<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 5, 1997
- ----------------------------------------------REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ECHLIN INC.
(Exact name of registrant as specified in its charter)
Connecticut 06-0330448
- ----------- ----------
(State of incorporation) (I.R.S.
Employer
Identification
Number)
100 DOUBLE BEACH ROAD
BRANFORD, CONNECTICUT 06405
(203-481-5751)
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive office)
--------------------------
JON P. LECKERLING
EXECUTIVE VICE PRESIDENT - ADMINISTRATION,
GENERAL COUNSEL AND CORPORATE SECRETARY
100 DOUBLE BEACH ROAD
BRANFORD, CONNECTICUT 06405
(203-481-5751)
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the
public: from time to time after this Registration Statement
becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, check
the following box. / /
If any of the Securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box. /X/
--------------------------
CALCULATION OF REGISTRATION FEE
=================================================================
<TABLE>
<CAPTION>
Title of Proposed Proposed
each class maximum maximum Amount
of securities Amount offering aggregate of
to be to be price offering registration
registered registered per unit(1) price(1) fee
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 531,108 $32.00 $16,995,456 $5,150
par value $1.00
per share
</TABLE>
=================================================================
(1) Estimated solely for the purpose of determining the
registration fee in accordance with Rule 457(c) under the
Securities Act of 1933.
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SAID SECTION 8(A), MAY DETERMINE.
=================================================================
<PAGE>
ECHLIN INC.
CROSS REFERENCE SHEET
---------------------
<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION IN
CAPTION IN FORM S-3 PROSPECTUS
- ------------------- ----------
<S> <S> <S>
1. Forepart of Registration Facing Page of
Statement and Outside Front Registration
Cover Page of Prospectus Statement
and Cover Page
2. Inside Front and Outside Back Inside Cover Page;
Cover Pages of Prospectus Available
Information;
Incorporation of
Certain Documents by
Reference
3. Summary Information, Risk The Company
Factors and Ratio of Earnings
to Fixed Charges
4. Use of Proceeds *
5. Determination of Offering Price *
6. Dilution *
7. Selling Security Holders Cover Page; Selling
Stockholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to Description of
be Registered Capital Stock
10. Interests of Named Experts Legal Opinions;
and Counsel Experts
11. Material Changes *
12. Incorporation of Certain Incorporation of
Information by Reference Certain Documents by
Reference
13. Disclosures of Commission Indemnification of
Position on Indemnification for Directors and in
Securities Act Liabilities Part II of
Registration
Statement;
Undertakings in Part
II of Registration
Statement
</TABLE>
- -------------------------
* Omitted as inapplicable or in the negative.
<PAGE>
Preliminary Prospectus, Dated May 5, 1997
PROSPECTUS
531,108 SHARES
ECHLIN INC.
COMMON STOCK
($1.00 PAR VALUE)
--------------------------
THE SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE (THE
"COMMON STOCK"), OF ECHLIN INC. ("ECHLIN" OR THE "COMPANY") TO
WHICH THIS PROSPECTUS RELATES MAY BE OFFERED FOR SALE FROM TIME TO
TIME BY CERTAIN STOCKHOLDERS OF THE COMPANY (OR DONEES, TRANSFEREES
OR OTHER SUCCESSORS IN INTEREST OF SUCH STOCKHOLDERS) IN ORDINARY
BROKERAGE TRANSACTIONS ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE
AT MARKET PRICES PREVAILING AT THE TIME OF SALE OR AT NEGOTIATED
PRICES.
NONE OF THE PROCEEDS FROM THE SALE OF THE COMMON STOCK WILL
BE RECEIVED BY THE COMPANY. THE COMPANY WILL BEAR ALL EXPENSES OF
THE OFFERING, EXCEPT THAT THE SELLING STOCKHOLDERS WILL PAY ANY
APPLICABLE UNDERWRITERS' COMMISSIONS AND EXPENSES, BROKERAGE FEES
OR TRANSFER TAXES. THE COMPANY AND THE SELLING STOCKHOLDERS HAVE
AGREED TO INDEMNIFY EACH OTHER AGAINST CERTAIN LIABILITIES,
INCLUDING LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT").
THE COMMON STOCK IS LISTED ON THE NEW YORK STOCK EXCHANGE
UNDER THE SYMBOL "ECH." THE LAST SALE PRICE OF THE COMMON STOCK
ON MAY _, 1997 WAS $______ PER SHARE, AS REPORTED ON SUCH STOCK
EXCHANGE.
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------
The date of this Prospectus is May __, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR
TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER. SOLICITATION OR
SALE WOULD BE UNLAWFUL PRIOR TO THE REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith, files reports, proxy statements
and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other
information concerning the Company can be inspected and copied at
the public reference facilities of the Commission's office at 450
Fifth Street, N.W., Washington, DC 20549, and at certain of its
Regional Offices in New York (7 World Trade Center, 13th Floor, New
York, New York 10048), and Chicago (500 West Madison Street,
Chicago, Illinois 60661-2511). Copies of such material can be
obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D. C. 20549. Such material can
also be inspected and copied at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005 and The
Pacific Stock Exchange Inc., 618 South Spring Street, Los Angeles,
California 90014, and 301 Pine Street, San Francisco, California
94014. Additional information regarding the Company and the Common
Stock offered hereby is contained in the Registration Statement on
Form S-3 (of which this Prospectus forms a part) and the exhibits
relating thereto, filed with the Commission under the Securities
Act. The Registration Statement and any exhibits thereto may be
inspected without charge at the offices of the Commission at 450
Fifth Street, N.W., Washington, DC 20549, and copies thereof may be
obtained from the Commission upon the payment of the prescribed
fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated herein by reference the following
documents heretofore filed by the Company with the Commission:
(a) Annual Report on Form 10-K for the fiscal year ended
August 31, 1996; and
(b) All other reports filed since August 31, 1996 to the
date of this Prospectus pursuant to Section 13(a) or 15 (d) of
the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a),
13 (c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the
Common Stock shall be deemed to be incorporated by reference into
this Prospectus.
Any statement contained in a document, all or a portion of
which is incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for purposes
of the Registration Statement and this Prospectus to the extent
that a statement contained in the Registration Statement, this
Prospectus, or any other subsequently filed document that is also
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute part
of this Prospectus.
2
<PAGE>
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE
NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL
PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS PROSPECTUS IS
DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS WHICH ARE INCORPORATED HEREIN
BY REFERENCE (OTHER THAN EXHIBITS, UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS).
REQUESTS SHOULD BE DIRECTED TO THE CORPORATE SECRETARY, ECHLIN
INC., 100 DOUBLE BEACH ROAD, BRANFORD, CONNECTICUT 06405.
TELEPHONE REQUESTS MAY BE DIRECTED TO (203) 481-5751.
THE COMPANY
Echlin is a worldwide manufacturer and distributor of brake
system, engine system and other vehicular products principally in
the automotive aftermarket as replacement parts for use by
professional mechanics and by car and truck owners. Sales are made
by the Company to automotive and heavy duty warehouse distributors,
retailers, other parts manufacturers and parts remanufacturers.
The Company also sells its products to original equipment
manufacturers in both the automotive and heavy duty markets.
Echlin was incorporated under Connecticut law in 1959,
succeeding a business which had been organized in 1924. Echlin's
principal executive office is located at 100 Double Beach Road,
Branford, Connecticut 06405; its telephone number is 203-481-5751.
SECURITIES COVERED BY THIS PROSPECTUS
The Shares of Common Stock covered by this Prospectus were
issued on May 2, 1997 to Industria e Comercio Brosol Ltda. (the
"Selling Stockholder") pursuant to an Asset Purchase Agreement
dated as of March 20, 1997, as amended (the "Agreement"); pursuant
to the Agreement, the assets purchased from the Selling Stockholder
were acquired by Echlin do Brasil Industria e Comercio Ltda.
("Buyer"), a wholly-owned subsidiary of the Company.
SELLING STOCKHOLDERS
The following table sets forth information with respect to the
number of shares of Common Stock which may be offered for sale by
the Selling Stockholder. The Selling Stockholder does not
beneficially own more than one percent of the issued common stock
of the Company.
3
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK WHICH MAY
NAME AND ADDRESS OF BE OFFERED FOR SALE
SELLING STOCKHOLDER AND REGISTERED
- ------------------- ------------------------
<S> <C>
Industria e Comercio Brosol Ltda. 531,108
Rodovia Indio Tibirica, Km 39
Vila Bromberg, Bairro Represa
09400-970, Ribeirao Pires, SP, Brazil
</TABLE>
4
<PAGE>
Because the Selling Stockholder may offer all or part of the
Common Stock which it holds pursuant to the offering contemplated
by this Prospectus, no estimate can be given as to the amount of
Common Stock that will be held by the Selling Stockholder after
completion of this Offering. See "Plan of Distribution."
The Selling Stockholder and the Company have certain exclusive
rights and obligations under the Agreement as to the Shares of
Common Stock to which this prospectus relates. In no event shall
such rights or obligations be transferable with the Shares of
Common Stock sold or transferred pursuant to this Prospectus. Upon
any such sale or transfer such rights and obligations shall
terminate and any Shares of Common Stock sold or transferred shall
be free of such rights and obligations.
PLAN OF DISTRIBUTION
The distribution of the Common Stock by the Selling
Stockholders (or by pledges, donees, transferees or other
successors in interest of such Selling Stockholders) may be
effected from time to time in ordinary brokerage transactions on
the New York Stock Exchange or otherwise at market prices
prevailing at the time of sale or at negotiated prices. The
brokers or dealers through or to whom the Common Stock may be sold
may be deemed underwriters of the shares within the meaning of the
Securities Act, in which event all brokerage commissions or
discounts and other compensation received by such brokers or
dealers may be deemed underwriting compensation. In order to
comply with certain state securities laws, if applicable, the
Common Stock will not be sold in a particular state unless the
Common Stock has been registered or qualified for sale in such
state or an exemption from registration or qualification is
available and is complied with.
The Common Stock offered hereby will be sold by the Selling
Stockholders acting as principals for their own account. The
Company will receive none of the proceeds from this offering.
The Company will bear all expenses of the offering, except
that the Selling Stockholders will pay any applicable underwriters'
commissions and expenses, brokerage fees or transfer taxes.
The Company and the Selling Stockholders have agreed to
indemnify each other against certain liabilities including
liabilities arising under the Securities Act.
DESCRIPTION OF CAPITAL STOCK
Echlin's authorized capital stock consists of 150,000,000
shares of Common Stock, par value $1 per share, and 1,000,000
shares of Preferred Stock, without par value. None of the shares
of the Preferred Stock has been issued. The Preferred Stock may
be issued in series from time to time as determined by the Board
of Directors of the Company, who are empowered, for each series,
to fix the dividend rate, redemption provisions, liquidation
privileges, sinking fund provisions, voting powers and any
conversion rights. When any shares of Preferred Stock are
outstanding, dividends may be payable thereon at a fixed dividend
rate before dividends can be paid on outstanding shares of Echlin's
Common Stock. On dissolution, liquidation or winding-up of Echlin,
holders of Preferred Stock may be entitled to receive a stipulated
liquidation price before any distribution could be made to the
holders of the Common Stock. The Company presently has no plans,
arrangements or understandings with respect to the issuance of any
of the Preferred Stock (other than pursuant to the Preferred Stock
purchase rights described below).
5
<PAGE>
Each share of Common Stock is entitled to one vote and to
dividends as declared by the Board of Directors. Upon liquidation,
each share of Common Stock is entitled to an equal share in all of
the assets of the Company, after payment of creditors and holders
of Preferred Stock, if any. There are no preemptive rights and no
conversion, redemption or sinking fund privileges and all shares of
Common Stock outstanding are fully paid and non-assessable.
Under the terms of a shareholder rights plan approved by the
Company's Board of Directors in June 1989 ("Echlin's Shareholder
Rights Plan"), a Preferred Stock purchase right ("Right") is
attached to and automatically trades with each outstanding share
of Common Stock.
The Rights, which are redeemable, will become exercisable only
in the event that any person or group becomes a holder of 20
percent or more of the Company's Common Stock, or commences a
tender or exchange offer which, if consummated, would result in
that person or group owning at least 20 percent of the Common
Stock. Once the Rights become exercisable they entitle all other
shareholders to purchase, by payment of a $65 exercise price,
Common Stock (or, in certain circumstances, other consideration)
with a value of twice the exercise price. In addition, at any time
after a 20 percent position is acquired, the Board of Directors
may, at its option, require each outstanding Right (other than
Rights held by the acquiring person or group) to be exchanged for
one share of Common Stock or its equivalent. The Rights will
expire on June 30, 1999 unless redeemed or exchanged earlier.
The transfer agent and registrar for the Common Stock and
Rights Agent under Echlin's Shareholder Rights Plan is Boston
EquiServe, L.P., Boston, Massachusetts.
The Common Stock is listed on the New York Stock Exchange, The
Pacific Stock Exchange and the International Stock Exchange in
London.
LEGAL OPINIONS
The legality of the Shares offered hereby will be passed upon
for Echlin by Jon P. Leckerling, Esq., Executive Vice President -
Administration, General Counsel and Corporate Secretary of Echlin.
EXPERTS
The consolidated financial statements of the Company
incorporated in this Prospectus by reference to the Company's
Annual Report on Form 10-K for the fiscal year ended August 31,
1996 have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
6
<PAGE>
No person has been authorized
to give any information or to
make any representations other
than those contained in this
Prospectus and, if given or
made, such information or
representations must not be
relied upon as having been
authorized by the Company or
any person using this
Prospectus in connection with
the sale of shares issued in
acquisition and mergers.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information .... 2
Incorporation of Certain
Documents by Reference ... 2
The Company .............. 3
Securities Covered by
this Prospectus .......... 3
Selling Stockholders ..... 4
Plan of Distribution...... 5
Description of
Capital Stock............. 5
Legal Opinions............ 6
Experts................... 6
</TABLE>
This Prospectus does not
constitute an offer to sell or
a solicitation of an offer to
buy any securities other than
the Common Stock to which it
relates, or an offer to or
solicitation of any person in
any jurisdiction in which such
offer or solicitation would be
unlawful. The delivery of this
Prospectus at any time does not
imply that the information
herein is correct as of any
time subsequent to its date.
<PAGE>
531,108 Shares
ECHLIN INC.
Common Stock
__________
PROSPECTUS
__________
May __, 1997<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated fees and expenses payable by the Corporation in
connection with the issuance and distribution of the Common Stock
registered hereunder are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee ..... $5,150
Legal fees and expenses ................................. 1,000
Accounting fees and expenses ............................ 1,000
Printing fee ............................................ 1,000
Miscellaneous ........................................... 1,000
------
Total Fees and Expenses ................................. $9,150
======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Connecticut by statute provides for indemnification of
directors, officers, shareholders, employees and agents of a
corporation. Under Sec. 33-320a of the Connecticut Stock
Corporation Act (the "Act"), a corporation is required to indemnify
a director against judgments and other expenses of litigation when
he is sued by reason of his being a director in any proceeding
brought, other than on behalf of the corporation, if the director:
(1) is successful on the merits in defense, or
(2) acted in good faith and in a manner reasonably
believed to be in the best interests of the corporation,
or
(3) in a criminal action or proceeding, has no
reasonable cause to believe his conduct was unlawful.
In a proceeding brought on behalf of a corporation (a
derivative action), a director is entitled to be indemnified by the
corporation for reasonable expenses of litigation, if the director
is finally adjudged not to have breached his duty to the
corporation. In addition, a director is entitled to
indemnification for both derivative and non-derivative actions, if
a court determines, upon application, that the director is fairly
and reasonably entitled to be indemnified.
A Connecticut corporation may not provide for indemnification
in any manner inconsistent with the statutory indemnification
provisions (which, however, expressly allow a corporation to
procure insurance providing greater indemnification.)
---------------------------
<PAGE>
The Registrant maintains a directors and officers liability
insurance policy which insures the Registrant's directors and
officers against claims and liabilities arising out of negligent
errors or omissions in the course of the performance of their
official duties, including claims and liabilities arising under the
securities laws of the United States and states of applicable
jurisdiction. Fraudulent and willful acts are excluded.
--------------------------
The Registrant's Certificate of Incorporation provides by
amendment that a person who is or was a director of the corporation
shall have no personal liability to the corporation or its
shareholders for monetary damages for any breach of duty in such
capacity in excess of the compensation received by the director for
serving the corporation during the year of violation.
The amendment was adopted to implement changes to Section 33-
290 of the Act, effective October 1, 1989. Under this change in
the law, a Connecticut corporation may amend its Certificate of
Incorporation to limit the personal liability of directors to the
corporation or its shareholders for monetary damages for breach of
duty in their capacity as directors.
The limitation may not be to an amount less than the
compensation received by the director for serving the corporation
during the year of the violation and director liability cannot be
limited if the violation:
(1) involved a knowing and culpable violation of
law by the director;
(2) enabled the director or an associate to receive
an improper personal economic gain;
(3) showed a lack of good faith and a conscious
disregard for the duty of the director to the corporation
under circumstances in which the director was aware that
his conduct or omission created an unjustifiable risk of
serious injury to the corporation;
(4) constituted a sustained and unexcused pattern
of inattention that amounted to an abdication of the
director's duty to the corporation; or
(5) created a liability under Section 33-321, which
relates to directors who vote for any distribution of
assets of a corporation to its shareholders in violation
of the Act.
II-2
<PAGE>
ITEM 16. LIST OF EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<S> <S>
2. -Asset Purchase Agreement dated as of March 20, 1997, as
amended, by which the Company acquired certain assets of
Industria e Comercio Brosol Ltd.
4(a) -By-Laws, as amended, filed as Exhibit 3(ii) to Echlin's
Annual Report on Form 10-Q for the quarterly period ended
February 28, 1997, is incorporated herein by reference.
4(b) -Certificate of Incorporation, filed as Exhibit 3(3)(ii)
to Echlin's Annual Report on Form 10-K for the fiscal
year ended August 31, 1987, is incorporated herein by
reference.
4(c) -Certificate of Amendment amending the Certificate of
Incorporation to Establish Series A Cumulative
Participating Preferred Stock, filed as Exhibit 3(3)(iii)
to Echlin's Annual Report on Form 10-K for the fiscal
year ended August 31, 1989, is incorporated herein by
reference.
4(d) -Certificate of Amendment, amending the Certificate of
Incorporation, to limit the liability of directors for
monetary damages under certain circumstances, filed as
Item 2 to Echlin's 1989 Annual Proxy Statement, is
incorporated herein by reference.
4(e) -Rights Agreement, dated as of June 21, 1989, between
Echlin and the Connecticut Bank and Trust Company, N.A.,
as Rights Agent, which includes the form of Amendment to
the company's Certificate of Incorporation as Exhibit A,
the form of Rights Certificate as Exhibit B and the
Summary of Rights to Purchase Preferred Stock as Exhibit
C, filed as Exhibit 1 to Echlin's Current Report on Form
8-K dated June 21, 1989, is incorporated herein by
reference.
4(f) -Successor Rights Agent Agreement between Echlin and The
First National Bank of Boston appointing The First
National Bank of Boston as successor Rights Agent to
replace the Connecticut Bank and Trust Company, N.A. as
Rights Agent, filed as Exhibit 3(3)(iv) to Echlin's
Annual Report on Form 10-K for the fiscal year ended
August 31, 1990, is incorporated herein by reference.
5. -Opinion of Jon P. Leckerling, Esq. as to the legality of
the Common Stock being offered under this Registration
Statement.
24(a) -Consent of Price Waterhouse LLP.
24(b) -Consent of Counsel. (Included in Exhibit 5 hereto).
25. -Powers of Attorney. (Included on the signature page
hereto).
</TABLE>
II-3
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a) (1) To file, during any period in which offers
or sales are being made, a post-effective amendment to
this Registration Statement;
(i) To include any prospectus required
by section 10(a)(3) of the Securities Act of
1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any
facts or events arising after the effective
date of the Registration Statement (or the
most recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement;
(iii) To include any material
information with respect to the plan of
distribution not previously disclosed in the
Registration Statement or any material change
to such information in the Registration
Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Company pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-
effective amendment shall be deemed to be a new
Registration Statement relating to the securities
offered therein, and the offering of such
securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities
which remain unsold at the termination of the
offering.
(b) That, for purposes of determining any liability
under the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized,
in Branford, Connecticut, on the 2nd day of May, 1997.
ECHLIN INC.
By: /s/ Larry W. McCurdy
-------------------------
Larry W. McCurdy
President and Chief Executive
Officer
POWER OF ATTORNEY
The undersigned directors and officers of Echlin Inc. do
hereby constitute and appoint Jon P. Leckerling and Edward D. Toole
or either of them, our true and lawful attorneys-in-fact and agents
to do any and all acts and things in our name and behalf in our
capacities as directors and officers, and to execute any and all
instruments for us and in our names in the capacities indicated
below which such person or persons may deem necessary or advisable
to enable Echlin Inc. to comply with the Securities Act of 1933, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission, in connection with this
Registration Statement, including specifically, but not limited to,
power and authority to sign for us, or any of us, in the capacities
indicated below any and all amendments (including post-effective
amendments) hereto and we do hereby ratify and confirm all that
such person or persons shall do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities indicated on the 2nd day of May, 1997.
Name Title
---- -----
Principal Executive Officer:
/s/ Larry W. McCurdy
- -------------------------
Larry W. McCurdy President and Chief Executive
Officer; Director
Principal Financial Officer:
/s/ Joseph A. Onorato
- -------------------------
Joseph A. Onorato Vice President and Chief
Financial Officer
Principal Accounting Officer:
/s/ Kenneth T. Flynn, Jr.
- -------------------------
Kenneth T. Flynn, Jr. Vice President and Controller
II-6
<PAGE>
/s/ John F. Creamer, Jr.
- -------------------------
John F. Creamer, Jr. Vice Chairman of the Board
and Director
/s/ Milton P. DeVane
- -------------------------
Milton P. DeVane Director
/s/ John E. Echlin, Jr.
- -------------------------
John E. Echlin, Jr. Director
/s/ John F. Gustafson
- -------------------------
John F. Gustafson Director
/s/ Donald C. Jensen
- -------------------------
Donald C. Jensen Director
/s/ Trevor O. Jones
- -------------------------
Trevor O. Jones Chairman of the Board and
Director
/s/ Frederick J. Mancheski
- -------------------------
Frederick J. Mancheski Director
/s/ Phillip S. Myers
- -------------------------
Phillip S. Myers Director
/s/ William P. Nusbaum
- -------------------------
William P. Nusbaum Director
/s/ Jerome G. Rivard
- -------------------------
Jerome G. Rivard Director
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <S>
2. -Asset Purchase Agreement dated as of March 20, 1997, as
amended, by which the Company acquired certain assets of
Industria e Comercio Brosol Ltda.
5. -Opinion of Jon P. Leckerling, Esq. as to the legality of the
Common Stock being offered under this Registration Statement.
24(a) -Consent of Price Waterhouse LLP.
24(b) -Consent of Counsel. (Included in Exhibit 5 hereto).
25. -Powers of Attorney. (Included on the signature page hereto).
</TABLE>
II-8
<PAGE>
ECHLIN INC. [LOGO] EXHIBIT 5
100 Double Beach Road
Branford, CT 06405
May 2, 1997
Echlin Inc.
100 Double Beach Road
Branford, CT 06405
Gentlemen:
In connection with the registration under the Securities Act of 1933,
as amended, of 531,108 shares of common stock, one dollar ($1.00) par value, of
Echlin Inc., a Connecticut corporation ("Echlin"), I have examined such
corporate records and other documents, including the registration statement on
Form S-3, to be filed with the Securities and Exchange Commission, relating to
such shares (the "Registration Statement"), and have reviewed such matters of
law as I have deemed necessary for this opinion. Based on such examination, I
advise you that in my opinion:
1. Echlin is a corporation duly organized and existing under the
laws of the State of Connecticut.
2. All necessary corporate action on the part of Echlin has been
taken to authorize the registration of shares of common stock
by Echlin, and when sold as contemplated in the Registration
Statement, such shares will be legally issued, fully paid and
nonassessable.
I consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Jon P. Leckerling
------------------------------
Jon P. Leckerling
:jea
<PAGE>
EXHIBIT 24A
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
September 24, 1996, which appears on page 31 of the 1996 Annual Report to
Shareholders of Echlin Inc., which is incorporated by reference in Echlin Inc.'s
Annual Report on Form 10-K for the year ended August 31, 1996. We also consent
to the incorporation by reference of our report on the Financial Statement
Schedule, which appears on page 12 of such Annual Report on Form 10-K. We also
consent to the reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Stamford, Connecticut
April 30, 1997
<PAGE>
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 Rua
Taquari, 1328/38, 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 Rodovia Indio Tibirica,
Km 39, in the city of Ribeirao Pires, 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,
Vila Iara, 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 Tempo de Servico -
FGTS) No. 1912702 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 "Carter"), 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.
Rodovia Indio Tibirica, Km 39
Vila Bromberg, Bairro Represa
09400-970, Ribeirao Pires, SP, Brazil
Attn.: Mr. Nelson Higino da Silva
Telephone: 235-9190/9377
Fax: 256-1036
With copy to:
Uniao de Comercio e Participacoes Ltda.
Cidade de Deus, Vila Iara
06029-900, Osasco, SP, Brazil
Attn.: Mr. Domingos Figueiredo Abreu
Telephone: 704-5122
Fax: 704-5449
If to Buyer:
Echlin do Brasil Industria e Comercio Ltda.
Rua Taquari, 1328/38
03166-901 Sao Paulo, SP, Brazil
Attn.: Mr. Plinio V. Genz
Telephone: 291-4055
Fax: 264-3151
With copy to:
Echlin, Inc.
100 Double Beach Road
06405 Branford, Connecticut, USA
Attn.: Corporate Secretary
Telephone: (001 203) 481-5751
Fax: (001 203) 481-6485
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 Carlos Zani and Luiz
Carlos Angelotti 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.
<PAGE>
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/ Nelson Higino da Silva
--------------------------
By: Nelson Higino da Silva
Title: Delegated Manager
/s/ Joao Carlos Zani
--------------------------
By: Joao Carlos Zani
Title: Delegated Manager
BUYER: ECHLIN DO BRASIL INDUSTRIA E COMERCIO LTDA.
/s/ Plinio Virgilio Genz
--------------------------
By: Plinio Virgilio Genz
Title: Director President
/s/ Braulio de Carvalho
--------------------------
By: Braulio de Carvalho
Title: Finance Director
GURANTORS: UNIAO DE COMERCIO E PARTCIPACOES LTDA.
/s/ Marcio Arter Laurelli Cypriano
----------------------------------
Marcio Arter Laurelli Cypriano
/s/ Dorival Antonio Bianchi
---------------------------
Dorival Antonio Bianchi
ECHLIN, INC.
/s/ Thomas P. Marchese
--------------------------
By: Thomas P. Marchese
Title: Assistant Vice President Corporate
Development
WITNESSES:
1. /s/ Orivaldir Odair Simoes
----------------------------
Orivaldir Odair Simoes
2. /s/ Sergio Goncalves Braga
----------------------------
Sergio Goncalves Braga
<PAGE>
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 Rua Taquari, 1328/38, 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 Rodovia Indio Tibirica,
Km 39, in the city of Ribeirao Pires, 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,
Vila Iara, 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/ Nelson Higino da Silva
-------------------------------
By: Nelson Higino da Silva
Title: Delegated Manager
/s/ Joao Carlos Zani
-------------------------------
By: Joao Carlos Zani
Title: Delegated Manager
Buyer: ECHLIN DO BRASIL INDUSTRIA E COMERCIO LTDA.
/s/ Plinio Virgilio Genz
-------------------------------
By: Plinio Virgilio Genz
Title: Director President
/s/ Braulio de Carvalho
-------------------------------
By: Braulio de Carvalho
Title: Finance Director
Guarantors: UNIAO DE COMERCIO E PARTICIPACOES LTDA.
/s/ Antonio Bornia
-------------------------------
By: Antonio Bornia
/s/ Marcio Artur Laurelli Cypriano
-------------------------------
By: Marcio Artur Laurelli Cypriano
WITNESSES:
/s/ Fatima A. Carr
- -------------------
ECHLIN INC.
/s/ Thomas P. Marchese
-------------------------------
By: Thomas P. Marchese
Title: Assistant Vice President Corporate
Development
WITNESSES:
/s/ Edward D. Toole
- ----------------------------
/s/ Julie E. Amendola
- ----------------------------
