Document:

exv10w1

 

Exhibit 10.1

ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT, dated as of November 30, 2006 (the “Effective Date”),
is made by and among LEAR CORPORATION, a Delaware corporation (“Lear”), INTERNATIONAL
AUTOMOTIVE COMPONENTS GROUP NORTH AMERICA, INC., a Delaware corporation (the “Company”), WL
ROSS & CO. LLC, a Delaware limited liability company (“WL Ross”), FRANKLIN MUTUAL ADVISERS,
LLC (“Franklin”), and INTERNATIONAL AUTOMOTIVE COMPONENTS GROUP NORTH AMERICA, LLC, a
Delaware limited liability company (“IACNA”). WL Ross, Franklin and IACNA have entered
into this Agreement solely for purposes of agreeing to be bound by the provisions of Section 6.20
below. Each of Lear and the Company may hereafter be referred to as a “party” or collectively as
“parties.”

RECITALS

     A. The Asset Sellers (as hereinafter defined) and the Sale Companies (as hereinafter defined)
are engaged in the research, development, engineering, design, manufacturing, distributing,
marketing and selling of automotive interiors components to customers in North America.

     B. The Asset Sellers desire to transfer, sell, convey, assign and deliver to the Company, and
the Company desires to purchase and accept from the Asset Sellers, the Purchased Assets (as
hereinafter defined), and the Stock Sellers (as hereinafter defined) desire to sell to the Company
and the Company desires to purchase, the Holding Company Shares (as hereinafter defined), in each
case, on the terms and subject to the conditions of this Agreement.

     C. The Asset Sellers desire to assign to the Company, and the Company is willing to assume,
the Specified Liabilities (as hereinafter defined) on the terms and subject to the conditions of
this Agreement.

     D. Lear and the Company desire that the foregoing transactions be completed on such terms and
subject to such conditions and, together with the other, wish to make certain representations,
warranties and covenants in connection therewith.

AGREEMENT

     Now, therefore, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

     1.1 Definitions. In addition to the terms defined elsewhere herein, the following
terms, as used herein, have the following meanings when used herein with initial capital letters:

     “Accounting Firm” means Deloitte & Touche LLP, or such other firm as may be agreed in
writing by the Company and Lear.

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     “Affiliate” means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by or under common control with the first Person on or after the date of
this Agreement. For the purposes of this Agreement, “control,” when used with respect to
any Person, means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.

     “Affiliate Loans” means (i) a loan from WL Ross (or one or more of its Affiliates) to
the Company in the principal amount of $33,333,333 on the terms and conditions set forth in the
applicable Promissory Note and (ii) a loan from Franklin (or one or more of its Affiliates) to the
Company in the principal amount of $16,666,667 on the terms and conditions set forth in the
applicable Promissory Note.

     “Agreement” means this Asset Purchase Agreement, as the same may be amended from time
to time in accordance with the terms hereof.

     “Ancillary Agreements” means (i) the Transition Services Agreement; (ii) the
Promissory Notes; (iii) the Intellectual Property Transfer and License Agreement; (iv) the LLC
Agreement; (v) the Registration Rights Agreement; (vi) the Supply Agreement; (vii) the Asian Joint
Venture Agreement; (viii) the Facility Leases; and (ix) all other instruments, deeds, assignments,
assumptions, certificates, bills of sale and other agreements entered into by a Lear Company, WL
Ross, Franklin, the Company or IACNA (or any of them or any of their Affiliates) in connection with
the consummation of the transactions contemplated by this Agreement.

     “Antitrust Laws” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder, the Competition Act (Canada), the
Mexican Federal Economic Competition Law and regulations promulgated thereunder and any other
statutes, rules, regulations, orders, decrees, administrative or judicial doctrines or other laws
that are designed to prohibit, restrict or regulate action having the purpose or effect of
monopolization or restraint of trade.

     “Asian Joint Venture” means a limited liability company established to hold assets
directly related to Lear’s existing interiors business with Asian customers, as more specifically
described on Schedule 1.1.1.

     “Asian Joint Venture Agreement” means a limited liability company agreement between a
Subsidiary of Lear, WL Ross and Franklin relating to the Asian Joint Venture, such agreement to be
consistent with the terms set forth on Schedule 1.1.1.

     “Asset Sellers” means Lear and any of its Affiliates that hold the Purchased Assets
immediately prior to the Closing, including any Subsidiary that Lear forms prior to the Closing to
hold the Purchased Assets in furtherance of the transactions contemplated by this Agreement.

     “Assumed Employee Liabilities” means all Liabilities arising in the Ordinary Course of
Business for the payment of employee wages or salaries, bonuses, commissions, vacation pay for the
period from the date that is 12 months prior to the Closing Date through the Closing, sick pay,
payroll and employer related withholding and tax and social security obligations, but excluding any
other liabilities or obligations arising under any Benefit Plan.

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     “Balance Sheet” means the unaudited consolidated balance sheet for the Business,
including the Sale Companies, as of the Balance Sheet Date.

     “Balance Sheet Date” means September 30, 2006.

     “Benefit Plans” means any employee benefit plan, program, scheme, policy, obligation,
arrangement or customary practice, whether written or unwritten, owed, adopted or followed by a
Lear Company or any ERISA Affiliate, to provide benefits to current or former officers, directors,
Employees of the Business, or a Lear Company or ERISA Affiliate in connection with the Business,
including without limitation, an “employee benefit plan” within the meaning of ERISA Section 3(3),
any deferred compensation plan, material fringe benefit plan or program, bonus or incentive plan,
stock option, stock purchase, restricted stock, stock bonus, phantom stock or stock appreciation
plan or arrangement or stock related award, vacation pay, bonus program, service award, moving
expense, deferred bonus plan, severance plan or arrangement, salary reduction agreement,
change-in-control agreement, employment agreement or consulting agreement, compensation or
separation, whether or not insured or funded, which in all cases, is sponsored or maintained,
contributed to, or required to be contributed to, by a Lear Company or an ERISA Affiliate for the
benefit of, or as to which a Lear Company or an ERISA Affiliate has any actual or contingent
liability with respect, current or former Employees, officers or directors of the Business or a
Lear Company or an ERISA Affiliate in connection with the Business.

     “Business” means the business and operations comprising Lear’s North American Interior
Systems Division (consisting of instrument panels, headliners, cockpits, flooring, acoustics, door
panels, blow molding and other miscellaneous automotive plastic parts) as of the Closing Date, but
excluding those operations listed on Schedule 1.1.2 attached hereto.

     “Business Day” means a day that is not a Saturday, Sunday or a day on which commercial
banking institutions located in New York City are authorized or required to close.

     “Business IP” means any Intellectual Property Right which relates primarily to the
Business.

     “Business IP Agreements” means (i) licenses of Intellectual Property by a Sale Company
to a third party, (ii) licenses of Intellectual Property by any third party to a Sale Company in
connection with the Business, other than nonexclusive object code licenses of commercially
available software, (iii) agreements between any Sale Company and any third party relating to the
development or use of Intellectual Property or the development or transmission of data, and (iv)
consents, settlements, decrees, orders, injunctions, judgments or rulings governing the use,
validity or enforceability of the Owned Intellectual Property.

     “Canadian Holding Company” means the Delaware corporation to be formed by the Lear
Companies pursuant to the Reorganization, which, as of the Closing Date, shall own, directly or
indirectly, all of the issued and outstanding shares or other equity ownership interests of the
Canadian Subsidiaries.

     “Canadian Subsidiaries” means the Canadian entities formed pursuant to the
Reorganization to hold, as of the Closing Date, the assets owned by the Current Canadian
Subsidiaries and used primarily in the Business.

     “Closing Net Working Capital” means the Net Working Capital as of the Closing Date,
determined pursuant to the procedures set forth in Section 2.5.

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     “Closing Tooling Net Assets” means the Tooling and Engineering Net Assets included in
the Purchased Assets and the Sale Companies as of the Closing Date.

     “Code” means the U.S. Internal Revenue Code of 1986, as amended.

     “Contracts” means purchase orders, sales agreements, service contracts, distribution
agreements, leases, licenses, product warranty or service agreements, and other commitments,
agreements, and undertakings binding upon a Person.

     “Current Assets” means all accounts receivable, inventory and prepaid expenses to
non-affiliated third parties, (including all inter-company trade accounts receivable between two or
more Lear Companies (with respect to the Business), but excluding all other inter-company
receivables between two or more Lear Companies (with respect to the Business)) and excluding the
assets described in clause (i) of the definition of Tooling and Engineering Net Assets.

     “Current Canadian Subsidiaries” means Lear Canada Investments, Ltd., Lear Corporation
Canada, Ltd. and Lear Canada.

     “Current Liabilities” means all accounts payable and accrued expenses (including all
inter-company trade accounts payable between two or more Lear Companies (with respect to the
Business), but excluding all other inter-company payables between two or more Lear Companies (with
respect to the Business)), excluding all accrued Income Taxes of any Lear Company and Transfer
Taxes as defined in Section 6.14(g) and excluding the liabilities described in clause (ii) of the
definition of Tooling and Engineering Net Assets.

     “Current Mexican Subsidiaries” means Lear Corporation Mexico, S. de R.L. de C.V., Lear
Electrical Systems de Mexico, S. de R.L. de C.V., Consorcio Industrial Mexicano de Autopartes, S.A.
de C.V. and Lear Corporation Silao, S.A. de C.V.

     “Current Subsidiaries” means the Current Canadian Subsidiaries and the Current Mexican
Subsidiaries.

     “Customer Contract” means all Contracts between a Lear Company and a customer of the
Business in connection with the Business.

     “Employees” means all current and former employees of the Asset Sellers and the
Current Subsidiaries (to the extent employed primarily in connection with the Business) and all
current or former employees of the Sale Companies, other than the Excluded Employees.

     “ERISA Affiliate” means any Person that, together with the Asset Sellers, would be
treated as a single employer under Section 414 of the Code.

     “Excluded Assets” means the following assets of the Asset Sellers:

     (i) all cash, cash equivalents (including marketable securities), bank accounts and
bank deposits (other than rent deposits in respect of any leasehold Real Property);

     (ii) all prepaid Income Taxes and claims or rights to refunds for any Income Taxes for
which the relevant Asset Seller either is or may be liable, together with

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any net operating losses or future tax benefits relating thereto that the relevant
Asset Seller is or may be entitled to;

     (iii) all pension or retirement plan assets of the relevant Asset Seller under any
Benefit Plan of any Lear Company with respect to any Employee;

     (iv) all corporate minute books and stock transfer books, corporate seals, books of
account, financial records, Tax Returns, Tax files and related Tax work papers and all
documents prepared in connection with the transactions contemplated by this Agreement,
whether in hard copy or electronic format (collectively, the “Excluded Records”),
provided that the Company shall receive copies of the books of accounts and financial
records included in the Excluded Records;

     (v) all rights of the relevant Asset Seller pertaining to any causes of action,
lawsuits, judgments, claims, demands, counterclaims, set-offs or defenses that the relevant
Asset Seller may have with respect to the Retained Liabilities, any of the Excluded Assets,
this Agreement and/or any of the Ancillary Agreements;

     (vi) the Retained Names, other than the rights to use any such Retained Name or other
right pursuant to the Intellectual Property Transfer and License Agreement and pursuant to
Section 6.15;

     (vii) any equity interest in any Lear Company other than the Sale Companies;

     (viii) all Intellectual Property Rights owned or licensed by the relevant Asset Seller
other than the Lear Business IP and the Business IP Agreements, except to the extent set
forth in the Intellectual Property Transfer and License Agreement;

     (ix) all policies of insurance and all proceeds therefrom to the extent related to any
Excluded Liability;

     (x) all assets of the Business sold or otherwise disposed of in the Ordinary Course of
Business during the period from the Effective Date until the close of business on the
Closing Date not in violation of any Asset Seller’s obligations under this Agreement;

     (xi) all accounts receivable (including all inter-company non-trade receivables) and
prepaid expenses to the extent not reflected in the calculation of the Closing Net Working
Capital;

     (xii) all assets set forth in Schedule 1.1.3; and

     (xiii) all other assets of the relevant Asset Seller that are not primarily used in the
Business and all rights arising from any of those assets.

     “Excluded Employees” means those persons listed in Schedule 1.1.4.

     “Facility Leases” means the lease(s) for the facilities described in Section 6.18, the
material terms of which are set forth on Exhibit A hereto.

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     “Financial Statements” means (i) the Balance Sheet and (ii) the related unaudited
consolidated statements of income for the Business for the nine months ended on the Balance Sheet
Date, attached hereto as Schedule 1.1.5.

     “GAAP” means generally accepted accounting principles, as in effect in the United
States on the date of this Agreement, consistently applied in accordance with the past practice of
the Business.

     “Governmental Authority” means any governmental or regulatory agency, authority,
bureau, commission, department, official or similar body or instrumentality, or any governmental
court, arbitral tribunal or other body administering dispute resolution or judicial or
quasi-judicial authority.

     “Holding Companies” means the Canadian Holding Company and the Mexican Holding
Company.

     “Holding Company Shares” means all of the issued and outstanding shares or other
equity ownership interests of the Mexican Holding Company and the Canadian Holding Company.

     “Income Taxes” means any Tax imposed on, or measured by, net income or net worth
(including any penalties or interest or other additional amounts imposed thereon).

     “Income Tax Return” means any return, declaration, report, claim for refund,
information return or other document (including any related or supporting schedules, statements or
information) filed or required to be filed in connection with the determination, assessment or
collection of Income Taxes of any party or the administration of any Laws or administrative
requirements relating to any Income Taxes.

     “Indebtedness” means indebtedness for borrowed money or capitalized lease obligations,
whether or not pursuant to a written Contract, and all obligations to guarantee or collateralize
any such indebtedness or obligation of any Affiliate.

     “Intellectual Property Transfer and License Agreement” means the Intellectual Property
Transfer and License Agreement in the form of Exhibit B.

     “Intellectual Property Right” means any trademark, service mark, trade name, product
designation, logo, slogan, invention, patent, trade secret, copyright, know-how, proprietary design
or process, computer software and database, Internet address or domain name (including any
registrations or applications for registration or renewal of any of the foregoing), research in
progress, or any other similar type of proprietary intellectual property right.

     “IRS” means the U.S. Internal Revenue Service or any successor agency and, to the
extent relevant, the U.S. Department of Treasury.

     “Knowledge of Lear”, or words of similar import, means the actual knowledge of Roger
Jackson, Douglas DelGrosso, Daniel Ninivaggi, Joseph Zimmer, James Kamsickas, Jeff Vanneste, Earl
La Fontaine (with respect to intellectual property matters) or Bill Brockhaus (as to the Current
Mexican Subsidiaries), collectively.

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     “Knowledge of the Company”, or words of similar import, means the actual knowledge of
Wilbur Ross, Patrick Machir or Stephen Toy, collectively.

     “Law” means any U.S. or non-U.S. federal, state or local statute, law, rule,
regulation, ordinance, code, permit, license, policy or rule of common law.

     “Lear Business IP” means all Business IP owned or controlled by Lear or any Lear
Affiliate (other than the Sale Companies).

     “Lear Company” means Lear or one of its controlled Affiliates (including, for the
avoidance of doubt, the Sale Companies).

     “Lear IP Agreements” means (a) licenses of Business IP by Lear or any Lear Affiliate
(other than the Sale Companies) to any third party, (b) licenses of Business IP by any third party
to Lear or any Lear Affiliate (other than the Sale Companies), (c) agreements between Lear or any
Lear Affiliate and any third party relating to the development or use of Business IP, and (d)
consents, settlements, decrees, orders, injunctions, judgments or rulings governing the use,
validity or enforceability of the Lear Business IP.

     “Liability” means any obligation or liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due).

     “Lien” means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, encumbrance or other adverse claim of any kind in respect of such
property or asset.

     “LLC Agreement” means the limited liability company agreement of IACNA, the form of
which is attached hereto as Exhibit C.

     “Material Adverse Effect” means one or more events, occurrences, developments or
circumstances that, individually or in the aggregate, has had, or could reasonably be expected to
have, a material adverse effect on the assets, business, financial condition, prospects or results
of operations of the Business, as applicable (taken as a whole), excluding, in each case, any such
effect resulting from or arising out of (i) changes or conditions generally affecting the
automotive industry in North America or the industry sectors that include the Business that do not
have a disproportionate effect on the Business relative to the competitors of the Business, (ii)
the execution or performance of this Agreement or the announcement thereof, (iii) changes in
financial markets or changes in the economies of Canada, Mexico or the United States, (iv) changes
arising from or relating to compliance with the terms of this Agreement, or action taken, or
failure to act, to which Lear or the Company, as applicable, has consented, or (v) changes in Laws
after the date hereof.

     “Mexican Holding Company” means the Delaware corporation to be formed by the Lear
Companies pursuant to the Reorganization, which, as of the Closing Date, shall own, directly or
indirectly, all of the issued and outstanding shares or other equity ownership interests of the
Mexican Subsidiaries.

     “Mexican Subsidiaries” means Consorcio Industrial Mexicano de Autopartes, S.A. de C.V.
and/or Lear Corporation Silao, S.A. de C.V. and/or one or more Mexican entities formed

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pursuant to the Reorganization to hold, as of the Closing Date, the assets owned by the
Current Mexican Subsidiaries and used primarily in the Business.

     “Net Working Capital” means the remainder of (i) the consolidated Current Assets of
the Sale Companies and the Current Assets included in the Purchased Assets, minus (ii) the
consolidated Current Liabilities of the Sale Companies and the Asset Sellers, excluding any
Retained Sale Company Liabilities and Retained Liabilities.

     “Order” means any judgment, injunction, judicial or administrative order or decree.

     “Ordinary Course of Business” means, with respect to any Person, the ordinary course
of business of such Person, consistent in all material respects with such Person’s past practice
and custom.

     “Owned Intellectual Property” means Business IP owned by a Sale Company.

     “Permit” means all permits, licenses, franchises and other federal, state, local and
foreign governmental approvals and authorizations.

     “Permitted Lien” means (i) Liens of landlords pursuant to Purchased Contracts,
mechanics’, workmen’s, carriers’ repairmen’s, retention of title or other like Liens arising or
incurred in the Ordinary Course of Business in respect of obligations that are not overdue or which
are being contested in good faith (provided that such contested obligations are not material in
amount), (ii) statutory liens for Taxes, assessments and other similar governmental charges that
are not overdue or Liens required to maintain or comply with the terms of any currently active Tax
Incentives, (iii) Liens that arise under zoning, land use and other similar imperfections of title
that arise in the Ordinary Course of Business and that, in the aggregate, do not materially affect
the value, use or marketability of the property subject thereto, (iv) other Liens on assets that do
not materially affect the value, use or marketability of the assets subject thereto, and (v) Liens
created by the Company or IACNA. Any statutory lien arising under Sections 302 or 4068 of ERISA or
Section 412 of the Code with respect to any Benefit Plan in favor of such plan or PBGC shall not be
a Permitted Lien.

     “Person” means an individual, corporation, partnership, limited liability company,
joint venture, association, trust or other entity or organization or Governmental Authority.

     “Post-Closing Tax Period” means any Tax period beginning after the Closing Date.

     “Pre-Closing Tax Period” means any Tax period ending on or before the Closing Date.

     “Promissory Notes” means the Promissory Notes by the Company to each of WL Ross and
Franklin evidencing their respective Affiliate Loans in the form attached hereto as Exhibit
D.

     “Purchased Assets” means all of each Asset Seller’s right, title and interest in the
assets, properties, rights, contracts, interests, claims and operations, wherever located, whether
tangible or intangible, real or personal, that are owned by, leased by or in the possession or
control of such Asset Seller and used primarily in the Business, other than the Excluded Assets,
including:

     (i) all raw materials and inventories, wherever located, owned or maintained by the
relevant Asset Seller, including inventories of warehoused stock,

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finished product, work-in progress, raw and pack materials, stores and supplies to the
extent relating primarily to the Business;

     (ii) the freehold, leasehold and other interests in the real property that are listed
or required to be listed in Schedule 4.14, together with all right, title and interest of
the relevant Asset Seller in all buildings, improvements, fixtures and other appurtenances
thereto (the “Real Property”);

     (iii) the machinery, tooling, equipment, furniture, computers and other tangible
personal property used primarily in the Business;

     (iv) the accounts receivable and prepaid expenses arising out of or relating primarily
to the Business to the extent reflected in the calculation of the Closing Net Working
Capital (including all inter-company trade accounts receivable between an Asset Seller or a
Sale Company and Lear or any of Lear’s Subsidiaries) and the assets described in clause (i)
of the definition of Tooling and Engineering Net Assets;

     (v) the Customer Contracts and all other contracts of the relevant Asset Seller
relating primarily to the Business, including the Lear IP Agreements (the “Purchased
Contracts”);

     (vi) all Lear Business IP as set forth in the Intellectual Property Transfer and
License Agreement;

     (vii) the goodwill, to the extent generated by and associated with the Business;

     (viii) the books and records of the relevant Asset Seller relating primarily to the
Business, including the books of account, tax, general, financial, accounting and personnel
records as legally permissible, files, invoices, client (current and prospective) and
supplier lists, business plans, marketing studies and other written information, other than
the Excluded Records;

     (ix) all Permits relating to, or required for, the Business, to the extent transferable
under their terms and applicable Laws;

     (x) the assets reflected as such in the Financial Statements and any similar assets
acquired between the date thereof and the Closing Date (including all rent deposits in
respect of leasehold Real Property);

     (xi) all proceeds received or receivable by the relevant Asset Seller under any
insurance policy to the extent related to any Assumed Liability;

     (xii) all claims, rights and causes of action that may arise under any Purchased
Contract or the conduct of the Business (other than any claims, rights and causes of actions
to the extent related to a Retained Liability or an Excluded Asset); and

     (xiii) all other assets of the relevant Asset Seller that are primarily used in the
Business, and all rights arising from any of those assets.

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     “Registered” means issued by, registered with, renewed by or the subject of a pending
application before any Governmental Authority or Internet domain name register.

     “Registration Rights Agreement” means the registration rights agreement, the form of
which is attached hereto as Exhibit E.

     “Relevant Lear Company” means Lear, each Asset Seller, each Current Subsidiary and
each Stock Seller.

     “Retained Names” means the “Lear” name, all variations, derivations and graphical
representations thereof and all trademarks, service marks, trade names, or related corporate names
and all domain names and Interest addresses that include the name “Lear.”

     “Sale Companies” means the Holding Companies, the Canadian Subsidiaries and the
Mexican Subsidiaries.

     “Sale Companies Adjustment” means (a) the sum of the cash and cash equivalents and the
amount of inter-company receivables due to the Sale Companies from Lear or any of Lear’s
Subsidiaries at Closing (excluding any such inter-company accounts receivable that are trade
accounts receivable) minus (b) the amount of inter-company payables due to Lear or any of Lear’s
Subsidiaries from the Sale Companies at Closing (excluding any such inter-company accounts payable
that are trade accounts payable), all as determined without regard to the Mexican Tax
Reimbursement, including the payments and obligations related thereto.

     “Specified Liabilities” means all Liabilities of the Asset Sellers or the Sale
Companies, as the case may be, arising out of or relating to the ownership of the Purchased Assets
(in the case of the Asset Sellers) or the operation of the Business prior to or following the
Closing in the following categories of Liabilities: product warranty, product liability,
litigation and environmental, excluding, however, any Liabilities (i) arising from criminal acts by
or attributable to Lear or any of its Affiliates or (ii) incurred other than in the Ordinary Course
of Business of the applicable Lear Company.

     “Stock Sellers” means the Lear Companies that hold the Holding Company Shares
immediately prior to the Closing.

     “Subsidiary” means, with respect to any Person, (i) any corporation 50% or more of
whose stock of any class or classes having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether or not at the time stock of
any class or classes of such corporation have or might have voting power by reason of the happening
of any contingency) is at the time owned by such Person, directly or indirectly through
Subsidiaries, and (ii) any partnership, limited liability company, association, joint venture,
trust or other entity in which such Person, directly or indirectly through Subsidiaries, is either
a general partner, has a 50% or greater equity interest at the time or otherwise owns a controlling
interest.

     “Subsidiary Shares” means all of the issued and outstanding shares or other equity
ownership interests in the Mexican Subsidiaries and the Canadian Subsidiaries.

     “Supply Agreement” means one or more supply agreements between Lear and the Company,
the material terms of which are summarized in Exhibit F attached hereto. 

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     “Target Net Working Capital” means $48.5 Million.

     “Target Tooling Net Assets” means $110 Million.

     “Tax” means (i) any foreign, United States federal, state or local net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value
added, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other
tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any
interest, penalty, addition to tax or additional amount imposed by any Law or Taxing Authority,
whether disputed or not, (ii) any liability for the payment of any amounts of any of the foregoing
as a result of being a member of an affiliated, consolidated, combined, unitary or similar group,
or being a party to any agreement or arrangement whereby liability for payment of such amounts was
determined or taken into account with reference to the liability of any other Person, (iii) any
liability for the payment of any amounts as a result of being a party to any tax sharing agreements
or arrangements (whether or not written) or with respect to the payment of any amounts of any of
the foregoing as a result of any express or implied obligation to indemnify any other Person, and
(iv) any liability for the payment of any of the foregoing types as a successor or transferee.

     “Taxing Authority” means any Governmental Authority responsible for the imposition,
administration or collection of any Tax.

     “Third-Party Claim” means any claim, demand, action, suit or proceeding made or
brought by any Person who or which is not a party to this Agreement or who or which is not an
Affiliate of any party to this Agreement.

     “Tooling and Engineering Net Assets” means (i) engineering and tooling costs that are
lump sum payable by the customer and capitalized engineering and tooling costs and gains that will
be amortized following the date of determination, less (ii) divisional accounts payable related to
the Business recorded at the Dearborn, Michigan Division Office.

     “Transaction Documents” means this Agreement and the Ancillary Agreements.

     “Transition Services Agreement” means the transition services agreement, the form of
which is attached hereto as Exhibit G.

     “Transferred Employees” means those Employees (including those on short-term
disability or long-term disability) who immediately prior to the Closing Date are employed by the
Sale Companies, other than Excluded Employees.

     1.2 Other Defined Terms. In addition, the following terms used herein with initial
capital letters will have the meanings specified on the following pages:

	 	 	 	 	 
	AAA 
	 	 	60	 
	Acquisition Proposal 
	 	 	41	 
	Assumed Liabilities 
	 	 	13	 
	Business Day 
	 	 	61	 
	Business Permits 
	 	 	27	 
	Canadian Commissioner 
	 	 	17	 
	Canadian Competition Act 
	 	 	17	 

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	Check the Box Election 
	 	 	44	 
	Closing 
	 	 	19	 
	Closing Date 
	 	 	19	 
	Company 
	 	 	1	 
	Company Indemnified Party 
	 	 	56	 
	Damages 
	 	 	56	 
	Direct Claim 
	 	 	57	 
	Dispute 
	 	 	59	 
	Dispute Notice 
	 	 	16	 
	Effective Date 
	 	 	1	 
	Employee Benefit Plans 
	 	 	50	 
	Environmental Laws 
	 	 	28	 
	Estimated Closing Tooling Net Assets 
	 	 	16	 
	Excluded Records 
	 	 	5	 
	Foreign Company Plan 
	 	 	51	 
	Franklin 
	 	 	1	 
	Hired Employees 
	 	 	52	 
	IACNA 
	 	 	1	 
	Indemnified Party 
	 	 	56	 
	Indemnifying Party 
	 	 	56	 
	Initial Valuation Report 
	 	 	15	 
	IRCA 
	 	 	30	 
	ISD Sale 
	 	 	41	 
	Lear 
	 	 	1	 
	Lear Calculation 
	 	 	16	 
	Lear Change in Control Transaction 
	 	 	41	 
	Lear Indemnified Party 
	 	 	56	 
	Lear Material Contract 
	 	 	25	 
	Lear Significant Customers 
	 	 	31	 
	Lear Significant Suppliers 
	 	 	31	 
	Mexican Tax Reimbursement 
	 	 	43	 
	Non-Compliance Event 
	 	 	46	 
	Post-Closing Straddle Period 
	 	 	43	 
	Pre-Closing Period Tax Matter 
	 	 	45	 
	Pre-Closing Straddle Period 
	 	 	43	 
	Property Agreements 
	 	 	27	 
	Purchase Price 
	 	 	15	 
	Real Property 
	 	 	8	 
	Records 
	 	 	39	 
	Reorganization 
	 	 	49	 
	Retained Liabilities 
	 	 	13	 
	Retained Sale Company Liabilities 
	 	 	15	 
	Straddle Period 
	 	 	43	 
	Straddle Period Tax Matter 
	 	 	45	 
	Tax Incentives 
	 	 	44	 
	Termination Date 
	 	 	20	 
	Transfer 
	 	 	13	 
	Transfer Taxes 
	 	 	44	 
	U.S. Company Employees 
	 	 	52	 
	U.S. Employee Benefit Plans 
	 	 	52	 
	WARN 
	 	 	30	 
	WC Resolution Period 
	 	 	16	 

Purchase Agreement

12

 

ARTICLE II

TRANSFER OF ASSETS AND SALE COMPANIES

     2.1 Purchased Assets.

          (a) Upon the terms and subject to the conditions of this Agreement, at the Closing, Lear will
and will cause each other Asset Seller to sell, transfer, convey, assign and deliver
(“Transfer”) and the Company will purchase and accept, free and clear of Liens (other than
Permitted Liens) all of such Asset Seller’s right, title and interest in the Purchased Assets.

          (b) In confirmation of the foregoing sale, assignment and transfer, Lear will, and will cause
the other Asset Sellers to, and the Company will, execute and deliver at the Closing such bills of
sale and other instruments of assignment and transfer as the Company or Lear may reasonably deem
necessary or desirable.

          (c) Notwithstanding anything to the contrary in this Agreement, the Excluded Assets are being
retained by the Asset Sellers and will not be included in the Purchased Assets.

     2.2 Liabilities Assumed by the Company.

          (a) At the Closing, the Company will assume as of the Closing Date, and will subsequently pay,
honor and discharge when due and payable and otherwise in accordance with their terms, all of the
following Liabilities of the Asset Sellers (other than any such Liabilities which are specifically
set forth in Section 2.2(b)) (collectively, the “Assumed Liabilities”):

          (i) all Current Liabilities of the Asset Sellers, to the extent included in the
calculation of the Closing Net Working Capital;

          (ii) all Specified Liabilities of the Asset Sellers;

          (iii) all Liabilities of the Asset Sellers under the executory portion of the Purchased
Contracts, excluding (A) any of such Purchased Contracts that contain a non-competition,
exclusivity or similar restrictive covenant limiting the rights of an Asset Seller to fully
conduct any business or activity after the Closing (other than any such Purchased Contracts
that contain such restrictions related to product development activities) and (B)
Liabilities arising from the breach of any such Purchased Contracts prior to the Closing;

          (iv) all Assumed Employee Liabilities of the Asset Sellers relating to Hired Employees;

          (v) all Liabilities for Transfer Taxes of the Asset Sellers to the extent set forth in
Section 6.14; and

          (vi) all divisional accounts payable related to the Business to the extent included in
the calculation of Tooling and Engineering Net Assets.

          (b) Except for the Assumed Liabilities specifically identified in Section 2.2, each Asset
Seller shall retain and subsequently pay, honor and discharge when due and

 

 

payable all other Liabilities of such Asset Seller (the “Retained Liabilities”),
including the following Liabilities:

          (i) all Liabilities of such Asset Seller to the extent attributable to any of the
Excluded Assets (irrespective of whether such obligations or liabilities arise before, on or
after the Closing Date);

          (ii) all Liabilities of such Asset Seller with respect to any employee of such Asset
Seller who is not a Hired Employee;

          (iii) all Liabilities for any legal, accounting, investment banking, brokerage or
similar fees or expenses incurred by such Asset Seller or any of its Affiliates in
connection with the transactions contemplated by this Agreement;

          (iv) all Liabilities of such Asset Seller relating to, resulting from or arising out of
the failure of such Asset Seller to perform or discharge any of its agreements contained in
this Agreement;

          (v) all Liabilities for Income Taxes of such Asset Seller to the extent arising out of
the conduct of the Business prior to and including the Closing;

          (vi) all Liabilities of such Asset Seller under any Contracts to the extent not assumed
under Section 2.2(a)(iii);

          (vii) all Liabilities of such Asset Seller incurred by or accruing to such Asset Seller
after the Closing Date that is not an Assumed Liability;

          (viii) all Liabilities of such Asset Seller that were required to be reflected on the
Balance Sheet under GAAP and were not so reflected;

          (ix) all Indebtedness of such Asset Seller; and

          (x) all Liabilities arising under any Benefit Plan.

          (c) In furtherance of the foregoing, the Company will execute and deliver at the Closing all
instruments of assumption as Lear may reasonably deem necessary or desirable to evidence the
assumption by the Company of the Assumed Liabilities.

          (d) To the extent, if any, that any Liability might be partly an Assumed Liability and partly
a Retained Liability, the apportionment of such liability or obligation will be determined pursuant
to GAAP. Nothing set forth in the foregoing sentence will be deemed to affect, modify, supplement
or otherwise change the definitions of Assumed Liabilities and Retained Liabilities set forth in
this Agreement.

     2.3 Transfer of Holding Company Shares; Retention of Sale Company Liabilities.

          (a) Upon the terms and subject to the conditions of this Agreement, at the Closing, Lear will
cause the Stock Sellers to Transfer, and the Company will purchase, all of the Holding Company
Shares, free and clear from all Liens.

 

 

          (b) Immediately prior to the Closing, Lear will cause each Stock Seller to assume as of
immediately prior to the Closing, and will cause each of them to subsequently pay, honor and
discharge when due and payable and otherwise in accordance with their terms, all Liabilities of the
Sale Companies owned, directly or indirectly, by it other than:

          (i) all Current Liabilities of such Sale Company, to the extent included in the
calculation of the Closing Net Working Capital;

          (ii) all Specified Liabilities of such Sale Company;

          (iii) all Liabilities of such Sale Company under the executory portion of the customer
and other Contracts of such Sale Company relating primarily to the Business, excluding (A)
any of such Contracts that contain a non-competition, exclusivity or similar restrictive
covenant limiting the rights of such Sale Company, the Company or any of its Affiliates to
fully conduct any business or activity after the Closing (other than any such Contracts that
contain such restrictions related to product development activities) and (B) Liabilities
arising from the breach of any such Contract prior to the Closing;

          (iv) all Assumed Employee Liabilities of such Sale Company relating to Transferred
Employees; and

          (v) all Tax Liabilities of such Sale Company other than Tax Liabilities for which a
Lear Company is specifically liable pursuant to Section 6.14.

          (c) In furtherance of the foregoing, the Stock Sellers and the Sale Companies will execute and
deliver at the Closing all instruments of assignment and assumption as the Company or Lear may
reasonably deem necessary or desirable to evidence the assumption by the Stock Sellers of the
Retained Sale Company Liabilities.

          (d) The Liabilities assumed by the Stock Sellers pursuant to Section 2.3(b) are referred to
herein as the “Retained Sale Company Liabilities”.

     2.4 Consideration.

          (a) In consideration of the Transfer of the Purchased Assets and the Holding Company Shares to
the Company at Closing, the Company shall (i) pay Lear $300,000 (the “Cash Consideration”)
and (ii) assume the Assumed Liabilities (together with the Cash Consideration, the “Purchase
Price”). The parties hereto further acknowledge and agree that Lear may be required to fund up
to $25 Million in cash as additional Purchased Assets based on the financial performance of the
Business in 2007 as separately agreed to by the parties.

          (b) In accordance with Section 1060 of the Code and the regulations thereunder, the
consideration hereunder shall be allocated among the Purchased Assets and the Holding Company
Shares as agreed to by the parties prior to Closing and attached hereto as Schedule 2.4.
In furtherance of the foregoing, Lear will deliver to the Company a proposed allocation and
supporting valuation report (the “Initial Valuation Report”) no later than 60 days after
the date hereof, and the Company will provide any comments, questions or objections with respect
thereto no later than 20 days after the delivery of the Initial Valuation Report, provided that the
deadline for delivery of the Initial Valuation Report may be extended in 15-day increments with the
Company’s prior written consent, not to be unreasonably withheld or

 

 

delayed. The parties will thereafter cooperate diligently and in good faith to promptly
resolve any disputes and agree upon Schedule 2.4. The parties, in connection with their
respective U.S. federal, state, and local tax returns and other filings, agree not to take any
position inconsistent with such purchase price allocation for Tax reporting purposes. Any
adjustment to the purchase price shall be allocated as provided by Treasury Regulation Section
1.1060-1(c).

     2.5 Closing Net Working Capital.

          (a) Notwithstanding anything to the contrary in Section 6.1 or the definitions of Purchased
Assets and Assumed Liabilities, the parties by mutual agreement shall prior to the Closing (i)
cause the Asset Sellers to exclude certain accounts receivable from the Purchased Assets or the
Sale Companies to distribute certain accounts receivable to another Lear Company or (ii) cause the
Asset Sellers to exclude certain accounts payable from the Assumed Liabilities or the Sale
Companies to distribute certain accounts payable to another Lear Company, in any case, in
furtherance of trying to provide Closing Net Working Capital to the Company at Closing that is as
close as practicable to the Target Net Working Capital.

          (b) No less than five Business Days prior to the Closing, Lear shall deliver to the Company a
written statement setting forth in detail Lear’s good faith estimate of the Closing Net Working
Capital, taking into account any actions of the Lear Companies pursuant to Section 2.5(a), and
Lear’s good faith estimate of the Closing Tooling Net Assets (the “Estimated Closing Tooling
Net Assets”). If the Estimated Closing Tooling Net Assets is greater than $130 Million based
on changes in the actual collection or payment of amounts from the forecast existing as of the date
of this Agreement, the parties shall consult with one another in good faith to determine whether
any withholding of receivables by Lear from the Purchased Assets is appropriate under the
circumstances.

          (c) Lear shall deliver to the Company, no later than 60 days after the Closing Date, Lear’s
calculation of the Closing Net Working Capital and the Closing Tooling Net Assets (the “Lear
Calculation”).

          (d) Lear’s calculation of the Closing Net Working Capital and the Closing Tooling Net Assets
shall be (A) prepared in good faith and based upon reasonable assumptions, and (B) consistent with
GAAP and the accounting practices set forth in Schedule 2.5, which were used in the
preparation of the Financial Statements.

          (e) If the Company disagrees with the Lear Calculation, the Company shall provide written
notice (a “Dispute Notice”) to Lear of its objection(s) to such calculation. If the
Company does not provide a Dispute Notice within 30 days after Lear’s delivery of the Lear
Calculation, the Closing Net Working Capital and the Closing Tooling Net Assets set forth therein
shall be deemed the finally determined Closing Net Working Capital and the Closing Tooling Net
Assets. If the Company delivers a Dispute Notice, Lear and the Company will use good faith efforts
during the 30 day period after the delivery of such Dispute Notice (the “WC Resolution
Period”) to seek to resolve the differences set forth therein. If Lear and the Company cannot
reach written agreement during the WC Resolution Period, their disagreements, limited to those
issues still in dispute, will be submitted by the parties for determination by the Accounting Firm.

          (f) During the period beginning on the date hereof and ending upon the final determination of
the Closing Net Working Capital and the Closing Tooling Net Assets (including the WC Resolution
Period, if necessary), the parties will provide to each other such reasonable

 

 

access to financial and other information of the Business, the Lear Companies and the Sale
Companies as it may request in good faith to assess the Closing Net Working Capital and the Closing
Tooling Net Assets.

          (g) Lear and the Company shall use their reasonable best efforts to cause the Accounting Firm
to submit its written statement of its adjudication of the disputes between Lear and the Company
within 10 days after submission of the matter to the Accounting Firm. The determination of the
Accounting Firm shall constitute an arbitral award that is final, binding and unappealable and upon
which a judgment may be entered by any court having jurisdiction thereof. In acting hereunder, the
Accounting Firm shall be entitled to the privileges and immunities of arbitrators.

          (h) If the finally determined Closing Net Working Capital is less than $47.5 Million, Lear
shall make a cash payment to the Company in the amount by which the finally determined Closing Net
Working Capital is less than $47.5 Million. If the finally determined Closing Net Working Capital
is greater than $49.5 Million, the Company shall make a cash payment to Lear in the amount by which
the finally determined Closing Net Working Capital is greater than $49.5 Million. If the finally
determined Closing Net Working Capital is equal to or greater than $47.5 Million and less than or
equal to $49.5 Million, no payment shall be required by either party.

          (i) If the finally determined Closing Tooling Net Assets is less than the Target Tooling Net
Assets, Lear shall make a payment to the Company in the amount by which the finally determined
Closing Tooling Net Assets is less than the Target Tooling Net Assets either by (i) delivering a
cash payment to the Company equal to such amount, (ii) crediting the amount due against accounts
receivable from the Company to the Lear Companies, (iii) retaining accounts payable related to the
Tooling and Engineering Net Assets in such amount or (iv) any combination of the foregoing.

          (j) Any payments required to be made pursuant to Sections 2.5(h) and 2.5(i) shall be netted
against each other and any resulting amount payable, shall be made within five Business Days after
the date of the final determination of the Closing Net Working Capital and Closing Tooling Net
Assets by wire transfer of immediately available funds to an account specified by the recipient or
delivery of a credit memo, as applicable.

          (k) Any amounts paid or credited pursuant to this Section 2.5 shall for Income Tax purposes be
treated as an adjustment to the purchase price and shall be allocated among the Purchased Assets
and the Holding Company Shares as provided by Treasury Regulation Section 1.1060-1(c).

ARTICLE III

THE CLOSING

     3.1 Conditions Precedent to Obligations of the Company. The obligations of the
Company under this Agreement to consummate the transactions contemplated hereby will be subject to
the satisfaction, at or prior to the Closing, of the following conditions, any one or more of which
may be waived at the option of the Company:

          (a) Regulatory Approvals. Subject to Section 6.5(d), the applicable waiting period,
if any, under the Antitrust Laws shall have expired or been waived or terminated, and all

 

 

other required regulatory approvals shall have been received, including (i) in respect of the
European Union, (A) a decision by the European commission under the ECMR that the European
Commission has decided not to oppose the proposed concentration and has declared it to be
compatible with the common market, or (B) the time limit (including any applicable extensions) for
the taking by the European Commission of a decision under Article 6(1) of the ECMR having passed
with no such decision having been taken and (ii) in respect of Canada, the Commissioner of
Competition (the “Canadian Commissioner”) appointed under the Competition Act (Canada) (the
“Canadian Competition Act”) shall have (A) issued an advance ruling certificate under
Section 102 of the Canadian Competition Act, or (B) advised the Company in writing that the
Canadian Commissioner has determined not to file an application for an order under Part VIII of the
Canadian Competition Act, and any terms and conditions attached to such advice shall be acceptable
to the Company.

          (b) No Misrepresentation or Breach. (i) There shall have been no material breach by
Lear in the performance of any of the covenants herein to be performed by it in whole or in part
prior to the Closing, (ii) the representations and warranties of Lear contained in this Agreement
shall be true and correct on the Closing Date as if made anew on the Closing Date (except for
representations or warranties made as of a specified date, which shall be true and correct as of
the specified date), except for changes therein specifically permitted by this Agreement or
resulting from any transaction expressly consented to in writing by the Company and other than
breaches of representations and warranties which, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect, and (iii) Lear shall have delivered to the
Company a certificate certifying each of the foregoing, dated the Closing Date and signed by one of
its executive officers to the foregoing effect.

          (c) Ancillary Agreements. Each of the Ancillary Agreements shall have been executed
and delivered by the parties thereto (other than the Company and its Affiliates).

          (d) Certain Consents. The Lear Companies shall have obtained the consents, waivers or
approvals set forth in Schedule 3.1(d) which consents shall not impose any conditions
adverse to the Company or a Sale Company or any terms or conditions that are less favorable than
those applicable immediately prior to the Closing) and the Company shall have received all Permits
material to the operation of the Business; provided, that in the event of the failure to obtain any
such consents or Permits, the parties shall work in good faith to negotiate alternative
arrangements (including pursuant to Section 6.10(b)) that provide the Company or the applicable
Sale Company with substantially the same benefits or authorizations, without imposing any
additional material costs or risks, in order to satisfy this condition to Closing.

          (e) Liens. The Company shall have received evidence reasonably satisfactory to it
that the Purchased Assets and the Holding Company Shares at the Closing will be Transferred to the
Company, free and clear of all Liens other than, in the case of the Purchased Assets, Permitted
Liens.

          (f) Litigation. No Order shall have been issued by any court of competent
jurisdiction and be in effect which restrains or prohibits any material transaction contemplated by
this Agreement.

          (g) Business Condition. There shall not have occurred program terminations as a
result of the transactions contemplated by this Agreement that individually or in the aggregate
have had or could reasonably be expected to have a Material Adverse Effect.

 

 

          (h) Material Adverse Effect. There shall have been no Material Adverse Effect since
the Balance Sheet Date.

          (i) Reorganization. Lear shall have completed the Reorganization as set forth in
Section 6.21.

          (j) Tooling Net Assets. The Estimated Closing Tooling Net Assets shall be no less
than $110 Million, provided, however, that if Estimated Closing Tooling Net Assets
is less than $110 Million, Lear shall have the option (but not the obligation) to cure such
deficiency by making a payment to the Company in the amount by which the Estimated Closing Tooling
Net Assets is less than $110 Million, either by (i) delivering a cash payment to the Company equal
to such shortfall, (ii) crediting an amount equal to the shortfall against accounts receivable from
the Company to the Lear Companies, (iii) retaining accounts payable related to the Tooling and
Engineering Net Assets in an amount equal to the shortfall, or (iv) any combination of the
foregoing.

     3.2 Conditions Precedent to Obligations of Lear. The obligations of Lear under this
Agreement to consummate the transactions contemplated hereby will be subject to the satisfaction,
at or prior to the Closing, of the following conditions, any one or more of which may be waived at
the option of Lear:

          (a) Regulatory Approvals. The condition set forth in Section 3.1(a) shall have been
satisfied.

          (b) No Misrepresentation or Breach. (i) There shall have been no material breach by
the Company in the performance of any of the covenants herein to be performed by it in whole or in
part prior to the Closing, (ii) the representations and warranties of the Company contained in this
Agreement shall be true and correct as of the Closing Date as if made anew on the Closing Date
(except for representations or warranties made as of a specified date, which shall be true and
correct as of the specified date), except for changes therein specifically permitted by this
Agreement or resulting from any transaction expressly consented to in writing by Lear and other
than breaches of representations and warranties which, individually or in the aggregate, are not
reasonably likely to have a material adverse effect on the Company’s ability to consummate the
transactions contemplated hereby, and (iii) the Company shall have delivered to Lear a certificate
certifying each of the foregoing, dated the Closing Date and signed by one of its executive
officers to the foregoing effect.

          (c) Ancillary Agreements. Each of the Ancillary Agreements shall have been executed
and delivered by the parties thereto (other than Lear and its Affiliates).

          (d) Litigation. No Order shall have been issued by any court of competent
jurisdiction and be in effect which restrains or prohibits any material transaction contemplated by
this Agreement.

          (e) Related Transactions. Each of IACNA, WL Ross and Franklin shall have performed
its obligations under Section 6.20 hereof.

          (f) PBGC Consent. Lear shall have received the
consent of the PBGC to the treatment of its pension plans in connection with the transaction
contemplated hereby, which consent shall not impose any conditions materially adverse to Lear.

 

 

     3.3 The Closing. Subject to the fulfillment or waiver of the conditions precedent
specified in Sections 3.1 and 3.2, the consummation of the transactions contemplated hereby (the
“Closing”) will take place on the fifth business day after the conditions set forth in
Sections 3.1(a), 3.1(d), 3.1(e), 3.1(i) and 3.2(a) have been satisfied or such other date as the
parties agree in writing to be the date of the closing (the “Closing Date”). The Closing
will take place at 10:00 A.M., Eastern Time, at the New York office of Jones Day, or by the
exchange of documents and instruments by mail, courier, fax, wire transfer or other electronic
communication to the extent mutually acceptable to the parties hereto. Notwithstanding any other
provision hereof, the Closing will be deemed effective for accounting and tax purposes as of 12:01
a.m. (Eastern Time) on the Closing Date.

     3.4 Deliveries by Lear. At the Closing, Lear shall deliver, or cause to be delivered,
to the Company such documents and instruments as may be reasonably required to consummate the
transactions contemplated by the Transaction Documents and to comply with the terms thereof.

     3.5 Deliveries by the Company. At the Closing, the Company will:

          (a) deliver to Lear the Cash Consideration;

          (b) deliver to Lear an assumption agreement assuming and agreeing to assume, pay and perform
all Assumed Liabilities, in form and substance reasonably acceptable to Lear; and

          (c) issue, deliver or cause to be delivered to Lear, such other documents and instruments as
may be reasonably required to consummate the transactions contemplated by the Transaction Documents
and to comply with the terms thereof.

     3.6 Termination. Notwithstanding anything contained in this Agreement to the
contrary, this Agreement may be terminated at any time prior to the Closing:

          (a) By the mutual written consent of the Company and Lear;

          (b) By either the Company or Lear if the Closing shall not have occurred on or before April
15, 2007 (“Termination Date”), provided, however, that the right to terminate this
Agreement pursuant to this Section 3.6(b) will not be available to any party whose breach of any
provision of this Agreement results in the failure of the Closing to occur by such time;
provided, further, that, if any of the conditions to Closing set forth in Sections
3.1(a), 3.1(d), 3.1(e), 3.1(g) or 3.2(a) remains unsatisfied or not waived and if all other
conditions to the respective obligations of the parties to close hereunder that are capable of
being fulfilled by the Termination Date shall have been so fulfilled or waived, then no party may
terminate this Agreement prior to May 31, 2007; or

          (c) By either the Company or Lear if there shall have been entered a final, nonappealable
order or injunction of any Governmental Authority restraining or prohibiting the consummation of
the Closing; or

          (d) By the Company if Lear shall have (i) failed to perform any obligation or to comply with
any agreement or covenant applicable to it under this Agreement or (ii) breached any of its
representations or warranties, in each case if the failure or breach is not curable prior

 

 

to the Termination Date such that the condition in Section 3.1(b) could not be satisfied prior
to the Termination Date; or

          (e) By Lear if any of IACNA, the Company, WL Ross or Franklin shall have (i) failed to perform
any obligation or comply with any agreement or covenant applicable to it under this Agreement or
the Ancillary Agreements or (ii) breached any of its representations or warranties, in each case if
the failure or breach is not curable prior to the Termination Date such that the condition in
Section 3.2(b) could not be satisfied prior to the Termination Date.

     In the event of the termination of this Agreement under this Section 3.6, each party hereto
will pay all of its own fees and expenses. There will be no further liability hereunder on the
part of any party hereto if this Agreement is so terminated, except by reason of a prior breach of
Section 6.5 (Reasonable Best Efforts) or a breach of Section 6.17 (Confidential Nature of
Information), which shall survive any termination of this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF LEAR

     Lear represents and warrants to the Company as set forth below.

     4.1 Corporate Existence and Power. (a) Lear is, and each Sale Company and each
Relevant Lear Company will be as of the Closing, duly incorporated or organized (as applicable),
validly existing and in good standing under the laws of its jurisdiction of incorporation or
organization (as applicable). Each Sale Company and each Relevant Lear Company in existence on the
date hereof has, and each Sale Company and each Relevant Lear Company will have as of the Closing,
all necessary power and all material governmental licenses, authorizations, Permits, consents and
approvals required to carry on its business.

          (b) On the date hereof and immediately following the Closing: (i) the fair value of the assets
of Lear (individually and on a consolidated basis with its Subsidiaries) exceeds its debts and
liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the
property of Lear (individually and on a consolidated basis with its Subsidiaries) is greater than
the amount that will be required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities become absolute and
matured; (iii) Lear (individually and on a consolidated basis with its Subsidiaries) is able to pay
its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured; and (iv) Lear (individually and on a consolidated basis with its
Subsidiaries) does not have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be conducted following the date
hereof.

     4.2 Corporate Authorization; Enforceability. The execution, delivery and performance
by each Relevant Lear Company and each Sale Company of each of the Transaction Documents to which
it will be a party at the Closing are, or will be at the Closing, within its powers and have been,
or will be at the Closing, duly authorized and no other corporate or company (as applicable) action
on the part of any Relevant Lear Company or any Sale Company is or will be necessary to authorize
any of the Transaction Documents to which it will be a party at the Closing. Each of the
Transaction Documents to which any Relevant Lear Company or any Sale Company will be a party at the
Closing will have been, as of the Closing, duly executed and delivered by each such party.
Assuming the due execution and delivery by

 

 

the other party or parties thereto of the Transaction Documents to which any Relevant Lear
Company or any Sale Company will be a party at the Closing, each Transaction Document to which any
Relevant Lear Company or any Sale Company will be a party at the Closing will constitute valid and
binding agreements of such party, enforceable against it in accordance with their terms except to
the extent that their enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles.

     4.3 Books and Records. All accounts, books, ledgers and other records material to the
Business of whatsoever kind have been properly and accurately kept in all material respects and are
complete in all material respects, and there are no material inaccuracies or discrepancies of any
kind contained or reflected therein.

     4.4 Ownership of Sale Companies; Subsidiaries.

          (a) As of the Closing, the Holding Companies will be the direct or indirect holder of all of
the Subsidiary Shares and will have sole voting and dispositive power over such Subsidiary Shares,
all of which will have been issued in proper legal form and will be fully paid or credited as fully
paid. As of the Closing, the Subsidiary Shares will constitute all of the issued and outstanding
shares or other equity securities (or local equivalent) in the capital of the Mexican Subsidiaries
and the Canadian Subsidiaries and there will be no options, warrants, conversion rights,
subscriptions, or agreements or rights of any kind (other than pursuant to this Agreement) to
subscribe for or purchase, or commitments to issue (either formal or informal, firm or contingent),
any shares, stock or other securities of any of the Mexican Subsidiaries or the Canadian
Subsidiaries. None of the Mexican Subsidiaries or the Canadian Subsidiaries legally or
beneficially owns any equity interest in any Person other than another Mexican Subsidiary or
Canadian Subsidiary, as applicable.

          (b) As of the Closing, the Stock Sellers will own and will be the direct, sole holders of all
of the Holding Company Shares and will have sole voting and dispositive power over such Holding
Company Shares, all of which will have been issued in proper legal form and will be fully paid or
credited as fully paid. As of the Closing, the Holding Company Shares will constitute all of the
issued and outstanding shares or other equity securities (or local equivalent) in the capital of
the Mexican Holding Company and the Canadian Holding Company and, as of the Closing, there will be
no options, warrants, conversion rights, subscriptions, or agreements or rights of any kind (other
than pursuant to this Agreement) to subscribe for or purchase, or commitments to issue (either
formal or informal, firm or contingent), any shares, stock or other securities of any of the
Mexican Holding Company or the Canadian Holding Company. Neither the Mexican Holding Company nor
the Canadian Holding Company will, as of Closing, legally or beneficially own any equity interest
in any Person other than another Mexican Subsidiary or Canadian Subsidiary, as applicable.

     4.5 Non-Contravention; Consents. The execution, delivery and performance by Lear of
this Agreement and the execution, delivery and performance by each other Relevant Lear Company and
each Sale Company of each Transaction Document to which it will be a party at the Closing do not
and will not at the Closing (a) violate the certificate of incorporation, organization or formation
or bylaws or other equivalent governing document of any such Person, (b) violate in any material
respect any applicable Law or Order, (c) except as set forth in Section 3.1(a) or on Schedule
4.5, require any filing with or Permit, consent or approval of, or the giving of any notice to,
any Person, (d) result in a violation or breach of, conflict with, constitute (with or without due
notice or lapse of time or both) a default under, or give rise to any

 

 

right of termination, cancellation or acceleration of any right or obligation of any Relevant
Lear Company or any Sale Company or to a loss of any benefit to which it is entitled under, any
Lear Material Contract or Permit or (e) result in the creation or imposition of any material Lien
on any of its assets except for Permitted Liens and such of the foregoing as are listed or
described in Schedule 4.5 and except in the case of clause (c) above, for any such filings,
Permits, consents, approvals or notices the failure to obtain or make would not be material to the
Business.

4.6 Tax Matters. Except as disclosed in Schedule 4.6,

          (a) All material Tax Returns required to be filed with any Taxing Authority with respect to
any Pre-Closing Tax Period by or on behalf of any of the Sale Companies, to the extent required to
be filed on or before the Closing Date, have been filed when due in accordance with all applicable
Laws.

          (b) All such Tax Returns with respect to Pre-Closing Tax Periods are correct and complete in
all material respects. None of the Sale Companies is currently a beneficiary of any extension of
time within which to file any Tax Return.

          (c) No Tax Return of any of the Sale Companies with respect to any Pre-Closing Tax Period is
currently under an audit by any Taxing Authority.

          (d) None of the Sale Companies has any Tax liabilities (whether due or to become due) with
respect to the income, property and operations of such Sale Companies, except for Tax liabilities
reflected on the Balance Sheet or that have arisen after the date of the Balance Sheet in the
Ordinary Course of Business.

          (e) All Taxes owed by any of the Sale Companies (whether or not shown as due and payable on
any Tax Return) have been timely paid or withheld and remitted to the appropriate Taxing Authority.

          (f) None of the Sale Companies has granted or has had granted on its behalf any extension or
waiver of the statute of limitations period applicable to any Tax Return, which period (after
giving effect to such extension or waiver) has not yet expired.

          (g) There is no proceeding now pending or, to the Knowledge of Lear, threatened against or
with respect to any of the Sale Companies in respect of any Tax of which Lear or the Sale Companies
has received written notice.

          (h) There are no Liens for Taxes upon the assets or properties of any of the Sale Companies,
except for statutory liens for current Taxes, assessments or other governmental charges not yet
delinquent or the amount or validity of which is being contested in good faith by appropriate
proceedings.

          (i) None of the Sale Companies has been a member of an affiliated, consolidated, combined or
unitary group or participated in any other arrangement whereby any income, revenues, receipts, gain
or loss was determined or taken into account for Tax purposes with reference to or in conjunction
with any income, revenues, receipts, gain, loss, asset or liability of any other Person other than
a group of which a Lear Company is the parent. None of the Sale Companies has any liability for
the Taxes of any Person (other than under Treasury Regulation Section 1.1502-6 (or any similar
provision of U.S. federal, state, local or foreign Law)), as a transferee or successor, by
contract, or otherwise.

 

 

          (j) None of the Sale Companies has received written notice of any claim by a Governmental
Authority in a jurisdiction where any of the Sale Companies does not file Tax Returns that it is or
may be subject to taxation by that Governmental Authority.

          (k) Each of the Sale Companies has withheld and paid all material Taxes required to have been
withheld and paid by applicable Law in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other Person.

          (l) None of the Sale Companies will be required to include any material item of income, or
exclude any material item of deduction from taxable income for any period ending after the Closing
Date under Section 481 of the Code (or any similar provision of the Laws of any jurisdiction), as a
result of a change in method of accounting for a Pre-Closing Tax Period or pursuant to the
provisions of any agreement entered into with any Taxing Authority or pursuant to a “closing
agreement” as defined in Section 7121 of the Code (or any similar provisions of state, local or
foreign Law) executed on or prior to the Closing Date.

          (m) None of the Sale Companies is a party to any Tax allocation or sharing agreement.

          (n) None of the Sale Companies has participated in any “reportable transaction” as defined in
Treasury Regulation Section 1.6011-4(b) (or any predecessor provision).

          (o) There are no outstanding rulings of, or requests for rulings with, any Taxing Authority
expressly addressed to any of the Sale Companies.

          (p) None of sections 78, 80, 80.01, 80.02, 80.03 or 80.04 of the Income Tax Act (Canada), or
any equivalent provision of the Tax legislation of any province or any other jurisdiction of
Canada, have applied or will apply to the Canadian Subsidiaries at any time up to and including the
Closing Date.

          (q) The Canadian Subsidiaries have not acquired property from a non-arm’s length Person,
within the meaning of the Income Tax Act (Canada), for consideration, the value of which is less
than the fair market value of the property acquired in circumstances which could subject it to a
liability under section 160 of the Income Tax Act (Canada).

          (r) For all transactions between the Canadian Subsidiaries and any non-resident Person with
whom the Canadian Subsidiaries were not dealing at arm’s length during a taxation year commencing
after 1998 and ending on or before the Closing Date, the Canadian Subsidiaries have made or
obtained, or will make or obtain, records or documents that meet the requirements of paragraphs
247(4)(a) to (c) of the Income Tax Act (Canada).

          (s) The Canadian Subsidiaries will be duly registered under subdivision (d) of Division V of
Part IX of the Excise Tax Act (Canada) with respect to the goods and services tax and harmonized
sales tax on or before the Closing Date, if required.

     4.7 Financial Statements. Each of the Financial Statements, including the notes
thereto which identify the basis of presentation and preparation, has been based upon the
information contained in the books and records of the Business (which books and records are correct
and complete in all material respects), is accurate and complete in all material respects and
presents fairly in all material respects the consolidated financial condition and results of

 

 

operations of the Business as of the times and for the periods referred to therein, and such
Financial Statements (including all reserves included therein) have been prepared in accordance
with GAAP as identified in the notes thereto; provided, that the notes to the Financial
Statements do not include the full set of disclosures and footnotes required under GAAP, the
Financial Statements do not include statements other than the balance sheet and income statement
which otherwise would be required by GAAP and the Financial Statements are subject to normal
year-end adjustments.

     4.8 Conduct of the Business; Absence of Certain Changes. (a) Except as disclosed in
Schedule 4.8(a), and except as a result of matters permitted or required by this Agreement,
since December 31, 2005, (i) the Lear Companies have conducted the Business in the Ordinary Course
of Business (excluding actions taken in connection with the transactions contemplated by this
Agreement), and (ii) none of the Lear Companies has taken any action that would have constituted a
violation of Section 6.1 (Conduct of Business) if Section 6.1 had applied since December 31, 2005.

          (a) Since September 30, 2006, there has not been a Material Adverse Effect.

          (b) Except as set forth on Schedule 4.8(c), as of the Closing Date, it will be the
case that none of the Sale Companies shall have ever conducted any business, entered into any
Contract or incurred any Liabilities other than in connection with the conduct of the Business.

     4.9 Known Liabilities. To the Knowledge of Lear, (a) there are no Assumed Liabilities
or Liabilities of the Lear Companies existing as of the date hereof that were required to be
disclosed in a Schedule to this Agreement and were not so disclosed, and (b) there will not be any
Assumed Liabilities or Liabilities of the Lear Companies existing as of the Closing Date that will
be required to be disclosed in a Schedule to this Agreement and will not be so disclosed.

     4.10 Contracts. (a) Except as disclosed in Schedule 4.10(a), none of the
Relevant Lear Companies, with respect to the Business, and none of the Sale Companies is a party to
or bound by any Contract that is of a type described below (each such Contract, a “Lear
Material Contract”):

          (i) Any employment, severance or consulting contract with any current Employee,
officer, director, or consultant of the Business or a Lear Company in connection with the
Business, or any former Employee, officer, director, or consultant of the Business or a Lear
Company in connection with the Business, to the extent that any Lear Company or any Sale
Company has a current or future obligation arising thereunder;

          (ii) Any collective bargaining Contract with any labor union in respect of the
Employees;

          (iii) Any Contract or series of related Contracts for capital expenditures or the
acquisition or construction of fixed assets or software development that could reasonably be
expected to require aggregate future payments in excess of $2,500,000;

          (iv) Any Contract or series of related Contracts relating to cleanup, abatement or
other actions in connection with environmental Liabilities;

 

 

          (v) Any Lear IP Agreements or Business IP Agreements (other than nonexclusive object
code licenses of commercially available software and licenses for terms of less than one
year granted or received in the Ordinary Course of Business);

          (vi) Any Contract with any sales agent or other independent contractor having a
remaining term in excess of one year and that is not terminable without penalty on 90
calendar days’ or less notice;

          (vii) Any Contract that could reasonably be expected to require payments in any year in
excess of $1,000,000 under which the applicable Lear Company is (i) a lessee of, or holds or
uses, any machinery, equipment, vehicle or other tangible personal property owned by a third
Person or (ii) a lessor of or one who otherwise makes available for third party use any
tangible personal property owned by any Relevant Lear Company or any of the Sale Companies;

          (viii) Any Contract or series of related Contracts that could reasonably be expected to
require aggregate future payments by or to the Sale Companies in excess of $2,500,000;

          (ix) Any Contract granting to any Person a first-refusal, first-offer or other similar
right to purchase or acquire any of the Purchased Assets or Subsidiary Shares; any
stockholders agreement or any Contract with respect to a joint venture or partnership
arrangement; any Contract granting a power of attorney other than in connection with the
asserted rights of landlords in the event of a default under any real property lease; any
Contract with respect to letters of credit, surety or other bonds or pursuant to which any
material assets or properties of the Business is, or is to be, subjected to a Lien; any
Contract limiting or restricting the ability of a Relevant Lear Company or any Sale Company
to enter into or engage in any market or line of business in or related to the Business;

          (x) Any Property Agreements or other Contract relating to a Lear Company’s occupation
or use of the Real Property;

          (xi) Any Contracts relating to or evidencing Indebtedness; or

          (xii) Any other Contract or series of related Contracts that is, or could reasonably be
expected to be, material to the Business or that was entered into other than in the Ordinary
Course of Business.

          (b) Except as set forth in Schedule 4.10(b), each Lear Material Contract to which any
Relevant Lear Company or any Sale Company is party or by which it is bound is a valid and binding
obligation of such Person and, to the Knowledge of Lear, the other parties thereto, except in
either case to the extent that their enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles. Except as set forth in Schedule
4.10, to the Knowledge of Lear, the Relevant Lear Companies and the Sale Companies have
performed in all material respects the obligations required to be performed by them under each of
the Lear Material Contracts prior to the date hereof and none of them are (with or without the
lapse of time or the giving of notice, or both) in breach or default in any respect thereunder nor
have any of them received any written notice of default or termination of any Lear Material
Contract from any party thereto, except in any such case for any breach,

 

 

default or termination which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Lear has made available to the Company complete copies
of the Lear Material Contracts.

     4.11 Litigation. Except as disclosed in Schedule 4.11, there is no action,
suit, investigation, arbitration or administrative or other proceeding before any court or
arbitrator or any Governmental Authority pending or, to the Knowledge of Lear, threatened, (i)
against or affecting the Business, any Lear Company in connection with the Business, any of the
Sale Companies or any of the Purchased Assets, (ii) against a Lear Company by any Employee in
respect of his or her employment or participation in, or benefits under, any Benefit Plan; or (iii)
which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement and/or the Ancillary Agreements. There are no
outstanding Orders (whether rendered by a court, administrative agency, arbitral body or
Governmental Authority) against any Lear Company in respect of the Business, the Purchased Assets
or the Assumed Liabilities.

     4.12 Compliance with Laws. No Lear Company (in connection with the Business) and none
of the Sale Companies is or has ever been in violation of any applicable Law or Order that could
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Each
Relevant Lear Company and each of the Sale Companies has all material Permits required under any
applicable Law for the conduct of the Business as presently conducted by it (collectively, the
“Business Permits”). Except as set forth in Schedule 4.12, each Business Permit is
valid and in full force and effect and neither the execution of this Agreement nor the Closing do
or will in any material respect constitute or result in a default under or violation of any such
Business Permit.

     4.13 Title to Assets. Each Relevant Lear Company and each of the Sale Companies has
good title to, or in the case of leased property has valid leasehold interests in, all personal
property presently held or used by it free and clear of all Liens, except for Permitted Liens. The
tangible assets owned or used by the Relevant Lear Companies (in connection with the Business) and
the Sale Companies have been maintained in all material respects in accordance with normal industry
practice, are in all material respects in good operating condition and repair (subject to normal
wear and tear), and are suitable in all material respects for the purpose for which they are
presently used.

     4.14 Real Property. Except as set forth in Schedule 4.14, none of the
Relevant Lear Companies (in connection with the Business) and none of the Sale Companies has any
ownership in any real property or leasehold interest in any real property. Except as set forth in
Schedule 4.14, the Real Property constitutes all of the real property used in the Business
by Lear and/or its Affiliates. The Relevant Lear Companies hold their interests in the Real
Property free and clear of all Liens other than Permitted Liens. The leases, licenses and
subleases related to the Real Property (the “Property Agreements”) are valid and subsisting
leases, licenses or subleases which are in full force and effect with respect to the Relevant Lear
Company that is a party thereto and, to the Knowledge of Lear, the other parties thereto, and none
of the Lear Companies or, to the Knowledge of Lear, any other party thereto, is in material default
thereunder. There is no dispute between any Lear Company on the one hand and the other parties to
the Property Agreements on the other hand. The buildings and other structures on the Real Property
are in materially good and substantial repair and fit for the purposes for which they are used.
All documents necessary to prove the title of the relevant Lear Company to or in the owned Real
Property have been duly registered where necessary and are in the

 

 

exclusive possession or under the exclusive control of such Relevant Lear Company free from
any rights and interests of any third parties.

     4.15 Environmental Matters. Except as set forth in Schedule 4.15:

          (a) Each Lear Company (in connection with the Business) and the Sale Companies have complied
and are complying in all material respects with all Laws which protect or relate to the protection
of the environment (including the production, emission, storage, transportation, treatment,
recycling or disposal of any waste or hazardous substance) and/or the health and well-being of
human beings (“Environmental Laws”) and all recommendations, requests or demands from any
body or Governmental Authority charged with overseeing or enforcing Environmental Laws.

          (b) In the past three years, none of the Lear Companies (in connection with the Business) or
any of their respective officers, directors, or employees (in their capacities as such with respect
to the Business) has been a party to any civil or criminal liability in relation to any matters
relating to compliance with Environmental Laws and, to the Knowledge of Lear, there are no matters
or circumstances which might give rise to any such court or administrative proceedings. The Lear
Companies (in connection with the Business) have made or obtained all registrations,
authorizations, permissions, consents, Permits or licenses required for the carrying on of the
Business and have complied in all material respects with all conditions attaching thereto.

          (c) To the Knowledge of Lear, none of the Real Property (i) is contaminated in any material
respect by any hazardous substance or (ii) comprises reclaimed, made or filled land.

     4.16 Intellectual Property. Schedule 4.16(a) sets forth a true and complete
list of all Owned Intellectual Property and Lear Business IP that is Registered. Subsequent to the
Closing, neither Lear nor any Lear Affiliate will own or control any Business IP. Immediately
subsequent to the Closing, except with respect to those patents identified on Schedule
4.16(a) as “unwarranted patents” and subject to any rights granted under the Business IP
Agreements, the Lear IP Agreements, or the Intellectual Property Transfer and License Agreement,
the Company and/or the Sale Companies will be the exclusive owners of all Owned Intellectual
Property and Lear Business IP, free and clear of all Liens other than Permitted Liens. Except with
respect to the Lear IP Agreements or Business IP Agreements listed in Schedule 4.5(c), the
consummation of the transactions contemplated by this Agreement will not result in the terminations
or impairment of any Owned Intellectual Property, Lear Business IP or Intellectual Property Right
licensed to the Company or the Sale Companies pursuant to the Business IP Agreements or Lear IP
Agreements. Except as set forth in Schedule 4.16(c), to the Knowledge of Lear, the conduct
of the Business as presently conducted does not infringe upon any Intellectual Property Right of
any third party. Except as set forth in Schedule 4.16(c), there is no claim, suit, action
or proceeding that is either pending or, to the Knowledge of Lear, threatened, that, in either
case, involves a claim of infringement by any Lear Company (in connection with the Business) of any
Intellectual Property Right of any third party, or challenging their ownership, right to use, or
the validity of any Intellectual Property Right listed or required to be listed in Schedule
4.16(c). To the Knowledge of Lear, there is no continuing infringement by any other Person of
any of the Intellectual Property Rights listed or required to be listed in Schedule
4.16(c). No Lear Company (in connection with the Business) has disclosed or permitted to be
disclosed or undertaken or arranged to disclose to any person any of its know-how, secrets,
confidential information, technical processes or lists of customers or suppliers

 

 

other than disclosures which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

     4.17 Employees.

          (a) Schedule 4.17(a) sets forth a true, complete and correct list of all Employees
earning in excess of $150,000 per annum, containing the following details with respect of each
Employee: (i) name, (ii) the start date and term of service, (iii) the total annual gross salary
for the most recently completed and current fiscal year, (iv) the total bonus and other incentive
compensation for the most recently completed fiscal year and the projected bonus and incentive
compensation for the current fiscal year, and (v) if applicable, the effective date on which any
fixed term employment Contract ends or the effective date on which any employment Contract of any
Employee ends where notice has been given or received to terminate such employment contract.

          (b) Schedule 4.17(b) sets forth a true, complete and correct list, for each relevant
jurisdiction separately, of all collective bargaining agreements with respect to the Employees to
which any of Lear Companies (with respect to the Business) is a party or by which any of them are
bound. Except as set for in Schedule 4.17(b), no Lear Company has a duty to bargain with a
labor organization (with respect to the Business), and no labor organization is certified as the
collective bargaining representative for any Employees of the Business. There are no oral or
written agreements, arrangements or understandings that modify the written terms and conditions of
the collective bargaining agreements set forth on Schedule 4.17(b) or their application.

          (c) The Lear Companies (with respect to the Business) and the Sale Companies have complied in
all material respects with their duties under labor and employment Laws and employment-related
Contracts, including all collective bargaining agreements, with respect to Employees, unions and
Government Authorities.

          (d) All payments to Employees and social security authorities relating to salaries, wages, or
severance payments in the context of earlier terminations, and premiums for insured benefits or
employer contributions to pension schemes under any Benefit Plans, in each case due prior to the
Closing, and all income tax deductions for which the employer is responsible under applicable Law,
have been made by the Lear Companies (to the extent applicable to Employees) or the Sale Companies
in a timely manner and in the correct amount; and no social security or tax authority has issued a
notice of deficiency with respect to such payment.

          (e) No Lear Company (with respect to the Business) nor any of the Sale Companies is in breach
in any material respect (in respect of the Employees) of any work safety regulations or in default
in any material respect with payments to workman’s compensation institutions or institutions with a
similar economic purpose.

          (f) Schedule 4.17(f) sets forth a true, complete and correct list of all Contracts
entered into by a Lear Company (with respect to the Business) or any of the Sale Companies, which
require the relevant employer to make any severance payment or payment with a similar economic
effect in case of a termination of employment of any Employee. For the avoidance of doubt,
collective bargaining agreements shall not fall under this clause, nor shall any statutorily
imposed obligation.

 

 

          (g) Schedule 4.17(g) sets forth a true, complete and correct list of all strikes,
walkouts, lockouts and, to the Knowledge of Lear, slowdowns and other work stoppages, for each
relevant jurisdiction separately, which have occurred within the last three years prior to the date
hereof with respect to Employees or the Business. There are no ongoing or threatened strikes, slow
downs, work stoppages, lockouts or other similar labor relations problems with respect to
Employees. To the Knowledge of Lear, no event has occurred that may provide the basis for any such
work stoppage or labor dispute. There is no lockout of any Employees by any Lear Company, and no
Lear Company contemplates such action. All of the Lear Companies are in compliance with their
obligations pursuant to the Worker Adjustment and Retraining Notification Act of 1988, as amended
(“WARN”), and any similar state or local law, in respect of the Business. Except as set
forth on Schedule 4.17(g), no Lear Company with respect to the Business has had any layoffs
of Employees within 90 days prior to the Effective Date or has taken any action which would
constitute a “plant closing” or “mass layoff” within the meaning of the WARN or issued any
notification of a plant closing or mass layoff required by WARN.

          (h) To the Knowledge of Lear, as of the Closing Date, there is no payment or compensation due
to Employees for any employee inventions which entitle such individuals to any payment or
compensation beyond their regular salary or wage. To the Knowledge of Lear, no employee, director,
agent, consultant or contractor of any Lear Company in connection with the Business is a party to,
or otherwise bound by, any Contract, including any confidentiality, non-competition or proprietary
rights agreement, with any other Person that in any way adversely affects or will affect (i) the
performance of his or her duties for the Sales Companies, (ii) his or her ability to assign to a
Sale Company rights to any invention, improvement, discovery or information relating to the
business of the Sale Companies free of any Liability or obligation of any Sale Company, or (iii)
the ability of the Sale Companies to conduct their business. Except as disclosed in Schedule
4.17(h), there are no employment-related change-in-control Contracts or Contracts with
change-in-control provisions in place which give rise to any payment or benefit to any Employee as
a result of the transactions contemplated under this Agreement and for which any of the Sale
Companies is or would be liable.

          (i) Except as set forth on Schedule 4.17(i), to the Knowledge of Lear, all current
Employees who are employed in the U.S. are legally authorized to work in the United States. Except
as described on Schedule 4.17(i), to the Knowledge of Lear, all Lear Companies have
completed and retained the necessary employment verification paperwork under the Immigration Reform
and Control Act of 1986 (“IRCA”) for the Employees hired prior to the Effective Date, and
have complied with anti-discrimination provisions of the IRCA. Further, at all times prior to the
Effective Date, to the Knowledge of Lear, all Lear Companies (with respect to the Business) were in
material compliance with both the employment verification provisions (including without limitation
the paperwork and documentation requirements) and the anti-discrimination provisions of IRCA.

          (j) Except as set forth on Schedule 4.17(j), to the Knowledge of Lear, there is not
(i) any organizing campaign or organizing activities by a labor organization directed at any
Employees; (ii) any representation proceedings or petitions filed or contemplated by a labor
organization to seek representation of any Employees; and (iii) any written demand by a labor
organization against Lear or a Lear Company that Lear or a Lear Company recognize such labor
organization as the bargaining representative of any Employees. Except as described on
Schedule 4.17(j), neither any Lear Company nor any of the Sale Companies is a party to any
agreement with a labor organization regarding neutrality, card check procedures or other such
representational agreements regarding Employees.

 

 

          (k) Except as set forth on Schedule 4.17(k), there is no unfair labor practice charge
or complaint or other proceeding pending or, to the Knowledge of Lear, threatened against any Lear
Company relating to the Business, nor are there any material grievances, or arbitration proceedings
pending or, to the Knowledge of Lear, threatened against any Lear Company relating to the Business.

          (l) Except as set forth on Schedule 4.17(l), no Lear Company is subject to or the
target of any corporate campaign by a labor organization or any other organization, nor to the
Knowledge of Lear, is a corporate campaign threatened against any Lear Company relating to the
Business.

     4.18 Indebtedness of the Sale Companies. Except as disclosed in Schedule
4.18, (i) no Sale Company has outstanding any Indebtedness; (ii) none of the Relevant Lear
Companies (in connection with the Business) or the Sale Companies is or has agreed to become bound
by any surety obligation and there is not now outstanding any surety obligation given for the
accommodation of or in respect of any Liability of a Relevant Lear Company (in connection with the
Business), the Sale Companies or the Business; and (iii) none of the Relevant Lear Companies (in
connection with the Business) or the Sale Companies has created or agreed to create and nor is
there subsisting any Lien (other than Permitted Liens) over all or any of its property, assets, or
share capital.

     4.19 Accounts Receivable. All of the accounts receivable (net of any applicable
reserves) of the Relevant Lear Companies (in connection with the Business), the Sale Companies or
included in the Purchased Assets represent valid and enforceable claims and have been recorded on
the books and records of the Business in the Ordinary Course of Business in accordance with the
applicable agreements giving rise to such accounts receivable and the normal accounting practices
of the Business.

     4.20 Assets. The Purchased Assets and, upon completion of the Reorganization, the
assets transferred to the Sale Companies pursuant to the Reorganization constitute all of the
assets currently required to conduct the Business in substantially the same manner and to the
extent presently conducted, other than (i) as disclosed in Schedule 4.20 and (ii) the
assets and services that are to be provided to the Company pursuant to any Ancillary Agreements
(including, for the avoidance of doubt, the Transition Services Agreement). Assuming the receipt
of the consents set forth in Schedule 4.5, there exists no condition, restriction or
reservation affecting the title to or utility of the Purchased Assets or Assumed Liabilities which
would prevent the Company and the Sale Companies from utilizing the Purchased Assets and the Sale
Companies’ assets or enforcing the rights under the Assumed Liabilities, or any part thereof,
immediately following the Closing, to the same extent that the Relevant Lear Companies and the Sale
Companies might continue to do so if the sale and transfer contemplated hereby did not take place.
All tooling included in the Purchased Assets is properly identified in all material respects in the
books and records of the Relevant Lear Companies and the Sale Companies.

     4.21 Inventories. The inventory (i) included in the Purchased Assets and (ii) owned
by the Relevant Lear Companies (in connection with the Business) and the Sale Companies consists of
a quantity and quality usable and salable in the Ordinary Course of Business, is not physically
damaged, previously used, obsolete, discontinued or excess, is merchantable and fit for its
intended use, subject, in each case, only to the reserve for inventory write-down which, as of the
Balance Sheet Date, was fairly presented on the face of the Balance Sheet (rather than in any notes
thereto). Except for inventory in-transit, no inventory included in the Purchased

 

 

Assets or owned by the Relevant Lear Companies (in connection with the Business) and the Sale
Companies is in the possession of a Person other than a Relevant Lear Company or a Sale Company.

     4.22 Customers and Suppliers. Schedule 4.22 sets forth a true, complete and
correct list of the Business’s 5 largest customers (“Lear Significant Customers”) and 10
largest suppliers (“Lear Significant Suppliers”) by volume of sales (by dollar volume) and
purchases (by dollar volume), respectively, for each of 2005 and the first 10 months of 2006.
Except as set forth on Schedule 4.22, since December 31, 2005, no Relevant Lear Company or
Sale Company has received any written indication from any Lear Significant Customer or Lear
Significant Supplier to the effect that such customer or supplier will stop buying or supplying
materials, products or services from or to the Business, which could reasonably be expected to have
a Material Adverse Effect.

     4.23 Affiliated Transactions. To the Knowledge of Lear, no director, officer,
employee of any Lear Company (or any individual related by blood, marriage or adoption to any such
individual or any entity in which any such individual owns any beneficial interest in excess of 10
percent) is a party to any Lear Material Contract or has any interest in any asset or Liability of
the Sale Companies, any Purchased Asset or any Assumed Liability.

     4.24 Insurance Policies. Set forth in Schedule 4.24 is a list of all
insurance policies in force covering or relating to the properties, operations or personnel of the
Business and the Sale Companies. All of such insurance policies are in full force and effect, and
no insured is in default in any material respect with respect to any of its obligations under any
of such insurance policies.

     4.25 Product Warranties; Product Liability Claims. Set forth on Schedule 4.25
are the standard forms of product warranties and guarantees used by or in the Business and any
other product warranties or guarantees given by a Lear Company in connection with the Business that
are materially different from such standard forms. Except as specifically described on
Schedule 4.25, no product warranty, product liability, product recall or similar claims
have been made against or with respect to the Business since the Balance Sheet Date except for
routine claims. No Person (including, but not limited to, Governmental Authorities of any kind)
has asserted in writing any claim against a Lear Company or the Business under any Law relating to
unfair competition, false advertising or other similar claims arising out of product warranties,
guarantees, specifications, manuals or brochures or other advertising materials used by or in the
conduct of the Business. No product produced or sold by the Business in the past three years has
been the subject or source of a product recall.

     4.26 Finders’ Fees. Except as disclosed in Schedule 4.26, there is no
investment banker, broker, finder or other intermediary which has been retained by or is authorized
to act on behalf of any Lear Company who might be entitled to any fee or other commission in
connection with the transactions contemplated by this Agreement.

     4.27 Full Disclosure. No representation or warranty of Lear herein and no statement,
information or certificate furnished or to be furnished by a Lear Company pursuant hereto or in
connection with the transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary in order to make the
statements contained herein or therein not misleading.

 

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to Lear as of the date hereof and the Closing Date as set
forth below.

     5.1 Corporate Existence and Power. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware. IACNA is a limited
liability company duly formed, validly existing and in good standing under the laws of the State of
Delaware. Each of the Company and IACNA has all necessary power and all material governmental
licenses, authorizations, Permits, consents and approvals required to carry on its business as now
conducted. IACNA was formed on November 14, 2006 and the Company was formed on November 17, 2006.
At all times since its formation through consummation of the transactions contemplated hereunder,
the Company and IACNA have not had and will not have any assets or liabilities (other than its
rights and obligations under this Agreement, nominal expenses related to their organization and
assets acquired and Liabilities incurred in contemplation of the transactions contemplated hereby)
and have not and will not conduct any business of any nature.

     5.2 Corporate Authorization; Enforceability. The execution, delivery and performance
by the Company and IACNA of this Agreement and each of the Ancillary Agreements to which it or
IACNA will be a party at the Closing are, and will be at the Closing, within its corporate powers
and have been duly authorized and no other action on the part of the Company or IACNA, as
applicable, is necessary to authorize this Agreement or any of the Ancillary Agreements to which
any of them will be a party at the Closing. This Agreement has been, and each of the Ancillary
Agreements to which the Company and IACNA will be a party at the Closing will have been, duly
executed and delivered by the Company and IACNA, as applicable. Assuming the due execution and
delivery of this Agreement and each of the Ancillary Agreements to which the Company or IACNA will
be a party at the Closing by Lear, its affiliates and the Sale Companies, this Agreement
constitutes, and each Ancillary Agreement to which the Company or IACNA will be a party at the
Closing will constitute at the Closing, valid and binding agreements of the Company or IACNA,
enforceable against them in accordance with their terms, except to the extent that their
enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors’ rights generally and by general equitable
principles.

     5.3 Capitalization. (a) The authorized capital stock of IACNA consists of
1,500,000,000 shares of capital stock, of which 1,000,000,000 shares are designated as common stock
and 500,000,000 shares are designated as preferred stock. Except as contemplated in the LLC
Agreement and except for the Common Stock Warrant referred to therein, there are no shares of IACNA
common stock and no subscriptions, options, warrants or other rights (contingent or otherwise) to
purchase or otherwise acquire shares of IACNA common stock or other securities of IACNA authorized,
issued or outstanding, nor is IACNA obligated in any other manner to issue shares of IACNA common
stock, subscriptions, warrants, options, convertible securities, or other such rights or to
distribute to holders of any of its equity securities any evidence of indebtedness or assets.
IACNA is the sole and exclusive shareholder and beneficial equity owner of the Company. Except for
the LLC Agreement and the Registration Rights Agreement, there are no voting trusts or other
agreements or understandings to which IACNA is a party or by which IACNA is bound with respect to
the voting, transfer or other disposition of shares of capital stock. The common stock of the
Company to be issued to IACNA will, when issued, be

 

 

duly and validly authorized and issued, fully paid and non-assessable. IACNA has not violated
any applicable Laws in connection with the offer, sale or issuance of any of its capital stock.

     (b) The authorized capital stock of the Company consists of 100 shares of common stock.
Except as contemplated in the LLC Agreement, there are no shares of Company common stock and no
subscriptions, options, warrants or other rights (contingent or otherwise) to purchase or otherwise
acquire shares of Company common stock or other securities of the Company authorized, issued or
outstanding, nor is the Company obligated in any other manner to issue shares of Company common
stock, subscriptions, warrants, options, convertible securities, or other such rights or to
distribute to holders of any of its equity securities any evidence of indebtedness or assets.
IACNA is the sole and exclusive shareholder and beneficial equity owner of the Company. Except for
the LLC Agreement and the Registration Rights Agreement, there are no voting trusts or other
agreements or understandings to which the Company is a party or by which the Company is bound with
respect to the voting, transfer or other disposition of shares of capital stock. The common stock
of the Company to be issued to IACNA will, when issued, be duly and validly authorized and issued,
fully paid and non-assessable. The Company has not violated any applicable Laws in connection with
the offer, sale or issuance of any of its capital stock.

     5.4 Non-Contravention; Consents. The execution, delivery and performance by the
Company and IACNA of this Agreement and of each Ancillary Agreement to which it will be a party at
the Closing do not and will not at the Closing (a) violate the certificate of formation or
operating agreement (or equivalent documents) of the Company or IACNA, (b) violate in any material
respect any applicable Law or Order, (c) except as set forth in Section 3.1(a), require any filing
with or Permit, consent or approval of, or the giving of any notice to, any Person, (d) result in a
violation or breach of, conflict with, constitute (with or without due notice or lapse of time or
both) a default under, or give rise to any right of termination, cancellation or acceleration of
any right or obligation of IACNA or the Company or to a loss of any benefit to which it is
otherwise entitled, (e) result in the creation or imposition of any material Lien on any of its
assets, except, in the case of clause (c) above, for any such filings, Permits, consents, approvals
or notices, the failure to obtain or make would not be material to the Business.

     5.5 Litigation. There is no action, suit, investigation, arbitration or
administrative or other proceeding before any court or arbitrator or any Governmental Authority
pending or, to the Knowledge of the Company, threatened (i) against or affecting the Company or
IACNA or (ii) which in any manner challenges or seeks to prevent, enjoin, alter or materially delay
the transactions contemplated by this Agreement and/or the Ancillary Agreements. There are no
outstanding Orders (whether rendered by a court, administrative agency, arbitral body or
Governmental Authority) against the Company or IACNA.

     5.6 Compliance with Laws. The Company and IACNA are not, and have never been, in
violation of any applicable Law or Order that could reasonably be expected to have, individually or
in the aggregate, a material adverse effect on the Company or IACNA.

     5.7 Finders’ Fees. Except as set forth on Schedule 5.7, there is no
investment banker, broker, finder or other intermediary which has been retained by or is authorized
to act on behalf of the Company or IACNA who might be entitled to any fee or other commission in
connection with the transactions contemplated by this Agreement.

     5.8 Full Disclosure. No representation or warranty of the Company or IACNA herein and
no statement, information or certificate furnished or to be furnished by or on behalf the

 

 

Company or IACNA pursuant hereto or in connection with the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements contained herein or therein not misleading.

ARTICLE VI

COVENANTS

     6.1 Conduct of Business. During the period from the date of this Agreement to the
Closing Date, Lear will, and will cause the other Lear Companies to, conduct the Business in the
Ordinary Course of Business, except as otherwise expressly contemplated by this Agreement or as set
forth in Schedule 6.1. Without limiting the generality or effect of the foregoing, except
as otherwise expressly contemplated by this Agreement or as set forth in Schedule 6.1,
prior to the Closing Date Lear will, and will cause each other Lear Company to, in connection with
the operation of the Business:

          (i) Use its commercially reasonable efforts to keep the Business intact and not take
any action or do anything other than in the Ordinary Course of Business as presently
conducted, and use its commercially reasonable efforts to keep intact, to preserve and
maintain the goodwill associated with the Business and the material trading relationships of
the Business (including with customers, suppliers and distributors);

          (ii) Continue existing practices relating to maintenance of the Purchased Assets and
the other assets of the Business;

          (iii) Not (A) sell, lease or dispose of, or enter into any lease, agreement or other
Contract for the purchase, sale, lease or disposition of, or subject to a Lien (other than a
Permitted Lien), any material asset that would be, but for such transaction, an asset of the
Business other than in the Ordinary Course of Business or (B) sell or dispose of a capital
asset having an individual fair market value of more than $1,000,000 other than in the
Ordinary Course of Business;

          (iv) Not waive any material rights related to the Business or any rights that
constitute Purchased Assets or forgive or cancel any Indebtedness owing to a Lear Company in
connection with the Business or constituting a Purchased Asset, in any case other than in
the Ordinary Course of Business;

          (v) Not incur any Indebtedness or guarantee any debt or other liability of any other
Person that would constitute an Assumed Liability or a Liability of a Sale Company (other
than a Retained Sale Company Liability);

          (vi) Not increase the compensation, including bonuses and incentive compensation,
payable or to become payable to any Employee whose annual base compensation exceeds $150,000
except as required under a Contract listed in Schedule 6.1(vi) and except in the
Ordinary Course of Business;

          (vii) Not enter into any employment Contract in respect of a Employee entitled to a
base salary of $150,000 or more per annum;

 

 

          (viii) Not adopt or enter into or vary any Benefit Plan or the material policies
thereunder, except as required by Law or the terms of the Benefit Plan as in effect on the
date hereof;

          (ix) Not make any material changes to the accounting policies or procedures applicable
in respect of the Business or the Sale Companies except as may be required by GAAP;

          (x) Not settle any material litigation to which the Business or a Lear Company (in
connection with the Business) is a party;

          (xi) Not enter into or amend (other than in the Ordinary Course of Business) any
Contract of a type described in Section 4.10; and

          (xii) Not enter into any Contract or take any other action that would be inconsistent
with any of the foregoing.

     6.2 Conduct of the Company. During the period from the date of this Agreement to the
Closing Date, except as may be required in connection with the consummation of the transactions
contemplated hereby, neither the Company nor IACNA will acquire any asset, enter any Contract,
incur any liability of any nature, or modify or amend or become obligated in any manner with
respect to any shares of capital stock or other equity securities or the capital structure of the
Company or IACNA. In addition, during such period, the Company will give Lear prior written notice
of the submission of any bid or other proposal by or on behalf of the Company or IACNA to acquire
by stock purchase, asset purchase or otherwise any Person.

     6.3 Conduct of the Sale Companies. During the period from the date of this Agreement
to the Closing Date, except as contemplated by Section 6.21 or except as otherwise undertaken in
the Ordinary Course of Business in the conduct of the Business after the Reorganization, Lear will
not permit a Sale Company to acquire any asset, enter any Contract, incur any liability of any
nature, or modify or amend or become obligated in any manner with respect to any shares of capital
stock or other equity securities or the capital structure of such Sale Company.

     6.4 Investigation. (a) Prior to the Closing, upon reasonable notice from the Company
to Lear given in accordance with this Agreement, Lear will, and will cause the other Lear Companies
to, afford to the officers, attorneys, accountants or other authorized representatives of the
Company reasonable access during normal business hours to the facilities, assets and the books and
records of the Business and the Lear Companies so as to afford the Company a reasonable opportunity
to make such review, examination and investigation of the Business as it may reasonably desire to
make; provided, however, that no Lear Company shall be required to violate any
obligation of confidentiality to which it is subject or to waive any privilege which it may possess
in discharging its obligations pursuant to this Section 6.4(a). The Company agrees that such
investigation shall be conducted in such a manner as not to interfere unreasonably with the
operations of the Business. Notwithstanding the foregoing, nothing in this Section 6.4(a) shall
permit the Company to conduct any soil, groundwater or other environmental sampling without Lear’s
prior written consent. The Company will be permitted to make extracts from or to make copies of
such books and records as may be reasonably necessary. The Company will not contact any employee
of the Business or the Lear Companies without previously consulting with an authorized
representative of Lear. Prior to the Closing, Lear will furnish to the Company, or cause to be
furnished to the Company, such

 

 

financial and operating data and other information pertaining to the Business as the Company
may reasonably request.

          (b) Prior to the Closing, upon reasonable notice from Lear to the Company given in accordance
with this Agreement, the Company will afford to the officers, attorneys, accountants or other
authorized representatives of Lear reasonable access during normal business hours to the
facilities, assets and the books and records of the Company and IACNA so as to afford Lear a
reasonable opportunity to make, at its cost and expense, such review, examination and investigation
of the Company and IACNA as it may reasonably desire to make. Lear will be permitted to make
extracts from or to make copies of such books and records as may be reasonably necessary. Prior to
the Closing, the Company and IACNA will furnish to Lear such financial data and other information
pertaining to the Company and IACNA as Lear may reasonably request.

          (c) The parties agree that any exchange of information prior to the Closing shall be in
compliance with all Antitrust Laws. The parties agree to ensure that information that its officers
or other authorized representatives acquire, or to which they have access, is not used prior to the
Closing in connection with any other activities that the respective party may have in the same (or
related) market as the other party.

     6.5 Reasonable Best Efforts. (a) The parties will cooperate and use their respective
reasonable best efforts to satisfy the conditions to Closing contained in this Agreement and to
take, or cause to be taken, all appropriate actions, and to make, or cause to be made, all filings
necessary, proper or advisable under applicable Laws to consummate and make effective the
transactions contemplated by this Agreement, including their respective reasonable best efforts to
obtain, as soon as reasonably practicable after the date hereof, all licenses, Permits, consents,
approvals, authorizations, qualifications and orders of Governmental Authorities and parties to
Contracts as are necessary to consummate the transactions contemplated by the Agreement and to
fulfill the conditions to the sale contemplated hereby; provided, however, that no
party shall have any obligation to expend money, commence or participate in any litigation or offer
or grant any accommodation (financial or otherwise) to any third Person in order to obtain any such
consents, approvals or waivers. The parties will cooperate with each other in connection with any
such filing (including, to the extent permitted by applicable Law, providing copies of all such
documents to the non-filing parties prior to filing and considering all reasonable additions,
deletions or changes suggested in connection therewith) and in connection with resolving any
investigation or other inquiry of any Governmental Authority with respect to any such filing or any
such transaction. Each such party shall use commercially reasonable efforts to furnish to each
other all information required for any application or other filing to be made pursuant to any
applicable Law in connection with the transactions contemplated by this Agreement. Each such party
shall promptly inform the other parties hereto of any oral communication with, and provide copies
of written communications with, any Governmental Authority regarding any such filings or any such
transaction. No party hereto shall independently participate in any formal meeting with any
Governmental Authority in respect of any such filings, investigation, or other inquiry without
giving the other parties hereto prior notice of the meeting and, to the extent permitted by such
Governmental Authority, the opportunity to attend and/or participate. The parties may, as each
deems advisable and necessary, reasonably designate any competitively sensitive material provided
to the other under this Section 6.5 as “outside counsel only.” Such materials and the information
contained therein shall be given only to the outside legal counsel of the recipient, and economists
or other agents engaged by such outside counsel, and will not be disclosed by such outside counsel
to

 

 

employees, officers, or directors of the recipient, unless express written permission is
obtained in advance from the source of the materials.

          (b) Each of the parties shall use its commercially reasonable efforts to resolve such
objections, if any, as may be asserted by any Governmental Authority with respect to the
transactions contemplated by this Agreement under any Antitrust Laws. In connection therewith, if
any legal proceedings are instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement is in violation of any Antitrust Law, each of the parties shall
cooperate and use its commercially reasonable efforts to contest and resist any such legal
proceeding, and to have vacated, lifted, reversed, or overturned any decree, judgment, injunction
or other order whether temporary, preliminary or permanent, that is in effect and that prohibits,
prevents, or restricts consummation of the transactions contemplated by this Agreement, including
by pursuing all available avenues of administrative and judicial appeal and all available
legislative action, unless, by mutual agreement, the Company and Lear decide that litigation is not
in their respective best interests. Each of the parties shall use its commercially reasonable
efforts to take such action as may be required to cause the expiration of the notice periods under
any applicable Antitrust Laws with respect to such transactions as promptly as possible after the
execution of this Agreement. In connection with and without limiting the foregoing, the Company
and Lear agree to, and to cause their Affiliates and representatives to, use commercially
reasonable efforts to take promptly any and all steps necessary to avoid or eliminate each and
every impediment under any Antitrust Laws that may be asserted by any antitrust or competition
authority, so as to enable the parties to close the transactions contemplated by this Agreement as
expeditiously as possible.

          (c) Each of the Company and Lear will consult and cooperate with one another, and consider in
good faith the views of one another, in connection with any analyses, appearances, presentations,
memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party
hereto in connection with proceedings under or relating to any Antitrust Law. Each of the Company
and Lear will (i) promptly (but not later than the close of business on the twentieth (20th) day
after the date hereof) submit the required Notification and Report Form under the Hart-Scott-Rodino
Act and all other filings required in connection with obtaining applicable approvals under
Antitrust Law, (ii) promptly notify the other party of any written communication to that party from
any Governmental Authority located in the U.S. and, to the extent practicable, outside of the U.S.
and, subject to applicable Law, if practicable, permit the other party to review in advance any
proposed written communication to any such Governmental Authority and incorporate the other party’s
reasonable comments, (iii) not agree to participate in any substantive meeting or discussion with
any such Governmental Authority in respect of any filing, investigation or inquiry concerning this
Agreement or the transactions contemplated hereby unless, to the extent reasonably practicable, it
consults with the other party in advance and, to the extent permitted by such Governmental
Authority, gives the other party the opportunity to attend and (iv) to the extent reasonably
practicable, furnish the other party with copies of all correspondence, filings and written
communications between them and their Affiliates and their respective officers, directors,
employees, agents, representatives, consultants, financial advisors, attorneys, accountants and
other agents on one hand, and any such Governmental Authority or its respective staff on the other
hand, with respect to this Agreement and the transactions contemplated hereby.

          (d) Notwithstanding the foregoing provisions of this Section 6.5 or any other provisions of
this Agreement, in no event shall any party be required to agree to any of the following actions:
(i) any material prohibition of or material limitation on the ownership or operation of any
material portion of its or one of its Affiliate’s business or assets other than the

 

 

Business, (ii) any requirement that it or one of its Affiliates divest, hold separate or
otherwise dispose of any material portion of its or its Affiliate’s business or assets other than
as related to the Business, (iii) any material limitation on its ability to acquire or hold, or
exercise full rights of ownership of the material portion of the Sale Companies or the Business, or
(iv) any other limitation on its or one of its Affiliate’s ability to effectively control its
business or operations other than the Business.

          (e) The Company will pay any filing fees incurred in connection with the regulatory approvals
contemplated by Section 3.1(a), provided, however, that if this Agreement is
terminated other than as a result of a breach by the Company of any provision of this Agreement,
Lear will promptly reimburse the Company for 25% of any filing fees so incurred. Except as
provided by the foregoing sentence, the parties will pay or cause to be paid all of their own fees
and expenses contemplated by this Section 6.5, including but not limited to the fees and expenses
of any broker, finder, financial advisor, legal advisor or similar person engaged by such party.

          (f) Lear will cause the other Relevant Lear Companies to perform this Agreement.

     6.6 Injunctions. Without limiting the generality or effect of any provision of
Article III, if any Governmental Authority having jurisdiction over any party issues or otherwise
promulgates any injunction, decree or similar order prior to the Closing which prohibits the
consummation of the transactions contemplated hereby, the parties will use their respective
reasonable efforts to have such injunction dissolved or otherwise eliminated as promptly as
possible and, prior to or after the Closing, to pursue the underlying litigation diligently and in
good faith.

     6.7 Press Releases. Except for the press release in substantially the form previously
agreed to by representatives of Lear and the Company, prior to, on and for one year following the
Closing, no party will issue or cause the publication of any press release or similar public
announcement with respect to this Agreement or the transactions contemplated hereby without the
prior consent of Lear or the Company (as the case may be), which consent will not be unreasonably
withheld; provided, however, that nothing herein will prohibit any party from issuing or causing
publication of any such press release or public announcement to the extent that such party
determines such action to be required by Law or the rules of any national stock exchange applicable
to it or its Affiliates, in which event the party making such determination will, if practicable in
the circumstances, use reasonable efforts to allow the other parties reasonable time to comment on
such release or announcement in advance of its issuance.

     6.8 Post-Closing Notifications. The Company and Lear will, and each will cause its
respective Affiliates to, comply with any post-Closing notification or other requirements, to the
extent then applicable to such party, of any antitrust, trade competition, investment, control or
other Law of any Governmental Authority having jurisdiction over the Business or the transactions
contemplated hereby.

     6.9 Access. (a) On the Closing Date, or as soon thereafter as practicable, and in no
event later than 90 calendar days after the Closing Date, Lear will deliver or cause to be
delivered to the Company (or as it shall direct) all original agreements, documents, books, records
and files relating to the Business or the Sale Companies (collectively, “Records”) in the
possession of Lear or any of its Affiliates to the extent not in the possession of the Company or
the Sale Companies, except for the Excluded Records.

 

 

          (b) After the Closing, upon reasonable notice, each party hereto will give, or cause to be
given, to the representatives, employees, counsel and accountants of the other parties hereto
reasonable access, during normal business hours, to Records and other books, records, documents and
data relating to the Business or the Sale Companies with respect to periods prior to or including
the Closing Date and will permit such Persons to examine and copy such Records and other data to
the extent reasonably requested by the other party in connection with (i) tax and financial
reporting matters, audits, legal proceedings, governmental investigations and other business
purposes, (ii) the determination or enforcement of rights and obligations under this Agreement,
(iii) compliance with the requirements of any Governmental or Regulatory Authority, (iv) compliance
with any applicable Law, (v) any actual or threatened action or proceeding and (vi) the
verification of the Purchased Assets and Assumed Liabilities; provided, however, that nothing
herein will obligate any party to take actions that would unreasonably disrupt the normal course of
its business, violate the terms of any Contract to which it is a party or to which it or any of its
assets is subject or grant access to any of its proprietary, confidential or classified information
or information that is privileged or similarly protected from disclosure. The parties hereto will,
and will cause their respective Affiliates to, cooperate with each other in the conduct of any tax
audit, claim for refund of taxes or similar proceedings involving or otherwise relating to the
Business (or the income therefrom or assets thereof) with respect to any Tax as may be necessary to
carry out the intent of Section 6.14 (Tax Matters).

     6.10 Certain Contracts. (a) Notwithstanding anything to the contrary in this
Agreement, in the event that an assignment or purported assignment to the Company of any Contract
or Permit, or any claim, right or benefit arising thereunder or resulting therefrom, without the
consent of other parties thereto constituted or would constitute a breach thereof or would not
result in the Company receiving upon and after the Closing all of the rights of the applicable Lear
Company or the Business thereunder, then, in each such case, the applicable Lear Company will be
deemed not to have Transferred, and will not be obligated to Transfer, to the Company any direct or
indirect right, title or interest in or to any such Contract without first having obtained all
necessary consents and waivers. The applicable Lear Company will use commercially reasonable
efforts to obtain such consents and waivers as may be necessary to cure such potential breach or
violation or result in the Company receiving such rights; provided, however, that
no Lear Company shall have an obligation to expend money, commence or participate in any litigation
or offer or grant any accommodation (financial or otherwise) to any third Person in order to obtain
any such consents, approvals or waivers.

          (b) To the extent that the consents and waivers referred to in the immediately preceding
paragraph are not obtained, or until the breaches or violations referred to in the immediately
preceding paragraph are resolved, the applicable Lear Company will use commercially reasonable
efforts to (i) provide to the Company, at its request, the benefits of any such Contract, (ii)
cooperate in any reasonable and lawful arrangement designed to provide such benefits to the
Company, and (iii) enforce, at the request, and for the account of the Company, any rights of the
applicable Lear Company arising from any such Contract against the other party or parties to such
Contract (including the right to elect to terminate in accordance with the terms thereof upon the
direction of the Company). Notwithstanding any provision to the contrary contained herein, if the
Company requests the benefits of any such Contract and to the extent such benefits are provided to
the Company, the Company will perform or pay for the benefit of the other party or parties thereto
the obligations of the applicable Lear Company under or in connection with any such Contract and
will indemnify and hold Lear and its Affiliates harmless from any Damages relating to, resulting
from or arising out of the performance by the

 

 

applicable Lear Company or the Company or any failure by the applicable Lear Company or the
Company to so perform or pay.

     6.11 No Solicitation; Acquisition Proposals. (a) At all times prior to the Closing,
Lear will not, and will cause the other Lear Companies and its and their respective affiliates,
officers, directors, employees, agents and representatives (including any investment banker,
financial advisor, attorney or accountant retained by any of the Lear Companies) not to initiate,
solicit or knowingly encourage (including by way of furnishing information or assistance), or take
any other action intended to or which could reasonably be expected to lead to an Acquisition
Proposal, or enter into or maintain or continue discussions or negotiations with any person in
furtherance of, furnish any information to any other person with respect to, or approve, agree to,
endorse or recommend, any Acquisition Proposal.

          (b) For the purposes of this Agreement, “Acquisition Proposal” means an inquiry,
offer, proposal or other indication of interest regarding an ISD Sale. “ISD Sale” means
the sale of all or a material portion of the Business other than as contemplated hereby, whether in
the context of a sale of the Business alone or otherwise, but excluding a Lear Change in Control
Transaction. A “Lear Change in Control Transaction” means a change in control transaction
involving Lear (including any tender or exchange offer, or the execution of any acquisition
agreement involving more than thirty percent (30%) of the outstanding common stock of Lear or all
or substantially all of the assets of Lear and its subsidiaries, taken as a whole).

          (c) Lear will immediately terminate, and will cause the other Lear Companies and its and their
respective directors, officers, employees, investment bankers, financial advisors, attorneys and
other representatives, to immediately terminate all discussions or negotiations, if any, with any
third party with respect to, or any that could reasonably be expected to lead to the possibility
of, an Acquisition Proposal.

     6.12 Collection of Payments. Following the Closing Date, subject to Section 2.5(h),
(a) Lear will, and will cause its Affiliates to, promptly, forward to the Company any payments
received by Lear or its Affiliates with respect to the Business that are Purchased Assets or assets
of a Sale Company, and any checks, drafts or other instruments payable to Lear or any of its
Affiliates with respect to the Business will, when so delivered, bear all endorsements required to
effectuate the transfer of the same to the Company, (b) Lear will, and will cause its Affiliates
to, promptly forward to the Company (or as it directs) any mail or other communications received by
Lear or its Affiliates relating to the Business, (c) the Company will, and will cause its
Affiliates to, promptly forward to Lear any payments received by the Company or its Affiliates with
respect to any of Lear’s operations or business that are Excluded Assets, and any checks, drafts or
other instruments payable to Lear or any of its Affiliates shall, when so delivered, bear all
endorsements required to effect the transfer of the same to Lear, and (d) the Company will, and
will cause its Affiliates to, promptly forward to Lear (or as it directs) any mail or other
communications received by the Company or any of its Affiliates relating to any of Lear’s
operations or business other than the Business. The Company and Lear will deliver a statement in
respect of any collections received on behalf of the other.

     6.13 Financial Statements. Prior to the Closing, Lear shall deliver to the Company
within fifteen (15) days after the end of each calendar month an unaudited balance sheet and
related unaudited consolidated statement of income for the Business for the month then ended, which
financial statements shall be deemed to be included within the definition of “Financial Statements”
for purposes of Section 6.7.

 

 

     6.14 Tax Matters.

          (a) Tax Returns.

          (i) Lear shall prepare and file, or cause to be prepared and filed, all of the Sale
Companies’ Income Tax Returns for all taxable years or periods ending on or before the
Closing Date (to the extent each of the Sale Companies has not already done so). Lear shall
pay or cause to be paid any Income Taxes shown as due thereon. Lear shall prepare, or cause
to be prepared, such Income Tax Returns using accounting methods and other practices that
are consistent with those used by Lear with respect to the Sale Companies in its prior
Income Tax Returns, except as required by applicable law. Lear shall deliver, or cause to
be delivered to the Company, a draft of each of the Income Tax Returns for each of the Sale
Companies not less than ninety (90) days prior to the due date for filing such Income Tax
Returns (including extensions) in the United States, and not less than thirty (30) days
prior to the due date for filing such Income Tax Returns in foreign jurisdictions, and the
Company shall provide Lear with comments on, and proposed changes to, such Income Tax
Returns not later than sixty (60) days prior to such due date in the United States, and not
less than twenty (20) days prior to the due date for filing such Income Tax Returns in the
foreign jurisdictions. If any aspect of such Income Tax Returns remains in dispute within
thirty (30) days prior to the due date for filing such Income Tax Returns in the United
States, and within ten (10) days prior to the due date for filing such Income Tax Return in
a foreign jurisdiction, the matter in dispute shall be submitted to the Accounting Firm for
resolution. The decision of the Accounting Firm shall be final and binding on the parties,
and the Company shall bear 100% of the Accounting Firm’s fees and expenses for such
resolution.

          (ii) The Company shall prepare and file, or cause to be prepared and filed, all of the
Sale Companies’ Income Tax Returns for all taxable years or periods ending after the Closing
Date, and the Company shall pay, or cause to be paid, all Income Taxes shown as due thereon;
provided, that with respect to any Straddle Period, the Company shall be entitled to
reimbursement and indemnification as set forth in this Agreement.

          (iii) The Company shall prepare and timely file, or cause to be prepared and timely
filed, all Income Tax Returns of each of the Sale Companies that are due with respect to any
Straddle Period. The Company shall pay or cause to be paid all Income Taxes imposed on any
of the Sale Companies shown as due and owing on such Income Tax Returns, subject to
reimbursement and indemnification by Lear pursuant to this Agreement. The Company shall
prepare, or cause to be prepared, such Income Tax Returns using accounting methods and other
practices that are consistent with those used by each of the Sale Companies in its prior
Income Tax Returns, except as required by applicable law. The Company shall deliver, or
cause to be delivered, a draft of each of the Income Tax Returns for each of the Sale
Companies to Lear not less than ninety (90) days prior to the due date for filing such
Income Tax Returns (including extensions) in the United States, and not less than thirty
(30) days prior to the due dates for filing such Income Tax Returns in foreign
jurisdictions, and Lear shall provide the Company with comments on, and proposed changes to,
such Income Tax Returns not later than sixty (60) days prior to such due date in the United
States and not less than twenty (20) days prior to the due dates for filing such Income Tax
Returns in foreign jurisdictions. If any aspect of such Income Tax Returns remains in
dispute within thirty (30) days prior to the due date for filing such Income Tax Returns in
the United States,

 

 

and within ten (10) days prior to the due date for filing such Income Tax Return in a
foreign jurisdiction, the matter in dispute shall be submitted to the Accounting Firm for
resolution. The decision of the Accounting Firm shall be final and binding on the parties,
and the Company shall bear 100% of the Accounting Firm’s fees and expenses for such
resolution.

          (b) Apportionment of Income Taxes. For purposes of this Agreement, the portion of
Income Tax of any of the Sale Companies that is attributable to any Tax period that begins on or
before the Closing Date and ends after the Closing Date (a “Straddle Period”) shall be
apportioned between the period of the Straddle Period that begins before the Closing Date and
extends through the Closing Date (the “Pre-Closing Straddle Period”) and the period of the
Straddle Period that extends from the day after the Closing Date to the end of the Straddle Period
(the “Post-Closing Straddle Period”) in accordance with this Section. With respect to any
Straddle Period, the Company and Lear shall, to the extent permitted by Law, elect to treat the
Closing Date as the last day of the taxable year or period of each of the Sale Companies and shall
apportion any Income Taxes arising out of or relating to a Straddle Period to the Pre-Closing
Straddle Period under the “closing-the-books” method as described in Treasury Regulation Section
1.1502-76(b)(2)(i) (or any similar provision of state, local or foreign Law). In any case where
applicable Law does not permit any of the Sale Companies to treat the Closing Date as the last day
of the taxable year or period, any Income Taxes arising out of or relating to a Straddle Period
will be apportioned to the Pre-Closing Straddle Period based on a closing of the books of the
relevant Sale Company; provided, however, that (i) exemptions, allowances,
deductions or credits that are calculated on an annualized basis (including depreciation,
amortization and depletion deductions) shall be apportioned on a daily pro rata basis, (ii) solely
for purposes of determining the marginal tax rate applicable to income during such period in a
jurisdiction in which such tax rate depends upon the level of income, annualized income shall be
taken into account, and (iii) any net operating loss or credit carryforwards shall be used first
against income or Tax arising in the Pre-Closing Straddle Period.

          (c) Indemnification by Lear. Lear shall indemnify and hold harmless the Company and
the Sale Companies for, and shall pay to the Company the monetary value of, (i) all Income Taxes
(or the nonpayment thereof) of any of the Sale Companies for any Pre-Closing Tax Period and any
Pre-Closing Straddle Period; (ii) all Income Taxes of any member of an affiliated, combined or
unitary group of which any of the Sale Companies is or was a member on or prior to the Closing
Date, including pursuant to Treasury Regulation Section 1.1502-6 or any analogous or similar state,
local or foreign Law; (iii) any and all Income Taxes of any Person (other than any of the Sale
Companies) imposed on the Sale Companies as a transferee or successor, by contract or pursuant to
any Law, which Income Taxes relate to an event or transaction occurring on or before the Closing
Date; (iv) any adverse consequences arising, directly or indirectly, from or in connection with any
proceedings, claims, demands or assessments incidental to any of the matters set forth herein; and
(v) any Taxes imposed by a Canadian Tax authority on any Lear Company party to a Reorganization
transaction and payable by such Lear Company for any period ended prior to or including the date(s)
of the Reorganization transaction if such Tax or an amount on account of such Tax is assessed
against or otherwise becomes payable by such Sale Company as a transferee of assets of such Lear
Company, other than Transfer Taxes provided for in Section 6.14(g). In furtherance of the above,
Lear’s obligations hereunder shall be reduced by any Lear Company payments required to be paid to
the Mexican Subsidiaries under Mexican law to reimburse the Mexican Subsidiaries for their share of
Income Taxes for the period prior to the Closing (the “Mexican Tax Reimbursement”).

 

 

          (d) Indemnification by the Company. The Company shall indemnify and hold harmless
Lear and its Affiliates for any Taxes arising out of or relating to any breach of the Company’s
covenants contained herein.

          (e) Tax Sharing Agreements and Tax Elections. Lear shall cause the Sale Companies to
terminate as of the Closing Date any Income Tax sharing, Income Tax indemnity or Income Tax
allocation agreement between any of the Sale Companies and any other party. Lear shall not,
without the prior written consent of the Company (which consent may not be unreasonably withheld),
make or revoke, or cause or permit to be made or revoked, any Tax election pertaining to the Sale
Companies. Notwithstanding the above, Lear shall be entitled to cause each of the Mexican
Subsidiaries to make an election under Treasury Regulation section 301.7701-3 (a “Check the Box
Election”) to be disregarded, and the Company agrees that none of the Canadian Subsidiaries
shall make a Check the Box Election for (or which may otherwise affect) a period prior to the
Closing.

          (f) Tax Records. Lear shall make available to the Company such records as the Company
may require for the preparation of any Tax Return and such records as the Company may require for
the defense of any proceeding, claim, demand or assessment concerning such Tax Return. The Company
shall make available to Lear such records as the Lear may require for the preparation of any Tax
Return and such records as Lear may require for the defense of any proceeding, claim, demand or
assessment concerning any such Tax Return. At or prior to Closing, Lear agrees to provide copies
of any Check the Box Elections with respect to the Sale Companies and approvals thereof, if
received.

          (g) Transfer Taxes. All transfer, documentary, sales, non-refundable goods and
services, non-refundable value-added, use, stamp, registration, and other such Taxes and fees
(including any penalties and interest) imposed on the Company or a Lear Company in connection with
or in contemplation of this Agreement (“Transfer Taxes”) shall be borne and paid
three-fourths (3/4) by the Company and one-fourth (1/4) by Lear; provided, however, to the extent
the Transfer Taxes exceed $750,000, any Transfer Taxes above $750,000 shall be borne and paid by
Lear. The Company and Lear shall cooperate in filing, or causing to be filed, at the Company’s
expense all necessary Tax Returns and other documentation with respect to all such Transfer Taxes
and all such Transfer Taxes shall be paid by the Company and Lear in accordance with the terms of
this Section 6.14(g) when due.

          (h) Costs of Transferring Tax Incentives. All costs and expenses imposed on the
Company or a Lear Company in connection with this Agreement as a result of transferring or
obtaining the benefits associated with (i) currently active Tax abatements, incentives or similar
special Tax benefit programs (collectively, “Tax Incentives”) (ii) currently negotiated or
pending Tax Incentives, or (iii) currently concluded Tax Incentives shall be borne and paid as
follows: (A) in the case of Tax Incentives that will provide benefits to the Company after the
Closing, such costs and expenses shall be borne three-fourths (3/4) by the Company and one-fourth
(1/4) by Lear; and (B) in the case of all other Tax Incentives, such costs and expenses shall be
borne by Lear. The Company and Lear shall cooperate in filing, or causing to be filed, at the
Company’s expense all appropriate filings and other documentation required in connection with the
transfer of the Tax Incentives.

          (i) Cooperation; Audits. In connection with the preparation of Tax Returns, audit
examinations, and any administrative or judicial proceedings relating to the Tax liabilities
imposed on any of the Sale Companies, the Company and the Sale Companies, on the one hand, and
Lear, on the other hand, shall cooperate fully with each other, including, without

 

 

limitation, the furnishing or making available during normal business hours of records,
personnel (as reasonably required), books of account, powers of attorney or other materials
necessary or helpful for the preparation of such Tax Returns, the conduct of audit examinations or
the defense of claims by Taxing Authorities as to the imposition of Taxes. To the extent permitted
by applicable Law, the parties shall take consistent positions with respect to all Tax matters.

          (j) Certain Controversies. If any Taxing Authority issues to any Sale Company (i) a
written notice of its intent to audit, examine or conduct another proceeding with respect to Taxes
or Tax Returns of any of the Sale Companies for periods ending prior to the Closing Date or (ii) a
written notice of deficiency, a written notice of reassessment, a written proposed adjustment, a
written assertion of claim or written demand concerning Taxes or Tax Returns of any of the Sale
Companies for periods beginning on or prior to the Closing Date, the Company or the relevant Sale
Company shall notify Lear of their receipt of such communication from the Taxing Authority within
ten (10) Business Days after receiving such written notice. No failure or delay of the Company or
the relevant Sale Company in the performance of the foregoing shall reduce or otherwise affect the
obligations or liabilities of Lear pursuant to this Agreement, except to the extent that such
failure or delay shall preclude Lear from defending against any liability or claim for Taxes that
Lear is obligated to pay hereunder. The Company shall not allow any of the Sale Companies to
settle or otherwise resolve any such deficiency, reassessment, adjustment or assertion of claim or
demand without the prior written approval of Lear, which consent shall not be unreasonably withheld
or delayed. Lear shall have the right to represent the interests of the Sale Companies before the
relevant Taxing Authority with respect to any inquiry, proceeding, claim, demand or assessment or
other similar event relating to a taxable period that begins before and ends on or before the
Closing Date (a “Pre-Closing Period Tax Matter”), and Lear shall have the right to control
the defense, compromise or other resolution of any such Pre-Closing Period Tax Matter, including
responding to inquiries, filing Tax Returns and contesting, defending against and resolving any
assessment for additional Taxes or notice of Tax deficiency or other adjustment of Taxes of, or
relating to, such Pre-Closing Period Tax Matter. Lear shall not enter into any settlement of or
otherwise compromise any such Pre-Closing Period Tax Matter to the extent that it adversely affects
the Tax liability of the Company without the prior written consent of the Company, which consent
shall not be unreasonably withheld or delayed. Lear shall have the right to represent the
interests of the Sale Companies before the relevant Taxing Authority with respect to any inquiry,
proceeding, claim, demand or assessment or other similar event relating to a taxable period that
begins before but does not end on or before the Closing Date to the extent such inquiry,
proceeding, claim, demand or assessment or other similar event could give rise to a liability for
which Lear could be liable under this Agreement (a “Straddle Period Tax Matter”), and Lear
shall have the right to control the defense, compromise or other resolution of any such Straddle
Period Tax Matter, including responding to inquiries, filing Tax Returns and contesting, defending
against and resolving any assessment for additional Taxes or notice of Tax deficiency or other
adjustment of Taxes of, or relating to, such Straddle Period Tax Matter. The Company shall have
the right (but not the duty) to participate in the defense of such Straddle Period Tax Matter and
to employ counsel, at its own expense, separate from counsel employed by Lear, and Lear shall not
enter into any settlement of or otherwise compromise any such Straddle Period Tax Matter to the
extent that it adversely affects the Tax liability of the Company without the prior written consent
of the Company, which consent shall not be unreasonably withheld or delayed.

          (k) Maintenance of Tax Incentives. The Company, its Affiliates and the Sale Companies
shall use commercially reasonable efforts to continue to pursue, maintain, document, and otherwise
comply with the terms of all currently active, pending or concluded Tax Incentives with respect to
the Business, including permitting the continuance of the filing

 

 

against the Company or its Affiliates of a financing statement by the City of Iowa City with
respect to certain equipment located at the Iowa City plant through June 30, 2008; provided,
however, the above shall not restrict the Company’s ability to make business decisions with respect
to the ownership, disposition or operation of any aspect of the Business. Lear agrees to satisfy
any claims for Tax benefits associated with Tax Incentives received by a Lear Company with respect
to a period on or before the Closing Date. If the Company is unwilling or unable to continue to
pursue, maintain, or otherwise comply with the terms of any currently active, pending or concluded
Tax Incentives relating to the plants or operations in Iowa City, Iowa or Wauseon, Ohio (a
“Non-Compliance Event”), the Company agrees to provide Lear with advance notice of not less
than 60 days of an event which will trigger a Non-Compliance Event and agrees to cooperate in good
faith with Lear and to include Lear in any negotiations with governmental authorities regarding the
scope of any clawbacks or loss of refund attributable to a Non-Compliance Event, including allowing
Lear to initiate discussions with the governmental authorities regarding the same.

          (l) Tax Refunds. All Tax refunds (whether in the form of a direct payment or an
offset or credit to Taxes payable taking into account the Mexican Tax Reimbursement) plus interest
thereon, for Taxes of any Sale Company for any period ending on or before the Closing Date (or
portions thereof) shall be the property of Lear and such refunds, plus any interest earned in
connection with the refund shall be paid to Lear by the Company promptly upon receipt (or in the
case of offsets or credits, promptly upon the use of such offsets or credits to reduce Taxes
otherwise payable). The Company shall cooperate (and cause the Sale Companies to cooperate) with
Lear to obtain any refunds (including filing amended returns) that are the property of Lear.

          (m) NOL Carrybacks. To the extent permitted by applicable law, the Sale Companies
shall not carryback any net operating losses or other Tax attributes to any period ending on or
before the Closing Date and the Company and the Sale Companies shall make all necessary elections,
and cause their Affiliates, to make all necessary elections to not carryback net operating losses
or other Tax attributes to any period ending on or before the Closing Date. If any Sale Company is
required to carryback a net operating loss or other Tax attribute to a period ending on or before
the Closing Date, the Company shall indemnify and hold Lear and its Affiliates harmless from any
adverse Tax consequences resulting from such carryback (including any adverse consequences
resulting from disallowance of the item being carried back).

          (n) No Section 338 Election. The Company covenants and agrees that it shall not (and
shall not allow any Sale Company to) make an election under Code Section 338 with respect to the
acquisition of any of the Sale Companies or enter into agreement or take any action or consummate
any transaction (including, without limitation, having any Sale Company sell its assets or declare
or pay a dividend) if such election, action or transaction could increase Lear or any of its
Affiliate’s Tax Liabilities or decrease Lear or any of its Affiliate’s Tax attributes for any
period ending on or before the Closing Date.

          (o) Survival. Notwithstanding anything to the contrary in Article VIII, the parties’
obligations in this Section 6.14 shall survive until the applicable statute of limitations plus 30
days (including extensions).

     6.15 Use of Supplies and Materials Bearing Tradename.

 

 

          (a) Following the Closing, the Company and/or Sale Companies may have in inventory a quantity
of preprinted stationery, invoices, receipts, forms, advertising and promotional materials,
training and source literature, packaging materials, labels and other supplies which bear the
Retained Names.

          (b) Lear is not conveying ownership rights or granting the Company or any of its Affiliates a
license to use any of the Retained Names, except as set forth in the Intellectual Property Transfer
and License Agreement. In the event there are any inconsistencies between this Section 6.15 and
the Intellectual Property Transfer and License Agreement, the terms and provisions of the
Intellectual Property Transfer and License Agreement shall govern. The Company will, and will
cause the Sale Companies to (i) cease use of packaging, advertising, sales and promotional
materials bearing any of the Retained Names, and (ii) cease using or displaying the Retained Names
upon the earlier of (A) the date all inventory, warehoused stock and finished product held by the
Sale Companies or the Company as of the Closing has been depleted and (B) the date falling six
months after the Closing Date; provided, that the Company and the Sale Companies comply with all
Laws in any use of such materials. From and after such date, the Company shall not, and shall not
allow the Sale Companies to, sell any such inventory or use any such materials for any purpose and
shall destroy any such remaining materials. The Company shall, and shall cause the Sale Companies
to, cease using the Retained Names on buildings, vehicles, signs and other fixed assets of the
Business as soon as reasonably possible following the Closing Date and, in any event, within a
period not to exceed four (4) months after the Closing Date. The Company agrees to indemnify and
hold each Lear Indemnified Party harmless from any Damages relating to, resulting from or arising
out of use by the Company or its Subsidiaries of supplies and materials bearing any Retained Name,
and the Company agrees to indemnify and hold each Lear Indemnified Party harmless from any Damages
relating to, resulting from or arising out of the use by the Company or its Subsidiaries of
supplies and materials bearing a Retained Name, except in each case to the extent Lear is obligated
to indemnify a Company Indemnified Party with respect thereto.

          (c) The Company acknowledges that a violation of this Section 6.15 may cause Lear and its
Affiliates irreparable harm which may not be adequately compensated for by money damages. The
Company therefore agrees that in the event of any such actual or threatened violation of this
Section 6.15, Lear and any of its Affiliates shall be entitled, in addition to other remedies that
they may have, to a temporary restraining order and to preliminary and final injunctive relief
against the Company or any of its Subsidiaries to prevent any violations of this Section 6.15,
without the necessity of posting a bond.

     6.16 Further Assurances. From time to time, as and when requested by either party
hereto, the other party will execute and deliver, or cause to be executed and delivered, all such
documents and instruments and will take, or cause to be taken, all such further actions, as the
requesting party may reasonably deem necessary or desirable to make effective the transactions
contemplated by this Agreement, including executing and delivering such other instruments of
conveyance and transfer as the Company may reasonably request to more effectively convey and
transfer to, and vest in, the Company or the Sale Companies and put the Company or the Sale
Companies in possession of, any of the Purchased Assets.

     6.17 Confidential Nature of Information. Each party agrees that it will treat in
confidence all documents, materials and other information which it shall have obtained regarding
the other party during the course of the negotiations leading to the consummation of the
transactions contemplated hereby (whether obtained before or after the date of this Agreement), the
investigation provided for herein and the preparation of this Agreement and other related

 

 

documents, and, if the transactions contemplated hereby are not consummated, each party will
return to the other party all copies of nonpublic documents and materials which have been furnished
in connection therewith. Such documents, materials and information shall not be communicated to
any third Person (other than each party’s counsel, accountants, financial advisors or lenders). No
other party shall use any confidential information in any manner whatsoever except solely for the
purpose of evaluating the proposed transactions contemplated by this Agreement; provided, however,
that after the Closing, the Company may use or disclose any confidential information reasonably
related to the Business; provided, further, that to the extent that a Person receiving confidential
information hereunder may become required by law or regulation to disclose any of such confidential
information, such Person (a) may only disclose such information if it will first have used
commercially reasonable efforts to, and, if practicable, will have afforded the other party the
opportunity to, obtain an appropriate protective order or other satisfactory assurance of
confidential treatment for the information required to be so disclosed and (b) if such protective
order or other remedy is not obtained, or the other party waives such Person’s compliance with the
provisions of this Section 6.17, it will only furnish that portion of the confidential information
which is legally required to be so disclosed. The obligation of each party to treat such
documents, materials and other information in confidence shall not apply to any information (i)
which is or becomes generally available to the public other than as a result of a disclosure by the
party receiving the confidential information, (ii) that was available to the receiving party on a
non-confidential basis prior to its disclosure by the disclosing party or (iii) becomes available
to the receiving party from a Person other than the disclosing party or its Affiliates who is not,
to the receiving party’s knowledge, subject to any legally binding obligation to keep such
information confidential.

     6.18 Other Real Estate Matters. Prior to the Closing, the Company and Lear will
negotiate in good faith mutually acceptable leases on commercially reasonable terms consistent with
the terms set forth on the attached Exhibit A for the lease facilities located in Dearborn,
Michigan and Rochester Hills, Michigan relating to the management and operational support
personnel, including commercial and purchasing organizations associated with the Business.

     6.19 Change of Corporate Name. The Company acknowledges and agrees that all of the
rights (and the rights of any of its Subsidiaries, including the Sale Companies) in and to, and
ownership of, the Retained Names shall belong to Lear and its Affiliates. From and after the
Closing, the Company and its Subsidiaries shall be prohibited from using any Retained Name, except
to the extent expressly set forth in this Agreement or the Intellectual Property License Agreement.

     6.20 Certain Agreements of IACNA, WL Ross and Franklin.

          (a) Each of IACNA, WL Ross and Franklin hereby covenants and agrees that, subject to the
satisfaction or waiver of the Company’s conditions precedent set forth in Section 3.1, at Closing
it or one or more of its Affiliates shall (i) enter into each Ancillary Agreement to which it is a
party, (ii) make the capital contribution required of it under the LLC Agreement, (iii) subject to
the next sentence, make its Affiliate Loan to the Company, and (iv) make its escrow deposit as
contemplated by Section 2.4 of the LLC Agreement. WL Ross and
Franklin’s obligation to make or cause their Affiliates to make their
respective Affiliate Loans will be reduced pro rata to the extent the Company obtains debt
financing, funded at the Closing, from a third party on substantially the same or more favorable
terms as those set forth in the Promissory Notes.

          (b) Each
of IACNA, WL Ross and Franklin hereby covenants and agrees to cause
(or to cause its Affiliates to cause) the Company to
perform every covenant in this Agreement to be performed by the

 

 

Company prior to Closing. IACNA covenants and agrees to cause the capital contributions
required under Section 2.2 of the LLC Agreement to be contributed to the Company. IACNA hereby
guarantees the full and timely performance of the Company’s obligations set forth in Sections 6.14,
8.2 and 8.3.

          (c) Each of IACNA, WL Ross and Franklin, severally and not jointly, represents and warrants to
Lear, with respect to itself only, that (i) it has full capacity, power, and authority to enter
into this Agreement and to carry out its obligations set forth in this Section 6.20, (ii) the
provisions of this Section 6.20 are binding upon it and enforceable against it in accordance with
their terms, except to the extent that their enforceability may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles, (iii) no consents or approvals
(which have not been obtained) are required from any governmental authority or other person for it
to enter into this Agreement, and (iv) its execution and delivery of this Agreement, and the
performance of the obligations contemplated hereby, do not conflict with or contravene the
provisions of its charter documents, any agreement or instrument by which it or its properties are
bound or any law, rule, regulation, order or decree to which it or its properties are subject.

     6.21 Restructuring. Prior to the Closing, Lear shall cause the Lear Companies to
consummate the transactions contemplated by Exhibit H (the “Reorganization”). Lear
agrees not to take or to permit any Lear Company to take any action inconsistent with Exhibit
H without the prior written consent of the Company, which consent shall not be unreasonably
withheld or delayed. Lear will cause the Reorganization to be consummated so as to ensure that, as
of the Closing: (a) the assets owned by the Current Subsidiaries that are used primarily in the
Business are vested in the Sale Companies free and clear of Liens other than Permitted Liens and
(b) without limiting Section 2.3(b), the Liabilities of the Sale Companies will not include any
Retained Sale Company Liabilities. Lear will consult with the Company on a regular basis with
respect to the specific terms and sequencing of the Reorganization and will provide the Company
with an opportunity to review and comment on all documentation and governmental filings or notices
before they are implemented. Lear shall indemnify and hold harmless the Sale Companies for all
Damages arising out of non-compliance by a Sale Company with applicable Canadian bulk sales
legislation in connection with the Reorganization, provided that this indemnity shall not, without
limiting Section 6.14(c), apply to Damages related to the Liabilities referred to in Section
2.3(b)(i) – (iv), which Liabilities shall be retained by the Sale Company from and after Closing.

     6.22 Reimbursement for Sale Companies’ Assets. Lear shall deliver to the Company, no
later than 60 days after the Closing Date, Lear’s calculation of the Sale Companies Adjustment. If
the Company does not provide a notice of dispute to Lear with respect to Lear’s calculation of the
Sale Companies Adjustment within 30 days after Lear’s delivery of the calculation, the Sale
Companies Adjustment provided by Lear shall be deemed the finally determined Sale Companies
Adjustment. Any resolution of the Sale Companies Adjustment shall be subject to the procedures
relating to access to information and dispute resolution set forth in Section 2.5. If the amount
of the Sale Companies Adjustment is a positive number, the Company shall pay to the applicable
Stock Seller(s) promptly after the final determination of the Sale Companies Adjustment an amount
equal to the amount by which the Sale Companies Adjustment exceeds $0. If the amount of the Sale
Companies Adjustment is a negative number, Lear shall cause the applicable Stock Sellers to pay to
the Company promptly after the final determination of the Sale Companies Adjustment an amount equal
to the amount by which the Sale Companies Adjustment is less than $0. Lear and the Company shall
cause any inter-

 

 

company payables between a Sale Company and Lear or any of Lear’s Subsidiaries outstanding at
Closing (other than inter-company trade accounts payable) to be paid in full no later than the date
on which the payment set forth above is made with respect to the Sale Companies Adjustment.

ARTICLE VII

EMPLOYMENT MATTERS; EMPLOYEE BENEFITS

     7.1 Employee Benefit Plans.

          (a) Schedule 7.1(a) hereto lists all material Benefit Plans in effect as of the date
hereof including, without limitation, all pension, profit-sharing, savings and thrift, bonus,
incentive or deferred compensation, severance pay and medical and life insurance plans in which any
current or former Employees participate (collectively, “Employee Benefit Plans”).

          (b) Lear has provided or made available to the Company: (i) a complete copy of each written
Employee Benefit Plan and a description of any unwritten Employee Benefit Plan, each as in effect
on the date hereof; (ii) a copy of each trust agreement or other funding vehicle with respect to
each such plan; (iii) a copy of the most recently received determination letter, if any, and any
and all currently effective rulings or notices issued by a governmental or regulatory authority,
with respect to each such plan; (iv) a copy of the Form 5500 Annual Report (or similar governmental
report applicable outside of the United States), if any, for each of the two most recent plan years
for each such plan; and (vi) the most recent summary plan description, if any, with respect to each
such plan (excluding for purposes of this subsection (b) any documents not available to Lear
relating to any “multiemployer plan”, as defined in Section 4001(a)(3) of ERISA and any Canadian
multiemployer plan to which a Lear Company is contributing on behalf of non-U.S. Employees).

          (c) Each U.S. Employee Benefit Plan (other than a multiemployer plan) has been operated and
administered in material compliance with its terms and all applicable requirements of ERISA and the
Code and with any applicable reporting and disclosure requirements, including but not limited to
the requirement of Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the Code.

          (d) Each Employee Benefit Plan (other than a multiemployer plan) which is intended to meet the
requirements of a “qualified plan” under Section 401(a) of the Code is so qualified and has either
received a favorable determination letter from the Internal Revenue Service that such plan is so
qualified or has requested such a favorable determination letter within the remedial amendment
period of Section 401(b) of the Code and neither Lear nor any Lear Company is aware of any facts or
circumstances that would jeopardize the qualification of such plan or the tax exempt status of any
related trust maintained by any Lear Company or an ERISA Affiliate intended to be exempt from U.S.
federal income taxation under Section 501 of the Code, or the qualified or registered status of any
Benefit Plan or trust maintained outside the United States.

          (e) Except as set forth on Schedule 7.1(e), no U.S. Employee Benefit Plan (other than
a multiemployer plan) which is a defined benefit plan or is subject to Title IV of ERISA or any
trust established thereunder has incurred any “accumulated funding deficiency” (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived, as of the last day of the
most recent fiscal year of each Title IV Plan ended prior to the Closing Date.

 

 

          (f) Except as otherwise set forth on Schedule 7.1(f), none of the Employee Benefit
Plans provides or obligates any Lear Company or its Subsidiaries to provide any Employee (or any
dependent thereof) any life insurance or medical or health or any other welfare benefits after
their termination of employment with a Lear Company or any of its Subsidiaries, other than as
required under Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the Code or any similar
state law, and except as otherwise set forth on Schedule 7.1(f), neither the Company nor
any Subsidiary has at any time made a promise or guarantee, or any expression that could be
construed as such a promise or guarantee, to any Employee that any such retiree benefit is or will
be provided for the life of the retiree, spouse or dependent or on a permanent, “lifetime” or
vested basis.

          (g) Except as set forth on Schedule 7.1(g), neither Lear nor any of its Subsidiaries
is required with respect to the Business to contribute to, or during the five-year period ending on
the Closing Date will have been required to contribute to, any “multiemployer plan”, as such term
is defined in Section 4001(a)(3) of ERISA, and neither Lear nor any of its Subsidiaries is subject
to any withdrawal or partial withdrawal liability within the contemplation of Section 4201 of ERISA
with respect to the Business and will not become subject thereto as a result of the transactions
contemplated by this Agreement. To the Knowledge of Lear, no U.S. multiemployer plan is insolvent
or is in reorganization status under ERISA Section 4241. Except as set forth on Schedule
7.1(g), neither Lear nor any of its Subsidiaries is required with respect to Employees to
contribute to any Canadian multiemployer plan. Except as set forth on Schedule 7.1(g),
neither Lear nor any of its Subsidiaries is required with respect to Employees to contribute to any
Canadian multi-employer plan, and, to the Knowledge of Lear, the only obligation to or in respect
of any Canadian Benefit Plan that is a multi-employer plan is to make the required contributions to
such plan in the amounts and in the manner set forth in the applicable collective bargaining
agreements.

          (h) Except as otherwise set forth on Schedule 7.1(h) hereto, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any material payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due from Lear or any of its Subsidiaries
under any Employee Benefit Plan, (ii) materially increase any benefits otherwise payable under any
Employee Benefit Plan or (iii) result in the acceleration of the time of payment or vesting of any
such benefits to any material extent.

          (i) Except as otherwise set forth on Schedule 7.1(i) hereto or as would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse Effect, each Employee
Benefit Plan which is not a U.S. Company Employee Benefit Plan and is not a multiemployer plan (a
“Foreign Company Plan”) has been maintained in all material respects in accordance with its
terms and with all material legal requirements applicable thereto and is funded and/or book
reserved for in accordance with applicable laws. With respect to any non-U.S. multiemployer plan
Lear or its Affiliate has made all required contributions when due.

          (j) Subject to any applicable collective bargaining agreement and any non-U.S. law to the
contrary and except for any Canadian pension Employee Benefit Plan or multiemployer plan, or as may
be disclosed on Schedule 7.1(j), Lear and, where applicable, each Lear Company has the
right to amend or terminate its participation with respect to, and sponsorship of, each Employee
Benefit Plan.

     7.2 Employment Offers. Prior to the Closing Date, the Company will offer employment
to all current Employees of the Asset Sellers (including such Employees on short-term disability,

 

 

conditioned upon their acceptance of the Company’s employment offer by the earlier of the
expiration of the period of short-term disability or the date on which they are no longer disabled,
and excluding Employees on long-term disability), such employment to be effective as of 12:01 a.m.
on the Closing Date. With respect to bargaining unit Employees of the Asset Sellers, the terms of
their employment will be subject to the Company’s ability to negotiate or implement new or modified
wages, hours and other terms and conditions of employment with the appropriate authorized
collective bargaining representative at each such acquired location. Until such time as new or
modified wages, hours and terms and conditions are negotiated or implemented, such bargaining unit
employees will continue to work under the existing wages, hours and other terms and conditions of
employment set forth in the existing collective bargaining agreement at each such acquired
location. With respect to the non-bargaining unit Employees, the offer of employment or the
continued employment of Transferred Employees will be in the same or a comparable position with
wages, compensation and benefits (excluding any benefits under a defined benefit plan or any
retiree medical or life insurance program) that are not, in the aggregate, materially less
favorable to the Employee than those in place immediately prior to Closing, as determined by the
Company, with such wages, compensation and benefits, except with respect to defined benefit pension
plans and post-retirement benefits, being maintained for a minimum period of three months after the
Closing Date. Those Employees accepting such offers of employment by the Company will be deemed
“Hired Employees”. Within 10 days after the Closing Date, the Company will give Lear a
list of all Hired Employees.

     7.3 Termination of Participation. Except as provided in Sections 7.4 and 7.5 hereof,
as of the Closing Date, Lear shall cause the Sale Companies to cease participating in each Employee
Benefit Plan and the active participation in each Employee Benefit Plan of Transferred Employees
shall cease as of the Closing Date, and no additional benefits shall be accrued thereunder for such
Transferred Employees.

     7.4 Pension Plans. Lear and its Affiliates shall retain (a) all assets and
liabilities accrued through the Closing Date under the Employee Benefit Plans in which Employees in
the United States (“U.S. Company Employees”) participate (“U.S. Employee Benefit
Plans”) that are pension plans intending to be qualified under Code Section 401(a), and shall
make all contributions required to be made under the terms of each such plan for periods ending on
or before the Closing Date, and (b) all liabilities under any supplemental or other non-qualified
retirement or pension plan maintained for the benefit of U.S. Company Employees. Each Hired
Employee’s accrued benefit and account balance under U.S. Employee Benefit Plan shall be 100%
vested as of the Closing Date. Lear and its Affiliates shall (i) retain all assets and liabilities
accrued through the Closing Date with respect to Employees of the Canadian Holding Company and
Canadian Subsidiaries under the Employee Benefit Plans that are defined benefit or defined
contribution pension plans, excluding any Canadian multiemployer plan, (ii) make all contributions
required to be made under the terms of each defined benefit or defined contribution plan (or, with
respect to any Canadian multiemployer plan, under the terms of the applicable collective bargaining
agreement) with respect to which Employees of the Canadian Holding Company or Canadian Subsidiaries
participate for periods ending on or before the Closing Date, and (iii) retain all liabilities
under any supplemental pension plan maintained for the benefit of Employees of the Canadian Holding
Company and Canadian Subsidiaries.

     7.5 Welfare Plans. Lear shall retain all assets relating to the Employee Benefit
Plans in which Employees participate that are welfare benefit plans and shall be liable for and
shall hold the Company and its Subsidiaries harmless from and against all claims for the benefits
described below by participants of such plans which are incurred prior to the Closing Date. For

 

 

purposes of this Agreement, the following claims shall be deemed to be incurred as follows:
(i) life, accidental death and dismemberment and business travel accident insurance benefits, upon
the death or accident giving rise to such benefits; (ii) health, dental, and/or prescription drug
benefits, upon provision of such services, materials or supplies; (iii) long-term disability
benefits, as of the date of the event giving rise to the long-term disability benefit by Lear’s
insurance carrier; and (iv) workers’ compensation claims, upon the event giving rise to the claim.

     Lear shall be liable for and shall hold the Company and its Subsidiaries harmless from and
against any retiree welfare benefits to be provided to retirees of any Lear Company and its
Subsidiaries who have actually retired prior to the Closing Date, under any U.S. Employee Benefit
Plan. In addition, Lear shall remain liable for payment of amounts credited as of the Closing Date
to the MSP notational account for Mendon Employees covered by the collective bargaining agreement
with the UAW, such payments being due if a union employee leaves employment with Company and its
Subsidiaries or Lear and its Subsidiaries after attaining 10 years of service and 55 years of age.

     7.6 Assistance with Welfare Benefit Plan Transition. From the date of signing this
Agreement until the Closing Date, Lear and its Affiliates agree to work with the Company to enable
the Company or its Affiliates to establish welfare benefit plans mirroring the Lear plans that will
cover eligible Hired Employees and Transferred Employees and their eligible dependents, so that on
the Closing Date said individuals may obtain coverage under the Company’s or its Affiliates’ mirror
plans. Lear agrees to use its reasonable best efforts to obtain from its welfare benefits
providers comparable terms and conditions for the Company for the remainder of 2007. Lear shall
provide transition services to the Company with respect to the administration of the Company’s or
its Affiliates’ mirror plan on the terms and conditions set forth in the Transition Services
Agreement. In establishing its Flexible Spending Account Plan for the Hired Employees, the Company
agrees to credit each Hired Employee with the notational amount of that Employee’s health care
reimbursement account and/or dependent care reimbursement account balance as of the Closing Date to
the extent reflected on the Balance Sheet as of the Closing Date. After the end of the 2007 plan
year, Lear and the Company shall reconcile the amounts that each withheld from pay and paid out
under the Flexible Spending Account Plan and determine if either party is entitled to reimbursement
from the other.

     7.7 Company’s Obligations.

          (a) Except as may be required by non-U.S. law with respect to non-U.S. bargaining unit
Employees of the Sale Companies, the Company (i) expressly declines and refuses to assume or adopt
any collective bargaining agreement or other agreement, letter, memorandum, past practice or
understanding with any collective bargaining representative or labor organization at any acquired
location, and (ii) retains all of its rights and obligations as a successor employer to the Lear
Companies in connection with the Business, including to bargain in good faith with the authorized
collective bargaining representative at each acquired location to seek to establish new or modified
collective bargaining agreements, as well as other agreements, letters, memoranda, or
understandings.

          (b) Except as may be required by non-U.S. law with respect to non-U.S. bargaining unit
Employees of the Sale Companies, from and after the Closing Date, and notwithstanding any other
provision of this Agreement, the management and direction of the Company’s and its subsidiaries’
workforce and business, and the terms and conditions thereof, including all wage and salary
programs (including bonuses, and incentive compensation), medical and other benefit programs, other
compensation and benefit programs and the

 

 

establishment of procedures, policies and protocols for hiring, disciplining and firing
employees and setting general employee standards, shall be determined by the Board of Directors of
the Company (as delegated to the officers of the Company and its subsidiaries).

          (c) To the extent the Company is required by any non-U.S. law to pay notice, severance or
other separation benefits or damages to an Employee of a Sale Company who as of the Closing Date is
on long-term disability (including employees who have exhausted short-term disability benefits, but
have not been medically cleared to return to work), Lear shall reimburse the Company for the cost
of any such notice, severance or separation benefits or damages; provided, however, that (i) the
Company shall use commercially reasonable efforts to mitigate any such damages (it being agreed
that the Company shall have no obligation to return such Employees to work); (ii) should the
Company return any such Employee to work, Lear shall have no reimbursement obligation with respect
to any such Employee following such Employee’s return to work, and (iii) the Company shall tender
the defense of any claim for damages by such an Employee to Lear and shall not settle any such
claim without Lear’s prior written consent. For the avoidance of doubt, this subsection (c) does
not apply with respect to any Employee who as of the Closing Date is on short-term disability.

          (d) Subject to the provisions of Section 7.2 of this Agreement and this Section 7.7, the
Company agrees to give Hired Employees and Transferred Employees service credit for all periods of
employment with Lear or its Affiliates prior to the Closing Date for all purposes (other than for
pension benefit accruals) under any plan adopted or maintained by the Company or any of its
Subsidiaries in which Employees participate. The Company agrees to waive any limitations regarding
pre-existing conditions, and to give full credit for any co-payments made and deductibles fully or
partially satisfied prior to the Closing with respect to any welfare or other employee benefit
plans maintained by the Company or any of its Subsidiaries in which Employees participate after the
Closing.

          (e) Effective as of the Closing Date, the Company shall have in effect a defined contribution
plan that is intended to be qualified under Section 401(a) of the Code and that includes a
qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code with terms
and conditions no less favorable than those in Lear’s Savings Plan in which U.S. Company Employees
shall be eligible to participate; provided, however, that the terms and conditions of participation
and benefits under such plan with respect to bargaining employees shall be established pursuant to
Section 7.2. The Company’s Savings Plan shall accept direct rollovers with respect to U.S. Company
Employees who have had a severance of employment with Lear and elect to receive a distribution from
a Lear Savings Plan. From the date of this Agreement until the Closing Date, Lear and its
Affiliates agree to work with the Company to enable the Company and its Affiliates, and the Company
agrees, to establish or to cause its Affiliates to establish, effective as of the Closing Date, one
or more registered defined contribution pension plans (and, to the extent required by applicable
non-U.S. law, associated funding vehicles) to provide benefits to salaried and hourly Canadian
Transferred Employees who immediately prior to Closing are actively participating in registered
Canadian pension plans sponsored by Lear and its Affiliates and to register such plans and funding
vehicles with each appropriate Governmental Entity (subject, where applicable with respect to
bargaining Employees at the Maple location, to the terms and conditions set forth in the collective
bargaining agreement with UNITE HERE Ontario Council Local 1813). The contribution rates under
such plans to be established shall be at the discretion of the Company, but in no event shall such
contribution rates be so low as to cause Lear or its Affiliates to have a “wind-up” with respect to
its registered pension plans.

 

 

          (f) The Company shall be liable for and shall hold Lear and its Affiliates harmless from and
against any and all Assumed Employee Liabilities with respect to or arising out of: (i) Employees’
employee benefits, including, without limitation, Assumed Employee Liabilities, arising from or
with respect to, the Company’s employee benefit plans; and (ii) the employment of Hired Employees
by the Company or the employment of Transferred Employees by the Sale Companies from and after the
Closing.

          (g) The Lear Companies will take no action, or enter into any transaction, whatsoever contrary
to, or otherwise inconsistent with, the provisions of this Section 7.7.

          (h) If, as of the Closing Date, an Employee was not actively at work, or was at work on other
than a full-time basis, in either case, due to an injury for which the employee was receiving
benefits under the workers’ compensation law, or was working in accordance with a return to work
program in any applicable collective bargaining agreement, the Company agrees that at the time an
Employee is found by a third-party, which is independent of Lear or its Subsidiaries, to be able to
return to work, it will offer employment to such Employee.

     7.8 Plant Closing Laws. The Company shall be responsible for providing any notice
required, pursuant to the United States Federal Worker Adjustment and Retraining Notification Act
of 1988, any successor United States federal law, and any applicable plant closing notification law
with respect to a mass layoff or plant closing relating to the Business that occurs after the
Closing Date,

     7.9 Accrued Vacation. Subject to the requirements of relevant state labor laws, the
Company will permit Hired Employees, during the vacation accrual year containing the Closing Date,
to take accrued, but unused as of the Closing Date, vacation days with pay in accordance with the
applicable policies of Lear and its Subsidiaries as in effect as of the Closing Date. Lear shall
reimburse the Company for the cost of any such vacation days to the extent they were earned prior
to the date that is 12 months prior to the Closing Date.

     7.10 Miscellaneous. Lear and the Company agree to furnish each other with such
information concerning Employees and Benefit Plans, and to take all such other reasonable action,
as is necessary and appropriate to effect the transactions contemplated by this Article VII, in
each case to the extent permitted under applicable law, the Relevant Lear Companies hereby agree to
use their commercially reasonable best efforts to assist the Company in making offers and hiring
any of the Employees, including providing the Company with access to such Employees and their work
and personnel and related files, such access to files to be consistent with applicable law, during
a reasonable period of time prior to the Closing Date. Neither Lear nor any of the Relevant Lear
Companies shall take any action that would impede, hinder, interfere or otherwise compete with
Company’s effort to hire any Employees.

     7.11 Equity Incentives. IACNA and the Company agree that each offer of employment to
a management Employee shall (1) be conditioned on such Employee signing a waiver and termination of
rights under Lear’s equity incentive plans with respect to all unvested equity interests as of the
Closing Date and (2) provide for an equity grant from IACNA or the Company to such Employee of
substantially equivalent value to the unvested equity interests in Lear with respect to which such
Employee is forfeiting his or her rights (treating the Closing Date as a pro rata vesting date with
respect to restricted stock units).

 

 

ARTICLE VIII

SURVIVAL; INDEMNIFICATION

     The provisions of this Article VIII on indemnification shall collectively apply to
indemnification due pursuant to this Agreement.

     8.1 Survival. Except in the event of a fraudulent or intentional breach of a
representation or warranty, the representations and warranties of the parties contained in this
Agreement will not survive the Closing; provided that the representation and warranty of Lear in
Section 4.9 shall survive for a period of eighteen (18) months following the Closing Date. All
covenants and agreements of the parties contained in this Agreement will survive the Closing in
accordance with their terms.

     8.2 Indemnification. (a) The Company will indemnify, defend and hold harmless Lear
and its Affiliates, and their respective officers, directors, employees, affiliates, stockholders
and agents, and the successors to the foregoing (and their respective officers, directors,
employees, affiliates, stockholders and agents) (each, a “Lear Indemnified Party”), against
any and all liabilities, damages and losses and all costs or expenses, including reasonable
attorneys’ fees and expenses (“Damages”), incurred or suffered as a result of or arising
out of (i) any intentional or fraudulent breach by it of any representation or warranty made by it
in this Agreement, (ii) any breach by it of any covenant or agreement made or to be performed by it
pursuant to this Agreement, (iii) the Assumed Liabilities; and (iv) the ownership and operation of
the Purchased Assets after the Closing and the ownership of the Holding Company Shares after the
Closing.

          (b) Lear will indemnify, defend and hold harmless the Company and its Affiliates, their
officers, directors, employees, affiliates, stockholders and agents, and the successors to the
foregoing (and their respective officers, directors, employees, affiliates, stockholders and
agents) (each, a “Company Indemnified Party”) against Damages incurred or suffered as a
result of or arising out of (i) any intentional or fraudulent breach of any representation or
warranty made by it in this Agreement, (ii) any breach of any covenant or agreement made or to be
performed by it pursuant to this Agreement, (iii) any breach of the representation and warranty of
Lear contained in Section 4.9, and (iv) any Retained Liabilities. Notwithstanding anything to the
contrary in this Agreement, any indemnification obligations of Lear as a result of or arising out
of a breach of Section 4.9 shall terminate on the date that is eighteen (18) months after the
Closing Date; provided, that if a Company Indemnified Party delivers to Lear before the date that
is eighteen (18) months after Closing Date a claim for indemnification for which the Company
Indemnified Party reasonably expects to incur Damages pursuant to Section 4.9, then the
indemnification obligations for such Damages shall survive until, but only for purposes of, the
resolution of the matter covered by such claim.

     8.3 Procedures. (a) If any Person who or which is entitled to seek indemnification
under Section 8.2 (an “Indemnified Party”) receives notice of the assertion or commencement
of any Third-Party Claim against such Indemnified Party with respect to which the Person against
whom or which such indemnification is being sought (an “Indemnifying Party”) is obligated
to provide indemnification under this Agreement, the Indemnified Party will give such Indemnifying
Party reasonably prompt written notice thereof, but in any event not later than 20 days after
receipt of such written notice of such Third-Party Claim. Such notice by the Indemnified Party
will describe the Third-Party Claim in reasonable detail, will include copies of all available
material written evidence thereof and will indicate the estimated amount, if reasonably
practicable, of the Damages that has been or may be sustained by the Indemnified Party. The

 

 

Indemnifying Party will have the right to participate in, or, by giving written notice to the
Indemnified Party, to assume, the defense of any Third-Party Claim at such Indemnifying Party’s own
expense and by such Indemnifying Party’s own counsel (reasonably satisfactory to the Indemnified
Party), and the Indemnified Party will cooperate in good faith in such defense; provided, however,
that the Company will be entitled to control the handling of any proceeding, claim, demand or
assessments based on a claim for Taxes arising out of or relating to any taxable year or period of
any of the Sale Companies ending after the Closing Date.

          (b) If, within ten days after giving notice of a Third-Party Claim to an Indemnifying Party
pursuant to Section 8.3(a), an Indemnified Party receives written notice from the Indemnifying
Party that the Indemnifying Party has elected to assume the defense of such Third-Party Claim as
provided in the last sentence of Section 8.3(a), the Indemnifying Party will not be liable for any
legal expenses subsequently incurred by the Indemnified Party in connection with the defense
thereof provided, that if there exists a conflict of interest (including the availability
of one or more legal defenses to the Indemnified Party which are not available to the Indemnifying
Party) that would make it inappropriate in the reasonable judgment of the Indemnified Party (upon
and in conformity with advice of counsel) for the same counsel to represent both the Indemnified
Party and the Indemnifying Party, then the Indemnified Party will be entitled to retain one counsel
reasonably acceptable to the Indemnifying Party, at the expense of the Indemnifying Party; and
provided further, that if the Indemnifying Party fails to take reasonable steps necessary
to defend diligently such Third-Party Claim within ten days after receiving written notice from the
Indemnified Party, the Indemnified Party may assume its own defense, and the Indemnifying Party
will be liable for all reasonable costs and expenses paid or incurred in connection therewith.
Without the prior written consent of the Indemnified Party, the Indemnifying Party will not enter
into any settlement of any Third-Party Claim which would lead to liability or create any financial
or other obligation on the part of the Indemnified Party for which the Indemnified Party is not
entitled to indemnification hereunder, or which provides for injunctive or other non-monetary
relief applicable to the Indemnified Party, or does not include an unconditional release of all
Indemnified Parties. If a firm offer is made to settle a Third-Party Claim without leading to
liability or the creation of a financial or other obligation on the part of the Indemnified Party
for which the Indemnified Party is not entitled to indemnification hereunder and the Indemnifying
Party desires to accept and agree to such offer, the Indemnifying Party will give written notice to
the Indemnified Party to that effect. If the Indemnified Party fails to consent to such firm offer
within ten days after its receipt of such notice, the Indemnified Party may continue to contest or
defend such Third-Party Claim and, in such event, the maximum liability of the Indemnifying Party
as to such Third-Party Claim will not exceed the amount of such settlement offer. The Indemnified
Party will provide the Indemnifying Party with reasonable access during normal business hours to
books, records and employees of the Indemnified Party necessary in connection with the Indemnifying
Party’s defense of any Third-Party Claim which is the subject of a claim for indemnification by an
Indemnified Party hereunder.

          (c) Any claim by an Indemnified Party on account of Damages which does not result from a
Third-Party Claim (a “Direct Claim”) will be asserted by giving the Indemnifying Party
reasonably prompt written notice thereof, but in any event not later than 20 days after the
Indemnified Party becomes aware of such Direct Claim. Such notice by the Indemnified Party will
describe the Direct Claim in reasonable detail, will include copies of all available material
written evidence thereof and will indicate the estimated amount of Damages that has been or may be
sustained by the Indemnified Party. The Indemnifying Party will have a period of ten days within
which to respond in writing to such Direct Claim. If the Indemnifying Party does not so respond
within such ten day period, the Indemnifying Party will be deemed to have rejected

 

 

such claim, in which event the Indemnified Party will be free to pursue such remedies as may
be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

          (d) A failure to give timely notice or to include any specified information in any notice as
provided in Section 8.3(a), (b) or (c) will not affect the rights or obligations of any party
hereunder, except and only to the extent that, as a result of such failure, any party which was
entitled to receive such notice was deprived of its right to recover any payment under its
applicable insurance coverage or was otherwise materially prejudiced as a result of such failure.

          (e) Notwithstanding anything to the contrary in this Agreement, in no event shall any party
who is entitled to indemnification under this Article VIII have the right to set off amounts owed
(or asserted to be owed) to such party under this Article VIII and any and all such set off rights
that may exist under common law, by statute or otherwise are hereby unconditionally waived. Upon
payment in full of any Direct Claim for indemnification pursuant to this Article VIII or the
payment of any judgment or settlement with respect to a Third-Party Claim, the Indemnifying Party
shall be subrogated to the extent of such payment to the rights of the Indemnified Party against
any Person with respect to the subject matter of such Direct Claim or Third-Party Claim.

          (f) Each of the parties acknowledges and agrees that such party entered into each of the
Transaction Documents to which it is a party based solely on the representations and warranties set
forth therein, and such party is not relying on any other information (oral or written) provided by
one party to the other, including business plans and forecasts. As part of the bargained-for
consideration among the parties in respect of the transactions contemplated by the Transaction
Documents, following the Closing, the rights and remedies of the parties in the Transaction
Documents constitute the sole and exclusive rights and remedies of the parties under the
Transaction Documents in respect of the transactions contemplated hereby, all other rights and
remedies being hereby irrevocably waived, except for claims based on common law fraud.

     8.4 Treatment of Indemnification Payments. Any amount paid by Lear or the Company
under Sections 6.14, 6.22 and 8.2 shall for Income Tax Purposes be treated as an adjustment to the
purchase price and shall be allocated among the Purchased Assets and the Holding Company Shares as
provided by Treasury Regulation Section 1.1060-1(c).

ARTICLE IX

MISCELLANEOUS

     9.1 Notices. All notices, requests, claims, demands and other communications to any
party hereunder must be in writing (including facsimile transmission, which must be confirmed) and
will be given to such party at its address and facsimile number set forth in Schedule 9.1
(as applicable) (which may be changed by such party upon notice in accordance with this Section
9.1). All such notices, requests and other communications will be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such
day is a Business Day in the place of receipt. Otherwise, any such notice, request or
communication will be deemed not to have been received until the next succeeding Business Day in
the place of receipt following the date of receipt.

     9.2 Amendments and Waivers. (a) Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an

 

 

amendment, by each party to this Agreement, or in the case of a waiver, by the party against
whom the waiver is to be effective.

          (b) No failure or delay by any party in exercising any right, power or privilege hereunder
will operate as a waiver thereof nor will any single or partial exercise thereof preclude any other
or further exercise thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided will be cumulative and not exclusive of any rights or remedies provided by
Law.

     9.3 Expenses. Whether or not the transactions contemplated by this Agreement are
consummated, except as otherwise expressly provided for herein, the parties (including, in the case
of Lear, the Sale Companies) will pay or cause to be paid all of their own fees and expenses
incident to this Agreement and in preparing to consummate and in consummating the transactions
contemplated hereby, including the fees and expenses of any broker, finder, financial advisor,
investment banker, legal advisor or similar person engaged by such party.

     9.4 Successors and Assigns. The provisions of this Agreement will be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns. Lear may
not assign, delegate or otherwise transfer any of its rights or obligations under this Agreement
(including any transfer by way of merger or operation of law) other than to an Affiliate (but which
assignment will not reduce or eliminate Lear’s obligations or liabilities hereunder) without the
prior written consent of the Company. Any assignment in violation of the preceding sentence will
be void ab initio. The Company may not assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement (including by way of merger or operation of law) other than to an
Affiliate (but which assignment will not reduce or eliminate the Company ‘s obligations or
liabilities hereunder) without the prior consent of Lear.

     9.5 No Third-Party Beneficiaries. This Agreement is for the sole benefit of the
parties hereto and their permitted successors and assigns, and nothing herein expressed or implied
will give or be construed to give to any Person, other than the parties hereto and such permitted
successors and assigns, any legal or equitable rights hereunder.

     9.6 Governing Law. This Agreement will be governed by, and construed in accordance
with, the laws of the State of New York, regardless of the Laws that might otherwise govern under
principles of conflict of laws thereof.

     9.7 Public Announcements. From the date hereof until the Closing Date, the Company
and Lear will consult with each other before issuing, or permitting any agent or Affiliate to
issue, any press releases or otherwise making or permitting any agent or Affiliate to make, any
public statements with respect to this Agreement and the transactions contemplated hereby.

     9.8 Dispute Escalation and Binding Arbitration; Jurisdiction. (a) In the event of
any dispute, controversy or claim of any kind or nature arising under or in connection with this
Agreement (including disputes as to the creation, validity, interpretation, breach or termination
of this Agreement) (a “Dispute”), then upon the written request of either party, each of
the parties will appoint a designated senior business executive whose task it will be to meet for
the purpose of endeavoring to resolve the Dispute. The designated executives will meet as often as
the parties reasonably deem necessary in order to gather and furnish to the other all information
with respect to the matter in issue which the parties believe to be appropriate and germane in
connection with its resolution. Such executives will discuss the Dispute and will negotiate in
good faith in an effort to resolve the Dispute without the necessity of any formal proceeding

 

 

relating thereto. The specific format for such discussions will be left to the discretion of
the designated executives but may include the preparation of agreed upon statements of fact or
written statements of position furnished to the other party. No formal proceedings for the
resolution of the Dispute may be commenced until the earlier to occur of (i) a good faith mutual
conclusion by the designated executives that amicable resolution through continued negotiation of
the matter in issue does not appear likely or (ii) the 30th day after the initial request to
negotiate the Dispute.

          (b) Any Dispute, if not resolved informally through negotiation between the parties as
contemplated by Section 9.8(a), will be resolved by final and binding arbitration conducted in
accordance with and subject to the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) then applicable. Three arbitrators will be selected by the parties’
mutual agreement or, failing that, by the AAA, and the arbitrators will allow such discovery as is
appropriate, consistent with the purposes of arbitration in accomplishing fair, speedy and cost
effective resolution of disputes. The arbitrators will reference the Federal Rules of Civil
Procedure then in effect in setting the scope of discovery, except that no requests for admissions
will be permitted and interrogatories will be limited to identifying (i) persons with knowledge of
relevant facts and (ii) expert witnesses and their opinions and the bases therefore. Judgment upon
the award rendered in any such arbitration may be entered in any court having jurisdiction thereof.
Any negotiation, mediation or arbitration conducted pursuant to this Section 9.8 will take place
in New York, New York. Each party will bear its own costs and expenses with respect to any such
negotiation or arbitration, including one-half of the fees and expenses of the arbitrators, if
applicable; provided, that if the Closing has occurred, any fees and expenses of the arbitrators,
if applicable, shall be borne and paid seventy-five percent (75%) by the Company and twenty-five
percent (25%) by Lear. Other than those matters involving injunctive relief or any action
necessary to enforce the award of the arbitrators, the parties agree that the provisions of this
Section 9.8 are a complete defense to any suit, action or other proceeding instituted in any court
or before any administrative tribunal with respect to any Dispute. Nothing in this Section 9.8
prevents the Parties from exercising their right to terminate this Agreement in accordance with
Section 3.6.

          (c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

     9.9 Enforcement of Agreement. The parties hereto agree that irreparable damage would
occur in the event that the provisions contained in this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to
seek enforcement specifically of the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.

     9.10 Counterparts. This Agreement may be executed in one or more counterparts, all of
which will be considered one and the same agreement and will become effective when one or more
counterparts have been signed by each of the parties and delivered to the other parties.

     9.11 Headings. The headings in this Agreement are for convenience of reference only
and will not control or affect the meaning or construction of any provisions hereof.

 

 

     9.12 Entire Agreement. This Agreement (including the Schedules and Exhibits hereto)
and the Ancillary Agreements constitute the entire agreement among the parties with respect to the
subject matter of this Agreement. This Agreement (including the Schedules and Exhibits hereto) and
the Ancillary Agreements supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof of this Agreement.

     9.13 Severability. The provisions of this Agreement are severable. If any provision
of this Agreement is held invalid, illegal or otherwise unenforceable, in whole or in part, the
remaining provisions or enforceable parts thereof will not be affected thereby and will be enforced
to the fullest extent permitted by Law. In addition, should any provision or any portion thereof
ever be adjudicated by a court of competent jurisdiction to exceed the time or other limitation
permitted by applicable Law as determined by such court in such action, then such provisions will
be decreased, performed to the maximum time or other limitations prescribed by applicable Law, the
parties acknowledging their desire that in such event such action be taken.

     9.14 Certain Interpretive Matters. (a) When a reference is made in this Agreement to
an Article, Section, Exhibit or Schedule, such reference will be to an Article or Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and will not affect in any way
the meaning or interpretation of this Agreement. Whenever the words, “include,” “includes” or
“including” are used in this Agreement, they will be deemed to be followed by the words “without
limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in
this Agreement refer to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter genders of such
term. All references to “$” or dollar amounts will be to lawful currency of the United States of
America. Any agreement, instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or instruments) by
waiver or consent and (in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein. References to a Person
are also to its permitted successors and assigns. Lear has set forth information in the Disclosure
Schedule in a section that corresponds to the section of this Agreement to which it relates.
Disclosure of any fact or item in any Schedule hereto referenced by a particular Section in this
Agreement shall be deemed to have been disclosed in the Schedules for every other Section of the
Agreement to the extent that it is reasonably apparent that such disclosure was applicable with
respect to such other Sections of this Agreement. All references to Laws in this Agreement will
include any applicable amendments thereunder. To the extent the term “day” or “days” is used, it
will mean calendar days (unless referred to as a “Business Day”). Matters reflected in the
Schedules are not necessarily limited to matters required by this Agreement to be reflected
therein. Such additional matters may be set forth for informational purposes, do not necessarily
include other matters of a similar nature that are not required to be reflected in the Schedules,
and do not establish any standard or definition of materiality. Each party may, from time to time
prior to or at the Closing, by notice in accordance with the terms of this Agreement, supplement,
amend or create any Schedule, in order to add information or correct previously supplied
information. No such amendment shall be evidence, in and of itself, that the representations and
warranties in the corresponding Section are no longer true and correct in all material

 

 

respects or give rise to any potential Liability on the part of Lear to the Company
Indemnified Parties except to the extent that to the Knowledge of Lear, there was a Liability of
the Business or a Lear Company existing as of the date hereof that was required to be disclosed as
of the date of this Agreement in a Schedule to this Agreement and was not so disclosed. It is
specifically agreed that such Schedules may be amended to add immaterial, as well as material,
items thereto. No such supplemental, amended or additional Schedule shall be deemed to cure any
breach for purposes of Section 3.1(b) or 3.2(b).

          (b) No provision of this Agreement will be interpreted in favor of, or against, any of the
parties hereto by reason of the extent to which any such party or its counsel participated in the
drafting thereof or by reason of the extent to which any such provision is inconsistent with any
prior draft hereof or thereof.

[SIGNATURE PAGE FOLLOWS]

     IN WITNESS WHEREOF, the parties have duly executed this Asset Purchase Agreement on the date
first above written.

	 	 	 	 	 	 	 	 	 
	 	 	LEAR CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:

Name:
	 	/s/ Daniel A. Ninivaggi
 

Daniel A. Ninivaggi
	 	 
	 

	 	 	 	Title:
	 	Executive Vice President, Secretary and
General Counsel	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	INTERNATIONAL AUTOMOTIVE COMPONENTS GROUP NORTH AMERICA,
INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:

Name:
	 	/s/ Stephen J. Toy
 

Stephen J. Toy
	 	 
	 

	 	 	 	Title:
	 	Director & Vice President	 	 

THE UNDERSIGNED have executed this Asset Purchase Agreement as of the Effective Date for the sole
purpose of agreeing to be bound by the provisions of Section 6.20 and no other provision.

WL ROSS & CO. LLC

	 	 	 	 	 
	By:

	 	/s/ Stephen J. Toy
 

	 	 
	Name:

	 	Stephen J. Toy	 	 
	Title:

	 	Managing Director	 	 
	 
	 	 	 	 

 

 

	 	 	 	 	 
	FRANKLIN MUTUAL ADVISERS, LLC	 	 

	 
	 	 	 	 
	By:

	 	/s/ Bradley Takahashi
 

	 	 
	Name:

	 	Bradley Takahashi	 	 
	Title:

	 	Vice President	 	 
	 
	 	 	 	 
	INTERNATIONAL AUTOMOTIVE COMPONENTS 

GROUP NORTH AMERICA, LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/ Stephen J. Toy
 

	 	 
	Name:

	 	Stephen J. Toy	 	 
	Title:

	 	Director & Vice Presidentexv10w2

 

Exhibit 10.2

FORM OF LIMITED LIABILITY COMPANY AGREEMENT

OF

INTERNATIONAL AUTOMOTIVE COMPONENTS GROUP NORTH AMERICA, LLC

     This Limited Liability Company Agreement (the “Agreement”), as it may be further
amended, dated as of                     , 2007 (the “Effective Date”), is by and among
International Automotive Components Group North America, LLC, a Delaware limited liability company
(the “Company”), and the Stockholders identified on Schedule 1, and provides the terms
under which the Company was organized and will operate.

          NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:

I. ORGANIZATIONAL MATTERS

     1.1 Formation/Purpose. (a) The formation of the Company, a single employer separate and
apart from any other entity, without limitation, as a Delaware limited liability company under the
Delaware Limited Liability Company Act of 1992, as amended (the “Act”), and all actions
taken by the Person who executed and filed its certificate of formation are hereby adopted and
ratified, such Person being an “authorized person” within the meaning of the Act.

          (b) The Company is organized to (i) be a holding company for various automotive interiors
systems components businesses, including the Lear North American ISD Business, and (ii) engage in
all such other lawful transactions and business activities as may be determined by the Board,
subject to Section 3.4(c).

     1.2 Governance as if a Delaware Corporation. The rights of the members of the Company (which
are referred to herein as “Stockholders”) will be governed by the applicable Constituent
Documents, which will be interpreted as if the Company were a corporation incorporated under the
Delaware General Corporation Law (the “DGCL”) and its members were stockholders of such
corporation. Notwithstanding the foregoing:

          (a) Except as required by the Act, neither the Charter, any amendments thereto nor any other
organizational instrument (other than the Certificate of Formation) will be required to be filed
with the Secretary of State of the State of Delaware as required under Sections 101, 103, 241 or
242 of the DGCL (any such document which would otherwise be so required to be filed with the
Secretary of State of the State of Delaware will be filed with the Secretary of the Company);

          (b) All taxes and fees otherwise payable by the Company pursuant to Section 391 of the DGCL
will be determined under and payable solely in accordance with the Act; and

 

 

          (c) Notwithstanding any other provision hereof, neither the Company nor any other Person will
be subject to the provisions of DGCL Sections 145, 154, 160(a), 170, 172, 173, 174, 203, 220 or
282.

     1.3 Liability to Third Parties. Except as otherwise set forth in this Agreement or the other
Constituent Documents, the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, will be solely its debts, obligations and liabilities and none of the
direct or indirect equity holders, directors or Affiliates of the Company (the “Company
Persons”) will be personally obligated for any such debt, obligation or liability. Except as
set forth in this Agreement or the other Constituent Documents, no Company Person will be (i)
liable for any debts, obligations or liabilities, whether arising in contract, tort or otherwise,
of the Company or any other Company Person or (ii) required to loan or contribute any funds to the
Company.

     1.4 Powers. The Company will possess and may exercise all of the powers and privileges
granted by the Act, the DGCL (as if the Company were a corporation), any other law or this
Agreement, together with any powers incidental thereto, so far as such powers and privileges are
necessary or convenient to the conduct, promotion or attainment of its permitted business purposes
or activities. Without limiting the generality or effect of any other provision hereof, the
Company will have the power to effect the acquisition of any business or take any other action
consistent with the DGCL. As to any third person or entity, the signature of any officer of the
Company on any document will be conclusive evidence of the authority of such officer to execute
such document for and on behalf and in the name of the Company.

     1.5 Fiduciary Duties. No director of the Company shall be personally liable to the Company or
any of its Stockholders for monetary damages for breach of fiduciary duty as a director, provided
that the foregoing provision shall not eliminate or limit the liability of a director (i) for
breach of such director’s duty of loyalty to the Company or its Stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing violation of law,
or (iii) for any transaction from which such director derived an improper personal benefit.

II. CAPITALIZATION

     2.1 Capitalization. The capitalization of the Company is as set forth in the Charter.
Subject to Sections 3.2 and 3.4(c), the Board has the authority to issue additional Capital Stock,
which may include different classes of equity.

     2.2 Stockholders. (a) As of the Effective Date, and as a condition to the closing of the
Lear Acquisition Agreement, the Stockholders will make the following capital contributions to the
Company: (i) Lear NAOC will contribute $25 million in cash in exchange for twenty-five percent
(25%) of the Capital Stock and $300,000 in exchange for the Lear Warrant, (ii) WLR will contribute
$50 million in cash in exchange for fifty percent (50%) of the Capital Stock, and (iii) Franklin
will contribute $25 million in cash in exchange for twenty-five percent (25%) of the Capital Stock.
As of the Effective Date, after giving effect to such capital contributions, the name and address
of each of

2

 

the Stockholders and the number of shares of Capital Stock and percentage holding of each of
them respectively is as set forth on Schedule 1, and, as of the Effective Date, no other
parties shall own or have rights to acquire any Capital Stock of the Company.

          (b) Subject to Sections 3.2 and 3.4(c), the Company is authorized to issue Capital Stock in
exchange for either capital contributions, or the provision of services (together, “Capital
Stock Consideration”), having a Fair Market Value equal to the value of the Capital Stock
issued as determined in good faith by the Board. The amount of Capital Stock held by each
Stockholder shall not be affected by either (i) any issuance by the Company of Capital Stock to
other Stockholders, (ii) any change in the Capital Account of such Stockholder (other than such
changes to reflect additional Capital Stock Consideration from such Stockholder in exchange for new
Capital Stock) or (iii) any distributions not in redemption of Capital Stock. The shares of
Capital Stock shall be certificated and the Board shall maintain, or cause to be maintained, a
Capital Stock ledger. No Stockholder shall be required to make any additional capital
contributions to the Company.

          (c) Except as otherwise provided in this Agreement, no Person other than the parties set forth
on Schedule 1 will be a Stockholder of the Company, and no Capital Stock of the Company will be
issued or transferred, without compliance with the terms and provisions of the Company’s
Constituent Documents and the execution by any such Person of a joinder to this Agreement whereby
such Person agrees to be bound by this Agreement and the Company’s other Constituent Documents.

          (d) WLR is the “Majority Stockholder”; provided that once WLR ceases to own 10% or
more of the Common Stock of the Company, it will no longer be the Majority Stockholder for any
purpose hereunder.

          (e) Franklin and Lear NAOC are the “Minority Stockholders”; provided that upon the
earlier of (i) a Minority Stockholder ceasing to own 5% or more of the Common Stock of the Company
or (ii) a Minority Stockholder selling or transferring more than 20% of the Common Stock it held as
of the Effective Date other than to a Permitted Transferee or in connection with a pledge (or
exercise pursuant thereto), it will no longer be a Minority Stockholder for any purpose hereunder;
provided however, that in no event shall Lear NAOC cease to be a Minority Stockholder under clause
(i) prior to the date that is eighteen months after the Effective Date.

          (f) For purposes of the Act, the Stockholders are the members of the Company.

     2.3 2007 EBITDA. The Company shall deliver to the Stockholders, no later than 15 days after
the Company’s receipt of its audited consolidated financial statements for the year ending December
31, 2007, the Company’s calculation of 2007 EBITDA (the “Company Calculation”).

     (a) The Company Calculation shall be prepared in good faith, based on the Company’s books and
records and, for consolidated net income and the items in

3

 

subsections (i) (ii), (iii), (iv), (vii), (viii), (ix) and (xii) in the definition of 2007
EBITDA, in accordance with U.S. generally accepted accounting principles.

          (b) If Lear disagrees with the Company Calculation, Lear shall provide written notice (a
“Dispute Notice”) to the Company and the other Stockholders of its objection(s) to such
calculation. If Lear does not provide a Dispute Notice within 45 days after the Company’s delivery
of the Company Calculation, the 2007 EBITDA set forth therein shall be deemed the finally
determined 2007 EBITDA. If Lear delivers a Dispute Notice, the Company and Lear will use good
faith efforts during the 30-day period after the delivery of such Dispute Notice (the
“Resolution Period”) to seek to resolve the differences set forth therein. If the Company
and Lear cannot reach written agreement during the Resolution Period, their disagreements, limited
to those issues still in dispute, will be submitted by the parties for determination by the
Accounting Firm.

          (c) During the period beginning on the date of the delivery of the Company Calculation and
ending upon the final determination of 2007 EBITDA (including the Resolution Period, if necessary),
the parties will provide to each other such reasonable access to personnel involved in the Company
Calculation and to financial and other information of the Company as it may request in good faith
to determine 2007 EBITDA.

          (d) The Company and the Stockholders shall use their reasonable best efforts to cause the
Accounting Firm to submit its written statement of its adjudication of the disputes regarding 2007
EBITDA within 30 days after submission of the matter to the Accounting Firm. The determination of
the Accounting Firm shall constitute an arbitral award that is final, binding and unappealable and
upon which a judgment may be entered by any court having jurisdiction thereof. In acting
hereunder, the Accounting Firm shall be entitled to the privileges and immunities of arbitrators.

          (e) If the finally determined 2007 EBITDA is less than $41,666,666.67, the Stockholders will
contribute to the Company an amount (the “Shortfall Amount”) in cash equal to the lesser of
(i) three times the amount by which 2007 EBITDA is less than $41,666,666.67 and (ii) $60 million.
Each of the Stockholders will contribute to the Company an amount equal to the product of (x) its
respective Company Common Stock Percentage Interests, multiplied by (y) the total aggregate
additional capital contribution required of all the Stockholders.

          (f) The amount of any additional capital contribution required hereunder shall be payable
solely by a release of the Escrowed Funds (together with any income earned on such released funds)
or from a drawdown on a Letter of Credit posted in lieu of depositing funds in escrow.

          (g) If the finally determined 2007 EBITDA is equal to or greater than $41,666,666.67, each of
the Stockholders will be entitled to the return of its entire escrow deposit (plus any income
thereon) under the Escrow Agreement. Similarly, each Stockholder shall be entitled to have
returned promptly from the escrow account the amount by which such Stockholder’s total Escrowed
Funds exceeds such

4

 

Stockholder’s additional capital contribution required pursuant to subsection (e) above
(together with any income earned on such released funds).

          (h) Within three Business Days after the final determination of 2007 EBITDA, the Company and
the Stockholders will provide the escrow agent under the Escrow Agreement with joint written
instructions to disburse the funds held in escrow thereunder in accordance with the terms of this
Agreement and the Escrow Agreement.

          (i) The Company and the Stockholders agree that no additional shares of Capital Stock will be
issued in respect of additional capital contributions pursuant to this Section 2.3(e), except to
prevent dilution vis-à-vis a third party Stockholder who has purchased shares of Capital Stock or
Options between the Effective Date and the date of such capital contribution; provided that the
Stockholders’ percentage of ownership of the Company relative to each other shall stay
substantially the same following such capital contribution.

          (j) The Company and Stockholders agree that any amounts paid pursuant to Section 2.3(e) shall
for purposes of the Code be accorded treatment as a capital contribution pursuant to Section 721 of
the Code and none of the parties will take any action or position inconsistent with such treatment
under the Code.

     2.4 Escrowed Funds; Letter of Credit. As of the Effective Date, each of Lear NAOC, WL Ross
and Franklin shall (a) execute and deliver the Escrow Agreement and (b) deliver to the escrow agent
under the Escrow Agreement its respective portion of the Escrowed Funds to be deposited into the
escrow account established pursuant to the Escrow Agreement by delivery to such escrow agent of
cash or an irrevocable letter of credit in a form reasonably acceptable to Lear NAOC, in the case
of a Letter of Credit for the account of WL Ross or Franklin, and to WL Ross and Franklin, in the
case of a Letter of Credit for the account of Lear NAOC (each a “Letter of Credit” and
collectively, the “Letters of Credit”). The Escrowed Funds (including the Letters of
Credit) shall be used solely as contemplated by Section 2.3.

III. GOVERNANCE

     3.1 Charter and Bylaws. Except as provided in this Agreement, the Company will be governed by
the Charter and Bylaws.

     3.2 Preemptive Rights. After the Effective Date, the Company will not issue, sell or
exchange, agree to issue, sell or exchange, or reserve or set aside for issuance, sale or exchange,
any Capital Stock or Options (collectively, the “Preemptive Securities”), unless the
Company has first offered to sell to each of the Stockholders such Stockholder’s Pro Rata Share (as
defined below) of the Preemptive Securities, at a price and on such other terms as have been
specified by the Company in writing delivered to each such Stockholder (the “Preemptive
Offer”), which Preemptive Offer will be on terms substantially identical to the terms of the
Company’s proposed issuance, sale or exchange of Preemptive Securities and will remain open and
irrevocable for a period of 20 Business Days from the date it is delivered by the

5

 

Company (the “Preemptive Offer Period”). Notwithstanding the foregoing, Preemptive
Securities will not include (a) Options or other equity securities or rights issued pursuant to an
Employee Plan approved by the Board (subject to Section 3.4(b)(ii)) and any Capital Stock issued
upon the exercise of any such Options or other equity securities so long as such Options issued or
the equity securities issuable upon exercise of such Options do not represent in excess of 10% of
the fully diluted Common Stock, (b) the Lear Warrant or any equity securities issued pursuant to
the terms of the Lear Warrant, (c) equity securities issued by the Company as direct consideration
in connection with the acquisition of another business entity by the Company or a Subsidiary,
whether by merger, purchase of all or substantially all of the assets of such entity or otherwise,
(d) securities issued as a result of any split of, reclassification, subdivision of or other
distribution pro rata with respect to, the equity securities of the Company, or (e) any equity
securities issued in a Public Offering or pursuant to the Reorganization. Each Stockholder may
elect to purchase (or to have its designated Affiliate that is also, or simultaneously with such
purchase becomes, a Stockholder, purchase) all or any portion of such Stockholder’s Pro Rata Share
of the Preemptive Securities as specified in the Preemptive Offer at the price and on the terms
specified therein by delivering written notice of such election to the Company as soon as
practicable but in any event before the expiration of the Preemptive Offer Period. Any Preemptive
Securities not elected to be purchased by the end of the Preemptive Offer Period will be reoffered
for a five-day period by the Company on a pro rata basis to the Stockholders who have elected to
purchase their full Pro Rata Share of the Preemptive Securities. In the event the Stockholders
fail to exercise in full their preemptive rights as set forth above with respect to the Preemptive
Securities, the Company shall have 60 days thereafter to sell such Preemptive Securities, at a cash
or cash equivalent price that is not less than the price specified in the Preemptive Offer. In the
event the Company has not sold the Preemptive Securities within such 60-day period, the Company
shall not thereafter issue or sell any Preemptive Securities without first complying with the first
offer rights set forth in this Section 3.2. Each Stockholder’s “Pro Rata Share” of
Preemptive Securities is the product of (x) the total number of Preemptive Securities and (y) a
fraction, the numerator of which is the total number of shares or units of Common Stock then owned
by such Stockholder and the denominator of which is the total number of shares or units of Common
Stock then outstanding.

     3.3 Board Composition and Representation. (a) The number of directors comprising the Board
will not exceed five. Subject to Section 3.3(b) and Section 3.3(c), the directors comprising the
Board will consist of (i) two (or, in the circumstances described in Section 3.3(b), three)
representatives designated by WLR (as long as WLR is the Majority Stockholder), one of whom will be
the Chairman of the Board, (ii) one representative designated by Franklin (as long as Franklin is a
Minority Stockholder), and (iii) (if Lear NAOC so elects) one representative designated by Lear
NAOC (as long as Lear NAOC is a Minority Stockholder). The composition of the Board as of the
Effective Date will be as specified on Schedule 2. Lear NAOC may elect to designate a
director by providing written notice to the Company to that effect identifying its designee. Such
designee shall become a director on the earlier to occur of (i) the third Business Day after
delivery of such notice and (ii) the day on which WLR designates its third director. Each
Stockholder agrees to vote or cause its shares of Common Stock to be

6

 

voted at any meeting of the Stockholders and any and all postponements and adjournments
thereof or in any other circumstances in which a vote, consent or other approval (including by
written consent) is sought to elect or remove the directors designated pursuant to this Section 3.3
to serve on the Board and any other similar matter.

          (b) If and for so long as Lear NAOC exercises its right to designate a director, WLR shall be
entitled to designate a total of three representatives to the Board pursuant to Section 3.3(a).

          (c) If WLR ceases to be the Majority Stockholder or Franklin or Lear NAOC ceases to be a
Minority Stockholder, the director(s) that the Stockholder that is no longer the Majority
Stockholder or a Minority Stockholder, as applicable, had been entitled to designate will be
designated by a Majority in Interest.

          (d) Directors may be removed at any time with or without cause. A director may only be
removed by the affirmative vote of the Stockholder(s) entitled to designate such director. In the
event that a vacancy in the Board is created at any time by the death, disability, retirement,
resignation or removal (with or without cause) of any director, such vacancy may be filled only by
the Stockholder(s) entitled to designate such director pursuant to this Section 3.3.

          (e) The composition of each Subsidiary Board for a wholly-owned Subsidiary that is
incorporated or formed in the United States of America shall be the same as that of the Board.

          (f) Directors appointed to the Board will be compensated in accordance with the Bylaws.

          (g) The Company and the Stockholders will take all action necessary to cause the Subsidiaries
of the Company to implement and not contradict the actions and resolutions of the Board.

          (h) If and for so long as Lear NAOC does not exercise its right to designate a Board director
pursuant to Section 3.3(a), it will be entitled to designate one representative to attend meetings
of the Board, any board of directors (or equivalent governing body) of any controlled Subsidiary
(each, a “Subsidiary Board”) or any committee thereof in a non-voting observer category
(the “Observer”). The Observer will have no voting rights with respect to any decision of
the Board, or any committee of the Board. The Company will provide written notice to the Observer
of each meeting of the Board or Subsidiary Board or any committee thereof at the same time and in
the same manner as notice is given to the members of the Board or Subsidiary Board and will furnish
to the Observer copies of all written materials and other information (including copies of meeting
minutes) at the same time as given to directors at, in advance of, or subsequent to such meetings.
Lear NAOC’s right to designate an Observer will terminate if it ceases to be a Minority
Stockholder.

7

 

          (i) Lear NAOC and Franklin will each be entitled to designate one representative to attend
meetings of any board of directors (or equivalent governing body) of any controlled foreign
Subsidiary (each a “Foreign Subsidiary Board”) or any committee thereof in a non-voting
observer category (the “Foreign Subsidiary Observer”). The Foreign Subsidiary Observer
will have no voting rights with respect to any decision of the Foreign Subsidiary Board or any
committee of the Foreign Subsidiary Board. The Company will assure that there is provided to each
Foreign Subsidiary Observer written notice of each meeting of the Foreign Subsidiary Board at the
same time and in the same manner as notice is given to the members of the Foreign Subsidiary Board
and will furnish to each Foreign Subsidiary Observer copies of all written materials and other
information (including copies of meeting minutes) at the same time as given to directors at, in
advance of, or subsequent to such meetings. Lear NAOC’s right and Franklin’s right to designate a
Foreign Subsidiary Observer will terminate if it ceases to be a Minority Stockholder.

          (j) The Company shall pay all out-of-pocket expenses incurred by each director and any
permitted Observer or Subsidiary Observer in connection with attending any meetings of the Board,
any Subsidiary Board or any committee thereof. In the event that the Company pays any fee to a
director for serving on the Board, any Subsidiary Board or any committee thereof, the Company shall
pay to each director a fee in an amount equal to the amount paid to such other director. So long
as any director appointed by WLR, Lear NAOC or Franklin serves on the Board and for three years
thereafter, the Company shall maintain directors and officers indemnity insurance coverage
reasonably satisfactory to such Stockholder and the Charter and Bylaws shall provide for
indemnification and exculpation of directors to the fullest extent permitted under applicable law.

     3.4 Management; Officers. (a) The Board will be responsible for and will have authority to
generally oversee the management of the Company. The initial officers of the Company will be as
specified on Schedule 2. Unless otherwise determined by the Board, the authority of the
officers of the Company and the Subsidiaries will be as is customary for officers of a Delaware
corporation, including, but not limited to, the right and obligation to manage all labor relations
and personnel affairs of the Company in a manner consistent with the Company’s status as a single
employer separate and apart from any other entity, without limitation.

          (b) The Company will not take, and the Company will cause the Board and officers of each
Subsidiary to not take, any of the following actions without the Required Board Approval:

     (i) incur debt for borrowed money in the aggregate in excess of $75.0 million;

     (ii) create any employee option, incentive or similar plan pursuant to which
Company equity securities may be issued (“Employee Plans”);

8

 

     (iii) enter into any material contracts or arrangements outside the ordinary
course of the Company’s and the Subsidiaries’ business, excluding any acquisition of
any business by the Company or any Subsidiary, whether by merger, purchase of all or
substantially all of the assets of such business or otherwise;

     (iv) consummate a Reorganization or a Public Offering;

     (v) enter into or modify any agreement or enter into any transaction between
the Company or a Subsidiary and a Stockholder or any of its Affiliates other than in
relation to any issuance of shares of Capital Stock at Fair Market Value that
complies with Section 3.2;

     (vi) make any amendment to this Agreement or, except as contemplated in Section
6.1 in connection with a Reorganization, to the Company’s Constituent Documents;

     (vii) enter into an agreement pursuant to which it will sell or otherwise
transfer all or substantially all of the Company’s and the Subsidiaries’ assets,
whether by sale or transfer of assets, sale of equity, merger or a transaction of a
similar nature (a “Sale Transaction”); or

     (viii) approve the dissolution, winding-up, liquidation or bankruptcy of the
Company or a material Subsidiary.

          (c) The Company will not take, and the Company will cause the Board and officers of each
Subsidiary to not take, any of the following actions without the approval of each Minority
Stockholder:

     (i) consummate a Sale Transaction in which all Stockholders holding the same
class of Capital Stock do not receive the same consideration on the same terms,
determined on the same basis;

     (ii) approve the dissolution, winding-up, liquidation or bankruptcy of the
Company or a material Subsidiary;

     (iii) enter into or modify any agreement or enter into any transaction between
the Company or a Subsidiary and a Stockholder or any of its Affiliates other than on
arms length terms; provided, that with respect to any such transaction (or series of
related transactions) that involves aggregate payments or other property with a fair
market value in excess of $5 million, the Company shall, prior to the consummation
thereof, obtain a favorable opinion as to the fairness of such transaction or series
of related transactions to the Company or the relevant Subsidiary, as the case may
be, from a financial point of view, from an Arbiter experienced in the subject
matter of such transaction or transactions; provided however, that if Lear NAOC
ceases to be a Minority Stockholder, neither the Company nor a Subsidiary shall
enter into or modify any

9

 

agreement or enter into any transaction between the Company or a Subsidiary and
a Stockholder or any of its Affiliates, without the approval of Franklin;

     (iv) launch or acquire a new line or lines of business which is or are (a)
individually or in the aggregate reasonably likely to represent 20% or more of the
Company’s and Subsidiaries’ consolidated annual sales in the twelve months following
its launch or acquisition (as applicable), and (b) is significantly different from
the business conducted by the Company and the Subsidiaries as of the Effective Date
(after giving effect to the Lear ISD Closing);

     (v) issue any shares of Capital Stock at less than Fair Market Value;

     (vi) issue any shares of Capital Stock other than Common Stock to any
Stockholder or Affiliate of any Stockholder;

     (vii) consummate any recapitalization or reorganization of the Company’s
Capital Stock in which all Stockholders holding the same class of Capital Stock do
not receive the same consideration, on the same terms, determined on the same basis;

     (viii) effect any redemption or repurchase of any Capital Stock or make or pay
any dividends or other distributions other than on a pro rata basis as among
Stockholders holding the same class of Capital Stock;

     (ix) make any amendment to this Agreement or, except as contemplated in Section
6.1 in connection with a Reorganization, to the Company’s Constituent Documents; or

     (x) enter into any Change of Control or Restructuring transaction between the
Company or a Subsidiary and a Stockholder or any of its Affiliates other than on
arms length terms, provided that any such transaction (or series of related
transactions) shall be deemed to be on arms length terms if the Company, prior to
the consummation thereof, obtains an opinion as to the appropriate value(s) to be
ascribed to the elements of such transaction and a favorable opinion as to the
fairness to each of the Stockholders, Company or the relevant Subsidiary, as the
case may be, from a financial point of view, from an Arbiter experienced in the
subject matter of such transaction or transactions. The Company shall nominate a
party to serve as the Arbiter and shall disclose to the Minority Stockholders all
relationships between the Company or the Majority Stockholder and such nominee
during the preceding three years in a written notice (the “Arbiter Notice”). No
later than 15 days after a Minority Stockholder’s receipt of the Arbiter Notice,
such Minority Stockholder shall notify the Company in writing whether it consents to
the use of such

10

 

nominee, which consent shall not be unreasonably withheld. If a Minority
Stockholder does not so notify the Company as to its consent within 15 days after
its receipt of the Arbiter Notice, it will be deemed to have consented to the
nominee set forth therein. If a Minority Stockholder does not consent to the use of
such nominee, it shall provide the Company and the other Stockholders with a written
statement of its reasons for such failure to consent and the Company shall then
select another Arbiter and the parties shall comply with the foregoing provisions of
this Section 3.4(c)(x) until such time as an Arbiter has been selected.
Notwithstanding anything contained herein to the contrary or in the Act or in the
DGCL, if the Company complies with the provisions of this Section 3.4(c)(x), the
Minority Stockholders shall be foreclosed from alleging that the Company, any
Stockholder or any officer or director of the Company has breached or violated any
fiduciary duty owed by such Person to the Company or any Stockholder with respect to
the valuation of the proposed transaction and waives any and all rights it or any of
its Affiliates may have relating to the valuation of such transaction.

          (d) No vote or other action of the Stockholders is required to authorize the Company to take
or refrain from taking any action, other than as provided for in Section 3.4.

     3.5 Competitive Activities. The Company Persons, directly or through Affiliated entities, are
or may be engaged in businesses that may be competitive with the business of the Company or
companies it owns or in which it invests. Nothing herein, in the Act, the DGCL, any Constituent
Document or otherwise (collectively, the “Applicable Rules”) will be deemed to restrict any
Company Person from engaging in such other business activity (regardless of the effects thereof on
the Company or companies it owns or in which it invests) and, notwithstanding any Applicable Rule
to the contrary, in no event will any Company Person have any obligation to act or refrain from
acting (including without limitation presenting any opportunity or other matter to the Company for
it to consider or pursue or to maintain the confidentiality of, or not use, any confidential or
proprietary information) by reason of any relationship with, or actual or alleged duty to, the
Company, provided, however, that this Section 3.5 will not limit the scope or applicability of
Section 6.5, or any other written contract between a Company Person and the Company or any other
Company Person. The Company and the other Company Persons will have no rights by virtue of this
Agreement in and to such independent ventures of any Company Person or the income or profits
derived therefrom, and the pursuit of any such venture, even if competitive with the Company’s
business, will not be deemed wrongful or improper. Each party hereto agrees that, in any such
case, to the extent a court might otherwise hold that the conduct of such activity is a breach of
any Applicable Rule, it has hereby irrevocably waived any and all rights of recovery it may
otherwise have by reason thereof.

     3.6 Management of Workforce and Business. From and after the Effective Date, and
notwithstanding any other provision of this Agreement, the management and direction of the
Company’s and its Subsidiaries’ workforce and business, and the terms

11

 

and conditions thereof, including all wage and salary programs (including bonuses, and
incentive compensation), medical and other benefit programs, other compensation and benefit
programs and the establishment of procedures, policies and protocols for hiring, disciplining and
firing employees and setting general employee standards shall be determined by the Board of
Directors (as delegated to the officers of the Company and its Subsidiaries).

IV. TRANSFERS

     4.1 Transfers. (a) Except for Transfers that comply with this Article IV, without the
Required Board Approval (which, for purposes of clarification, shall not in any event prejudice the
rights of any other Stockholder under Section 4.2 or 4.3), no Stockholder may, directly or
indirectly, sell, transfer, gift, assign or otherwise dispose of, or permit, voluntarily or
involuntarily or by operation of law, any security, encumbrance, interest, pledge, mortgage, lien,
charge, adverse claim, option, warrant, grant of voting rights, preferential arrangement or
restriction of any kind (collectively, an “Encumbrance”) upon, all or any portion of such
Stockholder’s Capital Stock, Options or any interest therein or make or support an application
being made for entry of a decree under Section 18-802 of the Act or enter into an agreement to do
or permit any of the foregoing actions. Notwithstanding the foregoing, Lear NAOC shall be
permitted to pledge its Capital Stock and the Lear Warrant as collateral to secure indebtedness to
a bank or trustee incorporated and doing business in the United States having a combined capital
and surplus of at least $1 billion upon 45 days prior written notice (a “Pledge Notice”) to
the Company, WLR (as long as WLR is a Majority Stockholder) and Franklin (as long as Franklin is a
Minority Stockholder). In no event may a Stockholder Transfer Capital Stock or Options to any
Person who, in the reasonable opinion of the Board, is engaged (whether directly or through
Affiliated entities) in any material business that is competitive with the Business. The Board
shall notify any Stockholder within 20 Business Days of receipt of notice of any proposed
Stockholder Transfer of Capital Stock or Options whether or not the Board, in its reasonable
discretion, deems such transfer to be a prohibited transfer to a competitor in accordance with the
foregoing sentence. Notwithstanding the foregoing, nothing in this Agreement shall restrict a
Change in Control transaction involving Lear NAOC or any resulting Transfer as a result thereof.
Any purported sale, transfer, gift, assignment or other disposition or Encumbrance of a
Stockholder’s Capital Stock or Options (hereinafter collectively referred to as a
“Transfer”) which is in violation of this Agreement (a “Prohibited Transfer”) shall
be invalid and void, shall not bind the Company and shall have no effect whatsoever on the Company
or its Stockholders. Any Stockholder which engages in any Prohibited Transfer shall be liable to
the Company for all costs and expenses incurred by the Company as a result thereof or related
thereto, including with respect to legal action required to enforce the terms of this Agreement.

          (b) Notwithstanding the foregoing, the prohibitions in Section 4.1(a) shall not apply to: (i)
the Transfer by any Stockholder of Capital Stock or Options to the Permitted Transferees of such
Stockholder and (ii) the Transfer by any Stockholder of Capital Stock or Options to a third party,
provided that such Stockholder complies with Section 4.2 and 4.3, if applicable.

12

 

          (c) Any Transfer of Capital Stock or Options which is not prohibited by Section 4.1(a) or
4.1(e) shall be effective only if (i) such Transfer is in compliance with all applicable federal,
state and foreign securities laws and (ii) the Transferee has agreed in writing to be bound by the
terms and conditions of this Agreement.

          (d) If shares of Capital Stock or Options are certificated, each certificate representing the
Capital Stock or Options shall be stamped or otherwise imprinted with a legend or legends customary
in form reflecting the restrictions on transfer set forth in this Agreement and under applicable
securities laws.

          (e) Notwithstanding anything to the contrary in this Agreement, in no event may a Transfer by
any Stockholder be made if the Board concludes in good faith that such Transfer is reasonably
likely to result in (i) the Company being in violation of any applicable law or (ii) the
dissolution of the Company. In making the determination whether a Transfer is reasonably likely to
result in such a termination or dissolution or is reasonably likely to cause such violation, the
Board, in its sole discretion, may require the assignee to furnish, at such assignee’s expense, an
opinion of counsel passing on this issue in a form reasonably acceptable to the Board, with such
counsel to be reasonably acceptable to the Board.

     4.2 Right of First Refusal. (a) Except as otherwise provided herein, if at any time any
Stockholder proposes to Transfer any Capital Stock or Options in any manner to one or more third
parties (other than to Permitted Transferees), then such Stockholder (the “Transferring
Stockholder”) shall give all other Stockholders (the “Offeree Stockholders”) written
notice of its intention to make the Transfer (the “Transfer Notice”), which Transfer Notice
must include (i) a description and the number of shares of Capital Stock to be transferred and a
description of the Options, if any, to be transferred and the number of shares of Capital Stock for
which such Options are exercisable (“collectively, Offered Securities”), (ii) the identity
of the prospective transferee(s) (the “Proposed Transferee”), (iii) the consideration, if
any (the “Offered Price”), and the material terms and conditions upon which the proposed
Transfer is to be made (the “Offered Terms”), and (iv) an offer to sell the Offered
Securities to the Offeree Stockholders at the Offered Price and on the Offered Terms. The Transfer
Notice must certify that the Transferring Stockholder has received a bona fide offer from the
Proposed Transferee(s) and in good faith believes a binding agreement for the Transfer is
obtainable on the terms set forth in the Transfer Notice. The Transfer Notice must also include a
copy of any written proposal, term sheet, or letter of intent or other agreement relating to the
proposed Transfer. Upon the request of the Company or any Offeree Stockholder, the Transferring
Stockholder shall promptly furnish to the Company or to such Offeree Stockholder such other
information as may reasonably be requested to establish that the offer from the Proposed
Transferee(s) is bona fide. If the Offered Price includes consideration other than cash or if
there is no consideration, the cash-equivalent value of the non-cash consideration or the Fair
Market Value of the Offered Securities, as the case may be, will be determined by the Board in good
faith pursuant to the Required Board Approval.

13

 

          (b) Offeree Stockholders’ Option. The Offeree Stockholders will have an option for a
period of 20 Business Days from receipt of the Transfer Notice (the “Holder Option Period”)
to elect to purchase all (but not less than all) of such Offeree Stockholder’s pro rata portion,
calculated relative to the Capital Stock held by all Offeree Stockholders electing to purchase
Offered Securities, at the same price and subject to the same material terms and conditions as
described in the Transfer Notice (the “Holders’ Purchase Option”). Each Offeree
Stockholder may exercise the Holders’ Purchase Option by so notifying the Transferring Stockholder
in writing before expiration of the Holder Option Period. If one or more Offeree Stockholders
gives the Transferring Stockholder notice that they desire to purchase Offered Securities, payment
for such Offered Securities shall be in cash by certified check or wire transfer, against delivery
of certificates representing such Offered Securities, at a place agreed upon between the parties
and at the time of the scheduled closing therefor, which shall be no later than 30 Business Days
after the Offeree Stockholders’ receipt of the Transfer Notice. Any Offered Securities not elected
to be purchased by the end of the Holder Option Period will be re-offered for a five-day period by
the Transferring Stockholder to the Offeree Stockholders who have elected to purchase their full
pro-rata portion of the Offered Securities; if such Offeree Stockholders collectively subscribe for
more than the available Offered Securities, such Offered Securities will be allocated on a pro-rata
basis.

          (c) Transferring Stockholder’s Right to Transfer. If the Offeree Stockholders do not
exercise the Holders’ Purchase Option with respect to all of the Offered Securities, then all
elections to purchase such Offered Securities shall be null and void and the Transferring
Stockholder may Transfer the Offered Securities to the Proposed Transferee at the Offered Price or
at a higher price as long as such Transfer is consummated within 75 days after the date of the
Transfer Notice. If the Offered Shares are not transferred to the Proposed Transferee within such
period, a new Transfer Notice must be given before the Transferring Stockholder may Transfer any
Capital Stock or Options.

     4.3 Tag-Along Rights. (a) If one or more Stockholders other than Lear NAOC (“Selling
Stockholder”) proposes to sell Capital Stock to a third party purchaser (the “Prospective
Purchaser”) pursuant to a bona fide offer to purchase such Capital Stock (a “Qualified
Offer”), such Selling Stockholders may engage in such transaction, subject to their prior
compliance with Section 4.2, only if they assure that the other Stockholders or holders of Options
(“Tag-Along Stockholders”) also shall be afforded the right to sell a proportionate share
of their Capital Stock or Options to the Prospective Purchaser simultaneously therewith on terms
and conditions at least as favorable to the Selling Stockholders as the terms and conditions set
out in the Qualified Offer. Upon receipt by one or more Selling Stockholders of a Qualified Offer,
the Selling Stockholders shall notify the Tag-Along Stockholders in writing of such offer and its
terms and conditions (the “Offer Notice”), which written notice shall include the name of
the Prospective Purchaser and the consideration offered in connection therewith. In order to
exercise their right to sell their Capital Stock or Options as set forth above, the Tag-Along
Stockholders must provide written notice of such intention to the Selling Stockholders within 20
days after the date of their receipt of the Offer Notice. If the Tag-

14

 

Along Stockholders do not provide such written notice within 20 days, the Selling Stockholders
may sell their Capital Stock to the Prospective Purchaser on the terms of the Qualified Offer as
long as such sale is consummated within 75 days after the date of the Offer Notice. If the Capital
Stock is not transferred to the Prospective Purchaser within such period, a new Offer Notice must
be given before the Selling Stockholders may sell any Capital Stock. Each participating Tag-Along
Stockholder individually, not jointly and severally, shall make such Tag-Along Stockholder’s
proportionate share of any representations and warranties made in connection with any such
Transfer. In no event shall any Tag-Along Stockholder be liable for indemnification or similar
obligations in connection with such Transfer other than severally on a pro rata basis in an amount
not greater than the proceeds actually received by such Tag-Along Stockholder in connection with
such Transfer.

          (b) The co-sale rights provided to any Tag-Along Stockholder under Section 4.3(a) shall be
applicable to any direct or indirect sale (including by means of a merger, reorganization, or other
similar transaction) of the Capital Stock of the Company held by a Stockholder, other than Lear
NAOC, including any transfer (including by means of a merger, reorganization, or other similar
transaction) of all or substantially all of the issued and outstanding capital stock, or its
equivalent, of such Stockholder or its Affiliates to a third party; provided that Section 4.3(a)
shall not apply to an indirect transfer of Capital Stock caused by changes in the identity of or
investors in advisory clients of Franklin or funds or other investment vehicles included in the
definition of “WLR” or a transfer of Capital Stock by a Stockholder that is an advisory client of
Franklin or a limited partner or comparable passive investor in a fund or other investment vehicle
included in the definition of “WLR” that receives capital stock pursuant to a normal course
distribution (including a winding up) pursuant to the constituent documents of such fund or other
investment vehicle.

     4.4 Sale of the Company.

          (a) If the Board approves a Sale Transaction in accordance with Section 3.4, each Stockholder
will consent to such Sale Transaction and will vote all of its Capital Stock in favor of such Sale
Transaction, if such vote is required under applicable law, and, if Capital Stock is to be
transferred, will Transfer all of its Capital Stock and Options on the terms and subject to the
terms and conditions of such Sale Transaction. Subject to Section 4.4(b), each Stockholder agrees
to (i) cooperate in any Sale Transaction as reasonably requested by the Board and (ii) execute and
deliver all documents and instruments reasonably requested by the Board, in each case, as are
required in order to effectuate such Sale Transaction.

          (b) The obligations of each Stockholder set forth in Section 4.4(a) in connection with a Sale
Transaction are subject to the satisfaction of the following conditions: (i) upon the consummation
of the Sale Transaction, each Stockholder of the same class shall receive or have the option to
receive the same form of consideration and the same amount of per share consideration (with respect
to any Options on an as converted or exercised basis); (ii) if any Stockholder is given an option
as to the form and amount of consideration to be received, each Stockholder of the same class shall

15

 

be given the same option; and (iii) (in the case of Lear NAOC only) if the consideration to be
received by the Stockholders for the Capital Stock or Options upon consummation of the Sale
Transaction does not consist of cash or Marketable Securities any securities issued to Lear NAOC as
consideration for the Sale Transaction will be subject to substantially similar liquidity
protections (whether granted by the buyer or another party) as those set forth in this Agreement.
Each Stockholder individually, not jointly or severally, shall make such Stockholder’s
proportionate share of any representations and warranties made in connection with any such Sale
Transaction; provided, however, that while Lear NAOC may be required to provide its proportionate
share of indemnification with respect to representations and warranties regarding the Company, in
no event shall Lear NAOC be required to make any representations and warranties other than with
respect to title to the Capital Stock or Options to be sold by Lear NAOC in connection with such
Sale Transaction, its authority to enter into and perform its obligations in connection with such
Sale Transaction, and the lack of any conflicts resulting from its execution, delivery and
performance of the documents and transactions in connection with such Sale Transaction. In no
event shall any Stockholder be liable for indemnification or similar obligations in connection with
such Sale Transaction in an amount greater than the proceeds actually received by such Stockholder
in connection with such Sale Transaction. Notwithstanding the above, the Board, if requested by
Lear NAOC, shall use commercially reasonable efforts to obtain the agreement of the purchaser in a
Sale Transaction to purchase the Lear Warrant (as adjusted to account for the exercise price
thereof) without requiring the holder thereof to exercise the Lear Warrant in connection with such
Sale Transaction.

     4.5 Call Option. If Lear NAOC intends to make a Lear Demand Request, it will first notify the
Company (whether before or after the date on which Lear NAOC has the right to exercise a Demand
Registration Right) and will offer (and/or cause to be offered) to WLR (as long as WLR is a
Majority Stockholder) and Franklin (as long as Franklin is a Minority Stockholder) (the
“Optionholders”) the option (the “Call Option”) to acquire all (but not less than
all) of the shares of Capital Stock and Options held by it (and its Permitted Transferees) at the
Call Price by delivering written notice to that effect (a “Call Notice”) to the Company,
WLR and Franklin. The Call Option may be exercised by the Optionholders only in whole and not in
part. The Optionholders may assign the Call Option to the Company, but only in whole and not in
part.

          (a) Determination of Call Price. Upon delivery of a Call Notice to the Optionholders,
the Optionholders and Lear NAOC shall endeavor in good faith to promptly determine the applicable
Call Price. If the Optionholders and Lear NAOC cannot agree on the applicable Call Price within 10
days after the delivery of the Call Notice, as the case may be, they will, as soon as practicable,
select an Arbiter to determine the applicable Call Price. If the Optionholders and Lear NAOC
cannot agree on an Arbiter within 12 days after delivery of the Call Notice, the Optionholders and
Lear NAOC shall each select an Arbiter and shall each instruct their respective Arbiters to select,
within 15 days after delivery of the Call Notice, a third Arbiter to determine the Call Price. The
Optionholders and Lear NAOC shall instruct the selected Arbiter to determine the Call Price within
30 days after delivery of the Call Notice. The determination of the Call Price by such selected
Arbiter shall be final, binding and

16

 

conclusive, absent manifest error; provided, that following the determination of the Call
Price, Lear NAOC can withdraw its Lear Demand Request and the Call Option by written notice to the
Optionholders within 10 days after the determination of the Call Price (a “Lear Demand
Withdrawal”). Lear NAOC and the Company shall bear all fees, costs and expenses of the
Arbiters engaged pursuant to this Section 4.5 in proportion to Lear NAOC’s Percentage Interest
relative to the Optionholders’ aggregate Percentage Interest.

          (b) Exercise of Call Option. If after the Call Price is agreed or determined and
absent a Lear Demand Withdrawal, an Optionholder wishes to exercise the Call Option, it will notify
Lear NAOC of its intention to do so within 10 days of the Call Price being agreed or determined and
will specify the number of shares of Capital Stock and/or Options it wishes to acquire. In the
event of competition between the Optionholders, the number of shares of Capital Stock and/or
Options to be acquired by them pursuant to the Call Option shall be calculated on a pro rata basis
(“Proportionate Interests”), relative to the Capital Stock and/or Options held by all
Optionholders wishing to exercise the Call Option (“Accepting Optionholders”).

          (c) Closing of the Call Option. The closing of the Call Option pursuant to this
Section 4.5 (a “Call Option Closing”) shall occur on a Business Day specified by written
notice from the Optionholder holding the greater Proportionate Interest to Lear NAOC no later than
five Business Days prior to the proposed Call Option Closing. The Call Option Closing shall occur
no later than 30 days after the final determination of the Call Price. At the Call Option Closing,
the Accepting Optionholders shall pay, without condition, Lear NAOC the applicable Call Price by
wire transfer in lawful money of the United States of America and in immediately available funds,
and Lear NAOC shall deliver to the Accepting Optionholders an assignment of, and any certificates
evidencing, the Capital Stock and Options being transferred to them respectively.

     4.6 Redemption. Upon the occurrence of a Redemption Event in relation to any Stockholder (the
“Affected Stockholder”), if the Board (excluding any director designated by the Affected
Stockholder) so elects (by written notice (the “Redemption Notice”) to the Affected
Stockholder within 30 days after the Company becomes aware of the Redemption Event), all of the
shares of Capital Stock and Options owned by the Affected Stockholder and any Affiliate of the
Affected Stockholder shall be deemed automatically redeemed by the Company for the Redemption Price
without further action of the Affected Stockholder, subject to the right of Lear NAOC to withdraw
its delivery of a Pledge Notice as set forth below; provided, that if the Board reasonably expects
that a Bankruptcy Decision is likely to occur with respect to a Stockholder, the Board may elect
prior to the occurrence of any such Bankruptcy Decision that the Company shall exercise the
redemption right pursuant to this Section 4.6, effective automatically upon the occurrence of a
Bankruptcy Decision. The Redemption Price of the Capital Stock and Options of any Affected
Stockholder shall be determined as of the date of the Redemption Event, as follows. Upon delivery
of the Redemption Notice to the Affected Stockholder, the Company and the Affected Stockholder
shall endeavor in good faith to promptly determine the applicable Redemption Price. If the Company
and the Affected Stockholder cannot agree on the applicable Redemption Price within 15

17

 

days after the delivery of the Redemption Notice, they will, as soon as practicable, select an
Arbiter to determine the applicable Redemption Price. If the Company and the Affected Stockholder
cannot agree on an Arbiter within 20 days after delivery of the Redemption Notice, the Company and
the Affected Stockholder shall each select an Arbiter and shall each instruct their respective
Arbiters to select, within 25 days after delivery of the Redemption Notice, a third Arbiter to
determine the Redemption Price. The Company and the Affected Stockholder shall instruct the
selected Arbiter to determine the Redemption Price within 50 days after delivery of the Redemption
Notice. The determination of the Redemption Price by such selected Arbiter shall be final, binding
and conclusive, absent manifest error. Lear NAOC shall have the right, exercisable within 10 days
after determination of the Redemption Price, to withdraw its delivery of a Pledge Notice, in which
event the Company shall not have the right to redeem Lear NAOC’s Capital Stock and Options pursuant
to this Section 4.6. The Affected Stockholder shall bear a portion of the fees, costs and expenses
of the Arbiters engaged pursuant to this Section 4.6 equal to such Affected Stockholder’s
Percentage Interest. The Company shall bear the balance of such fees, costs and expenses. Payment
for such redemption shall be made no later than 45 days after the later of delivery of the
Redemption Notice and the final determination of the applicable Redemption Price. Each director
designated by the Affected Stockholder shall be excluded from any Board decisions (and from the
definition of “Required Board Approval”) in connection with this Section 4.6 and, if the Affected
Stockholder is a Minority Stockholder, its approval pursuant to Section 3.4(c) shall not be
required in connection with any Company action in connection with this Section 4.6.

V. TAX MATTERS; ALLOCATIONS AND DISTRIBUTIONS

     5.1 Tax Characterization. The Stockholders agree to a partnership characterization under
section 301.7701-3 of the Regulations, and no election inconsistent with such treatment shall be
made unless unanimously approved by the Board.

     5.2 Tax Matters Member. WLR is designated as the tax matters partner of the Company pursuant
to section 6231(a)(7) of the Code (the “Tax Matters Member”) and must take such actions as
are necessary to cause each other Stockholder to become a “notice partner” within the meaning of
section 6223 of the Code. WLR may not take any action contemplated by sections 6223 through 6229
of the Code unless unanimously approved by the Board. Except as provided in Section 5.1 and in
this Section 5.2, upon prior notice to Franklin and Lear NAOC, the Tax Matters Member is authorized
to make all appropriate tax elections to be made by the Company. WLR may notify the Board that WLR
no longer desires to serve as the Tax Matters Member; in such case, the Board will designate
another Stockholder to serve as the Tax Matters Member.

     5.3 Allocation of Profits and Losses. (a) Except as provided in Section 5.3(b) or 5.4,
Profits and Losses will be allocated among the Stockholders in proportion to the number of shares
of Common Stock held by each of them.

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          (b) Allocations Related to Capital Events. Upon the occurrence of a Capital Event,
all items of income, gain, loss and deduction that are attributable to such Capital Event will be
allocated among the Stockholders in a manner such that the Adjusted Capital Account balance of each
Stockholder, immediately after giving effect to such allocation and taking into account all
distributions made, will be, as nearly as possible, equal to such Stockholder’s Target Balance.

     5.4 Special Allocations.

          (a) Notwithstanding any other provision of this Agreement, if there is a net decrease in
Minimum Gain during any taxable year, each Stockholder shall be specially allocated items of
Company income and gain for such year (and, if necessary, for subsequent years) in proportion to,
and to the extent of, an amount equal to such Stockholder’s share of the net decrease in
Partnership Minimum Gain determined in accordance with Regulations Section 1.704-2(g)(2). The items
to be so allocated shall be determined in accordance with Treasury Regulation Section
1.704-2(j)(2)(i). This Section 5.4(a) is intended to comply with the minimum gain chargeback
requirement in the Regulations and shall be interpreted consistently therewith

          (b) Nonrecourse deductions for any taxable year shall be allocated to the Stockholders in
proportion to the number of shares of Common Stock held by each of them. For purposes of this
Section 5.4(b), “nonrecourse deductions” shall have the meaning set forth in Section 1.704-2(b)(1)
of the Regulations.

          (c) Notwithstanding any other provision of this Agreement, if there is a net decrease in
Stockholder Minimum Gain attributable to Stockholder Nonrecourse Debt during any taxable year, each
Stockholder who has a share of the Stockholder Minimum Gain attributable to such Stockholder
Nonrecourse Debt shall be specially allocated items of Company income and gain for such year (and,
if necessary, subsequent Company taxable years) equal to such Stockholder’s share of the net
decrease in Stockholder Minimum Gain. The items to be so allocated shall be determined in
accordance with Treasury Regulation Section 1.704-2(j)(2)(ii). Any Stockholder’s share of the net
decrease in Stockholder Minimum Gain shall be determined in accordance with Regulation Section
1.704-2(i)(5). This Section 5.4(c) is intended to comply with the partner minimum gain chargeback
requirements in the Regulations and shall be interpreted consistently therewith.

          (d) Any Stockholder Nonrecourse Deductions for any taxable year shall be specially allocated
to the Stockholder who bears the economic risk of loss with respect to the Stockholder Nonrecourse
Debt to which such Stockholder nonrecourse deductions are attributable in accordance with
Regulation Section 1.704-2(i). The amount of Stockholder Nonrecourse Deductions with respect to a
Stockholder Nonrecourse Debt for a taxable year equals the excess, if any, of the net increase, if
any, in the amount of Stockholder Minimum Gain attributable to such Stockholder Nonrecourse Debt
during that Taxable year over the aggregate amount of any distributions during that taxable year to
the Stockholder that bears the economic risk of loss for such Stockholder Nonrecourse Debt to the
extent such distributions are from

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the proceeds of such Stockholder Nonrecourse Debt and are allocable to an increase in
Stockholder Minimum Gain attributable to such Stockholder Nonrecourse Debt, determined in
accordance with Regulation Section 1.704-2(i)(1).

          (e) In the event any Stockholder unexpectedly receives any adjustment, allocation or
distribution described in paragraphs (4), (5) or (6) of Regulation Section 1.704-1(b)(2)(ii)(d), a
pro rata portion of each item of Company income and gain shall be specially allocated to the
Stockholder in an amount and manner sufficient to eliminate , to the extent required by the
Regulations , the Adjusted Capital Account Deficit of that Stockholder as quickly as possible. The
items to be allocated will be determined in accordance with Regulations Section
1.704-1(b)(2)(ii)(d)(6). This Section 5.4(e) is intended to comply with Regulations Section 1.704-1(b)(2)(ii)(d) and will be applied and interpreted in accordance with such regulation;
provided, that an allocation pursuant to this Section 5.4(e) shall be made only if and to the
extent that such Stockholder would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Article V have been tentatively made as if this Section 5.4(e)
were not in the Agreement.

          (f) In the event that any Stockholder has a deficit balance in its Adjusted Capital Account at
the end of any taxable year, that Stockholder shall be specially allocated items of Company income
and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant
to this Section 5.4(f) shall be made only if and to the extent that such Stockholder would have a
deficit balance in its Adjusted Capital Account after all other allocations provided for in this
Article V have been made as if Section 5.4(e) and this Section 5.4(f) were not in this Agreement.

          (g) No items of loss or deduction will be allocated to any Stockholder to the extent that any
such allocation would cause the Stockholder to have (or increase the amount of) a Deficit balance
in its Adjusted Capital Account at the end of any Company taxable year. All items of loss or
deduction in excess of the limitation set forth in this Section 5.4(g) shall be allocated among
such other Stockholders, which do not have a deficit balance in their Adjusted Capital Accounts,
pro rata, in proportion to the number of shares of Common Stock held by each of them, until no
Stockholder may be allocated any such items of loss or deduction without having or increasing such
a deficit balance in its Adjusted Capital Account. Thereafter, any remaining items of loss or
deduction shall be allocated to the Stockholders, pro rata, in proportion to the number of shares
of Common Stock held by each of them.

          (h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to
Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulation Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of that
adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases the basis of the asset), then that
gain or loss shall be specially allocated to the Stockholders in the manner consistent with the
manner in which their Capital Accounts are required to be adjusted pursuant to that Regulation.

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          (i) The allocations set forth in Section 5.4(a) through (h) hereof (the “Regulatory
Allocations”) are intended to comply with certain requirements of Treasury Regulations Section
1.704-1(b) and 1.704-2. The Regulatory Allocations may not be consistent with the manner in which
the Stockholders intend to divide Company distributions. Accordingly, the Board is authorized to
divide allocations of Profits, Losses and other items among the Stockholders so as to prevent the
Regulatory Allocations from distorting the manner in which Company distributions are required to be
divided among the Stockholders pursuant to this Agreement. In general, the Stockholders anticipate
that this will be accomplished by specially allocating Profits and Losses and items of income,
gain, loss and deduction among the Stockholders so that the net amount of the Regulatory
Allocations and such special allocations to each Stockholder is zero. The Board will have
discretion to accomplish this result in any reasonable manner.

          (j) In the event that a guaranteed payment to a Stockholder is ultimately recharacterized as a
distribution for federal income tax purposes (as the result of an audit of the Company’s return or
otherwise) and if such recharacterization has the effect of disallowing a deduction or reducing the
adjusted basis of any asset of the Company, then an amount of Company gross income equal to such
disallowance or reduction shall be allocated to the recipient of such payment. In the event that a
distribution to a Stockholder is ultimately recharacterized as a guaranteed payment for federal
income tax purposes (as a result of an audit of the Company’s return or otherwise), and if any such
recharacterization gives rise to a deduction, such deduction shall be allocated to the recipient of
the distribution.

          (k) The expense for each tax paid or accrued by the Company shall be allocated to each
Stockholder’s Capital Account in proportion to the allocation among such Capital Accounts of the
income to which such tax relates (in the manner contemplated by Regulations Section
1.704-1(b)(4)(viii) and the examples relating thereto). In so allocating expense for each tax paid
or accrued by the Company, the Company will not take into account revaluation gains and losses, as
described in paragraph (b) of the definition of “Book Value,” in computing the total income,
expenses, gains and losses allocated to each Capital Account.

     5.5 Distributions. (a) The Board may approve the payment of Distributions to Stockholders
from time to time, subject to Section 3.4(c). Distributions may be authorized, declared and paid
by the Board in any amount that it deems to be in the best interests of the Company and its
Stockholders, provided, however, that the Board may not authorize the payment of any Distribution
in any fiscal year that would be reasonably likely to result in the Company’s (i) breach or
violation of any ongoing contractual obligation of the Company or any of its Subsidiaries or (ii)
violation of applicable law.

          (b) Subject to the limitations of Section 5.5(a), the Board will authorize, declare and pay
quarterly Distributions to Stockholders in an amount at least equal to the estimated U.S. federal,
state or local taxes such Stockholders will be required to pay by virtue of the allocation of
Company taxable income to such Stockholders (the “Tax 

21

 

Distribution”). The amount of the Tax Distribution for each Stockholder for any
fiscal period will be calculated by approximating each such Stockholder’s or, in the case of a
pass-through entity, its direct or indirect equity holders’, tax liability in respect of taxable
income allocated to it during the preceding quarter, and using the single highest effective tax
rate determined by the Board in good faith for application to all Stockholders. Further, to the
extent the Company is required by any federal, state or local law or regulation to withhold from,
or pay income taxes with respect to, any distribution or allocation to any member, such amount of
taxes withheld or paid shall be considered as a distribution to pay taxes under this Section 5.5.
The amount of such taxes withheld or paid with respect to any Stockholder shall be applied against
the amount of the distribution otherwise payable to the Stockholder under this Section 5.5. Any
Tax Distribution made to a Stockholder will be treated as having been distributed under Section
5.5(c) or Section 5.5(d), as applicable, and thus will reduce, dollar for dollar, the distributions
to which such Stockholder would otherwise be entitled pursuant to Section 5.5(c) or Section 5.5(d).

          (c) Subject to the limitations of Section 5.5(a), the Board may authorize, declare and pay
Distributions to Stockholders in addition to those required pursuant to Section 5.5(b). Such
distributions will be made to the Stockholders in proportion to the number of shares of Common
Stock held by each of them.

          (d) Upon the liquidation of the Company, distributions of the assets of the Company to the
Stockholders will be made in proportion to the number of shares of Common Stock held by each of
them. It is intended that such distributions will result in the Stockholders receiving aggregate
distributions equal to their respective positive Capital Account balances, after giving effect to
all adjustments for the taxable year in which liquidation of the Company occurs. However, if the
positive balances in the Capital Accounts of the Stockholders are not equal to the amounts to be
distributed to each such Stockholder pursuant to this Section 5.5(d), constituent items of income,
gain, loss and deduction will be reallocated among the Stockholders for the year of liquidation, to
the extent permissible under Code Section 704(b) (and, if necessary and permissible under Code
Section 704(b), for prior Company taxable years for which the deadline (determined without regard
to extensions) for the filing of the Company’s federal income tax return has not passed), so as to
cause the balances in the Capital Accounts of the Stockholders to be in the amounts necessary to
assure that such result is achieved.

     5.6 Allocations and Distributions to New Stockholders. If shares of Common Stock are
transferred or if additional shares of Common Stock are issued to a new Stockholder during any
fiscal year, Profits and Losses for the fiscal year will be allocated to the new Stockholder in
accordance with section 706(d) of the Code, using any conventions permitted by law and selected by
the Stockholders. All Distributions on or before the date of a transfer will be made to the
transferor, and all Distributions after the date of a transfer must be made to the transferee.

     5.7 Capital Accounts. The Company will maintain an accounting record of each Stockholder’s
capital interest in the Company as determined under the rules set

22

 

forth in Regulation Section 1.704-1(b) (a “Capital Account”). There shall be credited to each
Stockholder’s Capital Account (a) the amount of any contribution of cash by that Stockholder, (b)
the Book Value of property contributed by that Stockholder, (c) that Stockholder’s allocable share
of Profits and any items in the nature of income or gain that are specially allocated to that
Stockholder, and (d) the amount of any Company liabilities assumed by such Stockholder or which are
secured by any property distributed to such Stockholder. There shall be debited against each
Stockholder’s Capital Account (i) the amount of all distributions of cash to that Stockholder
unless a distribution to the Stockholder is a loan or is deemed a payment under Code Section
707(c), (ii) the Book Value of property distributed to that Stockholder by the Company, (iii) that
Stockholder’s allocable share of Losses and any items in the nature of expenses or losses which are
specially allocated to that Stockholder, and (iv) the amount of any liabilities of such Stockholder
assumed by the Company or which are secured by any property contributed by such Stockholder to the
Company. This definition of Capital Account and the other provisions herein relating to the
maintenance of Capital Accounts are intended to comply with Regulation Sections 1.704-1(b) and
1.704-2 and shall be interpreted and applied in a manner consistent with those Regulation Sections.
In the event the Board reasonably determines that it is prudent to modify the manner in which the
Capital Accounts, or any debits or credits thereto, are computed in order to comply with that
Regulation, the Board may make such modification, provided that such modifications are not
reasonably expected to materially alter the amount and timing of distributions to the Stockholders
pursuant to Section 5.5 hereof. The Board shall also make any appropriate modifications in the
event unanticipated events might otherwise cause this Agreement not to comply with Regulation
Sections 1.704-1(b) and 1.704-2, provided that such modifications are not reasonably expected to
materially alter the amount and timing of distributions to the Stockholders pursuant to Section 5.5
hereof.

     5.8 Tax Allocations. (a) Any item of income, gain, deduction or loss (including creditable
foreign tax expenditures) with respect to any property (other than money) that has been contributed
by a Stockholder to the capital of the Company and which is required to be allocated to
Stockholders for income tax purposes under section 704(c) of the Code so as to take into account
the variation between the tax basis of such property and its Book Value at the time of its
contribution, will be allocated to the Stockholders for income tax purposes using such method
permitted under section 1.704-3 of the Regulations as the Company may select through unanimous
consent of the Board. If the Capital Accounts are adjusted pursuant to section
1.704-1(b)(2)(iv)(f) or (g) of the Regulations with respect to a revaluation of any asset of the
Company, subsequent allocations of income, gain, loss, and deduction, including depreciation or
deductions for cost recovery with respect to such asset, will take account of any variation between
the then existing adjusted basis of such asset for federal income tax purposes and the Book Value
of such asset as required by section 1.704-1(b)(2)(iv)(g) of the Regulations. Notwithstanding the
foregoing, if any Stockholder contributed property with an adjusted tax basis in excess of the
initial Book Value for such property, the Company shall take into account such variation only in
determining the amount of items allocated to the contributing Stockholder, and except as provided
in Regulations, in determining the amount of items allocated to the

23

 

noncontributing Stockholders, the tax basis of the contributed property in the hands of the
Company shall be treated as being equal to its initial Book Value. Creditable foreign tax
expenditures shall be allocated among the Stockholders for federal income tax purposes by taking
into account such 704(c) built-in gain or loss as provided in Regulations Section
1.704-1(b)(4)(viii)).

          (b) Each Stockholder represents and warrants that by executing this Agreement or a joinder to
this Agreement it is aware of the income tax consequences of allocations of profit and loss and
hereby agrees to report its share of such profits and loss for income tax purposes in a manner
consistent with such allocations.

     5.9 Tax Withholding. Each Stockholder agrees to allow the Company or the Tax Matters Member
to make appropriate tax withholdings pursuant to section 1446 of the Code. Any federal tax
obligation withheld on distributable net income by the Company or by the Tax Matters Member
pursuant to section 1446 of the Code will be directly attributable to the Stockholder or
Stockholders that are subject to such withholding in proportion to each Stockholder’s share of
distributable net income.

     5.10 Section 754 Elections. The Company shall be required to make a section 754 election upon
proper notice and request of a transferee Stockholder and provide information to the Stockholders
regarding the adjustment to the transferee.

     5.11 Grant of Profits Interest in Exchange for Services. By executing this Agreement, the
Stockholders and the Company agree that the Company and the Board are authorized and directed to
take such actions (including the making of an appropriate tax elections) as may be required by any
authority that may be issued in the future with respect to the taxation of “profits interests”
transferred in connection with the performance of services to conform the tax consequences to any
Stockholder that receives such “profits interest” as closely as possible to the consequences under
Revenue Procedure 93-27 and Revenue Procedure 2001-43. The Company and each of its Stockholders
(including the “profits interest” recipient Stockholder) agree to comply with all requirements
imposed in respect of such actions and consents to the amendment of this Agreement to the extent
such subsequent authority in order to permit the issuance of such “profits interests,” provided
that such amendment is not materially adverse to any Stockholder (other than due to a lower tax
deduction to the Company).

     5.12 Preparation of Tax Returns. The Company shall arrange for the preparation by the
independent certified public accountants retained by the Company of, and the timely filing of all
returns of the Company for federal, state, local and foreign tax purposes and shall cause to be
furnished to the Stockholders, the tax information reasonably required for the Stockholders’
federal, state, local and foreign tax reporting purposes (including but not limited to required
U.S. reporting of foreign operations) on or before June 30th of each year in the U.S.
The classification, realization and recognition of income, gain, losses and deductions and other
items, for tax purposes, shall be on that method of accounting adopted by unanimous consent of the
Stockholders.

24

 

     5.13 Tax Controversies. The Tax Matters Member is authorized and required to represent the
Company (at the Company’s expense) in connection with all examinations of the Company’s affairs by
tax authorities, including resulting administrative and judicial proceedings, and to expend Company
funds for professional services and costs associated therewith. The Tax Matters Member agrees to
promptly provide to the other Stockholders copies of any correspondence or other documents received
from or sent to any federal, state, local or foreign tax authorities relating to any examination of
the Company’s affairs. Each Stockholder, shall at its own expense, be permitted to attend and
participate in any discussions, negotiations or proceedings in which the Tax Matters Member is
involved on behalf of the Company.

     5.14 Capital Account Deficit Restoration. No Stockholder shall be obligated to restore after
the liquidation of the Company any deficit in its Adjusted Capital Account balance, and no creditor
of the Company shall have any right to enforce any obligation to restore any deficit Adjusted
Capital Account balance of any Stockholder.

     5.15 Tax Elections and Other Tax Matters. Unless otherwise specifically provided herein, all
United States federal income tax elections applicable to the Company shall be made by the unanimous
approval of the Board. In addition, if proposed Treasury Regulation Section 1.704-1(s) is
finalized, or a similar regulation is promulgated, the Stockholders will cooperate in good faith to
avoid the recognition by Lear NAOC of any taxable income or taxable gain in respect of Lear NAOC’s
exercise of the Lear Warrant.

VI. OTHER COVENANTS

     6.1 Public Offering. (a) Lear Demand Request. Provided that Lear NAOC has first
complied with Section 4.5 and either the Call Option granted pursuant thereto has not been
exercised or the Call Option has been exercised but the Call Option Closing has not occurred by the
date that is 20 days after the final determination of the Call Price, Lear NAOC may exercise its
demand registration rights set forth in the Registration Rights Agreement (a “Lear Demand
Request”). Lear NAOC’s right to make the Lear Demand Request will terminate upon Lear NAOC’s
transfer of any shares of Capital Stock or Options other than (i) in connection with a pledge (or
exercise pursuant thereto) of all of the Capital Stock and Options owned by Lear NAOC permitted
pursuant to Section 4.1(a), or (ii) a Transfer in accordance with this Agreement.

          (b) Board Decision. Subject to Section 3.4(b), in the event that the Board determines
pursuant to the Required Board Approval that it would be advisable to cause the equity of the
Company or its business to be sold to the public in a Public Offering, it may invoke Section
6.1(c).

          (c) Reorganization. If a Lear Demand Request is made or Section 6.1(b) is invoked, the
Board shall seek to facilitate a Public Offering by: (i) interposing between the Company and the
Subsidiaries a corporation that would be suitable for having its equity sold to the public in a
Public Offering (a “Newco”) or (ii) causing the Company to be reorganized (including by way
of merger, conversion, recapitalization,

25

 

asset and liability transfer, or equity exchange) into a Newco. The Board shall accomplish
the foregoing (a “Reorganization”) as promptly as practicable in such manner as it
reasonably deems appropriate, efficient (including in terms of tax treatment) and in the best
interests of each of the Stockholders, subject to the requirements of this Section 6.1. The
organizational documents of Newco will be in such form as is approved by the Board, and each
Stockholder agrees to vote its shares of Capital Stock and execute all documents and agreements as
reasonably requested by the Board in furtherance of a Reorganization.

          (d) Consummation of the Reorganization. Upon the consummation of the Reorganization,
each Stockholder will be entitled to cause the Company to redeem or exchange all (but not less than
all) of its Capital Stock for the applicable pro rata portion of the Newco common stock held by the
Company, with fractional shares of Newco common stock rounded or cashed out in an equitable manner,
as determined by the Board in good faith.

     6.2 Confidentiality. Any Stockholder receiving any Confidential Information related to the
Company or its Subsidiaries or Affiliates agrees to keep such Confidential Information confidential
and not disclose such Confidential Information to any third party without the prior written consent
of the Company (in its sole discretion), provided that nothing in this Agreement will prevent such
Stockholder from disclosing such Confidential Information (i) as required by law, regulation, other
legal process or the rules of any national stock exchange applicable to such Stockholder or any of
its Affiliates, (ii) to its limited partners or shareholders, representatives (including attorneys
and accountants), agents and affiliates, provided such Persons agree to be bound by the provisions
of this Section 6.2, (iii) as part of such Stockholder’s normal reporting, rating or review
procedures (including normal credit rating or pricing process) and (iv) in connection with the
transfer or proposed transfer of Common Stock, if the transferee or proposed transferee agrees in
writing to be bound by the provisions hereof.

     6.3 Information Rights. (a) The Company will, and will cause each of its Subsidiaries,
Affiliates, officers, directors, employees, auditors and agents, to afford each of WLR, Lear NAOC
and Franklin (as long as it is a Majority or Minority Stockholder, as applicable) and its
representatives and agents, upon reasonable notice, reasonable access during business hours to its
officers, employees, auditors, agents, properties, offices and other facilities and to all books
and financial and other records of the Company and the Subsidiaries.

            (b) The Company will furnish to each Stockholder the following:

     (i) within 30 days following the conclusion of each of the Company’s first
three fiscal quarters of each fiscal year, quarterly unaudited consolidated
financial statements of the Company and the Subsidiaries;

     (ii) within 60 days following the conclusion of the Company’s fiscal year,
annual audited consolidated financial statements of the

26

 

Company and the Subsidiaries audited by the Company’s independent accountants;

     (iii) within 15 days following the conclusion of each month, unaudited
consolidated financial statements of the Company and the Subsidiaries for such
month;

     (iv) within 15 days following the conclusion of each of the Company’s first
three fiscal quarters of each fiscal year, quarterly U.S. GAAP tax accrual
workpapers prepared in accordance with SFAS 109, Accounting for Income Taxes; and

     (v) within 30 days following the conclusion of the Company’s fiscal year,
annual U.S. GAAP tax accrual workpapers prepared in accordance with SFAS 109,
Accounting for Income Taxes.

     6.4 WLR Advisory Fee. For as long as WLR is the Majority Stockholder, WL Ross & Co. LLC shall
be entitled to the following advisory fees: (a) in the case of a cash capital contribution by
Franklin or Lear NAOC to the Company or a Subsidiary, other than capital contributions (i) by Lear
NAOC or Franklin pursuant to Section 2.3 or (ii) by Lear NAOC pursuant to Section 2.2, Franklin or
Lear NAOC, as the case may be, will pay WL Ross & Co. LLC an advisory fee equal to 1.5% of such
cash capital contribution; and (b) in the case of a cash capital contribution to the Company or a
Subsidiary from a Person other than WLR, Franklin or Lear NAOC, such Person will be required to pay
WL Ross & Co. LLC an advisory fee equal to 4.0% of such cash capital contribution. The advisory
fee shall be payable in cash contemporaneously with, and as a condition to, the capital
contribution on which it is based. For the avoidance of doubt, the parties acknowledge and agree
that WL Ross & Co. LLC shall not be entitled pursuant to this Section 6.4 to any advisory fee in
connection with a Transfer of Capital Stock by a Stockholder or in connection with a Public
Offering.

     6.5 Noncompetition. (a) Each of WLR and Franklin, each on behalf of itself and its
Affiliates, and Lear NAOC, on behalf of itself and Lear Corporation and its Subsidiaries, agrees
that, as long as it is a Stockholder and, in the case of Lear and WLR, for a period of one year
thereafter (the “Non-Compete Period”), it will not at any time without the prior written
consent of the Company, directly or indirectly, in any state, territory or possession of the United
States of America, the United Mexican States or Canada in which the Business has material
operations as of the date of the Lear Acquisition Agreement (the “Territory”) form,
acquire, finance, own an interest in, operate or control an enterprise which is directly
competitive with the Business (a “Competing Business”). Nothing herein shall prohibit any
Stockholder from (x) being a passive owner, directly or indirectly, of not more than 20% of the
outstanding equity, or instruments convertible into 20% of the outstanding equity, of any Person
that is a Competing Business which is publicly traded, so long as it does not have an active
participation in the business of such Persons, or (y) managing investments in Competing Businesses
for the account of Persons who are not Affiliates. Notwithstanding anything to the contrary in
this Agreement, with respect to Lear NAOC

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the restrictions in this Section 6.5 shall terminate upon a Change in Control with respect to
Lear NAOC or on the first anniversary of Lear NAOC’s ceasing to be a Minority Stockholder;
provided, that in the case of a Change in Control of Lear Corporation, Lear NAOC or its successor
shall (a) cause its Board designees (as designated pursuant to Section 3.3(a) herein) and Observers
to immediately resign from the Board and each Subsidiary Board, (b) cease to have any right to
appoint any individual to fill such vacancies, (c) retain in strict confidence any Confidential
Information that it has obtained as a member of the Board or any Subsidiary Board, as the case may
be, and shall not use for any purpose whatsoever, or divulge, disseminate or disclose to any third
party or Person involved in a Competing Business, any such Confidential Information, it being
understood that the exceptions in clauses (ii)-(iv) of Section 6.2 shall no longer apply to Lear
NAOC or its successor, and (d) no longer be entitled to receive any Confidential Information.
Notwithstanding anything to the contrary in this Agreement, Lear NAOC shall be entitled to: (i)
engage in sequencing activities in relation to a Competing Business, (ii) to generate annual gross
revenues of up to $200,000,000 attributable to a Competing Business (as determined without regard
to sequencing revenues), if such revenues are attributable to ancillary activities of Lear NAOC
relating to Lear NAOC’s core business operations, provided, that Lear NAOC shall first provide the
Company the opportunity to bid for such ancillary activities and will award such activities to the
Company if its bid is more competitive than the terms on which Lear NAOC is willing to provide such
activities, and (iii) engage in activities related to the development, manufacture and/or sale of
automotive seats or seat components, electrical distribution systems or components, or electronic
systems or components. In addition, notwithstanding the above, in the event Lear NAOC directly or
indirectly acquires all of or any portion of any Person, whether by merger, consolidation, purchase
of assets or otherwise, this Section 6.5 shall not apply with respect to the continued operation of
the business of such Person if (i) such Person, at the time of the acquisition, has annual gross
revenue from a Competing Business equal to or less than $100,000,000, or (ii) such Person, at the
time of the acquisition, has annual gross revenue from a Competing Business greater than
$100,000,000 and, in the case of clause (ii), Lear NAOC disposes of such Competing Business to a
third party purchaser within 15 months after the acquisition thereof; provided that in each case
Lear NAOC does not provide Confidential Information to any Person involved in such Competing
Business.

          (b) The Stockholders agree that the covenants set forth in this Section 6.5 are reasonable in
temporal and geographical scope and in all other respects.

          (c) The Company and the Stockholders intend that the covenants of this Section 6.5 shall be
deemed to be a series of separate covenants, one for each county or province of each and every
state, territory or jurisdiction of each country within the Territory and one for each month of the
Non-Compete Period.

          (d) If, at the time of enforcement of this Section 6.5, a court shall hold that the duration
or scope stated herein is unreasonable under circumstances then existing, the Company and the
Stockholders agree that the maximum duration or scope under such circumstances shall be substituted
for the stated duration or scope and that

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the court shall be allowed to revise the restrictions contained herein to cover the maximum
period and scope permitted by law.

          (e) Each of the Minority Stockholders shall have the right to seek to enforce the terms of
this Section 6.5 against any of the other Stockholders.

          (f) Each Stockholder recognizes and affirms that in the event of its breach of any provision
of this Section 6.5, money damages would be inadequate and the Company would not have an adequate
remedy at law. Accordingly, each Stockholder agrees that in the event of a breach or a threatened
breach by any Stockholder of any of the provisions of this Section 6.5, the Company and the
Stockholders, in addition and supplementary to other rights and remedies existing in its favor, may
apply to any court of law or equity of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any violations of the provisions hereof
(without posting a bond or other security).

          (g) For purposes of this Section 6.5, “Stockholder” shall mean, with respect to WLR and
Franklin, WLR and Franklin and each of their Affiliates, and with respect to Lear NAOC, Lear NAOC
and Lear Corporation and its Subsidiaries.

VII. GENERAL

     7.1 Waivers and Consents; Amendments. (a) No course of dealing and no delay in exercising
any rights hereunder will operate as a waiver of the rights hereof. No provision hereof may be
waived other than by a written instrument signed by the party or parties waiving such provision.
The Company shall not waive any provision of this Agreement without the consent of each of the
Minority Stockholders. Except as provided in Section 7.1(b), this Agreement may only be amended by
the Required Board Approval and the consent of each of the Minority Stockholders, provided,
that no amendment shall (i) change the limitation on liability of the Stockholders or the
Stockholders’ right to distributions on a pro rata basis in each case without the written consent
of each affected Stockholder or (ii) adversely affect any Stockholder without the written consent
of the Stockholder so adversely affected.

          (b) The Stockholders hereby specifically consent to the amendment of this Agreement from time
to time in such manner as is determined by counsel for the Company to be necessary upon publication
of final regulations in the federal Register (or other official pronouncement), to provide for (A)
the election of a safe harbor under proposed Treasury Regulations Section 1.83-3(l) (or any similar
provision) under which the fair market value of Capital Stock that is transferred in connection
with the performance of services is treated as being equal to the liquidation value of that
interest, (B) an agreement by the Company and all of its Stockholders to comply with all the
requirements set forth in such proposed Treasury Regulations and Notice 2005-43 (and any other
guidance provided by the Internal Revenue Service with respect to such election) with respect to
all Common Stock transferred in connection with the performance of services while the election
remains effective, and (C) any other related amendments.

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     7.2 Governing Law. This Agreement will be deemed to be a contract made under, and will be
construed in accordance with, the laws of the State of Delaware without giving effect to conflict
of laws principles thereof.

     7.3 Notices and Demands. Any notice or demand which is required or permitted to be given
under this Agreement must be given, and will be deemed to have been sufficiently given for all
purposes of this Agreement, on the date delivered by hand or distributed by fax or e-mail prior to
5:00 p.m., Eastern Standard Time (otherwise, such notice will be deemed received on the next
succeeding business day in the place of receipt), or the next business day after being sent by
overnight delivery by a reputable overnight courier service providing receipt of delivery, to the
addresses of the Stockholders set forth on Schedule 1.

     7.4 Remedies; Severability. It is specifically understood and agreed that any breach of the
provisions of this Agreement by any Person subject hereto will result in irreparable injury to the
other parties hereto, that the remedy at law alone will be an inadequate remedy for such breach and
that, in addition to any other remedies which they may have, such other parties may enforce their
respective rights by actions for specific performance (to the extent permitted by law). Whenever
possible, each provision of this Agreement will be interpreted in such a manner as to be effective
and valid under applicable law, but if any provision of this Agreement is deemed prohibited or
invalid under such applicable law, such provision will be ineffective to the extent of such
prohibition or invalidity, and such prohibition or invalidity will not invalidate the remainder of
such provision or the other provisions of this Agreement.

     7.5 Integration. This Agreement, including any exhibits or schedules referred to herein or
attached hereto (each of which is a part of this Agreement), constitutes the entire agreement, and
supersedes all other prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.

     7.6 Binding Agreement. This Agreement will be binding upon and enforceable by, and will inure
to the benefit of, the parties hereto and their respective successors, heirs, executors,
administrators and permitted assigns, and no others. Nothing in this Agreement will give any other
Person not named herein the benefit of any legal or equitable right, remedy or claim under this
Agreement. The rights and obligations under this Agreement are evidenced by the ownership of the
Capital Stock and Options. Notwithstanding the foregoing, the rights of the Majority Stockholder
and the Minority Stockholders in their capacities as such (i.e., in contrast to the rights of
Stockholders generally) may only be transferred by WLR, Franklin and Lear NAOC in connection with a
Transfer of Capital Stock and Options to their Permitted Transferees.

     7.7 Termination. (a) This Agreement will terminate automatically on the earlier of:

     (i) the written agreement of the Stockholders; or

     (ii) the consummation of an initial Public Offering.

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     7.8 Counterparts. This Agreement may be executed simultaneously in two or more counterparts
(including facsimile copies), any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the same agreement.

     7.9 Jurisdiction; Consent to Service of Process. (a) Each party hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive jurisdiction of the New York
state court located in the Borough of Manhattan, City of New York or the United States District for
the Southern District of New York (as applicable, the “New York Court”), and any appellate
court from any such court, in any proceeding arising out of or relating to any Constituent
Document, or for recognition or enforcement of any judgment resulting from any such proceeding, and
each party hereby irrevocably and unconditionally agrees that all claims in respect of any such
suit, action or proceeding may be heard and determined in the New York Court.

          (b) It will be a condition precedent to each party’s right to bring any such proceeding that
such proceeding, in the first instance, be brought in the New York Court (unless such proceeding is
brought solely to obtain discovery or to enforce a judgment), and if each such court refuses to
accept jurisdiction with respect thereto, such proceeding may be brought in any other court with
jurisdiction; provided that the foregoing will not apply to any proceeding by a party seeking
indemnification or contribution pursuant to any Constituent Document or otherwise in respect of a
proceeding against such party by a third party if such proceeding by such party seeking
indemnification or contribution is brought in the same court as the proceeding against such party.

          (c) No party may move to (i) transfer any such proceeding from the New York Court to another
jurisdiction, (ii) consolidate any such proceeding brought in the New York Court with a proceeding
in another jurisdiction, or (iii) dismiss any such proceeding brought in the New York Court for the
purpose of bringing the same in another jurisdiction.

          (d) Each party hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, (i) any objection which it may now or hereafter have to the laying
of venue of any proceeding arising out of or relating to the Constituent Documents in the New York
Court, (ii) the defense of an inconvenient forum to the maintenance of such proceeding in any such
court, and (iii) the right to object, with respect to such proceeding, that such court does not
have jurisdiction over such party. Each party irrevocably consents to service of process in any
manner permitted by law.

     7.10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW
OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY.

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     7.11 No Strict Construction. The parties have participated jointly in the preparation of
the Constituent Documents. In the event an ambiguity or question of intent or interpretation
arises, any provision contained in the Constituent Documents will be construed as if drafted
jointly by the parties, and no presumption or burden of proof will arise favoring or disfavoring
any party by virtue of the authorship of any of the provisions of the Constituent Documents.

     7.12 Certain Other Interpretive Matters. (a) Titles and headings to Sections herein are
inserted for convenience of reference only, and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement.

          (b) Unless the context otherwise requires, (i) all references to articles, sections or
schedules are to articles, sections or schedules of this Agreement, (ii) the words “include”,
“includes”, and “including” shall be deemed to be followed by “without limitation” whether or not
they are in fact followed by such words or words of similar import, (iii) each term defined in this
Agreement has the meaning assigned to it, and (iv) each accounting term not otherwise defined in
this Agreement has the meaning assigned to it in accordance with U.S. GAAP. All references to “$”
or dollar amounts are references to lawful currency of the United States of America.

     7.13 Expenses. All Reimbursable Expenses incurred by WLR, Franklin and Lear NAOC will be paid
or reimbursed by the Company. The Company will pay and be responsible for all expenses and fees
relating to its formation.

     7.14 Definitions. For purposes of this Agreement, in addition to the terms defined elsewhere
herein, the following terms have the following meanings when used herein with initial capital
letters:

          “2007 EBITDA” means the consolidated net income of the Business for calendar year
2007, (a) excluding (to the extent net income is reduced or increased or net loss is increased or
reduced thereby), without duplication, (i) interest expense, (ii) provisions for taxes based on
income, (iii) depreciation expense, (iv) amortization expense, (v) Restructuring Costs, (vi)
transaction costs incurred in connection with the consummation of the transactions contemplated in
the Lear Acquisition Agreement, (vii) gains or losses on the sale or disposal of assets not in the
ordinary course of business, (viii) the cumulative effect of any changes in accounting principles
or policies, (ix) investment income and losses, (x) fees or other amounts paid to Affiliates of the
Company, other than reimbursement of out-of-pocket expenses incurred in good faith in furtherance
of the Business, (xi) any WLR advisory or management fees, (xii) non-recurring or extraordinary
gains, losses or expenses and (xiii) any costs related to establishing the Business as a stand
alone entity, including costs incurred under the Transition Services Agreement, (b) adding thereto,
without limitation, the actual benefits of any of the following occurring (in whole or in part)
prior to December 31, 2007, in each case measured relative to the circumstances as of the date of
the Lear Acquisition Agreement and annualized for the entire 2007 calendar year, (x) implementation
of the Restructuring Plan, (y) increased pricing and other changes to customer contracts agreed to
or implemented on or after the date of the Lear Acquisition Agreement, and (z)

32

 

changes in wage rates, benefits and other aspects of labor or benefit agreements agreed to or
implemented on or after the date of the Lear Acquisition Agreement (or agreed to prior to, but
implemented on or after the date of the Lear Acquisition Agreement), (c) deducting therefrom any
costs incurred under the Transition Services Agreement (other than non-recurring, one-time costs)
and, without duplication, any actual additional recurring administrative and overhead expenses
consistent with the services initially provided under the Transition Services Agreement or
otherwise required to operate the Business as a stand alone entity, in each case annualized for the
entire 2007 calendar year, and (d) including such other equitable adjustments (additions or
exclusions) as reasonably appropriate to account for and exclude from 2007 EBITDA the effects of
non-recurring, extraordinary events or transactions outside the ordinary course of business. The
annualized benefits described in (b) above, the annualized costs described in (c) above and the
equitable adjustments described in (d) above shall be determined in good faith and the Company
and/or Stockholders agree, upon request, to meet to discuss the appropriate treatment of
extraordinary events or transactions outside of the ordinary course of business for purposes of
determining 2007 EBITDA.

          “Accepting Optionholders” has the meaning set forth in Section 4.5.

          “Accounting Firm” means Deloitte & Touche LLP, or such other firm as may be agreed in
writing by the Company and the Stockholders.

          “Adjusted Capital Account” means, with respect to any Stockholder, such Stockholder’s
Capital Account increased by the sum of (i) such Stockholder’s share of “partnership minimum gain”
within the meaning of section 1.704-2(d) of the Regulations and (ii) such Stockholder’s share of
“partner nonrecourse debt minimum gain” within the meaning of section 1.704-2(i) of the
Regulations.

          “Affected Stockholder” has the meaning set forth in Section 4.6.

          “Affiliate” of a Person means any Person or entity which directly or indirectly
controls, is controlled by, or is under common control with (within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act) such Person or entity.

          “Arbiter” means a reputable investment banking or accounting firm nationally
recognized in the United States with no material relationship to the Company or any of WLR,
Franklin or Lear NAOC.

          “Asset Sale” means the sale or other disposition of all or a substantial portion of
the assets of the Company, as determined by the Board in good faith.

          “Bankruptcy Decision” means, with respect to any Person, any of the following actions:
(a) filing any voluntary petition in bankruptcy on behalf of such Person, (b) consenting to the
filing of any involuntary petition in bankruptcy against such Person, (c) filing any petition
seeking, or consenting to, reorganization or relief under any applicable federal, state or foreign
law relating to bankruptcy or insolvency, on

33

 

behalf of such Person, (d) consenting to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of such Person or a substantial part of the
property of such Person, or (e) making any assignment for the benefit of creditors on behalf of
such Person.

          “Board” means the Company’s Board of Directors.

          “Book Value” means with respect to any Company asset, the asset’s adjusted tax basis,
except as follows:

(a) the initial Book Value of any asset contributed by a Stockholder to the Company shall be
the gross Fair Market Value of that asset;

(b) the Book Value of all Company assets shall be adjusted to equal their respective gross
Fair Market Values as of the date upon which any of the following occurs: (i) the
acquisition of an additional interest in the Company after the Effective Date by any new or
existing Stockholder, in exchange for more than a de minimis Capital Contribution or the
distribution by the Company to a Stockholder of more than a de minimis amount of Company
property as consideration for an interest in the Company, if the Board reasonably determines
that such adjustment is necessary or appropriate to reflect the relative economic interests
of the Stockholders of the Company; (ii) the liquidation of the Company within the meaning
of Regulation Section 1.704-1(b)(2)(ii)(g); and (iii) the grant of an interest in the
Company as consideration for the provision of services to or for the benefit to the Company;

(c) the Book Value of any Company asset distributed to any Stockholder shall be the gross
Fair Market Value of that asset on the date of distribution; and

(d) if an election under Code Section 754 has been made , the Book Value of Company assets
shall be increased (or decreased ) to reflect any adjustments to the adjusted basis of the
assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that
those adjustments are taken into account in determining Capital Accounts pursuant to
Regulation Section 1.704-1(b)(2)(iv)(m) and Section 5.4(h) hereof; provided, however, that
Book Value shall not be adjusted pursuant to this subsection (d) to the extent that the
Board reasonably determines that an adjustment pursuant to subsection (b) hereof is
necessary or appropriate in connection with a transaction that would otherwise result in an
adjustment pursuant to this subsection (d).

If the Book Value of an asset has been determined or adjusted hereby, that Book Value shall
thereafter be determined by taking into account all adjustments for depreciation, if any, taken
with respect to that asset for purposes of computing Profits and Losses.

          “Business” means the business and operations comprising the Lear North American ISD
Business as of the date of the Lear Acquisition Agreement (consisting of instrument panels,
headliners, cockpits, flooring, acoustics, door panels, blow molding

34

 

and other miscellaneous automotive plastic parts), excluding any operations relating to the
Dayton, Tennessee plant and the existing joint ventures of Lear NAOC or its Affiliates, being the
Amtex, Reyes and CLA joint ventures.

          “Business Day” means a day that is not a Saturday, Sunday or day on which commercial
banking institutions located in New York City are authorized or required to close.

          “Bylaws” means the Company’s bylaws, attached as Annex B.

          “Call Notice” has the meaning set forth in Section 4.5.

          “Call Option” has the meaning set forth in Section 4.5.

          “Call Option Closing” has the meaning set forth in Section 4.5.

          “Call Price” means the fair market value of the Capital Stock subject to the Call
Option determined based on the equity value of the Company and its Subsidiaries as a whole
multiplied by the Percentage Interest represented by such Capital Stock after application of any
reasonably relevant discounts, for minority ownership status or the like, but not for liquidity,
all as agreed or determined in accordance with Section 4.5. The Call Price for an Option will
equal the Call Price for the Capital Stock for which such Option is exercisable less the applicable
exercise price.

          “Capital Account” means the capital account maintained for each Stockholder pursuant
to Section 5.7.

          “Capital Contributions” means, with respect to any Stockholder, the amount of money
and the initial Book Value of any property (other than money), net of the amount of any debt to
which such property is subject, contributed to the Company with respect to the Common Stock in the
Company held by such Stockholder. The principal amount of a promissory note which is not readily
tradable on an established securities market and which is contributed to the Company by the maker
of the note shall not be included in the Capital Account of any Person until the Company makes a
taxable disposition of the note or until (and to the extent) such Stockholder makes principal
payments on the note, all in accordance with Regulations Section 1.704-1(b)(2)(iv)(d)(2).

          “Capital Event” means (i) an Asset Sale, or (ii) the liquidation of the Company,
including, without limitation, a liquidation pursuant to an initial Public Offering.

          “Capital Stock” includes all equity interests of the Company or any Subsidiary,
including common stock, preferred stock, membership interests and all other equity interests of any
kind.

          “Change in Control” means, with respect to any Person, the occurrence of any of the
following events: (i) any Person becomes the beneficial owner (as defined in Rules 13d 3 and 13d 5
of the Securities Exchange Act of 1934) of securities of such

35

 

Person representing more than 40% of the total voting power of such Person’s outstanding
securities determined on a fully diluted basis; (ii) any transaction (including, without
limitation, any merger or consolidation) involving such Person after the consummation of which the
holders of such Person’s equity securities immediately prior to such consummation will not own a
majority of the outstanding equity interest and voting power of the surviving corporation
immediately after such consummation; or (iii) the sale of a majority of such Person’s assets.

          “Charter” means the Company’s charter, attached hereto as Annex A.

          “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any
corresponding provisions of any succeeding law.

          “Common Stock” means Capital Stock issued pursuant to the Company’s Constituent
Documents that is designated therein as “common stock.”

          “Confidential Information” means all intellectual property, documents, financial
statements, records, business plans, reports and other information (whether written or oral) of
whatever kind or nature, which has value to the Company or the Subsidiaries, or which is treated by
the Company or a Subsidiary as confidential and regardless of whether such information is marked
“confidential”, except such information that (i) is or becomes generally available to the public
through no action of the party (including its limited partners, representatives, agents and
affiliates) to which such information was furnished, (ii) becomes available to the receiving party
from a Person who is not, to the receiving party’s knowledge, subject to any legally binding
obligation to keep such information confidential, (iii) is in the possession of the receiving party
prior to receipt from the Company or (iv) is developed independently by the receiving party.

          “Constituent Documents” of an entity means the entity’s certificate of incorporation
or formation, operating agreement, charter, bylaws and other documents pursuant to which the entity
was legally formed and, as applied to the Company, this Agreement, the Charter and Bylaws.

          “Demand Registration” means a Demand Registration pursuant to Section 1.1 of the
Registration Rights Agreement.

          “Distribution” means a transfer of cash or property to a Stockholder on account of
Capital Stock. All amounts required to be withheld pursuant to Code section 1446 or any other
provision of federal, state or local tax law are treated as Distributions to the Stockholders
subject to such requirement.

          “Escrow Agreement” means that certain escrow agreement by and among Lear NAOC, the
Company, WL Ross, Franklin and the escrow agent named therein, the form of which is attached hereto
as Annex C.

          “Escrowed Funds” means the total amount of Sixty Million Dollars ($60,000,000) either
to be deposited and held in escrow in accordance with the terms of the Escrow Agreement or to be
covered by one or more Letters of Credit, (i) Thirty

36

 

Million Dollars ($30,000,000) of which shall be the responsibility of WL Ross, (ii) Fifteen
Million Dollars ($15,000,000) of which shall be the responsibility of Franklin, and (iii) Fifteen
Million Dollars ($15,000,000) of which shall be the responsibility of Lear NAOC.

          “Fair Market Value” means the fair market value as determined in good faith by the
Board pursuant to the Required Board Approval.

          “Foreign Subsidiary Board” has the meaning set forth in Section 3.3.

          “Foreign Subsidiary Observer” has the meaning set forth in Section 3.3.

          “Franklin” means the Stockholders identified under the name “Franklin” on Schedule
1, together with any of their Affiliates holding Capital Stock or Options.

          “Lear Acquisition Agreement” means that certain Asset Purchase Agreement dated as of
                    , 2006, among                     , Lear Corporation, the Company, International
Automotive Components Group North America, Inc., WLR and Franklin.

          “Lear Demand Request” has the meaning set forth in Section 6.1.

          “Lear ISD Closing” means the Closing as defined in the Lear Acquisition Agreement.

          “Lear NAOC” means Lear North Atlantic Operations Corporation and the Stockholders
identified under the name “Lear NAOC” on Schedule 1, together with any of their Affiliates
holding Capital Stock or Options.

          “Lear North America ISD Business” shall mean the Business (as defined in the Lear
Acquisition Agreement).

          “Lear Warrant” means the warrant to acquire Common Stock issued to Lear NAOC by the
Company pursuant to Section 2.2 in the form of Annex D hereto.

          “Majority in Interest” means the affirmative vote of Stockholders that hold more than
50% of the Common Stock outstanding as of the record date for such vote.

          “Marketable Securities” means securities (i) which are of a class: (a) of securities
issued or fully guaranteed by the United States of America or any agency thereof and entitled to
the full faith and credit of the United States of America, for which price quotations are routinely
quoted and for which there is a ready liquid market; or (b) both (I) registered pursuant to either
section 12(b) or section 12(g) of the Securities Exchange Act of 1934, as amended, and (II) either
listed on a national securities exchange or on the Nasdaq Stock Market; and (ii) which may be
resold immediately in the public markets without requirement of further registration under the
Securities Act or which include contractual rights that could result in the registration of such
securities under the Securities Act within six months of the date of acquisition of such
securities.

37

 

          “Minimum Gain” shall have the meaning set forth in Regulation Section 1 .704-2(d).

          “Observer” has the meaning set forth in Section 3.3(h).

          “Options” means a security convertible into, exercisable for or exchangeable for
Capital Stock or any other right or option to acquire Capital Stock, including , without
limitation, the Lear Warrant.

          “Optionholders” has the meaning set forth in Section 4.5.

          “Percentage Interest” means, with respect to a given Stockholder or shares of Capital
Stock, the percent derived by dividing the number of shares of Capital Stock held by such
Stockholder by the number of shares of Capital Stock then issued and outstanding.

          “Permitted Transferee” of a specified Person shall mean (i) any Affiliate of such
Person (and/or, in the case of Franklin, any advisory client of Franklin Mutual Advisers, LLC) or,
in the case of WLR, any limited partner or comparable passive investor in a fund or other
investment vehicle included in the definition of “WLR” that receives Capital Stock or Options
pursuant to a normal course distribution (including a winding up) pursuant to the constituent
documents of such fund or other investment vehicle; provided that, in any such case, such
transferee is not engaged directly or indirectly in a business that competes with the Business or
(ii) any direct or indirect acquiror of a Person in connection with a Change of Control.

          “Person” means an individual, corporation, partnership, limited liability company,
association, trust or any unincorporated organization.

          “Pledge Notice” has the meaning set forth in Section 4.1.

          “Profits” and “Losses” for any period means the taxable income or loss of the
Company for such period, as determined for federal income tax purposes, adjusted as follows:

          (a) Items that are required by Section 703(a)(i) of the Code to be separately stated shall be
included;

          (b) Tax-exempt income as described in section 705(a)(1)(B) of the Code realized by the Company
during such fiscal year are taken into account as if it was not tax exempt;

          (c) Expenditures of the Company described in section 705(a)(2)(B) of the Code for such year,
including items treated under section 1.704-1(b)(2)(iv)(i) of the Regulations as items described in
section 705(a)(2)(B) of the Code, are taken into account as if they were deductible items;

38

 

          (d) With respect to property (other than money) which has been contributed to the capital of
the Company, Profit and Loss are computed in accordance with the provisions of section
1.704-1(b)(2)(iv)(g) of the Regulations by computing depreciation, amortization, gain or loss based
upon the Fair Market Value of such property on the books of the Company;

          (e) With respect to any property of the Company which has been revalued as required or
permitted by the Regulations under section 704(b) of the Code, Profit or Loss are determined based
upon the Fair Market Value of such property as determined in such revaluation;

          (f) The difference between the Book Value and the Fair Market Value of any asset of the
Company are treated as gain or loss from the disposition of such asset in the event that any
revaluation of assets occur pursuant to section 1.704-1(b)(2)(iv)(e) or (f), including whenever,
any new or existing Stockholder acquires an additional interest in the Company in exchange for a
non-de minimis contribution to the capital of the Company; or such asset of the Company is
distributed to a Stockholder or a distribution is made to a Stockholder as consideration for a
reduction of such Stockholder’s interest in the Company or in liquidation of such interest as
defined in section 1.704-1(b)(2)(ii)(g) of the Regulations; and

          (g) Interest paid on loans made to the Company by a Stockholder and fees and other
compensation paid to any Stockholder are deducted in computing Profit and Loss.

          “Proportionate Interests” has the meaning set forth in Section 4.5.

          “Public Offering” means any firm commitment, underwritten public offering of the
Common Stock of the Company registered under the Securities Act, other than a registration relating
solely to a transaction under Rule 145 under the Securities Act (or any successor thereto) or to an
employee benefit plan of the Company.

          “Redemption Event” means (i) a Bankruptcy Decision with respect to any Stockholder or
(ii) (with respect to Lear NAOC only) a Change in Control or the delivery of a Pledge Notice.

          “Redemption Notice” has the meaning set forth in Section 4.6.

          “Redemption Price” means the fair market value of the Capital Stock being redeemed
pursuant to Section 4.6 determined based on the equity value of the Company and its Subsidiaries as
a whole multiplied by the Percentage Interest represented by such Capital Stock after application
of any reasonably relevant discounts, for minority ownership status, liquidity or the like, all as
agreed or determined in accordance with Section 4.6, provided, however, that the Redemption Price
shall not include a discount for liquidity if the applicable Redemption Event occurs after the date
on which Lear NAOC may first exercise the Lear Demand Right. The Redemption Price for an Option
will equal the Redemption Price for the Capital Stock for which it is exercisable less the
applicable exercise price.

39

 

          “Registration Rights Agreement” has the meaning set forth in the Lear Acquisition
Agreement.

          “Regulations” means regulations of the Department of the Treasury under the Code as
such regulations may be changed from time to time.

          “Reimbursable Expenses” means all reasonable documented third-party fees and expenses
incurred by WLR, Franklin or Lear NAOC (including for legal and other professional fees) in
connection with this Agreement, and the transactions contemplated hereby and thereby (excluding,
for the avoidance of doubt, the Lear Acquisition Agreement).

          “Reorganization” has the meaning set forth in Section 6.1.

          “Required Board Approval” means either (i) if the Board comprises less than five
directors, the unanimous approval of the Board, or (ii) if the Board comprises five directors, the
approval of four of the five members of the Board.

          “Restructuring” means the Company or any of its Subsidiaries or Affiliates (a)
becomes a party to any merger or consolidation or (b) purchases or otherwise acquires all or a
substantial part of the assets or equity of any Person.

          “Restructuring Costs” means the costs incurred by the Company in connection with
implementation of the Restructuring Plan.

          “Restructuring Plan” means the Restructuring Plan, as agreed to by the parties prior
to the date hereof, as it may be amended by the Company from time to time, provided that if the
Company materially modifies the Restructuring Plan after the date hereof, the parties shall in good
faith make such equitable adjustments as are reasonably appropriate in the calculation of 2007
EBITDA.

          “Sale Transaction” the meaning set forth in Section 3.4.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Stockholder Minimum Gain” means an amount, with respect to each Stockholder
Nonrecourse Debt, equal to the Minimum Gain that would result if such Stockholder Nonrecourse Debt
were treated as a nonrecourse liability, determined in accordance with Regulation Section
1.704-2(i).

          “Stockholder Nonrecourse Debt” shall have the meaning of “partner nonrecourse debt”
set forth in Regulation Section 1.704-2(b)(4).

          “Stockholder Nonrecourse Deductions” has the same meaning as “partner nonrecourse
deduction” in Treasury Regulation Section 1.704-2(i)(1).

40

 

          “Subsidiary” means any entity directly or indirectly controlled (within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act) by the Company, whether
or not in existence as of the date hereof.

          “Target Balance” means, for any Stockholder as of any date, the amount that would be
distributable to such Stockholder on such date if (i) all the assets of the Company were sold for
cash equal to their respective Book Values as of such date, (ii) all liabilities of the Company
were paid in full (except that in the case of a nonrecourse liability, such payment would be
limited to the Book Value of the asset or assets securing such liability), and (iii) all remaining
cash were distributed to the Stockholders pursuant to Section 5.5(d).

          “WLR” means the Stockholders identified under the name “WLR” on Schedule 1,
together with any of their Affiliates holding Capital Stock or Options.

[Signature page to follow]

41

 

     Executed as of the Effective Date.

	 	 	 	 	 
	 	WLR Recovery Fund II, LP

 	 
	 	By:  	 	 
	 	Name: Stephen Toy 	 
	 	Title: Managing Director 	 
	 
	 	WLR Recovery Fund III, LP

 	 
	 	By:  	 	 
	 	Name: Stephen Toy 	 
	 	Title: Managing Director 	 
	 
	 	Mutual Beacon Fund of Franklin Mutual Series Fund, Inc.

 	 
	 	By:  	 	 
	 	Name: Bradley Takahashi 	 
	 	Title: Vice President 	 
	 
	 	Mutual Discovery Fund of Franklin Mutual Series Fund, Inc.

 	 
	 	By:  	 	 
	 	Name: Bradley Takahashi 	 
	 	Title: Vice President 	 
	 
	 	Mutual Qualified Fund of Franklin Mutual Series Fund, Inc. 

 	 
	 	By:  	 	 
	 	Name: Bradley Takahashi 	 
	 	Title: Vice President 	 
	 

B-1

 

	 	 	 	 	 
	 	Mutual Shares Fund of Franklin Mutual Series Fund, Inc.

 	 
	 	By:  	 	 
	 	Name: Bradley Takahashi 	 
	 	Title: Vice President 	 
	 
	 	Mutual Beacon Fund

 	 
	 	By:  	 	 
	 	Name: Bradley Takahashi 	 
	 	Title: Vice President 	 
	 
	 	Mutual Discovery Fund

 	 
	 	By:  	 	 
	 	Name: Bradley Takahashi 	 
	 	Title: Vice President 	 
	 
	 	Mutual Discovery Securities Fund of Franklin Templeton Variable Insurance Products Trust

 	 
	 	By:  	 	 
	 	Name: Bradley Takahashi 	 
	 	Title: Vice President 	 
	 
	 	Mutual Shares Securities Fund of Franklin Templeton Variable Insurance Products Trust

 	 
	 	By:  	 	 
	 	Name: Bradley Takahashi 	 
	 	Title: Vice President 	 
	 

B-2

 

	 	 	 	 	 
	 	Franklin Mutual Beacon Fund of Franklin Templeton Investment Funds

 	 
	 	By:  	 	 
	 	Name: Bradley Takahashi 	 
	 	Title: Vice President 	 
	 
	 	Franklin Mutual Recovery Fund

 	 
	 	By:  	 	 
	 	Name: Bradley Takahashi 	 
	 	Title: Vice President 	 
	 
	 	Mutual Recovery Fund Limited

 	 
	 	By:  	 	 
	 	Name: Bradley Takahashi 	 
	 	Title: Vice President 	 
	 
	 	Lear North Atlantic Operations Corporation

 	 
	 	By:  	 	 
	 	Name: Daniel A. Ninivaggi 	 
	 	Title: Vice President & Secretary 	 
	 

B-3

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