EX-10.9
Subscription Agreement
EXHIBIT 10.09
EXECUTION COPY
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT, dated as of December 23, 2004 (this
"Agreement"), among Cypress Merchant Banking Partners II L.P., a Delaware
limited partnership ("Cypress Onshore"), Cypress Merchant B II C.V., a limited
partnership formed under the laws of The Netherlands ("Cypress Offshore"), 55th
Street Partners II L.P., a Delaware limited partnership ("55th Street") and
Cypress Side-By-Side LLC, a Delaware limited liability company ("Side-by-Side"
and, together with Cypress Onshore, Cypress Offshore and 55th Street, "Cypress")
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 Xxxxxx Tire & Rubber Company, a Delaware corporation
("Cooper"), Xxxxxx 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 (the "Transaction"); and
WHEREAS, on the terms and subject to the conditions set forth below,
Cypress desires to subscribe for and acquire from the Company, and the Company
desires to issue and sell to Cypress, the number of shares of common stock, par
value $0.01 per share (the "Common Stock"), of the Company 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:
"55th Street" has the meaning assigned to such term in the preamble
hereto.
"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.
"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.
"Closing" has the meaning set forth in Section 3 below.
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"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.
"Xxxxxx" has the meaning assigned to such term in the preamble hereto.
"Cypress" has the meaning assigned to such term in the preamble
hereto.
"Cypress Offshore" has the meaning assigned to such term in the
preamble hereto.
"Cypress Onshore" 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.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"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.
"Side-by-Side" 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.
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2. Subscription for and Purchase of the Common Stock. Pursuant to the
terms and subject to the conditions set forth in this Agreement, Cypress hereby
subscribes for and agrees to purchase, and the Company hereby agrees to issue
and sell to Cypress, on the Closing Date 1,590,000 shares of Common Stock (the
"Shares") having an aggregate purchase price equal to $159,000,000 (the
"Purchase Price"). For purposes of this Agreement, the price per share of Common
Stock shall be $100, subject to adjustments in respect thereof for any stock
dividends, combinations, splits or the like subsequent to the date hereof and
prior to the Closing. Of the total number of Shares to be so acquired by
Cypress, the portion of the Shares of Common Stock to be acquired by each of
Cypress Onshore, Cypress Offshore, 00xx Xxxxxx and Side-by-Side shall be
1,508,152.1964 shares by Cypress Onshore, 64,113.9393 shares by Cypress
Offshore, 14,553.8642 shares by 00xx Xxxxxx and 3,180 shares by Side-by-Side.
3. The Closing. The closing (the "Closing") of the issuance and sale
of the Shares shall take place on the day (the "Closing Date ") of, and
simultaneously with, the consummation of the Transaction pursuant to the
Purchase Agreement. The Closing shall occur at the offices of Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other
place as the parties may mutually agree. At the Closing, the following shall
occur:
(a) Cypress shall deliver to the Company the Purchase Price payable by
delivery to the Company of such amount by a single wire transfer of
immediately available funds as consideration for all of the Shares to be
issued hereunder; and
(b) the Company shall duly issue the Shares to be received by Cypress
and shall deliver to Cypress stock certificates representing the Shares
purchased by Cypress consistent with the apportionment described in Section
2.
4. Stockholders Agreement and Registration Rights Agreement. On the
date of consummation of the Transaction pursuant to the Purchase Agreement,
Cypress 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 Cypress 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 Cypress 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
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subject to any preemptive rights and restrictions on transfer other than
under applicable securities laws, the terms of this Agreement and the
Stockholders Agreement;
(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, (ii) 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 Cypress. Each of Cypress Onshore,
Cypress Offshore 55th Street, and Side-by-Side represents and warrants to the
Company as follows:
(a) (i) each of Cypress Onshore, Cypress Offshore and 55th Street is a
limited partnership duly formed, validly existing and in good standing
under the laws of the jurisdiction of its formation and has full
partnership power and authority to execute and deliver this Agreement and
to perform its obligations hereunder, (ii) Side-by-Side is a limited
liability company 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 (iii) each of this Agreement has been duly
authorized, executed and delivered by each of Cypress Onshore, Cypress
Offshore, 00xx Xxxxxx and Side-by-Side and is valid, binding and
enforceable against each of Cypress Onshore, Cypress Offshore, 00xx Xxxxxx
and Side-by-Side in accordance with its terms;
(b) the execution, delivery and performance by Cypress of this
Agreement will not (i) conflict with the partnership agreement or
certificate of formation of Cypress Onshore, Cypress Offshore or 55th
Street, (ii) conflict with the certificate of incorporation or bylaws of
Side-by-Side, (iii) 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 Cypress Onshore, Cypress
Offshore, 55th Street or Side-by-Side is a party or by which Cypress
Onshore, Cypress Offshore, 55th Street or Side-by-Side is bound or (iv)
except for compliance with the applicable requirements of the HSR Act,
require any
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consent, waiver, approval, order, permit or authorization of, or
declaration or filing with, or notification or report to, any Governmental
Body;
(c) Cypress is acquiring the Shares for investment and solely for its
own account and not with a present view to, or for resale in connection
with, the distribution or other disposition thereof;
(d) Cypress has been advised by the Company that:
(i) the offer and sale of the Shares have not been registered
under the Securities Act;
(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) Cypress' 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) Cypress' 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) Cypress 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
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Shares and, accordingly, it may not be possible for Cypress to liquidate
its investment in case of emergency or otherwise; (iv) Cypress 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 Cypress or its
representatives concerning the Shares or the Company or their prospects or
other matters; (v) Cypress 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
Cypress or its representatives deems necessary; (vi) in making its decision
to purchase the Shares hereby subscribed for, Cypress 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) Cypress is an "accredited
investor" within the meaning of Rule 501 of Regulation D under the
Securities Act.
(f) Cypress has acquired an understanding of the Company and its
business. Cypress 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
Cypress deems necessary to evaluate the merits and risks related to its
investment in the shares of Common Stock.
7. Covenants of the Company and Cypress.
(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
Cypress to consummate the Closing are subject to the satisfaction or written
waiver by both the Company and Cypress on or prior to the Closing Date 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 Cypress and the other transactions
contemplated hereby illegal or otherwise prohibiting consummation
thereof.
9. 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
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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.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
and
GS Capital Partners 2000, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
and
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
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(2) If to Cypress:
Cypress Merchant Banking Partners II L.P.
Cypress Merchant B II C.V.
55th Street Partners II L.P.
Cypress Side-by-Side LLC
c/o The Cypress Group L.L.C.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
(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.
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(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.
(f) Entire Agreement. Except as otherwise expressly set forth herein,
this 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) 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.
(h) 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 Cypress. Unless otherwise specifically provided
for herein, this Agreement is not assignable.
(i) 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/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CYPRESS MERCHANT BANKING PARTNERS II L.P.
By: Cypress Associates II LLC,
its general partner
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Member
CYPRESS MERCHANT B II C.V.
By: Cypress Associates II LLC,
its managing general partner
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Member
55th STREET PARTNERS II L.P.
By: Cypress Associates II LLC,
its general partner
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Member
CYPRESS SIDE-BY-SIDE LLC
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Member
Subscription Agreement - Cypress
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. 64,113.9393 0
00xx Xxxxxx 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
Xxxxxxx Xxxxx Direct Investment Fund 2000, L.P. 39,750 0
Xxxxx X. XxXxxx 10,000 5,000**
X.X. Xxxxxxx 2,000 3,000
Xxxxxxx X. Way 0 2,500
Xxxxx X. Xxxxx 0 3,227.725
Xxxxx X. Xxxxxxxx 0 3,038.985
Xxxx X. Xxxxxxx 0 3,009.07
Xxxxxx X. Xxxxxx 0 2,709.33
Xxxx X. Xxxxxxxx 0 3,029.93
Xxxxx X. Xxxxx 0 3,454.03
Xxxxxxx X. Xxxxxxxx 0 2,598.83
Xxxxx X. Xxxxx 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.
