EXHIBIT 10.2
STONERIDGE, INC.
$200,000,000
11 1/2% Senior Notes due 2012
PURCHASE AGREEMENT
New York, New York
April 25, 2002
Deutsche Bank Securities Inc.
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
NatCity Investments, Inc.
As Representatives of the several Initial Purchasers
named in Schedule I hereto
c/o Deutsche Bank Securities Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Stoneridge, Inc., a corporation organized under the laws of Ohio
(the "Company"), and the guarantors named in Schedule II hereto (the
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"Guarantors" and, together with the Company, the "Issuers"), jointly and
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severally, propose to issue and sell to the several initial purchasers named in
Schedule I hereto (the "Initial Purchasers"), for whom you (the
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"Representatives") are acting as representatives, $200,000,000 principal amount
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of its 11 1/2% Senior Notes due 2012 (the "Securities"). The Securities are to
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be issued under an indenture (the "Indenture"), to be dated as of May 1, 2002,
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among the Issuers and Fifth Third Bank, as trustee (the "Trustee"). The
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Securities have the benefit of the guarantees (the "Guarantees") provided for in
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the Indenture and, unless the context otherwise requires, any reference to the
"Securities" shall include a reference to the related Guarantees. The Securities
also have the benefit of a registration rights agreement (the "Registration
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Rights Agreement") of even date herewith among the Issuers and the Initial
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Purchasers, pursuant to which the Issuers have agreed to register the Securities
under the Act subject to the terms and conditions therein specified. To the
extent there are no additional parties listed on Schedule I other than you, the
term Representatives as used herein shall mean you as the Initial Purchasers,
and the terms Representatives and Initial Purchasers shall mean either the
singular or plural as the context
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requires. The use of the neuter in this Agreement shall include the feminine and
masculine wherever appropriate. Certain terms used herein are defined in Section
17 hereof.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Act in reliance upon exemptions
from the registration requirements of the Act.
In connection with the sale of the Securities, the Issuers have
prepared a preliminary offering memorandum, dated April 15, 2002 (as amended or
supplemented at the Execution Time, including any and all exhibits thereto and
any information incorporated by reference therein, the "Preliminary
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Memorandum"), and a final offering memorandum, dated April 25, 2002 (as amended
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or supplemented at the Execution Time, including any and all exhibits thereto
and any information incorporated by reference therein, the "Final Memorandum").
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Each of the Preliminary Memorandum and the Final Memorandum sets forth certain
information concerning the Issuers and the Securities. Each Issuer hereby
confirms that it has authorized the use of the Preliminary Memorandum and the
Final Memorandum, and any amendment or supplement thereto, in connection with
the offer and sale of the Securities by the Initial Purchasers. Unless stated to
the contrary, any references herein to the terms "amend," "amendment" or
"supplement" with respect to the Final Memorandum shall be deemed to refer to
and include any information filed under the Exchange Act subsequent to the
Execution Time which is incorporated by reference therein. The Issuers
understand that the Initial Purchasers propose to make offers and sales of the
Securities purchased by the Initial Purchasers hereunder only on the terms and
in the manner set forth in the Final Memorandum, as soon as the Initial
Purchasers deem advisable after this Agreement has been executed and delivered,
(i) to persons in the United States whom the Initial Purchasers reasonably
believe to be qualified institutional buyers (as defined in Rule 144A under the
Act) in transactions under Rule 144A under the Act and (ii) outside the United
States to persons other than U.S. persons in reliance upon and in compliance
with Regulation S under the Act.
1. Representations and Warranties. The Issuers, jointly and
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severally, represent and warrant to each Initial Purchaser as set xxxx below in
this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. At the Execution Time and on the
Closing Date, the Final Memorandum did not, and will not (and any amendment or
supplement thereto, at the date thereof and at the Closing Date, will not),
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Issuers
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make no representation or warranty as to the information contained in or omitted
from the Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity
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with information furnished in writing to the Company by or on behalf of the
Initial Purchasers through the Representatives specifically for inclusion
therein. Any document incorporated by reference in the Preliminary Memorandum
and/or the Final Memorandum, when filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
(b) None of the Issuers, nor any of their respective Affiliates,
nor any person acting on any of their behalf has, directly or indirectly, made
offers or sales of any security (as defined in Section 2(a)(1) of the Act), or
solicited offers to buy any security, under circumstances that would require the
registration of the Securities under the Act.
(c) None of the Issuers, nor any of their respective Affiliates,
nor any person acting on any of their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States.
(d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
(e) None of the Issuers, nor any of their respective Affiliates,
nor any person acting on any of their behalf has engaged in any directed selling
efforts with respect to the Securities, and each of them has complied with the
offering restrictions requirement of Regulation S. Terms used in this paragraph
have the meanings given to them by Regulation S.
(f) The Issuers have been advised by the NASD's PORTAL Market
that the Securities have been designated PORTAL-eligible securities in
accordance with the rules and regulations of the NASD.
(g) No Issuer is, nor after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Final Memorandum will be, an "investment company" within the meaning of
the Investment Company Act, without taking account of any exemption arising out
of the number of holders of such Issuer's securities.
(h) The Company is subject to and in material compliance with
the reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
(i) No Issuer has paid or agreed to pay to any person any
compensation for soliciting another to purchase any Securities or any other
securities of such Issuer that are similar to the Securities (except as
contemplated by this Agreement).
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(j) No Issuer has taken, directly or indirectly, any action
designed to cause or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in the stabilization or
manipulation of the price of any security of any Issuer to facilitate the sale
or resale of the Securities.
(k) The information provided by any Issuer pursuant to Section
5(h) hereof will not, at the date thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(l) Each of the Issuers and their respective subsidiaries has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized with
full corporate power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the Final
Memorandum, and is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which requires such
qualification, except for such jurisdictions in which the failure to be so
qualified or to be in good standing, singly or in the aggregate, would not have
a material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of such Issuer and its subsidiaries, taken as a
whole.
(m) All the outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise set forth in the
Final Memorandum, all outstanding shares of capital stock of such subsidiaries
are owned by the Company either directly or through wholly owned subsidiaries
free and clear of any perfected security interest or any other security
interests, claims, liens or encumbrances.
(n) The Company's capitalization is as set forth in the Final
Memorandum.
(o) The statements in the Final Memorandum under the heading
"Certain United States Federal Tax Considerations," "Description of the Notes"
and "Description of Credit Facility" fairly and accurately summarize the matters
therein described.
(p) This Agreement has been duly authorized, executed and
delivered by the Issuers; the Indenture has been duly authorized and, assuming
due authorization, execution and delivery thereof by the Trustee, when executed
and delivered by the Issuers, will constitute a legal, valid, binding instrument
enforceable against the Issuers in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from time to time
in effect and to general principles of equity); the Securities have been duly
authorized, and, when
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executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers under this Agreement,
will have been duly executed and delivered by the Company and will constitute
the legal, valid and binding obligations of the Company entitled to the benefits
of the Indenture (subject, as to the enforcement of remedies, to applicable
bankruptcy, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity); the
Exchange Securities have been duly authorized, and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
as contemplated by the Registration Rights Agreement, will have been duly
executed and delivered by the Company and will constitute the legal, valid and
binding obligations of the Company entitled to the benefits of the Indenture
(subject, as to the enforcement of remedies, to applicable bankruptcy,
insolvency, moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity); the Guarantees have
been duly authorized, and, when the Securities have been executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers, will have been duly executed and
delivered by the Guarantors and will constitute the legal, valid and binding
obligations of the Guarantors entitled to the benefits of the Indenture
(subject, as to the enforcement of remedies, to applicable bankruptcy,
insolvency, moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity); and the
Registration Rights Agreement has been duly authorized and, when executed and
delivered by the Issuers, will constitute the legal, valid, binding and
enforceable instrument of the Issuers (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in effect and
to general principles of equity).
(q) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with the
transactions contemplated herein or in the Indenture or the Registration Rights
Agreement, except such as will be obtained under the Act and the Trust Indenture
Act and such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the Initial
Purchasers in the manner contemplated herein and in the Final Memorandum and the
Registration Rights Agreement.
(r) Neither the execution and delivery of the Indenture, this
Agreement or the Registration Rights Agreement, nor the issuance and sale of the
Securities, nor the consummation of any other of the transactions herein or
therein contemplated, nor the fulfillment of the terms hereof or thereof will
conflict with, result in a breach or violation or imposition of any lien, charge
or encumbrance upon any property or assets of any Issuer or any of its
subsidiaries pursuant to, (i) the charter or by-laws of any Issuer or any of its
subsidiaries; (ii) the terms of any indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which such Issuer or
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any of its subsidiaries is a party or bound or to which its or their property is
subject, except for such conflicts, breaches or violations or impositions of any
lien, charge or encumbrance which, singly or in the aggregate, would not have a
material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of such Issuer and its subsidiaries, taken as a
whole; or (iii) any statute, law, rule, regulation, judgment, order or decree
applicable to such Issuer or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over such Issuer or any of its subsidiaries or any of its or
their properties.
(s) The consolidated historical financial statements of the
Company and its consolidated subsidiaries included in the Final Memorandum
present fairly in all material respects the financial condition, results of
operations and cash flows of the Company and its consolidated subsidiaries as of
the dates and for the periods indicated, comply as to form with the applicable
accounting requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein); the
selected financial data set forth under the caption "Selected Historical and Pro
Forma Consolidated Financial Data" in the Final Memorandum fairly present, on
the basis stated in the Final Memorandum, the information included therein; the
pro forma financial data included in the Final Memorandum include assumptions
that provide a reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the related pro
forma adjustments give appropriate effect to those assumptions, and the pro
forma adjustments reflect the proper application of those adjustments to the
historical financial statement amounts in the pro forma financial data included
in the Final Memorandum; the pro forma financial data included in the Final
Memorandum comply as to form in all material respects with the applicable
accounting requirements of Regulation S-X under the Act; and the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of those data.
(t) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving any Issuer or
any of its subsidiaries or its or their property is pending or, to the best
knowledge of the Issuers, threatened that (i) could reasonably be expected to
have a material adverse effect on the performance of this Agreement, the
Indenture or the Registration Rights Agreement, or the consummation of any of
the transactions contemplated hereby or thereby; or (ii) could reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of such Issuer and its
subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(u) Each Issuer and each of its subsidiaries owns or leases all
such properties as are necessary to the conduct of its operations as presently
conducted.
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(v) No Issuer nor any subsidiary of any Issuer is in violation
or default of (i) any provision of its charter or bylaws; (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject; or (iii) any
statute, law, rule, regulation, judgment, order or decree applicable to such
Issuer or any of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having jurisdiction
over such Issuer or such subsidiary or any of its properties, as applicable,
except, with respect to clauses (ii) and (iii), for such violations or defaults
which, singly or in the aggregate, would not have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or
properties of such Issuer and its subsidiaries, taken as a whole.
(w) Xxxxxx Xxxxxxxx LLP ("AA"), who have certified certain
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financial statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated financial
statements included in the Final Memorandum, are independent public accountants
with respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
(x) Each Issuer has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of such Issuer and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto) and has paid all taxes required to be paid by
it and any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such assessment,
fine or penalty that is currently being contested in good faith or as would not
have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of such Issuer and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(y) No labor problem or dispute with the employees of any Issuer
or any of its subsidiaries exists or is threatened or imminent, and no Issuer is
aware of any existing or imminent labor disturbance by the employees of any of
its or its subsidiaries' principal suppliers, contractors or customers, that
could have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of such Issuer and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
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(z) Each Issuer and each of its material subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in
which they are engaged; all policies of insurance and fidelity or surety bonds
insuring any Issuer or any of its subsidiaries or their respective businesses,
assets, employees, officers and directors are in full force and effect; each
Issuer and its material subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; and there are no claims by
any Issuer or any of its material subsidiaries under any such policy or
instrument as to which any insurance company is denying liability or defending
under a reservation of rights clause; no Issuer nor any of its material
subsidiaries has been refused any insurance coverage sought or applied for; and
no Issuer nor any of its material subsidiaries has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a material
adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of such Issuer and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto).
(aa) No subsidiary of any Issuer is currently prohibited,
directly or indirectly, from paying any dividends to such Issuer, from making
any other distribution on such subsidiary's capital stock, from repaying to such
Issuer any loans or advances to such subsidiary from such Issuer or from
transferring any of such subsidiary's property or assets to such Issuer or any
other subsidiary of such Issuer, except as described in or contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto).
(bb) Each Issuer and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, except for such licenses, certificates, permits and other
authorizations the failure of which to possess, singly or in the aggregate,
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of such Issuer and its
subsidiaries, taken as a whole, and no Issuer nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of such Issuer and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto).
(cc) Each Issuer and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are exe-
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cuted in accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(dd) Each Issuer and its subsidiaries are (i) in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"); (ii) have received and are in compliance with all
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permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (iii) have not
received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of such Issuer and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto); except as set forth in the
Final Memorandum, no Issuer nor any of its subsidiaries has been named as a
"potentially responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(ee) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws, or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties); on the basis of such review, the
Company has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto).
(ff) With such exceptions as, singly or in the aggregate, would
not have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its subsidiaries,
taken as a whole: the Company and its sub-
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sidiaries have fulfilled their obligations, if any, under the minimum funding
standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and the regulations thereunder with
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respect to each "plan" (as defined in Section 3(3) of ERISA and such
regulations) in which employees of such Issuer and/or such subsidiary are
eligible to participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such regulations;
neither the Company nor any of its subsidiaries have incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title IV
of ERISA.
(gg) The statistical and market-related data included or
incorporated in the Final Memorandum are based on or derived from sources which
the Company believes to be reliable and accurate.
(hh) With such exceptions as, singly or in the aggregate, would
not have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its subsidiaries,
taken as a whole, the Issuers and their respective subsidiaries own, possess,
license or have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets, technology,
know-how and other intellectual property (collectively, the "Intellectual
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Property") necessary for the conduct of their respective businesses as now
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conducted or as proposed in the Final Memorandum to be conducted. Except as set
forth in the Final Memorandum under the heading "Business -- Patents and
Intellectual Property" and with such exceptions as, singly or in the aggregate,
would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, (a) there are no rights of third parties to any
such Intellectual Property; (b) there is no material infringement by third
parties of any such Intellectual Property; (c) there is no pending or, to the
Issuers' knowledge, threatened action, suit, proceeding or claim by others
challenging any Issuer's rights in or to any such Intellectual Property, and no
Issuer is aware of any facts which would form a reasonable basis for any such
claim; (d) there is no pending or, to the Issuers' knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any
such Intellectual Property, and no Issuer is aware of any facts which would form
a reasonable basis for any such claim; (e) there is no pending or, to the
Issuers' knowledge, threatened action, suit, proceeding or claim by others that
any Issuer infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others, and no Issuer is aware of
any other fact which would form a reasonable basis for any such claim; (f) there
is no U.S. patent or published U.S. patent application which contains claims
that dominate or may dominate any Intellectual Property described in the Final
Memorandum as being owned by or licensed to any Issuer or that interferes with
the issued or pending claims of any such Intellectual Property; and (g) there is
no prior art of which any Issuer is aware that
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may render any U.S. patent held by any Issuer invalid or any U.S. patent
application held by any Issuer unpatentable which has not been disclosed to the
U.S. Patent and Trademark Office.
(ii) The statements contained in the Final Memorandum under the
headings "Risk Factors -- Risk Factors Related to Our Business," "Business
-- Patents and Intellectual Property," "Business -- Environmental and Other
Regulations," "Business -- Legal Proceedings" and "Certain Relationships and
Related Party Transactions," insofar as such statements summarize legal matters,
agreements, documents, or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or proceedings.
(jj) Except as disclosed in the Final Memorandum, no Issuer (i)
has any material lending or other relationship with any bank or lending
affiliate of any Initial Purchaser and (ii) intends to use any of the proceeds
from the sale of the Securities hereunder to repay any outstanding debt owed to
any affiliate of any Initial Purchaser.
(kk) The Company has received from AA (i) a letter dated March
15, 2002 concerning AA's quality controls in connection with AA's audit of the
audited financial statements of the Company and its consolidated subsidiaries
included in the Final Memorandum and (ii) a letter dated April 9, 2002
concerning AA's quality controls in connection with AA's review of the unaudited
interim financial statements of the Company and its consolidated subsidiaries
included in the Final Memorandum (collectively, the "AA Representation
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Letters"), in each case including representations regarding the continuity of
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AA's personnel working on the audit or review, as the case may be, the
availability of national office consultation and the availability of personnel
at foreign affiliates of AA to conduct relevant portions of the audit or review,
as the case may be. Neither of the AA Representation Letters has been rescinded
and the Company has no reason to believe that the representations contain in the
AA Representation Letters are not true and correct in all respects.
Any certificate signed by any officer of any Issuer and delivered
to the Representatives or counsel for the Initial Purchasers in connection with
the offering of the Securities shall be deemed a representation and warranty by
such Issuer, as to matters covered thereby, to each Initial Purchaser.
2. Purchase and Sale. Subject to the terms and conditions and
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in reliance upon the representations and warranties herein set forth, the
Issuers, jointly and severally, agree to sell to each Initial Purchaser, and
each Initial Purchaser agrees, severally and not jointly, to purchase from the
Issuers, at a purchase price of 97.25% of the principal amount thereof, the
principal amount of Securities set forth opposite such Initial Purchaser's name
in Schedule I hereto.
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3. Delivery and Payment. Delivery of and payment for the
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Securities shall be made at 10:00 A.M., New York City time, on May 1, 2002,
which date and time may be postponed by agreement between the Representatives
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
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Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Initial Purchasers against payment by the
several Initial Purchasers through the Representatives of the purchase price
thereof to or upon the order of the Company by wire transfer payable in same-day
funds to the account specified by the Company. Delivery of the Securities shall
be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
4. Offering by Initial Purchasers. Each Initial Purchaser,
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severally and not jointly, represents and warrants to and agrees with each
Issuer that:
(a) It is either a qualified institutional buyer (as defined in
Rule 144A under the Act) or an accredited investor (within the meaning
of Rule 501(a) of the Act).
(b) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Act) and that,
in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is
aware that such sale is being made in reliance on Rule 144A; or (ii)
in accordance with the restrictions set forth in Exhibit A hereto.
(c) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising
(within the meaning of Regulation D) in the United States.
5. Agreements. The Issuers, jointly and severally, agree with
----------
each Initial Purchaser that:
(a) The Issuers will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as they may
reasonably request.
(b) The Issuers will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act that
are incorporated by reference therein, without the prior written
consent of the Representatives; provided, however, that, prior to the
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completion of the distribution of the Securities by the Initial
Purchasers (as determined by the Initial Purchasers), no Issuer will
file any document
-13-
under the Exchange Act that is incorporated by reference in the Final
Memorandum unless, prior to such proposed filing, such Issuer has
furnished the Representatives with a copy of such document for their
review and the Representatives have not reasonably objected to the
filing of such document. The Issuers will promptly advise the
Representatives when any document filed under the Exchange Act that is
incorporated by reference in the Final Memorandum shall have been
filed with the Commission.
(c) If at any time prior to the completion of the sale of
the Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
should be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Issuers promptly (i) will notify the
Representatives of any such event; (ii) subject to the requirements of
paragraph (b) of this Section 5, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final
Memorandum to the several Initial Purchasers and counsel for the
Initial Purchasers without charge in such quantities as they may
reasonably request.
(d) The Issuers will arrange, if necessary, for the
qualification of the Securities for sale by the Initial Purchasers
under the laws of such jurisdictions as the Initial Purchasers may
designate and will maintain such qualifications in effect so long as
required for the sale of the Securities; provided that in no event
--------
shall any Issuer be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject. The Issuers will promptly
advise the Representatives of the receipt by any Issuer of any
notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
(e) The Issuers will not, and will not permit any of their
respective Affiliates to, resell any Securities that have been
acquired by any of them.
(f) None of the Issuers, nor any of their respective
Affiliates, nor any person acting on any of their behalf will,
directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would
require the registration of the Securities under the Act.
-14-
(g) None of the Issuers, nor any of their respective Affiliates,
nor any person acting on any of their behalf will engage in any form
of general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities
in the United States.
(h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act, each Issuer will,
during any period in which it is not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act or it is not exempt from such
reporting requirements pursuant to and in compliance with Rule
12g3-2(b) under the Exchange Act, provide to each holder of such
restricted securities and to each prospective purchaser (as designated
by such holder) of such restricted securities, upon the request of
such holder or prospective purchaser, any information required to be
provided by Rule 144A(d)(4) under the Act. This covenant is intended
to be for the benefit of the holders, and the prospective purchasers
designated by such holders, from time to time of such restricted
securities.
(i) None of the Issuers, nor any of their respective Affiliates,
nor any person acting on any of their behalf will engage in any
directed selling efforts with respect to the Securities, and each of
them will comply with the offering restrictions requirement of
Regulation S. Terms used in this paragraph have the meanings given to
them by Regulation S.
(j) Each Issuer will cooperate with the Representatives and use
its best efforts to permit the Securities to be eligible for clearance
and settlement through The Depository Trust Company.
(k) No Issuer will for a period of 90 days following the
Execution Time, without the prior written consent of Deutsche Bank
Securities Inc., offer, sell or contract to sell, or otherwise dispose
of (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by such Issuer or any Affiliate of such
Issuer or any person in privity with such Issuer or any Affiliate of
such Issuer), directly or indirectly, or announce the offering of, any
debt securities issued or guaranteed by such Issuer (other than the
Securities).
(l) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(m) The Issuers, jointly and severally, agree to pay the costs
and expenses relating to the following matters: (i) the preparation of
the Indenture and the
-15-
Registration Rights Agreement, the issuance of the Securities and the
fees of the Trustee; (ii) the preparation, printing or reproduction of
the Preliminary Memorandum and Final Memorandum and each amendment or
supplement to either of them; (iii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for
counting and packaging) of such copies of the Preliminary Memorandum
and Final Memorandum, and all amendments or supplements to either of
them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (iv) the
preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes
in connection with the original issuance and sale of the Securities;
(v) the printing (or reproduction) and delivery of this Agreement, any
blue sky memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the
Securities; (vi) any registration or qualification of the Securities
for offer and sale under the securities or blue sky laws of the
several states (including filing fees and the reasonable fees and
expenses of counsel for the Initial Purchasers (which shall be
approximately $5,000) relating to such registration and
qualification); (vii) admitting the Securities for trading in the
PORTAL Market; (viii) the transportation and other expenses incurred
by or on behalf of Issuer representatives in connection with
presentations to prospective purchasers of the Securities; (ix) the
fees and expenses of any Issuer's accountants and the fees and
expenses of counsel (including local and special counsel) for any
Issuer; and (x) all other costs and expenses incident to the
performance by any Issuer of its obligations hereunder. It is
understood and agreed that, except as set forth above and in Section 7
hereof, the Initial Purchasers will pay all of their costs and
expenses, including fees and disbursements of their counsel, transfer
taxes payable on the resale of the Securities by them and any
advertising expenses connected with any offer they make.
6. Conditions to the Obligations of the Initial Purchasers. The
-------------------------------------------------------
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Issuers contained herein at the Execution Time and the Closing Date, to the
accuracy of the statements of the Company made in any certificates pursuant to
the provisions hereof, to the performance by the Issuers of their obligations
hereunder and to the following additional conditions:
(a) The Company shall have requested and caused Xxxxx &
Xxxxxxxxx LLP, counsel for the Issuers, and Xxxxx & Xxxxxxxx LLP,
Massachusetts special counsel for Stoneridge Control Devices, Inc., to
furnish to the Representatives their opinions, dated the Closing Date
and addressed to the Representatives, collectively to the effect that:
-16-
(i) each of the Issuers has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction in which it is chartered or organized, with
all requisite corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its
business as described in the Final Memorandum, and is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, except for such jurisdictions in which the failure
to be so qualified or to be in good standing, singly or in the
aggregate, would not have a material adverse effect on the cond
tion (financial or otherwise), prospects, earnings, business or
properties of such Issuer and its subsidiaries, taken as a whole;
(ii) all outstanding shares of capital stock of the Company
and each Guarantor have been duly and validly authorized and
issued and are fully paid and nonassessable, and, to the
knowledge of such counsel and except as otherwise set forth in
the Final Memorandum, all outstanding shares of capital stock of
the Guarantors are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any security
interest and, after due inquiry, any other security interests,
claims, liens or encumbrances; the Company's capitalization is as
set forth in the Final Memorandum;
(iii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against each Issuer in accordance with its terms
(subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect
and to general principles of equity); the Securities have been
duly and validly authorized and, when executed and authenticated
in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers under this Agreement,
will constitute legal, valid, binding and enforceable obligations
of the Company entitled to the benefits of the Indenture
(subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect
and to general principles of equity); the Exchange Securities
have been duly and validly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture
and delivered as contemplated by the Registration Rights
Agreement, will constitute legal, valid, binding and enforceable
obligations of the Company entitled to the benefits of the
Indenture (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to
time in effect and to general principles of equity); the Guaran-
-17-
tees have been duly and validly authorized and, when the
Securities have been executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid
for by the Initial Purchasers under this Agreement, will
constitute legal, valid, binding and enforceable obligations of
the Guarantors entitled to the benefits of the Indenture
(subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect
and to general principles of equity); the Registration Rights
Agreement has been duly authorized, executed and delivered and
constitutes the legal, valid, binding and enforceable instrument
of each Issuer (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to
time in effect and to general principles of equity); and the
statements set forth under the heading "Description of the Notes"
in the Final Memorandum, insofar as such statements purport to
summarize certain provisions of the Securities, the Indenture and
the Registration Rights Agreement, provide a fair summary of such
provisions;
(iv) to the knowledge of such counsel, there is no pending
or threatened action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator
involving any Issuer or any of its subsidiaries or its or their
property that is not adequately disclosed in the Final
Memorandum, except in each case for such proceedings that, if the
subject of an unfavorable decision, ruling or finding would not
singly or in the aggregate, result in a material adverse change
in the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken
as a whole; and the statements in the Final Memorandum under the
headings "Certain United States Federal Tax Considerations" and
"Description of Credit Facility," in each case insofar as the
statements constitute summaries of legal matters, documents or
proceedings referred to therein, fairly summarize the matters
therein described;
(v) such counsel has no reason to believe that (except for
financial statements and schedules and other financial and
statistical data as to which such counsel need not express a
belief) at the Execution Time and on the Closing Date the Final
Memorandum contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each
case, other than the financial statements and other financial
information contained therein, as to which such counsel need
express no opinion);
-18-
(vi) this Agreement has been duly authorized, executed and
delivered by each Issuer;
(vii) each Issuer has all requisite corporate power and
authority, has taken all requisite corporate action necessary to
enter into and perform this Agreement, the Indenture, the
Registration Rights Agreement and the Securities, and no consent,
approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the
transactions contemplated herein or in the Indenture and the
Registration Rights Agreement, except such as will be obtained
under the Act and the Trust Indenture Act and such as may be
required under the blue sky or securities laws of any
jurisdiction in connection with the purchase and sale of the
Securities by the Initial Purchasers in the manner contemplated
in this Agreement and the Final Memorandum and the Registration
Rights Agreement and such other approvals (specified in such
opinion) as have been obtained;
(viii) neither the execution and delivery of the Indenture,
this Agreement or the Registration Rights Agreement, the issue
and sale of the Securities, nor the performance of its
obligations will conflict with, result in a breach or violation
of, or imposition of any lien, charge or encumbrance upon any
property or asset of any Issuer or its subsidiaries pursuant to,
(i) the charter or by-laws of such Issuer or any of its
subsidiaries; (ii) to such counsel's knowledge, the terms of any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which such Issuer or any of
its subsidiaries is a party or bound or to which their respective
properties is subject, except for such conflicts, breaches or
violations or impositions of any lien, charge or encumbrance
which, singly or in the aggregate, would not have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of such Issuer and
its subsidiaries, taken as a whole; (iii) any statute, law, rule
or regulation applicable to such Issuer or any of its
subsidiaries; or (iv) to such counsel's knowledge, any judgment,
order or decree applicable to such Issuer or any of its
subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over such Issuer, any of its subsidiaries or any of
their respective properties;
(ix) assuming the accuracy of the representations and
warranties and compliance with the agreements contained herein,
no registration of the Securities under the Act, and no
qualification of an indenture under the Trust Indenture Act, are
required for the offer and sale by the Initial Purchasers of the
Securities in the manner contemplated by this Agreement; and
-19-
(x) no Issuer is, nor after giving effect to the offering
and sale of the Securities and the application of the proceeds
thereof as described in the Final Memorandum will be, an
"investment company" as defined in the Investment Company Act
without taking account of any exemption arising out of the number
of holders of such Issuer's securities.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of the laws of any jurisdiction
other than (i) in the case of Xxxxx & Xxxxxxxxx, LLP, Ohio and Texas
and the Federal laws of the United States and (ii) in the case of
Xxxxx & Xxxxxxxx LLP, Massachusetts and the Federal law of the United
States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe
to be reliable and who are satisfactory to counsel for the Initial
Purchasers; and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Issuers and
public officials. In addition, in rendering its opinion, Xxxxx &
Xxxxxxxxx LLP may assume as to matters involving the laws of New York,
to the extent it deems proper and specified in such opinion, that the
laws of New York are identical to the laws of Ohio. References to the
Final Memorandum in this Section 6(a) include any amendment or
supplement thereto at the Closing Date.
(b) The Representatives shall have received from Xxxxxx Xxxxxx &
Xxxxxxx, counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with
respect to the issuance and sale of the Securities, the Indenture, the
Registration Rights Agreement, the Final Memorandum (as amended or
supplemented at the Closing Date) and other related matters as the
Representatives may reasonably require, and the Issuers shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(c) Each Issuer shall have furnished to the Representatives a
certificate of such Issuer, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of such
Issuer, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Final Memorandum, any
amendment or supplement to the Final Memorandum and this Agreement and
that:
(i) the representations and warranties of such Issuer in
this Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date, and such Issuer has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date;
and
-20-
(ii) since the date of the most recent financial statements
included in the Final Memorandum (exclusive of any amendment or
supplement thereto), there has been no material adverse change in the
condition (financial or otherwise), prospects, earnings, business or
properties of such Issuer and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereto).
(d) At the Execution Time and at the Closing Date, the Company shall
have requested and caused AA to furnish to the Representatives letters,
dated respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Representatives, confirming that
they are independent accountants within the meaning of the Act and the
Exchange Act and the applicable rules and regulations thereunder, that they
have performed a review of the unaudited interim financial information of
the Company for the three-month period ended March 31, 2002 and as at March
31, 2002, and stating in effect that:
(i) in their opinion the audited financial statements included
in the Final Memorandum and reported on by them comply as to form in
all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and
regulations thereunder;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review in accordance with the standards
established under Statement on Auditing Standards No. 71 of the
unaudited interim financial information for the three-month period
ended March 31, 2002 and as at March 31, 2002; carrying out certain
specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter; a reading of the minutes of the meetings of the
stockholders, directors and audit and compensation committees of the
Company and its subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions and
events subsequent to December 31, 2001, nothing came to their
attention which caused them to believe that:
(1) any unaudited financial statements included in the Final
Memorandum do not comply in form in all material respects with
applicable accounting requirements of the Act and the Exchange
Act and with the published rules and regulations of the
Commission with respect to financial statements included in
quarterly reports on Form
-21-
10-Q under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements included in the
Final Memorandum; or
(2) with respect to the period subsequent to March 31, 2002,
there were any changes, at a specified date not more than five
days prior to the date of the letter, in the total debt or
long-term debt of the Company and its subsidiaries or capital
stock of the Company or decreases in the stockholders' equity of
the Company or total assets or working capital of the Company and
its subsidiaries as compared with the amounts shown on the March
31, 2002 consolidated balance sheet included in the Final
Memorandum, or for the period from April 1, 2002 to such
specified date there were any decreases, as compared with the
corresponding period in the preceding year in net sales,
operating income or income before income taxes or in total or per
share amounts of net income of the Company and its subsidiaries,
except in all instances for changes or decreases set forth in
such letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Representatives;
or
(3) the financial information included in the Final
Memorandum is not in conformity in all material respects with the
disclosure requirements of Regulation S-K; or
(4) the unaudited amounts of any capsule information
included in the Final Memorandum do not agree with the amounts
set forth in the unaudited financial statements for the same
periods or were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited
financial statements included in the Final Memorandum or do not
conform with generally accepted accounting principles;
(iii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries)
included in the Final Memorandum agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of legal
interpretation.
-22-
(iv) on the basis of a reading of the unaudited pro forma
financial data (the "pro forma financial data") included in the Final
Memorandum; carrying out certain specified procedures; inquiries of
certain officials of the Company who have responsibility for financial
and accounting matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
the pro forma financial data, nothing came to their attention which
caused them to believe that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
statements.
References to the Final Memorandum in this Section 6(d) include any
amendment or supplement thereto at the date of the applicable letter.
(e) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change
or decrease specified in the letter or letters referred to in paragraph (d)
of this Section 6; or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
prospects, earnings, business or properties of any Issuer and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Final Memorandum (exclusive of any amendment or supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above, is,
in the sole judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to market the Securities as contemplated
by the Final Memorandum (exclusive of any amendment or supplement thereto).
(f) The Securities shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the NASD, and
the Securities shall be eligible for clearance and settlement through The
Depositary Trust Company.
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(h) On the Closing Date, the Company shall have furnished to the
Representatives evidence satisfactory to the Representatives of the
execution and delivery of the Credit Agreement to be dated on or prior to
the Closing Date among the Company,
-23-
as borrower, the lending institutions named therein, as lenders, and
National City Bank, as agent.
(i) On the Closing Date, the Company shall have furnished to the
Representatives evidence satisfactory to the Representatives of the
repayment in full of all amounts outstanding under the Credit Agreement
dated as of December 30, 1998, as amended, among the Company, as borrower,
the lending institutions named therein, as lenders, DLJ Capital Funding,
Inc., as syndication agent, National City Bank, as administrative agent and
collateral agent, and PNC Bank, National Association, as documentation
agent.
(j) On the Closing Date, the AA Representation Letters shall not have
been rescinded and the Company shall have no reason to believe that the
representations in the AA Representation Letters are not true and correct in all
respects.
(k) Prior to the Closing Date, the Issuers shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
canceled at, or at any time prior to, the Closing Date by the Representatives.
Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of Xxxxx & Xxxxxxxxx LLP, counsel for the Issuers, at
3200 National City Center, 0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxx, xx the Closing
Date.
7. Reimbursement of Expenses. If the sale of the Securities provided
-------------------------
for herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof (except for Section 10(a)(iv)
hereof) or because of any refusal, inability or failure on the part of any
Issuer to perform any agreement herein or comply with any provision hereof other
than by reason of a default by any of the Initial Purchasers, the Issuers,
jointly and severally, agree to reimburse the Initial Purchasers severally
through Deutsche Bank Securities Inc. on demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities.
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8. Indemnification and Contribution. (a) The Issuers, jointly and
--------------------------------
severally, agree to indemnify and hold harmless each Initial Purchaser, the
directors, officers, employees and agents of each Initial Purchaser and each
person who controls any Initial Purchaser within the meaning of either the Act
or the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum, the Final Memorandum (or in any supplement or amendment
thereto) or any information provided by any Issuer to any holder or prospective
purchaser of Securities pursuant to Section 5(h), or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Issuers will not
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be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in the Preliminary
Memorandum or the Final Memorandum, or in any amendment thereof or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Initial Purchasers through the
Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which any Issuer may otherwise have.
(b) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless each Issuer, each of its directors, each of its
officers, and each person who controls such Issuer within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Issuers to each Initial Purchaser, but only with reference to written
information relating to such Initial Purchaser furnished to the Company by or on
behalf of such Initial Purchaser through the Representatives specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or supplement thereto). This indemnity agreement will be in addition
to any liability which any Initial Purchaser may otherwise have. The Issuers
acknowledge that the statements set forth in the last paragraph of the cover
page regarding the delivery of the Securities, the second and third sentences of
the third paragraph under the heading "Private Placement" concerning the terms
of the offering by the Initial Purchasers and the sixth paragraph under the
heading "Private Placement" concerning stabilization, syndicate covering
transactions and penalty bids in the Preliminary Memorandum and the Final
Memorandum, constitute the only information furnished in writing by or on behalf
of the Initial Purchasers for inclusion in the Preliminary Memorandum or the
Final Memorandum (or in any amendment or supplement thereto).
-25-
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses;
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
-------- -------
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Issuers and the Initial Purchasers, in
order to provide just and equitable contribution, agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which an indemnified party may be subject in such
------
proportion as is appropriate to reflect the relative benefits received by the
Issuers on the one hand and by the Ini-
-26-
tial Purchasers on the other from the offering of the Securities; provided,
--------
however, that in no case shall any Initial Purchaser (except as may be provided
-------
in any agreement among the Initial Purchasers relating to the offering of the
Securities) be responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by such Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Issuers and the Initial Purchasers shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Issuers on the one hand and
of the Initial Purchasers on the other in connection with the statements or
omissions which resulted in such Losses, as well as any other relevant equitable
considerations. Benefits received by the Issuers shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
the Company, and benefits received by the Initial Purchasers shall be deemed to
be equal to the total purchase discounts and commissions. Relative fault shall
be determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Issuers on the
one hand or the Initial Purchasers on the other, the intent of the parties and
their relative knowledge, information and opportunity to correct or prevent such
untrue statement or omission. The Issuers and the Initial Purchasers agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Initial Purchaser within the meaning
of either the Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls an Issuer within the meaning of
either the Act or the Exchange Act and each officer and director of an Issuer
shall have the same rights to contribution as such Issuer, subject in each case
to the applicable terms and conditions of this paragraph (d). The obligations of
the Initial Purchasers to contribute pursuant to this paragraph (d) are several
in proportion to their respective purchase commitments set forth in Schedule I
hereto and not joint.
(e) Notwithstanding anything to the contrary in this Section 8,
the indemnification and contribution provisions of the Registration Rights
Agreement shall govern any claim with respect thereto.
9. Default by an Initial Purchaser. If any one or more Initial
-------------------------------
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Secu-
-27-
rities set forth opposite their names in Schedule I hereto bears to the
aggregate amount of Securities set forth opposite the names of all the remaining
Initial Purchasers) the Securities which the defaulting Initial Purchaser or
Initial Purchasers agreed but failed to purchase; provided, however, that in the
-------- -------
event that the aggregate amount of Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10%
of the aggregate amount of Securities set forth in Schedule I hereto, the
remaining Initial Purchasers shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such
nondefaulting Initial Purchasers do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Initial
Purchaser or the Company. In the event of a default by any Initial Purchaser as
set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding five Business Days, as the Representatives shall determine
in order that the required changes in the Final Memorandum or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Initial Purchaser of its liability, if any, to the
Company or any nondefaulting Initial Purchaser for damages occasioned by its
default hereunder.
10. Termination. (a) This Agreement may be terminated in the
-----------
sole discretion of the Initial Purchasers by notice to the Company given prior
to the Closing Date in the event that the Issuers shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on their part
to be performed or satisfied hereunder at or prior thereto or, if at or prior to
the Closing Date:
(i) any of the Issuers or their respective subsidiaries shall
have sustained any loss or interference with respect to its businesses
or properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor
dispute, slow down or work stoppage or any legal or governmental
proceeding, which loss or interference, in the sole judgment of the
Representatives, has had or has a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, or
there shall have been, in the sole judgment of the Representatives,
any event or development that, individually or in the aggregate, has
or could be reasonably likely to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole
(including without limitation a change in control of such Issuer),
except in each case as described in the Final Memorandum (exclusive of
any amendment or supplement thereto);
(ii) trading in securities of the Company or in securities
generally on the New York Stock Exchange, American Stock Exchange or
the NASDAQ National Market shall have been suspended or materially
limited or minimum or maximum prices shall have been established on
any such exchange or market;
-28-
(iii) a banking moratorium shall have been declared by New
York or United States authorities or a material disruption in
commercial banking or securities settlement or clearance services in
the United States;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States which, in the case of (A), (B) or (C)
above and in the sole judgment of the Representatives, makes it
impracticable or inadvisable to proceed with the offering or the
delivery of the Securities as contemplated by the Final Memorandum; or
(v) any securities of the Company shall have been downgraded
or placed on any "watch list" for possible downgrading by any
nationally recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 10
shall be without liability of any party to any other party except as provided in
Section 11 hereof.
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Issuers or their respective officers and of the Initial Purchasers set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Initial Purchasers
or the Issuers or any of the officers, directors or controlling persons referred
to in Section 8 hereof, and will survive delivery of and payment for the
Securities. The provisions of Sections 7, 8, 11 and 14 hereof shall survive the
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
-------
and effective only on receipt, and, if sent to the Representatives, will be
mailed or delivered to Deutsche Bank Securities Inc., at 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 Attention: Corporate Finance Department; or, if sent to
any Issuer, will be mailed or delivered to Stoneridge, Inc. at 0000 Xxxx Xxxxxx
Xxxxxx, Xxxxxx, Xxxx 00000, Attention: Xxxxx Xxxxx, with a copy to Xxxxx &
Xxxxxxxxx LLP, 0000 Xxxx Xxxxx Xxxxxx, 0000 Xxxxxxxx Xxxx Xxxxxx, Xxxxxxxxx,
Xxxx 00000, Attention: Xxxxx Xxxxx, Esq.
13. Successors. This Agreement will inure to the benefit of and
----------
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and, except as expressly set forth in Section 5(h) hereof, no other person will
have any right or obligation hereunder.
-29-
14. Applicable Law. This Agreement will be governed by and
--------------
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. Headings. The section headings used herein are for
--------
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
-----------
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and he
---
rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
---------
Regulation D.
"Business Day" shall mean any day other than a Saturday, a Sunday
------------
or a legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
"Commission" shall mean the Securities and Exchange Commission.
----------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended, and the rules and regulations of the Commission promulgated thereunder.
"Exchange Securities" shall have the meaning specified in the
-------------------
Registration Rights Agreement.
"Execution Time" shall mean, the date and time that this
--------------
Agreement is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act of
----------------------
1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"NASD" shall mean the National Association of Securities Dealers,
----
Inc.
"Regulation D" shall mean Regulation D under the Act.
------------
"Regulation S" shall mean Regulation S under the Act.
------------
-30-
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939,
-------------------
as amended, and the rules and regulations of the Commission promulgated
thereunder.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement between
the Issuers and the several Initial Purchasers.
Very truly yours,
Stoneridge, Inc.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President and Chief Financial
Officer
Stoneridge Control Devices, Inc.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Treasurer
Stoneridge Electronics, Inc.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Deutsche Bank Securities Inc.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Director
X.X. Xxxxxx Securities Inc.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
Xxxxxx Xxxxxxx & Co. Incorporated
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
NatCity Investments, Inc.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
As Representatives of the several Initial Purchasers named in Schedule I hereto
SCHEDULE I
Principal Amount of
Initial Purchasers Securities to Be Purchased
------------------ --------------------------
Deutsche Bank Securities Inc. ........................ US$120,000,000
X.X. Xxxxxx Securities Inc. .......................... 20,000,000
Xxxxxx Xxxxxxx & Co. Incorporated .................... 20,000,000
NatCity Investments, Inc. ............................ 16,000,000
Comerica Securities, Inc. ............................ 10,000,000
PNC Capital Markets, Inc. ............................ 10,000,000
U.S. Bancorp Xxxxx Xxxxxxx Inc. ...................... 4,000,000
-----------------------
Total ................................................ US$200,000,000
SCHEDULE II
Guarantors
----------
Stoneridge Control Devices, Inc., a Massachusetts corporation
Stoneridge Electronics, Inc., a Texas corporation
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1)(a) The Securities have not been and will not be registered
under the Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Act or pursuant to an exemption from the registration requirements
of the Act. Each Initial Purchaser represents and agrees that, except as
otherwise permitted by Section 4(b)(i) of the Agreement to which this is an
exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its Affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(b)(i) of the Agreement to which this is an
exhibit), it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Act") and may not be
offered or sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and the closing
date of the offering, except in either case in accordance with
Regulation S or Rule 144A under the Act. Terms used above have
the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with its
Affiliates or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it
has not offered or sold and, prior to the date six months after the date of
issuance of the Securities, will not offer or sell any Securities to persons in
the United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or as
agent) for the purposes of their businesses or otherwise in circumstances which
have not
-2-
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Xxx 0000 of the United Kingdom with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom;
and (iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 9(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom the document may otherwise lawfully be issued or passed
on.
