SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported) AUGUST 19, 1998
MARKER INTERNATIONAL
(Exact Name of Registrant as Specified in Charter)
UTAH 0-24556 87-0372759
(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification
No.)
1070 WEST 2300 SOUTH, SALT LAKE CITY, UTAH 84119
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number,
including area code: (801) 972-2100
N/A
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
This report on Form 8-K/A amends and restates in its entirety the
Registrant's report on Form 8-K filed with the Securities and Exchange
Commission on September 3, 1998 to correct a typographical error and to update
certain information with respect to the Registrant's credit facilities.
Item 5. OTHER EVENTS.
On August 24, 1998, Marker International (the "Registrant" or
"Marker") issued and sold 1,000,000 shares of its Series B Preferred Stock,
$0.01 par value (the "Preferred Stock"), for a purchase price of $3,000,000 to
Henry E. Tauber, President of Marker. As a result of such investment, Henry
Tauber increased his percentage ownership in the Registrant to 45.4%. Allen &
Company Incorporated gave an oral report, concluding that the terms of the sale
of the Preferred Stock were fair and reasonable, and no less favorable to the
Registrant than those that could be obtained from an unrelated third party
making a similar investment in the Registrant.
On August 19, 1998, First Security Bank, N.A. ("First Security")
agreed to increase its existing line of credit to the Registrant by
approximately $4,000,000. First Security also agreed in principle to extend the
existing credit facility until March 31, 1999 upon the satisfaction of certain
conditions which the Registrant believes can be met prior to expiration of the
credit facility on September 18, 1998. The Registrant agreed to pledge
additional collateral to First Security consisting of certain real property in
Salt Lake City, Utah and certain intellectual property rights owned by the
Registrant.
On August 20, 1998, Bayerische Hypotheken-und Wechsel-Bank AG and
Deutsche Bank AG (together, the "German Banks") agreed in principle to extend
their existing lines of credit to Marker Deutschland GmbH ("Marker Germany")
through March 31, 1999 and to provide a temporary increase in available credit
by DM 10 million through November 30, 1998. Marker Germany has agreed to pledge
additional collateral to the German Banks consisting of certain intellectual
property rights owned by Marker Germany.
The above transactions with First Security and the German Banks are
subject to documentation acceptable to the respective parties.
On August 24, 1998, the Registrant issued the press release set forth
as Exhibit 99.1 hereto.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS.
None.
(b) PRO FORMA FINANCIAL INFORMATION.
None.
(c) EXHIBITS.
4.1 Marker International Series B Preferred Stock Purchase Agreement,
dated August 19,1998.
99.1 Press Release, dated August 24, 1998.
99.2 Addendum and Amendment to Fourth Amended and Restated Revolving and
Term Credit Agreement, dated August 18, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MARKER INTERNATIONAL
By: /S/ KEVIN HARDY
---------------------
Name: Kevin Hardy
Title: Chief Financial Officer
Dated: September 10, 1998
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
4.1 Marker International Series B Preferred Stock Purchase Agreement,
dated August 19,1998 (including, as Exhibit A thereto, a form of the
Certificate of Designation of Marker International with respect to
its Series B Preferred Stock).
99.1 Press Release, dated August 24, 1998.
99.2 Addendum and Amendment to Fourth Amended and Restated Revolving and
Term Credit Agreement with First Security Bank of Utah, N.A.,
dated August 18, 1998.
EXHIBIT 4.1
MARKER INTERNATIONAL
SERIES B PREFERRED STOCK
PURCHASE AGREEMENT
AUGUST 19, 1998
<PAGE>
TABLE OF CONTENTS
1. AGREEMENT TO PURCHASE AND SELL STOCK...............................1
(a) AUTHORIZATION.................................................1
(b) AGREEMENT TO PURCHASE AND SELL SECURITIES.....................1
2. CLOSING............................................................1
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................2
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION.................2
(b) CAPITALIZATION................................................2
(c) DUE AUTHORIZATION.............................................2
(d) VALID ISSUANCE OF STOCK.......................................2
(e) GOVERNMENTAL CONSENTS.........................................3
(f) COMPLIANCE WITH OTHER INSTRUMENTS.............................3
(g) EXCHANGE ACT REPORTS..........................................3
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE
INVESTOR...........................................................3
(a) AUTHORIZATION.................................................3
(b) GOVERNMENTAL CONSENTS.........................................4
(c) NON-CONTRAVENTION.............................................4
(d) PURCHASE FOR OWN ACCOUNT......................................4
(e) INVESTMENT EXPERIENCE.........................................4
(f) ACCREDITED INVESTOR STATUS....................................4
(g) RESTRICTED SECURITIES.........................................4
(h) LEGENDS.......................................................5
(i) DUE DILIGENCE.................................................5
5. CONDITIONS TO THE INVESTOR'S OBLIGATIONS AT CLOSING................5
(a) REPRESENTATIONS AND WARRANTIES TRUE...........................5
(b) PERFORMANCE...................................................5
(c) SECURITIES EXEMPTIONS.........................................5
(d) SATISFACTION OF ESCROW INSTRUCTIONS...........................5
(e) CERTIFICATE OF DESIGNATION....................................5
(f) SCHEDULE 3(B).................................................6
(g) OTHER ACTIONS.................................................6
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING.................6
(a) REPRESENTATIONS AND WARRANTIES TRUE...........................6
(b) PERFORMANCE...................................................6
(c) PAYMENT OF PURCHASE PRICE.....................................6
(d) SECURITIES EXEMPTIONS.........................................6
(e) OTHER ACTIONS.................................................6
7. COVENANTS OF COMPANY...............................................6
(a) REGISTRATION RIGHTS...........................................7
8. INDEMNIFICATION...................................................10
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES...................10
(b) THE INVESTOR=S AGREEMENT TO INDEMNIFY........................10
(c) THE COMPANY'S AGREEMENT TO INDEMNIFY.........................10
(d) NOTICE OF CLAIM..............................................10
(e) COOPERATION; ASSIGNMENT OF CLAIMS............................11
(f) MEDIATION....................................................11
(g) ARBITRATION..................................................11
(h) CERTAIN LIMITATIONS..........................................12
(i) OTHER RIGHTS AND REMEDIES....................................12
9. MISCELLANEOUS.....................................................12
(a) SUCCESSORS AND ASSIGNS.......................................12
(b) GOVERNING LAW................................................12
(c) COUNTERPARTS.................................................12
(d) HEADINGS.....................................................12
(e) NOTICES......................................................12
(f) AMENDMENTS AND WAIVERS.......................................13
(g) SEVERABILITY.................................................13
(h) ENTIRE AGREEMENT.............................................13
(i) FURTHER ASSURANCES...........................................13
(j) CONSTRUCTION.................................................13
(k) FEES, COSTS AND EXPENSES.....................................13
(l) ADJUSTMENTS FOR STOCK SPLITS, ETC............................13
<PAGE>
MARKER INTERNATIONAL
SERIES B PREFERRED STOCK
PURCHASE AGREEMENT
This Series B Preferred Stock Purchase Agreement (this "Agreement") is
made and entered into as of August 19, 1998 by and between Marker International,
a Utah corporation (the "COMPANY"), and Henry E. Tauber, an Individual (the
"INVESTOR").
RECITAL
In consideration for Three Million Dollars ($3,000,000) in cash, the
Company shall issue a number of shares of Series B Preferred Stock, $.01 par
value per share, of the Company (the "SERIES B PREFERRED STOCK") on the terms
and conditions set forth in this Agreement.
AGREEMENT
In consideration of the foregoing recitals, the mutual promises
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK.
(a) AUTHORIZATION. As of the Closing, the Company's Board of Directors
(the "BOARD") shall have authorized the issuance, pursuant to the
terms and conditions of this Agreement, of up to Two Million
(2,000,000) shares of Series B Preferred Stock, $.01 par value, having
the rights, preferences, privileges and restrictions set forth in the
Certificate of Designation of the Series B Preferred Stock in the form
attached hereto as EXHIBIT A (the "CERTIFICATE OF DESIGNATION") and up
to Two Million Six Hundred Sixty Thousand (2,660,000) shares of the
Company's common stock, par value $.01 (the "COMMON Stock"), for
issuance upon conversion of Series B Preferred Stock.
(b) AGREEMENT TO PURCHASE AND SELL SECURITIES. The Company hereby
agrees to issue to the Investor at the Closing, and the Investor
agrees to acquire from the Company at the Closing, One Million
(1,000,000) shares of Series B Preferred Stock (collectively, the
"PURCHASED SHARES") for a total cash purchase price of Three Million
Dollars ($3,000,000) (the "PURCHASE PRICE").
2. CLOSING. The purchase and sale of the Purchased Shares (the "CLOSING")
shall take place at the offices of Snell & Wilmer in Salt Lake City, Utah on
August 19, 1998, or at such other time and place as the Company and the Investor
mutually agree upon (which time and place are referred to in this Agreement as
the "CLOSING DATE"). At the Closing, the Company shall deliver to the Investor
certificates representing the Purchased Shares and the Investor shall deliver to
the Company the Purchase Price.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investor that the statements in this Section 3
are true and correct:
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Utah and has all corporate power and
authority required to (i) carry on its business as presently conducted
and (ii) enter into this Agreement, and to consummate the transactions
contemplated hereby. Each of the Company and its subsidiaries is
qualified to do business and is in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse
effect on the Company.
(b) CAPITALIZATION. As of the date hereof, (i) the Company=s
authorized capital stock consists of: 30,0000,000 shares of Common
Stock, $.01 par value per share, of which 11,130,577 shares are
validly issued and outstanding, fully paid and nonassessable, and
5,000,000 shares of preferred stock, $.01 par value per share (the
"Preferred Stock"), none of which has been issued and (ii) the Company
has outstanding the securities set forth on Schedule 3(b) (which shall
be provided to Investor prior to Closing) which are convertible into
or exercisable or exchangeable for Common Stock (the "DERIVATIVE
SECURITIES"). From the date hereof to the Closing, there will be no
changes in such authorized capital stock or Derivative Securities,
except as contemplated by this Agreement except as may result from the
exercise or conversion of the Derivative Securities during such
period. All the issued and outstanding shares of capital stock are
free of preemptive and similar rights.
(c) DUE AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and shareholders, necessary for the
authorization, execution, delivery of, and the performance of all
obligations of the Company under this Agreement and for the
authorization, issuance, reservation for issuance and delivery of all
of the Purchased Shares, will be taken prior to the Closing, and this
Agreement constitutes a valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except (i) as may be limited by (A) applicable bankruptcy, insolvency,
reorganization or others laws of general application relating to or
affecting the enforcement of creditors' rights generally and (B) the
effect of rules of law governing the availability of equitable
remedies, and (ii) as rights to indemnity or contribution may be
limited under federal or state securities laws or by principles of
public policy thereunder.
(d) VALID ISSUANCE OF STOCK.
(i) VALID ISSUANCE. The Purchased Shares, when issued, sold and
delivered in accordance with the terms of this Agreement, will be
duly and validly issued, fully paid and nonassessable. The Common
Stock to be issued upon conversion of the Purchased Shares (the
"CONVERSION SHARES") have been duly and validly reserved for
issuance and, upon issuance, sale and delivery in accordance with
the terms of this Agreement, will be duly and validly issued,
fully paid and nonassessable.
(ii) COMPLIANCE WITH SECURITIES LAWS. Assuming the correctness of
the representations made by the Investor in Section 4, the
Purchased Shares and the Conversion Shares (assuming no change in
applicable law and no unlawful distribution of Purchased Shares
by the Investor or other Persons) will be issued to the Investor
in compliance with applicable exemptions from the registration
and prospectus delivery requirements of the Securities Act of
1933, as amended (the "SECURITIES ACT").
(e) GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration qualification, designation,
declaration or filing with, any federal, state or local governmental
authority on the part of the Company or any of its subsidiaries is
required in connection with the consummation of the transactions
contemplated by this Agreement except for the filing of the
Certificate of Designation with the Secretary of State of the State of
Utah. Such qualification and filing will, in the case of
qualification, be effective on the Closing Date and will, in the case
of filing, be made within the time prescribed by law.
(f) COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation, breach or default of any term of its Articles of
Incorporation, as amended ("ARTICLES") or Bylaws. The execution,
delivery, and performance of, and compliance with, this Agreement and
the consummation of the transactions contemplated hereby will not
result in any such violation or default, or be in conflict with or
constitute, with or without the passage of time or the giving of
notice or both, either a default under Company's Articles or Bylaws,
or any agreement or contract of the Company, or, to the best of the
Company's knowledge, a violation of any statutes, laws, regulations or
orders, or any event which results in the creation of any lien, charge
or encumbrance upon any asset of the Company.
(g) EXCHANGE ACT REPORTS. As of their respective dates, the filings
made by the Company pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act Reports"), complied in all material
respects with the requirements of the Exchange Act and the rules and
regulations of the Securities and Exchange Commission promulgated
thereunder and other applicable federal, state and local laws, rules
and regulations, and none of the Exchange Act Reports contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The Company has timely filed its Exchange
Act Reports.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE INVESTOR.
The Investor hereby represents and warrants to the Company and agrees that:
(a) AUTHORIZATION. This Agreement constitutes the Investor's valid and
legally binding obligation, enforceable in accordance with its terms,
except (i) as may be limited by (A) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and (B) the
effect of rules of law governing the availability of equitable
remedies, and (ii) as rights to indemnity or contribution may be
limited under federal or state securities laws or public policy
thereunder.
(b) GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration qualification, designation,
declaration or filing with, any federal, state or local governmental
authority on the part of the Investor is required in connection with
the consummation of the transactions contemplated by this Agreement,
except for the filing of such qualifications or filings under the
Securities Act or the Exchange Act and the regulations thereunder and
all applicable state securities laws as may be required in connection
with the transactions contemplated by this Agreement. All such
qualifications and filings will, in the case of qualifications, be
effective on the Closing Date and will, in the case of filings, be
made within the time prescribed by law.
(c) NON-CONTRAVENTION. The execution, delivery and performance of this
Agreement by the Investor, and the consummation by the Investor of the
transactions contemplated hereby, do not and will not: (i) constitute
a violation of any provision of any federal, state, local or foreign
law binding upon or applicable to the Investor; or (ii) constitute a
default or require any consent under, give rise to any right of
termination, cancellation or acceleration of, or result in the
creation or imposition of any lien, claim or encumbrance on any assets
of the Investor under, any contract to which the Investor is a party
or any permit, license or similar right relating to the Investor or by
which the Investor may be bound or affected in such a manner as,
together with all other such matters, would have a material adverse
effect on the Investor.
(d) PURCHASE FOR OWN ACCOUNT. The Purchased Shares are being acquired
for investment for the Investor's own account, not as a nominee or
agent, and not with a view to the public resale or distribution
thereof within the meaning of the Securities Act, and the Investor has
no present intention of selling, granting any participation in, or
otherwise distributing the same.
(e) INVESTMENT EXPERIENCE. The Investor understands that the purchase
of the Purchased Shares involves substantial risk. The Investor
acknowledges that he is able to fend for himself, can bear the
economic risk of his investment in the Purchased Shares and has such
knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of his investment in the
Purchased Shares and protecting his own interests in connection with
this investment.
(f) ACCREDITED INVESTOR STATUS. The Investor is an "accredited
investor" within the meaning of Regulation D promulgated under the
Securities Act.
(g) RESTRICTED SECURITIES. The Investor understands that the Purchased
Shares, and the Conversion Shares upon issuance will be, characterized
as "restricted securities" under the Securities Act, inasmuch as they
are being acquired from the Company in a transaction not involving a
public offering and that under the Securities Act and applicable
regulations thereunder such securities may be resold without
registration under the Securities Act only in certain limited
circumstances. The Investor is familiar with Rule 144 of the
Securities Act, as presently in effect, and understands the resale
limitations imposed thereby and by the rules and regulations of the
Securities Act.
(h) LEGENDS. The Investor agrees that the certificates for the
Purchased Shares and, upon issuance thereof, the Conversion Shares,
will bear the following legend:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or with
any state securities commission. They may not be transferred or
disposed of by the holder in the absence of a registration
statement which is effective under the Securities Act of 1933 and
applicable state laws and rules, unless, immediately prior to the
time set for transfer, such transfer may be effected without
violation of the Securities Act of 1933 and other applicable
state laws and rules.
(i) DUE DILIGENCE. The Investor acknowledges receipt of, and the
opportunity to review, the information that the Investor believes
necessary to make an investment in the Purchased Shares.
5. CONDITIONS TO THE INVESTOR'S OBLIGATIONS AT CLOSING. The obligations
of the Investor under Sections l and 2 are subject to the fulfillment or its
waiver, before the Closing of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. Each of the representations
and warranties of the Company contained in Section 3 shall be true and
correct in all material respects on and as of the date hereof and on
and as of the Closing Date, with the same effect as though such
representations and warranties had been made as of the Closing Date.
(b) PERFORMANCE. The Company shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by it at or before
the Closing and shall have obtained all approvals, consents and
qualifications necessary to complete the purchase and sale described
herein.
(c) SECURITIES EXEMPTIONS. The offer and sale of the Purchased Shares
to the Investor pursuant to this Agreement shall be exempt from the
registration requirements of the Securities Act and the registration
or qualification requirements of all applicable state securities laws.
(d) SATISFACTION OF ESCROW INSTRUCTIONS. All conditions required in
those certain escrow instructions dated August 19, 1998 by and among
the Company, the Investor and First Security Bank, N.A. shall have
been satisfied.
(e) CERTIFICATE OF DESIGNATION. The parties shall have mutually agreed
upon and the Company shall have filed with the Secretary of State of
the State of Utah the Certification of Designation.
(f) SCHEDULE 3(B). The Company shall have delivered a copy of Schedule
3(b) to the Investor.
(g) OTHER ACTIONS. The Company shall have executed such other
certificates, agreements, instruments and other documents, and taken
such other actions, as shall be customary or reasonably requested by
the Investor in connection with the transactions contemplated hereby.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company under Sections 1 and 2 are subject to the fulfillment or its
waiver before the Closing of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Investor contained in Section 4 shall be true and
correct in all material respects on and as of the date hereof and on
and as of the Closing Date with the same effect as though such
representations and warranties had been made as of the Closing Date.
(b) PERFORMANCE. The Investor shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by him at or before
the Closing and shall have obtained all approvals, consents and
qualifications necessary to complete the purchase and sale described
herein.
(c) PAYMENT OF PURCHASE PRICE. The Investor shall have delivered to
the Company the Purchase Price of the Purchased Shares as specified in
Section 1.
(d) SECURITIES EXEMPTIONS. The offer and sale of the Purchased Shares
to the Investor pursuant to this Agreement shall be exempt from the
registration requirements of the Securities Act and the registration
and qualification requirements of all applicable state securities
laws.
(e) OTHER ACTIONS. The Investor shall have executed such other
certificates, agreements, instruments and other documents, and taken
such other actions, as shall be customary or reasonably requested by
the Company in connection with the transactions contemplated hereby.
7. COVENANTS OF COMPANY. The Company covenants and agrees that it hereby
grants to Investor certain registration rights with respect to the Registerable
Securities, as hereinafter defined:
(a) REGISTRATION RIGHTS.
(i) DEFINITIONS. For purposes of this Agreement:
A. REGISTRATION. The terms "REGISTER," "REGISTERED," and
"REGISTRATION" refer to a registration effected by preparing
and filing a registration statement in compliance with the
Securities Act and the declaration or ordering of
effectiveness of such registration statement.
B. REGISTERABLE SECURITIES. The term "REGISTERABLE
SECURITIES" means: (1) all shares of Common Stock issued or
issuable upon conversion of any of the Purchased Shares, and
(2) any shares of Common Stock issued as (or issuable upon
the conversion or exercise of any warrant, right or other
security that is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of,
any of the securities described in the immediately preceding
clause.
C. HOLDER. The term "HOLDER" means any Person owning of
record Registrable Securities that have not been sold to the
public or pursuant to Rule 144 promulgated under the
Securities Act or any permitted assignee of record of such
Registrable Securities to whom rights under this Section
7(a) have been duly assigned in accordance with this
Agreement.
(ii) PIGGYBACK REGISTRATION. If at any time after receipt of the
Registerable Securities by Holder, the Company shall propose to
file with the Securities and Exchange Commission (the
"Commission") on behalf of the Company or any other stockholder a
registration statement under the Securities Act, with respect to
any class of security (as defined in Section 3(a)(10) of the
Exchange Act), other than a registration statement approved by
the Board on Form S-4 or S-8, or such amended or alternative form
for Form S-4 or S-8 as the Commission may from time to time
require, the Company shall in each case timely notify Holder. The
Company will include in such registration statement any or all of
the Registerable Securities within twenty (20) days after the
Company's giving of such notice, provided that the Company shall
have the right to postpone or withdraw any registration effected
pursuant to this Section 7(a)(ii) without obligation to the
Holder and subject to the conditions set forth herein.
(iii) ONE-TIME DEMAND REGISTRATION ON FORM S-3. In addition to
the rights contained in Section 7(a)(ii) above, the Holder shall
have the one-time right, commencing on the Closing Date, to
request a registration on Form S-3 (such requests shall be in
writing and shall state the number of Registerable Securities to
be disposed of and the intended methods of disposition of such
securities), provided, however, that the Company shall not be
obligated to effect any such registration if (A) a Form S-3
registration is unavailable; or (B) the Board determines that
such Form S-3 registration would be detrimental to the Company,
in which case such registration may be delayed for a period not
to exceed sixty (60) days. The rights of the Holder to demand
registration under this paragraph shall expire upon the filing of
the Form S-3 Registration Statement by the Company after the
initial demand made by the Holder. The Company shall maintain its
eligibility to register stock on Form S-3, or if the Company is
not eligible, upon Holder=s demand, it will register the
Registerable Securities on an available form.
(iv) REGISTRATION PROCEDURES. If, pursuant to Sections 7(a)(ii)
or 7(a)(iii) hereof, the Company is required to include any
Registerable Securities in a registration statement proposed to
be filed, the Company will, as expeditiously as possible: (A)
prepare and file such registration statement under the Securities
Act on an appropriate form and use its best efforts to cause such
registration statement to become effective; (B) prepare and file
with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of
the Securities Act and the Exchange Act with respect to the offer
of the securities covered by such registration statement during
the period required for distribution of such securities; (C)
furnish to the Holder such number of copies of such registration
statement and all amendments thereto and of such prospectus
(including each preliminary, amended or supplemental prospectus)
as such Holder may reasonably request in order to facilitate the
sale or transfer of the securities covered by such registration
statement; (D) use its reasonable efforts to register or qualify
the securities covered by any such registration statement in such
jurisdictions as such Holder may reasonably request; provided
that the Company will not be required to (i) qualify generally to
do business in any jurisdiction where it will not otherwise be
required to qualify but for this Subsection, (ii) subject itself
to taxation in any such jurisdiction, or (iii) consent to general
service of process in any such jurisdiction; (E) furnish, at the
request of Holder, on the date that such Registerable Securities
are delivered to the underwriters for sale pursuant to such
registration or, if such Registerable Securities are not being
sold through underwriters, on the date such registration
statement becomes effective (1) an opinion, dated such date, in a
form customary to such transactions, of the independent counsel
representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to Holder making such
request, reasonably acceptable in form and substance to such
underwriter and Holder, and (2) a letter, dated such date, from
the independent certified public accountants of the Company,
addressed to the underwriters, if any, and Holder, stating that
they are independent certified public accountants within the
meaning of the Securities Act and that in the opinion of such
accountants, the financial statements and other financial data of
the Company included in the registration statement or the
prospectus, or any amendment or supplement thereto (including, in
each case, documents incorporated by reference thereto), comply
as to form in all material respects with the applicable
accounting requirements of the Securities Act; such opinion of
counsel shall additionally cover such other legal matters with
respect to the registration statement and the Company as the
underwriters, if any, or Holder may reasonably request; and such
letter from the independent certified public accountants shall
additionally cover such other financial matters (including
information as to the period ending not more than five (5)
business days prior to the date of such letter) with respect to
the registration statement and the Company as the underwriters,
if any, or Holder may reasonably request; (F) use its best
efforts to keep such registration and qualification effective
until all exercises, sales and distributions contemplated by the
requests made pursuant to Section 7(a)(ii) or 7(a)(iii) hereof
shall have been completed, but not in any event for a period in
excess of one (1) year; and (G) pay the following expenses
incurred by Holder and the Company in complying with this
Section: (1) all registration and filing fees; (2) all printing
expenses; (3) all fees and disbursements of the counsel and
independent public accountants for the Company; and (4) all Blue
Sky fees and expenses (including fees and expenses of counsel in
connection with Blue Sky surveys). Notwithstanding the foregoing,
the Company shall not be obligated to pay any underwriter=s
discounts or commissions or attorneys= fees or expenses of the
Holder.
(v) CERTAIN CONDITIONS TO REGISTRATION. The right of Holder to
have any Registerable Securities included in any registration
statement pursuant to the provisions of Section 7(a)(ii) or
Section 7(a)(iii) hereof shall be subject to the following
further conditions: (A) should the request for registration be
pursuant to Section 7(a)(ii), and should the registration
statement proposed by the Company relate to an underwritten
offering of securities of the Company, and should the managing
underwriter for the Company render a recommendation to the effect
that such registration of all or a part of the Registerable
Securities would impair the Company=s ability to sell the
securities being registered by the Company, then Holder shall be
entitled to participate pro rata with all other stockholders
entitled to registration rights of equal priority, if any ("Other
Stockholder"), based upon the number of shares owned by or
issuable to Holder and each Other Stockholder in the maximum
amount of shares that such underwriter determines may be sold
without such impairment after the Company has included all stock
that it desires to sell; (B) Holder shall furnish to the Company
in writing such information and documents as, in the opinion of
counsel to the Company, may be reasonably required to properly
prepare and file such registration statement in accordance with
applicable provisions of the Securities Act; and (C) if Holder
desires to sell and distribute securities over a period of time,
or from time to time at the prevailing market prices pursuant to
a registration statement to be filed by the Company under the
Securities Act, then Holder shall execute and deliver to the
Company such written undertakings as the Company and its counsel
may reasonably require in order to assure full compliance with
relevant provisions of the Securities Act and the Exchange Act.
(vi) NOTICES OF REGISTRATION STATEMENTS. The Company shall not
file any registration statement under the Securities Act covering
any debt or equity securities unless it shall first have given
Holder at least sixty (60) days prior written notice thereof.
8. INDEMNIFICATION.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except for the
representations, warranties and agreements made by the Company and the
Investor in Section 7 of this Agreement, all representations,
warranties and agreements made by the Company and the Investor in this
Agreement shall survive for a period of one (1) year from the Closing
Date; the representations, warranties and agreements in Section 7
shall survive for a period of five (5) years from the Closing Date;
and no claim for any breach thereof may be made unless notice thereof
is given to the other party prior to such date; PROVIDED, HOWEVER,
that the limitations on survival shall not apply to any breach of this
Agreement resulting from any willful or knowing misrepresentation or
omission or fraud.
(b) THE INVESTOR=S AGREEMENT TO INDEMNIFY. The Investor agrees to
indemnify and hold harmless the Company and its directors, officers,
general partners, limited partners, employees and agents from and
against all proceedings, judgments, decrees, demands, claims, actions,
losses, damages, liabilities, costs and expenses, including, without
limitation, reasonable attorneys' fees and costs and costs of
investigation (collectively referred to as "Losses") asserted against
or incurred by the Company or its directors, officers, employees or
agents resulting from a breach of any covenant, agreement,
representation or warranty of the Investor contained in this Agreement
or the exhibits or schedules hereto.
(c) THE COMPANY'S AGREEMENT TO INDEMNIFY. The Company hereby agrees to
indemnify and hold harmless the Investor and its agents from and
against all Losses asserted against or incurred by the Investor or its
agents resulting from a breach of any covenant, agreement,
representation, or warranty of the Company contained in this Agreement
or the exhibits or schedules hereto.
(d) NOTICE OF CLAIM. Any party who has a claim which would give rise
to liability pursuant to this Article 8 shall give notice to the other
party of such claim, together with a reasonable description thereof.
With respect to any claim by a third party which is covered by the
indemnifications contained hereunder, the party obligated to indemnify
shall be afforded the opportunity, at its expense, to defend or settle
such claim if, within ten (10) days of notice thereof, it acknowledges
in writing its indemnification obligation hereunder, utilizes counsel
reasonably satisfactory to the indemnified party, commences such
defense promptly and pursues such defense with diligence; PROVIDED,
HOWEVER, that such indemnifying party shall secure the consent of the
indemnified party to any settlement, which consent shall not be
unreasonably withheld.
(e) COOPERATION; ASSIGNMENT OF CLAIMS. A party seeking indemnification
pursuant to this Article 8 shall use reasonable efforts to cooperate
with the indemnifying party in connection with its defense of
indemnifiable claims and settlements thereof. In the event such
indemnified party has a claim or claims against any third party
arising out of or connected with the indemnified matter, then upon
receipt of notice from the indemnifying party pursuant to Section 8
(d) acknowledging the indemnifying party's indemnification obligation
under this Agreement, the indemnified party shall assign to the
indemnifying party the entire claim or claims to the extent of the
indemnification actually paid by the indemnifying party and the
indemnifying party shall thereupon be subrogated with respect to such
claim or claims of the indemnified party.
(f) MEDIATION. Any claim, dispute, or controversy between the parties
arising in connection with or relating to this Agreement or the
making, performance or interpretation thereof shall, if not settled by
negotiation, be submitted to non-binding mediation under the
Commercial Mediation Rules of the American Arbitration Association
then in effect. Any demand for mediation shall be made in writing and
served upon the other party in the same manner as otherwise provided
for notice in this Agreement. The demand shall set forth with
reasonable specificity the basis of the dispute and the performance or
relief sought. The parties shall, within thirty (30) days of receipt
of a demand to mediate, confer and select a mediator. The mediation
shall take place at a time and location in Salt Lake City, Utah
mutually agreeable to the parties and the mediator, but not later than
sixty (60) days after a demand for mediation is received.
(g) ARBITRATION. All disputes under this Agreement shall be settled by
arbitration in Salt Lake City, Utah pursuant to the rules of the
American Arbitration Association. Arbitration may be commenced at any
time by any party hereto giving written notice to each other party to
a dispute that such dispute has been referred to arbitration under
this Agreement. The arbitrator(s) shall be selected by the joint
agreement of the parties, but if they do not so agree within twenty
(20) days after the date of the notice referred to above, the
selection shall be made pursuant to the rules from the panels of
arbitrators maintained by such Association. Any award rendered by the
arbitrator shall be conclusive and binding upon the parties hereto;
provided, however, that any such award shall be accompanied by a
written opinion of the arbitrator giving the reasons for the award.
This provision for arbitration shall be specifically enforceable by
the parties and the decision of the arbitrator in accordance herewith
shall be final and binding and there shall be no right of appeal
therefrom. Each party shall pay its own expenses of arbitration and
the expenses of the arbitrator shall be equally shared; provided,
however, that if in the opinion of the arbitrator any claim or any
defense or objection thereto was unreasonable, the arbitrator may
assess, as part of his award, all or any part of the arbitration
expenses of the other party (including reasonable attorneys= fees) and
of the arbitrator against the party raising such unreasonable claim,
defense or objection. Nothing contained in this paragraph shall
prevent the parties from settling any dispute by mutual agreement at
any time.
(h) CERTAIN LIMITATIONS. In no event shall either party be required to
indemnify the other party for any Losses relating to any matters
subject to indemnification under this Article 8, unless and until such
Losses exceed $5,000 individually or $10,000 in the aggregate, in
which event all such Losses shall be recoverable by the indemnified
party.
(i) OTHER RIGHTS AND REMEDIES. The rights of the parties provided
under this Article 8 are independent of and in addition to such rights
and remedies as the parties may have at law, in equity or otherwise;
PROVIDED, HOWEVER, that the parties shall not be entitled to seek
rescission of the purchase and sale of the Series B Preferred Stock
contemplated herein.
9. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall not be assignable by
any party without the prior written consent of the other party hereto.
Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the
parties hereto.
(b) GOVERNING LAW. This Agreement shall be governed by and construed
under the internal laws of the State of Utah, without reference to
principles of conflict of laws or choice of laws.
(c) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(d) HEADINGS. The headings and captions used in this Agreement are
used for convenience only and are not to be considered in construing
or interpreting this Agreement. All references in this Agreement to
sections, paragraphs, exhibits and schedules shall, unless otherwise
provided, refer to sections and paragraphs hereof and exhibits and
schedules attached hereto, all of which exhibits and schedules are
incorporated herein by this reference.
(e) NOTICES. Any notice required or permitted under this Agreement
shall be given in writing, shall be effective when received, and shall
in any event be deemed received and effectively given upon personal
delivery to the party to be notified or three (3) business days after
deposit with the United States Post Office, by registered or certified
mail, postage prepaid, or one (1) business day after deposit with a
nationally recognized courier service such as FedEx for next business
day delivery under circumstances in which such service guarantees next
business day delivery, or one (1) business day after facsimile with
copy delivered by registered or certified mail, in any case, postage
prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof or at such other
address as the Investor or the Company may designate by giving at
least ten (10) days advance written notice pursuant to this Section
9(e).
(f) AMENDMENTS AND WAIVERS. This Agreement may be amended and the
observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the
Investor. Any amendment or waiver effected in accordance with this
Section 9 shall be binding upon the Investor, the Company and their
respective successors and assigns.
(g) SEVERABILITY. If any provision of this Agreement is held to be
unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
(h) ENTIRE AGREEMENT. This Agreement, together with all exhibits and
schedules hereto, constitutes the entire agreement and understanding
of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties with respect
to the subject matter hereof.
(i) FURTHER ASSURANCES. From and after the date of this Agreement upon
the request of the Company or the Investor, the Company and the
Investor shall execute and deliver such instruments, documents or
other writings as may be reasonably necessary or desirable to confirm
and carry out and to effectuate fully the intent and purposes of this
Agreement.
(j) CONSTRUCTION. Whenever in this Agreement the word "include" or
"including" is used, such term shall be deemed to mean "include,
without limitation," or "including, without limitation," as the case
may be, and the language following "include" or "including" shall not
be deemed to set forth an exhaustive list. The words "hereof,"
"herein," '"hereby," "hereunder," and similar terms in this Agreement
refer to this Agreement as a whole and not to any particular provision
of this Agreement.
(k) FEES, COSTS AND EXPENSES. All fees, costs and expenses (including
attorney's fees and expenses) incurred by either party hereto in
connection with the preparation, negotiation and execution of this
Agreement and the consummation of the transactions contemplated hereby
and thereby (including the costs associated with any filings with, or
compliance with any of the requirements of, any governmental
authorities), shall be the sole and exclusive responsibility of such
party.
(l) ADJUSTMENTS FOR STOCK SPLITS, ETC. Wherever in this Agreement
there is a reference to a specific number of shares of capital stock
of the Company, then, upon the occurrence of any subdivision,
combination or stock dividend of such shares of capital stock, the
specific number of shares so referenced in this Agreement shall
automatically be proportionally adjusted to reflect the affect on the
outstanding shares of such class or series of stock by such
subdivision, combination or stock dividend.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
MARKER INTERNATIONAL INVESTOR
By: /s/ Kevin Hardy By: /s/ Allan L. Sullivan
----------------------------- --------------------------
Name: Kevin Hardy Name: Allan L. Sullivan
Title: Chief Financial Officer Title: Attorney For Henry E. Tauber
Date Signed: August 19, 1998 Date Signed: August 19, 1998
Address: 1070 W. 2300 South Address Suite 900
Salt Lake City, UT 111 Boradway
84119 Salt Lake City, UT 84111
Telephone No.: (801) 972-2100 Telephone No.: (801) 237-1955
Facsimile No.: (801) 972-1011 Facsimile No.: ____________________
With copy to: ___________________ With copy to: Allan L. Sullivan
__________________________ William C. Gibbs
__________________________ Snell & Wilmer, LLP
Telephone No.: ___________________ Address 111 East Broadway,
Facsimile No.: ___________________ Suite 900
Salt Lake City, Ut 84111
Telephone No.:(801) 237-1907
Facsimile No.:(801) 237-1950
<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATION
OF
MARKER INTERNATIONAL
PURSUANT TO THE AUTHORITY vested in the Board of Directors of Marker
International by the provisions of its Amended and Restated Articles of
Incorporation ("ARTICLES OF Incorporation"), and as permitted by Section
16-10a-602(4) of the Utah Revised Business Corporation Act, the Board of
Directors hereby adopts the following amendments to the Articles of
Incorporation of Marker International:
FIRST: The name of the corporation is Marker International (the
"COMPANY").
SECOND: The following amendment to the Articles of Incorporation of
the Company was duly adopted by the Board of Directors without shareholder
action on August 17, 1998 (shareholder action was not required):
Article III of the Amended and Restated Articles of Incorporation is
hereby amended by adding the following:
The Company hereby designates a series of its preferred stock, with
the following terms and conditions:
1. DEFINITIONS. As used herein, the following words and expressions
have the respective meanings set out below:
(a) "ARTICLES OF INCORPORATION" means the Articles of
Incorporation of the Company as amended and in effect from time to
time.
(b) "COMMON STOCK" means the capital stock of the Company
designated as common stock and authorized from time to time and being
stock which is junior to all series of Preferred Stock in respect of
dividend payments and of distributions or payments upon liquidation.
(c) "COMPANY" means MARKER INTERNATIONAL and any subsidiaries and
includes any successor corporation by merger, consolidation or
otherwise if the stockholders of the former corporations continue as
stockholders of the new combined corporation.
(d) "CONVERSION RATE" shall have the meaning set forth in
paragraph 2(d) below.
(e) "JUNIOR STOCK" shall mean all stock, whether or not presently
authorized, ranking as to both payment of dividends and distribution
of assets, junior to the Series B Preferred Stock.
(f) "LIQUIDATION EVENT" means the voluntary or involuntary
liquidation, distribution or sale of substantially all of the
Company's assets, or the dissolution or winding up of the Company and
includes the merger or consolidation of the Company with another
corporation pursuant to any statute except for a merger or
consolidation of the Company in which the Company is the surviving
entity and immediately after which persons who held shares
representing a majority of the votes for directors of the Company
under these Amended and Restated Articles of Incorporation hold shares
representing a majority of votes for directors of the surviving
entity.
(g) "LIQUIDATION PRICE" shall have the meaning set forth in
paragraph 3(a) below. (h) "SERIES B PREFERRED STOCK" means the
authorized class of capital stock of the Company designated as Series
B Preferred Stock.
2. RIGHTS AND PREFERENCES OF SERIES B PREFERRED STOCK:
(a) VOTING RIGHTS OF SERIES B PREFERRED STOCK. Except as
otherwise provided by law, the holders of Series B Preferred Stock
shall have the right to one vote for each share of Common Stock into
which such holders= Series B Preferred Stock is convertible; and with
respect to such vote, such holders shall have, subject to Utah law,
all voting rights and powers equal to the voting rights and powers of
holders of Common Stock, and shall be entitled to notice of any
stockholders meetings in accordance with the Bylaws of the Company and
shall be entitled to vote with the holders of the Common Stock
together as a single class upon any question affecting the management
and affairs of the Company.
(b) MAJORITY APPROVAL. As long as any shares of Series B
Preferred Stock are outstanding, the Company shall not, without first
obtaining the approval of the holders of at least a majority of the
shares of Series B Preferred Stock then outstanding: (i) pay any
dividends to holders of Common Stock; (ii) alter or change the rights,
preferences or privileges of the Series B Preferred Stock; (iii)
increase the authorized number of shares of the Series B Preferred
Stock; (iv) create any new class or series of shares having preference
over the Series B Preferred Stock; (v) authorize any amendment to
these Articles of Incorporation which would adversely affect the
rights of the holders of the Series B Preferred Stock or reclassify
any shares of any class of capital stock into a class ranking prior to
or in parity with the Series B Preferred Stock; or (vi) repurchase any
equity security except redemptions of stock purchased from employees
upon such employee(s) termination of employment.
(c) DIVIDENDS.
(i) The holders of shares of Series B Preferred Stock, in
preference to the holders of Common Stock, and of any Junior
Stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the
purpose, annual dividends payable in cash or by the issuance of
shares of Series B Preferred Stock, at the election of the
Company, at the rate of $0.27 per share, or 9/100 of a share of
Series B Preferred Stock, respectively (as adjusted to reflect
subsequent stock dividends, stock splits or recapitalizations),
on the first day of January in each year (each such date being
referred to herein as a "DIVIDEND PAYMENT DATE"), commencing on
the first Dividend Payment Date after the first issuance of a
share or fraction of a share of Series B Preferred Stock.
(ii) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the date of
issuance of such shares. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series B Preferred
Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series B Preferred
Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall not be more than sixty
(60) days prior to the date fixed for the payment thereof.
(iii) No dividends shall be declared or paid or set apart
for payment on any class or series of Junior Stock (other than
dividends payable in a particular class or series of Junior Stock
to holders thereof) unless all aggregate accrued dividends on all
outstanding shares of Series B Preferred Stock shall have been
paid, or contemporaneously are declared and paid, for all past
periods.
(d) CONVERSION OF PREFERRED STOCK TO COMMON STOCK. Each share of
Series B Preferred Stock shall be convertible, at the option of the
owner thereof, at any time, upon surrender to the Company of the
certificates for the shares to be converted, into fully paid and
nonassessable shares of Common Stock of the Company, at the initial
rate of one and one-third (1-1/3) shares of Common Stock for each
share of Series B Preferred Stock ("CONVERSION RATE"). Conversion of
Series B Preferred Stock into Common Stock shall be made pursuant to
the following terms:
(i) DELIVERY OF CERTIFICATES. Any holder of the Series B
Preferred Stock desiring to convert shares as herein provided
shall deliver to the Company, duly endorsed in blank, the
certificate or certificates representing the shares to be
converted, and at the same time the holder shall notify the
Secretary of the Company in writing, that such holder desires to
convert the Series B Preferred Stock into Common Stock at the
Conversion Rate pursuant to these provisions.
(ii) ISSUANCE OF CERTIFICATES. Upon receipt by the Secretary
of a certificate or certificates representing the Series B
Preferred Stock and a notice that the holder thereof desires to
convert the same, the Company shall forthwith cause to be issued
to the holder of the Series B Preferred Stock surrendering the
same, one and one-third (1-1/3) shares of Common Stock for each
share of Series B Preferred Stock surrendered, with fractional
shares, if any, being purchased by the Company at the then fair
market value and the cash proceeds being distributed to the
holder of the fractional interest.
(iii) DILUTION ADJUSTMENT. The number and kind of securities
issuable upon conversion of the Series B Preferred Stock shall be
subject to adjustment from time to time upon the happening of
certain events, as follows:
(1) In case the Company shall (A) declare a dividend on
its Common Stock in shares of Common Stock or make a
distribution in shares of Common Stock, (B) subdivide its
outstanding shares of Common Stock, (C) combine its
outstanding shares of Common Stock into a smaller number of
shares of Common Stock or (D) issue by reclassification of
its shares of Common Stock other securities of the Company
(including any such reclassification in connection with a
consolidation or merger in which the Company is the
continuing corporation), then the number of shares of Common
Stock issuable upon conversion of the Series B Preferred
Stock immediately prior thereto shall be adjusted so that
the holder of the Series B Preferred Stock shall be entitled
to receive the kind and number of shares of Common Stock of
the Company which he, she or it would have owned or would
have been entitled to receive after the happening of any of
the events described above, had the Series B Preferred Stock
been converted immediately prior to the happening of such
event or any record date with respect thereto. An adjustment
made pursuant to this paragraph shall become effective
immediately after the effective date of such event
retroactive to immediately after the record date, if any,
for such event.
(2) Whenever the number of shares of Common Stock
issuable upon the conversion of the Series B Preferred Stock
or the conversion price of such Common Stock is adjusted,
the Company shall promptly mail by first-class mail, postage
prepaid, to each holder, notice of such adjustment or
adjustments.
(3) Notwithstanding any adjustment in the number or
kind of shares issuable upon the conversion of the Series B
Preferred Stock, certificates representing shares of Series
B Preferred Stock issued prior or subsequent to such
adjustment may continue to refer to the same number and kind
of shares as were issuable prior to such adjustment.
(iv) RESERVATION OF STOCK ISSUABLE UPON Conversion. The
Company shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the
purpose of effecting the conversion of the shares of the Series B
Preferred Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of
all outstanding shares of the Series B Preferred Stock, and if at
any time the number of authorized but unissued shares of Common
Stock shall not be sufficient to effect the conversion of all
then outstanding shares of Series B Preferred Stock, the Company
shall take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be
sufficient for such purpose.
3. LIQUIDATION RIGHTS.
(a) In the event of the occurrence of any Liquidation Event, the
holders of Series B Preferred Stock shall be entitled to receive, on a
pro rata basis, prior and in preference to any distribution of any
assets of the Company to the holders of Common Stock or any Junior
Stock, an amount equal to three dollars ($3.00) per share of Series B
Preferred Stock issued and outstanding along with any accrued but
unpaid dividends on such stock ("LIQUIDATION PRICE").
(b) All assets remaining in the Company after the distributions
provided for in paragraph 3(a) have been fully made, shall be divided
pro rata among the holders of Common Stock.
(c) In any sale of assets of the Company, if the consideration
received by the Company is other than cash, the consideration=s value
will be deemed to be its fair market value. In the case of publicly
traded securities received in a merger, consolidation or sale of the
Company, fair market value shall mean the closing market price for
such securities on the last trading date prior to the date when such
consolidation, merger or sale is consummated. If the consideration is
in a form other than publicly traded securities, its value shall be
determined by the Board of Directors of the Company.
4. REDEMPTION.
(a) MANDATORY REDEMPTION
(i) At the election of a majority of the holders of the
Series B Preferred Stock, the Company shall redeem each year,
beginning September 1, 2003, and on each September 1 thereafter,
if any of the shares of Series B Preferred Stock remain
outstanding, at a price per share equal to $3.00 plus all accrued
and unpaid cumulative dividends thereon (whether or not declared
or earned) to the date fixed for such redemption, twenty-five
percent (25%) of the total number of shares of the Series B
Preferred Stock at the time outstanding. Election of the holder
to have such stock redeemed shall be made by giving the Company
written notice not less than forty-five (45) days prior to the
first redemption date and each redemption date thereafter.
(ii) If the full number of shares required to be redeemed as
aforesaid shall not be so redeemed, the deficiency shall be made
good thereafter as soon as funds shall become lawfully available
therefor.
(iii) If the Company shall fail to discharge its obligation
to redeem shares of Series B Preferred Stock pursuant to this
Section 4(a) (the "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon as
the Company is permitted by law to discharge such Mandatory
Redemption Obligation. If and so long as the Mandatory Redemption
Obligation with respect to Series B Preferred Stock shall not
fully be discharged, the Company shall not, directly or
indirectly, declare or pay any dividend or make any distributions
on, or purchase, redeem or retire, or satisfy any mandatory
redemption, sinking fund or other similar obligation in respect
of, any stock or other securities ranking junior to the Series B
Preferred Stock or warrants, rights or options exercisable for
any such Junior Stock or other junior securities (other than
dividends or distributions payable in a particular class or
series of such stock or other junior securities to holders
thereof).
(b) OPTIONAL REDEMPTIONS. If the price of the Company=s Common
Stock on NASDAQ is greater than $3.375 per share for twenty (20)
consecutive trading days, the Company shall have the option of
redeeming all or any portion of the outstanding Series B Preferred
Stock at a price of $3.00 per share plus all accrued and unpaid
cumulative dividends thereon (whether or not declared or earned) to
the date of redemption, plus all amounts accrued under Section 2(c) to
the redemption date and unpaid.
(c) MANNER AND EFFECT OF REDEMPTIONS. Notice of any proposed
redemption of shares of Series B Preferred Stock shall be given by the
Company by mailing a copy of such notice at least sixty (60) days
prior to the date fixed for such redemption to the holders of record
of the shares of Series B Preferred Stock to be redeemed at their
respective addresses appearing on the books of the Company. Said
notice shall specify the shares called for redemption, the redemption
price and the place at which and the date on which the shares called
for redemption will, upon presentation and surrender of the
certificates of stock evidencing such shares, be redeemed. At any time
prior to the date fixed for redemption, the holders of Series B
Preferred Stock shall have the right to convert such Preferred Stock
to Common Stock pursuant to the provisions set forth in Section 2(d)
hereof.
If less than all of the shares of Series B Preferred Stock are to be
redeemed on a given date pursuant to the provisions of Section 4 hereof, the
Company shall redeem, as nearly as practicable on such date, that number of
whole shares of Series B Preferred Stock then held by each holder of such shares
that bears the same proportion to the total number of such shares to be redeemed
as the total number of such shares then outstanding.
From and after the date fixed in any such notice as the date of
redemption of shares of Series B Preferred Stock, unless default shall be made
by the Company in providing monies at the time and place specified for the
payment of the redemption price pursuant to said notice, all dividends on the
Series B Preferred Stock thereby called for redemption shall cease to accrue
and, except as specifically provided herein, all rights of the holders thereof
as shareholders of the Company, except the right to receive the redemption
price, shall cease and terminate.
All shares of Series B Preferred Stock which shall have been redeemed,
purchased or otherwise acquired by the Company, shall be canceled and shall not
be reissued as shares of Series B Preferred Stock.
<PAGE>
IN WITNESS WHEREOF, the amendments set forth above were adopted on the
24 day of August, 1998.
MARKER INTERNATIONAL
/s/ Kevin Hardy
---------------------------
By: Kevin Hardy
Its: Chief Financial Officer
EXHIBIT 99.1
FOR: Marker International
FOR IMMEDIATE RELEASE
CONTACT: Shannon Moody/Kiron Bloom
Press: Michael McMullan
Morgen-Walke Associates
212-850-5600
MARKER INTERNATIONAL ANNOUNCES
FINANCIAL RESTRUCTURING
Salt Lake City, UT, August 24, 1998 - Marker International (Nasdaq:
MRKR) today announced that the Company had completed negotiations with its
lenders in the United States and Germany to extend the Company's credit lines.
In addition, the Banks in both the United States and Germany have agreed to
provide additional borrowings for working capital needed by the Company. The
credit facilities are subject to meeting certain conditions set by the lenders.
The financial restructuring was completed with the ongoing support of
First Security Bank in the United States, and the Bayerische Hypotheken-und
Wechsel Bank and Deutsche Bank in Germany.
Marker International through its subsidiaries in the United States,
Germany, Japan, Switzerland, Austria and Canada, is a leading designer,
manufacturer and marketer of alpine ski bindings and related products. Marker
Ltd., the Company's soft goods subsidiary in the United States, designs,
distributes and markets outerwear, luggage and gloves.
- -------------------------------------------------------------------------------
EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE STATEMENTS IN
THIS RELEASE ARE FORWARD-LOOKING AND MADE PURSUANT TO THE SAFE HARBOR PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING
STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES WHICH MAY CAUSE THE
COMPANY'S ACTUAL RESULTS IN FUTURE PERIODS TO DIFFER MATERIALLY FROM FORECASTED
RESULTS. THOSE RISKS INCLUDE A SOFTENING OF RETAILER OR CONSUMER ACCEPTANCE OF
THE COMPANY'S PRODUCTS, PRICING PRESSURES AND OTHER COMPETITIVE FACTORS AND
RISKS, WHICH ARE MORE FULLY DESCRIBED IN THE COMPANY FORM 10-K FOR THE FISCAL
YEAR ENDED MARCH 31, 1998, DATED JULY 13. 1998 AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
# # #
EXHIBIT 99.2
ADDENDUM AND AMENDMENT TO FOURTH
AMENDED AND RESTATED REVOLVING AND TERM
CREDIT AGREEMENT
This Addendum is dated this 18th day of August, 1998, by and between
MARKER INTERNATIONAL, a Utah corporation, MARKER LTD., a Utah corporation,
MARKER USA, a Utah corporation, DNR USA, a Utah corporation, DNR NORTH AMERICA,
a Delaware corporation, (hereafter collectively referred to as "Marker") and
FIRST SECURITY BANK, NATIONAL ASSOCIATION (hereafter referred to as "First
Security").
This Addendum shall amend that "Fourth Amended and Restated Revolving
and Term Credit Agreement," dated November 6, 1997 (the "Fourth Agreement"). The
loans of First Security to Marker International, to Marker Ltd., to Marker USA,
and to DNR North America have heretofore been documented by an "Eighth Amended
Revolving Note" in the principal sum of $27,000,000.00 (the "Eighth Note," which
was made by Marker International, by Marker Ltd, by Marker USA, and by DNR North
America), and by a "Term Promissory Note" in the principal sum of $5,000,000.00
(which was made by Marker USA, by Marker Ltd. and by Marker International). Each
Marker International, Marker USA, Marker Ltd., and DNR North America
unconditionally reaffirm their respective obligations of indebtedness to First
Security pursuant to the said promissory notes and all related loan
documentation and confirm the enforceability of such promissory notes and
related loan documentation in accordance with their respective terms and
conditions.
Marker and First Security have agreed to amend the Fourth Agreement
and the Eighth Note to provide for the extension of additional credit to Marker
in the amount of $4,100,000.00. The principal amount of the indebtedness of
Marker to First Security now outstanding is $29,365,020.84; accrued and unpaid
interest on said indebtedness, as of the date hereof, totals $401,332.18. As a
condition of the further extension of credit herewith granted to Marker by First
Security, Marker has agreed to the following terms and conditions:
1. ADDITIONAL BORROWER: DNR USA, together with DNR North America,
Marker International, Marker USA, and Marker Ltd., executes and delivers to
First Security the "Ninth Amended and Substituted Revolving Promissory Note" in
the principal amount of $33,600,000.00 (the "Ninth Note").
2. ADDITIONAL COLLATERAL: Marker has agreed to provide additional
collateral to First Security as follows:
a. Marker Ltd., Marker USA, DNR USA, and DNR North America
execute and deliver to First Security the "Second Amendment
to Receivables and Inventory Security Agreement" which
grants unto First Security a security interest in all
trademarks, patents, distribution agreements, marketing
agreements, license agreements, sublicense agreements, and
general intangibles associated with such trademarks, license
agreements, patents of Marker used in connection with the
manufacture or sale of "Marker" branded goods in the U.S.A
b. Marker International herewith executes and delivers to
First Security a "Deed of Trust (with Assignment of Rents)"
encumbering the real estate and fixtures owned by Marker
International at 2300 South 1070 West Street, and at 2305
South 1070 West Street, Salt Lake City, Utah. In connection
therewith, Marker International shall provide to First
Security, a second priority encumbrance on such parcels of
real estate, subject only to such other liens and
encumbrances as First Security may accept, and Marker
International shall provide, at its sole expense, a
mortgagee's policy of insurance in the total amount of
$2,600,000.00. First Security and Marker have agreed to
release such encumbrances upon payment to First Security by
Marker International, from the proceeds of the sale or
refinancing of such real estate, the total sum of
$2,600,000.00, or such lesser sum as may represent the net
proceeds from the sale or refinancing of such parcels of
real estate, reduced only by the following:
i) principal and interest owing to the holders of the
first priority encumbrances on each such parcel, including
any fees incurred by Marker International in connection with
any prepayment;
ii) accrued taxes and assessments then due with
respect to such parcels;
iii) customary escrow and recording expenses in
connection with any sale or refinancing of such parcels; and
iv) customary brokerage fees incurred and payable by
Marker International (if any) in connection with any such
sale or refinancing of such parcels.
Notwithstanding the provisions of Section 5. 8 MERGER OR
SALE of the Fourth Agreement, Marker and First Security
contemplate that Marker International will diligently
attempt to complete the sale or refinancing of the real
estate encumbered by the said "Deed of Trust (with
Assignment of Rents)" in order to reduce the outstanding
balance of the Ninth Note.
c. Marker International executes and delivers to First
Security a "Collateral Assignment of Trademarks and Patents"
in form and in substance acceptable to First Security,
encumbering certain of the trademarks of Marker used in the
manufacture and marketing of "Marker" branded goods in the
U. S. A. [Marker and First Security contemplate the
execution and delivery of additional such collateral
assignments of trademarks and patents by Marker in favor of
First Security as contemplated by that letter of
understanding dated August 16, 1998. ]
d. Marker Ltd., Marker USA, DNR North America, and DNR USA
execute and deliver to First Security Uniform Commercial
Code Financing Statements in form and substance acceptable
to First Security describing all inventories, accounts
receivable, general intangibles, goods, and other collateral
described in the "Second Amendment to Receivables and
Inventory Security Agreement";
e. Marker International executes and delivers to First
Security Uniform Commercial Code Financing Statements in form
and in substance acceptable to First Security describing the
following collateral:
i) all trademarks, patents, distribution agreements,
marketing agreements, license agreements, sublicense
agreements, and general intangibles associated with such
trademarks, license agreements, patents of Marker used in
connection with the manufacture or sale of "Marker" branded
goods in the U. S. A., and
ii) all fixtures used in connection with the real
estate encumbered by the said "Deed of Trust (with
Assignment of Rents)."
Marker and First Security hereby agree that in the event that Marker is able to
permanently reduce the outstanding, unpaid principal sum of the Ninth Note by at
least $2,600,000.00, AND, Marker is able to eliminate, on or before December 31,
1998, the temporary "overadvance" under the Fourth Agreement [being the sum of
$$5,073,913.00 as of the date hereof] either as a result of additional
reductions in the outstanding, principal balance of the Ninth Note, or as a
result of increases in the value of the "Borrowing Base," THEN IN SUCH EVENT,
First Security shall release all of the additional collateral (described in this
paragraph 2). Notwithstanding the foregoing, First Security and Marker
understand that the Fourth Agreement shall expire, by its own terms, at the
Termination Date.
3. New Definitions in Fourth Agreement. The Fourth Agreement is hereby
amended as follows:
"AGREEMENT" shall mean the Fourth Agreement as amended by
this Addendum, as this Agreement may be further amended from time to
time.
"AGGREGATE OUTSTANDINGS" shall mean the sum of (i) the
outstanding and unpaid principal balance of the Revolving Note, (ii)
the amounts outstanding, whether drawn or undrawn, under the then
effective L/Cs issued by Bank for the account of any Borrower, and
(iii) the FX Amount.
"AVAILABLE CREDIT" has application as a limitation on all of
the Commitments in the aggregate and means the amount available at any
given time for Advances, Import L/C's, and Foreign Exchange Contracts.
The amount of Available Credit shall mean: at any given time from the
date hereof through and including the Termination Date, the difference
obtained by subtracting the then Aggregate Outstandings from the
lesser of: (1) the sum of the Borrowing Base plus $5,073,913.00; or
(2) $33,600,000.00 (provided that Available Credit shall not be a
negative number).
"BORROWERS" shall mean Marker International, Marker Ltd.,
Marker USA, DNR USA, and DNR North America.
"BORROWING BASE" shall mean, at any time, THE SUM OF:
(i) the amount determined under a Borrowing Base Certificate
by applying (as shown in the formula therein contained) the applicable
Advance Rate to, respectively, Eligible Inventory and Eligible
Accounts, PLUS
(ii) the undrawn face amounts of any outstanding letters of
credit obtained by Borrowers in favor of Bank as beneficiary, which
letters of credit shall be in a form and issued by financial
institutions acceptable to Bank, PLUS
(iii) $2,600,000.00, LESS the amount of proceeds received by
First Security from the sale or refinancing of real estate encumbered
by the "Deed of Trust (with Assignment of Rents)," dated August 18,
1998, provided that in the event that all real property encumbered by
such deed of trust is reconveyed by First Security, such value shall
be deleted from the Borrowing Base.
"BORROWING BASE CERTIFICATE" shall mean the certificate in
the form set forth in EXHIBIT "A" hereto which must be submitted by
the Collateral Parties on a daily basis and serves as a basis for
determining the amount of Available Credit from time to time. "
"COLLATERAL PARTIES" shall mean any of Marker International,
Marker USA, Marker Ltd., DNR North America and DNR USA.
"COMMITMENTS" shall mean the obligations of the Bank, upon
the terms and subject to the conditions of this Agreement and pursuant
to the provisions of Section 2. 1 hereinafter to make Advances to
Borrowers, to provide Import L/Cs to Borrowers and to enter into
Foreign Exchange Contracts with Borrowers under the Revolving
Commitment.
"NOTES" shall mean the Revolving Note (Exhibit "B"), and the
L/C Notes (in the customary form), together with all amendments,
renewals and substitutions therefor.
"REVOLVING COMMITMENT," shall mean the Bank's commitment
under Section 2. 1(a) of the Fourth Agreement to lend to Borrowers, on
a revolving basis, in the form of Advances and Import L/Cs up to the
maximum aggregate principal amount of $33,600,000.00, at any time from
the date hereof, through and including the Termination Date (provided
there is sufficient Available Credit to permit said levels of
borrowing); provided further that the FX Amount calculated from time
to time (based upon the percentages of outstanding Foreign Exchange
Contracts set forth in the definition of FX Amount above) shall reduce
(on a dollar for dollar basis) the amount available under the
Revolving Commitment for Advances and Import L/Cs.
"REVOLVING NOTE means the Ninth Amended and Substituted
Revolving Promissory Note, dated of even date herewith, made by the
Borrowers and payable to the Bank in the maximum aggregate principal
sum of $33,600,000.00, in the form of Exhibit "B" attached hereto and
incorporated herein by this reference.
"SECURITY AGREEMENT" means the "Second Amendment to
Receivables and Inventory Security Agreement" as further amended from
time to time.
"TERM COMMITMENT," "TERM EURODOLLAR RATE," "TERM LOAN,"
"TERM MATURITY DATE," and "TERM NOTE" are eliminated and deleted as
defined terms, for the reason that the "TERM NOTE" has been
consolidated into the "REVOLVING NOTE" and the "TERM LOAN" eliminated.
4. ELIMINATION OF TERM LOAN COMMITMENT AND TERM LOAN NOTE. Section 2.
1 "BANK'S COMMITMENTS" is amended to read as follows:
"Upon the terms and subject to the conditions of this Agreement, the
Bank will extend credit to the Borrowers prior to the Termination Date
through the following financial accommodations: (a) the Bank hereby
commits to lend to Borrowers, by making Advances to the Borrowers on a
revolving basis and by issuing Import L/Cs for the account of
Borrowers, for use by the Borrowers in their general business
operations, subject to repayment as hereinafter stated (the "Revolving
Commitment"), up to the maximum aggregate amount at any one time
outstanding of $33,600,000.00 at any time through the date hereof
through and including the Termination Date (provided there is
sufficient Available Credit to permit said levels of borrowing),
provided further that the FX Amount calculated from time to time shall
reduce (on a dollar for dollar basis) the amount available under the
Revolving Commitment for Advances and Import L/Cs; (b) within the
Revolving Commitment, the Bank hereby further commits, subject to the
conditions and limitations set forth in Section 2. 6 below and
elsewhere in this Agreement, to make its foreign currency exchange
facilities available to Borrowers by entering into contracts with
Borrowers for sale by Bank to Borrowers of various foreign currencies
(provided there is sufficient Available Credit to permit such activity
in accordance with Section 2. 6 and recognizing that the FX Amount
calculated from time to time shall reduce (on a dollar for dollar
basis) the amount available under the Revolving Commitment for Advances
and Import L/Cs). The sum of all Advances outstanding under this
Agreement, the face amounts of all Import L/Cs outstanding under this
Agreement, and the FX Amount (the Aggregate Outstandings) shall not at
any time exceed the Available Credit at any given time from and
including the Termination Date. Repayment and reborrowing under the
Revolving commitment shall be permitted subject to the conditions
hereinafter set forth. "
Section 2. 7 "THE TERM NOTE" is deleted in its entirety. Section 3. 1 (b) "TERM
LOAN INTEREST" is deleted in its entirety. All other references to the "Term
Loan," "Term Note," or "Term Commitment," whether or not specifically identified
above, are hereby deleted to conform to the intent of the parties to consolidate
the term loan into the "Revolving Commitment. "
5. CERTAIN REPRESENTATIONS. Section 2. 4 "CERTAIN REPRESENTATIONS," is
amended to read as follows:
"Each draft upon the checking Account or withdrawal therefrom which
give rise to an Advance shall be deemed to be the representation to the
Bank by the Borrowers and the Authorized Representative making such
request that (a) no known Default or Event of Default exists or will
exist upon completion of the requested Advance; (b) the total amount of
the Aggregate Outstandings will not exceed the lesser of the Borrowing
Base or: $33,600,000.00 at any given time from the date hereof through
and including the Termination Date; (c) the representations and
warranties contained in Article IV hereof are true and correct with the
same force and effect as if made on the date of such request (except
for representations and warranties which relate solely to an earlier
date and except for changes of which the Bank has been previously
advised occurring as a result of transactions or events which are not
in violation of any term of this Agreement); and (d) the Borrowers are
otherwise in compliance with the terms of this Agreement without known
breach, delinquency, Default or Event of Default. "
Notwithstanding the foregoing, First Security and Marker acknowledge that Marker
is presently in default of certain of the terms of the Agreement, namely Section
3. 2 MANDATORY PAYMENT AND PREPAYMENTS C REVOLVING NOTE, Section 5. 15
CONSOLIDATED TANGIBLE NET WORTH, Section 5. 16 HYPOTHEKEN BANK LOAN, Section 7.
1 (a), (b), (e), and (g) EVENTS OF DEFAULT. First Security agrees to forbear
through the Termination Date with respect to the exercise of its rights and
remedies against Marker as a result of such conditions of default.
6. ELIMINATION OF EXCESS BORROWING RIGHT. Section 2. 9 EXCESS
BORROWING RIGHT is hereby deleted.
7. SUBORDINATION OF INSIDER DEBT. Marker delivers herewith the Letter
of Understanding of Alan Sullivan, attorney for Henry E. Tauber, agreeing to the
subordination of the priority and payment of $3,000,000.00 in debt which may
hereafter be owed by Marker to Henry E. Tauber TO THE PAYMENT OF ALL OBLIGATIONS
OF INDEBTEDNESS OF MARKER TO FIRST SECURITY. Through and including the
Termination Date, all representations of Marker to First Security shall include
an acknowledgement of such conditions of default.
Except as otherwise amended herein, all other terms, conditions and
provisions of the Fourth Agreement are hereby reaffirmed.
Marker International, a Utah corporation
By: /S/ KEVIN HARDY
-----------------------------
Title: CHIEF FINANCIAL OFFICER
Marker USA, a Utah corporation
By: /S/ KEVIN HARDY
-----------------------------
Title: CHIEF FINANCIAL OFFICER
Marker Ltd., a Utah corporation
By: /S/ KEVIN HARDY
------------------------------
Title: CHIEF FINANCIAL OFFICER
DNR USA, a Utah corporation
By: /S/ KEVIN HARDY
-------------------------------
Title: CHIEF FINANCIAL OFFICER
DNR North America
By: /S/ KEVIN HARDY
-------------------------------
Title: CHIEF FINANCIAL OFFICER
First Security Bank, National Association
By: /S/ VICKI J. PERKINS
----------------------------------
Title: VICE PRESIDENT
<PAGE>
EXHIBIT A
To: First Security Bank, N.A
Special Loans Dept.
79 South Main Street, 8th Floor
Salt Lake City, Utah 84111
ATTN: Vicki Perkins
Effective date of this Certificate:
Pursuant to the terms and conditions of that certain "Addendum and
Amendment to Fourth Amended and Restated Revolving Credit Agreement" dated as of
August 18, 1998, among MARKER INTERNATIONAL, a Utah corporation, MARKER USA, a
Utah corporation, MARKER LTD, a Utah corporation, DNR North America, and DNR USA
(hereinafter collectively referred as "Borrowers"), and FIRST SECURITY BANK,
N.A. ("Bank"), as amended from time to time (the "Agreement"), Borrowers hereby
certify, that the representations and warranties of the Agreement are true and
correct as of the date set forth below with the same effect as if made as of the
date of said Agreement, and Borrowers warrant, that no Event of Default, as
defined in the Agreement, has occurred and that the Borrowers are in full
compliance with all terms and conditions of the Agreement.
Borrowers further certify, that the following computations of the
"Borrowing Base" are true and correct in accordance with the terms and
conditions of the Agreement as of the date hereof:
1. Summary of Inventory (as defined in the Agreement) of USA and LTD (at
"cost" - basis for valuation will be supplied at the request of Bank):
A. Inventory items held for sale (excluding
(i) items subject to lease or rental
agreements and whether in processing or
not, and (ii) items identified to a
contract of sale to any purchaser)
See Attached Summary of items, by type, and
quantity and ascribed value.
Total Value: $_____________
B. Less Inventories included in "A" above
subject to any encumbrance, lien or
security interest (excepting security
interests of Bank) or Inventories held
for sale on consignment (if any) $_____________
C. Less Inventories of MARKER LTD which as
of April 1 of any year are not carried
in MARKER LTD's current or coming season
catalog $
D. Total Adjusted Value of Inventories for
Borrowing Base (A-B-C) x 55% = $______________
2. A. All "Accounts" (as defined in the
Agreement) of BORROWERS $______________
B. Less "Accounts" included in "A" above
subject to any prior encumbrance, lien
or security interest (excepting
encumbrances of Bank) $______________
C. Less "Accounts" more than sixty (60)
days past the original contracted
payment due date $______________
D. Less other Accounts which are not
"Eligible" as provided in the definition
of "Eligible Accounts" in the Agreement $______________
E. Adjusted Value of "Satisfactory
Accounts" for Borrowing Base (A-B-C-D) x
80% = $_______________
3. A. $2,600,000.00 = $2,600,000.00
B. LESS the total sum of proceeds received
by Bank from the sale or refinancing of
real estate encumbered by Bank's "Deed
of Trust (with Assignment of Rents)"
dated as of 8-18-98. (At such time that
Bank has received the proceeds to which
Bank is entitled from the sale or
refinancing of BOTH parcels of such real
estate, the net = $ amount under this 3C
shall be zero from that time forward for
purposes of calculating the total
"Borrowing Base"). = $________________
C. Adjusted Value of Real Estate Collateral
(A-B) = $_________________
4. Total "Borrowing Base"
(1D + 2E + 3C. ) = $_________________
5. Aggregate Outstandings under the
Agreement (as defined in the Agreement)
$_________________
6. Amount Available for Advancement to
Borrowers (4-5) if the Difference is a
Positive Figure ("Available Credit") $_________________
Sum to be Repaid by Borrowers (4-5) if the
Difference is a Negative Figure $_________________
The undersigned certifies that all values
are calculated as of the date hereof in
accordance with the terms of the
Agreement.
DATED this_________ day of ______________, 19__.
MARKER USA, a Utah corporation
By:
Its:
MARKER LTD, a Utah corporation
By:
Its:
MARKER INTERNATIONAL, a Utah corporation
By:
Its:
DNR USA, a Utah corporation
By:
Its:
DNR North America, a Delaware corporation
By:
Its:
<PAGE>
Exhibit B to Addendum
NINTH AMENDED AND SUBSTITUTED
REVOLVING PROMISSORY NOTE
August 18, 1998
Borrowers: MARKER USA, a Utah corporation
MARKER LTD, a Utah corporation
MARKER INTERNATIONAL, a Utah corporation
DNR NORTH AMERICA, INC., a Delaware corporation
DNR USA, INC., a Delaware corporation
Rate: As outlined in the Agreement (as defined below)
Principal Amount: Thirty-Three Million Six Hundred Thousand Dollars
($33,600,000.00)
Due Date: September 5, 1998
For value received, the undersigned ("Borrowers"), jointly and
severally, promise to pay on or before September 5, 1998, to First Security
Bank, N. A. f/k/a First Security Bank of Utah, National Association ("First
Security"), or to its order, the total principal sum of Thirty- Three Million
Six Hundred Thousand Dollars ($33,600,000.00), or such other amount then
outstanding on this Note, plus interest then accrued and unpaid. This Note is
payable in lawful money of the United States of America.
Interest on the unpaid balance outstanding will be calculated at a per
annum rate in effect pursuant to the terms of the Fourth Amended and Restated
Revolving and Term Credit Agreement dated as of November 6, 1997, as amended by
that certain Addendum and Amendment to Fourth Amended and Restated Revolving and
Term Credit Agreement dated August 18, 1998 (collectively the "Agreement").
Notwithstanding the foregoing, upon the occurrence of an "Event of Default" (as
defined in the Agreement), the rate of interest per annum shall be three percent
(3.0%) above the "Prime Rate" per annum from and after such Event of Default;
provided further, however, that if First Security shall waive in writing or
allow a cure of such Event of Default, the interest rate shall revert to the
then effective non-default rate from and after such waiver or completion of cure
(whichever is sooner). As used herein, "Prime Rate" shall mean First Security's
announced rate of interest (per annum) used as a reference point from which the
cost of credit to customers may be calculated, and is subject to change from
time to time. First Security may make loans bearing interest above, at or below
its Prime Rate; such rate, though designated as the Prime Rate, not necessarily
being the best or lowest rate available to borrowers from First Security. The
interest rate in effect for this Note may change from time to time, and the
interest payable on this Note will continue to fluctuate with the applicable
index rate and with changes in certain applicable interest margins, all as
specified in the Agreement. Any changes in the interest rate under this Note
shall become effective, without prior notice, on the date on which the
applicable index rate changes (or on which the applicable interest margin
changes), as provided in the Agreement. Interest will be charged on a daily
basis for the actual number of days the unpaid principal is outstanding on a per
annum basis from the date of disbursement to the date of maturity. The actual
interest to be charged under this Note shall be calculated on a 365 day year.
Should the rate of interest, as calculated, exceed that allowed by law, the
applicable rate of interest will be the maximum rate of interest lawfully
allowed. The principal amount outstanding, on which the interest rate shall be
charged, shall be determined from the records of First Security, which shall be
presumed correct unless clear and convincing evidence to the contrary shows the
same to be mistaken.
Installments of all accrued and then unpaid interest shall be paid on
the first day of each calendar month during the term hereof. The maximum
principal amount that Borrowers have the right to borrow under this Note is
limited by certain "Borrowing Base," "Available Credit" and other restrictions
contained in the Agreement. In the event that any of the above provided monthly
interest installments (or prepayments of principal) are not paid when due, or
within ten (10) days after such due date, Borrowers agree to pay without further
notice hereof, a late fee equal to five percent (5%) of the unpaid and
delinquent amount. If, however, such installment of interest or principal
prepayment falls due and payable on a Saturday, Sunday, legal holiday or other
nonbanking day under the laws of the State of Utah, the due date of such
installment or principal prepayment shall be extended to the next succeeding
business day and interest hereon shall be payable at the then applicable rate
during such extension.
All payments received by First Security on this Note shall be applied
as follows: first, following any "Default" under the Agreement, toward the
satisfaction of reasonable attorneys' fees and costs incidental thereto and to
advances made and costs and expenses incurred by the holder of this Note and its
agents to enforce Borrowers' obligations hereunder and under the related loan
documents or to preserve the collateral securing said obligations; second,
toward the reduction of any and all accrued and unpaid interest under this Note,
including uncollected late charges; third, toward the reduction of unpaid
principal under this Note; and fourth, toward the reduction of any obligations
of Borrowers under "Import L/Cs" issued under the Agreement.
This Note is the "Revolving Note" referred to in the Agreement and is
entitled to the benefits thereof. This Note evidences a revolving line of credit
and Borrowers may prepay the unpaid principal sum hereof as provided in the
Agreement, and, during the pendency of the "Revolving Commitment" set forth in
Section 2 of the Agreement, reborrow such sums subject to the conditions and
limitations set forth therein.
Upon the occurrence of an Event of Default related to the failure to
make any payment of said installments of interest or any part thereof, it shall
be optional with the legal holder of this Note to declare the entire principal
and interest balance hereunder due and payable, and proceedings may at once be
instituted for the enforcement and collection of the same by law.
If there shall be an Event of Default pursuant to the Agreement which
authorizes the acceleration of the maturity of this Note, First Security or the
holder of this Note, at its option, may declare the whole immediately due and
payable. Borrowers understand and agree that failure of First Security or any
holder of this Note to exercise this option shall not constitute a waiver of the
right to exercise the same on a later Event of Default.
In the Event of Default, Borrowers agree to pay all reasonable
attorneys' fees and other expenses incurred by First Security in the enforcement
of any of its rights hereunder whether the Event of Default is ultimately cured
or whether First Security is obligated to pursue its legal remedies, including
such expenses incurred prior to the institution of legal action, during the
pendency of such legal action and continuing to include all such expenses
incurred in connection with any appeal to higher courts arising out of legal
proceedings to enforce Borrowers' obligations hereunder or in any way in
connection with bankruptcy or other insolvency proceedings.
The makers, sureties, guarantors and endorsers of this Note jointly
and severally waive presentment for payment, notice of dishonor, protest, notice
of protest and of nonpayment of this Note, and consent to any extension of time
of payment hereof, any addition, release or substitution of all or any
collateral securing the payment hereof, and any addition, release or
substitution of any party liable for this obligation. Time is of the essence
hereof.
This Note shall be construed according to the laws of the State of
Utah.
This Note is intended to replace by consolidation and substitution
that certain Term Promissory Note dated October 29, 1996, made by Marker USA,
Marker LTD, and Marker International, in the original principal sum of
$5,000,000 (the "Term Note"). As of the date of this Note, the outstanding
principal balance of the Term Note ($4,500,000) shall be considered to have been
transferred to this Note, and the term feature of the indebtedness under the
Term Note shall, as of the date of this Note, be modified to be included as part
of the revolving indebtedness under this Note. This Note is also intended to
amend by substitution the Eighth Amended and Substituted Revolving Promissory
Note dated November 6, 1997, made by Marker USA, Marker Ltd, Marker
International, and DNR North America, Inc., and payable to First Security in the
maximum principal amount of $27,000,000 (the "Eighth Amended Note"), which in
turn amended by substitution the Seventh Amended and Substituted Revolving
Promissory Note dated October 29, 1996, made by Marker USA, Marker Ltd and
Marker International (the "Original Borrowers") and payable to First Security in
the maximum principal amount of $20,000,000 (the "Seventh Amended Note"), which
in turn amended by substitution the Sixth Amended and Substituted Revolving
Promissory Note dated August 26, 1996, made by Original Borrowers and payable to
First Security in the maximum principal amount of $20,000,000 (the "Sixth
Amended Note"), which in turn amended by substitution the Fifth Amended and
Substituted Revolving Promissory Note dated September 5, 1995, made by Original
Borrowers and payable to First Security in the maximum principal amount of
$18,000,000 (the "Fifth Amended Note"), which in turn amended by substitution
the Fourth Amended and Substituted Revolving Promissory Note dated July 15,
1994, made by Original Borrowers and payable to First Security in the maximum
principal amount of $14,000,000 (the "Fourth Amended Note"), which in turn
amended by substitution the Third Amended and Substituted Revolving Promissory
Note dated August 6, 1993, made by Original Borrowers and payable to First
Security in the maximum principal amount of $10,500,000 (the "Third Amended
Note"), which in turn amended by substitution the Second Amended and Substituted
Revolving Promissory Note dated July 31, 1992, made by Original Borrowers and
payable to First Security in the maximum principal amount of $8,500,000 (the
"Second Amended Note"), which in turn amended by substitution the Amended and
Substituted Revolving Promissory Note dated October 11, 1991, made by Original
Borrowers and payable to First Security in the maximum principal amount of
$8,500,000.00 (the "Amended Note"), which in turn amended by substitution the
Revolving Promissory Note dated March 28, 1991, made by Original Borrowers and
payable to First Security in the maximum principal amount of $7,500,000 (the
"Original Note"). This Note is not a novation or payment of the Term Note, the
Eighth Amended Note, the Seventh Amended Note, Sixth Amended Note, the Fifth
Amended Note, the Fourth Amended Note, the Third Amended Note, the Second
Amended Note, the Amended Note or the Original Note.
MARKER USA, a Utah corporation
By:/S/ KEVIN HARDY
------------------------------
Its: CHIEF FINANCIAL OFFICER
MARKER LTD, a Utah corporation
By:/S/ KEVIN HARDY
-----------------------------
Its: CHIEF FINANCIAL OFFICER
MARKER INTERNATIONAL, a Utah corporation
By:/S/ KEVIN HARDY
-----------------------------
Its: CHIEF FINANCIAL OFFICER
DNR NORTH AMERICA, INC.,
a Delaware Corporation
By:/S/ KEVIN HARDY
------------------------------
Its: CHIEF FINANCIAL OFFICER
DNR USA, INC., a Delaware corporation
By:/S/ KEVIN HARDY
-------------------------------
Its: CHIEF FINANCIAL OFFICER
