ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made in the city of Sao Paulo,
State of Sao Paulo, Brazil, on this 20th day of March, 1997, by and between, on
the one hand, ECHLIN DO BRASIL INDUSTRIA E COMERCIO LTDA., a company organized
and existing in accordance with the laws of Brazil, with head offices at Xxx
Xxxxxxx, 0000/00, in the city of Sao Paulo, State of Sao Paulo, registered with
the CGC/MF under No. 61.091.963/0001-32, in this act represented by its duly
authorized representatives signed below ("Buyer") and, on the other hand,
INDUSTRIA E COMERCIO BROSOL LTDA., a company organized and existing in
accordance with the laws of Brazil, with head offices at Xxxxxxx Xxxxx Xxxxxxxx,
Xx 00, in the city of Ribeirao Xxxxx, State of Sao Paulo, registered with the
CGC/MF under No. 61.090.890/0001-64, in this act represented by its duly
authorized representatives signed below ("Seller"), as guarantor of Seller,
UNIAO DE COMERCIO E PARTICIPACOES LTDA., with head offices in Cidade de Deus,
Xxxx Xxxx, Osasco, Sao Paulo, registered with the CGC/MF under No.
33.344.557/0001-07 ("Uniao"), and as guarantor of Buyer, Echlin, Inc., a company
organized and existing in accordance with the laws of the State of Connecticut,
USA ("Echlin").
WITNESSETH:
WHEREAS, Seller is currently controlled and owned by Uniao, a
subsidiary of Banco Bradesco S.A;
WHEREAS, Buyer has always been directly or indirectly controlled and
owned by Echlin;
WHEREAS, Uniao acquired the control of Seller as a result of its
financial situation (Chapter 11), which took place in 1995, recovered it, and
decided to offer the Business (as defined in Section 1 below) to any interested
party;
WHEREAS, in view of Buyer's activities, Buyer has been interested in
acquiring the Business and, after careful consideration, Uniao decided to cause
Seller to sell the Business to Echlin (whether directly or through one of its
Brazilian subsidiaries) and, accordingly, on October 10, 1996, Seller and Uniao
on the one hand and Echlin on the other hand executed a Letter of Intent (the
"Letter of Intent") whereby they set forth the basic and most important
conditions for Seller to sell the Business to Echlin;
WHEREAS, in accordance with the Letter of Intent, Seller has decided to
sell the Business to Echlin and Echlin has decided to designate Buyer to buy the
Business from Seller;
WHEREAS, Seller has the necessary Social Security Institute's Debt
Clearance Certificate (Certidao Negativa de Debito do Instituto Nacional da
Seguridade Social) No. 477887, issued on January 23, 1997, Severance System
Clearance Certificate (Certidao do Fundo de Garantia por Xxxxx xx Xxxxxxx -
XXXX) Xx. 0000000 issued on October 30, 1996, Federal Taxes Clearance
Certificate (Certidao Negativa de Tributos e Contribuicoes Federais) No.
0.551.068, issued on November 6. 1996, and is therefore in a position to
immediately sell the Business to Buyer;
NOW THEREFORE, in consideration of the premises, representations and
mutual covenants contained herein, and intending to be legally bound hereby, the
Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, including the Attachments hereto, the
defined terms set forth in this Article shall have the meanings set forth in
this Article. All Article and Section numbers and Attachment references used in
this Agreement refer to Articles and Sections of this Agreement and Attachments
attached hereto, unless otherwise specifically described. Capitalized terms used
but not defined in this Article are used with the definitions given throughout
this Agreement.
"Assets" means all assets, free and clear of encumbrances, liens,
security interests or any other restriction, currently owned by Seller, used in
the Business, and which Buyer will use in its own business;
"Business" means, in accordance with Article III and the Attachments to
this Agreement, the business dedicated to and associated with engine components
as until this date owned and conducted by Seller, including without limitation
all fixed assets such as machinery and equipment, and all intellectual property
rights such as patents, know-how, trademarks (particularly the trademarks and
brand names "Brosol" and "Xxxxxx"), technical documentation, free and clear of
any claims, liens or security interests;
"Buyer" means Echlin do Brasil Industria e Comercio Ltda.;
"Closing Date" has the meaning specified in Section 9.1;
"Closing Memorandum" has the meaning specified in Section 9.3;
"Echlin" means Echlin, Inc.;
"Exercise Date" has the meaning specified in Section 7.2;
"Inventories" has the meaning specified in Section 3.2;
"NYSE" means the New York Stock Exchange;
"Obligations" means those certain obligations referred to in Section
3.1 below which are currently Seller's obligations and are necessary for the
Business, but only to the extent arising and to be performed after (but not as
to matters occurring at or prior to) the Closing Date;
"Parties" means both Buyer and Seller;
"Party" means either Buyer or Seller;
"Purchase Price" means the total amount necessary for Buyer to acquire
the Business;
"Purchase Price of Inventories" has the meaning specified in Article V;
"Rights" means those rights referred to in Section 3.1 below, currently
owned by Seller, free and clear of any restriction whatsoever and used in the
Business;
"Seller" means Industria e Comercio Brosol Ltda.;
"Uniao" means Uniao de Comercio Participacoes Ltda.
ARTICLE II
PURPOSE
The purpose of this Agreement is the purchase and sale of the Business,
with all of its Assets, Rights and Inventories and the assumption of the
Obligations, in accordance with the terms and conditions established herein. The
Business currently exists within Seller's industrial facilities operated in a
real estate property leased from a third party in accordance with the Lease
Agreement set forth in Attachment II and which Buyer will succeed to as a lessee
thus undertaking all rights and obligations of the Business arising and to be
performed after (but not as to matters occurring at or prior to) the Closing
Date inherent thereto with the exception of the payment provided for in the sole
paragraph of Section 17 of such Lease Agreement which with such matters
occurring at or prior to the Closing Date will continue to be Seller's sole
responsibility.
ARTICLE III
ASSETS, RIGHTS, OBLIGATIONS AND INVENTORIES OF THE BUSINESS
3.1 The Business encompasses all the Assets and Rights,
without limitation, of the type set forth in Attachment 3.1(A) (industrial
machinery and equipment, and office equipment), Attachment 3.1(B) (hardware and
software), Attachment 3.1(C) (telephone, facsimile and telex lines), Attachment
3.1(D) (intellectual property), and the Rights and Obligations expressly set
forth in Attachment 3.1 (E) (Contracts currently in force), utilized in and
necessary to the Business.
3.2 The Business further encompasses the following Inventories
currently existing therein (raw materials, products in process, finished
products, and intermediary, packaging and maintenance materials). On the Closing
Date the Parties shall take a physical count of the Inventories to exclude
therefrom the defective or obsolete Inventories.
3.3 The Assets, Rights, Obligations and Inventories mentioned
in Section 3.1 and 3.2 above constitute all of the assets, rights, obligations
and inventories which currently have been used or held for use in connection
with the operation of the Business or to which the Business is subject.
3.4 The Assets and Rights listed by Seller in Attachments 3.1
(A), 3.1 (B), 3.1 (C), 3.1(D) and 3.1 (E) which will be transferred to Buyer on
the Closing Date are all of the Assets and Rights used, existing or necessary in
connection with the operation of the Business. The Obligations under the
Contracts listed by Seller in Attachment 3.1(E) are the only Obligations of the
Business (in addition to the certain obligations, specified in Article II, under
the Lease Agreement) to be assumed by Buyer on the Closing Date. To the extent
that any such Assets or Rights have been mistakenly omitted from these
Attachments, Seller agrees to transfer them to Buyer in the future.
ARTICLE IV
PURCHASE PRICE AND PRICE ALLOCATION
4.1 For purposes of this Agreement, Purchase Price shall mean
the total amount necessary for Buyer to acquire the Business. The Purchase Price
is US$17,500,000.00 (Seventeen Million Five Hundred Thousand Dollars of the
United States of America) that Buyer shall pay to Seller in the form specified
by Section 7.1 and the assumption of the Obligations to be assumed by Buyer on
the Closing Date in consideration for the purchase of the Business.
4.2 For all legal purposes, the Purchase Price will be
allocated in accordance with the results of an appraisal that Buyer will have
performed by the Closing Date.
ARTICLE V
PURCHASE PRICE OF THE INVENTORIES
5.1 The purchase price of the Inventories (the "Purchase Price
of Inventories"), which is not included in the Purchase Price, shall be the
total price negotiated by the Parties on the Closing Date in accordance with the
following criteria:
(a) raw materials: Closing Date replacement cost;
(b) work-in-process: the replacement cost of the raw
materials multiplied by a factor of 1.5 (one and one half);
(c) finished products: seventy percent (70%) of the
sales price to Seller's most-favored customer.
5.2 The Purchase Price of Inventories shall include the
corresponding ICMS and IPI values, which values shall be evidenced by Seller in
such a form as to ensure the corresponding tax credits to Buyer.
ARTICLE VI
TAXES ON THE PURCHASE PRICE AND ON
THE PURCHASE PRICE OF INVENTORIES
Any and all tax costs associated with the Purchase Price shall be borne
by and be the sole responsibility of Seller. Any and all tax costs associated
with the Purchase Price of Inventories shall be borne by and be the sole
responsibility of Seller, except for the provisions of Section 5.2 above.
ARTICLE VII
PAYMENT OF THE PURCHASE PRICE
7.1 Buyer shall pay the Purchase Price in Echlin common shares
(the "Echlin Shares") at market value. Market value shall correspond to the
average daily closing price (without regard to volume) of one share of the
Echlin Shares on the NYSE for the five (5) consecutive trading days ending six
(6) trading days immediately prior to the Closing Date (the "Closing Date Share
Price"). The Purchase Price shall thus correspond to the number of Echlin Shares
resulting from the division of US$17,500,000.00 (Seventeen Million Five Hundred
Thousand Dollars of the United States of America) by the Closing Date Share
Price.
7.2 Subject to compliance with the United States of America
securities laws and NYSE rules and regulations, after the Closing Seller shall
be free to sell the Echlin Shares corresponding to the Purchase Price, provided,
however, if Seller does not sell all of the Echlin Shares within the six (6)
months from the Closing Date, then Seller shall have the right on the six (6)
month anniversary date of the Closing Date (the "Exercise Date") to sell the
remaining Echlin Shares back to Buyer, and Buyer shall have the obligation to
buy back such Echlin Shares from Seller; provided, further, however, that Buyer,
from time to time, shall have the right to buy back the Echlin Shares, and
Seller shall have the obligation to sell the Echlin Shares it then holds, at any
time prior to the Exercise Date. In no event shall Seller have any obligation to
sell Echlin Shares back to Buyer to the extent such shares have been sold and
are no longer held by Seller at the time Buyer exercises a right to buy.
7.2.1 Should Seller's right to sell be exercised, the purchase
price of the Echlin Shares shall be an amount equal to the amount obtained by
multiplying such number of Echlin Shares by the Closing Date Share Price plus
interest fixed at the six (6) month LIBOR rate on such amount minus dividends
attributed to such number of Echlin Shares and paid between the Closing Date and
the Exercise Date (or to be paid on the next regular quarter by dividend payment
date, if the Exercise Date is after a quarterly dividend record date). Buyer
shall not have the right to assign its obligation to buy, relating to Seller's
right to sell Echlin Shares back to Buyer, without the prior and written consent
of Seller.
7.2.2 Should Buyer's right to buy be exercised, the purchase
price of the Echlin Shares shall be an amount equal to the amount obtained by
multiplying such number of Echlin Shares by the Closing Date Share Price plus
interest at the above mentioned LIBOR rate to such date of exercise on such
amount minus dividends attributed to such number of Echlin Shares and paid
between the Closing Date and such date of exercise (or to be paid on the next
quarterly dividend payment date, if the date of exercise is after a quarterly
dividend record date) plus fifty percent (50%) of the positive difference, if
any, in the aggregate value of such number of Echlin Shares on the Exercise Date
of Buyer's right to buy obtained by multiplying the closing price of a share of
Echlin common stock on the NYSE on the day immediately preceding the date on
which Buyer exercises its right to buy by such number of Echlin Shares above the
amount obtained by multiplying such number of Echlin Shares by the Closing Date
Share Price. Buyer shall have the right to assign its right to buy Echlin Shares
from Seller to a third-party purchaser, which right shall not affect fulfillment
of the obligation to buy provided for in Section 7.2.1 above and shall further
not affect the conditions provided for in this Section 7.2.2.
7.3 The Echlin shares shall be registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act") as follows:
7.3.1 Promptly after the Closing Date, Buyer shall cause to be
filed with the U.S. Securities and Exchange Commission (the "SEC") under the
Securities Act, on an appropriate form as Buyer in its sole discretion shall
determine, a registration statement under Section 5 of the Securities Act (the
"Registration Statement") for an offering to be made on a continuous or delayed
basis covering the offer and sale of the Echlin Shares by Seller. Buyer agrees
to use its best efforts to cause the Registration Statement and any necessary
state filings which Buyer shall cause to be prepared to become effective and to
remain effective until the completion of the distribution of the Echlin Shares,
but in no event later than the second anniversary of the Closing Date (the
"Registration Period").
7.3.2 Buyer shall cause to be paid all expenses (including the
federal and any state registration fee) incurred by or on behalf of Buyer in
connection with the preparation and execution of the Registration Statement
referred to in this Section 7.3 including, without limitation, furnishing
prospectuses to the Seller in such quantities as it may reasonably request;
provided, however, that Buyer shall not be obligated to pay any underwriting or
brokerage commissions, discounts or fees relating to any sale of the Echlin
Shares or the fees and expenses of any counsel of Seller.
7.3.3 Buyer shall indemnify and hold harmless Seller, its
directors, officers, agents and affiliates from and against any and all losses,
liabilities, claims, damages and expenses and reasonable counsel fees which
arise out of or are based upon any alleged untrue statement or alleged omission
to state a material fact in connection with the Registration Statement or any
prospectus relating thereto; provided however, Buyer will not be liable to
Seller in any such case to the extent that any such loss, liability, claim,
damage or expense arises out of or is based upon any untrue statement or
omission to state a material fact made in the Registration Statement or any
prospectus relating thereto or in any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing by Seller
for use in the preparation thereof. Seller shall cooperate with Buyer in the
preparation and filing of the Registration Statement, amendment or supplement,
required hereunder and shall furnish Buyer such information as may be needed
from it in connection with such filing and registration and Seller shall
indemnify and save harmless Buyer, its directors, officers, agents and
affiliates from any and all losses, liabilities, claims, damages and expenses
and reasonable counsel fees which arise out of or are based upon any untrue
statement or omission to state a material fact in connection with such filing
and registration, if and to the extent such untrue statement or omission is made
in reliance upon and in conformity with the information furnished in writing by
Seller for use in the preparation of the Registration Statement or any
prospectus relating thereto.
7.3.4 In the event Buyer shall furnish Seller written notice
stating that, in the good faith judgment of counsel for Buyer, the sale or
transfer of the Echlin Shares pursuant to the Registration Statement would, at
such time, require the disclosure of material information that Buyer has a bona
fide business purpose for preserving as confidential, Seller shall suspend sales
of the Echlin Shares under the Registration Statement for a reasonable period
until Buyer determines that such confidential information may be disclosed;
provided. however, that in no event shall any such suspension exceed sixty (60)
days in the aggregate during any twelve (12) month period. Seller agrees to keep
confidential any notification by Buyer to Seller pursuant to this Section 7.3.
7.3.5 Upon the effectiveness of the Registration Statement
(and any required State registrations), evidence of the effectiveness of which
Buyer agrees to furnish to Seller, Buyer agrees to the removal of any legend
affixed to any certificates evidencing the Echlin Shares.
7.3.6 It is intended that the rights and obligations contained
in Section 7.2 as to the Echlin Shares be exclusive to Seller and Buyer (other
than Buyer's right to assign its right to buy to a third party purchaser) and in
no event shall such rights or obligations be transferable upon the sale or
transfer of the Echlin Shares pursuant to the Registration Statement. Upon any
such sale pursuant to the Registration Statement such rights and obligations
shall terminate and be of no force or effect as to any Echlin Shares sold.
ARTICLE VIII
PAYMENT OF THE PURCHASE PRICE OF INVENTORIES
Buyer shall pay the Purchase Price of Inventories to Seller in
Brazilian currency within ten (10) working days after valuation of the
Inventories, in accordance with the criteria of Section 5.1 above.
ARTICLE IX
CLOSING DATE
9.1 Unless the Parties agree otherwise in writing, for
purposes of this Agreement Closing Date shall be April 30, 1997.
9.2 On the Closing Date, upon Buyer's payment of the Purchase
Price to Seller, Seller shall transfer the Business which will include:
(a) the Assets and Rights set forth in Attachment
3.1(A) through Attachment 3.1(C);
(b) the intellectual property Assets and Rights set
forth in Attachment 3.1(D);
(c) the Rights and Obligations set forth in
Attachment 3.1 (E); and
(d) the Inventories referred to in Section 3.2 above.
9.3 On the Closing Date the Parties shall execute a Closing
Memorandum formalizing inter alia payment of the Purchase Price, transfer and
title to the Business and the Inventories.
9.4 Buyer shall not assume and shall not be liable for and
Seller is not transferring to Buyer and Seller shall be responsible for all
debts, contingencies, liabilities, taxes and contractual and any other
obligations associated with the Business and the Inventories prior to the
Closing Date, with the exception of the Obligations set forth in Attachment
3.1(E). Seller's responsibility shall include any and all liabilities and
obligations of any kind or nature, whether foreseen or unforeseen, known or
unknown, existing or which may arise in the future, fixed or contingent, matured
or unmatured of Seller arising out of the ownership, use or possession of the
Assets, Rights, Obligations and Inventories, or the operation or conduct of the
Business, on or prior to the Closing Date.
9.5 On the Closing Date:
(a) Seller shall assign and transfer possession and
title of the Business and Inventories to Buyer; and
(b) Buyer shall (i) take possession of the Business
and title to the Assets, Rights and Obligations set forth in Attachments 3.1(A)
through 3.1(E), and the Inventories referred to in Section 3.2 above, and (ii)
assume all benefits inherent to the assignment and transfer of the Business and
the Inventories; and
(c) Buyer shall evidence transfer of the Echlin
Shares to Seller in accordance with Section 7.1 above.
ARTICLE X
EMPLOYEES AND SALES REPRESENTATIVES OF THE BUSINESS
10.1 Seller shall terminate the labor contracts of
approximately 158 (one hundred fifty-eight) Business employees who have been
duly identified by and are known to Buyer and who will not be transferred to
Buyer. The total amount paid by Seller to the terminated employees shall be
reimbursed to Seller by Buyer inasmuch as these are Buyer's expenses. The
reimbursement shall occur upon Seller's presentation to Buyer of evidence of the
general release the amounts of which shall be determined and shall include a
reserve of the amounts of possible future labor claims, which the parties have
agreed to be 25% (twenty-five percent) of the total amount of the
indemnification funds actually paid to the untenured employees within the 158
employees mentioned above, and fees for negotiation with the Metalworkers' ABC
Union and, further, the amount necessary to maintain the terminated employees'
medical insurance for 6 months after the Closing Date. The parties recognize
that the total amount that Buyer will reimburse Seller in accordance with this
Section 10.1 is an expense of Buyer.
10.2 Approximately 498 (four hundred ninety-eight) Business
employees, who have been duly identified by and are known to Buyer, shall have
their labor contracts transferred to Buyer on the Closing Date. Said employees
shall be guaranteed the same previously existing conditions such as
compensation, term of employment and severance fund deposits. The employees who
possibly reject being transferred to Buyer shall be terminated by Seller and
Buyer shall reimburse and make a reserve to Seller in the same manner provided
for in Section l0.1 above.
10.3 The labor claims of employees terminated by Seller by the
Closing Date and/or in accordance with Section 10.1 above shall be Seller's
exclusive responsibility. Conversely, Buyer shall be exclusively liable for
labor claims filed by the employees referred to in Section 10.2 above, including
those which may be filed in connection with or based on the past.
10.4 On the Closing Date Buyer sixteen (16) sales
representatives, who have been duly identified by and are known to Buyer, shall
be transferred to Buyer together with their contractual rights, including rights
of the past.
10.5 Claims already made or that may be made by sales
representatives whose contracts have been terminated by Seller by the Closing
Date shall be Seller's exclusive responsibility.
ARTICLE XI
TAX SITUATION OF THE BUSINESS
11.1 Seller and Uniao hereby represent and warrant that the
tax situation of the Business and the Inventories is perfectly regular vis-a-vis
the Federal, State and Municipal public agencies and authorities and that the
books and records of the Business have been correctly recorded and are being
kept in strict compliance with the applicable laws, rules and regulations.
Seller and Uniao further represent and warrant that within the last five (5)
years the Business has had no pending tax obligation, whether principal or
accessory, with the exception of those listed in Attachment 11.1.
11.2 On the Closing Date Seller shall remove from the Business
and at its sole expense and responsibility maintain in custody all books, tax
invoices and any other legal document related to the Business and the
Inventories and which have supported the operations of the Business and refer to
transactions occurred before the Closing Date. Upon a justified, prior written
request, not to be unreasonably withheld, Buyer shall have prompt access to any
such books, tax invoices and documents.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES OF SELLER AND UNIAO
12.1 Seller and Uniao hereby represent, warrant and covenant
that they have complete knowledge of all the facts related to the transactions
contemplated herein and hereby represent and warrant that the statements of
fact, representations and warranties contained in Sections 12.2 and 12.3 below
shall be deemed to be material and essential to this Agreement.
12.2 Seller and Uniao hereby represent, warrant and covenant
that:
(a) Seller and Uniao are companies duly organized,
validly existing and in good standing in accordance with the laws of Brazil,
with all necessary powers, capacity and authority to enter into and perform
this Agreement and to make the representations and warranties as set forth in
herein, and that all corporate actions that may be required to execute and
perform this Agreement have been taken:
(b) no provision in Seller's or Uniao's By Laws,
Articles of Organization or in any contracts or agreements to which Seller or
Uniao is a party prevents the execution or performance of this Agreement;
(c) the execution or performance of this Agreement by
Seller or Uniao does not violate any decrees, rules or regulations to which
Seller or Uniao is subject;
(d) this Agreement and all other documents delivered
on this date or on the Closing Date whether by Seller or Uniao are or will be
duly executed and/or initialed and validly authorized and will be binding and
enforceable in accordance with their terms and conditions effective on this
date or on the Closing Date;
(e) there is no broker, finder or financial advisor
appointed by Seller or Uniao, who has the right to claim any brokerage or
finder's or financial advisory fee in connection with the transactions
contemplated hereby; and
(f) Seller and Uniao are aware that the Echlin Shares
have not been registered under the Securities Act. Seller agrees that the
Echlin Shares may not be sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of (i) without registration under the
Securities Act, except pursuant to an exemption from such registration
available under such Act and (ii) except in accordance with any applicable
provisions of state securities laws. Seller agrees that Buyer may at its
election affix a legend to any certificates evidencing such shares summarizing
or identifying such restrictions.
12.3 Seller and Uniao further represent and warrant that:
(a) the Business has been managed in accordance with
good and acceptable commercial practices;
(b) all information regarding the Business that
Seller has provided to Buyer are true, precise and correct, and all such
information was provided in good faith and fairly represents the Business;
(c) as from December 1, 1995, Seller has operated the
Business in the ordinary course of business consistent with past practices and
in accordance with its best managing skills, and there has been no material
adverse effect in the Business; however, Buyer is aware of the joint venture to
carry on body parts components of vehicles and also of the discontinuance of
the carburetor business for auto assemblers.
(d) all Rights and Assets of the Business, including
those set forth in the Attachments hereto, are lawfully owned by Seller and,
except as set forth in Attachment 12.3(d) hereto, are free and clear of any and
all encumbrances, charges, and pledges and there are no restrictions of a
legal, judicial, contractual or any other nature that may hinder Seller from
actually selling the Business to Buyer and/or which may in any way prevent or
restrict the subsequent and actual ownership and free use of the Rights and
Assets of the Business by Buyer; furthermore, the Assets are in good operating
condition and have been sufficient for the conduct of the Business and Seller
shall totally and completely free the Assets set forth in Attachment 12.3(d)
hereto within a maximum term of six (6) months from the date hereof:
(e) none of the intellectual properties set forth in
Attachment 3.1(D) are subject to any claim of invalidity and they are in full
force and effect. Attachment 3.1(D) sets forth a complete and correct list of
all registrations of the intellectual properties referred to above and
pertaining to the Business, as well as licenses to and from third parties for
trademarks, copyrights and patents or other intellectual property. On the
Closing Date Seller shall deliver to Buyer all pertinent certificates and other
intellectual property documents related to the intellectual properties listed
in Attachment 3.1(D);
(f) Seller has correctly filed, when appropriate, all
income tax returns, as well as other tax statements, forms and lists required
by the Federal, State and Municipal agencies and authorities, and has timely
paid or duly settled all Federal, State and Municipal taxes and other
governmental levies or charges for the period prior to the date hereof
including without limitation those assessed on revenues, franchises, gross
income, sales, labor charges, personal properties and real estate assets, as
well as taxes on consumption, services, contributions to the Social Security
system, Unemployment Compensation Fund (FGTS), PIS, FINSOCIAL, and social
insurance contributions related to the Business, due and payable by Seller. No
tax deficiency was determined against or charged to Seller as regards the
Business as a result of any inspection carried out by Federal, State or
Municipal authorities;
(g) Seller and the Business have been and now are in
full compliance with all laws, rules and regulations including without
limitation all tax, labor, environmental, health and safety laws, rules and
regulations;
(h) the Business holds, or will hold by the Closing
Date, all licenses, approvals, certificates, authorizations and consents
required by Federal, State and Municipal agencies and authorities for the
performance of its activities as they are currently handled and performed, and
there is no license, approval, certificate, authorization and consent that
Seller has not yet already obtained or requested on behalf of the Business;
furthermore, Seller is currently unaware of any actual or threatened
cancellation in this respect by the competent agencies or authorities;
(i) further to Article X above, all Business
employees are and have been duly registered as employees of Seller and on the
date hereof there are no labor or related claims against Seller, with the
exception of those listed in Attachment 12.3(i);
(j) there is no litigation, suit, proceeding, action,
claim, or investigation, at law or in equity, pending or threatened against and
affecting the Business before any court, agency, authority or arbitration
tribunal, except as set forth in Attachment 12.3(j);
(k) there is no outstanding order, judgment,
stipulation, injunction, decree, determination, award or other order of any
court, arbitral body, governmental agency or instrumentality, domestic or
foreign, against the Business, except for those listed in Attachment 12.3(k);
(l) as of this date, no guarantees, commitments,
mortgages, burdens, encumbrances, debts or liabilities of any kind, whether
actual or contingent, have been rendered or incurred by or on behalf of the
Business, except for those listed in Attachment 12.3(1);
(m) Seller is not a party to any contracts,
agreements or arrangements the default of which could affect the Business or
Seller's ability to sell the Business to Buyer;
(n) the Business is in compliance in all material
respects with all requirements of law that are essential to the Business;
(o) with Seller's full cooperation, Buyer shall
continue to have the right to conduct due diligence procedures until the
Closing Date; and
(p) Seller has delivered to Buyer a true and complete
copy of the balance sheet of Seller as of December 31, 1996, and the related
statements of income, together with the notes thereto, all of which audited by
Price Waterhouse Auditores Independentes, independent certified public
accountants (all the foregoing financial statements being referred to herein
collectively as the "Seller Financial Statements"). Seller Financial Statements
are in accordance with the books and records of Seller and fairly present the
financial position, results of operations and shareholders' equity of Seller as
of the date and for the period indicated, in each case in conformity with
generally accepted accounting principles consistently applied. The books and
accounts of Seller are complete and correct and fully and fairly reflect all of
the transactions of Seller and are located solely at the offices of Seller and
not at any other location. At the Closing Date no material adverse change shall
have occurred or shall be reasonably likely to occur in the financial condition
or results of operations of Seller except as disclosed in the Seller Financial
Statements or disclosed on Attachment 12.3(p).
(q) the financial statements of Uniao audited by
Price Waterhouse Auditores Independentes, independent certified public
accountants, as at the close of business of December 31, 1996, which have been
furnished to Buyer, present fairly, in all material respects, the financial
condition on a consolidated basis of Uniao and its consolidated subsidiaries as
of said date, and said financial statements, including the related notes, show
all known material liabilities of Uniao, direct or contingent, as of said date.
ARTICLE XIII
INDEMNIFICATION BY SELLER AND UNIAO
Seller and Uniao jointly and severally shall indemnify, defend and hold
Buyer and Echlin harmless from and against any and all claims, damages, losses,
expenses, obligations or liabilities of any kind to the extent arising from or
attributable to any breach of any of the representations and warranties,
covenants or agreements made in this Agreement; provided, further, Seller and
Uniao hereby agree to indemnify and hold Buyer and Echlin harmless from any and
all losses, liabilities, damages, penalties, judgments, actions, claims, costs
and expenses (including, without limitation, fees, disbursements and expenses of
legal counsel, experts, engineers and consultants and the costs of investigation
and feasibility studies) based upon attributable to or resulting from any
Environmental Claim or Remedial Action (collectively, "Environmental
Liabilities") arising out of or based upon anything relating to the property,
facilities or operations of the Business on or before the Closing Date,
regardless of when an Environmental Claim is asserted or when Remedial Action is
performed. For the avoidance of doubt, since Buyer at the request of Seller will
not delay the Closing to complete an environmental analysis to fully identify
all environmental issues or to determine definitely the condition of the
property, facilities and operations at the time of Closing, any environmental
issue or condition identified or determined after the Closing Date shall be
deemed to have existed on or before the Closing Date and neither buyer nor
Echlin shall be deemed to have contributed to such condition after the Closing
Date, to the extent Buyer operates the Business in the ordinary course of
business substantially consistent with Seller's practices before the Closing
Date. Therefore, Buyer and Echlin shall be entitled to indemnification and
defense for Environmental Liabilities hereunder without limitation, except to
the extent of any such liabilities identified as arising solely from or based
solely upon Buyer's operation of the Business, after the Closing other than in
the ordinary course of Business substantially consistent with Seller's practices
before the Closing Date.
"Environmental Claim" means any accusation, allegation, notice of
violation, action, claim, lien, demand, abatement or government or governmental
authority, by the owner of Seller's industrial facilities, or by any other
person (including any employee or former employee) for personal injury
(including sickness, disease or death), tangible or intangible property damage,
damage to the environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restriction resulting
from or based upon (i) the existence, or the continuation of the existence, of a
Release (including, without limitation, sudden or non-sudden accidental or
non-accidental Releases) of, or exposure to, any Hazardous Material or other
substance, chemical, material, pollutant, odor, audible noise, or other Release
in, into or onto the environment (including, without limitation, the air, soil,
surface water or groundwater) at, in, by, from or related to the property,
facilities or operations of the Business; (ii) the environmental aspects of the
transportation, storage, treatment or disposal of Hazardous Materials in
connection with the property, facilities or operations of the Business; or (iii)
the violation, or alleged violation, of any Environmental Laws, relating to
environmental matters connected with the property, facilities or operations of
the Business.
"Environmental Law" means any applicable federal, state or local law,
statute, code, ordinance, rule, regulation or other requirement, currently or
hereinafter enacted, concerning Releases into any part of the environment, or
activities that might result in damage to the environment or natural resources,
or any law relating to protecting or improving the environment or public and
employee health and safety.
"Hazardous Material" means any substance, material or waste which is
regulated under any provision of Environmental Law, including but not limited
to, petroleum, petroleum products, asbestos, urea formaldehyde and
polychlorinated biphenyls.
"Release" means any release, spill, emission, leaking, pumping,
pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal,
leaching, or migration on, into or out of the property of the Business including
the movement of any Hazardous Material or other substance through or in the air,
soil, surface water, groundwater, or property.
"Remedial Action" means all actions, including, without limitation, any
capital expenditures, required or voluntarily undertaken to (i) clean up,
remove, treat, or in any other way address any Hazardous Material or other
substance in the indoor or outdoor environment; (ii) prevent the Release or
threat of Release, or minimize the further Release of any Hazardous Material or
other substance so it does not migrate or endanger or threaten to endanger
public health or welfare or the indoor or outdoor environment; (iii) perform
pre-remedial studies and investigations or post-remedial monitoring and care; or
(iv) bring the property, facilities or operations of the Business into
compliance with all Environmental Laws.
ARTICLE XIV
REPRESENTATIONS AND WARRANTIES OF BUYER AND ECHLIN
14.1 Buyer and Echlin hereby represent, warrant and covenant
that they have complete knowledge of all the transactions contemplated herein
and hereby represent and warrant that the statements of fact, representations
and warranties contained in Section 14.2 below shall be deemed to be material
and essential to this Agreement.
14.2 Buyer and Echlin hereby represent, warrant and covenant
that:
(a) Buyer and Echlin are companies duly organized,
validly existing and in good standing in accordance with the laws of their
respective jurisdictions of incorporation, with all necessary powers, capacity
and authority to enter into and perform this Agreement and to make the
representations and warranties as set forth herein, and that all corporate
actions that may be required to execute and perform this Agreement have been
taken;
(b) no provision in Buyer's or Echlin's Articles of
Organization, By-laws or in any contracts or agreements to which Buyer or
Echlin is a party prevents the execution or performance of this Agreement;
(c) the execution or performance of this Agreement by
Buyer or Echlin does not violate any decrees, rules or regulations to which
Buyer or Echlin is subject;
(d) this Agreement and all other documents delivered
on this date or on the Closing Date whether by Buyer or Echlin are or will be
duly executed and/or initialed and validly authorized and will be binding and
enforceable in accordance with their terms and conditions effective on this
date or on the Closing Date;
(e) the fee of any broker, finder or financial
advisor appointed by Buyer or Echlin who has the right to claim any brokerage
or finder's or financial advisory fee in connection with the transactions
contemplated hereby shall be paid by Buyer or Echlin in accordance with Buyer's
or Echlin's agreement with any such person;
(f) the restrictions contained in Section 12.2(f)
above and any other restriction contained herein or in the U.S. federal or
state laws do not and shall not prevent Buyer from buying back the Echlin
Shares from, and paying the corresponding price to, Seller, if and when Seller
exercises its right to sell the Echlin Shares to Buyer in accordance with
Section 7.2 above. In the event Seller exercises its right to sell the Echlin
Shares to Buyer in accordance with Section 7.2, (i) Buyer shall pay the price
of the Echlin Shares to Seller notwithstanding lack or suspension of the
registration with the SEC, and (ii) Seller shall acknowledge receipt of the
Echlin Shares price and shall deliver the Echlin Shares to Buyer in form for
transfer;
(g) the Echlin Shares to be issued and delivered to
Seller pursuant to this Agreement will on the Closing Date have been duly
authorized, validly issued and outstanding, fully paid and nonassessable, and
entitled to all rights granted to all shares of Echlin Inc. Common Stock $1 par
value; and
(h) the financial statements of Echlin audited by
Price Waterhouse LLP, as at the close of business of August 31, 1996, which
have been furnished to Seller, present fairly, in all material respects, the
financial condition on a consolidated basis of Echlin and its consolidated
subsidiaries as of said date, and said financial statements, including the
related notes, show all known material liabilities of Echlin, direct or
contingent, as of said date.
ARTICLE XV
INDEMNIFICATION BY BUYER AND ECHLIN
Buyer and Echlin shall indemnify, defend and hold Seller and Uniao
harmless from and against any and all claims, damages, losses, expenses,
obligations or liabilities of any kind to the extent arising from or
attributable to any breach of any of the representations and warranties made by
Buyer and Echlin in this Agreement.
ARTICLE XVI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
16.1 Each representation and warranty made or to be made by
Buyer, Seller, Uniao and Echlin pursuant to this Agreement is true, accurate and
complete. No representation or warranty of Buyer, Seller, Uniao and Echlin in
this Agreement or in any writing furnished or to be furnished pursuant hereto
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to make the statements herein or
therein in light of the circumstances in which they were made not misleading.
16.2 The representations and warranties contained herein shall
survive the Closing Date and continue for six (6) years thereafter, unless there
is specific statute of limitations which expire earlier; provided, however, the
expiration of such time period shall not apply to any pending claim asserted in
good faith by any Party under this Agreement prior to the expiration of such
time period. It is understood that such time period shall not apply as to any
claim relating to (i) any nonfulfillment of any covenant or agreement on the
part of any Party under this Agreement, and (ii) all liabilities, commitments
and obligations of Seller arising from or in connection with the Business,
except Obligations expressly assumed by Buyer. This Agreement shall be binding
upon and inure to the benefit of the Parties hereto, their successors and
assigns.
ARTICLE XVII
CONDITIONS TO OBLIGATIONS OF BUYER
17.1 The obligation of Buyer to consummate the transactions
contemplated by this Agreement is subject to Seller's fulfillment of each of the
following conditions on or before the Closing Date:
(a) execution of this Agreement by Buyer, Seller,
Uniao and Echlin;
(b) approval of the transactions contemplated in this
Agreement by Echlin's Board of Directors by April 15, 1997;
(c) delivery by Seller, and acceptance by Buyer, of
the list of Attachments to this Agreement as well as acceptance by Buyer of the
results of the joint visits to Seller's most important customers;
(d) compliance by the Parties with any applicable
regulatory requirements;
(e) the approval of the payment of the Purchase Price
(Article VII) by the Central Bank of Brazil;
(f) change of Seller's current name "Industria e
Comercio Brosol Ltda." for another name which shall not contain any reference
to the name "Brosol";
(g) obtention by Seller of all licenses and permits
necessary for Buyer to operate the Business; and
(h) delivery of Uniao's audited financial statements
dated as of December 31, 1996.
17.2 The obligation of Buyer to consummate the transactions
contemplated by this Agreement is further subject to all of Seller's and Uniao's
representations and warranties in this Agreement continuing to be true until the
Closing Date.
ARTICLE XVIII
CONDITIONS TO OBLIGATIONS OF SELLER
18.1 The obligation of Seller to consummate the transactions
contemplated by this Agreement is subject to Buyer's fulfillment of each of the
following conditions on or before the Closing Date:
(a) Buyer's payment of the Purchase Price in
accordance with Article VII above;
(b) the Central Bank of Brazil's approval referred to
in Section 17.1(e) above; and
(c) delivery of Echlin's audited financial statements
dated as of August 31, 1996.
18.2 The obligation of Seller to consummate the transactions
contemplated by this Agreement is further subject to all of Buyer's and Echlin's
representations and warranties in this Agreement continuing to be true until the
Closing Date.
ARTICLE XIX
SUBMISSION OF THIS TRANSACTION TO ANTITRUST AUTHORITIES
19.1 The Parties hereby declare to have reviewed the Brazilian
competition antitrust law and to be convinced that this Agreement should not be
subject to any restriction in this area in view of the characteristics of the
Brazilian market of engine components; furthermore, even if any such restriction
were to exist, the Parties acknowledge that there are valid legal alternatives
to conform the transactions contemplated herein to possible requests by the
antitrust authorities.
19.2 Each Party and Uniao hereby undertake to fully assist the
other Party with the antitrust process, subscribing requests, information, and
forms to be filed with the antitrust authorities, to always act in a diligent,
expeditious and proficient manner.
19.3 Each Party shall be responsible for its own costs and
expenses including without limitation legal fees, and for the required action to
comply with the Brazilian competition antitrust law and with the requests and
decisions of the antitrust authorities.
ARTICLE XX
NON-COMPETITION
Seller and Uniao agree and covenant to refrain totally from engaging in
any and all activities related to the manufacture, marketing or sale of products
relating to or competing with the Business for a term of five (5) years
commencing on the Closing Date. Consequently, Seller and Uniao shall not (i)
exercise said activities directly or indirectly, as a shareholder, quotaholder
or partner of any company engaged in a business in competition with the
Business, if in the capacity of manager, controller or consultant thereof, and
shall, in addition to any injunctive relief available to Buyer, be subject to
indemnify Buyer for any and all direct or indirect loss, damage and lost profit,
as well as any cost, expense and disbursement incurred, paid or disbursed by
Buyer in connection herewith; (ii) communicate with any of the customers of the
Business for the purpose of soliciting such customers to purchase products
relating to the Business; (iii) contact any former Business employee who becomes
an employee of Buyer for the purpose of soliciting, hiring or attempting to
hire, without Buyer's authorization, or in any manner attempting to induce such
employee to leave the employ of Buyer; and (iv) use or disclose to others any
trade secret or other confidential information relating to the Business.
Notwithstanding anything herein to the contrary, Uniao may hold control or be
responsible for the management of a business in competition with the Business,
provided Buyer so previously agrees in writing.
ARTICLE XXI
RESPONSIBILITY FOR PRODUCTS SOLD BEFORE THE CLOSING
21.1 Seller shall be responsible for all products sold or
delivered to third parties before the Closing (including without limitation
defective products and consumer protection issues) and Seller and Uniao hereby
jointly and severally indemnify Buyer from and against any and all liabilities
related to such products. Nevertheless, responsibility for normal product
returns, in accordance with the statistics set forth in Attachment 21.1, shall
be Buyer's responsibility.
21.2 After the Closing Buyer shall clearly differentiate the
Business products manufactured by Buyer from those manufactured by Seller.
ARTICLE XXII
COMPLIANCE WITH OBLIGATIONS
22.1 The Parties agree and undertake to strictly fulfill all
of their legal obligations arising out of or based on this Agreement.
22.2 Even after the Closing Date, Seller and Uniao shall: (i)
continue to be solely responsible for all liabilities and expenses with respect
to (x) any legal proceeding or obligation whether or not disclosed on Attachment
12.3(i), (j), (k) and (l), (y) any legal proceeding or obligation that arises
after the Closing which is based upon facts or events occurring prior to the
Closing, regardless of when a claim is filed, including, without limitation,
claims relating to businesses or assets sold to others by Seller, and (z) all
other obligations of Seller which are not defined as an Obligation hereunder,
and (ii) pay or cause to be paid; all such amounts promptly or promptly upon
written notice reimburse Buyer for any amounts paid by Buyer with respect
thereto.
ARTICLE XXIII
NOTICES
All notices and other communications hereunder shall be in writing and
be deemed to have been duly given if transmitted by personal delivery,
facsimile, telegram or by registered mail, as follows:
If to Seller:
Industria e Comercio Brosol Ltda.
Xxxxxxx Xxxxx Xxxxxxxx, Xx 00
Xxxx Xxxxxxxx, Bairro Represa
09400-970, Ribeirao Xxxxx, XX, Brazil
Attn.: Xx. Xxxxxx Xxxxxx xx Xxxxx
Telephone: 000-0000/9377
Fax: 000-0000
With copy to:
Uniao de Comercio e Participacoes Ltda.
Cidade de Deus, Xxxx Xxxx
00000-000, Xxxxxx, XX, Xxxxxx
Attn.: Xx. Xxxxxxxx Xxxxxxxxxx Xxxxx
Telephone: 000-0000
Fax: 000-0000
If to Buyer:
Echlin do Brasil Industria e Comercio Ltda.
Xxx Xxxxxxx, 0000/00
00000-000 Xxx Xxxxx, XX, Xxxxxx
Attn.: Xx. Xxxxxx X. Xxxx
Telephone: 000-0000
Fax: 000-0000
With copy to:
Echlin, Inc.
000 Xxxxxx Xxxxx Xxxx
00000 Xxxxxxxx, Xxxxxxxxxxx, XXX
Attn.: Corporate Secretary
Telephone: (000 000) 000-0000
Fax: (000 000) 000-0000
ARTICLE XXIV
AMENDMENTS AND NON-WAIVER
This Agreement may not be modified or amended except by a written
instrument signed by each of the Parties hereto. No failure on the part of any
Party hereto to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy hereunder preclude any other or further
exercise of any right, power or remedy.
ARTICLE XXV
FURTHER ASSURANCES
25.1 The Parties agree to fully cooperate in implementing the
transactions contemplated herein including without limitation Seller's
assistance to Buyer in recruiting employees of the Business. The Parties further
agree to execute such other documents or agreements as may be necessary or
desirable for the implementation of this Agreement and the consummation of the
transactions contemplated hereby, provided however that no such documents shall
limit or extend the obligations of the Parties as provided in this Agreement.
25.2 Seller shall permit Buyer and its legal representatives
(including its officers, independent auditors and counsel) access to the
facilities, books and records of the Business including, at appropriate times
and when approved of and accompanied by the Seller, to its customers and
distributors.
25.3 Any matter not provided for in this Agreement will be
dealt with in the spirit of mutual confidence and goodwill existing between the
Parties.
ARTICLE XXVI
COSTS, FEES AND EXPENSES
Each Party hereto shall bear and pay its costs, fees and expenses
incurred in connection with the transactions contemplated herein including
without limitation counsel, auditor, financial advisor and accounting fees.
ARTICLE XXVII
ASSIGNMENT
No Party hereto may assign any right or obligation arising out of this
Agreement to third parties without the prior and written consent of the other
Party, except to the limited extent specifically provided in Section 7.2.2.
ARTICLE XXVIII
CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
28.1 Unless and until Closing shall occur, the Parties hereto,
Echlin and Uniao undertake to maintain this Agreement confidential.
Nevertheless, each Party is hereby authorized to fully disclose any information
and release any documents related to this Agreement when requested to do so by
any governmental authority or agency. In this event, one Party shall notify the
other within two (2) days from the information disclosure or documents release.
28.2 On and after the date hereof and through the Closing
Date, Seller and Buyer, and also Echlin and Uniao, shall consult with each other
before issuing any press releases or otherwise making any public statements with
respect to this Agreement and the transactions contemplated hereby. Neither
Seller, Buyer, Echlin nor Uniao shall issue any press release or make any public
statement prior to obtaining the other party's approval, which approval shall
not be unreasonably withheld, except that no such approval shall be necessary to
the extent disclosure may be required by law or any listing agreement of either
party hereto.
ARTICLE XXIX
GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by the laws of Brazil and any disputes
arising hereunder or related hereto shall be settled by and before the
jurisdiction of the Courts of the City of Sao Paulo, State of Sao Paulo, Brazil.
ARTICLE XXX
LANGUAGE; NUMBER OF COPIES
This Agreement shall be executed in English and in Portuguese in four
(4) counterparts, each of which shall be considered an original. In the event of
any discrepancy between the English and the Portuguese texts, the Portuguese
version shall prevail. The attachments to this Agreement, in Portuguese-language
only, shall be initialed by Seller through Messrs. Joao Xxxxxx Xxxx and Xxxx
Xxxxxx Xxxxxxxxx and by Buyer, through Mr. Mario Massanori Iwamizu.
ARTICLE XXXI
HEADINGS
The headings of Sections have been inserted for convenience of
reference only and shall not affect the interpretation of any of the provisions
of this Agreement.
ARTICLE XXXII
ENTIRE AGREEMENT
32.1 This Agreement is the entire agreement between the
Parties hereto and supersedes any previous agreements, understandings or
arrangements that the Parties may have had concerning this subject matter.
32.2 Neither Party hereto shall assert that it had an
understanding or agreement inconsistent with, or beyond, or which falls short of
any provisions hereof.
32.3 Nothing in this Agreement, express or implied, is
intended nor shall be construed to confer upon, or give to, any person other
than the Parties hereto any right, remedy, or claim under or by reason of this
Agreement, or any covenant, condition, or agreement hereof.
ARTICLE XXXIII
ATTACHMENTS
All Attachments referred to herein and annexed to this Agreement form
an integral part hereof. They are by reference incorporated herein and shall
have the same effect as if set out at length in this Agreement.
IN WITNESS WHEREOF, the Parties execute this Agreement in the place and
on the date first above written, before two witnesses, to become effective on
the same date.
SELLER: INDUSTRIA E COMERCIO BROSOL LTDA.
/s/ Xxxxxx Xxxxxx xx Xxxxx
--------------------------
By: Xxxxxx Xxxxxx xx Xxxxx
Title: Delegated Manager
/s/ Joao Xxxxxx Xxxx
--------------------------
By: Joao Xxxxxx Xxxx
Title: Delegated Manager
BUYER: ECHLIN DO BRASIL INDUSTRIA E COMERCIO LTDA.
/s/ Xxxxxx Xxxxxxxx Xxxx
--------------------------
By: Xxxxxx Xxxxxxxx Xxxx
Title: Director President
/s/ Xxxxxxx xx Xxxxxxxx
--------------------------
By: Xxxxxxx xx Xxxxxxxx
Title: Finance Director
GURANTORS: UNIAO DE COMERCIO E PARTCIPACOES LTDA.
/s/ Xxxxxx Xxxxx Xxxxxxxx Xxxxxxxx
----------------------------------
Xxxxxx Xxxxx Xxxxxxxx Xxxxxxxx
/s/ Dorival Xxxxxxx Xxxxxxx
---------------------------
Dorival Xxxxxxx Xxxxxxx
ECHLIN, INC.
/s/ Xxxxxx X. Xxxxxxxx
--------------------------
By: Xxxxxx X. Xxxxxxxx
Title: Assistant Vice President Corporate
Development
WITNESSES:
1. /s/ Orivaldir Xxxxx Xxxxxx
----------------------------
Orivaldir Xxxxx Xxxxxx
2. /s/ Xxxxxx Xxxxxxxxx Xxxxx
----------------------------
Xxxxxx Xxxxxxxxx Braga
AMENDMENT TO THE
ASSET PURCHASE AGREEMENT
OF MARCH 20, 1997
THIS AMENDMENT (the "Amendment") is made in the city of Sao
Paulo, State of Sao Paulo, Brazil, on this 30th day of April, 1997, by and
between, on the one hand, ECHLIN DO BRASIL INDUSTRIA E COMERCIO LTDA., a company
organized and existing in accordance with the laws of Brazil, with head offices
at Xxx Xxxxxxx, 0000/00, in the city of Sao Paulo, State of Sao Paulo,
registered with the CGC/MF under No. 61.091.963/0001-32, in this act represented
by its duly authorized representatives signed below ("Buyer") and, on the other
hand, INDUSTRIA E COMERCIO BROSOL LTDA., a company organized and existing in
accordance with the laws of Brazil, with head offices at Xxxxxxx Xxxxx Xxxxxxxx,
Xx 00, in the city of Ribeirao Xxxxx, State of Sao Paulo, registered with the
CGC/MF under No. 61.090.890/0001-64, in this act represented by its duly
authorized representatives signed below ("Seller"), as guarantor of Seller,
UNIAO DE COMERCIO E PARTICIPACOES LTDA., with head offices in Cidade de Deus,
Xxxx Xxxx, Osasco, Sao Paulo, registered with the CGC/MF under No.
33.344.557/0001-07 ("Uniao"), and as guarantor of Buyer, Echlin, Inc., a company
organized and existing in accordance with the laws of the State of Connecticut,
USA ("Echlin").
W I T N E S S E T H:
WHEREAS, on March 20, 1997, the Parties executed the Asset
Purchase Agreement (the "Agreement") , which Agreement contains rights and
obligations of the Parties as well as certain definitions that are also used in
this Amendment;
WHEREAS, Section 7.1 of the Agreement provides that Buyer
should pay the Purchase Price in Echlin Shares in the manner specified in said
Section 7.1 and throughout the Agreement;
WHEREAS, the Parties agreed with the provisions of Section 7.1
of the Agreement after having discussed and reviewed it with officers of the
Central Bank of Brazil;
WHEREAS, after execution of the Agreement and in preparation
for the Closing, the Parties once again contacted officers of the Central Bank
of Brazil to implement the provisions of Section 7.1 but were surprised to learn
that the necessary approvals by the Central Bank of Brazil would not occur by
the Closing Date but, instead, could occur only within a few months therefrom;
WHEREAS, the Parties continue to implement the Closing as
originally provided for in the Agreement;
NOW THEREFORE, in consideration of the premises,
representations and mutual covenants contained herein, and intending to be
legally bound hereby, in accordance with Article XXIV of the Agreement the
Parties hereto agree to enter into this Amendment, as follows:
1. Section 7.1 of the Agreement is hereby amended to read as follows:
"7.1 On the Closing Date, Echlin shall make funds corresponding to the
Purchase Price available to Buyer so that Buyer can pay the Purchase
Price to Seller. Also on the Closing Date, Seller shall use all of such
funds received from Buyer to purchase Echlin common shares (the "Echlin
Shares") at market value. Market value shall correspond to the average
daily closing price (without regard to volume) of one share of the
Echlin Shares on the NYSE for the five (5) consecutive trading days
ending six (6) trading days immediately prior to the Closing Date (the
"Closing Date Share Price")."
2. Section 17.2 of the Agreement is hereby amended to read as follows:
"17.2 The obligation of Buyer to consummate the transactions
contemplated by this Agreement is further subject to Seller's actual
purchase of the Echlin Shares (Section 7.1 above) and to all of
Seller's and Uniao's representations and warranties in this Agreement
continuing to be true until the Closing Date."
3. Section 18.2 of the Agreement is hereby amended to read as follows:
"18.2 The obligation of Seller to consummate the transactions
contemplated by this Agreement is further subject to the evidence that
the Echlin Shares are actually transferred to Seller (Section 9.5(c))
and to all of Buyer's and Echlin's representations and warranties in
this Agreement continuing to be true until the Closing Date."
4. The Parties finally agree to ratify all other clauses and conditions of
the Agreement herein not specifically amended.
IN WITNESS WHEREOF, the Parties execute this Amendment in the place and
on the date first above written, before two witnesses, to become effective on
the same date.
Seller: INDUSTRIA E COMERCIO BROSOL LTDA.
/s/ Xxxxxx Xxxxxx xx Xxxxx
-------------------------------
By: Xxxxxx Xxxxxx xx Xxxxx
Title: Delegated Manager
/s/ Joao Xxxxxx Xxxx
-------------------------------
By: Joao Xxxxxx Xxxx
Title: Delegated Manager
Buyer: ECHLIN DO BRASIL INDUSTRIA E COMERCIO LTDA.
/s/ Xxxxxx Xxxxxxxx Xxxx
-------------------------------
By: Xxxxxx Xxxxxxxx Xxxx
Title: Director President
/s/ Xxxxxxx xx Xxxxxxxx
-------------------------------
By: Xxxxxxx xx Xxxxxxxx
Title: Finance Director
Guarantors: UNIAO DE COMERCIO E PARTICIPACOES LTDA.
/s/ Xxxxxxx Xxxxxx
-------------------------------
By: Xxxxxxx Xxxxxx
/s/ Marcio Xxxxx Xxxxxxxx Xxxxxxxx
-------------------------------
By: Marcio Xxxxx Xxxxxxxx Xxxxxxxx
WITNESSES:
/s/ Xxxxxx X. Xxxx
-------------------
ECHLIN INC.
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------
By: Xxxxxx X. Xxxxxxxx
Title: Assistant Vice President Corporate
Development
WITNESSES:
/s/ Xxxxxx X. Xxxxx
----------------------------
/s/ Xxxxx X. Xxxxxxxx
----------------------------
