EX-2.1 Stock Purchase Agreement

EXHIBIT 2.1

March 24, 2005

GE Capital Equity Holdings Inc.:
c/o GE Equity
30 Berkeley Square
London W1J 6EW
Attn.Sherwood Dodge

3i Group and 3i Europartners II:
c/o 3i SGR S.p.A.
Via Orefici, 2
20123 Milano

Attn. Edoardo Professione

Roberto Poli
Via Foppa, 11
20144 Milano

Alberto Bombonato
Via Federico Tesio, 23
20151 Milano

     Re: Stock Purchase Agreement

Dear Sirs:

     Following our discussions, we are pleased to submit to you our proposed text of the Stock Purchase Agreement, which reads as follows:

* * * * *

STOCK PURCHASE AGREEMENT
By and between

GE Capital Equity Holdings, Inc. (“GE”), a company organized and existing under the laws of the State of Delaware, United States of America, with its principal place of business at 120 Long Ridge Road, Stamford, Connecticut, 06927, United States of America;

3i Group plc, a company organized and existing under the laws of the United Kingdom, with registered offices in London, Waterloo Road, 91;

3i Europartners II LP, a company organized and existing under the laws of the United Kingdom, with registered offices in London, Waterloo Road, 91;

Roberto Poli, born in Fontaniva (PD) on May 21, 1943, residing in Milan, Via Foppa, 11;

Alberto Bombonato, born in Milan on May 20, 1941, residing in Milan, Via Federico Tesio, 23;

on the one side (collectively, the “Sellers”)

and

Stoneridge, Inc, an Ohio corporation, with head offices at 9400 East Market Street, Warren, Ohio (USA), on the other side (the “Purchaser”).

WHEREAS,

NOW, THEREFORE,

the Parties hereto agree as follows.

In every part of this Agreement, including Recitals and Exhibits, the terms listed below shall have the following meanings:

“2003 Financial Statements” shall mean the Company’s audited financial statements as of December 31, 2003, as provided by the Sellers to the Purchaser.

“Accounting Principles” shall mean the general accounting principles adopted by the Consigli Nazionali dell’Ordine dei Dottori Commercialisti and dei Ragionieri Italiani (and, in absence thereof, the international accounting principles IAS).

“Accounts Payable” shall have the meaning set out in Section 5.6.

“Adjustment Amount” shall have the meaning set out in Section 3.2(b).

“Adjustment Amount Objection Date” shall have the meaning set out in Section 3.2(c).

“Affiliate” shall mean a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with the person specified.

“Aggregate Borrowings Amount” shall mean the aggregate amount of all Outstanding Borrowings.

“Agreement” shall mean this agreement, including its Recitals and the Exhibits.

“Applicable Rate” shall mean a rate per annum equal to the statutory interest (interesse legale) from time to time in effect.

“Arbitratore” shall have the meaning set out in Section 3.2(c).

“Business Day” shall mean any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in Milan (Italy), or Warren, Ohio (USA).

“Closing” shall mean the sale and purchase of the Stock and the consummation of the other transactions constituting the Closing under Section 4.2.

“Closing Date” shall mean the date on which the Closing takes place.

“Closing Date NFP” shall mean the NFP of the Company as at the Closing.

“Company” shall mean Vimercati S.p.A., as better identified in Recital “A” of this Agreement.

“Control” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.

“Damages” shall have the meaning set out in Section 6.2.

“Encumbrances” shall mean liens, pledges, mortgages, security interests, claims, and encumbrances of any kind, including any restriction on the use, voting, transfer, receipt of income, or other exercise of any attributes of ownership.

“Funds” shall mean, collectively, GE Capital Equity Holdings, Inc., 3i Group plc and 3i Europartners II LP, as better identified in the headings of this Agreement.

“Interim Balance Sheet” shall mean the Company’s balance sheet as of September 30, 2004, as provided by the Sellers to the Purchaser.

“Knowledge of the Sellers” shall mean the actual knowledge of any of the Sellers; provided, however, the knowledge of the Sellers who are also Managers shall mean the actual knowledge of Managers after due and careful investigation and inquiry.

“Lender” shall mean any of bank or other financial institution, including, without limitation, San Paolo IMI, Banco Mediocredito S.p.A., Credito Artigiano and Banco Popolare di Sondrio, that shall have outstanding indebtedness to the Company as at the Closing.

“Letter of Adherence” shall have the meaning set out in Section 7.1(k).

“Liquidated Damages” shall have the meaning set out in Section 9.2(a).

“Loan Agreement” shall mean each loan agreement currently in force between the Company and a Lender, as applicable.

“Managers” shall mean Mr. Aldo Bianchi Vimercati, Mr. Roberto Poli and Mr. Alberto Bombonato, as better identified in Recital “C” and in the headings of this Agreement, respectively.

“Net Financial Position” or “NFP” of the Company shall mean the algebraic sum (calculated in Euro) of the amounts (as at a specified date) of each of the following line items, each as defined by Article 2424 of the Italian Civil Code as currently in effect:

“Objection Date” shall have the meaning set out in Section 3.2(e).

“Ossona Net Proceeds” shall have the meaning set out in Section 7.2(d).

“Outstanding Borrowings” shall mean the outstanding aggregate amount of all borrowings (whether short-term or long-term) of the Company from a Lender under the relevant Loan Agreement as at the Closing.

“Parties” shall mean the Sellers and the Purchaser.

“Price” shall have the meaning set out in Section 3.2(a).

“Purchaser” shall mean Stoneridge, Inc.

“Purchaser Request” shall have the meaning set out in Section 9.2(a).

“Releasee” shall have the meaning set out in Section 10.1.

“SEC” shall have the meaning set out in Section 8.

“Sellers” shall have the meaning set out in the headings of this Agreement; it being agreed that, upon Vimercati’s execution and delivery of the Letter of Adherence in accordance to Section 7.1(k), the term “Sellers” shall include Vimercati, and Vimercati shall be a “Seller” for all purposes hereunder.

“Sellers Shares” shall have the meaning set out in Recital “A”.

“September 30 NFP” shall mean the NFP of the Company as at the close of business on September 30, 2004, which Sellers have represented to be equal to Euro 7,994,000.

“Stock” shall mean, collectively, the Sellers Shares and the Vimercati Shares, representing, in the aggregate, 100% of the corporate capital of the Company.

“Termination Date” shall have the meaning set out in Section 9.2(a).

“Third Party Claim” shall have the meaning set out in Section 6.5.

“Vimercati” shall have the meaning set out in Recital “C”.

“Vimercati Shares” shall have the meaning set out in Recital “C”.

The obligation of the Purchaser to proceed with the Closing is subject to the conditions that:

The Purchaser may waive any condition in this Section if it executes a writing so stating. Solely for purposes of this Section 4.1, each condition precedent subject to a materiality qualification shall be deemed to have been satisfied unless the aggregate effect of any non-compliance with the conditions subject to materiality qualifications is equal to or greater than €.1,000,000 (one million euro). The parties agree, however, that, if the Closing occurs as an effect of the operation of the provisions in the immediately preceding sentence, despite the non-compliance with Closing conditions subject to materiality qualifications, the Purchaser shall be entitled to indemnification from the Sellers, subject to the limitations set forth in Section 6.3, for the aggregate euro amount of Damages arising out of, or in connection with, such non-compliance.

The obligation of the Sellers to proceed with the Closing is subject solely to the conditions set forth above in Section 4.1(d) and Section 4.1(e).

Provided each of the conditions to the Purchaser’s obligation to proceed with Closing set forth in Section 4.1 has been satisfied or waived, the Closing shall take place on the fifth Business Day after each of the conditions set forth in Section 4.1 have been satisfied or waived, in Milan, Italy, or such other time or place agreed upon by the Parties.

At the Closing, the following shall occur:

The Parties agree that the Closing shall not be considered as completed unless all the above activities are duly fulfilled.

Each of the Sellers severally represents and warrants the matters set forth in this Section 5 with respect to the Company and the other issues contemplated hereunder. The representations and warranties of the Sellers contained in this Section 5 constitute a unilateral, autonomous and independent guarantee commitment for all legal purposes assumed by the Sellers to the Purchaser in connection with the transactions contemplated by this Agreement.

The Sellers acknowledge that, in connection with the purchase and sale of the Stock and all other transactions contemplated herein, the Purchaser is relying upon each of the representations and warranties of the Sellers in this Section 5 and the Purchaser acknowledges, as of the date hereof, that the Purchaser is not aware of any event, circumstance or condition that would constitute a breach by the Sellers of their representations and warranties set forth in this Section 5.

The Company is duly organized, validly existing and in good standing under Italian law.

The accounting records of the Company, as well as its company books, are accurate and complete and comply with Italian law. The Sellers have delivered to the Purchaser accurate and complete copies of the Company’s articles of incorporation and by-laws.

All of the Company’s offices and facilities are located in Italy.

The Company owns all permits, registrations, certificates, licenses, and other similar authorizations which are necessary to its activity as presently conducted. The Company has full power and authority to carry on the business in which it is engaged and to own and use its properties owned and used.

The Company does not own or hold, directly or indirectly, any equity interest in any company, partnership or similar entity, except for a participation equal to 30% of the corporate capital of the Spanish company Previnsa S.A., with registered offices in Madrid, Calle Pérex Ayuso, 16, Spain.

The Stock is validly issued and represents 100% of the corporate capital of the Company. There are no outstanding subscriptions, options, warranties, rights, convertible securities, or other securities contemplating the purchase, issue or sale of any portion of the capital stock or any equity security of the Company.

Each of the Sellers and Vimercati holds full, valid, legal and beneficial title to their respective shares of the Stock and all of the Stock is free and clear of any Encumbrances.

Each of the Sellers and Vimercati have full authority and capacity to act, execute and perform this Agreement and the transactions contemplated hereby.

This Agreement has been duly executed and delivered by each Seller and constitutes the legal, valid and binding obligation of each Seller enforceable against him or it, as applicable, in accordance with the terms of this Agreement.

The Letter of Adherence has been duly executed and delivered by Vimercati and has the effect of validly making Vimercati a Party to this Agreement, which constitutes the legal, valid and binding obligation of Vimercati enforceable against him in accordance with the terms of this Agreement.

Neither the execution and delivery of the Agreement, nor the consummation of the transactions contemplated hereby will, directly or indirectly (with or without notice of lapse of time) (i) contravene, conflict with, or violate any constitution, statute, regulation, rule, injunction, judgment, order, or other governmental restriction to which the Company or the Sellers are subject or (ii) except as disclosed in Exhibit 5.3, contravene, conflict with, violate, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, or cancel, or require any notice under any agreement, contact, lease, license, permit, authorization, or instrument to which the Company is a party or to which the Company’s assets are subject.

The Company can validly use (as owner or lessee) all the assets necessary for its activity, as currently operated, free from any Encumbrance. The Company has good title to, or a valid leasehold interest, free from any Encumbrance, in all material, tangible, personal property assets used in the conduct of its business, including all fixtures, furniture, equipment, machinery, and leasehold improvements. Such assets of the Company are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such assets is in need of maintenance or repairs except for ordinary, routine maintenance and repairs. The assets of the Company are sufficient for the continued conduct of the Company’s businesses after the Closing in substantially the same manner as conducted prior to the Closing.

The Company’s inventory as reflected on the Interim Balance Sheet is valued at the lower of cost or market value on a basis consistent with past practice.

The Company has full and exclusive ownership of its inventory free from any Encumbrance except for customary retention of title clauses in favor of suppliers. The Company permits some of its customers to store products/items in the Company’s warehouse and such products/items are not owned by the Company.

The inventory is of marketable quality and saleable in the ordinary course of business.

Reserves have been established on the Company’s books of account and Interim Balance Sheet with respect to obsolete and slow-moving inventory in accordance with Accounting Principles.

The Company’s receivables are valid and existing, properly reflected on the Interim Balance Sheet and result from the ordinary course of business. They are subject to no known offsets, counterclaims, defenses of any kind, returns, allowances, or credits. Reserves required by Accounting Principles have been established on the Company’s books of account with respect to uncollectible receivables. The Company’s accounts payable have been incurred in the ordinary course of business and include accruals for severance indemnity and other employees’ entitlements as well as accruals for taxes, social security (the “Accounts Payable”). There have been no changes outside of the ordinary course of business in the Company’s accounts receivable or accounts payable since the date of the Interim Balance Sheet. As and at the Closing, other than the Aggregate Borrowings Amount and the Accounts Payable, the Company will have no indebtedness to any Seller or third party.

The Company owns and possesses the right to use, free and clear of all liens, charges, Encumbrances or other claims, the trademark, trade names, patents, trade secrets, and know-how necessary for the operation of its business as presently conducted and listed on Exhibit 5.7. The manufacture and sale of the Company’s products, as presently conducted, does not result in an infringement of any intellectual property owned by a third party. There exist no facts which would invalidate the intellectual property listed in Exhibit 5.7. No proceedings are pending or threatened which challenge the validity or the ownership by the Company of the intellectual property used in the Company’s business or listed on Exhibit 5.7.

The 2003 Financial Statements, which are attached hereto as Exhibit 5.8(a) have been prepared from the Company’s books and in accordance with the Accounting Principles and have also been prepared in accordance with Italian law, on a consistent basis to meet applicable legal requirements, interpreted and integrated by correct accounting principles, and are true, complete and exact and represent a true and correct view of the assets and liabilities (situazione patrimoniale), financial position (situazione finanziaria) and results of the operations (risultato economico) of the Company as of December 31, 2003.

Except for the evaluation of the inventory (based solely on a reasonable and customary accounting method, without physical count) the Interim Balance Sheet, which is attached hereto as Exhibit 5.8(b), has been drafted by consistently applying the same rules and principles used for the 2003 Financial Statements and represents a true, complete and correct view of the assets and liabilities (situazione patrimoniale), financial position (situazione finanziaria) and results of the operations (risultato economico) of the Company as of September 30, 2004. The Company does not have any material liability or obligation of any nature except those set forth or reflected in (i) this Agreement or Exhibits hereto or (ii) the Interim Balance Sheet or those incurred in the ordinary course of business since the date of the Interim Balance Sheet.

Except for the events listed in Exhibit 5.9, during the period from October 1, 2004, through the Closing, the Company (i) has conducted its business in the ordinary course, without material adverse changes in its liabilities and financial position; (ii) has not made any material change in its accounting principles or practices or its methods of application of such principles or practices; (iii) has not made any sale, lease or other disposition of, or any agreement to sell or lease, any of the material properties or assets of the Company; and (iv) has not made any declaration of, or any payment of, any dividend in respect to the Stock.

Except for the employees regularly hired by the Company and reflected on the Company’s books, no other individual (external counsel or else) is entitled to claim the position of employee of the Company.

The Company has duly paid or adequately reserved for all payments (i) due for salaries, commissions, severance indemnity (and any other similar entitlement depending on termination of the employment), social security and taxes and bonuses or (ii) due in connection with any other employee benefit or employee retirement plan.

No event has occurred or circumstance exists that could provide the basis for any work stoppage or other labor dispute. There is no lockout of any employees by the Company, and no such action is contemplated by the Company. The Company has complied in all respects with all legal requirements relating to employment, equal employment opportunity, nondiscrimination, immigration, wages, hours and overtime work, benefits, holidays, paid permits and leaves, collective bargaining, mandatory hiring, the payment of social security and similar taxes, and occupational safety and health. The Company is not liable for the payment of any compensation, damages, taxes, fines, penalties, or other amounts, however designated, for failure to comply with any of the foregoing legal requirements. The Company has no liabilities or obligations for the employees of Menzaghi S.p.A. and no grounds exist for the assertion of any such liability or obligation.

The Company is in compliance with all applicable laws and regulations concerning labor, employment and employment practices, wages and social security.

Exhibit 5.11 contains a full and complete list of the Company’s agents. With respect to such agents and except as otherwise disclosed in such Exhibit:

Part 1 of Exhibit 5.13 contains a complete list of the following agreements to which the Company is a party:

The Sellers have delivered to the Purchaser a true, correct and complete copy of each agreement listed in Exhibit 5.13. With respect to each such agreement, except as otherwise disclosed Exhibit 5.13, (i) each is enforceable, (ii) no party thereto is in material breach or default, (iii) no event has occurred which, with notice or lapse of time would constitute a material breach or default, or permit termination, material modification or acceleration under the agreement. Further, neither the Closing nor the Purchaser’s ownership of the Company will constitute a material breach or default, or permit termination, material modification or acceleration under the agreement.

All insurance policies of the Company have been regularly paid and are in full force and effect. All such policies have been issued by financially sound, solvent and reputable insurers, unaffiliated with the Company, and are in such amounts and against such risks as is customary of companies in the Company’s line of business. The Company will renew or replace with substantially similar coverage all insurance policies that are scheduled to expire prior to the Closing. Exhibit 5.14 includes a summary of coverage and limits compared to insurable values for all insurance polices. Except as disclosed on Exhibit 5.14, no claim regarding insurance issues is pending and, to the knowledge of the Sellers, there are no circumstances which are likely to give rise to such claims. The Company has not received any notice from any of its insurers of any pending change in coverage, termination thereof, or reservation of rights.

The Company carries out and has carried out its activities without any breach or violation of any applicable law or regulation.

The Company has paid, or caused to be paid, or adequately reserved for, all applicable taxes, including penalties, if any. All applicable taxes have been paid by both parties in connection with the October 1997 merger between the Company and Progetto 7.

The Company has duly filed, or cause to be filed in a timely manner, all reports or returns relating to or covering any such taxes in respect of any fiscal period.

Except as disclosed on Exhibit 5.17, there is no (i) claim, action, suit, inquiry or proceeding by or before any court or other governmental authority pending, or (ii) to the knowledge of the Sellers, any such claim, action, suit, inquiry or proceeding or governmental investigation threatened, against the Company, relating to any product alleged to have been designed, manufactured or sold by the Company and alleged to have been defective or improperly designed or manufactured or for which there has been inadequate or improper warnings or labels. To the knowledge of the Sellers there is no pending or threatened government-mandated or manufacturer recall of any product sold by the Company and each product manufactured, sold, leased or delivered by the Company has been in material conformity with all contractual commitments and all express and implied warranties.

The Company, and the facilities related to the Company, fully comply with applicable environmental regulations including, without limitation, the provisions relating to: (i) soil and subsoil contamination, (ii) waste disposal, (iii) wastewater and water supplies, (iv) air pollution and noise reduction, and (v) use or existence of polluting substances and dangerous materials (asbestos, radon etc.).

The Company, and the facilities related to the Company, are managed in compliance with applicable environmental laws and regulations related to the emission, spillage and leakage of polluting materials, waste and waste water and to the production, transformation, distribution, use, treatment, transport and disposal of polluting materials, waste and waste water.

No Seller has any basis to expect, nor has any of them or the Company received, any actual or threatened order, notice, or other communication from (i) any governmental or public body or private person or entity acting in the public interest, or (ii) the current or prior owner or operator of any facilities, of any actual or potential violation or failure to comply with any environmental law, or of any actual or threatened obligation to undertake or bear the cost of any environmental liabilities with respect to any of the Company’s facilities or any other properties or assets (whether real, personal, or mixed) in which the Company has had an interest, or with respect to any property or facility at or to which hazardous materials were generated, manufactured, refined, transferred, imported, used, or processed by the Company. There are no pending or, to the knowledge of the Sellers, threatened claims, Encumbrances, or other restrictions of any nature, resulting from any environmental law, with respect to or affecting any of the Company’s assets.

There has been no environmental investigation, study, audit, test, review or other analysis conducted in relation to any real property of the Company, any facility formerly owned operated or leased by the Company, or any facility to which the Company has sent any hazardous materials, which has not been provided or made available to the Purchaser as of the date of this Agreement.

Except as disclosed in Exhibit 5.19, there are no actions, suits, proceedings or investigations pending or threatened against or affecting the business or properties of the Company before or by any domestic or foreign authority, either public or private (including tax authorities, environmental authorities, labor offices, arbitration panels, etc.). To the knowledge of the Sellers, except as disclosed in Exhibit 5.19, no grounds exist that may give rise to such actions, suits, proceedings or investigation.

Except as disclosed in Exhibit 5.20, neither the execution of this Agreement nor the consummation of the transactions set forth herein has or will have the effect of enabling any party, according to the agreements in force between the Company and such party, to accelerate the maturity dates or to withdraw from or to terminate any such agreements.

The Company has not assumed, guaranteed, endorsed or otherwise become liable on any indebtedness of any third party.

Except as disclosed in Exhibit 5.22, none of the Company’s largest four customers in 2004, which together represent more than 80% of the Company’s 2004 revenue, has given notice to the Company or to any individual Seller that any material contract or agreement or orders will be terminated or cancelled prior to their expiration date or that it intends to end its relationship with the Company if there is a change in the ownership or control of the Company or if the Company is acquired by the Purchaser. Other than the Company’s largest four customers in 2004 no other customer of the Company in 2004 represented 2% or more of the Company’s 2004 revenues.

Except for the Company’s lease of office space in Milan, Italy from the father of one of the Managers, no Seller or any person controlled by such Seller has been involved in any material business relationship or arrangement with the Company within the past 12 months or any subsidiary of the Company and no Seller owns, directly or indirectly, any asset, tangible or intangible, which is used in the business of the Company. Such office lease is no less favorable to the Company than the Company could obtain in a comparable arm’s-length transaction with an independent third-party lessor.

As of the Closing, none of Seller or Vimercati has any claim, demand, cause of action or right, contractual or otherwise, known or unknown, at law or in equity, against the Company that arose on or prior to the Closing or on account of or arising out of any matter, cause or event occurring prior to Closing, including rights to indemnification or reimbursement, other than (i) claims arising under, out of, or resulting from the participation of a Seller or Vimercati (as applicable) in an employee benefit plan or (ii) the payment of current compensation and the reimbursement of reasonable business expenses incurred by a Seller or Vimercati (as applicable) through the Closing, to the extent incurred in the ordinary course of business.

The books of account, the minute books and other records of the Company provided to or made available to the Purchaser or its professional advisors have been maintained in accordance with sound business practices. The Company’s minutes books contain minutes of all meetings of directors, statutory auditors (sindaci) and shareholders since the date of incorporation and reflects all actions by the directors (and any committee of directors), statutory auditors (sindaci) and shareholders with respect to all transactions referred to in such minutes accurately in all material respects. At the Closing, all of those books and records will be in the possession of the Company.

No representation or warranty of the Sellers contained in this Agreement and the Exhibits attached hereto contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which they were or will be made.

The respective indemnification rights and obligations of the Parties for breach of the representations or warranties contained in Section 5 shall remain in full force and effect for a period of 20 months from the Closing Date.

In any event, it is understood that in case a claim related to any representation and warranty is filed before the corresponding expiration date, or should a controversy arise between the Parties before such date, the expiration date of such representation or warranty shall be postponed until the final disposition of the claim (i.e., waiver of the claim or settlement of the claim or final and binding decision thereupon).

Each of the Sellers shall indemnify, defend, and hold the Purchaser harmless from and against any actions, suits, proceedings, investigation, charges, complaints, demands, claims, judgments, orders, decrees, rulings, damages, penalties, fines, amounts paid in settlement, liabilities, losses, costs and fees and expenses, including reasonable attorneys’ fees and expenses (the “Damages”) arising out of, or in any way based upon, or in connection with:

The liability of the Sellers under this Section 6.2 shall be several and not joint. Therefore, each of the Sellers shall be liable vis-à-vis the Purchaser in proportion to the transferred shareholding as indicated in Section 3.2(f). In any event, the liability of the Sellers shall be subject to the limitations set out in Section 6.3.

Without prejudice to Article 1229 of the Italian Civil Code and except in the case of fraud or willful concealment on the part of any of the Sellers, the liability and indemnity obligations of the Sellers under the preceding Section 6.2 shall be subject to the following limitations:

The Parties further agree that:

6.4 Assessment of Damages

In presence of events giving rise to the Sellers’ indemnity obligations under Section 6.2, the following procedure shall apply:

The Purchaser shall give prompt written notice to the Sellers of any pending or threatened claim or demand by a third party that the Purchaser has determined has given or could give rise to a right of indemnification hereunder (each a “Third Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Sellers from any of its obligations under Section 6 except to the extent the Purchaser is materially prejudiced by such failure, it being understood that notices for claims in respect of a breach of a representation or warranty must be delivered prior to the expiration of the applicable survival period specified in Section 6.1 for such representation or warranty.

The Sellers shall have the right, but not the obligation, to direct, through counsel of its own choosing, which counsel shall be reasonably satisfactory to the Purchaser, the defense or settlement of any Third Party Claim the subject of indemnification hereunder at its own expense. If the Sellers elect to assume the defense of any such Third Party Claim, the Purchaser may participate in such defense, but in such case the expenses of the Purchaser shall be paid by the Purchaser. The Purchaser shall provide the Sellers with reasonable access to its records and personnel relating to any such claim, assertion, event or proceeding during normal business hours and shall otherwise cooperate with the Sellers in the defense or settlement thereof, and the Sellers shall reimburse the Purchaser for all its reasonable out-of-pocket expenses in connection therewith.

If the Sellers shall fail to undertake any such defense, the Purchaser shall have the right to undertake the defense or settlement thereof, at the Sellers’ expense. Whether or not the Sellers shall have assumed the defense of a Third Party Claim, the Purchaser shall not admit any liability with respect thereto, or settle, compromise or discharge such Third Party Claim without the Sellers’ prior written consent which shall not be unreasonably delayed or withheld. If the Purchaser assumes the defense of any such Third Party Claim pursuant to this Section 6.5 and proposes to settle such claim or proceeding prior to a final judgment thereon or to forgo any appeal with respect thereto, then the Purchaser shall give the Sellers prompt written notice thereof and the Sellers shall have the right to participate in the settlement or assume or reassume the defense of such claim or proceeding at any time by written notice to the Purchaser.

As applicable, from the period from the execution of this Agreement through the Closing, the Parties agree as follows:

With respect to the land owned by the Company in Ossona, the Parties agree as follows:

The Purchaser and the Sellers, as the case may be, will make all reasonable efforts to consult with one another before issuing or causing to be issued any press release or otherwise making any public statements, if any, with respect to the transactions contemplated by this Agreement, and shall not issue any such press release or make any such public statement prior to such consultation except as may be required by applicable law, regulations or by the rules of the New York Stock Exchange. Notwithstanding the foregoing, the parties may, on a confidential basis, advise and release information regarding the existence and content of this Agreement or the transactions contemplated hereby to their respective Affiliates or any of their agents, accountants, attorneys and prospective lenders or investors in connection with or related to the transactions contemplated by this Agreement. The Sellers understand that the Purchaser may be required by law or regulation to file this Agreement with the United States

Securities and Exchange Commission (“SEC”). If required by law or regulation the Sellers agree that the Purchaser may file this Agreement with the SEC.

The Parties may terminate this Agreement at any time prior to the Closing as provided below:

If the Purchaser terminates this Agreement pursuant to Section 9.1(b) because of the failure of the Closing to occur on or before June 30, 2005, and such failure results from the breach of the covenant set out in Section 7.1(k) or the failure of the condition precedent set out in Section 4.1(l) to be satisfied on or prior to June 30, 2005, then, notwithstanding anything contained in this Agreement to the contrary, the following provisions shall apply:

10.2 Notices and Service

Any notice to be sent with respect to this Agreement shall be made in writing by letter, facsimile or telegram and shall be considered to have been effectively and validly served upon receipt thereof, provided that it has been addressed as follows:

or to any different address which a Party may communicate to the other subsequent to the date hereof in compliance with the provisions set forth above.

The Parties elect their domicile for all purposes relating to this Agreement, including judicial services, at the aforesaid addresses or at the different addresses they may communicate in the future.

This Agreement shall be binding upon the Parties and their respective successors and assignees.

This Agreement (including its Exhibits) contains the entire agreement between the Parties and supersedes any other previous agreement.

This Agreement may be modified or amended only by an instrument in writing and signed by all of the Parties.

Each Party shall entirely bear all fees of brokers and/or finders possibly appointed by such Party in connection with this Agreement.

Each Party shall bear its own taxes and expenses, including legal fees, incurred in connection with this Agreement.

This Agreement has been drafted and executed only in English. Possible translations into other languages shall not be used for purposes of interpretation of this Agreement.

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party (it being acknowledged and agreed that the provisions of Section 4.1(l) or 7.1(k) constitute essential elements of the agreed exchange that is the subject matter of this Agreement; accordingly, if any of these provisions is determined to be invalid, illegal or unenforceable, the remainder of this Agreement shall not be enforceable against the Purchaser). Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

Each of the Sellers and the Purchaser may (i) extend the time for the performance of any of the obligations or other acts of the other Party, (ii) waive any inaccuracies in the representations and warranties of the other Party contained

herein or in any document delivered by such other Party pursuant hereto, or (iii) waive compliance with any of the agreements or conditions of the other Party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition, of this Agreement. The failure of any Party to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

This Agreement shall be governed by and construed in accordance with the laws of Italy.

Any controversy deriving from this Agreement will referred to an Arbitration Panel composed of three members, one appointed by the Purchaser, one collectively by the Seller(s) and the third, who will act as Chairman, upon mutual agreement of the first two arbitrators.

The Panel shall decide by applying the law in accordance with Article 806 and following of the Italian Code of Civil Procedure; however, without application of Article 838 thereof.

The place of arbitration shall be Milan, Italy. The language to be used in the arbitral proceedings shall be Italian; however, the arbitrators shall be fluent in English and, in particular, shall not require any translation of documents written in English nor the assistance of an interpreter for any oral declaration rendered in English by any person during the proceedings.

* * * * *

This Agreement has been executed on behalf of each Seller, as applicable, by a duly authorized representative of each Seller.

If you are in agreement with the above terms and conditions, please return to us the enclosed copy of this Agreement duly signed by you for acceptance. This Agreement may be signed in counterparts.

[Signatures on following page]

Kind regards,

STONERIDGE, INC.

For acceptance:

GE CAPITAL EQUITY HOLDINGS, INC.

3i GROUP PLC

3i EUROPARTNERS II LP

Roberto POLI

Alberto BOMBONATO

Exhibit Index          

[The above referenced exhibits are not included in this filing. The Company agrees to furnish supplementally a
copy of any omitted schedule (exhibit) to the Securities and Exchange Commission upon request.]