SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A, AMENDMENT NO. 2
(Mark One)
X Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1994 or
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
- ---
Act of 1934. [No Fee Required]
For the transition period from to
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Commission File Number 0-2642
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DE TOMASO INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Maryland 52-0466460
- --------------------------------- ------------------------
(State of other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
P.O. Box 856
107 Monmouth Street, Red Bank, New Jersey 07701
- ------------------------------------------ -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 842-7200
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $2.50 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes: X No:
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant, computed by reference to the average of bid and asked price of
the stock as of March 22, 1995, was $12,651,310.
The number of shares of common stock, $.10 par value, outstanding as of March
22, 1995 was 2,057,446.
DOCUMENTS INCORPORATED BY REFERENCE:
None.
Page 1 pf 47 Pages
Exhibit Index appears at Page 3.
<PAGE>
SIGNATURES
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Pursuant to the requirements of Section 13 or 15(d) 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.
DE TOMASO INDUSTRIES, INC.
Date: May 2, 1995 By: s/ Catherine D. Germano
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Catherine D. Germano, Treasurer
Date: May 2, 1995 By: s/ Howard E. Chase
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Howard E. Chase, Vice President,
Secretary
<PAGE>
PART IV
INDEX TO EXHIBITS
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Page Number
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3(a) Restated Articles of Incorporation of Regis-
trant (filed as Exhibit 3(a) to Registrant's
1981 Annual Report on Form 10-K and incorpo-
rated herein by reference).
3(b) By-laws of Registrant (filed as Exhibit 3(b)
to Registrant's 1981 Annual Report on Form
10-K and incorporated herein by reference).
3(c) Articles of Amendment to Articles of Incorpo-
ration filed January 31, 1986 with Maryland
Department of Assessments and Taxation (filed
as Exhibit 3(c) to Registrant's 1985 Annual
Report on Form 10-K and incorporated herein
by reference).
3(d) Articles of Incorporation, as amended by the
Articles of Amendment described in 3(c),
above (filed as Exhibit 3(d) to Registrant's
1985 Annual Report on Form 10-K and incorpo-
rated herein by reference).
10(a) Agreement dated May 17,1993 between O.A.M.
S.p.A., Fiat Auto, S.p.A. and other (filed as
Exhibit 10.1 to the Current Report Dated May
17, 1993 filed on Form 8-K).
10(b) Agreement dated April 27, 1995 between Regis- 4
trant and Finprogetti, S.p.A., together with
Exhibits A-D thereto.
10(c) 45
Agreement dated April 10, 1995 between Regis-
trant and Alejandro DeTomaso.
12. Subsidiaries: Maserati Automobiles Incorpo-
rated, G.B.M. S.p.A., American Finance S.p.-
A., O.A.M. S.p.A., Storm S.r.l., Centro Rica-
mbi S.r.l., Nuova Callegari e Ghighi S.p.A.,
Tridentis Financiere, S.A., Newstead, Ltd.
2
Exhibit 10(b)
STOCK PURCHASE AGREEMENT
------------------------
STOCK PURCHASE AGREEMENT (the "Agreement") entered into
this 27th day of April, 1995, by and among DeTomaso Industries,
Inc. ("DTI" or "Purchaser"), a Maryland corporation and Finproge-
tti S.p.A. ("Seller"), an Italian corporation.
R E C I T A L S
Purchaser is undertaking a redemption offer to its
public shareholders to repurchase up to 80% of their shareholdin-
gs, an operation which could cost as much as $15,000,000 (US).
However, as the maintaining of Purchaser's status as a public
company the shares of which are quoted on NASDAQ is deemed
essential by Seller and Purchaser, both parties intend to make
every effort to encourage the maintenance of the current level of
public equity participation in Purchaser and, if possible, to
increase the level of such participation.
Purchaser owns all or a majority equity interest in
several subsidiaries, including American Finance S.p.A., OAM
S.p.A., GBM S.p.A., Maserati Automobiles Inc., Newstead Ltd., and
Tridentis S.A. OAM SpA, approximately 84% of which is owned by
Purchaser through American Finance S.p.A. and approximately 15.6%
of which is owned by a subsidiary of Chrysler Corporation, has
cash of approximately Lit. 40,000,000,000 which will be available
for use in connection with the contemplated merchant banking
operations to be undertaken after the closing of the Transactions
(as defined below). It is anticipated that prior to such closing
a plan for the restructuring of Purchaser's subsidiaries will
have been established, the implementation of which will result
either in Chrysler Corporation owning DTI Common Stock
1
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(as defined below) or, alternatively, in Chrysler Corporation
owning an equity interest in a combined entity which includes
American Finance S.p.A. and OAM S.p.A. and which will engage in
the contemplated merchant banking operations.
Seller is the owner of all of the issued and outstand-
ing shares of capital stock of Finprogetti International Holding
S.A., a Luxembourg corporation, and Intertrust S.p.A., an Italian
corporation. Seller also is the owner of approximately 95% of
the issued and outstanding shares of capital stock of Finproserv-
ice S.p.A., an Italian corporation. The shares issued by the
Finprogetti Subsidiaries (the "Finprogetti Subsidiaries") are
hereinafter referred to as the "Finprogetti Subsidiary Shares".
Purchaser desires to acquire the Finprogetti Subsidiary Shares
from Seller in exchange for shares of DTI common stock, $2.50 par
value per share ("DTI Common Stock"), upon the terms and subject
to the conditions hereinafter set forth. Contemporaneously with
such purchase and sale, Seller (i) shall invest or shall cause
others to invest Lit. 15,000,000,000 in DTI for the purchase of
additional shares of DTI Common Stock, and (ii) shall be granted
an option to purchase additional shares of DTI Stock. (Such
exchange of shares, capital investment and option to invest an
additional Lit. 5,000,000,000 in DTI for the purchase of addi-
tional shares of DTI Common Stock. This and all other transac-
tions contemplated by this Agreement are referred to herein as
the "Transactions"). Accordingly, in consideration of the
premises and mutual promises and covenants hereinafter contained,
and intending to be legally bound hereby, the parties hereby
agree as follows:
ARTICLE 1
2
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Contemplated Transactions
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SECTION 1.1 Stock for Stock Exchange. Subject to the
-------------------------
terms and conditions contained in this Agreement, Seller agrees
to, sell, assign, transfer and deliver to Purchaser the Finproge-
tti Subsidiary Shares in exchange for certain shares of DTI
Common Stock and Purchaser agrees to sell, assign, transfer and
to transfer and deliver to Seller such shares of DTI Common Stock
in exchange for the Finprogetti Subsidiary Shares, in accordance
with the further provisions of this Article 1.
SECTION 1.2 Exchange Ratio. The number of shares of
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DTI Common Stock to be issued (the "DTI Exchange Shares") in
exchange for the Finprogetti Subsidiary Shares shall be deter-
mined by dividing the "Agreed Finprogetti Value" by the "DTI
Value Per Share". For purposes hereof:
"Agreed Finprogetti Value" shall mean the highest
value, expressed in Lira, of the Finprogetti Subsidiaries,
including for purposes of such valuation all subsidiaries of the
Finprogetti Subsidiaries and 100% ownership of TIM S.r.l., as
determined in a valuation to be conducted by KPMG (the "KPMG
Finprogetti Valuation"); and
"DTI Value Per Share" shall mean the highest value of
DTI, expressed in Lira, as determined in a valuation of KPMG,
dated December 14, 1994, divided by the number of shares of DTI
Common Stock outstanding, on a fully diluted basis, on the
Closing Date, subject to adjustment as provided in Section 1.6(a)
hereof.
3
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SECTION 1.3 Delivery of DTI Exchange Shares. At the
-------------------------------
Closing, DTI shall issue and deliver to the Seller the DTI
Exchange Shares.
SECTION 1.4 Delivery of Finprogetti Subsidiary Shares.
-----------------------------------------
At the Closing, the Seller shall deliver to Purchaser, free and
clear of any lien, pledge, charge, security interest or other
encumbrance, certificates representing 100% of the Finprogetti
Subsidiary Shares, duly endorsed to Purchaser or its designee, or
together with other instruments of transfer, duly executed, and
accompanied by all requisite stock transfer stamps.
SECTION 1.5 KPMG Finprogetti Valuation. If the KPMG
--------------------------
Finprogetti Valuation indicates a value of less than Lit. 35,000-
,000,000, then either party may, upon notice thereof to the
other, terminate this Agreement without obligation or liability
of any kind to the other. Seller has engaged KPMG, at Seller's
cost, to perform such valuation as soon as practicable, using
standards and procedures equivalent to those used in the December
14, 1994 KPMG valuation of DTI and provide a copy of such valua-
tion to DTI promptly following receipt thereof by Finprogetti
and, in any event, not less than two (2) weeks before the Closing
Date.
SECTION 1.6 Additional Capital Investments.
------------------------------
(a) Seller covenants and agrees that it will
invest or cause third parties to invest Lit. 15,000,000,000 (the
"Required Capital Investment") in DTI as of the Closing, in
consideration of the issuance by DTI, on the Closing Date, of
such number of additional shares of DTI Common Stock (the "DTI
Investment Shares"), as results by dividing the Required Capital
Investment by the DTI Value Per Share. If the amount so invested
by the Closing Date is less than Lit. 15,000,000,000, then (i)
the term "DTI Value Per Share" shall mean, for all purposes of
this Agreement, including without limitation, determination of
the number of DTI
4
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Exchange Shares, DTI Value Per Share, increased by five percent
(5%) thereof, (ii) the number of DTI Investment Shares shall be
determined by dividing the actual amount of Lira so invested, by
the DTI Value Per Share (as so adjusted), and (iii) if the amount
so invested is less than Lit. 10,000,000,000, then in addition to
such rights and remedies which DTI may have as a result of
Seller's breach of its covenant to make the Required Capital
Investment, DTI may terminate this Agreement upon notice thereof
given to Seller.
(b) As of the Closing, DTI shall grant to the
Seller an option to invest an additional Lit. 5,000,000,000 in
shares of DTI Common Stock, at an exercise price equal to the DTI
Value Per Share (the "DTI Option Shares"), exercisable until
December 31, 1995, pursuant to an option agreement, the form of
which is set forth in Exhibit A hereto.
ARTICLE 2
Representations and Warranties of Seller
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Notwithstanding any knowledge of, or investigation by
Purchaser to the contrary, Seller hereby makes the representa-
tions, warranties and agreements set forth in Exhibit B hereto.
ARTICLE 3
Representations and Warranties of DTI
-------------------------------------
Notwithstanding any knowledge of, or investigation by
Seller to the contrary, Purchaser hereby makes the representa-
tions, warranties and agreements set forth in Exhibit C hereto.
5
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ARTICLE 4
Joint Representation and Warranty of DTI and Seller
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SECTION 4. Brokerage. Each of DTI and Seller hereby
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represents to the other that as to it no broker or finder has
acted directly or indirectly, for Purchaser, Seller or the
Finprogetti Subsidiaries as the case may be in connection with
this Agreement or the Transactions, and no broker or finder is
entitled to any brokerage or finder's fee or other commission in
respect thereof, based in any way on agreements, arrangements or
understandings made by or on behalf of Purchaser, Seller or the
Finprogetti Subsidiaries.
ARTICLE 5
Provisions Regarding DTI Transactional Shares
---------------------------------------------
Seller hereby makes the representations, warranties and
agreements involving matters relating to the United States
federal securities laws which are set forth in Exhibit B hereto
and agrees to the application to the DTI Exchange Shares, the DTI
Investment Shares and the DTI Option Shares (all herein referred
to as the "DTI Transactional Shares") of the Registration Rights
Provisions attached as Exhibit D hereto.
ARTICLE 6
Closing; Deliveries
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SECTION 6.1 Closing Date. The closing of the exchange
------------
of the Finprogetti Subsidiary Shares for the DTI Exchange Shares
and the purchase of the DTI Investment Shares (the "Closing")
shall take place as soon as both parties shall have satisfied all
of the covenants
6
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and conditions specified in Article 7 hereof, but in no event
later than September 30, 1995 (the "Closing Date") at the offices
of Morrison Cohen Singer & Weinstein LLP, 750 Lexington Avenue,
New York, New York 10022.
SECTION 6.2 Deliveries By Seller. On the Closing
---------------------
Date, Seller shall deliver to Purchaser certificates representing
all Finprogetti Subsidiary Shares issued and outstanding on the
Closing Date, duly endorsed for transfer to Purchaser or its
designee with documentary transfer stamps affixed and payment, by
wire transfer in a manner reasonably acceptable to Purchaser, of
the Required Capital Investment. In addition, Seller shall
deliver a certificate, dated the Closing Date, of a duly autho-
rized officer of Seller, stating that the conditions precedent
relating to Seller, set forth in Section 7.2, have been satis-
fied.
SECTION 6.3 Deliveries by DTI. DTI shall deliver the
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DTI Exchange Shares, the DTI Investment Shares, registered in the
name of Seller and in the name(s) of any third parties who shall
have purchased any part of the DTI Investment Shares. In addi-
tion, DTI shall deliver a certificate, dated the Closing Date, of
a duly authorized officer of DTI, stating that the conditions
precedent relating to DTI, set forth in Section 7.2, have been
satisfied.
SECTION 6.4 Further Assurances. In addition to the
------------------
actions, documents and instruments specifically required to be
taken or delivered hereby, Seller and DTI shall execute and
deliver such other instruments and take such reasonable addition-
al actions as the other party, or its counsel, may request in
order to complete and make effective the Transactions, including,
without limitation, certificates from each of the parties hereto
to the effect that all representations and warranties contained
herein are true and correct and shall be deemed restated as of
the Closing Date.
7
<PAGE>
ARTICLE 7
Covenants and Conditions
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SECTION 7.1 Maintenance of Business. Each of DTI and
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Seller covenants and agrees that between the date hereof and the
Closing Date, it will operate its business only in the ordinary
course, consistent with prior practice.
SECTION 7.2 Conditions Precedent. Neither Seller nor
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DTI shall be obligated to consummate the Closing unless (a) the
Boards of Directors of each of Seller and DTI shall have ratified
the execution and performance of this Stock Purchase Agreement
within nine weeks after the date of its execution on behalf of
Seller and DTI, (b) the representations and warranties of the
other party contained herein shall be true and correct as of the
Closing Date, (c) no action, suit or proceeding shall have been
brought or threatened against either party by any government or
regulatory authority seeking to restrain or prevent any of the
Transactions, (d) no material adverse change shall have been
suffered by the other party in its financial condition or opera-
tions and the other party shall not have become a party to any
litigation or been threatened with any litigation against it,
which, if adversely determined, could have a material adverse
effect on the financial condition, business or results of opera-
tions of DTI or any of Finprogetti subsidiaries. For purposes
hereof, a "material adverse change" and a "material adverse
effect" shall mean a change or effect having a negative impact of
at least Lit. 1,600,000,000.
SECTION 7.3 Amendment of DTI Charter. DTI, at the
-------------------------
next meeting of its shareholders to be held after the date
hereof, shall cause a resolution to be presented to such share-
holders calling for the amendment of DTI's charter to eliminate
all authorized but unissued
8
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preferred shares and to increase the number of authorized common
shares from 10,000,000 to 20,000,000.
SECTION 7.4 Distribution of DTI Exchange Shares and
-----------------------------------------
DTI Investment Shares to the Finprogetti Shareholders. Finproge-
- -----------------------------------------------------
tti shall be dissolved and the DTI Exchange shares and the DTI
Investment Shares shall be distributed to the Finprogetti share-
holders as soon as reasonably practicable.
ARTICLE 8
Other Agreements
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SECTION 8 Survival of Warranties; Indemnification
---------------------------------------
(a) All representations, warranties, covenants,
indemnities and agreements made by the parties hereto (which are
contained herein or in any Exhibit hereto), and all claims which
accrue thereunder, shall survive for a period of two (2) years
following the Closing Date and any action to be taken seeking
indemnification hereunder must be commenced within such two (2)
year period; provided, however, with respect to the representa-
tion of DTI relating to certain liabilities of OAM S.p.A. which
are set forth in Section C.9 of Exhibit C hereto, the applicable
time period shall be four (4) years following the Closing Date.
Seller hereby indemnifies DTI for any cost, loss, expense,
damage, claim or other liability (including, without limitation,
reasonable counsel fees incurred in litigation investigation or
otherwise) ("Indemnifiable Damages") suffered or incurred by DTI
arising from any breach of any representation or warranty made by
Seller herein or in any Exhibit hereto, any breach or failure to
perform any covenant or agreement of Seller herein or in any
Exhibit hereto. DTI hereby
9
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indemnifies Seller for any cost, loss, expense, damage, claim or
other liability suffered or incurred by Seller arising from any
breach of any representation or warranty made by DTI herein or in
any Exhibit hereto or any breach or failure to perform any
covenant or agreement of DTI herein or in any Exhibit hereto.
(b) In order for any party (the "Indemnified
Party") to be entitled to any indemnification provided for under
this Agreement in respect of, arising out of or involving a claim
made by any person, firm, governmental authority or corporation
against the Indemnified Party (a "Third Party Claim"), such
Indemnified Party must notify the indemnifying party in writing
of the Third Party Claim within a reasonable time after receipt
by such Indemnified Party of written notice of the Third Party
Claim unless the indemnifying party shall have previously re-
ceived knowledge thereof. Thereafter, the Indemnified Party
shall deliver to the indemnifying party, within a reasonable time
after the Indemnified Party's receipt thereof, copies of all
notice and documents (including court papers) received by the
Indemnified Party relating to the Third Party Claim.
(c) If a Third Party Claim is made against an
Indemnified Party, the indemnifying party shall be entitled, but
shall not be obligated, to participate in the defense thereof.
(d) Anything contained in this Section 8 to the
contrary notwithstanding, no failure by the Indemnified Party to
furnish any notice or copy thereof shall relieve the indemnifying
party of any obligation to indemnify, except to the extent that
the indemnifying party shall have been prejudiced as a result of
such failure, and except that the indemnifying
10
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party shall not be liable for any expenses incurred during the
period in which the Indemnified Party failed to give notice.
ARTICLE 9
Miscellaneous
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SECTION 9.1 Expenses. Except as otherwise provided
--------
herein, Seller and DTI shall each bear its own expenses (includ-
ing those of counsel, accountants and investment bankers) in-
curred by such of them in connection with this Agreement and the
transactions herein contemplated.
SECTION 9.2 Rights Confined to Parties. Nothing
----------------------------
expressed or implied herein is intended or shall be construed to
confer upon or give to any person, other than the parties hereto,
and their successors and assigns as permitted hereunder, any
right, remedy, or claim under or by reason of this Agreement or
of any term, covenant, or condition hereto, and all the terms,
covenants, conditions promises, and agreements contained herein
shall be for the sole and exclusive benefit of the parties hereto
and their successors and assigns as permitted hereunder.
SECTION 9.3 Amendment. This Agreement may not be
---------
amended except by an instrument in writing signed by or on behalf
of all of the parties hereto.
SECTION 9.4 Entire Agreement. This Agreement (includ-
----------------
ing the documents and instruments referred to herein) constitutes
the entire agreement and supersedes all other prior agreements
and understandings, both oral and written, between the parties
with respect to the subject matter hereof.
11
<PAGE>
SECTION 9.5 Governing Law. This Agreement is governed
-------------
by and construed and enforced in accordance with the internal
laws of the State of New York, without regard to the conflict of
laws principles thereof.
SECTION 9.6 Severability. Any provision of this
------------
Agreement which is prohibited or unenforceable in any jurisdic-
tion shall not affect the validity or enforceability of any other
provision in such jurisdiction of the validity or enforceability
of such provision in any other jurisdiction.
SECTION 9.7 Headings and Exhibits. The headings of
----------------------
the various Articles and Sections herein are for convenience of
reference only and shall not define or limited any of the terms
or provisions hereof. Schedules and documents referred to in
this Agreement are in integral part of this Agreement.
SECTION 9.8 English Language Version Governs. This
---------------------------------
Agreement may be executed in English language and in Italian
language versions. In the event of any differences between such
two versions, the provisions of the English language version
shall govern.
SECTION 9.9 Notices. Any notices or other communica-
-------
tions required or permitted under this Agreement shall be in
writing and hand delivered, telecopied, telexed or cabled to the
addresses designated below, or to such other address or addresses
as may hereafter be furnished by one party to the other party in
compliance with the terms hereof:
12
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If to DTI:
c/o it attorneys:
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, New York 10022
Attn: Howard E. Chase, Esq.
If to Seller:
c/o its attorneys:
Finprogetti S.p.A.
Via Fieno n. 8
20123 Milano, Italy
Attn.: Francesco Pugno Vanoni
All such notices and communications shall be effective when
received at the respective designated addresses.
SECTION 9.10 Execution. Because the English language
---------
version of the Agreement governs, as provided in Section 9.8
above, the Agreement may be executed on behalf of Purchaser and
Seller upon separate English and Italian version counterparts,
provided, that each party shall execute the Agreement upon at
least one English language version counterpart. The Agreement
shall become effective only when each of the parties shall have
executed a counterpart of the Agreement in such English language
version. If the Agreement is fully executed in to or more
English language version counterparts, it shall not be necessary
in mailing proof of this Agreement to produce or account for more
than one such fully executed counterpart.
13
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be duly executed by its duly authorized
officer, all as of the day and year first above written.
DE TOMASO INDUSTRIES, INC.
By: s/ Mario Tozzi-Condivi
-------------------------------------
Title: Director
----------------------------------
Attest:
- --------------------
FINPROGETTI S.p.A.
By: s/ Francesco Pugno Vanoni
--------------------------------
Title: President
-----------------------------
Attest:
- --------------------
14
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Exhibit A
OPTION AGREEMENT
----------------
AGREEMENT made as of , 1995 by and between
-----------------
De Tomaso Industries, Inc. (the "Company") and Finprogetti,
S.p.A. ("Finprogetti").
RECITALS
--------
The Company and Finprogetti have entered into that certain
Stock Purchase Agreement, dated the day of , 1995,
-------- ------
("Stock Purchase Agreement"), pursuant to which the Company will
acquire the Finprogetti Subsidiaries and Finprogetti will acquire
the DTI Exchange Shares and DTI Investment Shares (as each such
term is defined in the Stock Purchase Agreement).
NOW, THEREFORE, it is agreed as follows:
1. Grant of Option. The Company hereby grants to Finpro-
---------------
getti the right, privilege, and option to purchase 248,673 shares
of its unregistered, restricted common stock at the dollar
equivalent of Lit. 20,106.73 per share, calculated at the dollar-
lire exchange rate prevailing on the date of exercise. Such
price is equal to the DTI Value Per Share as defined in the Stock
Purchase Agreement.
2. Time of Exercise of Option. Finprogetti may exercise
---------------------------
the option granted hereby, in whole, or in part, at any time on
or before December 31, 1995.
3. Method of Exercise. The option shall be exercised by
-------------------
written notice directed to the Company at its principal place of
business, accompanied by a check in full payment of the option
price for the number of shares to be purchased. The Company
shall make prompt delivery of a legended certificate of such
shares for which the option has been exercised.
<PAGE>
4. Nontransferability. The option granted herein is not
------------------
transferable by Finprogetti otherwise than (a) upon dissolution
of Finprogetti and the distribution of its assets to its share-
holders, or (b) with the prior consent of DTI and, in any event,
in compliance with U.S. securities laws.
5. No Rights Prior to Exercise. Finprogetti shall have
----------------------------
no rights as a stockholder in the shares subject to the option
granted herein until payment of the option price and delivery to
Finprogetti of a certificate for such shares as herein provided.
6. Changes in Capital Structure. In the event that the
-----------------------------
outstanding number of shares of common stock of the Company are
hereafter increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the
Company or of another corporation, by reason of reorganization,
merger, consolidation, recapitalization, reclassification, stock
split-up, combination of shares or dividend payable in corporate
shares, appropriate adjustment shall be made in the number and
kind of shares as to which outstanding options, or portions
thereof then unexercised, shall be exercisable, to the end that
Finprogetti's proportionate interest shall be maintained as
before the occurrence of such event; such adjustment in outstand-
ing options shall be made without change in the total price
applicable to the unexercised portion of the option and with a
corresponding adjustment in the option price per share.
7. Shares for Investment. By accepting this option,
-----------------------
Finprogetti acknowledges that any and all shares acquired under
this Agreement shall be acquired for investment and not for
distribution, and prior to the issuance for any or all of the
shares issuable pursuant hereto, shall deliver to the Company a
representation in writing that such shares are being acquired in
good faith for investment and not for distribution. Shares
acquired hereunder shall not be sold except pursuant to an
effective registration statement under the Securities Act of
1933, as amended, or pursuant to a valid exemption therefrom and
shall bear a legend to such effect. Shares acquired pursuant to
this option shall be subject to the Registration Rights set forth
on Exhibit D of the Stock Purchase Agreement.
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8. Severable Provision. The provisions of this Agreement
-------------------
are severable and if any one or more provisions may be determined
to be illegal or otherwise unenforceable, in whole or in part,
the remaining provisions and any partially unenforceable provi-
sion to the extent enforceable in any jurisdiction shall, never-
theless, be binding and enforceable, and such illegal or unen-
forceable provision shall be deemed modified to the extent
necessary to make the same legal and enforceable.
9. Waiver. The failure of either party hereto to enforce
------
any provision or provisions of this Agreement shall not in any
way be construed as a waiver of any such provision or provisions
as to any future violations thereof, nor prevent that party
thereafter from enforcing each and every other provisions of this
Agreement. The rights granted the parties hereto are cumulative
and the waiver of any single remedy shall not constitute a waiver
of such party's right to assert all other legal remedies avail-
able to it under the circumstances.
10. Notices. Any notice to be given under this Agreement
-------
shall be personally delivered in writing or shall have been
deemed duly given when received after it is posted in the United
States mails, postage prepaid, registered or certified, return
receipt requested, and if mailed to the Company shall be ad-
dressed to the Company at its principal place of business,
attention: Catherine D. Germano, and if mailed to Finprogetti
shall be addressed to it at Finprogetti Spa, via Fieno 8,
--------
Milano, Attn: Carlo Previtali, or such other address or addresses
as either the Company or Finprogetti may hereafter designate in
writing to the other.
11. Binding Effect; Amendment. The rights and obligations
-------------------------
of the Company under this Agreement shall inure to the benefit
of, and shall be binding upon, the Company and its successors and
assigns, and the rights and obligations of Finprogetti under this
Agreement shall inure to the benefit of, and shall be binding
upon, Finprogetti and representatives, successors and assigns.
This Agreement supersedes all prior agreements and understandings
between the parties hereto respecting the subject matter hereof.
This Agreement shall not be modified, amended, or changed in any
respect except in writing, signed by the parties hereto.
3
<PAGE>
12. Governing Law. This Agreement shall be governed by,
-------------
and construed in accordance with, the laws of the State of New
York without regard to the law of conflict of laws of any juris-
diction. The parties hereto consent to the jurisdiction of the
Courts of the State of New York.
13. Captions and Paragraph Headings. Captions and para-
--------------------------------
graph heading used herein are for convenience and are not a part
of this Agreement and shall not be used in construing it.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
DE TOMASO INDUSTRIES, INC.
ATTEST: By:
----------------- -------------------------------
President
FINPROGETTI, S.P.A.
By: s/ Francesco Pugno Vanoni
-------------------------------
4
<PAGE>
EXHIBIT B
Representations and Warranties of Seller
----------------------------------------
SECTION B.1 Due Execution and Delivery. This
------------------------------
Agreement has been duly executed and delivered by Seller. This
Agreement constitutes a valid and binding obligation of Seller,
enforceable in accordance with its terms except to the extent
that (i) such enforcement may be limited by bankruptcy, insolven-
cy, moratorium or other similar laws affecting the enforcement of
creditors' rights generally (the "Bankruptcy Exception"), and
(ii) certain of the covenants contained herein may not be specif-
ically enforceable, and courts may award money damages rather
than specific performance of contractual provisions involving
matters other than the payment of money.
SECTION B.2 No Acceleration Due to Transac-
-----------------------------------
tions. Except as set forth in exhibit B.2, there exist no
-----
agreements or other commitments binding on Seller or any of the
Finprogetti Subsidiaries which provide for an acceleration of
rights against either of the Finprogetti Subsidiaries or entitle-
ment to benefits upon the occurrence of a change in control of
either of the Finprogetti Subsidiaries or the occurrence of any
of the Transactions.
SECTION B.3 Organization and Authority of Finprogetti.
------------------------------------------
(a) Seller and each of the Finprogetti
Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation. Seller has all requisite power and authority
(corporate and other)
<PAGE>
to execute and deliver this Agreement, and to consummate the
Transactions. Seller has taken (or will before closing take) all
actions as and in the manner required by applicable law, its
Certificate of Incorporation (Charter) and its Bylaws or other-
wise to authorize the execution, delivery and the carrying out of
this Agreement and the Transactions.
(b) The execution and delivery of this
Agreement by Seller does not, and the consummation of the Trans-
actions will not, with or without the giving of notice or the
lapse of time or both, (i) violate any provision of law, statute,
rule or regulation to which seller or either of the Finprogetti
Subsidiaries is subject; (ii) conflict with or result in a breach
of or constitute or result in a default under any of the terms,
conditions or provisions of the Certificate of Incorporation or
By-laws of Seller or any of the Finprogetti Subsidiaries or any
judgment, order, injunction or decree of any court or governmen-
tal authority, domestic or foreign, to which seller or any of the
Finprogetti Subsidiaries is subject or by which Seller or any of
the Finprogetti Subsidiaries or their respective properties is
bound, where such conflict, breach or default would have a
material adverse effect on the financial condition, results of
operations, assets, properties or business of Seller or any of
the Finprogetti Subsidiaries (a "Material Adverse Effect"); or
(iii) require any consent, approval or notice under, or permit
the termination of any provision of, or result in the accelera-
tion of (or give the right to accelerate) the maturity or perfor-
mance of any obligation of Seller or any of the Finprogetti
Subsidiaries or result in the creation or imposition of any
mortgage, pledge, security interest, encumbrance, lien, claim or
charge of any kind (a "Lien") upon any of the properties, assets
or business of Seller or any of the Finprogetti Subsidiaries
under any notice, bond, indenture, mortgage, deed of trust,
lease, franchise, permit, authorization, license, contract,
instrument or other agreement
2
<PAGE>
or commitment to which Seller or any of the Finprogetti Subsid-
iaries is a party or by which seller or any of the Finprogetti
Subsidiaries is bound where the imposition of such Lien would
have a Material Adverse Effect.
(c) Finprogetti and each of the Finpr-
ogetti Subsidiaries (i) has all requisite corporate power and
authority to carry on its business as presently conducted and to
own or lease and operate its properties; and (ii) is qualified or
licensed to do business and is in good standing as a foreign
corporation in every jurisdiction in which the failure to so
qualify would have a Material Adverse Effect.
SECTION B.4 Capitalization of Finprogetti Subsid-
----------------------------------------
iaries. The authorized capital stock of Finprogetti Internation-
------
al Holding S.A. consists solely of 550 shares of F.S. 1000 each,
of which 550 are issued and outstanding and none of which are
treasury shares. The authorized capital stock of Intertrust,
S.p.A. consists solely of 1.688.880 shares of Lit. 170 each, of
which 1.688.800 are issued and outstanding and none of which are
treasury shares. The authorized capital stock of Finproservice
S.p.A. consists solely of 5000 shares of Lit. 1.000.000, each of
which 5000 are issued and outstanding and none of which are
treasury shares. The Finprogetti Subsidiary Shares have been
duly authorized and validly issued and are fully paid and non-
assessable. None of the Finprogetti Subsidiaries is bound by any
option, warrant or other right, call or commitment to issue, or
any obligation or commitment to purchase, any of its authorized
voting capital stock or any securities convertible into or
exchangeable for any of its authorized voting capital stock.
3
<PAGE>
SECTION B.5 Clear Title to Finprogetti Subsidiary
----------------------------------------
Shares. Seller is, and will be as of and on the Closing Date,
------
the direct owner of all of the issued and outstanding capital
stock of the Finprogetti Subsidiaries, with the exception of
Finproservice S.p.A. of which Seller owns approximately 95%
thereof. Seller is the lawful record and beneficial owner of all
of the Finprogetti Shares, free and clear of all claims, mortgag-
es, pledges, liens, encumbrances, security interests and adverse
interests of every nature whatsoever, and the sale of the Finpro-
getti Shares and the delivery of certificates evidencing same to
the Purchaser will transfer valid title and beneficial ownership
thereto, free and clear of all claims, mortgages, pledges, liens,
encumbrances, security interests and adverse interests of every
nature whatsoever. The Finprogetti Shares were acquired by the
Seller in compliance with all applicable laws.
SECTION B.6 Basic Documents of Finprogetti Subsid-
----------------------------------------
iaries. Copies of the Certificate of Incorporation (Charter) and
------
By-laws of each of the Finprogetti Subsidiaries which have been
delivered to DTI prior to the date of this Agreement, are true
and complete copies of such instruments as amended to the date of
this Agreement and are in full force and effect. The corporate
records of the meetings of the directors and shareholders of each
of the Finprogetti Subsidiaries are true, correct and complete in
all material respects and reflect all material corporate actions
and proceedings of such bodies to date.
SECTION B.7 Subsidiaries. On the date hereof,
------------
Finprogetti, S.p.A. directly and indirectly owns 55% of the stock
of TIM S.r.l. and, on the Closing Date, Finprogetti Service Srl
will directly own 100% of the capital stock of TIM S.r.l., free
and clear
4
<PAGE>
of any liens, claims, security interests or encumbrances. The
Finprogetti Subsidiaries own those stock interests of those
corporations set forth in Exhibit B.7 and the Finprogetti Subsid-
iaries, together with the corporations described in Exhibit B.7,
own all the assets and businesses which will be included in the
KPMG Finprogetti Valuation, all as set forth in Exhibit B.7.
SECTION B.8 Consents and Approvals of Governmental
----------------------------------------
Authorities. No consent, authorization or approval of, or any
-----------
exemption by, or declaration, filing or registration with, any
governmental or regulatory authority is required to be obtained
by Seller or either of the Finprogetti Subsidiaries in connection
with the execution and delivery of this Agreement and the Consum-
mation by Seller of the Transactions.
SECTION B.9 Financial Statements. The unaudited
---------------------
financial statements (the "Financial Statements") for the Finpro-
getti Subsidiaries for the year ended December 31, 1994, hereto-
fore delivered to Purchaser, and the audited financial statements
for such period which shall be prepared by Ernst & Young and
which shall be delivered to Purchaser on or before May 31, 1995,
have been or shall have been prepared in accordance with rules
promulgated by the Consigli Nazionali dei Dottori Commercialisti
e dei Ragionieri and,where such rules are not applicable, the
rules of the International Accounting Standards Committee, all
applied on a consistent basis, are or, when delivered, will be
true, complete and accurate and fairly present or will fairly
present the financial position of the Finprogetti Subsidiaries as
at the dates thereof and the results of their operations, cash
flows and stockholders' equity for the periods then ended. Since
December 31, 1994, none of the Finprogetti Subsidiaries has
suffered
5
<PAGE>
any material adverse change in its working capital, financial
condition, assets, liabilities (absolute, accrued, contingent or
otherwise) reserves, business, operations or prospects. Nothing
contained in such audited financial statements shall vary in any
material respect from that contained in the unaudited financial
statements heretofore delivered.
SECTION B.10 Assets. The Finprogetti Subsidiaries
------
have good and marketable title to, or valid leasehold interests
in, all of their respective assets included in the Financial
Statements, whether or not included in Schedule B.7, and to be
included in the KPMG Finprogetti Valuation, subject to no liens
or encumbrances except as shown on the Financial Statements and
the KPMG Finprogetti Valuation, respectively.
SECTION B.11 Full Disclosure. No financial state-
----------------
ment, Exhibit, Schedule or document required to be prepared or
furnished by or on behalf of the Finprogetti Subsidiaries or the
Seller to the Purchaser in connection with this Agreement or any
agreement contemplated hereby or delivered pursuant hereto,
contained or contains any material misstatement of fact or omits
to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The Seller shall notify Purchaser promptly
of the occurrence of any event or the discovery of any fact which
would render the immediately preceding sentence untrue. All
information contained in any Exhibit hereto shall be deemed
incorporated by reference in all other Exhibits hereto requiring
the disclosure or inclusion of such information.
6
<PAGE>
SECTION B.12 Representations, Warranties and Agree-
----------------------------------------
ments Regarding DTI Transactional Shares.
----------------------------------------
(a) Seller is acquiring the DTI Transactional
Shares for its own account, for investment
and not with a view to the distribution or
resale thereof, except the distribution of
the DTI Transactional Shares to the Finprog-
etti Shareholders pursuant to Section 7.4
hereof, which distribution shall be effected
in accordance with the provisions of this
Section B.12.
(b) Seller and its counsel has had the opportu-
nity to ask questions and receive answers
concerning the terms and conditions of the
Transactions contemplated hereby and to ob-
tain any additional information which DTI
possesses or can acquire without unreason-
able effort or expense that is necessary to
verify the accuracy of the information fur-
nished by DTI hereunder.
(c) Seller and its counsel has such knowledge
and experience in financial and business
matters that Seller is capable of evaluating
the merits and risks of the prospective in-
vestment.
(d) Seller understands that the sale of the DTI
Transactional Shares pursuant hereto is in-
tended to be a non-public offering pursuant
to Regulation D, promulgated under the Secu-
rities Act, and that the DTI Transactional
Shares have not been registered under the
Securities Act and no aspect of this offer-
ing has been reviewed by
7
<PAGE>
the Commission or by the securities regula-
tory authorities of any state in the United
States of America or any other Country.
(e) Seller agrees that it will not offer, sell,
transfer, assign, mortgage, pledge or other-
wise dispose of, distribute or encumber any
DTI Transactional Shares delivered pursuant
to this Agreement, unless, (i) in the opin-
ion of counsel to DTI or the opinion of cou-
nsel satisfactory to DTI's counsel, regis-
tration of such shares under the Securities
Act and the rules and regulations of the
Commission thereunder, as then in effect, is
not required in connection with such trans-
action, or (ii) sale of the DTI Transaction-
al Shares is permissible pursuant to Rule
144 under the Securities Act, in which event
the Seller shall furnish DTI with an opinion
of counsel reasonably acceptable to DTI to
the effect that the sale of the DTI Transac-
tional Shares proposed to be sold is permis-
sible pursuant to Rule 144, or (iii) a reg-
istration statement under the Securities Act
is then in effect with respect to such
shares and the purchaser or transferee has
been furnished with a prospectus meeting the
requirements of Section 10 of the Securities
Act.
(f) Anything in paragraph (e) above to the con-
trary notwithstanding, Seller will not of-
fer, sell, transfer, assign, mortgage,
pledge or otherwise dispose of, distribute
or encumber any DTI Transactional Shares if
any such transaction would render the con-
summation
8
<PAGE>
of the transactions contemplated by this
Agreement to be deemed to be an "offer,"
"offer to sell," "offer for sale," or "sale"
of the DTI Transactional Shares to any per-
son other than the Seller, within the mean-
ing of Rule 145 of the Rules and Regulations
of the Commission under the Securities Act,
as in effect on the date hereof.
(g) Seller agrees that DTI may endorse on any
certificate for DTI Transactional Shares to
be delivered pursuant to this Agreement an
appropriate legend referring to the provi-
sions of Paragraphs (a) through (g) of this
Section B.12 and that DTI may instruct its
transfer agents not to transfer any such DTI
Transactional Shares unless advised by DTI
that such provisions have been complied
with.
9
<PAGE>
EXHIBIT B.7
Subsidiaries
------------
The following is a textual description of a chart annexed
to Exhibit B as Exhibit B.7:
Finprogetti S.p.A. owns a 100% interest in subsidiaries
engaged in three areas of business: Merchant Banking, Real Estate
Development and Services.
Its 100% owned Merchant Banking subsidiary is Finprogetti
International Holding S.A., which owns an 80% interest in Grant
Hotel Bitia, S.r.l. and a 66.7% interest in Immobiliare Broseta
S.r.l.
Its 100% owned Real Estate Development Subsidiary is Finpr-
ogetti Investimenti Immobiliari S.p.A. (formerly Intertrust
S.p.A.), which owns a 25% interest in Interim S.p.A., a 100%
interest in Pastorino Strade S.r.l. and interests in Immobile Di
Cologne Bresciano & di crediti d'imposta a rimborso. Immobiliare
Broseta S.r.l. owns a 33.3% interest in Interim S.p.A.
Finprogetti's 100% owned Service subsidiary is Finprogetti
Servizi S.p.A., which owns a 95% interest in Finproservice S.p.A.
and a 100% interest in Temporary Integrated Management S.r.l.
<PAGE>
Exhibit B2
LIST OF PATRONAGE LETTERS
<TABLE><CAPTION>
Issuance
Date In favor of On behalf of Amount It/Lire As a guaranty of
- -------- ----------- ------------ -------------- ---------------
<S> <C> <C> <C>
11/04/89 Agricola Mantova Finproservice - Bs 3.000.000.000 Credit Line
04/07/94 Centrobanca Intertrust 10.000.000.000 Long term debit on Cologne Bresciano
09/07/90 Ca.ri.plo Finproservice - Bs 2.750.000.000 Credit Line
09/10/90 Banco Lariano Finproservice - Bs 2.500.000.000 Credit Line
01/02/93 Trento e Bolzano Finproservice - Bs 5.500.000.000 Credit Line
20/01/95 BNL Finproservice - Bs 2.000.000.000 Credit Line
24/09/91 Credito Agrario
Bresciano Finproservice - Bs 1.700.000.000 Credit Line
08/10/91 Banco Lariano Finproservice - Bs 3.000.000.000 Credit Line
08/10/93 Banca Popolare di Verona Finproservice - Bs 1.100.000.000 Credit Line
20/01/94 lst Bancario S.Paolo
Torino Finproservice - Bs 3.000.000.000 Credit Line
20/01/94 Credito Commerciale Finproservice - Bs 1.200.000.000 Credit Line
18/05/93 Credito Romagnolo Finproservice - Bs 7.200.000.000 Credit Line
</TABLE>
The foregoing is a fair and accurate textual English translation of an
Italian table annexed as Exhibit B2 to the agreement between the Company
and Finprogetti, S.p.A.
s/ Howard E. Chase
------------------------------
Howard E. Chase
<PAGE>
EXHIBIT C
Representations and Warranties of DTI
-------------------------------------
SECTION C.1 Due Execution and Delivery. This Agree-
--------------------------
ment has been duly executed and delivered by DTI. This Agreement
constitutes a valid and binding obligation of DTI, enforceable in
accordance with its terms, except for the Bankruptcy Exception
and except that certain of the covenants contained herein may not
be specifically enforceable, and courts may award money damages
rather than specific performance of contractual provisions
involving matters other than the payment of money.
SECTION C.2 No Acceleration Due to Transactions.
-----------------------------------
There exist no agreements or other commitments binding on DTI
which provide for any acceleration of rights against DTI or any
entitlement to benefits upon the occurrence of any of the Trans-
actions.
SECTION C.3 Organization and Authority of DTI.
---------------------------------
(d) DTI is a corporation duly orga-
nized, validly existing and in good standing under the laws of
the State of Maryland and has all requisite power and authority
(corporate and other) to execute and deliver this Agreement and
to consummate the Transactions. DTI has taken all actions as and
in the manner required by applicable law, its
1
<PAGE>
certificate or articles of incorporation and its by-laws or
otherwise to authorize the execution, delivery and carrying out
of this Agreement and the Transactions.
(b) The execution and delivery of this
Agreement by DTI does not, and the consummation of the Transac-
tions will not, with or without the giving of notice or the lapse
of time or both, (i) violate in a material manner any provision
of law, statute, rule or regulation to which DTI is subject; (ii)
conflict with or result in a breach of or constitute or result in
a default under any of the terms, conditions or provisions of the
charter or by-laws of DTI, or any order of any governmental body
to which DTI is subject or by which DTI or any of its properties
is bound where such conflict with, breach or default would have a
Material Adverse Effect; or (iii) require any consent, approval
or notice under, or violate, or be in conflict with, or consti-
tute a default under, or permit the termination of any provision
of, or result in the acceleration of (or give the right to
accelerate) the maturity or performance of any obligation of DTI.
SECTION C.4 Securities Act. DTI acknowledges that
--------------
the Finprogetti Shares are being acquired for its own account and
with no intention of distributing or reselling the Shares or any
part thereof in any transaction which would be in violation of
the Securities Acto of 1933, as amended, (the "Securities Act")
or any state securities or "blue sky" laws.
SECTION C.5 Consents and Approvals of Governmental
--------------------------------------
Authorities. No consent, authorization or approval of, or any
-----------
exemption by or declaration, filing or registration
2
<PAGE>
with, any governmental or regulatory authority is required to be
obtained by DTI in connection with the execution and delivery of
this Agreement and the consummation by DTI of the transactions
contemplated hereby.
SECTION C.6 Capitalization. As of the date of this
--------------
Agreement, the authorized capital stock of DTI consists of
10,000,000 shares of Common Stock, $2.50 par value per share
("Common Stock"), of which 2,057,446 shares are issued and
outstanding and, 2,000,000 shares of Convertible Voting Preferred
Stock, $2.50 par value per share ("Preferred Stock"), of which
1,000,000 shares are issued and outstanding. All issued and
outstanding shares of DTI Common Stock and Preferred Stock are
validly issued, fully paid and nonassessable. As of the date of
this Agreement, except for (a) the rights granted on October 24,
1986 by Alejandro DeTomaso to a subsidiary of Chrysler Corpora-
tion to acquire Mr. DeTomaso's shares of capital stock of DTI and
(b) except for the conversion rights carried by the Preferred
Stock issued to Mr. DeTomaso, there are no outstanding (x)
securities convertible into, exchangeable for or evidencing the
right to purchase, any shares of DTI capital stock; (y) options,
warrants, calls or other rights to purchase or subscribe to DTI
capital stock or securities convertible into, exchangeable for or
evidencing the right to purchase, any shares of DTI capital
stock; or (z) any contracts commitments, agreements, understand-
ings or arrangements, understandings or arrangements of any kind
relating to the issuance of any shares of DTI capital stock, any
such convertible or exchangeable securities or any such other
securities evidencing the right to purchase any such options,
warrants or rights.
3
<PAGE>
SECTION C.7 SEC Reports; Financial Statements. DTI
---------------------------------
has made available to seller its (i) Annual Reports on Form 10-K
for the years ended December 31, 1992, 1993 and 1994 as filed
with the Securities and Exchange Commission ("Commission"), (ii)
Quarterly Reports on Form 10-Q for the three months ended March
31, 1994,the three and six month periods ended June 30, 1994 and
the three and nine month periods ended September 30, 1994, all as
filed with the Commission, and (iii) Reports on Form 8-K, dated
May 17, 1993 as amended 6,26,1993, 10,28,1993 and Form 8K 10,28,-
1993. Purchaser shall deliver to Seller its Annual Report on
Form 10-K for the year ended December 31, 1994 on or before April
30, 1995. As of their respective dates, such reports and state-
ments did not or will not contain any 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, in
light of the circumstances under which they were made, not
misleading. The audited consolidated financial statements and
unaudited interim financial statements of DTI included in such
reports have been prepared in accordance with generally accepted
U.S. accounting principles, applied on a consistent basis (except
as may be indicated in the notes thereto), are true, complete and
accurate and fairly present the financial position of DTI and its
consolidated subsidiaries as at the dates thereof and the results
of their operations, cash flows and stockholders' equity for the
periods then ended, subject in the case of the unaudited interim
financial statements, to normal year-end adjustments and any
other adjustments described therein. Since December 31, 1994,
DTI has not suffered any Material Adverse Effect in its working
capital, financial condition, assets, liabilities (absolute,
accrued, contingent or otherwise), reserves, business, operations
or prospects.
4
<PAGE>
SECTION C.8 Validity of DTI Transactional Shares.
------------------------------------
The DTI Transactional Shares, when issued as provided herein,
will be duly authorized validly issued, fully paid and nonassess-
able.
SECTION C.9 O.A.M. S.p.A. Liabilities. With respect
-------------------------
to DTI majority-owned subsidiary, O.A.M. S.p.A. ("OAM"), DTI
represents that, to the best of DTI's knowledge, the aggregate
Lit. 8,913,000,000 reserve included in OAM's Italian fiscal
statements as of September 30, 1994 is at least equal to the
aggregate amount of the following liabilities: (i) unliquidated
wage claims asserted by former employees of Innocenti S.p.A.,
(ii) warranty and "Lemon Law" claims asserted by Maserati Automo-
biles Incorporated, and (iii) potential Italian tax liability of
OAM arising out of events which occurred prior to december, 31,
1994. If, within four (4) years following the Closing Date, one
or more adjustments are made to any of such liabilities because
of events occurring after December 31, 1994, resulting in such
aggregate liabilities exceeding Lit. 8,913,000,000, then the
number of DTI Exchange Shares shall be increased by a number
equal to the amount of the increase in such liabilities, divided
by the DTI Value Per Share, and such additional shares, if and
when issued, shall be deemed for all purposes of this Agreement
to be DTI Exchange Shares.
SECTION C.10 Registration Rights. DTI agrees that
-------------------
Seller shall have such registration rights with respect to the
DTI Transactional Shares as are set forth in Exhibit D attached
hereto.
5
<PAGE>
Exhibit D
REGISTRATION RIGHTS
1. Definitions
Participating Shareholders shall mean holders of record of
--------------------------
Registrable Shares who have notified the Company as required
hereunder to cause their Registrable Securities to be included in
a registration statement.
Public Offering shall mean the offer for sale of securities
---------------
pursuant to an effective registration statement filed under the
Securities Act.
Registrable Shares shall mean DTI Exchange Shares, DTI
-------------------
Investment Shares and DTI Option Shares held of record by Finpro-
getti or by persons who acquired such shares directly or indi-
rectly from Finprogetti other than by a Public Offering or
pursuant to a transaction following which such shares in the
hands of the holders of record are not "restricted securities"
within the meaning of the Securities Act.
Securities Act shall mean the Securities Act of 1933, as
--------------
amended, and the rules and regulations promulgated thereunder, as
the same may be amended from time to time.
2. (a) "Piggyback" Registration. Whenever DTI proposes to
-------------------------
file under the Securities Act a registration statement relating
to any of its Common Stock (other than in respect of employee
benefit plans of DTI on Form S-8 or any similar form from time to
time in effect or pursuant to subsection (b)), whether on its own
behalf or on behalf of any holders of Common Stock, DTI shall, at
least 30 days prior to such filing, give written notice of such
proposed filing
<PAGE>
to the registered holders of Registrable Shares. Upon receipt by
DTI not more than 15 days after such written notice of a written
request or written requests from one or more of such holders for
registration of Registrable Shares, DTI shall (A) include in such
registration statement or in a separate registration statement
concurrently filed, and shall use its best efforts to cause such
registration statement to become effective with respect to, the
Registrable Shares as to which such holder or holders request
registration and (B) if such proposed registration is in
connection with an underwritten offering of Common Stock for the
benefit of DTI, upon request of such holder or holders, use its
best efforts to cause the managing underwriter therefor to
include in such offering the Registrable Shares as to which such
holder or holders request such inclusion, on terms and conditions
comparable to those of the securities offered on behalf of DTI.
(b) Demand Registration. Whenever one or more record
--------------------
holders of Registrable Shares shall make a written request to DTI
to register under the Securities Act Registrable Shares held by
such holder or holders, and the aggregate number of Registrable
Shares so requested to be registered represents, as of the date
of such request, at least 25% of the total number of the Regis-
trable Shares originally issued, DTI, within days after such
--
request shall promptly give written notice of such request to all
record holders of Registrable Shares other than the holder or
holders making such request, such notice stating the estimated
approximate date of filing of such registration statement, and
thereupon shall promptly use its best efforts to register the
Registrable Shares of or pertaining to the holder or holders
making such request and each other holder of Registrable Shares
from whom written request for registration is effective or
received on or before the later to occur of (A) the day after the
date of such notice by DTI or (B) the day prior to estimated date
of filing specified in such notice (the "Request Date"); provid-
-------
ed, however, DTI shall not be required to effect more than two
-- -------
registrations pursuant to this subsection (b).
(c) Other Provisions Relating to Registration Rights. In
--------------------------------------------------
connection with any registration pursuant to this Section:
2
<PAGE>
(i) Upon the request of any Participating Share-
holders, DTI will cooperate with any underwriters (as
defined in the Securities Act) for such holder, includ-
ing, without limitation, providing such information,
certificates, comfort letters of accountants and opin-
ions of counsel as may be reasonably requested by such
underwriters.
(ii) If an offering of the Registrable Shares
involves an underwritten offering and the managing
underwriter thereof shall advise DTI that, in its
opinion, the distribution of all or a part of the
Registrable Shares requested to be included in the
registration concurrently with other securities then
being registered by DTI would materially adversely
affect the distribution of such securities by DTI for
its own account, then the number of such Registrable
Shares included in the pending registration shall be
reduced pro rata among all of the Participating Share-
holders.
(iii) DTI will furnish to each Participating
Shareholder (A) at least seven (7) days prior to the
filing thereof with the Commission, a copy of the
registration statement in the form in which DTI propos-
es to file the same with the Commission and, not later
than the effective date thereof, a copy of any and all
amendments to such registration statement, (B) within
five (5) days of the filing thereof with the Commis-
sion, a copy of any and all post-effective amendments
to such registration statement and (C) at the request
of any such holder and, in the case of a registration
pursuant to subsection (b), a reasonable number of
copies of a preliminary prospectus and a final prospec-
tus (each of which shall, as of their respective dates,
comply with Section 20 of the Securities Act and shall
not, as of such dates, include an untrue statement of a
material fact or omit to state a material fact required
to be stated therein or necessary to make statements
therein not misleading) covering the offering and sale
by such Participating Shareholders.
3
<PAGE>
(iv) DTI will advise each of the Participat-
ing Shareholders of the entry of any stop order sus-
pending the effectiveness of such registration state-
ment or of the initiation of any proceeding for that
purpose, and, if such stop order should be entered, use
its best efforts promptly to cause such stop order to
be lifted or removed.
(v) If any event shall occur as result of which
it is necessary to amend or supplement the prospectus
forming a part of a registration statement filed here-
under in order to correct an untrue statement of a
material fact, or an omission to state a material fact
necessary to make statement therein, in the light of
the circumstances existing when such prospectus is
delivered to a purchaser, not misleading or if it is
necessary to amend or supplement such prospectus to
comply with any law, DTI forthwith will prepare and
furnish to each Participating Shareholder a reasonable
number of amended or supplemented prospectuses so that
statements in the prospectuses as so amended or supple-
mented will not, in the light of the circumstances then
existing, be misleading, or so that such prospectuses
will comply with law.
(vi) DTI will use its best efforts to quali-
fy, file or register the Registrable Shares being
registered under the securities laws of such states of
the United States of America as may be reasonably
designated by the Participating Shareholders and to
obtain the consent, authorization or approval of any
governmental agency (other than any such consent,
authorization or approval required under any statute or
regulation applicable to any such holders and not
applicable to investors generally) required in connec-
tion with the issuance of the Registrable Shares being
registered or in order that such holders may publicly
sell the Registrable Shares covered by such registra-
tion statement.
(vii) With the exception of underwriting
commissions and related distribution expenses set forth
in the last sentence of this subparagraph, all fees,
4
<PAGE>
disbursements and expenses incurred by DTI in connection
with the registration pursuant to subsection (a) or (b)
shall be borne by DTI, including, without limitation, all
registration and filing fees, all costs of preparation and
printing (in such quantities as the holders of
Registrable Shares may reasonably request) of any registra-
tion statement and related prospectus and any amendments or
supplements thereto, all fees and disbursements of counsel
for DTI, the expenses of complying with applicable securi-
ties or blue sky laws, and all costs in connection with the
preparation and delivery of such legal opinions, auditors'
comfort letters or other closing documents as the Partici-
pating Shareholders shall reasonably request. All under-
writing commissions and expenses incurred in connection with
the sale of the Registrable Shares, including expenses
incurred by the underwriter, shall be allocated among the
Participating Shareholders pro rata according to the number
of Registrable Shares being registered by each such holder
or in such other manner as such holders may agree.
(viii) DTI will indemnify and hold harmless each
Participating Shareholder and any underwriter (as
defined in the Securities Act) for such holder and each
person or entity, if any, who controls such holder or
underwriter within the meaning of the Securities Act,
against any losses, claims, damages, liabilities, costs
or expenses, joint or several, or actions in respect
thereof to which such holder or underwriter or control-
ling person or entity may become subject under the
Securities Act, or otherwise, insofar as such losses,
claims, damages, liabilities, costs, expenses or ac-
tions in respect thereof arise out of, or are based
upon, or are related to, any untrue statement or al-
leged untrue statement of any material fact contained
in any registration statement under which Registrable
Shares of or pertaining to such holder were registered
under the Securities Act, any preliminary prospectus,
amended preliminary prospectus, or final prospectus,
amended preliminary prospectus, or final prospectus
contained therein, or any amendment or supplement
thereto, or arise out of, or are based upon, or are
related to, the omission or alleged omission to state
therein a material fact
5
<PAGE>
required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such
holder or underwriter or controlling person or entity
for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided
--------
that 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 said registration statement,
said preliminary prospectus, said amended preliminary
prospectus or said final prospectus or any said amend-
ment or supplement in reliance upon, and in conformity
with, written information furnished to DTI in an in-
strument duly executed by such holder or by any under-
writer for such holder specifically for use in the
preparation thereof, DTI will not be so liable to such
holder or underwriter.
(ix) Each Participating Shareholder will indemnify
and hold harmless DTI, its officers, directors, agents and
employees, and any underwriter therefor against any losses,
claims, damages, liabilities, costs or expenses, joint or
several, or actions in respect thereof to which such person
may become subject under the Securities Act, or otherwise,
insofar as such losses, claims, damages, liabilities, costs,
expenses or actions in respect thereof arise out of, or are
based upon, or are related to, any untrue statement or
alleged untrue statement of any material fact contained in
any registration statement under which Registrable Shares of
or pertaining to such Participating Shareholder were regis-
tered under the Securities Act, any preliminary prospectus,
amended preliminary prospectus, or final prospectus, amended
preliminary prospectus, or final prospectus contained there-
in, or any amendment
6
<PAGE>
or supplement thereto, or arise out of, or are based
upon, or are related to, the omission or alleged omis-
sion to state therein a material fact required to be
stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged
omission) is made in such registration statement,
preliminary prospectus, amended preliminary prospectus,
or final prospectus, amended preliminary prospectus, or
final prospectus contained therein, or any amendment or
supplement thereto, in reliance upon and in conformity
with information furnished to DTI by such Participating
Shareholder in writing expressly for use therein;
provided, however, that the obligations of each such
-------- -------
Participating Shareholder shall be limited to an amount
equal to the net proceeds to such holder of Registrable
Securities sold pursuant to such registration state-
ment.
Mario Tozzi-Condivi Francesco Pugno Vanoni
7
Exhibit 10(c)
De Tomaso Industries Inc.
10/04/1995
Dear Sig. A. De Tomaso,
This letter will confirm the agreement of De Tomaso
Industries, Inc. (the "Company") to purchase, and your agreement
to sell to the Company, some or all of your shares of the Compan-
y's preferred stock, $2.50 par value per share ("Preferred
Stock") and Common Stock, $2.50 par value per share ("Common
Stock"), subject to the option granted by you to the Chrysler
Corporation in 1986, for the price equal to the dollar equivalent
at closing of Lit 20,106.73 per share, calculated at the dollar-
lire exchange rate prevailing on the closing date, multiplied by
the number of shares of Preferred Stock and the number of shares
of Common Stock delivered, less .99 cents per share so delivered.
The purchase price per share so computed is referred to in this
letter as the "Discounted Price Per Share" and the aggregate
purchase price is referred to as the "Discounted Price".
On the date of closing of the contemplated transaction
between the company and Finprogetti S.p.A., evidenced by a
certain Stock Purchase Agreement, dated April, 1995 (the Finprog-
etti Transaction"), you will deliver a sufficient number of
shares of Common Stock and Preferred Stock to constitute payment
in full, based on the Discounted Price Per Shares, for the
following properties and cash described in items 1) through 4)
below. Such Shares shall be duly endorsed in blank for transfer,
and will convey all of your rights, title and interest in and to
all such shares, free and clear of all claims, interests, liens
or encumbrances of any sort whatsoever,.
The Company shall cause the relevant Italian Subsidiar-
ies of the Company to transfer, convey, assign and deliver to you
the properties and cash described in items 1) through 4) below,
it being agreed that the properties described in items 1) trough
3) are being valued at the highest values ascribed to them by
KPMG in the valuation conducted for the Company and delivered on
or about December 14, 1994 :
1) The equity interest of G.B.M. S.p.A. in the Hotel
Canalgrande, free and clear of all claims, interests, liens or
encumbrances of any sort whatsoever.
2) All right, title and interest of O.A.M. S.p.A. in
and to those Maserati motor vehicles and engines referred to as
the "Maserati Museum".
<PAGE>
page 2
3) The equity interest of American Finance S.p.A. in
the Hotel Roma S.p.A., free and clear of all claims, interests,
liens or encumbrances of any sort whatsoever.
4) Lit 5,000,000,000 in cash.
In addition, on the date of closing of the Finprogetti
Transaction, you will deliver all of your remaining shares of
Common Stock and Preferred Stock to the Company which will hold a
like aggregate number of shares of Common Stock in your name and
for your benefit, subject to the following conditions :
1. The Company, at its expense, will register such
shares for sale pursuant to the Securities Act of 1933, as
amended, utilizing a registration statement for such purpose
which it shall maintain effective for three years from the date
of closing of the Finprogetti Transaction or until such earlier
date as all of such shares shall have been sold by you ;
2. The Company, on twenty days written notice to you
and given at any time prior to the third anniversary of the
closing date of the Finprogetti Transaction, can purchase any or
all of such shares by paying you cash equal to the Discounted
Price Per Share, multiplied by the number of shares to be pur-
chased; provided, however, you can cut off the Company's right to
purchase such shares by demanding delivery of such shares your-
self in the manner set forth in item 3. below ;
3. You, at any time prior to the third anniversary of
the closing date of the Finprogetti Transaction, can give the
Company written notice of your demand for delivery of any or all
of such shares. If the Company previously has notified you of its
intention to purchase any or all of such shares and you desire to
take delivery of any or all of the shares the Company so wishes
to purchase, you must notify the Company in writing of your
demand to take delivery of that part or all of such shares within
fifteen days after your receipt of the Company's notice of
intention to purchase;
4. If, on the third anniversary of the Finprogetti
Transaction, the Company continues to hold any of such shares, it
shall buy all of such then remaining shares at the Discounted
Price Per Share, multiplied by the number of shares so purchased.
The Company shall obtain and maintain a bank guarantee in an
amount sufficient to insure its purchase obligation pursuant to
this item 4. Should the Company purchase or should you take
delivery of
<PAGE>
page 3
any of such shares prior to such third anniversary, the Company
shall have no further obligation to you with respect thereto from
and after such purchase(s) and delivery(ies).
As of the closing date of the Finprogetti Transaction,
you will be deemed to have resigned as an officer and director of
the Company and of each and every subsidiary of the Company of
which you presently are an officer or director. You agree to
execute any other documents necessary to effect such resignation.
This agreement is subject to the consummation and
closing of the Finprogetti Transaction. The closing hereunder
shall take place on the closing date of the Finprogetti Transac-
tion.
This agreement shall be governed by and shall be
construed in accordance with the laws of the State of New York.
Please reflect your agreement with the foregoing by
executing this document in the space provided below.
Very truly yours,
De Tomaso Industries, Inc.
by
s/ Howard E. Chase
Howard E. Chase, Director
s/ Santiago De Tomaso
Santiago De Tomaso, Director
s/Mario Tozzi-Condivi
Mario Tozzi-Condivi, Director
Accepted and Agreed :
s/ Alejandro DeTomaso
Alejandro, DeTomaso
Witness:
s/ John Wittner
