EXHIBIT 2.1
EXECUTION VERSION
STOCK PURCHASE AGREEMENT
AMONG
COOPER TIRE & RUBBER COMPANY,
COOPER TYRE & RUBBER COMPANY UK LIMITED
AND
CSA ACQUISITION CORP.
DATED AS OF
SEPTEMBER 16, 2004
TABLE OF CONTENTS
(continued)
PAGE
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ARTICLE I
DEFINITIONS.....................................................1
1.1 Certain Defined
Terms..................................................1
1.2 Other Interpretive
Provisions.........................................14
ARTICLE II PURCHASE AND
SALE..............................................14
2.1 Purchase and Sale of the
Shares.......................................14
2.2
Consideration.........................................................14
2.3 Adjustment to Cash and Cash Equivalents and Debt
Obligations..........15
2.4 The
Closing...........................................................16
2.5 Deliveries at the
Closing.............................................17
2.6 Structuring
Cooperation...............................................18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE
SELLERS..................19
3.1
Organization..........................................................19
3.2 Authorization;
Enforceability.........................................19
3.3 Capital Stock of the Sold
Companies...................................19
3.4 Subsidiaries and Joint
Ventures.......................................20
3.5 Financial
Statements..................................................21
3.6 No Conflicts or
Approvals.............................................22
3.7 Compliance with Law; Governmental
Authorizations......................23
3.8
Proceedings...........................................................23
3.9 Absence of Certain
Changes............................................24
3.10 Tax
Matters...........................................................24
3.11 Employee
Benefits.....................................................26
3.12 Labor
Relations.......................................................31
3.13 Intellectual
Property.................................................32
3.14
Contracts.............................................................33
3.15 Environmental
Matters.................................................35
3.16
Insurance.............................................................36
3.17 Personal Property
Assets..............................................36
3.18 Real
Property.........................................................37
3.19 Customers and
Suppliers...............................................37
3.20 Product
Liability.....................................................38
3.21 Affiliate
Transactions................................................38
3.22
Accounts..............................................................38
3.23
Inventory.............................................................39
3.24 Bank
Accounts.........................................................39
3.25 No Brokers' or Other
Fees.............................................39
3.26 Directors and
Officers................................................39
3.27 No Other Representations or
Warranties................................39
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE
BUYER....................40
4.1
Organization..........................................................40
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(continued)
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4.2 Authorization;
Enforceability.........................................40
4.3 No Conflicts or
Approvals.............................................40
4.4
Proceedings...........................................................41
4.5 No Brokers' or Other
Fees.............................................41
4.6 Investment
Intent.....................................................41
4.7
Financing.............................................................41
4.8 No Other Representations or
Warranties................................41
ARTICLE V COVENANTS AND
AGREEMENTS.......................................42
5.1 Conduct of the Business Prior to the
Closing..........................42
5.2 Access to Books and Records;
Confidentiality..........................45
5.3 Section 338
Election..................................................46
5.4 Tax Returns, Contests and
Cooperation.................................46
5.5 Tax
Matters...........................................................49
5.6 Refunds and Tax
Benefits..............................................50
5.7 Employees; Benefit
Plans..............................................52
5.8 Labor
Matters.........................................................66
5.9 Contact with Customers and
Suppliers..................................68
5.10 Intercompany
Debt.....................................................68
5.11 Minimum Cash
Requirement..............................................68
5.12 Corporate
Names.......................................................68
5.13
Restructuring.........................................................70
5.14 Consents and
Competition..............................................70
5.15 Intentionally
omitted.................................................71
5.16
Insurance.............................................................71
5.17 Notice of
Events......................................................71
5.18
Noncompetition........................................................72
5.19 Non-Solicitation and Non-Hire of
Employees............................73
5.20 Acquisition
Financing.................................................74
5.21 Letters of Credit on Account of Sold Companies or
Subsidiaries........74
5.22
Guarantees............................................................74
5.23 Buyer
Financing.......................................................74
ARTICLE VI CONDITIONS TO
CLOSING..........................................75
6.1 Conditions to the Obligations of the
Parties..........................75
6.2 Conditions to the Obligation of the
Sellers...........................75
6.3 Conditions to the Obligations of the
Buyer............................75
ARTICLE VII
TERMINATION....................................................76
7.1
Termination...........................................................76
7.2 Effect of
Termination.................................................77
ARTICLE VIII
INDEMNIFICATION................................................77
8.1 Indemnification by the
Sellers........................................77
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(continued)
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8.2 Indemnification by the
Buyer..........................................79
8.3 Indemnification as Exclusive
Remedy...................................79
8.4
Survival..............................................................79
8.5 Limitations on
Indemnification........................................80
8.6
Procedures............................................................83
ARTICLE IX
MISCELLANEOUS..................................................84
9.1 Fees and
Expenses.....................................................84
9.2 Governing
Law.........................................................84
9.3
Projections...........................................................84
9.4
Amendment.............................................................85
9.5
Assignment............................................................85
9.6
Waiver................................................................85
9.7
Notices...............................................................85
9.8 Complete
Agreement....................................................87
9.9
Counterparts..........................................................87
9.10
Publicity.............................................................87
9.11
Headings..............................................................87
9.12
Severability..........................................................87
9.13 Third
Parties.........................................................87
9.14 Further
Assurances....................................................87
9.15 Consent to Jurisdiction; Waiver of Jury
Trial.........................87
9.16 Specific
Performance..................................................88
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SCHEDULES
Schedule A Sold Companies
Schedule B Restructuring
Schedule C Capital Expenditure Budget
Schedule 1.1(a) Debt Obligations
Schedule 1.1(b) Knowledge of the Buyer
Schedule 1.1(c)(i) Knowledge of the Sellers; Sold Companies
or
Subsidiaries
Schedule 1.1(c)(ii) Knowledge of the Sellers; Venture Entities
Schedule 1.1(d) Permitted Liens
Schedule 2.5(a)(vi) Consents
Schedule 2.5(a)(viii) Resignations of Directors and Officers
Schedule 3.3 Capital Stock of the Sold Companies
Schedule 3.4(a) Subsidiaries
Schedule 3.4(b) Venture Entities
Schedule 3.5(a) Financial Statements
Schedule 3.5(b) Undisclosed Liabilities
Schedule 3.5(d) Venture Entity Liabilities
Schedule 3.6(a) No Conflicts
Schedule 3.6(b) Consents
Schedule 3.7 Compliance with Law; Governmental
Authorizations
Schedule 3.8 Proceedings
Schedule 3.9 Absence of Certain Changes
Schedule 3.10 Tax Matters
Schedule 3.11(a)(i)-1 Employee Benefits; Plans
Schedule 3.11(a)(i)-2 Employee Benefits; Company Employees
Schedule 3.11(b) Employee Benefits; IRS Exceptions
Schedule 3.11(c) Employee Benefits; Compliance
Schedule 3.11(f) Employee Benefits; Proceedings
Schedule 3.11(g) Employee Benefits; Parachute Payments
Schedule 3.11(h) Employee Benefits; 280G Payments
Schedule 3.11(i) Employee Benefits; US Employees
Schedule 3.11(j) Employee Benefits; Foreign Plan Exceptions
Schedule 3.12 Labor Relations
Schedule 3.13(a) Intellectual Property
Schedule 3.13(b) Intellectual Property Exceptions
Schedule 3.14(a) Material Contracts
Schedule 3.15 Environmental Matters
Schedule 3.16(a) Insurance Policies
Schedule 3.16(c) Insurance Exceptions
Schedule 3.17 Personal Property Assets
Schedule 3.18(a) Leased Real Property
Schedule 3.18(b) Owned Real Property
Schedule 3.19 Customers and Suppliers
Schedule 3.20 Product Liability
Schedule 3.21 Affiliate Transactions
Schedule 3.24 Bank Accounts
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Schedule 3.26 Directors and Officers
Schedule 4.3(b) Buyer Consents
Schedule 4.4 Buyer Proceedings
Schedule 4.7 Financing
Schedule 5.1 Conduct of the Business Prior to the
Closing
Schedule 5.1(h) Executives
Schedule 5.3 Section 338 Elections
Schedule 5.7(a) Active Company Employees
Schedule 5.7(e) Former Employee Pension Participants
Schedule 5.7(f) Former Employee Savings Participants
Schedule 5.7(g) Assumed Plans
Schedule 5.7(i)(i) Cooper Severance Obligations
Schedule 5.7(j) Former Employee Retiree Welfare Benefit
Participants
Schedule 5.7(m) Cooper's SERP
Schedule 5.7(t) Secunded Employees
Schedule 5.12 Trademarks
Schedule 8.1(a)(vi)(D) Environmental Matters
EXHIBITS
Exhibit A Confidentiality Agreement
Exhibit B Transition Services Agreement
Exhibit C Severance Procedures
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of September 16,
2004, is by
and among Cooper Tire & Rubber Company, a Delaware corporation
("COOPER"),
Cooper Tyre & Rubber Company UK Limited, a company organized
under the laws of
England and Wales ("COOPER UK", and, together with Cooper, the
"SELLERS") and
CSA Acquisition Corp., a Delaware corporation (the "BUYER").
A. Cooper's automotive business segment, indirectly
through the Sold
Companies (as defined below), the Subsidiaries (as defined below)
and the
Venture Entities (as defined below), is engaged in the design,
manufacture and
sale of fluid handling systems, body sealing systems and active and
passive
vibration control systems (any of said activities as so conducted
anywhere in
the world by all, any or each of them, as the context may require,
the
"BUSINESS");
B. Cooper and Cooper UK own all of the issued and
outstanding shares
of capital stock (or equivalent) designated on SCHEDULE 3.3 (such
shares, the
"SHARES") of the companies listed on SCHEDULE A (such companies,
the "SOLD
COMPANIES");
C. The Sellers desire to sell, and the Buyer desires to
purchase, the
Shares, upon the terms and subject to the conditions set forth in
this
Agreement; and
NOW, THEREFORE, in consideration of the representations,
warranties,
covenants and agreements herein contained and intending to be
legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used in this Agreement, the
following
terms have the following meanings:
"ACQUISITION FINANCING" has the meaning set forth in
SECTION 4.7.
"ACTIVE COMPANY EMPLOYEES" has the meaning set forth in
SECTION
5.7(A).
"ADJUSTED PURCHASE PRICE ALLOCATION" has the meaning set
forth in
SECTION 2.2(B)(II).
"AFFILIATE" means, with respect to any Person, (i) any
Person directly
or indirectly controlling, controlled by or under common control
with such
Person, (ii) any Person directly or indirectly owning or
controlling ten percent
(10%) or more of any class of outstanding equity securities of such
Person or
(iii) any officer, director, general partner or trustee of any such
Person
described in clause (i) or (ii).
"AFFILIATE CONTRACTS" has the meaning set forth in
SECTION 3.21.
"AGREEMENT" means this Stock Purchase Agreement
(including the
Schedules and Exhibits), as amended, modified or supplemented from
time to time.
"ANNUAL FINANCIAL STATEMENTS" has the meaning set forth
in SECTION
3.5(A).
"APPLICABLE RATE" means a rate per annum equal to the
"prime rate" as
set forth from time to time in The Wall Street Journal, Eastern
Edition, "Money
Rates" column.
"APPLICABLE PORTION" means, as to any non-wholly owned
Subsidiary or
Venture Entity, the percentage ownership interest (direct or
indirect) of the
Sellers in such entities as of the Closing.
"ARBITRATION FIRM" means the firm of
PricewaterhouseCoopers LLP or, if
such firm is unable or unwilling to serve in such capacity on terms
mutually
acceptable to Buyer and Sellers, another independent accounting
firm mutually
acceptable to Buyer and Sellers.
"ASSUMED PLANS" has the meaning set forth in SECTION
5.7(G).
"BALANCE SHEET" has the meaning set forth in SECTION
3.5(A).
"BUSINESS" has the meaning set forth in the recitals.
"BUSINESS DAY" means any day that is not a Saturday, a
Sunday or other
day on which banks in New York, New York are required or authorized
by Law to be
closed.
"BUYER" has the meaning set forth in the preamble.
"BUYER FILED TAX RETURNS" has the meaning set forth in
SECTION 5.4(B).
"BUYER INDEMNIFIED PERSONS" has the meaning set forth in
SECTION
8.1(A).
"BUYER ACTUARY" has the meaning set forth in SECTION
5.7(S)(I).
"BUYER'S PENSION PLAN" has the meaning set forth in
SECTION 5.7(E).
"BUYER'S PRB PLAN" has the meaning set forth in SECTION
5.7(J).
"BUYER'S SAVINGS PLAN" has the meaning set forth in
SECTION 5.7(F).
"BUYER'S WELFARE PLANS" has the meaning set forth in
SECTION 5.7(D).
"CANADIAN SALARIED PLAN" means the Pension Plan for
Salaried Employees
of Cooper-Standard Automotive Canada Limited (FSCO Reg. No.
0250548).
"CASH AND CASH EQUIVALENTS" means, as of any date, the
fair market
value (expressed in United States dollars) of (i) all cash and cash
equivalents
(including marketable securities and short term investments) of any
Sold Company
or wholly owned Subsidiary plus (ii) the Applicable Portion of cash
and cash
equivalents (including marketable securities and short term
investments) of any
non-wholly owned Subsidiary or Venture Entity. Any monetary
2
conversion from the currency of a foreign country to United States
dollars shall
be calculated using the applicable exchange rates set forth in The
Wall Street
Journal, Eastern Edition.
"CAPITAL EXPENDITURE BUDGET" means the capital
expenditure with
respect to the Business for the calendar year 2004, as set forth on
SCHEDULE C.
"CELLECT" means Cellect LLC.
"CHANGE OF CONTROL OF COOPER" means the occurrence of any
of the
following events after the Closing Date: (a) any Person engaged in
a Competitive
Business is or becomes the "beneficial owner" (as defined in Rule
13d-3 under
the Securities Exchange Act of 1934), directly or indirectly, of
securities of
Cooper representing 50% or more of the combined voting power of
Cooper's
then-outstanding voting securities; (b) Cooper merges or
consolidates into
itself, or is merged or consolidated with, another Person engaged
in a
Competitive Business and as a result of such merger or
consolidation less than
50% of the voting power of the then-outstanding voting securities
of the
surviving or resulting entity immediately after such transaction
are directly or
indirectly beneficially owned in the aggregate by the former
stockholders of
Cooper immediately prior to such transaction; or (c) all or
substantially all
the assets accounted for on the consolidated balance sheet of
Cooper are sold or
transferred to one or more Persons engaged in a Competitive
Business.
"CLAIM" has the meaning set forth in SECTION 8.6(A).
"CLAIM NOTICE" has the meaning set forth in SECTION
8.6(A).
"CLAIM RESPONSE" has the meaning set forth in SECTION
8.6(A).
"CLOSING" has the meaning set forth in SECTION 2.4.
"CLOSING DATE" has the meaning set forth in SECTION 2.4.
"CODE" has the meaning set forth in SECTION 2.2(C).
"COMPANY BENEFIT PLAN" has the meaning set forth in
SECTION
3.11(A)(I).
"COMPANY EMPLOYEE" has the meaning set forth in SECTION
3.11(A)(I).
"COMPANY FOREIGN BENEFIT PLAN" has the meaning set forth
in SECTION
3.11(A)(II).
"COMPANY U.S. BENEFIT PLAN" has the meaning set forth in
SECTION
3.11(A)(II).
"COMPETITION/INVESTMENT LAW" means any Law that is
designed or
intended to prohibit, restrict or regulate (a) foreign investment
or (b)
antitrust, monopolization, restraint of trade or competition.
"COMPETITIVE BUSINESS" has the meaning set forth in
SECTION 5.18(A).
3
"CONFIDENTIALITY AGREEMENT" means the confidentiality
agreement
between the Buyer and Cooper, a copy of which is attached as
EXHIBIT A.
"CONSENT" means any consent, approval, order, Permit,
authorization,
waiver, report or notification required to be obtained from, filed
with or
delivered to any Governmental Authority or other third party in
connection with
the execution, delivery and performance of this Agreement and the
Transaction
Agreements, the consummation of the transactions contemplated
hereby and thereby
or compliance by the Sellers, the Subsidiaries and the Sold
Companies with any
of the provisions hereof and thereof.
"CONTRACT" means any contract, agreement, obligation,
plan, indenture,
note, bond, loan, instrument, lease (including real property
leases),
conditional sale contract, mortgage, license, Permit, franchise,
insurance
policy, undertaking, commitment or other enforceable arrangement or
agreement,
whether written or oral.
"CONTROLLED GROUP" has the meaning set forth in SECTION
3.11(C).
"COOPER" has the meaning set forth in the preamble.
"COOPER'S ACTUARY" has the meaning set forth in SECTION
5.7(E)(V).
"COOPER'S FLEXIBLE ACCOUNT PLAN" has the meaning set
forth in SECTION
5.7(K).
"COOPER'S PENSION PLAN" has the meaning set forth in
SECTION 5.7(E).
"COOPER'S SAVINGS PLAN" has the meaning set forth in
SECTION 5.7(F).
"COOPER'S SERP" has the meaning set forth in SECTION
5.7(M).
"COOPER UK" has the meaning set forth in the preamble.
"CRAIG ASSEMBLY" means Craig Assembly Inc., a Michigan
corporation.
"CSA" has the meaning set forth in SECTION 5.7(T).
"CSA UK FLUID" has the meaning set forth in SECTION
5.7(S)(I).
"CURRENT TAX MATTER" means any claim, suit, action,
audit, litigation
or proceeding relating to Taxes solely in respect of a Pre-Closing
Tax Period
(other than any Transfer Pricing Tax Matter) that is in progress as
of the
Closing Date.
"DEBT FINANCING" has the meaning set forth in SECTION
4.7.
"DEBT FINANCING COMMITMENT" has the meaning set forth in
SECTION 4.7.
"DEBT OBLIGATIONS" means, with respect to any Person as
of any date
without duplication, all (a) indebtedness for borrowed money of
such Person
(including principal and accrued interest), including under those
agreements set
forth on SCHEDULE 1.1(A), (b) obligations of such Person in respect
of
capitalized leases required to be recorded as such on a balance
sheet
4
prepared in accordance with GAAP and obligations of such Person for
the deferred
purchase price of goods or services (other than trade payables
incurred in the
ordinary course of business), (c) obligations of such Person in
respect of
banker's acceptances or letters of credit issued or created for the
account of
such Person (excluding any letters of credit issued or created by
or for the
benefit of such Person relating to workers' compensation, workers
entitlement
guarantees or employers' liability obligations of such Person), (d)
all
indebtedness or obligations of such Person of the types referred to
in the
preceding clauses (a) and (b) secured by any Lien on any assets of
such Person,
(e) guarantees of obligations of any other Person of the type
described in
clauses (a) and (b) above by such Person, and (f) any payment
obligation in
respect of interest under any existing interest rate swap, hedge or
similar
agreement entered into by any Person with respect to any
indebtedness described
in clause (a) above, including under those agreements set forth on
SCHEDULE
1.1(A).
"DEDUCTIBLE" has the meaning set forth in SECTION 8.1(B).
"DISCONTINUED BUSINESS EMPLOYEE" has the meaning set
forth in SECTION
3.11(A)(I).
"EC MERGER REGULATION" means Council Regulation (EEC)
4064/89 of the
European Community, as amended.
"EMPLOYMENT AGREEMENT" means the Employment Agreement,
dated June 6,
2000, by and between Cooper and James S. McElya, as amended by that
certain
First Amendment to Employment Agreement dated as of February 4,
2004.
"ENVIRONMENT" means the outdoor or indoor environment,
including soil,
surface waters, groundwater, land, stream sediments, surface or
subsurface
strata or ambient air.
"ENVIRONMENTAL CLAIM" means any written notice, or, to
the Knowledge
of the Sellers, any oral notice, or Proceeding by any Person
alleging liability
or potential liability relating to any Environmental Losses or in
respect of any
Environmental Laws.
"ENVIRONMENTAL LAW" means any Law, including common law,
relating to
the protection of the Environment, natural resources or, to the
extent relating
to exposure to Hazardous Materials, human health or safety.
"ENVIRONMENTAL LOSSES" means Losses arising from a
Release or
threatened Release of Hazardous Materials or noncompliance with or
liability or
Loss under any Environmental Law.
"EQUITY FINANCING" has the meaning set forth in SECTION
4.7.
"EQUITY FINANCING COMMITMENT" has the meaning set forth
in SECTION
4.7.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as
amended, and the rules and regulations promulgated thereunder.
5
"ESTIMATED CASH AND CASH EQUIVALENTS" has the meaning set
forth in
SECTION 2.3(A).
"ESTIMATED CASH AND DEBT STATEMENT" has the meaning set
forth in
SECTION 2.3(A).
"ESTIMATED DEBT OBLIGATIONS" has the meaning set forth in
SECTION
2.3(A).
"FACTORING AGREEMENTS" means collectively the (a)
Professional
Receivables Assignment Agreement, dated as of April 30, 1997, by
and between
Standard Products Industriel (n.k.a. Cooper-Standard Automotive
France S.A.S.)
and Banque Francaise du Commerce Exterior (n.k.a. Natexis Banques
Populaires);
(b) Discount With Limited Recourse Agreement, dated as of June 18,
2003, by and
between Cooper-Standard Automotive France S.A.S. and Credit
Lyonnais; and (c)
Discount Without Any Recourse Agreement, dated as of December 16,
2002, by and
between Cooper-Standard Automotive France S.A.S. and Credit
Commercial de
France.
"FIFO" has the meaning set forth in SECTION 3.23.
"FINAL CASH AND CASH EQUIVALENTS" means the amount of
Cash and Cash
Equivalents as determined pursuant to SECTION 2.3(C).
"FINAL CASH AND DEBT STATEMENT" has the meaning set forth
in SECTION
2.3(B).
"FINAL DEBT OBLIGATIONS" means the amount of Debt
Obligations of the
Sold Companies and wholly-owned Subsidiaries and Venture Entity and
Non-Wholly
Owned Subsidiary Debt Obligations as determined pursuant to SECTION
2.3(C).
"FINAL PURCHASE PRICE" means an amount equal to the
Preliminary
Purchase Price as adjusted to reflect the differences, if any,
between (a)
Estimated Cash and Cash Equivalents and Final Cash and Cash
Equivalents and (b)
Estimated Debt Obligations and Final Debt Obligations.
"FINAL TRANSFER DATE" has the meaning set forth in
SECTION 5.7(E)(IV).
"FINANCIAL STATEMENTS" has the meaning set forth in
SECTION 3.5(A).
"FINANCING COMMITMENTS" has the meaning set forth in
SECTION 4.7.
"FORMER EMPLOYEES" means former employees of the Sold
Companies, the
Subsidiaries and the Sellers, who were employed primarily in the
Business.
"GAAP" means United States generally accepted accounting
principles
and practices as in effect from time to time.
"GENERAL ENFORCEABILITY EXCEPTIONS" has the meaning set
forth in
SECTION 3.2.
6
"GOVERNMENTAL AUTHORITY" means any government or other
political
subdivision (whether federal, state, provincial, local or foreign),
or any
agency or instrumentality of any such government or political
subdivision, or
any federal, state, provincial, local or foreign court or
arbitrator.
"GOVERNMENTAL ORDER" means any judgment, order, writ,
assessment,
injunction, decree or ruling of any Governmental Authority.
"GOVERNMENT SCHEMES" means any mandatory
government-sponsored or
maintained agreements, arrangements, customs, practices or
obligations under any
Law to which any company contributes in compliance with applicable
Law in
existence as of the date of this Agreement for the payment of,
provision for, or
contribution towards, any pensions, allowances, lump sums or other
like benefits
on retirement, death, termination of employment (whether voluntary
or not), or
during periods of sickness or disablement, which are for the
benefit of an
employee or the benefit of persons dependent on any employee.
"HAZARDOUS MATERIALS" means any pollutant, toxic
substance, asbestos
and asbestos-containing materials, hazardous waste, solid waste,
hazardous
material, hazardous substance, contaminant, petroleum,
petroleum-containing
materials, radiation and radioactive materials and polychlorinated
biphenyls as
defined in, or regulated by, any Environmental Law and any other
material that
could result in liability under any Environmental Law.
"HSR ACT" means the Hart-Scott-Rodino Antitrust
Improvements Act of
1976, as amended, and the rules and regulations promulgated
thereunder.
"INCOME TAXES" means any Tax imposed on or measured by
income.
"INDEMNIFIED PARTY" means a party entitled to
indemnification under
this Agreement.
"INDEMNIFYING PARTY" means a party obligated to provide
indemnification under this Agreement.
"INSURANCE POLICIES" has the meaning set forth in SECTION
3.16(A).
"INTELLECTUAL PROPERTY" means all (a) patents, (b)
inventions,
discoveries, processes, formulae, designs, models, industrial
designs, know-how,
confidential information, proprietary information and trade
secrets, whether or
not patented or patentable, (c) trademarks, service marks, trade
names, brand
names, trade dress, slogans, logos, internet domain names and all
goodwill
associated therewith, (d) copyrights and other copyrightable works
and works in
progress, databases and software, (e) all other intellectual
property rights and
foreign equivalent or counterpart rights and forms of protection of
a similar or
analogous nature or having similar effect in any jurisdiction
throughout the
world, (f) any renewals, extensions, continuations, divisionals,
reexaminations
or reissues or equivalent or counterpart of any of the foregoing in
any
jurisdiction throughout the world, and (g) all registrations and
applications
for registration of any of the foregoing.
"INTERIM FINANCIAL STATEMENTS" has the meaning set forth
in SECTION
3.5(A).
7
"IRS" has the meaning set forth in SECTION 3.11(B).
"KNOWLEDGE OF THE BUYER" means the actual knowledge of
the individuals
listed on SCHEDULE 1.1(B).
"KNOWLEDGE OF THE SELLERS" means (a) when used with
reference to the
Sold Companies or Subsidiaries, the actual knowledge of the
individuals listed
on SCHEDULE 1.1(C)(I) and (b) when used with reference to the
Venture Entities,
the actual knowledge of the individuals listed on SCHEDULE
1.1(C)(II).
"LAW" means any law, statute, code, ordinance, treaty,
Governmental
Order, rule or regulation of any Governmental Authority.
"LEASED REAL PROPERTY" has the meaning set forth in
SECTION 3.18(A).
"LIABILITIES" means any indebtedness, obligations or
liabilities of
any kind (whether accrued, absolute, contingent or otherwise, and
whether or not
due or to become due or asserted or unasserted).
"LIEN" means any voting trust, shareholder agreement,
proxy or other
similar restriction, lien, mortgage, pledge, security interest, or
other
encumbrance.
"LIFO" has the meaning set forth in SECTION 3.23.
"LOSSES" means any and all claims, liabilities, losses,
damages,
fines, penalties, judgments and costs (in each case including
reasonable
out-of-pocket expenses).
"MATERIAL CONTRACTS" has the meaning set forth in SECTION
3.14(A).
"MAXIMUM AMOUNT" has the meaning set forth in SECTION
8.1(B).
"NET INTERCOMPANY AMOUNTS" has the meaning set forth in
SECTION 5.10.
"NISHIKAWA" means Nishikawa Standard Company, a Delaware
general
partnership.
"NLRA" has the meaning set forth in SECTION 5.8(C).
"NLRB" has the meaning set forth in SECTION 3.12(A).
"OLIVER RUBBER EMPLOYEE" means the individual identified
on SCHEDULE
5.7(V).
"ORDINARY COURSE OF BUSINESS" means, in all material
respects, the
usual, regular and ordinary course of a business consistent with
the past
practice thereof.
"ORGANIZATIONAL DOCUMENT" means, as to any Person, its
certificate or
articles of incorporation, its regulations or by-laws or any
equivalent
documents under the Law of such Person's jurisdiction of
incorporation or
organization.
8
"OUTSIDE DATE" has the meaning set forth in SECTION
7.1(B).
"OWNED REAL PROPERTY" has the meaning set forth in
SECTION 3.18(B).
"PBGC" has the meaning set forth in SECTION 3.11(C).
"PENSION PARTICIPANTS" has the meaning set forth in
SECTION 5.7(E).
"PERIODIC COSTS" has the meaning set forth in SECTION
5.7(S)(I).
"PERMITS" has the meaning set forth in SECTION 3.7.
"PERMITTED LIENS" means (a) Liens arising under the Debt
Obligations
as set forth on SCHEDULE 1.1(D), (b) Liens for Taxes, assessments
and other
charges of Governmental Authorities not yet due and payable or
being contested
in good faith by appropriate proceedings, (c) mechanics',
workmen's,
repairmen's, warehousemen's, carriers' or other like Liens arising
or incurred
in the ordinary course of business or by operation of Law if the
underlying
obligations are not delinquent, (d) with respect to the Real
Property (i) any
conditions that may be shown by a current, accurate survey, (ii)
easements,
encroachments, restrictions, rights of way and any other
non-monetary title
defects; and (iii) zoning, building and other similar restrictions;
provided
none of the foregoing described in clause (d) will individually or
in the
aggregate materially impair the value or continued use and
operation of the
property to which they relate in the Business as presently
conducted.
"PERSON" means any individual, sole proprietorship,
partnership, firm,
corporation, association, trust, unincorporated organization, joint
venture,
limited liability company, Governmental Authority or other legal
entity.
"PLAN" has the meaning set forth in SECTION 3.11(A)(I).
"POST-CLOSING LOSS" has the meaning set forth in SECTION
5.6(A).
"PRE-CLOSING TAX MATTER" has the meaning set forth in
SECTION
5.4(E)(II).
"POST-CLOSING TAX PERIOD" means a taxable period (or in
the case of a
Straddle Period, the portion thereof) ending after the Closing
Date.
"PRE-CLOSING EMPLOYER'S LIABILITY INSURANCE CLAIMS" has
the meaning
set forth in SECTION 5.7(N)(II).
"PRE-CLOSING WORKERS' COMPENSATION CLAIMS" has the
meaning set forth
in SECTION 5.7(N)(I).
"PRE-CLOSING SELF INSURED WORKERS' COMPENSATION
ARRANGEMENTS" has the
meaning set forth in SECTION 5.7(N)(I).
"PRE-CLOSING TAX PERIOD" means a taxable period (or in
the case of a
Straddle Period, the portion thereof) ending on or before the close
of business
on the Closing Date.
9
"PRELIMINARY PURCHASE PRICE" has the meaning set forth in
SECTION
2.2(A).
"PROCEEDING" means any claim, action, suit, proceeding,
administrative
enforcement proceeding or arbitration proceeding before any
Governmental
Authority.
"PURCHASE PRICE ALLOCATION" has the meaning set forth in
SECTION
2.2(B).
"RABBI TRUST" has the meaning set forth in SECTION
5.7(I)(II).
"REAL PROPERTY" means the Owned Real Property and the
Leased Real
Property.
"RELEASE" means any spilling, leaking, pumping, pouring,
emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or
disposing of a
Hazardous Material into the Environment.
"RESPONSE PERIOD" has the meaning set forth in SECTION
8.6(A).
"RESTRAINT" has the meaning set forth in SECTION 6.1(A).
"RESPONSIBLE PARTY" has the meaning set forth in SECTION
8.6(B)(II).
"RESTRUCTURING" has the meaning set forth in SECTION
5.13.
"RETAINED NAMES" has the meaning set forth in SECTION
5.12(A).
"SAVINGS PARTICIPANTS" has the meaning set forth in
SECTION 5.7(F).
"SAVINGS TRANSFER DATE" has the meaning set forth in
SECTION
5.7(F)(III).
"SCHENECTADY FACILITY MATTER" means the Settlement
Agreement and
Mutual Release, dated as of October 8, 2003, by and among Standard,
Sentinel and
Cellect, the Environmental Indemnification Agreement, dated as of
March 1, 1998,
by and between Schenectady County Industrial Development Agency
("SCIDA") and
Standard Products Company, the Environmental Indemnification
Agreement, dated as
of October 8, 2003, by and between Standard and the SCIDA and the
Agreement
Concerning Campbell Plastics Building, dated as of October 8, 2003,
by and among
the SCIDA, Standard, Sentinel and Cellect, pursuant to which
Standard has agreed
to share the costs of demolition and disposal of the building and
agreed to
indemnify SCIDA, Sentinel and Cellect for certain matters relating
to the
property at or about 2900 Campbell Avenue in the Town of Rotterdam
and City of
Schenectady, New York.
"SCIDA" means the Schenectady County Industrial
Development Agency.
"SECUNDED EMPLOYEES" has the meaning set forth in SECTION
5.7(T).
"SECUNDMENT PERIOD" has the meaning set forth in SECTION
5.7(T).
"SECURITIES ACT" means the Securities Act of 1933, as
amended, and the
rules and regulations promulgated thereunder.
10
"SELLER BENEFIT PLAN" has the meaning set forth in
SECTION
3.11(A)(III).
"SELLER INDEMNIFIED PERSONS" has the meaning set forth in
SECTION
8.2(A).
"SELLER TAXES" shall mean (a) all Taxes imposed on or
payable with
respect to the Sold Companies or the Subsidiaries relating to a
Pre-Closing Tax
Period, (b) all Taxes of any member of an affiliated, consolidated,
combined or
unitary group of which the Sold Companies or the Subsidiaries (or
any
predecessor of any of the foregoing) are or were a member on or
prior to the
Closing Date, including pursuant to Treasury Regulation Section
1.1502-6 or any
analogous or similar state, local, or foreign law or regulation, as
a transferee
or successor, by contract or otherwise, (c) any Taxes (including
Transfer Taxes)
arising from or in connection with the Restructuring, or (d) any
Taxes arising
from or in connection with any breach by Sellers of any
representation, warranty
or covenant contained in this Agreement, in each case, to the
extent such Taxes
are the liability of Sellers pursuant to SECTION 5.5(A) hereof.
"SELLER WELFARE PLANS" has the meaning set forth in
SECTION 5.7(D).
"SELLERS' ACTUARY" has the meaning set forth in SECTION
5.7(S)(I).
"SELLER'S LONG-TERM DISABILITY PLAN" has the meaning set
forth in
SECTION 5.7(Q).
"SELLERS" has the meaning set forth in the preamble.
"SENTINEL" means Sentinel Products Corp.
"SEVERANCE PLAN" means the Cooper Tire & Rubber
Company Change in
Control Severance Pay Plan.
"SHARES" has the meaning set forth in the recitals.
"SIEBE ACTUARY" has the meaning set forth in SECTION
5.7(S)(I).
"SIEBE PLAN" has the meaning set forth in SECTION
5.7(S)(I).
"SIEBE PURCHASE AGREEMENT" has the meaning set forth in
SECTION
8.1(A).
"SIEBE RULES" has the meaning set forth in SECTION
5.7(S)(I).
"SOLD COMPANIES" has the meaning set forth in the
recitals.
"SOLD COMPANY BENEFIT PLAN" has the meaning set forth in
SECTION
3.11(A)(III).
"SOLD COMPANY MATERIAL ADVERSE EFFECT" means any state of
facts,
change, occurrence or development that (i) directly or indirectly
prevents or
materially impairs or delays the ability of any Seller to perform
its
obligations hereunder or (ii) has a material adverse effect on the
condition
(financial or otherwise), results of operations, business,
properties, assets or
Liabilities of the Business or the Sold Companies, Subsidiaries and
Venture
Entities taken as a whole, but excludes any effect (a) resulting
from general
economic conditions (whether as a
11
result of acts of terrorism, war (whether or not declared), armed
conflicts or
otherwise) and (b) impacting companies in the industry in which the
Business is
conducted generally, in each such case except to the extent such
effects, facts,
change, occurrence or development has a disproportionately adverse
impact on the
Business or the Sold Companies, Subsidiaries and Venture Entities.
"STANDARD" means Cooper-Standard Automotive Inc.
"STRADDLE PERIOD" means any taxable period which begins
before and
ends after the Closing Date.
"STRADDLE PERIOD TAX MATTER" has the meaning set forth in
SECTION
5.4(E)(III).
"SUBSIDIARIES" means the Persons listed on SCHEDULE
3.4(A),
constituting all of the direct and indirect majority or wholly
owned
subsidiaries of the Sold Companies.
"TAX" or "TAXES" means any income, alternative or add-on
minimum,
gross receipts, sales, use, ad valorem, franchise, profits,
license, transfer,
withholding, payroll, employment, excise, severance, stamp,
occupation, premium,
value added, property, environmental or windfall profits taxes,
customs, duties
or similar fees, assessments or charges of any kind whatsoever,
together with
any interest and any penalties, additions to tax or additional
amounts imposed
by any Taxing Authority.
"TAX CLAIM" has the meaning set forth in SECTION
5.4(E)(I).
"TAX RESERVE" means the amount of any liability, accrual
or reserve
for Taxes other than Income Taxes reflected on the Balance Sheet
(excluding
reserves for deferred Taxes), as adjusted solely for operations and
transactions
through the Closing Date consistent with past custom and practice.
"TAX RETURN" means any and all returns (including amended
returns),
filings, statements or similar reports relating to Taxes.
"TAXING AUTHORITY" means any Governmental Authority
responsible for
the administration or imposition of any Tax.
"THIRD PARTY CLAIM" has the meaning set forth in SECTION
8.6(B)(I).
"TRADEMARKS" has the meaning set forth in SECTION
5.12(B).
"TRANSACTION" has the meaning set forth in SECTION
5.8(C).
"TRANSACTION AGREEMENTS" means (a) with respect to the
Shares, such
instruments of sale, conveyance, transfer and assignment, and such
other
agreements or documents, if any, necessary under Law or
contemplated by this
Agreement in order to transfer all right, title and interest of the
applicable
Sellers in such Shares in accordance with the terms hereof and (b)
the
Transition Services Agreements.
12
"TRANSFER AMOUNT" has the meaning set forth in SECTION
5.7(E)(V).
"TRANSFER PRICING TAX MATTER" means any audit or other
administrative
or judicial Proceeding that relates to transfer pricing or other
similar issues
for any of the Sold Companies or the Subsidiaries for a Pre-Closing
Tax Period
or Straddle Period.
"TRANSFER TAXES" has the meaning set forth in SECTION
5.4(C).
"TRANSFERRED BENEFIT LIABILITY" has the meaning set forth
in SECTION
5.7(E)(V).
"TRANSITION SERVICES AGREEMENTS" means (a) the Transition
Services
Agreement to be entered into between Cooper and Buyer and (b) the
two Supply
Agreements to be entered into between Cooper and Standard,
substantially in the
forms attached hereto as EXHIBIT B.
"TREASURY REGULATIONS" means the Treasury Regulations
promulgated
under the Code.
"UNION EMPLOYEES" has the meaning set forth in SECTION
5.7(C).
"VENTURE ENTITIES" means Craig Assembly and Nishikawa.
"VENTURE ENTITY AND NON-WHOLLY OWNED SUBSIDIARY DEBT
OBLIGATIONS"
means the Applicable Portion of Debt Obligations of the Venture
Entities and the
non-wholly owned Subsidiaries.
"VENTURE FINANCIAL STATEMENTS" has the meaning set forth
in SECTION
3.5(C).
"VENTURE ENTITY PLAN" means each Plan which is sponsored,
entered into
or maintained by any Venture Entity.
"WAIVER" means a fully executed, binding, and irrevocable
waiver
entered into prior to the Closing Date (i) with respect to James S.
McElya, of
any claims or right he may have under the Employment Agreement to
termination or
severance benefits, other than as a result of the termination of
his employment
during the Term (as defined in the Employment Agreement) (x)
following the
Closing Date by the Buyer without Cause (as defined in the
Employment Agreement)
or (y) following the Closing Date by Mr. McElya due to the failure
of the Buyer
to provide him with the employment terms and compensation set forth
in
definitive employment documentation to be entered into with Buyer
prior to the
Closing Date, which failure is not remedied by the Buyer within ten
(10)
calendar days after receipt by the Buyer of written notice of such
failure; and
(ii) with respect to Paul C. Gilbert, Edward A. Hasler, James W.
Pifer, Gary T.
Phillips, Allen J. Campbell, Michael C. Verwilst, Helen T. Yantz
and Larry J.
Beard, of any claims or right he or she may have under the
Severance Plan to
termination or severance benefits, other than as a result of the
termination of
their employment during the Severance Period (as defined in the
Severance Plan)
(x) following the Closing Date by the Buyer without Cause (as
defined in the
Severance Plan) or (y) following the Closing date by such
individual due to the
failure of the Buyer to provide him or her with the employment and
compensation
set forth in definitive employment documentation to be entered into
with Buyer
prior to the Closing
13
Date, which failure is not remedied by the Buyer within ten (10)
calendar days
after receipt by the Buyer of written notice of such failure.
"WARN ACT" has the meaning set forth in SECTION 3.12(A).
"WICKES AGREEMENT" means the Settlement Agreement and
Mutual Release
entered into as of the 1st day of June, 1998, by and between Cooper
and Wickes
Manufacturing Company.
1.2 OTHER INTERPRETIVE PROVISIONS. The words "hereof,"
"herein" and
"hereunder" and words of similar import when used in this Agreement
refer to
this Agreement as a whole (including any Schedules and Exhibits
hereto) and not
to any particular provision of this Agreement, and all Article,
Section,
Schedule and Exhibit references are to this Agreement unless
otherwise
specified. The words "include," "includes" and "including" will be
deemed to be
followed by the phrase "without limitation." The meanings given to
terms defined
herein will be equally applicable to both the singular and plural
forms of such
terms. Whenever the context may require, any pronoun includes the
corresponding
masculine, feminine and neuter forms. Except as otherwise expressly
provided
herein, all references to "dollars" or "$" will be deemed
references to the
lawful money of the United States of America.
ARTICLE II
PURCHASE AND SALE
2.1 PURCHASE AND SALE OF THE SHARES. On the Closing Date
and subject
to the terms and conditions set forth in this Agreement, Cooper and
Cooper UK
shall sell, convey, assign and transfer to the Buyer and the Buyer
will purchase
and acquire, all of Cooper's and Cooper UK's right, title and
interest in and to
the Shares, in each case, free and clear of all Liens, other than
such Liens as
may be created by or on behalf of the Buyer.
2.2 CONSIDERATION. On the Closing Date and subject to the
terms and
conditions set forth in this Agreement, the Buyer will pay to
Cooper and Cooper
UK, in consideration of the sale, assignment and transfer of the
Shares, the
aggregate sum of $1,157,500,000 in cash (in U.S. dollars) plus all
Estimated
Cash and Cash Equivalents minus all Estimated Debt Obligations (as
adjusted
pursuant to SECTION 2.3, the "PRELIMINARY PURCHASE PRICE"). Such
amount shall be
paid to the applicable Seller on the Closing Date by means of one
or more wire
transfers of immediately available funds to an account or accounts
designated in
writing by Cooper at least one Business Day prior the Closing Date.
(b) (i) On or prior to the Closing Date, Buyer and
Sellers shall
jointly prepare and agree in good faith to a statement allocating
the
Preliminary Purchase Price among the Shares sold by each Seller and
the
non-competition and non-solicitation covenants contained herein
(the "PURCHASE
PRICE ALLOCATION") in accordance with applicable Law. If the
parties cannot
agree in good faith within the time period set forth above, then
Cooper and
Buyer jointly shall engage the Arbitration Firm to resolve such
dispute and
whose fees shall be borne equally by Cooper and Buyer. The
determination by the
Arbitration Firm shall be binding on the parties. None of the
Sellers, the Buyer
or their respective Affiliates shall take any position inconsistent
14
with the Purchase Price Allocation on any Tax Return or in any
audit or other
proceeding relating to Taxes unless otherwise required by
applicable Law.
(ii) If an adjustment is made to the (A) Preliminary
Purchase Price
pursuant to SECTION 2.3 hereof or otherwise or (B) Final
Purchase Price,
the parties shall jointly agree to allocate such adjustment
among the
Shares sold by each Seller and the non-competition and
non-solicitation
covenants contained herein (the "ADJUSTED PURCHASE PRICE
ALLOCATION"). If
after good faith negotiations, the parties cannot agree upon
the allocation
of such adjustment among the Shares sold by each Seller and
such
non-competition and non-solicitation covenants within thirty
(30) days
after such adjustment was made, then Cooper and Buyer jointly
shall engage
the Arbitration Firm to resolve such dispute and whose fees
shall be borne
equally by Cooper and Buyer. The determination by the
Arbitration Firm
shall be binding on the parties. None of the Sellers, the
Buyer or their
respective Affiliates shall take any position inconsistent
with the
Adjusted Purchase Price Allocation on any Tax Return or in any
audit or
other proceeding relating to Taxes unless otherwise required
by Law.
(c) Notwithstanding anything in this Agreement to the
contrary, if any
of the Sellers fails to provide the Buyer with the certification
provided in
SECTION 2.5(A)(V) in whole or in part, the Buyer shall be entitled
to withhold
the requisite amount from the Preliminary Purchase Price in
accordance with
Section 1445 of the Internal Revenue Code of 1986, as amended (the
"CODE") and
the Treasury Regulations promulgated thereunder or other applicable
Law.
2.3 ADJUSTMENT TO CASH AND CASH EQUIVALENTS AND DEBT
OBLIGATIONS. Five
(5) Business Days prior to the Closing Date, Cooper shall prepare
and deliver to
Buyer (i) a statement (the "ESTIMATED CASH AND DEBT STATEMENT") of
(A) a good
faith estimate of the amount of Cash and Cash Equivalents
anticipated to exist
immediately prior to the Closing (the "ESTIMATED CASH AND CASH
EQUIVALENTS"),
and (B) a good faith estimate of the Debt Obligations of the Sold
Companies and
the wholly-owned Subsidiaries and the Venture Entity and Non-Wholly
Owned
Subsidiary Debt Obligations anticipated to be outstanding
immediately prior to
the Closing ("ESTIMATED DEBT OBLIGATIONS") and (ii) a statement
reflecting a
good faith estimate of the combined balance sheet of the Business
as of the
Closing. The Estimated Cash and Debt Statement shall be subject to
the review of
Buyer, and Cooper and the Buyer will cooperate and negotiate in
good faith to
resolve any dispute regarding the Estimated Cash and Debt Statement
prior to the
Closing; provided that if any item of dispute regarding the
Estimated Cash and
Debt Statement is not resolved by agreement in writing between
Cooper and the
Buyer two (2) Business Days prior to the Closing Date, then
Cooper's estimate of
such disputed item together with the resolved disputed items and
the undisputed
items contained in the Estimated Cash and Debt Statement shall be
deemed final
and shall be deemed the Estimated Cash and Cash Equivalents and the
Estimated
Debt Obligations for purposes of SECTION 2.2(A).
(b) Within 45 days following the Closing Date, Buyer
shall prepare and
deliver to Cooper a statement setting forth the Final Cash and Cash
Equivalents,
the Final Debt Obligations and the Final Purchase Price (the "FINAL
CASH AND
DEBT STATEMENT").
15
(c) Within fifteen (15) days following receipt by Cooper
of the Final
Cash and Debt Statement, Cooper shall deliver written notice to
Buyer of any
dispute it has with respect to the preparation or content of the
Final Cash and
Debt Statement. Such notice must describe in reasonable detail the
items
contained in the Final Cash and Debt Statement that Cooper disputes
and the
basis for any such disputes. If Cooper does not notify Buyer of a
dispute with
respect to the Final Cash and Debt Statement within such 15-day
period, such
Final Cash and Debt Statement will be final, conclusive and binding
on the
parties. In the event of such notification of a dispute, Cooper and
Buyer shall
negotiate in good faith to resolve such dispute. If Cooper and
Buyer,
notwithstanding such good faith effort, fail to resolve such
dispute within ten
(10) days after Cooper advises Buyer of its objections, then Cooper
and Buyer
jointly shall engage the Arbitration Firm to resolve such dispute.
As promptly
as practicable thereafter, Cooper and Buyer shall each prepare and
submit a
written presentation to the Arbitration Firm. As soon as
practicable thereafter,
Cooper and Buyer shall cause the Arbitration Firm to choose one of
the party's
positions based solely upon the presentation by Cooper and Buyer.
All fees and
expenses relating to this work of the Arbitration Firm shall be
borne by the
party whose position was not selected by the Arbitration Firm. All
determinations made by the Arbitration Firm will be final,
conclusive and
binding on the parties.
(d) For purposes of complying with the terms set forth in
this SECTION
2.3, each party shall cooperate with and make available to the
other parties and
their respective representatives all information, records, data and
working
papers, and shall permit reasonable access to its facilities and
personnel, as
may be reasonably required in connection with the preparation and
analysis of
the Final Cash and Debt Statement and the resolution of any
disputes thereunder.
(e) If Final Purchase Price (as finally determined
pursuant to SECTION
2.3(C)) is less than the Preliminary Purchase Price, Cooper shall
pay Buyer by
means of one or more wire transfers of immediately available funds
to an account
or accounts designated in writing by Buyer an amount in cash (in
U.S. dollars)
equal to such shortfall (together with interest thereon at the
Applicable Rate
from and including the Closing Date to, but excluding, the date of
such
payment). Such payment is to be made within five (5) Business Days
of the date
on which Final Purchase Price is finally determined pursuant to
SECTION 2.3(C).
(f) If Final Purchase Price (as finally determined
pursuant to SECTION
2.3(C)) is greater than the Preliminary Purchase Price, Buyer shall
pay Cooper
by means of one or more wire transfers of immediately available
funds to an
account or accounts designated in writing by Cooper an amount in
cash (in U.S.
dollars) equal to such excess (together with interest thereon at
the Applicable
Rate from and including the Closing Date to, but excluding, the
date of such
payment). Such payment is to be made within five (5) Business Days
from the date
on which the Final Purchase Price is finally determined pursuant to
SECTION
2.3(C).
2.4 THE CLOSING. Unless this Agreement is terminated
pursuant to
ARTICLE VII, the closing of the transactions contemplated by this
Agreement (the
"CLOSING") shall take place at the offices of Simpson Thacher &
Bartlett LLP,
425 Lexington Avenue, New York, New York 10017, not later than the
third
Business Day following the satisfaction or waiver of the conditions
set forth in
ARTICLE VI hereof (other than those conditions that are to be
satisfied at
16
the Closing), or at such other place and on such other date or time
as may be
agreed upon by the Sellers and the Buyer (the "CLOSING DATE").
2.5 DELIVERIES AT THE CLOSING. At or prior to the
Closing, the Sellers
shall deliver or cause to be delivered to the Buyer:
(i) stock certificates (or local legal equivalent)
evidencing the
Shares to be sold by each Seller, accompanied by stock powers
duly executed
in blank and requisite transfer tax stamps, if any, as may be
necessary or
desirable to effect the transactions described in SECTION 2.1;
(ii) a receipt from each Seller for the portion of the
Preliminary
Purchase Price paid to such Seller;
(iii) the Transaction Agreements to which each Seller is
a party, duly
executed by each relevant Seller;
(iv) copies of the resolutions (or local equivalent) of
the boards of
directors of the Sellers, authorizing and approving this
Agreement and the
Transaction Agreements and the transactions contemplated
hereby and
thereby, certified by the respective corporate secretaries (or
local
equivalent) of the applicable Sellers to be true and complete
and in full
force and effect and unmodified as of the Closing Date;
(v) certificates in form and substance satisfactory to
the Buyer, duly
executed and acknowledged by each Seller to the extent
required under
applicable Law, certifying that the transactions contemplated
hereby are
exempt from withholding under Section 1445 of the Code and
other applicable
Law;
(vi) the Consents listed on SCHEDULE 2.5(A)(VI);
(vii) the certificates required by SECTION 6.3(C);
(viii) the resignations of the officers, as corporate
officers, and
directors of the Sold Companies and Subsidiaries set forth on
SCHEDULE
2.5(A)(VIII);
(ix) assignment of the Wickes Agreement;
(x) a receipt duly executed by each Seller and each Sold
Company and
Subsidiary acknowledging, on behalf of Sellers and each of
their
subsidiaries, settlement of all intercompany receivables,
payables, loans
and investments then existing between any Seller or any of its
subsidiaries
that is not a Sold Company or Subsidiary, on the one hand, and
the Sold
Companies or Subsidiaries, on the other hand, pursuant to
SECTION 5.10;
(xi) all minute books, stock record books (or similar
registries) and
corporate (or similar) records and seals of each Sold Company
and
Subsidiary not already in the possession of the Sold Companies
or the
Subsidiaries; and
17
(xii) a list of the signatories on each of the bank
accounts set forth
on SCHEDULE 3.24.
(b) At or prior to the Closing, the Buyer shall deliver
or cause to be
delivered to the respective Sellers the following:
(i) the Preliminary Purchase Price by wire transfer of
immediately
available funds to an account or accounts designated by Cooper
as provided
in SECTION 2.2(A);
(ii) a receipt evidencing the Buyer's receipt of the
Shares;
(iii) copies of the resolutions of the board of directors
(or
equivalent) of the Buyer authorizing and approving this
Agreement and all
other transactions and agreements contemplated hereby,
certified by the
corporate secretary (or equivalent) of the Buyer to be true
and complete
and in full force and effect and unmodified as of the Closing
Date;
(iv) the Transaction Agreements to which the Buyer is a
party, duly
executed by the Buyer;
(v) the certificate required by SECTION 6.2(C); and
(vi) assumption of Cooper's obligations under the Wickes
Agreement.
2.6 STRUCTURING COOPERATION. Notwithstanding any other
provision of
this Agreement to the contrary, prior to the Closing (A) the
Sellers shall, and
shall cause the Sold Companies and Subsidiaries to, cooperate with
Buyer in
connection with structuring the acquisition of the Shares
(including without
limitation allowing for the purchases contemplated hereunder to be
effected by
one or more Affiliates of the Buyer, and providing for the separate
purchase of
all or any portion of the equity of any Subsidiary or Venture
Entity by Buyer or
an Affiliate of Buyer, any such equity to be included in the
definition of
"Shares" for purposes of this Agreement) and shall take any and all
actions
necessary to effectuate such structure (including without
limitation entering
into separate agreements with respect to such transactions),
provided that such
cooperation and other actions do not have any adverse financial or
Tax
consequences to the Sellers or any of their Affiliates that will
not be
reimbursed pursuant to a mutually agreed to indemnity given by
Buyer and (B)
Buyer shall, and shall cause any of its Affiliates (1) to cooperate
with Sellers
in connection with filing Form 8832, Entity Classification
Election, with
respect to Cooper-Standard Automotive (Deutschland) GmbH,
Cooper-Standard
Automotive Ceska republika s.r.o. and Cooper-Standard Automotive
Espana, S.A.
(or its successor), and (2) to otherwise cooperate with Sellers in
connection
with structuring the acquisition of the Shares, provided that such
cooperation
referred to in clause (2) (A) does not have any adverse financial
or Tax
consequences to Buyer or any of its Affiliates as of the Closing
Date that will
not be reimbursed pursuant to a mutually agreed to indemnity given
by Sellers
and (B) such cooperation will not be expected to have any adverse
structural,
operational or similar consequences to Buyer, the Sold Companies or
the
Subsidiaries after the Closing Date, as determined in good faith by
Buyer.
Sellers and Buyer shall and shall cause of each of their Affiliates
to file all
relevant Tax Returns consistently with the structure agreed to by
the parties
18
hereto pursuant to this SECTION 2.6, unless and until otherwise
required by a
Taxing Authority or a court of competent jurisdiction.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, jointly and severally, hereby represent and
warrant to
the Buyer as follows:
3.1 ORGANIZATION. Each of the Sellers and the Sold
Companies is a
corporation duly incorporated, validly existing and in good
standing under the
Laws of its jurisdiction of incorporation. Each of the Sellers and
the Sold
Companies has the requisite corporate power and authority to own,
lease and
operate its assets and to carry on its business as now being
conducted and is
duly qualified, authorized or licensed to do business and is in
good standing in
the jurisdictions in which the ownership, lease or operation of its
assets or
the conduct of its business requires such qualification,
authorization or
license, except where the failure to be so qualified, authorized or
licensed (a)
would not reasonably be expected, individually or in the aggregate,
to have a
material adverse effect on the ability of the Sellers to consummate
the
transactions contemplated by this Agreement or (b) with respect to
the Sold
Companies, would not reasonably be expected, individually or in the
aggregate,
to have a Sold Company Material Adverse Effect.
3.2 AUTHORIZATION; ENFORCEABILITY. Each of the Sellers
has the
requisite corporate power and authority to execute and deliver this
Agreement
and the Transaction Agreements to which each is a party and to
perform its
obligations hereunder and thereunder. The execution and delivery of
this
Agreement and the Transaction Agreements by each of the Sellers, as
applicable,
and the performance by each of them of their respective obligations
hereunder
and thereunder have been duly authorized by all necessary corporate
action on
the part of such party and no other corporate or shareholder
proceedings or
actions are necessary to authorize and consummate this Agreement,
the
Transaction Agreements or the transactions contemplated hereby or
thereby. This
Agreement has been, and each of the Transaction Agreements will be,
when
delivered to Buyer, duly executed and delivered by each of the
Sellers, as
applicable, and, assuming due authorization, execution and delivery
by the
Buyer, this Agreement constitutes, and each of the Transaction
Agreements will
constitute, a valid and binding agreement of each of the Sellers,
as applicable,
enforceable against each of them in accordance with its terms,
except as may be
limited by applicable bankruptcy, insolvency, fraudulent
conveyance,
reorganization, moratorium and other similar Laws relating to or
affecting
creditors' rights generally and general equitable principles
(whether considered
in a proceeding in equity or at law) (the "GENERAL ENFORCEABILITY
EXCEPTIONS").
3.3 CAPITAL STOCK OF THE SOLD COMPANIES. SCHEDULE 3.3
sets forth for
each of the Sold Companies (a) its jurisdiction of incorporation,
formation or
organization, as applicable, and (b) the number of authorized,
issued and
outstanding shares of capital stock, the names of the holders
thereof, and the
number of shares of capital stock held by each such holder and,
except as set
forth on SCHEDULE 3.3, there are no other authorized, issued or
outstanding
shares of capital stock or other equity interests of any of the
Sold Companies.
All of the issued and outstanding shares of capital stock are
owned,
beneficially and of record, free and clear of
19
any Liens. All of the shares of capital stock are duly authorized
and validly
issued and are fully paid and nonassessable and have been issued in
compliance
with (and since such issuance, have not been transferred except in
compliance
with) all applicable federal, state and foreign securities Laws and
any
preemptive rights, rights of first refusal or similar rights of any
Person.
Except for this Agreement, there are no outstanding subscriptions,
options,
warrants, calls, preemptive rights, conversion or other rights,
agreements,
commitments, arrangements, trusts, proxies or understandings
relating to the
sale, issuance or voting of any shares of the capital stock of any
of the Sold
Companies, or of any securities or other instruments convertible
into,
exchangeable for or evidencing the right to purchase any shares of
capital stock
of any of the Sold Companies. There are no outstanding agreements
or commitments
obligating any Seller or Sold Company to repurchase, redeem or
otherwise acquire
any outstanding shares or other equity interests of any Sold
Company. At the
Closing, the applicable Sellers will convey good and valid title to
the Shares
to the Buyer, free and clear of any Liens, other than Liens created
by or on
behalf of the Buyer.
3.4 SUBSIDIARIES AND JOINT VENTURES.
(a) SUBSIDIARIES. SCHEDULE 3.4(A) sets forth for each of
the
Subsidiaries (i) its jurisdiction of incorporation, formation or
organization,
as applicable and (ii) the number of authorized, issued and
outstanding shares
of each class of its capital stock or other authorized, issued and
outstanding
equity interests, as applicable, the names of the holders thereof,
and the
number of shares or percentage interests, as applicable, held by
each such
holder. Each Subsidiary is duly incorporated, formed or organized,
as
applicable, validly existing and, where applicable, in good
standing under the
Laws of its jurisdiction of incorporation, formation or
organization, as
applicable, has the requisite corporate or similar power and
authority to own,
lease and operate its assets and to carry on its business as now
being
conducted, and is duly qualified, authorized or licensed to do
business, and,
where applicable, is in good standing in the jurisdictions in which
the
ownership, lease or operation of its assets or the conduct of its
business
requires such qualification or license, except where the failure to
be so
qualified, authorized or licensed would not reasonably be expected,
individually
or in the aggregate, to have a Sold Company Material Adverse
Effect. Except as
set forth on SCHEDULE 3.4(A), all the issued and outstanding shares
of capital
stock or other equity interests of the Subsidiaries are owned,
beneficially and
of record, by the Sold Companies or another Subsidiary, free and
clear of any
Liens, and such Sold Company or Subsidiary has good and valid title
to such
shares of capital stock or other equity interests. All of such
issued and
outstanding shares were duly authorized and validly issued and are
fully paid
and nonassessable and have been issued in compliance with (and
since such
issuance, have not been transferred except in compliance with) all
applicable
federal, state and foreign securities Laws and any preemptive
rights, rights of
first refusal or similar rights of any Person. Except as set forth
on SCHEDULE
3.4(A), there are no outstanding subscriptions, options, warrants,
calls,
preemptive rights, conversion or other rights, agreements,
commitments,
arrangements, trusts, proxies or understandings relating to the
sale, issuance
or voting of any shares of the capital stock or other equity
interest of any of
the Subsidiaries, or of any securities or other instruments
convertible into,
exchangeable for or evidencing the right to purchase any shares of
capital stock
or other equity interests of any of the Subsidiaries. There are no
outstanding
agreements or commitments obligating any Seller, Sold Company or
Subsidiary to
repurchase, redeem or otherwise acquire any outstanding shares or
other equity
interests of any Subsidiary. Except (i) for the Venture Entities
and (ii) for
equity interests set
20
forth on SCHEDULE 3.4(A) that will no longer be owned by the Sold
Companies and
Subsidiaries after giving effect to the Restructuring, neither the
Sold
Companies nor the Subsidiaries own any equity interest in any other
Person.
(b) JOINT VENTURES. SCHEDULE 3.4(B) sets forth for each
of the Venture
Entities (i) its jurisdiction of incorporation, formation or
organization, as
applicable and (ii) the number of authorized, issued and
outstanding shares of
each class of its capital stock or other authorized, issued and
outstanding
equity interests, as applicable, the names of the holders thereof,
and the
number of shares or percentage interests, as applicable, held by
each such
holder. Each Venture Entity is duly incorporated, formed or
organized, as
applicable, validly existing and, where applicable, in good
standing under the
Laws of its jurisdiction of incorporation, formation or
organization, as
applicable, has the requisite corporate, partnership or similar
power and
authority to own, lease and operate its assets and to carry on its
business as
now being conducted, and, to the Knowledge of the Sellers, is duly
qualified,
authorized or licensed to do business, and, where applicable, is in
good
standing in the jurisdictions in which the ownership, lease or
operation of its
assets or the conduct of its business requires such qualification
or license,
except where the failure to be so qualified, authorized or licensed
would not
reasonably be expected, individually or in the aggregate, to have a
Sold Company
Material Adverse Effect. The issued and outstanding shares of
capital stock or
other equity interests of the Venture Entities that are owned,
beneficially and
of record, by the Sold Companies or Subsidiaries, as applicable,
are owned free
and clear of any Liens, and such Sold Company or Subsidiary, as
applicable, has
good and valid title to such shares of capital stock or other
equity interests.
All of such issued and outstanding shares or other equity interests
owned by the
Sellers, Sold Companies or Subsidiaries were duly authorized and
validly issued
and are fully paid and nonassessable and have been issued in
compliance with
(and since such issuance, have not been transferred except in
compliance with)
all applicable federal, state and foreign securities Laws and any
preemptive
rights, rights of first refusal or similar rights of any Person.
Except as set
forth on SCHEDULE 3.4(B), there are no outstanding subscriptions,
options,
warrants, calls, preemptive rights, conversion or other rights,
agreements,
commitments, arrangements, trusts, proxies or understandings
relating to the
sale, issuance or voting of any shares of the capital stock or
other equity
interest of any of the Venture Entities that are owned by the Sold
Companies or
Subsidiaries. There are no outstanding agreements or commitments
obligating any
Venture Entity to repurchase, redeem or otherwise acquire any
outstanding shares
or other equity interests of any Venture Entity that are owned by
the Sold
Companies or Subsidiaries.
3.5 FINANCIAL STATEMENTS. SCHEDULE 3.5(A) sets forth the
audited
combined summary balance sheet of the Business as of December 31,
2003 and
December 31, 2002, and the audited combined statements of income
and retained
earnings and the audited combined statements of cash flows of the
Business for
each of the years in the period then ended (the "ANNUAL FINANCIAL
STATEMENTS").
SCHEDULE 3.5(A) also sets forth the unaudited combined summary pro
forma balance
sheet of the Business as of June 30, 2004 (the "BALANCE SHEET"),
the related
unaudited combined pro forma statement of income and retained
earnings and the
combined pro forma statement of cash flows for the six-month period
then ended
(the "INTERIM FINANCIAL STATEMENTS" and, together with the Annual
Financial
Statements, the "FINANCIAL STATEMENTS"). Except as set forth on
SCHEDULE 3.5(A),
the Financial Statements have been prepared from the books and
records of the
Business, and fairly present in all material respects the financial
position and
results of operations of the Business at the dates and for the
respective
21
periods covered, in each case in accordance with GAAP applied on a
consistent
basis, subject in the case of the Interim Financial Statements, to
the absence
of note disclosures and normal year end adjustments.
(b) The Business has no Liabilities of any kind, whether
absolute,
accrued, contingent or otherwise, except for Liabilities (i)
incurred in the
ordinary course of business since the date of the Balance Sheet,
(ii) reflected
on, accrued or reserved against, in the Balance Sheet, (iii) that,
if known,
would not be required by GAAP to be reflected or reserved against
on a balance
sheet (or disclosed in the notes thereto) of the Business and the
Sold Companies
and the Subsidiaries, (iv) as would not reasonably be expected to,
individually
or in the aggregate, constitute a Sold Company Material Adverse
Effect or (v)
set forth on SCHEDULE 3.5(B).
(c) Sellers have previously delivered to Buyer (i) the
unaudited
balance sheet of Craig Assembly as of June 30, 2004 and the
unaudited statement
of income of Craig Assembly for the three-month period then ended
and (ii) the
reviewed and unaudited balance sheet of Nishikawa for the six-month
periods
ended June 27, 2004 and June 29, 2003 and the related unaudited
statements of
income, changes in partners' equity and cash flows of Nishikawa for
each of the
periods then ended (the "VENTURE FINANCIAL STATEMENTS"). To the
Knowledge of the
Sellers, the Venture Financial Statements have been prepared from
the books and
records of the applicable Venture Entity, and fairly present in all
material
respects the financial position and results of operations of each
Venture Entity
at the date and for the period covered, in each case in accordance
with GAAP
applied on a consistent basis, subject to the absence of note
disclosures and to
normal year-end adjustments.
(d) To the Knowledge of the Sellers, the Venture Entities
have no
Liabilities of any kind, whether absolute, accrued, contingent or
otherwise,
except for Liabilities (i) incurred in the ordinary course of
business since the
date of the applicable balance sheet included in the Venture
Financial
Statements, (ii) reflected on, accrued or reserve against, in such
applicable
balance sheet, (iii) that, if known, would not be required by GAAP
to be
reflected or reserved against on a balance sheet (or disclosed in
the notes
thereto) of the applicable Venture Entity, (iv) as would not
reasonably be
expected to, individually or in the aggregate, constitute a Sold
Company
Material Adverse Effect or (v) set forth on SCHEDULE 3.5(D).
3.6 NO CONFLICTS OR APPROVALS. Except as set forth on
SCHEDULE 3.6(A),
the execution, delivery and performance by the Sellers of this
Agreement and the
Transaction Agreements and the consummation by the Sellers of the
transactions
contemplated hereby and thereby do not and will not (i) violate,
conflict with
or result in a breach of the organizational documents of any of the
Sellers, the
Sold Companies or the Subsidiaries or, to the Knowledge of the
Sellers, the
Venture Entities, (ii) violate, conflict with or result in a breach
of, or
constitute a default by any of the Sellers, the Sold Companies, the
Subsidiaries
or, to the Knowledge of the Sellers, the Venture Entities (or
create an event
which, with notice or lapse of time or both, would constitute a
default) or give
rise to any right of termination, consent, cancellation,
acceleration, increased
Liabilities or fees, or right to increase the obligations or
otherwise modify
the terms under, or result in the creation of any Lien, other than
Permitted
Liens, upon any of the properties, rights or assets of any of the
Sellers, its
subsidiaries, the Sold Companies or the Subsidiaries or, to the
Knowledge of the
Sellers, the Venture Entities or on the Shares or to
22
which any of such properties, assets or Shares are subject, under
any Contract
to which any of the foregoing is a party or otherwise bound, except
as would
not, individually or in the aggregate, have a Sold Company Material
Adverse
Effect or a material adverse effect on the ability of any of the
Sellers to
consummate the transactions contemplated by this Agreement, or
(iii) subject to
the receipt of the requisite approvals referred to on SCHEDULE
3.6(B), conflict
with or violate any Governmental Order or Law applicable to any of
the Sellers,
the Sold Companies or the Subsidiaries or, to the Knowledge of the
Sellers, the
Venture Entities or any of their respective properties, rights or
assets.
(b) Except as set forth on SCHEDULE 3.6(B), no Consent is
required to
be obtained, filed or delivered by the Sellers for the consummation
by the
Sellers of the transactions contemplated by this Agreement and the
Transaction
Agreements that if not obtained, filed or delivered, as the case
may be, would
reasonably be expected, individually or in the aggregate, to have a
Sold Company
Material Adverse Effect.
3.7 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORIZATIONS.
Except as set
forth on SCHEDULE 3.7, the Sold Companies, the Subsidiaries and, to
the
Knowledge of the Sellers, the Venture Entities, and with respect to
the
Business, the Sellers and their subsidiaries, are currently in
compliance with
all Laws and Governmental Orders, except where noncompliance would
not
reasonably be expected, individually or in the aggregate, to have a
Sold Company
Material Adverse Effect. Except as set forth in SCHEDULE 3.7, each
of the Sold
Companies and the Subsidiaries and, to the Knowledge of the
Sellers, each
Venture Entity possess all licenses, consents, approvals, permits,
registrations, certificates and other governmental authorizations
("PERMITS")
necessary to own, lease and operate its assets and conduct the
Business as
currently conducted, except, in each case, where the failure to
have such
Permits would not reasonably be expected to have a Sold Company
Material Adverse
Effect. Except as set forth in SCHEDULE 3.7, as of the date of this
Agreement,
the Permits are in full force and effect and the Sellers, their
subsidiaries,
the Sold Companies and the Subsidiaries and, to the Knowledge of
the Sellers,
the Venture Entities have not received any written notice from any
Governmental
Authority (a) asserting that any Sold Company, Subsidiary or
Venture Entity is
not in material compliance with any Law or Permit or (b)
threatening to suspend,
revoke, revise, limit, restrict or terminate any Permit held by any
Sold
Company, Subsidiary or Venture Entity or declare any such Permit
invalid. Except
as set forth in SCHEDULE 3.7, (x) the statutory records of each of
the Sold
Companies and the Subsidiaries and, to the Knowledge of the
Sellers, the Venture
Entities required to be maintained by the Laws of its jurisdiction
of
incorporation have been properly kept and contain an accurate and
materially
complete record of the applicable matters required to be contained
therein and
no notice or allegation that any of them is incorrect or should be
rectified has
been received and (y) all documents required to be filed with any
relevant
authority in any relevant jurisdiction in respect of the Sold
Companies and the
Subsidiaries and, to the Knowledge of the Sellers, the Venture
Entities have
been filed and were correct in all material respects.
3.8 PROCEEDINGS. Except as set forth on SCHEDULE 3.8,
there are no
Proceedings or, to the Knowledge of the Sellers, governmental
investigations
pending or, to the Knowledge of the Sellers, threatened against any
Seller, its
subsidiaries, Sold Company or Subsidiary that (a) challenge, or
question the
validity of, this Agreement, any Transaction Agreement or any
action taken or to
be taken by any Seller, its subsidiaries, Sold Company or
23
Subsidiary in connection with, or which seeks to enjoin or obtain
monetary
damages in respect of, the consummation of the transactions
contemplated hereby
or thereby or (b) involve more than $1,000,000 in claims or damages
individually
or that seek injunctive or other equitable relief that would be
materially
adverse to the Business and the Sold Companies and Subsidiaries,
taken as a
whole. Except as set forth in SCHEDULE 3.8, to the Knowledge of the
Sellers,
there are no Proceedings or governmental investigations pending or
threatened in
writing against either of the Venture Entities.
3.9 ABSENCE OF CERTAIN CHANGES. Except as (a) set forth
in SCHEDULE
3.9, (b) contemplated by the Restructuring or (c) otherwise
expressly permitted
or required by this Agreement, since December 31, 2003, (i) the
Business has
been conducted only in the ordinary course of business, (ii) there
shall not
exist any state of facts, change or event or effect that has had or
would
reasonably be expected, individually or in the aggregate, to have a
Sold Company
Material Adverse Effect and (iii) as of the date of this Agreement,
the Sold
Companies and the Subsidiaries and, to the Knowledge of the
Sellers, the Venture
Entities, and with respect to the Business, the Sellers and their
subsidiaries,
have not taken any action and there has not occurred any event or
failure to act
that if taken or had it occurred after the date hereof would
constitute a
violation of SECTION 5.1.
3.10 TAX MATTERS. Except as set forth in SCHEDULE 3.10;
(a) All material Tax Returns required to be filed by or
on behalf of
the Sold Companies and Subsidiaries, and to the Knowledge of the
Sellers, the
Venture Entities have been timely filed (subject to permitted
extensions
applicable to such filing), and all such Tax Returns of the Sold
Companies and
Subsidiaries, and to the Knowledge of the Sellers, the Venture
Entities are
true, correct and complete in all material respects. All material
Taxes of the
Sold Companies and Subsidiaries, and to the Knowledge of the
Sellers, the
Venture Entities due or payable (whether or not shown on such Tax
Returns) have
been paid within the prescribed period or any extension thereof,
other than
Taxes that are being contested in good faith or reflected in the
Tax Reserve.
All material elections made on behalf of the Sold Companies or the
Subsidiaries,
or to the Knowledge of the Sellers, the Venture Entities have been
timely and
properly made.
(b) There are no material Liens relating to Taxes
encumbering any of
the Shares or any assets or properties of the Sold Companies or the
Subsidiaries, or to the Knowledge of the Sellers, the Venture
Entities, in all
cases, except for Permitted Liens.
(c) As of the date of this Agreement, there are no
Proceedings
currently pending against the Sold Companies or the Subsidiaries
or, to the
Knowledge of the Sellers, against the Venture Entities or, to the
Knowledge of
the Sellers, threatened, against the Sold Companies, the
Subsidiaries or the
Venture Entities in respect of any Tax that would result in
material Taxes of
the Sold Companies, Subsidiaries or the Venture Entities for any
taxable period
ending on or before the Closing Date, other than Taxes that are
being contested
in good faith or which are reflected in the Tax Reserve. To the
Knowledge of the
Sellers, no claims for Taxes have been made by any Taxing Authority
in a
jurisdiction in which any of the Sold Companies, Subsidiaries or
Venture
Entities does not file a Tax Return.
24
(d) None of the Sold Companies or Subsidiaries, or to the
Knowledge of
the Sellers, the Venture Entities has granted any extension or
waiver of the
statute of limitations period applicable to any material Tax or
material Tax
Return, or agreed to any extension of time with respect to a
material Tax
assessment or deficiency, which period (after giving effect to such
extension or
waiver) has not yet expired.
(e) None of the Sold Companies or Subsidiaries, or to the
Knowledge of
the Sellers, the Venture Entities (i) has been a member of an
affiliated,
consolidated, combined or unitary group as set forth in Section
1504 of the Code
or any other similar provision of state, local or foreign Law other
than a group
the common parent of which is Cooper or (ii) has any material
liability for
Taxes of any Person (other than Cooper or any of its subsidiaries)
under
Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local
or foreign law), as transferee or successor, by contract or
otherwise.
(f) All material amounts required to be withheld or
collected for
payment by the Sold Companies or Subsidiaries, or to the Knowledge
of the
Sellers, the Venture Entities, including from employee salaries,
wages and other
compensation, have been collected or withheld and paid to the
appropriate Taxing
Authorities.
(g) None of the Sold Companies or Subsidiaries, or to the
Knowledge of
the Sellers, the Venture Entities will be required to include any
material item
of income in, or exclude any material item of deduction from,
taxable income for
any taxable period (or portion thereof) ending after the Closing
Date (i) as a
result of any change in method of accounting made between October
28, 1999 and
on or prior to the Closing Date or to the Knowledge of Sellers,
prior to October
28, 1999, (ii) pursuant to a "closing agreement" as described in
Section 7121 of
the Code (or any corresponding or similar provision of state, local
or foreign
income Tax law) executed between October 28, 1999 and on or prior
to the Closing
Date or to the Knowledge of Sellers, prior to October 28, 1999,
(iii) pursuant
to a material installment sale or open transaction disposition made
between
October 28, 1999 and prior to the Closing or to the Knowledge of
Sellers, prior
to October 28, 1999, or (iv) as a result of any material prepaid
amount received
between October 28, 1999 and prior to the Closing or to the
Knowledge of
Sellers, prior to October 28, 1999. Any income, gain, deduction or
loss
attributable to "intercompany transactions" (as defined in Treasury
Regulations
under Section 1502 of the Code or any corresponding provision of
state or local
income Tax Law) involving the Sold Companies or any Subsidiary
consummated prior
to the Closing or "excess loss accounts" (as defined in Treasury
Regulations
under Section 1502 of the Code or any corresponding provision of
state or local
income Tax Law) with respect to the stock of the Sold Companies or
any
Subsidiary existing at the Closing will be taken into account for
federal, state
or local Income Tax purposes as a result of the transactions
contemplated by
this Agreement.
(h) Within the last two (2) years, none of the Sold
Companies or
Subsidiaries, or to the Knowledge of the Sellers, the Venture
Entities has been
a "distributing corporation" or a "controlled corporation" in a
distribution
that was purported or intended to be governed by Section 355(a) of
the Code.
(i) (A) Since 1999, no Tax Return filed with respect to
the Sold
Companies or Subsidiaries, or to the Knowledge of the Sellers, the
Venture
Entities reflects any material
25
adjustment pursuant to Section 482 of the Code or any analogous
provision of
state, local or foreign Tax law, and (B) other than with respect to
the Code
Section 482 type adjustments which have been questioned in
connection with
intercompany transactions between Standard and CSA Canada for years
June 30,
1995 - December 31, 2001, prior to 1999, to the Knowledge of
Sellers, no Tax
Return with respect to the Sold Companies or Subsidiaries or the
Venture
Entities reflects any material adjustment pursuant to Section 482
of the Code or
any analogous provision of state, local or foreign Tax law.
(j) None of the Sold Companies or Subsidiaries, or to the
Knowledge of
the Sellers, the Venture Entities has taken any deduction or
received any Tax
benefit arising from participation in a "tax shelter" as defined in
Section
6111(c) of the Code or participated in a "reportable transaction"
as defined in
Treasury Regulation Sections 1.6011-4(a), (c)(3), 1.6011-4T(a),
(b), or any
analogous provision of state, local or foreign Tax law.
3.11 EMPLOYEE BENEFITS. SCHEDULE 3.11(A)(I)-1 sets forth
a true and
complete list of all "employee benefit plans" (within the meaning
of Section
3(3) of ERISA, including, without limitation, multiemployer plans
within the
meaning of Section 3(37) of ERISA), all severance, termination,
salary
continuation, change in control, retention, parachute, employment,
incentive,
bonus, stock option, stock purchase, restricted stock, retirement,
pension,
redundancy, profit sharing, deferred compensation, employee loan,
retiree
welfare, fringe benefit and all other employee benefit plans,
programs,
agreements, policies or arrangements, whether or not subject to
ERISA, whether
formal or informal (each a "PLAN"), (i) under which any Company
Employee has any
present or future right to benefits and which are contributed to,
entered into,
sponsored by or maintained by the Sellers, Sold Companies or
Subsidiaries, or
any member of their respective Controlled Group (as defined below),
(ii) under
which the Sold Companies or Subsidiaries have had or have any
present or future
liability or (iii) which is a Venture Entity Plan (each, a "COMPANY
BENEFIT
PLAN"). "COMPANY EMPLOYEE" means any current or former employee,
director or
officer of the Sold Companies or Subsidiaries or any current
employee of the
Sellers who is or was employed primarily in the Business and is
listed on
SCHEDULE 3.11(A)(I)-2; provided, that, except as set forth on
SCHEDULE
3.11(A)(I)-2, Company Employee shall not include any Discontinued
Business
Employee. "DISCONTINUED BUSINESS EMPLOYEE" means any present or
former employee
of the Seller or its Affiliates who was employed primarily in the
Business, or
any present or former employee of the Sold Companies or
Subsidiaries, in each
case who performs or performed services for (A) a plant or facility
that has
been divested, shut down or closed, (B) a plant or facility whose
divestiture,
shut-down or closure has been announced at any time prior to the
Closing Date or
(C) any other plant or facility not identified on SCHEDULES 3.18(A)
or 3.18(B).
Notwithstanding the foregoing, any Company Benefit Plans under
which the Sold
Companies or Subsidiaries have had liability, but do not have
present or future
liability, shall not be included on SCHEDULE 3.11(A)(I)-1.
(ii) SCHEDULE 3.11(A)(I)-1 separately identifies each
Company Benefit
Plan that is maintained in the United States (each, a "COMPANY
U.S. BENEFIT
PLAN"), and each Company Benefit Plan that is not a Company
U.S. Benefit
Plan (each, a "COMPANY FOREIGN BENEFIT PLAN").
(iii) SCHEDULE 3.11(A)(I)-1 separately identifies each
Company Benefit
Plan that is sponsored, maintained or entered into solely by
the Sold
Companies or
26
Subsidiaries (and not by Sellers or its other Affiliates)
(each, a "SOLD
COMPANY BENEFIT PLAN"), and each Company Benefit Plan that is
not a Sold
Company Benefit Plan (each, a "SELLER BENEFIT PLAN").
Notwithstanding any provision of this Agreement, all Seller
representations
with respect to Venture Entity Plans shall be deemed to be
limited to the
Knowledge of the Sellers, and SECTION 3.11(A) shall apply only
to Venture
Entity Plans that are defined benefit plans (as defined in
Section 3(35) of
ERISA), multiemployer plans (as defined in Section 4001(a)(3)
of ERISA and
welfare benefit plans (as defined in Section 3(1) of ERISA)
that provide
post-retirement, medical or life insurance benefits.
(b) Current, accurate and complete copies (or, as to
clause (i) of
this sentence, to the extent no copy exists, an accurate
description) of the
following materials have been delivered to the Buyer with respect
to each
Company U.S. Benefit Plan, to the extent applicable: (i) current
plan documents,
any amendments and any related trust agreement, group annuity
contract or other
funding instrument, (ii) except as set forth in SCHEDULE 3.11(B),
the most
recent determination letter from the Internal Revenue Service
("IRS"), (iii) the
most recent summary plan description and summary of material
modifications to
the extent not included in the summary plan description in each
case distributed
to employees, and (iv) for the three (3) most recent years (A) the
Form 5500 and
attached schedules, (B) audited financial statements and (C)
actuarial valuation
reports.
(c) Except as set forth in SCHEDULE 3.11(C) or as would
not have a
Sold Company Material Adverse Effect: (i) the Company U.S. Benefit
Plans have
been established and administered in compliance with their terms
and the
applicable requirements of ERISA, the Code, and other applicable
Laws; (ii) each
Company U.S. Benefit Plan and related trust that is intended to be
qualified
within the meaning of Section 401 or 501, as applicable, of the
Code is so
qualified and has received or has timely applied for a favorable
determination
letter as to its qualification, and nothing has occurred, whether
by action or
failure to act, that could reasonably be expected to cause the loss
of such
qualification or other losses arising from such action or failure
to act; (iii)
no event has occurred and no condition exists with respect to any
Company U.S.
Benefit Plan that would subject the Sold Companies or Subsidiaries,
either
directly or by reason of their affiliation with any member of their
"CONTROLLED
GROUP" (defined as any organization which is a member of a
controlled group of
organizations within the meaning of Sections 414(b), (c) (m) or (o)
of the Code,
or which would be considered to be a single employer with that
entity pursuant
to Section 4001(b) of ERISA), to any material tax, fine, lien,
penalty or other
liability imposed by ERISA, the Code or other applicable Laws; (iv)
no
"reportable event" (as such term is defined in Section 4043 of the
Code),
non-exempt "prohibited transaction" (as such term is defined in
Section 406 of
ERISA and Section 4975 of the Code), or "accumulated funding
deficiency" (as
such term is defined in Section 302 of ERISA and Section 412 of the
Code
(whether or not waived)) has occurred with respect to any Company
U.S. Benefit
Plan; (v) all premiums due to the Pension Benefit Guaranty
Corporation ("PBGC")
with respect to any Company U.S. Benefit Plan have been timely paid
in full;
(vi) the PBGC has not instituted proceedings to terminate any
Company U.S.
Benefit Plan; and (vii) no Liability (other than for premiums to
the PBGC) under
Title IV of ERISA has been or could reasonably be expected to be
incurred by any
of the Sold Companies or Subsidiaries.
27
(d) No insurance policy funding any Company U.S. Benefit
Plan provides
for a retroactive rate adjustment or loss sharing arrangement that
would result
in material liability to the Buyer, the Sold Companies or the
Subsidiaries.
(e) No Company U.S. Benefit Plan is a "multiemployer
plan" (as defined
in Section 4001(a)(3) of ERISA), and neither the Sold Companies nor
Subsidiaries, nor any member of their Controlled Group, has any
unpaid liability
or obligation in respect of any multiemployer plan.
(f) With respect to any Company U.S. Benefit Plan, except
as set forth
in SCHEDULE 3.11(F) or, with respect to clauses (i), (ii) and (iv),
as would not
have a Sold Company Material Adverse Effect: (i) there are no
pending or, to the
Knowledge of the Sellers, threatened Proceedings, other than
routine claims for
benefits in the ordinary course by participants and beneficiaries;
(ii) to the
Knowledge of the Sellers, no facts or circumstances exist that
could give rise
to any such Proceedings; (iii) no written or oral communication has
been
received from the PBGC in respect of any Company U.S. Benefit Plan
subject to
Title IV of ERISA concerning the funded status of any such plan or
any transfer
of assets and liabilities from any such plan in connection with the
transactions
contemplated herein; and (iv) no administrative investigation,
audit or other
Proceeding by the Department of Labor, the PBGC, the IRS or other
Governmental
Authorities is pending or in progress or, to the Knowledge of the
Sellers,
threatened.
(g) Except as set forth in SCHEDULE 3.11(G), no Company
U.S. Benefit
Plan exists that, as a result of the execution of this Agreement,
shareholder
approval of this Agreement or the transactions contemplated by this
Agreement
(whether alone or in connection with any other events), would (i)
entitle any
Company Employee to severance pay or any increase in severance pay
upon any
termination of employment after the date of this Agreement; (ii)
with respect to
any Company Employee, accelerate the time of payment or vesting or
result in any
payment or funding (through a grantor trust or otherwise) of
compensation or
benefits under, increase the amount payable or result in any other
material
obligation pursuant to, any of the Company Benefit Plans; (iii)
limit or
restrict the right of the Sold Companies or Subsidiaries to merge,
amend or
terminate any of the Company U.S. Benefit Plans; or (iv) cause the
Sold
Companies or Subsidiaries to record additional compensation expense
on their
income statements with respect to any outstanding stock option or
other
equity-based award.
(h) Except as set forth in SCHEDULE 3.11(H), there is no
Contract,
plan or arrangement (written or otherwise) covering any Company
Employee that,
individually or collectively, could give rise to the payment of any
amount that
would be nondeductible pursuant to Section 280G of the Code or
could give rise
to the payment of any amount in respect of Code Section 4999, nor
will any of
the transactions contemplated by this Agreement result in any
amounts that are
not deductible pursuant to Section 280G of the Code or the payment
of any amount
in respect of Code Section 4999.
(i) Except as would not have a Sold Company Material
Adverse Effect,
with respect to individuals described in this SECTION 3.11(I) who
are located in
the United States, (i) all persons classified as independent
contractors of the
Sold Companies or Subsidiaries satisfy and have at all times
satisfied in all
material respects the requirements of applicable Law to be so
28
classified; (ii) the Sellers, Sold Companies and Subsidiaries have
fully and
accurately reported such persons' compensation on IRS Form 1099
when required to
do so; (iii) none of the Sellers, the Sold Companies nor any
Subsidiary has or
has had any obligations to provide benefits with respect to such
persons under
any Company Benefit Plan or otherwise and (iv) none of the Sold
Companies or
Subsidiaries has employed or employs any "leased employees" as
defined in
Section 414(n) of the Code.
(j) (i) With respect to each Company Foreign Benefit Plan
which is not
a Government Scheme, to the extent applicable, current, accurate
and complete
copies of (A) current plan documents, any amendments and any
related trust
agreement, group annuity contract or other funding instrument (or,
to the extent
no copy exists, an accurate description), and (B) the most recent
audited
financial statements and/or actuarial valuation reports, have been
delivered to
the Buyer, except with respect to such Plans which, individually or
in the
aggregate, do not create Liabilities which are material to the Sold
Companies as
a whole; provided that any such documentation which has not been
delivered to
the Buyer as of the date hereof pursuant to the immediately
preceding exception
shall be delivered to the Buyer prior to the Closing Date;
(ii) with respect to each Company Foreign Benefit Plan,
except as set
forth in SCHEDULE 3.11(J), all data and information required,
in the case
of such Plans that are not Government Schemes, to administer
or , in the
case of such Plans that are Government Schemes, to comply with
applicable
rules and regulations, is in the possession or control of the
Sold
Companies or the Subsidiaries and is complete and correct in
all material
respects;
(iii) with respect to each Company Foreign Benefit Plan,
except as set
forth in SCHEDULE 3.11(J) or, with respect to clauses (A),
(B), and (D), as
would not have, individually or in the aggregate, a Sold
Company Material
Adverse Effect: (A) there are no pending or, to the Knowledge
of the
Sellers, threatened Proceedings, other than routine claims for
benefits in
the ordinary course by participants and beneficiaries; (B) to
the Knowledge
of the Sellers, no facts or circumstances exist that could
give rise to any
such Proceedings; (C) no written or oral communication has
been received
from any Governmental Authority in respect of any Company
Foreign Benefit
Plan concerning the funded status of any such plan or any
transfer of
assets and liabilities from any such plan in connection with
the
transactions contemplated herein; and (D) no administrative
investigation,
audit or other Proceeding by any Governmental Authority is
pending or in
progress or, to the Knowledge of the Sellers, threatened;
(iv) with respect to each Company Foreign Benefit Plan,
except as set
forth in SCHEDULE 3.11(J) or as would not have, individually
or in the
aggregate, a Sold Company Material Adverse Effect: (A) each
such plan that
is intended to be tax qualified or tax registered (or in the
case of such
plans established in the UK, exempt approved under Chapter 1,
Part XIV of
the UK Income and Corporation Taxes Act 1988) is so qualified
or registered
or exempt approved, and nothing has occurred, whether by
action or failure
to act, that could reasonably be expected to cause the loss of
such
qualification or registration or exemption or approval (and in
the case of
such plans established in Canada, the assets of such plans
have been
invested so as to avoid exposure to penalty taxes under the
Income Tax Act
(Canada)); (B) all Company Foreign Benefit Plans that
29
are required to be funded are funded in accordance with
applicable Law and
other requirements (and in the case of such plans established
in the UK in
accordance with the advice of the actuary appointed to the
plan) (and in
the case of such plans established in Canada were fully funded
on a going
concern and on a solvency basis determined as of the date of
the most
recently filed actuarial valuation reports for such plans and
in accordance
with the methods and assumptions set forth therein); (C) for
all Company
Foreign Benefit Plans that are not required to be funded,
reserves in
amounts required by Law or applicable accounting standards
exist in the
accounts of the relevant obliged entities, calculated in
compliance with
actuarial methods and the Law applicable in the relevant
jurisdictions; (D)
all current obligations under any Company Foreign Benefit Plan
have been
met, and all contributions to and, with respect to Company
Foreign Benefit
Plans that are not Government Schemes, payments from any
Company Foreign
Benefit Plan in respect of any Company Employee that are
required in
accordance with the terms of such Company Foreign Benefit Plan
or
applicable Law have been timely made, or if not yet due, have
been properly
reflected in the Financial Statements; (E) where applicable,
all
contributions or premiums to any governmental or non
governmental
reinsurance scheme backing up any Company Foreign Benefit Plan
in case of
insolvency of the relevant obligor have been paid, and nothing
has
occurred, whether by action or failure to act, that could
reasonably be
expected to cause the loss of the coverage under such
reinsurance scheme;
(F) no Company Foreign Benefit Plans (other than Government
Schemes which
have been described generically) or similar schemes or
promises, whether
with respect to groups of beneficiaries or individual
beneficiaries, exist
with respect to or obliging any of the Sold Companies or
Subsidiaries that
have not been disclosed on SCHEDULE 3.11(J) or expressly or
reasonably
identifiable and adequately provided for on the financial
statements of
such companies; (G) all Company Foreign Benefit Plans (and
their
corresponding assets or funds) have been implemented,
administered and
invested in compliance with their terms, the Law and all
applicable
collective bargaining agreements, and all reports, returns or
similar
documents required to be filed with a Governmental Authority
in respect of
the Foreign Company Benefit Plans have been duly and timely
filed; (H) any
and all one-time lump sum payments to be paid under French
law, applicable
bargaining agreements or individual agreements to employees of
the Sold
Companies or Subsidiaries upon reaching retirement age
(indemnites de
depart) are either appropriately reflected in the so-called
annexe to the
relevant Financial Statements in compliance with Art. L.
123-13 of the
French Code de Commerce or have been reserved for in the
relevant Financial
Statements; (I) with respect to all Foreign Company Benefit
Plans in
Canada, no Governmental Authority has the power to order a
wind up (in
whole or in part) of the plan in respect of events prior to
the Closing
Date, no such plans have received a transfer of assets from or
been merged
with the assets of another plan, and no conditions have been
imposed by a
Governmental Authority and no undertakings or commitments have
been given
in writing to any Governmental Authority, union or Company
Employee
concerning the use or recognition of actual or actuarial
surplus assets
relating to any Company Foreign Benefit Plan or any related
funding medium;
and (J) the Sold Companies' and Subsidiaries' essential
obligation to or in
respect of any Foreign Company Benefit Plan that is a multiple
employer
plan is to make contributions to such plan in the amounts and
in the manner
described in the relevant collective bargaining agreement;
30
(v) Except as set forth in SCHEDULE 3.11(J), no Company
Foreign
Benefit Plan exists that, as a result of the execution of this
Agreement,
shareholder approval of this Agreement or the transactions
contemplated by
this Agreement (whether alone or in connection with any other
events),
would (A) entitle any Company Employee to severance pay or any
increase in
severance pay upon any termination of employment after the
date of this
Agreement; (B) with respect to any Company Employee,
accelerate the time of
payment or vesting or result in any payment or funding
(through a grantor
trust or otherwise) of compensation or benefits under,
increase the amount
payable or result in any other material obligation pursuant
to, any of the
Company Foreign Benefit Plans; (C) limit or restrict the right
of the Sold
Companies or Subsidiaries to merge, amend or terminate any of
the Company
Foreign Benefit Plans; or (D) cause the Sold Companies or
Subsidiaries to
record additional compensation expense on their income
statements with
respect to any outstanding stock option or other equity-based
award.
(k) (i) Except as would not have a Sold Company Material
Adverse
Effect, all contributions (including, without limitation, all
employer matching
or other contributions and employee salary reduction contributions)
to and
payments from any Company U.S. Benefit Plan in respect of any
Company Employees
that are required in accordance with the terms of such Company U.S.
Benefit
Plan, any related document, the Code or ERISA have been timely
made, or, if not
yet due, have been properly reflected in the Financial Statements;
and (ii) all
such contributions to, and payments from, any Company U.S. Benefit
Plan, except
those to be made from a trust qualified under Section 401(a) of the
Code, that
are required to be made as of the Closing Date will be made on or
prior to the
Closing Date.
(l) None of the Company U.S. Benefit Plans is a multiple
employer plan
described in Section 413(c) of the Code.
3.12 LABOR RELATIONS. Except as set forth in SCHEDULE
3.12 or as
otherwise permitted pursuant to this Agreement, (i) none of the
Sold Companies
or the Subsidiaries or, to the Knowledge of the Sellers, the
Venture Entities is
a party to any collective bargaining agreement nor is any such
contract or
agreement presently being negotiated, (ii) none of the Sold
Companies or
Subsidiaries or, to the Knowledge of the Sellers, the Venture
Entities is in
material breach of any collective bargaining agreement, (iii)
within the past
three (3) years, there has been no labor strike, work stoppage,
slowdown,
lockout or other labor controversy in effect with respect to the
Sold Companies
or the Subsidiaries or, to the Knowledge of the Sellers, the
Venture Entities,
or, to the Knowledge of the Sellers, threatened against the Sold
Companies or
the Subsidiaries or the Venture Entities, (iv) there are no
material grievances
or other material labor disputes or proceedings pending against the
Sold
Companies or the Subsidiaries or, to the Knowledge of the Sellers,
the Venture
Entities or, to the Knowledge of the Sellers, threatened against
the Sold
Companies or the Subsidiaries or involving any Company Employees or
the Venture
Entities, (v) there are no material unfair labor practice charges,
grievances or
complaints, actions, inquiries, proceedings or, to the Knowledge of
the Sellers,
investigations pending against the Sold Companies or the
Subsidiaries or, to the
Knowledge of the Sellers, the Venture Entities or, to the Knowledge
of the
Sellers, threatened against the Sold Companies or the Subsidiaries
or the
Venture Entities by or on behalf of any Company Employees and (vi)
the Sold
Companies and the Subsidiaries and, to the Knowledge of the
Sellers, the Venture
Entities are in compliance with their obligations pursuant to the
Worker
Adjustment and Retraining
31
Notification Act of 1988 ("WARN ACT"), and all other notification
and bargaining
obligations arising under any collective bargaining agreement,
statute or
otherwise. As of the date of this Agreement, to the Knowledge of
the Sellers,
there is no union campaign being conducted to solicit cards from
the Company
Employees to authorize a union to request a National Labor
Relations Board
("NLRB") certifications election or to seek a certification
pursuant to the
Ontario Labour Relations Act with respect to the Company Employees
or any
employee of either Venture Entity.
(b) Except as set forth on SCHEDULE 3.12, the Sold
Companies and
Subsidiaries and, to the Knowledge of the Sellers, the Venture
Entities and,
with respect to the Business, the Sellers and their subsidiaries
are in material
compliance with all applicable Laws, Governmental Orders,
agreements, contracts
and policies relating to the employment of their respective
employees, including
all such Laws and Governmental Orders relating to wages, hours,
collective
bargaining, compensation, overtime (including but not limited to
compensation
for such overtime), benefits, terms and conditions of employment,
termination or
employment, employment discrimination, immigration, disability,
civil rights,
occupational safety and health, workers' compensation, pay equity
and the
collection and payment of withholding and/or social contribution
taxes and
similar Taxes, except where noncompliance would not reasonably be
expected,
individually or in the aggregate, to have a Sold Company Material
Adverse
Effect.
(c) Except as set forth on SCHEDULE 3.12, no Sold Company
or
Subsidiary or, to the Knowledge of the Sellers, the Venture
Entities has, and,
with respect to the Business, no Seller or any of its subsidiaries
has, closed
any plant or facility, effectuated any layoffs of employees or
implemented any
early retirement, separation or window program within the past
three (3) years,
nor has any Seller or any of its subsidiaries with respect to the
Business or
any Sold Company or Subsidiary or, to the Knowledge of the Sellers,
the Venture
Entities planned or announced any such action or program for the
future.
(d) Except as set forth on SCHEDULE 3.12, no Sold Company
or
Subsidiary or, to the Knowledge of the Sellers, the Venture
Entities is, and,
with respect to the Business, no Seller or any of its subsidiaries
is, a party
to or otherwise bound by, any consent decree with, or citation by,
any
Governmental Authority related to employees or employment
practices.
3.13 INTELLECTUAL PROPERTY. SCHEDULE 3.13(A) sets forth a
complete
list of material Intellectual Property registrations and
applications owned by
the Sold Companies or the Subsidiaries or, to the Knowledge of the
Sellers, the
Venture Entities and any actions or fees due on or before January
31, 2005 to
maintain same. Except (a) as set forth in SCHEDULE 3.13(B), (b) for
the
agreements listed on SCHEDULE 3.14(A) or (c) with respect to the
use of
corporate names (including the Trademarks) in accordance with
SECTION 5.12, (i)
one or more of the Sold Companies or the Subsidiaries and, to the
Knowledge of
the Sellers, the Venture Entities owns or has the right to use all
material
Intellectual Property necessary for the conduct of the Business as
it is
currently conducted (including the Trademarks), free from (A) any
Liens other
than Permitted Liens, and (B) any present or future requirement of
royalty
payments or other license fees or payments, (ii)(A) the operation
of the
Business does not infringe or otherwise materially violate any
Intellectual
Property of any other Person, (B) none of the Sold Companies or any
of the
Subsidiaries and, to the Knowledge
32
of the Sellers, the Venture Entities, and with respect to the
Business, the
Sellers and their subsidiaries, have received written notice or, to
the
Knowledge of the Sellers, oral notice, from, or exchanged any
correspondence
with, any Person that challenges (or relates to the challenge of)
the use or
ownership of the Intellectual Property or the validity or
enforceability
thereof, except as would not reasonably be expected to have a Sold
Company
Material Adverse Effect, and (C) none of the Intellectual Property
owned by the
Sold Companies or the Subsidiaries or, to the Knowledge of the
Sellers, the
Venture Entities is being materially infringed by any other Person,
(iii) after
the Restructuring has been completed, the material Intellectual
Property
purportedly owned by the Sold Companies or the Subsidiaries and, to
the
Knowledge of the Sellers, the Venture Entities, will be owned
solely by same,
valid and enforceable and free of adverse ownership claims or
interests of the
Sellers or third parties, including, without limitation, current or
former
employees or contractors, subject to payment obligations to
inventors required
by applicable Law and (iv) there is no material Intellectual
Property that is
shared by one or more of the Sold Companies, the Subsidiaries or
the Venture
Entities on the one hand, and the Sellers or any of their
Affiliates (excluding
the Sold Companies, Subsidiaries and Venture Entities) on the other
hand.
3.14 CONTRACTS. (a) SCHEDULE 3.14(A) sets forth a true,
complete and
correct list of each of the following contracts to which any of the
Sold
Companies or the Subsidiaries is a party or by which any of them is
bound as of
the date of this Agreement, other than Company Benefit Plans
(collectively, the
"MATERIAL CONTRACTS"):
(i) Contracts involving the expenditure by the Sold
Companies or the
Subsidiaries of more than $1,000,000 in any instance for the
purchase of
materials, supplies, equipment or services, excluding any such
contracts
that are terminable by the Sold Companies or the Subsidiaries
without
penalty on not more than ninety (90) days notice;
(ii) (A) indentures, mortgages, loan agreements, capital
leases,
security agreements, or other Contracts relating to Debt
Obligations or (B)
any Contract or other currently outstanding instrument under
which any of
the Sold Companies or the Subsidiaries has, directly or
indirectly, made
any advance, loan, extension of credit (other than an account
receivable)
or capital contribution to, or other investment in, any
Person;
(iii) Contracts that restrict the Sold Companies or the
Subsidiaries
or any of their Affiliates after the Closing Date from
engaging in any line
of business in any geographic area or competing with any
Person;
(iv) Contracts that restrict the declaration, set aside
or payment of
any dividends or distributions on, or in respect of, any
capital stock or
equity interest of any Sold Company or Subsidiary;
(v) Contracts to acquire or sell goods with respect to
the customers
set forth on SCHEDULE 3.19;
(vi) any option, other agreement or right to purchase or
otherwise
acquire or sell or otherwise dispose of any interest in real
property
involving payments by any of the Sold Companies or the
Subsidiaries in
excess of $1,000,000;
33
(vii) any commitment to make any capital expenditure or
to purchase a
capital asset not contemplated by the Capital Expenditure
Budget;
(viii) except as to the extent contemplated by the
Capital Expenditure
Budget, any commitment for the purchase or sale of any of its
assets, other
than in the ordinary course of business, or any capital stock
of the Sold
Companies or the Subsidiaries;
(ix) any lease or similar agreement under which (A) any
of the Sold
Companies or the Subsidiaries is the lessee of, or holds or
uses, any
facility, machinery, equipment, vehicle or other tangible
personal property
owned by any third Person for an annual rent in excess of
$500,000 or (B)
any of the Sold Companies or the Subsidiaries is the lessor
of, or makes
available for use by any third Person, any tangible personal
property owned
by any of the Sold Companies or the Subsidiaries for an annual
rent in
excess of $500,000;
(x) Contracts (i) entered into or assumed by any of the
Sold Companies
or Subsidiaries in which it has an obligation in respect of
providing for
indemnification or purchase price adjustment, in connection
any
disposition, sale or other transfer or any present or former
business or
commercial activity and (ii) which was either (A) entered into
after
January 1, 1999 or (B) pursuant to which there are any
outstanding,
unresolved or potential indemnification claims in excess of
$500,000
against any of the Sold Companies or Subsidiaries;
(xi) Contracts under which any of the Sold Companies or
the
Subsidiaries has licensed material Intellectual Property to or
from any
other Person or that otherwise relate primarily to material
Intellectual
Property, excluding non-exclusive, commercially available
software licenses
entered into in the ordinary course of business for annual
payments of less
than $250,000; provided that, for purposes of the Sellers'
disclosure
obligations under SECTIONS 3.14(A) and (B), Sellers shall
provide only a
representative sample of any of the foregoing Contracts that
were entered
into in the ordinary course of business with consultants and
employees;
(xii) partnership, limited liability company, joint
venture agreements
or other Contracts involving a sharing of profits or expenses
by the Sold
Companies or Subsidiaries; and
(xiii) any other Contracts not otherwise described in
clauses (i)
through (xii) above to which any of the Sold Companies or the
Subsidiaries
is a party or is otherwise bound which is reasonably expected
to result in
an annual expenditure by any of the Sold Companies or the
Subsidiaries
after the Closing Date of more than $1,000,000 for any such
individual
Contract.
(b) True, correct and complete copies of each of the
Material
Contracts that are in writing have been made available to the Buyer
and, if such
Material Contract is not in writing, written summaries thereof have
been made
available to the Buyer, including in each case amendments, waivers
or other
changes thereto.
34
(c) Each Material Contract is in full force and effect,
and is a valid
and binding agreement of the applicable Sold Company or Subsidiary
enforceable
by or against such applicable Sold Company or Subsidiary or, with
respect to the
Business, the applicable Seller or its subsidiary, in accordance
with its terms
subject to the General Enforceability Exceptions. The Sold
Companies or the
Subsidiaries have performed in all material respects its
obligations required to
be performed by them to date under the Material Contracts. There is
no default
or breach (or allegation of same) by the Sold Companies or the
Subsidiaries or,
to the Knowledge of the Sellers, any other party, in the timely
performance of
any material obligation to be performed or paid under any Material
Contract.
3.15 ENVIRONMENTAL MATTERS. Except as set forth on
SCHEDULE 3.15:
(a) each of the Sold Companies and the Subsidiaries and,
to the
Knowledge of the Sellers, the Venture Entities is in compliance
with all
applicable Environmental Laws (including all Permits required under
such
Environmental Laws), except for such noncompliance that would not
have,
individually or in the aggregate, a Sold Company Material Adverse
Effect;
(b) none of the Sellers, the Sold Companies and the
Subsidiaries and,
to the Knowledge of the Sellers, the Venture Entities, has received
any
unresolved Environmental Claim or, to the Knowledge of the Sellers,
notice of
any threatened Environmental Claim regarding any Sold Company,
Subsidiary,
Venture Entity, the Business or the Real Property;
(c) none of the Sold Companies and the Subsidiaries and,
to the
Knowledge of the Sellers, the Venture Entities has Released any
Hazardous
Materials at or in the vicinity of the Real Property that requires
reporting,
investigation, assessment, cleanup, remediation or other type of
response action
by any Sold Company, Subsidiary or, to the Knowledge of the
Sellers, the Venture
Entities pursuant to any Environmental Law or that could otherwise
reasonably be
expected to result in material liability under or relating to any
Environmental
Law, and Hazardous Materials are not otherwise present at or about
any of the
Real Property, or any other facility currently or formerly owned,
leased or
operated by any of the Sold Companies, the Subsidiaries or, to the
Knowledge of
the Sellers, the Venture Entities, in amount or condition that
could reasonably
be expected to result in material liability to any Sold Company,
Subsidiary or,
to the Knowledge of the Sellers, the Venture Entities under or
relating to any
Environmental Law;
(d) to the Knowledge of the Sellers, no material costs,
including
capital expenditures that are inconsistent with prior expenditures
made in
relation to the Sold Companies, the Subsidiaries and the Business
and that are
not reflected in the Capital Expenditure Budget will be required in
order for
the Sold Companies, the Subsidiaries and the Business to comply
during the
one-year period following the Closing Date with all existing
applicable
Environmental Laws existing as of the Closing Date (including
Permits required
pursuant to existing Environmental Law);
(e) except as would not reasonably be expected to result
in material
liability under any Environmental Law, to the Knowledge of the
Sellers in the
case of the Venture Entities, there are no (i) underground or
aboveground
storage tanks, (ii) asbestos, (iii) polychlorinated biphenyls, or
(iv)
urea-formaldehyde insulation present at or about any of
35
the Real Property in a condition that currently requires reporting,
investigation, assessment, cleanup, remediation or other type of
response action
by any Sold Company, Subsidiary or, to the Knowledge of the
Sellers, the Venture
Entities pursuant to any Environmental Law, or that would otherwise
result in
liability under any Environmental Laws;
(f) Hazardous Materials have not been Released,
transported, disposed
of or arranged to be disposed of by, or on behalf of, any of the
Sold Companies,
the Subsidiaries or, to the Knowledge of the Sellers, the Venture
Entities to
any location, in material violation of, or in a manner that would
reasonably be
expected to result in material liability under or relating to, any
Environmental
Law; and
(g) none of the Sold Companies and the Subsidiaries or,
to the
Knowledge of the Sellers, the Venture Entities has expressly
assumed or retained
by contract any material liabilities or material obligations of
other Persons
under any Environmental Laws.
3.16 INSURANCE. (a) SCHEDULE 3.16(A) contains a complete
and correct
list of all insurance policies held in the names of the Sold
Companies or the
Subsidiaries and all other insurance arrangements or contracts for
the transfer
or sharing of insurance risks covering the assets, businesses,
operations,
Company Employees, officers or directors of the Sold Companies and
the
Subsidiaries (the "INSURANCE POLICIES") as of the date hereof,
specifying the
insurer, amount of coverage and type of insurance. All such
policies are in full
force and effect and were in full force and effect during the
periods of time
that such insurance policies purported to be in effect, are valid,
enforceable,
existing and binding and all premiums due thereon have been timely
paid (subject
to changes made in the ordinary course of business that will not
materially
reduce the coverage thereunder) and will re
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