EXHIBIT 10.11
EXECUTION COPY
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT, dated as of December 23, 2004 (this
"Agreement"), between the individual identified on the signature page hereto
(the "Management Investor") and CSA ACQUISITION CORP., a Delaware corporation
(the "Company").
WHEREAS, pursuant to that certain Stock Purchase Agreement, dated as
of September 16, 2004, as amended as of December 3, 2004 (the "Purchase
Agreement"), by and among ▇▇▇▇▇▇ Tire & Rubber Company, a Delaware corporation
("Cooper"), ▇▇▇▇▇▇ Tyre & Rubber Company UK Limited, a company organized under
the laws of England and Wales (together with Cooper, the "Sellers") and the
Company, the Company will purchase equity interests held by the Sellers in the
Sold Companies (as defined in the Purchase Agreement) (the "Transaction"); and
WHEREAS, on the terms and subject to the conditions set forth below,
the Management Investor desires to subscribe for and acquire from the Company,
and the Company desires to issue and sell to the Management Investor, shares of
common stock, par value $0.01 per share (the "Common Stock"), of the Company as
set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the adequacy of which are hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. Capitalized terms used and not defined herein shall
have the meaning assigned to such terms in the Purchase Agreement. As used in
this Agreement, the following terms shall have the meanings set forth below:
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. The term "control" means, with respect to any Person, the power to
direct or cause the direction of the management or policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" has the meaning set forth in the preamble hereto.
"Bonus Payments" means, to the extent applicable to the Management
Investor, payments made by Cooper pursuant to the (i) ▇▇▇▇▇▇ Tire & Rubber
Company Return On Assets Managed Bonus Program, (ii) Letter agreement
regarding stay bonus, dated as of March 10, 2004, from ▇▇▇▇▇▇-Standard
Automotive Inc. to the Management Investor and (iii) ▇▇▇▇▇▇ Tire & Rubber
Company Automotive Group Sale Incentive Plan and accompanying letter
agreement, dated as of May 13, 2004, to the Management Investor.
"Business Day" means any day other than a Saturday, Sunday or day on
which commercial banks in New York, New York are authorized or required by
law to remain closed.
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"Closing" has the meaning set forth in Section 3 below.
"Closing Date" has the meaning set forth in Section 3 below.
"Common Stock" has the meaning set forth in the preamble hereto.
"Company" has the meaning set forth in the preamble hereto.
"▇▇▇▇▇▇" has the meaning assigned to such term in the preamble hereto.
"Governmental Body" means any government or governmental or regulatory
body thereof, or political subdivision thereof, of any country or
subdivision thereof, whether international, supranational, national,
federal, state or local, or any agency or instrumentality thereof, or any
court or regulatory (including a stock exchange or other self-regulatory
body) authority or agency.
"Management Investor" has the meaning set forth in the preamble
hereto.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivisions thereof or any group comprised of two or more of the
foregoing.
"Purchase Agreement" has the meaning set forth in the preamble hereto.
"Purchase Price" has the meaning set forth in Section 2 below.
"Registration Rights Agreement" means the Registration Rights
Agreement, substantially in the form of Exhibit B hereto.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Sellers" has the meaning assigned to such term in the preamble
hereto.
"Stockholders Agreement" means the Stockholders Agreement,
substantially in the form of Exhibit A hereto.
"Transaction" has the meaning set forth in the preamble hereto.
2. Subscription for and Purchase of the Common Stock. Pursuant to the
terms and subject to the conditions set forth in this Agreement, the Management
Investor hereby subscribes for and agrees to purchase, and the Company hereby
agrees to issue and sell to the Management Investor, on each Closing Date such
number of shares of Common Stock ("Shares") having an aggregate purchase price
equal to the applicable Bonus Payment received by the Management Investor (the
"Purchase Price") to which the Closing on such Closing Date relates, subject to
the last sentence of this Section 2. For purposes of this Agreement, the price
per share of Common Stock shall be $100, subject to adjustment in respect
thereof for any stock
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dividends, combinations, splits or the like subsequent to the date hereof and
prior to the applicable Closing. The maximum aggregate number of Shares (subject
to adjustment contemplated by the previous sentence) to be issued to the
Management Investor pursuant to this Agreement is the number of Shares set forth
opposite the name of the Management Investor on Exhibit C hereto at a Purchase
Price of $100 per share (subject to adjustment contemplated by the previous
sentence).
3. The Closing. The closing (the "Closing") of the issuance and sale
of Shares referred to in Section 2 shall be on the day (the "Closing Date") that
is twenty (20) days after receipt by the Management Investor of a Bonus Payment.
If the Management Investor receives multiple Bonus Payments at different times,
there shall be successive Closings, on and subject to the terms hereof until the
maximum aggregate purchase price has been paid. Each Closing shall occur at the
main offices of the Company unless an alternative location is mutually agreed
upon. At a Closing, the following shall occur:
(a) the Management Investor shall deliver to the Company the Purchase
Price payable by delivery to the Company of such amount by wire transfer of
immediately available funds or delivery of a certified check payable to the
Company as consideration for the Shares to be issued hereunder; and
(b) the Company shall duly issue the Shares to be received by the
Management Investor and shall deliver to the Management Investor stock
certificates representing the Shares purchased by the Management Investor.
4. Stockholders Agreement and Registration Rights Agreement. On the
date of consummation of the Transaction pursuant to the Purchase Agreement, the
Management Investor and the Company shall execute and deliver the Stockholders
Agreement and the related Registration Rights Agreement.
5. Representations and Warranties of the Company. The Company
represents and warrants to the Management Investor as follows:
(a) (i) the Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and
has full corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, and (ii) this Agreement
has been duly authorized, executed and delivered by the Company and is
valid, binding and enforceable against the Company in accordance with its
terms;
(b) the Shares to be issued to the Management Investor pursuant to
this Agreement, when issued and delivered in accordance with the terms
hereof, will be duly and validly issued and, upon receipt by the Company of
the Purchase Price therefor, will be fully paid and nonassessable with no
personal liability attached to the ownership thereof and will not be
subject to any preemptive rights and restrictions on transfer other than
under applicable securities laws, the terms of this Agreement or the
Stockholders Agreement;
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(c) the execution, delivery and performance by the Company of this
Agreement will not (i) conflict with the certificate of incorporation or
by-laws of the Company, (ii) result in any material breach of any terms or
provisions of, or constitute a material default under, any material
contract, agreement or instrument to which the Company is a party or by
which the Company is bound, (iii) violate any United States federal or
state law, rule or regulation applicable to the Company or (iv) require any
consent, waiver, approval, order, permit or authorization of, or
declaration or filing with, or notification or report to, any Governmental
Body;
(d) immediately after giving effect to the transactions pursuant to
the Purchase Agreement, including equity issued in connection therewith on
the date of the closing thereunder, the capitalization of the Company shall
be substantially as set forth on Exhibit C hereto; and
(e) the transactions contemplated by this Agreement do not violate any
"blue sky" or other securities law of any jurisdiction or require the
Company to file a registration statement with the SEC or apply to qualify
any securities under the "blue sky" or other securities law of any
jurisdiction.
6. Representations and Warranties of the Management Investor. The
Management Investor represents and warrants to the Company as follows:
(a) (i)(x) the Management Investor is over 21 years of age, (y) the
address set forth in Section 10(a)(2) hereof is the true and correct
address and residence of the Management Investor, and (z) the Management
Investor has no current intention of becoming a resident of any other state
or jurisdiction in the foreseeable future and (ii) this Agreement has been
duly authorized, executed and delivered by the Management Investor and is
valid, binding and enforceable against the Management Investor in
accordance with its terms;
(b) the execution, delivery and performance by the Management Investor
of this Agreement will not (i) result in any material breach of any terms
or provisions of, or constitute a material default under, any material
contract, agreement or instrument to which the Management Investor is a
party or by which the Management Investor is bound, (ii) violate any United
States federal or state law, rule or regulation applicable to the
Management Investor or (iii) except as set forth on Schedule 6(b), require
any consent, waiver, approval, order, permit or authorization of, or
declaration or filing with, or notification or report to, any Governmental
Body;
(c) the Management Investor is acquiring the Shares for investment
solely for investment for its own account and not with a view to, or for
sale in connection with, the distribution or other disposition thereof;
(d) the Management Investor has been advised by the Company that:
(i) the offer and sale of the Shares have not been registered
under the Securities Act;
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(ii) there is no established market for the Shares and it is not
anticipated that there will be any public market for the
Shares in the foreseeable future;
(iii) Rule 144 promulgated under the Securities Act is not
presently available with respect to the sale of any
securities of the Company;
(iv) when and if shares of the Shares may be disposed of without
registration under the Securities Act in reliance on Rule
144, such disposition can be made only in limited amounts in
accordance with the terms and conditions of Rule 144;
(v) if the Rule 144 exemption is not available, the offer or
sale of the Shares without registration will require
compliance with some other exemption under the Securities
Act;
(vi) a restrictive legend in the form heretofore set forth in the
Stockholders Agreement shall be placed on the certificates
representing the Shares; and
(vii) a notation shall be made in the appropriate records of the
Company indicating that the Shares are subject to
restrictions on transfer and, if the Company should at some
time in the future engage the services of a securities
transfer agent, appropriate stop-transfer instructions will
be issued to such transfer agent with respect to the Shares.
(e) (i) the Management Investor's financial situation is such that it
can afford to bear the economic risk of holding the Shares for an
indefinite period of time, has adequate means for providing for its current
needs and personal contingencies, and can afford to suffer a complete loss
of its investment in the Shares; (ii) the Management Investor's knowledge
and experience in financial and business matters are such that it is
capable of evaluating the merits and risks of the investment in the Shares;
(iii) the Management Investor understands that the Shares are a speculative
investment which involves a high degree of risk of loss of its investment
therein, there are substantial restrictions on the transferability of the
Shares, and, on the Closing Date and for an indefinite period following the
Closing, there will be no public market for the Shares and, accordingly, it
may not be possible for the Management Investor to liquidate its investment
in case of emergency or otherwise; (iv) the Management Investor understands
and has taken cognizance of all the risk factors related to the purchase of
the Shares, and, other than as set forth in this Agreement, no
representations or warranties have been made to the Management Investor or
its representatives concerning the Shares or the Company or their prospects
or other matters; (v) the Management Investor has been given the
opportunity to examine all documents and to ask questions of, and to
receive answers from, the Company and its representatives concerning the
Company and its subsidiaries, the Transaction, the Purchase Agreement and
the terms and conditions of the purchase of the Shares and to obtain all
additional information which the Management
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Investor or its representatives deems necessary; (vi) in making its
decision to purchase the Shares hereby subscribed for, the Management
Investor has relied upon independent investigations made by it and, to the
extent believed by it to be appropriate, its representatives, including its
own professional, financial, tax and other advisors; and (vii) the
Management Investor is an "accredited investor" within the meaning of Rule
501 of Regulation D under the Securities Act.
(f) The Management Investor is as of the date hereof an employee of
the Company and in such capacity has an understanding of the Company and
its business. The Management Investor has been given the opportunity to
obtain any additional information or documents (and to ask questions and
receive answers about such information and documents) about the Company and
its business which the Management Investor deems necessary to evaluate the
merits and risks related to its investment in the shares of Common Stock.
7. Covenants of the Company and the Management Investor.
(a) Further Assurances. Each of the parties shall, and shall cause
their respective Affiliates under their control to, execute such
instruments and take such action as may be reasonably required or desirable
to carry out the provisions hereof and the transactions contemplated
hereby.
8. Conditions Precedent to Closing. The obligations of the Company and
the Management Investor to consummate each Closing are subject to the
satisfaction or written waiver by both the Company and the Management Investor
on or prior to the Closing Date for such Closing of the following conditions:
(i) the Transaction shall have been consummated pursuant to the
Purchase Agreement; and
(ii) no laws shall have been adopted or promulgated, and no temporary
restraining order, preliminary or permanent injunction or other
order issued by a court or other Governmental Body of competent
jurisdiction shall be in effect, having the effect of making the
purchase of the Shares by the Management Investor and the other
transactions contemplated hereby illegal or otherwise prohibiting
consummation thereof; and
(iii) no voluntary or involuntary proceeding, or filing of any
petition seeking liquidation, reorganization or other relief,
under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law shall have been made with respect to
the Company.
9. Termination.
(a) This Agreement shall terminate on September 30, 2005.
(b) If this Agreement terminates pursuant to Section 9(a), such
termination shall be without liability of any party (or any Affiliate,
stockholder, general partner, limited
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partner, member, director, officer, employee, agent, consultant or
representative of such party or of its Affiliates) to the other party to
this Agreement and this Agreement shall become void and of no further force
or effect, except in the case of a material breach of this Agreement prior
to any such termination. Notwithstanding the foregoing, the provisions of
Sections 10(g), (h) and (i) shall survive any termination hereof pursuant
to Section 9(a).
10. Miscellaneous.
(a) Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified; (b) when
sent by confirmed facsimile if sent during normal business hours of the
recipient, if not, then on the next Business Day, provided that a copy of
such notice is also sent via nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt; (c)
five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (d) one (1) Business Day
after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All communications
shall be sent to such party's address as set forth below or at such other
address as the party shall have furnished to each other party in writing in
accordance with this provision:
(1) If to the Company:
CSA Acquisition Corp.
c/o The Cypress Group L.L.C.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
GS Capital Partners 2000, L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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and
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(2) If to the Management Investor:
To the address set forth below such
Management Investor's signature
hereto
(b) Amendment and Waiver.
(i) No failure or delay on the part of any party hereto in exercising
any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to the parties hereto at
law, in equity or otherwise.
(ii) Any amendment, supplement or modification of or to any provision
of this Agreement, any waiver of any provision of this Agreement,
and any consent to any departure by any party from the terms of
any provision of this Agreement, shall be effective against a
party to this Agreement only if it is made or given in writing
and signed by such party.
(c) Specific Performance. Each party hereto acknowledges that money
damages would not be an adequate remedy in the event that any of the
covenants or agreements in this Agreement are not performed in accordance
with its terms, and it is therefore agreed that in addition to and without
limiting any other remedy or right it may have, the non-breaching party
will have the right to an injunction, temporary restraining order or other
equitable relief in any court of competent jurisdiction enjoining any such
breach and enforcing specifically the terms and provisions hereof.
(d) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(e) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other
jurisdiction, but this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.
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(f) Entire Agreement. Except as otherwise expressly set forth herein,
this Agreement together with the Stockholders Agreement and the
Registration Rights Agreement embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter
hereof and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, that may have
related to the subject matter hereof in any way.
(g) Expenses. Each of the parties hereto shall bear its own expenses
(including fees and disbursements of counsel, accountants and other
experts) incurred by it in connection with the preparation, negotiation,
execution, delivery and performance hereof, each of the other documents and
instruments executed in connection herewith or contemplated hereby and the
consummation of the transactions contemplated hereby and thereby.
(h) GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. THIS AGREEMENT
SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE. Any claim arising out of or relating to this Agreement may be
instituted in Federal or State court in the State of New York (unless
personal or subject matter jurisdiction cannot be obtained therein), and
each party agrees not to assert, by way of motion, as a defense or
otherwise, in any such claim, that it is not subject personally to the
jurisdiction of such court, that the claim is brought in an inconvenient
forum, that the venue of the claim is improper or that this Agreement or
the subject matter hereof may not be enforced in or by such court. Each
party further irrevocably submits to the jurisdiction of such courts in any
such claim. Any and all service of process and any other notice in any such
claim shall be effective against any party if given personally or by
registered or certified mail, return receipt requested, or by any other
means of mail that requires a signed receipt, postage prepaid, mailed to
such party as herein provided. Nothing herein contained shall be deemed to
affect the right of any party to serve process in any manner permitted by
law or to commence legal proceedings or otherwise against any other party
in any other jurisdiction.
(i) No Recourse. Notwithstanding anything else that may be expressed
or implied in this Agreement, the Management Investor hereby covenants,
agrees and acknowledges that no recourse under this Agreement or any
documents or instruments delivered in connection with this Agreement or any
of the transactions contemplated hereby shall be had against any current or
future director, officer, employee, general or limited partner, member or
Affiliate (including The Cypress Group L.L.C. and GS Capital Partners 2000,
L.P.) of the Company or of any of the foregoing, whether by the enforcement
of any assessment or by any legal or equitable proceeding, or by virtue of
any statute, regulation or other applicable law, it being expressly agreed
and acknowledged that no personal liability whatsoever shall attach to, be
imposed on or otherwise be incurred by any current or future officer, agent
or employee of the Company or any current or future stockholder of the
Company or any current or future director, officer, employee, general or
limited partner, member or Affiliate (including The Cypress Group L.L.C.
and GS Capital Partners 2000, L.P.) of any of the foregoing, as such, for
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any obligation of the Company under this Agreement or any documents or
instruments delivered in connection with this Agreement or any of the
transactions contemplated hereby or for any claim based on, in respect of
or by reason of such obligations of the Company or their creation.
(j) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective permitted
successors and assigns, including Permitted Transferees (as defined in the
Stockholders Agreement) of the Management Investor. Unless otherwise
specifically provided for herein, this Agreement is not assignable.
(k) Counterparts; Facsimile Signatures. This Agreement may be executed
in any number of counterparts, each of which shall be an original, but all
of which together shall constitute one instrument. This Agreement may be
executed by facsimile signature(s).
[Remainder of page left intentionally blank]
IN WITNESS WHEREOF, the undersigned have executed, or have caused to
be executed, this Agreement on the date first written above.
CSA ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Management Subscription Agreement
Exhibit C
POST-TRANSACTION CAPITALIZATION
OF CSA ACQUISITION CORP.
PRO FORMA COMMON
STOCK OWNERSHIP AS OF SHARES
STOCKHOLDER DECEMBER 23, 2004 SUBSCRIBED FOR*
----------- --------------------- ---------------
Cypress Merchant Banking Partners II L.P. 1,508,152.1964 0
Cypress Merchant B II C.V. 64,113.9394 ▇
▇▇▇▇ ▇▇▇▇▇▇ Partners II L.P. 14,553.8642 0
Cypress Side-by-Side LLC 3,180 0
GS Capital Partners 2000, L.P. 899,797 0
GS Capital Partners 2000 Offshore, L.P. 326,952 0
GS Capital Partners 2000 GmbH & Co. Beteiligungs KG 37,609 0
GS Capital Partners 2000 Employee Fund, L.P. 285,892 0
▇▇▇▇▇▇▇ ▇▇▇▇▇ Direct Investment Fund 2000, L.P. 39,750 0
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 10,000 5,000**
▇.▇. ▇▇▇▇▇▇▇ 2,000 3,000
▇▇▇▇▇▇▇ ▇. Way 0 2,500
▇▇▇▇▇ ▇. ▇▇▇▇▇ 0 3,227.725
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0 3,038.985
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 0 3,009.07
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 0 2,709.33
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0 3,029.93
▇▇▇▇▇ ▇. ▇▇▇▇▇ 0 3,454.03
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0 2,598.83
▇▇▇▇▇ ▇. ▇▇▇▇▇ 0 1,024.77
* Shares referred to in this column will be purchased after the date hereof
pursuant to Subscription Agreements entered into as of the date hereof.
** At the option of the Stockholder, the maximum number of shares such
Stockholder may purchase may be increased to 12,000.