IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

COOPER TIRE & RUBBER COMPANY, Plaintiff, ) ) ) )

v. ) ) ) Civil Action No. 8980

- VCG APOLLO (MAURITIUS) HOLD INGS PVT. LTD., APOLLO TYRES B.V ., and APOLLO ACQUISITION CORP.,

Defendants. )

) ) ) )
MEMORANDUM OPINION
Date Submitted: July 9, 2014 Date Decided: October 31, 2014 Stephen C. Norman, Kevin R. Shannon , John A. Sensing , and Christopher N. Kelly, of POTTER ANDERSON & CORROON LLP ; OF COUNSEL: Robert S. Faxon, Mi chael A. Platt, Louis A. Chaiten , Kyle T. Cutts, and Marjorie P. Duffy, of JONES DAY , Attorneys for the Plaintiff. Raymond J. DiCamillo, Susan M. Hannigan, and Christopher H. Lyons, of RICHARDS LAYTON & FINGER, P.A. ; OF COUNSEL: John L. Hardiman , Robin D . Fessel, Adam R. Brebner, Laura K. Oswell, Oded Zaluski, Asel Aliyasova, and Christen M. Martosella, of SULLIVAN & CROMWELL LLP, Attorneys for the Defendants.

GLASSCOCK, Vice Chancellor2

This matt er involves the unraveling of the Agreement and Plan of Merger (the ―Merger Agreement‖) by which a large Indian tire manufacturer

— Apollo (Mauritius) Holdings Pvt. Ltd (―Apollo‖)

— was to buy a large American tire
company

— Cooper Tire & Rubber Company (―Cooper‖). Among other reasons, acquisition of Cooper was attractive to Apollo because it would provide Apollo an entrée into the Chinese market; a significant part of Cooper‘s business was its majority ownership of an affiliate, a Chines e tire manufacturer , Chengshan Cooper
Tires (―CCT‖) . Once the merger was announced, however , Cooper‘s ownership of the affiliate emerged as a major obstacle to the deal‘s consummation. The minority p artner of CCT

— known as Chairman Che

— either vehemently o pposed the merger or saw it as an opportunity to extort value from the parties beyond what his minority interest would justify. In either case, he used his position of authority over the workers and their union to physically seize the CCT facility, preven t production of Cooper product s there, and deny access of the parties to the facility and to CCT‘s financial records.
Consummation of the deal encountered another obstacle: Cooper faced
resistance from its own domestic union , the United Steelworkers (―USW‖ ) , w hich argued that the merger triggered a contractual right to renegotiation in several of its collective bargaining agreement s . An arbitrator agreed, and Cooper and Apollo reluctantly entered into an agreement with the USW whereby the merger could not3

close until a settlement was reached as to the collective bargaining agreements. Initially barred from the negotiating table by Apollo due to its historically poor
relations with its labor unions , Cooper became increasingly frustrated by Apollo‘s
lack of progress in negotiating with the USW . As the deadline loomed for Cooper to report its third quarter financials

— a condition to closing the merger, which Cooper could not fulfill due to the disruption at CCT

— Cooper began to suspect that Apollo had grown cold to the merger and was failing to negotiate with the
USW in good faith in order to avoid consummating the transaction. Once Cooper suspected bad faith, t he Merger A g ree ment came a cropper. Cooper sued, seeking specific performance or damages for breach of contract

. Apollo counterclaimed, requesting that I declare that Cooper had failed to meet all conditions to closing, and was therefore not entitled to relief. The ma tter moved on an expedited schedule to trial, where Cooper asked me to quickly consider the specific performance issue in isolation, citing exigencies of its impending financial reporting obligation. I complied with Cooper‘s requ est; in a November 8 bench ruling, supplemented the next day by a letter opinion ( together, the ―USW Opinions‖), I found that the failure to reach an agreement with the USW prevented the transaction from closing at that time, that this failure was not the result of a
contractual br each on Apollo‘s part, and thus that Cooper was not entitled to specific performance. Because Cooper represented that appellate relief would be4

meaningless if not given immediately, I certified an interlocutory appeal on the narrow grounds of my ruling on specific performance. While that appeal was pending, however, Cooper dropped its request for specific performance, notifying the Supreme Court that it instead intended to terminate the merger and sue for damages under the reverse ter mination fee provisio ns of the Merger A greement (the ―Reverse Termination Fee‖)

. The Supreme Court dismissed the interlocutory appeal as improvidently accepted , and s hortly thereafter Apollo moved for an order temporarily restraining Cooper from drawing on a letter o f credit for the Reverse
Termination F ee and, in an effort to permanently p revent Cooper from seeking the
Reverse Termination F ee, a judicial declaration on its counterclaim that Cooper
had not satisfied all conditions to closing t he merger as of the trial date. T his Memorandum Opinion addresses the latter issue, and the effect that the rather bizarre events in China had on Cooper‘s ability t o perform as called for in the Merger A greement. For reasons arising from the takeover at CCT, and independent of the failur e to reach an agreement with the USW , I find that Cooper was unable to satisfy all conditions to closing

. I. SCOPE OF THIS OPINION I first turn to the appropriate scope of this decision. Due to the convoluted procedural posture of the case, the parties di sagree as to what is left for me to decide. This action is before me on Apollo‘s post

- trial Motion for Entry of a5

Declaratory Judgment on its counterclaim, in which Apollo has asked this Court to
declare that ― the conditions to closing had not been satisfied prior to the trial of this action, and Cooper [was], thus, not in a position to close the merger

. ‖ 1 Cooper contends that addressing this Motion in full is inappropriate, given my USW Opinions , in which I determined that Cooper was not entitled, as of that date, to specific performance of the merger agreement , because closing was conditioned on Apollo entering into an agreement with the USW and because Apollo had not (as of that time) breached its obligation to use best efforts in reachi ng such a resolution. Cooper suggests that ―[b]ecause the Court‘s decision as to the USW is sufficient by itself to grant a declaratory judgment for Apollo, the Court should refrain from reaching any other issue.‖ 2
I rejected that contention in a letter opinion on January 27, 2014 , 3 for reasons that I repeat briefly here. In the USW Opinions , I addressed a request for equitable relief on a rigorously expedited schedule so that , if appropriate, the merger could close before Cooper was required to produce its third quarter financials, a contractual requirement it knew it could not meet due to the lockout at
CCT. The precise issue before me now

— whether Cooper had satisfied all
conditi ons to closing the merger

— was not before me in the USW Opinions, in

1 Defs.‘ Mot. for Declaratory J. at 1. 2 Pl.‘s Br. in Opp‘n to Defs.‘ Mot. for Declaratory J. at 12

– 13. 3 See Cooper Tire & Rubber Co. v. Apollo (Mauritius) Holdings Pvt. Ltd. , C.A. No. 8980

- VCG (Del. Ch. Jan. 27, 2014).6

which I determined that Cooper was not entitled to specific performance as of the trial date, but also that the parties‘ obligations under the merger agreement remained outstanding

. At any rate, as an appeal of my USW Opinions appears inevitable, I beli eve it appropriate to resolve the issues arising from the CCT
takeover presented at trial, in the interest of judicial efficiency; in doing so, I note that these issues were presented in detail at a three

- day expedited trial, have been fully briefed, and m ay ultimately be dispositive if the case is remanded

. For its part , Apollo contends that, if I am to evaluate the conditions to closing beyond the failure to reach an agreement with the USW , I should make that determination as of November 14, 2013, the date Cooper was required to (and failed to) file its third quarter financials. In contrast , Cooper suggests in briefing that my holding should be limited to the period before October 10, 2013, arguing that ―it would be inappropriate for Apollo now to obtain a declaration that covers the period through the date of trial,‖ given that ―Apollo‘s counterclaim for a declaratory judgment was commenced on October 10, and included allegations only through that date;‖ ―Apollo never filed a supplemental pleading ;‖ ―the parties agreed to collect document discovery only through October 10;‖ and ―Apollo successfully prevented Cooper from including at trial any post

- October 10 claims by Cooper relating to the tentative agreement with the USW.‖ 4 I find it appropriate

4 Pl.‘s Br. in Opp‘n to Defs.‘ Mot. for Declaratory J. at 13.7

that I determine this matter as of the date of trial

. In its Motion, Apollo itself requested a determination ―prior to trial of this action.‖ Further, a t oral argument on the pending Motion, Cooper‘s counsel indicated that the facts relevant to my analy sis, at least with respect to the ongoing lockout at CCT and Cooper‘s inability to produce financials, had not changed between October 10, 2013 and the date of
trial

. 5 Accordingly, I do not feel required to expand my decision as Apollo requests or constra in my decision as Cooper requests. Rather, the appropriate scope of the issue before me now is, setting aside the issues surrounding negotiations with the USW , whether Cooper had satisfied the conditions to closing the merger as of the trial date.
I I. BAC KGROUND
A

. The Cooper

- Apollo Merger Cooper , a Delaware corporation , is the fourth largest tire manufacturer in
North America and the eleventh largest tire company in the world

. 6 Cooper employs 13,000 people globally, 7 and its revenues in 2012 were more than $4
billion. 8

5 See, e.g. , July 9, 2014 Oral Arg. Tr. 67:4

– 7 (explaining that, following the anno uncement of the termination of the Merger Agreement, ―[t]he [CCT] labor union relinquished their control over the facilities. The facilities went back to work producing all tires. Cooper ‘ s financials are now cur rent and have been for some time. ‖ ); id. at 68:1

– 5 (― But there is no record of anything that happened after the trial.

. . . The only issues are those that stood at the time of trial. ‖). 6 Defs.‘ Countercl. ¶ 11 ; Trial Tr. 13:5

– 7 (Armes)

. 7 Trial Tr. 13:20 (Armes). 8 Id. at 13:22.8

Apollo is a n Indian tire manufacturer founded in 1975 and organized under
the laws of th e Republic of Mauritius. I n 2005, the business began to expand globally, and by 2010, Apollo had grown into a $2 billion company
. 9 By 2013, Apollo viewed an acquisition of Cooper‘s foothold in Chin a

— CCT , a joint venture with Chengsha n Group that accounted for roughly 20% of Cooper‘s business in
2012

— as vital to its efforts at global expansion. 10
Accordin g to the testimony elicited at the November 2013 trial , Cooper‘s business plan in 2012 focused primarily on acquiring smaller companies; Cooper
did not originally plan to sell its business. 11 Cooper and Apollo initially met in
2012 to discuss the possibility of a joint venture. 12 A joint v enture between the two companies never materialized, and i n January 2013, Apollo approached Cooper
about a potential acquisition

. Over the next several months, Apollo made bids to purchase Cooper for $22.75, $25 to $ 26, $33, $33.75, and finally $35 per sh are. 13 During that negotiation period , Cooper entertained at l east one other potential bidder: Chengshan Group, Cooper‘s 35% Chinese joint venture partner

a t CCT

. 14 The Chairman of Chengshan Group, Chairman Che, organized an

9 Id. at 545:17

– 546:17 (Kanwar). 10 Id. at 548:6

– 549:24; Pl.‘s Pre

- Trial Br. at 9

. 11 Trial Tr. at 16:1

– 4 (Armes). 12 Id. at 16:8

– 17. Cooper and Apollo had also previously discussed cooperation in certain other projects, including one that would facilitate Cooper‘s expansion into the South African tire market. Id. at 16:11

– 23. 13 Pl.‘s Pre

- Trial Br. at 9. 14 Id.9

investor group and orally proposed an offer of $ 38 per share , but he ultimately
declined to make a formal offer. 15 A lthough Cooper informed Chengshan Group, as its joint v enture partner, that Apollo had approached Cooper about an acquisition, Apollo was never informed that Chengsha n Group had expressed an
interest in acquiring Cooper

. 16 On June 12, 2013, A pollo and Cooper entered into the Merger Agreement , whereby Apollo agr eed to acquire all outstanding Cooper shares for $35 per share , representing a 40% premium over trading prices and a total transaction value of roughly $2.5 billion. 17 On September 30, approximately 74% of Cooper‘s outstanding shares voted in support of the merger. 18 Had the deal closed, t he resulting entity would have been the seventh largest t ire manufacturer in the
world

. 19
B. The CCT Strike As noted above, Cooper and Apollo entered into the Merger Agreement o n June 12, 2013

. After the transaction was announced, Apollo‘s stock price dropped

15 Trial Tr. 32:1

– 33:21 (Armes); see also JX 1 (―Prior to the signing of the merger agreement, Chengshan Group Chairman Che Hongzhi was given the opportunity to bid for Cooper. Chengshan Group was fully supported in the process. Chengshan Group was given access to Cooper‘s data room, and Cooper CEO Roy Armes made multiple trips to Beijing to meet with Che and his advisors. However, Chengshan Group ultimately did not make a formal bid.‖); Armes Dep. Tr. 15:15

– 20. 16 Trial Tr. 91:3

– 19 (Armes); id. at 560:15

– 562:2 (Kanwar). 17 Compl. ¶ 2. 18 Id. ¶ 1 23. 19 Id. ¶ 2.10

by 39%

. 20 R esearch analysts speculated that the acquisition was too highly leveraged and provided few synergies for Apollo. 21 In addition, t he labor union at CCT, Cooper‘s Chinese joi nt venture, openly criticized the merger as too highly leveraged , 22 publishing a paid advertisement in the Wall Street Journal denouncing the merger. 23 On June 21, 2013, the CCT labor union went on strike. 24 The union returned to work on June 28, 2013, but resumed the strike again on or around July 12, 2013. 25
On August 17, the CCT union again resume d work at the plant , but refused

to produce Cooper

- branded tires. 26 In addition, ―the union . . . physically barr[ed] certain Cooper

- appointed managers from accessing CCT‘s facility or from obtaining certain of CCT‘s f inancial books and record s, and . . . prevented CCT from entering certain operating and financial d ata into CCT‘s computer systems .‖ 27

20 Id. ¶ 54. 21 Id. ¶ 55. 22 Id. ¶ 57. 23 JX 70. 24 Compl. ¶ 58. 25 Id. ¶¶ 58, 63

. 26 Id. ¶ 67; see also Trial Tr. 51:16

– 20 (Armes) (―The financial data is not being uploaded like we would normally do. The production does continue, but they are not producing Cooper

branded products. And they‘re restricting the access of our people into the plant.‖). 27 Comp l. ¶ 67; see also JX 584 at COOPER0073766 (―The union has prevented Cooper and others from entering the factory to retrieve their property, and we have recently been told that Cooper

- affiliated management will be prohibited from entering their offices begi nning on August 12.‖); JX 252 at COOPER0037907 (―We have and will continue to supply you with reasonable access to information. As a result of the announcement of the merger, however, the union and our partner at CCT have taken actions to limit our access to the plant, including limiting access to certain books and records. You know that already.‖); JX 620 at APOLLO_00006337 (noting that Cooper‘s visibility into CCT was largely limited ―to what raw11

The union‘s reaction to news of the merger was unprecedented , 28 and in an effort

to hold up production and force an end to the ― strike ‖

— in actualit y, the physical exclusion of Cooper from its subsidiary

— Cooper management adopted a policy of suspending payment s to supplier s who continued to ship supplies during the pendency of the strike. 29 Cooper also floated ―potential plans . . . to change th e security firm at the CCT site ‖

— i.e. , to physically replace security guards with their

own men

—

but Apollo rejected this idea due to ―concern[s] for personal safety of the pe ople at and near the plant

. ‖ 30

material inventory is entering the plant‖); JX 255 at GPC 014773 (―[W]hile the suggestion that [Apollo] show up at CCT to attempt access appeared perplexing, I want you to know that as soon as you have enough access or control at CCT to allow us access we will have people on the next available flights . . . .‖). 28 Cooper CEO Roy Armes testified at trial that during his tenure at Cooper, the CCT union had never gone on strike and had never blocked management from CCT facilities. Trial Tr. 52:3

– 20. 29 Id. at 278:9

– 12 (Hughes). On September 25, 2013, the General Manager of Cooper‘s Asia Operations, Allen Tsaur, sent an email to the President of Cooper‘s International Tire Division, Hal Miller, which Mr. Miller subsequently forwarded to Cooper CEO Roy Armes and General Counsel S teven Zamansky, summarizing the anticipated consequences of Cooper‘s plan to cut off payment to CCT‘s suppliers as follows:

 OE customers are likely to sue CCT for contract violation and lost time penalty. Please note that CCT supplies to all top 5 truck co mpanies in China.

 The raw material payment of 40M RMB is not all for new purchase. Some are for goods already received. Along with our suppliers, they are likely to sue CCT for delinquency.

 Many suppliers are in CCT Purchasing Department office everyday demanding payment.
 CCT is likely to lose in the lawsuits for contract violation and lost time penalty to OE and delinquency for suppliers. The consequence can be very bad as not only we need to pay [sic] but also ruin the creditability. CCT will need to buy on cash in the future. JX 445 at COOPER0033397. 30 JX 292.12

Although the parties initially believed that the strik e in China was instigated by CCT‘s labor union, Apollo contends that, upon hiring a private investigator to interview employees at CCT, it uncovered that the true cause of the strike at CCT was Chairman Che, who had instructed middle management to warn wor kers that ―anyone that does not take part in the protest will be fired.‖ 31 This news came as a surprise to both Cooper and Apollo, who anticipated in diligence that Chairman Che might disfavor the merger , 32 but had met together with Chairman Che prior to

31 JX 357; see also JX 584 at COOPER0073766 (―A number of workers attempted to return to work on August 5, but union representatives and security blocked the entrance to the factory and prevented them from returning.‖); JX 76 (―It seems that the workers interviewed clearly know the agenda behind the protest. According to them, it is Che Hongzhi that instigated the protest.‖). 32 See Trial Tr. 19:16

– 20:7 (Armes) (―As we were talking about a lot of business things as I indicated before, Chengshan or CCT came up because there was concern from Apollo about how the Chairman Che would react to this acquisition. And as I recall, I mentioned to Apollo there could be one of three things that he could do: One, he could go along with the acquisition and really support it and transition it. Second, he could possibly offer up his shares. He has 35 percent in the joint venture. He could possibly be looking for selling those. And then, thirdly, he could

— he c ould disrupt it or try to undermine it. And as we talked back and forth, later on there was a fourth one that came up that basically he may try to put his own bid together. We just weren‘t sure.‖). But see id. at 87:13

– 88:4 (Armes) (― Q. Now, you testifi ed on your direct that you told Apollo that he would

-- that Che might do something to undermine the situation. I think that was your language. Correct me if I'm wrong. A. Mm

- hmm. Q. You didn't tell him, though, that that was a likely situation, though, di d you? A. No. I didn't feel that it was a likely situation. Q. If fact, you thought from all indications that he would support the transaction. A. Yes, all our ind ications was that. Q. In fact, after the first problems surfaced at CCT, you told your board that it was very unexpected to you, didn't you? A. Yes.‖); id. at 270:8

– 11 (Hughes) (― Q. And Apollo was never told during the merger negotiations that it was likely that there would be disruption at CCT, was it? A. Not in a discussion I was present at.‖); id. at 557:19

– 558:1 (Kanwar) (―Q. Is it your perception that the chairman has taken over CCT? A. Yes. Q. In the premerger agreement meetings with the folks at Cooper, did anybody suggest to you that anything like that was going to happen? A. No.‖).13

signing the Merger Agreement, 33 and had understood that as the owner of a 35%
interest , ―[f]rom a technical point of view, [Chengshan Group had] no veto or put rights, so [Cooper did] not need their approval for the deal.‖ 34
I nformation that Chairman Che was behind the strike at CCT incited Apollo‘s ―Project Charlie,‖ a codename Apollo used in reference to its efforts at negotiations and relationship

- building with Chairman Che. 35 Although Cooper representatives initially sought to resolve the conflict without Apollo‘s direct involvement, 36 o n September 2, 2013, Apollo also sent a letter to Chairman Che

33 See id. at 459:7

– 12 (Zamansky) (―It was consistent that the meeting went well, that there was some relationship building to do; but [Chairman Che] didn‘t raise any concerns other than saying that we have some relationship building to do, but it went well and w e‘re moving forward.‖). 34 JX 18; see also Trial Tr. 21:1

– 5 (Armes) (―Q. Did

— before March 7th did Chairman Che ever tell you that he would derail any deal that Cooper was a part of? A. There was no indication of that at all.‖); JX 52 at 7 (identifying, in due diligence summary materials , change in control provisions in the CCT joint venture agreement that could trigger Chengshan Group‘s right of first refusal, but determining that ―these provisions are unlikely to be triggered by an indirect change of contr ol such as that associated with the Proposed Transaction‖); JX 584 at COOPER0073765 (―Weeks prior to the signing of the merger deal with Apollo, Cooper asked Che for his support of the deal and Che did nothing to indicate that there would be a strike if th e Apollo deal went forward.‖). 35 See, e.g. , JX 75 (describing, in a summary of meetings with Chengshan Group, the reaction to the merger at CCT as ―very strong and somewhat irrational,‖ and noting that ―[t]his challenge will take a  ̳creative‘ solution to r esolve the union‘s concerns in this situation‖); JX 584 at COOPER0073766 (―It is unclear why Chairman Che would want to dissolve a company that is profitable, employs a sizeable work force, and brings prosperity to the local community, by first advocating a strike and then using the strike as grounds for dissolving the company.‖); JX 76 (―It seems that the workers interviewed clearly know the agenda behind the protest. According to them, it is Che Hongzhi that instigated the protest. . . . The workers int erviewed said they personally have no concerns over the acquisition.‖); JX 153 at GPC01602 (providing an overview of ―Project Charlie,‖ and indicating the unusual position that Chengshan Group held a ―35% minority stake in unlisted subsidiary, with limited rights (however effective management control)‖). 36 See generally JX 86 (summarizing a July 10, 2013 meeting between Cooper representatives and Chairman Che).14

indicating that , despite disruptions at CCT, Apollo still planned to consummate the

me rger with Cooper , and explaining that, ―[a]s I am sure you are aware, the opposition will not prevent the merger from going ahead as planned, for legal and commercial reasons.‖ 37 Apollo likewise indicated by letter to the Mayor of Rongcheng, China, that both Cooper and Apollo ―are legally committed, under
United States and inter national laws, to proceed with the merger.‖ 38 However, despite Apollo‘s assurances that it stood behind the merger , Cooper contends that the strike at CCT ―soured Apollo on the Merger, ‖ 39 and that Apollo subsequently ―began to look for some other pretext for seeking to escape
what it now perceive[d] as a bad deal, either by delaying the closing long enough
so that the risk relating to CCT shift[ed] to Cooper, or by obtaining leverage to renegotiate the Merger consideration downward.‖ 40
C

. The USW Strike In addition to the strike at CCT, Cooper‘s domestic union, the USW , reacted to the merger announcement by filing grievances against Cooper , claiming that the proposed merger violated Cooper‘s collective bargaining agreements governing its Findlay , Ohio and Texarkana , Arkansas plants ; the USW argued that those agreements prevent ed Cooper from selling its plants prior to a renegotiation of the

37 JX 4. 38 JX 151 at APOLLO_00005514. 39 Compl. ¶ 69. 40 Id. ¶ 71.15

collective bargaining agreements between a buyer and the union

. 41 During the diligence and negotiation process, Cooper and Apollo anticipated what response the merger announcement would likely generate , including the likelihood that the
USW would invoke the renegotiation provisions

. 42 H owever, Cooper‘s management believed

— and indicated to Apollo

— that the odds of Coop er receiving a favorable outcome at arb itration were quite high. 43 As a result, w ith Apollo‘s approval, Cooper submitted the USW‘s grievances to binding arbitration , with proceedings held on August 28 and 29 , 2013

. 44 T o the surprise of Cooper and Apollo, t he arbitrator issued a decision in favor of the USW, determining that the
merger could not close prior to a successful negotiation between Apollo and the
USW

. Rather than permitting the arbitrator‘s ruling to become a court order enjoining the transaction , on September 25, Apollo, Cooper, and the USW entered
into an agreement providing that the merger ―shall not close unless an agreement has been entered into in satisfaction of the Opinion and Award issued by [the arbitrator] on terms acceptable to [ the US W].‖ 45

41 Id. ¶ 72. 42 Id. ¶ 73. 43 Cooper‘ s General Counsel Steve Zamansky relayed to Apollo that outside counsel put the likelihood of success in the range of 60%

– 95 % , though he expressed his disagreement that the odds were as high as 95%

. Trial Tr. 534:9

– 535:22 (Zamansky). Cooper‘s CEO Roy Armes indicated that he communicated to Apollo a suc cess rate in the range of 80%

– 85%

. Id. at 105:24

– 106:2 (Armes). 44 Compl. ¶ 76. 45 Defs.‘ Answer and Countercl. Ex. A; JX 248.16

On September 7, 2013, immediately after the arbitration decision was issued, representatives from Cooper and Apollo met in New York to develop a negotiating strategy. On September 19 and 20, Apollo met with USW representatives in Nashville, Tennes see. On September 23, Apollo requested supplemental
information from Cooper in order to learn more about the concessions Coo p er had encouraged Apollo to make with the USW

. 46 Apollo‘s V ice Chairman and Cooper‘s CEO spoke on September 27, and Apollo again m et with the USW on September 25 and 26 , and on October 1 and 2 , in Pittsburgh, Pennsylvania. Throughout the se meetings , Apollo prevented Cooper from participating because , according to Apollo, Cooper had historically maintained strained relationship s with its labor unions and Apollo wished to rebuild relationships with Cooper‘s unions

. 47 At the same time, Apollo requested that Cooper agree to a p rice reduction, as
concessions to the USW would be costly. Cooper rejected Apollo‘s request for a price adjustm ent, and in an effort to speed up negotiations between Apollo and the
USW , in November 2013, Cooper independently negotiated a conditional agreement with the USW , which guaranteed the union certain benefits in the event the merger did not close.

46 JX 242. 47 Defs.‘ Countercl. ¶ 3 4

. On the other hand, Cooper has pointed out that Apollo lost significant negotiating leverage by refusing to permit Cooper to negotiate with the USW, since Cooper was ultimately able to work out a deal with the USW that included contingent terms in the event that the merger did not close, while suc h a strategy was not available without Cooper‘s presence. See Trial Tr. 386:21

– 392:20 (Weiner)

.17

The merger , by its terms, had to close no later than December 31, 2013. 48 Notwithstanding that ―Outside Date,‖ Cooper needed to close the transaction by
mid

- November 2013 because it would otherwise be required to provide its third quarter financial information as a condition to financing, which it could not do in light of its exclusion from the CCT facility and documents therein. 49
D. Procedural History Cooper filed its Complaint in this action on October 4, 2013, seeking (1) a positive injunction requiring Apollo to (a) use its reasonable best efforts to resolve any disagreements with the USW by permitting Cooper to negotiate in Apollo‘s stead, and subse quently approving a commercially reasonable agreement negotiated by Cooper , and (b) consummate the Merger ; (2) a declaration that , apart from Apollo‘s obligation to use best efforts to reach an agreement with the USW,
all conditions to closing had been sat isfied; and, in the alternative, (3) unspecified money damages to compensate Cooper for losses it incurred due to Apollo‘s alleged breach of the Merger Agreement . In response, Apollo brought a
counterclaim seeking a declaration that conditions precedent t o closing had not
been satisfied. The matter was expedited because Cooper, as described above, knew it would not be able to satisfy a contractual condition after mid

- November.

48 JX 65 (― Merger Agreement ‖) § 8.1(b)(i ). 49 Compl. ¶¶ 42, 67, 128.18

I held a three

- day t rial from November 5

– 7, 2013, in which the parties presented evidence on whether Apollo was in material breach of the Merger Agreement by failing to use its reasonable best efforts to negotiate with the USW, and whether all conditions precedent to closing had otherwise been sa tisfied. At that time, Cooper sought specific performance of the Merger Agreement, and represented that, because it was vanishingly unlikely due to the strike at CCT that Cooper would be able to deliver third quarter financials to Apollo‘s financing

sourc es by November 14 , 2013 , as required by the Merger Agreement, any injunctive relief , to be meaningful, would have to be granted by that date. As a result, on November 8, I delivered a bench decision , supplemented on November 9 by a letter opinion, on a single dispositive issue

— whether Cooper was entitled to injunctive relief, and ultimately specific performance of the Merger Agreement , because Apollo had materially breached the Agreement by failing to use its reasonable best efforts to negotiate a resol ution with the USW. In those USW Opinions, I found that Apollo was not in breach and that Cooper was not entitled to the relief it sought

. 50 At Cooper‘s request, I then certified an interlocutory appeal, with the understanding that Monday, November 11 was a holiday, and that Cooper would

50 See Cooper Tire & Rubber Co. v. Apollo (Mauritius) Holdings Pvt. Ltd. , C. A. No. 8980

- VCG, at 998:24

– 1012:9 (Del. Ch. Nov. 8 , 2013) (TRANSCRIPT); Cooper Tire & Rubber Co. v. Apollo (Mauritius) Holdings Pvt. Ltd. , C. A. No. 8980

- VCG (Del. Ch. Nov. 9 , 2013)

.19

be denied meaningful access to an appeal if it could not receive a decision on its appeal by November 14, while specific performance of the Merger Agreement

— that is, while delivery of Cooper‘s current financial information

— was still possible. Instead, after I certified the interlocutory appeal, Cooper represented in its application to the Supreme Court that it sought recovery of the Reverse Termination Fee under the Merger Agreement rather than injunctive relief, and
theref ore the timeline under which this Court had accommodate d the parties was
no lo nger applicable. T he Supreme Court dismissed Cooper‘s appeal on December
16 , 2013 as ―improvidently accepted

. ‖ 51 That same day , in an effort to prevent Cooper from pursuing the Reverse
Termination Fee it now sought , Apollo moved for a temporary restraining order preventing Cooper from drawing on the letter of credit for the Reverse Termination Fee, and a judicial declaration that Cooper had not satisfied all conditions to
cl osing prior to trial

. On January 24, 2014, the parties submitted written argument regarding how this case should move forward. Despite Cooper‘s request that I convert my November 8 bench ruling into a final judgment on Apollo‘s
counterclaim , I determined on January 27, 2014 that Apollo‘s Motion for Entry of

51 Cooper Tire & Rubber Co. v. Apollo (Mauritius) Holdings Pvt. Ltd

. , C.A No. 624, 2013 (Del

. Dec. 16, 2013) (ORDER).20

a Declaratory Judgment should be resolved befo re a final judgment is entered. 52 I heard oral argument on that Motion on July 9, 2014.
E. Conditions to Closing Apollo argues, and requests a judicial declaration stating, that ―the conditions to closing had not been satisfied prior to the trial of this action, and Cooper [was], thus, not in a position to close the merger

. ‖ 53 Specifically, Apollo contends that: (1) the 20

- day Marketing Period has not taken place; 54 and (2) certain of Apollo‘s Section 7.2 conditions to closing have not been satisfied, including that (a) a Material Ad verse Effect has taken place; (b ) Cooper has not satisfied all of its covenants and agreements under Article V of t he Merger

52 See Cooper Tire & Rubber Co. v. Apollo (Mauritius) Holdings Pvt. Ltd ., C.A. No. 8980

- VCG (Del. Ch. Jan. 27, 2014). 53 Defs.‘ Mot. for Declaratory J. at 1. It is clear that in the present action Apollo seeks a declaratory judgmen t that would effectively prevent Cooper from pursuing the Reverse Termination Fee under the Merger Agreement

. See Defs.‘ Br. in Support of Mot. for TRO and Declaratory J. at 12 (―Cooper informed the Supreme Court by letter . . . that, instead of seeking t o prevent the termination of the Merger Agreement, Cooper was now  ̳consider[ing]‘ terminating the Merger Agreement itself  ̳to protect [its] rights under the letter of credit securing the reverse termination fee.‘ A few hours after Cooper‘s revelation, the Supreme Court dismissed the interlocutory appeal as improvidently granted. Apollo now brings the present motion to prevent Cooper from continuing with its scheme to obtain a termination fee to which it is not entitled.‖ (alterations in original) (citatio ns omitted)). While my declaration as to whether Cooper satisfied all conditions to closing prior to trial will likely be dispositive of Cooper‘s ability to recover the Reverse Termination Fee, see Merger Agreement §§ 8.2(c), 8.1(g), my ruling here is nec essarily limited to consideration of the conditions to closing, and not whether Cooper is entitled to the Reverse Termination Fee. 54 Apollo contends that the occurrence of the Marketing Period, a lthough not an Article VII condition to closing, is necessary for the merger to clo se according to Section 1.2. Thus, I list it among the ―conditions to closing‖ that Apollo seeks to have evaluated in its Motion for Entry of Declaratory Judgment. However, as detailed below, my decision does not rely on this issue, and thus I do not find it necessary to determine whether the Marketing Period must occur as a condition to closing or merely as a condition to Cooper‘s entitlement to the Reverse Termination Fee under Section 8.1(g).21

Agreement; and (c ) Cooper was in breach of certain of its representations and warranties under Article VI of the Merger Agreement. In order f or Apollo to prevail on its Motion, only one of these contentions must be true. Consequently, i n my sub sequent analysis on the issues, I primarily discuss Cooper‘s breach of its obligation to operate its, and its subsidiaries‘, business in the ordinary course during the pendency of the merger

— a covenant under Article V . My finding on
that issue is sufficie nt to resolve the issues remaining before me. For the sake of completeness, however, all of Apollo‘s contentions are set out in full below, together with the contractual provisions sufficient to understand them.

1

. Marketing Period Although not contingent on financing, t he Merger Agreement provides for
the occurrence of a 20

- day Marketing Period , during which Apollo‘s financing
banks can market the debt by which Apollo hoped to finance the merger. Apollo planned to finance the transaction with a combinati on of equity and a debt offering
underwritten by Morgan Stanley, Deutsche Bank, Goldman Sachs, and Standard
Chartered Bank ; in the event that a debt offering was unsuccessful, the financing
banks would extend a temporary bridge loan until the debt could be sold. The Merger Agreement therefore provides that : T he closing of the Merger (the ―Closing‖) shall take place at 10:00 am on the fourth Business Day after the satisfaction or waiver of all of the conditions (other than any condition that by its nature c annot be satisfied until the Closing, but subject to satisfaction of any such22

condition) set forth in ARTICLE VII (the ―Closing Date‖) . . . provided that if the Marketing Period has not ended at the time of the satisfaction or waiver of the conditions set forth in ARTICLE VII

. . . then, subject to the satisfaction or waiver of the conditions set forth in ARTICLE VI I at such time, the Closing shall occur instead on the earlier of (a) any Business Day during the Marketing Period as may be specified by [Apollo] on no less than three (3) Business Days‘ prior written notice to [Cooper] and (b) three (3) Business Days aft er the final day of the Marketing Period. 55 ―Marketing Period‖ is defined in Section 10.2 as ―the first period of 20 consecutive Business Days after the date of this Agreement throughout which [Apollo] shall have the Required Information [Cooper] is requir ed to provide pursuant to Section 6.11 and such Requi red Information is Compliant; ‖ however, ―the Marketing Period shall not commence and shall be deemed not to have commenced (i) prior to the mailing of t he Proxy Statement .‖ 56 Section 6.11(e)(i) defines ― Required
Information ‖ as: (A) [F]inancial statements, financial data and other pertinent information regarding [Cooper] and its Subsidiaries of the type required by SEC Regulation S

- X and SEC Regulation S

- K under the Securities Act (excluding pro forma fin ancial statements, pro forma adjustments and information relating specifically to the Financing (other than historical information relating to [Cooper] and its Subsidiaries and forward looking information regarding [Cooper] and its Subsidiar i es otherwise required by applicable Law)) and (B) i nformation relating to [Cooper] and its Subsidiaries (including information to be used in the preparation of one or more information packages (including customary confidential information, memor anda, offering circulars or pr o s pectuses) regarding the bus iness, operations and business plan or budget of [Cooper] and its Subsidiaries)

55 Merger Agreement § 1.2 (typeface alt ered from original). 56 Id. § 10.2 (―Marketing Period‖)

.23

customary for the placement, arrangement and/or syndication of loans as contemplated by the Financing Documents, to the extent reasonably req uested by [Apollo] to assist in preparation of customary offering or information documents or rating agency or lender or investor presentations relating to such placement, arrangement and/or syndication of loans; provided, that any memoranda or prospectuse s need not be issued by [Cooper] or any of its Affiliates . . . . 57 Further, under the terms of the Merger Agreement, Required Information is ―Compliant‖ if: (a) [S]uch Required Information does not contain any untrue statement of a material fact or omit t o state any material fact, in each case with respect to [Cooper] and its Subsidiaries, necessary in order to make the statements contained in such Required Information, in the context in which they are made, not misleading; (b) [S] uch Required Information is, and remains throughout the Marketing Period, compli ant in all material respects with all applicable requirements of Regulation S

- K and Regulation S

- X under the Securities Act (excluding information required by Rule 3

- 09, Rule 3

- 10 or Rule 3

- 16 or Regu lation S

- X or Compensation Disclosure and Analysis required by Regulation S

- K Item 402(b)); (c) [Cooper‘s] auditors have not withdrawn any audit op inion with respect to any financial statements contained in the Required Information; (d) [Cooper‘s] audito rs have delivered drafts of customary comfort letters, including customary negative assurance comfort with respect to periods following the end of the latest fiscal year or fiscal quarter for which historical financial statements are included in the Requir ed Information, and such auditor s have confirmed they are prepared to issue any such comfort letter upon any pricing date occurring during the Marketing Period; and

57 Id. § 6.11(e)(i)

.24

(e) [T] he financial statements in such Required Information are, and remain throughout the Marketing Period, sufficiently current to permit a registration statement on Form S

- 1 using such financial statements to be declared effective by the SE C on or before the l ast day of the Marketing Period. 58 If at any point within that 20

- day Marketing Period the Required Information is no longer Compliant, ―a new 20 Business Day period shall commence upon [Apollo] and its Financing Sources receiving updated Required Informat i on that would be Compliant .‖ 59 Cooper notified Apollo on September 3, 2013 that Cooper believed the 20

- day Marketing Period anticipated in Section 1.2 of the Merger Agreement had begun, as , according to Cooper, all Required Information had been delivered and

was Compliant since August 30. 60 On August 30, Cooper had provided Apollo
with (1) a draft offering memorandum incorporating Coo per‘s most recent 10

- K
and 10

- Q; (2) an updated business plan ; (3) historical information regarding Cooper‘s finan cials for the prior three years; and (4) a draft comfort letter from Ernst & Young. With respe ct to the updated business plan , Cooper CFO Brad Hugh es acknowledged in two separate emails that the operating profit projection in that plan was ―very fluid . . . given t he lack of clarity about what is going on at

58 Id. § 10.2 (―Compliant‖)

. 59 Id. (―Marketing Period‖). 60 JX 161.25

CCT, ‖ 61 and that information related to CCT‘s business was only ―directional at this point.‖ 62 Nevertheless, Cooper claims that the business plans it provided on August 30 were Compliant, as defined in Section 10 .2 of the Merger Agreement. By contrast, Apollo contends that any Required Information provided by Cooper prior to September 3 was not Compliant, as Cooper failed to (1) deliver

accurate business plans relating to CCT, or (2) deliver a final, as opposed to draft, ―customary comfort letter‖ providing ―customary negative assurance comfort.‖ 63 In fact, on September 5, Apollo responded to Cooper‘s notification that the Marketing Period had begun , taking the position that ―[w]e do not believe that the Company has completed the delivery of Require d Information that is Compliant, ‖ 64 and noting that Apollo was continuing to work with Cooper representatives to
obtain Required Information, including a revised business plan that addressed developments at CCT , to ― be finalized shortly after the Company‘s financial information for August is available. ‖ 65

61 JX 399. 62 JX 199. As of September 15, 2013, Cooper could provide only estimated financials for the month of August. JX 219. 63 See Defs.‘ Pre

- Trial Br. at 26

– 27, 45

– 47. Notably, the parties do not argue that, during the 20

- day period in which Cooper alleges the Marketing Period occurred, the Required Information was insufficient under federal securities laws. 64 JX 186. 65 Id.26 2. Material Adverse Effect Section 7.2(c) of the Merger Agreement conditions Apollo‘s obligation to
close the transaction on the non

- occurrence of a Material Adverse Effect . Section
10.2 defines ― Material Adverse Effect ‖ as : any fact, circumstance, event, change, effect or occurrence that (i) has had or would reasonably be expected to have a material adverse effect on the business, results of operations or fi nancial condition of [Cooper] , its Subsidiaries and Joint Ventures, taken as a whole . . . or (ii) that would reasonably be expected to prevent or materially delay or impair the ability of [Cooper] to perform its obligations under this Agreement or to cons ummate the Transactions. 66 Further, subsection (i) to that definition carves out several circumstances that do not constitute Material Adverse Effects, including those attributable to (F) t he execution and delivery of this Agreement or the public announcement or pendency of the Merger or any of the other Transactions or the Financing, including the impact thereof on the relationships, contractual or otherwise, of the Company or any of its Subsidiaries with employees, labor unions, customers, suppli ers or partners, and any litigation arising from allegations of any breach of fiduciary duty or violation of Law relating to this Agreement or the transactions contemplated by this Agreement , or compliance by the Company with the terms of this Agreement .

. . . 67 Apollo argues that an event falling under the carve out of subsection (i)(F) is not
foreclosed from constituting a Material Adverse Effect under subsection (ii) , however . Specifically, Apollo argues that the lockout at CCT was not contemplated b y the parties , prevent ed Cooper from satisfying its obligations under

66 Merger Agreement § 10.2 (―Material Adverse Effect‖)

. 67 Id. § 10.2 (―Material Adverse Effect,‖ (i)(F) )

.27

the Merger Agreement , and therefore constitute d a Material Adverse Effect under
subsection (ii)

. Despite that contention, James Dougherty, Cooper‘s corporate counsel at Jones Day, testified at trial that Cooper communicated from the outset that its goals in negotiating the Merger Agreement were to secure maximum deal and financing certainty, and for the deal to close as quickly as possible. 68 A ccordin g to Dougherty, Cooper believed it was w holly allocating to Apollo the risk that tensions between Cooper and its subsidiaries and joint venture partners would
arise. 69 Cooper therefore contends that the definition of Material Adverse Effect evidences the p arties‘ intent to prevent Apollo from avoiding its obligation to close for any reason attributable to the merger announcement‘s impact on Cooper‘s relationships with its subsidiaries or joint venture partners.

3

. Covenants and Agreements as Conditions to C losing In addition, as outlined in Section 7.2 (b) of the Merger Agreement, Apollo‘s obligation to close the transaction is conditioned on the satisfaction of several covenants and agreements. That Section provides: The obligation of [Apollo] to effect the Merger is further subject to the satisfaction, or waiver by [Apollo], at or prior to the Effective Time of the following conditions:

. . . .

68 Trial Tr. 143:18

– 144:14 (Dougherty). 69 Id. at 147:3

– 153:3.28

(b) [Cooper] shall have in all material respects performed or complied with the covenants and agreements conta ined in this Agreement to be performed or complied with by it prior to or on the Closing Date. 70
Article V sets out the c ovenants to which the parties agree d , including Section 5.1(a), which states: From the date of this Agreement and until the Effective Time or the earlier termination of this Agreement in accordance with its terms, except as (w) otherwise expressly contemplated by this Agreement . . . [Cooper] shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice and in compliance in all material respects with all material applicable Laws, and shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve intact its present business organization, keep available the services of its directors, officers and employees and maintain existing relations and goodwill with customers, distributors, lenders, partners, supplie r s and others having material business associations with it or its Subsi diaries. 71 Apollo argues that the takeover at CCT amounted to a breach of Cooper‘s covenant to maintain its interim operations under Section 5.1(a)

. Apollo further argues that Cooper has breach ed Section s 6.11 and 6.5 , and
therefore has failed to satisfy condition s to closing under Section 7.2(b). Section 6.11(e) requires that , ―[p]rior to the Closing Date, [Cooper] shall use reasonable best efforts to provide and to cause its Subsidiaries and Representatives, including legal, finance and acco unting, to provide, to [Apollo], at [Apollo‘s] sole expense,

70 Merger Agreement § 7.2. 71 Id. § 5.1(a).29

all cooperation reasonably requested by [Apollo] that is customary in connection
with the arr angement of the Financing .‖ 72 Section 6.5 states: Subject to the Confidentiality Agreement and applica ble Law relating to the sharing of information, [Cooper] agrees to provide, and shall cause its Subsidiaries to provide, [Apollo] and its Representatives, from time to time prior to the earlier of the Effective Time or the termination of this Agreement, re asonable access during normal business hours to (i) [Cooper‘s] and its Subsidiaries‘ respective properties, books, Contracts, commitments, personnel and records and (ii) such other information as [Apollo] shall reasonably request with respect to [Cooper] a nd its Subsidiaries and their respective businesses, financial condition and operations, in each case, to the extent related to consummation of the Transactions or the ownership or operation of the respective businesses of [Cooper] and its Subsidiaries fro m and after Closing . . . . 73
4

. Representations and Warranties as Conditions to Closing Finally, Section 7.2(a) provides that Apollo‘s obligation to close is subject to the accuracy of certain representations and warranties. Section 7.2(a) states: The representations and warranties of [Cooper] set forth herein shall be true and correct in all respects (without giving effect to any materiality or ―Material Adverse Effect‖ qualifications contained therein) both when made and at and as of the Closing D ate, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be so true and correct would not reasonably be exp ected to have or result in, individually or in the aggregate, a Material Adverse Effect . . . . 74

72 Id. § 6.11(e). 73 Id. § 6.5. 74 Id. § 7.2(a).30

Apollo points to four representations and warranties that Cooper has purportedly breached. First, Section 3.5(d) represents that Cooper ―maintains internal c ontrol over financial reporting,‖ and that ―[s]uch internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose s i n accordance with GAAP .‖ 75 Second , Section 3.6 represents that ―[s] ince December 31, 2012, except as otherwise required or contemplated by this Agreement, [Cooper], its Subsidiaries and, to the Knowledge of [Cooper], its Joint Ventures
have conducted their respective businesses only in the ordinary course of business consistent with past practice in all material respects.‖ 76 Third, Section 3.13 represents that: [Cooper] or any of its Subsidiaries [are not] the subject of any material Action that asserts tha t [Cooper] or any of its Subsidiaries has committed an unfair labor practice or that seeks to compel it to bargain with any labor union or labor organization, nor is there pending or, to the Knowledge of [Cooper], threatened, nor has there been for the pas t five years, any labor strike or lock

- out or any material dispute, walk

- out, work stoppage or slow

- down involving [Cooper] or any of its Subsidiaries. 77 Finally, Section 3.14(b) represents that , ―[e]xcept as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, [Cooper] or one of its Subsidiaries has exclusive possession of each Owned Real

75 Id. § 3.5(d). 76 Id. § 3.6. 77 Id. § 3.13.31

Property and Leased Real Property .‖ 78 Apollo contends that the lockout at CCT , and the resulting inability of Cooper‘s management to obtain CCT financial records, have cau sed Cooper to breach each of th e se representations.
I I I. ANALYSIS
A

. The Issues Presented In the analysis below, I find that, due to the CCT strike and physical takeover of the CCT facility, apparent ly orchestrated by Chairman Che, and due to Cooper‘s reaction to that takeover, which involved an effort to cut off supply from
third

- party contractors to CCT, Cooper failed to comply with Section 5 .1(a) of the Merger Agreement, which required Cooper to ―cause each of its subsidiaries to conduct its business in the ordinary course of business.‖ Compliance with Section 5.1(a) had a cascade effect on other contractual provisions, including those
invol ving Material Adverse Effects and the Marketing Period. For purposes of this Memorandum Opinion, however, because Cooper‘s failure to comply with Section 5.1(a) is sufficient to grant the declaratory judgment Apollo seeks here, I confine my analysis to th at issue only. As described above, pursuant to Section 7.2(b) of the Merger Agreement , Apollo‘s obligation to close was conditioned on Cooper‘s fulfillment of certain

78 Id. § 3.14(b).32

covenants and agreements contained in Article V of the Merger Agreement

. Section 5.1(a) set s out one such covenant : From the date of this Agreement and until the Effective Time or the earlier termination of this Agreement in accordance with its terms, except as (w) otherwise expressly contemplated by this Agreement . . . [Cooper] shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice and in compliance in all material respects with all material applicable Laws, and shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve intact its present business organization, keep available the services of its directors, officers and employees and maintain existing relations and goodwill with customers, distributors, lenders, part ners, supplie r s and others having material business associations with it or its Subsidiaries. 79 Apollo contends that Cooper has failed to cause CCT to ―conduct its business in the ordinary course of busines s consistent with past practice, ‖ or to ―use its

c ommercially reasonable efforts to preserve intact its present business organization, keep available the services of its directors, officers and employees and maintain existing relations and goodwill with customers, distributors, lenders, partners, supplie r s and others having material business associations with it or its Subsidiaries.‖ I address those contentions below.
B

. Apollo Did Not Acquiesce in Any Breach of the Merger Agreement Preliminarily, Cooper contends that Apollo should be estopped from
chall enging Cooper‘s failure to fulfill any covenants as a result of the lockout at
CCT because Apollo participated in , or acquiesced to, attempts to resolve the

79 Id. § 5.1(a).33

disruption , and in the process represented that it was bound to close the transaction by the Merger Agreement

. Among other things, Cooper suggests that the following factors demonstrate Apollo ‘s ―participat[ion] in the situati on about which it now complains ‖ 80 : (i) Apollo‘s statements to Chairman Che and the Mayor of Rongcheng indicating that it was required by the Merger Agreement to close the transaction; (ii) Apollo‘s rejection of Cooper‘s proposal to ―replac[e] the CCT security personnel [physically] blocking Cooper‘s representatives from the CCT facility;‖ 81 (i i i) communications that, according to Cooper, indicate that Apollo ―took responsibility for negotiating a resolution with Che;‖ 82 and (iv ) Apollo‘s attempts throughout ―Project Charlie‖ to negotiate a buyout of Che‘s 35% interest in CCT, which, according to Cooper, ―provided [Che] an incentive to hold
out for more

— i.e. , to continue the disruptions until Apollo increased its offer to
one that [C he ] found acceptable. ‖ 83 Cooper contends that, ―[u]nder such circumstances, it would be unfair and inequitable to allow Apollo to claim that Cooper somehow violated its covenants by failing to resolve the CCT disruptions.‖ 84

80 Pl.‘s Br. in Opp‘n to Defs.‘ Mot. for Declaratory J. at 28. 81 Id. at 30. 82 Id. at 29. 83 Id. at 30

– 31. 84 Id. at 31 (emphasis omitted).34

A cquiescence in another party‘s conduct , under certain circumstances, m ay give rise to estoppel

. 85 In Delaware, as a general rule , ―one who participates or acquiesces in another‘s conduct has no standing in equity to complain against it.‖ 86 As our Supreme Court recently explained, a claimant acquiesces in an act where
he:
has full knowledge of his rights and the material facts and (1) remains inactive for a considerable time; or (2) freely does what amounts to recognition of the complained of act; or (3) acts in a manner inconsistent with the subsequent repudiation, which lead s the other party to believe the act has been approved. 87
F or the reasons explained below, I find that , despi te statements indicating that the transaction would close, and its cooperation with Cooper in attempting to resolve the lockout at CCT, Apollo did not participate or acquiesce in any breach of the terms of the Merger Agreement arising from the lockout , and is therefore not estopped from alleging such a breach

. Although Cooper seeks to prevent Apollo from challenging any breach caused by Chairman Che‘s seizure of CCT, Cooper does not, and cannot, contend

85 Council of S. Bethany v. Sandpiper Dev. Corp., Inc. , 1986 WL 13707, at *4 (Del. Ch. Dec. 8, 1986). 86 Id. ; see also Gottlieb v. McKee , 107 A.2d 240, 244 ( Del. Ch. 1954) (―The rule is a general one that he who participates in or acquiesces in an action has no standing in a court of equity to complain against it. Equity will not hear a complainant stultify himself by complaining against acts in which he participated or of which he has demonstrated his approval by sharing in their benefits

. ‖); Trounstine v. Remington Rand , 194 A. 95, 99 ( Del. 1937). 87 Klaassen v. Allegro Dev. Corp ., 2014 WL 996375, at *8 (Del. Mar. 14, 2014) (quoting Cantor Fitzgerald, L.P. v. Cantor , 72 4 A.2d 571, 582 (Del. Ch. 1998), and The NTC Group, Inc. v. West Point

– Pepperell, Inc., 1990 WL 143842, at *5 (Del. Ch. Oct. 17, 1990)).35

that Apollo incite d , support ed , or actively further ed the lockout at CCT

. The evidence on which Cooper now relies does not demonstrate that Apollo actively impeded, directed, or even approved of C ooper‘s attempts to resolve the situation
at CCT such that Apollo must now be prohibited in equity or law from challenging Cooper‘s fulfillment of its covenants. For example, Apollo‘s attempts to buy out Chairman Che‘s interest in CCT , and its rejection o f Cooper‘s proposal to send in
its own security personnel ―to attempt to regain control by force , ‖ 88 do not demonstrate participation in the lockout ; instead, those acts demonstrate simply that Apollo took reasonable steps in attempting to resolve the CCT l ockout while preserving safe conditions for workers at CCT

. In addition, w hile Apollo‘s involvement may in fact have ―changed the facts on the ground,‖ 89 there is no evidence that Apollo‘s involvement with Chairman Che

— as the soon

- to

- be acquirer of 65% of this joint venture

— impeded Cooper‘s ability to direct its subsidiary or stalled resolution of the lockout

. I n further support of its acquiescence defense, Cooper relies on Apollo‘s representations to Chairman Che and the Mayor of Rongcheng that the parties were legally required to close the transaction , as well as Apollo‘s other interactions with Chairman Che throughout its pursuit of ―Project Charlie

. ‖ The problem with Cooper‘s theory, however, is that Cooper cannot demonstrate that it reasonably

88 Def s.‘ Br. in Support of Mot. for TRO and Declaratory J. at 36 n.24. 89 Pl.‘s Br. in Opp‘n to Defs.‘ Mot. for Declar atory J. at 30 n.10.36

understood, based on Apollo‘s attempts to build a relationship with

— or develop an exit strategy for

— Chairman Che, that Apollo consented to any breach on Cooper‘s part resulting from the lockout at CCT. Instead, the evidence presented at trial
indicated a good faith effort on Apollo‘s part to resolve the lockout caused by Chairman Che, not because Apollo accepted any breach caused by the lockout , but because Apollo believed it could close the deal if the lockout at CCT was re solved. That Apollo acted to resolve the dispute with Chairman Che in order to facilitate closing cannot prevent it from seeking to vindicate its rights under the Merger Agreement when those efforts failed. 90 For the reasons explained above, I find that Ap ollo is not estopped from challenging Cooper‘s failure to meet its obligations under the Merger Agreement.
C

. Cooper Breached Section 5.1(a) of the Merger Agreement
1

. The Seizure of CCT Pursuant to Section 5.1(a) of the Merger Agreement , Cooper must fulfill two separate obligations. First, Cooper ―shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course of business consistent with past

90 I note that it is clear from the record evidence that Apollo‘s representations to Chairman Che and the Mayor of Rongcheng indicating that the merger was required to close regardless of the lockout at CCT was a negotiating tactic inte nded to strengthen both Apollo‘s and Cooper‘s negotiating position with Chairman Che, and Cooper undoubtedly understood those statements as such. Indeed, it is easy to envision what Cooper would have argued had Apollo said the opposite

— that the lockout co uld and would impede the transaction. Had Apollo taken such a position, Cooper undoubtedly would have argued that Apollo contributed to the lockout or caused it to continue, and Chairman Che likely would have been even less amenable to negotiating a deal with Apollo.37

practice and in compliance in all material respects with all m aterial applicable
Laws.‖ 91 Second, Cooper: shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to preserve intact its present business organization, keep available the services of its directors, officers and employe es and maintain existing relations and goodwill with customers, distributors, lenders, partners, supplie r s and others having material business associations with it or its Subsidiaries. 92 Notably, the second clause of Section 5.1(a) contemplates the use of ―commercially reasonable efforts‖ by Cooper and its subsidiaries , while the first
clause imposes an unconditional obligation

. The parties dispute whether the first or second clause of Section 5.1(a)

a pplies , and , as a result , whether Cooper‘s obligation to conduct the business of
CCT was governed by a ―commercially reasonable efforts‖ standard. Apollo argues that under the first clause of Section 5.1(a), Cooper has an unqualified obligation to cause CCT to operate its busine ss in the ordinary course, consistent with past practice, and that Cooper was unable to satisfy this obligation due to the
lockout at CCT

. According to Apollo, such a reading ―makes sense because a company can reasonably be tasked with an absolute require ment to take its own actions, and to cause its subsidiaries to do so,  ̳in the ordinary course.‘‖ 93 Conversely, Apollo notes that the commercially reasonable efforts standard

91 Merger Agreement § 5.1(a). 92 Id. 93 Defs.‘ Br. in Supp. of Mot. for Declaratory J. at 26.38

appearing in the second clause of Section 5.1(a) makes business sense in a situation not applicable here , as ―with respect to its relationship with third

- parties, all that [Cooper] can do is employ commercially reasonable efforts to ensure that
others maintain their  ̳ material business associations with it or its Subsidiarie s. ‘‖ 94 Apollo emphasizes that its reading of Section 5.1(a) is also consistent with Section
6.8 , which provides that, ―[w]henever this Agreement requires a Subsidiary of [Cooper] to take any action, such requirement shall be deemed to include an
undertakin g on the part of [Cooper] to cause such Subsidiary to take su ch action .‖ 95 By contrast , Cooper argues that the language of Section 5.1(a) distinguishes
between ―those aspects of Cooper‘s and CCT‘s business that are fully within their control, and those asp ects that involve third parties, ‖ such as CCT‘s employees or partners. 96 A ccording to Cooper , Section 5.1(a) imposes an obligation on Cooper to operate its subsidiaries‘ business es only in relation to those ―things that are completely with in the control of Cooper or CCT , ‖ while a commercially
reasonable efforts standard applies ―[w]here third parties, such as Cooper‘s or
CCT‘s employees and partners [,] are involved.‖ 97 Cooper argues that , because ―the disruptions at CCT relate entirely to Cooper‘s ability t o maintain existing relations with its joint venture partner and CCT‘s ability to keep available the

94 Id. 95 Merger Agreement § 6.8. 96 Pl.‘s Br. in Opp‘n to Defs.‘ Mo t. for Declaratory J. at 31. 97 Id

.39

services of employees and labor union s ,‖ 98 Section 5.1(a) only obligates Cooper to use commercially reasonable efforts to maintain CCT‘s business

. According to Cooper, its efforts satisfied that standard. Even accepting Cooper‘s reading of Section 5.1(a), I find that events at CCT cannot be fairly characterized as bearing solely on ―Cooper‘s ability to maintain existing relations with its joint ventu re partner and CCT‘s ability to keep available the services of employees and labor union s .‖ 99 Although Cooper characterize s events at CCT as a labor strike, trial testimony and evide nce in the record make clear that the disruption s at CCT were far more com plicated

. T he events at CCT
do not represent a traditional dis pute between labor and capital. CCT employees were not attempting to secure better working conditions or other concessions from their employer, nor were they actively contesting the details of the deal

. I nstead,
CCT employees were told by certain members of management acting unde r the
direction of Chairman Che that they would lose their jobs if they did not strike ; that order, in all likelihood, was given not primarily as a result of a disagreement about the Cooper

- Apollo deal terms as they affected employees , but for reasons personal
to Chairman Che himself. In other words, what appeared to be a labor strike was

98 Id. at 32. 99 Id. Because I find this portion of the Merger Agreement unambiguous, I do not consider parole evidence in my analysis. See Lillis v. AT&T Corp. , 2007 WL 2110587 , at *16 (Del. Ch. July 20, 2007) (― The court will consider extrinsic evidence to interpret the a greement only if there is an ambiguity in the contract. If the instrument is clear and unambiguous on its face, parole evidence may not be used  ̳ to interpret it or search for the parties ‘ intent. ‘‖ (footnotes omitted)).40

in fact a mechanism used by Chairman Che to advance his efforts to physically seize the joint venture

— a seizure he was legally not entitled to make as he retained only a min ority voting interest

. Moreover, the events at CCT were not , as Cooper avers, centered on Cooper‘s ― ability to maintain existing relations with its joint venture partner,‖ Chairman Che; r ather, the events at CCT were precipitated by Che‘s physical
takeover of the facilities

. As a result of Chairman Che‘s instigation , Cooper‘s largest subsidiary

— which Co oper had undertaken in the Merger Agreement to cause to operate in the ordinary course consistent with past practice

— stopped producing Cooper

- branded tires or generating financial statements, and physically prevented Cooper employees from accessing records and facilities

. These aspects of the disruption do not implicate Cooper‘s ability to ―keep available the services of its . . . employees ‖ or ―maintain existing relations and goodwill with customers .

. . partners, [or] suppliers ,‖ as Cooper contends, but Cooper‘s ability to cause its subsidiary

— an entity Cooper legally controlled with its 65% ownership interest

— to operate in the ordinary course of business

. 100 This Court has previously interpreted the contractual term ―ordinary course‖ to mean ―[t]he normal and ordinary routine of conducting business.‖ 101 As noted above, CCT halted

100 Merger Agreement § 5.1(a). 101 Iviz e of Milwaukee, LLC v. Comp lex Litig. Support, LLC , 2009 WL 1111179, at *9 (Del. Ch. Apr. 27, 2009).41

production of Cooper

- branded tires, 102 restricted ―certain Cooper employees . . . from entering parts of CCT,‖ and ―limited [Cooper‘s] access to the financials [of CCT].‖ 103 Coo per, moreover, had only ―limited information about to whom [CCT] products [were] being sold.‖ 104 In fact, Cooper‘s own actions, while perhaps a reasonable reaction to the extra

legal seizure of CCT, evinces a conscious effort to disrupt the operations of the facility. Cooper itself suspended payments to suppliers who continued to ship
material s to CCT. As Cooper CFO Brad Hughes testified, ― What we did is we said to suppliers that if they had not shipped material that had been

— that we w ould pay for what had been received. We would not pay for shipments that were following a particular point in time. ‖ 105 In an internal email dated September 25, 2013 from Cooper‘s Senior Vice President and General Manager of Asia Operations, Allen Tsaur, to the President of Cooper‘s International Tire Division, Hal Miller, which Mr. Miller subsequently forwarded to Cooper CEO Roy Armes and General Counsel Steve Zamansky , Mr. Tsaur summarized what he anticipated to be the likely consequences of Cooper‘s plan to cut off payment to CCT‘s suppliers :

 OE customers are likely to sue CCT for contract violation and lost time penalty. Please note that CCT supplies to all top 5 truck

102 Trial Tr. 270:15

– 17 (Hughes). 103 Id. at 343:1

– 8 (Hughes); see also id. at 84:6

– 85:19 (Armes) (testifying as to Cooper‘s limited access to CCT financials and restricted access to the CCT facilities). 104 Id. at 273:8

– 9 (Hughes). 105 Id. at 341:23

– 342:3 (Hughes).42

companies in China

 The raw material payment of 40M RMB is not all for new purchase. S ome are for goods already received. Along with our suppliers, they are likely to sue CCT for delinquency.

 Many suppliers are in CCT Purchasing Department office everyday demanding payment.

 CCT is likely to lose in the lawsuits for contract violation and l ost time penalty to OE and delinquency for suppliers. The consequence can be very bad as not only we need to pay [sic] but also ruin the creditability

. CCT will need to buy on cash in the future. 106 Reflecting on the plan to ―put pressure on Che,‖ Mr. Tsau r concluded: ―What this means is that we officially shut down CCT given the low possibilities of Che‘s willingness to enter financial data. Of course, the issues will go away if Che agrees to enter data for whatever reason. That is currently our only hop e to avoid the showdown.‖ 107 These elements of the CCT lockout illustrate Cooper‘s failure
to cause CCT

—

its largest subsidiary

— to conduct business in the ordinary course,
and demonstrate just the opposite.

2

. The ―Material Adverse Effect‖ Exclusions Do N ot Trump Cooper‘s Obligations Under Section 5.1(a) Cooper asserts that the phrase ―except as . . . otherwise expressly contemplated by [the Merger] Agreement‖ in Section 5.1(a) ―naturally incorporates the expressly

- contemplated exclusions from events constituting [a

106 JX 445 at COOPER0033397. 107 Id.43

Material Adverse Effect] .‖ 108 Cooper argues that, because ―the parties expressly agreed that disruptions at CCT caused by the merger would not permit Apollo to abandon the deal,‖ it would be illogical if ―the very same event that the parties‘ intended would not prevent a closing as [ a Material Adverse Effect] would prevent a closing by reason of a breach of Section 5.1(a) .‖ 109 Citing to this Court‘s
decision in In re IBP, Inc. Shareholders Litigation , Cooper argues that ―[s]uch an interpretation, which requires Section[] 5.1(a) . . . to be read in isolation, and not in connection with the [Mate rial Adverse Effect] exclusions, is not only wrong but  ̳would be unreal to men of business and practical affairs.‘‖ 110 Section 7.2(c) provides, as a condition to closing, that ―[e] xcept for any event, state of facts or circumstances disclosed in the Company Disclosure Letter, since December 31, 2012, there shall not have occurred any event, state of facts or
circumstances which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.‖ 111 The Merger Agreement defines ―Material Adverse Effect‖ by laying out two general categories

— subsections (i)

108 Pl.‘s Br. in Opp‘n to Defs.‘ Mot. for Declaratory J. a t 22. 109 Id. at 20, 22 (emphasis omitted). 110 Id. at 21 (citing In re IBP, Inc. S’holders Litig. , 789 A.2d 14, 57 (Del . Ch. 2001)); see also id. at 21

– 22 (―If Cooper and Apollo specifically agreed that a negative reaction to the merger by Cooper‘s labor unions or joint venture partners would not prevent a closing under the [Material Adverse Effect] clause, it is implausible to think that the Merger Agreemen t would construe those very same circumstances as preventing a closing due to alleged non

- compliance with Section 5.1(a) . . . . As in IBP , this Court should not accept such a bizarre and implausible construction of the Merger Agreement.‖). 111 Merger Agree ment § 7.2(c).44

and (ii)

— and a series of specific carve

- outs to subsection (i)

— subsections (i)(A)

– (J) : ―Material Adverse Effect‖ means any fact, circumstance, eve nt, change, effect or occurrence that (i) has had or would reasonably be expected to have a material adverse effect on the business, results of operations or financial condition of the Company, its Subsidiaries and Joint V entures, taken as a whole, but wil l not include facts circumstances, events, changes, effects, or occurrences to the extent attributable to . . . (F) the execution and delivery of this Agreement or the public announcement or pendency of the Merger or any of the other Transactions or the Fi nancing, including the impact thereof on the relationships, contractual or otherwise, of the Company or any of its Subsidiaries with employees, labor unions, customers, suppliers or partners, and any litigation arising from allegations of any breach of fid uciary duty or violation of Law relating to this Agreement or the transactions contemplated by this Agreement or compliance by the Company with the terms of this Agreement . . . ; or (ii) that would reasonably be expected to prevent or materially delay or impair the ability of [Cooper] to perform its obligations under this Agreement or to consummate the Transactions. 112 As noted above, Cooper argues that ―[i]f Cooper and Apollo specifically agreed that a negative reaction to the merger by Cooper‘s labor unions or joint venture partners would not prevent a closing under the [Material Adverse Effect] clause, it is implausible to think that the Merger Agreem ent would construe those very same circumstances as preventing a closing due to alleged non

- compliance with Section 5.1(a).‖ 113

112 Id. § 10.2 (―Material Adverse Effect‖) (typeface altered from original)

. 113 Pl.‘s Br. in Opp‘n to Defs.‘ Mot. for Declaratory J. at 22.45

In IBP , then

- Vice Chancellor Strine, in evaluating a plaintiff

- seller‘s request for specific performance of a merger agreement, a ddressed the defendant

- buyer‘s
defense that the seller had breached certain representations made in the merger agreement when it restated its financial information due to the discovery of improper accounting pra ctices. 114 The relevant provision of the agreement in that

case represented that, ―[e]xcept as set forth in Schedule 5.11 [or the Warranted Financials], there are no liabilities of the Company or any Subsidiary of any kind whether accrued, contingent, absolute, determinable or otherwise .‖ 115 Schedule 5.11 expressly disclosed that the seller may be subject to further liabilities associated with improper accounting practices, and the buyer acknowledged that
the seller‘s restatement of its financials did not breach Schedule 5.11; nevertheless,
the buyer argued that the same facts expressly carved out of Schedule 5.11

— the
incurrence of liabilities due to the restatement of financial information

— breach ed representations made in the ―Warranted Financials.‖ The C ourt rejected that argument , explai ning that at trial, the buyer‘s CFO could not articulate why the parties would have agreed to such a scheme, while the buyer‘s general counsel ―admitted that it made no economic difference whether the Warranted Financials
were restated to record the liabil ities or whether those liabilities were recorded in a

114 In re IBP , 789 A.2d at 51

– 52. 115 Id. at 56.46

filing for a later period.‖ 116 Considering the provisions together with additional
extrinsic evidence , the n - Vice Chancellor Strine concluded that ―the record reveals
that this sort of hair

- splitting has no rational commercial purpose , ‖ and that the buyer‘s construction of the merger agreement did not reflect the parties‘ intent at the time of drafting. 117 Here, b y contrast, a rational business purpose is evident in the parties‘ drafting of the definition of Material Adverse Effect in Section 10.2. S ubsection ( i) states that any event that ―has had or would reasonably be expected to have a material adverse effect on the business, result of operations or financial condition
of [Cooper] , its Subsi diaries and Joint Ventures,‖ will constitute a Material Adverse Effect, provided that the event does not fall under certain enumerated exceptions. Subsection (ii ) further provides that an event ―that would reasonably be expected to prevent or materia lly delay or impair the ability of [Cooper] to perform its obligations under this Agreement or to consummate the Transaction‖
will nevertheless also constitute a Material Adverse Effect

. If subsection (i) were properly to be considered in isolation, Coope r might
be correct that the lockout at CCT falls under the exclusion enumerated in
subsection (i)(F) , which exempts from the definition of Material Adverse Effect the impact of the pendency of the merger on the relationships of Cooper and its

116 Id. at 57. 117 Id.47

subsidiaries or partners. However, it is axiomatic that contractual provisions must
be read to make sense of the whole. 118 W hile Cooper understands subsection (i) to shift the risk of certain events, including the lockout at CCT, wholly onto Apollo, the parties made cl ear under subsection (ii) that Apollo would bear the risk of such an event only so long as that event would not ―reasonably be expected to prevent or materially delay or impair the ability of [Cooper] to perform its obligations under [the Merger Agreement] .‖ In other words, the logical operation of the
definition of Material Adverse Effect shifts the risk of any carved

- out event onto Apollo, unless that event prevents Cooper from complying with its obligations under the Merger Agreement; the parties agreed not to excuse Cooper for any such
breach. Evaluating the language of the Material Adverse Effect definition in Section
10.2 in the context of the entire transaction bolsters this reading. As noted above, Apollo intended to finance the transaction in par t with a debt offering to be underwritten by Morgan Stanley, Deutsche Bank, Goldman Sachs, and Standard
Chartered Bank . In order to facilitate that debt offering, the parties negotiated a
20

- day Marketing Period, which by the terms of the Merger Agreement was

118 See, e.g. , Kuhn Constr., Inc. v. Diamo nd State Port Corp. , 990 A.2d 393, 396

– 97 (Del. 2010) (stating the principle that ―[the court] will read a contract as a whole and we will give each provision and term effect,‖ and ruling in favor of the plaintiff because, ―[a]lthough isolated terms and pr ovisions of the contract support [the defendant‘s] contractual interpretation, the contract as a whole . . . supports [the plaintiff‘s] interpretation‖).48

required to take place for the merger to close and could not begin until Cooper delivered all Required Information necessary to market the debt. That the parties negotiated a provision in the definition of Material Adverse Effect that protected Apoll o‘s contractual right to require Cooper to comply with its obligations, when those obligations would impact Apollo‘s ability, among other things, to obtain financing, is not commerc ially unreasonable. Unlike the irrational contractual interpretation propo unded by the buyer in IBP , Apollo has convincingly articulated why the parties intended , under subsection (i), to exclude as a Material Adverse
Effect an event such as the labor disruption at a subsidiary but , under subsection (ii), to nevertheless require Cooper to comply with its oblig ations if such an event
occurred

. Having determined that the carve out under subsection (i)(F) does not prevent Apollo from enforcing Cooper‘s obligations under the Merger Agreement,
I conclude that Cooper breached its obliga tions under Section 5.1(a), thereby relieving Apollo of its obligations to clo se pursu ant to Section 7.2(b). Having found that Cooper had not satisfied the condition in Section 7.2(b), I do not find it

neces sary to consider the other conditions that Apollo alleges Cooper failed to
meet, and Apollo is entitled to a declaratory judgment that the conditions to closing
remained unsatisfied as of the trial date

.49 IV . CONCLUSION
In addition to the USW strike addressed in the USW Opinions , the seizure of
Co oper‘s CCT facility, by the workers at the direction of the minority partner in that venture, emerged as a barrier to the consummation of the Apollo

- Cooper merger. The seizure was unanticipated, and neither party caused it to occur; nonetheless, it preven ted Cooper from complying with its contractual obligations necessary to close the merger. For the reasons described above, and for the reasons addressed in the USW Opinions , the Defendants‘ Mot ion for Entry of a Declaratory Judgment is GRANTED

. The parti es should submit an appropriate
form of order.