Document:

sage-ex104_11.htm

 

exhibit 10.4

SEVERANCE and CHANGE IN CONTROL AGREEMENT

This Severance and Change in Control Agreement (this “Agreement”) is made as of March 21, 2017 by and between Sage Therapeutics, Inc., a Delaware corporation (the “Company”), and Michael Cloonan (the “Executive”) and shall become effective on the date of hire with the Company.

1.Purpose.  The Company considers it essential to the best interests of its stockholders to promote and preserve the continuous employment of key management personnel.  The Board of Directors of the Company (the “Board”) recognizes that, as is the case with many corporations, the possibility of a Change in Control (as defined in Section 2 hereof) exists and that such possibility, and the uncertainty and questions that it may raise among management, may result in the departure or distraction of key management personnel to the detriment of the Company and its stockholders.  Therefore, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s key management, including the Executive, to their assigned duties without distraction, including in the face of potentially disturbing circumstances arising from the possibility of a Change in Control.  Nothing in this Agreement shall be construed to affect the at-will nature of the employment relationship, the Executive shall not have any right to be retained in the employ of the Company.

2.Change in Control.  A “Change in Control” shall be deemed to have occurred upon the occurrence of any one of the following events: (a) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (b) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (c) the sale of all of the stock of the Company to an unrelated person, entity or group thereof acting in concert, or (d) any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.

3.Terminating Event.

A “Terminating Event” shall mean any of the events provided in this Section 3:

(a)Termination by the Company.  Termination by the Company of the employment of the Executive with the Company for any reason other than for Cause, death or Disability.  For purposes of this Agreement, “Cause” shall mean, as determined by the Company in good faith:

(i)the indictment the Executive of any felony, any crime involving the Company, or any crime involving fraud, moral turpitude or dishonesty;  

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(ii)any unauthorized use or disclosure of the Company’s proprietary information which has an adverse effect on the Company’s business or reputation.  As used in this paragraph, "Proprietary Information" means any information in whatever form, tangible or intangible, related to the business of the Company unless the information is publicly available in hard copy or electronic format, through lawful means; 

(iii)any intentional misconduct or gross negligence on the Executive’s part which has a materially adverse effect on the Company’s business or reputation; or

(iv)the Executive’s repeated and willful failure to perform the duties, functions and responsibilities of the Executive’s position after a written warning from the Company.

A Terminating Event shall not be deemed to have occurred pursuant to this Section 3(a) solely as a result of the Executive becoming an employee of any direct or indirect successor to the business or assets of the Company, rather than continuing as an employee of the Company following a Change in Control.  For purposes hereof, the Executive will be considered “Disabled” if, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from his duties to the Company on a full‐time basis for 180 calendar days in the aggregate in any 12-month period.

(b)Termination by the Executive for Good Reason.  Termination by the Executive of the Executive’s employment with the Company for Good Reason.  For purposes of this Agreement, “Good Reason” shall mean that the Executive has complied with the “Good Reason Process” (hereinafter defined) following, the occurrence of any of the following events:

(i)a material diminution in the Executive’s responsibilities, authority or duties;

(ii)a material diminution in the Executive’s base salary except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company; 

(iii)a material change, defined as  miles or more, in the geographic location at which the Executive is required to provides services to the Company, not including business travel and short-term assignments; or

(iv)a material breach of this Agreement by the Company.

“Good Reason Process” shall mean that (i) the Executive reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) the Executive notifies the Company in writing of the first occurrence of the Good Reason condition within 60 days of the first occurrence of such condition; (iii) the Executive cooperates in good faith with the Company’s efforts, for a period not less than 30 days following such notice (the “Cure Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) the Executive provides a Notice of Termination to the Company within 60 days after the end of the Cure Period.  If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

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4.Change in Control Payment.  In the event a Terminating Event occurs on or within the 12 months immediately after a Change in Control (such 12-month period, the “Change in Control Period”), subject to the Executive signing a separation agreement containing, among other provisions, a general release of claims in favor of the Company and related persons and entities, confidentiality, return of property and non-disparagement, in the form attached hereto as Attachment A (the “Separation Agreement and Release”) and the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination or end of the Cure Period , the following shall occur

(a)the Company shall pay to the Executive an amount equal to the sum of (i) 9 months of the Executive’s annual base salary in effect immediately prior to the Terminating Event (or the Executive’s annual base salary in effect immediately prior to the Change in Control, if higher), and  (ii) a pro rata portion of the Executive’s target bonus for the fiscal year in which the termination of employment occurs, determined by multiplying the target bonus by a fraction, the numerator of which shall be the number of days during the fiscal year in which the Executive was employed by the Company and the denominator of which shall be 365; 

(b)if the Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation , then the Company shall pay to the Executive a lump sum payment, in an amount equal to 12 times the  monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company; 

(c)notwithstanding anything to the contrary in any applicable option agreement or stock-based award agreement, all stock options and other stock-based awards with time-based vesting held by the Executive shall immediately accelerate and become fully exercisable and nonforfeitable as of the Executive’s Date of Termination conditioned upon the Separation Agreement and Release becoming irrevocable; and

(d)the amounts payable under this Section 4 shall be paid out in a lump sum commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the amounts shall be paid in the second calendar year by the last day of such 60-day period.  All other wages earned, including, but not limited to, accrued vacation, to the Date of Termination shall be paid on the Date of Termination. 

5.Severance Outside the Change in Control Period.  In the event a Terminating Event occurs at any time other than during the Change in Control Period, subject to the Executive signing the Separation Agreement and Release and the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination, the following shall occur:

(a)the Company shall pay to the Executive an amount equal to 12 months times the Executive’s annual base salary in effect immediately prior to the Terminating Event; 

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(b)if the Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Executive a monthly cash payment for 12 months in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company; and

(c)the amounts payable under this Section 5 shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over 12 months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Severance Amount shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination.  Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).   

6.Additional Limitation.

(a)Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code and the applicable regulations thereunder (the “Compensatory Payments”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), (or any successor provision), then the Compensatory Payments shall be reduced so that the sum of all of the Compensatory Payments shall be $1.00 less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code (or any successor provision); provided that such reduction shall only occur if it would result in the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Compensatory Payments were not subject to such reduction.  In such event, the Compensatory Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Compensatory Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code:  (i) cash payments not subject to Section 409A of the Code; (ii) cash payments subject to Section 409A of the Code; (iii) equity-based payments and acceleration; and (iv) non-cash forms of benefits; provided that in the case of all the foregoing Compensatory Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).  

(b)For purposes of this Section 6, the “After Tax Amount” means the amount of the Compensatory Payments less all federal, state, and local income, excise and employment taxes imposed on the Executive as a result of the Executive’s receipt of the Compensatory Payments.  For purposes of determining the After Tax Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. 

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(c)The determination as to whether a reduction in the Compensatory Payments shall be made pursuant to Section 6(a) shall be made by an accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive.  Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

7.Section 409A.

(a)Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive’s “separation from service” within the meaning of Section 409A of the Code, the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Executive’s separation from service, or (B) the Executive’s death.  

(b)The parties intend that this Agreement will be administered in accordance with Section 409A of the Code.  To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code.  The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

(c)All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement.  All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred.  The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year.  Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(d)To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.”  The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

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(e)The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

8.Term.  This Agreement shall take effect on the date first set forth above and shall terminate upon the earlier of (a) the termination of the Executive’s employment with the Company for any reason other than the occurrence of a Terminating Event, or (b) the date all amounts have been paid to the Executive upon a Terminating Event pursuant to Section 4 or Section 5 hereof.

9.Withholding.  All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.

10.Notice and Date of Termination.

(a)Notice of Termination.  After a Change in Control and during the term of this Agreement, any purported termination of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with this Section 10.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.  

(b)Date of Termination.  “Date of Termination” shall mean:  (i) if the Executive’s employment is terminated by his death, the date of his death; (ii) if the Executive’s employment is terminated on account of Executive’s Disability or by the Company for Cause, the date on which Notice of Termination is given; (iii) if the Executive’s employment is terminated by the Company without Cause the date on which a Notice of Termination is given; (iv) if the Executive’s employment is terminated by the Executive without Good Reason, 30 days after the date on which a Notice of Termination is given, and (v) if the Executive’s employment is terminated by the Executive with Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period.  Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.

11.No Mitigation.  The Company agrees that, if the Executive’s employment by the Company is terminated during the term of this Agreement, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 4 or Section 5 hereof.  Further, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned by the Executive as the result of employment by another employer.

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12.Consent to Jurisdiction.  The parties hereby consent to the jurisdiction of the Superior Court or the Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts.  Accordingly, with respect to any such court action, the Executive (a) submits to the personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process. 

13.Integration.  This Agreement constitutes the entire agreement between the parties with respect to severance pay, benefits and accelerated vesting in connection with any termination of employment, to the extent inconsistent with any prior agreements supersedes the inconsistent provisions of such prior agreements between the parties concerning such subject matter, including without limitation any provisions of any offer letter or employment agreement relating to severance pay or benefits in connection with the ending of Executive’s employment relationship with the Company.  In the interest of clarity, any agreement relating to confidentiality, noncompetition, nonsolicitation or assignment of inventions shall not be affected by the Agreement.  

14.Successor to the Executive.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal representatives, executors, administrators, heirs, distributees, devisees and legatees.  In the event of the Executive’s death after a Terminating Event but prior to the completion by the Company of all payments due him under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to his death (or to his estate, if the Executive fails to make such designation).

15.Enforceability.  If any portion or provision of this Agreement (including, without limitation, any portion or provision of any Section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

16.Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

17.Notices.  Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service of by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company, or to the Company at its main office, attention of the Board of Directors.

18.Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

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19.Effect on Other Plans and Agreements.  An election by the Executive to resign for Good Reason under the provisions of this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the provisions of any of the Company's benefit plans, programs or policies.  Nothing in this Agreement shall be construed to limit the rights of the Executive under the Company’s benefit plans, programs or policies except as otherwise provided in Section 6 hereof, and except that the Executive shall have no rights to any severance benefits under any Company severance pay plan, offer letter or otherwise.  In the event that the Executive is party to an agreement with the Company providing for payments or benefits under such agreement and this Agreement, the terms of this Agreement shall govern and Executive may receive payment under this Agreement only and not both.  Further, Section 4 and Section 5 of this Agreement are mutually exclusive and in no event shall Executive be entitled to payments or benefits pursuant to Section 4 and Section 5 of this Agreement.  

20.Governing Law.  This is a Massachusetts contract and shall be construed under and be governed in all respects by the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of laws principles of such Commonwealth.  With respect to any disputes concerning federal law, such disputes shall be determined in accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the First Circuit.

21.Successor to Company.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement to the same extent that the Company would be required to perform it if no succession had taken place.  Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall be a material breach of this Agreement.  

22.Gender Neutral.  Wherever used herein, a pronoun in the masculine gender shall be considered as including the feminine gender unless the context clearly indicates otherwise.

23.Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document. 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year first above written.

 

	
SAGE THERAPEUTICS, INC.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Jeffrey Jonas

	
 
	
 
	
Name:  Jeffrey M. Jonas

	
 
	
 
	
Title:    Chief Executive Officer

	
 
	
 
	
 

 

	
 
	
 
	
/s/ Michael Cloonan

	
Michael Cloonan

 

 

[Signature Page to Severance and Change in Control Agreement]ACTIVE/73518052.2

AMECURRENT 709779592.3 19-Aug-14 18:52EXHIBIT 10.1

 

CONFIDENTIAL TREATMENT

 

The material marked “[REDACTED]”
on the Schedule 2.1 to this agreement has been omitted from the filed copy of this agreement pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission by the Company accordance with Rule 24b-2 of the Securities Exchange
Act of 1934, as amended. The Company has furnished an un-redacted copy the agreement to the Securities and Exchange Commission
as part of the Company’s application for confidential treatment.

 

AGREEMENT FOR THE PURCHASE AND
SALE OF QUOTAS OF CAPITAL OF PST ELETRÔNICA LTDA.

 

The parties to this Agreement
for the Purchase and Sale of Quotas of Capital of PST Eletrônica LTDA. (the “Agreement”) are:

 

STONERIDGE, INC. (“Stoneridge”
or the “Buyer”), an Ohio corporation, with its corporate office at 39675 MacKenzie Drive, Novi, MI, 48377,
U.S.A., represented herein by its administrator, COARACI NOGUEIRA DO VALE, Brazilian citizen, married, lawyer, with office in the
City and State of São Paulo, at Rua Jerônimo da Veiga, 45, 2nd floor, suite 21, holder of Identity Card RG No. 2.676.014-9
SSP-SP, Individual Taxpayers’ Registration (CPF/MF) No. 043.350.028-91;

 

ADRIANA CAMPOS DE CERQUEIRA
LEITE (“Adriana Leite”), a Brazilian citizen, divorced, psychologist, resident in the City
of Campinas, State of São Paulo, at Alameda Bauinias, No. 350, Condomínio Chácaras, Alto de Nova Campinas,
holder of the Identity Card RG No. 15.664.219-0 SSP/SP, Individual Taxpayer Registration (CPF/MF) No. 108.088.738-57; and

 

MARCOS FERRETTI
(“Ferretti”), a Brazilian citizen, married, electrical engineer, with office in the City of Campinas,
State of São Paulo, at Rua José Rocha Bonfim, 214, Bloco D, sala 116, Condomínio Praça Capital, holder
of Identity Card RG No. 13.602.771, Individual Taxpayers’ Registration (CPF/MF) No. 061.910.648-45 (Ferretti and Adriana
Leite are each a “Seller” and collectively, the “Sellers”);

 

and as “Intervening
Party” and “Guarantor”:

 

PST ELETRÔNICA
LTDA. (the “Company”), a Brazilian limitada (a limited liability company), with head office
in the City of Manaus, State of Amazonas, at Avenida Açaí, 2045, Plot 2.2, Distrito Industrial, Federal Taxpayers’
Registration (CNPJ/MF) No. 84.496.066/0001-04, with its articles of association recorded with the Commercial Registry of the State
of Amazonas, under NIRE 13200.277.643 on August 27, 1993, and subsequent amendments.

 

    	 	1	 

     

    

 

The Buyer, the Sellers
and the Intervening Party and Guarantor hereinafter jointly referred to as “Parties”.

 

WHEREAS, Adriana
Leite is the owner of an aggregate of one billion, six hundred thirty four million, three hundred forty three thousand, four
hundred ninety nine (1,634,343,499) quotas of capital of the Company, representing 17.33333334% of the Company’s corporate
capital on the present date (the “Adriana Leite Quotas”), as provided for in the 11th Amendment
to the Articles of Association of the Company (“11th Amendment”);

 

WHEREAS, Adriana
Leite wishes to sell to the Buyer all Adriana Leite Quotas;

 

WHEREAS, Ferretti
is the owner of an aggregate of eight hundred seventeen million, one hundred seventy one thousand, seven hundred fifty (817,171,750)
quotas of capital of the Company, representing 8.66666666% of the Company’s corporate capital on the present date (the “Ferretti
Quotas” and, together with Adriana Leite Quotas, the “Purchased Quotas”);

 

WHEREAS, Ferretti
wishes to sell to the Buyer all Ferretti Quotas;

 

WHEREAS, Buyer wishes
to purchase from the Sellers their respective Purchased Quotas, which jointly represent twenty six percent (26%) of the Company’s
corporate capital on the present date, pursuant to the terms and subject to the conditions set forth herein; and

 

WHEREAS, the Parties
have entered into a Quotaholders Agreement of the Company on October 29, 1997, as amended on December 21, 2004, December 29, 2011
and December 22, 2015 (“Quotaholders Agreement”).

 

Accordingly, subject to
the terms and conditions contained in this Agreement, the Sellers, the Buyer and the Intervening Party agree as follows:

 

1.           Purchase
and Sale of the Purchased Quotas. Upon the terms set forth herein, at the present date Sellers sell, assign and transfer
to the Buyer, and the Buyer purchases from the Sellers, the Purchased Quotas, free and clear of all liens, pledges, encumbrances,
options, rights of first refusal and all claims, whether judicial or not, of every kind whatsoever.

 

1.1           Buyers’
obligations under this Agreement are transferable to another controlled entity of Buyer, at Buyer’s choice, provided that
Buyer remains jointly liable with such controlled entity for such obligations.

 

    	 	2	 

     

    

 

2.           Consideration.

 

2.1           Consideration.
As full consideration for the Purchased Quotas, the Buyer (i) pays to the Sellers in immediately available funds, at the present
date, an initial payment in Reais equivalent to one million and five hundred thousand dollars (USD 1,500,000.00) (the “Initial
Payment”), and (ii) shall pay to the Sellers a contingent supplementary purchase price (the “Supplementary
Purchase Price”) in Reais, payable in accordance with Section 2.5, in either 2021 or 2022, as applicable,
equivalent to twenty-six percent (26%) of the multiple of four (4) times the Company’s 2020 or 2021 EBITDA (earnings before
interest, taxes, depreciation and amortization), in accordance with the following formula:

 

Supplementary Purchase
Price = (EBITDA x 4.0) x .26 

 

The determination of the Supplementary Purchase
Price shall (i) take into account the rules set forth in Section 2.3 below, and (ii) be calculated based on the audited
financial statements as of December 31, 2020 or 2021 prepared in accordance with the accounting principles adopted by the Company
in the ordinary course of business (“Business”, as defined bellow), and consistent with past practices,
i.e., Brazilian GAAP (the Initial Payment together with the Supplementary Purchase Price (if any), the “Acquisition
Price”).

 

For the purposes of this Agreement, the Company’s
“Business” shall mean the business activities carried out by the Company on the present date, including
the manufacture and commercialization of electronic products in general, import or export, and those set forth in its corporate
purpose pursuant to its Articles of Association currently in force, defined in more detail in Schedule 2.1.

 

2.2         Determination
of the Fiscal Year for the Calculation of the Supplementary Purchase Price: The calculation of the
Supplementary Purchase Price shall take into account the operations and results of the Company in the fiscal years of 2020 or 2021,
at the sole discretion of each Seller in relation to his or her respective Purchased Quotas. Each Seller shall have autonomy and
discretion with respect to the choice of the fiscal year to be adopted as basis for payment of the respective Supplementary Purchase
Price (e.g., Adriana Leite may select 2020 and Ferretti may select 2021, and vice-versa).

 

2.2.1           No
later than March 15th, the Buyer shall provide to the Sellers audited financial statements of the Company for the preceding
fiscal year (2020 and/or 2021, as the case may be), the report of the management for the approval of accounts of the preceding
year, and the final draft of the respective annual report, and any additional information reasonably requested by the Sellers,
provided that such information is readily available to the Company and/or the Buyer. Upon having timely received all such information,
each Seller shall notify the Buyer in writing no later than March 31, 2021 whether such Seller elects to use the 2020 fiscal year
for determination of the Supplementary Purchase Price. If a Seller does not elect the 2020 fiscal year then the 2021 fiscal year
shall automatically be used to calculate the Supplementary Purchase Price, if any. In case the Buyer and the Company fail to timely
submit to the Sellers the documentation listed in the first paragraph of this Section, the deadline for electing 2020 EBITDA for
purposes of calculating the Supplementary Purchase Price shall be extended to the same number of days of delay.

 

    	 	3	 

     

    

 

2.3         Rules
for Determining Supplementary Purchase Price. In determining the Supplementary Purchase Price under the formula
in Section 2.1, the following rules shall apply:

 

		(i)	All recurring expenses resulting from government mandated
laws and regulations that impact the activities developed by the Company, such as, but not limited to, of an environmental nature,
shall be considered;

 

		(ii)	Any non-recurring expenses of the Company, including but
not limited to expenses arising from (a) activities carried out by the Company outside the Business, and (b) any acquisition,
merger, consolidation, amalgamation, spin off or any other corporate restructuring involving the Company shall not be considered;

 

		(iii)	As stated above, the valuation (for purposes of the Supplementary
Purchase Price) of the Purchased Quotas shall be determined based on an EBITDA formula determined in accordance with this Agreement
and with the rules of Section 2.1. The EBITDA shall be based on the product lines of the Business as of the present
date. Therefore, the Buyer agrees that, notwithstanding the Supplementary Purchase Price, in a case where the Buyer makes a decision
to sell any of the Company’s product lines or business, the Buyer shall pay the Sellers a twenty-six percent (26%) share
of the net proceeds of the sold product line or business which shall be divided between them in accordance with the respective
equity ownership percentages of the Purchased Quotas, based on the same value that is received by the Company for the sale of
the product line or business;

 

		(iv)	The payment of the Supplementary Purchase Price to the
Sellers shall be made in immediately available funds, in a single installment, in the date of the completion of the sale of the
relevant Product Line and/or Business; and

 

		(v)	If the Buyer makes an acquisition, merger, etc. in an area
other than the Business, as defined in Section 2.1, the results and the direct costs of the new business will be
excluded from the valuation of the Company for purposes of the calculation of the Supplementary Purchase Price.

 

		2.3.1	If there is not positive EBITDA in the fiscal year for
determining the Supplementary Purchase Price then the Seller shall not be entitled to payment of the Supplementary Purchase Price.

 

    	 	4	 

     

    

 

2.4          Verification
of the Supplementary Purchase Price. After electing to receive the Supplementary Purchase Price (in 2021 or 2022),
the Buyer and the respective Seller(s) shall proceed with the verification and confirmation of the Supplementary Purchase Price
before its final payment:

 

		(i)	After the election by a Seller with respect to the 2020
or 2021 EBITDA for purposes of payment of the Supplementary Purchase Price by the Buyer, the Buyer shall, no later than seven
(7) days thereafter, notify such Seller with its bona fide calculation of the final result of the Supplementary Purchase Price
and deliver its supporting data, in a report format (“Supplementary Purchase Price Report”), following the
rules on notices provided for in Section 12.3.

 

		(ii)	After the receipt of the Supplementary Purchase Price Report,
each Seller shall have a twenty (20) day period to express its acceptance or challenge to the terms of the Supplementary Purchase
Price Report and may request the Buyer and the Company to provide any reasonable accounting, financial and operational information
which may be necessary in its opinion towards the decisions making process of whether to accept or challenge the proposed calculation
of the Supplementary Purchase Price by the Buyer. Such information to the extent readily available shall be provided by the Buyer
and/or the Company to the Sellers no later than five (5) Business Days from the date of request.

 

		(ii.i)	If after the twenty (20) day period each Seller does not
react or accepts the proposed Supplementary Purchase Price calculation by the Buyer, the acceptance of the terms will be presumed
and the Purchase Price will be considered due and payable immediately.

 

		(ii.ii)	If each Seller, with the exclusion of what is provided
for in Section 2.4(iii), disagrees with the terms of the Supplementary Purchase Price Report, such Seller shall
expressly reject such terms within mentioned twenty (20) day period (also informing its bona fide calculation of the final result
of the Supplementary Purchase Price) through written notice sent to the Buyer, following the rules on notices provided for in
Section 12.3.

 

		(iii)	The parties hereby agree that the following matters cannot
be subject to challenge by the Sellers:

 

		(iii.i)	The audited financial statements of the Company as of December
31, 2020 or 2021, as by as prepared in accordance with the accounting principles adopted by the Company in the ordinary course
of business, as set forth in Section 2.1 (the basis for the EBTIDA calculation) and except for cases of fraud, gross
negligence or manifest error.

 

    	 	5	 

     

    

 

		(iii.ii)	The multiple of four (4) times the Company’s 2020
or 2021 EBITDA, as set forth in Section 2.1.

 

		(iii.iii)	Any of the rules set forth in Section 2.3
for the determination of the Supplementary Purchase Price under the formula described in Section 2.1.

 

		(iv)	In case of challenge mentioned in Section 2.4(ii.ii)
above, the respective Parties agree to commence immediate good faith discussions on the numbers in the Supplementary Purchase
Price Report, in order to try and reach an agreement. Those discussions shall not exceed ten (10) days.

 

		(v)	If, by the end of the discussion period an agreement on
the Supplementary Purchase Price Report is not reached, the respective Parties in dispute agree to resolve it by mutually engaging
and submitting such dispute to, and the same shall be finally resolved in accordance with the provisions of this Agreement by
PricewaterhouseCoopers LLP or, if such firm is not available or unwilling to accept such engagement, such other independent accounting
firm mutually acceptable to the Buyer and the Sellers (the “Independent Accountant”). As promptly as
practicable thereafter (and, in any event, within seven (7) days after the Independent Accountant’s engagement), the Buyer
and the Sellers shall each prepare and submit a presentation detailing each party’s complete statement of the proposed resolution
of Supplementary Purchase Price to the Independent Accountant, and the Independent Accountant can only consider the application
of the principles set forth herein and respective presentations by each of the Buyer and the Sellers (who may act jointly). The
Buyer and Sellers shall use their respective commercially reasonable efforts to cause the Independent Accountant to resolve Supplementary
Purchase Price dispute as soon as practicable, but in any event within fifteen (15) days (or such other period of time as the
Buyer and the Sellers shall agree) after submission by the Buyer and the Sellers of their respective presentations, and to set
forth in a written statement its final determination of the Supplementary Purchase Price amount. The Independent Accountant may
not assign a value to any item greater than the greatest value for any item or part of the Supplementary Purchase Price claimed
by either party or less than the least value for such item claimed by either party. The decision of the Independent Accountant
shall be deemed final and binding upon the Parties in dispute and enforceable by a court of competent jurisdiction. Each Party
shall bear its own costs and expenses in connection with the resolution of such Disputed Items by the Independent Accountant.
The fees and expenses of the Independent Accountant shall be allocated as follows the Buyer (50%) and the Sellers (50%).

 

    	 	6	 

     

    

 

(vi)        After
determination or agreement on the Supplementary Purchase Price and for purposes of (and before) its payment in accordance with
Section 2.5(b) below, the EBITDA cost in R$ shall be converted to US Dollars based on the PTAX, option 5, using the average of
the ask and bid rates, announced two (2) days before the date of payment of the Supplementary Purchase Price so that the purchase
price amount is set in US Dollars.

 

2.5          Payment
of the Acquisition Price. The payment of the Acquisition Price shall be made by the Buyer to the Sellers as follows:

 

		(a)	Initial Payment.

 

		(i)	an amount in Reais equivalent to one million in
US Dollars (US$ 1,000,000.00) (equal to 2/3 of the Initial Payment), as converted based on the PTAX, option 5, using the average
of the ask and bid rates, announced two (2) days before the present date, shall be paid to a bank account previously indicated
by Adriana Leite; and

 

		(ii)	an amount in Reais equivalent to five hundred thousand
in US Dollars (US$ 500,000.00) (equal to 1/3 of the Initial Payment) as converted based on the PTAX, option 5, using the
average of the ask and bid rates, announced two (2) days before the present date, shall be paid to a bank account previously indicated
by Ferretti.

 

(b)          Supplementary
Purchase Price. After the verification and confirmation established in Section 2.4, the payment of the Supplementary
Purchase Price shall be made by the Buyer to the Sellers as follows:

 

		(i)	an amount in U.S. Dollars equivalent to the amount of Reais
converted based on the PTAX, option 5, using the average of the ask and bid rates, announced two (2) days before the date in which
the Supplementary Purchase Price will be paid, corresponding to 2/3 of the Supplementary Purchase Price, calculated in accordance
with Sections 2.1, 2.2 and 2.3, and verified in accordance with Section 2.4, shall be paid by the Buyer to Adriana Leite, in immediately
available funds, to the bank account indicated by her prior to the payment date, on a date to be mutually agreed between the Buyer
and Adriana Leite, but no later than one hundred and twenty (120) days after the closing of the 2020 or 2021 fiscal year, as applicable;
and

 

    	 	7	 

     

    

 

		(ii)	an amount in U.S. Dollars equivalent to the amount of Reais
converted based on the PTAX, option 5, using the average of the ask and bid rates, announced two (2) days before the date in which
the Supplementary Purchase Price will be paid, corresponding to 1/3 of the Supplementary Purchase Price, shall be paid by the
Buyer to Ferretti, in immediately available funds, to the bank account indicated by him prior to the payment date, on a date to
be mutually agreed between the Buyer and Ferretti, but no later than one hundred and twenty (120) days after the closing of the
2020 or 2021 fiscal year, as applicable.

 

		 	The payment of the Supplementary Purchase Price shall be made to Adriana Leite and Ferretti
                                                                                    as described above, provided, however, that in the event of the dispute mechanism of Section 2.4(v) is
                                                                                    triggered, such payment will occur within seven (7) days after the final determination by the Independent Accountant of the
                                                                                    Supplementary Purchase Price.

 

2.6          Reports.
Until the Supplementary Purchase Price is fully paid or it is determined that there is no Supplementary Purchase Price, the
Buyer shall provide the Sellers (i) no later than March 15th with audited financial statements of the Company for the
preceding fiscal year and (ii) when available - but no later than forty-five (45) days from the end of each quarter - unaudited
quarterly P&L reports which shall contain, among other information, detailed description of each year’s EBITDA reconciled
calculations as set forth in Section 2.1. In addition, the Sellers may request to the Buyer all reasonable documents
and information necessary for monitoring the Business and financials; provided, however, the Sellers shall use the information
provided by the Buyer under this section or any other section of the Agreement solely for the purposes set forth under Sections
2.2 and 2.4, and agree that any such information provided is confidential and shall be treated as such and shall not be shared
with third parties other than Buyer’s professional advisors who agree to treat the information as confidential.

 

2.7          Call
Option. In case the Buyer fails to timely pay the Supplementary Purchase Price in accordance with the provisions
of Section 2.5(b) above, the Sellers shall have the option, at their respective sole discretion and at any time during
the Call Exercise Period, to purchase quotas of the Company owned by the Buyer in the same equity ownership proportion of the Purchased
Quotas on the present date 17.33333334% and 8.66666666%) of the total quotas issued by the Company may be purchased by Adriana
Leite and Ferretti, respectively) (“Call Quotas”), and the Buyer shall sell and transfer such Call Quotas
to each of the Sellers, for an aggregate purchase price of one thousand Dollars (US$ 1,000.00), being an amount in Reais,
corresponding to 2/3 of such amount in respect to Adriana Leite’s Call Quotas and an amount in Reais, corresponding to 1/3
of such amount in respect to Ferretti’s Call Quotas (“Repurchase Price”) (“Call Option”).

 

    	 	8	 

     

    

 

		2.7.1	Exercise of the Call Option. The Call Option
may be exercised by each Seller within a maximum of thirty (30) days from the end of the final term for the payment of the Supplementary
Purchase Price, in accordance with the provisions of Section 2.5(b) above (“Call Exercise Period”),
after which the Call Option expires, by means of the delivery of a notice to the Buyer for the exercise of the Call Option (“Notice
of Exercise of Option”), pursuant to the rules on notices provided for in Section 12.3, provided,
however, that the Notice of Exercise of Option cannot be served if the Supplementary Purchase Price has been paid. If the Notice
of Exercise of Option is timely delivered the Buyer may within three (3) business days of its receipt pay to the Seller(s) the
Supplementary Purchase Price, in full, and upon such payment the Call Option shall be deemed cancelled and the Buyer will be under
no obligation to Complete the Call Option pursuant to Section 2.7.2.

 

		2.7.2	Completion of the Call Option.

 

		(a)	The completion of the purchase of the Call Quotas pursuant
to the exercise of the Call Option by each of the Sellers shall take place at the office of the Company on the date specified
in the Notice of Exercise of Option (which shall be a date not earlier than ten (10) days from the date of receipt of the Notice
of Exercise of Option (“Completion Term”).

 

		(b)	each of the Sellers shall pay to the Buyer, within the
Completion Term, the Repurchase Price for the Call Quotas, as established in Section 2.7, through an international wire transfer
to the Buyer’s bank account timely indicated by the Buyer.

 

		(c)	it is the obligation of the Sellers and the Buyer to, within
the Completion Term, do, or cause to be done, all acts and measures, and execute or cause to be executed all documentation, especially
an Amendment to the Articles of Association of the Company, to effect the assignment and transfer of the Call Quotas to each of
the Sellers, as the case may be, and to obtain, or cause to be obtained, all approvals and consents required for the assignment
and transfer of the Call Quotas.

 

2.8          Guarantee.
The Company hereby agrees and undertakes to be the guarantor of the Buyer payment obligations undertaken herein, being severally
liable with Buyer, waiving all benefits of order.

 

    	 	9	 

     

    

 

3.           Closing

 

3.1          Actions
at Closing. At the present date (“Closing”), upon the execution of the 12th Amendment
to the Articles of Association of the Company (“12th Amendment”):

 

		(a)	the Sellers shall transfer the Purchased Quotas to the
Buyer;

 

		(b)	the Buyer shall pay the Initial Payment to the Sellers,
in accordance with the provisions of Section 2.5(a); and

 

		(c)	the Parties shall terminate the Quotaholders Agreement,
by means of the execution of a termination agreement (“QA Termination Agreement”), which shall be duly
filed in the Company`s headquarters, with due regard of the provisions of Section 6.1 below in connection with the provisions
related to the Unpaid Dividends, which shall survive such termination.

 

		3.1.1	All deliveries, payments and other transactions and documents
relating to the Closing (i) shall be independent and shall not be effective unless and until all are effective, and (ii) shall
be deemed to be consummated simultaneously.

 

4.           Representations
and Warranties of the Sellers. The Sellers, severally but not jointly, represent and warrant to the Buyer as follows, such
representations and warranties made as of the date hereof, which shall be true and correct, as of the present date.

 

4.1          Authority
of Each Seller; Validity and Enforceability; No Conflicts. Each Seller is a natural person and citizen of Brazil. Each
Seller has full mental capacity to enter into this Agreement. Each Seller has full power and authority:

 

		(a)	to enter into this Agreement, to carry out its obligations
hereunder and to consummate the transactions contemplated hereby. The execution and delivery by each Seller of this Agreement
and the performance by each Seller of its obligations hereunder will not conflict with or result in a violation or breach of any
provision of any law or governmental order applicable to the Seller.

 

		(b)	necessary to execute, deliver and perform its obligations
under this Agreement to be executed and delivered by the each Seller. This Agreement has been duly authorized,
executed and delivered by each Seller, and does not require any further authorization or consent of the Seller. This Agreement
is the legal, valid and binding obligation of each Seller, enforceable against the Sellers in accordance with its terms, except
as may be limited by bankruptcy, insolvency or other Laws affecting creditors’ rights generally, or as may be modified by
a court of equity.

 

    	 	10	 

     

    

 

4.2          Ownership
of Quotas. Adriana Leite is the record and beneficial owner of the Adriana Leite Quotas, and has valid title to the Adriana
Leite Quotas, free and clear of any and all liens, and there are no restrictions on her right to transfer the Adriana Leite Quotas
to the Buyer pursuant to this Agreement. Ferretti is the record and beneficial owner of the Ferretti Quotas, and has valid title
to the Ferretti Quotas, free and clear of any and all liens, and there are no restrictions on his right to transfer the Ferretti
Quotas to the Buyer pursuant to this Agreement.

 

4.3          Due
Diligence. Each Seller: (i) has participated in the drafting and negotiation of this Agreement; (ii) has been represented
in negotiations for, and preparation of, this Agreement by counsel of his or her choosing; (iii) has read the Agreement and has
had the Agreement fully explained by his or her counsel; (iv) has received all of the information he or she considers necessary
or appropriate for deciding whether to enter into the transaction contemplated herein; and (v) is fully aware of the contents and
legal effect of this Agreement.

 

4.4        Other
Quota Matters.

 

(a)          Upon
consummation of the transactions contemplated by this Agreement, the Buyer will own all of the Adriana Leite Quotas and all of
the Ferretti Quotas, free and clear of any lien or encumbrance.

 

(b)          The
sale of the Adriana Leite Quotas and the Ferretti Quotas does not violate any agreement, arrangement or commitment to which any
of Adriana Leite, Ferretti or the Company is a party nor is the sale subject to or in violation of any preemptive or similar rights
of any other person.

 

(c)          There
are no outstanding or authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments
of any character relating to the Purchased Quotas or obligating any Seller to sell any Purchased Quotas, or any other interest
in the Company. There are no voting trusts, quotaholders’ agreements (except for what is referred to in Section 6.1 below),
proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Adriana Leite Quotas
and the Ferretti Quotas.

5.           Representation and Warranties of the Buyer.

 

5.1          Authority;
Validity and Enforceability; No Conflicts. The Buyer is an Ohio corporation duly incorporated in good standing
under Ohio law. The Buyer has the full power and authority:

 

		(a)	to enter into this Agreement, to carry out its obligations
hereunder and to consummate the transactions contemplated hereby. The execution and delivery by the Buyer of this Agreement and
the performance by Buyer of its obligations hereunder will not conflict with or result in a violation or breach of any provision
of any law or governmental order applicable to Buyer.

 

    	 	11	 

     

    

 

		(b)	necessary to execute, deliver and perform its obligations
under this Agreement to be executed and delivered by the Buyer. This Agreement has been duly authorized, executed
and delivered by the Buyer, and does not require any further authorization or consent of the Buyer or its board of directors
or shareholders. This Agreement is the legal, valid and binding obligation of the Buyer, enforceable against the Buyer in accordance
with its terms, except as may be limited by bankruptcy, insolvency or other Laws affecting creditors’ rights generally,
or as may be modified by a court of equity.

 

5.2          Due
Diligence. The Buyer: (i) has participated in the drafting and negotiation of this Agreement; (ii) has been represented
in negotiations for, and preparation of, this Agreement by counsel of its choosing; (iii) has read the Agreement and has had the
Agreement fully explained by its counsel; (iv) has received all of the information it considers necessary or appropriate for deciding
whether to enter into the transaction contemplated herein; and (v) is fully aware of the contents and legal effect of this Agreement.

 

6.           Covenants.

 

6.1          Unpaid
Dividends. The outstanding debts representing 2010, 2011 and 2012 dividends declared and payable by the Company to the
Sellers, as indicated on Schedule 6.1 herein (“Unpaid Dividends”), shall be paid to each
of them by January 1, 2020, as agreed among the Parties under the Quotaholders Agreement (provided that the provisions related
to such Unpaid Dividends were first established in the third amendment to the Quotaholders Agreement) and under the Termination
of the Quotaholders Agreement executed among the Parties on the present date, including in connection with the monetary adjustments
provided therein.

 

6.2          Protection
for Purchased Quotas. The Sellers and the Company shall maintain the Buyer fully protected, therefore, free and unencumbered,
of any Actions from any third party challenging the purchase of the Purchased Quotas under this Agreement, undertaking, consequently,
to take all possible actions, whether judicial or not, necessary to sustain the completion of the transfer of the Purchased Quotas.

 

6.3          SUFRAMA
Communication. The Buyer undertakes to cause the Company to communicate, within thirty (30) days as of the present date,
the Superintendência da Zona Franca de Manaus (“SUFRAMA”) pursuant to Resolution No. 203/2012
(article 48), the transfer of the Purchased Quotas sold hereby implies a change to the corporate structure of the Company.

 

6.4          Fees
and Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated by this
Agreement (including among others, the relevant fees of financial advisors, lawyers, accounts, auditors and/or any other consultants)
shall be paid by the party incurring the cost or expense.

 

    	 	12	 

     

    

 

6.5          Certain
Other Agreements. Each of the Sellers and the Buyer warrant and represent that there are no agreements relating to the
subject matters and transactions contemplated in this Agreement, other than those expressly referred in this Agreement.

 

7.           Change
of Control.

 

7.1          Change
of Control of the Buyer. This Agreement does not prevent the Buyer from carrying out, or being a part of, a corporate reorganization
including those which may result in a transfer of its Corporate Control (as defined below). However, the liabilities and obligations
assumed by the Buyer hereunder shall remain, even (i) in the case of a transfer of Buyer’s Corporate Control; (ii) in the
case of succession of the Buyer by another company; or (iii) if the Buyer assigns its equity stake in the Company to third parties,
directly or indirectly. In these cases, the Buyer undertakes to comply, and/or cause any successor to comply (Buyer remaining jointly
liable), with the performance of the Buyer’s obligations undertaken under this Agreement.

 

7.2          Transfer
of Buyers’ Corporate Control. For purposes of this Agreement, “Transfer of Buyer’s Corporate Control”
means the occurrence of any of the following: (i) the Board of Directors or the shareholders of the Buyer approve a consolidation
or merger that results in the shareholders of the Buyer immediately prior to the transaction giving rise to the consolidation or
merger owning less than fifty percent (50%) of the total combined voting power of all classes of stock entitled to vote of the
surviving entity immediately after the consummation of the transaction giving rise to the merger or consolidation; (ii) the Board
of Directors or the shareholders of the Buyer approve the sale of substantially all of the assets of the Buyer; or (iii) any person
or other entity (other than the Buyer or a Buyer’s subsidiary or any Buyer employee benefit plan (including any trustee of
any such plan acting in its capacity as trustee)) purchases any the Buyer common shares (or securities convertible into common
shares) pursuant to a tender or exchange offer without the prior consent of the Board of Directors, or becomes the beneficial owner
of securities of the Buyer, representing fifty percent (50%) or more of the voting power of the Buyer’s outstanding voting
securities.

 

8.           Amendment;
Waiver and Termination

 

8.1          Amendment.
This Agreement may not be amended, except by an instrument in writing signed by all Parties hereto.

 

8.2          Waiver.
No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of a party of any right hereunder operate as a waiver of any other right, power or privilege hereunder,
nor shall any partial exercise of any right, power or privilege hereunder preclude any other further exercise thereof or the exercise
of any other right, power or privilege hereunder.

 

    	 	13	 

     

    

 

9.           Survival
of Representations and Warranties

 

9.1          Survival
of Representations and Warranties. The representations and warranties contained in Section 4.1 (Authority
of Each Seller, Validity and Enforceability, No Conflicts); Section 4.2 (Ownership of Quotas); Section 4.3
(Due Diligence), Section 5.1 (Authority, Validity, Enforceability, No Conflicts), and Section 5.2 (Due
Diligence); shall survive the Closing, without limitation. Any investigation by or on behalf of any Party hereto shall not constitute
a waiver as to enforcement of any representation or warranty.

 

10.         Miscellaneous.

 

10.1        Irrevocability.
This Agreement is irrevocable, obligating not only the Parties, but also their heirs, successors and assigns.

 

10.2        Validity.
The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

 

10.3        Notices.
All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be delivered
in: sent by certified mail (return receipt requested) to the respective parties as follows:

 

If to the Buyer:

 

Stoneridge, Inc.

39675 MacKenzie Drive

Novi, MI, 48377, U.S.A.

Attention: Mr. Jon DeGaynor, President and Chief Executive
Officer

 

with a copy to:

 

Tucker Ellis LLP

950 Main Avenue, Suite 1100

Cleveland, Ohio 44113-7213

Attention: Robert M. Loesch

 

Rosman, Penalva, Franco, Vale

Rua Jerônimo da Veiga, 45 – 2nd floor, Suite
21, CEP 04536-000

São Paulo, SP - Brazil

Attention: Coaraci Nogueira do Vale

 

    	 	14	 

     

    

 

If to the Sellers:

 

Adriana Campos de Cerqueira Leite (Seller)

Alameda Bauinias, No. 350, Condomínio Chácaras,
Alto de Nova Campinas, Zip Code 13085048

Campinas, SP - Brazil

 

with a copy to:

 

Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados

Al. Joaquim Eugenio de Lima, No. 447

São Paulo, SP – Brazil

Attention: Renato Tastardi Portella

 

Marcos Ferretti (Seller)

Rua José Rocha Bonfim, No. 214, Bloco D, room 116

Condomínio Praça Capital, Zip Code 13080-650

Campinas, SP - Brazil

 

with a copy to:

 

Mesquita Ortiz Advogados

Avenida José Bonifácio, 2021, Jd. das Paineiras,
ZIP CODE 13092-305

Campinas, SP – Brazil

Attention: Eduardo Frediani Duarte Mesquita

 

If to the Company:

 

PST Eletrônica da Amazônia Ltda.,

Avenida Açaí, 2045, Lote 2.2, CEP 69075-020

Manaus, AM - Brazil

Attention: Caetano Roberto Ferraiolo

 

or to such other address as the person to whom
notice is given may have previously furnished to the others in writing in the manner set forth above (provided that notice of any
change of address shall be effective only upon receipt of notice of the change). Notices will be deemed to have been given hereunder
when delivered personally, fifteen (15) business days after deposit in the mail, or when confirmation of receipt is received; provided.

 

10.4        Governing
Law; Dispute Resolution. This Agreement shall be governed by the laws of Brazil. The courts sitting in the City of São
Paulo, State of São Paulo, shall have exclusive jurisdiction over any questions regarding the construction and interpretation
or any controversy or claim arising out of or relating to this Agreement, or the breach thereof or relationship created thereby.

 

    	 	15	 

     

    

 

10.5        Headings.
The headings in this Agreement are for convenience of reference only and are not intended to be part of or to affect the meaning
or interpretation of this Agreement.

 

10.6        Parties
in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party to this Agreement, and
nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature
under or by reason of this Agreement.

 

10.7        Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which shall constitute
one and the same agreement.

 

10.8        Press
Releases. The Buyer may issue a press release or make other public statements about this Agreement and the transactions
contemplated hereby as may be required by law and the rules of the New York Stock Exchange or in circumstances in which the Buyer
believes such press release or public statement is in the best interest of the Buyer. Also, this Agreement may be disclosed in
filings required to be made by the Buyer with the U.S. Securities and Exchange Commission.

 

10.9        Entire
Agreement. This Agreement constitutes the entire agreement among the Parties with respect to its subject matter and supersedes
all other prior agreements and understandings, both written and oral, among the Parties with respect to that subject matter.

 

[REMAINDER OF PAGE BLANK – SIGNATURE
PAGE FOLLOWS]

 

    	 	16	 

     

    

And, being in agreement,
the Parties execute this instrument in 6 (six) counterparts of one sole content and effect, in the presence of the undersigned
witnesses.

 

AGREEMENT FOR THE PURCHASE AND SALE OF QUOTAS
OF PST ELETRÔNICA LTDA.

 

Campinas, May 16, 2017

BUYER:

 

Stoneridge,
Inc.

 

	/s/ Coaraci Nogueira do Vale	 	 
	 	 	 
	By: Coaraci Nogueira do Vale	 	 
	Title: Attorney in fact	 	 

 

SELLERS:

 

	/s/ Adriana Campos De Cerqueira Leite	 	 
	 	 	 
	ADRIANA CAMPOS DE CERQUEIRA LEITE	 	 
	 	 	 
	/s/ Marcos Ferretti	 	 
	 	 	 
	MARCOS FERRETTI	 	 

 

	INTERVENING PARTY/GUARANTOR:	 	 
	 	 	 
	PST ELETRÔNICA LTDA.	 	 
	 	 	 
	/s/ Ricardo Cavalcanti Alves	 	/s/ Caetano Roberto Ferraiolo
	 	 	 
	By: Ricardo Cavalcanti Alves	 	By: Caetano Roberto Ferraiolo
	Title: Financial/Administrative Director 	 	Title: Director of Operations

 

WITNESSES:

 

	/s/ Jéssica Rodrigues Guimarães	 	 
	 	 	 
	Name: Jéssica Rodrigues Guimarães	 	 
	ID: 59.511.900-0	 	 

 

	/s/ Jéssica de Oliveira Vasques	 	 
	 	 	 
	Name: Jéssica de Oliveira Vasques	 	 
	ID: 36.300.301-D	 	 

 

    	 	17	 

     

    

 

Schedule 2.1

Business

 

	A)	No longer in production
	 	Instrument Clusters Helium
	 	Navigator
	 	Window Lifter Mechanism
	B)	Currently under production
	 	Car Alarms
	 	Motorcycle Alarms
	 	Car Tracker/Blocker System
	 	Vehicles Tracker Services Rendered
	 	Cargo Tracker Services Rendered
	 	Door Lock Actuator
	 	Electric Windows Sets
	 	Electric Window Controller
	 	Electric Lock Sets
	 	Instrument Clusters
	 	Car Audio
	 	Ultrasound Modules
	 	Telematic Units
	 	Telematics Platforms
	 	Blind Spot Sensors
	 	Rear Power Windows
	 	Parking Sensors

 

[REDACTED]

 

    	 	18	 

     

    

 

Schedule 6.1

Unpaid Dividends (R$)

 

	 	 	Adriana	 	 	Sergio	 	 	Potamotryngi	 	 	Marcos	 	 	Brienzer	 	 	Stoneridge	 	 	Alphabet	 	 	Total	 
	2010 25% minimum	 	 	-	 	 	 	1,062,062	 	 	 	1,062,062	 	 	 	531,031	 	 	 	531,031	 	 	 	1,628,495.32	 	 	 	1,557,691.18	 	 	 	6,372,373	 
	2010 Additional	 	 	-	 	 	 	2,544,519.50	 	 	 	2,544,519.50	 	 	 	1,272,260	 	 	 	1,272,260	 	 	 	3,901,596.82	 	 	 	3,731,962.18	 	 	 	15,267,118	 
	2010 paid to Marcos	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(1,803,291	)	 	 	(1,803,291	)	 	 	-	 	 	 	-	 	 	 	(3,606,582	)
	2011 25% minimum	 	 	1,067,729.50	 	 	 	-	 	 	 	1,067,729.50	 	 	 	41,107.60	 	 	 	1,026,622.40	 	 	 	1,637,185.49	 	 	 	1,566,003.51	 	 	 	6,406,378	 
	2011 Additional	 	 	3,203,189	 	 	 	-	 	 	 	3,203,189	 	 	 	123.322,77	 	 	 	3,079,866.23	 	 	 	4,911,556.72	 	 	 	4,698,010.78	 	 	 	19,219,135	 
	2012 25% minimum	 		141,821	 	 		-	 	 		141,821	 	 		5,460.10	 	 		136,360.90	 	 		614,557.98	 	 		596,375.80	 	 		1,636,397	 
	Balance	 	 	4,412,739.50	 	 	 	3,606,581.50	 	 	 	8,019,321	 	 	 	169,890.40	 	 	 	4,242,849.53	 	 	 	12,693,392.34	 	 	 	12,150,043.44	 	 	 	45,294,819	 

 

    	 	19

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