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Exhibit 10.6
STOCK EXCHANGE AGREEMENT
AMONG
STONERIDGE, INC.,
BERIFORS HOLDING BV,
STEN FORSEKE
AND
XXXXX XXXXXXXX
Dated October 6, 1997
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TABLE OF CONTENTS
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Page
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1. Purchase and Sale of Shares .......................................... 1
1.1 The Purchase and Sale ........................................... 1
2. Consideration ........................................................ 2
2.1 Exchange of Shares .............................................. 2
3. Representations and Warranties ....................................... 2
3.1 Regarding Related Entities ...................................... 2
3.2 Authority; No Conflicts ......................................... 2
3.3 Capitalization .................................................. 3
3.4 Compliance with Applicable Laws ................................. 4
3.5 Financial Statements ............................................ 4
3.6 Tax Representations and Cooperation
and Exchange of Information ..................................... 4
3.7 Absence of Changes or Events .................................... 5
3.8 Contracts and Customers ......................................... 5
3.9 Litigation ...................................................... 6
3.10 Title to Assets; Liens .......................................... 6
3.11 Absence of Undisclosed Liabilities .............................. 6
3.12 The Buyer's IPO ................................................. 6
3.13 Securities Matters .............................................. 7
3.14 Relations with Unions ........................................... 7
4. Representations and Warranties of the Buyer .......................... 7
4.1 Authority; No Conflicts ......................................... 7
4.2 Stoneridge Shares ............................................... 7
5. Covenants ............................................................ 8
5.1 Certain Actions ................................................. 8
5.2 Reasonable Best Efforts ......................................... 8
5.3 Antitrust Notification .......................................... 8
5.4 Notification of Certain Matters ................................. 8
5.5 Fees and Expenses ............................................... 8
5.6 Conduct of the Business of the
Company ......................................................... 8
5.7 Certain Other Agreements ........................................ 9
5.8 Lockup Agreements ............................................... 9
5.9 Certain Restrictions ............................................ 9
5.10 Prior Agreement ................................................. 10
5.11 Change of Name of the Seller .................................... 10
6. The Closing .......................................................... 10
6.1 Date and Place of Closing ....................................... 10
6.2 Deliveries at Closing ........................................... 11
7. Conditions to Closing ................................................ 11
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Page
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7.1 Conditions to Each Party's
Obligations to Close ............................................ 11
7.2 Conditions to the Buyer's
Obligations to Close ............................................ 12
8. Termination: Amendment; Waiver ....................................... 13
8.1 Termination ..................................................... 13
8.2 Effect of Termination ........................................... 13
8.3 Amendment ....................................................... 13
8.4 Extension; Waiver ............................................... 13
9. Survival of Representations and Warranties;
Indemnification ...................................................... 14
9.1 Survival of Representations and
Warranties ...................................................... 14
9.2 Indemnification ................................................. 14
9.3 Satisfaction of Indemnification.................................. 14
10. Miscellaneous ........................................................ 14
10.1 Validity ........................................................ 14
10.2 Notices ......................................................... 15
10.3 Governing Law; Dispute Resolution ............................... 15
10.4 Headings ........................................................ 16
10.5 Parties in Interest ............................................. 16
10.6 Counterparts .................................................... 16
10.7 Press Releases .................................................. 16
10.8 Entire Agreement ................................................ 16
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STOCK EXCHANGE AGREEMENT
Dated October 6, 1997
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The parties to this Stock Exchange Agreement (the "Agreement")
are Stoneridge, Inc., an Ohio corporation (the "Buyer"), Xxxx Forseke and
Xxxxx Xxxxxxxx (each a "Shareholder" and collectively the "Shareholders") and
Berifors Holding BV, a Dutch Private closed company (the "Seller").
WHEREAS, the Buyer, each Shareholder, Bernt & Sten AB and
Stoneridge AB are parties to a Shareholders' Agreement dated 26 April 1996 (the
"Prior Agreement");
WHEREAS, the Seller is, or immediately prior to the Closing (as
defined in Section 6) will be, the owner of fifty (50) shares of Stoneridge AB,
a Swedish corporation ("XAB") with registration number 556442-9198 and of five
hundred (500) shares of Bernt & Sten AB, another Swedish corporation ("YAB")
with registration number 556433-3879, representing all of the issued and
outstanding equity interest of XAB and YAB (such equity interest the "Shares");
WHEREAS, the Shareholders are, or immediately prior to the
Closing will be, the owners of all of the issued and outstanding equity
securities of the Seller;
WHEREAS, each of XAB and YAB are, or immediately prior to the
Closing will be, the owners of 1500 shares of Berifors AB, a Swedish corporation
(the "Company") with registration number 556442-9388, representing a majority of
all of the issued and outstanding equity interests of any class of the Company
(the "Berifors Shares");
WHEREAS, the Company owns all of the issued and outstanding
stock of each of the following entities; Berifors Production AB, Berifors
Electronic AB and Berifors GmbH Electronics (each a "Subsidiary," collectively
the "Subsidiaries");
WHEREAS, the Seller wishes to sell to the Buyer, and the Buyer
wishes to purchase from the Seller, the Shares pursuant to the terms and subject
to the conditions set forth herein.
Accordingly, the parties agree as follows:
1. PURCHASE AND SALE OF SHARES.
1.1 THE PURCHASE AND SALE. On the terms and subject to the conditions
hereof, the Seller hereby agrees to sell, transfer and deliver to the Buyer, and
the Buyer hereby agrees to purchase from the Seller, at the Closing, the Shares.
At the Closing, the Seller shall deliver to
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the Buyer the certificates representing the Shares (the "Certificates") Properly
endorsed.
2. CONSIDERATION.
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2.1 EXCHANGE OF SHARES. At the Closing, in payment in full for the Shares,
the Buyer shall sell, transfer and deliver to the Seller, and the Seller shall
acquire from the Buyer, 704,563 unregistered Common Shares, without par value,
of the Buyer (the "Stoneridge Shares"). The number of Stoneridge Shares shall
not be revised if the actual price at which such shares are sold is different
from the parties most current estimate of the price at which the Buyer's common
shares are most likely to be sold to the public in the Buyers' IPO Price (as
defined in Section 3.12) (the "Estimated IPO Price") or if the exchange rate
between U.S. $ and SEK changes.
3. REPRESENTATIONS AND WARRANTIES. Unless otherwise reported to the Buyer of
discussed at any meeting with the Board of directors of the Company at which
meeting any of the Directors representing the Buyer has been present, the Seller
and each Shareholder jointly and severally represent and warrant to the Buyer as
follows:
3.1 REGARDING RELATED ENTITIES. The Seller was incorporated in the
Netherlands on September 5, 1997, specifically for the purpose of entering into
this Agreement and the transactions contemplated by this Agreement and has
taken no action and conducted no business other than the acquisition of XAB
and YAB and entering into this agreement. XAB and YAB were formed by the
Shareholders solely for the purpose of owning shares of stock of the Company and
have taken no action and conducted no business other than purchasing and holding
stock of the Company. The Seller has, and immediately prior to the Closing will
have no liabilities or obligations, contingent or otherwise, other than the
obligations of the Seller under this Agreement. The Buyer is aware of that XAB
and YAB at the Closing will have debts to Sparbanken amounting to SEK 1,500,000
each. The settlement of these debts will be the Buyer's responsibility.
Furthermore, the Buyer also acknowledges that XAB has debts of SEK 500,000 to
each of the Shareholders and that the Company, before the Closing shall pay SEK
1,000,000 to XAB in repayment of shareholders contribution from XAB to the
Company, with which amount XAB shall settle corresponding debts to the
Shareholders.
3.2 AUTHORITY; NO CONFLICTS. Each of the Seller, XAB, YAB, the Company and
each Subsidiary is a corporation duly formed, validly existing and in good
standing under the laws of its jurisdiction of incorporation or formation. The
Buyer acknowledges that the registered share capital of both XAB and YAB is
limited to SEC 50,000 and that the Swedish Companies Act will require a
registered share capital of minimum SEK 100,000 effective from January 1, 1998.
If so requested by the Buyer, the Shareholders and the Seller jointly and
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severally covenants to take or cause to be taken all necessary actions, except
for the contribution of the necessary funds, for such increase in order to
increase the registered share capital of both XAB and YAB to SEK 100,000 in
such time as necessary to meet the requirements of the Swedish Companies Act.
Each of the Seller, XAB, YAB, the Company and each Subsidiary is duly qualified
to do business and is in good standing in each jurisdiction where the nature of
the business conducted by it or the properties owned by it requires it to
qualify to do business as a foreign entity. This Agreement and the transactions
contemplated hereby have been duly authorized by all requisite board of director
and stockholder actions of the parties thereto and constitute the valid and
binding obligation of the Seller, XAB, YAB, the Shareholders and the other
parties thereto, enforceable against them in accordance with their respective
terms. The execution and delivery of this Agreement does not and did not, and
the consummation of the transactions contemplated hereby will not and did not,
(a) conflict with the organizational or governing documents of any of XAB, YAB
the Company, any Subsidiary or the Seller, (b) result in any violation of or
default under, or give rise to a right of termination or acceleration of any
obligation or to loss of a material benefit under, any material contract,
agreement or arrangement to which the Company, XAB, YAB or any Subsidiary is a
party or by which any of the Company or any Subsidiary may be bound, or (c)
violate any material judgment, statute, law or rule applicable to any of the
Company, any Subsidiary, XAB, YAB or the Seller or any of their property or
assets. No consent, approval or notification to any court or governmental or
regulatory authority is required to be obtained or made by or with respect to
any of the Company, any Subsidiary or the Seller in connection with the
execution, delivery or performance of this Agreement or the Consummation of the
transactions contemplated hereby except such as have been obtained or made or
are contemplated by Section 5.3.
3.3 CAPITALIZATION. Immediately prior to the Closing, the authorized and
outstanding capital stock of the Company will consist of 5,475 shares and
(assuring that the Convertible Debt (as defined in Section 7.2(e)) has not been
converted into capital stock of the Company) will be owned as set forth in
Schedule 3.3 to this Agreement. Immediately following the Closing, (i) the Buyer
will own all of the issued and outstanding capital stock of XAB and YAB, (ii)
XAB will own 27.5% and YAB will own 27.5% of the issued and outstanding capital
stock of the Company (assuming that the Convertible Debt has not been converted
into capital stock of the Company), and (iii) the Company will own all of the
issued and outstanding capital stock of the Subsidiaries, in each case free and
clear of all encumbrances, security interests and restrictions whatsoever,
except as regards the Berifors Shares, in which a security has been granted in
favor of Sparbanken. The Berifors Shares will be free and clear of all
encumbrances referenced immediately above following settlement of the
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debts to Sparbanken amounting to SEK 3,000,000 referenced in 3.1 above. The
Shares and the Berifors Shares have been duly authorized and validly issued,
are fully paid and nonassessable and are free of preemptive rights. Except for
the Convertible Debt and as set forth in the Prior Agreement, there are no
outstanding subscriptions, options or other agreements or commitments relating
to the issuance, transfer, purchase or sale of any capital stock or securities
(including debt obligations) convertible into capital stock (or any such
convertible into or exchangeable for exchangeable securities) of XAB, YAB, the
Company or any Subsidiary, or obligations to grant or enter into any
subscription, convertible or exchangeable security or other similar agreement
or commitment. Other than the Subsidiaries, the Company is not, directly or
indirectly, the record or beneficial owner of any shares of capital stock or
other equity interests of any corporation, company, partnership or other
entity. XAB and YAB immediately prior to the Closing, will not be, directly or
indirectly, the record or beneficial owner of any shares of capital stock or
other equity interest of any corporation, company, partnership or other entity,
other than the Company. The Conversion Stock (as defined in Section 7.2(e)) has
been duly authorized for issuance upon the conversion of the Convertible Debt
and when issued upon conversion of the Convertible Dept, will be validly
issued, fully paid and nonassessable and free of preemptive rights.
3.4 COMPLIANCE WITH APPLICABLE LAWS. The business and affairs of each of
the Company, each Subsidiary, YAB and XAB have been conducted in compliance with
all applicable laws, order, ordinances, rules and regulations of any
governmental authority, except to the extent noncompliance would not have a
material adverse effect on the business or financial condition of any such
entity.
3.5 FINANCIAL STATEMENTS. The unaudited consolidated balance sheet and
related income statement and statement of cash flow of the Company and the
Subsidiaries (the "Interim Financials") as of and for the eight months ended
August 31, 1997 (the "Interim Financial Statement Date") were prepared in
accordance with generally accepted accounting principles in Sweden consistently
applied, except as may be indicated in the notes thereto. The Interim Financials
fairly present, in all material respects, the consolidated results of operations
and financial position of the Company and the Subsidiaries for the periods and
at the dates presented.
3.6 TAX REPRESENTATIONS AND COOPERATION AND EXCHANGE OF INFORMATION.
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(i) the members of the Company Group (as defined in Schedule 3.6) have (a)
timely filed with all appropriate Taxing Authorities (as defined in Schedule
3.6) true, correct, and complete copies of all tax return required to be filed
by or with respect to them, and (b) paid in full
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all taxes due or owing (whether or not shown on any Tax Return (as defined in
Schedule 3.6)). With respect to Taxes (as defined in Schedule 3.6) not yet due,
each member of the Company Group has made adequate provision (reflected in the
Interim Financial Statements and also set forth in Schedule 3.6 hereof) for the
payment of such Taxes (including, without limitation, any Taxes for periods up
to and including the Closing, any Taxes resulting from potential audit
adjustments, and any Taxes resulting from book/tax timing differences). None of
the transactions contemplated by this Agreement or to be consummated before the
transactions contemplated by this Agreement will cause any Tax (including any
increase or acceleration in any Tax) to be due from the Buyer or any member of
the Company Group.
(ii) None of the members of the Company Group has received any notice
of deficiency or assessment from any taxing authority with respect to
liabilities for taxes of any member of the Company Group. There is no
pending or, to the best of the knowledge of the Seller, the Shareholders, or
any member of the Company Group, threatened tax audit, administrative
proceeding or judicial proceeding being conducted with respect to any member of
the Company Group. No member of the Company Group has executed or filed with
any taxing authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any taxes.
(iii) Each party hereto, on behalf of itself and its affiliates, agrees to
retain or cause to be retained all information that may be relevant to any Tax
for any period with respect to which the relevant statute of limitations has not
expired and shall provide the other party hereto with such information and
cooperation as such other party shall reasonably request in connection with the
preparation or filing of any Tax Return or other document with any tax
authority.
3.7 ABSENCE OF CHANGES OR EVENTS. Since December 31, 1996, the business of
the Company and each Subsidiary has been conducted in the ordinary course and
there has not been any material adverse change in the business or financial
condition of the Company, any Subsidiary, YAB or XAB or any event which could
reasonably be expected to result in any such material adverse change.
3.8 CONTRACTS AND CUSTOMERS. Neither the Company nor any Subsidiary nor, to
the best knowledge of the Seller and the Shareholders, any other party, is, or
with the giving of notice or the passage of time will be, in breach or default
under any contract or agreement, oral or written, to which the Company or any
Subsidiary is bound, except for any such breach or default which could not
reasonably be expected to have a material adverse effect on the Company or any
Subsidiary. Since December 31, 1996, no customer of the Company or any
subsidiary has
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terminated its relationship with, or had decreased materially its purchases
from, the Company or any Subsidiary, and no Shareholder, the Company or any
Subsidiary has received any notice or has any reason to believe that any
customer of the Company or any Subsidiary intends to terminate its relationship
with or materially decrease its purchase from the Company or any Subsidiary.
3.9 LITIGATION. There are no actions, suits, arbitrations, investigations
or proceedings pending or, to the best knowledge of the Seller and the
Shareholders, threatened against the Company, any Subsidiary, XAB, YAB or the
Seller, or any property of the Company, any Subsidiary, XAB, YAB, or the
Seller of any kind, except actions, suits, arbitrations, investigations or
proceedings which, individually or in the aggregate, have not had and if
adversely determined or resolved, could not reasonably be expected to have a
material adverse effect on the business or financial condition of the Company,
the Seller any Subsidiary, XAB or YAB.
3.10 TITLE TO ASSETS; LIENS. Except as disclosed in Schedule 3.10, the
Company and the Subsidiaries have good and marketable title, insurable
indefeasible fee simple title in the case of real property to all of their
property, equipment and other assets, and such assets are free and clear of any
mortgages, liens, security interests, encumbrances or title defects of any
nature whatsoever, except such as could not have a material adverse effect on
the Company or any Subsidiary.
3.11 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in Schedule
3.11 or referenced in Section 3.1, neither the Company, XAB, YAB nor any
Subsidiary has any liabilities or obligations (whether xxxxxx or inchoate,
absolute or contingent, or otherwise) except with respect to the Company and the
Subsidiaries (a) liabilities which are reflected and reserved against or
disclosed on the Interim Financial Statements, and (b) liabilities incurred in
the ordinary course of business and consistent with past practice and which have
not resulted in, and could not reasonably be expected to result in, individually
or in the aggregate, a material adverse effect on the business or financial
condition of the Company or any Subsidiary. Neither Shareholder, any entity
controlled by any shareholder, XAB nor YAB has any claim whatsoever against the
Company, any Subsidiary, YAB or XAB.
3.12 THE BUYER'S IPO. The Seller and the Shareholders acknowledge that the
Buyer filed with the United States Securities and Exchange Commission a
Registration Statement on Form S-1 on August 8, 1997 (the "Registration
Statement"), relating to a proposed initial public offering of the Buyer's
common shares (the "Buyer's IPO"). The Seller and the Shareholders further
acknowledge that the Buyer's IPO may or may not be consummated, for reasons
within or without the Buyer's control, that the Buyer, in its sole discretion,
may determine not to
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consummate the Buyer's IPO and that, if consummated, the Buyer's IPO may be
consummated on terms and conditions other than those disclosed in the
Registration Statement. In the event the Buyer's IPO is not consummated, the
Buyer shall have no liability or obligation to the Seller under this Agreement,
the shareholders or any other party whatsoever as a result thereof, whether or
not the Closing occurs.
3.13 SECURITIES MATTERS. The Seller and the Shareholders acknowledge that
(i) the Buyer has delivered to them a copy of the Registration Statement, (ii)
they have had an opportunity to meet with representatives of the Buyer and to
obtain all of the information they have requested regarding the Buyer and have
received complete and satisfactory answers to any questions posed by them to
representatives of the Buyer, and (iii) the Stoneridge Shares are not registered
with any foreign, U.S. or state securities or other governmental authority, that
the Buyer has no current plans to register the Stoneridge Shares, and that the
Seller and Shareholders have no right to require the Buyer to register any
Stoneridge Shares with any such authority. The Seller agrees to hold the
Stoneridge Shares subject to any and all applicable restrictions.
3.14 REGULATIONS WITH UNIONS. Schedule 3.14 lists all collective
bargaining agreements to which the Company or any subsidiary is a party. Neither
the Company nor any of the Subsidiaries is in breach of any such agreement and
all necessary negotiations according to the Swedish Act on co-determination for
employees have been fulfilled by the Company, the Seller, XAB and YAB.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer hereby represents
and warrants to each Shareholder and to the Seller as follows:
4.1 AUTHORITY; NO CONFLICTS. The Buyer is a corporation duly formed validly
existing and in good standing under the laws of its jurisdiction of
incorporation. This Agreement and the transactions contemplated hereby have been
duly authorized by all requisite board of director and stockholder action on the
part of the Buyer and this Agreement constitutes a valid and binding obligation
of the Buyer, enforceable against the Buyer in accordance with its terms. With
respect to the Buyer, the information contained in the "Red Xxxxxxx"-
prospectus as well as the final prospectus governing the Buyer's IPO (Section
3.12 refers) is true and correct in all material respects.
4.2 STONERIDGE SHARES. Immediately prior to the Closing, the Stoneridge
Shares will have been duly authorized and, upon payment of the consideration
therefor as set forth in this Agreement, will be validly issued, fully paid and
nonassessable.
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5. COVENANTS
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5.1 CERTAIN ACTIONS. No party will take any action or refrain from taking
any action that would cause any representation or warranty of such party to
become or not be true and correct.
5.2 REASONABLE BEST EFFORTS. Each party shall use its reasonable best
efforts to cause the fulfillment at or prior to the Closing of all the
conditions to such other party's obligation to consummate the transactions
contemplated by this Agreement.
5.3 ANTITRUST NOTIFICATION. Following the Closing, the Buyer and the Seller
shall file this Agreement in connection with the antitrust laws of any
government which has jurisdiction over the parties. In the event that such
authorities would not be prepared to give their clearance to the sale and
purchase contemplated by this Agreement, the Buyer and the Seller undertake to
negotiate in good faith with the relevant authorities in order to obtain
clearances and to take any measures required by the Authorities in order that
the said sale and purchase will not be revoked.
5.4 NOTIFICATION OF CERTAIN MATTERS. The Shareholders and the Seller shall
give prompt notice to the Buyer, and the Buyer shall give prompt notice to the
Shareholders and the Seller, of (i) the occurrence or nonoccurrence of any event
the occurrence or nonoccurrence of which is likely to cause any representation
or warranty of the notifying party in this Agreement to be untrue or inaccurate
at or prior to be Closing and (ii) any failure of the notifying party to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement; provided, however, that the delivery of
any notice pursuant to this Section 5.4 shall not limit or otherwise affect the
remedies available under this Agreement to any of the parties receiving such
notice.
5.5 FEES AND EXPENSES. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated by this Agreement shall be paid
by the party incurring the cost or expense.
5.6 CONDUCT OF THE BUSINESS OF THE COMPANY. During the period from the date
of this Agreement to the Closing: (i) the Shareholders will cause the Company
and each Subsidiary to conduct their business only in the ordinary course
consistent with past practice, and cause the Company and all Subsidiaries not to
take any action except in the ordinary course consistent with past practice, and
(ii) the Shareholders will cause the Company and each Subsidiary to preserve
intact their current business organizations and reputations, keep available the
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services of their current officers and employees, preserve their relationships
with customers, suppliers and others having business dealings with them with the
objective that their goodwill and ongoing businesses shall be unimpaired at the
Closing and comply in all material respects with all laws, rules, regulations
and orders of all governmental entities or regulatory authorities applicable to
them.
5.7 CERTAIN OTHER AGREEMENTS. The Seller and the Shareholders (i) shall
not, and shall cause all third parties directly or indirectly controlled by them
not to, exercise any right under Section 11 or 12 of the Prior Agreement, and
(ii) hereby waive all rights thereunder with respect to the transactions
contemplated hereby and the Buyer's IPO. The parties agree that upon the Closing
the Prior Agreement is automatically terminated. This Section 5.7 is valid only
provided that the Buyer's IPO is consummated. If the Buyer's IPO is not
consummated the Prior Agreement shall remain in full effect.
5.8 LOCKUP AGREEMENTS. The Seller and the Shareholders shall cause all
parties which acquire a direct or indirect interest in the Stoneridge Shares to
execute and deliver to the Buyer's underwriters, in connection with the Buyer's
IPO, "lockup" or other similar agreements restricting the transfer of the
Stoneridge Shares to execute and deliver to the Buyer's underwriters, in
connection with the Buyer's IPO, "lockup" or other similar agreements
restricting the transfer of the Stoneridge Shares for a period not in excess of
one year following the date of the consummation of the Buyer's IPO, in form and
substance requested by the Buyer.
5.9 CERTAIN RESTRICTIONS
(a) COVENANT NOT TO COMPETE. Each Shareholder agrees that he will not,
during the period commencing on the date hereof and ending on the second
anniversary of the date on which he ceases to be employed by, or otherwise
affiliated with, the Company, engage, directly or indirectly, or otherwise, in
any or all of the following activities in any country in which (A) with respect
to the period during which he is employed by or otherwise affiliated with the
Company, the Company is engaged in business during such period, and (B) with
respect to the period following the date on which he ceases to be employed by or
otherwise affiliated with the Company (the "Separation Date"), any country in
which the Company is engaged in business on the Separation Date:
(i) enter into or engage in any business which competes with
any business conducted by the Company (A) with respect to the
period during which he is employed by or otherwise affiliated
with the Company, any business conducted by the Company
during such period, and (B) with respect to the period
following the Separation Date, any business in which the
Company is
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engaged on the Separation Date (such businesses, the
"Applicable Businesses"); or
(ii) solicit customers or business patronage which may result
in competition with any Applicable Business or may result in
any customer ceasing to be a customer of the Company with
respect to any Applicable Business.
(b) COVENANT AGAINST DISCLOSURE. Each Shareholder agrees, from and
after the date hereof, except as necessary in the performance of his duties on
behalf of the Company, not to (i) disclose to any person, association, firm,
corporation or other entity in any manner, directly or indirectly, any
information or data relevant to the business of the Company, whether of a
technical or commercial nature.
(c) COVENANT AGAINST HIRING. Each Shareholder agrees that he will not,
during the period commencing on the date hereof and ending on the second
anniversary of the date on which he ceases to be employed by, or otherwise
affiliated with, the Company, take any action which would induce any employee or
representative of the Company not to become or continue as an employee or
representative of the Company.
(d) INJUNCTIVE RELIEF. Each Shareholder acknowledges and agrees that
the remedies at law of the Company or the Buyer for any breach of any of his
obligations under this Section 5.9 hereof would be inadequate, and agrees and
consents that temporary and permanent injunctive relief may be granted in a
proceeding which may be brought to enforce any provision of this Section 5.9
without the necessity of proof of actual damage.
5.10 PRIOR AGREEMENT. Upon the closing, the Prior Agreement shall be deemed
terminated in all respect.
5.11 CHANGE OF NAME OF THE SELLER. The name of the Seller contains the
Company's name "Berifors". The Seller and the Shareholders jointly and severally
covenant to immediately take or cause to be taken all actions necessary in order
to change the name of the Seller to a name not containing "Berifors" or any
other element confusable therewith, if the Buyer should so request in writing.
6. THE CLOSING.
6.1 DATE AND PLACE OF CLOSING. The closing of the transactions contemplated
hereby (the "Closing") shall take place on such date and time as is designated
by the Buyer (the "Closing Date"), at the offices of Advokatfirman
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Xxxxxxxxxx KB, Xxxxxxxxxx 00, 000 00 Xxxxxxxxx, Xxxxxx; provided, that the Buyer
shall have the right to change the Closing Date from time to time, it being
acknowledged that the Buyer currently intends to schedule the Closing
contemporaneously with the consummation of the Buyer's IPO. The Buyer shall give
the Seller and the Shareholders reasonable advance notice of the Closing Date
and any changes thereto.
6.2 DELIVERIES AT CLOSING.
(a) At the Closing, the Seller and the Shareholders shall deliver or cause
to be delivered to the Buyer the Following:
(i) the Certificates (as defined in Section 1.1);
(ii) the legal opinions referenced in Section 7.2(b);
(iii) the certificate referenced at Section 7.2(c); and
(iv) the certificates referenced at Section 7.2(d).
(b) At the Closing the Buyer shall cause to be delivered to the Seller
certificates representing the Stoneridge Shares, duly registered in the name of
the Seller.
(c) Notwithstanding the foregoing provisions of this Section 6.2, not less
than three (3) days prior to the Closing, all documents and instruments to be
delivered under this Section 6.2 shall be delivered to Advokatfirman Xxxxxxxxxx
KB, as escrow agent, and the release thereof from escrow shall be subject only
to the satisfaction of the Conditions to Closing set forth in Article 7 which
relate to matters other than the delivery at the Closing of documents and
instruments.
7. CONDITIONS TO CLOSING.
7.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO CLOSE. The obligation of each
party to close the transactions contemplated hereby is subject to the
satisfaction or waiver, prior to the Closing, of the following conditions:
(a) no statute, rule, decree of injunction shall have been enacted,
entered, promulgated or enforced by any court or governmental authority against
the Seller, XAB, YAB, the Company, any Subsidiary or the Buyer and be in effect
that prohibits or restricts the consummation of such transactions or makes such
consummation illegal (each party agreeing to use all reasonable efforts to have
such prohibition lifted);
(b) the representations and warranties of the other party in this
Agreement shall have been true and
-11-
15
correct when made and shall be true and correct as of the Closing as if made
again on and as of the Closing, and all of the covenants in this Agreement to be
complied with or performed by the other party at or before the Closing shall
have been complied with and performed; and
(c) the Buyer's IPO shall have been consummated or shall be consummated
contemporaneously with the Closing.
7.2 CONDITIONS TO THE BUYER'S OBLIGATIONS TO CLOSE. The obligations of the
Buyer to close the transactions contemplated hereby shall be subject to the
satisfaction or waiver, prior to the Closing, of the following additional
conditions;
(a) since the date of this Agreement, there shall not have been
occurred any material adverse change in the business of financial condition of
the Company, any Subsidiary, XAB, YAB or the Seller;
(b) The Buyer shall have received two opinions, one (i) from a
respectable Dutch lawfirm and one (ii) from a respectable Swedish law firm, both
being addressed to the Buyer and dated the Closing Date, with respect to matters
relating to the authorization, execution delivery and performance of this
Agreement, in form and substance acceptable to the Buyer, and as to other
matters, in substantially the forms attached hereto as Schedule 7.2(b)(i) and
(ii) respectively;
(c) the Seller shall have furnished the Buyer with a certificate dated
the Closing Date signed on its behalf by an authorized officer to the effect
that the conditions set forth in paragraphs 7.1(b) and 7.2 have been satisfied.
All of the consents of any third parties or governmental entities required to be
obtained or made in connection with the transactions contemplated by this
Agreement (other than in Section 5.3) shall have been obtained;
(d) the Seller shall have delivered to the Buyer certificates of
registration as of a recent date for the Company, XAB, YAB and each subsidiary
in Sweden, and a certificate of the Dutch Companies Registrar as to the good
standing of the Seller in the Netherlands; and,
(e) the holders of two convertible debt instruments of SEK 225,000
each, issued by the Company (the "Convertible Debt") shall have converted the
Convertible Debt into common stock of the Company (the "Conversion Stock") and
shall have sold or promised to sell, or contemporaneously with the Closing shall
sell to the Buyer, the Conversion Stock.
-12-
16
8. TERMINATION; AMENDMENT; WAIVER.
8.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing:
(a) by mutual written consent of the Buyer and the Seller;
(b) by the Buyer of the Seller, if the terminating party is not in
material breach of any of its obligations under this Agreement at the time of
termination, if the Closing has not occurred prior to December 31, 1997;
(c) by the Buyer or the Seller, if any court of competent jurisdiction
shall have issued an order (other than a temporary restraining order), decree or
ruling or taken any other action restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement; provided, however, that the
party seeking to terminate this Agreement shall have used its reasonable best
efforts to remove or lift such order, decree of ruling; or
(d) by the Buyer or the Seller if, prior to the Closing, the Buyer
determines definitively not to consummate the Buyer's IPO.
8.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
Section 8.1, this Agreement (except for Section 10.7, which shall survive the
termination of this Agreement) shall forthwith become void and have no effect,
without any liability on the part of any party or its directors, officers or
stockholders; provided, that nothing in this Section 8.2 shall relieve any party
of liability for breach of this Agreement.
8.3 AMENDMENT. This agreement may not be amended, except by an instrument
in writing signed on behalf of all the parties.
8.4 EXTENSION; WAIVER. At any time prior to the Closing, the Seller and the
Shareholders, on the one hand, and the Buyer, on the other hand, may (a) extend
the time for the performance of any of the obligations or other acts of the
other parties in this Agreement, (b) waive any inaccuracies in the
representations and warranties by any other party or in any document,
certificate or writing delivered pursuant to this Agreement by any other party,
or (c) waive compliance with any of the agreements or conditions in this
Agreement. Any agreement by any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of that
party.
-13-
17
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The covenants,
representations and warranties contained in this Agreement or in any
certificate, document or instrument delivered pursuant to this Agreement shall
survive the Closing. Any investigation by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation or warranty.
9.2 INDEMNIFICATION. Notwithstanding the Closing, the Seller and each
Shareholder jointly and severally, on the one hand, and the Buyer, on the other
hand (as applicable, the "Indemnifying Party"), covenant and agree to defend,
indemnify and hold harmless the Buyer, on the one hand, and the Seller and
each Shareholder, on the other hand, and their respective officers, directors,
partners, employees, agents, advisers and representatives, on the one hand (such
parties, as applicable, the "Indemnified Partied"), from and against, and pay or
reimburse each such person for, any and all claims, liabilities, obligations,
losses, fines, costs, proceedings or damages (whether absolute, accrued,
conditional or otherwise, and whether or not resulting from third party claims),
including out-of-pocket expenses and reasonable attorneys' and accountants' fees
incurred in the investigation or defense of any of the same or in asserting any
of their respective rights hereunder (collectively, "Losses") resulting from or
arising out of any breach or inaccuracy of any representation or warranty (or
the schedules relating thereto) or nonperformance of any covenant of the
Indemnifying Party.
9.3 SATISFACTION OF INDEMNIFICATION. In the event that an Indemnifying
Party is required to indemnify an Indemnified Party pursuant to Section 9.2, (a)
if the Indemnifying Party is the Seller or a Shareholder, such indemnification
obligation shall be satisfied, to the extent of the value thereof, by the
delivery of such number of Stoneridge Shares as have a value equal to the amount
of the Losses to be indemnified (it being agreed that each Stoneridge Share
shall have a value for purposes of this Section 9.3 equal to what such shares
are priced to be sold to the public in the Buyer's IPO (as defined in Section
3.12) (the "IPO Price"), with the balance, if any, paid in cash, and (b) if the
Indemnifying Party is the Buyer, such indemnification obligation shall be
satisfied by the payment of cash in the amount of the Losses to be indemnified.
All payments of cash under this Section 9.3 shall be made in United States
Dollars.
10. MISCELLANEOUS.
10.1 VALIDITY. The invalidity or unenforceability of any provision of this
agreement shall not affect the validity or enforceability of any other
-14-
18
provision of this Agreement, which shall remain in full force and effect.
10.2 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person, by facsimile transmission with
confirmation of receipt, or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties as follows:
if to the Buyer:
Stoneridge, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
with a copy to:
Xxxxx & Xxxxxxxxx LLP
3200 National City Center
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xx. Xxxxx X. Xxxxx
if to the Seller:
Berifors Holding X.X.
Xxxxxxx 00000
0000 XX AMSTERDAM
HOLLAND
if to the Shareholders:
Sten Forseke
Soldat Dockes vag 10
175 75 JARFALLA
SWEDEN
Xxxxx Xxxxxxxxx
Xx. Xxxxxxx Xx Xxxxxx 00
XXX 00
00 00 XXXXXXXX
XXXXXXX
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt of notice of the change).
10.3 GOVERNING LAW: DISPUTE RESOLUTION. This Agreement shall be governed by
and construed in accordance
-15-
19
with the law of the State of Ohio, U.S.A., regardless of the law that might
otherwise govern under principles of conflicts of laws applicable thereto. Any
controversy or claim arising out of or relating to this Agreement, or the breach
thereof or relationship created thereby, which is not settled through
negotiation shall be resolved exclusively by arbitration under the auspices of
and in accordance with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce then in effect. The arbitration shall be held
in London, England. The arbitration shall be heard before three arbitrators, one
to be chosen by the Buyer, one to be chosen by the Shareholders and the third to
be chosen by those two arbitrators. The arbitration shall be conducted in the
English language. The arbitration shall be final and binding on the parties, and
shall not be subject to any appeal. Judgment on the award of the arbitrators may
be entered by any court having jurisdiction to do so. Notwithstanding any other
provision of this Agreement, any party shall be entitled to seek injunctive or
other provisional relief from any court of competent jurisdiction pending the
final decision or award of the arbitrators.
10.4 HEADINGS. The headings in this Agreement are for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
10.5 PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party to this Agreement, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature under or by reason of this Agreement.
10.6 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original but all of which shall constitute one
and the same agreement.
10.7 PRESS RELEASES. Seller shall obtain Buyer's written consent before
issuing any press release or otherwise making any public statement with respect
to the transactions contemplated by this Agreement, and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by law.
10.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties with respect to its subject matter and supersedes all other
prior agreements and understandings, both written and oral, among the parties
with respect to that subject matter. In the event of any dispute regarding this
Agreement, this English version of this Agreement shall control.
Space below intentionally left blank.
-16-
20
In WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
STONERIDGE, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
----------------------------
Title: Secretary
----------------------------
SELLER
By: /s/ Sten Forseke
------------------------------
Name: Sten Forseke
----------------------------
Title:
---------------------------
STEN FORSEKE
/s/ Sten Forseke
----------------------------------
XXXXX XXXXXXXX
ENLIGT FULLMAKT/By Proxy
/s/ Sten Foreke
----------------------------------
-17-
21
Schedule 3.3
--------------- --------------- ---------------
Stoneridge Inc. Stoneridge XX Xxxxx & Sten AB
--------------- --------------- ---------------
2,475 1,500 1,500
---------------
Berifors AB
---------------
22
Schedule 3.6: Tax Definitions
-----------------------------
For purposes of this Agreement, the following definitions apply:
(i) "Tax" or "Taxes" means all forms of taxation, whenever created or
imposed, and whether of the United States or elsewhere, and whether imposed by a
local, municipal, governmental, state, foreign, federal or other body, and
without limiting the generality of the foregoing, shall include income, sales,
use, ad valorem, gross receipts, license, value added, franchise, transfer,
recording, withholding, payroll, wage withholding, employment, excise,
occupation, unemployment insurance, social security, business license, business
organization, stamp, environmental, premium and property taxes, together with
any related interest, penalties and additions to any such tax, or additional
amounts imposed by any taxing authority (domestic or foreign) upon the Company,
any Subsidiary, XAB or YAB, or any of their respective divisions or branches or
affiliates (the Company, its Subsidiaries, XAB and YAB and any of their
respective divisions or branches are hereafter sometimes collectively referred
to as the "Company Group"). All representations and warranties made in this
Agreement by the Company Group or any member thereof shall be deemed to be made
by the Shareholders and by Seller for purposes of enforcing the indemnification
provided in Section 9.2 of this Agreement.
(ii) "Tax Return" means any return, filing, questionnaire, information
return or other document required to be filed, including requests for extensions
of time, filing made with respect to estimated tax payments, claims for refund
and amended returns and the like that may be filed, for any period with any
Taxing Authority (whether domestic or foreign) in connection with any Tax or
Taxes (whether or not a payment is required to be made with respect to such
filing).
(iii) "Taxing Authority" means any governmental or quasi-governmental body
exercising any Taxing authority or Tax regulatory authority.
23
Schedule 3.10
[LISTING OF LEASED PROPERTIES]
24
Schedule 3.11
[LIABILITIES]
25
Schedule 3.14
-------------
The Company (or its subsidiary) is part to the following
collective bargaining agreements;
- Xxxxxxx Xxxxxxxxxxxxxxxxxxxx Xxxxxxxxxxxxxxxxx
0000 - 00
- Xxxxxxx Verkstadsindustriers Verkstadsavtal
1995 - 97
26
Schedule 7.2(b)(i)
-------------------
To: Stoneridge Inc.
From: Date (_________) 1997
Dear Sirs:
Introduction
------------
1. We have acted as advisers as to Dutch law to Berifors Holding B.V.,
(the "Seller"), Sten Forseke, Xxxxx Xxxxxxxx, Xxxxx & Sten AB ("YAB")
and Stoneridge AB, ("XAB"), in relation to said persons' and
companies' preparation of a transfer of 3,000 shares in Berifors AB,
("the Company") to you. We have been asked to provide an opinion to
you pursuant to Clause 7.2(b) of a Stock Exchange Agreement dated
September (_____) 1997 between yourself, Sten Forseke, Xxxxx Xxxxxxxx
and the Seller (the "Exchange Agreement").
2. In connection with the above-mentioned transaction, we have examined
the Exchange agreement and (______________).
3. In connection with Clause 7.2(b) of the Exchange Agreement, we have
made investigations with _________________ (the Dutch Company
Registry) and _______________________ as the basis for the opinion set
out in paragraph 5 below.
4. This opinion is confined to matters of Dutch law. Accordingly, we
express no opinion herein with regard to any systems of law other than
the laws of the Netherlands as currently applied by the Dutch courts.
Opinion
-------
5. On the basis of, and subject to, the foregoing and the matters set out
in paragraph 6 below and any matters not disclosed to us, and having
regard to such considerations of Dutch law in force as of the date of
this letter as we consider relevant, we are of the opinion that:
a. the Seller has been duly incorporated and registered in the
Netherlands and no order or resolution for the winding up of
the Seller and no notice of appointment in respect of the
Seller and no notice of appointment in respect of the Seller
of a liquidator, receiver in bankruptcy or a trustee or a
reconstructor has been made;
b. the Seller has the requisite corporate capacity to enter
into the Exchange Agreement and to
27
perform its obligations thereunder;
c. the Seller has good title to all outstanding shares in XAB
and YAB;
d. the execution and delivery of the Exchange Agreement has
been duly authorized by all necessary corporate action on
the part of the Seller and the Exchange Agreement has been
duly executed and delivered by the Seller which executions
and deliveries do not and will not result in any violation
by the Seller of any term of its relevant constitutional
documents or of any law or regulation having the force of
law in the Netherlands and so applicable to the Seller;
e. notwithstanding the choice provision therein, the
obligations of the Seller under the Exchange Agreement
will be recognized and enforceable in the Dutch courts;
f. no consents, licenses, approvals or authorizations of any
governmental or other authority or agency in the Netherlands
are required by law in connection with the execution,
delivery and performance of the Exchange Agreement by the
Seller;
g. no filing or registration of the Exchange Agreement is
necessary under Dutch law;
h. there is no reason to believe that the choice of the
International Chamber of Commerce in London as having
exclusive jurisdiction with respect to any disputes arising
out of the Exchange Agreement, as set out in Clause 10.3 of
the Exchange Agreement not will be recognized in and upheld
by the Dutch courts; and
i. there is no reason to believe that the Dutch courts not will
give respect to and enforce an award in respect of the
Exchange Agreement obtained through arbitration as set out
above.
Benefit of opinion
------------------
6. This opinion is addressed to you, Stoneridge Inc., solely for your own
benefit in relation to the Exchange Agreement and, except with our
prior written consent, is not to be relied upon by any other person or
used or relied upon by you for any other purpose.
Yours faithfully,
28
Schedule 7.2(b)(ii)
-------------------
To: Stoneridge Inc.
From: Date (_________) 1997
Dear Sirs:
Introduction:
-------------
1. We have acted as advisers as to Swedish law to Sten Forseke, Xxxxx
Xxxxxxxx, Xxxxx & Sten AB, ("YAB") and Stoneridge AB, ("XAB"), in
relation to said persons' and companies' ownership and management of
Berifors AB, ("the Company"). We have been asked to provide an opinion
to you in relation to a Stock Exchange Agreement dated September
(_____) 1997 between yourself, Sten Forseke, Xxxxx Xxxxxxxx and
Stoneridge Holding B.V. (the "Exchange Agreement").
2. In connection with the above-mentioned transaction, we have examined
the Exchange agreement and (_____________________).
3. In connection with Clause 7.2(b) of the Exchange Agreement, we have
made investigations with the Company Registry of the Swedish Patent
and Registration Office ("PRV") and ____________________ as the basis
for the opinion set out in paragraph 5 below.
4. This opinion is confined to matters of Swedish law. Accordingly, we
express no opinion herein with regard to any system of law other than
the laws of Sweden as currently applied by the Swedish courts.
Opinion
-------
5. On the basis of, and subject to, the foregoing and the matters set out
in paragraph 6 below and any matters not disclosed to us, and having
regard to such considerations of Swedish law in force as of the date
of this letter as we consider relevant, we are of the opinion that:
a. the Company and its Swedish subsidiaries as well as YAB and
XAB have been duly incorporated and registered in Sweden and
no order or resolution for the winding up of said companies
and no notice appointment in respect of said companies of a
liquidator, receiver in bankruptcy in accordance with the
Swedish Bankruptcy Act of 1987 ("Konkurslagen") or a trustee
in accordance with the Composition Act
29
of 1970 ("Ackordslagen") or a reconstructor in accordance
with the Business Reconstruction Act of 1996 ("Lagen om
foretagsrekonstruktion") has been made;
b. the execution of the Exchange Agreement will not and the
consummation of the transactions contemplated thereby will
not conflict with organizational or governing documents of
any of YAB, XAB, the Company or any of its Swedish
subsidiaries;
c. notwithstanding the choice of law provision therein, the
obligations of Sten Forseke and Xxxxx Xxxxxxxx under the
Exchange Agreement will be recognized and enforceable in the
Swedish courts;
d. except as provided for in the Exchange Agreement, Section
5.3, no consents, licenses, approvals or authorizations of
any governmental or other authority or agency in Sweden are
required by law in connection with the execution, delivery
and performance of the Exchange Agreement by Sten Forseke
and Xxxxx Xxxxxxxx;
e. except as provided for in the Exchange Agreement, no filing
or registration of the Exchange Agreement is necessary under
Swedish law;
f. there is no reason to believe that the choice of the
International Chamber of Commerce in London as having
exclusive jurisdiction with respect to any disputes arising
out of the Exchange Agreement, as set out in Clause 10.3 of
the Exchange Agreement not will be recognized in and upheld
by the Swedish courts; and
g. there is no reason to believe that the Swedish courts not
will give respect to and enforce an award in respect of the
Exchange Agreement obtained through arbitration as set out
above.
Benefit of opinion
------------------
6. This opinion is addressed to you, Stoneridge Inc., solely for your own
benefit in relation to the Exchange Agreement and, except with our
prior written consent, is not to be relied upon by any other person or
used or relied upon by you for any other purpose.
Yours faithfully,
30
CLOSING ESCROW AGREEMENT
------------------------
Advokatfirman Xxxxxxxxxx KB
Nybrokajen 00
X-000 00 Xxxxxxxxx, Xxxxxx
Attention: Xxxxxx Xxxxxx, Esq.
Re: Escrow Arrangement Relating to Deliveries under Stock
-----------------------------------------------------
Exchange Agreement among Stoneridge, Inc. et. al.
-------------------------------------------------
Gentlemen:
This Closing Escrow Agreement (this "Agreement") will confirm
our agreement whereby you will act as escrow agent ("Escrow Agent") on behalf of
(i) Stoneridge, Inc., an Ohio corporation ("Buyer"), (ii) Berifors Holding BV,
a Dutch private closed company ("Seller"), (iii) Sten Forseke, an individual
("Forseke"), and (iv) Xxxxx Xxxxxxxx, an individual ("Eriksson")(each of Forseke
and Eriksson, a Shareholder, and collectively, the "Shareholders").
This Agreement is entered into by the parties hereto in
connection with the purchase by Buyer of all of the outstanding shares of
Stoneridge AB, a Swedish corporation, and Bernt & Sten AB, a Swedish
corporation, pursuant to a Stock Exchange Agreement by and among the Buyer,
Seller, Forseke and Eriksson, dated as of the date hereof (the "Stock Exchange
Agreement").
A. DELIVERIES: Buyer, Seller and each of the Shareholders
contemplate that, prior to the closing of the transactions contemplated by the
Stock Exchange Agreement, the following items (the "Deliveries") have been or
will be delivered to you as Escrow Agent:
(1) The Certificates (as defined in Section 1.1 of the
Stock Exchange Agreement), together with stock powers
or other instruments sufficient to convey title
thereto to Buyer;
(2) The legal opinions referenced in Section 7.2(b) of
the Stock Exchange Agreement;
(3) The certificate referenced in Section 7.2(c) of the
Stock Exchange Agreement;
(4) The certificates referenced in Section 7.2(d) of the
Stock Exchange Agreement; and
(5) Certificates representing the Stoneridge Shares (as
defined in the Stock Exchange Agreement), with the
date of issuance left blank, duly registered in the
name of Seller, referenced at Section 2.1 of the
Stock Exchange Agreement.
31
B. ESCROW INSTRUCTIONS: Buyer, Seller and each of the
Shareholders request that you comply with the following instructions (the
"Escrow Instructions") as Escrow Agent. When
(i) you have received all of the Deliveries in
complete and fully executed form;
(ii) Buyer's attorneys have given you confirmation
and approval of (a) all of the Deliveries; and (b) the
satisfaction or waiver of all of the Conditions to Closing set
forth in Sections 7.1 and 7.2 of the Stock Exchange Agreement;
and
(iii) the attorney for Seller and the Shareholders
has given you confirmation and approval of; (a) all of the
Deliveries; and (b) the satisfaction or waiver of all of the
Conditions to Closing act forth in Section 7.1 of the Stock
Exchange Agreement (other than the consummation of the Buyer's
IPO);
then you shall (i) fill in the date of the Buyer's IPO in the certificates
representing the Stoneridge Shares and (ii) release and deliver all Deliveries
to the respective parties entitled thereto pursuant to the Stock Exchange
Agreement upon the closing of the transactions contemplated by the Stock
Exchange Agreement, and upon your release and delivery of such Deliveries, the
transactions contemplated by the Stock Exchange Agreement shall thereby be
deemed to have closed.
C. TERM: The Escrow contemplated by this Agreement shall
remain in effect until the earlier of (i) December 31, 1997 and (ii) the release
and delivery of the Deliveries pursuant to Section B. If the release and
delivery of the Deliveries has not occurred by December 31, 1997, Escrow Agent
shall return all Deliveries made prior to such time to the respective party from
which such Delivery originated and the parties hereto, including the Escrow
Agent, shall have no further obligations hereunder.
D. INDEMNIFICATION OF ESCROW AGENT: Buyer, Seller and each of
the Shareholders agree to indemnify and hold Escrow Agent harmless from and
against all reasonable losses, costs, expenses, claims and damages which it may
suffer or incur as a result of this escrow arrangement, except those arising
from the Escrow Agent's intentional misconduct or gross negligence.
E. MISCELLANEOUS:
(1) All notices or approvals which any party is required to,
or may wish to, give to any other party in connection with this Agreement shall
be in writing and shall be directed as follows:
2
32
If to Buyer: Stoneridge, Inc.
----------- 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attn: Xxxxx Xxxxxxx
Fax: (000) 000-0000
If to Seller or
the Shareholders: Berifors AB
---------------- ------------------------
Karlsbodaragen 17A
------------------------
108 67 Bromma
------------------------
Attn: Sten Forseke
-------------------
Fax: x00 0 000 0000
-------------------
If to Escrow Agent: Advokatfirman Xxxxxxxxxx KB
------------------ Nybrokajen 00
X-000 00 Xxxxxxxxx, Xxxxxx
Attention: Xxxxxx Xxxxxx, Esq.
Fax: (000-000) 000-0000
or to such address as such party may from time to time designate in a notice to
the other. Notices shall be personally delivered (including delivery by Federal
Express or other courier service) or sent by facsimile to the offices set forth
above, in which case they shall be deemed delivered on the date of delivery to
said offices.
(2) This Agreement may not be amended except by a writing
signed by all of the parties hereto.
(3) This Agreement constitutes entire agreement between Escrow
Agent, on the one part, and Buyer, Seller and each of the shareholders, on the
other part, with respect to the Escrow Instructions, it being understood and
agreed upon, however, that the terms and provisions of this Agreement shall in
no event amend, or in any other respect modify, the rights and obligations of
each the parties as set forth in the Stock Exchange Agreement, and all
provisions of such Stock Exchange Agreement shall remain in full force and
effect.
(4) This Agreement shall be binding upon, and inure the
benefit of, the parties hereto and their respective successors and assigns.
(5) This Agreement may be executed in separate counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
3
33
(6) This Agreement shall be governed by the construed in
accordance with the laws of the State of Ohio, U.S.A., regardless of the law
that might otherwise govern under principles of conflicts of laws applicable
thereto. Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof or relationship created thereby, which is not settled
through negotiation shall be resolved exclusively by arbitration under the
auspices of and in accordance with the Rules of Conciliation and Arbitration of
the International Chamber of Commerce then in affect. The arbitration shall be
held in London, England. The arbitration shall be heard before three
arbitrators, one to be chosen by the Buyer, one to be chosen by the Shareholders
and the third to be chosen by those two arbitrators. The arbitration shall be
conducted in the English language. The arbitration shall be final and binding on
the parties, and shall not be subject to any appeal. Judgment on the award of
the arbitrators may be entered by any court having jurisdiction to do so.
Notwithstanding any other provision of this Agreement, any party shall be
entitled to seek injunctive or other provisional relief from any court of
competent jurisdiction pending the final decision or award of the arbitrators.
4
34
This Agreement is entered into as of the 6th day of October,
1997.
BUYER:
STONERIDGE, INC., an Ohio
corporation
By: /s/ Xxxxx X. Xxxxx
---------------------------------
SELLER:
BERIFORS HOLDING BV,, a Dutch
private closed company
By: /s/ STEN FORSEKE
---------------------------------
/s/ STEN FORSEKE
-------------------------------------
STEN FORSEKE
BY PROXY
/s/ STEN FORSEKE
-------------------------------------
XXXXX XXXXXXXX
ACCEPTED AND AGREED TO:
-----------------------
ADVOKATFIRMAN XXXXXXXXXX KB
By: /s/ Xxxxxx Xxxxxx
---------------------------
Xxxxxx Xxxxxx
5
35
1
ADVOKATFIRMAN XXXXX & HESSLE HB
EXHIBIT 7.2 (b)(ii)
To: Stoneridge Inc
From: Xxxxxxx Xxxxxx
Advokatfirman Xxxxx & Hessle HB
Box 3546
103 69 STOCKHOLM
Dear Sirs,
Introduction
------------
1. We have from time to time acted as advisers as to Swedish civil
law to Sten Forsekes, Xxxxx Xxxxxxxx, Xxxxx & Sten AB, ("YAB")
and Stoneridge AB, ("XAB") in relation to said persons' and
companies' ownership of Berifors AB, ("the Company"). We have
been asked to provide an opinion to you in relation to a Stock
Exchange Agreement dated October 6 1997 between yourself, Sten
Forseke, Xxxxx Xxxxxxxx and Berifors Holding B.V. (the "Exchange
Agreement").
2. In connection with the above-mentioned transaction, we have
examined the Exchange Agreement.
3. In connection with Clause 7.2 (b) of the Exchange Agreement, we
have made investigations with the Company Registry of the
Swedish Patent and Registration Office ("PRV") as the basis for
the opinion set out in paragraph 5 below.
4. This opinion is continued to matters of Swedish civil law.
Accordingly, we express no opinion herein with regard to any
system of law other than the laws of Sweden as currently applied
by the Swedish courts.
Opinion
-------
5. On the basis of, and subject to, the forgoing and the matters
set out in paragraph 6 below and any matters not disclosed to
us, having regard to such conside-
[BOTTOM XXXXXXXXXX]
00
0
XXXXXXXXXXXXX XXXXX & XXXXXX XX
rations of Swedish civil law in force as of the date of this
letter an we consider relevant, we are of the opinion that:
a) According to the official registers, and to the best of our
knowledge, Company and its Swedish subsidiaries an well as
YAB and XAB have been duly incorporated and registered in
Sweden and no order or resolution for the winding up of said
companies and no notice of appointment in respect of said
companies of a liquidator, receiver in bankruptcy in
accordance with the Swedish Bankruptcy Act of 1987
("Konkurslagen") or a trustee in accordance with the
Composition Act of 1970 ("Ackordslagen") or a reconstructor
in accordance with the Business Reconstruction Act of 1996
("Lagen om foretagsrekonstruktion") has been made as per
October 2 1997.
b) the execution of the Exchange Agreement the consummation of
the transactions contemplated thereby will not conflict with
the organizational or governing documents of any of YAB,
XAB, the Company or any of its Swedish subsidiaries.
c) except as for art 5.9, we have no reason to believe that,
notwithstanding the choice of law provision therein, the
obligations of Sten Forseke and Xxxxx Xxxxxxxx under the
Exchange Agreement not will be recognized and enforceable in
the Swedish courts.
d) except as provided for in the Exchange Agreement, Section
5.3., no consents, licenses, approvals or authorizations of
any governmental or other authority or agency in Sweden are
required by law in connection with the execution, delivery
and performance of the Exchange Agreement by Sten Forseke
and Xxxxx Xxxxxxxx.
e) except as provided for in the Exchange Agreement, no filing
or registration of the Exchange Agreement is necessary under
Swedish law.
f) there is, in principle, no reason to believe that the choice
of the International Chamber of Commerce in London as having
exclusive jurisdiction with respect to any disputes arising
out of the Exchange Agreement, as set out in Clause 10.3 of
the Exchange Agreement not will be recognized by the Swedish
courts, and
g) there is, in principle, no reason to believe that the
Swedish courts not will give respect to an award in respect
of the Exchange Agreement obtained through arbitration as
set out above.
[BOTTOM LETTERHEAD]
37
3
ADVOKATFIRMAN XXXXX & HESSLE HB
Benefit of opinion
------------------
6. This opinion is addressed to you, Stoneridge Inc., solely for
your own benefit in relation to the Exchange Agreement and,
except with our prior written consent, is not to be relied upon
by any other person or used or relied upon by you for any other
purpose. Our responsibility for the legal opinion is limited to
sanctions by the Ethnic committee of the Swedish Bar Association
and to what is claimable according to our cumpulsory Assurance.
Stockholm, October 1997.
Yours faithfully,
Advokatfirman Xxxxx & Hessle
-------------------------------
Xxxxxxx Xxxxxx
[BOTTOM LETTERHEAD]
38
[Coopers and Xxxxxxx Letterhead]
Stoneridge Inc. Draft of 7 October 1997
Subject
Exchange Agreement
Berifors Holding
Dear Sirs,
1. We have acted as special legal counsel for the purpose of rendering an
opinion on certain matters of Dutch law, in relation to the
preparation by Berifors Holding B.V., (the "Seller"), Sten Forseke,
Xxxxx Xxxxxxxx, Bernt & Sten AB ("YAB") and Stoneridge AB ("XAB"), of
a transfer of shares in YAB and XAB (together "the Company") to you.
We have been asked to provide an opinion to you pursuant to Clause
7.2(b) of a Stock Exchange Agreement dated October [_____] 1997
between yourself, Sten Forseke, Xxxxx Xxxxxxxx and the Seller (the
"Exchange Agreement").
2. In connection with the above mentioned transaction, we have examined
and relied only on the following documents:
a a draft Exchange Agreement dated ___________;
b a certified copy of the deed of incorporation, incorporating
articles of association, of the Sellers;
c an extract of the registration in respect of the Seller with the
Trade Register of the Chamber of Commerce in ___________, dated
__________ (the "Extract");
d a copy of the register of shareholders of the Seller;
e a copy of the resolution of the general meeting of holders of
shares in the capital of the Seller, approving the execution of
the Exchange Agreement by the Seller; and
f a copy of the resolution of the board of managing directors of
the Seller, dated _________, resolving to execute the Exchange
Agreement;
(the "Documents").
[Illegible copy]
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Stoneridge Inc.
Draft of 7 October 1997
Page 2
3 In connection with Clause 7.2(b) of the Exchange Agreement, we have
made investigations with the Trade Register of the Chamber of Commerce
and the District Court as the basis for the opinion set out in
paragraph 5 below.
4 In connection with such examination and in giving this opinion, we
have assumed:
1 the genuineness of all signatures to all Documents, the
authenticity and completeness of all Documents submitted to
us as originals, the conformity to the original documents of
all Documents submitted to us as copies and the authenticity
and completeness of such original documents;
2 the legal capacity (handelingsbekwaamheid) of the natural
persons acting on behalf of any of the parties, the due
incorporation and valid existence of, the power, authority
and legal rights of, and the due authorization and execution
of each of the Documents - if in executed form - (other than
by the Seller) under any applicable law;
3 the due compliance with all matters of, and validity,
binding effect and enforceability of each of the Documents
under any applicable law (other than Dutch law) and in any
jurisdiction (other than The Netherlands) in which any
obligation under any of the Documents fails to be performed.
This opinion is given only with respect to Dutch law as
generally interpreted and applied by the Dutch courts as of
the date of this opinion. As to matters of fact we have
relied on the representations and warranties expressed in
any of the Documents. We do not express an opinion on the
law of any jurisdiction other than The Netherlands, any
representations or warranties made by the parties to the
Documents, any matters of fact, international law,
including, without limitation, the law of the European union
or any tax and anti-trust law, except to the extent that
such representations, warranties and matters of fact and law
are explicitly covered by the opinions below. No opinion is
given on any commercial, accounting or non-legal matters or
on the ability of the
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[Coopers & Xxxxxxx letterhead]
Stoneridge Inc.
Draft of 7 October 1997
Page 3
parties to meet their financial or other obligations under
the Documents. We have assumed that any foreign law which
may apply with respect to the Documents or the transactions
contemplated therein would not be such as to affect this
opinion.
Opinion
5 On the basis of, and subject to, the foregoing and the matters set out
in paragraph 6 below and any matters not disclosed to us, and having
regard to such considerations of Dutch law in force as of the date of
this letter as we consider relevant, we are of the opinion that:
a the Seller is a private company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid),
duly incorporated and validly existing under the law of The
Netherlands and possesses the capacity to xxx and to be sued
in its own name.
It does not appear from the Extract that the Seller has been
dissolved (antibunden) or has been declared bankrupt (in
staat van faillisement verklaard) or that the Seller has
been granted a suspension of payments (survience verleend);
b the Seller has the corporate power and authority to execute
this Exchange Agreement, to perform its obligations
thereunder and to consummate the transactions contemplated
therein;
c the Seller has taken all necessary corporate action
(including shareholder action) to authorize the execution of
the Exchange Agreement, the performance of its obligations
thereunder and the consummation of the transactions
contemplated therein;
d the execution by the Seller of the Exchange Agreement, the
performance of its obligations thereunder and the
consummation of the transactions contemplated therein do not
conflict with or result in an
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Stoneridge Inc.
Draft of 7 October 1997
Page 6
agreement.
e In Dutch law, agreements may be amended orally by the
parties thereto notwithstanding provisions therein to the
contrary.
f The enforcement in The Netherlands of the Exchange Agreement
is subject to the Dutch rules of civil procedure as applied
by the Dutch courts.
g The term "enforceable", where used above, means that the
obligations assumed by the relevant party under the Exchange
Agreement are of a type which Netherlands' law generally
enforces or recognizes; however, enforcement before the
courts of The Netherlands will in any event be subject to
the degree to which the relevant obligations are enforceable
under their governing law (if other than Netherlands' law),
the nature of the remedies available in such courts (and
nothing in this opinion must be taken as indicating that
specific performance of injunctive relief would be available
as remedies for the enforcement of such obligations), the
acceptance by such courts of jurisdiction, to proscription
or limitation periods (within which suits, actions or
proceedings must be brought) and to the availability of
defenses such as set-off (unless validly waived) abatement
and counter-claim.
h The choice of the law of the State of Ohio, United States of
America, in the Exchange Agreement is valid and binding on
the Seller. However, when applying the law of the State of
Ohio, United States of America, the courts of The
Netherlands might give effect to the mandatory rules of the
law of another country with which the situation concerned
has a close connection if - and insofar as - under the law
of the latter country such rules must be applied whatever
the chosen law.
i The Dutch courts may stay or refer proceedings if concurrent
proceedings are being brought elsewhere.
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Draft of 7 October 1997
Page 7
j Dutch courts may render judgments for a monetary amount in
foreign currencies, but such foreign monetary amounts may be
converted into Dutch Guilders for enforcement purposes.
Foreign currency amounts claimed in a Dutch suspension of
payment (survience) or bankruptcy (faillisement) proceeding
will be converted into Dutch Guilders at the rate prevailing
at the commencement of such proceeding (relevantie dient nog
xx xxxxxx onderzocht)
k Pursuant in the Dutch rules of corporate benefit, financial
assistance and fraudulent preference, the validity of a
legal act (such as the execution of an agreement or the
giving of guarantee or security) performed by a Dutch
company and/or governed by Dutch law may be contested.
Without purporting to be comprehensive, we would
particularly draw your attention to the following points:
(i) the validity of a legal act performed by a company
may be contested by such company or, in case of bankruptcy,
its public receiver (curator) if (a) as a result thereof the
company's object was exceeded and (b) the other party was
aware thereof or, without personal investigation, should
have been so aware;
(ii) it is prohibited for a Dutch private company with
limited liability (a) to give guarantees or otherwise
provide security and (b) to make loans (unless the loans do
not exceed the amount of the freely distributable reserves
of such company and are permitted under its articles of
association) for the purpose of the subscription of other
acquisition by third parties of shares in such company (or
of depository receipts (certificaten) issued in exchange for
such shares). This prohibition also extends to its
subsidiaries; and
(iii) if a legal act performed by a company is
prejudicial to the interests of the creditors of the
company, the validity of such legal act may in certain
circumstances be contested by any of such creditors or a
public receiver in bankruptcy of the company;
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Draft of 7 October 1997
Page 5
h there is no reason to believe that the exclusive choice of
arbitration under the auspices of and in accordance with the
Rules of Conciliation and Arbitration of the International
Chamber of Commerce, then in force, to be held in London,
England, with respect to any disputes arising out of the
Exchange Agreement, as set out in Clause 10.3 of the
Exchange Agreement will not be recognized in and upheld by
the courts of The Netherlands; and
i there is no reason to believe that a final award of the
arbitrators in an action instituted in the manner as
contemplated in the Exchange Agreement will not be
recognized and enforced by the courts of The Netherlands,
subject to the conditions and limitations of the Convention
on the Recognition and Enforcement of Foreign Arbitral
Awards (10 June 1958, New York) and the rules and
regulations promulgated pursuant thereto.
6 The opinions expressed above are subject to the following
qualifications:
a Our opinions expressed herein are subject to and limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting the
enforcement of agreements generally.
b Delivery of documents is not a concept of Dutch law and we
have therefore assumed the due delivery of the Exchange
Agreement by each of the parties thereto under any
applicable law in which such concept is relevant.
c Any provision of the Exchange Agreement stating that any
rights and obligations thereunder shall bind successors and
assigns of any party thereto may not be enforceable in the
absence of further agreement and documentation.
d Matters of limitation of rights and procedures created by an
agreement are governed by the statute of limitation of the
law applicable to each
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Draft of 7 October 1997
Page 4
violation of any provision of the Articles of the Seller on
any provision of, or rule or regulation under, the law of
The Netherlands, applicable to companies generally;
e the courts of The Netherlands will observe and give effect
to the choice of the laws of the State of Ohio, United
States of America, as the law governing the Exchange
Agreement in any proceedings in relation to such agreement
on the basis and within the scope of and subject to the
limitations imposed by the 1980 Rome Convention on the Law
Applicable to Contractual Obligations (the "Rome
Convention").
With the express reservation that as Dutch lawyers we are
not qualified to assess the exact meaning and consequences
of the terms of the Exchange Agreement under the laws of
the State of Ohio, on the face of such agreement we are not
aware of any provision that is likely to be manifestly
incompatible with Netherlands' public policy (article 16
Rome Convention) or that is likely to give time to
situations where mandatory rules of Netherlands' law will
prevail over the chosen law of the Exchange Agreement
(article 7(2) Rome Convention). It should also be noted that
we are not aware of any published order, ruling or decision
of a Netherlands court, in which such a court ban gives
overriding effect to foreign mandatory rules pertaining to a
law other than the chosen (or applicable) law or
Netherlands' law (article 7(1) Rome Convention) in
commercial or financial litigation brought before such
courts;
f no consents, licenses, approvals or authorizations of any
governmental or other authority or agency in the Netherlands
are required by law in connection with the execution,
delivery and performance of the Exchange Agreement by the
Seller;
g no filing or registration of the Exchange Agreement is
necessary under Dutch law;
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Stoneridge Inc.
Draft of 7 October 1997
Page 8
l We express no opinion as to the effect of the Exchange
Agreement on assets situated outside The Netherlands. The
effectiveness of the Exchange Agreement as regards such
assets is governed by law other than Dutch law.
m We have assumed that the relevant Extract fully and
accurately reflects the corporate status and position of the
Seller. It is noted, however, that the Extract many not
completely and accurately reflect such status and position
insofar as there may be a delay between the taking of a
corporate action (such as the issuance of shares, the
appointment or removal of a director, a winding-up
(ontbinding) or suspension of payment resolution or the
making of a court order, like a winding-up, suspension of
payment or bankruptcy order) and the filing of the necessary
documentation at the Trade Register and a further delay
between such filing and an entry appearing on the file of
the relevant party at the Trade Register.
n We note that it is to be expected that as from 1 January
1999 the lawful currency of each of the Member States of the
European Union, which will for such a date participate in
the European Monetary Union, will be replaced by the euro,
and that as from a date to be set by such Member States
(which date may be no later than 1 January 2002) any
obligations in the lawful currency of any participating
Member States can only be discharged in euro (relevantie
dient nog onderzocht xx xxxxxx).
o We have assumed that each of the Documents which were
executed prior to the date hereof remain in full force and
effect and that none of them has been amended, varied or
canceled.
p It is assumed that the Exchange Agreement constitutes valid,
binding and enforceable obligations of the parties thereto
under the laws to which they are subject.
q Unless a Treaty provides otherwise, a judgment rendered by a
foreign court will not be directly enforceable in The
Netherlands and in the
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Stoneridge Inc.
Draft of 7 October 1997
Page 9
absence of applicable Treaty provisions it will be necessary
to bring the matter before a Netherlands' court, which may
give such effect to the foreign judgment as it deems
appropriate;
r In issuing this opinion we do not assume any obligation to
notify or to inform you of any developments subsequent to
its date that might render its contents unique or inaccurate
in whole or in part at such time.
This opinion, which is strictly limited to the matters stated herein and which
is not to be read as extending by implication to any other matter in connection
with the Documents or otherwise, is given on the basis that it is governed by
and to be construed in accordance with Dutch law and that any action, arising
out of it, is to be determined by the competent court in Amsterdam which shall
have exclusive jurisdiction in relation thereto. We do not assume any obligation
to advise you (or any other person entitled to rely on this opinion) of any
subsequent change in, or in the interpretation of, Dutch law.
Benefit of opinion
------------------
This opinion is given solely for the benefit of yourselves, in this particular
matter and the context specified herein. It may not, without our prior written
consent, be transmitted or otherwise disclosed to, or relied upon by, others,
referred to in any other matter or context whatsoever, or be quoted or made
public in any way.
Yours faithfully,
47
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Stoneridge Inc.
Draft of 7 October 1997
Page 10
Xxxxxxx X.X. Snethlage
48
EXHIBIT 7.2 (C)
From: Berifors Holding BV
To: Stoneridge Inc.
Undersigned hereby warrants that the conditions set forth in
paragraphs 7.1 (b) and 7.2 in the Stock Exchange Agreement
have been satisfied.
Stockholm October 6, 1997
Berifors Holding BV
/s/ Sten Forseke
----------------------------------------
Sten Xxxxxxx
00
XXXXX XXXXXXXX OPTION AGREEMENT
BETWEEN
STONERIDGE, INC.,
AND
KARE ESP
Dated September October 6, 1997
50
TABLE OF CONTENTS
-----------------
Page
----
Grant of Option to Purchase..........................................1
1.1 Grant of Option to Purchase.................................1
1.2 Option Period and Excercise of the Option...................1
1.3 Stock Exchange Agreement....................................1
2. Consideration........................................................2
2.1 Exchange of Shares..........................................2
3. Representations and Warranties.......................................2
3.1 Conversion Transaction......................................2
3.2 Authority; No Conflicts.....................................2
3.3 Ownership...................................................2
3.4 Compliance with Applicable Laws.............................2
3.5 Absence of Changes or Events................................3
3.6 Contracts and Customers.....................................3
3.7 Litigation..................................................3
3.8 The Buyer's IPO.............................................3
3.9 Securities Matters..........................................3
4. Representations and Warranties of the Buyer..........................3
4.1 Authority; No Conflicts.....................................4
4.2 Stoneridge Shares...........................................4
5. Covenants............................................................4
5.1 Certain Actions.............................................4
5.2 Reasonable Best Efforts.....................................4
5.3 Antitrust Filing............................................4
5.4 Notification of Certain Matters.............................4
5.5 Fees and Expenses...........................................5
5.6 Lockup Agreements...........................................5
5.7 Certain Restrictions........................................5
6. The Closing..........................................................6
6.1 Date and Place of Closing...................................6
6.2 Deliveries at Closing.......................................6
7. Amendment; Waiver....................................................6
7.1 Amendment...................................................6
7.2 Extension; Waiver...........................................6
8. Survival of Representations and Warranties;
Indemnification......................................................7
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Page
----
8.1 Survival of Representations and Warranties..................7
8.2 Indemnification.............................................7
8.3 Satisfaction of Indemnification.............................7
9. Miscellaneous........................................................8
9.1 Validity....................................................8
9.2 Notices.....................................................8
9.3 Governing Law; Dispute Resolution...........................8
9.4 Headings....................................................9
9.5 Parties in Interest.........................................9
9.6 Counterparts................................................9
9.7 Press Releases..............................................9
9.8 Entire Agreement............................................9
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52
STOCK EXCHANGE AGREEMENT
Dated October 6, 1997
---------------------
The parties to this Stock Exchange Option Agreement (the
"Agreement") are Stoneridge, Inc., an Ohio corporation (the "Buyer"), and Kare
Esp, an individual (the "Shareholders").
WHEREAS, the Shareholder is the holder of certain indebtedness
of Berifors AB, a Swedish corporation (the "Company") which indebtedness is, at
the option of the Shareholder, convertible into common equity of the Company
(the "Convertible Debt").
WHEREAS, prior to the Closing, the Convertible Debt will be so
converted and the Shareholder will be the holder of record of 135 shares of
capital stock of the Company, representing 2.35% of all of the issued and
outstanding equity interests of any class of the Company (the "Shares");
WHEREAS, the Company owns all of the issued and outstanding
stock of each of the following entities; Berifors Production AB, Berifors
Electronic AB and Berifors GmbH Electronics (each a "Subsidiary," collectively
the "Subsidiaries");
WHEREAS, the Shareholder wishes to grant to the Buyer an
option to purchase from the Shareholder, the Shares pursuant to the terms and
subject to the conditions set forth herein.
Accordingly, the parties agree as follows:
1. Grant of Option to Purchase.
----------------------------
1.1 GRANT OF OPTION TO PURCHASE. The Shareholder hereby and on the
terms and subject to the conditions hereof grants the Buyer an irrevocable right
of option to purchase from the Shareholder, at the Closing, the Shares (the
"Options"). At the Closing, the Shareholder shall deliver to the Buyer the
certificates representing the Shares (the "Certificates") properly endorsed. The
Option is conditional upon consummation of the Buyer's IPO (as defined in
Section 3.8)
1.2 OPTION PERIOD AND EXERCISE OF THE OPTION. If the Buyer whishes to
exercise the option, he shall during the period of January 1 - February 28, 1998
provide the Shareholder with written notice thereof. In such notice the Buyer
shall designate a date and time on which the closing of the exchange of shares
contemplated by this agreement shall take place, Section 6.1 refers. Such date
must not be earlier than two weeks and no later than four weeks from the date
when such notice was duly given, Section 9.2 refers.
1.3 STOCK EXCHANGE AGREEMENT. Upon Closing, this Agreement shall
transform into a Stock Exchange Agreement and
53
governed all aspects of the relations between the parties even following the
exchange of shares pursuant herewith. Accordingly, no new or additional
agreement shall be entered into between the parties as a result of the Buyer's
exercise of the Option.
21 Consideration.
--------------
2.1 EXCHANGE OF SHARES. At the Closing, in payment in full for the
Shares, the Buyer shall sell, transfer and deliver to the Shareholder, and the
Shareholder shall acquire from the Buyer, 26,250 unregistered Common Shares,
without par value, of the Buyer (the "Stoneridge Shares"). The number of
Stoneridge Shares shall not be revised if the actual price at which such shares
will be sold differs from the parties current estimate of the price at which the
Buyer's common shares are most likely to be sold to the public in the Buyer's
IPO (as defined in Section 3.8) or if the exchange rate between U.S. $ and SEK
changes.
3. REPRESENTATIONS AND WARRANTIES. Unless otherwise reported to the Buyer or
discussed at any meeting with the Board of Directors of the Company at which
meeting any of the Directors representing the Buyer has been present, the
Shareholder represents and warrants to the Buyer as follows:
3.1 CONVERSION TRANSACTION. The conversion of all of the Convertible
Debt into the Shares has been consummated or will be consummated immediately
prior to the Closing (the "Conversion Transaction"). Upon the consummation of
the Conversion Transaction, the Company will have no remaining obligation to the
shareholder with respect to the Convertible Debt, whether financial or
otherwise.
3.2 AUTHORITY; NO CONFLICTS. The execution and delivery of this
Agreement and the applicable documents relating to the Conversion Transaction
(the "Conversion Transaction Documents") do not and did not, and the
consummation of the transactions contemplated hereby and thereby constitute the
valid and binding obligations of the Shareholder, enforceable in accordance with
their terms, and will not and did not, (a) result in any violation of or default
under, or give rise to a right of termination or acceleration of any obligation
or to loss of a material benefit under, any material contract, agreement or
arrangement to which the Shareholder is a party or by which the Shareholder may
be bound, or (b) violate any material judgment, statute, law or rule applicable
to the Shareholder.
3.3 OWNERSHIP. Immediately prior to the Closing, the Shareholder will
own the Shares free and clear of all encumbrances, security interests and
restrictions whatsoever.
3.4 COMPLIANCE WITH APPLICABLE LAWS. To the best knowledge of the
Shareholder, the business and affairs of the Company and each Subsidiary have
been conducted in compliance with all applicable laws, rules and regulations of
any governmental authority, except to the extant noncompliance
-2-
54
would not have a material adverse effect on the business or financial condition
of any such entity,
3.5 ABSENCE OF CHANGES OR EVENTS. To the best knowledge of the
Shareholder, since December 31, 1996, the business of the Company and each
Subsidiary has been conducted in the ordinary course and there has not been any
material adverse change in the business or financial condition of the Company or
any Subsidiary, or any event which could reasonably be expected to result in any
such material adverse change.
3.6 CONTRACTS AND CUSTOMERS. To the best knowledge of the Shareholder,
neither the Company nor any Subsidiary is in breach or default under any
contract or agreement which the Company or any Subsidiary is bound, except for
any such breach or default which could not reasonably be expected to have a
material adverse effect on the Company or any Subsidiary.
3.7 LITIGATION. To the best knowledge of the Shareholder, there are no
actions, suits, arbitrations or investigations pending or threatened against the
Company or any Subsidiary except actions, suits, arbitrations or investigations
which, individually or in the aggregate, have not had and if adversely
determined or resolved, could not reasonably be expected to have a material
adverse effect on the business or financial condition of the Company or any
Subsidiary.
3.8 THE BUYER'S IPO. The Shareholder acknowledges that the Buyer filed
with the United States Securities and Exchange Commission a Registration
Statement on Form S-1 an August 8, 1997 (the "Registration Statement"), relating
to a proposed initial public offering of the Buyer's common shares (the "Buyer's
IPO"). The Shareholder further acknowledges that the Buyer's IPO may or may not
be consummated, for reasons within or without the Buyer's controls that the
Buyer, in its sole discretion, may determine not to consummate the Buyer's IPO
and that, if consummated, the Buyer's IPO may be consummated on terms and
conditions other than those disclosed in the Registration Statement.
3.9 SECURITIES MATTERS. The Shareholder acknowledges that (i) the Buyer
has delivered to him a copy of the Registration Statement, (ii) he has had an
opportunity to meet with representatives of the Buyer and to obtain all of the
information he has requested regarding the Buyer, and has received complete and
satisfactory answers to any questions posed by him to representatives of the
Buyer, and (iii) the Stoneridge Shares are not registered with any foreign, U.S.
or state securities or other governmental authority, that the Buyer has no
current plans to register the Stoneridge Shares, and that the Shareholder has no
right to require the Buyer to register any Stoneridge Shares with any such
authority. The Shareholder agrees to hold the Stoneridge Shares subject to any
and all applicable restrictions.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer hereby represents and
warrants to the Shareholder as follows:
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55
4.1 AUTHORITY; NO CONFLICTS. The Buyer is a corporation duly formed
validly existing and in good standing under the laws of its jurisdicton of
incorporation. This Agreement and the transactions contemplated hereby have been
duly authorized by all requisite board of director and stockholder action on the
part of the Buyer and this Agreement, following the Buyer's exercise of the
Option as set out in Section 1.2, constitutes a valid and binding obligation of
the Buyer, enforceable against the Buyer in accordance with its terms. With
respect to the Buyer, the information contained in the "Red Xxxxxxx" -prospectus
as well as the final prospectus governing the Buyer's IPO (Section 3.8 refers),
is true and correct in all material respects.
4.2 STONERIDGE SHARES. Immediately prior to the Closing, the Stoneridge
Shares will have been duly authorized and, upon payment of the consideration
therefor as set forth in this Agreement, will be validly issued, fully paid and
nonassessable.
5. Covenants
---------
5.1 CERTAIN ACTIONS. No party will take any action or refrain from
taking any action that would cause any representation or warranty of such party
to become or not be true and correct.
5.2 REASONABLE BEST EFFORTS. Following the Buyer's exercise of the
Option as set out in Section 1.2, each party shall use its reasonable best
efforts to cause the fulfillment at or prior to the Closing of all the
conditions to such other party's obligation to consummate the transactions
contemplated by this Agreement.
5.3 ANTITRUST FILING. The Shareholder shall cooperate with the Buyer in
the Buyer's filing of this Agreement in connection with the antitrust laws of
any government which has jurisdiction over the parties and, if reasonably
requested by the Buyer, In the Buyer's efforts to file any documents relating
thereto, including the gathering of information related to such filing.
5.4 NOTIFICATION OF CERTAIN MATTERS. Following the Buyer's exercise of
the Option as set out in Section 1.2, the Shareholder shall give prompt notice
to the Buyer, and the Buyer shall give prompt notice to the Shareholder, of (i)
the occurrence or nonoccurrence of any event which is likely to cause any
representation or warranty of the notifying party in this Agreement to be untrue
or inaccurate at or prior to the Closing and (ii) any failure of the notifying
party to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
the delivery of any notice pursuant to this Section 5.4 shall not limit or
otherwise affect the remedies available under this Agreement to any of the party
receiving such notice.
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56
5.5 FEE AND EXPENSES. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated by this Agreement shall be
paid by the party incurring the cost or expense.
5.6 LOCKUP AGREEMENTS. The Shareholder shall cause all parties which
acquire a direct or indirect interest in the Stoneridge Shares to execute and
deliver to the Buyer's underwriters, in connection with the Buyer's IPO,
"lockup" or other similar agreements restricting the transfer of the Stoneridge
Shares for a period not in excess of one year following the date of the
consummation of the Buyer's IPO, in form and substance requested by the Buyer.
5.7 Certain Restrictions.
---------------------
(a) COVENANT NOT TO COMPETE. The Shareholder agrees that he
will not, during the period commencing on the date hereof and ending on the
second anniversary of the date on which he ceases to be employed by, or
otherwise affiliated with, the Company, engage, directly or indirectly, or
otherwise, in any or all of the following activities in any country in which (A)
with respect to the period during which he is employed by or otherwise
affiliated with the Company, the Company is engaged in business during such
period, and (B) with respect to the period following the date on which he ceases
to be employed by or otherwise affiliated with the Company (the "Separation
Date"), any country in which the Company is engaged in business on the
Separation Date:
(i) enter into or engage in any business which
competes with any business conducted by the Company (A) with
respect to the period during which he is employed by or
otherwise affiliated with the Company, any business conducted
by the Company during such period, and (B) with respect to the
period following the Separation Date, any business in which
the Company is engaged on the Separation Date (such
businesses, the "Applicable Businesses"); or
(ii) solicit customers or business patronage which
may result in competition with any Applicable Business or may
result in any customer ceasing to be a customer of the Company
with respect to any Applicable Business.
(b) COVENANT AGAINST DISCLOSURE. The Shareholder agrees, from
and after the date hereof, except as necessary in the performance of his duties
on behalf of the Company, not to (i) disclose to any person, association, firm,
corporation or other entity in any manner, directly or
-5-
57
indirectly, any information or data relevant to the business of the Company,
whether of a technical or commercial nature.
(c) COVENANT AGAINST HIRING. The Shareholder agrees that he
will not, during the period commencing on the date hereof and ending on the
second anniversary of the date on which he ceases to be employed by, or
otherwise affiliated with, the Company, take any action which would induce any
employee or representative of the Company not to become or continue as an
employee or representative of the Company.
(d) INJUNCTIVE RELIEF. The Shareholder acknowledges and agrees
that the remedies at law of the Company or the Buyer for any breach of any of
his obligations under this Section 5.7 hereof would be inadequate, and agrees
and consents that temporary and permanent injunctive relief may be granted in a
proceeding which may be brought to enforce any provision of this Section 5.7
without the necessity of proof of actual damage.
6. The Closing.
------------
6.1 DATE AND PLACE OF CLOSING. The closing of the transactions
contemplated hereby (the "Closing") shall take place on such date and time as is
designated by the Buyer (the "Closing Date"), at the offices of Advokatfirman
Xxxxxxxxxx KB, Xxxxxxxxxx 00, 000 00 Xxxxxxxxx, Xxxxxx.
6.2 Deliveries at Closing.
----------------------
(a) At the Closing, the Shareholder shall deliver or cause to be
delivered to the Buyer the Certificates (as defined in Section 1.1).
(b) At the Closing, the Buyer shall cause to be delivered to the
Shareholder certificates representing the Stoneridge Shares, duly registered in
the name of the Seller.
(c) Notwithstanding the foregoing provisions of this Section 6.2, not
less than three (3) days prior to the Closing, all documents and instruments to
be delivered under this Section 6.2 shall be delivered to Advokatfirman
Xxxxxxxxxx KB, as escrow agent, and the release thereof from escrow shall be
subject only to the duly perfected Closing.
7. Amendment; Waiver.
------------------
7.1 AMENDMENT. This Agreement may not be amended, except by an
instrument in writing signed on behalf of all the parties.
7.2 EXTENTION; WAIVER. At any time prior to the Closing, the Buyer, may
(a) extend the time for the performance of any of the obligations or other acts
of the Shareholder in this Agreement, (b) waive any inaccuracies in the
representations and warranties by the Shareholder or in any document,
certificate or writing delivered pursuant to
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58
this Agreement by the Shareholder, or (c) waive compliance with any of the
agreements or conditions in this Agreement. Any agreement by the Buyer to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf the Buyer.
8. Survival of Representations and Warranties; Indemnification.
------------------------------------------------------------
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in this Agreement or in any certificate, document or
instrument delivered pursuant to this Agreement shall survive the Closing. Any
investigation by or on behalf of any party hereto shall not constitute a waiver
as to enforcement of any representation or warranty.
8.2 INDEMNIFICATION. Notwithstanding the Closing, the Buyer, on the one
hand, the Shareholder, on the other hand (as applicable, the "Indemnifying
Party"), covenant and agree to defend, indemnify and hold harmless the
Shareholder, on the one hand, and the Buyer, on the other hand, and, as
applicable, their respective officers, directors, partners, employees, agents,
advisers and representatives, on the one hand (such parties, as applicable, the
"Indemnified Parties"), from and against, and pay or reimburse each such person
for, any and all claims, liabilities, obligations, losses, fines, costs,
proceedings or damages (whether absolute, accrued, conditional or otherwise, and
whether or not resulting from third party claims), including out-of-pocket
expenses and reasonable attorneys' and accountants' fees incurred in the
investigation or defense of any of the same or in asserting any of their
respective rights hereunder (collectively, "Losses") resulting from or arising
out of any breach or inaccuracy of any representation or warranty (or the
schedules relating thereto) or nonperformance of any covenant of the
Indemnifying Party.
8.3 SATISFACTION OF INDEMNIFICATION. In the event that an Indemnifying
Party is required to indemnify an Indemnified Party pursuant to Section 8.2, (a)
if the Indemnifying Party is the Shareholder, such indemnification obligation
shall be satisfied, to the extent of the value thereof, by the delivery of such
number of Stoneridge Shares as have a value equal to the amount of the Losses
to be indemnified (it being agreed that each Stoneridge Share shall have a value
for purposes of this Section 8.3 equal to what such shares are priced to be sold
to the public in the Buyer's IPO (as defined in Section 3.8)(the "IPO Price"),
with the balance, if any, paid in cash, and (b) if the Indemnifying Party is the
Buyer, such indemnification obligation shall be satisfied by the payment of
cash in the amount of the Losses to be indemnified. All payments of cash under
this Section 8.3 shall be made in United States Dollars.
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59
9. Miscellaneous.
-------------
9.1 VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9.2 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person, by facsimile transmission with
confirmation of receipt, or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties as follows:
if to the Buyer:
Stoneridge, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
with a copy to:
Xxxxx & Xxxxxxxxx LLP
3200 National City Center
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xx. Xxxxx X. Xxxxx
if to the Shareholder:
Kare Esp
Xxxxxxxxxxxx 0
000 00 XXXXXXXX XXXXX
XXXXXX
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt of notice of the change).
9.3 GOVERNING LAW; DISPUTE RESOLUTION. This Agreement shall be governed
by and construed in accordance with the law of the State of Ohio, U.S.A.,
regardless of the law that might otherwise govern under principles of conflicts
of laws applicable thereto. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof or relationship created thereby, which
is not settled through negotiation shall be resolved exclusively by arbitration
under the auspices of and in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce then in effect. The
arbitration shall be held in London, England. The arbitration shall be heard
before three
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60
arbitrators, one to be chosen by the Buyer, one to be chosen by the Shareholder
and the third to be chosen by those two arbitrators. The arbitration shall be
conducted in the English language. The arbitration shall be final and binding on
the parties, and shall not be subject to any appeal. Judgment on the award of
the arbitrators may be entered by any court having jurisdiction to do so.
Notwithstanding any other provision of this Agreement, any party shall be
entitled to seek injunctive or other provisional relief from any court of
competent jurisdiction pending the final decision or award of the arbitrators.
9.4 HEADINGS. The headings in this Agreement are for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
9.5 PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party to this Agreement, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature under or by reason of this Agreement.
9.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but all of which shall constitute one
and the same agreement.
9.7 PRESS RELEASES. The Shareholder shall obtain Buyer's written
consent before issuing any press release or otherwise making any public
statement with respect to the transactions contemplated by this Agreement, and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by law.
9.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties with respect to its subject matter and supersedes all other
prior agreements and understandings, both written and oral, among the parties
with respect to that subject matter. In the event of any dispute regarding this
Agreement, this English version of this Agreement shall control.
Space intentionally left blank.
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61
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
STONERIDGE,
INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
SHAREHOLDER:
/s/ Kare Esp
-----------------------------------
Kare Esp
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62
STOCK EXCHANGE OPTION AGREEMENT
BETWEEN
STONERIDGE, INC.,
AND
Xxxxx Xxxxxxx
Dated September October 6, 1997
63
TABLE OF CONTENTS
-----------------
Page
----
Grant of Option to Purchase..........................................1
1.1 Grant of Option to Purchase.................................1
1.2 Option Period and Excercise of the Option...................1
1.3 Stock Exchange Agreement....................................1
2. Consideration........................................................2
2.1 Exchange of Shares..........................................2
3. Representations and Warranties.......................................2
3.1 Conversion Transaction......................................2
3.2 Authority; No Conflicts.....................................2
3.3 Ownership...................................................2
3.4 Compliance with Applicable Laws.............................2
3.5 Absence of Changes or Events................................3
3.6 Contracts and Customers.....................................3
3.7 Litigation..................................................3
3.8 The Buyer's IPO.............................................3
3.9 Securities Matters..........................................3
4. Representations and Warranties of the Buyer..........................3
4.1 Authority; No Conflicts.....................................4
4.2 Stoneridge Shares...........................................4
5. Covenants............................................................4
5.1 Certain Actions.............................................4
5.2 Reasonable Best Efforts.....................................4
5.3 Antitrust Filing............................................4
5.4 Notification of Certain Matters.............................4
5.5 Fees and Expenses...........................................5
5.6 Lockup Agreements...........................................5
5.7 Certain Restrictions........................................5
6. The Closing..........................................................6
6.1 Date and Place of Closing...................................6
6.2 Deliveries at Closing.......................................6
7. Amendment; Waiver....................................................6
7.1 Amendment...................................................6
7.2 Extension; Waiver...........................................6
8. Survival of Representations and Warranties;
Indemnification......................................................7
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Page
----
8.1 Survival of Representations and Warranties..................7
8.2 Indemnification.............................................7
8.3 Satisfaction of Indemnification.............................7
9. Miscellaneous........................................................8
9.1 Validity....................................................8
9.2 Notices.....................................................8
9.3 Governing Law; Dispute Resolution...........................8
9.4 Headings....................................................9
9.5 Parties in Interest.........................................9
9.6 Counterparts................................................9
9.7 Press Releases..............................................9
9.8 Entire Agreement............................................9
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STOCK EXCHANGE AGREEMENT
Dated October 6, 1997
---------------------
The parties to this Stock Exchange Option Agreement (the
"Agreement") are Stoneridge, Inc., an Ohio corporation (the "Buyer"), and Xxxxx
Xxxxxxx, an individual (the "Shareholders").
WHEREAS, the Shareholder is the holder of certain indebtedness
of Berifors AB, a Swedish corporation (the "Company") which indebtedness is, at
the option of the Shareholder, convertible into common equity of the Company
(the "Convertible Debt").
WHEREAS, prior to the Closing, the Convertible Debt will be so
converted and the Shareholder will be the holder of record of 135 shares of
capital stock of the Company, representing 2.35% of all of the issued and
outstanding equity interests of any class of the Company (the "Shares");
WHEREAS, the Company owns all of the issued and outstanding
stock of each of the following entities; Berifors Production AB, Berifors
Electronic AB and Berifors GmbH Electronics (each a "Subsidiary," collectively
the "Subsidiaries");
WHEREAS, the Shareholder wishes to grant to the Buyer an
option to purchase from the Shareholder, the Shares pursuant to the terms and
subject to the conditions set forth herein.
Accordingly, the parties agree as follows:
1. Grant of Option to Purchase.
----------------------------
1.1 GRANT OF OPTION TO PURCHASE. The Shareholder hereby and on the
terms and subject to the conditions hereof grants the Buyer an irrevocable right
of option to purchase from the Shareholder, at the Closing, the Shares (the
"Options"). At the Closing, the Shareholder shall deliver to the Buyer the
certificates representing the Shares (the "Certificates") properly endorsed. The
Option is conditional upon consummation of the Buyer's IPO (as defined in
Section 3.8)
1.2 OPTION PERIOD AND EXERCISE OF THE OPTION. If the Buyer whishes to
exercise the option, he shall during the period of January 1 - February 28, 1998
provide the Shareholder with written notice thereof. In such notice the Buyer
shall designate a date and time on which the closing of the exchange of shares
contemplated by this agreement shall take place, Section 6.1 refers. Such date
must not be earlier than two weeks and no later than four weeks from the date
when such notice was duly given, Section 9.2 refers.
1.3 STOCK EXCHANGE AGREEMENT. Upon Closing, this Agreement shall
transform into a Stock Exchange Agreement and
66
governed all aspects of the relations between the parties even following the
exchange of shares pursuant herewith. Accordingly, no new or additional
agreement shall be entered into between the parties as a result of the Buyer's
exercise of the Option.
21 Consideration.
--------------
2.1 EXCHANGE OF SHARES. At the Closing, in payment in full for the
Shares, the Buyer shall sell, transfer and deliver to the Shareholder, and the
Shareholder shall acquire from the Buyer, 26,250 unregistered Common Shares,
without par value, of the Buyer (the "Stoneridge Shares"). The number of
Stoneridge Shares shall not be revised if the actual price at which such shares
will be sold differs from the parties current estimate of the price at which the
Buyer's common shares are most likely to be sold to the public in the Buyer's
IPO (as defined in Section 3.8) or if the exchange rate between U.S. $ and SEK
changes.
3. REPRESENTATIONS AND WARRANTIES. Unless otherwise reported to the Buyer or
discussed at any meeting with the Board of Directors of the Company at which
meeting any of the Directors representing the Buyer has been present, the
Shareholder represents and warrants to the Buyer as follows:
3.1 CONVERSION TRANSACTION. The conversion of all of the Convertible
Debt into the Shares has been consummated or will be consummated immediately
prior to the Closing (the "Conversion Transaction"). Upon the consummation of
the Conversion Transaction, the Company will have no remaining obligation to the
shareholder with respect to the Convertible Debt, whether financial or
otherwise.
3.2 AUTHORITY; NO CONFLICTS. The execution and delivery of this
Agreement and the applicable documents relating to the Conversion Transaction
(the "Conversion Transaction Documents") do not and did not, and the
consummation of the transactions contemplated hereby and thereby constitute the
valid and binding obligations of the Shareholder, enforceable in accordance with
their terms, and will not and did not, (a) result in any violation of or default
under, or give rise to a right of termination or acceleration of any obligation
or to loss of a material benefit under, any material contract, agreement or
arrangement to which the Shareholder is a party or by which the Shareholder may
be bound, or (b) violate any material judgment, statute, law or rule applicable
to the Shareholder.
3.3 OWNERSHIP. Immediately prior to the Closing, the Shareholder will
own the Shares free and clear of all encumbrances, security interests and
restrictions whatsoever.
3.4 COMPLIANCE WITH APPLICABLE LAWS. To the best knowledge of the
Shareholder, the business and affairs of the Company and each Subsidiary have
been conducted in compliance with all applicable laws, rules and regulations of
any governmental authority, except to the extant noncompliance
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67
would not have a material adverse effect on the business or financial condition
of any such entity,
3.5 ABSENCE OF CHANGES OR EVENTS. To the best knowledge of the
Shareholder, since December 31, 1996, the business of the Company and each
Subsidiary has been conducted in the ordinary course and there has not been any
material adverse change in the business or financial condition of the Company or
any Subsidiary, or any event which could reasonably be expected to result in any
such material adverse change.
3.6 CONTRACTS AND CUSTOMERS. To the best knowledge of the Shareholder,
neither the Company nor any Subsidiary is in breach or default under any
contract or agreement which the Company or any Subsidiary is bound, except for
any such breach or default which could not reasonably be expected to have a
material adverse effect on the Company or any Subsidiary.
3.7 LITIGATION. To the best knowledge of the Shareholder, there are no
actions, suits, arbitrations or investigations pending or threatened against the
Company or any Subsidiary except actions, suits, arbitrations or investigations
which, individually or in the aggregate, have not had and if adversely
determined or resolved, could not reasonably be expected to have a material
adverse effect on the business or financial condition of the Company or any
Subsidiary.
3.8 THE BUYER'S IPO. The Shareholder acknowledges that the Buyer filed
with the United States Securities and Exchange Commission a Registration
Statement on Form S-1 an August 8, 1997 (the "Registration Statement"), relating
to a proposed initial public offering of the Buyer's common shares (the "Buyer's
IPO"). The Shareholder further acknowledges that the Buyer's IPO may or may not
be consummated, for reasons within or without the Buyer's controls that the
Buyer, in its sole discretion, may determine not to consummate the Buyer's IPO
and that, if consummated, the Buyer's IPO may be consummated on terms and
conditions other than those disclosed in the Registration Statement.
3.9 SECURITIES MATTERS. The Shareholder acknowledges that (i) the Buyer
has delivered to him a copy of the Registration Statement, (ii) he has had an
opportunity to meet with representatives of the Buyer and to obtain all of the
information he has requested regarding the Buyer, and has received complete and
satisfactory answers to any questions posed by him to representatives of the
Buyer, and (iii) the Stoneridge Shares are not registered with any foreign, U.S.
or state securities or other governmental authority, that the Buyer has no
current plans to register the Stoneridge Shares, and that the Shareholder has no
right to require the Buyer to register any Stoneridge Shares with any such
authority. The Shareholder agrees to hold the Stoneridge Shares subject to any
and all applicable restrictions.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer hereby represents and
warrants to the Shareholder as follows:
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4.1 AUTHORITY; NO CONFLICTS. The Buyer is a corporation duly formed
validly existing and in good standing under the laws of its jurisdicton of
incorporation. This Agreement and the transactions contemplated hereby have been
duly authorized by all requisite board of director and stockholder action on the
part of the Buyer and this Agreement, following the Buyer's exercise of the
Option as set out in Section 1.2, constitutes a valid and binding obligation of
the Buyer, enforceable against the Buyer in accordance with its terms. With
respect to the Buyer, the information contained in the "Red Xxxxxxx" -prospectus
as well as the final prospectus governing the Buyer's IPO (Section 3.8 refers),
is true and correct in all material respects.
4.2 STONERIDGE SHARES. Immediately prior to the Closing, the Stoneridge
Shares will have been duly authorized and, upon payment of the consideration
therefor as set forth in this Agreement, will be validly issued, fully paid and
nonassessable.
5. Covenants
---------
5.1 CERTAIN ACTIONS. No party will take any action or refrain from
taking any action that would cause any representation or warranty of such party
to become or not be true and correct.
5.2 REASONABLE BEST EFFORTS. Following the Buyer's exercise of the
Option as set out in Section 1.2, each party shall use its reasonable best
efforts to cause the fulfillment at or prior to the Closing of all the
conditions to such other party's obligation to consummate the transactions
contemplated by this Agreement.
5.3 ANTITRUST FILING. The Shareholder shall cooperate with the Buyer in
the Buyer's filing of this Agreement in connection with the antitrust laws of
any government which has jurisdiction over the parties and, if reasonably
requested by the Buyer, In the Buyer's efforts to file any documents relating
thereto, including the gathering of information related to such filing.
5.4 NOTIFICATION OF CERTAIN MATTERS. Following the Buyer's exercise of
the Option as set out in Section 1.2, the Shareholder shall give prompt notice
to the Buyer, and the Buyer shall give prompt notice to the Shareholder, of (i)
the occurrence or nonoccurrence of any event which is likely to cause any
representation or warranty of the notifying party in this Agreement to be untrue
or inaccurate at or prior to the Closing and (ii) any failure of the notifying
party to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
the delivery of any notice pursuant to this Section 5.4 shall not limit or
otherwise affect the remedies available under this Agreement to any of the party
receiving such notice.
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69
5.5 FEE AND EXPENSES. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated by this Agreement shall be
paid by the party incurring the cost or expense.
5.6 LOCKUP AGREEMENTS. The Shareholder shall cause all parties which
acquire a direct or indirect interest in the Stoneridge Shares to execute and
deliver to the Buyer's underwriters, in connection with the Buyer's IPO,
"lockup" or other similar agreements restricting the transfer of the Stoneridge
Shares for a period not in excess of one year following the date of the
consummation of the Buyer's IPO, in form and substance requested by the Buyer.
5.7 Certain Restrictions.
---------------------
(a) COVENANT NOT TO COMPETE. The Shareholder agrees that he
will not, during the period commencing on the date hereof and ending on the
second anniversary of the date on which he ceases to be employed by, or
otherwise affiliated with, the Company, engage, directly or indirectly, or
otherwise, in any or all of the following activities in any country in which (A)
with respect to the period during which he is employed by or otherwise
affiliated with the Company, the Company is engaged in business during such
period, and (B) with respect to the period following the date on which he ceases
to be employed by or otherwise affiliated with the Company (the "Separation
Date"), any country in which the Company is engaged in business on the
Separation Date:
(i) enter into or engage in any business which
competes with any business conducted by the Company (A) with
respect to the period during which he is employed by or
otherwise affiliated with the Company, any business conducted
by the Company during such period, and (B) with respect to the
period following the Separation Date, any business in which
the Company is engaged on the Separation Date (such
businesses, the "Applicable Businesses"); or
(ii) solicit customers or business patronage which
may result in competition with any Applicable Business or may
result in any customer ceasing to be a customer of the Company
with respect to any Applicable Business.
(b) COVENANT AGAINST DISCLOSURE. The Shareholder agrees, from
and after the date hereof, except as necessary in the performance of his duties
on behalf of the Company, not to (i) disclose to any person, association, firm,
corporation or other entity in any manner, directly or
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70
indirectly, any information or data relevant to the business of the Company,
whether of a technical or commercial nature.
(c) COVENANT AGAINST HIRING. The Shareholder agrees that he
will not, during the period commencing on the date hereof and ending on the
second anniversary of the date on which he ceases to be employed by, or
otherwise affiliated with, the Company, take any action which would induce any
employee or representative of the Company not to become or continue as an
employee or representative of the Company.
(d) INJUNCTIVE RELIEF. The Shareholder acknowledges and agrees
that the remedies at law of the Company or the Buyer for any breach of any of
his obligations under this Section 5.7 hereof would be inadequate, and agrees
and consents that temporary and permanent injunctive relief may be granted in a
proceeding which may be brought to enforce any provision of this Section 5.7
without the necessity of proof of actual damage.
6. The Closing.
------------
6.1 DATE AND PLACE OF CLOSING. The closing of the transactions
contemplated hereby (the "Closing") shall take place on such date and time as is
designated by the Buyer (the "Closing Date"), at the offices of Advokatfirman
Xxxxxxxxxx KB, Xxxxxxxxxx 00, 000 00 Xxxxxxxxx, Xxxxxx.
6.2 Deliveries at Closing.
----------------------
(a) At the Closing, the Shareholder shall deliver or cause to be
delivered to the Buyer the Certificates (as defined in Section 1.1).
(b) At the Closing, the Buyer shall cause to be delivered to the
Shareholder certificates representing the Stoneridge Shares, duly registered in
the name of the Seller.
(c) Notwithstanding the foregoing provisions of this Section 6.2, not
less than three (3) days prior to the Closing, all documents and instruments to
be delivered under this Section 6.2 shall be delivered to Advokatfirman
Xxxxxxxxxx KB, as escrow agent, and the release thereof from escrow shall be
subject only to the duly perfected Closing.
7. Amendment; Waiver.
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7.1 AMENDMENT. This Agreement may not be amended, except by an
instrument in writing signed on behalf of all the parties.
7.2 EXTENTION; WAIVER. At any time prior to the Closing, the Buyer, may
(a) extend the time for the performance of any of the obligations or other acts
of the Shareholder in this Agreement, (b) waive any inaccuracies in the
representations and warranties by the Shareholder or in any document,
certificate or writing delivered pursuant to
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this Agreement by the Shareholder, or (c) waive compliance with any of the
agreements or conditions in this Agreement. Any agreement by the Buyer to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf the Buyer.
8. Survival of Representations and Warranties; Indemnification.
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8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in this Agreement or in any certificate, document or
instrument delivered pursuant to this Agreement shall survive the Closing. Any
investigation by or on behalf of any party hereto shall not constitute a waiver
as to enforcement of any representation or warranty.
8.2 INDEMNIFICATION. Notwithstanding the Closing, the Buyer, on the one
hand, the Shareholder, on the other hand (as applicable, the "Indemnifying
Party"), covenant and agree to defend, indemnify and hold harmless the
Shareholder, on the one hand, and the Buyer, on the other hand, and, as
applicable, their respective officers, directors, partners, employees, agents,
advisers and representatives, on the one hand (such parties, as applicable, the
"Indemnified Parties"), from and against, and pay or reimburse each such person
for, any and all claims, liabilities, obligations, losses, fines, costs,
proceedings or damages (whether absolute, accrued, conditional or otherwise, and
whether or not resulting from third party claims), including out-of-pocket
expenses and reasonable attorneys' and accountants' fees incurred in the
investigation or defense of any of the same or in asserting any of their
respective rights hereunder (collectively, "Losses") resulting from or arising
out of any breach or inaccuracy of any representation or warranty (or the
schedules relating thereto) or nonperformance of any covenant of the
Indemnifying Party.
8.3 SATISFACTION OF INDEMNIFICATION. In the event that an Indemnifying
Party is required to indemnify an Indemnified Party pursuant to Section 8.2, (a)
if the Indemnifying Party is the Shareholder, such indemnification obligation
shall be satisfied, to the extent of the value thereof, by the delivery of such
number of Stoneridge Shares as have a value equal to the amount of the Losses
to be indemnified (it being agreed that each Stoneridge Share shall have a value
for purposes of this Section 8.3 equal to what such shares are priced to be sold
to the public in the Buyer's IPO (as defined in Section 3.8)(the "IPO Price"),
with the balance, if any, paid in cash, and (b) if the Indemnifying Party is the
Buyer, such indemnification obligation shall be satisfied by the payment of
cash in the amount of the Losses to be indemnified. All payments of cash under
this Section 8.3 shall be made in United States Dollars.
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9. Miscellaneous.
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9.1 VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9.2 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person, by facsimile transmission with
confirmation of receipt, or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties as follows:
if to the Buyer:
Stoneridge, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
with a copy to:
Xxxxx & Xxxxxxxxx LLP
3200 National City Center
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xx. Xxxxx X. Xxxxx
if to the Shareholder:
Xxxxx Xxxxxxx
Xxxxxxxxxxxxxxx 0x
000 00 XXXXXXXXX
XXXXXX
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt of notice of the change).
9.3 GOVERNING LAW; DISPUTE RESOLUTION. This Agreement shall be governed
by and construed in accordance with the law of the State of Ohio, U.S.A.,
regardless of the law that might otherwise govern under principles of conflicts
of laws applicable thereto. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof or relationship created thereby, which
is not settled through negotiation shall be resolved exclusively by arbitration
under the auspices of and in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce then in effect. The
arbitration shall be held in London, England. The arbitration shall be heard
before three
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arbitrators, one to be chosen by the Buyer, one to be chosen by the Shareholder
and the third to be chosen by those two arbitrators. The arbitration shall be
conducted in the English language. The arbitration shall be final and binding on
the parties, and shall not be subject to any appeal. Judgment on the award of
the arbitrators may be entered by any court having jurisdiction to do so.
Notwithstanding any other provision of this Agreement, any party shall be
entitled to seek injunctive or other provisional relief from any court of
competent jurisdiction pending the final decision or award of the arbitrators.
9.4 HEADINGS. The headings in this Agreement are for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
9.5 PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party to this Agreement, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature under or by reason of this Agreement.
9.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but all of which shall constitute one
and the same agreement.
9.7 PRESS RELEASES. The Shareholder shall obtain Buyer's written
consent before issuing any press release or otherwise making any public
statement with respect to the transactions contemplated by this Agreement, and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by law.
9.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties with respect to its subject matter and supersedes all other
prior agreements and understandings, both written and oral, among the parties
with respect to that subject matter. In the event of any dispute regarding this
Agreement, this English version of this Agreement shall control.
Space intentionally left blank.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
STONERIDGE,
INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
SHAREHOLDER:
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
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