Exide Technologies--Form 10-Q

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MU3d5fOKmYB3KlDE+5TcZ9HJWlJ3sDVFK3cnmOLeRZGQ0Iw/m4RysD0jPjRj25rp NXRGY4JTsmESazee3b6BmQ== 0001193125-03-037184.txt : 20030814 0001193125-03-037184.hdr.sgml : 20030814 20030814105151 ACCESSION NUMBER: 0001193125-03-037184 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXIDE TECHNOLOGIES CENTRAL INDEX KEY: 0000813781 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 230552730 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11263 FILM NUMBER: 03844089 BUSINESS ADDRESS: STREET 1: 210 CARNEGIE CENTER STREET 2: SUITE 500 CITY: PRINCETON STATE: NJ ZIP: 08540 BUSINESS PHONE: 6096277200 FORMER COMPANY: FORMER CONFORMED NAME: EXIDE CORP DATE OF NAME CHANGE: 19920703 10-Q 1 d10q.htm EXIDE TECHNOLOGIES--FORM 10-Q Exide Technologies--Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal quarter ended June 30, 2003

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-11263

EXIDE TECHNOLOGIES

(Exact Name of Registrant as Specified in Its Charter)

Delaware		23-0552730
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

210 Carnegie Center, Suite 500
Princeton, New Jersey		08540
(Address of principal executive offices)		(Zip Code)

(609) 627-7200

(Registrant’s telephone number, including area code)

Indicate by a check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

As of August 8, 2003, 27,383,084 shares of common stock were outstanding.

EXIDE TECHNOLOGIES AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION

Item 1	FINANCIAL STATEMENTS (UNAUDITED)	3
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND JUNE 30, 2002	3
	CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2003 AND MARCH 31, 2003	4
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND JUNE 30, 2002	5
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6
Item 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	29
Item 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS	37
Item 4	CONTROLS AND PROCEDURES	38

	PART II. OTHER INFORMATION
Item 1	LEGAL PROCEEDINGS	40
Item 2	CHANGES IN SECURITIES AND USE OF PROCEEDS	45
Item 3	DEFAULTS UPON SENIOR SECURITIES	45
Item 4	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	45
Item 5	OTHER INFORMATION	45
Item 6	EXHIBITS AND REPORTS ON FORM 8-K	45
SIGNATURES		46

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

EXIDE TECHNOLOGIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per-share data)

	For the Three Months Ended
	June 30, 2003			June 30, 2002
NET SALES	$	584,566		$	554,989
COST OF SALES		468,317			444,659

Gross profit		116,249			110,330

EXPENSES:
Selling, marketing and advertising		67,906			62,052
General and administrative		44,241			45,093
Restructuring and impairment (Note 16)		2,485			6,288
Goodwill impairment charge (Note 8)		—			37,000
Other (income) expense, net (Note 13)		(9,204	)		(5,203	)
Interest expense, net (Note 12)		25,441			27,615

		130,869			172,845

Loss before reorganization items, income taxes, minority interest and cumulative effect of change in accounting principle		(14,620	)		(62,515	)
REORGANIZATION ITEMS, NET (NOTE 6)		8,651			12,098
INCOME TAX (BENEFIT) PROVISION		(189	)		2,048
MINORITY INTEREST		(31	)		(21	)

Net loss before cumulative effect of change in accounting principle		(23,051	)		(76,640	)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (Note 3)		15,593			—

Net loss	$	(38,644	)	$	(76,640	)

NET LOSS PER SHARE, BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
Basic and Diluted	$	(0.84	)	$	(2.80	)

CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE PER SHARE
Basic and Diluted	$	(0.57	)	$	—

NET LOSS PER SHARE (Note 17)
Basic and Diluted	$	(1.41	)	$	(2.80	)

WEIGHTED AVERAGE SHARES
Basic and Diluted		27,383			27,383

The accompanying notes are an integral part of these statements.

EXIDE TECHNOLOGIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except per-share data)

	June 30, 2003			March 31, 2003
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	33,799		$	39,766
Restricted cash		17,111			6,297
Receivables, net of allowance for doubtful accounts of $31,779 and $35,666, respectively		650,041			665,010
Inventories (Note 9)		407,426			399,973
Prepaid expenses and other		20,181			16,451
Deferred financing costs, net		12,532			17,028
Deferred income taxes		35,413			33,233

Total current assets		1,176,503			1,177,758

PROPERTY, PLANT AND EQUIPMENT, NET		533,840			533,375

OTHER ASSETS:
Goodwill, net (Note 8 )		493,547			463,920
Other intangibles, net (Note 8)		47,280			47,560
Investments in affiliates		7,054			6,186
Deferred financing costs, net		—			647
Deferred income taxes		73,869			67,017
Other (Note 10)		70,481			70,728

		692,231			656,058

Total assets	$	2,402,574		$	2,367,191

LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Short-term borrowings (Note 11)	$	9,022		$	7,778
Current maturities of long-term debt (Note 11)		713,314			598,427
Accounts payable		245,969			247,189
Accrued expenses		329,001			324,740

Total current liabilities		1,297,306			1,178,134
LONG-TERM DEBT (Note 11)		22,712			117,405
NONCURRENT RETIREMENT OBLIGATIONS		178,980			170,181
OTHER NONCURRENT LIABILITIES		60,915			41,924
LIABILITIES SUBJECT TO COMPROMISE (Note 7)		1,521,296			1,533,089

Total liabilities		3,081,209			3,040,733

COMMITMENTS AND CONTINGENCIES (Notes 14 and 15)
MINORITY INTEREST		23,037			21,827

STOCKHOLDERS’ DEFICIT
Common stock, $0.01 par value 100,000 shares authorized; 27,383 and 27,383 shares issued and outstanding		274			274
Additional paid-in capital		570,589			570,589
Accumulated deficit		(970,648	)		(932,004	)
Notes receivable—stock award plan		(665	)		(665	)
Accumulated other comprehensive loss		(301,222	)		(333,563	)

Total stockholders’ deficit		(701,672	)		(695,369	)

Total liabilities and stockholders’ deficit	$	2,402,574		$	2,367,191

The accompanying notes are an integral part of these statements.

EXIDE TECHNOLOGIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	For the Three Months Ended
	June 30, 2003			June 30, 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(38,644	)	$	(76,640	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities—
Depreciation and amortization		23,993			22,629
Cumulative effect of change in accounting principle		15,593			—
Net gain on asset sales		(3,175	)		(407	)
Amortization of original issue discount on notes		—			428
Provision for doubtful accounts		1,657			1,513
Non-cash provision for restructuring		56			2,949
Reorganization items, net		8,651			12,098
Goodwill impairment charge		—			37,000
Minority interest		(31	)		(21	)
Amortization of deferred financing costs		6,047			3,015
Net change from sales of receivables
European Securitization		—			(124,793	)
U.S. Securitization		—			(117,455	)
Other, net		—			(19,475	)
Changes in assets and liabilities excluding effects of acquisitions and divestitures—
Receivables		40,412			15,261
Inventories		(1,328	)		794
Prepaid expenses and other		(13,737	)		(5,671	)
Payables		(14,764	)		10,006
Accrued expenses		(22,531	)		15,949
Noncurrent liabilities		(277	)		(9,239	)
Other, net		(12,498	)		(3,506	)

Net cash used in operating activities		(10,576	)		(235,565	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(11,728	)		(8,223	)
Proceeds from sales of assets		17,892			407

Net cash provided by (used in) investing activities		6,164			(7,816	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in short-term borrowings		770			(1,995	)
Borrowings under Senior Secured Global Credit Facilities Agreement		—			6,191
Repayments under Senior Secured Global Credit Facilities Agreement		—			(2,727	)
Borrowings under DIP Credit Facility		223,600			255,068
Repayments under DIP Credit Facility		(212,295	)		(97,576	)
European asset securitization		(18,714	)		130,475
Increase (decrease) in other debt		2,897			(6,749	)
Financing costs and other		(400	)		(19,422	)

Net cash (used in) provided by financing activities		(4,142	)		263,265

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		2,587			5,007

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(5,967	)		24,891
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		39,766			31,703

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	33,799		$	56,594

The accompanying notes are an integral part of these statements.

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2003

(In thousands, except per-share data)

(Unaudited)

(1) BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements include the accounts of Exide Technologies (referred together with its subsidiaries, unless the context requires otherwise, as “Exide” or the “Company”) and all of its majority-owned subsidiaries. The accompanying unaudited condensed consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by generally accepted accounting principles (“GAAP”), or those normally made in the Company’s Annual Report on Form 10-K. Accordingly, the reader of this Form 10-Q may wish to refer to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2003 for further information. The financial information contained herein is unaudited.

The financial information has been prepared in accordance with the Company’s customary accounting practices. In the Company’s opinion, the accompanying consolidated financial information includes all adjustments of a normal recurring nature necessary for a fair statement of the results of operations and financial position for the periods presented.

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with Statement of Position 90-7 (“SOP 90-7”), “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (see Note 2). Accordingly, all pre-petition liabilities subject to compromise have been segregated in the condensed consolidated balance sheets and classified as Liabilities Subject To Compromise, at the estimated amount of allowable claims. Liabilities not subject to compromise are separately classified. Additional pre-petition claims (liabilities subject to compromise) may arise due to the rejection of executory contracts or unexpired leases, or as a result of the allowance of contingent or disputed claims. Revenues, expenses, realized gains and losses and provision for losses resulting from the reorganization are reported separately as Reorganization items, net, in the unaudited condensed consolidated statements of operations.

These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which assumes continuity of operations and realization of assets and satisfaction of liabilities in the ordinary course of business. The ability of the Company to continue as a going concern is predicated upon, among other things, confirmation of a bankruptcy reorganization plan on a timely basis, compliance with the provisions of both the debtor-in-possession financing facility (“DIP Credit Facility”) and other ongoing borrowing arrangements, the ability to generate cash flows from operations and, where necessary, obtaining financing sources sufficient to satisfy the Company’s future obligations, as well as certain contingencies described in Note 15. Based upon business plans updated in June 2003, the Company obtained amendments to its existing financial covenants in order to maintain compliance during fiscal 2004. The Standstill Agreement and Fifth Amendment to the Credit and Guarantee Agreement (“Standstill Agreement”) expires on December 18, 2003 and the DIP Credit Facility expires 30 days prior to the expiration of the Standstill Agreement (but no later, if the Standstill Agreement is extended, than February 15, 2004). If a plan of reorganization is not confirmed by the Bankruptcy Court before the expiration of these agreements, the Company will have to request extensions of such agreements. There can be no assurance that the Company will be able to have a plan of reorganization confirmed by that time or obtain extensions. Failure to have a plan of reorganization confirmed by the Bankruptcy Court prior to the expiration of the Standstill Agreement or the DIP Credit Facility or to be able to obtain such extensions or failure to maintain compliance with the covenants in such agreements would result in an event of default which, absent cure within defined grace periods or obtaining appropriate waivers, would restrict the Company’s access to funds necessary to maintain its operations and assist in funding of its reorganization plan.

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As a result of the Chapter 11 filing and consideration of various strategic alternatives, including possible asset sales, the Company would expect that any reorganization plan will result in material changes to the carrying amount of assets and liabilities in the unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not, however, include adjustments, if any, to reflect the possible future effects on the recoverability and classification of recorded assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties.

Upon emergence from bankruptcy, the amounts reported in subsequent financial statements will materially change due to the restructuring of the Company’s assets and liabilities as a result of any plan of reorganization and the application of the provisions of SOP 90-7 with respect to reporting upon emergence from Chapter 11 (“fresh start” accounting). Changes in accounting principles required under GAAP within twelve months of emerging from bankruptcy are required to be adopted at the date of emergence. Additionally, the Company may choose to make changes in accounting practices and policies at that time. For all these reasons, the financial statements for periods subsequent to emergence from Chapter 11 will not be comparable with those of prior periods.

Certain reclassifications of prior period financial statements have been made to conform to the current interim period presentation.

(2) PROCEEDINGS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

On April 15, 2002 (“Petition Date”), Exide and three of its wholly-owned, U.S. subsidiaries (RBD Liquidation, LLC (“RBD”), Exide Delaware, LLC (“Exide Delaware”) and Exide Illinois, Inc. (“Exide Illinois”)) filed voluntary petitions for reorganization under Chapter 11 of the federal bankruptcy laws (“Bankruptcy Code” or “Chapter 11”) in the United States Bankruptcy Court for the District of Delaware (“Bankruptcy Court”) under case numbers 02-11125 through 02-11128. On November 21, 2002, Refined Metals Corporation (“Refined”) and Dixie Metals Company (“Dixie”), both wholly owned, non-operating subsidiaries of Exide, filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court under case numbers 02-13449 and 02-13450. Refined and Dixie have no employees and negligible, if any, assets. RBD, Exide Delaware, Exide Illinois, Dixie and Refined, together with Exide are hereinafter referred to as the “Debtors.” All of the foregoing cases are being jointly administered for procedural purposes before the Bankruptcy Court under case number 02-11125KJC.

The Debtors are currently operating their business as debtors-in-possession pursuant to the Bankruptcy Code.

The Company and certain of its subsidiaries decided to file for reorganization under Chapter 11, as it offered the most efficient alternative to restructure its balance sheet and access new working capital while continuing to operate in the ordinary course of business. The Company has a heavy debt burden, caused largely by a debt-financed acquisition strategy and the significant costs of integrating those acquisitions. Other factors leading to the reorganization included the impact of adverse economic conditions on the Company’s markets, particularly telecommunications, ongoing competitive pressures and capital market volatility. These factors contributed to a loss of revenues and resulted in significant operating losses and negative cash flows, severely impacting the Company’s financial condition and its ability to maintain compliance with debt covenants.

As debtors-in-possession under Chapter 11, the Debtors are authorized to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the approval of the Bankruptcy Court. The Company’s operations outside of the U.S. are not included in the Chapter 11 proceedings.

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

However, in connection with the Chapter 11 filing, the Company entered into a Standstill Agreement with its pre-petition Senior Secured Global Credit Facility lenders, whereby those lenders have agreed to forbear collection of principal payments on foreign borrowings under the Senior Secured Global Credit Facility from non-Debtor subsidiaries until December 18, 2003, subject to earlier termination upon the occurrence of certain events. The principal events which could result in an early termination of the Standstill Agreement are: 1) non-payment of interest on the European tranche of the Company’s Senior Secured Global Credit Facility as and when due; 2) if any significant foreign subsidiaries commence any winding up or liquidation proceeding; 3) breach of financial and other customary negative covenants (as described with respect to the DIP Credit Facility); and 4) default with respect to the European securitization agreement and 9.125% Senior Notes (Deutsche Mark denominated) agreement. No such events have occurred as of June 30, 2003, or through the date of this Report. See Note 11.

On May 10, 2002, the Debtors received final Bankruptcy Court approval of its $250,000 DIP Credit Facility. The DIP Credit Facility is being used to supplement cash flows from operations during the reorganization process including the payment of post-petition ordinary course trade and other payables, the payment of certain permitted pre-petition claims, working capital needs, letter of credit requirements and for other general corporate purposes.

Under Section 362 of the Bankruptcy Code, actions to collect pre-petition indebtedness from the Debtors, as well as most other pending pre-petition litigation, are stayed. Absent an order of the Bankruptcy Court, substantially all pre-petition liabilities are subject to settlement under a plan of reorganization to be approved by the Bankruptcy Court. On July 24, 2003, the Debtors filed with the Bankruptcy Court their First Amended Joint Plan of Reorganization (as it may be amended, the “Plan”) together with a related Disclosure Statement for the solicitation of votes for the acceptance or rejection of the Plan (as it may be amended, the “Disclosure Statement”). As of the date hereof, the Disclosure Statement has not been approved by the Bankruptcy Court, and is not an offer with respect to any securities or a solicitation of acceptances of the Plan. A hearing before the Bankruptcy Court to consider approval of the Disclosure Statement and to authorize the commencement of the Debtors’ solicitation of votes for the acceptance or rejection of the Plan is scheduled for August 25, 2003. If the Disclosure Statement is approved by the Bankruptcy Court, all holders of debt, claims and securities of the Debtors will receive additional information about the Plan and the solicitation procedures. As provided by the Bankruptcy Code, the Debtors have the exclusive right to solicit votes in favor of a Chapter 11 plan through October 7, 2003, unless that period is lengthened or shortened by the Bankruptcy Code. Although the Debtors expect the Plan to be approved and to emerge pursuant thereto as a going concern, there can be no assurance that the Plan will be confirmed by the Bankruptcy Court or that the Plan will be successfully implemented.

Under the Bankruptcy Code, the Debtors may also assume or reject executory contracts, including lease obligations, subject to the approval of the Bankruptcy Court and certain other conditions. Parties affected by these rejections may file claims with the Bankruptcy Court in accordance with the reorganization process. Due to the timing of the Chapter 11 proceedings, the Company cannot currently estimate or anticipate what impact the rejection and subsequent claims of executory contracts may have on the reorganization process.

On June 14, 2002, the Company filed with the Bankruptcy Court schedules and statements of financial affairs setting forth, among other things, the assets and liabilities of the Debtors as shown by the Company’s books and records on the Petition Date, subject to the assumptions contained in certain notes filed in connection therewith. All of the schedules are subject to further amendment or modification. The Bankruptcy Code provides for a claims reconciliation and resolution process. The Bankruptcy Court established April 23, 2003 as the deadline for submission of proofs of claim for general unsecured claims. A separate bar date for certain other claims has been established as August 14, 2003. Pre-petition claims against the Debtors must be submitted to the Bankruptcy Court prior to the applicable bar date to be eligible to participate in any distribution of assets from the Debtors in connection with the plan of reorganization. Differences between amounts scheduled by the

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Debtors in filings with the Bankruptcy Court and claims by creditors will be investigated and resolved in connection with the claims resolution process. That process, however, has only recently commenced and given the number or creditors and claims filed, will take significant time to complete. As the ultimate number and amount of allowed claims is not presently known, and because any settlement terms of such allowed claims are subject to a confirmed plan of reorganization, the ultimate distribution with respect to allowed claims is not presently ascertainable.

The United States Trustee has appointed an unsecured creditors committee. The official committee and its legal representatives have a right to be heard on all matters that come before the Bankruptcy Court. The Bankruptcy Court determined that the United States Trustee should appoint an official committee of equity holders, which it has done. The Company has appealed the appointment of the equity holders committee to the United States Circuit Court of Appeals for the Third Circuit, where it is currently pending. See Note 15, regarding additional litigation between the Debtors, the equity committee and its members.

At this time, it is not possible to predict the effect of the Chapter 11 reorganization process on the Company’s business, various creditors and security holders, or when it may be possible for the Debtors to emerge from Chapter 11. The Company’s future results are dependent upon its confirming and implementing, on a timely basis, a plan of reorganization. However, under the Plan, the Company’s 10% senior notes would be converted into 100% of the new common equity of the reorganized Company, and the Company’s convertible senior subordinated notes and the Company’s current common stock would be cancelled.

The ultimate recovery, if any, by creditors, security holders and/or common shareholders will not be determined until confirmation of a plan of reorganization. No assurance can be given as to what value, if any, will be ascribed in the bankruptcy proceedings to each of these constituencies. Accordingly, Exide urges appropriate caution be exercised with respect to existing and future investments in any of these securities.

(3) ASSET RETIREMENT OBLIGATIONS

Effective April 1, 2003, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 143, “Accounting for Asset Retirement Obligations” (“SFAS 143”). The provisions of SFAS 143 address financial accounting and reporting requirements for obligations associated with the retirement of tangible long-lived assets and the associated retirement costs and require companies to record an asset and related liability for the cost associated with the retirement of long-lived tangible assets if a legal liability to retire the asset exists.

The adoption of SFAS 143 resulted in a charge, which is reflected in the unaudited condensed consolidated statements of operations as a cumulative effect of change in accounting principle of $15,593, or $0.57 per share. The charge results from certain commitments made by the Company in accordance with permit requirements for its North American lead recycling and hazardous waste facilities. The Company is obligated under these permits to undertake agreed-upon remediation and decommissioning activities in the event of a facility closure. The recorded asset retirement obligation is based upon estimated investigation, remediation and decommissioning costs. These estimates are determined through a combination of methods including outside estimates of likely expense and the Company’s historical experience in the management of these matters. Future findings or changes in estimates could result in either an increase or decrease in the asset retirement obligation.

Had the provisions of SFAS 143 been in effect as of April 1, 2002, the pro forma asset retirement obligation would have been $15,593 as of April 1, 2002 and March 31, 2003. The pro forma impact on net loss before cumulative effect of change in accounting principle for the three months ended June 30, 2002 would have been immaterial.

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(4) DEBTORS’ FINANCIAL INFORMATION

The unaudited condensed combined financial statements of the Debtors are presented below. These statements reflect the financial position, results of operations and cash flows of the combined Debtor subsidiaries, including certain amounts and activities between the Debtors and non-Debtor subsidiaries of the Company which are eliminated in the Company’s unaudited condensed consolidated financial statements. The unaudited condensed combined financial statements of the Debtors are presented as follows:

DEBTORS’ CONDENSED COMBINED STATEMENT OF OPERATIONS

(Unaudited, in thousands)

	For the Three Months Ended June 30, 2003			For the Period From April 15, 2002 Through June 30, 2002
NET SALES	$	244,031		$	215,848
COST OF SALES		203,220			174,819

Gross profit		40,811			41,029
EXPENSES:
Selling, marketing and advertising		25,923			22,070
General and administrative		18,030			17,540
Restructuring		457			4,612
Other income, net		(3,485	)		(678	)
Interest expense, net		14,319			12,797

Loss before reorganization items, income taxes and cumulative effect of change in accounting principle		(14,433	)		(15,312	)
REORGANIZATION ITEMS, net (Note 6)		8,651			10,559
INCOME TAX PROVISION		—			—

Net loss before cumulative effect of change in accounting principle		(23,084	)		(25,871	)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (NOTE 3)		15,593			—

Net loss	$	(38,677	)	$	(25,871	)

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DEBTORS’ CONDENSED COMBINED BALANCE SHEETS

(Unaudited, in thousands)

	June 30, 2003			March 31, 2003
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7,429		$	8,434
Receivables, net		169,398			161,341
Intercompany receivables		43,476			44,849
Inventories		132,190			139,622
Prepaid expenses and other		19,877			23,449

Total current assets		372,370			377,695

PROPERTY, PLANT AND EQUIPMENT, net		244,532			247,939

OTHER ASSETS:
Goodwill and other intangibles, net		40,965			40,965
Investments in affiliates		2,743			2,118
Deferred financing costs, net		—			647
Intercompany notes receivable		256,510			236,593
Other		44,493			45,451

		344,711			325,774

Total assets	$	961,613		$	951,408


LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	58,933		$	60,263
Accrued interest payable		36,351			28,224
Accrued expenses		93,887			84,085
Current maturities of long-term debt (DIP Facility)		180,069			168,764

Total current liabilities		369,240			341,336
NONCURRENT RETIREMENT OBLIGATIONS		12,399			10,437
OTHER NONCURRENT LIABILITIES		15,593			—
LIABILITIES SUBJECT TO COMPROMISE		1,521,296			1,533,089

Total liabilities		1,918,528			1,884,862
STOCKHOLDERS’ DEFICIT
Total stockholders’ deficit		(956,915	)		(933,454	)

Total liabilities and stockholders’ deficit	$	961,613		$	951,408

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DEBTORS’ CONDENSED COMBINED STATEMENT OF CASH FLOWS

(Unaudited, in thousands)

	For the Three Months Ended June 30, 2003			For the Period From April 15, 2002 Through June 30, 2002
CASH RECEIPTS:
Customer receipts	$	238,970		$	233,973
Other third party receipts		2,688			—
Borrowings under DIP Credit Facility		223,600			255,068
Intercompany receipts from non-Debtor entities		33,557			—

Total cash receipts		498,815			489,041

CASH DISBURSEMENTS:
Supplier payments		83,845			71,120
Repurchase of securitized accounts receivable		—			117,455
Financing costs, fees and interest		2,961			17,425
Capital expenditures		5,845			3,331
Freight and logistics		29,931			16,709
Leasing and rental costs		11,502			6,638
Payroll and benefits		81,852			54,159
Professional / consulting fees		13,159			4,664
Taxes		1,968			5,791
Utilities		16,970			7,441
Other disbursements		21,492			32,132
Intercompany loans to non-Debtor entities		18,000			55,000
Repayments under DIP Credit Facility		212,295			97,576

Total cash disbursements		499,820			489,441

NET DECREASE IN CASH AND CASH EQUIVALENTS		(1,005	)		(400	)
CASH AT BEGINNING OF PERIOD		8,434			4,715

CASH AT END OF PERIOD	$	7,429		$	4,315

The Company’s unaudited condensed consolidated statement of operations for the three months ended June 30, 2002 also includes Reorganization items, net (consisting primarily of professional fees) for the period prior to the Petition Date from April 1 to April 14, 2002 and professional fees incurred by non-Debtor subsidiaries.

(5) COMPREHENSIVE LOSS

Total comprehensive loss and its components are as follows:

	For the Three Months Ended
	June 30, 2003			June 30, 2002
Net loss	$	(38,644	)	$	(76,640	)
Reclassification to earnings of cash flow hedges		—			2,083
Change in cumulative translation adjustment		32,341			26,015

Total comprehensive loss	$	(6,303	)	$	(48,542	)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(6) REORGANIZATION ITEMS

Reorganization items represent amounts the Company incurred as a result of the Chapter 11 process and are presented separately in the unaudited condensed consolidated statements of operations.

	For the Three Months Ended
	June 30, 2003			June 30, 2002
Professional fees	$	8,494		$	10,170
Employee costs		450			375
Interest income		(293	)		(530	)
Other		—			2,083

Total reorganization items	$	8,651		$	12,098

Net cash paid for reorganization items during the three months ended June 30, 2003 and June 30, 2002 was $9,743 and $4,636, respectively.

The following paragraphs provide additional information relating to the above reorganization items:

Professional fees

Professional fees include financial, legal and valuation services directly associated with the reorganization process, including fees incurred related to possible asset sales.

Employee costs

The Company has implemented a Bankruptcy Court-approved retention plan that provides for cash incentives to key members of the Company’s management team. The retention plan is a milestone-based plan expected to encourage employees to continue their employment through the reorganization process.

Interest income

Interest income represents interest income earned by the Debtors as a result of assumed excess cash balances due to the Chapter 11 filing.

Other

Other represents contractual claims arising from termination of pre-petition financial instruments.

(7) LIABILITIES SUBJECT TO COMPROMISE

Under U.S. bankruptcy law, actions by creditors to collect indebtedness the Debtors owed prior to the Petition Date are stayed and certain other pre-petition contractual obligations may not be enforced against the Debtors. The Debtors have received approval from the Bankruptcy Court to pay certain pre-petition liabilities including certain employee salaries, wages and benefits and other obligations. All pre-petition liabilities of the Debtors have been classified as liabilities subject to compromise in the unaudited condensed consolidated balance sheets. Adjustments to these amounts may result from negotiations, payments authorized by the Bankruptcy Court, rejection of executory contracts, including leases, or other events. Amounts recorded may ultimately be different than amounts filed by the creditors under the Bankruptcy Court claims reconciliation and resolution process.

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Pursuant to an order of the Bankruptcy Court, in February 2003, the Debtors mailed notices to all known creditors that the deadline for filing proofs of claim for general unsecured claims with the Bankruptcy Court was April 23, 2003. A separate bar date for certain other claims has been established as August 14, 2003. An estimated 3,600 claims were filed as of April 23, 2003, out of an estimated 32,000 notices sent to constituents. Amounts that the Company has recorded are in many instances different from amounts filed by the creditors. Differences between amounts scheduled by the Debtors and claims by creditors are beginning to be investigated and will be resolved in connection with the claims resolution process. Until the process is complete, the ultimate number and amount of allowable claims cannot be ascertained. In this regard, it should be noted that the claims reconciliation process may result in material adjustments to current estimates of allowable claims. The ultimate resolution of these claims will be based upon the final plan of reorganization approved by the Bankruptcy Court.

The following table summarizes the components of the liabilities classified as Liabilities subject to compromise in the unaudited condensed consolidated balance sheets:

	June 30, 2003		March 31, 2003
Accounts payable	$	69,707	$	72,115
Accrued interest payable		19,403		19,403
Restructuring reserve		7,873		8,212
Warranty reserve		10,305		12,921
Accrued expenses		59,073		62,114
Retirement obligations		128,293		128,293
Long-term debt (Note 11)		1,081,293		1,081,293
Other liabilities		145,349		148,738

Total liabilities subject to compromise	$	1,521,296	$	1,533,089

(8) ACCOUNTING FOR GOODWILL AND INTANGIBLES

Effective April 1, 2001, the Company adopted SFAS No. 141 “Business Combinations” (“SFAS 141”) and SFAS No. 142 “Goodwill and Other Intangible Assets” (“SFAS 142”). SFAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. SFAS 141 also specifies the criteria applicable to intangible assets acquired in a purchase method business combination to be recognized and reported apart from goodwill. SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment, at least annually. SFAS 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and be reviewed for impairment.

During the first quarter of fiscal 2003, the Company experienced deterioration in the performance of its European Network Power business. In accordance with the provisions of SFAS 142, the goodwill associated with the Network Power business was reviewed for impairment due to the fact that circumstances indicated the carrying value may not be recoverable. As a result, the Company recognized a goodwill impairment charge in the first quarter of fiscal 2003 of $37,000. The impairment charge was determined based upon a comparison of the book carrying value of this reporting segment, including goodwill, against its fair value, estimated using a discounted cash flow model. After giving effect to the first quarter fiscal 2003 impairment charge, all goodwill of the Network Power segment has been written off.

The Company completed its annual impairment assessment of goodwill effective December 31, 2002, utilizing its most recently updated five-year business plan as the basis for development of discounted cash flows and an estimate of fair values. As a result of the comparison of the book carrying values of its reporting segments, including goodwill, against these estimated fair values, the Company determined that no goodwill

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

impairment charges were required. As a result of the Chapter 11 filing, and consideration of various strategic alternatives, including possible asset sales, the Company would expect that any reorganization plan will result in material changes to the carrying amount of assets and liabilities, including goodwill, in the unaudited condensed consolidated financial statements.

Summarized goodwill activity is as follows:

	For the Three Months Ended June 30, 2003
Goodwill, net at beginning of period	$	463,920
Currency translation		29,627

Goodwill, net at end of period	$	493,547

The amounts of goodwill, net allocated to the Company’s Transportation, Motive Power and Network Power segments are approximately $287,037, $206,510 and $0, respectively, at June 30, 2003.

At June 30, 2003 and March 31, 2003, net intangible assets include trademarks of $38,600, which are not subject to amortization, and technology of $8,680 which is amortized over its useful life of 10 years. The technology gross carrying amount was $10,900 at June 30, 2003 and March 31, 2003, and the related accumulated amortization was $2,220 and $1,940 at June 30, 2003 and March 31, 2003, respectively.

(9) INVENTORIES

Inventories, valued by the first-in, first-out (“FIFO”) method, consist of:

	June 30, 2003		March 31, 2003
Raw materials	$	71,512	$	74,756
Work-in-process		86,701		81,577
Finished goods		249,213		243,640

	$	407,426	$	399,973

In connection with the inventory management component of the Company’s restructuring and reorganization programs, during fiscal 2002, the Company recorded a charge to write-down excess inventories by approximately $10,000. The charge was determined after an assessment of the Company’s five-year business plan and updated demand forecasts, the continued weakening of the Company’s business segments, particularly the telecommunications market, and ongoing stock keeping unit (SKU) rationalization.

(10) OTHER ASSETS

Other assets consist of:

	June 30, 2003		March 31, 2003
Deposits	$	24,530	$	24,530
Pension assets		17,509		16,886
Capitalized software, net		15,811		16,864
Loan to affiliate		4,935		4,935
Other		7,696		7,513

	$	70,481	$	70,728

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

During fiscal 2003, letters of credit under the Company’s pre-petition Senior Secured Global Credit Facility of $27,844 were drawn by the beneficiaries. Such amounts have been reflected as increases in the carrying amount of long-term debt classified as subject to compromise. Deposits above principally represent amounts drawn and held by the beneficiaries as cash collateral for those parties’ contingent obligations with respect to certain environmental matters, workers compensation insurance and operating lease commitments.

(11) DEBT

At June 30, 2003 and March 31, 2003, short-term borrowings of $9,022 and $7,778, respectively, consisted of various operating lines of credit and working capital facilities maintained by certain of the Company’s non-U.S. subsidiaries. Certain of these borrowings are secured by receivables, inventories and/or property. These borrowing facilities, which are typically for one-year renewable terms, generally bear interest at current local market rates plus up to one percent.

Total long-term debt comprises the following:

	June 30, 2003		March 31, 2003
Debt Not Subject To Compromise:
DIP Credit Facility—Borrowings at LIBOR plus 3.75%(2)	$	180,069	$	168,764
Senior Secured Global Credit Facility (Europe)—Borrowings primarily at LIBOR plus 4.75% to 5.25%(2)		279,620		271,415
9.125% Senior Notes (Deutsche mark denominated, due April 15, 2004)(2)		103,032		96,634
European Accounts Receivable Securitization(2)		146,778		155,465
Other, including capital lease obligations and other loans at interest rates generally ranging from 0.0% to 11.0% due in installments through 2015(1)		26,527		23,554

Total debt not subject to compromise		736,026		715,832
Less—current maturities (included in total debt not subject to compromise above)		713,314		598,427

	$	22,712	$	117,405

Debt Subject To Compromise:
Senior Secured Global Credit Facility (U.S.)—Borrowings primarily at LIBOR plus 4.75% to 5.25%	$	458,965	$	458,965
10% Senior Notes, due April 15, 2005		300,000		300,000
Convertible Senior Subordinated Notes, due December 15, 2005		321,132		321,132
Other		1,196		1,196

Total debt subject to compromise (Note 7)	$	1,081,293	$	1,081,293

(1)

Includes various operating lines of credit and working capital facilities maintained by certain of the Company’s non-U.S. subsidiaries.

(2)

Debt classified as current based upon maturity dates of the respective agreements.

Total debt at June 30, 2003 and March 31, 2003 was $1,826,341 and $1,804,903, respectively, (including amounts subject to compromise).

On April 15, 2002, the Company and three of its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code. In connection with the filing, the Company also entered into a Standstill Agreement with its pre-petition Senior Secured Global Credit Facility lenders, whereby

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

the lenders have agreed to forbear collections of principal payments on foreign borrowings under the Senior Secured Global Credit Facility from non-Debtor subsidiaries until December 18, 2003, subject to earlier termination upon the occurrence of certain events. The principal events which could result in an early termination of the Standstill Agreement are: 1) non-payment of interest on the European tranche of the Company’s Senior Secured Global Credit Facility as and when due; 2) if any significant foreign subsidiaries commence any winding up or liquidation proceeding; 3) breach of financial and other customary negative covenants (as described with respect to the DIP Credit Facility); and 4) default with respect to the European securitization agreement and 9.125% Senior Notes (Deutsche Mark denominated) agreement. The Company continues to accrue interest of the Debtors under the pre-petition Senior Secured Global Credit Facility and makes adequate protection payments subject to liquidity calculations prescribed in the DIP Credit Facility. Borrowings under the Senior Secured Global Credit Facility by Debtors within the Chapter 11 case are subject to compromise.

On May 10, 2002, the Company received final Bankruptcy Court approval of its $250,000 DIP Credit Facility. The DIP Credit Facility is being used to supplement cash flows from operations during the reorganization process including the payment of post-petition ordinary course trade and other payables, the payment of certain permitted pre-petition claims, working capital needs, letter of credit requirements and other general corporate purposes.

On April 17, 2002, approximately $129,000 of the DIP Credit Facility was drawn down, $117,000 being used to terminate and repurchase uncollected securitized accounts receivable under the Company’s then existing U.S. receivables sale facility and the balance for financing costs and related fees.

The DIP Credit Facility is a secured revolving credit and term loan facility under which Exide Technologies is the borrower with certain U.S. subsidiaries acting as guarantors. The DIP Credit Facility is afforded super priority claim status in the Chapter 11 case and is collateralized by first liens on certain eligible U.S. assets of the Company, principally accounts receivable, inventory and property.

The revolving credit tranche of the DIP Credit Facility provides for borrowing up to $121,000, of which up to $65,000 is available to Exide Technologies for on-lending to its foreign subsidiaries. An additional $50,000 sub-facility is also available to the foreign subsidiaries based on certain collateral asset values in the United Kingdom and Canada. To the extent funds are borrowed under the DIP and on-lent to foreign subsidiaries, additional liens on certain assets of the borrowing foreign subsidiary and related guarantees are required. Up to $40,000 of the revolving credit tranche is available for letters of credit.

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

covenants in order to maintain compliance during fiscal 2004. The Standstill Agreement expires on December 18, 2003, and the DIP Credit Facility expires 30 days prior to the expiration of the Standstill Agreement (but no later, if the Standstill Agreement is extended, than February 15, 2004). If the Debtors do not have a plan of reorganization confirmed by the Bankruptcy Court before the expiration of these agreements, the Company will have to request extensions of such agreements. There can be no assurance that the Company will be able to have a plan confirmed by that time or obtain extensions. Failure to have a plan of reorganization confirmed by the Bankruptcy Court prior to the expiration of the Standstill Agreement or the DIP Credit Facility or to be able to obtain such extensions or failure to maintain compliance with the covenants in such agreements would result in an event of default which, absent cure within defined grace periods or obtaining appropriate waivers, would restrict the Company’s access to funds necessary to maintain its operations and assist in funding of its reorganization plan.

The DIP Credit Facility matures on the earlier of February 15, 2004, 30 days before the final maturity of any principal obligations under the pre-petition Revolving Credit and Tranche A Senior Secured Credit Facilities (currently scheduled for December 18, 2003) or the date the Company emerges from bankruptcy.

Total availability under the DIP Credit Facility as of June 30, 2003 was $23,600.

On May 31, 2002, the Company entered into a $177,500 European accounts receivable securitization facility. This facility replaced the Company’s then existing $175,000 European securitization program. This facility is accounted for as a secured borrowing in accordance with the requirements of FAS 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”, whereby the accounts receivable and related borrowings are recorded on the Company’s unaudited condensed consolidated balance sheet.

(12) INTEREST EXPENSE, NET

Interest income of $267 and $380 is included in Interest expense, net for the three months ended June 30, 2003 and 2002, respectively. Interest income earned as a result of assumed excess cash balances due to the Chapter 11 filing is recorded in Reorganization items, net in the unaudited condensed consolidated statements of operations. See Note 6.

As of the Petition Date, the Company ceased accruing interest on certain unsecured pre-petition debt classified as Liabilities subject to compromise in the unaudited condensed consolidated balance sheets in accordance with SOP 90-7. Interest is being accrued on certain pre-petition debt to the extent that the Company believes it is probable of being deemed an allowed claim by the Bankruptcy Court. Interest at the stated contractual amount on pre-petition debt that was not charged to results of operations for the three months ended June 30, 2003 and 2002 was approximately $10,237 and $8,626, respectively.

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(13) OTHER (INCOME) EXPENSE, NET

Other (income) expense, net comprises:

	For the Three Months Ended
	June 30, 2003			June 30, 2002
Losses on sales of accounts receivable	$	3,254		$	2,716
Net gain on asset sales		(3,175	)		(518	)
Equity income		(634	)		(437	)
Currency gain		(8,844	)		(7,024	)
Other		195			60

	$	(9,204	)	$	(5,203	)

On April 15, 2003, the Company sold its European non-lead battery assets to SAFT, a subsidiary of Alcatel, for proceeds of $16,300. Of this amount, $13,200 is held in escrow pursuant to the Company’s borrowing arrangements and is included in Restricted cash in the unaudited condensed consolidated balance sheet at June 30, 2003. This sale resulted in a gain of $3,175.

Losses on sales of accounts receivable represent expenses related to the Company’s receivables sales facilities in the U.S. and Europe (See Note 11).

In the first quarter of fiscal 2004 and 2003, the Company recognized net currency gains, primarily from the translation of U.S. dollar denominated borrowings in Europe.

(14) ENVIRONMENTAL MATTERS

(15) COMMITMENTS AND CONTINGENCIES

Bankruptcy Considerations

As of the Petition Date, substantially all pending litigation against the Debtors was stayed. To the extent any of the Debtors are ultimately found liable with respect to such litigation, the Debtors believe the claim resulting therefrom would constitute a general unsecured claim against the Debtors, the treatment of which would be governed by any plan of reorganization confirmed by the Bankruptcy Court. Litigation against the Company’s non-Debtor subsidiaries has not been stayed and will not be affected by the bankruptcy proceedings.

Former Senior Executives and Battery Quality Matters

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

payment terms of the plea agreement are dependent upon the Company’s compliance with the plea agreement during the five-year probation period. Generally, the terms of the probation would permit the U.S. Government to reopen the case against the Company if the Company violates the terms of the plea agreement or other provisions of law. The plea agreement was lodged with the U.S. District Court for the Southern District of Illinois, and accepted on February 27, 2002. The Company reserved $31,000 for this matter, including expected costs and out-of-pocket expenses, in the first quarter of fiscal 2001, and an additional $1,000 in the third quarter of fiscal 2002. At June 30, 2003, approximately $27,500 of this reserve remains and is classified as a Liability subject to compromise. As a result of the imposition of the automatic stay arising upon the Company’s Chapter 11 filing, the Company has not made installment payments of its $27,500 fine. The Company is uncertain as to the effect of these non-payments and the bankruptcy filing with respect to the plea agreement. On June 10, 2002, the United States Attorney’s Office for the Southern District of Illinois filed a claim as a general unsecured creditor for $27,900.

The Company is currently involved in litigation with the former senior executives referenced above. The former senior executives made claims to enforce separation agreements, reimbursements of legal fees and other contracts, and the Company has filed claims and counterclaims asserting fraud, breach of fiduciary duties, misappropriation of corporate assets and civil conspiracy. In addition, the Company has filed actions in the Bankruptcy Court against the former senior executives to recover certain payments of legal fees that the Company was required to advance to such individuals prior to the Petition Date.

The Company has filed two claims with its insurers for reimbursement of the amounts paid to the former executives, and believes it is entitled to obtain substantial reimbursement for those amounts. However, the Company has not recognized any receivables for such reimbursements at June 30, 2003.

The Company has completed an investigation and determined that due to a deviation from manufacturing procedures approximately 950,000 automotive aftermarket batteries sold during 2001 and 2002 in North America did not contain one minor feature of several advertised for the batteries. In all cases the batteries performed in accordance with their labeled specifications. The feature was reinstated and the Company has discussed the situation with certain customers. The Company cannot predict at this time the effects of this matter on its business, but the remediation that has been offered is not material to its financial condition, cash flows or results of operations.

Private Party Lawsuits

Active Lawsuits

In June 2002, the following lawsuit was filed in Louisiana state court: Hardy et. al. v. Ducote Wrecking, et. al. The case was filed as a putative class action for damages brought by two employees of Ducote Wrecking & Demolition, an independent contractor performing multiple maintenance projects at the Company’s Baton Rouge, Louisiana facility. The plaintiffs allege that while they were engaged in work at the Company’s facility, they were intentionally exposed to and poisoned by lead, acid, and other heavy metals. Plaintiffs named the Company’s insurance carriers and supervisory employee as defendants, along with Ducote. The case was removed to the U.S. District Court for the Western District of Louisiana. Plaintiffs filed a motion to remand, which was denied by the court in a January 2003 decision. In the same January 2003 decision, the Court dismissed the Company’s supervisory employee and the independent contractor defendant from the litigation. The Court also has denied plaintiffs’ motion for class certification. The Company’s insurer has issued a reservation of rights as to the Company’s coverage for the alleged claims.

On April 11, 2003, the following lawsuit was filed in the Delaware Court of Chancery by the official committee of equity holders and its members: Kandathil et. al. v. Exide, The complaint seeks to compel the

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Company to convene a meeting of stockholders. On April 21, 2003, the Debtors filed a complaint against the official committee of equity holders and its members in the Bankruptcy Court seeking to enjoin their attempts to compel the Company to convene a meeting of stockholders. Hearings on the two complaints are currently scheduled for August 2003.

Exide is a defendant in an arbitration proceeding initiated in October of 2001 by Margulead Limited (“Margulead”). In June of 1997, GNB, now an operating division of Exide, entered into an agreement with Margulead, which Margulead contended obligated the Company to build a facility to test and develop certain lead acid battery recycling technology allegedly developed by Margulead. GNB terminated the contract in 1998. Exide contended, in part, that the Margulead process was not ready for pilot plant implementation and also failed to meet success criteria. Margulead claimed approximately $13,000 in damages. The Company denied that it was liable and defended the matter in the arbitration. An arbitration decision was rendered on May 7, 2003, determining that the contract was unenforceable and that neither party was entitled to damages or costs. Margulead asked the arbitrator to reconsider the decision Margulead has now advised the Company that it intends to challenge the arbitrator’s award in the English commercial court. On or about July 23, 2003, Margulead filed an Application Notice advising of its intent to apply for an extension of time in which to make an application under certain sections of the Arbitration Act of 1996. The Company does not believe it is likely that Margulead will succeed in any challenge of the arbitrator’s decision.

In November 2002, the following lawsuit was filed in the Ontario Court of Justice: Exide Canada, Inc., v. Lorne Hilts et. al. This lawsuit was initiated by Exide Canada, Inc. against former officers, employees and a former logistics services vendor seeking in excess of $1,500 in damages on multiple grounds including breach of trust, breach of contract and fraud. Defendant Hilts filed a counterclaim against Exide Canada for severance and other benefits and seeks damages in an amount exceeding $620. Defendant Ryad counterclaimed against Exide Canada alleging breach of contract and against Exide Technologies alleging it induced Exide Canada to breach its contract with Ryad for certain logistics services. Ryad seeks damages against each defendant in an amount exceeding $6,300. The Company believes that the counterclaims are without merit and is vigorously defending itself.

The Company’s preliminary review of these active claims suggest they are without merit, and, to the extent the Company is a party to these active lawsuits, it plans to vigorously defend itself. The Company does not believe any reserves are currently warranted for these claims.

Stayed Pre-Petition Lawsuits

The following lawsuits allege that Exide and its predecessors allowed hazardous materials used in the battery manufacturing process to be released from certain of its facilities, allegedly resulting in personal injury and/or property damage. On August 25, 1999 several cases were filed in the Circuit Court for Greenville County, South Carolina and are currently pending: Joshua Lollis v. Exide; Buchanan v. Exide; Agnew v. Exide; Patrick Miller v. Exide; Kelly v. Exide; Amanda Thompson v. Exide; Jonathan Talley v. Exide; Smith v. Exide; Lakeisha Talley v. Exide; Brandon Dodd v. Exide; Prince v. Exide; Andriae Dodd v. Exide; Dominic Thompson v. Exide; Snoddy v. Exide; Antoine Dodd v. Exide; Roshanda Talley v. Exide; Fielder v. Exide; Rice v. Exide; Logan Lollis v. Exide; and Dallis Miller v. Exide. In January 2002, counsel that brought the South Carolina actions filed additional claims in the Circuit Court for Greenville County, South Carolina. The following lawsuits of this type are currently pending in the Court of Common Pleas for Berks County, Pennsylvania: Grillo v. Exide, filed on May 24, 1995; Blume v. Exide, filed on March 4, 1996; Esterly v. Exide, filed on May 30, 1995; and Saylor v. Exide, filed on October 18, 1996. The following lawsuit of this type is currently pending in the United States District Court for the Southern District of Indiana: Strange v. Exide. Finally, the following lawsuit of this type is

EXIDE TECHNOLOGIES AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

pending in the Circuit Court of Shelby County, Tennessee: Cawthon v. Exide, et al. All these cases have been stayed.

In July 2001, Pacific Dunlop Holdings (US), Inc. (“PDH”) and several of its foreign affiliates under the various agreements through which Exide and its affiliates acquired GNB, filed a complaint in the Circuit Court for Cook County, Illinois alleging breach of contract, unjust enrichment and conversion against Exide and three of its foreign affiliates. The plaintiffs maintain they are entitled to approximately $17,000 in cash assets acquired by the defendants through their acquisition of GNB. In December 2001, the Court denied the defendants’ motion to dismiss the complaint, without prejudice to re-filing the same motion after discovery proceeds. The defendants have filed an answer and counterclaim. On July 8, 2002, the Court authorized discovery to proceed as to all parties except Exide. In August 2002, the case was removed to the U.S. Bankruptcy Court for the Northern District of Illinois and in October 2002, the parties presented oral arguments, in the case of PDH, to remand the case to Illinois state court and, in the case of Exide, to transfer the case to the U.S. Bankruptcy Court for the District of Delaware. On February 4, 2003, the U.S. Bankruptcy Court for the Northern District of Illinois transferred the case to the U.S. Bankruptcy Court in Delaware, where the plaintiffs’ motion to abstain or remand will be heard. To the extent this action implicates Exide’s interests, the Company plans to vigorously defend the action and pursue the counterclaim.

In December 2001, PDH filed a separate action in the Circuit Court for Cook County, Illinois seeking recovery of approximately $3,100 for amounts allegedly owed by Exide under various agreements between the parties. The claim arises from letters of credit and other security allegedly provided by PDH for GNB’s performance of certain of GNB’s obligations to third parties that PDH claims Exide was obligated to replace. Exide’s answer contested the amounts claimed by PDH and Exide filed a counterclaim. Although this action has been consolidated with the Cook County suit concerning GNB’s cash assets, the claims relating to this action are currently subject to the automatic bankruptcy stay, and have been transferred to the U.S. Bankruptcy Court for the District of Delaware.

Between March and September 2002, the following cases were filed in the U.S. District Court for the Middle District of Louisiana: Joseph et. al. v. Exide; Andrews et. al. v. Exide; and Armstead v. Exide. These actions seek monetary damages and injunctive relief for alleged racial discrimination in the Company’s Shreveport and Baton Rouge, Louisiana plants. The Joseph and Andrews cases have been consolidated and all three lawsuits have been stayed.

In February 2001, the following lawsuit was filed in the U.S. District Court for the Northern District of California: Flaherty v. Exide, et. al. Plaintiff contends the Company is responsible, in part, for contamination resulting from alleged disposal of hazardous substances at plaintiff’s property. The suit contains claims predicated on CERCLA, private nuisance, public nuisance, trespass, negligence, equitable indemnity, contribution, injunctive relief under RCRA and declaratory relief under state law. The Company has filed counterclaims against plaintiff and other potentially responsible parties.

The Company’s preliminary review of these claims suggests they are without merit and the Company plans to vigorously defend itself with regard to the stayed pre-petition lawsuits. The Company expects that all of these lawsuits will be compromised upon confirmation of a plan of reorganization by the Bankruptcy Court.

Environmental Matters

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company is exposed to liabilities under such EH&S laws arising from its past handling, release, storage and disposal of hazardous substances and hazardous wastes. The Company previously has been advised by the U.S. Environmental Protection Agency or state agencies that it is a “Potentially Responsible Party” (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) or similar state laws at 91 federally defined Superfund or state equivalent sites. At 44 of these sites, the Company has paid its share of liability. The Company is currently paying its share of liability at one site. The Company expects its liability will be compromised upon confirmation of a plan of reorganization by the Bankruptcy Court as to a number of additional Superfund sites. In most instances, the Company’s remaining obligations are not expected to be significant because its portion of any potential liability appears to be minor or insignificant in relation to the total liability of all identified PRPs that are financially viable. The Company’s share of the anticipated remediation costs associated with all of the Superfund sites where it has been named a PRP, based on the Company’s estimated volumetric contribution of waste to each site, is included in the environmental remediation reserves discussed below.

Of those sites for which the Company has not completed payment of its share of liability, it currently has greater than 50% liability at three Superfund sites, and allocated liability that exceeds five percent at an additional seven sites that averages approximately 22%. Because the Company’s liability under such statutes may be imposed on a joint and several basis, the Company’s liability may not necessarily be based on volumetric allocations and could be greater than the Company’s estimates. The Company believes, however, that its PRP status at these Superfund sites will not have a material adverse effect on the Company’s business or financial condition because, based on the Company’s experience, it is reasonable to expect that the liability will be roughly proportionate to its volumetric contribution of waste to the sites.

The Company is also involved in the assessment and remediation of various other properties, including certain Company owned or operated facilities. Such assessment and remedial work is being conducted pursuant to applicable EH&S laws with varying degrees of involvement by appropriate legal authorities. Where probable and reasonably estimable, the costs of such projects have been accrued by the Company, as discussed below. In addition, certain environmental matters concerning the Company are pending in various courts or with certain environmental regulatory agencies.

While the ultimate outcome of the foregoing environmental matters is uncertain, after consultation with legal counsel, the Company does not believe the resolution of these matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

The Company has established reserves for on-site and off-site environmental remediation costs and believes that such reserves are adequate. As of June 30, 2003 and March 31, 2003, the amount of such reserves on the Company’s unaudited condensed consolidated balance sheets was $95,527 and $78,340, respectively. Of these amounts, $66,362 was included in Liabilities subject to compromise at both June 30, 2003 and March 31, 2003. Included in environmental reserves at June 30, 2003 are asset retirement obligations, which the Company recorded upon adoption of SFAS 143. See Note 3. Because environmental liabilities are not accrued until a liability is determined to be probable and reasonably estimable, not all potential future environmental liabilities have been included in the Company’s environmental reserves and, therefore, additional earnings charges are possible. Also, future findings or changes in estimates could have a material effect on the recorded reserves and cash flows.

In the U.S., the Company has advised each state and federal authority with whom the Company has negotiated plans for environmental investigations or remediation of the Debtors’ Chapter 11 filing as required by those agreements or applicable rules. In some cases these authorities may require the Company to undertake

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certain agreed remedial activities under a modified schedule, or may seek to negotiate or require modified remedial activities. Such requests have been received at several sites and are the subject of ongoing discussions. At this time no requests or directives have been received which, individually or in the aggregate, would materially alter the Company’s reserves or have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

Tampa, Florida

The Tampa site is a former secondary lead smelter, lead oxide production facility, and sheet lead-rolling mill that operated from 1943 to 1989. Under a RCRA Part B Closure Permit and a Consent Decree with the State of Florida, Exide is required to investigate and remediate certain historic environmental impacts to the site. Cost estimates for remediation (closure and post-closure) range from $12,500 to $20,500 depending on final State of Florida requirements. The remediation activities are expected to occur over the course of several years.

Columbus, Georgia

The Columbus site is a former secondary lead smelter that was decommissioned in 1999, which is part of a larger facility that includes an operating lead acid battery manufacturing facility. Groundwater remediation activities began in 1988. Costs for supplemental investigations, remediation and site closure are currently estimated at $13,500.

Sonalur, Portugal

The Sonalur facility is an active secondary lead smelter. Materials from past operations present at the site are stored in aboveground concrete containment vessels and in underground storage deposits. The Company is in the process of obtaining additional site characterization data to evaluate remediation alternatives agreeable to local authorities. Costs for remediation are currently estimated at $3,500 to $7,000.

Other

In February 2002, the Company’s principal French subsidiary was notified by local competition authorities that in connection with certain sales of batteries by several French manufacturers in 1996 and 1997, the subsidiary is alleged to have violated local competition laws. The civil investigative agency in the case has recommended a fine be imposed on the Company for $6,800, but the Company does not believe that the subsidiary acted improperly and intends to defend this matter vigorously. A judicial decision with respect to this matter is expected within the next 90 days.

From 1957 to 1982, the Company’s French subsidiary, CEAC, operated a plant using crocidolite asbestos fibers in the formation of battery cases, which, once formed, encapsulated the fibers. Approximately 1,500 employees worked in the plant over the period. Since 1982, the French governmental agency responsible for worker illness claims has received 34 employee claims alleging asbestos-related illnesses, and no such claims have been filed since August 2001. For some of those claims, CEAC is obligated to and has indemnified the agency in accordance with French law for approximately $132, $169 and $260 in calendar years 2001, 2002 and 2003, respectively. In addition, CEAC has been adjudged liable to indemnify the agency for approximately $45, $78, and $200, during the same periods to date for the dependents of four such claimants. Although the Company cannot predict the number or size of any future claims, after consultation with legal counsel the Company does not believe resolution of the current or any future claims, individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

The Company is involved in various other claims and litigation incidental to the conduct of its business. Based on consultation with legal counsel, management does not believe that any such claims or litigation to

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which the Company is a party, either individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

Guarantees

In November 2002, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an Interpretation of FASB Nos. 5, 57 and 107 and Rescission of FASB Interpretation No. 34.” This Interpretation addresses the disclosures to be made by a guarantor in its interim and annual financial statements about obligations under guarantees. This Interpretation also clarifies the requirements related to the recognition of a liability by a guarantor at the inception of a guarantee for the obligations the guarantor has undertaken in issuing that guarantee. The initial recognition and initial measurement provisions shall be applied only on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements are effective for financial statements for interim or annual periods ending after December 15, 2002.

At June 30, 2003, the Company had outstanding letters of credit with a face value of $6,055 ($113 of which was pre-petition) and surety bonds with a face value of $43,465. The majority of the letters of credit and surety bonds have been issued as collateral or financial assurance with respect to certain liabilities the Company has recorded, including but not limited to environmental remediation obligations and self-insured workers compensation reserves. Failure of the Company to satisfy its obligations with respect to the primary obligations secured by the letters of credit or surety bonds could entitle the beneficiary of the related letter of credit or surety bond to demand payments pursuant to such instruments. The letters of credit generally have terms up to one year. The surety bonds have annual terms but are generally renewable by the Company. It is expected that limited availability of new surety bonds from traditional sources may impact the Company’s liquidity needs in future periods.

Certain of the Company’s European subsidiaries have bank guarantees outstanding, which have been issued as collateral or financial assurance in connection with environmental obligations, income tax claims and customer contract requirements. At June 30, 2003, bank guarantees with a face value of $8,700 were outstanding.

Warranty

The Company provides customers various warranty or return privileges in each of its three business segments. The estimated cost of warranty is recognized as a reduction of sales in the period in which the related revenue is recognized. These estimates are based upon historical trends and claims experience, and include an assessment of the anticipated lag between the date of sale and claim date.

A reconciliation of changes in the Company’s consolidated warranty liability for the three months ended June 30, 2003 follows:

Balance at March 31, 2003	$	62,464
Accrual for warranties provided during the period		11,500
Settlements made (in cash or credit) during the period		(16,232	)
Currency		2,033

Balance at June 30, 2003	$	59,765

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(16) RESTRUCTURING AND IMPAIRMENT

The Company previously implemented certain restructuring activities as part of an overall program to reduce costs, eliminate excess capacity and improve cash flows, including activities in connection with the September 2000 acquisition of GNB.

In addition, during the first quarter of fiscal 2004, the Company recognized restructuring and impairment charges of $2,485, representing $1,936 for severance, $493 for related closure costs and $56 for a non-cash charge related to the write-down of machinery and equipment. These charges resulted from actions completed during the first quarter of fiscal 2004 related to the Motive and Network consolidation efforts in Europe, Corporate severance, Europe Transportation headcount reductions and the closure of a North American Transportation facility. Approximately 75 positions have been eliminated in connection with the first quarter fiscal 2004 plans.

Summarized restructuring reserve activity follows:

	Severance Costs			Closure Costs			Total
Balance at March 31, 2003	$	19,360		$	13,524		$	32,884
Charges, fiscal 2004		1,936			493			2,429
Payments and currency changes		(4,550	)		(881	)		(5,431	)

Balance at June 30, 2003	$	16,746		$	13,136		$	29,882

Remaining expenditures principally represent (i) severance and related benefits payable, per employee agreements and or regulatory requirements over periods up to three years (ii) lease commitments for certain closed facilities, branches and offices, as well as leases for excess and permanently idle equipment payable in accordance with contractual terms, over periods up to five years and (iii) certain other closure costs including dismantlement and costs associated with removal obligations incurred in connection with the exit of facilities.

(17) NET LOSS PER SHARE

Basic loss per share is computed using the weighted average number of common shares outstanding for the period, while diluted loss per share is computed assuming conversion of all dilutive securities such as options, convertible debt and warrants. In all periods presented net losses were incurred, therefore dilutive common stock equivalents were not used in the calculation of earnings per share as they would have an anti-dilutive effect.

(18) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued FASB Interpretation No. (“FIN”) 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB 51”. This Interpretation addresses consolidation by business enterprises of certain variable interest entities (“VIEs”). The Interpretation is effective immediately for all enterprises with variable interests in VIEs created after January 31, 2003. For variable interests in VIEs created before February 1, 2003, the provisions of this Interpretation will be applicable no later than the beginning of the first interim or annual period beginning after June 15, 2003. Further, the disclosure requirements of the Interpretation are applicable for all financial statements initially issued after January 31, 2003, regardless of the date on which the VIE was created. The Company has performed an evaluation to identify such entities and does not believe that any entities fall within the scope of this standard, other than the special purpose entity established in connection with the Company’s European accounts receivable securitization facility, which is accounted for as a secured borrowing in accordance with the requirements of SFAS 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (“SFAS 150”). SFAS 150 addresses how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS 150 requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). SFAS 150 applies immediately to financial instruments entered into or modified after May 31, 2003 and at the beginning of the first interim period beginning after June 15, 2003 for all other financial instruments. As of June 30, 2003 and for the three months then ended, the Company had no such financial instruments outstanding.

In May 2003, the Emerging Issues Task Force (“EITF”) reached a consensus on Issue No. 01-08, “Determining Whether an Arrangement Contains a Lease.” EITF Issue No. 01-08 provides guidance on how to determine if an arrangement contains a lease that is within the scope of SFAS 13, “Accounting for Leases.” The provisions of EITF Issue No. 01-08 will apply primarily to arrangements agreed to or committed to after the beginning of an entity’s next reporting period beginning after May 28, 2003, or previous arrangements modified after the beginning of an entity’s next reporting period beginning after May 28, 2003. The Company is currently evaluating the effect EITF Issue No. 01-08 will have on its consolidated financial position, liquidity, and results of operations.

(19) SEGMENT INFORMATION

The Company has three primary business segments: Transportation, Motive Power and Network Power.

Transportation applications include automotive, heavy duty, agricultural, marine and other batteries, as well as new technologies being developed for hybrid vehicles and new 42-volt automobile applications. Network Power applications include batteries for telecommunications systems, fuel cell load leveling, electric utilities, railroads, photovoltaic and other critical uninterruptible power supply markets. Motive Power applications include batteries for a broad range of equipment uses including lift trucks, mining and other commercial vehicles.

Certain asset information required to be disclosed is not reflected below as it is not allocated by segment nor utilized by management in the Company’s operations.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Selected financial information concerning the Company’s reportable segments is as follows:

	For the Three Months Ended June 30, 2003
	Transportation		Motive Power		Network Power			Other (a)			Consolidated
Net sales	$	357,315	$	127,540	$	99,711		$	—		$	584,566
Gross profit		63,285		27,156		25,808			—			116,249
Income (loss) before reorganization items, income taxes, minority interest and cumulative effect of change in accounting principle (c)		23,813		1,872		12,123			(52,428	)		(14,620	)
	For the Three Months Ended June 30, 2002
	Transportation		Motive Power		Network Power (b)			Other (a)			Consolidated
Net sales	$	353,469	$	110,888	$	90,632		$	—		$	554,989
Gross profit		63,894		24,876		21,560			—			110,330
Income (loss) before reorganization items, income taxes, minority interest and cumulative effect of change in accounting principle (d)		22,929		3,536		(38,090	)		(50,890	)		(62,515	)

(a)

Other includes corporate expenses, interest expense, net, currency remeasurement loss (gain) and losses on sales of accounts receivable.

(b)

Includes a goodwill impairment charge of $37,000 (see Note 8).

(c)

Includes restructuring charges of $661, $1,208, $353 and $263 within Transportation, Motive, Network and Other, respectively (see Note 16).

(d)

Includes restructuring charges of $1,676, $0, $4,612 and $0 within Transportation, Motive, Network and Other, respectively (see Note 16).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

On April 15, 2002 (“Petition Date”), Exide Technologies (together with its subsidiaries unless the context requires otherwise, “Exide” or the “Company”) and three of its wholly-owned, U.S. subsidiaries (RBD Liquidation, LLC (“RBD”), Exide Delaware, LLC (“Exide Delaware”) and Exide Illinois, Inc. (“Exide Illinois”)) filed voluntary petitions for reorganization under Chapter 11 of the federal bankruptcy laws (“Bankruptcy Code” or “Chapter 11”) in the United States Bankruptcy Court for the District of Delaware (“Bankruptcy Court”) under case numbers 02-11125 through 02-11128. On November 21, 2002, Refined Metals Corporation (“Refined”) and Dixie Metals Company (“Dixie”), both wholly owned, non-operating subsidiaries of Exide, filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court under case numbers 02-13449 and 02-13450. Refined and Dixie have no employees and negligible, if any, assets. RBD, Exide Delaware, Exide Illinois, Dixie and Refined, together with Exide are hereinafter referred to as the “Debtors.” All of the foregoing cases are being jointly administered for procedural purposes before the Bankruptcy Court under case number 02-11125KJC.

The Debtors are currently operating their business as debtors-in-possession pursuant to the Bankruptcy Code.

The Company and certain of its subsidiaries decided to file for reorganization under Chapter 11 as it offered the most efficient alternative to restructure its balance sheet and access new working capital while continuing to operate in the ordinary course of business. The Company has a heavy debt burden, caused largely by a debt-financed acquisition strategy and the significant costs of integrating those acquisitions. Other factors leading to the reorganization included the impact of adverse economic conditions on the Company’s markets, particularly telecommunications, ongoing competitive pressures and capital market volatility. These factors contributed to a loss of revenues and resulted in significant operating losses and negative cash flows, severely impacting the Company’s financial condition and its ability to maintain compliance with debt covenants.

The Company’s operations outside of the U.S. are not included in the Chapter 11 proceedings.

On May 10, 2002, the Debtors received final Bankruptcy Court approval of its $250 million DIP Credit Facility. The DIP Credit Facility requires maintenance of certain financial covenants and other restrictions on matters such as indebtedness, guarantees and future asset sales.

Under the Bankruptcy Code, actions against the Debtors to collect pre-petition indebtedness, as well as most other pending litigation against the Debtors, are stayed. In addition, the Debtors may also assume or reject executory contracts, including lease obligations, subject to the approval of the Bankruptcy Court and certain other conditions.

On July 24, 2003, the Debtors filed with the Bankruptcy Court their First Amended Joint Plan of Reorganization (as it may be amended, the “Plan”) together with a related Disclosure Statement for the solicitation of votes for the acceptance or rejection of the Plan (as it may be amended, the “Disclosure Statement”). As of the date hereof, the Disclosure Statement has not been approved by the Bankruptcy Court, and is not an offer with respect to any securities or a solicitation of acceptances of the Plan. A hearing before the Bankruptcy Court to consider approval of the Disclosure Statement and to authorize the commencement of the Debtors’ solicitation of votes for the acceptance or rejection of the Plan is scheduled for August 25, 2003. If the Disclosure Statement is approved by the Bankruptcy Court, all holders of debt, claims and securities of the Debtors will receive additional information about the Plan and the solicitation procedures. As provided by the Bankruptcy Code, the Debtors have the exclusive right to solicit votes in favor of a Chapter 11 plan through October 7, 2003, unless that period is lengthened or shortened by the Bankruptcy Code. Although the Debtors expect the Plan to be approved and to emerge pursuant thereto as a going concern, there can be no assurance that the Plan will be confirmed by the Bankruptcy Court or that the Plan will be successfully implemented.

Factors Which Affect the Company’s Financial Performance

Competition. The global transportation, motive power and network power battery markets, particularly in North America and Europe, are highly competitive. In recent years, competition has continued to intensify and the Company continues to come under increasing pressure for price reductions. This competition has been exacerbated by excess capacity and fluctuating lead prices as well as low-priced Asian imports impacting the Company’s markets.

Exchange Rates. The Company is exposed to foreign currency risk in most European countries, principally from fluctuations in the Euro and British Pound. The Company is also exposed, although to a lesser extent, to foreign currency risk in Australia and the Pacific Rim. Movements of exchange rates against the U.S. dollar can result in variations in the U.S. dollar value of non-U.S. sales. In some instances, gains in one currency may be offset by losses in another. Movements in European currencies impacted the Company’s results for the periods presented herein.

Markets. The Company is subject to concentrations of customers and sales in a few geographic locations and is dependent on customers in certain industries, including the automotive, telecommunications and material handling markets. Economic difficulties experienced in these markets and geographic locations have and continue to impact the Company’s financial results.

Weather. Unusually cold winters or hot summers accelerate automotive battery failure and increase demand for automotive replacement batteries.

Interest rates. The Company is exposed to fluctuations in interest rates on its variable rate debt.

Lead. Lead is the primary material by weight used in the manufacture of batteries, representing approximately one-fourth of the Company’s cost of goods sold. The market price of lead fluctuates. Generally, when lead prices decrease, customers may seek disproportionate price reductions from the Company, and when lead prices increase, customers may resist price increases.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The Company believes that the critical accounting policies and estimates disclosed in the Company’s Annual Report on Form 10-K (the “10-K”) for the fiscal year ended March 31, 2003 affect the preparation of its

unaudited condensed consolidated financial statements. The reader of this report may wish to refer to the 10-K for further information.

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and in accordance with Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (“SOP 90-7”).

The ability of the Company to continue as a going concern is predicated upon, among other things, confirmation of a bankruptcy reorganization plan on a timely basis, compliance with the provisions of both the DIP Credit Facility and other ongoing borrowing arrangements, the ability to generate cash flows from operations and, where necessary, obtaining financing sources sufficient to satisfy the Company’s future obligations as well as certain contingencies described in Note 15. Based upon business plans updated in June 2003, the Company obtained amendments to its existing financial covenants in order to maintain compliance during fiscal 2004. The Standstill Agreement expires on December 18, 2003, and the DIP Credit Facility expires 30 days prior to the expiration of the Standstill Agreement, (but no later, if the Standstill Agreement is extended, than February 15, 2004). If the Debtors do not have a plan of reorganization confirmed by the Bankruptcy Court before the expiration of these agreements, the Company will have to request extensions of such agreements. There can be no assurance that the Company will be able to have a plan of reorganization confirmed by that time or obtain extensions. Failure to have a plan of reorganization confirmed by the Bankruptcy Court prior to the expiration of the Standstill Agreement or the DIP Credit Facility or to be able to obtain such extensions or failure to maintain compliance with the covenants in such agreements would result in an event of default which, absent cure within defined grace periods or obtaining appropriate waivers, would restrict the Company’s access to funds necessary to maintain its operations and assist in funding of its reorganization plan. As a result of the Chapter 11 filing, and consideration of various strategic alternatives, including possible asset sales, the Company would expect that any reorganization plan will result in material changes to the carrying amount of assets and liabilities in the unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not, however, include adjustments, if any, to reflect the possible future effects on the recoverability and classification of recorded assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties.

Upon emergence from bankruptcy, the amounts reported in subsequent financial statements will materially change due to the restructuring of the Company’s assets and liabilities as a result of any plan of reorganization and the application of the provisions of SOP 90-7 with respect to reporting upon emergence from Chapter 11 (“fresh start” accounting). Changes in accounting principles required under generally accepted accounting principles (“GAAP”) within twelve months of emerging from bankruptcy are required to be adopted at the date of emergence. Additionally, the Company may choose to make changes in accounting practices and policies at that time. For all these reasons, the financial statements for periods subsequent to emergence from Chapter 11 will not be comparable with those of prior periods.

Results of Operations

Three months ended June 30, 2003 compared with three months ended June 30, 2002

Overview

Net loss for the first quarter of fiscal 2004 was $38.6 million, or $1.41 per diluted share versus the first quarter of fiscal 2003 net loss of $76.6 million, or $2.80 per diluted share. First quarter fiscal 2004 results include restructuring costs of $2.5 million, reorganization items in connection with the bankruptcy of $8.7 million and cumulative effect of change in accounting principle of $15.6 million. First quarter fiscal 2003 results include a non-cash charge of $37.0 million for goodwill impairment in the Network Power segment, restructuring costs of $6.3 million and reorganization items in connection with the Bankruptcy of $12.1 million. In addition, currency remeasurement gains of $8.8 million and $7.0 million, primarily on U.S. dollar denominated debt in Europe, have been recognized in Other (income) expense, net in the first quarter of fiscal 2004 and 2003, respectively.

Net Sales

Net sales were $584.6 million in the first quarter of fiscal 2004 versus $555.0 million in the first quarter of fiscal 2003. Sales volumes were lower in all three of the Company’s business segments during the first quarter of fiscal 2004. Currency positively impacted net sales in the first quarter of fiscal 2004 by approximately $56.9 million.

Transportation net sales were $357.3 million in the first quarter of fiscal 2004 versus $353.5 million in the first quarter of fiscal 2003. Transportation revenues in North America declined due to reduced unit volumes, principally in the aftermarket channel, while European volumes declined in the original equipment channel. European selling prices for the first quarter of fiscal 2004 were lower than the first quarter of fiscal 2003, including the effect of lead-related pricing adjustments. These reductions were partially offset by benefits from warranty management programs in North America. Currency positively impacted Transportation net sales in the first quarter of fiscal 2004 by approximately $27.2 million.

Motive Power net sales in the first quarter of fiscal 2004 were $127.5 million versus $110.9 million in the first quarter of fiscal 2003. Lower volumes and competitive pricing pressures in Europe within both the original equipment and aftermarket channels were partially offset by higher volumes in North America. Currency positively impacted Motive Power net sales in the first quarter of fiscal 2004 by approximately $17.5 million.

Network Power net sales in the first quarter of fiscal 2004 were $99.7 million versus $90.6 million in the first quarter of fiscal 2003. Sales volumes were lower due to weakness in the Asian market, offset partially by higher volumes in North America and higher military shipments in Europe. Currency positively impacted Network Power net sales in the first quarter of fiscal 2004 by approximately $12.2 million.

Gross Profit

Gross profit was $116.2 million in the first quarter of fiscal 2004 versus $110.3 million in the first quarter of fiscal 2003. Gross margin was 19.9% in the both the first quarter of fiscal 2004 and the first quarter of fiscal 2003. Currency positively impacted gross profit in the first quarter of fiscal 2004 by approximately $13.4 million. Gross profit in each of the Company’s business segments was negatively impacted by lower sales volumes and higher benefit costs, including medical and pension expenses, offset partially by the Company’s cost reduction programs.

Transportation gross profit was $63.3 million in the first quarter of fiscal 2004 versus $63.9 million in the first quarter of fiscal 2003. The effect of lower sales volumes in North America and Europe was partially offset by the benefits from plant rationalization and headcount reductions, North American warranty management programs and lower lead pricing in Europe. Gross margin was 17.7% in the first quarter of fiscal 2004 versus 18.1% in fiscal 2003. Currency positively impacted Transportation gross profit in the first quarter of fiscal 2004 by approximately $5.9 million.

Motive Power gross profit was $27.1 million in the first quarter of fiscal 2004 versus $24.9 million in the first quarter of fiscal 2003. Gross profit was negatively impacted by lower sales volumes and competitive pricing pressures, particularly in the European markets, offset partially by the favorable impact of lower European lead prices. Gross margin was 21.3% in the first quarter of fiscal 2004 versus 22.4% in the first quarter of fiscal 2003. Currency positively impacted Motive Power gross profit in the first quarter of fiscal 2004 by approximately $4.2 million.

Network Power gross profit was $25.8 million in the first quarter of fiscal 2004 versus $21.5 million in the first quarter of fiscal 2003. Gross profit was positively impacted by the Company’s cost reduction programs and favorable sales mix, offset partially by lower sales volume. Gross margin was 25.9% in the first quarter of fiscal 2004 versus 23.8% in the first quarter of fiscal 2003. Currency positively impacted Network Power gross profit in the first quarter of fiscal 2004 by approximately $3.3 million.

Expenses

Expenses were $130.9 million in the first quarter of fiscal 2004 versus $172.8 million in the first quarter of fiscal 2003. First quarter fiscal 2003 expenses included a $37.0 million goodwill impairment charge in Network Power. Expenses also included restructuring charges of $2.5 million in the first quarter of fiscal 2004 and $6.3 million in the first quarter of fiscal 2003. Excluding these items, expenses were $128.4 million and $129.5 million in the first quarters of fiscal 2004 and 2003, respectively. Stronger European currencies unfavorably impacted expenses by approximately $12.5 million in the first quarter of fiscal 2004. The change in expenses was impacted by the following matters: (i) first quarter fiscal 2004 selling, marketing and advertising costs and general and administration costs in each of the Company’s business segments were favorably impacted by the Company’s cost-reduction programs, primarily through headcount reductions; (ii) first quarter fiscal 2004 expenses in each of the Company’s business segments were negatively impacted by an increase in benefit costs, including medical and pension expenses; (iii) first quarter fiscal 2004 expenses include a $3.2 million gain on the sale of the Company’s European non-lead battery assets, included in Other (income) expense, net; (iv) interest, net decreased $2.2 million, principally due to ceasing accruing certain interest on pre-petition debt classified as subject to compromise; and (v) fiscal 2004 and fiscal 2003 first quarter expenses included currency remeasurement gains of $8.8 million and $7.0 million, respectively, included in Other (income) expense, net.

Transportation expenses were $39.5 million in the first quarter of fiscal 2004 versus $40.9 million in the first quarter of fiscal 2003. The decrease in expenses was due primarily to the Company’s cost reduction programs offset partially by increased benefit costs, including medical and pension expenses. Currency unfavorably impacted Transportation expenses in the first quarter of fiscal 2004 by approximately $3.1 million.

Motive Power expenses were $25.3 million in the first quarter of fiscal 2004 versus $21.3 million in the first quarter of fiscal 2003. Currency unfavorably impacted Motive Power expenses in the first quarter of fiscal 2004 by approximately $3.4 million. Also contributing to the increase in expenses were higher selling expenses in North America and increased benefit costs, including medical and pension expenses, offset partially by the Company’s cost reduction programs.

Network Power expenses were $13.7 million in the first quarter of fiscal 2004 versus $59.7 million in the first quarter of fiscal 2003. First quarter fiscal 2003 Network Power expenses included a goodwill impairment charge of $37.0 million and restructuring charges of $4.6 million. First quarter fiscal 2004 expenses included a $3.2 million gain on the sale of the Company’s European non-lead battery assets and restructuring charges of $0.4 million. Excluding these items, expenses were $16.5 million and $18.1 million in the first quarter of fiscal 2004 and fiscal 2003, respectively. The decrease was due primarily to the Company’s cost reduction programs offset partially by increased benefit costs, including medical and pension expenses. Currency unfavorably impacted Network Power expenses in the first quarter of fiscal 2004 by approximately $1.4 million.

Unallocated expenses, net were $52.4 million in the first quarter of fiscal 2004 versus $50.9 million in the first quarter of fiscal 2003. Fiscal 2004 and fiscal 2003 first quarter expenses included currency remeasurement gains of $8.8 million and $7.0 million, respectively. Currency unfavorably impacted unallocated expenses in the first quarter of fiscal 2004 by approximately $4.6 million. Corporate expenses were $32.6 million and $27.6 million in the first quarter of fiscal 2004 and fiscal 2003, respectively. The increase was due to currency impact, increased benefit costs, including medical and pension expenses, and higher restructuring costs, offset partially by the favorable impact of the Company’s cost reduction programs, primarily through headcount reductions. Interest expense, net was $25.4 million in the first quarter of fiscal 2004 versus $27.6 million in the first quarter of fiscal 2003. The decrease is due to ceasing accruing certain interest on pre-petition debt classified as subject to compromise in the Company’s consolidated balance sheet in accordance with SOP 90-7. Interest, at the stated contractual amount on debt that was not charged to operations for the first quarter of fiscal 2004 and fiscal 2003, was approximately $10.2 million and $8.6 million, respectively.

Loss before reorganization items, income taxes, minority interest and cumulative effect of change in accounting principle was $14.6 million, or (2.5)% of net sales in the first quarter of fiscal 2004 versus $62.5 million, or (11.3)% of net sales in the first quarter of fiscal 2003, due to the items discussed above.

Transportation income before reorganization items, income taxes, minority interest and cumulative effect of change in accounting principle was $23.8 million, or 4.1% of net sales in the first quarter of fiscal 2004 versus $22.9 million, or 4.1% of net sales in the first quarter of fiscal 2003, due to the items discussed above.

Motive Power income before reorganization items, income taxes, minority interest and cumulative effect of change in accounting principle was $1.9 million, or 0.3% of net sales in the first quarter of fiscal 2004 versus $3.5 million, or 0.6% of net sales in the first quarter of fiscal 2003, due to the items discussed above.

Network Power income (loss) before reorganization items, income taxes, minority interest and cumulative effect of change in accounting principle was $12.1 million, or 2.1% of net sales in the first quarter of fiscal 2004 versus ($38.1) million, or (6.9)% of net sales in the first quarter of fiscal 2003, due to the items discussed above.

Reorganization items

Reorganization items represent amounts the Company incurred as a result of the Chapter 11 filing and are presented separately in the unaudited condensed consolidated statements of operations. Reorganizations items in the first quarter of fiscal 2004 and 2003 were $8.7 million and $12.1 million, respectively. These items comprise: professional fees including financial and legal services; employee retention costs for key members of management; and interest income earned as a result of having assumed excess cash balances due to the Chapter 11 filing. See Note 6.

Income Taxes

In the first quarter of fiscal 2004, an income tax benefit of $0.2 million was recorded on a pre-tax loss of $23.3 million. In the first quarter of fiscal 2003, an income tax provision of $2.0 million was recorded on a pre-tax loss of $74.6 million. The effective tax rate was 0.8% and (2.7%) in the first quarter of fiscal 2004 and 2003, respectively. The effective tax rate for the first quarters of fiscal 2004 and fiscal 2003 were impacted by the generation of income in tax-paying jurisdictions, principally Europe, with limited or no offset on a consolidated basis as a result of recognition of valuation allowances on tax benefits generated from current period losses in both the U.S. and certain international regions. The effective tax rate for the first quarter of fiscal 2004 was impacted by the $3.2 million gain on the sale of the Company’s European non-lead battery assets, which was a non-taxable transaction. The effective tax rate for the first quarter of fiscal 2003 was also impacted by the non-deductibility of the $37.0 million Network Power goodwill impairment charge.

Liquidity and Capital Resources

Capital Structure

Following evaluation of possible capital structure alternatives, on April 15, 2002, Exide Technologies and three of its wholly-owned U.S. subsidiaries filed for reorganization under Chapter 11 as it offered the most efficient alternative to restructure its balance sheet and access new working capital while continuing to operate in the ordinary course of business. In addition, on November 21, 2002, two of the Company’s other wholly-owned subsidiaries filed for reorganization pursuant to Chapter 11. The Company’s operations outside of the U.S. are not included in the Chapter 11 proceedings. However, in connection with the bankruptcy filing, the Company entered into a Standstill Agreement with the pre-petition Senior Secured Global Credit Facility lenders, whereby the lenders agreed to forbear collection of principal payments on foreign borrowings under the Senior Secured Global Credit Facility from non-Debtor subsidiaries until December 18, 2003, subject to earlier termination for the occurrence of certain events. The principal events which could result in an early termination of the Standstill Agreement are: 1) non-payment of interest on the European tranche of the Company’s Senior Secured Global Credit Facility as and when due; 2) if any significant foreign subsidiaries commence any winding up or liquidation proceeding; 3) breach of financial and other customary negative covenants (as described with respect to the DIP Credit Facility); and 4) default with respect to the European securitization agreement and 9.125%

Senior Notes (Deutsche mark denominated) agreement. The Company continues to accrue interest under the pre-petition Senior Secured Global Credit Facility and makes adequate protection payments subject to liquidity calculations prescribed in the DIP Credit Facility.

On May 10, 2002, the Company received final Bankruptcy Court approval of its $250.0 million DIP Credit Facility. The DIP Credit Facility was arranged by Citicorp N.A., and Salomon Smith Barney and is being used to supplement cash flows from operations during the reorganization process including the payment of certain post-petition ordinary course trade and other payables, the payment of permitted pre-petition claims, working capital needs, letter of credit requirements and other general corporate purposes.

Upon closing, approximately $129.0 million of the DIP Credit Facility was drawn down, $117.0 million being used to terminate and repurchase uncollected securitized accounts receivable under the Company’s then existing U.S. receivables sale facility and the balance for financing costs and related fees.

The revolving credit tranche of the facility provides for borrowings up to $121.0 million, of which up to $65.0 million is available to Exide Technologies for on-lending to its foreign subsidiaries, subject to borrowing base availability. An additional $50.0 million sub-facility is also available to the foreign subsidiaries based on certain collateral asset values in the United Kingdom and Canada. To the extent funds are borrowed under the DIP Credit Facility and on-lent to foreign subsidiaries, additional liens on certain assets of the borrowing foreign subsidiary and related guarantees are required. Up to $40 million of the revolving credit tranche is available for letters of credit.

Borrowings under the DIP Credit Facility bear interest at Libor plus 3.75% per annum. Borrowings are limited to eligible collateral under the DIP Credit Facility. Eligible collateral under the DIP Credit Facility includes certain accounts receivable and inventory in the U.S. and certain property in the U.S. and Europe. Availability to the Company is impacted by changes in both the amounts of the collateral and qualitative factors (such as aging of accounts receivable and inventory reserves) as well as cash requirements of the business such as trade credit terms. The DIP Credit Facility contains certain financial covenants requiring the Company to maintain specified levels of monthly earnings before interest, taxes, depreciation, amortization, restructuring and certain other defined charges, as well as limits on capital expenditures and cash restructuring expenditures. The DIP Credit Facility also contains other customary covenants, including certain reporting requirements and covenants that restrict the Company’s ability to incur indebtedness, create or incur liens or guarantees, enter into leases, sell or dispose of assets, change the nature of its business or enter into related party transactions. The Company believes it was in compliance with DIP Credit Facility covenants as of June 30, 2003. Based upon business plans updated in June 2003, the Company obtained amendments to its existing financial covenants in order to maintain compliance during fiscal 2004. The Standstill Agreement expires on December 18, 2003 and the DIP Credit Facility expires 30 days prior to the expiration of the Standstill Agreement (but no later, if the Standstill Agreement is extended, than February 15, 2004). If the Debtors do not have a plan of reorganization confirmed by the Bankruptcy Court before the expiration of these agreements, the Company will have to request extensions of such agreements. There can be no assurance that the Company will be able to have a plan confirmed by that time or obtain extensions. Failure to have a plan of reorganization confirmed by the Bankruptcy Court prior to the expiration of the Standstill Agreement or the DIP Credit Facility or to be able to obtain such extensions or failure to maintain compliance with the covenants in such agreements would result in an event of default which, absent cure within defined grace periods or obtaining appropriate waivers, would restrict the Company’s access to funds necessary to maintain its operations and assist in funding of its reorganization plan.

The DIP Credit Facility matures on the earlier of February 15, 2004, 30 days before the final maturity of any principal obligations under the pre-petition Senior Secured Global Credit Facility (currently scheduled for December 18, 2003) or the date the Company emerges from bankruptcy.

Total availability under the DIP Credit Facility as of August 7, 2003 and June 30, 2003 was $21.6 million and $23.6 million, respectively.

As described above, in connection with its bankruptcy filing, the Company also entered into a Standstill Agreement with its pre-petition Senior Secured Global Credit Facility lenders. Under the agreement the lenders agreed to forebear collection of any principal payments on foreign borrowings under this facility by non-Debtor subsidiaries until December 18, 2003, subject to earlier termination upon the occurrence of certain events. Borrowings under the pre-petition Senior Secured Global Credit Facility by the Debtors are subject to compromise.

Interest obligations for the non-Debtor subsidiaries continue to be accrued and paid when due. The Standstill Agreement contains essentially the same financial covenants as the DIP Credit Facility.

On May 31, 2002, the Company entered into a $177.5 million European accounts receivable securitization facility. This facility replaced the Company’s then existing $175 million European securitization program. This facility is accounted for as a secured borrowing in accordance with the requirements of SFAS 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”, whereby the accounts receivable and related borrowings are recorded on the Company’s unaudited condensed consolidated balance sheet.

Sources of Cash

The Company’s liquidity requirements have been met historically through operating cash flows, borrowed funds and the proceeds of sales of accounts receivable and sale-leaseback transactions. Additional cash has been generated in recent years from the sale of non-core businesses and assets.

The Company generated $17.9 million and $0.4 million in cash from the sale of non-core businesses and other assets in the first quarter of fiscal 2004 and fiscal 2003, respectively. On April 15, 2003, the Company sold its European non-lead battery assets for proceeds of $16.3 million. Of this amount, $13.2 million is held in escrow pursuant to the Company’s borrowing arrangements and is included in Restricted cash in the unaudited condensed consolidated balance sheet at June 30, 2003. Remaining proceeds from these sales were primarily used to reduce debt.

Total debt at June 30, 2003 was $1,826.3 million. See Note 11 to the unaudited condensed consolidated financial statements for composition of such debt. Pre-petition indebtedness of the Debtors, amounting to approximately $1,081.3 million, is subject to settlement under the plan of reorganization to be voted upon by creditors and equity holders and approved by the Bankruptcy Court.

Going forward, in addition to operating cash flows, the Company’s principal sources of liquidity will be the DIP Credit Facility, plus proceeds from any asset sales. The Company is considering various asset sales, and in connection therewith has engaged The Blackstone Group to evaluate potential opportunities.

Uses of Cash

The Company’s liquidity needs arise primarily from the funding of working capital needs, obligations on indebtedness and capital expenditures. Because of the seasonality of the Company’s business, more cash has been typically generated in the third and fourth fiscal quarters than the first and second fiscal quarters. Greatest cash demands from operations have historically occurred during the months of June through October.

Cash flows used in operating activities were $10.6 million in the first quarter of fiscal 2004. This compares to cash flows used in operating activities of $235.6 million (including $261.7 million usage of cash related to the net change from sales of receivables) in the first quarter of fiscal 2003. Excluding the effect of the accounts receivable securitization activity in the first quarter of fiscal 2003, comparative cash flows were negatively impacted by the effect of lower general sales volumes and higher payments of accounts payable and accrued expenses. The uncertainties of the Chapter 11 filing could also have an impact on the Company’s ability to attract and retain customers. NAPA, a major customer of the Transportation segment, advised the Company during the first quarter of fiscal 2003 of its intent to source certain of its requirements from competitors. The Company currently estimates that this action will likely result in potential lost sales of $15 million to $25 million annually.

Cash flows (used in) provided by financing activities were ($4.1) million and $263.3 million in the first quarter of fiscal 2004 and fiscal 2003, respectively. Cash flows (used in) provided by financing activities in both periods relate primarily to borrowings and repayments under the DIP Credit Facility and European asset securitization facility.

Prior to the Company’s Chapter 11 filing, and since that time, the Company has experienced a tightening of trade credit availability and terms. In the future there can be no assurance that the Company will be able to obtain and return to trade credit on terms traditionally obtained.

Capital expenditures were $11.7 million and $8.2 million in the first quarter of fiscal 2004 and fiscal 2003, respectively.

Financial Instruments and Market Risk

The Company’s ability to utilize financial instruments has been significantly restricted because of the Chapter 11 cases and the resultant tightening, and/or elimination of credit availability with counter-parties. At March 31, 2003, the Company had no outstanding hedging contracts. Accordingly, the Company is now exposed to greater risk with respect to its ability to manage exposures to fluctuations in foreign currencies, interest rates, and lead prices.

In the past, the Company used financial instruments, including fixed and variable rate debt as well as swap, forward and option contracts to finance its operations and to hedge interest rate currency and certain lead purchasing requirements. The swap, forward, and option contracts were entered into for periods consistent with related underlying exposures and did not constitute positions independent of those exposures. The Company did not enter into contracts for speculative purposes nor was it a party to any leveraged instruments.

Related Parties

The services of Lisa J. Donahue, Chief Restructuring Officer, are provided to the Company pursuant to a Services Agreement, dated October 25, 2001, between the Company and AP Services, LLC. Under the Services Agreement, the Company is charged an hourly fee for Ms. Donahue’s and other temporary employees’ services, and Ms. Donahue, a principal in AP Services, LLC, is compensated independently by AP Services, LLC. The agreement with AP Services, LLC also provides for payment of a one-time success fee upon the Company’s emergence from bankruptcy. AP Services, LLC is an affiliate of AlixPartners, LLC, a financial advisory and consulting firm specializing in corporate restructuring, which has been retained by the Company in connection with its financial restructuring. Ms. Donahue is also a principal in AlixPartners, LLC. Fees incurred by the Company during the first quarter of fiscal 2004 and 2003 under the Services Agreement were $3.0 million and $3.1 million, respectively.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

Changes to the quantitative and qualitative market risks as of June 30, 2003 are described in Management’s Discussion and Analysis—Liquidity and Capital Resources. Also, see the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2003 for further information.

Item 4. Controls and Procedures

The Company, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer, together with the other members of management participating in the evaluation, concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISION OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Except for historical information, this report may be deemed to contain “forward-looking” statements. The Company desires to avail itself of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”) and is including this cautionary statement for the express purpose of availing itself of the protection afforded by the Act.

Examples of forward-looking statements include, but are not limited to (a) projections of revenues, cost of raw materials, income or loss, earnings or loss per share, capital expenditures, growth prospects, dividends, the effect of currency translations, capital structure and other financial items, (b) statements of plans of and objectives of the Company or its management or Board of Directors, including the introduction of new products, or estimates or predictions of actions by customers, suppliers, competitors or regulating authorities, (c) statements of future economic performance and (d) statements of assumptions, such as the prevailing weather conditions in the Company’s market areas, underlying other statements and statements about the Company or its business.

Factors that could cause actual results to differ materially from these forward looking statements include, but are not limited to, the following General Factors such as: (i) the Company’s ability to implement business strategies and financial reorganization and restructuring plans, (ii) unseasonable weather (warm winters and cool summers) which adversely affects demand for automotive and some industrial batteries, (iii) the Company’s substantial debt and debt service requirements which restrict the Company’s operational and financial flexibility, as well as imposing significant interest and financing costs, (iv) the Company is subject to a number of litigation proceedings, the results of which could have a material adverse effect on the Company and its business, (v) the Company’s assets include the tax benefits of net operating loss carry forwards, realization of which are dependent upon future taxable income, (vi) lead, which experiences significant fluctuations in market price and which, as a hazardous material, may give rise to costly environmental and safety claims, can affect the Company’s results because it is a major constituent in most of the Company’s products, (vii) the battery markets in North America and Europe are very competitive and, as a result, it is often difficult to maintain margins, (viii) the Company’s consolidation and rationalization of acquired entities requires substantial management time and financial and other resources and is not without risk, (ix) foreign operations involve risks such as disruption of markets, changes in import and export laws, currency restrictions and currency exchange rate fluctuations, (x) the Company is exposed to fluctuations in interest rates on our variable debt which can affect the Company’s results, (xi) general economic conditions, (xii) the ability to acquire goods and services and/or fulfill labor needs at budgeted costs and Bankruptcy Considerations such as: (a) the Company’s ability to continue as a going concern, (b) the Company’s ability to operate in accordance with the terms of and maintain compliance with covenants of the DIP Credit Facility and other financing arrangements, (c), the Company’s ability to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 cases from time to time, (d) the Company’s ability to confirm and consummate a plan of reorganization with respect to the Chapter 11 cases, (e) the Company’s ability to attract, motivate and retain key personnel, (f) the Company’s ability to obtain and maintain normal terms with vendors and service providers, (g) the Company’s ability to maintain contracts that are critical to our business, and (h) the Company’s ability to attract and retain customers.

Therefore, the Company cautions each reader of this Report carefully to consider those factors hereinabove set forth, because such factors have, in some instances, affected and in the future could affect, the ability of the Company to achieve its projected results and may cause actual results to differ materially from those expressed herein.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Bankruptcy Considerations

Former Senior Executives and Battery Quality Matters

On March 23, 2001, the Company reached a plea agreement with the U.S. Attorney for the Southern District of Illinois, resolving an investigation into a scheme by former officers and certain corporate entities involving fraudulent representations and promises in connection with the distribution, sale and marketing of automotive batteries between 1994 and 1997. Under the terms of that settlement, the Company agreed to pay a fine of $27.5 million over five years, to five-years’ probation and to cooperate with the U.S. Attorney in her prosecution of Arthur M. Hawkins, Douglas N. Pearson and Alan E. Gauthier, former senior executives of the Company. The payment terms of the plea agreement are dependent upon the Company’s compliance with the plea agreement during the five-year probation period. Generally, the terms of the probation would permit the U.S. Government to reopen the case against the Company if the Company violates the terms of the plea agreement or other provisions of law. The plea agreement was lodged with the U.S. District Court for the Southern District of Illinois, and accepted on February 27, 2002. The Company reserved $31.0 million for this matter, including expected costs and out-of-pocket expenses, in the first quarter of fiscal 2001, and an additional $1.0 million in the third quarter of fiscal 2002. At June 30, 2003, approximately $27.5 million of this reserve remains and is classified as a Liability subject to compromise in the unaudited condensed consolidated financial statements. As a result of the imposition of the automatic stay arising upon the Company’s Chapter 11 filing, the Company has not made installment payments of its $27.5 million fine. The Company is uncertain as to the effect of these non-payments and the bankruptcy filing with respect to the plea agreement. On June 10, 2002, the United States Attorney’s Office for the Southern District of Illinois filed a claim as a general unsecured creditor for $27.9 million.

Private Party Lawsuits

Active Lawsuits

In June 2002, the following lawsuit was filed in Louisiana state court: Hardy et. al. v. Ducote Wrecking, et. al. The case was filed as a putative class action for damages brought by two employees of Ducote Wrecking & Demolition, an independent contractor performing multiple maintenance projects at the Company’s Baton Rouge, Louisiana facility. The plaintiffs allege that while they were engaged in work at the Company’s facility, they were intentionally exposed to and poisoned by lead, acid, and other heavy metals. Plaintiffs named the Company’s insurance carriers and supervisory employee as defendants, along with Ducote. The case was removed to the U.S. District Court for the Western District of Louisiana. Plaintiffs filed a motion to remand, which was denied by the Court in a January 2003 decision. In the same January 2003 decision, the Court dismissed the Company’s supervisory employee and the independent contractor defendant from the litigation. The Court also has denied plaintiffs’ motion for class certification. The Company’s insurer has issued a reservation of rights as to the Company’s coverage for the alleged claims.

On April 11, 2003, the following lawsuit was filed in the Delaware Court of Chancery by the official committee of equity holders and its members: Kandathil et. al. v. Exide. The complaint seeks to compel the Company to convene a meeting of stockholders. On April 21, 2003, the Debtors filed a complaint against the official committee of equity holders and its members in the Bankruptcy Court seeking to enjoin their attempts to compel the Company to convene a meeting of stockholders. Hearings on the two complaints are currently scheduled for August 2003.

Exide is a defendant in an arbitration proceeding initiated in October of 2001 by Margulead Limited (“Margulead”). In June of 1997, GNB, now an operating division of Exide, entered into an agreement with Margulead, which Margulead contended obligated the Company to build a facility to test and develop certain lead acid battery recycling technology allegedly developed by Margulead. GNB terminated the contract in 1998. Exide contended, in part, that the Margulead process was not ready for pilot plant implementation and also failed to meet success criteria. Margulead claimed approximately $13 million in damages. The Company denied that it was liable and defended the matter in the arbitration. An arbitration decision was rendered on May 7, 2003, determining that the contract was unenforceable and that neither party was entitled to damages or costs. Margulead asked the arbitrator to reconsider the decision. Margulead has now advised the Company that it intends to challenge the arbitrator’s award in the English commercial court. On or about July 23, 2003, Margulead filed an Application Notice advising of its intent to apply for an extension of time in which to make an application under certain sections of the Arbitration Act of 1996. The Company does not believe it is likely that Margulead will succeed in any challenge of the arbitrator’s decision.

In November 2002, the following lawsuit was filed in the Ontario Court of Justice: Exide Canada, Inc., v. Lorne Hilts et. al. This lawsuit was initiated by Exide Canada, Inc. against former officers, employees and a former logistics services vendor seeking in excess of $1.5 million in damages on multiple grounds including breach of trust, breach of contract and fraud. Defendant Hilts filed a counterclaim against Exide Canada for severance and other benefits and seeks damages in an amount exceeding $0.6 million. Defendant Ryad counterclaimed against Exide Canada alleging breach of contract and against Exide Technologies alleging it induced Exide Canada to breach its contract with Ryad for certain logistics services. Ryad seeks damages against each defendant in an amount exceeding $6.3 million. The Company believes that the counterclaims are without merit and is vigorously defending itself.

Stayed Pre-Petition Lawsuits

In July 2001, Pacific Dunlop Holdings (US), Inc. (“PDH”) and several of its foreign affiliates under the various agreements through which Exide and its affiliates acquired GNB, filed a complaint in the Circuit Court for Cook County, Illinois alleging breach of contract, unjust enrichment and conversion against Exide and three of its foreign affiliates. The plaintiffs maintain they are entitled to approximately $17.0 million in cash assets acquired by the defendants through their acquisition of GNB. In December 2001, the Court denied the defendants’ motion to dismiss the complaint, without prejudice to re-filing the same motion after discovery proceeds. The defendants have filed an answer and counterclaim. On July 8, 2002, the Court authorized discovery to proceed as to all parties except Exide. In August 2002, the case was removed to the U.S. Bankruptcy Court for the Northern District of Illinois and in October 2002, the parties presented oral arguments, in the case of PDH, to remand the case to Illinois state court and, in the case of Exide, to transfer the case to the U.S. Bankruptcy Court for the District of Delaware. On February 4, 2003, the U.S. Bankruptcy Court for the Northern District of Illinois transferred the case to the U.S. Bankruptcy Court in Delaware, where plaintiffs’ motion to abstain or remand will be heard. To the extent this action implicates Exide’s interests, the Company plans to vigorously defend the action and pursue the counterclaim.

In December 2001, PDH filed a separate action in the Circuit Court for Cook County, Illinois seeking recovery of approximately $3.1 million for amounts allegedly owed by Exide under various agreements between the parties. The claim arises from letters of credit and other security allegedly provided by PDH for GNB’s performance of certain of GNB’s obligations to third parties that PDH claims Exide was obligated to replace. Exide’s answer contested the amounts claimed by PDH and Exide filed a counterclaim. Although this action has been consolidated with the Cook County suit concerning GNB’s cash assets, the claims relating to this action are currently subject to the automatic bankruptcy stay, and have been transferred to the U.S. Bankruptcy Court for the District of Delaware.

Between March and September 2002, the following cases were filed in the U.S. District Court for the Middle District of Louisiana: Joseph et. al. v. Exide; Andrews et. al. v. Exide; and Armstead v. Exide. These actions seek monetary damages and injunctive relief for alleged racial discrimination in the Company’s Shreveport and Baton Rouge, Louisiana plants. The Joseph and Andrews cases have been consolidated and all three lawsuits have been stayed.

contribution, injunctive relief under RCRA and declaratory relief under state law. The Company has filed counterclaims against plaintiff and other potentially responsible parties.

Environmental Matters

As a result of its multinational manufacturing, distribution and recycling operations, the Company is subject to numerous federal, state and local environmental, occupational safety and health laws and regulations, as well as similar laws and regulations in other countries in which the Company operates (collectively “EH&S laws”). The Company is exposed to liabilities under such EH&S laws arising from its past handling, release, storage and disposal of hazardous substances and hazardous wastes. The Company previously has been advised by the U.S. Environmental Protection Agency or state agencies that it is a “Potentially Responsible Party” (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) or similar state laws at 91 federally defined Superfund or state equivalent sites. At 44 of these sites, the Company has paid its share of liability. The Company is currently paying its share of liability at one site. The Company expects its liability will be compromised upon confirmation of a plan of reorganization by the Bankruptcy Court as to a number of additional Superfund sites. In most instances, the Company’s remaining obligations are not expected to be significant because its portion of any potential liability appears to be minor or insignificant in relation to the total liability of all identified PRPs that are financially viable. The Company’s share of the anticipated remediation costs associated with all of the Superfund sites where it has been named a PRP, based on the Company’s estimated volumetric contribution of waste to each site, is included in the environmental remediation reserves discussed below.

statements. Because environmental liabilities are not accrued until a liability is determined to be probable and reasonably estimable, not all potential future environmental liabilities have been included in the Company’s environmental reserves and, therefore, additional earnings charges are possible. Also, future findings or changes in estimates could have a material effect on the recorded reserves and cash flows.

In the U.S., the Company has advised each state and federal authority with whom it has negotiated plans for environmental investigations or remediation of the Debtors’ Chapter 11 filing as required by those agreements or applicable rules. In some cases these authorities may require the Company to undertake certain agreed remedial activities under a modified schedule, or may seek to negotiate or require modified remedial activities. Such requests have been received at several sites and are the subject of ongoing discussions. At this time no requests or directives have been received which, individually or in the aggregate, would materially alter the Company’s reserves or have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

Tampa, Florida

The Tampa site is a former secondary lead smelter, lead oxide production facility, and sheet lead-rolling mill that operated from 1943 to 1989. Under a RCRA Part B Closure Permit and a Consent Decree with the State of Florida, Exide is required to investigate and remediate certain historic environmental impacts to the site. Cost estimates for remediation (closure and post-closure) range from $12.5 million to $20.5 million depending on final State of Florida requirements. The remediation activities are expected to occur over the course of several years.

Columbus, Georgia

Sonalur, Portugal

Other

In February 2002, the Company’s principal French subsidiary was notified by local competition authorities that in connection with certain sales of batteries by several French manufacturers in 1996 and 1997, the subsidiary is alleged to have violated local competition laws. The civil investigative agency in the case has recommended a fine be imposed on the Company for $6.8 million, but the Company does not believe that the subsidiary acted improperly and intends to defend this matter vigorously. A judicial decision with respect to this matter is expected within the next 90 days.

calendar years 2001, 2002 and 2003, respectively. In addition, CEAC has been adjudged liable to indemnify the agency for approximately $45 thousand, $78 thousand, and $200 thousand during the same periods to date for the dependents of four such claimants. Although the Company cannot predict the number or size of any future claims, after consultation with legal counsel the Company does not believe resolution of the current or any future claims, individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

The Company is involved in various other claims and litigation incidental to the conduct of its business. Based on consultation with legal counsel, the Company does not believe that any such claims or litigation to which the Company is a party, either individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

Item 2. Changes in Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

As a result of the Chapter 11 cases, certain of the Company’s pre-petition debt arrangements are in default. See Note 2 (Proceedings Under Chapter 11 of the Bankruptcy Code) and Note 11 (Debt) to the Company’s unaudited condensed consolidated financial statements.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8-K

(a)

Exhibits.

4.30

Seventh Amendment and Waiver to the Credit Agreement, dated July 29, 2003, to the Secured Super Priority Debtor In Posession Credit Agreement.

4.31

Fifth Amendment and Waiver to the Standstill Agreement, dated as of July 29, 2003, to the Standstill Agreement and Fifth Amendment to the Credit Agreement.

31.1

Certification of Craig H. Muhlhauser, Chairman, President and Chief Executive Officer, pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

31.2

Certification of Biagio N. Vignolo, Jr., Executive Vice President and Chief Financial Officer, pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

Certifications pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

(b)

Reports on Form 8-K.

None.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

EXIDE TECHNOLOGIES

By:		/s/ BIAGIO N. VIGNOLO, JR.

		Biagio N. Vignolo, Jr. Executive Vice President and Chief Financial Officer Date: August 14, 2003

EXIDE TECHNOLOGIES

By:		/s/ IAN J. HARVIE

		Ian J. Harvie Vice President, Corporate Controller Date: August 14, 2003

EX-4.30 3 dex430.txt 7TH AMENDMENT TO THE CREDIT AGREEMENT Exhibit 4.30 EXECUTION COPY Seventh Amendment and Waiver to The Credit Agreement This Seventh Amendment and Waiver to The Credit Agreement dated as of July 29, 2003 (this "Seventh Amendment and Waiver"), is entered into among Exide Technologies, a Delaware corporation and a debtor and a debtor in possession (the "Company"); Exide Delaware LLC, a Delaware limited liability company ("Exide LLC" ); Exide Illinois, Inc., a Pennsylvania corporation ("Exide Illinois"); RBD Liquidation, LLC, a Delaware limited liability company ("RBD"; together with the Company, Exide LLC and Exide Illinois, the "Borrowers"); GNB Battery Technologies Japan, Inc., a Delaware corporation ("GNB"; and together with the Borrowers, the "Domestic Guarantors"); the Lenders party hereto; and Citicorp USA, Inc. ("CUSA"), as agent for the Lenders and the Issuers (in such capacity, the "Administrative Agent") and as collateral monitoring agent (in such capacity, the "Collateral Monitoring Agent"), and amends that certain Credit Agreement dated as of April 15, 2002 and amended as of a First Amendment dated as of May 17, 2002, a Second Amendment dated as of June 10, 2002, a Third Amendment and Waiver dated as of December 18, 2002, a Fourth Amendment and Waiver dated as of March 31, 2003, a Fifth Amendment and Waiver dated as of April 11, 2003 and a Sixth Amendment dated as of June 13, 2003 (as amended hereby and as the same may be further amended, supplemented or otherwise modified from time to time, the "Credit Agreement") entered into among the Borrowers, the Domestic Guarantors, the Lenders, the Issuers, and CUSA as Administrative Agent and Collateral Monitoring Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement. W I T N E S S E T H: WHEREAS, the Company has requested (i) that certain provisions of the Credit Agreement be amended, (ii) that the Lenders waive compliance with certain provisions of the Credit Agreement and (iii) that certain transactions be permitted, all as more particularly set forth herein; WHEREAS, pursuant to Section 13.1(a) (Amendments, Waivers, Etc.) of the Credit Agreement, the consent of the Requisite Lenders is required to modify certain portions of the Credit Agreement and permit certain transactions as requested by the Company; NOW, THEREFORE, in consideration of the above premises, the parties hereto hereby agree as follows: Section 1. Seventh Amendment to the Credit Agreement. The Credit Agreement is, effective as of the Seventh Amendment Effective Date (as defined below), hereby amended as follows: (a) Article I of the Credit Agreement is amended by adding the following new definition in the appropriate alphabetical order: "Shuttered Assets" means all non-operational assets including, but not limited to all Real Property, personal property and equipment owned by any Borrower or any of such Borrower's Subsidiaries which is no longer used and for which such Borrower or such Subsidiary has no future intention of use." (b) Section 2.9(k) of the Credit Agreement is amended (i) by deleting, in the fourth line thereof, the figure "$1,000,000" and replacing such figure with "$5,000,000" and (ii) by deleting, in the fourth line thereof, the phrase "on the next Business Day" and replacing such phrase with "on the fifth Business Day thereafter"; (c) Section 8.4(j) is amended by deleting the word "and" at the end thereof; (d) Section 8.4(k) is deleted in its entirety and replaced with the following: "(k) the sale of Shuttered Assets so long as (i) the aggregate amount of all Shuttered Assets so sold does not exceed $15,000,000 and (ii) prior to any sale of Shuttered Assets, the Company shall have delivered to the Administrative Agent a certificate, signed by a Responsible Officer of the Company, certifying that such sale is a sale of Shuttered Assets; and" (e) Section 8.4(k) is amended by adding a new Section 8.4(1) before the proviso at the end thereof to read as follows: "(1) so long as no Default or Event of Default is continuing or would result therefrom, any other Asset Sale for Fair Market Value, payable in cash upon such sale (or, to the extent previously consented to by the Administrative Agent, payable for at least seventy-five percent (75%) cash; provided, however, that with respect to any such Asset Sale pursuant to this clause (l), (i) the aggregate consideration received for the sale of all assets sold during (1) the Fiscal Year ending March 31, 2003 shall not exceed $10,000,000 and (2) any Fiscal Year thereafter shall not exceed $10,000,000 and (ii) all Net Cash Proceeds of such Asset Sale are applied as set forth in and as required by Section 2.9 (Mandatory Prepayments);" Section 2. Consent and Waiver to the Credit Agreement. Effective as of the Seventh Amendment Effective Date (as defined below) and subject to the terms and conditions set forth herein, the Administrative Agent and the Requisite Lenders hereby consent to the following transaction and grant a waiver in respect thereof as follows: (i) The Administrative Agent and the Requisite Lenders hereby consent to the sale by Exide Italia S.r.L. ("Exide Italia") to Iorio Trasporti e Logistica S.r.L. of certain unoccupied buildings and a portion of the real estate located in Casalnuovo, Naples, Italy for approximately (euro)9,000,001 in cash (the 2 "Exide Italia Sale"), provided, that the proceeds from the Exide Italia Sale are received by Exide Italia approximately as follows: (euro)1,032,000 deposit paid July 14, 2003, (euro)1,437,500 due December 31, 2003 and (euro)6,530,501 due March 31, 2004; (ii) The Administrative Agent and the Requisite Lenders hereby waive the requirements of Section 8.4 (Sale of Assets) of the Credit Agreement solely with respect to the completion of the Exide Italia Sale as set forth in clauses (i) above; and (iii) The Administrative Agent and the Requisite Lenders hereby agree that no part of the aggregate consideration received for the Exide Italia Sale shall be applied to the $10,000,000 limit referred to in Section 8.4(l) (Sale of Assets) (as amended hereby) of the Credit Agreement. Section 3. Covenants. The Company and each Loan Party a party hereto agrees with the Lenders and the Administrative Agent to each of the following: (i) The Company shall provide proof of receipt to the Administrative Agent of payment of each portion of the proceeds of the Exide Italia Sale immediately upon receipt thereof. (ii) Immediately following the consummation of the Exide Italia Sale, and receipt of any proceeds therefrom, Exide Italia shall apply such proceeds in accordance with Section 2.9 (Mandatory Prepayments) of the Credit Agreement. Section 4. Conditions Precedent to the Effectiveness of this Seventh Amendment and Waiver. This Seventh Amendment and Waiver shall become effective as of the date hereof on the date (the "Seventh Amendment Effective Date") when the following conditions precedent have been satisfied: (i) Certain Documents. The Administrative Agent shall have received on or before the Seventh Amendment Effective Date all of the following, all of which shall be in form and substance satisfactory to the Administrative Agent, in sufficient quantity and, as applicable, originally executed for each of the Lenders: (A) this Seventh Amendment and Waiver executed by the Borrowers, the Domestic Guarantors, sufficient Lenders to constitute the Requisite Lenders and the Administrative Agent; (B) a Fifth Amendment and Waiver to the Standstill Agreement, dated as of the date hereof, executed by the Standstill Parties signatory thereto, the Standstill Lenders and the Pre-Petition Agent; 3 (C) A description of the nature and material terms and conditions of the Exide Italia Sale including a detailed description of the structure of the transaction and each specific asset to be sold and showing the flow of funds; and (D) such additional documentation as the Administrative Agent or, if appropriate, the Requisite Lenders may reasonably require. (ii) Representations and Warranties. Each of the representations and warranties made by the Borrowers or the other Loan Parties in or pursuant to the Credit Agreement, as amended by this Seventh Amendment and Waiver, and the other Loan Documents to which the Borrowers or any of the other Loan Parties is a party or by which the Borrowers or any of the Loan Parties is bound, shall be true and correct in all material respects on and as of the Seventh Amendment Effective Date (other than representations and warranties in any such Loan Document expressly that are limited to a specific date). (iii) Corporate and Other Proceedings. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Seventh Amendment and Waiver shall be satisfactory in all respects, including without limitation, form and substance, to the Administrative Agent in its sole discretion. (iv) No Events of Default. No Event of Default or Default shall have occurred and be continuing on the Seventh Amendment Effective Date. (v) Payment of Costs, Fees and Expenses. All costs, fees and expenses due and owing under any Loan Documents or Fee Letters to the Administrative Agent and the Lenders shall have been paid in full and legal counsel, including but not limited to, all foreign counsel, to the Administrative Agent shall have been paid all outstanding fees and expenses due and owing in connection with the Credit Agreement, the other Loan Documents and this Seventh Amendment and Waiver. Section 5. Representations and Warranties. Each Borrower and each Domestic Guarantor hereby represents and warrants to the Lenders that (a) as of the date hereof, and after giving effect to the amendments contained herein, no Event of Default or Default under the Credit Agreement shall have occurred and be continuing and (b) all of the representations and warranties of such Borrower and such Domestic Guarantor contained in Article IV (Representations and Warranties) of the Credit Agreement and in any other Loan Document are true and correct as of the date of execution hereof in all material respects, as though made on and as of such date (other than representations and warranties in any such Loan Document expressly that are limited to a specific date). 4 Section 6. Reference to and Effect on the Loan Documents. (a) Upon the effectiveness of this Seventh Amendment and Waiver, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like import, and each reference in the other Loan Documents to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. (b) Except as specifically amended hereby, all of the terms of the Credit Agreement and all other Loan Documents shall remain unchanged and in full force and effect. (c) The execution, delivery and effectiveness of this Seventh Amendment and Waiver shall not operate as a waiver of any right, power or remedy under the Credit Agreement or any of the Loan Documents of any Lender, any Issuer, the Administrative Agent, the Collateral Monitoring Agent, or the Swing Loan Lender nor constitute a waiver of any provision of the Credit Agreement or any of the Loan Documents. Section 7. Fees, Costs and Expenses. The Borrowers and the Domestic Guarantors agree to pay on demand in accordance with the terms of Section 13.3 (Costs and Expenses) of the Credit Agreement all costs and expenses of the Administrative Agent in connection with the preparation, reproduction, execution and delivery of this Seventh Amendment and Waiver and all other Loan Documents entered into in connection herewith, including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent with respect thereto. Section 8. Execution in Counterparts. This Seventh Amendment and Waiver may be executed and delivered in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which taken together shall constitute one and the same original agreement. Section 9. Affirmation of Guaranties. Each of the Domestic Guarantors hereby consents to the terms of this Seventh Amendment and Waiver in its capacity as a guarantor under the Credit Agreement and agrees that the terms of this Seventh Amendment and Waiver shall not affect in any way its obligations and liabilities under its Guaranty or any other Loan Document to which it is a party, all of which obligations and liabilities shall remain in full force and effect and each of which is hereby reaffirmed. Section 10. Governing Law. This Seventh Amendment and Waiver shall be interpreted, and the rights and liabilities of the parties determined, in accordance with the internal law of the State of New York. [Signature Pages Follow] 5 IN WITNESS WHEREOF, this Seventh Amendment and Waiver has been duly executed on the date set forth above. EXIDE TECHNOLOGIES, a debtor and a debtor in possession as a Borrower and a Domestic Guarantor By: /s/ Illegible ------------------------------- Name: Illegible Title: General Counsel EXIDE DELAWARE LLC, a debtor and a debtor in possession as a Borrower and a Domestic Guarantor By: /s/ Illegible ------------------------------- Name: Illegible Title: General Counsel RBD LIQUIDATION, LLC, a debtor and a debtor in possession as a Borrower and a Domestic Guarantor By: /s/ Illegible ------------------------------- Name: Illegible Title: General Counsel GNB BATTERY TECHNOLOGIES JAPAN, INC., as a Domestic Guarantor By: /s/ Illegible ------------------------------- Name: Title: EXIDE ILLINOIS, INC., a debtor and a debtor in possession as a Borrower and a Domestic Guarantor By: ------------------------------- Name: Title: GNB BATTERY TECHNOLOGIES JAPAN, INC., as a Domestic Guarantor By: ------------------------------- Name: Title: EXIDE ILLINOIS, INC., a debtor and a debtor in possession as a Borrower and a Domestic Guarantor By: /s/ Illegible ------------------------------- Name: Illegible Title: General Counsel Citicorp USA, Inc., as Administrative Agent, Swing Loan Lender, Collateral Monitoring Agent, and a Lender By: /s/ Keith R. Gerding ------------------------------- Name: Keith R. Gerding Title: Vice President Citibank, N.A., as Issuer By: /s/ Keith R. Gerding ------------------------------- Name: Keith R. Gerding Title: Vice President Other Lenders: CIT GROUP BUSINESS CREDIT By: /s/ Roderick Jarrett ------------------------------- Name: Roderick Jarrett Title: Assistant Vice President THE BANK OF NOVA SCOTIA, NEW YORK AGENCY By: ------------------------------- Name: Daniel A. Castigan Title: Director BEAR STEARNS & CO., INC. By: ------------------------------- Name: John E. McDermott Title: Senior Managing Director GE CAPITAL CFE, INC. By: -------------------------------- Name: William E. Magee Title: Duly Authorized Signatory CREDIT AGRICOLE INDOSUEZ By: ------------------------------- Name: Frederick W. Aase Title: Vice President By: ------------------------------- Name: Leo von Reissig Title: Vice President LEHMAN COMMERCIAL PAPER, INC. By: ------------------------------- Name: Frank P. Turner Title: Authorized Signatory Other Lenders: CIT GROUP BUSINESS CREDIT By: ------------------------------- Name: Roderick Jarrett Title: Assistant Vice President THE BANK OF NOVA SCOTIA, NEW YORK AGENCY By: /s/ Daniel A. Castigan ------------------------------- Name: Daniel A. Castigan Title: Director BEAR STEARNS & CO., INC. By: ------------------------------- Name: John E. McDermott Title: Senior Managing Director GE CAPITAL CFE, INC. By: -------------------------------- Name: William E. Magee Title: Duly Authorized Signatory CREDIT AGRICOLE INDOSUEZ By: ------------------------------- Name: Frederick W. Aase Title: Vice President By: ------------------------------- Name: Leo von Reissig Title: Vice President LEHMAN COMMERCIAL PAPER, INC. By: ------------------------------- Name: Frank P. Turner Title: Authorized Signatory Other Lenders: CIT GROUP BUSINESS CREDIT By: ------------------------------- Name: Roderick Jarrett Title: Assistant Vice President THE BANK OF NOVA SCOTIA, NEW YORK AGENCY By: ------------------------------- Name: Daniel A. Castigan Title: Director BEAR STEARNS & CO., INC. By: /s/ John E. McDermott ------------------------------- Name: John E. McDermott Title: Senior Managing Director GE CAPITAL CFE, INC. By: -------------------------------- Name: William E. Magee Title: Duly Authorized Signatory CREDIT AGRICOLE INDOSUEZ By: ------------------------------- Name: Frederick W. Aase Title: Vice President By: ------------------------------- Name: Leo von Reissig Title: Vice President LEHMAN COMMERCIAL PAPER, INC. By: ------------------------------- Name: Frank P. Turner Title: Authorized Signatory Other Lenders: CIT GROUP BUSINESS CREDIT By: ------------------------------- Name: Roderick Jarrett Title: Assistant Vice President THE BANK OF NOVA SCOTIA, NEW YORK AGENCY By: ------------------------------- Name: Daniel A. Castigan Title: Director BEAR STEARNS & CO., INC. By: ------------------------------- Name: John E. McDermott Title: Senior Managing Director GE CAPITAL CFE, INC. By: -------------------------------- Name: William E. Magee Title: Duly Authorized Signatory CREDIT AGRICOLE INDOSUEZ By: ------------------------------- Name: Frederick W. Aase Title: Vice President By: ------------------------------- Name: Leo von Reissig Title: Vice President LEHMAN COMMERCIAL PAPER, INC. By: /s/ Frank P. Turner ------------------------------- Name: Frank P. Turner Title: Authorized Signatory SPCP GROUP LLC By: ------------------------------- Name: Title: GOLDMAN SACHS CREDIT PARTNERS L.P. By: ------------------------------ Name: John Makrinos Title: Authorized Signature FOOTHILL INCOME TRUST, L.P. By: FIT GP, LLC, its General Partner By: /s/ Jeff Nikora --------------------------- Name: Jeff Nikora Title: Managing Member FOOTHILL INCOME TRUST II, L.P. By: FIT II GP, LLC, its General Partner By: /s/ Jeff Nikora --------------------------- Name: Jeff Nikora Title: Managing Member ENDURANCE CLO I, LTD. By: ING Capital Advisors LLC, as Portfolio Manager By: --------------------------- Name: Phillip C. Robbins Title: Director EATON VANCE SENIOR INCOME TRUST By: Eaton Vance Management as Investment Advisor By: --------------------------- Name: Scott H. Page Title: Vice President US BANK NATIONAL ASSOCIATION By: /s/ Suzanne E. Geiger ------------------------------- Name: Suzanne E. Geiger Title: Senior Vice President CANADIAN IMPERIAL BANK OF COMMERCE By: ------------------------------- Name: John Livingston Title: Authorized Signatory SUMITOMO MITSUI BANKING CORPORATION By: ------------------------------- Name: William M. Ginn Title: General Manager EATON VANCE SENIOR INCOME TRUST By: Eaton Vance Management as Investment Advisor By: --------------------------- Name: Scott H. Page Title: Vice President US BANK NATIONAL ASSOCIATION By: ------------------------------- Name: Suzanne E. Griger Title: Senior Vice President CANADIAN IMPERIAL BANK OF COMMERCE By: /s/ John Livingston ------------------------------- Name: John Livingston Title: Authorized Signatory SUMITOMO MITSUI BANKING CORPORATION By: ------------------------------- Name: William M. Ginn Title: General Manager EATON VANCE SENIOR INCOME TRUST By: Eaton Vance Management as Investment Advisor By: --------------------------- Name: Scott H. Page Title: Vice President US BANK NATIONAL ASSOCIATION By: ------------------------------- Name: Suzanne E. Griger Title: Senior Vice President CANADIAN IMPERIAL BANK OF COMMERCE By: ------------------------------- Name: John Livingston Title: Authorized Signatory SUMITOMO MITSUI BANKING CORPORATION By: /s/ William M. Ginn ------------------------------- Name: William M. Ginn Title: General Manager EATON VANCE SENIOR INCOME TRUST By: Eaton Vance Management as Investment Advisor By: --------------------------- Name: Scott H. Page Title: Vice President US BANK NATIONAL ASSOCIATION By: ------------------------------- Name: Suzanne E. Griger Title: Senior Vice President CANADIAN IMPERIAL BANK OF COMMERCE By: ------------------------------- Name: John Livingston Title: Authorized Signatory SUMITOMO MITSUI BANKING CORPORATION By: ------------------------------- Name: William M. Ginn Title: General Manager TRS1 LLC By: /s/ Deborah O'Keeffe ------------------------------- Name: Deborah O'Keeffe Title: Vice President EX-4.31 4 dex431.txt 5TH AMENDMENT AND WAIVER AND CONSENT TO THE STANDSTILL AGREEEMENT Exhibit 4.31 EXECUTION COPY FIFTH AMENDMENT AND WAIVER TO THE STANDSTILL AGREEMENT FIFTH AMENDMENT AND WAIVER TO THE STANDSTILL AGREEMENT, dated as of July 29, 2003 (this "Amendment"), to the Standstill Agreement and Fifth Amendment to the Credit Agreement dated as of April 15, 2002 (as amended, supplemented or otherwise modified from time to time, the "Standstill Agreement"), among the Borrowing Subsidiaries signatories thereto, the Foreign Subsidiary Guarantors signatories thereto, GNB Battery Technologies Japan, Inc., (GNB Battery Technologies Japan, Inc., together with the Borrowing Subsidiaries and the Foreign Subsidiary Guarantors, the "Standstill Parties"), the Standstill Lenders (as defined in the Credit Agreement), Credit Suisse First Boston, as administrative agent (in such capacity, the "Administrative Agent") for the Standstill Lenders, and others. PRELIMINARY STATEMENTS (1) The Company has requested that the DIP Lenders amend and waive compliance with certain provisions of the Post-Petition Credit Agreement, including amendments and waivers of certain of the Cross Referenced Covenants incorporated by reference in the Standstill Agreement, and that certain transactions be permitted as more particularly set forth herein. (2) The Standstill Parties have requested that the Standstill Lenders waive certain provisions of the Standstill Agreement to permit a certain transaction and amend certain Cross Referenced Covenants. The Standstill Lenders are willing to amend such provisions and consent to such a transaction upon and subject to the terms and conditions hereinafter set forth. NOW, THEREFORE, the parties hereto hereby agree as follows: SECTION 1. Defined Terms. Unless otherwise specified, terms defined in the Standstill Agreement or the Credit Agreement and used herein shall have the meanings given to them in the Standstill Agreement or the Credit Agreement, as applicable. SECTION 2. Amendments to Standstill Agreement. On the Effective Date (as hereinafter defined), (i) the Cross Referenced Covenants 8.4(j) and 8.4(k) in Section 6 of the Standstill Agreement shall be amended as set forth in the "Seventh Amendment to the Credit Agreement" attached hereto as Exhibit A and shall continue to be incorporated by reference as if fully set forth in the Standstill Agreement as so amended; and (ii) Section 8.4(1) as set forth in the "Seventh Amendment to the Credit Agreement" attached hereto as Exhibit A shall be incorporated by reference as if fully set forth in the Standstill Agreement and all defined terms in those sections shall have the meanings given those terms in Section 1.1 of the Post-Petition Credit Agreement except that each reference to the "Administrative Agent" shall be deemed to be a reference to the Administrative Agent under the Credit Agreement. SECTION 3. Waiver and Consent. Effective as of the Effective Date (as defined below) and subject to the terms and conditions set forth herein, the Required Standstill Lenders hereby waive the requirements of Cross Referenced Covenant 8.4 in Section 6 of the Standstill Fifth Amendment and Waiver to Standstill Agreement 2 Agreement (as such Cross Referenced Covenant was set forth in the Post-Petition Credit Agreement as in effect prior to the Third Amendment and Waiver to the Post-Petition Credit Agreement) solely to consent to and permit the sale by Exide Italia S.r.L. ("Exide Italia") to Iorio Trasporti e Logistica S.r.L. of certain unoccupied buildings and a portion of the real estate located in Casalnuovo, Naples, Italy for approximately (euro)9,000,001 in cash (the "Exide Italia Sale"), provided, that the proceeds from the Exide Italia Sale are received by Exide Italia approximately as follows: (euro)1,032,000 deposit paid July 14, 2003, (euro)1,437,500 due December 31, 2003 and (euro)6,530,501 due March 31, 2004. The Administrative Agent and the Required Standstill Lenders agree that no part of the aggregate consideration received for the Exide Italia Sale hereby shall be applied to the $10,000,000 limit referred to in Cross Referenced Covenant 8.4(1) (as amended hereby) of the Post-Petition Credit Agreement. SECTION 4. Conditions to Effectiveness. This Amendment shall be effective on the date on which the Administrative Agent shall have signed the Amendment and all of the following conditions precedent have been satisfied (the "Effective Date"): (a) Certain Documents. The Administrative Agent shall have received on or before the Effective Date all of the following, each of which shall be in form and substance satisfactory to the Administrative Agent: (i) this Amendment, executed and delivered by (w) sufficient Standstill Lenders to constitute the Required Standstill Lenders, (x) each of the Standstill Parties, (y) the Administrative Agent and (z) the Escrow Agent; (ii) an executed copy of the Seventh Amendment to the Post-Petition Credit Agreement in form and substance satisfactory to the Administrative Agent (in consultation with the Steering Committee); (iii) a description of the nature and material terms and conditions of the Exide Italia Sale including a detailed description of the structure of the transaction and each specific asset to be sold and showing the flow of funds; and (iv) such additional documentation as the Administrative Agent may reasonably require or as requested by the Post-Petition Administrative Agent or any of the DIP Lenders. (b) Corporate and Other Proceedings. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Amendment shall be satisfactory in all respects in form and substance to the Administrative Agent. (c) No Events of Default. After giving effect to the Amendment, no Standstill Event shall have occurred and be continuing, and the representations and warranties contained in the Standstill Agreement shall be correct in all material respects as though made on and as of the Effective Date. (d) Payment of Costs, Fees and Expenses. All accrued and unpaid fees and expenses of the Administrative Agent in connection with this Amendment including, without Fifth Amendment and Waiver to Standstill Agreement 3 limitation, the unpaid fees and expenses of counsel to the Administrative Agent (including United States and local counsel in foreign jurisdictions) shall have been paid. SECTION 5. Covenant. (a) Except upon written consent of the Administrative Agent, in consultation with the Steering Committee, none of Exide Italia nor any other Standstill Party shall transfer, direct transfer, or otherwise make payments in any manner from the proceeds of the Exide Italia Sale except to transfer the proceeds of the Exide Italia Sale to the Escrow Account promptly upon receipt thereof. (b) The Escrow Agent agrees that immediately upon receipt of the Exide Italia Sale proceeds in the Escrow Account, it shall provide written acknowledgment to the Administrative Agent that it has received such proceeds (including the amount of such proceeds) and is holding them pursuant to the terms of the Intercreditor Agreement. SECTION 6. Representations and Warranties. To induce the Standstill Lenders parties hereto to enter into this Amendment, each of the Standstill Parties hereby represents and warrants to the Administrative Agent and all of the Standstill Lenders the following: (a) The execution, delivery and performance by each Standstill Party of the Amendment and the Loan Documents to which it is a party, as amended hereby, are within such Standstill Party's corporate powers, have been duly authorized by all necessary corporate action, and do not (i) contravene such Standstill Party's Constituent Documents, (ii) violate any law (including, without limitation, the Securities Exchange Act of 1934), rule, regulation (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree, determination or award applicable to such Standstill Party, or (iii) conflict with or result in the breach of, or constitute a default under, any Contractual Obligation, including, without limitation, the bilateral loan documents, of EHE, EHA or any of their Subsidiaries. As of the Effective Date, no Standstill Party is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or breach of which is reasonably expected to have a Material Adverse Effect. (b) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required to be obtained by the Standstill Parties in connection with the execution and delivery, or performance by any Standstill Party of any of its obligations under the Amendment and the Standstill Agreement, as amended hereby. (c) The Amendment has been duly executed and delivered by each Standstill Party, and is the legal, valid and binding obligation of such Standstill Party, enforceable against such Standstill Party in accordance with its terms except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or limiting creditors' rights or by equitable principles generally. Fifth Amendment and Waiver to Standstill Agreement 4 (d) No Standstill Party has an existing claim against any Standstill Lender arising out of, relating to or in connection with the Loan Documents. (e) As of the Effective Date, EHE is not in breach of, or in default under, the DM Agreement, and no Foreign Subsidiary is in breach of, or in default under, any other Contractual Obligation, binding on or affecting any Foreign Subsidiary or any of their properties, where the consequence of such default is to confer rights upon any person against such Foreign Subsidiary which, if exercised, can be reasonably expected to have a Material Adverse Effect. (f) The representations and warranties made by each of the Standstill Parties in the Loan Documents are true and correct in all material respects on and as of the date hereof, after giving effect to the effectiveness of this Amendment, as if made on and as of the date hereof. (g) Each Standstill Party hereby represents and warrants to the Standstill Lenders and the Administrative Agent that as of the date hereof, and after giving effect to the waiver contained herein, (a) no Standstill Event under the Standstill Agreement shall have occurred and be continuing and (b) all of the representations and warranties of such Standstill Party contained in Section 12 of the Standstill Agreement and in any other Loan Document are, as of the date of execution hereof, true and correct in all material respects, as though made on and as of such date (other than representations and warranties in any such Loan Document expressly limited to a specific date). SECTION 7. Reference to and Effect on the Loan Documents. (a) On and after the Effective Date, each reference in the Standstill Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Standstill Agreement and each reference in the Credit Agreement and other Loan Documents to "the Standstill Agreement", "thereunder", "thereof" or words of like import referring to the Standstill Agreement, shall mean and be a reference to the Standstill Agreement as amended and otherwise modified hereby. (b) The Standstill Agreement, the Credit Agreement and each of the other Loan Documents, except to the extent of the amendments, covenants and other modifications specifically provided above, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Standstill Lender or any Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. (d) This Amendment is and shall be a Loan Document. SECTION 8. Affirmation of Loan Documents. Each Standstill Party, in its capacity as a Guarantor or otherwise, hereby consents to the modification of the Standstill Agreement, effected hereby and hereby acknowledges and agrees that the terms of this Amendment shall not affect in any way its duties, Obligations and liabilities under the Credit Fifth Amendment and Waiver to Standstill Agreement 5 Agreement, including under its Guarantee, the Standstill Agreement, or any other Loan Document to which it is a party, all of which duties, Obligations and liabilities shall remain in full force and effect and each of which is hereby reaffirmed. SECTION 9. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 10. Waiver of Jury Trial. Each of the Standstill Parties, the Administrative Agent and the Standstill Lenders irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Amendment or the actions of the Administrative Agent or any Standstill Lender in the negotiation, administration, performance or enforcement thereof. SECTION 11. Execution in Counterparts. This Amendment may be executed by one or more of the parties to this Amendment in any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page to this Amendment by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Amendment. SECTION 12. Costs and Expenses. EHE hereby agrees to pay, and each of the other Foreign Subsidiary Guarantors guarantees payment (subject to the exceptions set forth in Schedule 10.1 of the Credit Agreement) of, all reasonable costs and expenses associated with the preparation, execution, delivery, administration, and enforcement of this Amendment, including, without limitation, the fees and expenses of the Administrative Agent's counsel (including local counsel in foreign jurisdictions) and financial advisor and the out-of-pocket expenses of the Steering Committee (in each case, whether incurred prior to or after the Effective Date). [THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] Fifth Amendment and Waiver to Standstill Agreement IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written. Each of the following Subsidiaries as a Borrowing Subsidiary and as a Guarantor, subject to the limitations, if any, contained in Section 10.1 of the Credit Agreement EXIDE HOLDING EUROPE S.A. By: /s/ Illegible ------------------------------------ Name: Title: COMPAGNIE EUROPEENNE D'ACCUMULATEURS S.A. By: ------------------------------------ Name: Title: EURO EXIDE CORPORATION LIMITED By: ------------------------------------ Name: Title: SOCIEDAD ESPANOLA DEL ACUMULADOR TUDOR S.A. By: ------------------------------------ Name: Title: TUDOR A.B. By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written. Each of the following Subsidiaries as a Borrowing Subsidiary and as a Guarantor, subject to the limitations, if any, contained in Section 10.1 of the Credit Agreement EXIDE HOLDING EUROPE S.A. By: ------------------------------------ Name: Title: COMPAGNIE EUROPEENNE D'ACCUMULATEURS S.A. By: /s/ Xavier Izarn ------------------------------------ Name: XAVIER IZARN Title: PRESIDENT EURO EXIDE CORPORATION LIMITED By: ------------------------------------ Name: Title: SOCIEDAD ESPANOLA DEL ACUMULADOR TUDOR S.A. By: ------------------------------------ Name: Title: TUDOR A.B. By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written. Each of the following Subsidiaries as a Borrowing Subsidiary and as a Guarantor, subject to the limitations, if any, contained in Section 10.1 of the Credit Agreement EXIDE HOLDING EUROPE S.A. By: ------------------------------------ Name: Title: COMPAGNIE EUROPEENNE D'ACCUMULATEURS S.A. By: ------------------------------------ Name: Title: EURO EXIDE CORPORATION LIMITED By: /s/ Illegible ------------------------------------ Name: Title: SOCIEDAD ESPANOLA DEL ACUMULADOR TUDOR S.A. By: ------------------------------------ Name: Title: TUDOR A.B. By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written. Each of the following Subsidiaries as a Borrowing Subsidiary and as a Guarantor, subject to the limitations, if any, contained in Section 10.1 of the Credit Agreement EXIDE HOLDING EUROPE S.A. By: ------------------------------------ Name: Title: COMPAGNIE EUROPEENNE D'ACCUMULATEURS S.A. By: ------------------------------------ Name: Title: EURO EXIDE CORPORATION LIMITED By: ------------------------------------ Name: Title: SOCIEDAD ESPANOLA DEL ACUMULADOR TUDOR S.A. By: /s/ Jesus Lopez-Brea ------------------------------------ Name: JESUS LOPEZ-BREA Title: SECRETARY OF THE BOARD TUDOR A.B. By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written. Each of the following Subsidiaries as a Borrowing Subsidiary and as a Guarantor, subject to the limitations, if any, contained in Section 10.1 of the Credit Agreement EXIDE HOLDING EUROPE S.A. By: ------------------------------------ Name: Title: COMPAGNIE EUROPEENNE D'ACCUMULATEURS S.A. By: ------------------------------------ Name: Title: EURO EXIDE CORPORATION LIMITED By: ------------------------------------ Name: Title: SOCIEDAD ESPANOLA DEL ACUMULADOR TUDOR S.A. By: ------------------------------------ Name: Title: TUDOR A.B. By: /s/ Illegible /s/ Illegible ---------------------- -------------------- Name: Illegible Illegible Title: Board Directors Fifth Amendment and Waiver to Standstill Agreement EXIDE TECHNOLOGIES NEDERLAND B.V. By: /s/ Illegible ------------------------------------ Name: Illegible Title: Managing Director CMP BATTERIES LIMITED By: ------------------------------------ Name: Title: DEUTSCHE EXIDE STANDBY GMBH By: ------------------------------------ Name: Title: DEUTSCHE EXIDE GMBH By: ------------------------------------ Name: Title: MERCOLEC TUDOR B.V. By: /s/ Illegible ------------------------------------ Name: Illegible Title: Managing Director Fifth Amendement and Wavier to Standstill Agreement EXIDE TECHNOLOGIES NEDERLAND B.V. By: ------------------------------------ Name: Title: CMP BATTERIES LIMITED By: /s/ Illegible ------------------------------------ Name: Title: DEUTSCHE EXIDE STANDBY GMBH By: ------------------------------------ Name: Title: DEUTSCHE EXIDE GMBH By: ------------------------------------ Name: Title: MERCOLEC TUDOR B.V. By: ------------------------------------ Name: Title: Fifth Amendement and Wavier to Standstill Agreement EXIDE TECHNOLOGIES NEDERLAND B.V. By: ------------------------------------ Name: Title: CMP BATTERIES LIMITED By: ------------------------------------ Name: Title: DEUTSCHE EXIDE STANDBY GMBH By: /s/ Illegible /s/ Illegible ---------------------- --------------------- Name: Illegible Illegible Title: Procunist Procunist DEUTSCHE EXIDE GMBH By: /s/ Stefen Noll /s/ Frank U. Zukowsti ---------------------- --------------------- Name: Stefen Noll Frank U. Zukowsti Title: General Manager Procunist MERCOLEC TUDOR B.V. By: ------------------------------------ Name: Title: Fifth Amendement and Wavier to Standstill Agreement EXIDE TECHNOLOGIES NEDERLAND B.V. By: ------------------------------------ Name: Title: CMP BATTERIES LIMITED By: ------------------------------------ Name: Title: DEUTSCHE EXIDE STANDBY GMBH By: ------------------------------------ Name: Title: DEUTSCHE EXIDE GMBH By: ------------------------------------ Name: Title: MERCOLEC TUDOR B.V. By: /s/ Illegible ------------------------------------ Name: Illegible Title: Director Fifth Amendement and Wavier to Standstill Agreement Each of the following Subsidiaries as a Guarantor, subject to the limitations, if any, contained in Section 10.1 of the Credit Agreement CHLORIDE MOTIVE POWER IBERICA S.L. By: /s/ Jesus Lopez - Brea ------------------------------------ Name: JESUS LOPEZ - BREA Title: SECRETARY OF THE BOARD CMP BATTERIJEN N.V. By: ------------------------------------ Name: Title: EXIDE AUTOMOTIVE BATTERIE GMBH By: ------------------------------------ Name: Title: HAGEN BATTERIE AG By: ------------------------------------ Name: Title: ELECTRO MERCANTIL INDUSTRIAL S.L. By: /s/ Jesus Lopez - Brea ------------------------------------ Name: JESUS LOPEZ - BREA Title: SECRETARY OF THE BOARD EXIDE (DAGENHAM) LIMITED By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement Each of the following Subsidiaries as a Guarantor, subject to the limitations, if any, contained in Section 10.1 of the Credit Agreement CHLORIDE MOTIVE POWER IBERICA S.L. By: ------------------------------------ Name: Title: CMP BATTERIJEN N.V. By: /s/ N. S. Bright ------------------------------------ Name: N. S. BRIGHT Title: DIRECTOR EXIDE AUTOMOTIVE BATTERIE GMBH By: ------------------------------------ Name: Title: HAGEN BATTERIE AG By: ------------------------------------ Name: Title: ELECTRO MERCANTIL INDUSTRIAL S.L. By: ------------------------------------ Name: Title: EXIDE (DAGENHAM) LIMITED By: ------------------------------------ Name: Title: Each of the following Subsidiaries as a Guarantor, subject to the limitations, if any, contained in Section 10.1 of the Credit Agreement CHLORIDE MOTIVE POWER IBERICA S.L. By: ------------------------------------ Name: Title: CMP BATTERIJEN N.V. By: ------------------------------------ Name: Title: EXIDE AUTOMOTIVE BATTERIE GMBH By: /s/ Stefen Noll ------------------------------------ Name: Stefen Noll Title: Managing Director HAGEN BATTERIE AG By: /s/ Stefen Noll ------------------------------------ Name: Stefen Noll Title: Chairman ELECTRO MERCANTIL INDUSTRIAL S.L. By: ------------------------------------ Name: Title: EXIDE (DAGENHAM) LIMITED By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement Each of the following Subsidiaries as a Guarantor, subject to the limitations, if any, contained in Section 10.1 of the Credit Agreement CHLORIDE MOTIVE POWER IBERICA S.L. By: ------------------------------------ Name: Title: CMP BATTERIJEN N.V. By: ------------------------------------ Name: Title: EXIDE AUTOMOTIVE BATTERIE GMBH By: ------------------------------------ Name: Title: HAGEN BATTERIE AG By: ------------------------------------ Name: Title: ELECTRO MERCANTIL INDUSTRIAL S.L. By: /s/ Jesus Lopez - Brea ------------------------------------ Name: JESUS LOPEZ - BREA Title: SECRETARY OF THE BOARD EXIDE (DAGENHAM) LIMITED By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement Each of the following Subsidiaries as a Guarantor, subject to the limitations, if any, contained in Section 10.1 of the Credit Agreement CHLORIDE MOTIVE POWER IBERICA S.L. By: ------------------------------------ Name: Title: CMP BATTERIJEN N.V. By: ------------------------------------ Name: Title: EXIDE AUTOMOTIVE BATTERIE GMBH By: ------------------------------------ Name: Title: HAGEN BATTERIE AG By: ------------------------------------ Name: Title: ELECTRO MERCANTIL INDUSTRIAL S.L. By: ------------------------------------ Name: Title: EXIDE (DAGENHAM) LIMITED By: /s/ Illegible ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement FULMEN UK LIMITED By: /s/ Illegible ------------------------------------ Name: Title: EXIDE AUTOMOTIVE S.A. By: ------------------------------------ Name: Title: SOCIEDADE PORTUGUESA DO ACUMULADOR TUDOR S.A. By: ------------------------------------ Name: Title: EXIDE DANMARK A/S By: ------------------------------------ Name: Title: EXIDE BATTERIER AB By: ------------------------------------ Name: Title: CENTRA S.A. By: ------------------------------------ Name: Title: EXIDE SONNAK A/S By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement FULMEN UK LIMITED By: ------------------------------------ Name: Title: EXIDE AUTOMOTIVE S.A. By: /s/ Ghislain Pierre ------------------------------------ Name: Ghislain Pierre Title: Director SOCIEDADE PORTUGUESA DO ACUMULADOR TUDOR S.A. By: ------------------------------------ Name: Title: EXIDE DANMARK A/S By: ------------------------------------ Name: Title: EXIDE BATTERIER AB By: ------------------------------------ Name: Title: CENTRA S.A. By: ------------------------------------ Name: Title: EXIDE SONNAK A/S By: ------------------------------------ Name: Title: FULMEN UK LIMITED By: ------------------------------------ Name: Title: EXIDE AUTOMOTIVE S.A. By: ------------------------------------ Name: Title: SOCIEDADE PORTUGUESA DO ACUMULADOR TUDOR S.A. By: /s/ Illegible ------------------------------------ Name: Illegible Title: Director By: /s/ Fernando Manuel Pato Marouco ------------------------------------ Name: Fernando Manuel Pato Marouco Title: Director EXIDE DANMARK A/S By: ------------------------------------ Name: Title: EXIDE BATTERIER AB By: ------------------------------------ Name: Title: CENTRA S.A. By: ------------------------------------ Name: Title: FULMEN UK LIMITED By: ------------------------------------ Name: Title: EXIDE AUTOMOTIVE S.A. By: ------------------------------------ Name: Title: SOCIEDADE PORTUGUESA DO ACUMULADOR TUDOR S.A. By: ------------------------------------ Name: Title: EXIDE DANMARK A/S By: /s/ Illegible /s/ Illegible ---------------------- ------------- Name: Illegible Illegible Title: Board Directors EXIDE BATTERIER AB By: /s/ Illegible /s/ Illegible ---------------------- ------------- Name: Illegible Illegible Title: Board Directors CENTRA S.A. By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement FULMEN UK LIMITED By: ------------------------------------ Name: Title: EXIDE AUTOMOTIVE S.A. By: ------------------------------------ Name: Title: SOCIEDADE PORTUGUESA DO ACUMULADOR TUDOR S.A. By: ------------------------------------ Name: Title: EXIDE DANMARK A/S By: ------------------------------------ Name: Title: EXIDE BATTERIER AB By: ------------------------------------ Name: Title: CENTRA S.A. By: /s/ Malgorzata Majewska - Sliwa ------------------------------------ Name: Malgorzata Majewska - Sliwa Title: Country Manager EXIDE SONNAK A/S By: ------------------------------------ Name: Title: EXIDE SONNAK A/S By: /s/ Illegible /s/ Illegible ---------------------- ------------- Name: Illegible Illegible Title: Board Directors EXIDE BATTERIES LIMITED By: ------------------------------------ Name: Title: B.I.G. BATTERIES LIMITED By: ------------------------------------ Name: Title: EXIDE LENDING LIMITED By: ------------------------------------ Name: Title: EXIDE ITALIA S.R.L By: ------------------------------------ Name: Title: INDUSTRIA COMPOSIZIONI STAMPATE, SPA By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement EXIDE BATTERIES LIMITED By: /s/ Illegible ------------------------------------ Name: Title: B.I.G. BATTERIES LIMITED By: /s/ Illegible ------------------------------------ Name: Title: EXIDE LENDING LIMITED By: ------------------------------------ Name: Title: EXIDE ITALIA S.R.L. By: ------------------------------------ Name: Title: INDUSTRIA COMPOSIZIONI STAMPATE, SPA By: ------------------------------------ Name: Title: EXIDE HOLDINGS LIMITED By: /s/ Illegible ------------------------------------ Name: Title: EXIDE TECHNOLOGIES HOLDING BV By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement EXIDE BATTERIES LIMITED By: ------------------------------------ Name: Title: B.I.G. BATTERIES LIMITED By: ------------------------------------ Name: Title: EXIDE LENDING LIMITED By: /s/ Kiran Patel ------------------------------------ Name: KIRAN PATEL Title: DIRECTOR EXIDE ITALIA S.R.L. By: ------------------------------------ Name: Title: INDUSTRIA COMPOSIZIONI STAMPATE, SPA By: ------------------------------------ Name: Title: EXIDE HOLDINGS LIMITED By: ------------------------------------ Name: Title: EXIDE TECHNOLOGIES HOLDING BV By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement EXIDE BATTERIES LIMITED By: ------------------------------------ Name: Title: B.I.G. BATTERIES LIMITED By: ------------------------------------ Name: Title: EXIDE LENDING LIMITED By: ------------------------------------ Name: Title: EXIDE ITALIA S.R.L. By: /s/ Antoin Seosaimh O'Duill ------------------------------------ Name: ANTOIN SEOSAIMH O'DUILL Title: MANAGING DIRECTOR INDUSTRIA COMPOSIZIONI STAMPATE, SPA By: Antoin Seosaimh O'Duill ------------------------------------ Name: ANTOIN SEOSAIMH O'DUILL Title: MANAGING DIRECTOR EXIDE HOLDINGS LIMITED By: ------------------------------------ Name: Title: EXIDE TECHNOLOGIES HOLDING BV By: ------------------------------------ Name: Title: EXIDE BATTERIES LIMITED By: ------------------------------------ Name: Title: B.I.G. BATTERIES LIMITED By: ------------------------------------ Name: Title: EXIDE LENDING LIMITED By: ------------------------------------ Name: Title: EXIDE ITALIA S.R.L. By: ------------------------------------ Name: Title: INDUSTRIA COMPOSIZIONI STAMPATE, SPA By: ------------------------------------ Name: Title: EXIDE HOLDINGS LIMITED By: ------------------------------------ Name: Title: EXIDE TECHNOLOGIES HOLDING BV By: /s/ Illegible ------------------------------------ Name: Illegible Title: MAN. DIRECTOR Fifth Amendment and Waiver to Standstill Agreement EXIDE TRANSPORTATION HOLDING EUROPE, SL By: /s/ Jesus Lopez-Brea ------------------------------------ Name: JESUS LOPEZ-BREA Title: SECRETARY OF THE BOARD EXIDE AUSTRALIA PTY LIMITED By: ------------------------------------ Name: Title: EXIDE TECHNOLOGIES LIMITED By: ------------------------------------ Name: Title: EXIDE HOLDING ASIA PTE LIMITED By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement EXIDE TRANSPORTATION HOLDING EUROPE, SL By: ------------------------------------ Name: Title: EXIDE AUSTRALIA PTY LIMITED By: /s/ Illegible ------------------------------------ Name: Illegible Title: General Counsel EXIDE TECHNOLOGIES LIMITED By: /s/ Illegible ------------------------------------ Name: Illegible Title: General Counsel EXIDE HOLDING ASIA PTE LIMITED By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement EXIDE TRANSPORTATION HOLDING EUROPE, SL By: ------------------------------------ Name: Title: EXIDE AUSTRALIA PTY LIMITED By: ------------------------------------ Name: Title: EXIDE TECHNOLOGIES LIMITED By: ------------------------------------ Name: Title: EXIDE HOLDING ASIA PTE LIMITED By: /s/ Illegible ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement GNB TECHNOLOGIES (CHINA) LIMITED By: /s/ Illegible ------------------------------------ Name: Title: EXIDE SINGAPORE PTE LIMITED By: /s/ Illegible ------------------------------------ Name: Title: EXIDE CANADA INC. By: ------------------------------------ Name: Title: 1036058 ONTARIO INC. By: ------------------------------------ Name: Title: GNB TECHNOLOGIES LIMITED By: ------------------------------------ Name: Title: MBD NATIONAL LIMITED By: ------------------------------------ Name: Title: NATIONAL BATTERY DISTRIBUTION LIMITED By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement GNB TECHNOLOGIES (CHINA) LIMITED By: ------------------------------------ Name: Title: EXIDE SINGAPORE PTE LIMITED By: ------------------------------------ Name: Title: EXIDE CANADA INC. By: /s/ Molly M. Israel ------------------------------------ Name: Molly M. Israel Title: Asst. Secretary 1036058 ONTARIO INC. By: /s/ Molly M. Israel ------------------------------------ Name:Molly M. Israel Title: Asst. Secretary GNB TECHNOLOGIES LIMITED By: ------------------------------------ Name: Title: MBD NATIONAL LIMITED By: ------------------------------------ Name: Title: NATIONAL BATTERY DISTRIBUTION LIMITED By: ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement GNB TECHNOLOGIES (CHINA) LIMITED By: ------------------------------------ Name: Title: EXIDE SINGAPORE PTE LIMITED By: ------------------------------------ Name: Title: EXIDE CANADA INC. By: ------------------------------------ Name: Title: 1036058 ONTARIO INC. By: ------------------------------------ Name: Title: GNB TECHNOLOGIES LIMITED By: /s/ Illegible ------------------------------------ Name: Title: MBD NATIONAL LIMITED By: /s/ Illegible ------------------------------------ Name: Title: NATIONAL BATTERY DISTRIBUTION LIMITED By: /s/ Illegible ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement NORD GROUP LIMITED By: /s/ Illegible ------------------------------------ Name: Title: OHE LIMITED By: /s/ Illegible ------------------------------------ Name: Title: SPITFIRE BATTERIES LIMITED By: /s/ Illegible ------------------------------------ Name: Title: TS BATTERIES LIMITED By: /s/ Illegible ------------------------------------ Name: Title: GNB TECHNOLOGIES NV By: ------------------------------------ Name: Title: DETA UK LIMITED By: /s/ Illegible ------------------------------------ Name: Title: FRIWO BATTERIES LIMITED By: /s/ Illegible ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement NORD GROUP LIMITED By: ------------------------------------ Name: Title: OHE LIMITED By: ------------------------------------ Name: Title: SPITFIRE BATTERIES LIMITED By: ------------------------------------ Name: Title: TS BATTERIES LIMITED By: ------------------------------------ Name: Title: GNB TECHNOLOGIES NV By: /s/ Stefan Noll /s/ Illegible ------------------- -------------- Name: STEFAN NOLL Illegible Title: DIRECTOR DIRECTOR DETA UK LIMITED By: ------------------------------------ Name: Title: FRIWO BATTERIES LIMITED By: ------------------------------------ Name: Title: NORD GROUP LIMITED By: ------------------------------------ Name: Title: OHE LIMITED By: ------------------------------------ Name: Title: SPITFIRE BATTERIES LIMITED By: ------------------------------------ Name: Title: TS BATTERIES LIMITED By: ------------------------------------ Name: Title: GNB TECHNOLOGIES NV By: /s/ Illegible ------------------------------------ Name: Illegible Title: Director DETA UK LIMITED By: ------------------------------------ Name: Title: FRIWO BATTERIES LIMITED By: ------------------------------------ Name: Title: GEMALA IRELAND (HOLDINGS) LIMITED By: /s/ Illegible ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement GNB BATTERY TECHNOLOGIES JAPAN, INC. As a Guarantor, subject to the limitations, if any, contained in Section 10.1 of the Credit Agreement By: /s/ Illegible ------------------------------------ Name: Title: Fifth Amendment and Waiver to Standstill Agreement CITIBANK USA INC., as Escrow Agent By: /s/ Keith R. Gerding ------------------------------------ Name: KEITH R. GERDING Title: Vice President Fifth Amendment and Waiver to Standstill Agreement CREDIT SUISSE FIRST BOSTON, as Administrative Agent By: /s/ Didier Siffer ------------------------------------ Name: Didier Siffer Title: Director By: /s/ Carol Flaton ------------------------------------ Name: CAROL FLATON Title: MANAGING DIRECTOR Fifth Amendment and Waiver to Standstill Agreement Lenders AG CAPITAL FUNDING PARTNERS, L.P. BY: ANGELO, GORDON & CO., L.P., AS INVESTMENT ADVISOR [Print Name of Lender] By /s/ Jeffrey Aronson ------------------------------------- Name: Jeffrey Aronsan Title: MANAGING DIRECTOR Fifth Amendment and Waiver to Standstill Agreement Lenders ALPHA BANK A.E. By /s/ Martin J. Waghorn ------------------------------------- Name: MARTIN J. WAGHORN Title: DEPUTY GENERAL MANAGER By /s/ Stephen G. Uren ------------------------------------- Name: STEPHEN G. UREN Title: OPERATIONS MANAGER Lenders AVALON CAPITAL LTD. By: INVESCO Senior Secured Management, Inc. As Portfolio Advisor By /s/ Joseph Rotondo ------------------------------------- Name: Joseph Rotondo Title: Authorized Signatory Fifth Amendment and Waiver to Standstill Agreement Lenders AVALON CAPITAL LTD. 2 By: INVESCO Senior Secured Management, Inc. As Portfolio Advisor By /s/ Joseph Rotondo ------------------------------------- Name: Joseph Rotondo Title: Authorized Signatory Fifth Amendment and Waiver to Standstill Agreement Lenders BANCO ESPIRITO SANTO, S.A. [Print Name of Lender] By /s/ Guy Harris /s/ Malcolm Morris ----------------------- -------------------- Name: GUY HARRIS MALCOLM MORRIS Title: SENIOR MANAGER ASSITANT MANAGER Fifth Amendment and Waiver to Standstill Agreement Lenders THE BANK OF NOVA SCOTIA [Print Name of Lender] By /s/ Daniel A. Costigan ------------------------------------- Name: DANIEL A. COSTIGAN Title: DIRECTOR Fifth Amendment and Waiver to Standstill Agreement Lenders BANK OF SCOTLAND By /s/ Paul Simmons ------------------------------------- Name: PAUL SIMMONS Title: ASSOCIATE DIRECTOR Lenders BDCM OPPORTUNITY FUND, L.P. by Black Diamond Capital Management, L.L.C. its General Partner [Print Name of Lender] By /s/ Illegible ---------------------------------------- Name: Title: Fifth Amendment and Waiver to Standstill Agreement Lenders Bear Stearns & Co. [Print Name of Lender] By /s/ John E. McDermoti ------------------------------------- Name: JOHN E. McDERMOTI Title: SENIOR MANAGING DIRECTOR Fifth Amendment and Waiver to Standstill Agreement Lenders BLACK DIAMOND INTERNATIONAL FUNDING LTD. [Print Name of Lender] By /s/ Alan Corkish ------------------------------------- Name Alan Corkish Title Director Fifth Amendment and Waiver to Standstill Agreement Lenders BLACK DIAMOND CLO 199_-1 LTD. [Print Name of Lender] By /s/ Alan Corkish ------------------------------------- Name Alan Corkish Title Director Fifth Amendment and Waiver to Standstill Agreement Lenders BLACK DIAMOND CLO 2000-1 LTD. [Print Name of Lender] By /s/ Alan Corkish ------------------------------------- Name Alan Corkish Title Director Fifth Amendment and Waiver to Standstill Agreement Lenders Centurion CDO I, Limited By: American Express Asset Management Group Inc. as Collateral Manager [Print Name of Lender] By /s/ Leanne Stavrakis ------------------------------------- Name: Leanne Stavrakis Title: Director - Operations Fifth Amendment and Waiver to Standstill Agreement Lenders CERES II FINANCE LTD. By: INVESCO Senior Secured Management, Inc. As Sub-Managing Agent (Financial) By /s/ Joseph Rotondo ------------------------------------- Name: Joseph Rotondo Title: Authorized Signatory Fifth Amendment and Waiver to Standstill Agreement Lenders CITADEL CREDIT TRADING LTD. By: Citadel Limited Partnership, Portfolio Manager By: GLB Partners, L.P., its General Partner By: Citadel Investement Group, L.L.C., its General Partner [Print Name of Lender] By /s/ Adam C. Cooper ------------------------------------- Name: ADAM C. COOPER Title: Senior Managing Director & General Counsel Fifth Amendment and Waiver to Standstill Agreement Lenders CITADEL EQUITY FUND LTD. By: Citadel Limited Partnership, Portfolio Manager By: GLB Partners, L.P., its General Partner By: Citadel Investment Group, L.L.C., its General Partner [Print Name of Lender] By /s/ Adam C. Cooper ------------------------------------- Name: ADAM C. COOPER Title: Senior Managing Director & General Counsel Fifth Amendment and Waiver to Standstill Agreement CITIGROUP FINANCIAL PRODUCTS INC. By /s/ Neyda Darias ------------------------------------- Name: Neyda Darias Title: Assistant Vice President Fifth Amendment and Waiver to Standstill Agreement Lenders CREDIT INDUSTRIEL ET COMMERCIAL By /s/ Anthony Rock /s/ Sean Mounier ----------------------- -------------------- Name: Anthony Rock Sean Mounier Title: Vice President First Vice President Fifth Amendment and Waiver to Standstill Agreement Lenders CREDIT SUISSE FIRST BOSTON By /s/ Robert Healey /s/ Joseph Brosnan ----------------------- -------------------- Name: Robert Healey Joseph Brosnan Title: Director Vice President Fifth Amendment and Waiver to Standstill Agreement Lenders CREDIT SUISSE FIRST BOSTON INTERNATIONA [Print Name of Lender] By /s/ Illegible ------------------------------------- Name: Title: Lenders DEUTSCHE BANK AG, NEW YORK BRANCH By: DB Services New Jersey, Inc. By: /s/ Deborah O'Keeffe ------------------------------------ Name: Deborah O'Keeffe Title: Vice President By: /s/ Rosemary F. Dunne ------------------------------------ Name: Rosemary F. Dunne Title: Vice President Fifth Amendment and Waiver to Standstill Agreement Lenders GSC RECOVERY II, L.P. GSC RECOVERY IIA, L.P. By: GSC Recovery II GP, L.P., By: GSC Recovery IIA GP, L.P., its general partner its general partner By: GSC RII, LLC, By: GSC RIIA, LLC, its general partner its general partner By: GSCP (NJ) Holdings, L.P., By: GSCP (NJ) Holdings, L.P., its sole member its sole member By: GSCP (NJ), Inc. By: GSCP (NJ), Inc. its general partner its general partner By: /s/ Matthew Kaufman By: /s/ Matthew Kaufman ------------------------- -------------------------- Name: Matthew Kaufman Name: Matthew Kaufman Title: Managing Director Title: Managing Director Fifth Amendment and Waiver to Standstill Agreement KZH CYPRESSTREE-1 LLC By /s/ Hi Hua ------------------------------------- Name: HI HUA Title: AUTHORIZED AGENT Fifth Amendment and Waiver to Standstill Agreement KZH ING-2 LLC By /s/ Hi Hua ------------------------------------- Name: HI HUA Title: AUTHORIZED AGENT Fifth Amendment and Waiver to Standstill Agreement KZH STERLING LLC By /s/ Hi Hua ------------------------------------- Name: HI HUA Title: AUTHORIZED AGENT Fifth Amendment and Waiver to Standstill Agreement KZH WATERSLIDE LLC By /s/ Hi Hua ------------------------------------- Name: HI HUA Title: AUTHORIZED AGENT Fifth Amendment and Waiver to Standstill Agreement Lenders Lehman Commercial Paper Inc. [Print Name of Lender] By /s/ Frank P. Turner ------------------------------------- Name: Frank P. Turner Title: Authorized Signatory Fifth Amendment and Waiver to Standstill Agreement Lenders MORGAN STANLEY EMERGING MARKETS INC. By /s/ Edgar A. Sabounghi ------------------------------------- Name: EDGAR A. SABOUNGHI Title: Vice President Fifth Amendment and Waiver to Standstill Agreement Lenders R/2/ Top Hat, Ltd. By: ___________, L.P., as Investment Manager By: _______ Holdings, Inc., its general partner [Print Name of Lender] By /s/ Robert McCormick ------------------------------------- Name: Robert Mccormick Title: Vice President Fifth Amendment and Waiver to Standstill Agreement Lenders SILVER OAK CAPITAL, LLC [Print Name of Lender] By /s/ Illegible ------------------------------------- Name: Illegible Title: MANAGING DIRECTOR Fifth Amendment and Waiver to Standstill Agreement Lenders Smoky River CDO, L.P., By RBC Leveraged Capital as Portfolio Advisor By: /s/ Melissa Marano ------------------------------------ Name: Melissa Marano Title: Partner - Attorney ______ Fifth Amendment and Waiver to Standstill Agreement Lenders TRS 1 UC [Print Name of Lender] By Deborah O'Keeffe ------------------------------------- Name: Deborah O'Keeffe Title: Vice President Fifth Amendment and Waiver to Standstill Agreement Lenders UBS AG, Stamford Branch [Print Name of Lender] By /s/ Jennifer L. Poccia ------------------------------------- Name: Jennifer L. Poccia Title: Associate Director Banking Products Services, __ /s/ Janice L. Randolph ------------------------------------- Janice L. Randolph Associate Director Banking Products Services, US Fifth Amendment and Waiver to Standstill Agreement EX-31.1 5 dex311.txt CEO CERTIFICATION Exhibit 31.1 I, Craig H. Muhlhauser, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Exide Technologies; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 14, 2003 By: /s/ Craig H. Muhlhauser ----------------------------------------------- Craig H. Muhlhauser Chairman, President and Chief Executive Officer EX-31.2 6 dex312.txt CFO CERTIFICATION Exhibit 31.2 I, Biagio N. Vignolo, Jr., certify that: 1. I have reviewed this quarterly report on Form 10-Q of Exide Technologies; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 14, 2003 By: /s/ Biagio N. Vignolo, Jr. -------------------------- Biagio N. Vignolo, Jr. Executive Vice President and Chief Financial Officer EX-32 7 dex32.txt CEO/CFO CERTIFICATION Exhibit 32 Pursuant to (S) 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. (S) 1350) The undersigned, as the Chairman, President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer of Exide Technologies, each certify that the Quarterly Report on Form 10-Q for the period ended June 30, 2003, which accompanies this certification fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of Exide Technologies at the dates and for the periods indicated. The foregoing certification is made pursuant to (S) 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. (S) 1350) and no purchaser or seller of securities or any other person shall be entitled to rely upon the foregoing certification for any other purpose. A signed original of this written statement required by Section 906 has been provided to Exide Technologies and will be retained by Exide Technologies and furnished to the Securities and Exchange Commission or its staff upon request. The undersigned expressly disclaims any obligation to update the foregoing certification except as required by law. Date: August 14, 2003 /s/ Craig H. Muhlhauser ---------------------------------------- Craig H. Muhlhauser Chairman, President and Chief Executive Officer /s/ Biagio N. Vignolo, Jr. ---------------------------------------- Biagio N. Vignolo, Jr. Executive Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----