UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____)*
EXIDE ELECTRONICS GROUP, INC.
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
302052
(CUSIP Number)
Stig Stendahl, President and Chief Executive Officer, Fiskars OY AB,
Mannerheimintie 14A, 00101 Helsinki 10, Finland; 011-358-0-618-861
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
With a copy to:
Ralf Boer, Foley & Lardner,
777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202; (414) 271-2400
March 13, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [_].
Check the following box if a fee is being paid with the statement [X].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five
percent or less of such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that Section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
Page 1 of 6 Pages
Exhibit Index is on Page 5
<PAGE>
CUSIP No. 302052
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fiskars OY AB
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [_]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [_]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Finland
7 SOLE VOTING POWER
NUMBER OF
1,825,000
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
1,825,000
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,825,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.6%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Item 1. Security and Issuer.
Common Stock, $0.01 par value
Exide Electronics Group, Inc.
8521 Six Forks Road
Raleigh, NC 27615
Item 2. Identity and Background.
Name of Reporting Person
Fiskars OY AB
State or Other Place of Organization
Finland
Principal Business
Fiskars is a Finnish corporation with headquarters in Helsinki,
Finland and business operations around the world. Fiskars' Consumer
Products Group is the largest of its operations and includes the
manufacture and sale of scissors and other houseware products, knives, and
lawn and garden tools marketed principally in the United States and
Europe. Its UPS Group, which is being sold to Exide in the transaction
described in Item 4 of this Schedule 13D, manufactures and markets
uninterruptible power supply equipment and systems used with computers and
telecommunications equipment. Fiskars' INHA works produces aluminum
boats, hinges for the door and window industry, rail fittings and special
purpose radiators for sale principally in Finland and other Nordic
countries. Fiskars' real estate operations include substantial holdings
of real estate properties and related services in Finland. Finally,
Fiskars is the largest shareholder of the Metra Group, a financial
corporation whose stock is traded on the Helsinki Stock Exchange.
Address of Principal Business
Fiskars OY AB
Mannerheimintie 14A
00101 Helsinki 10, Finland
Address of Principal Office
Fiskars OY AB
Mannerheimintie 14A
00101 Helsinki 10, Finland
During the last five years, the reporting person has not been
convicted in a criminal proceeding or been a party to a civil proceeding
of a judicial or administrative judgment, decree or final order enjoining
future violation of, or prohibiting or mandating activities subject to
federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The consideration used in reporting person's acquisition of the
825,000 shares of Common Stock and 1,000,000 shares of Series G Preferred
Stock of Exide Electronics Group, Inc., a Delaware corporation ("Exide"),
was the assignment of all the common capital stock of Deltec Power
Systems, Inc., a Wisconsin corporation ("Deltec"), owned by Fiskars OY AB,
a Finnish corporation ("Fiskars"), the redemption of all the preferred
capital stock of Deltec owned by Fiskars Holdings, Inc., a Wisconsin
corporation that is a wholly-owned subsidiary of Fiskars ("Holdings"), and
the assignment by Fiskars of certain trademarks, a patent and other
intangible assets related to the Deltec business.
Item 4. Purpose of Transaction.
On November 16, 1995, Exide, Deltec, Fiskars and Holdings
entered into a Stock Purchase Agreement (the "Agreement"). Pursuant to
the Agreement, as amended as of February 9, 1996, on March 13, 1996, Exide
purchased all of the issued and outstanding common capital stock of Deltec
and certain trademarks, a patent and other intangible assets related to
the Deltec business from Fiskars in consideration for 825,000 shares of
Exide common stock, par value $0.01 ("Exide Common Stock"), 1,000,000
shares of Exide Series G Preferred Stock, par value $0.01 per share, and
approximately $149.3 million in cash. The cash purchase price payable to
Fiskars is subject to adjustment based upon the consolidated net asset
value of Deltec and its subsidiarieson March 13, 1996. Exide also paid
Fiskars $1,000,000 to reimburse Fiskars for certain expenses incurred in
the transaction. On March 14, 1996, Deltec redeemed certain of its issued
and outstanding preferred capital stock from Holdings in exchange for
approximately $8.68 million. Exide has agreed to cause Deltec to redeem
the balance of such preferred stock on or about January 8, 1997 in
exchange for approximately $520,000.
Item 5. Interest in Securities of the Issuer.
(a)-(b) Information concerning the amount and percent of
shares of Exide Common Stock, beneficially owned by Fiskars OY AB is set
forth below.
Sole voting Shared Voting
and and Aggregate Percentage of
Dispositive Dispositive Beneficial Outstanding
Power Power Ownership Shares
1,825,000(1) 0 1,825,000(1) 16.6%
_______________
(1) Includes 1,000,000 shares of Series G Preferred Stock
which are convertible at any time after March 13, 1996 on
a share-for-share basis into 1,000,000 shares of Common
Stock.
Item 6. Contract, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
On March 13, 1996, Exide and Fiskars entered into a Stockholder
Agreement (the "Stockholder Agreement") providing that Fiskars will
designate two persons to be elected to the board of directors of Exide
(the "Exide Board") and that Exide will nominate and use its best efforts
to cause such persons to be elected as directors of Exide (the
"Stockholder Representatives"). In the event that Fiskars' beneficial
ownership of Exide Stock becomes less than ten percent (10%) or five
percent (5%) (after consideration of the Exide Common Stock into which the
Series G Preferred Stock may be converted), Fiskars will designate one
Stockholder Representative or no Stockholder Representatives,
respectively.
The Stockholder Agreement also provides that Fiskars will vote
all Exide securities owned or controlled by Fiskars in favor of the
election of directors nominated by the Exide Board and, on all other
matters submitted to a shareholder vote, in accordance with the
recommendations of the Exide Board. Fiskars also agreed to cause all
Exide securities owned or controlled by Fiskars to be present, in person
or by proxy, and represented at all meetings of Exide stockholders.
The Stockholder Agreement further provides that Fiskars will not
exercise control or otherwise influence the policies and management of
Exide, except through the Stockholder Representatives or as provided in
the Stockholder Agreement. The Stockholder Agreement also restricts
further acquisitions or dispositions by Fiskars of Exide securities and
gives Fiskars certain registration rights with respect to the Exide Stock.
Item 7. Material to Be Filed as Exhibits.
Exhibit A: Stock Purchase Agreement made as of November 16,
1995, by and among Exide Electronics Group, Inc.,
Deltec Power Systems, Inc., Fiskars OY AB and
Fiskars Holdings, Inc.
Exhibit B: Amendment Agreement made as of February 9, 1996,
by and among Exide Electronics Group, Inc.,
Deltec Power Systems, Inc., Fiskars OY AB and
Fiskars Holdings, Inc.
Exhibit C: Stockholder Agreement made as of March 13, 1996,
by and between Exide Electronics Group, Inc. and
Fiskars OY AB.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
Dated: March 22, 1996.
/s/ Stig Stendahl
Stig Stendahl
President and Chief Executive Officer
Fiskars OY AB
STOCK PURCHASE AGREEMENT
BETWEEN
EXIDE ELECTRONICS GROUP, INC.
("Buyer")
DELTEC POWER SYSTEMS, INC.
("Company")
AND
FISKARS OY AB
and
FISKARS HOLDINGS, INC.
("Shareholders")
<PAGE>
STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
1. ACQUISITION OF SHARES . . . . . . . . . . . . . . . . . . . . . 1
1.1. Purchase and Sale of Common Shares . . . . . . . . . . . 1
1.2. Redemption of Preferred Shares . . . . . . . . . . . . . 1
2. PURCHASE PRICE - PAYMENT . . . . . . . . . . . . . . . . . . . . 3
2.1. Purchase Price . . . . . . . . . . . . . . . . . . . . . 3
2.2. Payment of Purchase Price . . . . . . . . . . . . . . . . 4
2.3. Post-Closing Adjustments . . . . . . . . . . . . . . . . 4
3. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES OF COMPANY AND
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1. Corporate . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2. Shareholders . . . . . . . . . . . . . . . . . . . . . . 8
3.3. No Violation . . . . . . . . . . . . . . . . . . . . . . 8
3.4. Financial Statements . . . . . . . . . . . . . . . . . . 9
3.5. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . 9
3.6. Absence of Certain Changes . . . . . . . . . . . . . . . 11
3.7. Absence of Undisclosed Liabilities . . . . . . . . . . . 13
3.8. Accounts Receivable . . . . . . . . . . . . . . . . . . . 13
3.9. Inventory . . . . . . . . . . . . . . . . . . . . . . . . 13
3.10. No Litigation . . . . . . . . . . . . . . . . . . . . . . 13
3.11. Compliance With Laws and Orders . . . . . . . . . . . . . 14
3.12. Environmental Matters . . . . . . . . . . . . . . . . . . 14
3.13. Title to and Condition of Properties . . . . . . . . . . 15
3.14. Contracts and Commitments . . . . . . . . . . . . . . . . 16
3.15. Labor Matters . . . . . . . . . . . . . . . . . . . . . . 17
3.16. Employee Benefit Plans . . . . . . . . . . . . . . . . . 18
3.17. Employment Compensation . . . . . . . . . . . . . . . . . 20
3.18. Trade Rights . . . . . . . . . . . . . . . . . . . . . . 21
3.19. Product Liability . . . . . . . . . . . . . . . . . . . . 22
3.20. Bank Accounts . . . . . . . . . . . . . . . . . . . . . . 22
3.21. Affiliates' Relationships to Fiskars Companies . . . . . 22
3.22. No Brokers or Finders . . . . . . . . . . . . . . . . . . 22
3.23. Insurance Coverage . . . . . . . . . . . . . . . . . . . 22
3.24. Investment Representations . . . . . . . . . . . . . . . 23
3.25. Limitations on Warranties and Disclaimers . . . . . . . . 23
4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . 24
4.1. Corporate . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2. Authority . . . . . . . . . . . . . . . . . . . . . . . . 24
4.3. No Violation . . . . . . . . . . . . . . . . . . . . . . 24
4.4. No Brokers or Finders . . . . . . . . . . . . . . . . . . 24
4.5. Investment Representations . . . . . . . . . . . . . . . 25
4.6. Buyer's Business Investigation. . . . . . . . . . . . . . 25
4.7. Knowledge of Buyer . . . . . . . . . . . . . . . . . . . 25
4.8. Sufficient Financing . . . . . . . . . . . . . . . . . . 25
5. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.1. Noncompetition; Confidentiality; Non-Solicitation . . . . 26
5.2. Hart-Scott-Rodino Act Filings . . . . . . . . . . . . . . 27
5.3. Access to Information and Records . . . . . . . . . . . . 27
5.4. Conduct of Business Pending the Closing . . . . . . . . . 27
5.5. Consents . . . . . . . . . . . . . . . . . . . . . . . . 29
5.6. Access to and Retention of Records . . . . . . . . . . . 29
5.7. Availability of Personnel . . . . . . . . . . . . . . . . 30
5.8. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . 30
5.9. Corporate Identity . . . . . . . . . . . . . . . . . . . 31
5.10. Transitional Use of Trademark . . . . . . . . . . . . . . 31
5.11. Plant Closing . . . . . . . . . . . . . . . . . . . . . . 31
5.12. Other Action . . . . . . . . . . . . . . . . . . . . . . 31
5.13. Disclosure Schedule . . . . . . . . . . . . . . . . . . . 31
5.14. Notification of Breach . . . . . . . . . . . . . . . . . 31
5.15. Exclusivity . . . . . . . . . . . . . . . . . . . . . . . 32
5.16. Release of Intercompany Payables . . . . . . . . . . . . 32
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS . . . . . . . . . . 32
6.1. Representations and Warranties . . . . . . . . . . . . . 32
6.2. Compliance With Agreement . . . . . . . . . . . . . . . . 32
6.3. Consents and Approvals . . . . . . . . . . . . . . . . . 32
6.4. Hart-Scott-Rodino Waiting Period . . . . . . . . . . . . 33
6.5. Buyer's Due Diligence Investigation . . . . . . . . . . . 33
6.6. No Litigation . . . . . . . . . . . . . . . . . . . . . . 33
7. CONDITIONS PRECEDENT TO SHAREHOLDERS' OBLIGATIONS . . . . . . . 33
7.1. Representations and Warranties . . . . . . . . . . . . . 33
7.2. Compliance With Agreement . . . . . . . . . . . . . . . . 33
7.3. Hart-Scott-Rodino Waiting Period . . . . . . . . . . . . 33
7.4. Release of Guarantees . . . . . . . . . . . . . . . . . . 33
7.5. Terminate all Licenses . . . . . . . . . . . . . . . . . 33
7.6. No Litigation . . . . . . . . . . . . . . . . . . . . . . 34
8. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . 34
8.1. By Shareholders . . . . . . . . . . . . . . . . . . . . . 34
8.2. By Buyer . . . . . . . . . . . . . . . . . . . . . . . . 34
8.3. Indemnification of Third-Party Claims . . . . . . . . . . 34
8.4. Payment . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.5. Limitations on Indemnification . . . . . . . . . . . . . 35
9. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.1. Documents to be Delivered by Company and Shareholders . . 37
9.2. Items to be Delivered by Buyer . . . . . . . . . . . . . 38
10. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.1. Right of Termination Without Breach . . . . . . . . . . . 39
10.2. Termination for Breach . . . . . . . . . . . . . . . . . 39
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.1. Disclosure Schedule . . . . . . . . . . . . . . . . . . . 40
11.2. Further Assurance . . . . . . . . . . . . . . . . . . . . 40
11.3. Disclosures and Announcements . . . . . . . . . . . . . . 40
11.4. Assignment; Parties in Interest . . . . . . . . . . . . . 40
11.5. Law Governing Agreement . . . . . . . . . . . . . . . . . 40
11.6. Amendment and Modification . . . . . . . . . . . . . . . 41
11.7. Notice . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.8. Expenses . . . . . . . . . . . . . . . . . . . . . . . . 42
11.9. Entire Agreement . . . . . . . . . . . . . . . . . . . . 43
11.10. Counterparts . . . . . . . . . . . . . . . . . . . . . . 43
11.11. Headings . . . . . . . . . . . . . . . . . . . . . . . . 43
11.12. Facsimile Versions . . . . . . . . . . . . . . . . . . . 43
11.13. Glossary of Terms . . . . . . . . . . . . . . . . . . . . 43
Disclosure Schedule
Schedule 2.1(g) - Trademarks to be Sold
Schedule 3.0 - Shareholders' Knowledge
Schedule 3.1.(c) - Foreign Corporation Qualification
Schedule 3.1.(d) - Subsidiaries
Schedule 3.3 - Default by Shareholders
Schedule 3.4 - Financial Statements
Schedule 3.5.(a) - Taxes
Schedule 3.5.(a) - Tax Returns (Exceptions to Representations)
Schedule 3.5.(b) - Tax Audits
Schedule 3.5.(c) - Consolidated Tax Returns
Schedule 3.6 - Certain Changes
Schedule 3.6(c) - No increase in Compensation
Schedule 3.6.(f) - Permitted Pre-Closing Dividends
Schedule 3.7 - Off-Balance Sheet Liabilities
Schedule 3.10 - Litigation Matters
Schedule 3.11.(a) - Non-Compliance with Laws
Schedule 3.12.(b) - Underground Storage Tanks
Schedule 3.13.(a) - Liens
Schedule 3.13.(b) - Real Property
Schedule 3.14.(a) - Real Property Leases
Schedule 3.14.(b) - Personal Property Leases
Schedule 3.14.(c) - Powers of Attorney
Schedule 3.14.(d) - Collective Bargaining Agreements
Schedule 3.14.(e) - Loan Agreements, etc.
Schedule 3.14.(f) - Guarantees
Schedule 3.14.(g) - Restrictive Agreements
Schedule 3.14.(h) - Other Material Agreements
Schedule 3.15 - Labor Matters
Schedule 3.16.(a) - Employee Plans/Agreements
Schedule 3.16.(b) - Non-US Employee Benefit Plans
Schedule 3.16.(h) - Right to Amend Plans
Schedule 3.16.(i) - Parachute Payments
Schedule 3.16.(j) - Obligations Triggered by Closing
Schedule 3.17 - Employment Compensation
Schedule 3.18 - Trade Rights
Schedule 3.19 - Product Liability Claims
Schedule 3.20 - Bank Accounts
Schedule 3.21.(a) - Contracts with Affiliates
Schedule 3.21.(c) - Obligations of and to Affiliates
Schedule 3.23 - Insurance Policies
Schedule 4.3 - Default by Buyer
Schedule 5.1.(a) - Permissible Activities
Schedule 5.1.(a)(1) - Non-Compete Agreement
Schedule 5.10 - Transitional Trademark License
Schedule 8.5.(d) - List of Buyer's Employees or Agents
Participating in Due Diligence
Schedule 9.1.(c) - Form of Foley & Lardner Legal Opinion
Schedule 9.1.(f) - Form of Shareholder Agreement
Schedule 9.2.(d) - Form of Buyer's Legal Opinion
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") dated November 16,
1995, by and among EXIDE ELECTRONICS GROUP, INC., a Delaware corporation
("Buyer"), DELTEC POWER SYSTEMS, INC., a Wisconsin corporation
("Company"), and FISKARS OY AB, a Finnish corporation ("Fiskars") and
FISKARS HOLDINGS, INC., a Wisconsin corporation ("Holdings") (individually
"Shareholder" and together the "Shareholders").
RECITALS
1. Company and its subsidiaries are engaged in the design,
manufacture, marketing, sale, distribution and service of uninterruptible
power supply systems for computers, telecommunications equipment and other
similar applications and related computer software (the "Business").
Shareholders own all of the issued and outstanding shares (the "Shares")
of capital stock of Company.
2. Company's facilities consist of the business locations
described in Schedule 3.13(b) (the "Facilities").
3. Buyer and Company desire to acquire the Shares from
Shareholders and Shareholders desire to sell and/or transfer the Shares to
Buyer and Company, upon the terms and conditions herein set forth.
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions
hereinafter set forth, and intending to be legally bound hereby, the
parties hereto agree as follows.
1. ACQUISITION OF SHARES
1.1. Purchase and Sale of Common Shares. Subject to the terms and
conditions of this Agreement, and on the basis of and in reliance upon the
representations, warranties, obligations and agreements set forth herein,
on the Closing Date (as hereinafter defined), Fiskars shall sell to Buyer
and Buyer shall purchase from Fiskars all the Shares constituting the
outstanding common capital stock of Company ("Common Shares").
1.2. Redemption of Preferred Shares.
1.2.(a) Dividends and Redemptions prior to Closing. During the
period beginning on the date hereof and ending on the Closing Date:
(i) Company may pay dividends on its Class A Preferred Shares in the
amounts described in Section 2.c.(3) of the Articles of Incorporation of
Company; (ii) Company may exercise its rights under Section 2.c.(5) of its
Articles of Incorporation to redeem whatever amount of its Class A
Preferred Shares that the Board of Directors of Company believes is
appropriate; and (iii) Company may incur indebtedness in an amount that
the Board of Directors of Company believes, in its sole discretion, to be
necessary to allow the payment of dividends and redemption price as
described above in this sentence.
1.2.(b) Dividends and Redemptions after the Closing. After the
Closing, Buyer shall cause Company to comply with the following
conditions:
(1) On the day immediately following the Closing Date, Company
shall redeem, pursuant to Section 2.c.(5) of Company's
Articles of Incorporation, all but 50 of the then outstanding
shares of its Class A Preferred Shares at a price of $10,000
per share plus all dividends that have accrued but have not
been paid previously on such shares; provided, however, that
if such redemption would violate the provisions of Wis. Stat.
Section 180.0640(3), then such redemption shall occur on the
first date, if any, following the Closing Date on which the
provisions of Wis. Stat. Section 180.0640(3) would not be
violated by such redemption.
(2) On January 8, 1997, Company shall redeem, pursuant to Section
2.c.(5) of Company's Articles of Incorporation, all of the
then outstanding shares of its Class A Preferred Shares at a
price of $10,000 per share plus all dividends that have
accrued but have not been paid previously on such shares;
provided, however, that if such redemption would violate the
provisions of Wis. Stat. Section 180.0640(3), then such
redemption shall occur on the first date, if any, after
January 8, 1997 on which the provisions of Wis. Stat. Section
180.0640(3) would not be violated by such redemption.
(3) Prior to January 8, 1997 Company shall not exercise its rights
under Section 2.c.(5) of its Articles of Incorporation to
redeem any Class A Preferred Shares except as described above
in this Section 1.2, and Company shall not liquidate or be
dissolved.
(4) Any Class A Preferred Shares held by Holdings that are
redeemed by Company on or after the date hereof shall be
cancelled upon redemption (rather than being treated, for
example, as "treasury stock") and shall not be issued
thereafter by Company.
1.2.(c) Restrictions While Class A Preferred Shares are
Outstanding. After the Closing, Buyer shall cause Company and each direct
or indirect subsidiary of Company to comply with each of the following
covenants while any Class A Preferred Shares are outstanding:
(1) Company shall not amend its Articles of Incorporation, By-laws
or other organic documents to change in any respect the
rights, privileges, or preferences of the holders of Class A
Preferred Shares.
(2) Company shall not be a party to any merger or consolidation,
whether or not Company is the surviving entity; provided,
however, that the foregoing restriction shall not prevent a
merger involving solely Company and Deltec Electronics
Corporation, a California company ("Deltec").
(3) No direct or indirect subsidiary of Company (other than
Deltec) shall declare or pay a dividend or make a
distribution, or shall redeem, purchase or otherwise acquire
its own stock, or shall purchase the stock of any corporation
that controls, or is controlled by, or is under common control
with, such subsidiary.
2. PURCHASE PRICE - PAYMENT
2.1. Purchase Price. The purchase price (the "Purchase Price") payable
for the purchase and/or redemption of the Shares shall be the sum of One
Hundred Ninety Five Million U.S. Dollars ($195,000,000), which shall be
allocated and paid as follows:
2.1.(a) To Holdings, the amounts specified in Sections
1.2(b)(1) and 1.2(b)(2) hereof;
2.1.(b) To Fiskars, an amount necessary to pay in full
Company's $10 million promissory note dated September 27, 1994 payable
to Fiskars;
2.1.(c) To Holdings, an amount necessary to pay all
intercompany debt owed by Deltec Electronics Corporation, a subsidiary
of Company ("Deltec"), to Holdings;
2.1.(d) To Fiskars, 1,875,000 shares of Buyer's common stock,
valued at a fixed price of $20.00 per share;
2.1.(e) To Fiskars, $10 million as the noncompete payment
provided in the Non-Compete Agreement annexed hereto as Schedule
5.1(a)(1) hereto;
2.1.(f) To Fiskars, $4 million as the prepaid royalties
provided in the License Agreement annexed hereto as Schedule 5.10;
2.1.(g) To Fiskars, $3 million representing the purchase price
for the trademarks listed in Schedule 2.1(g) hereto; and
2.1.(h) To Fiskars, the balance of the Purchase Price in
consideration for the purchase of the Common Shares.
Notwithstanding anything set forth in this Section 2.1, the
aggregate cash consideration to be paid by Buyer pursuant to this
Agreement shall not, except as set forth in Section 2.3(d) and 8.2, exceed
$157,500,000.
2.2. Payment of Purchase Price. All payments under Section 2.1(b), (c),
(e), (f), (g) and (h) shall be made at the Closing, and the payment
specified in Section 1.2(b)(1) on the day after Closing and the payment
specified in Section 1.2(b)(2) on January 8, 1997, by wire transfer of
immediately available funds to an account designated by the recipient not
less than one hour prior to the time for payment specified herein.
2.3. Post-Closing Adjustments.
2.3.(a) Preparation of Closing Date Balance Sheet. Within
sixty (60) days after the Closing Date, Price Waterhouse shall prepare
and deliver to the Buyer a consolidated balance sheet for the Company as
of the close of business on the Closing Date (the "Closing Date Balance
Sheet"). The Closing Date Balance Sheet shall be prepared in accordance
with U.S. generally accepted accounting principles ("GAAP"), using the
same methods and criteria employed in connection with the preparation of
the Company's December 31, 1994, consolidated balance sheet ("Latest
Year-End Balance Sheet").
2.3.(b) Resolution of Disputes. Unless Buyer notifies
Shareholders in writing within thirty (30) days after receipt of the
Closing Date Balance Sheet that Buyer disputes any matter with respect
to such Closing Date Balance Sheet, and specifies in reasonable detail
the basis for such objection and the amount in dispute, the Closing Date
Balance Sheet shall become final and binding upon the parties for
purposes of the post-closing adjustment to be made pursuant to this
Section 2.3. During the thirty (30) day period following Buyer's
receipt of the Closing Date Balance Sheet, Buyer and their
representatives shall have the right to review all books and working
papers of Shareholders and Price Waterhouse related to the preparation
of the Closing Date Balance Sheet. If Buyer provides such notice of
objection to Shareholders within such thirty-day period, Buyer and
Shareholders shall negotiate in good faith to resolve the issues set
forth in Buyer's notice of objection during the thirty-day period
following Buyer's notice. If Buyer and Shareholders are unable to
resolve such objections within such thirty-day period, the disputed
matters (and only the disputed matters) shall be submitted to one of the
nationally recognized independent accounting firms which is on the date
hereof among the six largest firms (the "Big Six Accounting Firm")
mutually selected by Buyer and Shareholders. Any reference to the Big
Six Accounting Firm shall be deemed to include a reference to any member
or employee thereof (who is a certified public accountant) which any
such firm may designate as the arbitrator on its behalf. If within ten
(10) days following commencement of the selection process Seller and
Shareholders shall have failed to agree upon the selection of the Big
Six Accounting Firm or such firm declines to act, then Buyer and
Shareholders shall each select a Big Six Accounting Firm and such firms
shall jointly select a third firm, with preference being given to any
one of the Big Six Accounting Firms, which firm shall then act as the
arbitrator (the "Arbitrator") to resolve the disputed matters. The
Arbitrator shall act promptly to resolve all disputed matters and its
decision with respect to all disputed matters shall be final and binding
upon the parties hereto and shall not be appealable to any court. The
fees, costs and expenses of the Arbitrator shall be shared equally
between Buyer and Shareholders.
2.3.(c) Determination of Closing Net Book Value. The Purchase
Price has been determined on the assumption, and the parties have
entered into this Agreement with the reasonable expectation, that the
excess of (i) the Total Assets of the Company as of the Closing Date,
over (ii) the Total Liabilities of the Company as of the Closing Date
(the "Closing Net Book Value"), will be $27,600,000. The term "Total
Assets" shall mean all assets as determined in accordance with U.S. GAAP
applied on a basis consistent with the Latest Year-End Balance Sheet,
excluding net unamortized goodwill and all intercompany receivables.
The term "Total Liabilities" shall mean all liabilities as determined in
accordance with U.S. GAAP applied on a basis consistent with the Latest
Year-End Balance Sheet, excluding all intercompany short and long term
debt, payables, and accrued liabilities, but including a $1,060,000
income tax reserve for the federal income tax risks associated with the
step-up of the assets in the Deltec Acquisition by Fiskars. The
calculation of Closing Net Book Value is to be determined in a manner
consistent with the preparation of the Recent Balance Sheet to be sold
(September 30, 1995) as listed in Schedule 3.4.
2.3.(d) Purchase Price Adjustment. Within ten (10) days after
the final and binding Closing Date Balance Sheet shall have been
prepared as provided in Section 2.3(b) hereof, and the Closing Net Book
Value shall have been determined as provided in Section 2.3(c) hereof,
the amount by which the Closing Net Book Value shall be less than
$27,600,000 shall be paid by Fiskars to Buyer as a reduction of the
Purchase Price, or the amount by which Closing Net Book Value shall be
more than $27,600,000 shall be paid by Buyer to Fiskars as an increase
in the Purchase Price, in either case plus interest computed on the
amount of the Purchase Price adjustment from the Closing Date to the
date of payment at the rate of 8% per annum, such payment to be made by
wire transfer as provided in Section 2.2 hereof.
3. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES OF COMPANY AND
SHAREHOLDERS
Company and Shareholders, jointly and severally, make the following
representations and warranties to Buyer, each of which is true and correct
on the date hereof, shall remain true and correct to and including the
Closing Date, and shall survive the Closing of the transactions provided
for herein for the period provided for in Section 8.5(a). Regardless of
the foregoing, the representations and warranties set forth in Section 3.2
are made severally by each Shareholder, with respect to such Shareholder
only. With respect to those representations and warranties below which
are stated "to Shareholders' knowledge" or "to Company's knowledge",
"knowledge" shall mean the actual knowledge of those persons whose names
and titles are set out on Schedule 3.0 hereto. For the purposes of this
Section 3 (but excluding Sections 3.1 and 3.4), the term "Company" shall
include all subsidiaries of the Company. The exceptions, modifications,
descriptions and disclosures in any schedule attached hereto are made for
all purposes of this Agreement and are exceptions to all representations
and warranties set forth in the Agreement or in any agreement or
instrument delivered pursuant to or in connection with this Agreement.
Disclosure of an item in response to one section of this Agreement shall
constitute disclosure in response to every section of this Agreement
notwithstanding the fact that no express cross reference is made. Certain
documents attached to Shareholders' disclosure schedules are in non-
English languages. The Shareholders hereby represent and warrant that
none of such documents discloses information that would constitute a
breach of or qualify a representation or warranty by Shareholders or
Company in this Agreement. Until the foregoing documents are translated
into or summarized in English, Buyer shall not be deemed to have actual
knowledge of their content for purposes of Section 4.7 and 8.5(d).
3.1. Corporate.
3.1.(a) Organization. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Wisconsin.
3.1.(b) Corporate Power. Company has all requisite corporate
power and authority to own, operate and lease its properties and to
carry on its business as and where such is now being conducted.
3.1.(c) Qualification. Company is duly licensed or qualified
to do business as a foreign corporation, and is in good standing, in
each jurisdiction wherein the character of the properties owned or
leased by it, or the nature of its business, makes such licensing or
qualification necessary to avoid a material penalty. The states in
which Company is licensed or qualified to do business are listed in
Schedule 3.1(c).
3.1.(d) Subsidiaries. Schedule 3.1(d) sets forth the name,
jurisdiction of incorporation, capitalization, ownership and officers
and directors of each corporation in which the Company has a direct or
indirect equity interest ("Subsidiary") and the jurisdictions in which
each Subsidiary is qualified or licensed to do business as a foreign
corporation (the Company and Subsidiaries are referred to herein
collectively as the "Fiskars Companies" and separately as a "Fiskars
Company"). Except as listed in Schedule 3.1.(d), the Company does not
own, directly or indirectly, any capital stock or other equity
securities of any corporation or have any direct or indirect equity or
other ownership interest in any entity or business. All of the
outstanding shares of capital stock of each Subsidiary owned by the
Company are free and clear of any security interest, restriction,
option, voting trust or agreement, proxy, are validly issued, fully paid
and nonassessable except to the extent provided by Section
180.0622(2)(b) of the Wisconsin Business Corporation Law. There are no
(a) securities convertible into or exchangeable for the capital stock or
other securities of any Subsidiary, (b) options, warrants or other
rights to purchase or subscribe to capital stock or other securities of
any Subsidiary or securities which are convertible into or exchangeable
for capital stock or other securities of any Subsidiary, or (c) except
for the redemption rights described in Section 1.2 hereof, contracts,
commitments, agreements, understandings or arrangements of any kind
relating to the issuance, sale or transfer of any capital stock or other
equity securities of any Subsidiary, any such convertible or
exchangeable securities or any such options, warrants or other rights.
Each Subsidiary (x), except as disclosed in Schedule 3.1(d), is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation, (y) has full corporate
power and authority to carry on its business as it is now being
conducted and to own and lease the properties and assets it now owns and
leases, and (z) is in good standing and is duly qualified or licensed to
do business as a foreign corporation in each of the jurisdictions listed
opposite the name of such Subsidiary in Schedule 3.1.(d), which are the
only jurisdictions in which such Subsidiary is required to be so
qualified or licensed to avoid a material penalty.
3.1.(e) Capitalization of the Company. The authorized capital
stock of the Company consists entirely of 6,000 shares of common stock,
par value $0.01 per share and 3,000 shares of Class A preferred stock,
par value $0.01 per share. No shares of such capital stock are issued
or outstanding except for 600 shares of common stock of the Company
which are owned of record and beneficially by Fiskars and prior to the
redemptions described in Section 1.2 hereof, 1,500 shares of Class A
preferred stock of the Company which are owned of record and
beneficially by Holdings. All such shares of capital stock of the
Company are validly issued, fully paid and nonassessable except to the
extent provided by Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law. There are no (a) securities convertible into or
exchangeable for any of the Company's capital stock or other securities,
(b) options, warrants or other rights to purchase or subscribe to
capital stock or other securities of the Company or securities which are
convertible into or exchangeable for capital stock or other securities
of the Company, or (c) except for the redemption rights described in
Section 1.2 hereof, contracts, commitments, agreements, understandings
or arrangements of any kind relating to the issuance, sale or transfer
of any capital stock or other equity securities of the Company, any such
convertible or exchangeable securities or any such options, warrants or
other rights.
3.1.(f) Power. The Company has full power, legal right and
authority to enter into, execute and deliver this Agreement and the
other agreements, instruments and documents contemplated hereby (such
other documents sometimes referred to herein as "Ancillary
Instruments"), and to carry out the transactions contemplated hereby.
3.1.(g) Authorization. The execution and delivery of this
Agreement and the Ancillary Instruments, and full performance hereunder
and thereunder, have been duly authorized by the Board of Directors of
Company, and no other or further corporate act on the part of Company is
necessary therefor.
3.1.(h) Validity. This Agreement has been duly and validly
executed and delivered by Company and is, and when executed and
delivered each Ancillary Instrument will be, the legal, valid and
binding obligation of Company, enforceable in accordance with its terms,
except as such may be limited by bankruptcy, insolvency, reorganization
or other laws affecting creditors' rights generally, and by general
equitable principles.
3.2. Shareholders.
3.2.(a) Power. Each Shareholder has full power, legal right
and authority to enter into, execute and deliver this Agreement and the
Ancillary Instruments, and to carry out the transactions contemplated
hereby.
3.2.(b) Authorization. The execution and delivery of this
Agreement and the Ancillary Instruments, and full performance hereunder
and thereunder, have been duly authorized by the respective boards of
directors of each Shareholder, and no other or further corporate act on
the part of any such Shareholder is necessary therefor.
3.2.(c) Validity. This Agreement has been duly and validly
executed and delivered by each Shareholder and is, and when executed and
delivered each Ancillary Instrument will be, the legal, valid and
binding obligation of such Shareholder, enforceable in accordance with
its terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally, and
by general equitable principles.
3.2.(d) Title. At Closing Buyer or Company, as the case may
be, will receive, good and marketable title to the Shares to be sold or
transferred by such Shareholder hereunder, free and clear of all Liens
(as defined in Section 3.13) including, without limitation, voting
trusts or agreements, proxies, marital or community property interests.
3.3. No Violation. Except as set forth on Schedule 3.3, neither the
execution and delivery of this Agreement or the Ancillary Instruments nor
the consummation by Company and Shareholders of the transactions
contemplated hereby and thereby (a) will violate any statute, law,
ordinance, rule or regulation (collectively, "Laws") or any order, writ,
injunction, judgment, plan or decree (collectively, "Orders") of any
court, arbitrator, department, commission, board, bureau, agency,
authority, instrumentality or other body, whether federal, state,
municipal, foreign or other (collectively, "Government Entities"), (b)
except for applicable requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"), will require any authorization,
consent, approval, exemption or other action by or notice to any
Government Entity (including, without limitation, under any
"plant-closing" or similar law), or (c) subject to obtaining the consents
referred to in Schedule 3.3, will constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
or will result in the termination of, or accelerate the performance
required by, or result in the creation of any Lien (other than a Permitted
Lien) upon any of the assets of the Fiskars Companies (or the Shares)
under, any term or provision of the Articles of Incorporation and By-Laws
of Company or organic documents of Subsidiaries or breach of any contract,
commitment, understanding, arrangement, agreement or restriction of any
kind or character that is material to the Business or would have a
material effect on the ability of the Shareholders and the Company to
consummate the transactions contemplated hereby.
3.4. Financial Statements. Included as Schedule 3.4 are true and
complete copies of the following financial statements of the Company and
certain Subsidiaries consisting of (i) audited balance sheets of Deltec
and of FPS Power Systems Oy Ab and each of its subsidiaries as of
December 31, 1992, 1993, and 1994 and the related statements of income for
the years then ended (including the notes contained therein or annexed
thereto), (ii) an audited consolidated balance sheet for the Company as of
December 31, 1994, and an unaudited consolidated statement of income of
the Company for the year then ended, and (iii) an unaudited consolidated
balance sheet of the Company as of September 30, 1995, showing in such
balance sheet certain adjustments for cash, goodwill and intercompany
items (the "Recent Balance Sheet"), and the related unaudited statement of
income for the nine (9) months then ended. All of such financial
statements except the Recent Balance Sheet (including all notes and
schedules contained therein or annexed thereto) have been prepared in
accordance with generally accepted accounting principles in effect in the
jurisdictions where that Fiskars Company is incorporated (except as
disclosed on Schedule 3.4 and, in the case of unaudited statements, for
the absence of footnote disclosure) applied on a consistent basis, have
been prepared in accordance with the books and records of each applicable
Fiskars Company, and fairly present the financial position, the results of
operations and cash flows of the applicable Fiskars Company as of the
dates and for the years and periods indicated.
3.5. Tax Matters. Except as set forth on Schedule 3.5(a), all tax
returns, statements, reports and forms (including without limitation
estimated tax returns and reports and information returns and reports)
required to be filed with any tax authority with respect to any taxable
period ending on or before the Closing Date, by or on behalf of any of the
Fiskars Companies (collectively, the "Fiskars Returns"), have been or will
be filed when due (including any extensions of such due date), and all
amounts shown due thereon on or before the Closing Date have been or will
be paid on or before such date. The financial statements (i) fully accrue
all actual liabilities for taxes with respect to all periods through
September 30, 1995 and the Fiskars Companies have not and will not incur
any tax liability in excess of the amount reflected on the September 30,
1995 Recent Balance Sheet with respect to such periods, and (ii) properly
accrue in accordance with GAAP all liabilities, including deferred tax
liabilities for taxes payable after September 30, 1995 with respect to all
transactions and events occurring on or prior to such date. In no event
shall any tax deficiencies be offset by Shareholders or Company against
the $1,060,000 income tax reserve referred to in Section 2.3(c). All
information set forth in the notes to the financial statements relating to
tax matters is true, complete and accurate in all material respects. No
material tax liability since September 30, 1995 has been incurred other
than in the ordinary course of business and adequate provision will be
made for all taxes since that date in accordance with GAAP on at least a
quarterly basis. The Fiskars Companies have withheld and paid to the
applicable financial institution or tax authority all amounts required to
be withheld. The Fiskars Companies (or any member of any affiliated or
combined group of which any of them has been a member) have not granted
any extension or waiver of the limitation period applicable to any Fiskars
Returns. There is no material claim, audit, action, suit, proceeding, or
investigation now pending or threatened against or with respect to any of
the Fiskars Companies in respect of any tax or assessment. No notice of
deficiency or similar document of any tax authority has been received by
any of the Fiskars Companies, and there are no liabilities for taxes
(including liabilities for interest, additions to tax and penalties
thereon and related expenses) with respect to the issues that have been
raised (and are currently pending) by any tax authority that could, if
determined adversely to any of the Fiskars Companies, materially and
adversely affect the liability of any of the Fiskars Companies for taxes.
The Fiskars Companies are in full compliance with all the terms and
conditions of any tax exemptions or other tax-sharing agreement or order
of a foreign government and the consummation of the transactions
contemplated by this Agreement will not have any adverse effect on the
continued validity and effectiveness of any such tax exemption or other
tax-sharing agreement or order. There is no agreement, contract or
arrangement to which any of the Fiskars Companies is a party that may
result in the payment of any amount that would not be deductible by the
Fiskars Companies by reason of Sections 280G, 162 or 404 of the Internal
Revenue Code (the "Code"). As of the Closing, none of the Fiskars
Companies will be a party to any tax sharing or tax allocation agreement.
Except as may be required as a result of the transactions contemplated by
this Agreement, none of the Fiskars Companies have been or will be
required to include any material adjustment in taxable income for any tax
period (or portion thereof) pursuant to Section 481 or 263A of the Code or
any comparable provision under state or foreign tax laws as a result of
transactions, events or accounting methods employed prior to the
consummation of the transactions contemplated by this Agreement. None of
the Fiskars Companies have filed any consent under Section 341(f) of the
Code. For purposes of this Agreement, the following terms have the
following meanings: "tax" (and, with correlative meaning, "taxes" and
"taxable") means (i) any net income, alternative or add-on minimum tax,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property environmental or windfall profit tax,
custom, duty or other tax governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any governmental tax
authority responsible for the imposition of any such tax (domestic or
foreign), (ii) any liability for the payment of any amounts of the type
described in (i) as a result of being a member of any affiliated,
consolidated, combined or unitary group for any taxable period and (iii)
any liability for the payment of any amounts of the type described in (i)
or (ii) as a result of any express or implied obligation to indemnify any
other person.
3.5.(a) Tax Returns Filed. Except as set forth on Schedule
3.5.(a), all federal, state, foreign, county, local and other tax
returns required to be filed by or on behalf of a Fiskars Company have
been timely filed and when filed were true and correct in all material
respects, and the taxes shown as due thereon were paid or adequately
accrued. The Fiskars Companies have duly withheld and paid all taxes
which each is required to withhold and pay relating to salaries and
other compensation heretofore paid to the employees of the Fiskars
Companies.
3.5.(b) Tax Audits. The income tax returns of the Fiskars
Companies have been audited by taxing authorities for the periods and to
the extent set forth in Schedule 3.5.(b), and no Fiskars Company has
received from the Internal Revenue Service or from the tax authorities
of any country, state, county, local or other jurisdiction any notice of
underpayment of taxes or other deficiency which has not been paid nor
any objection to any return or report filed by the Fiskars Company.
There are outstanding no agreements or waivers extending the statutory
period of limitations applicable to any tax return or report.
3.5.(c) Consolidated Group. Schedule 3.5.(c) lists every year
Company or Deltec was a member of an affiliated group of corporations
that filed a consolidated tax return on which the statute of limitations
does not bar a federal tax assessment, and each corporation that has
been part of such group. No affiliated group of corporations of which
Company or Deltec has been a member has discontinued filing consolidated
returns during the past five years.
3.6. Absence of Certain Changes. Except as and to the extent set forth
in Schedule 3.6, since the date of the Recent Balance Sheet, there has not
been:
3.6.(a) No Adverse Change. Any material adverse change, or any
event or condition which could reasonably be expected to result in, a
material adverse change in the results of operations, financial
condition, assets or liabilities of the Fiskars Companies taken as a
whole (a "Material Adverse Effect").
3.6.(b) No Damage. Any loss, damage or destruction, whether
covered by insurance or not, affecting a material part of the Business
or the Fiskars Companies' properties;
3.6.(c) No Increase in Compensation. Except as disclosed in
Schedule 3.6(c) hereto, any increase in the compensation, salaries or
wages payable or to become payable to any employee or agent of a Fiskars
Company (including, without limitation, any increase or change pursuant
to any bonus, pension, profit sharing, retirement or other plan or
commitment), or any bonus or other employee benefit granted, made or
accrued, in any case other than in the ordinary course of business
consistent with past practice;
3.6.(d) No Labor Disputes. Any labor dispute or disturbance,
other than routine individual grievances which are or could reasonably
be expected to be material to the business, financial condition or
results of operations of the Fiskars Companies;
3.6.(e) No Commitments. Any commitment or transaction by a
Fiskars Company (including, without limitation, any borrowing or capital
expenditure) other than in the ordinary course of business consistent
with past practice;
3.6.(f) No Dividends. Except as described in Section 1.2 or
disclosed in Schedule 3.6(f) and except for the regular quarterly
dividend payable with respect to Preferred Shares, any declaration,
setting aside, or payment of any dividend or any other distribution in
respect of a Fiskars Company's capital stock; any redemption, purchase
or other acquisition by a Fiskars Company of any capital stock of a
Fiskars Company, or any security relating thereto; or any other payment
to any shareholder of a Fiskars Company as such a shareholder;
3.6.(g) No Disposition of Property. Any sale, lease or other
transfer or disposition of any material properties or assets of a
Fiskars Company, except for the sale of inventory items in the ordinary
course of business;
3.6.(h) No Indebtedness. Any indebtedness for borrowed money
incurred, assumed or guaranteed by a Fiskars Company, other than
intercompany indebtedness and trade payables incurred in the ordinary
course of business consistent with past practice and intercompany loans
to fund the redemption described in Section 1.2 hereof;
3.6.(i) Loans and Advances. Any loan or advance (other than
advances to employees in the ordinary course of business for travel and
entertainment in accordance with past practice) to any person including,
but not limited to, any Affiliate (for purposes of this Agreement, the
term "Affiliate" shall mean and include all Shareholders, directors and
officers of the Fiskars Companies; the spouse of any such person; any
person who would be the heir or descendant of any such person if he or
she were not living; and any entity in which any of the foregoing has a
direct or indirect interest, except through ownership of less than 5% of
the outstanding shares of any entity whose securities are listed on a
national securities exchange or traded in the national over-the-counter
market);
3.6.(j) Credit. Any grant of credit to any customer or
distributor on terms or in amounts more favorable than those which have
been extended to such customer or distributor in the past, any other
change in the terms of any credit heretofore extended, or any other
change of a Fiskars Company's policies or practices with respect to the
granting of credit;
3.6.(k) No Change in Contract Rights. Any entry into,
amendment of, relinquishment, termination or non-renewal by any of the
Fiskars Companies of any material distribution agreement, OEM agreement,
technology agreement or any other material contract to which any of them
are a party other than in the ordinary course of business consistent
with past practice; or
3.6.(l) No Other Agreements. Any agreement or arrangement made
by any of the Fiskars Companies to take any action which, if taken prior
to the date hereof, would have made any representation or warranty set
forth in this Section 3.6 untrue or incorrect as of the date when made.
3.7. Absence of Undisclosed Liabilities. Except as and to the extent
specifically disclosed in the Recent Balance Sheet, in this Agreement or
in Schedule 3.7, to Company's and each Shareholder's knowledge, none of
the Fiskars Companies have any liabilities, commitments or obligations
(secured or unsecured, and whether accrued, absolute, contingent, direct,
indirect or otherwise), except those incurred in the ordinary course of
the Business or which will not have a Material Adverse Effect.
3.8. Accounts Receivable. All accounts receivable as set forth on the
Recent Balance Sheet or arising since the date of the Recent Balance Sheet
(i) have arisen only in the ordinary course of business consistent with
past practice and (ii) to the knowledge of Company and Shareholders are
collectible in full at the recorded amounts thereof (free of any, and
subject to no, defenses, set-offs or counterclaims) in the ordinary course
of business, net of any allowance for doubtful accounts reflected in the
Recent Balance Sheet.
3.9. Inventory. The inventory as set forth on the Recent Balance Sheet
or arising since the date of the Recent Balance Sheet was acquired and has
been maintained in accordance with the regular business practices of the
Company and the Fiskars Companies, consists of items of a quality and
quantity useable or saleable in the ordinary course of business consistent
with past practice, and is valued at reasonable amounts based on the
ordinary course of business of such companies within the past 12 months.
3.10. No Litigation. Except as set forth in Schedule 3.10, there is
no action, suit, arbitration, proceeding, investigation or inquiry,
whether civil, criminal or administrative ("Litigation") pending or, to
Company's and each Shareholder's knowledge, threatened against the Fiskars
Companies or their respective officers or directors (in such capacity) and
to the knowledge of the Company or each Shareholder, no event has occurred
which might reasonably be expected to result in any such Litigation.
Schedule 3.10 also identifies all Litigation to which the Fiskars
Companies or any of their officers or directors (in such capacity) have
been parties since January 1, 1993. Except as set forth in Schedule 3.10,
no Fiskars Company is subject to any Order of any Government Entity and to
the knowledge of the Company or each Shareholder, no event has occurred
which might reasonably be expected to result in any such Litigation.
3.11. Compliance With Laws and Orders.
3.11.(a) Compliance. Except as set forth in Schedule 3.11.(a),
to Company's and each Shareholder's knowledge, the Fiskars Companies
have been (within the last three years) in substantial compliance with
all applicable Laws and Orders, including, without limitation, those
applicable to discrimination in employment, occupational safety and
health, trade practices, competition and pricing, product warranties,
zoning, building and sanitation, employment, retirement and labor
relations, product advertising and protection of the environment where
failure to comply with such Laws and Orders would have a Material
Adverse Effect. Except as set forth in Schedule 3.11.(a), no Fiskars
Company has received notice of any violation or alleged violation of any
Laws or Orders that have not been cured or resolved.
3.11.(b) Licenses and Permits. The Fiskars Companies have all
licenses and permits of all Government Entities and all certification
organizations required for the conduct of the business (as presently
conducted) and operation of the Facilities where the failure to have
same would have a Material Adverse Effect. All such licenses, permits,
approvals, authorizations and consents are in full force and effect and
will not be affected or made subject to loss, limitation or any
obligation to reapply as a result of the transactions contemplated
hereby.
3.12. Environmental Matters.
3.12.(a) For the purposes of this Agreement, the term
"Environmental Laws" shall mean all applicable international, federal,
state, local and applicable foreign environmental protection,
occupational, health and safety or similar laws, ordinances,
restrictions, licenses, rules, regulations and permit conditions,
including, without limitation, the Federal Water Pollution Control Act,
Resource Conservation & Recovery Act, Clean Air Act, Comprehensive
Environmental Response, Compensation and Liability Act, Emergency
Planning and Community Right to Know Act, Occupational Safety and Health
Act and other federal, state or local laws of similar effect, each as
amended, and the term "Hazardous Materials" shall mean any toxic or
hazardous substance, material or waste or any pollutant or contaminant,
or infectious or radioactive substance or material, including without
limitation, those substances, materials and wastes defined in or
regulated under any applicable Environmental Laws.
3.12.(b) No Fiskars Company has received any notices,
directives, violation reports, actions or claims from or by (i) any
federal, state or local governmental agency concerning any Fiskars
Company and any Environmental Laws, or (ii) any person alleging that, in
connection with Hazardous Materials, conditions at any real properties
leased or owned by any Fiskars Company have resulted in or caused or
threatened to result in or cause injury or death to any person or
damages to or contamination of any property, including, without
limitation, damage to natural resources, and to the best of each of
Company's and Shareholder's knowledge no such notices, directives,
violation reports, actions, claims, assessments or allegations exist;
(iii) no Fiskars Company currently leases, operates or owns any real
properties or, to the knowledge of Company or the Shareholders, has
disposed of Hazardous Materials at any property or facility that are
listed or, to the knowledge of Company or the Shareholders, are
threatened to be listed on a "Superfund" List or with respect to which
there is any pending proceeding or investigation under any Environmental
Law, and, to the best of each of Company's and Shareholder's knowledge,
no such proceeding or investigation is threatened; (iv) to the best of
each of Company's and Shareholder's knowledge, throughout the period of
operation of any real properties by any Fiskars Company, each Fiskars
Company has operated and continues to operate such real properties in
compliance with all Environmental Laws; (v) to the best of each of
Company's and Shareholder's knowledge, no underground storage tanks
either are or have been located at any of such real properties other
than those identified in Schedule 3.12(b) (which disclosure does not, in
and of itself, qualify any of Company's or Shareholders' representations
set forth in this Section 3); (vi) to the best of each of Company's and
Shareholder's knowledge, there has been no spill, discharge, release,
contamination or cleanup of or by any Hazardous Materials used,
generated, treated, stored, disposed of or handled by any of the Fiskars
Companies at such real properties and to the best of each of Company's
and Shareholder's knowledge, no spill, discharge or release or
contamination or cleanup of or by Hazardous Materials has occurred on or
to such real properties by any third party; (vii) to the best of each of
Company's and Shareholder's knowledge, no Fiskars Company has used,
generated, treated, stored, disposed of, handled, transported or
released any Hazardous Material in a manner which would give rise to any
liability under any Environmental Laws; (viii) neither the Company nor
any Shareholder is aware of any facts, events, or conditions (including,
without limitation, the generation, treatment, transport, storage,
emission, disposal, release or other placement, deposit or location of
any substance) which materially interfere with or prevent continued
compliance by any Fiskars Company with, or give rise to any present or
potential liability (including with respect to past activities) under
any Environmental Laws which would have a Material Adverse Effect; and
(ix) to the best of each of Company's and Shareholder's knowledge, no
Fiskars Company has released any other person from any claim under any
Environmental Laws nor waived any rights or defenses concerning any
environmental conditions.
3.13. Title to and Condition of Properties.
3.13.(a) Marketable Title. The Fiskars Companies have good and
marketable title to all of their assets, including, without limitation,
all such properties (tangible and intangible) reflected in the Recent
Balance Sheet, except for inventory disposed of in the ordinary course
of business since the dates of such Recent Balance Sheet, free and clear
of all mortgages, liens (statutory or otherwise), security interests,
claims, pledges, licenses, equities, options, conditional sales
contracts, assessments, levies, easements, covenants, reservations,
restrictions, rights-of-way, exceptions, limitations, charges or
encumbrances of any nature whatsoever except Permitted Liens
(collectively, "Liens"). "Permitted Liens" means, with respect to any
Fiskars Company: (i) Liens for taxes which are not yet due, are being
contested in good faith, or are not material; (ii) Liens arising under
applicable laws to the extent that such Liens secure obligations
thereunder not yet due, including (but not limited to) Liens incurred
and deposits made in connection with workmen's compensation,
unemployment insurance, social security and similar laws; (iii) Liens
disclosed or otherwise reflected in the Recent Financial Statements or
elsewhere in this Agreement; (iv) in the case of real property,
municipal and zoning ordinances and easements for public utilities, none
of which interfere with the use of the property as currently utilized;
and (v) the Liens disclosed on Schedule 3.13(a).
3.13.(b) Real Property. Schedule 3.13.(b) sets forth all real
property owned, used or occupied by the Fiskars Companies (the "Real
Property"), including a description of all land, and all encumbrances,
easements or rights of way of record (or, if not of record, of which a
Fiskars Company has notice or knowledge) granted on or appurtenant to or
otherwise affecting such Real Property and all plants, buildings or
other structures located thereon. Schedule 3.13.(b) also sets forth,
with respect to each parcel of Real Property which is leased, the
material terms of such lease. There are now in full force and effect
duly issued certificates of occupancy permitting the Real Property and
improvements located thereon to be legally used and occupied as the same
are now constituted.
3.13.(c) No Condemnation or Expropriation. To Company's and
each Shareholder's knowledge, neither the whole nor any portion of the
property or any other assets of a Fiskars Company is subject to any
Order to be sold or is being condemned, expropriated or otherwise taken
by any Government Entity with or without payment of compensation
therefor.
3.14. Contracts and Commitments.
3.14.(a) Real Property Leases. Except as set forth in Schedule
3.14.(a), the Fiskars Companies have no leases of real property that are
material to the Business.
3.14.(b) Personal Property Leases. Except as set forth in
Schedule 3.14.(b), the Fiskars Companies have no leases of personal
property involving consideration or other expenditure in excess of
$10,000 or involving performance over a period of more than 12 months.
3.14.(c) Powers of Attorney. Except as set forth in Schedule
3.14(c), the Fiskars Companies have not given a power of attorney, which
is currently in effect, to any person, firm or corporation for any
purpose whatsoever.
3.14.(d) Collective Bargaining Agreements. Except as set forth
in Schedule 3.14.(d), the Fiskars Companies are not a party to any
collective bargaining agreements with any unions, guilds, shop
committees or other collective bargaining groups or any national labor
union contract. Copies of all such agreements have heretofore been
delivered to Buyer.
3.14.(e) Loan Agreements. Except as set forth in Schedule
3.14.(e), the Fiskars Companies are not obligated under any loan
agreement, promissory note, letter of credit, or other evidence of
indebtedness as a signatory, guarantor or otherwise.
3.14.(f) Guarantees. Except as disclosed on Schedule 3.14.(f),
the Fiskars Companies have not guaranteed the payment or performance of
any person, firm or corporation, agreed to indemnify any person or act
as a surety, or otherwise agreed to be contingently or secondarily
liable for the obligations of any person.
3.14.(g) Non-Competition Agreements. Except as disclosed on
Schedule 3.14.(g), the Fiskars Companies have not entered into any
agreement or commitment containing any covenant limiting the freedom of
any of the Fiskars Companies to engage in any line of business,
including, without limitation, the Business, or compete with any person.
3.14.(h) Other Material Agreements. Except as set forth in
Schedule 3.14.(h) hereto, none of the Fiskars Companies have entered
into any agreement or commitment which involve payment or receipt by any
of them of $50,000 or more in the aggregate or which are not cancelable
without penalty within 180 days. [Schedule to be delivered after
signing]
3.15. Labor Matters. Except as set forth in Schedule 3.15, within
the last three years the Fiskars Companies have not experienced any labor
disputes, union organization attempts or any work stoppage due to labor
disagreements in connection with its business. Except to the extent set
forth in Schedule 3.15, (a) there is no unfair labor practice charge or
complaint against any Fiskars Company pending or threatened; (b) there is
no labor strike, dispute, request for representation, slowdown or stoppage
actually pending or, to Company's or Shareholder's knowledge, threatened
against or affecting any Fiskars Company nor any secondary boycott with
respect to products of any Fiskars Company; (c) no question concerning
representation has been raised or, to Company's or Shareholder's
knowledge, is threatened respecting the employees of any Fiskars Company;
(d) no grievance which might have a Material Adverse Effect, nor any
arbitration proceeding arising out of or under collective bargaining
agreements or any national labor union contract, is pending; and (e) there
are no administrative charges or court complaints against any Fiskars
Company concerning alleged employment discrimination or other employment
related matters pending or, to Company's or Shareholders' knowledge,
threatened before the U.S. Equal Employment Opportunity Commission or any
Government Entity.
3.16. Employee Benefit Plans.
3.16.(a) Disclosure. Schedule 3.16.(a) describes all pension,
thrift, savings, profit sharing, retirement, incentive bonus and other
material bonus, medical, dental, life, accident insurance, benefit,
employee welfare, disability, group insurance, stock appreciation,
executive or deferred compensation, hospitalization and other similar
fringe or employee benefit plans, programs and arrangements, and any
employment or consulting contracts, "golden parachutes," collective
bargaining agreements, severance agreements or plans, vacation and sick
leave plans, programs, arrangements and policies, including, without
limitation, all "employee benefit plans" (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), all employee manuals, and all written statements of policies
relating to employment, which are provided to, for the benefit of, or
relate to, any persons ("Employees") employed by a Fiskars Company and
under which a Fiskars Company has any obligation. Without regard to
Section 8.5(b) hereof, Shareholders have agreed to make certain payments
to certain officers of the Company which have not been disclosed to
Buyer and for which Shareholders shall be solely responsible. The items
described in the foregoing sentence are hereinafter sometimes referred
to collectively as "Employee Plans/Agreements," and each individually as
an "Employee Plan/Agreement." Each of the Employee Plans/Agreements is
identified on Schedule 3.16.(a), to the extent applicable, as one or
more of the following: an "employee pension benefit plan" (as defined
in Section 3(2) of ERISA), a "defined benefit plan" (as defined in
Section 414 of the Code), an "employee welfare benefit plan" (as defined
in Section 3(1) of ERISA), and/or as a plan intended to be qualified
under Section 401 of the Code. No Employee Plan/Agreement is a
"multiemployer plan" (as defined in Section 4001 of ERISA), and neither
the Fiskars Companies nor (except as disclosed in Schedule 3.16.(a)(i)
any entity affiliated since January 31, 1989, with the Fiskars Companies
under Code Section 414 ("ERISA Affiliate") has ever contributed nor been
obligated to contribute to any such multiemployer plan.
3.16.(b) Prohibited Transactions, etc. There have been no
"prohibited transactions" within the meaning of Section 406 or 407 of
ERISA or Section 4975 of the Code which could have a Material Adverse
Effect.
3.16.(c) Payments and Compliance. With respect to each Employee
Plan/Agreement, (i) all payments due from a Fiskars Company to date have
been made and all amounts properly accrued to date as liabilities of the
Fiskars Company which have not been paid have been properly recorded on
the books of the Fiskars Company and are reflected in the Recent Balance
Sheet; (ii) all reports and information relating to each such Employee
Plan/Agreement required to be disclosed or provided to participants or
their beneficiaries have been timely disclosed or provided; and (iii)
each such Employee Plan/Agreement which is intended to qualify under
Section 401 of the Code has received a favorable determination letter
from the Internal Revenue Service with respect to such qualification,
its related trust has been determined to be exempt from taxation under
Section 501(a) of the Code, and nothing has occurred since the date of
such letter that has or is likely to adversely affect such qualification
or exemption.
3.16.(d) Post-Retirement Benefits. Except as set forth in
Schedule 3.16.(a), no Employee Plan/Agreement provides benefits,
including, without limitation, death or medical benefits (whether or not
insured) with respect to current or former Fiskars Company employees
beyond their retirement or other termination of service other than (i)
coverage mandated by applicable law, (ii) death or retirement benefits
under any Employee Plan/Agreement that is an employee pension benefit
plan, (iii) deferred compensation benefits accrued as liabilities on the
books of the Fiskars Companies (including the Recent Balance Sheet),
(iv) disability benefits under any Employee Plan/ Agreement that is an
employee welfare benefit plan and which have been fully provided for by
insurance or otherwise or (v) benefits in the nature of severance pay.
3.16.(e) Liability. There is no existing condition or event
with regard to any employee benefit plans ever maintained by the Fiskars
Companies or by an ERISA Affiliate that could subject the parties to
this Agreement or any Employee Plan/Agreement to any risk of liability
which would have a Material Adverse Effect.
3.16.(f) Funding. Except as set forth in Schedule 3.16(a), each
employee benefit plan that is subject to Title IV of ERISA and/or to
Section 412 of the Code and that is maintained by a Fiskars Company or
by an ERISA Affiliate is fully funded on a termination basis.
3.16.(g) Compliance. Each Employee Plan/Agreement has been
operated in accordance with its terms and in material compliance with
all applicable laws, orders, governmental rules and regulations
including, but no limited to, ERISA and the Code.
3.16.(h) Right to Amend or Terminate. Except as disclosed in
Schedule 3.16.(h) hereto, no condition exists that would prevent
amendment or termination of any Employee Plan/Agreement.
3.16.(i) Parachute. Except as disclosed in Schedule 3.16(i), no
excess parachute payment, within the meaning of Code Section 280G will
become payable by any Fiskars Company as a result of the execution or
performance of this Agreement, or on the termination of any director,
officer, or employee after the Closing Date in connection with this
Agreement.
3.16.(j) No Triggering of Obligations. Other than by reason of
actions taken by Buyer following the Closing, and except as disclosed in
Schedule 3.16(j), the consummation of the transactions contemplated by
this Agreement will not (i) entitle any current or former employee of a
Fiskars Company to severance pay, unemployment compensation or any other
payment, except as expressly provided in this Agreement, (ii) accelerate
the time of payment or vesting, or increase the amount of compensation
due to any such employee or former employee or (iii) result in any
prohibited transaction described in Section 406 of ERISA or Section 4975
of the Code for which an exemption is not available.
3.16.(k) Non-US Employee Benefit Plans. Schedule 3.16(b) lists
(i) each non-governmental retirement plan maintained or contributed to
by or on behalf of the Shareholders or the Fiskars Companies applicable
to employees of any Fiskars Company located outside of the US (a "Non-US
Retirement Plan") and (ii) each non-governmental non-industry welfare
benefit plan maintained or contributed to by or on behalf of the
Shareholders or the Fiskars Companies applicable to employees of any
Fiskars Company located outside of the US and which, in the case of
clause (ii), obligates or may reasonably be expected to obligate any
Fiskars Company to pay more than US $100,000 annually (a "Non-US Welfare
Plan"). Except as set forth in Schedule 3.16(b), each such Non-US
Retirement Plan and Non-US Welfare Plan (collectively, the "Non-US
Plans") has been administered, in all material respects, in compliance
with its terms and the requirements of all applicable Laws and all
required contributions to each Non-US Plan have been made. The Company
and/or the Shareholders has heretofore delivered to Buyer true and
complete copies of all of the written Non-US Plans and written summaries
of the oral Non-US Plans and, where applicable, related trusts,
including all amendments. There are no inquiries or investigations by
any foreign government authority, no termination proceedings and no
actions, suits or claims (other than claims for benefits) pending or, to
the Company's or the Shareholders' knowledge, threatened against any
Non-US Plan (or any Shareholder or any Fiskars Company with respect
thereto) or the assets thereof. Except as set forth in Schedule
3.16(b), there are no unfunded obligations under any Non-US Plan
providing benefits after termination of employment to any employee or
former employee of any Fiskars Company (or to any beneficiary of any
such employee or former employee), including but not limited to retiree
health coverage and deferred compensation, but excluding insurance
conversion privileges under applicable foreign law. No Non-US Plan,
plan documentation or agreement, summary plan description or other
written communication distributed generally to employees of any Fiskars
Company by its terms prohibits the amendment or termination of any such
Non-US Plan. All reports, forms and other documents required to be
filed or advisable to be filed with any government entity with respect
to each Non-US Plan have been timely filed and are accurate.
3.17. Employment Compensation. Schedule 3.17 contains a true and
correct list of all employees to whom a Fiskars Company is paying
compensation, including bonuses and incentives, at an annual rate in
excess of Fifty Thousand Dollars ($50,000) for services rendered or
otherwise; and in the case of salaried employees such list identifies the
current annual rate of compensation for each employee and in the case of
hourly or commission employees identifies certain reasonable ranges of
rates and the number of employees falling within each such range.
[Schedule 3.17 to be delivered after signing]
3.18. Trade Rights. Schedule 3.18 lists all Trade Rights (as
defined below but excluding know-how and trade secrets) in which a Fiskars
Company now has any interest, specifying whether such Trade Rights are
owned, controlled, used or held (under license or otherwise) by the
Fiskars Company, and also indicating which of such Trade Rights are
registered. All Trade Rights shown as registered in Schedule 3.18 have
been properly registered, all pending registrations and applications have
been properly made and filed and all annuity, maintenance, renewal and
other fees relating to registrations or applications are current. To the
Shareholders' and Company's knowledge, no Fiskars Company is infringing or
has infringed any Trade Rights of another in the operation of the Business
nor, to the Shareholders' and Company's knowledge, is any other person
infringing the Trade Rights of a Fiskars Company. Except as set forth on
Schedule 3.18, no Fiskars Company has granted any license or made any
assignment of any Trade Right listed on Schedule 3.18 nor does any Fiskars
Company pay any royalties or other consideration for the right to use any
Trade Rights of others. The consummation of the transactions contemplated
hereby will not alter or impair any Trade Rights owned or used by the
Fiskars Companies in any material adverse manner. As used herein, the
term "Trade Rights" shall mean and include: all patents, trademarks,
trade names, service marks, copyrights and any applications therefor,
maskworks, trade secrets, know-how and internally generated and developed
computer software programs or applications (in both source code and object
code forms) that are used in and are material to the Business as currently
conducted. Trade Rights shall not include any trademark or trade name
rights in the word "Fiskars" or in any combination of words or expression
or logo containing "Fiskars" and any rights any of the Fiskars Companies
may have to use such trademark or trade name rights will be specifically
assigned to Fiskars as of the Closing pursuant to written assignments
reasonably acceptable to Fiskars. The Fiskars Companies are the sole and
exclusive owner or licensee of, with all right, title and interest in and
to (free and clear of any Liens), the Trade Rights (defined for this
purpose to exclude know-how and trade secrets), and have sole and
exclusive rights (and are not contractually obligated to pay any
compensation to any third party in respect thereof) to the use thereof or
the material covered thereby in connection with the services or products
in respect of which the Trade Rights (defined for this purpose to exclude
know-how and trade secrets) are being used. Except as disclosed in
Schedule 3.18, no claims have been asserted or, to the Company's or
Shareholder's knowledge, are threatened by any person nor are there any
valid grounds, to the Company's or Shareholder's knowledge, for any bona
fide claims (i) to the effect that the manufacture, sale, licensing or use
of any of the products of the Fiskars Companies as now manufactured, sold
or licensed or used by any of the Fiskars Companies infringes on any
copyright, patent, trademark, service mark or trade secret, (ii) against
the use by any of the Fiskars Companies of any trademarks, service marks,
trade names, trade secrets, copyrights, patents, technology, know-how or
computer software programs and applications used in any of the Fiskars
Companies' business as currently conducted, or (iii) challenging the
ownership by any of the Fiskars Companies, the validity, or the
effectiveness, of any of the Trade Rights. No Trade Right or product of
any of the Fiskars Companies is subject to any outstanding decree, order,
judgment, or stipulation restricting in any manner the licensing thereof
by any of the Fiskars Companies. The Company has a policy requiring
certain employees to execute a proprietary information and confidentiality
agreement.
3.19. Product Liability. Schedule 3.19 sets forth a list of all
claims since January 1, 1992 arising from or alleged to arise from any
injury to person or property as a result of the use of any product
manufactured and sold by any of the Fiskars Companies.
3.20. Bank Accounts. Schedule 3.20 sets forth the names and
locations of all banks, trust companies, savings and loan associations and
other financial institutions at which the Fiskars Companies maintain a
safe deposit box, lock box or checking, savings, custodial or other
account of any nature, the type and number of each such account and the
signatories therefor, a description of any compensating balance
arrangements, and the names of all persons authorized to draw thereon,
make withdrawals therefrom or have access thereto.
3.21. Affiliates' Relationships to Fiskars Companies.
3.21.(a) Contracts With Affiliates. All leases, contracts,
agreements or other arrangements between a Fiskars Company and any
Affiliate that is material to the Business or which involve payment by
any of them of $50,000 or more in the aggregate or which are not
cancelable without penalty within 180 days notice to terminate are
described on Schedule 3.21(a) [delivered after signing].
3.21.(b) No Adverse Interests. No Affiliate has any direct or
indirect interest in (i) any entity which does business with a Fiskars
Company or is competitive with the Business, or (ii) any property, asset
or right which is used by a Fiskars Company in the conduct of its
business that will not be assigned to the Fiskars Company as part of the
Closing other than trade name or trademark rights in the word "Fiskars,"
which are the subject of Section 3.18 and 5.10.
3.21.(c) Obligations. All obligations of any Affiliate to a
Fiskars Company, and all obligations of a Fiskars Company to any
Affiliate, are listed on Schedule 3.21.(c).
3.22. No Brokers or Finders. Neither Company nor the Shareholders,
nor any of their respective directors, officers, employees or agents have
retained, employed or used any broker or finder in connection with the
transaction provided for herein or in connection with the negotiation
thereof other than Raymond James & Associates, Inc., whose commissions
will be paid by the Shareholders.
3.23. Insurance Coverage. There is set forth in Schedule 3.23
hereto a complete and accurate list of all material policies of insurance
maintained by the Fiskars Companies, showing, among other things, the
amount of coverage, the company issuing the policy and the expiration date
of each policy. Such policies are, in the opinion of the Company and the
Shareholders, adequate and in full force and effect and such policies, or
other policies covering the same risks, have been in full force and
effect, without gaps, continuously for the past two (2) years. Copies of
all current insurance policies of the Fiskars Companies have been made
available to Buyer for inspection. None of the Fiskars Companies is in
default under any of such policies, and none of the Fiskars Companies has
failed to give any notice or to present any claim under any such policy in
a due and timely fashion. Neither the Company or the Shareholders is
aware of any facts concerning any of the Fiskars Companies or their
respective business, operations, assets and liabilities, contingent or
otherwise, upon which an insurer might be justified in reducing or
cancelling coverage on existing policies.
3.24. Investment Representations. The representations and
warranties in this Section 3.24 are made by Fiskars exclusively and not by
Company or Holdings. Fiskars' financial condition is presently adequate
to bear the economic risks of owning Buyer's common stock and at the
present time Fiskars could afford a complete loss of such investment.
Buyer's common stock is being acquired by Fiskars for investment only and
not with a current view to resale or other disposition. Fiskars further
represents that Fiskars has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment that
requires the sale of Buyer's common stock except as may be permitted under
the Stockholder Agreement between Buyer and Fiskars. Fiskars acknowledges
that its right to sell any part or all of Buyer's common stock is limited
by and subject to the terms and provisions of the Stockholder Agreement.
In reaching the conclusion that Fiskars desires to acquire Buyer's common
stock as a result of the transactions contemplated by this Agreement,
Fiskars has carefully evaluated the financial resources and investment
position of Fiskars and the risks associated with the acquisition and
acknowledges that Fiskars is able to bear the economic risks of such
investment.
3.25. Limitations on Warranties and Disclaimers. The
representations and warranties set forth in this Article 3 and the
schedules, certificates and statements provided pursuant hereto are the
only representations and warranties made by Company and Shareholders with
respect to the Business, the Fiskars Companies or their assets,
liabilities, operations and financial condition. EXCEPT AS SPECIFICALLY
SET FORTH HEREIN, ALL WARRANTIES, EXPRESS OR IMPLIED, ARE HEREBY
DISCLAIMED AND EXCLUDED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL
COMPANY OR SHAREHOLDERS BE LIABLE FOR ANY OBLIGATIONS OR LIABILITIES WITH
RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY EXCEPT FOR THE REMEDIES,
INCLUDING INDEMNIFICATION, SPECIFICALLY SET FORTH IN THIS AGREEMENT,
WHETHER ARISING OUT OF BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING
NEGLIGENCE AND STRICT LIABILITY) OR OTHER THEORIES OF LAW. UNDER NO
CIRCUMSTANCES SHALL COMPANY OR SHAREHOLDERS BE LIABLE TO BUYER FOR AND
COMPANY AND SHAREHOLDERS HEREBY SPECIFICALLY DISCLAIM ALL CONSEQUENTIAL,
INCIDENTAL, PUNITIVE AND CONTINGENT DAMAGES WHATSOEVER ARISING FROM BREACH
OF THIS AGREEMENT. THE COMPANY AND SHAREHOLDERS MAKE NO REPRESENTATION OR
WARRANTY AS TO THE ACCURACY OR RELIABILITY OF ANY FORECASTS OF REVENUES,
SALES, EXPENSES OR PROFITS OF THE BUSINESS.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties to the
Shareholders, each of which is true and correct on the date hereof, shall
remain true and correct to and including the Closing Date and shall
survive the Closing of the transactions provided for herein for the period
provided for in Section 8.5(a).
4.1. Corporate.
4.1.(a) Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.
4.1.(b) Corporate Power. Buyer has all requisite corporate
power to enter into this Agreement and the other documents and
instruments to be executed and delivered by Buyer and to carry out the
transactions contemplated hereby and thereby.
4.2. Authority. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Buyer
pursuant hereto and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of
Buyer. No other corporate act or proceeding on the part of Buyer or its
shareholders is necessary to authorize this Agreement or the other
documents and instruments to be executed and delivered by Buyer pursuant
hereto or the consummation of the transactions contemplated hereby and
thereby. This Agreement constitutes, and when executed and delivered, the
other documents and instruments to be executed and delivered by Buyer
pursuant hereto will constitute, valid and binding agreements of Buyer,
enforceable in accordance with their respective terms, except as such may
be limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights generally, and by general equitable
principles.
4.3. No Violation. Except as set forth on Schedule 4.3, neither the
execution and delivery of this Agreement or the Ancillary Instruments nor
the consummation by Buyer of the transactions contemplated hereby and
thereby (a) will violate any Laws and Orders, (b) except for applicable
requirements of the HSR Act, will require any authorization, consent,
approval, exemption or other action by or notice to any Government Entity
(including, without limitation, under any "plant-closing" or similar law),
or (c) will constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or will result in the
termination of, any contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which the Buyer is a
party or by which the Buyer may be bound or affected, in any case where
such default, termination, acceleration would have a material effect on
the ability of Buyer to consummate the transactions contemplated hereby.
4.4. No Brokers or Finders. Neither Buyer nor any of its directors,
officers, employees or agents have retained, employed or used any broker
or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof, other than S.G. Warburg & Co.,
Inc., whose commissions will be paid by Buyer.
4.5. Investment Representations. Buyer's financial condition is
presently adequate to bear the economic risks of this investment and at
the present time Buyer could afford a complete loss of such investment
(including certain additional amounts under Wisconsin Statutes Section
180.0622(2)(b)). The Shares are being acquired by Buyer for investment
only and not with a view to resale or other distribution. Buyer further
represents that Buyer has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing
for or which is likely to compel a disposition in any manner of the
Company, that Buyer is not aware of any circumstances presently in
existence which are likely to promote in the future any disposition by
Buyer of the Company, and that Buyer does not presently contemplate any
sale of any part of the Company upon the occurrence or nonoccurrence of
any predetermined or undetermined event or circumstance. In reaching the
conclusion that Buyer desires to purchase the stock of Company, Buyer has
carefully evaluated the financial resources and investment position of
Buyer and the risks associated with the acquisition and acknowledges that
Buyer is able to bear the economic risks of such investment.
4.6. Buyer's Business Investigation. Without limiting Buyer's rights
under Section 6.5 of this Agreement, Buyer acknowledges that it has
conducted an investigation of the Fiskars Companies, their assets,
liabilities, operations and financial conditions, and the Business, it has
deemed necessary and advisable for purposes of determining to enter into
this Agreement and Ancillary Instruments. Except to the extent of the
express representations, warranties and agreements contained in this
Agreement, Buyer is purchasing the Shares in reliance upon its own
investigation of the Fiskars Companies. Buyer agrees and acknowledges
that it is experienced in the manufacturing business and has the knowledge
and ability to conduct a full investigation of the Fiskars Companies and
to evaluate the Fiskars Companies' business, operations, financial
conditions, assets and liabilities. BUYER EXPRESSLY REPRESENTS AND
WARRANTS THAT IT HAS NOT RELIED ON ANY PROJECTIONS OR REPRESENTATIONS
(ORAL OR WRITTEN) EXCEPT AS SET OUT HEREIN AND IN THE ANCILLARY
INSTRUMENTS, WHICH BUYER HAS OBTAINED FROM THE COMPANY, SHAREHOLDERS, ITS
AFFILIATED COMPANIES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES OR AGENTS OR THE FISKARS COMPANIES.
4.7. Knowledge of Buyer. Buyer has no actual knowledge of a breach of
any representation, warranty or covenant of Company and Shareholders
contained herein which gives rise, or following the Closing would give
rise, to an indemnification claim under Section 8.1.
4.8. Sufficient Financing. Buyer has sufficient funds or financing in
place to fund the Purchase Price to be paid at Closing to Shareholders for
the Shares.
5. COVENANTS
5.1. Noncompetition; Confidentiality; Non-Solicitation. Subject to the
Closing, and as an inducement to Buyer to execute this Agreement and
complete the transactions contemplated hereby, and in order to preserve
the goodwill associated with the Business, each Shareholder hereby
covenants and agrees as follows:
5.1.(a) Covenant Not to Compete. For a period of four (4)
years from the Closing Date (the Non-Compete Period), no Shareholder
will, directly or indirectly, engage in, continue in or carry on any
business which is competitive with the Business, including owning or
controlling any financial interest in any corporation, partnership, firm
or other form of business organization which is so engaged; provided,
however, that the foregoing shall not prohibit the ownership of
securities of Buyer as herein contemplated or in other corporations
which are listed on a national securities exchange or traded in the
national over-the-counter market in an amount which shall not exceed 5%
of the outstanding shares of any such corporation. Buyer confirms and
agrees that Fiskars, Inc., an affiliate of the Shareholders, currently
designs, manufactures and sells surge protectors and the other products
identified in Schedule 5.1.(a) and this Section 5.1 is not intended in
any manner to limit or restrict Fiskars, Inc. or any other affiliate of
the Shareholders from conducting any part of that business. The parties
agree that the geographic scope of this covenant not to compete shall
extend worldwide. The parties agree that Buyer may sell, assign or
otherwise transfer this covenant not to compete, in whole or in part, to
any person, corporation, firm or entity that purchases all or part of
the business of the Fiskars Companies. In the event a court of
competent jurisdiction determines that the provisions of this covenant
not to compete are excessively broad as to duration, geographical scope
or activity, it is expressly agreed that this covenant not to compete
shall be construed so that the remaining provisions shall not be
affected, but shall remain in full force and effect, and any such over
broad provisions shall be deemed, without further action on the part of
any person, to be modified, amended and/or limited, but only to the
extent necessary to render the same valid and enforceable in such
jurisdiction. As of the Closing, Buyer and Fiskars will enter into the
form of Non-Compete Agreement annexed hereto as Schedule 5.1(a)(1) which
will be consistent with the foregoing provisions.
5.1.(b) Covenant of Confidentiality. No Shareholder shall at
any time subsequent to the Closing, except as explicitly requested by
Buyer, (i) use for any purpose, (ii) disclose to any person, or (iii)
keep or make copies of documents, tapes, discs or programs containing,
any confidential information concerning the Fiskars Companies. For
purposes hereof, "confidential information" shall mean and include,
without limitation, all Trade Rights in which a Fiskars Company has an
interest (as limited by Sections 3.18 and 5.10), and all customer lists
and customer information.
5.1.(c) Non-Solicitation of Employees. Unless restricted by
applicable law, during the Non-Compete Period neither Shareholder will,
directly or indirectly, hire or offer employment to any employee of any
of the Fiskars Companies whose employment is continued by any of the
Fiskars Companies or the Buyer after the Closing Date unless such
Fiskars Company or the Buyer first terminates the employment of such
employee.
5.1.(d) Equitable Relief for Violations. Each Shareholder
agrees that the provisions and restrictions contained in this Section
5.1 are necessary to protect the legitimate continuing interests of
Buyer and Company in acquiring the Shares, and that any violation or
breach of these provisions will result in irreparable injury to Buyer
for which a remedy at law would be inadequate and that, in addition to
any relief at law which may be available to Buyer for such violation or
breach and regardless of any other provision contained in this
Agreement, Buyer shall be entitled to injunctive and other equitable
relief as a court may grant after considering the intent of this Section
5.1.
5.2. Hart-Scott-Rodino Act Filings. To the extent such filings have not
been completed prior to the execution of this Agreement, each of the
Shareholders shall cooperate with Buyer in its efforts to comply with the
HSR Act. Prior to making any communication, written or oral, with the
Federal Trade Commission, the Antitrust Division of the federal Department
of Justice or any other governmental agency or authority or members of
their respective staffs with respect to this Agreement or the transactions
contemplated hereby, the parties shall consult each other.
5.3. Access to Information and Records. During the period prior to the
Closing, Shareholders shall cause the Fiskars Companies to give Buyer, its
counsel, accountants and other representatives (i) access during normal
business hours to all of the properties, books, records, contracts and
documents of the Fiskars Companies for the purpose of such inspection,
investigation and testing as Buyer deems appropriate (and Company shall
furnish or cause to be furnished to Buyer and its representatives all
information with respect to the business and affairs of Company as Buyer
may request), and (ii) access to employees, agents and representatives for
the purposes of such meetings and communications as Buyer reasonably
desires.
5.4. Conduct of Business Pending the Closing. From the date hereof
until the Closing, except as otherwise approved in writing by the Buyer,
Shareholders shall use their best efforts to cause each of the following
to occur:
5.4.(a) No Changes. The Fiskars Companies will carry on the
Business in the same manner as heretofore and will not make or institute
any material changes in its methods of purchase, sale, management,
accounting or operation, except for the dividends disclosed in Schedule
3.6(f) and for the redemptions described in Section 1.2 hereof.
5.4.(b) Maintain Organization. Company will use its reasonable
efforts to preserve the business organization of the Fiskars Companies
intact, and to preserve present relationships with employees, suppliers,
customers and others having business relationships with the Fiskars
Companies.
5.4.(c) No Breach. Company and Shareholders will not do or
omit any act which may cause a breach of a contract, commitment or
obligation where such breach would have a Material Adverse Effect.
5.4.(d) No Material Contracts. No contract or commitment will
be entered into, and no purchase of raw materials or supplies and no
lease, license, encumbrance, sale or disposition of assets, goods or
services (real, personal, or mixed, tangible or intangible) will be
made, by or on behalf of a Fiskars Company, except contracts,
commitments, purchases or sales which are in the ordinary course of
business and consistent with past practice.
5.4.(e) No Corporate Changes. Company shall not amend its
Articles of Incorporation or By-Laws or make any changes in authorized
or issued capital stock.
5.4.(f) Maintenance of Insurance. Company shall maintain all
of the insurance in effect as of the date hereof for the Fiskars
Companies.
5.4.(g) Maintenance of Property. The Fiskars Companies shall
use, operate, maintain and repair all property of the Fiskars Companies
in a manner consistent with past practice.
5.4.(h) No Transfer of Common Shares. No Shareholder shall
transfer or attempt to transfer any of the Common Shares except to Buyer
pursuant hereto; and Company shall refuse to accept any certificates for
Common Shares to be transferred or otherwise to allow such transfers to
occur upon its books.
5.4.(i) Trade Rights. Transfer or license to any person or
entity or otherwise extend, amend or modify in any material respect any
Trade Rights other than licenses to customers in the ordinary course of
business consistent with past practices;
5.4.(j) Indebtedness. Incur any indebtedness for borrowed
money (other than pursuant to existing credit facilities in the ordinary
course of business or as described in Section 1.2(a) hereof) or
guarantee any such indebtedness or issue or sell any debt securities or
rights to acquire debt securities of any of the Fiskars Companies or
guarantee any debt of others;
5.4.(k) Revalue Assets. Revalue in any material respect any of
the Fiskars Companies' assets, including without limitation writing down
the value of inventory or writing off notes or accounts receivable other
than in the ordinary course of business consistent with past practice;
5.4.(l) Taxes. Make or change any material election in respect
of Taxes other than in the ordinary course and consistent with past
practice, adopt or change any accounting method in respect of Taxes,
file any material return or any amendment to a material return, enter
into any closing agreement, settle any claim or assessment in respect of
Taxes (except settlements effected solely through payment of immaterial
sums of money), or consent to any extension or waiver of the limitation
period applicable to any claim or assessment in respect of Taxes;
5.4.(m) Employee Compensation. Grant any severance or
termination pay (i) to any officer or (ii) to any other employee for
which any Fiskars Company would have any liability, except payments
consistent with past practices or pursuant to written agreements
outstanding, or policies existing, on the date hereof or as previously
disclosed to Buyer;
5.4.(n) Stock Issuance. Issue, grant or sell or authorize or
propose the issuance, grant or sale of, any shares of its capital stock
of any class or securities convertible into, or subscriptions, rights,
warrants or options to acquire, or enter into other agreements or
commitments of any character obligating it to issue, any such shares or
other convertible securities;
5.4.(o) Other Action. Take, or agree to take, any of the
actions described in Sections 5.4(a) through (n) above, or any action
which would cause or would be reasonably likely to cause any of the
conditions set forth in Article 6 not to be satisfied.
5.5. Consents. Company and Shareholders will use their best efforts
prior to Closing to obtain all consents that are material to the Business
and necessary for the consummation of the transactions contemplated
hereby. Buyer shall use its reasonable best efforts in response to any
reasonable request of Company to assist Company in obtaining any consents
of third parties necessary for the consummation of the transactions
contemplated by this Agreement.
5.6. Access to and Retention of Records. Following the Closing Date,
Buyer and Shareholders shall afford to each other and their duly
authorized representatives access at all reasonable times during normal
business hours to all books, records, documents and other information
concerning the Fiskars Companies as Buyer or Shareholders, as the case may
be, shall request in order to defend against, oppose or otherwise
investigate any claims or potential claims against Buyer, the Fiskars
Companies or Shareholders, as the case may be, arising as a result of any
acts, events or operations prior to the Closing Date or as a result of
this Agreement (including any claims for indemnification under Article 8).
Buyer and Shareholders each agree, and Buyer agrees to cause the Fiskars
Companies, to preserve and keep the records related to the Fiskars
Companies held by such party for a period of six (6) years from the
Closing, or for any longer period as may be required by law or any
government agency or ongoing litigation, and shall make such records and
personnel available, in the case of Buyer, to Shareholders, or in the case
of Shareholders, to Buyer as may be reasonably required in connection
with, among other things, any insurance claims, legal proceedings or
governmental investigations. If a party wishes to destroy such records at
that time, it first shall give ninety (90) days prior written notice to
the other party and the other party shall have the right at their option
and expense, upon prior written notice given within that ninety (90) day
period, to take possession of the records within one-hundred eighty (180)
days after the date of the initial notice.
5.7. Availability of Personnel. Buyer and Shareholders shall afford,
and shall cause their respective affiliates to afford, to each other on a
reasonable basis, but at no charge, personnel of Buyer, the Fiskars
Companies and Shareholders, as the case may be, as necessary to permit
Buyer or Shareholders, as the case may be, to defend against, oppose or
otherwise investigate any potential claim against Buyer or Shareholders,
as the case may be, in connection with the business or operations of the
Company or indemnifications provided hereunder.
5.8. Tax Matters.
5.8.(a) Returns. Shareholders shall cause the Fiskars
Companies to prepare and file all federal, state, local or foreign
returns required to be filed relating to tax periods ending prior to the
Closing Date. After the Closing Date, Buyer shall cause the Fiskars
Companies to prepare and file all federal, state, local or foreign
returns required to be filed relating to tax periods beginning on or
after the Closing Date.
5.8.(b) Access. Buyer shall make available to Shareholders, or
shall cause the Fiskars Companies to make available to Shareholders, as
may reasonably be requested by Shareholders, any and all records and/or
employees necessary or useful to Shareholders for (i) the preparation of
any tax returns required to be filed by Shareholders or (ii) the defense
of any audit, examination, administrative appeal or litigation of any
tax return in which the results of operations of the Fiskars Companies
were included. In addition, to the extent Shareholders need any
information concerning the Fiskars Companies, including financial
schedules, for the purpose of preparing or filing federal, state, local
or foreign tax returns or reports, or for any other business purpose,
Buyer agrees to furnish or cause the Fiskars Companies to furnish to
Shareholders with such information as shall be reasonably requested by
Shareholders within fifteen (15) calendar days of such request.
Shareholders shall make available to Buyer or the Fiskars
Companies, as may reasonably be requested by Buyer or the Fiskars
Companies, any and all records and/or employees retained by Shareholders
with respect to the Fiskars Companies necessary or useful to Buyer or
the Fiskars Companies for (i) the preparation of any tax returns
required to be filed by Buyer or the Fiskars Companies or (ii) the
defense of any audit, examination, administrative appeal or litigation
of any tax return in which the results of operations of the Fiskars
Companies were included. In addition, to the extent Buyer or the
Fiskars Companies needs any information concerning the Fiskars Companies
which is in the possession of Shareholders for the purpose of preparing
or filing federal, state, local or foreign returns or reports, or for
any other business purpose, Shareholders agree to furnish Buyer or the
Fiskars Companies with such information as shall be reasonably requested
by Buyer or the Fiskars Companies within fifteen (15) calendar days at
such request.
5.9. Corporate Identity. Buyer acknowledges that after the Closing Date
neither the Fiskars Companies nor Buyer has any right to use the name,
mark, trade name or trademark "Fiskars," the Fiskars corporate symbols or
logos, or any feature or mark similar to any of the foregoing either alone
or in any combination, all rights to which and the rights represented
thereby and pertaining thereto are being retained by Shareholders or their
affiliates. Within thirty (30) days following the Closing Date, Buyer
shall cause each of the Fiskars Companies that includes "Fiskars" in its
corporate or business name to change such name to one that does not
include such word or expression. Buyer agrees to deliver true and correct
copies of the instruments effecting each name change (showing public
filing data, if any) to Shareholders within five (5) business days
following such name change.
5.10. Transitional Use of Trademark. Fiskars agrees to grant to FPS
Power Systems Oy Ab ("FPS") the right to use the trademark "Fiskars"
("Trademark") solely in connection with the operation of the Business in
certain countries for a period of twenty-four (24) months from the Closing
Date, with an option to extend the license for an additional twelve (12)
months. During this period of transitional use, FPS shall not make or
commission any new uses of the Trademark and shall have no other right to
use the Trademark. FPS' limited right to use the Trademark shall be
subject to the terms of the License Agreement attached hereto as Schedule
5.10.
5.11. Plant Closing. Buyer shall defend and indemnify Shareholders,
their officers, directors, agents, and Affiliates, against any claim,
damage, or expense arising from the failure of any Fiskars Company to
comply with the Worker Adjustment and Retraining Notification Act ("WARN")
for a company "plant closing" or "mass layoff" (as those terms are defined
in the Act) occurring after the Closing Date or any state, local or
foreign law applicable to such matters.
5.12. Other Action. Each of the parties hereto shall use its best
efforts to cause the fulfillment at the earliest practicable date of all
of the conditions to the parties' obligations to consummate the
transactions contemplated in this Agreement.
5.13. Disclosure Schedule. Shareholders and Company shall have a
continuing obligation to promptly notify Buyer in writing with respect to
any matter hereafter arising or discovered which, if existing or known at
the date of this Agreement, would have been required to be set forth or
described in the Disclosure Schedule.
5.14. Notification of Breach. Buyer shall promptly notify
Shareholders and the Company of any information which makes, or if known
to Shareholders or the Company would make, any representation, warranty or
covenant of Shareholders or Company contained herein untrue.
5.15. Exclusivity. Unless and until this Agreement shall have
been terminated by either party pursuant to Article 10, Shareholders shall
not, directly or indirectly, (i) solicit, initiate or encourage submission
of proposals or offers from any person relating to any acquisition or
purchase of all or substantially all of the assets of or any equity
interest in any of the Fiskars Companies or any merger, consolidation,
business combination, purchase of shares or similar transaction with any
of the Fiskars Companies, or (ii) participating in any discussions or
negotiations with any third party regarding any of the foregoing. The
Shareholders will not furnish any information concerning any Fiskars
Company to any person other than Buyer for the purpose of, or with the
intent of, permitting such person or entity to evaluate a possible
acquisition of the Business, assets or capital stock of a Fiskars Company,
in whole or in part.
5.16. Release of Intercompany Payables. Effective upon the Closing,
the Shareholders and each Affiliate not constituting a Fiskars Company
release and discharge each Fiskars Company from all liabilities for
intercompany payables and any other amounts owing from any Fiskars Company
to either Shareholders or any Affiliates not constituting a Fiskars
Company except for payments provided hereunder and except for those
liabilities or payables reflected on the Closing Date Balance Sheet.
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of each of
the following conditions:
6.1. Representations and Warranties. Each of the representations and
warranties made by Shareholders and Company in this Agreement, and the
statements contained in the Disclosure Schedule, shall be (i) true and
correct in all material respects when made, and (ii) shall be true and
correct at and as of the Closing Date as though such representations and
warranties were made or given on and as of the Closing Date, except where
the failure of such representations or warranties to be true, complete and
correct would not have a Material Adverse Effect.
6.2. Compliance With Agreement. Shareholders and Company shall have in
all material respects complied with all of their agreements and
obligations under this Agreement which are to be complied with by them
prior to or on the Closing Date, including the delivery of the closing
documents specified in Section 9.1, except where the failure of such
compliance would not have a Material Adverse Effect.
6.3. Consents and Approvals. All approvals, consents (including
consents to the assignment of all material contracts of the Business) and
waivers that are required to effect the transactions contemplated hereby
shall have been received, and executed counterparts thereof shall have
been delivered to Buyer, except where the failure to obtain any such
approvals, consents or waivers would not have a Material Adverse Effect or
where such failure would not have a material effect on the ability of the
parties to consummate the transactions contemplated hereby.
6.4. Hart-Scott-Rodino Waiting Period. All applicable waiting periods
related to the HSR Act shall have expired.
6.5. Buyer's Due Diligence Investigation. Buyer's pre-closing due
diligence investigation of the Fiskars Companies shall not have uncovered
material facts that were not disclosed in this Agreement or the Disclosure
Schedules (the non-English documents referenced in the first paragraph of
Section 3 are deemed not to be disclosed for this purpose until translated
into or summarized in English) as of the date hereof and that would have a
Material Adverse Effect.
6.6. No Litigation. No Order shall have been issued or entered which
would be violated by the consummation of the transactions contemplated by
this Agreement and no litigation shall have been commenced seeking to
restrain or prohibit, this Agreement or the transactions contemplated
hereby.
7. CONDITIONS PRECEDENT TO SHAREHOLDERS' OBLIGATIONS
Each and every obligation of Shareholders to be performed on the Closing
Date shall be subject to the satisfaction prior to or at the Closing of
the following conditions:
7.1. Representations and Warranties. Each of the representations and
warranties made by Buyer in this Agreement shall be true and correct in
all material respects when made and shall be true and correct in all
material respects at and as of the Closing Date as though such
representations and warranties were made or given on and as of the Closing
Date.
7.2. Compliance With Agreement. Buyer shall have in all material
respects complied with all of Buyer's agreements and obligations under
this Agreement which are to be complied with by Buyer prior to or on the
Closing Date, including the delivery of the closing documents specified in
Section 9.2.
7.3. Hart-Scott-Rodino Waiting Period. All applicable waiting periods
related to the HSR Act shall have expired.
7.4. Release of Guarantees. All guarantees or other contingent
obligations of the Shareholders or their Affiliates other than the Fiskars
Companies for any liability or obligation of a Fiskars Company shall have
been released or terminated.
7.5. Terminate all Licenses. Except for the license described in
Schedule 5.10 hereto, all licenses of "Fiskars" trade names or trademarks
with any of the Fiskars Companies shall have been terminated and the
Fiskars Companies shall have assigned any rights they may have acquired in
the Fiskars trade names or trademarks to Fiskars pursuant to written
instruments reasonably acceptable to Fiskars.
7.6. No Litigation. No Order shall have been issued or entered which
would be violated by the consummation of the transactions contemplated by
this Agreement and no litigation shall have been commenced seeking to
restrain or prohibit, this Agreement or the transactions contemplated
hereby.
8. INDEMNIFICATION
8.1. By Shareholders. Subject to the terms and conditions of this
Article 8, each Shareholder, jointly and severally, hereby agrees to
indemnify, defend and hold harmless Buyer or any of the Fiskars Companies
from and against all Claims asserted against, resulting to, imposed upon,
or incurred by Buyer or any of the Fiskars Companies by reason of, arising
out of or resulting from (a) the inaccuracy or breach of any
representation or warranty of any Shareholder or Company contained in or
made pursuant to this Agreement, or (b) the breach of any covenant of any
Shareholder or the Company contained in this Agreement. As used in this
Article 8, the term "Claim" shall include (i) all losses, direct damages
(excluding any incidental, consequential, punitive or contingent damages),
judgments, awards, settlements, costs and expenses (including, without
limitation, interest, penalties, court costs and reasonable attorneys'
fees and expenses) actually suffered; and (ii) all suits, actions, causes
of action and proceedings.
8.2. By Buyer. Subject to the terms and conditions of this Article 8,
Buyer hereby agrees to indemnify, defend and hold harmless each
Shareholder from and against all Claims asserted against, resulting to,
imposed upon or incurred by any such person, directly or indirectly, by
reason of or resulting from (a) the inaccuracy or breach of any
representation or warranty of Buyer contained in or made pursuant to this
Agreement, or (b) the breach of any covenant of Buyer contained in this
Agreement.
8.3. Indemnification of Third-Party Claims. The obligations and
liabilities of any party to indemnify any other under this Article 8 with
respect to Claims relating to third parties shall be subject to the
following terms and conditions:
8.3.(a) Notice and Defense. The party or parties to be
indemnified (whether one or more, the "Indemnified Party") will give the
party from whom indemnification is sought (the "Indemnifying Party")
prompt written notice of any such Claim, and the Indemnifying Party will
undertake the defense thereof by representatives chosen by it.
Notwithstanding the foregoing, the failure of an Indemnified Party to
give prompt written notice of a Claim shall not relieve the Indemnifying
party of its indemnification obligations hereunder unless such failure
shall result in material prejudice to the Indemnifying Party. So long
as the Indemnifying Party is defending any such Claim actively and in
good faith, the Indemnified Party shall not settle such Claim. The
Indemnified Party shall make available to the Indemnifying Party or its
representatives all records and other materials required by them and in
the possession or under the control of the Indemnified Party, for the
use of the Indemnifying Party and its representatives in defending any
such Claim, and shall in other respects give reasonable cooperation in
such defense.
8.3.(b) Failure to Defend. If the Indemnifying Party, within a
reasonable time after notice of any such Claim, fails to defend such
Claim actively and in good faith, the Indemnified Party will (upon
further notice) have the right to undertake the defense, compromise or
settlement of such Claim or consent to the entry of a judgment with
respect to such Claim, on behalf of and for the account and risk of the
Indemnifying Party, and the Indemnifying Party shall thereafter have no
right to challenge the Indemnified Party's defense, compromise,
settlement or consent to judgment therein.
8.3.(c) Indemnified Party's Rights. Anything in this Section
8.3 to the contrary notwithstanding, (i) if there is a reasonable
probability that a Claim may materially and adversely affect the
Indemnified Party other than as a result of money damages or other money
payments which are less than $10,000,000, the Indemnified Party shall
have the right to defend, compromise or settle such Claim and (ii) with
respect to matters involving third party claimants or plaintiffs, the
Indemnifying Party shall not, without the written consent of the
Indemnified Party, settle or compromise any Claim or consent to the
entry of any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified
Party of a release from all liability in respect of such Claim.
8.4. Payment. Upon judgment, determination, settlement or compromise of
any third party Claim, the Indemnifying Party shall pay promptly on behalf
of the Indemnified Party, and/or to the Indemnified Party in reimbursement
of any amount theretofor required to be paid by it, the amount so
determined by judgment, determination, settlement or compromise and all
other Claims of the Indemnified Party with respect thereto, unless in the
case of a judgment an appeal is made from the judgment. Upon the payment
in full by the Indemnifying Party of such amounts, the Indemnifying Party
shall succeed to the rights of such Indemnified Party, to the extent not
waived in settlement, against the third party who made such third party
Claim. The Indemnified Party may not set off any amount owed to the
Indemnifying Party by the Indemnified Party for any indemnification amount
hereunder.
8.5. Limitations on Indemnification.
8.5.(a) Time Limitation. No claim or action shall be brought
by Buyer under this Article 8 (i) for a breach of the representations
and warranties made in Sections 3.10, 3.11 and 3.12 after the lapse of
three (3) years following the Closing, (ii) for a breach of the
representation and warranty made in Section 3.5 after the lapse of seven
(7) years following the Closing, and (iii) for breach of any other
representation or warranty after the lapse of eighteen (18) months
following the Closing. Any claim made hereunder for breach of a
representation or warranty served in accordance with the notice
provisions of Section 11.7 hereof prior to the termination of the
survival period for such claim shall be preserved despite the subsequent
termination of such survival period. Notwithstanding the foregoing,
there shall be no time limitations on claims or actions brought by Buyer
under this Article 8 for a breach of the representations and warranties
made in Sections 3.1(e) or 3.2.
8.5.(b) Amount Limitation. Buyer shall not be entitled to
indemnification under this Article 8 for breach of a representation or
warranty unless and then only to the extent the aggregate of the
Shareholders' indemnification obligations to the Buyer pursuant to this
Article 8 exceeds Two Million Five Hundred Thousand Dollars
($2,500,000), provided that the foregoing limitation shall not apply to
claims resulting from breach of Sections 3.1(d), (e), (f), (g), (h), 3.2
and 3.5 hereof. The Shareholders' aggregate liability for
indemnification claims hereunder shall be limited to fifty percent (50%)
of the Purchase Price.
8.5.(c) Reductions. Any determination of damages actually
incurred by an Indemnified Party shall be: (i) net of a reasonable
estimate of the present value of any tax benefits realized or reasonably
expected to be realized by the Indemnified Party by reason of the facts
and circumstances giving rise to the Indemnifying Party's liability
(after taking into consideration the tax effect of the receipt by the
Indemnified Party of the indemnification payment); and (ii) net of any
insurance proceeds received by the Indemnified Party in connection with
the facts giving rise to the right of indemnification. The parties
agree to use their best efforts to make claims on and pursue recovery
with respect to all insurance on account of such matters.
8.5.(d) Certain Claims Waived. Buyer hereby waives any right
it may have to file a claim for reimbursement or indemnity against
Shareholders under the terms of this Agreement concerning any matter
with respect to which it is ultimately determined that the employees,
agents or representatives of Buyer listed in Schedule 8.5(d) who
participated in a due diligence investigation of the Company or in any
of the management presentations conducted by the Company (i) has actual
personal knowledge prior to the Closing Date as a result of such due
diligence investigation or management presentations of specific facts
which clearly and obviously relate to such matter and constitute a
breach by a Shareholder of a representation or warranty made under this
Agreement and (ii) fails to disclose such facts to Shareholders to give
Shareholders a reasonable opportunity to cure such breach prior to the
Closing Date. Shareholders shall have the burden of proof with respect
to all facts triggering the waiver under this Section 8.5(d).
8.5.(e) Other Remedies. Nothing in this Agreement shall limit
a party's remedies for intentional misrepresentation or right to seek
injunctive relief or specific performance, for the breach of any
representation, warranty or covenant by any other party under this
Agreement.
9. CLOSING
The closing of this transaction (the "Closing") shall take place at the
offices of the Company, 2727 Kurtz Street, San Diego, California, at close
of business on January 4, 1996, or at such other time and place as the
parties hereto shall agree upon. Such date is referred to in this
Agreement as the "Closing Date."
9.1. Documents to be Delivered by Company and Shareholders. At the
Closing, Company and Shareholders shall deliver to Buyer the following
documents, in each case duly executed or otherwise in proper form:
9.1.(a) Stock Certificate(s). A stock certificate or
certificates representing the Common Shares, duly endorsed for transfer
or with duly executed stock powers attached.
9.1.(b) Compliance Certificate. A certificate signed by each
Shareholder that each of the representations and warranties made by
Shareholders and the Company in this Agreement is true and correct in
all material respects on and as of the Closing Date as required by
Section 6.1, and that Company and Shareholders have complied with all of
Company's and Shareholders' obligations under this Agreement which are
to be complied with on or prior to the Closing Date as required by
Section 6.2.
9.1.(c) Opinion of Counsel. A written opinion of Foley &
Lardner, counsel to Company and Shareholders, dated as of the Closing
Date, addressed to Buyer, substantially in the form of Schedule 9.1(c)
hereto.
9.1.(d) Certified Resolutions. Certified copies of the
resolutions of the Board of Directors of each Shareholder authorizing
and approving this Agreement and the consummation of the transactions
contemplated by this Agreement.
9.1.(e) Incumbency Certificate. Incumbency certificates
relating to each person executing (as a corporate officer or otherwise
on behalf of another person) any document executed and delivered to
Buyer pursuant to the terms hereof.
9.1.(f) Shareholder Agreement. Buyer's form of Shareholder
Agreement substantially in the form of Schedule 9.1(f) hereto.
9.1.(g) Other Documents. All other documents, instruments or
writings required to be delivered to Buyer at or prior to the Closing
pursuant to this Agreement, including, without limitation, the Non-
Compete Agreement in the form of Schedule 5.1(a)(1) hereto and the
License Agreement in the form of Schedule 5.10 hereto, and such other
certificates of authority and documents as Buyer may reasonably request.
9.2. Items to be Delivered by Buyer. At the Closing, Buyer shall
deliver or cause to be delivered to Shareholders the following items, in
each case duly executed or otherwise in proper form:
9.2.(a) Wire Transfers. To Fiskars and Holdings, wire
transfers of the amounts required by Section 2.2 hereof.
9.2.(b) Buyer's Stock Certificates. A stock certificate or
certificates representing the Buyer's stock to be issued and delivered
to Fiskars as provided in Section 2.1(d) hereof.
9.2.(c) Compliance Certificate. A certificate signed by Buyer
that the representations and warranties made by Buyer in this Agreement
are true and correct on and as of the Closing Date as required by
Section 7.1, and that Buyer has complied with all of Buyer's obligations
under this Agreement which are to be performed or complied with on or
prior to the Closing Date as required by Section 7.2.
9.2.(d) Opinion of Counsel. A written opinion of Brobeck
Phleger & Harrison, counsel to Buyer, dated as of the Closing Date,
addressed to Company, substantially in the form of Schedule 9.2(d)
hereto.
9.2.(e) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Buyer authorizing and approving
this Agreement and the consummation of the transactions contemplated by
this Agreement.
9.2.(f) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and delivered to
Company or Shareholders by Buyer pursuant to the terms hereof.
9.2.(g) Trademark Assignments. Assignments of any trademark or
trade name rights any of the Fiskars Companies may have in the "Fiskars"
trade name or trademark as required by Section 3.18.
9.2.(h) Other Documents. All other documents, instruments or
writings required to be delivered to the Shareholders at or prior to the
Closing pursuant to this Agreement, including, without limitation, the
Non-Compete Agreement in the form of Schedule 5.1(a)(1) hereto and the
License Agreement in the form of Schedule 5.10 hereto, and such other
certificates of authority and documents as the Shareholders may
reasonably request.
10. TERMINATION
10.1. Right of Termination Without Breach. This Agreement may be
terminated without further liability of any party at any time prior to the
Closing:
10.1.(a) by mutual written agreement of Buyer and Shareholders,
or
10.1.(b) by either party if the Closing shall not have occurred
on or before February 23, 1996, provided the terminating party has not,
through breach of a representation, warranty or covenant, prevented the
Closing from occurring on or before such date.
10.2. Termination for Breach.
10.2.(a) Termination by Buyer. If there has been a failure of
satisfaction of a condition to the obligations of Buyer as provided in
Article 6 hereof which has not been waived in writing by Buyer, then
Buyer shall notify Shareholders of such failure to give Shareholders the
opportunity, for thirty (30) business days following such notice, to
cure such failure if reasonably capable of being cured. If Shareholders
are unable to cure such failure within such thirty-day period, then,
subject to the last sentence of this Section, Buyer may, by written
notice to Shareholders at any time prior to Closing that such failure is
continuing, terminate this Agreement with the effect set forth in
Section 10.2.(c) hereof. Buyer shall have a right to terminate this
Agreement for breach by the Company or Shareholders of their
representations and warranties herein only with respect to those
breaches which would have a Material Adverse Effect and then only if
such breaches are not cured by Shareholders as provided in this Section
10.2(a). Buyer's sole remedy with respect to any other uncured breach
of representations and warranties shall be limited to Buyer's claiming
indemnification under Section 8.1 hereof.
10.2.(b) Termination by Shareholders. If (i) there has been a
failure of satisfaction of a condition to the obligations of
Shareholders as provided in Article 7 hereof which has not been waived
in writing by Shareholders, or (ii) Buyer shall have attempted to
terminate this Agreement under this Article 10 or otherwise without
grounds to do so, then Shareholders may, by written notice to Buyer at
any time prior to the Closing that such failure or wrongful termination
attempt is continuing, terminate this Agreement with the effect set
forth in Section 10.2.(c) hereof, provided that Buyer has not remedied
such matter (if reasonably capable of being remedied) within thirty (30)
business days following receipt of written notice from Shareholders.
10.2.(c) Effect of Termination. Termination of this Agreement
pursuant to this Section 10.2 shall not in any way terminate, limit or
restrict the rights and remedies of any party hereto against any other
party which has violated, breached or failed to satisfy any of the
representations, warranties, covenants, agreements, conditions or other
provisions of this Agreement prior to termination hereof.
11. MISCELLANEOUS
11.1. Disclosure Schedule. The Schedules have been compiled in a
volume (the "Disclosure Schedule") delivered to Buyer on the date of this
Agreement. Information set forth in the Disclosure Schedule specifically
refers to the article and section of this Agreement to which such
information is responsive but such information shall be deemed to have
been disclosed with respect to all other articles or sections of this
Agreement to which it is relevant.
11.2. Further Assurance. From time to time, at Buyer's request and
without further consideration, Company and Shareholders will execute and
deliver to Buyer such documents and take such other action as Buyer may
reasonably request in order to consummate more effectively the
transactions contemplated hereby.
11.3. Disclosures and Announcements. Announcements concerning the
transactions provided for in this Agreement by Buyer, Company or
Shareholders shall be subject to the approval of the other parties in all
essential respects; provided, however, that if either Buyer or
Shareholders reasonably determines that such party is required under
applicable securities laws or regulations or under the rules or
regulations of a stock exchange on which such party's stock is publicly
traded, to make such announcement or disclosure, that party may make such
announcement or disclosure as is required but will notify the other party
prior to doing so.
11.4. Assignment; Parties in Interest.
11.4.(a) Assignment. Except as expressly provided herein, the
rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the other
parties. Notwithstanding the foregoing, Buyer may, without consent of
any other party, cause one or more subsidiaries of Buyer to carry out
all or part of the transactions contemplated hereby; provided, however,
that Buyer shall, nevertheless, remain liable for all of its
obligations, and those of any such subsidiary, to Shareholders
hereunder.
11.4.(b) Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the respective
successors and permitted assigns of the parties hereto. Nothing
contained herein shall be deemed to confer upon any other person any
right or remedy under or by reason of this Agreement.
11.5. Law Governing Agreement. This Agreement may not be modified
or terminated orally, and shall be construed and interpreted according to
the internal laws of the State of California, excluding any choice of law
rules that may direct the application of the laws of another jurisdiction.
Fiskars irrevocably and unconditionally submits to the jurisdiction of
competent federal and state courts of the United States in any action
arising under this Agreement, whether in contract, tort, equity or
otherwise, and Fiskars hereby irrevocably and unconditionally agrees that
all claims in respect of any such actions may be heard and determined in
such courts. Fiskars shall appoint prior to the Closing and thereafter
shall maintain its own agent for service of summons or other legal process
in the United States of America, and shall prior to the Closing provide
Buyer with evidence of such appointment.
11.6. Amendment and Modification. Buyer and Shareholders may amend,
modify and supplement this Agreement in such manner as may be agreed upon
in writing between Buyer and the Shareholders.
11.7. Notice. All notices, requests, demands and other
communications hereunder shall be given in writing and shall be: (a)
personally delivered; (b) sent by telecopier, facsimile transmission or
other electronic means of transmitting written documents; or (c) sent to
the parties at their respective addresses indicated herein by registered
or certified U.S. mail, return receipt requested and postage prepaid, or
by private overnight mail courier service. The respective addresses to be
used for all such notices, demands or requests are as follows:
(a) If to Buyer, to:
Exide Electronics Group, Inc.
8521 Six Forks Road
Raleigh, NC 27615
Attention: Nicholas J. Costanza
Facsimile: (919) 870-3176
or to such other person or address as Buyer shall furnish to Shareholders
in writing.
(b) If to Shareholders, to:
Fiskars Oy Ab
Mannerheimintie 14 A
00101 Helsinki 10, Finland
Attention: Mr. Stig Stendahl
Facsimile: 011-358-0-644016
(with a copy to)
Mr. Ralf R. Boer
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, WI 53202-5367
Facsimile: (414) 297-4900
or to such other person or address as Shareholders shall designate in
accordance with this Agreement.
(c) If to Company, to:
Deltec Electronics Corporation
2727 Kurtz Street
San Diego, CA 92110
Attention: President
Facsimile: (619) 299-7205
(with a copy to)
Mr. Ralf R. Boer
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, WI 53202-5367
Facsimile: (414) 297-4900
Any notice to Company given after Closing shall also be given in the same
manner to Buyer.
If personally delivered, such communication shall be deemed delivered
upon actual receipt; if electronically transmitted pursuant to this
paragraph, such communication shall be deemed delivered the next business
day after transmission (and sender shall bear the burden of proof of
delivery); if sent by overnight courier pursuant to this paragraph, such
communication shall be deemed delivered upon receipt; and if sent by U.S.
mail pursuant to this paragraph, such communication shall be deemed
delivered as of the date of delivery indicated on the receipt issued by
the relevant postal service, or, if the addressee fails or refuses to
accept delivery, as of the date of such failure or refusal. Any party to
this Agreement may change its address for the purposes of this Agreement
by giving notice thereof in accordance with this Section.
11.8. Expenses. Regardless of whether or not the transactions
contemplated hereby are consummated:
11.8.(a) Brokerage. Except as to Raymond James & Associates,
Inc., who shall be compensated by the Shareholders and S.G. Warburg &
Co., Inc., who shall be compensated by Buyer, the Shareholders and Buyer
each represent and warrant to each other that there is no broker
involved or in any way connected with the transfer provided for herein
on their behalf respectively (and Shareholders represent and warrant
that there is no broker involved on behalf of Company) and each agrees
to hold the other harmless from and against all other claims for
brokerage commissions or finder's fees in connection with the execution
of this Agreement or the transactions provided for herein.
11.8.(b) Expenses to be Paid by Buyer. Buyer shall pay, and
shall indemnify, defend and hold Shareholders harmless from and against,
each of the following:
(i) Transfer Taxes. Any sales, use, excise, transfer or
other similar tax imposed with respect to the transactions provided
for in this Agreement, and any interest or penalties related
thereto.
(ii) HSR Act Fees. The filing fees relating to compliance
with the HSR Act.
(iii) Professional Fees. All fees and expenses of Buyer's
legal, accounting, investment banking and other professional
counsel in connection with the transactions contemplated hereby.
11.8.(c) Other Expenses. Except as otherwise provided herein,
each of the parties shall bear its own expenses and the expenses of its
counsel and other agents in connection with the transactions
contemplated hereby. All expenses of advisors and counsel for the
Company shall be borne by the Shareholders.
11.8.(d) Costs of Litigation. The parties agree that the
prevailing party in any action brought with respect to or to enforce any
right or remedy under this Agreement shall be entitled to recover from
the other party or parties all reasonable costs and expenses of any
nature whatsoever incurred by the prevailing party in connection with
such action, including without limitation attorneys' fees and
prejudgment interest.
11.9. Entire Agreement. This instrument embodies the entire
agreement between the parties hereto with respect to the transactions
contemplated herein, and there have been and are no agreements,
representations or warranties between the parties other than those set
forth or provided for herein.
11.10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.11. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
11.12. Facsimile Versions. Facsimile copies of this Agreement and
any documents or instruments contemplated hereby that contain signatures
shall be deemed to be original signed documents for purposes of this
Agreement and the Closing.
11.13. Glossary of Terms. The following sets forth the location of
definitions of capitalized terms defined in the body of this Agreement:
"Affiliate" - Section 3.6.(j)
"Agreement" - First Paragraph
"Ancillary Instruments" - Section 3.2.(a)
"Business" - Recitals
"Buyer" - First Paragraph
"Claim" - Section 8.1
"Closing" - Preamble to Article 9
"Closing Date" - Section 9
"Common Shares" - Section 1.1
"Company" - First Paragraph
"Deltec" - Section 2.1.(c)
"Disclosure Schedule" - Section 11.1
"Employee Plans/Agreement(s)" - Section 3.16.(a)
"Employees" - Section 3.16.(a)
"ERISA" - Section 3.16.(a)
"Facilities" - Recitals
"Fiskars" - First Paragraph
"Fiskars Company" - Section 3.1.(d)
"Government Entities" - Section 3.3
"Holdings" - First Paragraph
"HSR Act" - Section 3.3
"Indemnified Party" - Section 8.3.(a)
"Indemnifying Party" - Section 8.3.(a)
"Laws" - Section 3.3
"Lien" - Section 3.13.(a)
"Litigation" - Section 3.10
"Material Adverse Effect" - Section 3.6.(a)
"Orders" - Section 3.3
"Permitted Liens" - Section 3.13.(a)
"Preferred Shares" - Section 1.2
"Purchase Price" - Section 2.1
"Real Property" - Section 3.13.(b)
"Recent Balance Sheet" - Section 3.4
"Shareholder" - First Paragraph
"Shareholders' Knowledge" - Article 3 (Intro)
"Shares" - Recitals
"Subsidiary" - Section 3.1.(d)
"Trade Rights" - Section 3.18
"WARN" - Section 5.11
Where any group or category of items or matters is defined collectively
in the plural number, any item or matter within such definition may be
referred to using such defined term in the singular number.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
BUYER:
EXIDE ELECTRONICS GROUP, INC.
By: /s/ Nicholas J. Costanza
Name: Nicholas J. Costanza
Title: Vice President, Chief Administrative
Officer and General Counsel
DELTEC POWER SYSTEMS, INC.
By: /s/ Stig Stendahl
Name: Stig Stendahl
Title: Chairman
FISKARS OY AB
By: /s/ Stig Stendahl
Name: Stig Stendahl
Title: President
FISKARS HOLDINGS, INC.
By: /s/ Stig Stendahl
Name: Stig Stendahl
Title: President
Fiskars OY AB
Fiskars Holdings, Inc.
Deltec Power Systems, Inc.
Mannerheimintie 14 A
00101 Helsinki 10
FINLAND
February 9, 1996
Exide Electronics Group, Inc.
8521 Six Forks Road
Raleigh, North Carolina 27615
Re: Amendment to Stock Purchase Agreement dated November 16,
1995 (the "Stock Purchase Agreement")
Gentlemen:
We are parties to the Stock Purchase Agreement under the terms
of which Exide Electronics Group, Inc. ("Buyer") agreed to buy and Fiskars
OY AB ("Fiskars") and Fiskars Holdings, Inc. ("Holdings") (Fiskars and
Holdings are collectively referred to herein as "Shareholders") agreed to
sell all of the issued and outstanding capital stock of Deltec Power
Systems, Inc. ("Company"). This letter agreement may be referred to in
other writings as the "Amendment Agreement." Article 9 of the Stock
Purchase Agreement provides that the Closing of the transactions
contemplated by the Stock Purchase Agreement would take place at the
offices of the Company at the close of business on January 4, 1996, or at
such other time as we would mutually agree. The Closing did not occur on
January 4, 1996. At Buyer's request, we have agreed to extend the time
for Closing in consideration for amendments to the Stock Purchase
Agreement and certain financial concessions as follows:
1. The introductory paragraph of Article 9 of the Stock
Purchase Agreement is hereby amended to read in its entirety as follows:
"The closing of this transaction (the "Closing")
shall take place at the offices of the Company, 2727
Kurtz Street, San Diego, California, at the close of
business on the earlier of (i) the date that Buyer
closes on and is entitled to funding under its secured
term and revolving credit facility with J.P. Morgan &
Co., as agent bank, and its contemplated bond
financing, with aggregate net available funds of at
least $158,500,000 (collectively, the "Anticipated
Financing") or (ii) March 15, 1996. Such date is
referred to in this Agreement as the "Closing Date."
Time is of the essence as to the Closing."
2. In the event that the Closing of the transactions
contemplated by the Stock Purchase Agreement does not occur on or before
the close of business on March 15, 1996 for any reason whatsoever (other
than in the event Buyer makes a Buyer's Tender of Closing to Shareholders
on or before such date, Buyer shall have made all payments due under this
letter agreement, and the Shareholders fail to proceed with Closing on or
before such date), Buyer shall pay to Shareholders, as a break-up fee, $5
million, which shall be paid by wire transfer of immediately available
funds on the second business day following such date. In the event
payment is not made when due, such amount shall bear interest at a rate
per annum equal to five percent (5%) in excess of the prime lending rate
announced from time to time by Firstar Bank Milwaukee, N.A. (the "Prime
Rate"), which rate shall change as and when the Prime Rate changes. Such
break-up fee shall be paid to Shareholders in lieu of any other claims or
damages Shareholders may have as a result of Buyer's failure to close such
transactions, provided that if Buyer's failure to close did not result
from its inability (notwithstanding its good faith and reasonable efforts)
to obtain the Anticipated Financing, the Shareholders shall retain their
right to bring an action for specific performance to cause Buyer to close
such transactions. Such payment shall be made to the following account:
Skandinaviska Enskilda Banken, New York
Routing Number (ABA#): 026003036
For Further Credit to: Fiskars Oy Ab,
Account #3843
Contact: Alan Palmer (212) 907-4700
3. In consideration of the agreement of the Shareholders to
postpone Closing as provided in Section 1 hereof, Buyer shall pay the
Shareholders the following amounts:
(a) $1.5 million; and
(b) An amount equal to 12% per annum of $75 million
($24,658 per day) from January 19, 1996 until the earliest to occur
of the: (i) termination of the Stock Purchase Agreement in accordance
with its terms as amended by this Amendment ("Termination"), (ii)
Closing or (iii) March 15, 1996; and
(c) An amount equal to interest that would accrue at one
percent (1%) per annum in excess of the Prime Rate on $82.5 million
from January 19, 1996 until the earliest to occur of: (i)
Termination, (ii) Closing or (iii) March 15, 1996.
The sum of the amount described in Section 3(a), plus the
amounts described in Sections 3(b) and 3(c) for the period from January 19
through January 31, 1996, shall be paid by Buyer on Friday, February 9,
1996. The amounts accruing under Sections 3(b) and 3(c) for the period
after January 31 and before March 1, 1996 shall be paid on March 1, 1996
and for the period after February 29, 1996 and before Closing or March 15,
1996, as the case may be, shall be paid on the Closing Date or March 15,
1996, as the case may be. All such payments shall be made by a wire
transfer of immediately available funds to the account described in
Section 2 above. In the event that Buyer obtains bridge financing for the
cash portion of the Purchase Price payable to the Shareholders under the
Stock Purchase Agreement, and the transactions contemplated by the Stock
Purchase Agreement close on or before February 15, 1996, the Buyer may
credit against the cash Purchase Price payable to Fiskars at the Closing
one-half of the amount paid to the Shareholders pursuant to Section 3.(a)
hereof, provided that Buyer must obtain the consent of Shareholders to any
bridge financing that: (i) contains any warrants, options, stock or other
equity exercisable or issuable at less than market value when exercised or
issued and that dilute (or could dilute) Shareholders' interest in Buyer
to an extent unacceptable to Shareholders, or (ii) is not customary bridge
financing obtained from recognized financial institutions or investment or
merchant bankers.
4. Each of the parties to the Stock Purchase Agreement hereby
waives each and every one of the conditions precedent to its obligation to
proceed with Closing, provided that the following conditions precedent
shall remain in full force and effect: (i) the condition in Sections 6.2
and 7.2 to deliver the closing documents specified in Sections 9.1 and 9.2
(with the exception of the Compliance Certificates described in Sections
9.1(b) and 9.2(c)); and (ii) the condition that a party may refuse to
close if it has been enjoined from Closing by a court of competent
jurisdiction in an action not brought by the party asserting the condition
precedent. None of such waived conditions shall be asserted by any party
as a reason not to close the transactions contemplated by the Stock
Purchase Agreement. In the event Closing occurs, nothing in this
Amendment Agreement shall waive a party's rights to indemnity under
Article 8 of the Stock Purchase Agreement except to the extent of Claims
released pursuant to Section 1 of the Agreement Not to Sue or Interfere of
even date herewith among the parties.
5. [Intentionally left blank].
6. Buyer shall pay and indemnify and hold the Shareholders and
the Company harmless against all reasonable expenses of the Shareholders'
accountants, KPMG Peat Marwick and Price Waterhouse, in providing
supplemental financial information requested by Buyer for the Anticipated
Financing.
7. Buyer agrees to instruct its employees, consultants and
agents who may be dealing with the Company and its subsidiaries with
respect to coordination of technical developments, sales and marketing
programs and other matters that the transactions contemplated by the Stock
Purchase Agreement have not closed and that all such cooperative efforts
should be discontinued until Closing, except as provided below. Buyer, on
the one hand, and Shareholder and Company, on the other hand, hereby
confirm their respective duties to maintain information received from the
Shareholders and Company, on the one hand, and from Buyer, on the other
hand, confidential pursuant to those certain confidentiality agreements
executed and delivered prior to the Stock Purchase Agreement with respect
to all information that has been disclosed to Buyer or to Shareholder and
Company, or to their respective employees, consultants and agents or will
be disclosed to them as part of due diligence or otherwise as part of
these transactions. Notwithstanding the foregoing, Buyer and Deltec shall
continue to pursue two pending business transactions that involve (i)
Deltec manufacturing and selling certain products to Buyer on a private
label basis and (ii) a joint technical project related to combining Deltec
software and Buyer's hardware for the purpose of designing a product to
satisfy a supply contract with 3COM, provided that any disclosure by
Deltec to Buyer of any source code relating to Deltec's software shall be
subject to a special confidentiality agreement related to such software on
terms mutually acceptable to Deltec and Buyer. The Shareholders shall
cause Deltec: (i) to maintain any proprietary information received from
Buyer related to such development project confidential, (ii) not to use
such information without the written consent of Buyer in the event the
transactions contemplated by the Stock Purchase Agreement do not close,
and (iii) not to pursue (either singly or with others) a supply contract
with 3COM competitive with Buyer for the product(s) that is the subject of
the joint technical project described above. Each of Deltec and Buyer may
decide, in its absolute discretion, to enter into a joint supply
arrangement with the other party for the 3COM product, which supply
arrangement will be on reasonable and customary terms and conditions. In
addition, Shareholders and Company acknowledge and consent that Buyer may
continue to discuss the terms and conditions of post-closing employment
arrangements with the senior management of the Company.
8. Section 2.1 of the Stock Purchase Agreement is hereby
amended as follows:
(a) Section 2.1.(d) is restated as follows:
"To Fiskars, (i) 825,000 shares of Buyer's Common
Stock, valued at a fixed price of $20.00 per share and
(ii) 1,000,000 shares of Buyer's Series G Convertible
Preferred Stock (which stock shall have the rights,
privileges and preferences set forth on Schedule
2.1.(d) attached hereto), valued at a fixed price of
$20.00 per share;"
(b) The final sentence of Section 2.1 of the Stock
Purchase Agreement is restated as follows:
"Notwithstanding anything set forth in this Section
2.1, the aggregate cash consideration to be paid by
Buyer for the Shares pursuant to this Agreement shall
not, except as set forth in Section 2.3.(d) and 8.2,
exceed $158,500,000. In addition to the Purchase
Price for the Shares, Buyer shall pay to Fiskars at
the Closing, by wire transfer of immediately available
funds, the sum of $1,000,000 as reimbursement for
certain expenses incurred by the Shareholders in
connection with the negotiation, due diligence
investigation and closing of the transactions
contemplated by this Agreement."
9. Section 10.1. of the Stock Purchase Agreement is hereby
amended to read in its entirety as follows:
"10.1. Right of Termination. This Agreement may
be terminated at any time prior to the Closing:
10.1.(a) By mutual written agreement of
Buyer and Shareholders, or
10.1.(b) By Shareholders if the Closing
shall not have occurred on or before the close of
business on March 15, 1996 provided that, on such
date, Shareholders tendered or were prepared to
tender the documents described in Section 9.1 of
this Agreement other than the compliance
certificate described in Section 9.1.(b)
("Shareholders' Tender of Closing to Buyer") and
Buyer refused to close, or
10.1.(c) By Buyer if the Closing shall
not have occurred on or before the close of
business on April 15, 1996, provided that, on
such date, Buyer tendered or was prepared to
tender the payments and documents described in
Section 9.2 of this Agreement and the Amendment
Agreement other than the compliance certificate
described in Section 9.2.(c) ("Buyer's Tender of
Closing to Shareholders") and Shareholders
refused to close."
10. Section 10.2 of the Stock Purchase Agreement is hereby
restated as follows:
"10.2. Termination for Breach. Except as
provided in 10.1.(a) above, neither Buyer nor the
Shareholders may terminate this Agreement prior to
March 15, 1996, provided that Shareholders may
terminate the Agreement by written notice to Buyer, if
Buyer shall have failed to make any payment to
Shareholders required by Section 3 of that certain
Amendment Agreement, dated February 9, 1996, or Buyer
shall have failed to satisfy its obligation in Section
12 of such agreement,and such failure shall be
continuing on the date of Termination."
11. Section 1.1.(a) of that certain Stockholder Agreement that
is attached to the Stock Purchase Agreement as Schedule 9.1.(f) shall be
amended to delete the third sentence thereof and insert the following in
lieu thereof:
"The rights of Stockholder set forth herein will be
limited to one Stockholder Representative at any time
that the number of shares of Company Common Stock
beneficially owned by the Stockholder, when combined
with the number of shares of Company Common Stock that
could be obtained upon conversion of the Company
Series G Convertible Preferred Stock beneficially
owned by Stockholder (such combined number defined as
the "Imputed Common Stock Ownership"), equals less
than ten percent (10%) of the Company Common Stock
that would be outstanding upon such conversion without
taking into consideration any warrants, options, stock
or other equity issued in connection with the
Anticipated Financing (as defined in Article 9 of the
Purchase Agreement, as amended) except for Company
Common Stock issued pursuant to warrants, options or
other rights exercisable at a price at least equal to
the market value of such Common Stock on the date of
exercise (the "Financing Equity"), and the Stockholder
shall have no right to a Stockholder Representative at
any time that its Imputed Common Stock Ownership is
less than five percent (5%) of the Company Common
Stock that would be outstanding upon conversion of the
Series G Convertible Preferred Stock beneficially
owned by Stockholder without taking into consideration
the Financing Equity; provided, however, that the
ownership of the Company's Common Stock or Preferred
Stock by an entity controlling, controlled by or under
common control with the Stockholder with the prior
consent of the Company (which consent shall not be
unreasonably withheld), and which has agreed in a
writing delivered to the Company to be obligated as
the Stockholder hereunder (in the case of ownership of
Common Stock), shall be attributed to the Stockholder
for purposes of this 1.1.(a). The initial
Stockholder Representatives shall be Stig Stendahl and
Ralf Boer."
12. Buyer agrees to deliver to the Shareholders on or before
Thursday, February 15, 1996, a written commitment from J. P. Morgan & Co.
to extend its financial commitments to Buyer to finance the transactions
contemplated by the Stock Purchase Agreement until March 15, 1996.
Except as expressly amended by this letter agreement or the
Agreement Not to Sue or Interfere of even date herewith among the parties,
all other terms and conditions of the Stock Purchase Agreement remain in
full force and effect without amendment or modification. Capitalized
terms used but not defined herein shall have the meanings given them in
the Stock Purchase Agreement. This letter agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
Facsimile copies of this letter agreement that contain signatures shall be
deemed to be original signed versions for purposes of this letter
agreement.
If the foregoing is acceptable to you as an expression of our
agreement with respect to these matters, please sign a counterpart of this
letter and deliver it to the undersigned.
Sincerely yours,
FISKARS OY AB
By: /s/ Stig Stendahl
Title: President
FISKARS HOLDINGS, INC.
By: /s/ Stig Stendahl
Title: President
DELTEC POWER SYSTEMS, INC.
By: /s/ Stig Stendahl
Title: Chairman
The undersigned hereby confirms and agrees to the
terms of the foregoing Amendment Agreement this
9th day of February, 1996.
EXIDE ELECTRONICS GROUP, INC.
By: /s/Nicholas J. Costanza
Title: Vice President, Chief Administrative
Officer and General Counsel
<PAGE>
SCHEDULE 2.1.(d)
Terms of Preferred Stock
See Certificate of Designation of the Series G Convertible Preferred Stock
of Exide Electronics Group, Inc. attached hereto.
<PAGE>
CERTIFICATE OF DESIGNATION
OF THE
SERIES G PREFERRED STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware
The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted on February 9, 1996, by the Board of Directors (the "Board")
of EXIDE ELECTRONICS GROUP, INC., a Delaware corporation (the
"Corporation"), acting pursuant to the authority granted to the Board in
accordance with provisions of Section 151(g) of the General Corporation
Law of the State of Delaware, at a duly convened meeting of the Board at
which a quorum was present and acted throughout.
RESOLVED, that pursuant to the authority expressly granted to the
Board by the provisions of the Certificate of Incorporation of the
Corporation (the "Certificate of Incorporation"), there is hereby created
a Series G Convertible Preferred Stock, par value $.01 per share, which
shall consist of 1,000,000 shares of serial preferred stock (hereinafter
called the "Series G Preferred Stock"). The Series G Preferred Stock
shall have the following powers, designations, preferences and relative
participating, optional and other special rights, and the qualifications,
limitations and restrictions (in addition to the powers, designations,
preferences and relative, participating optional and other special rights,
and the qualifications, limitations or restrictions thereof, set forth in
the Certificate of Incorporation, which may be applicable to the serial
preferred stock) as follows:
A. Dividends
1. Cumulative. The holders of shares of Series G Preferred
Stock (hereinafter called the "Holders") shall be entitled to receive, out
of any assets at the time legally available therefor, cash dividends at
the rate of: (i) eighty cents ($0.80) per share per annum, and no more,
through March 31, 2001, and (ii) thereafter at a rate of one dollar twenty
cents ($1.20) per share, and no more. Dividends shall be payable in cash
quarterly, in arrears, commencing on June 30, 1996, and thereafter on the
last business day of March, June, September and December of each year that
any Series G Preferred Stock shall be outstanding. Such dividends are
prior and in preference to any declaration or payment of any distribution
(as defined below) on the common stock of the Corporation (the "Common
Stock"), and shall be prior and in preference to any declaration or
payment of any distribution on any other preferred stock of the
Corporation unless such stock is expressly senior to the Series G
Preferred Stock after written consent of Holders, which consent will not
be unreasonably withheld. Such dividends shall accrue on each share of
Series G Preferred Stock from day to day from the date of initial issuance
thereof whether or not earned, declared, or paid, and whether or not funds
are legally available therefor, so that if such dividends with respect to
any previous dividend period at the rate provided for herein have not been
paid on, or declared and set apart for, all shares of Series G Preferred
Stock at the time outstanding, the deficiency shall be fully paid on, or
declared and set apart for, such shares before any distribution shall be
paid on, or declared and set apart for Common Stock or any other series of
preferred stock except as aforesaid.
2. All cash dividends shall be paid by the Corporation to the
Holders except to the extent (but only to the extent) a payment would
cause the Corporation to violate any covenant or condition under any of
its credit or debt financing agreements. In the event any part or all of
a dividend payment will cause such violation, the Corporation will use
reasonable and good faith efforts to obtain waivers of compliance with its
debt covenants for the purpose of such dividend and will so notify the
Holders; provided, that such efforts shall not require the Corporation to
incur additional expenses, except for reasonable legal expenses related to
preparing such waivers.
3. The Corporation shall pay all cash dividends by certified
bank check or wire transfer.
4. For purposes of this Section (A), unless the context
otherwise requires, "distribution" shall mean the transfer of cash or
property without consideration, whether by way of dividend or otherwise,
or the purchase or redemption of shares of the Corporation (other than
repurchases of Common Stock held by directors, employees or consultants of
the Corporation upon termination of their directorship, employment or
services pursuant to agreements providing for such repurchase, which
agreements were either in effect prior to the Closing Date or in forms
which are customary and reasonable based on similar industry or
Corporation standards) for cash or property, including any such transfer,
purchase or redemption by a subsidiary of the Corporation.
B. Preference on Liquidation
1. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Holders of shares of
Series G Preferred Stock then outstanding shall be entitled to be paid,
out of the assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings, before any
payment shall be made in respect of the Common Stock (and before payment
with respect to any other series of preferred stock then in existence and
outstanding which is not expressly senior to the Series G Preferred Stock
as permitted by Section (A)), if any, an amount equal to Twenty Dollars
($20) per share of Series G Preferred Stock, plus all accrued and unpaid
dividends thereon to the date fixed for distribution. After setting apart
or paying in full the preferential amounts due to the Holders, the
remaining assets of the Corporation available for distribution to
stockholders, if any, shall be distributed exclusively to the holders of
Common Stock, each such issued and outstanding share of Common Stock
entitling the holder thereof to receive an equal proportion of said
remaining assets, unless the rights, preferences or privileges of another
series of preferred stock then in existence and outstanding has priority
over the Common Stock, in which case the holders of such preferred stock
would be entitled to receive assets prior to the receipt by holders of the
Common Stock as mandated by the terms of such preferred stock issue. If
upon the liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation available for distribution to its stockholders
shall be insufficient to pay the Holders the full amount to which they
shall be entitled, the Holders shall share ratably in any distribution of
assets according to the respective amounts which would be payable in
respect of the shares of Series G Preferred Stock held by them upon such
distribution if all amounts payable on or with respect to said shares were
paid in full.
2. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Corporation shall,
within ten (10) days after the date the Board of Directors approves such
action, or twenty (20) days prior to any stockholders' meeting called to
approve such action, or twenty (20) days after the commencement of any
involuntary proceeding, whichever is earlier, give each Holder initial
written notice of the proposed action by airmail or other express delivery
service. Such initial written notice shall describe the material terms
and conditions of such proposed action, including a description of the
stock, cash and property to be received by the Holders upon consummation
of the proposed action and the date of delivery thereof. If any material
change in the facts set forth in the initial notice shall occur, the
Corporation shall promptly give written notice by airmail or other express
delivery service to each Holder of such material change.
3. The Corporation shall not consummate any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation
before the expiration of thirty (30) days after the mailing by airmail or
other express delivery service of the initial notice or ten (10) days
after the mailing by airmail or other express delivery service of any
subsequent written notice, whichever is later; provided that any such 30-
day or 10-day period may be shortened upon the written consent of the
Holders of all of the outstanding shares of Series G Preferred Stock.
4. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation which will involve the
distribution of assets other than cash, the Corporation shall promptly
engage competent independent appraisers to determine the value of the
assets to be distributed to the Holders, the holders of shares of other
series of preferred stock then in existence and outstanding, if any, and
the holders of shares of Common Stock (it being understood that with
respect to the valuation of securities, the Corporation shall engage such
appraiser as shall be approved by the Holders of a majority of outstanding
shares of Series G Preferred Stock, which approval shall not be
unreasonably withheld). The Corporation shall, upon receipt of such
appraiser's valuation, give prompt written notice to each Holder of the
appraiser's valuation.
C. Voting
Except as otherwise required by law or as set forth herein, the
shares of Series G Preferred Stock shall be voted in accordance with any
stockholder agreement then in effect between the Corporation and the
Holder, and if no stockholder agreement is then in effect, such shares
shall be voted in the manner the Holders deem appropriate; in each case as
if it were Common Stock. Subject to the terms of any stockholders
agreement in effect, each Holder shall be entitled to such number of
votes for the Series G Preferred Stock held by the Holder on the record
date fixed for such meeting, or on the effective date of such written
consent, as shall be equal to the largest number of whole shares of the
Corporation's Common Stock into which all of the Holder's shares of Series
G Preferred Stock are convertible immediately after the close of business
on the record date fixed for such meeting or the effective date of such
written consent. Notwithstanding anything herein to the contrary, the
Holders shall be entitled to vote as a separate class for any changes in
the rights and privileges of the Series G Preferred Stock.
D. Conversion Rights
Each share of Series G Preferred Stock shall be convertible at any
time into fully paid and nonassessable shares of Common Stock of the
Corporation at the option of the Holder. The number of shares of Common
Stock into which each share of the Series G Preferred Stock may be
converted shall be determined by dividing the Original Purchase Price by
the Series G Conversion Price (determined as hereinafter provided) in
effect at the time of the conversion. The Original Purchase Price of the
Series G Preferred Stock is $20 per share. Subject to adjustment of the
Series G Conversion Price pursuant to Section (E), the Series G Preferred
Stock shall be convertible on a share-for-share basis into the
Corporation's Common Stock.
1. The Series G Conversion Price per share at which shares of
Common Stock shall be initially issuable upon conversion of any shares of
Series G Preferred Stock shall be twenty dollars ($20).
2. The Holder may exercise the conversion rights as to all
shares of Series G Preferred Stock owned by the Holder or any part thereof
by delivering to the Corporation during regular business hours, at the
office of any transfer agent of the Corporation for the Series G Preferred
Stock, or at the principal office of the Corporation or at such other
place as may be designated by the Corporation, the certificate or
certificates for the shares to be converted, duly endorsed for transfer to
the Corporation (if required by it), accompanied by written notice stating
that the Holder elects to convert such shares.
3. Conversion shall be deemed to have been effected on the
date when such delivery is made or to be made, and such date is referred
to herein as the "Conversion Date". As promptly as practicable after
delivery of the certificates representing Series G Preferred Stock to be
converted the Corporation shall issue and deliver to or upon the written
order of such Holder, at such office or other place designated by the
Holder, a certificate or certificates for the number of full shares of
Common Stock to which such Holder is entitled and a check for cash with
respect to any fractional interest in a share of Common Stock as provided
in subparagraph (4) of this Section (D). The Holder shall be deemed to
have become the holder of record of the Common Stock on the applicable
Conversion Date unless the transfer books of the Corporation are closed on
the date, in which event it shall be deemed to have become the holder of
record of the Common Stock on the next succeeding date on which the
transfer books are open, but the Series G Conversion Price shall be that
in effect on the Conversion Date. Upon conversion of only a portion of
the number of shares of Series G Preferred Stock represented by a
certificate surrendered for conversion, the Corporation shall issue and
deliver to or upon the written order of the Holder, at the expense of the
Corporation, a new certificate covering the number of shares of Series G
Preferred Stock representing the unconverted portion of the certificate so
surrendered.
4. No fractional shares of Common Stock or script shall be
issued upon conversion of shares of Series G Preferred Stock. If more
than one share of Series G Preferred Stock shall be surrendered for
conversion at any one time by the same Holder, the number of full shares
of Common Stock issuable upon conversion thereof shall be computed on the
basis of the aggregate number of shares of Series G Preferred Stock so
surrendered. Instead of any fractional shares of Common Stock which would
otherwise be issuable upon conversion of any shares of Series G Preferred
Stock, the Corporation shall pay a cash adjustment in respect of such
fractional interest equal to the fair market value of such fractional
interest as determined by the Corporation's Board of Directors.
5. At the time the Corporation delivers shares of Common Stock
to the Holder, the Corporation shall pay to the Holder the unpaid
dividends on the converted Series G Preferred Stock accrued through the
Conversion Date to the extent otherwise permitted in accordance with the
terms hereof, including without limitation, Section A.2 hereof. In the
event the payment of such unpaid dividends is not permitted in accordance
with the terms hereof, the Holder may elect, at the Holder's option, to
purchase additional shares of the Corporation's Common Stock with such
unpaid dividends at the Series G Conversion Price at which the Holder is
converting Series G Preferred Stock into the Corporation's Common Stock.
Such election shall be made by the Holder sending a written notice to the
Corporation within ten (10) days following the Corporation's failure to
pay such dividends. The Corporation shall deliver certificates for shares
of the Corporation's Common Stock so purchased as promptly as practicable
after receipt of the Holder's notice. Unpaid dividends that are not used
by the Holder to purchase the Corporation's Common Stock shall remain
accrued and outstanding and shall be paid at such time as the restrictions
against payment of such dividends no longer apply.
6. The Corporation shall pay any and all United States issue
and other taxes (other than taxes with respect to income, gain or
receipts) that may be payable in respect of any issue or delivery of
shares of Common Stock on conversion of Series G Preferred Stock pursuant
thereto. The Corporation shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which the
Series G Preferred Stock so converted were registered, and no such issue
or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of any such tax, or has
established, to the satisfaction of the Corporation, that such tax has
been paid.
7. The Corporation shall at all times reserve and keep
available, out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of Series G Preferred Stock, the full
number of shares of Common Stock deliverable upon the conversion of all
Series G Preferred Stock from time to time outstanding. The Corporation
shall from time to time (subject to obtaining necessary director and
stockholder action), in accordance with the laws of the State of Delaware,
increase the authorized amount of its Common Stock remaining unissued to
an amount that is sufficient to permit the conversion of all of the shares
of Series G Preferred Stock at the time outstanding.
8. All shares of Common Stock which may be issued upon
conversion of the shares of Series G Preferred Stock will upon issuance by
the Corporation be validly issued, fully paid and non-assessable and free
from all taxes, liens and charges with respect to the issuance thereof.
E. Adjustment of Series G Conversion Price
The Series G Conversion Price from time to time in effect shall be
subject to adjustment from time to time as follows:
1. Stock Splits, Dividends and Combinations.
In case the Corporation shall at any time subdivide the
outstanding shares of Common Stock, or shall issue a stock dividend on its
outstanding Common Stock, the Series G Conversion Price in effect
immediately prior to such subdivision or the issuance of such dividend
shall be proportionately decreased, and in case the Corporation shall at
any time combine the outstanding shares of Common Stock, the Series G
Conversion Price in effect immediately prior to such combination shall be
proportionately increased, effective at the close of business on the date
of such subdivision, dividend or combination, as the case may be.
2. Non-Cash Dividends, Stock Purchase Rights, Capital
Reorganizations and Dissolutions.
In case:
a. the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend,
or any other distribution, payable otherwise than in cash; or
b. the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to subscribe for or
purchase any shares of stock of any class or to receive any other rights;
or
c. of any capital reorganization of the Corporation,
reclassification of the capital stock of the Corporation (other than a
subdivision or combination of its outstanding shares of Common Stock),
consolidation or merger of the Corporation with or into another
corporation or conveyance of all or substantially all of the assets of the
Corporation to another corporation; or
d. of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then, and in any such case, the Corporation shall cause to be mailed to
the transfer agent for the Series G Preferred Stock and to the Holders of
record, at least ten (10) days prior to the date hereinafter specified, a
notice stating the date on which (x) a record is to be taken for the
purpose of such dividend, distribution or rights, or (y) such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation or winding up.
3. In the event the Corporation shall declare a distribution
payable in securities of other persons or evidences of indebtedness issued
by other persons, then, in each such case, the Holders shall be entitled
to the distributions at the rate provided for in Section (A) above before
any distribution shall be made to the holders of Common Stock, and no
adjustment to the Series G Conversion Price provided for in this
Section (E) shall be applicable.
4. The Corporation will not, by amendment of its Certificate
of Incorporation or through any reorganization, recapitalization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the Corporation, but will at all times in good faith assist in the
carrying out of all of the provisions of this Section (E) and in the
taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the Holders. In any such event, the
Series G Conversion Price shall be equitably adjusted, if necessary, to
reflect the effect on the Series G Preferred Stock and the Corporation's
Common Stock from any such events.
5. Upon the occurrence of each adjustment or readjustment of
the Series G Conversion Price pursuant to this Section (E), the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof, and prepare and furnish
to each Holder affected thereby a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the
written request at any time of any Holder, furnish or cause to be
furnished to such Holder a like certificate setting forth (A) such
adjustment or readjustment, (B) the Series G Conversion Price at the time
in effect, and (C) the number of shares of Common Stock and the amount, if
any, of other property which at the time would be received upon the
conversion of its shares.
6. Any shares of Series G Preferred Stock that are converted
shall resume the status of authorized but unissued shares of Series G
Preferred Stock.
7. So long as any shares of Series G Preferred Stock are
outstanding, the Corporation shall not, without first obtaining the
approval by vote or written consent, in the manner provided by law, of the
Holders of at least fifty-one percent (51%) of the total number of shares
of Series G Preferred Stock outstanding, voting separately as a class,
(a) reduce or eliminate any or all of the rights, preferences, privileges
and restrictions granted to or imposed upon the Series G Preferred Stock
or increase or decrease the authorized number of shares of Series G
Preferred Stock; or (b) amend the provisions of this paragraph (7);
provided, however, that the Corporation may, with the Holders' written
consent, which consent will not be unreasonably withheld, create new class
or series of shares of preferred stock senior to or on a parity with the
Series G Preferred Stock as to voting rights, dividends or a distribution
of assets of the Corporation in liquidation.
F. Redemption
1. Optional Redemption: Corporation.
At any time after March 31, 1996, if the Market Price, as defined
below, of the Corporation's Common Stock has exceecded $28 for thirty
(30) consecutive trading days ended within five (5) trading days prior to
the date of the Corporation's Call Notice, as defined below, the
Corporation may redeem any number of shares of Series G Preferred Stock
then outstanding at the following redemption prices per share:
Call Redemption Date Price Per Share
March 31, 1996 - March 30, 1997 $20
March 31, 1997 - March 30, 1998 26
March 31, 1998 and thereafter 24
plus an amount equal to any accrued, but unpaid dividends thereon through
the Call Redemption Date (such price per share plus the amount of such
dividends the "Call Redemption Price"); provided, however, that until the
Call Redemption Date, as defined below, the Holders shall have the option
to exercise their conversion right pursuant to Section (D) hereof, and in
the event and to the extent that such conversion right is exercised, the
Corporation's Call Notice shall be ineffective and not apply to the number
of shares of Series G Preferred Stock that are subject to such conversion.
For purposes of this Certificate, "Market Price" shall mean the closing
price of the Corporation's Common Stock as quoted on the NASDAQ National
Market System (or if the Corporation's Common Stock is no longer listed on
NASDAQ, as quoted on such other national exchange on which the Common
Stock is then traded).
If on any redemption date specified by the Corporation pursuant
to this paragraph 1 (hereinafter, the "Call Redemption Date"), more shares
of Series G Preferred Stock are outstanding than the Corporation has
called for redemption, the Corporation shall redeem shares of Series G
Preferred Stock pro rata based upon the number of outstanding shares of
Series G Preferred Stock then owned by each Holder.
(i) Notice of Redemption.
The Corporation shall specify a Call Redemption Date in a
written notice, which shall be sent by air mail or other express delivery
service, postage prepaid, to the Holders at least thirty (30) days prior
to such Call Redemption Date (the "Call Notice"). The Call Notice shall
be addressed to each Holder at the address of such Holder appearing on the
books of the Corporation or given by such Holder to the Corporation for
the purpose of notice, or if no such address appears or is so given, at
the place where the principal office of the Corporation is located. In
addition to the Call Redemption Date, the notice shall state the Call
Redemption Price, the number of shares of Series G Preferred Stock of such
Holder to be redeemed and shall call upon such Holder to surrender to the
Corporation on the Call Redemption Date at the place designated in the
notice such Holder's certificate or certificates representing the shares
of Series G Preferred Stock to be redeemed. Upon receipt of the Call
Notice by a Holder and at any time prior to the applicable Call Redemption
Date, the Holder may convert all or any shares of Series G Preferred Stock
then owned by the Holder, following which only the Holder's shares of
Series G Preferred Stock which have not been so converted may be redeemed
by the Corporation.
On the applicable Call Redemption Date, the Holder or Holders
shall surrender to the Corporation at a place designated by the
Corporation a certificate or certificates representing the shares of
Series G Preferred Stock to be redeemed (the "Redeemed Shares"). Upon
surrender of such certificate or certificates, the Corporation shall
transmit payment in full for each Holder's Redeemed Shares in the manner
in which cash dividends are paid hereunder.
2. Optional Redemption: Holder.
Any Holder may, at any time after September 30, 2006 require the
Corporation to repurchase and redeem all or any part of the Holder's
shares of Series G Preferred Stock (each Holder requesting such repurchase
and redemption, a "Requesting Holder").
The redemption price per share of Series G Preferred Stock
shall be twenty-four dollars ($24) per share plus an amount equal to any
accrued, but unpaid dividends thereon through the Holder Redemption Date
(the "Holder Redemption Price").
(i) Notice of Redemption.
Each Requesting Holder who desires to have Series G Preferred
Stock owned of record by such Requesting Holder redeemed by the
Corporation shall so specify in a written notice to the Corporation (the
"Holder Redemption Notice"). A Holder Redemption Notice shall be sent to
the Corporation at its principal of business by air mail or other express
delivery service, postage prepaid and within thirty (30) days from receipt
thereof the Corporation shall set a closing date for redemption of the
Requesting Holder's shares (the "Holder Redemption Date"). Further, upon
receipt of the Holder Redemption Notice, the Corporation shall promptly
notify all other Holders of the redemption request of a Requesting Holder
and of the applicable Holder Redemption Date (the Corporation Notice").
If any other Holders (collectively, the "Other Holders" ) desire the
Corporation to redeem all or any portion of the Series G Stock owned of
record by the Other Holders, each Other Holder shall send a Holder
Redemption Notice to the Corporation within ten (10) days after receipt of
the Corporation Notice.
On the applicable Holder Redemption Date, the Requesting Holder
and, if applicable, the Other Holders shall surrender to the Corporation
at a place designated by the Corporation a certificate or certificates
representing the shares of Series G Preferred Stock to be redeemed (the
"Redeemed Shares"). Upon surrender of such certificate or certificates,
the Corporation shall transmit payment in full for the Redeemed Shares in
the manner in which cash dividends are paid.
The Call Redemption Date and the Holder Redemption Date are
hereinafter called collectively the "Redemption Date" and the Call
Redemption Price and the Holder Redemption Price are hereinafter called
collectively the "Redemption Price".
Notwithstanding any provisions set forth in this Section (F),
the Corporation shall not redeem any shares of Series G Preferred Stock
pursuant to paragraph 1 of this Section (F) unless the Corporation (i) is
in compliance with all its debt covenants set forth in any and all credit
and debt financing agreements the Corporation is a party to, or (ii)
obtained a waiver of its compliance with any debt covenant which prevents
the Corporation from redeeming shares of Series G Preferred Stock pursuant
to paragraph 1 of this Section (F). Furthermore, the Corporation shall
redeem any shares of Series G Preferred Stock pursuant to Paragraph 2 of
this Section (F) except to the extent (but only to the extent) a
redemption of shares would cause the Corporation to violate any covenant
or condition under any of its credit or debt financing agreements. In the
event a redemption of any number of shares under Paragraph 2 of this
Section (F) will cause such violation, the Corporation will use reasonable
and good faith efforts to obtain waivers of compliance with its debt
covenants for the purpose of such redemption and will so notify the
Holders.
4. Termination of Rights After Redemption.
From and after the Redemption Date (unless default shall be made
by the Corporation in duly paying the Redemption Price, in which case all
the rights of the Holders of Redeemed Shares shall continue) the Holders
of the Redeemed Shares shall cease to have any rights as Holders of such
Redeemed Shares except the right to receive, without interest, the
Redemption Price thereof upon surrender of certificates representing the
shares of Series G Preferred Stock, and such shares shall not thereafter
be transferred (except with the consent of the Corporation) on the books
of the Corporation and shall not be deemed outstanding for any purpose
whatsoever. Any money deposited for payments of the Redemption Price
which is unclaimed by a Holder for two (2) years after the Redemption
Date, as of the case may be, thereof shall be returned to the Corporation.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
to be executed by ___________, its ___________, and attested by _________,
its Secretary, this ____ day of February, 1996.
EXIDE ELECTRONICS GROUP, INC.
BY:____________________________
Name:
Title:
ATTEST:
By:________________________
Name:
Title: Secretary
STOCKHOLDER AGREEMENT
Dated
March 13, 1996
By and Between
EXIDE ELECTRONICS GROUP, INC. ("Company")
and
FISKARS OY AB ("Stockholder")
<PAGE>
TABLE OF CONTENTS
1. CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Board Membership . . . . . . . . . . . . . . . . . . . 1
1.2. Voting of Company Securities . . . . . . . . . . . . . 2
1.3. Restrictions on Other Actions of Stockholder . . . . . 3
2. RESTRICTIONS ON ACQUISITIONS AND OWNERSHIP OF COMPANY
SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1. First Tier Limitations . . . . . . . . . . . . . . . . 5
2.2. Second Tier Limitations . . . . . . . . . . . . . . . 5
3. RESALE OF COMPANY SECURITIES . . . . . . . . . . . . . . . . . . 5
3.1. Open Market Sales . . . . . . . . . . . . . . . . . . 5
3.2. Private Sales . . . . . . . . . . . . . . . . . . . . 6
3.3. Right of First Refusal . . . . . . . . . . . . . . . . 6
3.4. Tender Offers . . . . . . . . . . . . . . . . . . . . 7
3.5. Restrictions Following Offerings . . . . . . . . . . . 9
3.6. Registration Rights . . . . . . . . . . . . . . . . . 9
3.7. Indemnification in Connection with
Registration Statements . . . . . . . . . . . . . . . 11
3.8. Filings with the Securities and Exchange
Commission . . . . . . . . . . . . . . . . . . . . . . 13
4. REPRESENTATIONS, WARRANTIES AND INDEMNITIES . . . . . . . . . . 13
4.1. Representations and Warranties . . . . . . . . . . . . 13
4.2. Indemnification . . . . . . . . . . . . . . . . . . . 14
5. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.1. Press Releases . . . . . . . . . . . . . . . . . . . . 14
5.2. Confidentiality . . . . . . . . . . . . . . . . . . . 15
5.3. Specific Performance . . . . . . . . . . . . . . . . . 15
5.4. Notices . . . . . . . . . . . . . . . . . . . . . . . 15
5.5. Invalid or Unenforceable Provisions . . . . . . . . . 16
5.6. Benefit and Burden . . . . . . . . . . . . . . . . . . 16
5.7. Gender . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8. Changes; Waiver . . . . . . . . . . . . . . . . . . . 16
5.9. Entire Agreement . . . . . . . . . . . . . . . . . . . 16
5.10. Governing Law; Forum for Disputes . . . . . . . . . . 17
5.11. Headings . . . . . . . . . . . . . . . . . . . . . . . 17
5.12. Term of Agreement . . . . . . . . . . . . . . . . . . 17
5.13. Obligations in the Event of Certain Breaches . . . . . 17
STOCKHOLDER AGREEMENT
This Stockholder Agreement (the "Agreement") is dated the 13th
day of March, 1996, by and between EXIDE ELECTRONICS GROUP, INC. (the
"Company"), a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware with its principal place
of business at 8521 Six Forks Road, Raleigh, North Carolina, and FISKARS
OY AB, a Finnish corporation, having its principal place of business at
Mannerheimintie 14 A, 00101 Helsinki 10 Finland (the "Stockholder").
WHEREAS, the Company has sold to the Stockholder 1,875,000
shares of its Common Stock (such shares together with any shares received
by the Stockholder with respect to such shares are collectively referred
to herein as the "Shares") pursuant to a Stock Purchase Agreement entered
into as of November 16, 1995 (the "Purchase Agreement"); and
WHEREAS, the Company agreed to sell the Shares to the
Stockholder, and to amend its Shareholder Rights Plan, dated as of
November 25, 1992, by and between the Company and First Union National
Bank of North Carolina (the "Shareholder Rights Plan"), to permit the
Stockholder's purchase of the Shares, on the express condition that the
Stockholder agree to certain restrictions on its control, voting, transfer
and acquisition rights.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
1. CONTROL
1.1. Board Membership
(a) Election of Directors. The Stockholder shall
designate two (2) persons (the "Stockholder Representatives") to be
elected as members of the Company's Board of Directors (the "Board"), and
the Company shall nominate each Stockholder Representative for election as
a director of the Company, and use its best efforts to cause each
Stockholder Representative to be so elected. In the event a Stockholder
Representative's position as a director is terminated for any reason (a
"Terminated Stockholder Director"), such Terminated Stockholder Director's
position on the Board, and any committees thereof, shall be filled
promptly by a successor Stockholder Representative nominated by
Stockholder and approved in accordance with the Company's Bylaws and
Certificate of Incorporation. The rights of Stockholder set forth herein
will be limited to one Stockholder Representative at any time that the
number of shares of Company Common Stock beneficially owned by the
Stockholder, when combined with the number of shares of Company Common
Stock that could be obtained upon conversion of the Company Series G
Convertible Preferred Stock beneficially owned by Stockholder (such
combined number defined as the "Imputed Common Stock Ownership"), equals
less than ten percent (10%) of the Company Common Stock that would be
outstanding upon such conversion without taking into consideration any
warrants, options, stock or other equity issued in connection with the
Anticipated Financing (as defined in Article 9 of the Purchase Agreement,
as amended) except for Company Common Stock issued pursuant to warrants,
options or other rights exercisable at a price at least equal to the
market value of such Common Stock on the date of exercise (the "Financing
Equity"), and the Stockholder shall have no right to a Stockholder
Representative at any time that its Imputed Common Stock Ownership is less
than five percent (5%) of the Company Common Stock that would be
outstanding upon conversion of the Series G Convertible Preferred Stock
beneficially owned by Stockholder without taking into consideration the
Financing Equity; provided, however, that the ownership of the Company's
Common Stock or Preferred Stock by an entity controlling, controlled by or
under common control with the Stockholder with the prior consent of the
Company (which consent shall not be unreasonably withheld), and which has
agreed in a writing delivered to the Company to be obligated as the
Stockholder hereunder (in the case of ownership of Common Stock), shall be
attributed to the Stockholder for purposes of this 1.1.(a). The initial
Stockholder Representatives shall be Stig Stendahl and Ralf Boer. Upon
the Company's request following an event resulting in the limitation or
loss of Stockholder's rights to Stockholder Representative(s), the
Stockholder will cause one or both of the Stockholder Representatives, as
the case may be, to resign as a director. The Board, other than the
Stockholder Representatives, will have the right to approve any
Stockholder Representative nominated by the Stockholder, provided that
such approval will not be unreasonably withheld, and provided further that
in the event any Stockholder Representative is not so approved,
Stockholder shall continue to nominate Stockholder Representatives until
such approval is granted.
(b) Special Meetings of Board of Directors. The
Stockholder shall cause the Stockholder Representative not to call, and
not to participate in calling a special meeting of the Board, but once a
Special Meeting is called, the Stockholder Representative may participate
in such meeting subject to the terms of this Agreement.
1.2. Voting of Company Securities
(a) Election of Directors. The Stockholder shall vote the
Shares and all other securities of the Company owned or controlled by it
(whether acquired by open market purchase or otherwise) (the Shares and
all such other securities so owned or controlled being referred to
hereinafter collectively as "Company Securities") in favor of the election
of directors nominated by the Board.
(b) Stockholder Matters. On all matters on which a
stockholder vote or stockholder action is requested, the Stockholder shall
vote (or otherwise consent with respect to) all Company Securities in
accordance with the recommendations of the Board.
(c) Representation of Shares. The Stockholder will cause
all Company Securities to be present in person or by proxy and represented
at all meetings of the Company's stockholders called by the Board, and
will cause the Company Securities to be voted in accordance with the
provisions of this Agreement at all meetings of stockholders and on all
matters acted upon by stockholders of the Company by written consent.
1.3. Restrictions on Other Actions of Stockholder
(a) Special Meeting of Stockholders. The Stockholder will not
call or participate, directly or indirectly, in calling any special
meeting of stockholders which has not been called or approved by the
Board.
(b) Stockholder Proposals. The Stockholder will not submit,
directly or indirectly, any stockholder proposal for approval at any
meeting of stockholders or by consent of stockholders.
(c) Proxy Solicitation. The Stockholder will not initiate,
encourage or cooperate or participate, directly or indirectly, in any
proxy solicitation on behalf of any person other than the Company, the
Board or a person whose solicitation is supported by the Board.
(d) Corporate Transactions. Except as permitted by Article 2
of this Agreement, the Stockholder will not initiate, encourage or
cooperate or participate in, directly or indirectly, any proposal (i) to
acquire the Company; (ii) to acquire a substantial portion of the Company
assets; or (iii) to merge, restructure, combine or recapitalize the
Company, unless such proposal is supported by the Board.
(e) Formation of Exchange Act "Group". Except by reason of a
transfer or transfers to an entity controlling, controlled by or under
common control with the Stockholder as contemplated in Section 1.1(a)
hereof, the Stockholder will not form, join, or in any way participate,
directly or indirectly (other than with a wholly-owned subsidiary of the
Stockholder) in a "Group" within the meaning of Section 13(e)(3) of the
Securities Exchange Act of 1934, or any other similar or successor
provision with respect to any securities of the Company.
(f) Acquisition Financings. The Stockholder will not arrange,
or in any way participate in, the financing of any third party, the
proceeds of which will be used for the purchase of any voting securities
or securities convertible or exchangeable into or exercisable for any
voting securities or assets of the Company.
(g) Exercise of Control. The Stockholder will not otherwise
seek or propose to influence or control the Company's management or
policies (other than through the Stockholder Representatives or the voting
of Company Securities, in each case as contemplated by this Agreement).
(h) Communications with Employees. Other than through the
Stockholder Representatives' service on the Board, the Stockholder will
not seek to retain, hire or negotiate or influence the terms and
conditions of employment of, employees of the Company.
(i) Efforts to Amend Agreement. The Stockholder will not (i)
request the Company directly or indirectly to amend or waive any provision
of Articles 1, 2 or 3 of this Agreement or (ii) take any action designed
to or which can reasonably be expected to require the Company to make a
public announcement regarding its discussions with the Stockholder or its
position regarding a possible merger or other extraordinary transaction
involving the Company.
(j) Actions by Third Parties. The Stockholder will not enter
into any discussions, negotiations, arrangements or understandings with or
advise, assist, encourage or cooperate with any third party with respect
to any of the acts specified in Article 1 of this Agreement or take,
assist, encourage or cooperate in any other action that is inconsistent
with the terms of this Agreement.
(k) Actions Regarding Shareholder Rights Plan. After the date
hereof, the Stockholder will not make any request to the Company, or take
any other action with the intent and for the purpose of causing the
Company to amend the Shareholder Rights Plan (other than through the
Stockholder Representatives or the voting of Company Securities, in each
case as contemplated by this Agreement).
(l) Actions by Stockholder Representatives. Stockholder shall
cause the Stockholder Representatives not to vote or take any other action
that would approve, ratify or otherwise further any transaction or action
which the Stockholder is prohibited or restricted from taking under this
Agreement.
2. RESTRICTIONS ON ACQUISITIONS AND OWNERSHIP OF COMPANY SECURITIES
2.1. First Tier Limitations
For a period of five (5) years from the date of this Agreement,
neither the Stockholder nor any of its affiliates shall directly or
indirectly, through one or more transactions or acting in concert with
other persons, companies or other entities, offer to acquire or acquire
any securities of the Company, except for such securities the acquisition
of which is contemplated by this Agreement or results solely from action
by the Board (with the Stockholder Representatives abstaining), or results
solely from the provisions of the Company's Certificate of Incorporation
or Bylaws.
2.2. Second Tier Limitations
For a period commencing on the date the restrictions in Section
2.1 of this Agreement expire, and for as long as the Stockholder or any of
its affiliates owns or holds any Company Securities, in addition to the
circumstances under which the Stockholder may acquire securities under
Section 2.1, the Stockholder will be permitted to offer to acquire or
acquire additional securities of the Company only with the prior approval
of the Board (with the Shareholder Representatives abstaining), and only
if the following conditions are met: (i) such acquisition is made pursuant
to an offer to acquire all of the Company's equity securities; (ii) the
purchase price therefor is supported by a written fairness opinion,
addressed to the Board, from a recognized investment banking firm selected
by the Company; and (iii) the acquisition is conditioned upon the
acceptance of the offer by not less than eighty percent (80%) of the
outstanding shares of Common Stock not held by the Stockholder and its
affiliates.
3. RESALE OF COMPANY SECURITIES
3.1. Open Market Sales
For a period of five (5) years from the date of this Agreement,
the Stockholder will make open market sales of Company Securities only (i)
pursuant to a registration statement filed by the Company in accordance
with the rules and regulations of the Securities Act of 1933 (the
"Securities Act") or (ii) in volumes not exceeding the limitations set
forth in Rule 144(e)(1) under the Securities Act (whether or not the
Stockholder's sales of Company Securities are then subject to Rule 144)
and, in the case of this clause (ii), otherwise in accordance with Rule
144 under the Securities Act to the extent applicable.
3.2. Private Sales
For a period of five (5) years from the date of this Agreement,
and subject to Section 3.4 of this Agreement, the Stockholder may Transfer
(as defined below) Company Securities in transactions other than in the
open market only upon receipt of a bona fide written offer (a "Third Party
Offer") from someone who is not affiliated with the Stockholder
("Offeror"), and only after first offering such Company Securities to the
Company in accordance with the provisions of Section 3.3 of this
Agreement.
3.3. Right of First Refusal
(a) Offer to Company. If the Stockholder receives from an
Offeror a Third Party Offer for any or all of the Company Securities, then
before accepting such Third Party Offer, the Stockholder shall first offer
to the Company the Company Securities proposed to be Transferred at an
offering price that shall be the same as, and on the same terms and
conditions as, those contained in the Third Party Offer, or if the Third
Party Offer provides for non-cash consideration or other terms and
conditions not practically obtainable by the Company, then for
consideration and upon terms and conditions substantially equivalent to
those contained in the Third Party Offer. The offer shall be made by a
written offer notice to the Company, which offer notice shall be
accompanied by a copy of the Third Party Offer and shall describe the
identity and background of the Offeror. The Company shall have thirty
(30) days after the date of receipt of such offer notice (the "Election
Period") within which to elect to purchase all of the Company Securities
proposed to be Transferred. Such election shall be made by a written
notice of election given to the Stockholder by or on behalf of the
Company. In such notice of election, the Company shall set a closing date
not more than thirty (30) days after expiration of the Election Period.
(b) Acceptance by Company. At the closing of such purchase by
the Company, the Stockholder shall deliver to the Company certificates
evidencing the number of Company Securities being purchased, in valid form
for transfer with appropriate duly executed assignments, stock powers or
endorsements, bearing any necessary documentary stamps and accompanied by
such certificate of authority, tax releases, consents to transfer or other
instruments or evidences of the good title of Stockholder to such Company
Securities as may reasonably be requested by Company, and the Company
shall pay to the Stockholder the purchase price therefor in immediately
available funds or by certified check. Nothing in this Agreement shall be
deemed to create any obligation for the Company to elect to purchase
Company Securities under this Agreement.
(c) Non-Acceptance by Company. If the Company shall not elect,
pursuant to the terms of this Agreement, to purchase all of the Company
Securities proposed to be Transferred, or shall elect to purchase such
Company Securities but fail to close the purchase on the closing date,
then the Stockholder shall be free to a period of sixty (60) days after
expiration of the Election Period (or the failure to purchase on the
closing date, if applicable) to sell such Company Securities to the
Offeror under terms and conditions and at a price no less favorable to the
Stockholder than those contained in the Third Party Offer. If such
Company Securities are not so sold by the Stockholder within such 60-day
period, all rights of Stockholder to Transfer such Company Securities free
of the restriction in this Agreement shall thereupon terminate, and such
restrictions shall again apply to such Company Securities.
(d) Definition of "Transfer". For purposes of this Agreement,
the term "Transfer" shall include a sale, gift, assignment or other
disposition, whether direct or indirect (including without limitation
transfer of direct or indirect control over an entity holding Company
Securities), including a disposition under judicial order, legal process,
execution or attachment or enforcement of a pledge trust or other
encumbrance; provided that the term "Transfer" shall not include a
transfer or transfers to an entity controlling, controlled by or in common
control with the Stockholder as contemplated in Section 1.1(a) hereof.
3.4. Tender Offers
(a) For so long as the Stockholder shall own or hold any of the
Shares, the Stockholder will not tender any Company Securities in any
tender or exchange offer by a person or entity other than the Company or
any affiliate of the Company (the "Bidder") except under the following
circumstances:
(i) The Board (with Stockholder Representatives
abstaining) recommends that shareholders accept such tender or
exchange offer;
(ii) In connection with such tender or exchange offer, the
Board (with Stockholder Representatives abstaining) redeems the
outstanding rights under the Shareholder Rights Plan; or
(iii) During, prior to or in anticipation of, a tender or
exchange offer, the Board (with Stockholder Representatives
abstaining) exempts the Bidder from the operation of the
Shareholder Rights Plan.
(b) In the event (i) Stockholder is prohibited by Section
3.4(a) hereof from tendering or exchanging Company Securities into a
tender or exchange offer which is consummated without the favorable
recommendation of the Board ("Consummated Offer") and, as a result of the
Consummated Offer, the Bidder beneficially owns more than 50 percent (50%)
of the outstanding voting securities of the Company, and (ii) Stockholder
within ninety (90) days of the Consummated Offer sells or otherwise
disposes of Company Securities in a merger or other transaction in which
the Company or a successor or affiliate is a party for a per share or per
unit price which is less than the highest per share or other per unit
price offered by the Bidder in the tender or exchange offer, then within
thirty (30) days following such sale or other disposition, Company shall
pay to Stockholder an amount equal to (i) the difference between the
highest price per share or other per unit price offered by the Bidder in
the tender or exchange offer and the per share or per unit price for which
the Stockholder sold its Company Securities, multiplied by (ii) the number
of shares or other units of Company Securities sold or disposed of by
Stockholder within such ninety (90) day period.
(c) In the event (i) Stockholder is prohibited by Section
3.4(a) hereof from tendering or exchanging any Company Securities into a
tender or exchange offer which results in a Consummated Offer and, as a
result of the Consummated Offer, the Bidder beneficially owns more than
fifty percent (50%) of the outstanding voting securities of the Company
and (ii) the Stockholder has not sold all of its Company Securities within
ninety (90) days following the consummation of the Consummated Offer, then
within one hundred twenty (120) days following the consummation of the
Consummated Offer, Company shall pay to Stockholder in cash an amount
equal to (i) the sum of the highest per share or other per unit price paid
by the Bidder in the Consummated Offer, less the average of the last
reported sales price per share of Common Stock and/or other Company
Security if listed on The Nasdaq Stock Market or the average closing price
per share of Common Stock and/or other Company Security if listed on a
national securities exchange for the thirty (30) consecutive trading days
immediately preceding the fifth business day prior to the commencement of
the tender or exchange offer (or if such Shares or other Company
Securities subject to the tender or exchange offer are not listed on The
Nasdaq Stock Market or on a national securities exchange, the fair market
value of a share of Common Stock and/or unit of other Company Security
subject to the tender or exchange offer, calculated as of the fifth
business day immediately prior to the commencement of such tender or
exchange offer, as determined by an independent appraiser with an
established national reputation for appraising businesses selected by
mutual agreement of Company and Stockholder, or in the absence of such
mutual agreement, selected by Price Waterhouse LLP), multiplied by (ii)
the number of Shares and/or other Company Securities subject to the tender
or exchange offer held by Stockholder on the one hundred and twentieth
(120th) day following consummation of the Consummated Offer.
(d) In the event of an exchange offer or a tender offer other
than an all cash tender offer, the "highest per share or other per unit
price paid by the Bidder" as such phrase applies to non-cash consideration
paid by the Bidder, shall mean the fair market value of such non-cash
consideration calculated on a per share or per unit basis, as the case may
be, as of the time of the applicable payment, as determined by an
independent appraiser with an established national reputation for
appraising businesses selected by mutual agreement of the Company and
Stockholder, or in the absence of such mutual agreement, selected by Price
Waterhouse LLP.
3.5. Restrictions Following Offerings
For so long as the Stockholder shall own or hold any of the
Shares, the Stockholder will agree to reasonable and customary "lock-up"
restrictions on the resale of Company Securities during or following a
registered public offering of any securities of the Company, provided that
such restrictions do not apply for more than one hundred fifty (150) days
following the completion of such registered public offering and that such
restrictions are also agreed to by the Company and all of its affiliates,
directors and executive officers whose agreement is deemed necessary by
the underwriters of such offering.
3.6. Registration Rights
(a) Piggyback Registration. If at any time that the
Stockholder owns or holds Shares, the Company proposes to file a
registration statement under the Securities Act with respect to an
offering of Common Stock solely for cash (other than a registration
statement (i) on Form S-8 or any successor form to such form or in
connection with any employee or director welfare, benefit or compensation
plan; (ii) on Form S-4 or any successor form to such form or in connection
with an exchange offer; (iii) in connection with a rights offering
exclusively to existing holders of Common Stock; (iv) in connection with
an offering solely to employees of the Company or its Subsidiaries; or (v)
relating to a transaction pursuant to Rule 145 under the Securities Act),
whether or not for its own account, the Company shall give prompt written
notice of such proposed filing to the Stockholder. The notice referred to
in the preceding sentence shall constitute an offer by Company to the
Stockholder of the opportunity to register such number of Shares as the
Stockholder may request (a "Piggyback Registration"). The Company shall
include in the Piggyback Registration and in any underwriting in
connection therewith all Shares for which the request is received by the
Company within fifteen (15) calendar days after the notice referred to
above has been given by the Company. The Stockholder shall be permitted
to withdraw all or part of the Shares from a Piggyback Registration at any
time prior to the effective date of such Piggyback Registration or, if the
Piggyback Registration is for an underwritten offering prior to the
execution of an underwriting agreement by Stockholder and Company. If a
Piggyback Registration is an underwritten primary registration on behalf
of the Company and the managing underwriter advises the Company that the
total number of Shares requested to be included in such registration, when
combined with the shares of Common Stock that the Company otherwise
proposes to register, would create a substantial risk of materially
reducing the proceeds of the offering or price per share of the Common
Stock to be offered, the number of Shares requested to be included by
Stockholder in any such Piggyback Registration shall be reduced on a pro
rata basis among Stockholder and any other stockholder also requesting
participation in such Piggyback Registration.
(b) Demand Registration. Upon a written request of the
Stockholder, the Company shall file a registration statement with the
Securities and Exchange Commission within sixty (60) days of receipt of
such written request for registration under the Securities Act of all or
part of its Shares; provided, however, that the Company shall not be
obligated to file a registration statement hereunder until October __,
1996. Any such request by the Stockholder shall specify the aggregate
number of Shares proposed to be sold and shall also specify the intended
method of disposition thereof; provided, however, that the Stockholder's
demand shall be for registration of at least twenty-five percent (25%) of
the Shares owned by Stockholder as of the date hereof or three percent
(3%) of the Company's then outstanding shares of Common Stock, whichever
is less. The Company shall use its best efforts to keep the registration
statement effective until the earlier of six (6) months after the date of
effectiveness of the registration statement or until the Stockholder has
sold the number of Shares for which it requested registration. The
Stockholder shall not be entitled to make a demand pursuant to this
Section 3.6 more than two (2) times; provided, however, that if no
registration statement is declared effective with respect to a demand
which the Stockholder has made (other than because the Stockholder has
requested that the registration statement not be declared effective) that
demand shall not be counted for purposes of this limit. The Company may
defer filing a registration statement pursuant to this Section 3.6 for up
to ninety (90) days if in the good faith reasonable judgment of the Board
the filing of such registration statement would create a material adverse
effect on any material Company financing planned or contemplated or,
pursuant to a written opinion of Company's legal counsel, require the
Company to disclose non-public information, the disclosure of which would,
in the good faith reasonable judgment of the Board, have a material
adverse effect on the Company.
(c) Registration Procedures.
(i) The Company shall have no obligation to include Shares
in a registration statement pursuant to this Section 3.6 unless
and until the Stockholder has furnished the Company with all
information and statements about or pertaining to the
Stockholder in such reasonable detail and on such timely basis
as is reasonably deemed by the Company to be necessary or
appropriate for the preparation of the registration statement.
(ii) The Company shall take such action to list the Shares
to be registered hereunder on any securities exchange on which
the Common Stock is registered.
(iii) In connection with any registration hereunder,
Company shall use its best efforts to register and qualify the
Shares to be registered under such other securities or blue sky
laws of such jurisdictions as Stockholder shall request,
provided, however, that the Company will not be required to do
any of the following: (i) qualify generally to do business in
any jurisdiction where it would not be required but for this
Section 3.6(c); (ii) subject itself to taxation in any such
jurisdiction; or (iii) file any general consent to service of
process in any such jurisdiction.
(iv) Company shall immediately notify Stockholder of the
happening of any event of which it has knowledge as a result of
which the prospectus included in a registration statement filed
pursuant to a Demand Registration or Piggyback Registration, as
then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in
the light of the circumstances then existing.
(v) Company shall take such other actions required to
register the Shares hereunder as Stockholder may reasonably
request.
(d) Registration Expenses. If Shares are included in a
registration statement filed by the Company, the Stockholder shall pay all
transfer taxes, if any, relating to the sale of the Shares, the fees and
expenses of its own counsel, and its pro-rata share of any underwriting
discounts or commissions or the equivalent thereof. Company shall pay all
other costs and expenses associated with any Demand Registration or
Piggyback Registration, including, without limitation, all registration
and filing fees, fees and expenses of compliance with Blue Sky laws,
printing expenses, messenger and delivery expenses, and fees and expenses
of counsel for the Company and all independent certified public
accountants and other persons retained by the Company.
3.7. Indemnification in Connection with Registration Statements
(a) In connection with any Demand Registration or any Piggyback
Registration pursuant to this Agreement, Stockholder shall indemnify and
hold harmless Company and any underwriters (as defined in the Securities
Act) of such offering and their respective officers, directors and
controlling persons (within the meaning of either the Securities Act or
the Securities Exchange Act of 1934, as amended) from any and all loss,
liability, claims, damages and expenses (including reasonable attorneys
fees and disbursements) incurred by them insofar as such losses,
liabilities, claims, damages and expenses arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the registration statement or prospectus covering the Shares
to be sold or arise out of or are based upon the omission or alleged
omission to state therein 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; provided, however, that
Stockholder shall only be liable in any such case to the extent that any
such loss arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with information relating to such
Stockholder as furnished in writing to Company or any underwriter by or on
behalf of Stockholder expressly for use in the registration statement or
prospectus covering the Shares to be sold. Except to the extent set forth
in the foregoing sentence, Company shall indemnify and hold harmless
Stockholder, its respective officers, directors, partners and controlling
persons (within the meaning of either the Securities Act or the Securities
Exchange Act of 1934, as amended) participating in the Demand Registration
or any Piggyback Registration from any and all loss, liability, claims,
damages and expenses (including reasonable attorneys' fees and
disbursements) incurred by them insofar as such losses, liabilities,
claims, damages and expenses arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact furnished by
Company for use in such registration statement or prospectus related
thereto or arise out of or are based upon the omission or alleged omission
to state therein a material fact pertaining to Company and required to be
stated therein or necessary to make the statements made therein, in light
of the circumstances in which they were made, not misleading. The
indemnification provided by this Section 3.7 shall be a continuing right
to indemnification and shall survive the registration and sale of any
securities by Stockholder or any other person entitled to indemnification
hereunder.
(b) If the indemnification provided for in Section 3.7 is held
by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other hand in connection with the statements or
omissions which resulted in such loss, liability, claims, damage or
expenses as well as any other relevant equitable considerations. The
relevant fault of the indemnifying party and the indemnified party shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or
by the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. Notwithstanding the foregoing, the amount Stockholder shall
be obligated to contribute pursuant to this Section 3.7 shall be limited
to an amount equal to the proceeds to such Stockholder from the sale of
Shares sold pursuant to the registration statement which gives rise to
such obligation to contribute (less the aggregate amount of any damages
which Stockholder has otherwise been required to pay in respect of such
loss, claim, damage, liability or action or any substantially similar
loss, claim, damage, liability or action arising from the sale of such
Shares).
3.8. Filings with the Securities and Exchange Commission
With a view to making available the benefits of certain rules
and regulations of the Securities and Exchange Commission that may permit
the sale of the Shares to the public without registration, the Company
agrees to use its best efforts to: (a) remain subject to the reporting
requirements of Section 13 of the Securities Exchange Act of 1934, as
amended, and file with the Securities and Exchange Commission in a timely
manner all reports required of the Company thereunder; and (b) furnish to
the Stockholder upon written request a written statement by the Company as
to its compliance with the reporting requirements of Section 13 of the
Securities Exchange Act of 1934, as amended.
4. REPRESENTATIONS, WARRANTIES AND INDEMNITIES
4.1. Representations and Warranties
(a) As a material inducement to the Company to enter in the
Purchase Agreement and sell the Shares to the Stockholder, the Stockholder
hereby represents and warrants to Company and agrees that neither
Stockholder nor any of its affiliates (i) intends to, directly or
indirectly, manage or control the affairs of or acquire a controlling
interest in the Company or any of its subsidiaries or affiliates (whether
through acquisition of stock, assets or otherwise) at this time or in the
future; (ii) will in the future seek to directly or indirectly, manage or
control the affairs of, or acquire a controlling interest in, the Company
or any of its subsidiaries or affiliates (whether through acquisition of
stock, assets or otherwise), except as expressly provided for in this
Agreement; and (iii) will, directly or indirectly, attempt to influence or
encourage any other person, company, other entity or group to seek to
manage or control the affairs of, or acquire a controlling interest in,
the Company or any of its subsidiaries or affiliates (whether through
acquisition of stock, assets or otherwise), except as expressly provided
for in this Agreement. The Stockholder hereby expressly acknowledges its
understanding that the Company would not have entered in the Purchase
Agreement or consummated the transactions contemplated thereby without
Stockholder's assurances and agreements set forth in this Article 4
relating to its present and future role in the Company's affairs.
(b) The Stockholder hereby represents and warrants to the
Company that the Stockholder's execution, delivery and performance of this
Agreement do not conflict with any provisions of its charter and
organizational instruments or its other governing corporate documents.
(c) Company hereby represents and warrants to the Stockholder
that the execution, delivery and performance of this Agreement do not
conflict with any provisions of the Company's Certificate of
Incorporation, By-laws or other governing corporate documents.
4.2. Indemnification
Each party hereto shall indemnify, defend and hold the other and
each of its directors, officers, affiliates and advisors harmless against
any and all liabilities, claims, damages or losses, together with all
reasonable costs and expenses related thereto (including legal fees and
expenses) arising from, relating to, or connected with such party's breach
of any of the foregoing representations and warranties or any other
provision of this Agreement. The indemnification obligations under this
Section 4.2 shall be limited to actual damages and shall not apply to
exemplary, special, consequential or incidental damages. This Section 4.2
shall operate in addition to, and not in lieu of, the indemnification
provisions of Section 3.7 hereof.
5. MISCELLANEOUS
5.1. Press Releases
All press releases relating to the investment pursuant to the
Purchase Agreement or this Agreement will be issued or approved in advance
by the Company and jointly agreed upon by the Company and the Stockholder,
subject to their respective obligations under foreign, federal and state
securities laws.
5.2. Confidentiality
The Stockholder shall, and will cause each of the Stockholder
Representatives to keep confidential and not disclose or divulge any
confidential, proprietary or secret information which any Stockholder
Representative may obtain from the Company pursuant to financial
statements, reports and other materials submitted by the Company to the
Stockholder or any Stockholder Representative or learned by the
Stockholder or any Stockholder Representative from the Board.
5.3. Specific Performance
Strict compliance shall be required with each and every
provision of this Agreement. The Stockholder agrees that money damages
would not be a sufficient remedy for any breach of this Agreement by the
Stockholder or its affiliates (including the Stockholder Representatives),
that such a breach would result in irreparable harm to the Company and its
stockholders, and that, in addition to all other remedies, the Company
shall be entitled to specific performance and injunctive or other
equitable relief for any such breach, and the Stockholder further agrees
to waive any requirement for the securing or posting of any bend in
connection with such remedy.
5.4. Notices
All notices, requests, consents and other communications under
this Agreement shall be in writing and shall be delivered by hand or
airmailed by first class certified or registered airmail, return receipt,
postage prepaid or sent by express or overnight courier or by telecopier
(with acknowledgment of receipt):
If to the Company, at The Forum II, 8521 Six Forks Road, Suite
300, Raleigh, North Carolina 27615 USA, Attention: Nicholas J. Costanza,
Vice President, Chief Legal Counsel and Secretary, or at such other
address or addresses as may have been furnished in writing by the Company
to the Stockholder; or
If to the Stockholder, at Mannerheimintie 14 A, 00101 Helsinki
10 Finland, Attention: Stig Stendahl, or at such other address or
addresses as may have been furnished to the Company in writing by the
Stockholder. A copy of such notice shall be sent simultaneously to Foley
& Lardner, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202,
Attention: Ralf R. Boer.
Notices provided in accordance with this paragraph shall be
deemed delivered upon personal delivery or five (5) days after delivery to
a recognized overnight courier.
5.5. Invalid or Unenforceable Provisions
The invalidity or unenforceability of any particular provision
of this Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
5.6. Benefit and Burden
This Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their successors and assigns and
other legal representatives.
5.7. Gender
The use of any gender herein shall be deemed to be or include
the other genders and the use of the singular herein shall be deemed to be
or include the plural, and vice versa, wherever appropriate.
5.8. Changes; Waiver
No change or modification of this Agreement shall be valid
unless the same is in writing and signed by all the parties hereto. No
waiver of any provisions of this Agreement shall be valid unless in
writing and signed by the person against whom it is sought to be enforced.
The failure of any party at any time to insist upon strict performance of
any condition, promise, agreement or understanding set forth herein shall
not be construed as a waiver or relinquishment of the right to insist upon
strict performance of the same or any other condition, promise, agreement
or understanding at a future time.
5.9. Entire Agreement
This Agreement and the Purchase Agreement (including all
exhibits thereto) set forth all of the promises, agreements, conditions,
understandings, warranties and representations among the parties hereto
with respect to the Shares and any other matters set forth herein, and
there are no promises, agreements, conditions, understandings, warranties
or representations, oral or written, express or implied, among them with
respect to the Shares or such other matters except as set forth herein or
therein. Any and all prior agreements among the parties hereto with
respect to the Shares are hereby revoked. This Agreement and the Purchase
Agreement (including all exhibits thereto) are, and are intended by the
parties to be, an integration of any and all prior agreements or
understandings, oral or written, with respect to the Shares.
5.10. Governing Law; Forum for Disputes
This Agreement shall be construed and enforced in accordance
with the laws of the State of Delaware (without giving effect to conflict
of laws principles). No party may initiate litigation in a dispute
arising under or relating to this Agreement other than in a state or
federal court of competent jurisdiction in the United States of America.
Each of the Company and the Stockholder shall appoint and maintain its own
agent for service of summons or other legal process in the United States
of America, and shall provide the other party with evidence of such
appointment.
5.11. Headings
The headings, subheadings and other captions in this Agreement
are for convenience and reference only and shall not be used in
interpreting, construing or enforcing any of the provisions of this
Agreement.
5.12. Term of Agreement
This Agreement shall be effective as of the date first
hereinabove set forth and, unless otherwise provided elsewhere herein,
shall terminate upon the earlier of: (a) two (2) years after the first
date on which the Stockholder no longer owns or holds any Company
Securities, provided that such level of ownership or control shall not
have resulted from Transfers in violation of this Agreement; (b) such time
as (i) Company makes a general assignment for the benefit of creditors;
(ii) shall have been adjudicated bankrupt; (iii) shall have filed a
voluntary petition for bankruptcy or for reorganization or effectuated a
plan or other similar arrangement with creditors; (iv) shall have filed an
answer to a creditor's petition; (v) or if a petition is filed against
Company for an adjudication in bankruptcy or reorganization, the Company
shall have applied for or permitted the employment of a receiver or
trustee or custodian for any of its property or assets; or (c) mutual
written agreement of the parties hereto.
5.13. Obligations in the Event of Certain Breaches
In the event of a breach by the Company of its obligations under
Section 3.6 hereof (except for any breach by the Company of the last
sentence of each of Section 3.6(a) or (b)), which breach continues for a
period of thirty (30) days following delivery of notice thereof by the
Stockholder to the Company, then this Agreement shall terminate thirty
(30) days thereafter or, at the Company's option exercised by written
notice delivered to the Stockholder within such thirty-day period, the
Stockholder shall, for a period of thirty (30) days after such notice of
exercise, have the right to "put" all but not less than all of the Shares
owned by the Stockholder and/or its affiliates to the Company and the
Company shall have the right to "call" all but not less than
all of the Shares owned by the Stockholder and/or its affiliates, in
either case at a price payable to the Stockholder equal to the Fair Market
Value of the Shares to be acquired by the Company. For purposes of this
Section 5.13, "Fair Market Value" of the Shares to be acquired by the
Company shall be an amount equal to (i) if such Shares are listed on The
Nasdaq Stock Market, the average of the last reported sales price per
share or, if the Shares are then listed on a national securities exchange,
the average closing price per share, in either case for the thirty (30)
consecutive trading days immediately preceding the date that the
Stockholder provides notice to the Company of a breach as contemplated in
this Section 5.13, multiplied by (ii) the number of Shares to be acquired
by the Company; provided, however, that in the event the Shares are not
then traded on The Nasdaq Stock Market or a national securities exchange,
the Fair Market Value of the Shares to be acquired by the Company shall be
determined by an independent appraiser with an established national
reputation for appraising businesses selected by mutual agreement of the
Company and the Stockholder, or in the absence of such mutual agreement,
selected by Price Waterhouse LLP. The closing of the acquisition of
Shares pursuant to this Section 5.13 shall occur within thirty (30) days
following the determination of Fair Market Value. Payments made to the
Stockholder by the Company pursuant to this Section 5.13 shall be made in
immediately available funds or by certified check.
IN WITNESS WHEREOF, each of the Company and the Stockholder has
caused this Agreement to be executed and delivered by its duly authorized
officer, all as of the day and year first above written.
EXIDE ELECTRONICS GROUP, INC.
Attest:
By: /s/ Marty R. Kittrell By: /s/ Nicholas J. Costanza
Title: Vice President & Chief Title: Vice President, Chief
Financial Officer Administrative Officer and General
Counsel
[Corporate Seal]
FISKARS OY AB
By: /s/ Stig Stendahl
Title: President
