher Resource Agreement (which agreement shall not vary or contradict the terms of this Order or the Hold Separate Agreement). Provided, however, that if, at the time the Commission determines to make the Order final, the Commission notifies the Respondent that Gopher Resource is not an acceptable acquirer, or the Gopher Resource Agreement is not an acceptable manner of divestiture, then Respondent shall immediately rescind the transaction with Gopher Resource and shall divest the Vernon Plant Assets, within six (6) months after the date on which the Order becomes final, to an acquirer that receives the prior approval of the Commission, and only in a manner that receives the prior approval of the Commission.
C. The purpose of the divestiture of the Vernon Plant Assets is to ensure the continued use of the Vernon Plant Assets in the production of Secondary Lead Products and in the recycling of lead scrap into Secondary Lead Products, and to remedy the lessening of competition resulting from the Acquisition as alleged in the Commission's complaint.
D. Pending divestiture of the Vernon Plant Assets, respondent shall take such actions as are necessary to maintain the viability and marketability of the Vernon Plant Assets and to prevent the destruction, removal, wasting, deterioration, or impairment of any of the Vernon Plant Assets except for ordinary wear and tear.
E. Respondent shall comply with all terms of the Agreement to Hold Separate, attached to this Order and made a part hereof as Appendix I. The Agreement to Hold Separate shall continue in effect until such time as respondent has divested all the Vernon Plant Assets as required by this Order.
IT IS FURTHER ORDERED that:A. If respondent has not divested, absolutely and in good faith and with the Commission's prior approval, the Vernon Plant Assets within the time period required by Paragraph II of this Order, the Commission may appoint a trustee to divest the Vernon Plant Assets. In the event that the Commission or the Attorney General brings an action pursuant to § 5(l) of the Federal Trade Commission Act, 15 U.S.C. § 45(l), or any other statute enforced by the Commission, respondent shall consent to the appointment of a trustee in such action. Neither the appointment of a trustee nor a decision not to appoint a trustee under this Paragraph shall preclude the Commission or the Attorney General from seeking civil penalties or any other relief available to it, including a court-appointed trustee, pursuant to § 5(l) of the Federal Trade Commission Act, or any other statute enforced by the Commission, for any failure by the respondent to comply with this Order.
B. If a trustee is appointed by the Commission or a court pursuant to Paragraph III.A. of this Order, respondent shall consent to the following terms and conditions regarding the trustee's powers, duties, authority, and responsibilities:
IT IS FURTHER ORDERED that within thirty (30) days after the Respondent signed the Agreement Containing Consent Order and every thirty (30) days thereafter until respondent has fully complied with the provisions of Paragraphs II or III of this Order, respondent shall submit to the Commission a verified written report setting forth in detail the manner and form in which it intends to comply, is complying, and has complied with Paragraphs II and III of this Order. Respondent shall include in its compliance reports, among other things that are required from time to time, a full description of the efforts being made to comply with Paragraphs II and III of the Order, including a description of all substantive contacts or negotiations for the divestiture and the identity of all parties contacted. Respondent shall include in its compliance reports copies of all written communications to and from such parties, all internal memoranda, and all reports and recommendations concerning divestiture.
IT IS FURTHER ORDERED that respondent shall notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in the corporation that may affect compliance obligations arising out of the Order.
IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Order, upon written request, respondent shall permit any duly authorized representative of the Commission:A. Access, during office hours and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda and other records and documents in the possession or under the control of respondent relating to any matters contained in this Order; and
B. Upon five days' notice to respondent and without restraint or interference from it, to interview officers, directors, employees, agents or independent contractors of respondent.
Signed this _____ day of _______________, 19____.
FEDERAL TRADE COMMISSION
William J. Baer
In the matter of
File No. 981-0327
AGREEMENT TO HOLD SEPARATE
This Agreement to Hold Separate ("Hold Separate Agreement") is by and between Quexco Incorporated ("Quexco"), a corporation having its principal offices at 2777 Stemmons Freeway, Suite 1800, Dallas, Texas, 75207, and the Federal Trade Commission (the "Commission"), an independent agency of the United States Government, established under the Federal Trade Commission Act of 1914, 15 U.S.C. § 41, et seq. (collectively, the "Parties").
WHEREAS, on or about July 6, 1998, Quexco, Howard M. Meyers ("Mr. Meyers"), a natural person with his office and principal place of business at 2777 Stemmons Freeway, Suite 1800, Dallas, Texas, 75207 and Quexco's controlling shareholder, and RSR Corporation ("RSR"), a corporation having its principal offices at 2777 Stemmons Freeway, Suite 1800, Dallas, Texas, 75207 and Quexco's wholly-owned subsidiary, announced an intention to acquire from Pacific Dunlop Limited, Pacific Dunlop GNB (the "Acquisition"); and
WHEREAS, the Commission is now investigating the Acquisition to determine whether it would violate any of the statutes enforced by the Commission; and
WHEREAS, if the Commission accepts the attached Agreement Containing Consent Order ("Consent Order"), which would require the divestiture of the Vernon Plant Assets, as defined in the Consent Order, the Commission must place the Consent Order on the public record for a period of at least sixty (60) days and may subsequently withdraw such acceptance pursuant to the provisions of Section 2.34 of the Commission's Rules; and
WHEREAS, the Commission is concerned that if an understanding is not reached, preserving the status quo ante of the Vernon Plant Assets, as defined in the Consent Order, during the period prior to the final acceptance and issuance of the Consent Order by the Commission (after the 60-day public comment period), divestiture resulting from any proceeding challenging the legality of the Acquisition might not be possible, or might be less than an effective remedy; and
WHEREAS, the Commission is concerned that if the Acquisition is consummated, it will be necessary to preserve the Commission's ability to require the divestiture of the Vernon Plant Assets, as described in the Consent Order, and the Commission's right to have the Vernon Plant Assets continue as a viable competitor independent of Quexco, Mr. Meyers, and RSR; and
WHEREAS, if the Commission determines to finally accept the Consent Order, pending a divestiture acceptable to the Commission, it is necessary to hold separate the Vernon Plant Assets, as described in the Consent Order, to protect interim competition pending divestiture or other relief; and
WHEREAS, the purpose of the Hold Separate Agreement and the Consent Order is to:
WHEREAS, Quexco's entering into this Hold Separate Agreement shall in no way be construed as an admission by Quexco that the Acquisition is illegal; and
WHEREAS, Quexco understands that no act or transaction contemplated by this Hold Separate Agreement shall be deemed immune or exempt from the provisions of the antitrust laws or the Federal Trade Commission Act by reason of anything contained in this Hold Separate Agreement.
NOW, THEREFORE, upon the understanding that the Commission has not yet determined whether the Acquisition will be challenged, and in consideration of the Commission's agreement that at the time it accepts the Consent Order for public comment it will grant early termination of the Hart-Scott-Rodino waiting period, Quexco agrees as follows:
1. Quexco agrees that from the date this Hold Separate Agreement is signed by it until the earliest of the dates listed in Paragraphs 1.a and 1.b, it will comply with the provisions of this Hold Separate Agreement:
2. Quexco agrees to execute and be bound by the attached Consent Order and to comply with the provisions of the Consent Order as if it were final from the date it signs the Consent Order.
3. As used in this Hold Separate Agreement, the following definitions shall apply:
4. To assure the complete independence and viability of the Vernon Plant Assets, and to assure that no Material Confidential Information is exchanged between the Vernon Plant Assets and Quexco, Mr. Meyers or RSR, Quexco shall hold the Vernon Plant Assets separate and apart on the following terms and conditions:
5. Should the Commission seek in any proceeding to compel Quexco to divest any of the Vernon Plant Assets, as provided in the Consent Order, or seek any other available relief, including other injunctive or equitable relief, for any failure to comply with the Consent Order or this Hold Separate Agreement, or in any way relating to the Acquisition, as defined in the draft complaint, Quexco shall not raise any objection based upon the expiration of the applicable Hart-Scott-Rodino Antitrust Improvements Act waiting period or the fact that the Commission has permitted the consummation of the Acquisition. Quexco also waives all rights to contest the validity of this Hold Separate Agreement.
6. To the extent that this Hold Separate Agreement requires Quexco, Mr. Meyers, and RSR to take, or prohibits Quexco, Mr. Meyers, and RSR from taking, certain actions that otherwise may be required or prohibited by contract, Quexco, Mr. Meyers, and RSR shall abide by the terms of this Hold Separate Agreement or the Consent Order and shall not assert as a defense such contract requirements in a civil action brought by the Commission or the United States to enforce the terms of this Hold Separate Agreement or Consent Order.7. For the purposes of determining or securing compliance with this Hold Separate Agreement, and subject to any legally recognized privilege, and upon written request with reasonable notice to Quexco, made to its principal office, Quexco shall permit any duly authorized representatives of the Commission:
8. This Hold Separate Agreement shall not be binding on the Commission until it is approved by the Commission.
Dated: April __, 1999
Owen M. Johnson, Jr.
FEDERAL TRADE COMMISSION