SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 and 15(d) of the
Securities Exchange Act of 1943
Date of Report: May 16, 1994
BROWN & SHARPE MANUFACTURING COMPANY
(Exact name of Registrant as specified in its charter)
DELAWARE 1-5881 050113140
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation of organization) File Number) Identification No.)
Precision Park, 200 Frenchtown Road, North Kingstown, Rhode Island 02852
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code 401-886-2000
Item 2. Acquisition or Disposition of Assets
Brown & Sharpe Manufacturing Company through its subsidiary Brown
& Sharpe International Capital Corporation purchased, on March 24, 1994,
the stock of the French company Ets. Pierre Roch, S.A. (Roch) and its
German sister company, Mauser Prazisions - Messmittel GmbH, which
together manufacture and market micrometers, calipers, height gages,
digital indicators, and other similar precision measuring instrument
products. The business is headquartered in Luneville, France which is
its sole manufacturing site. The German operation is a sales office.
These operations were purchased from Diehl GmbH & Co. of Nurnberg,
Germany ("Diehl"). The Company intends to continue using the acquired
assets in businesses in which they have been previously employed.
The purchase price was delivery to Diehl of 175,000 shares of
Brown & Sharpe Class A Common Stock, subject to certain post closing
adjustments and granting Diehl the right to receive additional 50,000
shares of such stock in the event the Company's Class A Common Stock
attains a market price of $15 or more per share for a total of 30 days
or more during any twelve month period within the five years following
the purchase. The purchase price was determined through negotiation by
the parties subject to adjustment based on specified closing balance
sheet changes. Roch entered into a nine year lease agreement to lease
the Luneville facility from Societe Immobiliere Lunevilloise S.A.R.L., a
subsidiary of Diehl, for about $34,000 annually and has options to
purchase the facility during the lease term.
The acquisition has been accounted for by the purchase method of
accounting, and accordingly, the purchase price has been allocated to
assets acquired and liabilities assumed based on an estimate of their
fair values at the date of acquisition. The book value of the net
assets exceeded the purchase price before allocation by approximately
$2,100. The estimated fair values of assets and liabilities after
allocation are summarized as follows:
Cash $ 1,380,000
Accounts receivable 2,700,000
Inventory 3,250,000
Machinery and equipment 510,000
Accounts payable and accruals 3,880,000
Short-term debt 2,350,000
Long-term debt 410,000
-----------
$ 1,200,000
The results of operations of the acquired entities are not yet
available as those companies have not previously reported results under
U.S. Generally Accepted Accounting Principles (U.S. GAAP). The
operating results of these companies will be included in the
consolidated Brown & Sharpe operating results beginning in the second
quarter of 1994.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Companies Acquired
Item 2. requires the filing of audited financial statements of the acquired
companies for the years ended December 31, 1991, 1992, and 1993.
Brown & Sharpe is currently obtaining audit reports and financial
statements prepared under U.S. GAAP. Accordingly, the Company
herein elects a 60 day extension until June 8, 1994 (75 days from
the acquisition date) to file these statements.
(b) Pro Forma Financial Information
Pro forma financial information for 1993 will also be provided under cover
of Form 8 by June 8, 1994.
(c) Exhibit
Share Purchase and Transfer Agreement dated March 24, 1994, by and
between Diehl GmbH & Co., a German company, and Brown & Sharpe Manufacturing
Company and Brown & Sharpe International Capital Corporation, both Delaware
corporations. Except for Exhibit 13.3.1 to the foregoing Agreement a Commercial
Lease Agreement proposed to be entered into between Societe Immobiliere
Lunevilloise S.A.R.L., a subsidiary of Diehl, and Ets. Pierre Roch S.A. as
part of the transaction, no additional schedules or exhibits to the foregoing
exhibit are being filed, but are referred to in the schedule list included in
the exhibit. A copy of such schedules will be furnished supplementally to the
Commission by the registrant upon request.
SIGNATURE
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 thereunto duly authorized.
BROWN & SHARPE MANUFACTURING COMPANY
Date: May 16, 1994 By: /s/ Charles A. Junkunc
Charles A. Junkunc
Vice President and Chief
Financial Officer
<PAGE> 1
Roll of deeds No. _41/1994
Before me,
the undersigned notary public
Dr. Hannes Schneider
of
Frankfurt am Main
who came upon the request of the parties to the offices of the law firm
Bruckhaus Westrick Stegemann, Frankfurt am Main appeared today
1. Dr. Gerhard Hederer, whose business address is c/o
DIEHL GmbH & Co., Stephanstrasse 49, 90478
Nurnberg, acting on behalf of DIEHL GmbH & Co.,
Stephanstrasse 49, 90478
Nurnberg, Germany, identifying himself by his valid ID card No. 8920483947.
2. Attorney-at-law Dr. Markus Fisseler, whose business address is
Taunusanlage 11, 60329
Frankfurt am Main, Germany, acting on behalf of Brown & Sharpe Manufacturing
Company, 200 Frenchtown Road, Precision Park, North Kingstown, RI 02852, USA
and Brown & Sharpe International Capital Corporation, 200 Frenchtown Road,
Precision Park, North Kingstown, RI 02852, USA, personally known to the
acting notary
<PAGE> 2
The persons appearing excluded any personal liability. They declared that
they wished to have this deed partly recorded in the English language.
The notary public who is in command of the English language ascertained that
the persons appearing are also in command of the English language.
Having been advised of their rights the persons appearing waived their rights
to the presence of a sworn interpreter and a certified translation of this
deed.
The person appearing at 1. presented a written power of attorney and a
certified excerpt from the commercial register of Nurnberg, evidencing that
he was duly authorized to represent DIEHL GmbH & Co. in this transaction.
The person appearing at 2. presented to the notary public notarized and
legalized powers of attorney of Brown & Sharpe Manufacturing Company and
Brown & Sharpe International Capital Corporation, respectively, together with
Secretary's Certificates evidencing the authority of the persons who
have issued the powers of attorney.
Copies of the powers of attorneys, and the Secretary's Certificates are
attached to this deed.
<PAGE> 3
The notary public advised the persons appearing that he was unfamiliar with
the laws of United States of America and the laws of France and that,
therefore, he was unable to accept any responsibility with regard to the
implementation or enforcement of any provisions of this deed under US or
French law. The persons appearing accepted this limitation to the liability
of the notary public.
The persons appearing, acting as aforementioned declared that they wished to
have the following agreement recorded:
<PAGE> 4
SHARE PURCHASE AND TRANSFER AGREEMENT
between
DIEHL GmbH & Co.
Stephanstrasse 49
90478 Nurnberg
Germany
- hereinafter called "DIEHL" or "Seller" -
and
Brown & Sharpe Manufacturing Company
200 Frenchtown Road,
Precision Park,
North Kingston,
RI 02852-1700
USA
- hereinafter called "B&S" -
and
B&S's wholly-owned subsidiary
BROWN & SHARPE International Capital Corporation
200 Frenchtown Road,
Precision Park,
North Kingstown,
RI 02852,
USA
- hereinafter called "ICC" or "Buyer" -
<PAGE> 5
INDEX
Article 1 ETABLISSEMENTS PIERRE ROCH S.A. Page 8
Article 2 MAUSER PRAZISIONS-MESSMITTEL GmbH Page 9
Article 3 Shareholder Loan Page 10
Article 4 Purchase and Sale Page 10
Article 5 Transfer of the ROCH-Shares Page 11
Article 6 Transfer of the MPM-Share Page 12
Article 7 Transfer of the Shareholder Loan Page 12
Article 8 Purchase Price/
Contingent Stock/Price Adjustment Page 12
Article 9 Voting Agreement, B&S Right
of First Refusal, DIEHL Registration
Rights, and Standstill Agreement Page 16
Article 10 Representations and Warranties Page 18
by DIEHL
Article 11 Representations and Warranties by B&S Page 28
Article 12 Liability of Seller and Buyer, B&S Page 30
Article 13 Further Covenants Page 36
Article 14 Costs Page 53
Article 15 Publications Page 53
Article 16 Supplemental Documents Page 53
Article 17 Merger Control Page 53
Article 18 Coming into Force Page 54
Article 19 Applicable Law Page 54
Article 20 Preceding Negotiations and Agreement,
Written Form Requirement Page 54
Article 21 Partial Invalidity Page 54
Article 22 Venue/Arbitration Page 55
Article 23 Communications Page 55
<PAGE> 6
EXHIBITS
Exhibit 8.1.4 20 m FF Debt structure Art. 8.1
Exhibit 10.5.2 Disclosure re: liabilities Art. 10.5
Exhibit 10.8 List of Court Proceedings of Art. 10.8
ROCH and MPM or claims
against ROCH and MPM
Exhibit 10.10.3 Legal safety requirements Art. 10.10
Exhibit 10.11.1 List of Senior Employees Art. 10.11
Exhibit 10.12.1 Pension / bonus arrangements Art. 10.12
Exhibit 10.12.2 Termination liabilities Art. 10.12
Exhibit 10.13.1 Exemptions to ownership of
Industrial Property Rights Art. 10.13.
Exhibit 10.13.2 Industrial Property Rights Art. 10.13.
Exhibit 10.13.3 Infringement Art. 10.13.
Exhibit 10.14 Agreements with Affiliates Art. 10.14
Exhibit 10.19 Banking Relations Art. 10.19
Exhibit 13.1.7 Patents etc. to be transferred Art. 13.1.7
Exhibit 13.3.1 Real Estate Lease Art. 13.3
Exhibit 13.3.2 Option Formula Art. 13.3
Exhibit 13.4 License Agreement Art. 13.4
<PAGE> 7
Preamble
As per December 17, 1993 DIEHL and B&S have negotiated for the sale and
transfer of, effectively, all assets used in the worldwide conduct of
DIEHL's non-CMM Metrology Business, the Roch precision measuring instruments
business ("RPMI Business"). Consequently, DIEHL is willing to sell to B&S or
its designee ICC, and B&S has the intention to cause ICC to purchase from
DIEHL, pursuant and subject to the provisions of this Agreement,
approximately 99.8 % of the share capital of ETABLISSEMENTS PIERRE ROCH S.A.
and all of the share capital of MAUSER PRAZISIONS-MESSMITTEL GmbH. The
aforementioned companies hold all assets and rights of the DIEHL group
appertaining to the RPMI-Business.
Subject to the terms and conditions set forth herein, B&S desires to issue
to DIEHL, and DIEHL desires to acquire from B&S,
(i) 175,000 shares of Class A common stock of B&S (to be adjusted in
accordance with the terms of this Agreement) and
(ii) under certain conditions set forth herein, an additional 50,000 shares
of Class A common stock of B&S.
As a condition to its acquisition of shares of common stock hereunder, DIEHL
has required that B&S provide DIEHL with certain rights to register the
Class A common stock, and all other common stock issued hereunder to DIEHL.
Therefore, DIEHL, B&S and ICC enter into this.
<PAGE> 8
SHARE PURCHASE AND TRANSFER AGREEMENT
1. ETABLISSEMENTS PIERRE ROCH S.A.
1.1 ETABLISSEMENTS PIERRE ROCH S.A., 13 et 15, Avenue Georges de la Tour,
54300 Luneville - hereinafter called "ROCH", is a Stock Corporation
(Societe Anonyme a Directoire et Conseil de Surveillance), organized and
existing in accordance with the laws of France.
1.2 The share capital of ROCH amounts to FF 11,750,000. It is divided into
235,000 shares of FF 50 each.
1.3 DIEHL is holding, directly or indirectly, 234,513 shares (including 200
shares held by the four members of the Supervisory Board); accordingly
DIEHL holds approximately 99.8 % of the share capital of ROCH. These
shares have been deposited at Societe Nanceienne, Varin-Bernier, Nancy
and carry the account numbers 84.39, 95.06, 28.13, 92.15, 91.18. They
are hereinafter called the "ROCH-Shares".
1.4 ROCH is registered in the Commercial Register of Nancy under the
registration no. B 761.800.671.
1.5 The share capital of ROCH has been fully paid and no repayment of share
capital (openly or concealed) has occurred.
1.6 ROCH owns no participations in other legal entities or partnerships or
companies of any nature whatsoever nor is it under the obligation
to acquire such participations, except shares in PMI Inc. ROCH has made
adequate reserves on its books for costs in connection with the
dissolution of that company.
<PAGE> 9
2. MAUSER PRAZISIONS-MESSMITTEL GmbH
2.1 MAUSER PRAZISIONS-MESSMITTEL GmbH, Stephanstrasse 49, 90478 Nurnberg, -
hereinafter called "MPM" - is a limited liability company (Gesellschaft
mit beschrankter Haftung), organized and existing in accordance with the
laws of the Federal Republic of Germany.
2.2 The share capital of MPM amounts to DM 50,000 and consists of 1 (one)
share.
2.3 DIEHL is holding this share in the nominal value of DM 50,000 -
hereinafter called the "MPM-Share" -; accordingly DIEHL holds 100 % of
the share capital of MPM.
2.4 MPM is registered in the Commercial Register of the Lower Court
(Amtsgericht) of Nurnberg, registration no. HRB 5781.
2.5 The share capital of MPM has been fully paid and no repayment of share
capital has occurred.
2.6 MPM owns no participations in other legal entitites or partnerships or
companies of any nature whatsoever nor is it under the obligation
to acquire such participations.
3. SHAREHOLDER LOAN
As per today, DIEHL is the owner of two shareholder loans in ROCH which
resulted from various business dealings between DIEHL and ROCH and amount,
as of today, to FF 1,670,000.00 and FF 5,221,046.00 - to that amount
collectively hereinafter referred to as the "Shareholder Loan" -.
<PAGE> 10
4. PURCHASE AND SALE
4.1 Seller hereby sells to ICC and B&S hereby causes ICC to buy from Seller
economically effective as per 12/31/93, 24 o'clock / 1/1/94, 0 o'clock,
Central European Time (CET), according to the terms and conditions of this
Agreement, the ROCH Shares which constitute 99.8 % of the total share
capital of ROCH of FF 11,750,000.
4.2 Seller hereby sells to ICC and B&S hereby causes ICC to buy from Seller
economically effective as per 12/31/93, 24 o'clock / 1/1/94, 0 o'clock,
Central European Time (CET), according to the terms and conditions of this
Agreement, the MPM-Share which constitutes the total share capital of
MPM in the nominal value of DM 50,000 (Deutsche Mark fifty thousand).
4.3 Seller hereby sells to ICC and B&S hereby causes ICC to buy from Seller
economically effective as per 12/31/93, 24 o'clock / 1/1/94, 0 o'clock,
central European time (CET), according to the terms and conditions of this
Agreement, the Shareholder Loan. Any remaining claims of DIEHL against ROCH
shall remain ordinary payables of ROCH. These payables shall be repaid within 4
weeks after the signing of this contract.
4.4 The rights to dividends, if any, of ROCH and MPM shall pass to the Buyer
as of the date mentioned in 4.1 and 4.2 above.
5. TRANSFER OF THE ROCH-SHARES
5.1 The ROCH-Shares held by DIEHL are transferred to ICC with effect of 24
March, 1994, 12 p.m. (noon) Central European Time (CET), and ICC accepts the
transfer of the ROCH-Shares.
5.2 All ROCH-Shares (save for the shares held by the four members of the
Supervisory Board) are at the moment deposited at Societe Nanceienne, Varin-
Bernier/SNVB, 4 Place Maginot, 54000 Nancy, in the account no. 84.39. DIEHL
will give order to SNVB (ordre de mouvement) to execute the transfer of
such ROCH-Shares to an account established by Buyer, and provide evidence
that SNVB has executed the order.
5.3 DIEHL shall procure that the remaining 200 shares, account nos. 28.13,
91.18, 95.06, 92.15, held by the four members of the Supervisory Board will
be transferred, to the extent legally permitted, to their successors upon
the request of ICC.
<PAGE> 11
6. TRANSFER OF THE MPM-SHARE
The MPM-Share held by DIEHL is transferred to ICC with effect of 24 March
1994, 12 p.m. (noon) Central European Time (CET), and ICC accepts the
transfer of the MPM-Share.
7. TRANSFER OF THE SHAREHOLDER LOAN
The Shareholder Loan held by DIEHL is transferred to ICC with effect of
24 March 1994, 12 p.m. (noon) Central European Time (CET), and ICC
accepts the transfer of the Shareholder-Loan.
8. PURCHASE PRICE/CONTINGENT STOCK/PRICE ADJUSTMENT
8.1 The purchase price (hereinafter the "Price") for the ROCH Shares and the
MPM Share, sold and transferred to ICC according to this Agreement is
as follows:
8.1.1 Class A Stock: B&S will issue to DIEHL a certain amount, up to but not
to exceed in the aggregate 250,000, shares of B&S Class A Common Stock, $
1.00 par value per share (the "Class A Stock"), with each share having
one vote, as follows:
8.1.1.1 B&S shall issue 34,650 shares (to be adjusted in accordance with the
terms of this Agreement) of Class A Stock without further
compensation by DIEHL in exchange for the sale and transfer to ICC
of the ROCH Shares and the MPM Share.
8.1.1.2 B&S shall issue 140,350 additional shares of Class A Stock to DIEHL
at a price of FF 57/share, for cash in a total amount of FF 8,000,000
(eight million).
8.1.2 Contingent Stock Right: In addition DIEHL receives a contingent, non-
assignable right (the "Class A Stock Right") to obtain 50,000
additional shares of Class A Stock (the "Contingent Stock") without
further compensation.
Such Class A Stock Right will be exercisable if and only if during the 5-
(five) year period following the transfer of the shares of ROCH and
MPM the closing price of B&S Class A Common Stock, on the New York Stock
Exchange on which such shares are trading equals or exceeds $ 15 per
share for any 30 (thirty) business days (whether consecutive or not) over
any twelve-months period of time. On the expiration date of such five-year
period, DIEHL's Class A Stock Right shall expire and be extinguished having
no further force and effect.
<PAGE> 12
8.1.3 Registration: The foregoing Class A Stock, the Class A Stock Right and
the Contingent Stock are to be issued initially without registration
under US securities laws but may be registered pursuant to Article
13.2.1 or 13.2.2..
B&S will use and apply the cash proceeds of payment by DIEHL for the
foregoing shares of Class A Stock to the extent that should be
necessary to obtain a full release of DIEHL from the existing
Commerzbank AG, Paris, credit line.
8.1.4 Retention of ROCH and MPM Debt: "Debt" within the meaning of this
Agreement shall be defined as including all third-party financial
institution short-term and long-term borrowings; and any and
all off-balance sheet financing including sold/discounted receivables,
notes or the like.
DIEHL has arranged to waive its shareholder loan in the amount of
DM 2,495,176.63 which it has advanced to MPM, to take economic effect
as of 12/31/93; this has lead to the extinction of all MPM Debt
vis-a-vis DIEHL as of that date. DIEHL has arranged, as of 12/31/93,
for the reduction of the Debt (as defined above) of ROCH so as to bring
the total Debt of the two companies to FF 20 million, by repaying bank
obligations of ROCH sufficient to bring the total Debt of the
companies up to the aforementioned amount, and so as to achieve a
structure of the Debt as set out in Exhibit 8.1.4. All remaining
balances under the current account arrrangements between DIEHL, MPM
and ROCH shall be settled within four weeks after the signing of this
Agreement.
8.1.5. Adjustments on Stock Splits and other Capital Changes: In the event
of any stock split, dividend distribution, combination,
reclassification, exchange of B&S Class A common stock or any other
capital stock of B&S or any other transaction or event that changes
the character or amount of the Class A Stock beneficially held by
DIEHL (each an "Adjustment Event"), the parties hereto agree that
adjustments shall be made in the character and number of shares of
such Class A Stock beneficially held by DIEHL at the time of such
Adjustment Event such that (x) the amount and value of the Class A
Stock beneficially owned by DIEHL immediately after the Adjustment
Event in relation to the number and value of the shares of Class A
common stock or other capital stock of B&S held by all shareholders
shall be equal to (y) the number of shares of Class A Stock
beneficially owned by DIEHL immediately prior to such Adjustment
Event in relation to the number of shares of Class A common stock and
any other capital stock owned by all shareholders of B&S
immediately prior to such Adjustment Event; provided, however, that
in the event of any merger, consolidation or other business
combination involving B&S, or the partial or complete liquidation
thereof (each, a "Business Reorganization"), DIEHL shall be entitled
to receive the value and amount of securities or other consideration
in relation to the total value and amount of outstanding securities
of B&S to which DIEHL would have been entitled in the absence of such
Business Reorganization.
<PAGE> 13
8.2 Price Adjustment:
8.2.1 The Price pursuant to Article 8.1.1.1 has been established on the basis
of the estimated Losses defined below; it shall be adjusted by
increasing or decreasing the number of shares of Class A Stock to be
issued pursuant to 8.1.1.1 by applying the following formula on the
basis of the actual Losses:
x = Losses
------
2 x 57, whereby x = amount of shares
of Class A Stock (rounded down to the next available amount of shares)
8.2.2 "Losses" as used in this Agreement shall include the consolidated
losses in FF of ROCH and MPM for the time period from January 1, 1994
up to the 23rd of March, 1994 (the "Interim Period").
8.2.3 The Losses shall be established by the present auditors of ROCH and
MPM, whose opinion shall be binding upon the parties in the absence of
manifest error.
8.2.4 For the purposes of establishing of the Price Adjustment the Class A
Stock shall be calculated at FF 57 per share; losses incurred in DM
shall be converted to FF at a rate of 3.44 FF/DM.
8.3 The purchase price for the Shareholder Loan shall be DM 1. Receipt by
DIEHL is hereby acknowledged.
8.4 Upon the signing of this Agreement and at any time thereafter when due
B&S shall convey, assign, transfer and deliver to DIEHL stock certificates
representing B&S common stock as owed by B&S pursuant to this Agreement,
duly endorsed or accompanied by duly executed stock powers, in proper
form for transfer and with all appropriate stock transfer tax stamps
affixed. B&S hereby agrees and covenants with DIEHL that at any time
and from time to time after the date hereof, it shall execute and
deliver such further instruments of conveyance, assignment, transfer,
endorsement, direction and authorization as shall be sufficient,
requisite and advisable, in the opinion of DIEHL or its counsel, to
effect the conveyance, assignment, transfer and delivery of all such
shares of common stock to DIEHL.
8.5 Upon signing of this Agreement, in satisfaction of its obligation under
Article 8.1.1.2 DIEHL shall deliver to B&S by bank cheque of Societe
Generale, Elsassische Bank an amount equal to FF 8 million (Eight million
French Francs).
<PAGE> 14
9. Voting Agreement, B&S First Refusal, DIEHL Registration Rights and
Standstill Agreement
9.1 Voting Agreement: DIEHL agrees to vote all shares of Class A Stock or
any other class of voting security of B&S, now or hereafter owned or
controlled by it, to elect as directors, in any election of directors of
B&S subsequent to the date hereof, such persons as designated by B&S as
nominees for directors of the board of directors of B&S. DIEHL shall not
vote to remove any member of the board of directors of B&S designated in
accordance with this Article 9.1.; provided, however, that the agree-
ments contained in this Article 9.1 shall terminate and be of no further
force and effect upon the first to occur of any of the following dates
or events: (i) December 31, 1995; (ii) the transfer by DIEHL of its
shares of Class A common stock to a third party; or (iii) the occurrence
of a change in control (as such term is defined in the Act (as defined
in Article 14.2)) with respect to B&S.
9.2 B&S Right to First Refusal to Purchase DIEHL Class A Stock: If at any
time within two years from the date hereof DIEHL wishes to sell, assign
or transfer, by gift or otherwise, to one person more than 100,000
shares of Class A common stock in one transaction or a series of tran-
sactions, DIEHL shall first submit a written offer (an "Offer") to
sell, assign, or transfer such shares to B&S, on terms and conditions,
including price, not less favorable to B&S than those on which DIEHL
proposes to sell, assign or transfer such shares of Class A Stock to the
transferee.
The Offer shall disclose (i) the identity of the proposed transferee; (ii)
the number of shares proposed to be sold, assigned or transferred;
(iii) the terms of the proposed sale, assignment or transfer; and (iv) any
other material facts relating to the proposed sale, assignment or transfer.
B&S shall have a period of ten (10) days after receipt of such Offer (the
"Exercise Period") during which to accept or reject it. In the event
that B&S shall elect on a timely basis to purchase or otherwise acquire the
shares covered by the Offer, B&S shall communicate in writing such
election ("Purchase Election") to DIEHL. The Purchase Election shall specify
a date for the closing of such sale or transfer to occur within five (5)
business days from the date of the Purchase Election. A Purchase Election
shall, when taken in conjunction with the Offer, be deemed to constitute a
valid, legally binding and enforceable agreement for the transfer of the
shares covered thereby. In the event that B&S shall not elect to purchase or
otherwise acquire all of the shares offered pursuant to the Offer by DIEHL,
the shares not so purchased or otherwise acquired may be sold, assigned or
transferred by DIEHL within a reasonable time after the expiration of the
Exercise Period. Any such sale, assignment or transfer shall be to the same
proposed transferee, at not less than the price and upon other terms and
conditions not more favorable to the transferee than those specified in the
Offer. Any shares not sold, assigned or transferred within such period after
the expiration of the Exercise Period shall continue to be subject to the
requirements of a prior offer to B&S pursuant to this Article 9.2.
<PAGE> 15
9.3 DIEHL shall have the right to registration of its shares of Class A
Stock pursuant to Articles 13.2.1 and 13.2.2. B&S will endeavour to
guide DIEHL to facilitate, (subject to B&S's right of first refusal set
forth in Article 9.2), the sale of any agreed upon amount of DIEHL
shares of Class A Stock to likely accredited institutional buyers
prior to the expiration of the Rule 144 24-month holding period who
would be permitted under applicable rules to purchase the stock for
investment. After expiration of such 24-month period, DIEHL will be free
to sell its B&S Shares in accordance with the provisions of Article 13.2.
9.4 Standstill Agreement: DIEHL will not, and guarantees that none of its
affiliates (within the meaning of Sec. 16 pp Stock Corporation Act) will,
purchase or otherwise acquire any additional shares of B&S stock without
prior approval from B&S's Board of Directors except however as may be
necessary to maintain the level of their ownership interest in B&S if
B&S issues stock for cash.
10. Representations and Warranties by DIEHL
DIEHL hereby warrants and represents to B&S and ICC (Zusicherung im Wege
eines verschuldensunabhangigen Garantieversprechens, S 305 BGB):
10.1 All written information regarding the factual status of ROCH, MPM,
their business operations and their financial conditions, supplied by
DIEHL to B&S during the course of the negotiations since July 1993 for
the transaction contemplated in this Agreement is correct and not
misleading in all material respects. Estimates regarding the future
performance of the companies were based on reaso-nable business
judgement at the time. The statements in Articles 1 and 2 of this
Agreement are correct. Upon the implementation of this Agreement, B&S
will effectively acquire the RPMI Business. There are no contracts or
commitments of any nature which would affect the share capital of
ROCH or MPM, e. g. capital increases or reductions, redemptions or
dissolutions.
10.2 The Seller is the owner of the ROCH-Shares and the MPM-Share, which have
been validly created. The Seller can freely dispose of these shares and
these shares are not subject to any option or pre-emption right and are
free and clear of any encumbrances or other rights or claims of third
parties. Seller has all permissions which might be necessary under
corporate and/or legal aspects to sell these shares.
10.3 ROCH and MPM are validly existing in accordance with the laws of the
Republic of France and the Federal Republic of Germany, respectively,
and have the right to pursue the objects indicated in their respective
articles of association.
<PAGE> 16
10.4 The articles of association of ROCH and MPM as presently in effect and
certified extracts from the commercial registers for each of ROCH
("extrait K-Bis") and MPM ("Handelsregisterauszug") have been submitted
previously by Seller to Buyer and reflect the presently effective legal
status.
10.5 The audited annual accounts (including the notes) as of 12/31/93 of
ROCH and MPM, respectively, (the "Accounts") have been prepared in
accordance with generally accepted French or German bookkeeping
and accounting principles, respectively, applied for the preparation of
the balance sheets and those of previous years on a consistent basis,
and present a true and fair view of the net worth (Vermogenslage),
financial position (Finanzlage), earnings position (Ertragslage) and
state of affairs (Lagebericht) where legally required of ROCH and MPM
as per 12/31/92. These Accounts have been handed over to ICC prior to
the signing of this Agreement.
Irrespective of the generality of the foregoing, save as disclosed in
Exhibit 10.5.2 the Accounts:
- - make full accruals for all bad and doubtful debts, depreciation,
obsolescence of assets and all foreseeable losses;
- - include stock and work in progress at the lower of cost and net realisable
value and have written down or written off as appropriate all slow moving,
redundant, obsolete, damaged, defective or unsaleable stock;
- - are not affected by any extraordinary or non-recurring item unless other-
wise expressly stated therein;
- - correctly reflect all assets of the relevant companies, including (without
limitations), subject to the general reserve for non-collectibility of
receivables, the receivables and do not place values on assets in excess
of market values (on a going concern basis) as of the relevant balance
sheet day;
- - fully depreciate the fixed assets of the relevant companies in accordance
with the proper accounting standards applicable in each jurisdiction;
- - show, at least as below the line items, all liabilities (including, but not
limited to, uncertain liabilities (ungewisse Verbindlichkeiten), con-
tingent liabilities (Eventualverbindlichkeiten), imminent losses resulting
from pending transactions (drohender Verlust aus schwebenden Geschaften) of
any kind and nature whatsoever, regardless of whether or not actual,
contingent, determined, determinable, qualified, disputed or otherwise,
regardless of whether or not such liabilities, contingent liabilities or
losses were recognizable at the time the relevant accounts have been
prepared, or whether or not such liabilities had to be shown in the
relevant accounts (for instance, off-balance sheet items).
<PAGE> 17
To the extent that there are capitalization options (Aktivierungswahlrechte)
no capitalization has taken place, and to the extent that there are
options to include items in the liabilities (Passivierungswahlrechte) such
items have been included, and all statutorily permitted depreciations
and accruals have been taken, save as disclosed in Exhibit 10.5.2.
Since December 31, 1993 :
- - ROCH and MPM have carried on their businesses in the ordinary and usual
course without any interruption or alteration in the nature, scope or
manner of their business, moreover, all dealings have been made at arm's
length as between unrelated parties;
- - there has been no material adverse change in the financial or trading
position of ROCH and MPM;
- - ROCH and MPM have not acquired or agreed to acquire any asset for a
consideration which is materially higher than market value at the time of
acquisition and have not disposed of or agreed to dispose of any asset for
a consideration which is materially lower than market value or book value,
whichever is the higher, at the time of disposal;
- - ROCH and MPM have not assumed or incurred any liability or entered into
any commitment outside the normal course of business, such as purchases of
raw material, services and capital expenditures;
- - there have been no unusual increases or decreases in stock levels or bank
debt;
- - no distribution of capital or income, whether openly or concealed, has been
declared, made or paid in respect of any share in ROCH or MPM;
- - no supplier to or customer of ROCH or MPM who provides more than 10 % to,
or purchase more than 10 % from, the relevant company has been lost, or has
indicated intentions to cease or substantially reduce, business
relations. The same holds true for the whole of the year 1993.
- - the total Debt of ROCH and MPM has been reduced, as of 12/31/93 as agreed in
8.1.4 without any unusual sale of fixed or current assets of any of the two
companies.
<PAGE> 18
10.6 ROCH and MPM have properly filed all tax returns to be filed and/or
paid all taxes to be paid as per 12/31/93 and the accruals and reserves
for taxes reflected in the balance sheet are adequate to cover all
taxes due and payable for the periods.
All taxes and other public dues of any kind (Abgaben, Sozial- und
Arbeitslosenversicherungsbeitrage etc.) payable as due by ROCH or MPM,
respectively, which relate to the time up to the date hereof and which
have not been paid shall be payable by DIEHL. No public grants or
subsidies are subject to repayment.
Neither ROCH nor MPM will be required to pay (it being understood that
the reduction of losses carried forward is not a payment within the
meaning of this subparagraph) any additional taxes or other public dues
in connection with MPM's acquisition of parts of the business of ROCH
(MPM goodwill).
10.7 ROCH and MPM are entitled to all assets and rights which are listed in
their Accounts or which are used in their operations, except as far as
leased or held under other rights or disposed of in the ordinary course
of business. Save for customary retentions of title in favour of
suppliers such assets are not charged with any rights or claims of any
third party except for those which are reflected in the balance sheets
and except for any charges provided by law. They are in a usable
condition and have been properly maintained.
10.8 ROCH and MPM are not involved in any court actions as plaintiff or
defendants, administrative proceedings with a financial impact on the
relevant company of more than DM 20,000 (Deutsche Mark twenty thousand)
in one single case (or in a series of related cases) or DM 100,000
(Deutsche Mark one hundred thousand) in the aggregate, or in criminal
investigations, and none of its employees is subject to criminal
investigations (including administrative offences (Ordnungswidrigkeiten))
concerning the RPMI Business, except those actions which have been
listed in Exhibit 10.8. There are also no claims in an amount of more
than DM 20,000 (Deutsche Mark twenty thousand) which have been
raised in writing. To the best of the knowledge of the management there are
no facts which could lead to court actions, administrative proceedings,
or criminal investigations in the future.
<PAGE> 18
10.9 ROCH and MPM have all official permits required for the operations as
presently run and the operations of ROCH and MPM are, in all material
respects, run in accordance with such official permits and all
applicable laws and regulations. To the best of the knowledge of the
management there are no reasons why any permit should be cancelled or
revoked following the implementation of this Agreement.
10.10 Neither ROCH nor MPM materially infringe any laws and regulations, in
particular:
10.10.1 those regarding the protection of the environment; there has not
been and there is no negative impact on the environment which could
cause any damages or fines or impediments by public authorities, or
civil obligations vis-a-vis third parties of any kind to remedy
pollution;
10.10.2 the buildings belonging to and used by ROCH have been constructed in
accordance with the applicable building laws and regulations,
construction plans and are maintaind in accordance with said laws;
10.10.3 the machines and the other equipment of ROCH comply with the legal
safety requirements save as disclosed in Exhibit 10.10.3;
10.10.4 the conduct of ROCH and MPM does not violate export restrictions of
any applicable jurisdiction;
10.10.5 neither ROCH nor MPM violate antitrust laws of any applicable
jurisdiction;
10.10.6 ROCH and MPM are in material compliance with the applicable labour
law provisions;
10.10.7 ROCH and MPM are in material compliance with all applicable product
liability provisions.
10.11 ROCH and MPM did not enter into contracts outside of their normal
course of business. They are not party to any arrangement which would
be subject to termination as a consequence of the implementation
of this Agreement. They are not, and have not been, party to any
agreements with the senior employees listed in Exhibit 10.11.1 (other
than such employees' employment contracts). The companies are in no
material default (erheblicher Zahlungs- oder Leistungsverzug) with
regard to any significant obligation.
<PAGE> 19
10.12 Save as disclosed in Exhibit 10.12.1 there are no agreements and
obligations relating to pensions, other social benefits, profit
participations other than legally forseen, turnover participations or
other success bonuses as well as similar agreements. Save as disclosed
in Exhibit 10.12.2 there are no liabilities associated with employees
whose work contracts ROCH or MPM has terminated, or laid off prior to
the date hereof or put on part-time or temporary status or the like,
including but not limited to severance pay or pension liabilities
except those liabilities which are a consequence of lay off or
termination decisions made by ROCH and/or MPM at the specific direction
of B&S.
10.13 Save as disclosed in Exhibit 10.13.1 and subject to the arrangements
in Article 13.1.7, ROCH and MPM own all industrial property necessary
to carry on their business operations. All industrial property rights
set out in Exhibit 10.13.2 are owned by ROCH or MPM, have been properly
maintained and have not be challenged by any third party. To the best
of the knowledge of the management of ROCH or MPM neither ROCH nor MPM
infringes upon the industrial property rights of third parties. Save
as disclosed in Exhibit 10.13.3, to the best of the knowledge of the
management of ROCH or MPM , no allegations of infringement have been
raised by third parties and to the best of the knowledge of the
management, there are no circumstances which would make it likely,
that such allegations be raised in the future.
10.14 Save as disclosed in Exhibit 10.14 neither ROCH nor MPM are parties
to any agreement with DIEHL or with a person affiliated with DIEHL
(within the meaning of Sec. 16 pp German Stock Corporation Act or
otherwise) which would survive following the execution of this
agreement, and any such agreements (save as disclosed) have been
terminated without compensation for the relevant counter part.
Neither ROCH nor MPM are subject to enterprise contracts
(Unternehmensvertrage), for instance, profit and loss assumption
agreements.
10.15 ROCH or MPM, respectively, have been properly insured with respect to
their assets, business operations and product liability, respectively,
as of the date of the signing of this Agreement. The companies have
always complied with the terms of the relevant insurance policies.
The premiums have been paid, and no notice has been given or received
by ROCH or MPM.
10.16 Neither ROCH nor MPM owns any real estate.
<PAGE> 20
10.17 DIEHL acknowledges that the Class A Stock and the Class A Stock Right
(and the Contingent Stock if issued) will be issued without
registration under the Act (as defined in Article 13.2 below) on the
basis that the transactions contemplated by this Agreement do not
involve any public offering of securities pursuant to the exemption
from registration under Section 4 (2) of such Act, it being also the
intention of the parties that the stock issuance transactions
contemplated hereunder will be covered by the provisions of Rule 505 of
Regulation D promulgated by the Securities and Exchange Commission
under the Act. DIEHL confirms to B&S that it is acquiring the Class A
Stock and the Class A Stock Right (and any contingent Stock
thereunder) for its own account for investment with no present
intention, now and on any date of acquisition, to make a distribution
of such securities except that DIEHL contemplates the eventual sale of
such securities either pursuant to a registration under the Act or an
exemption therefrom, as the case may be, and that it has been advised
in this transaction by counsel experienced in US securities law
matters. DIEHL acknowledges (I) that it has been fully informed
of the limitations that are implicit in the fact that the securities
referred to above are not registered under the Act and may not be sold
or transferred, which DIEHL contemplates eventually to occur, absent
registration or an exemption therefrom; (ii) that except as expressly
provided in this Agreement B&S has no obligation to register any of
such securities; (iii) that the exemptions from the registration
requirements of such Act are limited; and (iv) that such securities
are required to bear and will bear a legend to note such restrictions
on their transfer in substantially the following form:
"The securities represented hereby have not been registered under the
Securities Act of 1933 and may not be offered or sold in the absence
of an opinion of counsel satisfactory to the issuer thereof that such
registration has been effected or an exemption therefrom is available.
Transfer may be refused in the absence of such opinion."
DIEHL acknowledges receipt from B&S of publicly available financial
information concerning B&S and that it has had the opportunity to
obtain additional information concerning B&S. DIEHL represents and
agrees that it has not taken prior to the date of this Agreement, and
will not take after the date of this Agreement, any action that
would make unavailable the exemption provided in Section 4 (2) of the
Act or Rule 505 promulgated thereunder with respect to the receipt by
it of the securities referred to above; and, that prior to delivery of
the securities, it will take such actions to execute such documents as
counsel for B&S may reasonably require in connection with compliance
with federal and state securities laws and other legal matters.
<PAGE> 21
10.18 ROCH and MPM have no obligation to accept returns
(Rucknahmeverpflichtung, ausqenommen qesetzliche
Rucknahmeverpflichtungen) from, or do extend credit terms to, its
customers (outside the normal course of business) and have no policy,
custom or practice of accepting such returns or extending credit.
10.19 Exhibit 10.19 contains a true and complete list, as of the date hereof,
of each bank or other financial institution, trust company or brokerage
firm in which ROCH or MPM has an account or safe deposit box, and the
names of all persons authorized to draw thereon, have access or
transact business with respect thereto.
11. Representations and Warranties of B&S;
B&S hereby warrants and represents do Seller (Zusicherungim Wege eines
verschuldensunabhangigen Garantieversprechens, S 305 BGB) as of today:
11.1 B&S has all necessary corporate power and authority to execute and
deliver this Agreement and the Class A Stock Right and to carry out its
obligations thereunder and to cause any of its subsidiaries to carry
out any of its obligations under this Agreement. The execution and
delivery of this Agreement, the Class A Stock Right and the
consummation of the transactions contemplated thereby have been duly
authorized by the Board of Directors of B&S. This Agreement and the
Class A Stock Right constitute the valid and legally binding obligation
of B&S and is enforceable against B&S in accordance with its terms,
subject to bankruptcy, insolvency, reorganization or similar laws of
general application affecting the rights and remedies of creditors, and
to general equity principles; and, the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
will not conflict with or result in any violation of or default under
any provision of the charter or by-laws of B&S or any mortgage,
indenture, lease agreement or other instrument, permit, concession,
grant, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to B&S or any of its
properties. No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority of
the United States is required in connection with the execution and
delivery of this Agreement and the Class A Stock Right or the
consummation of the transactions contemplated thereby by B&S.
<PAGE> 22
11.2 B & S's authorized capital stock consists of 15,000,000 shares of Class
A Common Stock, 2,000,000 shares of Class B Common Stock, and 1,000,000
shares of Preferred Stock. On March 4, 1994 there were issued and
outstanding 4,468,138 shares of Class A Common Stock, 545,680 shares of
Class B Common Stock and no shares of Preferred Stock. The Class A
Stock to be issued in connection with the transactions contemplated
hereby will have been duly authorized and, when issued under this
Agreement, shall be validly issued, fully paid and non-assessable.
The Class A Stock Right has been duly authorized and when executed and
delivered in accordance with the terms of this Agreement will be the
valid and legally binding obligation of B&S and will be enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization or similar laws of general application affecting the
rights and and remedies of creditors. B&S has reserved a sufficient
number of shares of Class A Stock for issuance upon the exercise of the
Class A Stock Right, and upon issuance, such Contingent Stock shall be
duly authorized and validly issued, fully paid and non-assessable. The
Class A Stock and the Contingent Stock will be duly authorized for
listing on the New York Stock Exchange on or shortly after the issue
thereof pursuant to this Agreement. References to the Class A Stock in
this Section include any additional shares of such stock that may be
issued to DIEHL pursuant to the post-closing purchase price adjustment
or issued as a result of any Adjustment Event pursuant to Article 8.1.5.
11.3 Copies of the B & S's 1992 and 1991 Annual Reports, which contain the
consolidated balance sheet and income statement of B&S and its
subsidiaries at and for the years ending December 26, 1992 and
December 28, 1991 and are audited by Coopers & Lybrand, and the first
quarter 1993 10 Q reports have been made available to DIEHL. Such
financial statements are true and complete in all material respects and
have been prepared in accordance with US generally accepted accounting
principles consistently applied throughout the periods indicated and
fairly present the financial condition of the entities covered thereby,
as of the dates thereof, and the results of their operations for the
indicated periods.
12. Liability of DIEHL and ICC; of B&S
12.1 Liability of DIEHL in connection with its representations and warranties
under Article 10 shall be as follows:
<PAGE> 23
12.1.1 In case any representation or warranty of DIEHL in Article 10 should
turn out to be incorrect in whole or in part and should such
incorrectness result in a claim exceeding FF 100,000 (French Francs
one hundred thousand) in the aggregate (such amount of FF 500,000 to
serve as a deductible, so that only claims of ICC shall be
acknowledged to the extent they exceed that amount in the aggregate),
DIEHL shall be obligated to place ICC or, at the option of ICC, the
relevant company would be if the representation and warranty had been
correct. In case DIEHL does not place ICC or the relevant company in
such position within 90 days after ICC has notified DIEHL in writing
of the breach of a representation or warranty, ICC shall be entitled
to be compensated, at the option of DIEHL, either in cash or in B&S
shares which had been previously issued by B&S to DIEHL pursuant to
this Agreement, to be valued at FF 57/share. In the event that the
shares have already been transferred to third parties or to the
extent that the transfer of shares to ICC would not suffice to
compensate the breach, DIEHL shall compensate ICC in cash.
ICC shall not be entitled to demand additional damages, including
compensation for lost profit, or to cancel or to withdraw from this
Agreement.
12.1.2 The period for asserting claims under Article 12.1.1 shall run
12.1.2.1 in respect of claims for an untrue representations/warranty until
September 30, 1995 unless DIEHL maliciously or intentionally made
wrong representations. In the case of a maliciously or
intentionally wrong representation, the statutory period shall
apply;
12.1.2.2 in respect of tax liabilities, and for liabilities for the payment
of other public dues until the expiry of three months after the
assessments (including correction assessments issued after a
tax or other audit, if any) for the taxes or dues related to the
relevant period have become final and unappealable.
<PAGE> 24
12.1.2.3 In order to meet the periods of asserting claims mentioned in
12.1.2.1 and 12.1.2.2. it is not necessary to assert the claim in
a formal procedure. Written notification to DIEHL by letter,
telex, cable or telefax, mailed or sent by the dates specified in
12.1.2.1 and 12.1.2.2 shall be sufficient. Notification sent by
telex, cable or telefax shall be confirmed by letter. Such
confirmation letter, however, does not have to be sent within the
said period.
12.1.2.4 Claims which have been asserted by ICC in accordance with 12.1.2.3
above until September 30, 1995 shall be barred if they are not
asserted before the arbitration panel at the latest 6 months
following the assertion, but not before September 30, 1995.
12.1.3 ICC has the obligation to inform DIEHL immediately in writing in case
third parties have announced or threatened claims against ICC, ROCH,
or MPM which could lead to the liability of DIEHL according to
Article 12.1. ICC will supply DIEHL with all pertinent information
and documentation which may be necessary to judge the entitlement of
the announced or threatened claim.
The parties will notify each other of the defense strategies against
any of the above mentioned claims. DIEHL will have the opportunity to
participate in the defense of the claim in an appropriate way. In
case ICC is not willing to defend itself against the claim,
regardless what its legal reasons may be, ICC will permit DIEHL to
defend itself in its own name and costs against the claim as far as a
defense against such a claim does not interfere with its own business
actions.
12.1.4 In case of a breach of a representation or a warranty by DIEHL, ICC
has exclusively the claims provided for in this Agreement.
<PAGE> 25
12.1.5 DIEHL's liability in connection with claims of ICC vis-a-vis DIEHL
for breach of a representation or warranty shall, in total, be
limited to a cap of FF 5,500,000 in the aggregate.
Further, claims under the representations and warranties shall not be
capped under this Article 12.1.5 if and to the extent they were
intentionally or grossly negligently made or given incorrectly by
DIEHL, or its representatives (having made proper inquiries with the
management) during the negotiations of this Agreement. DIEHL's
knowledge or negligence shall include the knowledge or negligence of
the senior managers Pauchot and Wolf.
12.1.6 There shall be no restrictions whatsoever with regard to claims of
ICC for damages under the representations and warranties given by
DIEHL with respect to taxes and other public dues (Article 10.6)
payable by MPM or ROCH.
The aforementioned waiver of the restrictions contained in this
Article 12.1.6 shall apply to the de minimis clause and the basket
(Article 12.1.1) and the cap (Article 12.1.5).
12.2 The liability of B&S in connection with its representation and
warranties in Article 11 shall be as follows:
<PAGE> 26
12.2.1 In case any representation or warranty of B&S in Article 11 should
turn out to be incorrect in whole or in part and should such
incorrectness result in a claim exceeding FF 100,000 (French
Francs one hundred thousand), in each individual case or series of
related cases, and FF 500,000 (French Francs five hundred thousand)
in the aggregate (such amount of FF 500,000 to serve as a
deductible, so that only claims of DIEHL shall be acknowledged to the
extent they exceed that amount in the aggregate), B&S shall be
obligated to place DIEHL in a position in which DIEHL would be if
the representation and warranty had been correct. In case B&S does
not place DIEHL in such position within 90 days after DIEHL has
notified B&S in writing of the breach of a representation or warranty,
DIEHL shall be entitled to be compensated, at the option of B&S,
either in cash or in B&S shares to be valued at FF 57/share.
DIEHL shall not be entitled to demand additional damages, including
compensation for lost profit, or to cancel or to withdraw from this
Agreement.
12.2.2 The period for asserting claims under Article 12.2.1 shall run
12.2.2.1 in respect of claims for an untrue representation/warranty until
September 30, 1995 unless B&S maliciously or intentionally made
wrong representations. In the case of a maliciously or
intentionally wrong representation, the statutory period shall
apply;
12.2.2.2 in respect of tax liabilities, and for liabilities for the payment
of other public dues until the expiry of three months after the
assessments (including correction assessments issued after a
tax or other audit, if any) of the taxes or dues related to the
relevant period have become final and unappealable.
12.2.2.3 In order to meet the periods of asserting claims mentioned in
12.2.2.1 and 12.2.2.2 it is not necessary to assert the claim in a
formal procedure. Written notification to B&S by letter, telex,
cable or telefax, mailed or sent by the date specified in
12.2.2.1 and 12.2.2.2 shall be sufficient. Notification sent by
telex, cable or telefax shall be confirmed by letter. Such
confirmation letter, however, does not have to be sent within the
said period.
<PAGE> 27
12.2.2.4 Claims which have been asserted by DIEHL in accordance with
12.2.2.2 above until September 30, 1995 shall be barred if they are
not asserted before the arbitration panel at the latest 6 months
following the assertion, but not before September 30, 1995.
12.2.3 DIEHL has the obligation to inform B&S immediately in writing in case
third parties have announced or threatened claims against DIEHL which
could lead to the liability of B&S according to Article 12.2. DIEHL
will supply B&S with all pertinent information and documentation
which may be necessary to judge the entitlement of the announced or
threatened claim.
The parties will notify each other of the defense strategies against
the abovementional claim. B&S will have the opportunity to
participate in the defense of the claim in an appropriate way. In
case DIEHL is not willing to defend itself against the claim,
regardless what its legal reasons may be, DIEHL will permit B&S to
defend itself in its own name and costs against the claim as far as a
defense against such a claim does not interfere with its own business
actions.
12.2.4 In case of a breach of a representation or a warranty by B&S, DIEHL
has exclusively the claims provided for in this Agreement.
12.2.5 B & S's liability in connection with claims of DIEHL vis-a-vis B&S
for breach of a representation or warranty shall, in total, be
limited to a cap of FF 5,500,000 in the aggregate.
Further, claims under the representations and warranties shall not be
capped under this Article 12.2.5 if and to the extent they were
intentionally or grossly negligently made or given incorrectly by
B & S, or its representatives (having made proper inquiries with the
management) during the negotiations of this Agreement.
<PAGE> 28
12.3 The liability of DIEHL, B&S or ICC, respectively, in connection with
covenants, promises and other undertakings of any kind shall be as
follows:
In the event that one of the covenants, promises or undertakings,
contained in this Agreement shall not be fulfilled, the relevant other
party shall have the right to demand fulfillment, giving adequate
notice. Upon the expiration of the relevant notice period, the party
who is obliged to perform under the covenant, promise or undertaking
shall be obligated to compensate the relevant other party in cash.
There shall be no right to cancellation or to withdrawal from this
Agreement, and no compensation other than case (unless DIEHL fails to
provide good title to the ROCH Shares or the MPM Share).
13. Further Covenants
13.1 DIEHL shall provide to ICC at no costs to ICC:
13.1.1 Certificates of releases of third parties for all security,
guarantees, comfort letters and the like, if any, extended by ROCH or
MPM, respectively, on behalf or in the interest of DIEHL or its
affiliates (within the meaning of Sections 16 pp Stock Corporation
Act);
13.1.2 DIEHL will procure that one of the existing members of the Board of
Directors (Supervisory Board) of ROCH will resign, and be replaced by
an appointee of ICC at no cost. Such appointee shall become
president of ROCH. DIEHL will further procure that all present
managing directors of MPM (except Mr. Elsner) will resign at no cost.
DIEHL will further procure that all members of the Board of Directors
(Supervisory Board) of ROCH (except ICC's appointees) had in
resignation letters at no cost to take effect at the next ordinary
shareholders' meeting of ROCH.
13.1.3 Minutes of the board meeting of the Board of Directors (Supervisory
Board) of ROCH at which the transaction contemplated in this
Agreement is approved;
13.1.4 The minutes of the meeting of the works counsel (Commite d'
Entreprise) giving its opinion on the proposed transfer of the ROCH
Shares;
<PAGE> 29
13.1.5 A transfer order in favour of ICC, duly signed by DIEHL, for the ROCH
Shares, and substantiation that the SNVB has executed the order to
transfer the ROCH Shares;
13.1.6 DIEHL shall procure that the patents and other industrial property
rights set out in Exhibit 13.1.7 shall be validly transferred,
together with all applicable files and other documentation, to
ROCH at no cost.
13.2 B&S covenants with DIEHL that DIEHL shall have the following rights
with respect to registration of its shares of Class A Stock (including
any Contingent Stock) to be issued to it by B&S.
13.2.1 DIEHL Demand Registration Rights: Subject to the conditions and
limitations set forth herein, DIEHL shall have a one-time right
exercisable during the one-year period commencing on a date which is
two (2) years from the date hereof and ending on a date which is
three (3) years from such date, (the "Registration Rights Period") to
request that B&S register shares of its Class A Stock under the Act
(as defined herein). Upon receipt of a notice from DIEHL during the
foregoing one-year period requesting registration of shares of its
Class A Stock and specifying the intended method or methods of
disposition of such Registrable Shares (as defined herein), B&S will
prepare and file with the Commission (as defined herein) a
registration statement on such form as shall be selected by B&S in
accordance with the provisions of Article 13.2.3 to permit the
disposition of the Registrable Shares included in the notice in
accordance with the intended method or methods of this disposition.
Notwithstanding the foregoing provisions of this Article 13.2.1, B&S
will not be required to effect, or to take any action to effect, any
such registration pursuant to such Article:
(i) if the request for registration does not request the registration
of at least 100,000 shares of DIEHL's Class A Stock and contain a
representation of a good faith intention to sell such shares
pursuant to the registration statement;
<PAGE> 30
(ii) if the Board of Directors of B&S determines in good faith that the
public sale of securities or the filing of a registration statement
at such time would be materially detrimental to B&S and in which
case B&S may defer registration for a period not to exceed ninety
(90) days provided however that the B&S Board may defer
registration hereunder no more than one time during the
Registration Rights Period and the Registration Rights Period
shall in the event of such deferral be extended by the period of
such deferral.; or
(iii) if in the written opinion of counsel to B&S, and, if the manner of
disposition proposed is an underwritten offering, in the written
opinion of counsel to the proposed underwriter, delivered to
B & S's transfer agent, and to DIEHL registration under the Act is
unnecessary to permit the sale or transfer of the Registrable
Securities proposed to be sold in the Registration in the manner
described in the request.
13.2.2 DIEHL Incidental Registration Rights: If B&S proposes at any time
during the two-year period preceding commencement of the Registration
Rights Period in Article 13.2.1 to register any shares of its Class A
common stock under the Act, whether or not for sale for its own
account on a form which would permit registration of DIEHL's
Registrable Securities for sale to the pbulci under the Act, it will
at such time give written notice to DIEHL of its intention to do so,
specifying the form and manner and the other relevant facts involved
in such proposed registration.
<PAGE> 31
Upon the written request of DIEHL delivered to B&S within 30 days
after the giving by B&S of any such notice to DIEHL to include its
Registrable Shares in such registration (which request shall specify
the Registrable Securities intended to be disposed of and the
intended method of disposition thereof), B&S will sue its best
efforts as a part of its filing to effect the registration under the
Act of all Registrable Securities which B&S has been so requested to
register by DIEHL to the extend requisite to permit the disposition
(in accordance with the intended methods thereof as aforesaid) of the
Registrable Securities to be registered, provided, however, in all
cases that:
- if (I) the registration so proposed by B&S involves an underwritten
offering (whether or not for sale for the account of B&S) to be
distributed on a firm commitment basis by or through one or more
underwriters of recognized standing under underwriting terms
appropriate for such a transaction; (ii) the Registrable Securities
so requested to be registered for sale for the account of DIEHL are
not also to be included in such underwritten offering (either
because B&S has not been requested so to include such Registrable
Securities pursuant to Article 13.2.2 hereof or, if requested to do
so, has been unable to include such Registrable Securities after
using reasonable efforts to do so as provided in Article 13.2.6
hereof); and (iii) the managing underwriter of such underwritten
offering shall advise B&S in writing that, in its opinion, the
distribution of all or a specified portion of such Registrable
Securities concurrently with the securities being distributed by
such underwriters will substantially interfere with the successful
offering of such securities by such underwriters (such opinion to
state the approximate number of shares of DIEHL's Class A stock
which can be distributed without such effect), then B&S will
promptly furnish DIEHL with a copy of such opinion and may require,
by written notice to DIEHL accompanying such opinion, that the
number of shares of Registrable Securities to be included in
such registration statement be limited to the number indicated in
such opinion;
<PAGE> 32
B&S shall not be obligated to effect any registration of Registrable
Securities under this Article 13.2.2 incidental to any registration
involving any of its securities other than its Class A common stock,
or incidental to the registration of Class A common stock in
connection with any merger, acquisition, exchange offer, dividend
reinvestment plan or stock option or other employee benefit plan;
and
if, at any time after giving written notice to DIEHL of its
intention to register shares of its Class A common stock and prior
to the effective date of the registration statement filed in
connection with such registration, B&S shall determine for any
reason either not to register or to delay registering such shares
of common stock, B&S may, at its election, give written notice of
such determination to DIEHL and, thereupon, (I) in the case of a
determination not to register, shall be relieved of its obligation
to register any Registrable Securities in connection with such
registration, without prejudice, however, to the rights of DIEHL to
request that such registration be effected as a registration under
Article 13.2.1, and 13.2.2 in the event of another incidental
registration, and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such
other shares of its Class A common stock.
13.2.3 Preparation of Registration Statement, etc.: In the event and
whenever B&S is required to use its best efforts to effect the
registration of any Registrable Securities under the Act as provided
in Articles 13.2.1 and 13.2.2 hereof, it will as expeditiously as
possible:
<PAGE> 33
(i) Prepare and (in the case of a registration pursuant to Article
13.2.1 hereof, within 45 days after the end of the period within
which a request for registration may be delivered to it) file with
the Commission a registration statement with respect to such
Registrable Securities and use its best efforts to cause such
registration statement to become effective and will cause such
registration statement to remain effective for a period not to
exceed ninety (90) days during which DIEHL may sell and dispose of
its Registrable Securities; provided that before filing such
registration statement any amendments thereto, B&S will furnish to
counsel selected by DIEHL copies of all such documents proposed to
be filed, which documents will be subject to the review of such
counsel;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such
registration statement effective for the registration period and
to comply with the provisions of the Act with respect to the
disposition of all Registrable Securities and other securities
covered by such registration statement until such time as all of
such Registrable Securities have been disposed of in accordance
with the intended methods of disposition by DIEHL thereof set
forth in such registration statement, but in no event for a period
longer than ninety (90) days after such registration statement
becomes effective;
(iii) furnish to DIEHL such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto (in each case including all exhibits, except that B&S
shall not be obligated to furnish DIEHL with more than two copies
of such exhibits other than incorporated documents), such number
of copies of the prospectus included in such registration
statement (including each preliminary prospectus and any summary
prospectus) in conformity with the requirements of the Act, such
documents incorporated by reference in such registration statement
or prospectus, and such other documents, as DIEHL may reasonably
request in order to facilitate the disposition of its Registrable
Securities covered by such registration statement;
(iv) use its best efforts to register or qualify such Registrable
Securities under such securities or blue sky laws of such
jurisdictions as DIEHL shall reasonably request, and do any and all
other acts and things which may be necessary or advisable to
enable DIEHL to consummate the disposition in such jurisdictions of
its Registrable Securities covered by such registration statement;
<PAGE> 34
(v) furnish to DIEHL a signed counterpart addressed to DIEHL of an
appropriate opinion of counsel for B & S covering substantially
the same matters with respect to such registration statement
(and the prospectus included therein) as are customarily covered
in opinions of issuer's counsel delivered to underwriters in
underwritten public offering of securities;
(vi) immediately upon becoming aware of the same, notify DIEHL as
seller of Registrable Securities covered by such registration
statement, at any time when a prospectus relating thereto is
required to be delivered under the Act, of the occurrence of any
event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing, and at the request of any such seller prepare and
furnish to such seller a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the
circumstances then existing;
(vii) unless such Registrable Securities are already listed on each
securities exchange, if any, on which B & S's Class A common stock
is then listed, use its best efforts to list the Registrable
Securities on such securities exchange.
DIEHL agrees that upon receipt of any notice from B & S of the
occurrence of any event of the kind described in clause (vi) of
this Article 13.2.3 that it will forthwith discontinue its
offering or disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until
it receives copies of the supplemented or amended prospectus
contemplated by said clause (vi) and, if so directed by B & S,
will deliver to B & S (at B & S's expense) all copies, other than
permanent file copies, then in such holder's possession of the
prospectus covering such Registrable Securities current at the
time of receipt of such notice.
<PAGE> 35
13.2.4 Information Concerning DIEHL: B & S may require DIEHL as a seller of
Registrable Securities as to which any registration is being effected
to furnish B & S such information regarding DIEHL and the distribution
of such securities as B & S may from time to time reasonably request
in writing and which shall be required by law or by the Commission in
connection therewith.
13.2.5 Demand Underwritten Offering: Whenever a registration requested by
DIEHL pursuant to Article 13.2.1 hereof is for an underwritten
offering, only shares which are to be distributed by the underwriters
designated by DIEHL may be included in such registration.
13.2.6 Underwriting Agreement: If requested by the underwriters for any
underwritten offering of Registrable Securities on behalf of DIEHL
pursuant to a registration requested under Article 13.2.1 hereof,
B & S will enter into an underwriting agreement with such underwriters
for such offering, such agreement to contain such representations and
warranties by B & S and such other terms and provisions as are
customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, indemnity
to the effect and to the extent provided in Article 13.2.10 hereof. If
B & S at any time proposes to register any of its securities under
the Act (other than pursuant to a request made under Article 13.2.1
hereof), whether or not for the sale for its own account, and such
securities are to be distributed by or through one or more
underwriters, B & S will make reasonable efforts, if requested by
DIEHL regarding incidental registration of Registrable Securities
pursuant to Article 13.2.2 hereof, to arrange for such underwriters
to include such Registrable Securities among those securities to be
distributed by or through such underwriters. DIEHL, on whose behalf
Registrable Securities are to be distributed by such underwriters,
shall be a party to any such underwriting agreement and the
representations and warranties by, and the other agreements on the
part of, B & S to and for the benefit of such underwriters, shall
also be made to and for the benefit of DIEHL.
<PAGE> 36
13.2.7 Participation: In connection with the preparation and filing of a
registration statement registering Registrable Securities under the
Act, B & S will give DIEHL, on whose behalf such Registration
Securities are to be so registered, and their underwriters, if any,
and their respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and
each amendment thereof or supplement thereto, and will give each of
them such access to its books and records and such opportunities to
discuss the business of B & S with its officers and the independent
public accountants who have certified its financial statements as
shall be necessary, in the opinion of DIEHL and such underwriters or
their respective counsel, to conduct a reasonable investigation
within the meaning of the Act.
13.2.8 Registration Expenses: B & S will pay Registration Expenses (as
defined below) in connection with all registrations which may be
effected pursuant to Article 13.2.1 or Article 13.2.2.
13.2.9 Indemnification by B & S: In the event of any registration of any
Registrable Securities under the Securities Act pursuant to Articles
13.2.1 or 13.2.2 hereof, B & S will, and hereby does, agree to
indemnify and hold harmless the seller of such securities, its
partners, directors and officers, each other Person who participates,
on behalf of such seller, as an underwriter, broker or dealer
in the offering or sale of such securities and each other Person, if
any, who controls such seller or any such participating Person
within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such seller or any such
partner, director or officer or participating or controlling Person
may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained or
incorporated by reference in any registration statement under which
such securities were registered under the Act, any preliminary
prospectus or final prospectus included therein, or any related
summary prospectus, or any amend-ment or supplement thereto, or any
document incorporated by reference therein, (ii) any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and will reimburse such seller and each such partner,
director, officer, participating Person and controlling Person for
any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
liability, action or proceeding, provided that B & S shall
not be liable to any such indemnified party in any such case to the
extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any
such preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement in reliance upon and in conformity with
written information furnished to B & S through an instrument duly
executed by DIEHL specifically stating that it is for use in the
preparation thereof. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
seller or any such partner, director, officer, participating Person
or controlling Person and shall survive the transfer of such
securities by such seller.
<PAGE> 37
13.2.10 Indemnification by DIEHL: B & S may require, as a condition to
including any Registrable Securities in any registration statement
filed pursuant to Article 13.2.1 or 13.2.2 hereof, that it shall
have received an undertaking satisfactory to it from DIEHL to
indemnify and hold B & S harmless (in the same manner and to the
same extent as set forth above in Article 13.2.9 hereof) and each
officer and director of B & S, and each other Person, if any, who
controls B & S within the meaning of the Act, with respect to any
statement in or omission from such registration statement, any
preliminary prospectus or final prospectus included therein, or any
amendment or supplement thereto, if such statement or omission was
made in reliance upon and in conformity with written information
furnished to B & S through an instrument duly executed by such
seller specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on be-half of B & S or any such director,
officer or controlling Person and shall survive the transfer
of such securities by such seller.
13.2.11 Notice and Defense of Claims: Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a claim of the type referred to in the preceding
Articles 13.2.9 and 13.2.10 such indemnified party will, if a claim
in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to given notice as
provided herein shall not relieve the indemnifying party of its
obligations under the preceding subsections except to the ex-
tent that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought against
an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified, to the extent that it
may wish, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter
in connection with the defense thereof provided, however, that
if any indemnified party reasonably believes that it is advisable
for such indemnified party to be represented by separate counsel
because of a potential conflict of interest or if the indem-
nifying party shall fail to assume responsibility for such defense,
such indemnified party may retain counsel satisfactory to such
indemnified party who will represent such indemnified party,
and the indemnifying party shall pay all fees and expenses of such
counsel promptly as statements therefore are received. No
indemnifying party will consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect to such claim or
litigation.
<PAGE> 38
13.2.12 Requirements of Rule 144: B & S shall use its best efforts to
continue to (i) have available adequate public information with
respect to it which meets the applicable condition of Rule 144 (c)
under the Act at such time or times as DIEHL may determine
to sell shares of its Class A Stock pursuant to the exemption
provided by Rule 144 ; (ii) file with the SEC in a timely manner all
reports and other documents required of B&S under the Act and
the Securities and Exchange Act, as amended (the "1934 Act"), and
(iii) furnish to DIEHL forthwith upon request a written statement by
B&S that it has complied with the reporting requirements of
Rule 144, the Act and the 1934 Act, a copy of the most recent annual
or quarterly report of B&S, and such other reports or documents so
filed by B&S as may be reasonably requested in availing DIEHL to
take advantage of any rule or regulation of the SEC permitting the
selling of any such securities without registration.
13.2.13 Transfer of Registration Rights: The registration rights of DIEHL
under this Agreement may be transferred to any transferee who
acquires (otherwise than in registered public offering) no
less than 100,000 shares of Registrable Securities.
13.2.14 Reorganization: B&S shall not, directly or indirectly, enter into
any merger, consolidation or reorganization in which B&S shall not
be the surviving corporation unless the proposed surviving
corporation shall, prior to such merger, consolidation or
reorganization, agree in writing to assume the obligations of B&S
under this Agreement, and for that purpose references hereunder to
"Registrable Securities" shall be deemed to be references to the
securities which DIEHL would be entitled to receive in exchange for
Registrable Securities under any such merger, consolidation or
reorganization; provided, however, that the provisions of this
Agreement shall not apply in the event of any merger,
consolidation or reorganization in which B&S is not the surviving
corporation if DIEHL is entitled to receive in exchange therefore
(i) cash, or (ii) securities of the acquiring corporation which may
be immediately sold to the public without registration under the Act.
<PAGE> 39
13.2.15 Definitions: For purposes of this Article 13.2, the following terms
shall have the meanings specified below:
"Act" shall mean the United States Securities Act of 1933 or any
successor federal statute and the rules and regulations of the
Commission promulgated thereunder all as the same shall be in
effect at the time.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Act.
"Person" shall mean an individual, partnership, corporation,
association, trust, joint venture, unincorporated organization, and
any government, governmental department or agency or political
subdivision thereof.
"Registrable Securities" or "Registrable Shares" shall mean (i) any
Class A Stock (including any Contingent Stock) issued to DIEHL in
connection with the acquisition by B & S of the Roch Group or (ii)
any B&S Class A Stock or other common equity securities issued or
issuable with respect to any Registrable Securities by way of stock
dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable
Securities, once issued such securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the sale
of such securities shall have become effective under the Act and such
securities shall have been disposed of in accordance with
such registration statement, (ii) they shall have been sold and
distributed to the public pursuant to Rule 144 (or any successor
provision) under the Act, or (iii) they shall have ceased to be
outstanding.
<PAGE> 40
"Registration Expenses" shall mean all expenses incident to
performance of or compliance with Articles 13.2.1, 13.2.2 and 13.2.3
hereof by B & S, including without limitation all registration and
filing fees, all fees and expenses of complying with securities or
blue sky laws, all printing expenses, all messenger and delivery
expenses, the fees and disbursements of counsel of B & S and of its
independent public accountants, including the expenses of any special
audits required by or incident to such performance and compliance,
but excluding the fees and disbursements of counsel for DIEHL on
whose behalf Registrable Securities are being registered and
any underwriting discounts and commissions and applicable transfer
taxes, if any, each of which shall be borne by DIEHL as seller of the
Registrable Securities in all cases.
13.3 The parties to this Agreement shall procure that Societe Immobiliere
Lunevilloise S.a.r.l. and ROCH conclude the Real Estate Lease Agreement
materially on the terms of the draft Real Estate Lease Agreement set
out in Exhibit 13.3.1.
Within 90 (ninety) days following the signing of this Agreement, DIEHL
shall make an unconditional offer for ROCH to acquire all shares in
Societe Immobiliere Lunevilloise S.a.r.l. ("SIL") at a price calculated
in accordance with the provisions set out in Exhibit 13.3.2. The offer
shall be open for the whole term of the Real Estate Lease Agreement.
It shall contain an unrestricted warranty/representation by way of
guarantee that SIL has not engaged in any business other than being
the Lessor under the Real Estate Lease Agreement, and further, that
DIEHL has advised ROCH within 90 days following a written request by
ROCH to that effect (such period to end prior to the exercise of the
option), of all liabilities (including contingent liabilities) of SIL.
Finally, it shall contain a representation/warranty that SIL is the
unrestricted owner of the Real Estate (as defined in the Real Estate
Lease Agreement), and that the Real Estate is unencumbered.
<PAGE> 41
13.4 The parties to this Agreement shall procure that Mauser Werke Oberndorf
GmbH, an affiliate of DIEHL, and ROCH conclude the License Agreement
materially on the terms of the draft License Agreement set out in
Exhibit 13.4.
13.5 DIEHL shall pay any excess amount over the total amount of DM 420,000,
to ICC, or, upon the request of ICC, to MPM, if and to the extent the
Social Costs in connection with the liquidation of the business
operations of MPM shall exceed the aforementioned amount. "Social Costs"
within the meaning of this Agreement shall mean all costs associated
with the termination, to be declared vis-a-vis the ordinary employees
by the Managing Director of MPM and vis-a-vis the Managing Directors,
if any, by the then current shareholder of MPM, at the next legally
permitted opportunity of the Employment Agreements between MPM and its
employees including without limitation, the costs for salaries up to
the end of the relevant employment terms, compensation payments,
reasonable legal and court fees etc. "Social Cost" shall also include
costs associated with the termination of the services of Mr. Elsner,
who is presently employed by DIEHL and the costs of which shall be
chargeable to MPM (or ICC, respectively).
DIEHL shall be obliged, to assist ICC to the extent possible, in
effecting the appropriate terminations of the employment agreements.
14. Costs
<PAGE> 42
14.1 Each of the parties will pay all expenses incurred by it in connection
with the conclusion of this Agreement including, without limitation, the
charges of its attorneys, counsels and its financial advisers.
14.2 All taxes and dues and all notarial fees incurred in connection with
the execution and implementation of this Agreement and all agree-
ments under this Agreement, shall be borne by ICC.
14.3 DIEHL and ICC represent to each other that they have not employed any
broker or agent in connection with the transaction contemplated by
this Agreement or otherwise taken any action which would create any
other liability for brokerage fees or agents commissions for the
respective other party in connection with this Agreement and
the transactions contemplated hereby.
15. Publications
The Parties shall issue a press release upon mutual agreement, save for
legally required releases of which they will notify each other prior to
issue of such releases.
16. Supplemental Documents
Each party to this Agreement agrees to execute such additional documents or
instruments and to take any further actions reasonably requested by
the other party as may be necessary or desirable to effect the purpose of
this Agreement and carry out its provisions.
<PAGE> 43
17. Merger Control
17.1 The parties assume that pre-notifications to the German Federal Cartel
Office or to the competent French cartel authorities are not necessary.
17.2 In case and to the extent that any notifications or similar measures
might be required in these countries or in foreign countries under foreign
antitrust laws, these shall be filed or taken by ICC . To the extent that
this is necessary, ICC shall also act on behalf of DIEHL in this
connection.
18. Coming into Force
This Agreement comes into force today.
19. Applicable Law
This Agreement, its performance and any dispute arising thereunder shall be
governed by the laws of the Federal Republic of Germany, unless specifically
provided otherwise.
20. Preceding Negotiations and Agreement, Written Form Requirement
This Agreement supersedes all prior negotiations and the agreements between
the parties concerning the subject matter hereof and can be amended or
changed validly only in writing, signed by all parties, unless another form
is prescribed by law. This form requirement shall also apply to any
change, modification or waiver of the form requirement set forth in the
preceding sentence.
<PAGE> 43
21. Partial Invalidity
In the event individual provisions of this Agreement should, in its entirety
or partially be or become invalid or impracticable, then the validity of the
remaining provisions of the Agreement shall not be affected thereby. Instead
of the invalid or impracticable provision such reasonable provision or
provisions shall apply which correspond as closely as legally possible to
what the Parties had they considered the matter initially in the light of
such invalidity or impracticability would have agreed according to
the sense and purpose of this Agreement. The same applies to any gaps in
this Agreement.
22. Venue/Arbitration
22.1 Venue for all disputes arising from this Agreement is Frankfurt am Main.
22.2 All disputes arising out of this Agreement with respect to the validity,
interpretation of and performance under this Agreement or this
Arbitration Clause shall be decided by an arbitration court in accordance
with the rules of Conciliation and Arbitration of the International
Chamber of Commerce, Paris, consisting of three arbitrators appointed in
accordance with said rules. All proceeding shall be in English, unless
all parties to the proceedings (including the arbitrators) shall agree
otherwise.
23. Communications
<PAGE> 44
23.1 Any communications or notices between the Parties under this Agreement
shall be made in English and shall be addressed to the following addresses or
to any other addresses notified in writing to the other Parties:
if to Seller: DIEHL GmbH & Co.
Attn. Mr. Manz-Siebje or Dr. Hederer
Stephanstrasse 49
90478 Nurnberg
if to B&S: Brown & Sharpe Manufacturing Company
Attn. James Hayes III
200 Frenchtown Road,
Precision Park,
North Kingstown, RI 02852-1700
USA
if to Buyer: Brown & Sharpe International Capital Corporation
Att. James Hayes III
Precision Park
200 Frenchtown Road
North Kingstown, RI 02852-1700
USA
In witness whereof this deed including its Exhibits has been read to the
persons appeared and then approved by them and thereupon signed by them and
the notary public as follows:
[gez. Dr. Hederer]
[gez. Dr. Fisseler]
[Notar]
<PAGE> 1
COMMERCIAL LEASE
Between the Undersigned:
Societe Immobiliere Lunevilloise S.A.R.L., a French company with a share
capital of FF 300,000 and registered offices at 13 et 15, Avenue Georges de
La Tour, Luneville, France (in the process of registration),
represented by its [ ], Mr. [ ],
specially authorized to sign this agreement pursuant to [ ],
hereinafter referred to as the "Lessor,"
FOR THE FIRST PART
AND:
Ets. Pierre Roch S.A., a French stock corporation with a share capital of FF
11,750,000, registered in the Trade and Companies Register of Nancy under the
number B 761 800 671 and having its registered offices at 13 et 15, Avenue
Georges de La Tour, 54300 Luneville, France,
represented by its [ ], Mr. [ ],
specially authorized to sign this agreement pursuant to [ ,
hereinafter referred to as the "Lessee,"
FOR THE SECOND PART
AND:
Diehl GmbH & Co., a German limited partnership with registered offices at
Stephanstrasse 49, 90478 Nurnberg, Germany, represented by its [
], Mr. [ ], specially authorized to sign this agreement
pursuant to [ ],
Hereinafter referred to as "Diehl"
<PAGE> 2
FOR THE THIRD PART
THE PARTIES HERETO HAVE AGREED AS FOLLOWS:
The Lessor hereby leases and rents to Pierre Roch S.A., as Lessee, who hereby
accepts, the premises described hereinafter, forming part of a building owned
by it at 13-15, Avenue Georges de La Tour in Luneville.
This Lease is subject to Decree no. 53-960 of September 30, 1953, as amended.
ARTICLE 1 - DESCRIPTION
The premises consist of a site for industrial use located at 13/15, Avenue
Georges de La Tour in Luneville, France, including:
- factory buildings and
- offices,
registered under Section AO no. 122, of 2.6210 hectares, comprising the
following lots:
- lot listed in Bureau des Hypotheques de Luneville on
December 13, 1946, volume 2244 no. 66,
- lot listed in Bureau des Hypotheques de Luneville on August
17, 1954, volume no. 2461 no. 29,
- lot listed in Bureau des Hypotheques de Luneville on
December 24, 1954, volume no. 2470 no. 15,
- lot listed in Bureau des Hypotheques de Luneville on May 3,
1957, volume no. 2538 no. 45,
- lot listed in Bureau des Hypotheques de Luneville on October
7, 1957, volume 2553 no. 18,
- lot listed in Bureau des Hypotheques de Luneville on January
23, 1961, volume 2687 no. 6,
- lot listed in Bureau des Hypotheques de Luneville on June
17, 1963, volume 2805 no. 39,
- lot listed in Bureau des Hypotheques de Luneville on
September 4, 1963, volume 2815 no. 25
- lot listed in Bureau des Hypotheques de Luneville on January
11, 1965, volume 2881 no. 34.
For the entirety of the premises, without exception of qualification, the
Lessee declares that it is fully familiar with the premises by virtue of
already occupying them.
<PAGE> 3
ARTICLE 2 - USE
The leased premises may be used for the type of activity presently carried
out by the Lessee. Any substantial change in such usage must in advance be
approved by the Lessor in writing, which approval shall not be unreasonably
withheld.
ARTICLE 3 - TERM
This Lease is granted and accepted for a term of nine full consecutive years,
beginning on March 24, 1994 and ending on March 23, 2003; the Lessee has
already taken possession.
The Lessee shall be entitled to terminate the Lease as per the end of any
calendar year by giving written notice of at least 12 months, i.e., for the
first time as per the end of 1995, by complying with the legal provisions in
force.
ARTICLE 4 - RENT AND CHARGES
This Lease is granted and accepted in consideration of a quarterly rent, net
of taxes, of FF 48,000, which the Lessee agrees to pay quarterly in advance
to the Lessor.
The first payment (of FF 52,130) shall be made on April 1, 1994 for the period
from March 24 through June 30, 1994. Subsequent payments (of FF 48,000) shall
be due on the first business day of each calendar quarter.
The Lessee shall pay all charges in relation to the premises as they become
due directly to the pertinent third party including those charges for
obligations of the owner (for example taxe fonciere).
Any amounts due from the Lessee to the Lessor for any rent shall be paid by
check or postal or bank transfer.
<PAGE> 4
ARTICLE 5 - TRIENNIAL ADJUSTMENT
The rent set above shall be subject to adjustment every three years and shall
be increased or decreased, as agreed upon by the parties, but in no event
exceeding the changes in the construction cost index published by INSEE (the
French National Statistics Agency).
The initial reference index shall be the index for the second quarter of 1993,
i.e. 1012. The comparison index to be used in calculation of the rent
adjustment shall be that of the second quarter of the year preceding the
adjustment.
The first adjustment, if any, shall be made on March 24, 1997.
In the event that the index specified above for use in calculating the
adjustment of the annual rent should cease to be published for any reason
whatsoever, the adjustment shall be calculated on the basis of either the
replacement index or a new index agreed to by the parties. If the parties
are unable to agree on the new index to be used, the parties hereby agree to
abide by the decision of an expert appointed by the Presiding Judge of the
District Court (Tribunal de Grande Instance), ruling in summary proceedings.
The new index adopted must reflect as closely as possible the construction
cost on the national level, or failing which, on the regional level.
ARTICLE 6 - OBLIGATIONS AND CONDITIONS
In addition, this Lease is granted and accepted subject to the following
general obligations and conditions:
6.1 - Inventory
The parties agree to draw up an inventory of the premises, based on the
current inventory, no later than one month after the date hereof. All
inventory forms part of this agreement.
<PAGE> 5
6.2 - Enjoyment
The Lessee shall enjoy the premises prudently and shall comply with the
requirements of the rules applicable to the leased premises.
In addition, it shall at all times maintain in the leased premises furniture,
personal property, goods and equipment which are sufficient in quality and
value to satisfy at all times its obligations to pay the rent and comply with
the other terms and conditions of this agreement.
6.3 - Maintenance (entretien)
6.3.1 The Lessee agrees to maintain the leased premises in a good state
throughout the term of the Lease.
6.3.2 The Lessee shall grant the Lessor, or any other persons appointed by
the Lessor, access to the leased premises for the purpose of evaluating this
condition and of providing periodic maintenance of any facilities therein
after receiving 15 days' prior notice thereof from the Lessor.
With respect thereto, the Lessor agrees that neither he nor his
employees or agents shall disturb the Lessee's activity during such
visits.
6.4 - Important Repairs (grosses reparations) and Improvements
The Lessee may carry out any important repairs and improvements in the leased
premises which are necessary for the conduct of its business with the express
written consent by the Lessor, which consent shall not be unreasonably
withheld. With respect to all important repairs and improvements, the Lessor
and the Lessee shall agree on a mechanism for reimbursing the Lessee for his
expenditures in case of termination of the lease agreement before full
amortization of the expenditures.
6.5 - Charges
6.5.1 The Lessee agrees to pay all personal charges for which lessees are
normally liable, including in particular personal taxes, or any others which
may be substituted therefore, taxes of any other sort, trash collection
charges, sewer charges, street cleaning charges, etc. and any others which
may replace them, and all personal charges for which normally the Lessor is
liable as the owner, especially taxes regarding the leased land and buildings,
including real-estate tax.
<PAGE> 6
6.5.2 The Lessee shall also take out contracts for water, gas electricity
and telephone services and shall duly pay the charges thereon at their due
dates, in such manner that the Lessor cannot be held liable for such payments.
ARTICLE 7 - SURRENDER OF THE PREMISES
7.1 Before quitting the premises, the Lessee shall provide the Lessor
with substantiation of the payment of the taxes for which the Lessee is liable,
including in particular the business tax, and all installments of rent and
other charges.
7.2 The Lessee shall surrender the leased premises in a condition
equivalent to the one existing on the date hereof, as reflected in the
inventory to be drawn up pursuant to Section 6.1, subject to normal wear and
tear and it is being understood that the Lessee may leave important repairs
and improvements approved pursuant to Section 6.4 in the approved condition.
ARTICLE 8 - INSURANCE
8.1 The Lessee shall take out insurance on the building against fire and
all other destructive events (causes de destruction) and against all risks
customarily insured against to cover its liability as lessee.
8.2 In addition, the Lessee shall be personally liable for any damage to
the improvements which it may make to the leased premises and to any damage
caused to furnishings, equipment, goods or any other property belonging to it
or held by it in any capacity whatsoever.
It shall insure against the risk inherent in its business with an
insurance company of good standing (fire, explosion, water damage).
Finally, it shall insure against the financial consequences of any
liability it may incur to neighbors or third parties in general.
8.3 The Lessee shall provide substantiation of all of these contracts
within one month following the Lessor's demand therefore. The Lessee shall
pay the outstanding fees for all of these contracts as they become due.
<PAGE> 7
ARTICLE 9 - ENVIRONMENT
The Lessor herewith declares that he has a perfect knowledge of the activity
of the Lessee since its parent company has been the main shareholder of the
latter for a long period until March 24, 1994.
9.1 - Representations and Warranties
The Lessor hereby warrants and represents:
9.1.1 There are no past or present events, and/or circumstances, or any
nature whatsoever which may give rise to any liability, or otherwise form the
basis of any action, suit, proceeding of any nature whatsoever based on or
related to the laws and reglementations applicable to environment protection
directly or indirectly linked to the site mentioned in Article 1.
9.1.2 All permits, licenses and other authorizations which are required
with respect to the business of the Lessee under the laws and reglementations
of France or the EEC relating to pollution or protection of the environment
have been obtained by the Lessee.
9.1.3 The business of the Lessee is operated in compliance with all terms
and conditions of the required permits, licenses and authorizations at the
date of signature. The business is also at the date of signature operated
by the Lessee in full compliance with all other limitations, restrictions,
conditions, prohibitions, requirements, obligations contained in those laws
or provisions applicable to the business.
9.1.4 Neither he nor the predecessor owner has been subject to any demand
or notification addressed by any governmental authority or third party
concerning reglementations applicable to environmental and pollution matters.
9.1.5 There has not been and is not, at the date of signature, any
(i) burying, dumping, leaking, tank failure, spillage, evaporation,
underground injection or similar disposition of any oil, chemical
products or other pollutants on the plant;
(ii) discharge of pollutants, whether solid, gaseous, or liquid, from the
plant, which has caused or may cause harm to human health or the
environment; or
<PAGE> 8
(iii) ground for a claim against the Lessee, whether asserted or unasserted,
based on any discharge on the plant of oil, chemical products, or
other pollutants.
9.1.6 No part of such property has been used at any time by any person as a
landfill or waste disposal site.
9.2 - Liability of the Lessor
If any of the declarations and/or warranties stipulated in Article 9.1 should
turn out to be untrue, and if further the Lessee therefore is, or in his
reasonable judgment will be in the foreseeable future,
- - either held liable to remove the environmental condition in question,
or to pay fines/damages on that ground, or
- - by such condition materially impaired in pursuing its ordinary course
of business as envisaged in this agreement,
the Lessor shall without delay take all necessary and appropriate measures and
activities to remove such condition and to put the Lessee as soon as possible,
given the circumstances, in the position he would have been in had the
warranty been true.
If, after the lapse of such period, this obligation has not been satisfied by
the Lessor, the Lessor shall indemnify the Lessee against and hold him
harmless from any liabilities and losses of every nature and character which
constitute, arise or result, directly or indirectly, from any error,
misstatement or omission, failure to perform or any breach in or of any such
representation, warranty, covenant or agreement.
While the Lessor is taking measures as described above, the Lessee shall not
take in any way competitive measures of his own unless expressly authorized
to do so by the Lessor.
<PAGE> 9
9.3 - Limitation of Representations and Warranties
9.3.1 The representations and warranties are granted by the Lessor for a
period of nine years beginning on the date hereof.
9.3.2 Except for those claims already raised and reasonably substantiated
by the Lessee, all representations and warranties shall automatically expire
as soon as the Lessee exercises his option pursuant to the option to be
granted to him by the Lessor in Article 13.3 of the Share Purchase and
Transfer Agreement between DIEHL, Brown & Sharpe Manufacturing Company and
Brown & Sharpe International Capital Corporation of the date hereof.
9.4 - Implementation of Representations and Warranties
9.4.1 The implementation of the warranty by the Lessee is not subject to
any formal procedure. Written notification by the Lessee to Lessor by letter,
telex or telefax sent as soon as reasonable possible shall be sufficient.
9.4.2 the payment of any sum due by the Lessor in application of Article 9
of this agreement can be made, at the Lessee's choice, either by means of
set-off against any sum that the Lessee owes to the Lessor, in particular as
payment of the rent, unless disputed by the Lessor, or by means of an actual
payment by the Lessor to the Lessee.
9.5 - Scope of Representations and Warranties
For the avoidance of doubt, all obligations of the Lessor in connection with
the representations and warranties contained in this agreement will also
apply to situations where any of the declarations and/or warranties stipulated
in Article 9.1 should turn out to be untrue due to a change in the law or the
applicable standards, or due to a new interpretation of such laws or such
standards, after the date of this agreement. The parties further agree that
knowledge the Lessee may have obtained on the premises before the signing of
this agreement does not in any way preclude him from invoking any of his
rights under this agreement.
<PAGE> 10
ARTICLE 10 - ASSIGNMENT
The Lessee may assign its rights under this lease to affiliated companies with
the express written consent of the Lessor, such consent not to be withheld
unreasonably.
ARTICLE 11 - SUB-LETTING
The Lessee may not sub-let all or part of the leased premises or lend the use
thereof, even on a gratuitous basis, without the express written consent of the
Lessor, such consent not to be withheld unreasonably.
ARTICLE 12 - VAT ELECTION
The Lessor reserves the right to elect to be subject to value-added tax on the
rent set above on the leased premises, pursuant to Decree no. 67-126 of
December 22, 1967.
ARTICLE 13 - TERMINATION
If any installment of rent, including the amount of its adjustment, is not
paid when due and one month after the Lessor issues an order to pay or a
formal notice sent by extra-judicial act setting forth the Lessor's intent to
invoke this article, which order or notice remains unheeded, this Lease shall
be terminated automatically and immediately, without the need to fulfill any
judicial formality and notwithstanding any subsequent offers or deposits.
ARTICLE 14 - EXPENSES AND REGISTRATION
The registration duties and the expenses and fees for this Lease shall be borne
in equal shares by the Lessee and the Lessor.
<PAGE> 11
ARTICLE 15 - ELECTION OF DOMICILE
The Lessee elects domicile in the leased premises for the performance hereof,
including in particular service of any documents.
The Lessor elects domicile at the registered offices of Diehl.
ARTICLE 16 - PAYMENTS
The payment of any sum due by one party to another under this agreement shall
be made within eight (8) days of a written notice for that effect by the other
party, supported by appropriate justifying documents.
If any payment under this agreement is not made by the due date, the sum due
will immediately and without prior notice bear interest, at an annual rate
corresponding to the TMM (French monetary market rate) in effect during the
relevant period (or failing which at PIBOR +2 points from day to day for the
relevant period) plus two (2) points. This provision shall not be construed
as entitling any party to make late payments.
ARTICLE 17 - GUARANTEE
Diehl shall fulfill, on behalf of the Lessor and upon the request of the
Lessee, all obligations of the Lessor under this Agreement, be it specific
performance, payment obligations or damages, provided that the Lessor does
not fulfill its obligations under this Agreement.
ARTICLE 18 - CHOICE OF LAW AND JURISDICTION
This Agreement shall be governed by French law. Place of jurisdiction shall
be Luneville.
Signed in [ ] in five originals,
On
_____________________________ ______________________________
DIEHL GmbH & Co. Pierre ROCH S.A.
______________________________
Societe Immobiliere Lunevilloise
