SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 24, 2000
Swiss Army Brands, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-2797726
(State of incorporation) (I.R.S. Employer Identification No.)
One Research Drive, Shelton, Connecticut 06484
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 929-6391
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITON OF ASSETS
On June 24, 2000, Swiss Army Brands, Inc., a Delaware corporation through a
wholly owned subsidiary (the "Company"), and Victorinox AG, a Swiss Corporation
and a principal supplier to and substantial shareholder of the Company
("Victorinox"), each acquired 50% of the issued and outstanding capital stock of
Xantia, S.A. Fabrique de Montres Precision ("Xantia"), the principal
manufacturer and assembler of watches sold by the Company. The Xantia shares
were acquired by both firms from Michel and Irene Thievent (the "Sellers")
pursuant to an agreement of June 23, 2000, as amended by agreements of July 10,
2000 and July 24, 2000 (collectively the "Agreements"), which contain provisions
intended to secure ongoing control of Xantia by the Company.
Pursuant to the Agreements, the Company paid at the closing 2,250,000 Swiss
Francs ("CHF") ($1,354,500) and delivered 108,374 shares of the Company's Common
Stock, such shares being valued for purposes of the Agreements at 1,000,000 CHF
($602,000) based upon the average daily closing price of such stock during the
period June 30, 2000 through July 14, 2000. At the closing, Victorinox paid to
the Sellers 3,250,000 CHF ($1,956,500). Each of the Company and Victorinox also
agreed to pay an additional 12,000,000 CHF ($7,224,000) over the next seven
years plus interest with the total purchase price subject to upward or downward
adjustment of up to 1,000,000 CHF ($602,000).
The source of funds for the acquisition by the Company was a bank line of
credit from the Company's existing lender. The purchase price was determined on
the basis of arm-length negotiations between the Company and the Sellers. The
division of the purchase price between the Company and Victorinox was based upon
an arms length agreement to share equally in the acquisition.
Pursuant to the Agreements, the Company and Victorinox each own 50% of the
capital stock of Xantia. In following the acquisition, Xantia retained all of
its pre-closing assets, including plant and equipment used in the manufacture
and assembly of watches and other timepieces and will continue to employ those
assets to manufacture timepieces to be supplied to the Company and to third
party customers.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
The Company shall file financial statements relating to the
acquisition by amendment to this Current Report not later than sixty (60)
days following the filing date of this Current Report.
(b) Pro Forma Financial Information.
The Company shall file financial statements relating to the
acquisition by amendment to this Current Report not later than sixty (60)
days following the filing date of this Current Report.
(c) Exhibits.
2.1 Share Purchase Agreement, dated as of June 23, 2000, by and among the
Company, the Buyer, and the Seller. (A list of exhibits and schedules to
the Share Purchase Agreement is set forth therein. The Company agrees to
furnish to the Commission supplementally, upon request, a copy of any such
exhibits or schedules not otherwise filed herewith.)
2.2 Amendment to the Share Purchase Agreement, dated as of July 10, 2000,
by and among the Company, the Buyer, and the Seller.
2.3 Second Amendment to the Share Purchase Agreement, dated as of July 24,
2000, by and among the Company, the Buyer, the Seller and Victorinox AG.
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99.1 Press release of Company dated June 26, 2000 relating to the
acquisition of the Xantia.
99.2 Press release of Company dated July 24, 2000 relating to the
acquisition of the Xantia.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
SWISS ARMY BRANDS, INC.
(Registrant)
Dated: August 7, 2000 By: /s/ J. Merrick Taggart
---------------------------
Name: J. Merrick Taggart
Title: President, and Chief
Executive Officer
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Exhibit 2.1
Share Purchase Agreement
between
Michel and Irene Thievent
Hohlenweg 37, CH-2564 Bellmund
(The"Sellers")
and
Swiss Army Brands CH, Inc.
One Research Drive, P. O. Box 874, Shelton, CT 06484-0874
("SABICH")
re: Xantia SA
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WHEREAS The Sellers are Swiss citizens who own all of the stock (the
"Stock") of Xantia SA, Fabrique de Montres de Precision ("XANTIA") and
are considering selling the stock to SABICH.
WHEREAS XANTIA is a Swiss corporation with registered office in
Biel/Bienne (CH), and a share capital of CHF 0.2 m divided into 200
registered shares with a par value of CHF 1000.- each, fully paid in.
WHEREAS XANTIA operates a watch design, manufacturing, and assembly
business which, inter alia, has supplied SABICH over the years (the
"Business").
WHEREAS SABICH is a Delaware corporation and a wholly owned subsidiary
of Swiss Army Brands Inc. ("SABI") with registered office in Shelton,
CT.
WHEREAS Swiss Army Brands Inc. and SABICH operate, inter alia, a
design, manufacturing, assembly, and distribution business of watches,
sunglasses and other Swiss Army Brand items, and is the exclusive
distributor in the United States, Canada, and the Caribbean of the
Victorinox tm Original Swiss Army Knife.
WHEREAS SABICH was given the opportunity to undertake a legal,
financial and tax due diligence, which included (i) the review of
documents asked for by SABICH and (ii) discussions with the
management, said opportunity and the use thereof not in any way to
reduce the force or effect and the available remedies of any
representations and warranties herein;
WHEREAS After having carried out the due diligence SABICH has decided
to acquire from the Sellers all stock of XANTIA.
Now, therefore, the parties have come to the following agreement:
1 DEFINITIONS
Affiliate: as to any persons, any other person which directly or
indirectly controls, or is under common control with, or is
controlled by, such person. As used in this definition "control"
shall mean possession directly or indirectly, of the power to
direct or cause the direction and management or policies of such
person.
Agreement: this agreement and its annexes.
Closing Date: the consummation of the transaction of this
Agreement.
Lien: any mortgage, pledge, security interest, encumbrance, lien
or other security interest of any type or nature whatsoever.
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Losses: claims, losses, liabilities, damages, deficiencies, costs
or expenses (including interest, penalties and reasonable
professional fees and disbursements).
Party: the Sellers on the one part or SABICH on the other part.
Parties: the Sellers, and SABICH or any entities designated and
controlled by any of them.
Taxes: All Swiss and foreign federal, cantonal, communal or other
taxes, including but not limited to, income taxes, capital gains
taxes, capital taxes, real estate gains taxes, value-added taxes,
turnover taxes, real estate transfer taxes, stamp taxes, transfer
taxes, other Transactional Taxes, property taxes or like charges
of any kind whatsoever, including any interest, penalties or
additions thereto whether disputed or not.
Transactional any Taxes or duties levied on the transfer of the
Taxes transferred shares other than income and capital gains taxes.
Transactional Taxes include but are not limited to stamp taxes,
securities transfer taxes, ownership change taxes, asset transfer
taxes, excise taxes, customs duties or like charges of any kind
whatsoever, including any interest penalties or additions thereto
whether disputed or not, but excluding value added tax.
Working Current assets minus current liabilities calculated in
Capital accordance with the Swiss legal standards in the Code of
Obligations, and in accordance with standards customary in the
industry. Such calculation shall exclude the tax reserves related
to inventory and legal reserves.
2 SALE AND PURCHASE OF STOCK
Subject to the terms and conditions defined herein, the Sellers hereby agree to
sell to SABICH as of the Closing Date, and SABICH agrees to buy from the Sellers
as of the Closing Date 200 registered shares with a par value of CHF 1000.-
each, i.e. all stock of XANTIA.
3 PURCHASE PRICE
3.1 Installments
The purchase price (the "Purchase Price" as calculated in Annex 1 hereto) for
the XANTIA stock shall be as follows:
a) At Closing
Cash of CHF 5'500'000.
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Restricted Swiss Army Brands Inc. common stock ("SABI Shares") with a
market value of at least CHF 1'000'000.-, valued at the average
closing price for freely traded SABI stock over the ten trading days
immediately preceding the Closing date.
The Sellers acknowledge that the SABI Shares have not and will not be
registered under the United States Securities Act of 1933. Therefore
the Sellers will not sell, pledge or otherwise dispose of any of the
SABI Shares unless he shall first have delivered to SABI a letter of
counsel, reasonably acceptable to SABI to the effect that such
transfer does not involve a violation of that Act. and that the
certificates representing the SABI Shares may bear a legend referring
to these restrictions. The Sellers further acknowledge that he has
received a copy of the Report of SABI on Form 10K for the calendar
year 1999 and any subsequent filings by SABI under the United States
Securities Exchange Act of 1934, as amended and has been granted
access to such other documents and information as he deemed
appropriate.
b) Subsequent Payments
Cash of CHF 12'000'000.- plus interest of CHF 1'459'000.- payable on
the following anniversaries of the Closing Date:
1st Anniv.: CHF 1'491'000.-
2nd Anniv.: CHF 1'605'000.-
3rd Anniv.: CHF 1'615'000.-
4th Anniv.: CHF 1'873'000.-
5th Anniv.: CHF 2'072'000.-
6th Anniv.: CHF 2'463'000.-
7th Anniv.: CHF 2'340'000.-
c) Purchase Price Guarantee, Subordination to Banks Schedule
Swiss Army Brands Inc. hereby guarantees to the Sellers that SABICH or
one of its affiliates pays the Purchase Price as agreed upon in this
Section, and also the obligations under Section 7.1. In case that
SABICH goes bankrupt or leaves the business, Swiss Army Brands Inc.
shall step in as the payor. If XANTIA should be sold to another
company not part of the Swiss Army Brands group, Swiss Army Brands
Inc. shall be relieved of this guarantee if and to the extent a
solvent buyer assumes it.
The payments provided for in Section 3.1b and the guarantee provided
for in Section 3.1c are, in the event of the liquidation or insolvency
of SABI, subordinated to the rights of SABI's lending banks.
d) Purchase Price Adjustments
Working Capital Adjustment
With-in 45 days after the Closing Date (or in the event of delay, as
soon as possible), SABICH shall prepare and deliver to the Sellers
financial statements of XANTIA for the years ended September 30, 1998
and 1999 prepared in accordance with the Swiss legal standards and
audited by Arthur Andersen AG ("Post Closing Statement") and a
statement of Working Capital ("WC Statement") as at the Closing Date.
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Within 15 days after such delivery SABICH shall deliver to the Sellers
a purchase price calculation ("the Purchase Price Calculation")
calculated in accordance with Annex 1. The Purchase Price Calculation
shall set forth the "Recalculated Purchase Price" based upon the Post
Closing Statement and calculated in accordance with Annex 1.
If the Recalculated Purchase Price is greater than CHF 18'500'000.-
the Purchase Price shall be increased by the amount by which the
Recalculated Purchase Price exceeds CHF 18'500'000.- up to a maximum
increase of CHF 1'000'000.-. If the Recalculated Purchase Price is
less than CHF 18'500'000.- the Purchase Price shall be decreased by
the amount by which the Recalculated Purchase Price is less than CHF
18'500'000.-, provided that if prior to the Closing SABICH has reason
to believe that the amount by which the Recalculated Purchase Price is
less than CHF 18'500'000.- exceeds CHF 1'000'000.- SABICH may
terminate this Agreement by written notice to the Sellers.
Any adjustment in the Purchase Price resulting form the operation of
this Section 3.1d shall be paid by SABICH or the Sellers as the case
may be via wire transfer within five business days after Post Closing
Purchase Price Calculation becomes final and binding on the Parties.
To the extent that the breach by Sellers of a representation or
warranty also results in an actual payment to SABICH as a result of an
adjustment pursuant to this Section 3.1d SABICH shall not be entitled
to double recovery.
Disagreement
The Purchase Price Calculation shall become final and binding upon the
parties on the 30th day following receipt thereof unless the Sellers
gives written notice of its disagreement (a "Notice of Disagreement")
with respect to the Purchase Price Calculation prior to such date. Any
Notice of Disagreement shall specify in reasonable detail the nature
of any disagreement so asserted. During the 30 business day period
following the delivery of a Notice of Disagreement, the Sellers and
SABICH shall seek in good faith to resolve in writing any differences
which they may have with respect to any matter specified in the Notice
of Disagreement. At the end of such 30 business-day period, the
Sellers and SABICH shall submit to an internationally recognized
independent public accounting firm for final decision. The costs
thereof shall be borne proportionally by the loosing Party.
3.2 Bank Account
The due amounts shall be paid to the bank account of Mr. Thievent, CreditSuisse
in Biel-Bienne, account No. 0112-265.287-70.
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4 COVENANTS AND ACTIONS BETWEEN SIGNING AND CLOSING
4.1 Covenants
a) Ordinary Business Conduct / No Material Adverse Change
From the date hereof until the Closing Date, subject to the
transaction contemplated herein, the Business of XANTIA has been and
will be conducted in the ordinary course consistent with past
practice, there have been or will be no substantial adverse
developments, and no tangible or intangible assets used have been or
will be sold, assigned or transferred other than in the ordinary
course of business, and no Lien has been or will be created.
The Sellers hereby covenant with SABICH that prior to the Closing and
without the prior written consent of SABICH the following shall apply:
XANTIA shall not make any investments in the Business exceeding CHF
50'000.-- in aggregate or enter into commitments to do so;
XANTIA shall present to SABICH for prior approval any personnel to
be employed for the Business;
XANTIA shall not make any change in the terms and conditions of
employment or pension benefits of any of the personnel;
XANTIA will not enter into or amend or terminate any contracts
written or oral nor waive any rights;
XANTIA shall not pay or authorize any dividends.
b) Notification
The Sellers shall forthwith notify SABICH in writing of any matter
which may arise or become known to him after the date hereof and prior
to the Closing which constitutes (or would after the lapse of time
constitute) a misinterpretation or a breach by the Sellers of any of
the warranties or the undertakings or other provisions contained in
this Agreement and its Annexes.
4.2 Undertakings
a) Shareholders Meeting
The Sellers agree to call for a shareholders' meeting in which all
members of the board resign except from Mr. Thievent, and to elect the
following persons as members of the board of directors:
Mr. Peter Gilson
Dr. Annette Spycher
These elections shall have effect upon the Closing Date, and Mr.
Thievent shall be a member of the board at least until 2007.
<PAGE>
b) Information
The Parties agree to jointly inform the personnel of XANTIA; they
shall fix the appropriate date of information.
No press release or other public statement shall be published except
as required in the United States.
5 CLOSING
5.1 Closing Date of Transaction
Unless the Parties mutually agree otherwise the transactions described in
this Agreement shall be completed on July 23rd, 2000 with immediate effect;
all exchanges will be accomplished simultaneously in the office of
Kellerhals & Partners at Kapellenstrasse 14, CH-3001 Bern or such other
place as the parties may agree to.
5.2 Conditions Precedent
The transaction contemplated herein shall be consummated if the following
conditions have been met. It being understood that either Party may rescind
this Agreement without any financial consequence in case one or several of
these conditions precedent should not be met by the Closing Date.
5.3 Undertakings as of the Closing
a) Undertakings of the Sellers
At the Closing, the Sellers hand over to SABICH
200 shares of XANTIA
the application to the commercial register of the new XANTIA board members
b) Undertakings of SABICH
hands over to the Sellers SABI Shares as defined in section 3.1a of this
Agreement
orders its bank to wire CHF 5'500'000.-- on Mr. Thievent' s bank account as
defined in section 3.2 of this Agreement.
6 REPRESENTATIONS, WARRANTIES AND COVENANTS
The Sellers represent and warrant to SABICH that as at the Closing Date:
6.1 Ownership and Transfer of Stock
a) Ownership of Stock
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The Sellers, jointly and severally, are the sole owners of and have good
and valid title to the XANTIA stock, free and clear of all Liens, charges,
and restrictions.
b) Transfer of Stock
The Sellers have full right and capacity to transfer and sell complete
title to the XANTIA Stock. The transaction has been approved by the board
of XANTIA; however, there is no corporate authorization or approval from
XANTIA or any other company or person or governmental authority required
for the consummation of this very transaction.
6.2 Status of XANTIA
a) Good Standing of XANTIA
XANTIA is a corporation duly organized and validly existing and in
good standing under the laws of Switzerland, and in all of the
jurisdictions in which it operates.
XANTIA is in compliance with all applicable rules and regulations, and
is not in violation of any of its contractual obligations.
The certified excerpt from the commercial register as attached in
Annex 2 hereto and the articles of corporation as amended as attached
in Annex 3 hereto present the legal status of XANTIA.
b) Capitalization of XANTIA
At the Closing Date, XANTIA has a working capital of at least CHF
9'800'000, of which CHF 6'000'000.- in cash or receivables all of
which are collectible within 60 days.
All the outstanding shares are validly issued and paid in.
There is no other authorized capital and no capital increase subject
to a condition.
There are no options issued or instruments convertible or exercisable
into equity nor any obligations to issue equity of any sort.
c) Ownership of Business
XANTIA owns all of its Business and assets used in the Business free
of Liens, charges and restrictions except as otherwise stated in the
financial statements or in this very Agreement.
6.3 Financing Matters
a) Financial Statements
<PAGE>
The financial statements submitted to SABICH as set out in Annex 4
attached hereto for the accounting years 1998 and 1999 (the "Financial
Statements") were prepared consistently and in accordance with the
Swiss legal standards in the Code of Obligations, and in accordance
with standards customary in the industry. Such financial information
fairly present the financial position and the results of operations of
the Business of XANTIA for the accounting years 1998 and 1999
including, without limitation, reserves for taxes, other reserves,
classifications of inventory, and proper reserves in respect of
accounts receivable which are hereby warranted as fully and timely
collectable except for reserves shown on the Financial Statements.
b) Financial Information
The books and records of XANTIA are correct and complete.
The financial information and material furnished and made available to
the auditors and tax advisors of SABICH are correct and complete.
The Sellers represent and warrant that there are no other liabilities,
fixed or contingent, of XANTIA other than (i) those shown in the
financial statements, and (ii) those incurred in the ordinary course
of business during the period between September 30, 1999 and the
Closing date.
To the extent that XANTIA shall have, at the Closing, liabilities,
whether fixed or contingent, other than as shown on Annex 4 or
acquired in the ordinary course of business since the date of the
Financial Statements the Sellers shall assume and pay or otherwise
satisfy such liabilities in a manner that will not be detrimental to
XANTIA or SABICH.
6.4 Taxes, Social Security Contributions, and other Duties
a) Returns
All returns of XANTIA regarding Taxes, social security contributions,
and other duties have correctly, completely and timely been filed, no
deficiencies have been asserted nor is any reason to believe that such
deficiency will be asserted.
b) Payments and Reserves
All taxes, social security contributions and duties have been paid or,
regarding any pending files, XANTIA calculated the appropriate tax and
duties reserves in the financial statement.
c) No Liabilities
There are no Tax, social security contribution or other duty or other
liabilities connected with XANTIA in a way that XANTIA, or SABICH may
be held liable thereof or that authorities may claim for a Lien over
such assets or contracts other than those shown in the financial
statements.
6.5 Personnel
a) Employment Contracts
None of the employment contracts provides for any obligation (whether
current or contingent) to contribute to any plan, agreement or
arrangement which is an employment, consulting or deferred
compensation agreement or severance agreement or an executive
compensation, incentive or bonus arrangement, a savings, or options
plan or a life, health or accident plan or other benefit plan.
There exists no agreement or arrangement with any employee under which
such employee is entitled to extraordinary termination or to a bonus
or other remuneration (monetary or non-monetary) which is conditional
upon the consummation of the transaction contemplated by this
Agreement.
Except for Mr. Thievent's status as a shareholder, the chairman and
Chief Executive Officer of XANTIA there have been no transactions and
there exists no contracts arrangements or other business relationships
between XANTIA, on the one hand and the Sellers, members of his family
or entities in which he holds an interest, on the other.
SABICH agrees to offer employment to Rene Bundeli by XANTIA. It is
understood that the provisions shall be less or at the most equally
favorable than the terms of his current employment with Swiss Army
Brands Inc.
b) Pension Scheme
The employees have been and are a party to a pension scheme a copy of
is attached in Annex 5 hereto which is in compliance with the
applicable laws and the by-laws. XANTIA has timely made all pension
funds and social security contributions (AHV/IV/EO/ALV) required to be
made when due (be it for the account of XANTIA or for the account of
any employee).
There have been made no promises to pay any pensions apart from those
based on the by-laws and accrued or otherwise explicitly disclosed in
the Financial Statements and that there are no current payment
obligations which are not in conformity with the pertinent by-laws.
6.6 Environmental Matters
The Sellers confirm that there have been no violations of environmental
laws, no claims of environmental infractions, and no activity of XANTIA in
the past will give rise to environmental claims in the future.
6.7 Intellectual Property Rights
a) Ownership and Registration of Trademarks
The Sellers confirm that XANTIA does not own other Intellectual
Property Rights apart from the following design patent of which Xantia
is the beneficial owner: No. DM/018 439, registered in CH, D, Benelux,
Italy, France, Egypt, Spain, Indonesia, Morocco, the Netherlands
(Caribbean part), Vatican, and Tunisia. The design patent is
registered in the name of Multec S.A., Macolin, and the following
trademarks of which Xantia is the legal or beneficial owner: ALURA,
CULTURA, GONAR, JUSTIME, JAVIVA, POCKETIME, PURANA, SOBERANO, TOURING,
XANTIA+fig.
<PAGE>
The Sellers confirm that all trademarks currently used by XANTIA are
owned by the company itself except from GONAR, PURANA; those are still
registered in the name of XANTIA's founder and former CEO, Mr. Ed.
Knutti (deceased).
The trademarks of XANTIA have been validly registered and all filings
or other measures have been undertaken and costs and fees paid to
maintain such registration.
b) Licensing of Trademarks
No licenses, limitations or restrictions on the use or the
enforceability of the trademarks have been or will be agreed with any
third party or registered in relation to any of them.
c) Absence of Claims and Infringements
No claims are pending or, to the knowledge of the Sellers, are
threatened against XANTIA which are based on the allegation that
XANTIA infringes the intellectual property rights of third parties and
XANTIA does not infringe the intellectual property rights of third
parties in any material respect.
No third party infringes the Intellectual Property Rights and there
are no material claims or demands of third parties pending or
threatened against XANTIA which relate to the Intellectual Property
Rights.
6.8 Real Estate
XANTIA owns all of the building at Grillenweg 4 free of Liens,
charges, debts and restrictions apart from the landed property on
which the building is built and which is owned by the municipality of
Biel/Bienne and leased to XANTIA until December 31, 2037.
XANTIA represents and warrants that the excerpts of the certified
copies of the Real Estate Register (Grundbuchauszuge) as attached in
Annex 6 hereto are correct, and complete.
XANTIA represents and warrants that all permits and authorizations
required to build the real estate have been duly issued.
6.9 Material Contracts
The Sellers confirm that
<PAGE>
XANTIA is not part of any partnerships, joint venture or consortium.;
XANTIA has not entered in any real estate or personal property lease
or rental agreement other than the ones with Cosmo AG (only oral
contract) and Precimation AG, Infotron AG, and Mr. Lee Kam-yum
(Hongkong) as attached in Annex 7 hereto;
XANTIA has not entered in any licensing agreement.;
XANTIA has not entered in any loans or credit agreements, debt or any
other financing instruments, guarantees, securities, pledges, letters
of comfort.
XANTIA has not entered in any distribution, supply, agency, factoring
or manufacturing agreement or any other contract written or oral which
cannot been terminated within 3 months after the Closing Date without
any remuneration.
XANTIA has not entered in any employment, consulting and management
agreement than those with its 31 employees.
6.10 Permits and Authorizations
XANTIA is in possession of all the permits and authorizations required to
pursue the Business and assets used in the Business as presently being
conducted.
6.11 Absence of Litigation and Claims
a) Absence of Litigation
There is no litigation or arbitration, no governmental investigation
or proceeding to which XANTIA is a party or subject, and to the best
of Sellers' knowledge no such litigation or proceeding is threatened.
b) Absence of Claims
There are no claims or, to the best of Sellers' knowledge, unasserted
claims against XANTIA except from one pending claim of a former
commission agent of XANTIA in Germany seeking payment in a sale of
watches that XANTIA concluded with Suunto which includes a contingent
liability of not more than CHF 100'000.
6.12 Effects of Execution of Agreement
The execution and delivery of this Agreement by the Sellers do not, and
consummation of the transaction contemplated hereby by the Sellers will
not, violate any provisions of the articles of incorporation of XANTIA or
any agreement to which XANTIA is a party or any law or order of any court
of governmental authority binding upon, or applicable to XANTIA. The
Sellers have obtained and will obtain upon the Closing Date all
governmental consents or permits of any nature to enter into this Agreement
and to consummate the transactions contemplated hereby.
<PAGE>
6.13 Maintenance of Significant Relationships
To the best of the Sellers' knowledge, no employee, supplier or other
person whose relationship is material to XANTIA has signified his or its
intention to change that relationship.
7. REPRESENTATIONS AND WARRANTIES OF SABICH
7.1 Status of SABICH
SABICH is a corporation duly organized and validly existing under the laws
of Delaware, and in all of the jurisdictions in which it operates.
7.2 Effects of Execution of Agreement
The execution and delivery of this Agreement by SABICH do not, and
consummation of the transaction contemplated hereby by SABICH, will not,
violate any provisions of the articles of incorporation of SABICH, or any
agreement to which SABICH is a party or any law or order of any court or
governmental authority binding upon, or applicable to SABICH. SABICH has
the full corporate powers, authority and the right to enter into this
Agreement and to consummate the transaction contemplated hereby. SABICH's
board of directors has taken all necessary corporate action to duly
authorize the execution, delivery and performance of this Agreement.
7.3 Sellers' Tax Ruling
SABICH guarantees to the Sellers that all factual statements supplied by
SABI, made to obtain the ruling from the Bernese tax authorities (of which
SABICH and the Sellers each have a copy) regarding the treatment of the
share purchase as an income tax free capital gain for the Sellers are true.
Furthermore, SABICH will not merge with XANTIA as stipulated in the tax
ruling and post closing comply with the conditions set forth by the
relevant Swiss tax authorities. In case of a breach of these conditions
SABICH will have to pay for all damages (e.g. taxes) which might occur to
the Sellers resulting from this breach.
8. COVENANTS
8.1 Covenants of the Sellers
Mr. Thievent covenants that he will continue to work with XANTIA at least
until April 30, 2007 unless one of the reasons as defined in the executive
employment agreement as attached in Annex 8 hereto will arise.
8.2 Covenants of SABICH
SABICH covenants that it will continue the employment of Mr. Thievent with
XANTIA at least until April 30, 2007 unless one of the reasons as defined
in the executive employment agreement as attached in Annex 8 hereto will
arise.
<PAGE>
9. REMEDIES
9.1 Term and Notice of Representations and Warranties
a) Term
The representations and warranties set forth in Sections 6-8 of this
Agreement shall continue in effect until December 31, 2005 save that
representations and warranties relating to Intellectual Property
Rights (section 6.7) and Taxes (section 6.4) shall survive until 30
days after the expiry of the applicable statute of limitations.
b) Notice
Notice of claims must be received in writing prior to December 31,
2005 (or, with respect to Taxes, within 30 days after the date on
which the applicable statute of limitation has expired). The notice
shall contain the relevant facts of the alleged breach and shall
indicate the Section or Subsection of this Agreement which is alleged
to be violated. Failure to give notice shall not affect the remedies
and indemnification provided hereunder except to the extent the
Sellers shall have been actually prejudiced as a result of such
failure.
The Parties waive all notification and examination requirements under
Art. 201 CO. The term for the warranties and representations set forth
in this Section 9.1a shall be read as extension of the statutory terms
pursuant to Art. 210 CO and such statute of limitations shall end at
the last day of the term set forth in the Section 9.1a.
9.2 Remedies
In case of a breach of any representations, warranties or covenants set
forth above (including but without limited to the covenants in Sect. 6.3b
relating to the satisfaction of liabilities) or non-performance of
covenants or undertakings each Party responsible for having given the
representation and warranty or covenant shall indemnify the other Party
against all Losses suffered by that Party as a result of any such
misrepresentation or breach of warranty or non-performance of any covenant
or undertaking. Neither of the Parties may rescind, however, this Agreement
due to a breach of a representation and warranty or covenant.
9.3 Third Party Claims and Governmental Notices
a) Notification and Actions
SABICH shall notify the Sellers in writing within 45 (forty-five)
business days of any third party claim or notice of violation made or
asserted in writing for which SABICH wants to hold the Sellers liable
under this Agreement. In case of litigation or other proceedings,
SABICH shall defend such claim in accordance with the Sellers'
instructions and cost or, if legally permitted and if requested by the
Sellers, shall give the Sellers the opportunity to defend such claims
at the Sellers' discretion and expense. The Parties shall not settle
any such litigation or proceedings without the written consent of the
other Party, such consent not to be withheld unreasonably. The Parties
shall keep each other fully informed of such litigation or proceeding.
<PAGE>
b) Failure to notify
SABICH's failure to notify or to follow the Sellers' instructions with
respect to or give the Sellers the opportunity to defend the claims
shall be deemed as a waiver of any claim or right against the Sellers
in connection with such claim only to the extent the Sellers shall
have been actually prejudiced as a result of such failure.
10 Miscellaneous
10.1 Costs and Taxes
The Parties shall pay their own Taxes, costs and expenses (including also
legal, accounting and other fees) relating to this Agreement and the
consummation of the transactions contemplated hereunder.
10.2. Notices
Any notice, request, instruction or other document deemed by either Party
to be necessary or desirable to be given to the other party hereunder,
shall be in writing and shall be mailed by registered mail addressed to the
address set forth on the first page of this Agreement as follows:
If to the Sellers: Mr. Michel Thievent, Hohlenweg 37, CH-2564 Bellmund
If to SABI or to SABICH: to the attention: Mr. Peter Gilson, 1 Research Drive,
Shelton, CT 06484 (USA)
SABI, SABICH or Mr. Thievent, may at any time, change its address by giving
notice to the other party in the manner described above.
10.3 Modifications
This Agreement shall not be amended or modified except by a document in
writing duly executed by the Parties hereto. This undertaking itself may
only be modified by an agreement in writing.
10.4 Previous Agreements Superseded
This Agreement supersedes all prior agreements, negotiations,
correspondence, undertakings and communications of the Parties, oral or
written with respect to such subject matter, including the letter of
Intent.
10.5 Severability
If any provision of this Agreement is held to be invalid or unenforceable
for any reason it shall be adjusted rather than voided, if possible, in
order to achieve the intent of the Parties to the fullest extent possible.
In any event, all other provisions of this Agreement shall be deemed and
remain valid and enforceable to the fullest extent possible.
<PAGE>
10.6 Non-Assignability
a) In general
Except as set forth in Sections 3.1c and 10.6b of this Agreement, no
Party hereto shall assign in whole or in part, or delegate all or any
part of its rights or obligations under this Agreement without the
prior written consent of the other Parties, such consent not to be
withheld unreasonably; provided, however, that SABICH may assign its
rights and obligations to any Affiliate. Any assignment or delegation
made without such consent shall be void.
b) Possible Assignment between Signing and Closing by SABICH
The Sellers agree that SABICH may assign this Agreement with all
Buyer's rights and obligations between the Signing and Closing Date to
any Affiliate without the conditions set forth in Section 10.6.a of
this Agreement.
10.7 No Waiver
The failure of any of the Parties to enforce any of the provisions of this
Agreement or any rights with respect thereto shall in no way be considered
as a waiver of such provisions or rights or in any way affect the validity
of this Agreement. The waiver of any breach of this Agreement by any Party
hereto shall not operate to be construed as a waiver of any other prior or
subsequent breach.
10.8 Entire Agreement
Subject to the separate agreements referred to herein, this instrument
embodies the entire agreement between the Parties hereto with respect to
the transactions contemplated herein and there have been no agreements or
representations and warranties between the Parties other than those set
forth or provided for herein.
10.9 Binding on Successors
All of the terms, provisions and conditions of this Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their
respective successors, assigns and legal representatives.
10.10 Governing Law
This Agreement shall be subject to and governed by Swiss substantive law.
10.11 Arbitration
<PAGE>
1. All disputes arising out of or in connection with this Agreement,
or amendments or related agreements hereto, including disputes on its
conclusion, binding effect, amendment and termination shall be
resolved, to the exclusion of the state courts, by a three person
arbitral tribunal in accordance with the International Arbitration
Rules of the Zurich Chamber of Commerce.
2. The seat of arbitration shall be at Bern.
3. The language of the proceeding shall be in English.
10.12 Counterparts
This Agreement may be executed in several counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same
instrument.
Shelton, June 23rd, 2000 Biel, June 23rd, 2000
Swiss Army Brands CH, Inc. (SABICH)
/s/ Thomas M. Lupinski /s/ Michel Thievent /s/Irene Thievent
Thomas M. Lupinski Michel Thievent Irene Thievent
We are in agreement with the terms and conditions of the guarantee as set forth
in Sec. 3.1.c of this Agreement:
Shelton, June 23rd, 2000
Swiss Army Brands Inc. (SABI)
/s/ Thomas M. Lupinski
Thomas M. Lupinski
<PAGE>
LIST OF ANNEXES
Annex 1: Purchase Price Calculation of XANTIA SA.
Annex 2: Certified Excerpt of the Commercial Register of XANTIA
Annex 3: Articles of Incorporation (Statuten) of XANTIA
Annex 4: Financial Statements of XANTIA of 1998, 1999
Annex 5: Employment Matters
Annex 6: Certified Excerpts of the Real Estate Register of XANTIA
Annex 7: Material Contracts
Annex 8: Executive Employment Agreement
<PAGE>
<TABLE>
<CAPTION>
Annex 1 (page 1 / 2)
Purchase Price Calculation of XANTIA SA
CHF
<S> <C>
Net Sales 1 24,260
Cost of sales 1 20,378
Gross profit @ 16 % 1 3,882
Operating Expenses @ 7.34 % 2 1,781
EBITDA - Non-Cyrk Business 2,101
Cyrk - Gross margin 1 751
-----
Total EBITDA 2,852
EBITDA multiplied by 5.32959 3 15,200
Building Purchase 1 3,800
Excess of Closing Working Capital 4
Over 10,000,000 CHF
Excess of 9,600,000 Over Closing
Working Capital ( )
Recalculated Purchase Price ----
</TABLE>
(1) These amounts are fixed in the calculation of the Recalculated Purchase
Price and will not be revised in the Post Closing Purchase Price calculation.
(2) The Operating Expenses are calculated at 7.34 % of net sales. The
calculation of the percentage is detailed on Page 2 of this Annex. The Operating
Expenses percentage and resultant Operating Expenses will be revised in the Post
Closing Purchase Price Calculation based upon the Post Closing Statement.
(3) The EBITDA multiple is fixed in the calculation of the Purchase Price and
will not be revised in the Post Closing Price Calculation.
(4) Closing Working Capital will be calculated in the Post Closing Purchase
Price Calculation.
<PAGE>
<TABLE>
<CAPTION>
Annex 1 (page 2/2)
Purchase Price Calculation of XANTIA SA
<S> <C>
CHF
Total operating expenses - years
ended September 30, 1999 and 1998 5,924,979
Less: Depreciation expense - years ended
September 30, 1999 and 1998 955,268
Bad debt expense- years ended
September 30, 1999 and 1998 92,000
Trade show booth construction expense -
year ended September 30, 1999 230,531
----------
Adjusted Operating Expenses 4,647,180
Total Net Sales - Years
Ended September 30, 1999 and 1998 63,338,395
-----------
Operating expense ratio 7,34%
======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Annex 4 (page 1 / 2 )
XANTIA SA Statement of Operations Years Ended Sept 30, 1999, and 1998
Two Years
ended
1999 1998 September 30, 1999
<S> <C> <C> <C>
CHF CHF CHF
Net sales 33,795,828 29,542,567 63,338,395
Cost of sales 27,795,257 25,745,099 53,540,356
---------- ---------- ----------
Gross profit 6,000,571 3,797,468 9,798,039
---------- ---------- ----------
GM % 17,8% 12,9% 15.5%
Operating expenses:
Personnel expense 1,688,119 1,488,914 3,177,033
Maintenance 141,469 129,275 270,744
Insurance and taxes 55,815 27,414 83,229
Administrative expenses 272,725 161,847 434,572
Sales and shipping costs 593,747 318,386 912,133
Depreciation 888,810 66,458 955,268
Bad debt expense (74,000) 166,000 92,000
---------- ---------- ----------
Total operating expense 3,566,685 2,358,294 5,924,979
Operating expenses as a %
of sales 10.6% 8.0% 9.4%
---------- ---------- -----------
Operating income 2,433,886 1,439,174 3,873,060
Interest income 40,860 154,345 195,205
---------- ---------- -----------
Income before taxes 2,474,746 1,593,519 4,068,265
Income taxes 650,011 537,261 1,187,272
---------- ---------- -----------
Net income 1,824,735 1,056,258 2,880,993
========== ========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Annex 4 (page 2 / 2 )
XANTIA SA. Balance Sheet Years Ended Sept 30, 1999, and 1998
1999 1998
<S> <C> <C>
CHF CHF
Cash 8,089,336 5,041,865
Accounts receivable 2,471,046 4,512,685
Inventory 3,365,875 4,850,604
Inventory reserve (1,178,075) (1,697,704)
Loan receivables 259,359 250,000
Other prepaids 438,071 481,317
----------- -----------
Total current assets 13,445,612 13,438,767
Building and other fixed assets 4,022,000 2,902,650
------------ -----------
Total Assets 17,467,612 16,341,617
============ ===========
Liabilities
Payables 2,867,038 3,491,778
Legal reserve 360,000 434,000
Capital 250,000 250,000
Retained Earnings 13,990,574 12,165,839
Total Equity 14,240,574 12,415,839
----------- ----------
Total Liabilities and Equity 17,467,612 16,341,617
=========== ==========
</TABLE>
<PAGE>
Exhibit 2.2
Amendment
to the
Share Purchase Agreement
between
Michel and Irene Thievent
Hohlenweg 37, CH-2564 Bellmund
(The"Sellers")
and
Swiss Army Brands CH, Inc.
One Research Drive, P. O. Box 874, Shelton, CT 06484-0874
("SABICH")
re: Xantia SA
<PAGE>
3. Purchase Price
Parties agree that the second paragraph of sect. 3.1a of the Purchase
Agreement is changed as follows:
Restricted Swiss Army Brands Inc. common stock ("SABI Shares") with a
market value of at least CHF 1'000'000.-, valued at the average
closing price for freely traded SABI stock over twenty to ten trading
days preceding the Closing date, i.e. from June 30 to July 14, 2000.
5.1 Closing Date of Transaction
Parties agree to change the Closing date from July 23rd to July 24, 2000.
10.6b Possible Assignment between Signing and Closing by SABICH
Parties take note that SABICH will most probably assign the Purchase
Agreement with all Buyer's rights and obligations to a Delaware LLC
affiliate.
Biel, July 10, 2000 Bern, July 11, 2000
On behalf of Swiss Army
Brands CH, Inc. (SABICH)
/s/ Michel Thievent /s/Irene Thievent /s/ Beat Brechbuhl,
Michel Thievent Irene Thievent Dr. Beat Brechbuhl,
attorney-at-law
<PAGE>
Exhibit 2.3
2nd Amendment
to the
Share Purchase Agreement
between
Michel and Irene Thievent
Hohlenweg 37, CH-2564 Bellmund
(The"Sellers")
and
Swiss Army Brands CH, Inc.
One Research Drive, P. O. Box 874, Shelton, CT 06484-0874
("SABICH")
and
Swiss Army Brands Inc.
One Research Drive, P. O. Box 874, Shelton, CT 06484-0874
("SABI")
and
Victorinox AG
Schmiedgasse 57, 6438 Ibach, Switzerland
("VICTORINOX")
re: Xantia SA
<PAGE>
WHEREAS SABI operates, inter alia, a design, manufacturing, assembly,
and distribution business of watches, sunglasses and other Swiss Army
Brand items, and is the exclusive distributor in the United States,
Canada, and the Caribbean of the Victorinox tm Original Swiss Army
Knife.
WHEREAS VICTORINOX operates, inter alia, the design, manufacturing,
assembly, and distribution business of watches, sunglasses and of the
Victorinox tm Original Swiss Army Knife.
WHEREAS SABICH is a Delaware corporation and a wholly owned subsidiary
of SABI with registered office in Shelton, CT.
WHEREAS SABICH has entered on June 23rd, 2000 into a share purchase
agreement ("Share Purchase Agreement") with Mr. and Mrs. Thievent
("the Sellers") acquiring Xantia SA, Fabrique de Montres de Precision
("XANTIA SA"), a Swiss corporation with registered office in
Biel/Bienne (CH), and a share capital of CHF 0.2 m divided into 200
registered shares with a par value of CHF 1000.- each, fully paid in.
WHEREAS SABICH and The Sellers agreed to amend the Share Purchase
Agreement for the first time on July 20, 2000.
WHEREAS VICTORINOX now is considering to purchase a 50% share of equity
interest in XANTIA SA.
WHEREAS It is the understanding and will of The Sellers, SABICH and
VICTORINOX that the latter shall become a party to the Share Purchase
Agreement, and buy half of all shares of XANTIA SA while SABICH shall
have at any time the control over XANTIA SA.
Now, therefore, the parties agree to change and to amend the Share Purchase
Agreement as amended on July 10, 2000 as follows:
<PAGE>
0. IN GENERAL/CONTROL
0.1 Unless the context otherwise requires, capitalized terms in this
Amendment shall have the same meaning ascribed to those terms in the Share
Purchase Agreement.
0.2 Subject to the terms and conditions of this Amendment, VICTORINOX
hereby becomes a party to this Share Purchase Agreement as if VICTORINOX
had been an original signatory thereto in respect of 50% of the Stock being
purchased and SABICH' s rights and obligations (including without
limitation, 50% of the right to receive or the obligation to pay 50% of any
amounts under Section 3.1 of the Share Purchase Agreement relating to a
possible post closing adjustment of the purchase price) shall similarly be
limited to 50% of the Stock. VICTORINOX has reviewed and is familiar with
the Stock Purchase Agreement and has received all the information in
respect of XANTIA and this transaction that VICTORINOX requested or deems
appropriate.
0.3 Notwithstanding, and without reducing, the control of XANTIA by SABICH,
provided for in this Amendment, SABI and SABICH on the one hand and
VICTORINOX on the other recognize that they have acted in harmony as
business friends for many decades and intend to continue to do so. In
furtherance of this mutually beneficial relationship, SABICH intends to
consult closely with VICTORINOX on all matters related to XANTIA and values
its ability to utilize the generations of knowledge and experience reposing
in VICTORINOX management.
It is recognized by the parties that from and after the Closing Date,
SABICH shall be and shall thereafter continue to be the controlling
stockholder of XANTIA. In furtherance of that status, it is agreed that
from and after the Closing Date, the Board of Directors of XANTIA shall
consist of five members, three of whom shall be designated by SABICH, and
two of whom shall be designated by VICTORINOX as set forth in Sec. 4.2a
hereafter. VICTORINOX and SABICH agree to, at all times, vote their stock
interest in XANTIA and take such other action as shall be necessary to
preserve that makeup of the Board and the control of SABICH.
0.4 SABICH shall act on behalf of itself and VICTORINOX in respect of that
working capital adjustment and in other instances where decisions are
required or action necessary in respect of the Share Purchase Agreement.
SABICH shall have no liability to VICTORINOX for any such action taken.
VICTORINOX shall remit to SABICH or its parent corporation 50% of the costs
heretofore incurred by them in connection with the acquisition of the Stock
upon receipt of an invoice covering such costs and, on an ongoing basis,
shall reimburse SABICH for costs incurred in administering the parties
interests in XANTIA.
0.5 The parties recognize that VICTORINOX and SABI may have future
commercial dealings with XANTIA. Neither VICTORINOX nor SABICH and SABI,
shall have any liability to the other for considering its own commercial
interests in such dealings with XANTIA.
0.6 Except as set forth by this Amendment, the Share Purchase Agreement
shall remain in full force and effect.
0.7 It is understood that the Sellers, for their convenience, shall address
all matters relating to and in connection with the Share Purchase Agreement
only to SABICH which may forward such correspondence to VICTORINOX if
relevant to it.
2. SALE AND PURCHASE OF STOCK
<PAGE>
Subject to the terms and conditions defined herein, the Sellers hereby
agree
to sell to SABICH as of the Closing Date and SABICH agree to buy from
the Sellers as of the Closing Date 100 registered shares par value
each of CHF 1000.-;
to sell to VICTORINOX as of the Closing Date, and SABICH and
VICTORINOX agree to buy from the Sellers as of the Closing Date 100
registered shares with a par value of CHF 1000.- each.
3. PURCHASE PRICE
3.1 Installments
The purchase price (the "Purchase Price" as calculated in Annex 1 hereto)
for the XANTIA stock shall be as follows:
a) At Closing
Cash of CHF 3'250'000.- by VICTORINOX;
Cash of CHF 2'250'000.- by SABICH;
Restricted Swiss Army Brands Inc. common stock ("SABI Shares") with a
market value of at least CHF 1'000'000.-, valued at the average
closing price for freely traded SABI stock over the ten trading days
immediately preceding the Closing date by SABICH.
The Sellers acknowledge that the SABI Shares have not and will not be
registered under the United States Securities Act of 1933. Therefore
the Sellers will not sell, pledge or otherwise dispose of any of the
SABI Shares unless he shall first have delivered to SABI a letter of
counsel, reasonably acceptable to SABI to the effect that such
transfer does not involve a violation of that Act. and that the
certificates representing the SABI Shares may bear a legend referring
to these restrictions. The Sellers further acknowledge that he has
received a copy of the Report of SABI on Form 10K for the calendar
year 1999 and any subsequent filings by SABI under the United States
Securities Exchange Act of 1934, as amended and has been granted
access to such other documents and information as he deemed
appropriate.
b) Subsequent Payments
Cash of CHF 12'000'000.- plus interest of CHF 1'459'000.- payable as it
follows:
Payments by SABICH: cash of CHF 6'000'000.- plus interest of CHF
729'500.- payable on the following anniversaries of the Closing Date:
- 1st Anniv.: CHF 745'500.-
- 2nd Anniv.: CHF 802'500.-
- 3rd Anniv.: CHF 807'500.-
- 4th Anniv.: CHF 936'500.-
- 5th Anniv.: CHF 1'036'000.-
- 6th Anniv.: CHF 1'231'500.-
- 7th Anniv.: CHF 1'170'000.-
Payments by VICTORINOX: cash of CHF 6'000'000.- plus interest of CHF
729'500.- payable on the following anniversaries of the Closing Date:
- 1st Anniv.: CHF 745'500.-
- 2nd Anniv.: CHF 802'500.-
- 3rd Anniv.: CHF 807'500.-
- 4th Anniv.: CHF 936'500.-
- 5th Anniv.: CHF 1'036'000.-
- 6th Anniv.: CHF 1'231'500.-
- 7th Anniv.: CHF 1'170'000.-
e) Purchase Price Guarantee, Subordination to Banks Schedule
Swiss Army Brands Inc. hereby guarantees to the Sellers that SABICH or
one of its affiliates pays the Purchase Price of 100 shares as agreed
upon in this Section. In case that SABICH goes bankrupt or leaves the
business, Swiss Army Brands Inc. shall step in as the payor. If SABICH
sold its shares to another company not part of the Swiss Army Brands
group, Swiss Army Brands Inc. shall be relieved of this guarantee if
and to the extent a solvent buyer assumes it.
The payments by SABICH provided for in Section 3.1b and the guarantee
provided for in Section 3.1c are, in the event of the liquidation or
insolvency of SABI, subordinated to the rights of SABI's lending
banks.
Swiss Army Brands Inc., and VICTORINOX hereby jointly and severally
guarantee SABICH's obligations under Sec. 7.3.
4. COVENANTS AND ACTIONS BETWEEN SIGNING AND CLOSING
4.2 Undertakings
a) Shareholders Meeting
The Sellers agree to call for a shareholders' meeting in which all
members of the board resign except from Mr. Thievent, and to elect the
following persons as members of the board of directors:
Mr. Charles Elsener
Mr. Charles Elsener
Mr. Peter Gilson
Dr. Annette Spycher
Mr. J. Merrick Taggart
These elections shall have effect upon the Closing Date, and Mr.
Thievent shall be a member of the board at least until 2007.
<PAGE>
At any time, SABICH shall have the right to be represented in the
board by 3 out of 6 members, and VICTORINOX shall have the right to be
represented in the board by 2 members, and both Parties shall have the
right to replace them by other persons of their choice. The Parties
shall vote at the shareholders' meeting in favor of the other party's
proposal.
5. CLOSING
5.3 Undertakings as of the Closing
a) Undertakings of the Sellers
At the Closing, the Sellers hand over
to SABICH 100 shares of XANTIA, and the application to the
commercial register of the new XANTIA board members
to VICTORINOX 100 shares of XANTIA.
b) Undertakings of SABICH
At the Closing, SABICH
hands over to the Sellers SABI Shares as defined in the Share Purchase
Agreement as amended on July 10, 2000;
orders its bank to wire CHF 2'250'000.-- on Mr. Thievent' s bank account as
defined in section 3.2 of this Agreement.
c) Undertakings of VICTORINOX
At the Closing VICTORINOX orders its bank to wire CHF 3'250'000.-- on
Mr. Thievent' s bank account as defined in section 3.2 of this
Agreement.
11. TRANSFERABILITY OF THE STOCK
11.1 SABICH and VICTORINOX recognize that the Stock has not been registered
under the United States Securities Act of 1933, as amended, and agree that
they will not sell, transfer, or otherwise hypothecate any of the stock in
violation of that Act.
11.2 In addition, SABICH and VICTORINOX agree that neither will sell,
hypothecate, or otherwise dispose of any of the Stock except as follows:
<PAGE>
If the selling party receives a bona fide offer from an unrelated party to
purchase all but not less than all of its share of the Stock, such Party may
offer to sell all, but not less than all, of its share of the Stock to the other
Party for the same price. The other Party shall have a period of 60 days to
accept that offer in full. If the offer is so accepted as to all of the Stock,
the Closing in respect of that Sale shall take place promptly and the purchase
price shall be paid, 1/3 at that closing and 1/3 on each of the first and second
anniversaries thereof, each such delayed payment to be accompanied by interest
at the prime rate as charged by the Chase Manhattan Bank NA, as that rate may
change from time to time. If the offer is not so accepted by the other Party,
the offering Party shall have a period of 30 days to sell all, but not less than
all, of the stock so offered to the Buyer named in this Offer to the other
Party.
Biel, 24. 7. 2000 Bern, 24. 7. 2000
On behalf of Swiss Army
Brands CH, Inc. (SABICH)
/s/Michel Thievent /s/Irene Thievent /s/Beat Brechbuhl
Michel Thievent Irene Thievent Dr. Beat Brechbuhl, attorney-at-law
Ibach, 21. 7. 2000 Bern, 24. 7. 2000
Victorinox AG On behalf of Swiss Army
Brands Inc. (SABI)
/s/ Charles Elsener /s/ Beat Brechbuhl
Charles Elsener Dr. Beat Brechbuhl, attorney-at-law
<PAGE>
Exhibit 99.1
PRESS RELEASE
SWISS ARMY BRANDS TO ACQUIRE SWISS WATCH MANUFACTURER, ASSEMBLER
SHELTON, CONN. - June 26 - Swiss Army Brands, Inc. (Nasdaq: sabi) today
announced an agreement to purchase the stock of Xantia, S.A., a leading watch
design, manufacturing and assembling business located in Biel, Switzerland. The
transaction, which is scheduled to close by late July, is valued at
approximately $11.5 million and is comprised of cash, stock and debt.
Xantia is the principal manufacturer and assembler of watches marketed and
sold by Swiss Army Brands. In addition to its business with Swiss Army, Xantia
will continue to serve its other customers and will seek to develop new
customers.
J. Merrick Taggart, president and chief executive officer of Swiss Army
Brands, said, "The joining of our two companies is a gratifying outcome of an
exceptional business partnership that began 10 years ago. Xantia's commitment to
quality, precision and design mirrors Swiss Army's image and widely recognized
brand qualities. As our focus on functional innovation in the watch segment of
our business intensifies, Xantia will play an even more critical role in our
success. We are also excited about the opportunities to grow Xantia's business
with existing and new customers."
Mr. Taggart also said that Swiss Army may share its ownership in Xantia
with another company but that no commitments have been made.
Swiss Army Brands, Inc. is the exclusive United States, Canadian and
Caribbean marketer of Victorinox tm Original Swiss Army tm Knives. In addition
to its line of Swiss Army tm Brand Watches, Sunglasses and Writing Instruments,
the company also markets Bear MGC tm knives and multi-tools, cutlery under the
R. H. Forschner tm brand, and Victorinox tm Travel Gear which is marketed under
a licensing agreement The company web site is located at www.swissarmy.com.
- end -
Safe Harbor Statements under the Private Securities Litigation Reform Act of
1995
This release contains, in addition to historical information, forward-looking
statements about the close of the transaction, anticipated growth of Xantia's
watch business, and the possibility of sharing the ownership. The
forward-looking statements were prepared on the basis of certain assumptions
based on the 10-year relationship with Xantia. Even if the assumptions upon
which the expectations are based prove to be accurate and appropriate, the
outcomes of the acquisition and the business going forward may differ from the
expectations stated herein.
<PAGE>
Exhibit 99.2
PRESS RELEASE
SWISS ARMY BRANDS, VICTORINOX CLOSE PURCHASE OF SWISS WATCH MANUFACTURER
SHELTON, CONN. - July 24 - Swiss Army Brands, Inc. (Nasdaq: sabi) and
Victorinox AG of Ibach, Switzerland, jointly announced today the completion of
the acquisition of Xantia, S.A., a leading watch design, manufacturing and
assembling business located in Biel, Switzerland. The transaction is comprised
of a combination of cash, common stock of Swiss Army Brands, and long-term debt.
Xantia is the principal manufacturer and assembler of watches marketed and
sold by Swiss Army Brands since 1989. In addition to its business with Swiss
Army, Xantia will continue to serve its other customers and will seek to develop
new customers. Victorinox is the manufacturer of Victorinox tm Original Swiss
Army tm Knives and is the provider of the Swiss-made knives, multi-tools and
cutlery products marketed by Swiss Army Brands. Victorinox and Swiss Army Brands
have a business relationship dating back to 1937.
Swiss Army Brands, Inc. is the exclusive United States, Canadian and
Caribbean marketer of Victorinox tm Original Swiss Army tm Knives. In addition
to its line of Swiss Army tm Brand Watches, Sunglasses and Writing Instruments,
the company also markets Bear MGC tm knives and multi-tools, cutlery under the
R. H. Forschner tm brand, and Victorinox tm Travel Gear which is marketed under
a licensing agreement The company web site is located at www.swissarmy.com.
- end -
Safe Harbor Statements under the Private Securities Litigation Reform Act of
1995
This release contains, in addition to historical information, forward-looking
statements about the seven-year payment schedule and anticipated growth of
Xantia's watch business. The forward-looking statements were prepared on the
basis of certain assumptions based on the 10-year relationship with Xantia. Even
if the assumptions upon which the expectations are based prove to be accurate
and appropriate, the outcomes of the acquisition and the business going forward
may differ from the expectations stated herein.
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