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Exhibit 10.11
AGREEMENT FOR THE PURCHASE AND SALE OF QUOTAS
OF P.S.T. INDUSTRIA ELETRONICA DA AMAZONIA LTDA.
The parties to this Agreement for the Purchase and Sale of Quotas (the
"Agreement"), as follows:
1) RICARDO RIBEIRO MACIEL, Brazilian citizen, married, accountant, resident and
domiciled at Alameda Procion, 548 - Condominio Morada das Estrelas, Aldeia da
Serra, Barueri,, State of Sao Paulo, holder of identification card RG/SP No.
32.798.056-4, Individual Taxpayers Registration No. 544.899.389-34 and ICHIRO
AOKI, Japanese citizen, married, electrical engineer, resident and domiciled at
Rua Joaquim Novaes, No. 250, apt. 61, Cambui, Campinas, State of Sao Paulo,
holder of Identity Card for Foreigners No. W482764-B, Individual Taxpayers
Registration Nbr 107.959.188-52, (each a "Seller" and collectively, the
"Sellers");
2) STONERIDGE, INC., an Ohio corporation, with headoffice at 9400 East Market
Street, in the city of Warren, State of Ohio, United States of America, in this
act represented by its attorney in fact, COARACI NOGUEIRA DO VALE, Brazilian
citizen, married, attorney-at-law and consultant, resident and domiciled in the
Capital City of the State of Sao Paulo, at Rua Tabapua, 821 - 8th floor, suite
96, holder of Identification Card No. 2.676.014-SSP/SP and Individual Taxpayers'
Registration No. 043.359.028-91, ("the Buyer");
3) MARCOS FERRETTI, Brazilian citizen, married, electrical engineer, resident
and domiciled at Rua Pedro Vieira da Silva, no. 64- Bl. 1, apt. 41, Jardim Santa
Genebra, Campinas, State of Sao Paulo, holder of identification card RG/SP No.
13.602.771, Individual Taxpayers Registration No. 061.910.648-45 and SERGIO DE
CERQUEIRA LEITE, Brazilian citizen, married, businessman, resident and domiciled
at Rua Joaquim Novaes, 250, ap. 62 - Cambui, Campinas, State of Sao Paulo,
holder of identification card RG/SP No. 15.307.343, Individual Taxpayers
Registration No. 102.104.068-10 (each a "Quotaholder" and collectively, the
"Quotaholders") and,
WHEREAS, the Sellers are the owners of an aggregate of 100,000 (one
hundred thousand) quotas of capital of P.S.T. Industria Eletronica da Amazonia
Ltda., a Brazilian limited liability commercial company with headoffice at the
city of Manaus, the state capital of the State of Amazonas, at Rua Sao Domingos,
86-B and 179, Aleixo, Federal Taxpayers' Registration No.
84.496.066/0001-04, with its Company Agreement recorded at the Commercial
Registry of the State of Amazonas, under Nbr. 13200.277.643 on August 27, 1993,
and subsequent amendments (the "Company"), representing 50% (fifty percent) of
the total quotas of capital of the Company ( the "Quotas");
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WHEREAS, the Quotaholders are the owners of an aggregate of 100,000
(one hundred thousand) quotas of the Company, representing 50% (fifty percent)
of the total quotas of capital of the Company;
WHEREAS, the Sellers wish to sell to the Buyer, and the Buyer wishes to
purchase from the Sellers, the Quotas pursuant to the terms and subject to the
conditions set forth herein.
Accordingly, the parties agree as follows:
1. Purchase and Sale of Quotas.
1.1 The Purchase and Sale. Subject to the terms and conditions hereof,
the Sellers hereby agree to sell, assign and transfer to the Buyer, and the
Buyer hereby agrees to purchase from the Sellers, on the date hereof, the
Quotas, free and clear of all liens, pledges, encumbrances, options, rights of
first refusal and all claims, whether judicial or not, of every kind whatsoever.
At the Closing, Buyer, Sellers and the Quotaholders shall sign an Amendment to
the Company Agreement of the Company effecting besides the assignment and
transfer of Quotas from Sellers to Buyer, other alterations mutually agreed upon
among Quotaholders and Buyer, as per Exhibit 1.1.
2. Purchase Price.
2.1 Payment of Purchase Price. As full consideration for the Quotas,
upon the terms and subject to the conditions of this Agreement, the Buyer agrees
to pay the Sellers an aggregate of US$ 17,500,000.00 (seventeen million five
hundred thousand US dollars) (the "Purchase Price"), payable as follows:
(a) US$ 1,000,000.00 (one million US dollars) being US$ 500,000.00
(five hundred thousand US dollars) to each Seller, which were transferred to the
Sellers bank account at Banco de Boston, branch 004, account nbr. 257833-05, who
having received said sums from Buyer, give to Buyer full and general releases
for the payment of this part of the price.
(b) R$ 9.080.445,00 (nine million eighty thousand four hundred
forty-five reais) equivalent to US$ 8,250,000.00 (eight million two hundred
fifty thousand US dollars), through a certified check No.188228, issued by the
Deutsche Bank, in favor of Coaraci Nogueira do Vale, and endorsed to Ricardo
Ribeiro Maciel, on the date hereof, and:
(c) R$ 9.080.445,00 (nine million eighty thousand four hundred
forty-five reais) equivalent to US$ 8,250,000.00 (eight million two hundred
fifty thousand US dollars), through a certified check No.188229, issued by the
Deutsche Bank, in favor of Coaraci Nogueira do Vale, and endorsed to Ichiro
Aoki, on the date hereof.
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3. Representations and Warranties of the Sellers. The Sellers jointly and
severally represent and warrant to the Buyer as follows:
3.1 Authority. The Company (a) is a limited liability commercial
company duly organized, validly existing, and in good corporate and tax standing
under the laws of Brazil, (b) has the full corporate powers and authority to own
or hold under lease or similar agreement the properties and assets which it now
owns or holds under such lease or agreement, and to carry on its business as it
is now being conducted, and (c) has obtained all the required licenses and
permits from relevant federal, state and municipal authorities for carrying on
its activities, and the undertaking of such activities does not violate any
treaty, statute, administrative law or regulation. Sellers have supplied to
Buyer's Legal Counsel copies of the Company Agreement for the organization of
the Company, the subsequent Amendments to the Company Agreement, including the
last Amendment to the Company Agreement currently in force, as filed with the
Commercial Registry of the State of Amazonas, Deliberations of the Quotaholders
and Certificate from the Commercial Registry of the State of Amazonas (the
"Organizational Documents"). Such copies are complete and correct. (Schedule
3.1)
3.2 No Conflicts. The execution of this Agreement do and did not, and
the consummation of the transactions contemplated hereby will not and did not,
(a) conflict with the Organizational Documents, (b) result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to loss of a material benefit, including fiscal benefits, under, any note,
bond, mortgage, indenture, deed of trust, license, lease, contract, commitment,
agreement or arrangement to which the Company is a party or by which the Company
may be bound, or (c) violate any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or the Sellers. Except
as contemplated by Section 5.2, no material third party consent or approval,
authorization, license, permit or other action by, or filing with, any
governmental body, is required, with respect to the actions of the Sellers in
connection with the execution and delivery by the Sellers of this Agreement or
in order for the Sellers to consummate the transactions contemplated hereby.
3.3 Capitalization. The total capital of the Company consists solely of
200,000 (two hundred thousand) quotas of the unitary value of R$ 1,00 (one
real), all of which are evidenced in the last Amendment to the Company Agreement
dated June 30, 1997, which is currently in force, and are fully paid in. Except
as set forth on Schedule 3.3, to the best of Sellers knowledge , there are no
outstanding subscriptions, options, warrants, puts, calls, rights or other
agreements or commitments relating to the issuance, transfer, purchase or sale
of any Quota, voting securities or securities (including debt obligations)
convertible into or exchangeable for quotas of capital or voting securities (or
any such convertible or exchangeable securities) of the
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Company, or obligations to grant, extend or enter into any subscription,
warrant, right, convertible or exchangeable security or other similar agreement
or commitment. The Sellers are, in the aggregate, the lawful owners of the
Quotas, which represent 50% (fifty percent) of the Company's quotas of capital ,
with clear and unencumbered title thereto, free and clear of all liens, pledges,
encumbrances, options, rights of first refusal and other claims of any kind, and
have full right, power and authority required by law to sell, assign and
transfer the Quotas to the Buyer. The sale, assignment and transfer of the
Quotas to the Buyer pursuant to this Agreement will transfer to and vest in
Buyer clear and unencumbered title thereto, free and clear of all liens, pledges
encumbrances, options, rights of first refusal and other claims of any kind. 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.
3.4 Financial Statements. Schedule 3.4 sets forth the unaudited
consolidated balance sheet, income statement, statement of changes in
stockholders' equity and statement of cash flow of the Company (the "Interim
Financials") as of July 31, 1997 and December 31, 1996, for the 7 (seven) months
ended July 31st, 1997 and for the 12 (twelve) month period ended December 31,
1996, respectively (the "Interim Financial Statement Dates"), as prepared by
Arthur Andersen and the consolidated balance sheets and related income
statements of the Company of and for the years ended December 31, 1996, 1995 and
1994 (only balance sheet) and for the 7 (seven) months ended July 31, 1997
(together with the Interim Financials, the "Financial Statements"). The
Financial Statements have been prepared in accordance with generally accepted
accounting principles in Brazil consistently applied, except as may be indicated
in the notes thereto. The Financial Statements fairly present, in all material
respects, the results of operations and financial condition of the Company for
the periods and at the dates presented. Schedule 3.4.1 sets forth documentation
referring to real estate owned by the company and to rights to intellectual
property. Schedule 3.4.2 sets forth income tax returns of the Company for years
ended December 31, 1993, 1994, 1995 and 1996.
3.5 Contracts. The Company is not in breach or default under any
contract or agreement, oral or written, to which the Company is bound. Likewise,
to the best of Sellers' knowledge, up through the date of signing of the present
agreement, there are no contracts or covenants with third party, oral or
written, whose nonperformance or renegotiation may have caused or will cause
losses to the Company. Schedule 3.5 sets forth outstanding contracts entered
into by the Company. Sellers shall not be responsible for the normal renewals
and normal renegotiations described in section 3.10 or for nonperformance which
results from the peculiarities of the operations of the Company, which are known
to, and accepted by, the Buyer.
3.6 Absence of Changes or Events. To the best of Sellers' knowledge,
since December 31, 1996, the commercial and financial business of the
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Company has been conducted in the ordinary course, and appropriate to the
peculiarities of the operations of the Company, as it is known to, and accepted
by, the Buyer, and no material adverse change, which could affect the business
of the Company through December 31, 1998 has taken place.
3.7 Absence of Claims. There is no unrecorded claim, obligation,
liability, litigation proceeding or governmental investigation pending or
threatened against the Company or its properties that could have a material
adverse effect on the Company, except for what is listed in Annex 3.7 hereto.
Neither of the Sellers, nor any entity controlled by either Seller, nor any
relative of either Seller, has any claim whatsoever against the Company.
Schedule 3.7.1 sets forth the list of employees of the Company on the date
hereof. Schedule 3.7.2 sets forth the notice from the Secretariat of Finance of
the State of Amazonas referring to current and on going tax inspection. Schedule
3..3 sets forth the guaranties offered by the Company to current creditors, of
which in certain contracts personal guaranties were offered by Sellers.
3.8 Compliance with Applicable Laws. The business and affairs of the
Company have been conducted in compliance with all applicable laws, orders,
ordinances, rules and regulations of any governmental authority, except to the
extent noncompliance would not have an adverse effect on the business or
financial condition of any such entity in an amount not to exceed reais
equivalent to US$ 100,000.00(one hundred thousand US dollars).
3.9 Binding Effect. This Agreement, upon execution and delivery by the
Sellers will constitute a legal, valid and binding obligation of the Sellers.
Neither the execution and delivery nor the performance by the Sellers of their
obligations under, nor the consummation of the transactions contemplated by,
this Agreement will, (i) violate, conflict with or result in a breach or
termination of, or otherwise give any other contracting party additional rights
or compensation under, or the right to terminate, or constitute a default under
the terms of, any agreement to which either Seller is a party or by which the
Sellers or any of their properties or assets are bound or subject, (ii) violate
any judicial order against, or binding upon, either of the Sellers or any of
their properties or assets, or (iii) constitute a violation by either of the
Sellers of any applicable law as such law relates to the Sellers or to the
properties or assets of the Sellers.
3.10 Suppliers and Customers -Since January 1, 1997, to the date
hereof, Sellers have no knowledge of any unusual condition or change external to
the company, relating to any current supplier or client of the company, that
could have a material adverse effect on the business of the company or on its
financial condition. For purposes of this Clause, an amount which would
negatively affect the earnings or the balance sheet up to the amount in reais
equivalent to US$ 100,000.00 (one hundred thousand US dollars) is not material.
For the legal effects of this Agreement and of this Clause, it is considered
that the normal changes of suppliers and clients, the
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normal renewal and renegotiation of financial and commercial conditions, and the
effects thereof, constitute normal operations of the Company resulting from
market conditions and opportunities, as known to, and agreed by, Stoneridge, so
that Sellers will not be responsible, under these circumstances, for any adverse
effect on the business or on the financial condition of the Company therefor.
3.11 Suframa - The Company has submitted to SUFRAMA (Superintendency of
the Manaus Free Trade Zone) 5 (five) projects aiming at obtaining tax benefits
a) from the Federal Government, comprising exemption of the IPI (Tax on
Industrialized Products) on manufactures products, the exemption and/or
reduction of the Importation Tax on capital goods and imported consumable items,
b) from the State Government of Amazonas, comprising the partial or total
restitution of the ICMS (Tax on the Circulation of Merchandise) and c) from
SUDAM (Superintendency for the Development of the Amazon Area), comprising the
exemption of the Corporate Income Tax and of the non-refundable additional
charges, said projects being: 1) Project for the Implantation of manufacture of
alarms, electrical locks and of the shift, sirens and automatic electrical
system for glass closure, dated August, 1993; 2) Project for Expansion and
Diversification, dated November, 1994; 3) Project for Diversification -
Assembled Printed Circuit Board - PCI, dated January, 1995; 4) Project for
Diversification - Audio Amplifier, dated February, 1996; 5) Project for
Revalidation of Fiscal Incentives, dated July, 1996. All projects were approved
and the tax benefits are available for the Company and in full force.
4. Representations and Warranties of the Quotaholders. The Quotaholders
jointly and severally represent and warrant to the Buyer as follows:
4.1 Authority. The Company (a) is a limited liability commercial
company duly organized, validly existing, and in good corporate and tax standing
under the laws of Brazil, (b) has the full corporate powers and authority to own
or hold under lease or similar agreement the properties and assets which it now
owns or holds under such lease or agreement, and to carry on its business as it
is now being conducted, and (c) has obtained all the required licenses and
permits from relevant federal, state and municipal authorities for carrying on
its activities, and the undertaking of such activities does not violate any
treaty, statute, administrative law or regulation. Buyer's Legal Counsel has
obtained copies of the Organizational Documents. To the best of the
Quotaholders' knowledge, such copies are complete and correct.
4.2 No Conflicts. The execution of this Agreement do and did not, and
the consummation of the transactions contemplated hereby will not and did not,
(a) conflict with the Organizational Documents, (b) result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any
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obligation or to loss of a material benefit, including fiscal benefits, under,
any note, bond, mortgage, indenture, deed of trust, license, lease, contract,
commitment, agreement or arrangement to which the Company is a party or by which
the Company may be bound, or (c) violate any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to the Company or the
Quotaholders. Except as contemplated by Section 5.2, no material third party
consent or approval, authorization, license, permit or other action by, or
filing with, any governmental body, is required, with respect to the actions of
the Quotaholders in connection with the execution and delivery by the
Quotaholders of this Agreement or in order for the Quotaholders to consummate
the transactions contemplated hereby.
4.3 Capitalization. The total capital of the Company consists solely of
200,000 (two hundred thousand) quotas of the unitary value of R$ 1,00 (one real)
all of which are evidenced in the last Amendment to the Company Agreement dated
June 30, 1997, which is currently in force, and are fully paid in. Except as set
forth on Schedule 3.3, to the knowledge of the Quotaholders, there are no
outstanding subscriptions, options, warrants, puts, calls, rights or other
agreements or commitments relating to the issuance, transfer, purchase or sale
of any quota, [voting securities or securities] (including debt obligations)
convertible into or exchangeable for quotas of capital or voting securities (or
any such convertible or exchangeable securities) of the Company, or obligations
to grant, extend or enter into any subscription, warrant, right, convertible or
exchangeable security or other similar agreement or commitment. The Quotaholders
are, in the aggregate, the lawful owners of 50% (fifty percent) of the Company's
quotas of capital , with clear and unencumbered title thereto, free and clear of
all liens, pledges, encumbrances, options, rights of first refusal and other
claims of any kind. 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.
4.4 Financial Statements. Schedule 3.4 sets forth the Financial
Statements. The Financial Statements have been prepared in accordance with
generally accepted accounting principles in Brazil consistently applied. The
Financial Statements fairly present, in all material respects, the results of
operations and financial condition of the Company for the periods and at the
dates presented. Schedule 3.4.1 sets forth documentation referring to real
estate owned by the company and to rights to intellectual property. Schedule
3.4.2 sets forth income tax returns of the Company for years ended December 31,
1993, 1994, 1995 and 1996.
4.5 Contracts. The Company is not in breach or default under any
contract or agreement, oral or written, to which the Company is bound. Likewise,
to the best of Quotaholders' knowledge, up through the date of signing of the
present agreement, there are no contracts or covenants with third party, oral or
written, whose nonperformance or renegotiation may have caused or will cause
losses to the Company. Schedule 3.5 sets forth
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outstanding contracts entered into by the Company. Quotaholders shall not be
responsible for the normal renewals and normal renegotiations described in
section 4.10 or for nonperformance which results from the peculiarities of the
operations of the Company, which are known to, and accepted by, Buyer.
4.6 Absence of Changes or Events. To the best of Quotaholders'
knowledge, since December 31, 1996, the commercial and financial business of the
Company has been conducted in the ordinary course, and appropriate to the
peculiarities of the operations of the Company, as it is known to, and accepted
by, Stoneridge, and no material adverse change, which could affect the business
of the Company through December 31, 1998 has taken place.
4.7 Absence of Claims. There is no unrecorded claim, obligation,
liability, litigation proceeding or governmental investigation pending or
threatened against the Company or its properties that could have a material
adverse effect on the Company, except for what is listed in Annex 3.7 hereto.
Neither of the Quotaholders, nor any entity controlled by either Quotaholder,
nor any relative of either Quotaholder, has any claim whatsoever against the
Company. Schedule 3.7.1 sets forth the list of employees of the Company on the
date hereof. Schedule 3.7.2 sets forth the notice from the Secretariat of
Finance of the State of Amazonas referring to current and on going tax
inspection. Schedule 3.3 sets forth the guaranties offered by the Company to
current creditors.
4.8 Compliance with Applicable Laws. The business and affairs of the
Company have been conducted in compliance with all applicable laws, orders,
ordinances, rules and regulations of any governmental authority, except to the
extent noncompliance would not have an adverse effect on the business or
financial condition of any such entity, in an amount no to exceed reais
equivalent to US$ 100,000.00 (one hundred thousand US dollars).
4.9 Binding Effect. This Agreement and the Quotaholders Agreement among
the Buyer and the Quotaholders of even date herewith (the "Quotaholders
Agreement"), upon execution by the Quotaholders will constitute the legal, valid
and binding obligations of the Quotaholders. Neither the execution nor the
performance by the Quotaholders of their obligations under, nor the consummation
by each of the transactions contemplated by, this Agreement or the Quotaholders
Agreement will, (i) violate, conflict with or result in a breach or termination
of, or otherwise give any other contracting party additional rights or
compensation under, or the right to terminate, or constitute a default under the
terms of, any agreement to which either Quotaholder is a party or by which the
Quotaholders or any of their properties or assets are bound or subject, (ii)
violate any judicial order against, or binding upon, either of the Quotaholders
or any of their properties or assets, or (iii) constitute a violation by either
of the Quotaholders of any
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applicable law as such law relates to the Quotaholders or to the properties or
assets of the Quotaholders.
4.10 Suppliers and Customers - Since January 1, 1997, to the date
hereof, Quotaholders have no knowledge of any unusual condition or change
external to the company, relating to any current supplier or client of the
company, that could have a material adverse effect on the business of the
company or on its financial condition. For purposes of this Clause, an amount
which would negatively affect the earnings or the balance sheet up to the amount
in reais equivalent to US$ 100,000.00 (one hundred thousand US dollars) is not
material. For the legal effects of this Agreement and of this Clause, it is
considered that the normal changes of suppliers and clients, the normal renewal
and renegotiation of financial and commercial conditions, and the effects
thereof, constitute normal operations of the Company resulting from market
conditions and opportunities, as known to, and agreed by, Stoneridge, so that
Quotaholders will not be responsible, under these circumstances, for any adverse
effect on the business or on the financial condition of the Company therefor.
4.11 Suframa - The Company has submitted to SUFRAMA (Superintendency of
the Manaus Free Trade Zone) 5 (five) projects aiming at obtaining tax benefits
a) from the Federal Government, comprising exemption of the IPI (Tax on
Industrialized Products) on manufactures products, the exemption and/or
reduction of the Importation Tax on capital goods and imported consumable items,
b) from the State Government of Amazonas, comprising the partial or total
restitution of the ICMS (Tax on the Circulation of Merchandise) and c) from
SUDAM (Superintendency for the Development of the Amazon Area), comprising the
exemption of the Corporate Income Tax and of the non-refundable additional
charges, said projects being: 1) Project for the Implantation of manufacture of
alarms, electrical locks and of the shift, sirens and automatic electrical
system for glass closure, dated August, 1993; 2) Project for Expansion and
Diversification, dated November, 1994; 3) Project for Diversification -
Assembled Printed Circuit Board - PCI, dated January, 1995; 4) Project for
Diversification - Audio Amplifier, dated February, 1996; 5) Project for
Revalidation of Fiscal Incentives, dated July, 1996. All projects were approved
and the tax benefits are available for the Company and in full force.
5. Covenants.
5.1 - The Sellers, the Quotaholders and the Company shall maintain
Buyer fully protected, therefore, free and unencumbered, of any actions or
claims from any third party relative to the purchase of quotas object of this
Agreement, undertaking, consequently, to take all possible actions, whether
judicial or not, necessary for the protection of the rights of Buyer, provided
that such obligations result from facts originated before the date of signing of
the present agreement.
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5.2 SUFRAMA Authorization. Antitrust Notification: (a) Sellers, WITH
THE SUPPORT OF BUYER, SHALL OBTAIN FROM SUFRAMA WITHIN THE PERIOD DEFINED BY
THIS AGENCY, OR WITHIN THE PERIOD ESTIMATED AT 12 (TWELVE) MONTHS COUNTING FROM
THE DATE HEREOF, through timely communication to SUFRAMA pursuant to Resolution
SUFRAMA 143/87, the necessary authorization for the transfer of the Quotas sold
hereby, for the free ownership of Buyer; provided, that if in the future SUFRAMA
revokes or denies all or part of the benefits described in correspondence and
technical affidavits issued by the Secretariat of Industry, Commerce and Tourism
of the State of Amazonas (Annex 5.2) attributable to products object of the
above referred benefits, such products which are on the date of this agreement
in normal process of manufacturing and production, and such revocation or denial
resulting from any action or failure to act prior to the date hereof or
resulting from the transfer of Quotas pursuant to this Agreement, Sellers will
immediately return to Buyer the entire Purchase Price paid for the Quotas; (b)
Sellers and the Company also represent and warrant that they obtained from
SUFRAMA (SUDAM) the necessary approvals for their industrial projects referred
to in sections 3.11 and 4.11, which enable the Company to enjoy, among other
benefits, the exemption of the income tax for the period of 10 (ten) years
counting from December, 1995, pursuant to the documents included as Annex 5.2.1
hereto; (c) Sellers represent and warrant that the Department of Administration
of Fiscal Incentives of the Superintendency for the Development of Amazonia -
SUDAM has not issued the Declaratory Act which recognizes to the Company the
right for the exemption of the income tax, being certain, however, that once
said Declaratory Act is issued, which is expected to be issued until no later
than January 31, 1998, shall be effective retroactively, that is, it shall
benefit the Company since December, 1995; and (d) within the time period defined
by law, Sellers and the Buyer shall submit to the Administrative Council of
Economic Defense - CADE, with support, where required, from the Quotaholders and
from the Company, the purchase of the Quotas referred hereto, for purposes of
obtaining its approval. In the event that such authorities do not give their
clearance to the sale and purchase contemplated by this Agreement, the Buyer and
the Sellers undertake to negotiate in good faith with the relevant authorities
in order to obtain clearance and to take any measures required by the
authorities in order that the said sale and purchase will not be revoked.
Sole paragraph:- SELLERS SHALL NOT UNDERTAKE ANY RESPONSIBILITY FOR THE DELAY IN
THE AUTHORIZATION TO BE GRANTED BY SUFRAMA, IN CASE THE DELAY RESULT FROM
INACTION FROM SAID AGENCY.
5.3 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.
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5.4 Certain Other Agreements. Each of the Sellers and each of the
Quotaholders warrant and represent that there are no agreements other than those
expressly referred in the clauses and annexes to this Agreement.
5.5 Certain Restrictions.
(a) Covenant Not to Compete. Having in view (i) the reasonable
limitation in time of the restrictions described below on Sellers future
engagement in business activities and (ii) taking into account that from the
total price payable to each of the Sellers, that is, reais equivalent to US$
1,000,000.00 (one million US dollars) for each, represent an indemnification for
their acceptance of said restrictions, each of the Sellers agrees that he will
not, during the period commencing on the date hereof and ending on the second
anniversary of the date hereof engage in Brazil, directly or indirectly, whether
on his own account or as a quotaholder, partner, joint venturer, officer,
director, and/or agent, of any person, firm, corporation or other entity or
otherwise, in any or all of the following activities in which the Company is
engaged on the date hereof:
(i) enter into or engage in any business which competes with any
business conducted by the Company (such businesses, the "Applicable
Businesses");
(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; or
(iii) promote or assist, financially or otherwise, any person, firm,
association, corporation or other entity engaged in any Applicable Business.
(b) Covenant Against Disclosure. Each of the Sellers agrees, from and
after the date hereof, and for a period of 2 (two) years from the date hereof,
not to (i) disclose to any person, association, firm, corporation or other
entity in any manner, directly or indirectly, any confidential information or
confidential data of the Company or the Buyer, whether of a technical or
commercial nature, or (ii) use, or permit or assist, by acquiescence or
otherwise, any person, association, firm, corporation or other entity to use, in
any manner, directly or indirectly, any such confidential information or data,
excepting only use of such data or information as is at the time generally known
to the public and which did not become generally known through any breach of
this Section 5.5(b) by such Seller.
(c) Covenant Against Hiring. Each of the Sellers agrees from and after
the date hereof that he shall not take any action which would, or is designed
to, induce any employee or representative of the Company not to continue as an
employee or representative of the Company.
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(d) Specific Performance. Each of the Sellers, Quotaholders and the
company understand and, above all, agree that BUYER has the indisputable right
to require judicially the full or partial performance of this Contract or of any
part, clause, section or condition of same pursuant to article 639 and following
articles of the Brazilian Civil Procedure Code. Furthermore, all obligations
assumed in this Contract may be the object of judicial claim, pursuant to art.
585, II of the same Brazilian Civil Procedure Code.
6. The Closing.
6.1 Deliveries at Closing.
(a) At the Closing, the Buyer shall deliver to the Sellers the balance
of the Purchase Price referred to in 2.1 (b) and 2.1 (c).
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 Waiver. No delay on the part of a party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of a party of any right hereunder operate as a waiver of any
other right, power or privilege hereunder, nor shall any partial exercise of any
right, power or privilege hereunder preclude any other further exercise thereof
or the exercise of any other right, power or privilege hereunder.
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
without limitation. 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. Sellers and Quotaholders shall indemnify the
Company and/or Buyer for all and any damages, losses or expenses which
effectively may occur as a consequence of the inaccuracy of the warrants and
representations included herein, including with regard to fines, interests,
monetary correction, legal fees, legal costs and other expenses, such as for:
(a) all obligations of the Company, independently of the legal cause
which might have originated said obligations, specially, but not limited to,
fiscal, social security and labor obligations, which until the date hereof may
not have been properly recorded in the Company's books or which may have
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been improperly recorded , or which may not have been described in Annexes to
this Contract; and,
(b) all titles or obligations of favour, of the Company's
responsibility to Sellers and/or third parties, which the Company is under the
obligation to perform and provided they were carried out to the date hereof.
8.3 Sellers shall always be assured of their right to defend themselves
in actions, claims or remedies against creditors which may require the
satisfaction of credits not recognized by Sellers, provided that adequate
guarantees are given to Buyer and/or to the Company that if such credits are
maintained, that they shall be fully satisfied by Sellers.
8.4 Buyer and the Company undertake to maintain Sellers free of any
claims from third party in regards to collateral provided by Sellers to guaranty
existing loans by the Company to third parties for the benefit of the Company,
further undertaking to indemnify eventual disbursements made by Sellers as a
result of said collaterals to the extent such disbursements are not related to
facts which are misrepresented in this Agreement.
9. Miscellaneous.
9.1 Irrevocability. This Agreement is irrevocable, obligating not only
the parties to this Agreement, but also their heirs and successors at any title.
9.2 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.
9.3 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be delivered
in two of the following mediums: personally delivered, sent by certified mail
(return receipt requested) or sent by facsimile (confirmation of receipt
requested) to the respective parties as follows:
if to the Buyer:
Stoneridge, Inc.
9400 East Market Street
Warren, Ohio 44484
Attention: Mr. Cloyd J. Abruzzo
with a copy to:
Baker & Hostetler LLP
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3200 National City Center
1900 East 9th Street
Cleveland, Ohio 44114-3485
Telecopier: (216) 696-0740
Attention: Mr. Avery S. Cohen
if to the Sellers:
Ricardo Ribeiro Maciel
Alameda Procion, 548
Condominio Morada das Estrelas,
Aldeia da Serra
Barueri, SP
Brasil
with a copy to:
Antonio Carlos Q. Ferreira
Ernst & Young
Condominio Sao Luiz - torre I - 7 degrees. andar
Av. Pres. Juscelino Kubitschek, 1830
04543-900 Sao Paulo, SP
Brasil
Ichiro Aoki
Rua Joaquim Novaes, No. 250 - apt. 61 - Cambui
13015-140 Campinas, SP
Brasil
with a copy to:
Antonio Carlos Q. Ferreira
Ernst & Young
Condominio Sao Luiz - torre I - 7 degrees. andar
Av. Pres. Juscelino Kubitschek, 1830
04543-900 Sao Paulo, SP
Brasil
if to the Quotaholders:
Sergio de Cerqueira Leite
Rua Joaquim Novaes, No. 250 - apt. 62 - Cambui
13015-140 Campinas, SP
Brasil
with a copy to:
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Marcelo Ribeiro de Almeida
Ernst & Young
Condominio Sao Luiz - torre I - 7 degrees. andar
Av. Pres. Juscelino Kubitschek, 1830
04543-900 Sao Paulo, SP
Brasil
Marcos Ferretti
Rua Pedro Vieira da Silva, No. 64
Bl. 1, apt. 41, Jardim Santa Genebra
01380-570 Campinas, SP
Brasil
with a copy to:
Marcelo Ribeiro de Almeida
Ernst & Young
Condominio Sao Luiz - torre I - 7 degrees. andar
Av. Pres. Juscelino Kubitschek, 1830
04543-900 Sao Paulo, SP
Brasil
if to P.S.T. Industria Eletronica da Amazonia Ltda.
Sergio de Cerqueira Leite
Marcos Ferretti
Rua Sao Domingos, 86-B and 179 - Aleixo
Manaus, AM
with a copy to:
Marcelo Ribeiro de Almeida
Ernst & Young
Condominio Sao Luiz - torre I - 7 degrees. andar
Av. Pres. Juscelino Kubitschek, 1830
04543-900 Sao Paulo, SP
Brasil
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). Notices will be deemed to have been given
hereunder when delivered personally, 15 business days after deposit in the mail,
or when confirmation of receipt is received; provided, however, that delivery of
a notice will be deemed to occur only when the later of the two deliveries is
deemed to have been given.
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9.4 Governing Law; Dispute Resolution. This Agreement shall be governed
by the laws of Brazil.The Courts sitting in the City of Sao Paulo, State of Sao
Paulo, shall have exclusive jurisdiction over any questions regarding the
construction and interpretation or any controversy or claim arising out of or
relating to this Agreement, or the breach thereof or relationship created
thereby.
9.5 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.
9.6 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.
9.7 Language; Counterparts. This Agreement is simultaneously executed
in English and Portuguese; in case of discrepancy between such languages, the
Portuguese language shall prevail. 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.
9.8 Press Releases. The Buyer and the Sellers shall consult with each
other 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.
9.9 Absence of Finders' Fees. Each party represents and warrants to the
others that all negotiations relating to this Agreement and the transactions
contemplated herein have been carried on without the intervention of any person
acting on its/his behalf in such a manner as to give rise to any valid claim
from any brokerage commissions or finders' fees or similar compensation in
connection with the purchase and sale of the Quotas.
9.10 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 PORTUGUESE version of this Agreement shall control.
And, being in agreement, the parties execute this instrument in 6 (six)
counterparts of one sole content and effect, in the presence of the undersigned
witnesses.
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AGREEMENT FOR THE PURCHASE AND SALE OF QUOTAS OF P.S.T. INDUSTRIA ELETRONICA DA
AMAZONIA LTDA.
Campinas October 29, 1997
/s/ RICARDO RIBEIBRO MACIEL
-----------------------------------
RICARDO RIBEIRO MACIEL
/s/ ICHIRO AOKI
-----------------------------------
ICHIRO AOKI
SELLERS
STONERIDGE, INC.
By: /s/ COARACI NOGUERIRA DO VALE
--------------------------------------
Name: Coaraci Nogueira do Vale
Attorney in fact
BUYER
/s/ SERGIO DE CERQUEIRA LEITE
--------------------------------------
SERGIO DE CERQUEIRA LEITE
/s/ MARCOS FERRETTI
--------------------------------------
MARCOS FERRETTI
QUOTAHOLDERS
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AGREEMENT FOR THE PURCHASE AND SALE OF QUOTAS OF P.S.T. INDUSTRIA ELETRONICA DA
AMAZONIA LTDA.
P.S.T. INDUSTRIA ELETRONICA DA AMAZONIA LTDA.
/s/ SERGIO DE CERQUEIRA LEITE
--------------------------------------
SERGIO DE CERQUEIRA LEITE
/s/ MARCOS FERRETTI
--------------------------------------
MARCOS FERRETTI
Witnesses:
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