-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O14TDaAvxakb0Ld0LV4SBgzs0XJuRIE/5GhxC3XZCBORr6Q4RY7A7Q09hsVGIkXe fdM0vK9xE9c2jo6DS1gh9A== 0000031348-97-000009.txt : 19970507 0000031348-97-000009.hdr.sgml : 19970507 ACCESSION NUMBER: 0000031348-97-000009 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970505 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ECHLIN INC CENTRAL INDEX KEY: 0000031348 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 060330448 STATE OF INCORPORATION: CT FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-26533 FILM NUMBER: 97595910 BUSINESS ADDRESS: STREET 1: 100 DOUBLE BEACH RD CITY: BRANFORD STATE: CT ZIP: 06405 BUSINESS PHONE: 2034815751 MAIL ADDRESS: STREET 1: 100 DOUBLE BEACH ROAD CITY: BRANFORD STATE: CT ZIP: 06405 FORMER COMPANY: FORMER CONFORMED NAME: ECHLIN MANUFACTURING CO DATE OF NAME CHANGE: 19820602 S-3 1 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 =================================================================
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 - ----------------------------------------------------------------- Common Stock, 531,108 $32.00 $16,995,456 $5,150 par value $1.00 per share
================================================================= (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. ================================================================= ECHLIN INC. CROSS REFERENCE SHEET ---------------------
ITEM NUMBER AND CAPTION IN CAPTION IN FORM S-3 PROSPECTUS - ------------------- ---------- 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
- ------------------------- * Omitted as inapplicable or in the negative. 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. 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 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
NUMBER OF SHARES OF COMMON STOCK WHICH MAY NAME AND ADDRESS OF BE OFFERED FOR SALE SELLING STOCKHOLDER AND REGISTERED - ------------------- ------------------------ Industria e Comercio Brosol Ltda. 531,108 Rodovia Indio Tibirica, Km 39 Vila Bromberg, Bairro Represa 09400-970, Ribeirao Pires, SP, Brazil
4 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 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 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 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
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. 531,108 Shares ECHLIN INC. Common Stock __________ PROSPECTUS __________ May __, 1997 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: 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 ======
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.) --------------------------- 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 ITEM 16. LIST OF EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 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).
II-3 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 (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 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 /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 EXHIBIT INDEX
Exhibit No. Description - ------- ----------- 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).
II-8 EX-5 2 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 EX-24 3 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 EX-2 4 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. 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 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 - ---------------------------- -----END PRIVACY-ENHANCED MESSAGE-----