SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported) JUNE 18, 1999
MARKER INTERNATIONAL
(Exact Name of Registrant as Specified in Charter)
UTAH 0-24556 87-037275
- -------------------------------- ----------------- ------------------
(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>
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 18, 1999, Marker International ("Marker" or the "Company"),
Marker Canada Ltd. ("Marker Canada"), CT Sports Holding AG, a corporation
organized and existing under the laws of Switzerland, and Lapointe Rosenstein,
as escrow agent, entered into a shareholders agreement (the "Shareholders
Agreement") pursuant to which CT Sports Holding AG purchased 200 class "A"
shares of Marker Canada for a purchase price of Cdn $1.5 million. CT Sports
Holding AG is a newly formed joint venture between Tecnica S.p.A. and H.D.
Cleven, the principal shareholder of the Volkl Group. The 200 class "A" shares
represent 66.66% of the outstanding voting and participating shares of Marker
Canada. The remaining 100 class "A" shares, representing 33.33% of the
outstanding and voting shares, are held by the Company.
CT Sports Holding AG will hold its 200 shares in the name of and on
behalf of Marker International GmbH (in foundation), which upon incorporation
will be deemed to be the shareholder of such shares. The purchase price of Cdn
$1.5 million (converted to U.S. dollars at an exchange rate of 1.4627 Canadian
dollar per U.S. dollar) will be deducted from the U.S. $15 million purchase
price of the assets of the Company pursuant to an asset purchase agreement
between the Company and a subsidiary of CT Sports Holding AG (the "Asset
Purchase Agreement"). CT Sports Holding AG has the option (the "Option") to
require Marker to sell to CT Sports Holding AG all of Marker's 100 shares of
Marker Canada for a purchase price of Cdn $750,000, less all or any amounts then
payable by Marker or any of its subsidiaries to Marker Canada, CT Sports Holding
AG or any subsidiary or affiliate of CT Sports Holding AG. The Option is
exercisable if: (i) the transactions contemplated by the Asset Purchase
Agreement are not consummated on or before December 31, 1999, (ii) Marker or any
of its subsidiaries is acquired by, merges with or sells all or a substantial
part of its assets or securities to a person other than CT Sports Holding AG,
its subsidiaries or affiliates, (iii) Marker makes a motion or application in
the bankruptcy court to reject the Option, or (iv) Marker contests the validity
or enforceability of the Option or denies it has any obligations under the
Shareholders Agreement.
In connection with the Shareholders Agreement, each of Marker, Tecnica
S.p.A. and the Volkl Group entered into distribution agreements with Marker
Canada granting Marker Canada the exclusive right to distribute certain products
in Canada for a period of five years.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS.
None.
(b) PRO FORMA FINANCIAL INFORMATION.
None.
(c) EXHIBITS.
10.1 Unanimous Shareholders Agreement made and entered into in
the City and District of Montreal, on the 18th day of June, 1999.
<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: July 2, 1999
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
10.1 Unanimous Shareholders Agreement made and entered into in the City and
District of Montreal, on the 18th day of June, 1999.
EXHIBIT 10.1
UNANIMOUS SHAREHOLDERS AGREEMENT MADE AND ENTERED INTO IN THE CITY AND
DISTRICT OF MONTREAL, ON THE 18TH DAY OF JUNE, 1999
BETWEEN: CT SPORTS HOLDING AG, a corporation duly
incorporated according to law, herein acting
and represented by Giancarlo Zanatta and
Christoph Bronder, acting for and on behalf
of Marker International GmbH (in foundation)
(hereinafter referred to as "CT SPORTS")
AND: MARKER INTERNATIONAL, a corporation duly
incorporated according to law, herein acting
and represented by Peter Weaver, its
President and CEO,
(hereinafter referred to as "MARKER")
AND: MARKER CANADA LTD., a corporation duly
incorporated pursuant to the CANADA BUSINESS
CORPORATIONS ACT, herein acting and
represented by Shaun Morris, its President,
(hereinafter referred to as the "COMPANY")
AND: LAPOINTE ROSENSTEIN, a general partnership,
having a place of business at 1250 Rene
Levesque Blvd. West, Suite 1400, Montreal,
Quebec, (hereinafter referred to as the
"ESCROW AGENT")
1. PREAMBLE
1.1 WHEREAS Marker has been and shall be, until the execution of this
Shareholders Agreement, the sole shareholder of the Company;
1.2 WHEREAS Tecnica S.p.A. (hereinafter "TECNICA") and Volkl (International)
A.G. (hereinafter "VOLKL") and Marker currently supply Ski Products to the
Company;
1.3 WHEREAS CT Sports is currently negotiating with Marker for the purchase from
Marker of substantially all of Marker's assets pursuant to the Plan and
according to the terms and conditions of an Asset Purchase Agreement currently
being negotiated between CT Sports and Marker;
1.4 WHEREAS because of the present financial condition of the Company, it is
unable to properly carry on the Business without additional capital funding of
at least $1,500,000;
1.5 WHEREAS CT Sports, being a joint venture company organized between Tecnica
and an Affiliate of Volkl, has agreed to provide such additional capital funding
prior to the execution of the Asset Purchase Agreement and the entry of the
Confirmation Order;
1.6 WHEREAS CT Sports, Marker and the Company have agreed to enter into this
Shareholders Agreement not only to provide for the provision of the additional
capital funding acquired by the Company but also to set out the conditions which
shall apply in the event that the acquisition of the assets of Marker by CT
Sports are or are not acquired by CT Sports (or its subsidiary);
1.7 WHEREAS contemporaneously with the execution of this Shareholders Agreement,
CT Sports shall subscribe for such number of Class "A" Shares of the Company
which, subsequent to the issue thereof, shall represent 66.66% of the
outstanding voting and participating Shares for a total subscription price of
$1,500,000;
1.8 WHEREAS all of the remaining outstanding Shares of the Company, namely 100
shares represent 33.33% of the outstanding voting and participating Shares,
shall be held by Marker;
1.9 WHEREAS the parties hereto wish to enter into this Shareholders Agreement to
set forth certain rights and obligations with respect to their shareholdings as
being in their respective best interests and for the purpose of providing for
the operation of the Company.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH THAT:
2. INTERPRETATION
2.1 DEFINITIONS - Unless the subject matter or context otherwise requires,
2.1.1 "AFFILIATE" means with respect to any Person, any Person directly or
indirectly controlling, controlled by or under common control with
such other Person (it being understood and agreed that for the
purposes of this Shareholders Agreement, Tecnica, Volkl and Mr.
Hans-Dieter Cleven shall be deemed to be Affiliates of CT Sports). For
the purposes of this definition, "control" when used with respect to
any Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of
voting securities by contract or otherwise and the terms "controlling"
and "controlled" have meanings co-relative to the foregoing;
2.1.2 "ASSET PURCHASE AGREEMENT" means an agreement, reasonably acceptable
to CT Sports, pursuant to which a nominee of CT Sports is to acquire
substantially all of the assets of Marker and certain of its
liabilities;
2.1.3 "ASSOCIATE" means with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with
such other Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing;
2.1.4 "BOARD" means the board of directors of the Company;
2.1.5 "BUSINESS" means the business currently carried on by the Company
consisting of the distribution and sale of sports equipment in
general, including but without restriction, skis, bindings,
snowboards, ski accessories, boots and shoes;
2.1.6 "BUSINESS DAY" means any day excluding Saturday, Sunday and any other
day which in Montreal is a legal holiday or a day on which banking
institutions are authorized by law to be closed for business;
2.1.7 "CBCA" means the CANADA BUSINESS CORPORATIONS ACT and any statute that
may be substituted therefor, as from time to time amended, and the
regulations thereto and any regulations that may be substituted
therefor, as from time to time amended;
2.1.8 "CONFIDENTIAL INFORMATION" means all financial information including
and not limited to information contained in the Company's annual
audited and quarterly unaudited statements and other information so
designated by the Company at the time of disclosure provided, however,
that the phrase "Confidential Information" shall not include
information which:
2.1.8.1 is in the public domain through no fault of the Shareholder or
any of its former or current directors, officers or employees,
2.1.8.2 is properly within the legitimate possession of the
Shareholder prior to its disclosure hereunder and without any
obligation of confidence,
2.1.8.3 after disclosure, is lawfully received by the Shareholder from
another Person who is lawfully in possession of such Confidential
information and such other Person was not restricted from disclosing
the information to the Shareholder,
2.1.8.4 is independently developed by the Shareholder through Persons
who have not had access to, or knowledge of, the Confidential
Information,
2.1.8.5 is approved by the Company in writing for disclosure prior to
its disclosure, or
2.1.8.6 is required to be disclosed by law;
2.1.9 "CONFIRMATION ORDER" means an order of the United States Bankruptcy
Court having jurisdiction in the matter of the Plan approving the Plan
and authorizing the consummation of the transactions contemplated by
the Plan and by the Asset Purchase Agreement which confirmation order
must be in form and substance reasonably satisfactory to CT Sports;
2.1.10 "ENCUMBRANCE" means any charge, lien or encumbrance, including any
hypothec, mortgage, claim, assignment, pledge, security agreement or
other similar charge, whether arising under civil law, common law,
statute or contract;
2.1.11 "PLAN" means Marker's plan of reorganization, reasonably acceptable to
CT Sports, under Title 11 of the United States Code entitled
"Bankruptcy", as now and hereinafter in effect, or any successor
statute;
2.1.12 "PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liabilities companies,
limited liability partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organisations, whether or not legal entities
and entities of any government;
2.1.13 "RELATED" has the meaning ascribed thereto in the INCOME TAX ACT
(Canada);
2.1.14 "SECURITIES" means any stocks, shares, options or warrants issued by
the Company including, without limitation, common shares, or any right
to subscribe to purchase or acquire, any of the foregoing;
2.1.15 "SHARE" or "SHARES" means the Class A voting and participating shares
of the Company;
2.1.16 "SHAREHOLDERS" means CT Sports and Marker and their respective
successors and permitted assigns and "SHAREHOLDER" means either of CT
Sports or Marker and their respective successors and permitted
assigns;
2.1.17 "SHAREHOLDERS AGREEMENT" means this agreement between CT Sports,
Marker, the Company and the Escrow Agent, as amended, supplemented or
otherwise modified from time to time;
2.1.18 "SKI PRODUCTS" means ski boots, skis and ski bindings;
2.1.19 "SUBSIDIARY" has the meaning ascribed to it in the CBCA and includes a
Subsidiary of a Subsidiary.
2.1.20 "THIRD PARTY" means a Person who is not Related to any Shareholder or
any Subsidiary or Affiliate thereof;
2.1.21 "TRANSFER" means, with respect to Shares or any other securities, as
the case may be, any direct or indirect transfer, sale, assignment or
other disposition of ownership thereof or the entering into of any
swap, participation or other arrangement that transfers to another
person, in whole or in part, any of the economic consequences of
ownership of such Shares or other securities, in each case as
expressly permitted under the terms of this Shareholders Agreement;
2.1.22 "TRANSFEREE" means any transferee of Shares pursuant to a Transfer.
All other capitalized terms used herein, unless defined above or unless
the context otherwise requires, shall have the respective meanings
ascribed thereto in the relevant section or paragraph of this
Shareholders Agreement.
2.2 INTERPRETATION NOT AFFECTED BY HEADINGS - The division of this Shareholders
Agreement into sections and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Shareholders Agreement.
2.3 APPLICABLE LAW - This Shareholders Agreement shall be deemed to have been
made in the Province of Quebec and shall be interpreted in accordance with and
be governed by the laws of Quebec and the laws of Canada applicable therein
(without giving effect to principles of conflicts of law).
2.4 FUNDS - All dollar amounts referred to in this Shareholders Agreement are in
lawful money of Canada.
2.5 PARAMOUNTCY - If any provision of this Shareholders Agreement conflicts with
any by-law of the Company or with any unanimous or other existing shareholders
agreement binding on the Company or any other party hereto, the provisions of
this Shareholders Agreement shall prevail.
2.6 INVALIDITY - If any provision of this Shareholders Agreement shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect or render invalid or unenforceable such provision
in any other jurisdiction or any other provision of this Shareholders Agreement
in any jurisdiction.
2.7 BUSINESS DAY - In the event that any action to be taken hereunder falls on a
day which is not a Business Day, then such action shall be taken on the next
succeeding Business Day.
2.8 CALCULATIONS - All calculations, financial statements and financial
documents required to be made or produced under or pursuant to this Shareholders
Agreement, other than monthly statements or reports, shall be made or produced
in accordance with generally accepted accounting principles which are from time
to time approved by the Canadian Institute of Chartered Accountants as set forth
in the publication known as the "CICA Handbook" and applicable as at the date on
which any calculation or financial document is required to be made or produced.
3. SHAREHOLDERS AND SHAREHOLDINGS
3.1 Immediately prior to the date hereof and without giving effect to the
subscription of Shares to CT Sports as contemplated hereby, the Company's
authorized capital stock consists of an unlimited number of Shares of which
there are presently issued and outstanding one hundred (100) Shares and an
unlimited number of non voting non participating Class B shares, none of which
are issued and outstanding as of the date hereof.
3.2 The Shareholders acknowledge that concurrently with the execution of this
Shareholders Agreement and the subscription for Shares to be made by CT Sports,
the Shares in the Company shall be held as follows:
SHAREHOLDER Class "A" Shares
CT Sports 200
MARKER 100
3.3 CT Sports hereby confirms that (i) it has entered into this Shareholders
Agreement and (ii) it will hold the Shares, strictly in the name and on behalf
of Marker International GmbH (in foundation), which latter corporation, upon
incorporation, shall be deemed the Shareholder of the Shares in question and a
party to this Shareholders Agreement.
3.4 The parties hereto hereby acknowledge and agree that the capital investment
made by CT Sports in the amount of Cdn $1,500,000 by way of the subscription for
Shares by CT Sports immediately subsequent to the execution of this Shareholders
Agreement shall be deemed to form part of CT Sports' capital contribution to
Marker International GmbH pursuant to the Asset Purchase Agreement and that,
consequently, at the closing of the Asset Purchase Agreement, the said capital
contribution of U.S. $15,000,000 will be reduced by the sum of Cdn $1,500,000
(converted to U.S. dollars and the exchange rate of 1.4627 Canadian dollars per
U.S. dollar).
4. CONDUCT OF AFFAIRS
4.1 DIRECTORS OF THE COMPANY - The Board shall consist of not more than (6)
directors, of whom CT Sports shall be entitled to nominate four (4), Marker
shall be entitled to nominate one (1) and one (1) other, namely Shaun Morris,
who shall be the joint nominee of Marker and CT Sports.
4.2 VACANCY. - CT Sports and Marker agree to vote or cause to be voted all of
the Shares of the Company at any regular or special meeting of the Shareholders
of the Company called for the purpose of filling positions on the Board, or any
written consent executed in lieu of such a meeting of Shareholders, and agree to
take or cause to be taken all actions otherwise necessary, to ensure the
election to the Board of the Company of the CT Sports nominees, the Marker
nominees, and the joint nominee as required by this Section CONDUCT OF AFFAIRS.
4.3 QUORUM AT MEETINGS - A quorum of a meeting of the Board shall consist of a
majority of the directors.
4.4 COMPANY - The Company agrees to carry out and be bound by the provisions of
this Shareholders Agreement as it applies to it to the fullest extent permitted
by law.
4.5 ACCOUNTING - The books of account of the Company shall be kept and
maintained at all times at the head office of the Company and shall be made
available to the Shareholders at any reasonable time during normal business
hours for inspection.
4.6 ADDITIONAL INFORMATION - The Shareholders shall be entitled to require the
Company to provide to it any information or report whatsoever required by it,
acting reasonably, relating to the Business and affairs of the Company.
5. OPERATIONS OF THE COMPANY
5.1 BUSINESS OF THE COMPANY - The Company shall not carry on any business other
than the Business.
6. BANKERS AND BANKING ARRANGEMENTS
6.1 BANKERS - The bankers of the Company shall be such bank, banks or other
financial institutions as may be agreed upon from time to time by the Board.
6.2 SIGNATORIES - All drafts, cheques and bills of exchange for or on behalf of
the Company's bank accounts shall require the signatures of such individuals as
may be agreed upon from time to time by the Board.
6.3 AUDITORS - The auditors of the Company shall be the auditors designated by
the Board from time to time.
7. MAJOR DECISIONS
7.1 SPECIAL BY-LAW - The parties agree that no action will be taken by the
Company in respect of the matters described in the by-law contained in this
subsection without the prior written approval of the Shareholders. Furthermore,
the Shareholders undertake to take whatever steps may be necessary to adopt the
following by-law as a by-law of the Company, and the Shareholders further
undertake not to vote their Shares and not otherwise make any decision or take
any action in any manner or capacity whatsoever for the purpose of amending or
repealing the said by-law of the Company, unless they do so by vote of the
Shareholders holding Shares representing 85% or more of the total issued and
outstanding Shares.
"Notwithstanding any by-law, resolution, decision or act previously
adopted, the following provisions override, supersede and amend all
by-laws of the Company inconsistent herewith:
7.1.1 at no time and at no meeting whatsoever shall the Chairman or
President of the Company have any additional vote or any vote
whatsoever in addition to his ordinary vote as shareholder or as
director and, more particularly, the Chairman or President shall have
no casting vote in case of a tie;
7.1.2 there shall be no by-law, resolution or act of the shareholders,
directors or officers of the Company having any of the following
objects or purposes unless approved by all the Shareholders:
7.1.2.1 taking any action to wind-up, dissolve or terminate the
corporate existence of the Company or any of its subsidiaries;
7.1.2.2 making an assignment or proposal under the BANKRUPTCY AND
INSOLVENCY ACT, or exercising any recourse or any other measure
designed for the protection of insolvent debtors pursuant to any other
legislation in connection with insolvency;
7.1.2.3 the sale, lease, exchange or disposition by the Company of its
entire undertaking, property or assets or any substantial part
thereof.
8. SHARE TRANSFERS
8.1 ALIENATION PROHIBITED - Prior to the consummation of the Asset Purchase
Agreement (or in default thereof, the exercise of the Option pursuant to Section
CALL OPTIONs hereof) and unless otherwise provided for in accordance with the
terms hereof, no Shareholder shall transfer, assign, cede, pledge, mortgage,
hypothecate, charge or otherwise encumber, alienate or dispose of in any manner
whatsoever the whole or any part of its Shares (or any interest therein) without
first obtaining the written consent of the other Shareholder.
9. CONFIDENTIALITY
9.1 CONFIDENTIALITY - Each of the Shareholders agrees to use, and to use its
best efforts to ensure that its authorized representatives use, the same degree
of care as such Shareholder uses to protect its own confidential information, to
keep confidential and not to make use of any Confidential Information in its
possession. The Shareholders may disclose Confidential Information to any of its
Affiliates, shareholders, partners, Subsidiaries or parents for the purpose of
reporting on the activities of, or evaluating its investment in the Company
provided that prior to disclosure such Affiliates, shareholder, partner,
Subsidiary or parent agrees to be bound by the confidentiality provisions of
this Section CONFIDENTIALITY and such other confidentiality provisions as may be
requested by the Company acting reasonably. Furthermore, the Shareholders shall
be entitled to disclose to any creditor of the Company, or to any other Person
to whom such disclosure is deemed necessary or useful by the Shareholders, any
information relating to the Business or affairs of the Company, the whole with a
view to resolving various problems encountered by the Company or ensuring its
continued existence. In addition, the Shareholders shall be entitled to disclose
financial and operational information relating to the Company including
Confidential Information (other than trade secrets or know-how), upon reasonable
written notice to the Company, to any Person interested in purchasing Shares
held by it. Notwithstanding anything contained herein, the Shareholders shall
require from any Person to whom any disclosure is so made a written
confidentiality agreement upon terms and conditions satisfactory to the Company,
acting reasonably.
9.2 DISCLOSURE REQUIRED - Anything to the contrary herein notwithstanding,
disclosure of Confidential Information shall not be precluded if such disclosure
is in response to a valid order of a governmental authority or is otherwise
required by law; provided, however, that the said Shareholders shall, if
reasonably possible, first have given notice thereof to the Company and shall
have, as appropriate:
9.2.1 fully co-operated in the Company's attempt, if any, to obtain a
"protective order" from the appropriate governmental authority; or
9.2.2 attempted to classify such documents to prevent access by the
public, in accordance with the provisions of any law pertaining to
freedom of information.
9.3 REASONABLENESS OF COVENANTS - The covenants set forth in subsections
CONFIDENTIALITY are reasonable and valid in all respects and each Shareholder
hereby irrevocably agrees to waive (and irrevocably agrees not to raise) as a
defence any issue of reasonableness in any proceeding to enforce any such
covenant.
10. CALL OPTIONS
10.1 CALL OPTION - In the event that:
(a) the transaction contemplated by the Asset Purchase Agreement is
not consummated on or before December 31, 1999; or
(b) if at any time Marker and/or any of its Subsidiaries is acquired
by or enters into or agrees to enter into a merger, tender or
exchange or other form of business combination with, or sells all
or any substantial part of its assets or Securities to any Person
(other than CT Sports, its subsidiaries or Affiliates); or
(c) Marker (or any trustee in bankruptcy) makes a motion or
application in the bankruptcy court to reject the option granted
herein; or
(d) Marker (or any trustee in bankruptcy) at any time contests the
validity or enforceablity of this option or denies it has any
obligations hereunder;
10.2 then CT Sports shall have the option, exercisable by written notice given
to the Company, Marker (notwithstanding the automatic stay imposed under Section
362(a) of the Bankruptcy Code) and the Escrow Agent at any time subsequent to
such date or event, to require Marker to sell to it all of Marker's Shares in
consideration of a purchase price equal to $750,000, less all or any amounts
then payable by Marker or any of its Subsidiaries to the Company, CT Sports or
any Subsidiary or Affiliate of CT Sports, provided that all such amounts are
due, exigible and not contested by Marker at the time of the payment of such
purchase price. Payment shall be made by certified cheque or bank draft at the
closing of such transaction and the share certificates evidencing such Shares
shall be delivered to CT Sports at closing by the Escrow Agent, together with
undated stock powers therefor executed in blank by Marker and all other
documents required to be executed in connection with such transactions. The
closing of this transaction shall occur on the 21st day following the date of
the receipt by the Company, Marker and the Escrow Agent of the written notice
forwarded by CT Sports pursuant to the terms hereof. Marker hereby grants to CT
Sports an IRREVOCABLE PROXY to vote the Shares held by Marker and to exercise
all other rights, powers, privileges and remedies to which a holder of such
Shares would be entitled (including giving or withholding written consents of
shareholders, calling special meetings of shareholders and voting at such
meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any such Shares on the record
books of the issuer thereof) by any other Person (including the Company or any
officer or agent of the Company), upon the failure of (i) the Escrow Agent to
deliver the Share certificates evidencing the Marker shares together with
executed stock powers pursuant to this Section CALL OPTIONs or (ii) Marker's
taking of any action pursuant to which Marker contests the validity or
enforceability of the terms of the call option set forth in this Section CALL
OPTIONs and which proxy shall only terminate upon the consummation of the
acquisition of such Shares or 120 days after the notice referred to in the
present subsection is given (or such longer period as may be necessary to
complete any applicable regulatory approval process of the acquisition of the
Shares) if CT Sports has not completed the acquisition of such Shares in
accordance herewith.
10.3 MARKER DISTRIBUTION AGREEMENT - In the event that CT Sports shall exercise
its option as provided in subsection CALL OPTION hereof, then the Distribution
Agreement to be entered into between Marker and/or its German subsidiary and the
Company, shall terminate without penalty or premium on the second anniversary of
the exercise of the option by CT Sports as set forth in subsection CALL OPTION
notwithstanding, the duration of such Distribution Agreement being of a longer
term.
10.4 CHANGE OF NAME - Should Marker, following the exercise of the call option
by CT Sports pursuant to the terms hereof, for written notice to the Company and
CT Sports requesting that the Company change its name in order to remove all
reference to the word "Marker", CT Sports and the Company hereby jointly
undertake to effect such name change without delay.
10.5 HYPOTHEC OF MARKER SHARES - As security for any and all of its obligations
under the present Sections CALL OPTIONs hereof, Marker hereby grants a hypothec
and a security interest in favour of CT Sports in and to all of its right, title
and interest to the present and future property comprised of the Shares which it
holds and may hold from time to time, (including any and all shares issued in
replacement thereof, all rights to dividends and distributions and all products
and proceeds relating to or arising therefrom) for the principal amount of
$750,000 plus interest in the amount of 10% per annum. The hypothec created
hereby shall be a hypothec with delivery, such that all share certificates
representing the Shares held by Marker are to be deposited with the Escrow Agent
pursuant to the terms of Section Escrow of MARKER'S shares hereof.
11. S. MORRIS OPTION
11.1 OPTION IN FAVOUR OF SHAUN MORRIS - CT Sports and Marker hereby agree to
enter into a Shareholders Agreement with Shaun Morris pursuant to which he shall
be entitled, (subsequent to the entry of the Confirmation Order and subject to
certain other restrictions and conditions), to purchase at a price to be
mutually agreed upon with CT Sports and Marker such number of Shares which will
result in his holding up to 10% of the issued and outstanding Shares of the
Company. Upon subscribing for Shares, Shaun Morris shall be obliged to execute
an amending agreement to this Shareholders Agreement pursuant to which he will
agree to be bound by the terms and conditions hereof and thereof, at which time
he shall be deemed to be a Shareholder.
12. DISTRIBUTION AGREEMENT 12.1 Concurrently with the execution of this
Shareholders Agreement, each of Tecnica, Volkl and Marker and/or its German
subsidiary shall enter into Distribution Agreements with the Company in the form
of the Distribution Agreements attached hereto as Exhibits 12.1. Each of said
Distribution Agreements shall have the same payment terms and shall have a
duration of 5 years, subject to Section MARKER DISTRIBUTION AGREEMENT
13. ARBITRATION
13.1 ARBITRATION. In the event of any dispute or controversy which arises out of
or relates to this Shareholders Agreement, its interpretation or any breach
thereof, then the following procedures shall apply:
(a) The party complaining (the "Initiator") shall immediately
notify the other (the "Respondent"),as the case may be, in
writing, of the dispute or breach (a "Dispute Notice");
(b) If the parties cannot informally resolve the dispute within
ten (10) Business Days following the receipt by a party of the
Dispute Notice, then the dispute shall be submitted to
arbitration upon notice in writing by either the Initiator or the
Respondent (the "Arbitration Notice");
(c) Promptly following the giving of any Arbitration Notice
hereunder, the Initiator and the Respondent shall promptly meet
and attempt in good faith to select a single arbitrator
acceptable to them;
(d) If a single arbitrator is not selected by mutual consent
within ten (10) Business Days after the giving of the Arbitration
Notice, then either party may apply to the President of the
Zurich Chamber of Commerce for the appointment of an arbitrator;
(e) The parties agree to instruct the arbitrator so selected, to
render a determination within fifteen (15) Business Days of the
conclusion of the arbitration hearing;
(f) Subject to the provisions hereof, the arbitration shall be
conducted in accordance with the arbitration provisions of the
International Chamber of Commerce which presently exist or as
same may be amended from time to time;
(g) The parties will use their reasonable best efforts to ensure
that the arbitration commences at a location in Zurich,
Switzerland to be chosen by the arbitrator no later than fifteen
(15) Business Days after the arbitrator has been selected as
aforesaid, and that such arbitration continues on each
consecutive Business Day therefrom until fully concluded, unless
continued by the arbitrator for good cause shown; provided,
however, that the parties will use their reasonable best efforts
to ensure that such arbitration does not continue for more than
ten (10) Business Days from the commencement thereof;
(h) No formal examination for discovery (e.g. depositions,
interrogatories, request for admission) shall be permitted by
either party in connection with such arbitration. There shall be
made available to the arbitrator all relevant documents and the
materials in connection with the dispute. The parties nonetheless
agree that they shall participate in an exchange of information
between them prior to the arbitration hearing in order to prepare
for same;
(i) Each of the parties shall bear their respective expenses
incurred in connection with any arbitration but any expenses
related to the compensation and/or costs of the arbitrator shall
be paid by the losing party in such arbitration;
(j) Each of the parties agree that an arbitrator may compel
specific performance of this Shareholders Agreement and/or
injunctive relief (without requiring a party to post a bond or
other security);
(k) The arbitrator may not limit, expand or otherwise modify the
terms of this Shareholders Agreement;
(l) The parties agree that the results, determinations,
findings, judgements and/or awards rendered through any such
arbitration (i) shall be limited to a holding for or against a
party, and affording such monetary remedy as is deemed equitable,
just and within the scope of this Shareholders Agreement; (ii)
may not include special or consequential or punitive damages; and
(iii) shall be final, binding and not subject to appeal of any
kind;
(m) The parties, their representatives, other participants and
the arbitrator shall hold the existence, context and result of
arbitration in confidence;
(n) The parties agree that arbitration as set forth above shall
be the sole means of resolving any disputes, claims and
controversies between them arising out of this Shareholders
Agreement; and
(o) The language of the arbitration proceedings shall be in
English and this Shareholders Agreement shall be interpreted and
governed by the laws of Quebec and Canada, as they may apply,
without regard to conflicts of law doctrines, except to the
extent that certain matters are governed as a matter of
controlling law by the law of the jurisdiction of organization of
the respective parties.
14. ADDITIONAL PROVISIONS RELATING TO TRANSFERS
14.1 The following provisions shall apply to each Transfer:
14.2 No Transfer by a Shareholder permitted hereunder shall relieve the
transferor Shareholder of any of its obligations or liabilities under this
Shareholders Agreement arising prior to or in connection with consummation of
such Transfer.
15. PAYMENTS AND SET OFF
15.1 Any payments to be received by Marker or any of its Subsidiaries pursuant
to the terms of this Shareholders Agreement and without limitation, pursuant to
any or all of Section CALL OPTIONs hereof, shall, in addition to any other
deductions as may be provided in this Shareholders Agreement, be net of all
obligations which are due, exigible and not contested by Marker (including,
without limitation, any indemnity obligations provided for in the Asset Purchase
Agreement, at the time of such sale).
16. ESCROW OF MARKER'S SHARES
16.1 ESCROW AGENT - Concurrently with the execution of this Shareholders
Agreement, Marker shall deposit with the Escrow Agent the share certificates
representing all of the Shares owned by it duly endorsed in blank for transfer.
The Escrow Agent is hereby authorized to hold and deal with same in accordance
with the terms and conditions of this Shareholders Agreement. Notwithstanding
the deposit of Marker's Shares with the Escrow Agent, at all times prior to the
closing of transactions referred to herein, each Shareholder shall vote its
Shares, (subject to any irrevocable proxy granted by such Shareholder pursuant
hereto) and be entitled to all dividends declared and paid thereon as well as to
all other benefits that may accrue from said Shares from time to time.
16.2 TRANSFERS - In the event that Marker is obliged to sell or otherwise
Transfer any or all of its Shares pursuant to Section CALL OPTIONs hereof, the
Escrow Agent shall, upon receipt of the notices referred in said Sections and
within the delays provided therein, arrange for the Transfer of Marker's Shares
in conformity with the terms and provisions of such Sections.
16.3 REALIZATION OF HYPOTHEC - In the event that Marker breaches its obligation
to Transfer its Shares pursuant to the terms of Section CALL OPTIONs hereof, CT
Sports shall be entitled to exercise its hypothecary recourses in respect of
such Shares and the Escrow Agent shall deal with the shares in the manner
provided for at law in respect of the hypothecary recourse exercised.
16.4 RESIGNATION - The Escrow Agent may, at any time, resign or be discharged
from any further duties and responsibilities hereunder upon giving fifteen (15)
days notice in writing to the Shareholders. In the event of the resignation,
dissolution or incapacity of the Escrow Agent herein named, the Shareholders
shall agree within fifteen (15) days on the appointment of its successor. Such
successor, immediately upon his appointment, shall be vested with the same
powers, rights, duties and responsibilities as if he had been originally named
as Escrow Agent herein, without any further formality, and the Escrow Agent
originally named and ceasing to act shall, upon payment of any amounts due to it
hereunder, execute and deliver all such assignments and other instruments as may
be reasonably necessary for the purpose of assuring to the new escrow agent full
seizing in the premises and shall deliver the certificates representing the
Shares which the Escrow Agent may hold to the new escrow agent.
16.5 NO LIABILITY - It is acknowledged by the parties that the Escrow Agent
shall not incur any liabilities or responsibilities by reason of any matter or
thing done or omitted to be done under or in relation to this Shareholders
Agreement (including acts of negligence), except for fraud on its part. The
Escrow Agent shall be entitled to reasonable remuneration for its services
hereunder, and all such fees shall be borne in equal shares by the Shareholders.
16.6 RESPONSIBLITES OF ESCROW AGENT - The Escrow Agent shall have no duties or
responsibilities except those expressly set forth herein. It may consult with
counsel and shall be fully protected with respect to any action taken or omitted
to be taken by it in good faith. In the event that the Escrow Agent shall be
uncertain as to its duties or rights hereunder, or shall receive instructions
from any of the Shareholders with respect to the Shares and/or any other
documents held by it in escrow pursuant to the provisions hereof which in the
Escrow Agent's opinion are in conflict with the provisions hereof, it shall be
entitled to refrain from taking any action other than to keep such Shares and/or
other documents safely until it shall have been directed otherwise in writing by
the Company and the Shareholders or by a final judgment or order of a court of
competent jurisdiction, the delays for appeal of such judgment having expired
without any appeal having been lodged.
16.7 INDEMNIFICATION - The Parties hereby agree solidarily (jointly and
severally) to indemnify and hold harmless the Escrow Agent from and against any
and all claims relating to anything done or omitted by the Escrow Agent in the
course of carrying out the terms and conditions of this Shareholders Agreement.
The Escrow Agent shall not be bound to enter into or maintain any litigation,
until it shall have been indemnified against all expenses and liabilities which
might be reasonably incurred thereby.
17. NOTICES
17.1 NOTICES - Any notice to be given under this Shareholders Agreement shall be
in writing and validly given if hand delivered, transmitted by telecopier or,
except in the event of disruption of postal service, mailed by prepaid
registered mail addressed to the party to whom it is to be given at his address
or telecopier number as shown below and such notice shall be deemed to have been
given on the day of delivery, the first Business Day following its transmission
by telecopier or on the fifth Business Day after mailing as aforesaid, as the
case may be:
if to the Company: Marker Canada Ltd.
6700 Cote de Liesse Road
Suite 100
St. Laurent, QC H4T 2E5
Attention: the President
Tel.: (514) 341-9555
Fax: (514) 341-4622
if to Marker: Marker International
1070 W. 2300 South
Salt Lake City, Utah 84119
Attention: the President
Tel.: (801) 972-2100
Fax: (801) 972-1011
with a copy to: Mark A. Rosenbaum
Stroock & Stroock & Lavan LLP
New York, NY 10038
Tel: 212-806-6631
Fax: 212-806-6006
if to CT Sports: CT Sports Holding AG
Reussenstrasse 6
6340 Baar
Zug
Switzerland
Attention: The President
Tel.: (011) 41-41-7697200
Fax: (011) 41-41-7697380
with a copy to: Brahm Gelfand
Lapointe Rosenstein
1250 Rene Levesque Blvd. West
Montreal, Que., H3B 5E9
CANADA
Tel: 514-925-6300
Fax: 514-925-6313
if to the Escrow Agent: Lapointe Rosenstein
1250 Rene Levesque Blvd. West
Montreal, Que., H3B 5E9
CANADA
Attention: Brahm Gelfand
Tel: 514-925-6300
Fax: 514-925-6313
or to such other address or telecopy number and with such other copies, as such
party may hereafter specify for the purpose by notice to the other parties. Each
such notice, request or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified in
this Section and evidence of receipt is received or (ii) if given by any other
means, upon delivery or refusal of delivery at the address specified in this
Section NOTICES.
Notice of change of address may be given by any party in the same manner.
18. GENERAL
18.1 APPLICATION OF SHAREHOLDERS AGREEMENT - Except as otherwise specified
herein or as the parties hereto may otherwise agree, this Shareholders Agreement
shall apply to all Shares from time to time outstanding.
18.2 UNANIMOUS SHAREHOLDERS AGREEMENT - The parties hereto agree that this
Shareholders Agreement shall constitute a unanimous shareholders' agreement
within the meaning of the CBCA.
18.3 VOTE - The Shareholders undertake to cast their votes in favour of all
resolutions and by-laws and the parties hereto undertake and agree to do all
things which may be necessary in order to give full force and effect to the
present Shareholders Agreement.
18.4 AMENDMENTS - This Shareholders Agreement may be only amended with the
consent in writing of all parties hereto.
18.5 TERMINATION - This Shareholders Agreement shall remain in force until such
time as either of CT Sports or Marker cease being Shareholders of the Company,
subject to the survival of the provisions of Section CALL OPTIONs hereof, should
same be applicable at such time.
18.6 ASSIGNMENT AND INUREMENT - None of the parties hereto shall be entitled to
assign its rights or obligations hereunder other than pursuant to a Transfer.
This Shareholders Agreement shall enure to the benefit of and be binding upon
the heirs, executors, administrators, successors (including successors by
amalgamation), receivers, trustees in bankruptcy, liquidators or any other legal
representatives of the parties hereto.
18.7 COUNTERPARTS - This Shareholders Agreement may be executed in one or more
counterparts each of which shall be deemed to be an original and such
counterparts together shall constitute but one and the same instrument. This
Shareholders Agreement may be executed and delivered by facsimile which when so
executed and delivered shall constitute a binding agreement.
18.8 SHARES OF THE COMPANY - The parties hereto covenant and agree that the
provisions of this Shareholders Agreement with respect to Shares of any class of
the Company shall apply mutatis mutandis to any shares into which such shares or
any of them may be converted, changed, reclassified, subdivided or consolidated
and to any Shares of the Company which are received by the holders of such
Shares as a stock dividend and to any Shares or other securities of the Company
or of a successor company which may be received by the holders of Shares of the
Company on a reorganization or amalgamation.
18.9 AUTHORITY - Each of the parties hereto hereby represents and warrants that
the execution and delivery of this Shareholders Agreement has been duly
authorized by all requisite corporate action and that this Shareholders
Agreement constitutes (upon execution and delivery thereof by each of the
parties), legal, valid, and binding obligations of each of the parties,
enforceable against each of them in accordance with its terms. The Company
further warrants and represents that the 200 Shares issued to CT Sports
contemporaneously herewith are fully paid and non-assessable and that the
issuance thereof has been duly authorized and approved by all necessary
corporate action on the part of the Company.
18.10 CONSIDERATION - Marker hereby expressly acknowledges and agrees that upon
the execution of this Shareholders Agreement it has received substantial direct
and indirect benefits from CT Sports' capital contribution made pursuant hereto
and from the other transactions contemplated hereby (including, without
limitation, the execution and delivery of the Distribution Agreements) and that
the granting to CT Sports of a hypothec and security interest in Marker's Shares
was due consideration therefor.
18.11 LANGUAGE - The parties hereto state their express wish that this
Shareholders Agreement as well as all documentation contemplated hereby,
pertaining hereto or to be executed in connection herewith be drawn up in the
English language. Les parties expriment leur desir explicite a l'effet que cette
entente de meme que tous documents envisages par les presentes, y ayant trait ou
qui seront signes relativement aux presentes soient rediges en anglais.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Shareholders Agreement
as of the date set out above.
CT SPORTS HOLDINGS AG MARKER INTERNATIONAL
Per: /s/ Giancarlo Zanatta Per: /s/ Peter Weaver
----------------------- -------------------
Giancarlo Zanatta Peter Weaver
LAPOINTE ROSENSTEIN
Per: /s/ Christoph Bronder /s/ LAPOINTE ROSENSTEIN
----------------------- -------------------------
Christoph Bronder
MARKER CANADA LTD.
Per: /s/ Shaun Morris
-----------------------
Shaun Morris
