SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 21, 1998
STANDARD AUTOMOTIVE CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 001-13657 59-2018007
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation File Number) Identification No.)
321 Valley Rd., Hillsborough, NJ 08876-4056
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, (908) 369-5544
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Item 2. Acquisition or Disposition of Assets.
On July 21, 1998, pursuant to the terms of the Stock Purchase Agreement
dated February 24, 1998, as amended, Standard Automotive Corporation (the
"Company") completed the acquisition of all of the outstanding capital stock of
Barclay Investments, Inc. ("Barclay"). In consideration for such capital stock,
the Company issued to the shareholders of Barclay an aggregate of 185,000 shares
of the common stock of the Company.
Simultaneously with the Company's acquisition of Barclay, pursuant to the
terms of the Stock Purchase Agreement dated February 13, 1998, as amended,
Barclay acquired all of the outstanding capital stock of R&S Truck Body, Inc.
(the "R&S Acquisition"). The aggregate consideration paid to the holders of the
capital stock of R&S (the "Shareholders") was $13,012,266 in cash and 95,126
shares of the Company's common stock (the "Consideration Shares"). Also, pending
the outcome of certain events which will impact the financial results of R&S as
of the Closing Date, the Shareholders may receive additional cash consideration
in the amount of approximately $656,000.
The Consideration Shares are subject to a put agreement among the
Shareholders, Barclay and the Company (the "Put Agreement"). Under the Put
Agreement, the Shareholders may sell or "put" the Consideration Shares to
Barclay or the Company for an aggregate dollar amount of $1,000,000 during the
period commencing on November 30, 1999 and ending December 31, 1999.
Concurrently with the R&S Acquisition, the Company also entered into a
consulting and noncompetition agreement with William Smith, a shareholder of
R&S, and employment agreements with several key employees of R&S.
R&S is engaged in the design, manufacture and sale of customized dump
trucks and trailers, specialized truck suspension systems and related products
and parts. R&S also acts as a distributor for truck equipment manufactured by
other companies, including cranes, tarpaulins, spreaders, plows and specialized
service bodies. R&S recently tripled its manufacturing facilities with the
completion of a new 145,000 square foot plant.
In connection with the acquisition of Barclay, the Company waived the
right to cause Barclay to acquire the capital stock of CPS Trailer Company, Inc.
("CPS"). This decision was made as a result of an accident involving a truck
body manufactured by CPS which occurred after the execution of the Purchase
Agreement between Barclay and CPS. Nevertheless, as a condition to the
acquisition of Barclay, the Company caused Barclay to enter into a 60-day
extension with CPS preserving Barclay's right to acquire CPS should it be
determined that the potential liability to CPS arising out of the aforementioned
incident is not significant or has been settled in a manner which limits the
potential liability of Barclay and the Company.
The source of the funds to finance the R&S Acquisition was a $40,000,000
Revolving Credit and Term Loan Agreement (the "Credit Agreement") which the
Company and certain of its subsidiaries (acting as Guarantors) entered into on
July 21, 1998 with PNC Bank, National Association ("PNC"), both individually and
as agent for other financial institutions.
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The Credit Agreement provides for Term Loans in the amount of $18,000,000
and a Revolving Loan in the principal amount of $14,000,000 (collectively, the
"Loans"). In addition, the amounts available under the Terms Loans and the
Revolving Loan will be increased by $7,000,000 and $1,000,000, respectively, if
the Company completes the acquisition of CPS. Portions of the Term Loans were
used to fund the R&S Acquisition and to retire certain indebtedness of R&S and
the Company. Proceeds available under the Revolving Loan may be used for general
working capital. Interest on the amounts outstanding under the Loans is payable
monthly and accrues at a variable rate based upon LIBOR or the Base Rate of PNC,
plus a percentage which adjusts from time to time based upon the ratio of the
Company's indebtedness to EBITDA, as such terms are defined in the Loan
Agreement. The rate of interest for the Loans is currently 8.16%. The principal
amount of the Term Loans is payable in full on July 21, 2004. Amounts
outstanding under the Revolving Loan are payable in full on July 21, 2001,
subject to the Company's request, with the approval of PNC, to extend the due
date for a one-year period, for a maximum extension period of three years. All
amounts outstanding under the Credit Agreement are secured by a lien on
substantially all of the Company's assets.
In connection with the R&S Acquisition, the Company incurred approximately
$3,700,000 in investment banking and finder's fees, and legal and accounting
expenses. The Company also incurred approximately $1,700,000 in similar fees and
expenses, including bank fees, in connection with the procurement of the
financing arrangement with PNC.
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Item 7. Financial Statements and Exhibits
(a) The financial statements required to be filed with this Report were
not available at the time of this filing. Such financial statements will be
filed as an amendment to this Form 8-K not later than 60 days after the date of
the acquisition.
(b) The pro forma financial information required to be filed with this
Report was not available at the time of this filing. Such pro forma financial
information will be filed as an amendment to this Form 8-K not later than 60
days after the date of the acquisition of R&S.
(c) Exhibits
2.1 Stock Purchase Agreement among Barclay Investments, Inc., CPS
Trailer Company, Inc. and the shareholder of CPS Trailer
Company, Inc.*
2.2 Stock Purchase Agreement among Standard Automotive
Corporation, Barclay Investments, Inc. and the shareholders of
Barclay Investments, Inc.*
2.3 Stock Purchase Agreement among Barclay Investments, Inc., R&S
Truck Body, Inc. and the shareholders of R&S Truck Body, Inc.*
2.4 First amendment to Stock Purchase Agreement among Barclay
Investments, Inc., CPS Trailer Company, Inc. and the
shareholder of CPS Trailer Company, Inc.**
2.5 First amendment to Stock Purchase Agreement among Barclay
Investments, Inc., R&S Truck Body, Inc. and the shareholders
of R&S Truck Body, Inc.**
2.6 Second Amendment to Stock Purchase Agreement among Barclay
Investments, Inc., R&S Truck Body, Inc. and the shareholders
of R&S Truck Body, Inc.**
2.7 Second Amendment to Stock Purchase Agreement among Barclay
Investments, Inc., CPS Trailer Company, Inc. and the
shareholder of CPS Trailer Company, Inc.
2.8 First Amendment to Stock Purchase Agreement among Standard
Automotive Corporation, Barclay Investments, Inc. and the
shareholders of Barclay Investments, Inc.
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* Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for December 31, 1997.
** Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STANDARD AUTOMOTIVE CORPORATION
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(Registrant)
Date: August 5, 1998 By: /s/ Roy Ceccato
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Name: Roy Ceccato
Title: Chief Financial Officer
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SECOND AMENDMENT TO STOCK ACQUISITION AGREEMENT
Second Amendment to Stock Acquisition Agreement dated as of this 8th day
of July, 1998 by and among BARCLAY INVESTMENTS, INC., a New Jersey corporation
having an address c/o Redstone Capital Corp., 280 Park Avenue, 21st Floor West,
New York, New York 10017 ("Purchaser"), Charles P. Siebert ("Shareholder"), CPS
Trailer Company, Inc. ("Trailer") and CPS Enterprises, Inc. ("Enterprises"),
both Missouri corporations of 500 Rosati Street, Oran, Missouri 63771 (Trailer
and Enterprises collectively hereinafter "CPS").
WHEREAS, Purchaser, Shareholder, Trailer and Enterprises are parties to a
Stock Acquisition Agreement dated as of January 30, 1998, as amended by First
Amendment to Stock Purchase Agreement dated June 10, 1998 (collectively the
"Original Agreement"); and
WHEREAS, the Original Agreement called for a Closing Date on or before
July 15, 1998; and
WHEREAS, CPS has been threatened with a lawsuit relating to an accident in
Alabama involving a trailer manufactured by CPS (the "Lawsuit"), an adverse
determination in which could have material financial impact on CPS; and
WHEREAS, the parties desire to extend the Closing Date to allow time for
the attempted settlement of the Lawsuit and take certain other actions in
connection with the Lawsuit;
NOW THEREFORE, it is hereby agreed as follows:
1. Closing Date. Paragraph 4 of the Original Agreement shall be amended
such that the Closing Date shall be further postponed to a day selected by
Purchaser on or before the close of business September 15, 1998 or at such other
date as the parties shall otherwise mutually agree upon.
2. Adjustment to Purchase Price. It is understood that CPS is endeavoring
to settle the Lawsuit. In the event CPS settles the Lawsuit, the cash
consideration to be paid by Purchaser pursuant to Paragraph 3.1(a) of the
Original Agreement shall be increased by the lesser of one-half of the
settlement amount or $250,000; provided, however, that (i) the full amount of
the settlement shall be treated as an expense for purposes of determining the
net income of CPS pursuant to Paragraph 3.1(b) of the Original Agreement, (ii)
no part of the credit described in Paragraph 5.37 of the Original Agreement (the
"Basket") shall be applied against the settlement amount, and (iii) the amount
of the Basket shall not be reduced as a result of the settlement. Thus, for
example, if the Lawsuit is settled for $400,000, the cash portion of the
purchase price under Paragraph 3.1(a) of the Original Agreement would be
increased by $200,000, but the net income of CPS under Paragraph 3.1(b) would be
reduced by $400,000.
3. Failure to Settle Lawsuit. As soon as practicable following execution
of the Amendment, Purchaser shall pay an additional $250,000 to Shareholder's
attorney to
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be held in escrow in accordance with Paragraph 3.2 of the Original Agreement and
this Amendment. In the event CPS fails to settle the Lawsuit on or before
September 15, 1998 for $1,000,000 or less, Purchaser, in its sole discretion,
may elect to not go forward with the purchase of CPS, and Purchaser in such
event shall receive back its $370,000 deposit (with interest earned thereon) and
neither party shall have any further rights or obligations under the Original
Agreement. In the event CPS settles the Lawsuit on or before September 15, 1998,
and Purchaser fails to purchase CPS in accordance with the Original Agreement
and this Amendment, and CPS and Shareholder are otherwise in compliance with the
Stock Acquisition Agreement, Shareholder in such event shall be entitled to
retain the full amount of the $370,000 deposit (with interest thereon).
4. Termination. Paragraph 13.2 of the Original Agreement is hereby amended
to change the dates therein to September 15, 1998.
5. Representations. Paragraph 5.2(a) is hereby modified to reflect the
fact that the stock of Trailer and of Enterprise do have pre-emptive rights.
6. Agreement in Full Force and Effect. Except as modified herein, the
Original Agreement shall remain in full force and effect.
7. Definitions. The capitalized terms used herein and not otherwise
defined shall have the same meaning as in the Original Agreement.
8. Facsimile Signatures Binding. It is agreed that facsimile signatures on
this Amendment shall be binding.
IN WITNESS WHEREOF, the undersigned have executed this Amended Stock
Acquisition Agreement as of the date first written above.
CPS ENTERPRISES, INC. CPS TRAILER COMPANY) INC.
By: /s/ Charles P. Siebert By: /s/ Charles P. Siebert
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Charles P. Siebert Charles P. Siebert
President Chief Executive Officer
Selling Shareholder:
By: /s/ Charles P. Siebert
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Charles P. Siebert, Individually
Purchasers: BARCLAY INVESTMENTS, INC.
By: /s/ Andrew A. Levy
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Andrew A. Levy, President
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
Reference is made to a Stock Purchase Agreement dated as of the 24th day
of February, 1998 (the "Original Agreement") among STANDARD AUTOMOTIVE
CORPORATION, a Delaware corporation ("Standard") and BARCLAY INVESTMENTS, INC.,
a New Jersey corporation (the "Company") and the shareholders of the Company,
being Andrew A. Levy, Farzana S. Habib, Richard Friedman, Jeffrey Markowitz and
Glenn Goldfinger (the "Shareholders").
WHEREAS, the Closing of the purchase of CPS Trailer Co., Inc. has been
delayed for reasons beyond the control of Standard and the Company; and
WHEREAS, Standard, Barclay and the Shareholders desire to amend the
Original Agreement to reflect the delayed closing of CPS Trailer Co., Inc. and
certain other changes.
NOW THEREFORE, it is hereby agreed as follows:
1. Closing Date. Section 1.2 of the Original Agreement is hereby amended
such that the Closing of the purchase of R&S Truck Body, Inc. shall take place
no later than July 30, 1998 and the Closing of the purchase of CPS Trailer Co.,
Inc. shall take no later than September 30, 1998.
2. Investment Banking Fee. Section 1.3(c) of the Original Agreement shall
be amended such that the fee of $600,000 shall be due to Redstone Advisors, not
Redstone Capital Corporation. It is acknowledged that $100,000 of said fee has
heretofore been paid to Redstone Advisors. Upon the Closing of the purchase of
R&S Truck Body, Inc., an additional $320,000 of the fee shall be paid to
Redstone Advisors. Upon the Closing of CPS Trailer Co., Inc., the remaining
$180,000 of the fee shall be paid to Redstone Advisors.
3. Brokers or Finders. Section 2.20 of the Original Agreement shall be
amended to reflect that the Investment Banking Fee shall be paid to Redstone
Advisers, not Redstone Capital Corporation.
4. Conditions Precedent to the Obligations of Standard. Section 4.10 of
the Original Agreement shall be amended such that the purchase of the Company
shall be conditioned only upon the acquisition of the stock of R&S Truck Body,
Inc. instead of upon the acquisition of R&S Truck Body, Inc. and CPS Trailer
Co., Inc. However, a further condition of closing shall be that the Company have
an enforceable agreement to purchase CPS at the Closing Date.
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5. Original Agreement Valid. In all other respects the Original Agreement
shall be deemed valid and in full force and effect.
IN WITNESS WHEREOF, the Shareholders, the Company and Standard have each
caused this First Amendment to Stock Purchase Agreement to be executed as of the
7th day of July, 1998.
STANDARD AUTOMOTIVE CORPORATION
By: /s/ Steven Merker
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Name: Steven Merker
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Title: Chairman
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BARCLAY INVESTMENTS, INC.
By: /s/ Andrew A. Levy
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Name: Andrew A. Levy
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Title: President
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SHAREHOLDERS:
/s/ Andrew A. Levy /s/ Richard Friedman
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Andrew A. Levy Richard Friedman
/s/ Farzana S. Habib /s/ Jeffrey Markowitz
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Farzana S. Habib Jeffrey Markowitz
/s/ Glenn Goldfinger
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Glenn Goldfinger
