STOCK PURCHASE AGREEMENT
BETWEEN
EXIDE ELECTRONICS GROUP, INC.
("Buyer")
DELTEC POWER SYSTEMS, INC.
("Company")
AND
FISKARS OY AB
and
FISKARS HOLDINGS, INC.
("Shareholders")
STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
1. ACQUISITION OF SHARES . . . . . . . . . . . . . . . . . . . . . 1
1.1. Purchase and Sale of Common Shares . . . . . . . . . . . 1
1.2. Redemption of Preferred Shares . . . . . . . . . . . . . 1
2. PURCHASE PRICE - PAYMENT . . . . . . . . . . . . . . . . . . . . 3
2.1. Purchase Price . . . . . . . . . . . . . . . . . . . . . 3
2.2. Payment of Purchase Price . . . . . . . . . . . . . . . . 4
2.3. Post-Closing Adjustments . . . . . . . . . . . . . . . . 4
3. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES OF COMPANY AND
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1. Corporate . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2. Shareholders . . . . . . . . . . . . . . . . . . . . . . 8
3.3. No Violation . . . . . . . . . . . . . . . . . . . . . . 8
3.4. Financial Statements . . . . . . . . . . . . . . . . . . 9
3.5. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . 9
3.6. Absence of Certain Changes . . . . . . . . . . . . . . . 11
3.7. Absence of Undisclosed Liabilities . . . . . . . . . . . 13
3.8. Accounts Receivable . . . . . . . . . . . . . . . . . . . 13
3.9. Inventory . . . . . . . . . . . . . . . . . . . . . . . . 13
3.10. No Litigation . . . . . . . . . . . . . . . . . . . . . . 13
3.11. Compliance With Laws and Orders . . . . . . . . . . . . . 14
3.12. Environmental Matters . . . . . . . . . . . . . . . . . . 14
3.13. Title to and Condition of Properties . . . . . . . . . . 15
3.14. Contracts and Commitments . . . . . . . . . . . . . . . . 16
3.15. Labor Matters . . . . . . . . . . . . . . . . . . . . . . 17
3.16. Employee Benefit Plans . . . . . . . . . . . . . . . . . 18
3.17. Employment Compensation . . . . . . . . . . . . . . . . . 20
3.18. Trade Rights . . . . . . . . . . . . . . . . . . . . . . 21
3.19. Product Liability . . . . . . . . . . . . . . . . . . . . 22
3.20. Bank Accounts . . . . . . . . . . . . . . . . . . . . . . 22
3.21. Affiliates' Relationships to Fiskars Companies . . . . . 22
3.22. No Brokers or Finders . . . . . . . . . . . . . . . . . . 22
3.23. Insurance Coverage . . . . . . . . . . . . . . . . . . . 22
3.24. Investment Representations . . . . . . . . . . . . . . . 23
3.25. Limitations on Warranties and Disclaimers . . . . . . . . 23
4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . 24
4.1. Corporate . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2. Authority . . . . . . . . . . . . . . . . . . . . . . . . 24
4.3. No Violation . . . . . . . . . . . . . . . . . . . . . . 24
4.4. No Brokers or Finders . . . . . . . . . . . . . . . . . . 24
4.5. Investment Representations . . . . . . . . . . . . . . . 25
4.6. Buyer's Business Investigation. . . . . . . . . . . . . . 25
4.7. Knowledge of Buyer . . . . . . . . . . . . . . . . . . . 25
4.8. Sufficient Financing . . . . . . . . . . . . . . . . . . 25
5. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.1. Noncompetition; Confidentiality; Non-Solicitation . . . . 26
5.2. Xxxx-Xxxxx-Xxxxxx Act Filings . . . . . . . . . . . . . . 27
5.3. Access to Information and Records . . . . . . . . . . . . 27
5.4. Conduct of Business Pending the Closing . . . . . . . . . 27
5.5. Consents . . . . . . . . . . . . . . . . . . . . . . . . 29
5.6. Access to and Retention of Records . . . . . . . . . . . 29
5.7. Availability of Personnel . . . . . . . . . . . . . . . . 30
5.8. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . 30
5.9. Corporate Identity . . . . . . . . . . . . . . . . . . . 31
5.10. Transitional Use of Trademark . . . . . . . . . . . . . . 31
5.11. Plant Closing . . . . . . . . . . . . . . . . . . . . . . 31
5.12. Other Action . . . . . . . . . . . . . . . . . . . . . . 31
5.13. Disclosure Schedule . . . . . . . . . . . . . . . . . . . 31
5.14. Notification of Breach . . . . . . . . . . . . . . . . . 31
5.15. Exclusivity . . . . . . . . . . . . . . . . . . . . . . . 32
5.16. Release of Intercompany Payables . . . . . . . . . . . . 32
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS . . . . . . . . . . 32
6.1. Representations and Warranties . . . . . . . . . . . . . 32
6.2. Compliance With Agreement . . . . . . . . . . . . . . . . 32
6.3. Consents and Approvals . . . . . . . . . . . . . . . . . 32
6.4. Xxxx-Xxxxx-Xxxxxx Waiting Period . . . . . . . . . . . . 33
6.5. Buyer's Due Diligence Investigation . . . . . . . . . . . 33
6.6. No Litigation . . . . . . . . . . . . . . . . . . . . . . 33
7. CONDITIONS PRECEDENT TO SHAREHOLDERS' OBLIGATIONS . . . . . . . 33
7.1. Representations and Warranties . . . . . . . . . . . . . 33
7.2. Compliance With Agreement . . . . . . . . . . . . . . . . 33
7.3. Xxxx-Xxxxx-Xxxxxx Waiting Period . . . . . . . . . . . . 33
7.4. Release of Guarantees . . . . . . . . . . . . . . . . . . 33
7.5. Terminate all Licenses . . . . . . . . . . . . . . . . . 33
7.6. No Litigation . . . . . . . . . . . . . . . . . . . . . . 34
8. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . 34
8.1. By Shareholders . . . . . . . . . . . . . . . . . . . . . 34
8.2. By Buyer . . . . . . . . . . . . . . . . . . . . . . . . 34
8.3. Indemnification of Third-Party Claims . . . . . . . . . . 34
8.4. Payment . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.5. Limitations on Indemnification . . . . . . . . . . . . . 35
9. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.1. Documents to be Delivered by Company and Shareholders . . 37
9.2. Items to be Delivered by Buyer . . . . . . . . . . . . . 38
10. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.1. Right of Termination Without Breach . . . . . . . . . . . 39
10.2. Termination for Breach . . . . . . . . . . . . . . . . . 39
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.1. Disclosure Schedule . . . . . . . . . . . . . . . . . . . 40
11.2. Further Assurance . . . . . . . . . . . . . . . . . . . . 40
11.3. Disclosures and Announcements . . . . . . . . . . . . . . 40
11.4. Assignment; Parties in Interest . . . . . . . . . . . . . 40
11.5. Law Governing Agreement . . . . . . . . . . . . . . . . . 40
11.6. Amendment and Modification . . . . . . . . . . . . . . . 41
11.7. Notice . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.8. Expenses . . . . . . . . . . . . . . . . . . . . . . . . 42
11.9. Entire Agreement . . . . . . . . . . . . . . . . . . . . 43
11.10. Counterparts . . . . . . . . . . . . . . . . . . . . . . 43
11.11. Headings . . . . . . . . . . . . . . . . . . . . . . . . 43
11.12. Facsimile Versions . . . . . . . . . . . . . . . . . . . 43
11.13. Glossary of Terms . . . . . . . . . . . . . . . . . . . . 43
Disclosure Schedule
Schedule 2.1(g) - Trademarks to be Sold
Schedule 3.0 - Shareholders' Knowledge
Schedule 3.1.(c) - Foreign Corporation Qualification
Schedule 3.1.(d) - Subsidiaries
Schedule 3.3 - Default by Shareholders
Schedule 3.4 - Financial Statements
Schedule 3.5.(a) - Taxes
Schedule 3.5.(a) - Tax Returns (Exceptions to Representations)
Schedule 3.5.(b) - Tax Audits
Schedule 3.5.(c) - Consolidated Tax Returns
Schedule 3.6 - Certain Changes
Schedule 3.6(c) - No increase in Compensation
Schedule 3.6.(f) - Permitted Pre-Closing Dividends
Schedule 3.7 - Off-Balance Sheet Liabilities
Schedule 3.10 - Litigation Matters
Schedule 3.11.(a) - Non-Compliance with Laws
Schedule 3.12.(b) - Underground Storage Tanks
Schedule 3.13.(a) - Liens
Schedule 3.13.(b) - Real Property
Schedule 3.14.(a) - Real Property Leases
Schedule 3.14.(b) - Personal Property Leases
Schedule 3.14.(c) - Powers of Attorney
Schedule 3.14.(d) - Collective Bargaining Agreements
Schedule 3.14.(e) - Loan Agreements, etc.
Schedule 3.14.(f) - Guarantees
Schedule 3.14.(g) - Restrictive Agreements
Schedule 3.14.(h) - Other Material Agreements
Schedule 3.15 - Labor Matters
Schedule 3.16.(a) - Employee Plans/Agreements
Schedule 3.16.(b) - Non-US Employee Benefit Plans
Schedule 3.16.(h) - Right to Amend Plans
Schedule 3.16.(i) - Parachute Payments
Schedule 3.16.(j) - Obligations Triggered by Closing
Schedule 3.17 - Employment Compensation
Schedule 3.18 - Trade Rights
Schedule 3.19 - Product Liability Claims
Schedule 3.20 - Bank Accounts
Schedule 3.21.(a) - Contracts with Affiliates
Schedule 3.21.(c) - Obligations of and to Affiliates
Schedule 3.23 - Insurance Policies
Schedule 4.3 - Default by Buyer
Schedule 5.1.(a) - Permissible Activities
Schedule 5.1.(a)(1) - Non-Compete Agreement
Schedule 5.10 - Transitional Trademark License
Schedule 8.5.(d) - List of Buyer's Employees or Agents
Participating in Due Diligence
Schedule 9.1.(c) - Form of Xxxxx & Xxxxxxx Legal Opinion
Schedule 9.1.(f) - Form of Shareholder Agreement
Schedule 9.2.(d) - Form of Buyer's Legal Opinion
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") dated November 16,
1995, by and among EXIDE ELECTRONICS GROUP, INC., a Delaware corporation
("Buyer"), DELTEC POWER SYSTEMS, INC., a Wisconsin corporation
("Company"), and FISKARS OY AB, a Finnish corporation ("Fiskars") and
FISKARS HOLDINGS, INC., a Wisconsin corporation ("Holdings") (individually
"Shareholder" and together the "Shareholders").
RECITALS
1. Company and its subsidiaries are engaged in the design,
manufacture, marketing, sale, distribution and service of uninterruptible
power supply systems for computers, telecommunications equipment and other
similar applications and related computer software (the "Business").
Shareholders own all of the issued and outstanding shares (the "Shares")
of capital stock of Company.
2. Company's facilities consist of the business locations
described in Schedule 3.13(b) (the "Facilities").
3. Buyer and Company desire to acquire the Shares from
Shareholders and Shareholders desire to sell and/or transfer the Shares to
Buyer and Company, upon the terms and conditions herein set forth.
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions
hereinafter set forth, and intending to be legally bound hereby, the
parties hereto agree as follows.
1. ACQUISITION OF SHARES
1.1. Purchase and Sale of Common Shares. Subject to the terms and
conditions of this Agreement, and on the basis of and in reliance upon the
representations, warranties, obligations and agreements set forth herein,
on the Closing Date (as hereinafter defined), Fiskars shall sell to Buyer
and Buyer shall purchase from Fiskars all the Shares constituting the
outstanding common capital stock of Company ("Common Shares").
1.2. Redemption of Preferred Shares.
1.2.(a) Dividends and Redemptions prior to Closing. During the
period beginning on the date hereof and ending on the Closing Date:
(i) Company may pay dividends on its Class A Preferred Shares in the
amounts described in Section 2.c.(3) of the Articles of Incorporation of
Company; (ii) Company may exercise its rights under Section 2.c.(5) of its
Articles of Incorporation to redeem whatever amount of its Class A
Preferred Shares that the Board of Directors of Company believes is
appropriate; and (iii) Company may incur indebtedness in an amount that
the Board of Directors of Company believes, in its sole discretion, to be
necessary to allow the payment of dividends and redemption price as
described above in this sentence.
1.2.(b) Dividends and Redemptions after the Closing. After the
Closing, Buyer shall cause Company to comply with the following
conditions:
(1) On the day immediately following the Closing Date, Company
shall redeem, pursuant to Section 2.c.(5) of Company's
Articles of Incorporation, all but 50 of the then outstanding
shares of its Class A Preferred Shares at a price of $10,000
per share plus all dividends that have accrued but have not
been paid previously on such shares; provided, however, that
if such redemption would violate the provisions of Wis. Stat.
Section 180.0640(3), then such redemption shall occur on the
first date, if any, following the Closing Date on which the
provisions of Wis. Stat. Section 180.0640(3) would not be
violated by such redemption.
(2) On January 8, 1997, Company shall redeem, pursuant to Section
2.c.(5) of Company's Articles of Incorporation, all of the
then outstanding shares of its Class A Preferred Shares at a
price of $10,000 per share plus all dividends that have
accrued but have not been paid previously on such shares;
provided, however, that if such redemption would violate the
provisions of Wis. Stat. Section 180.0640(3), then such
redemption shall occur on the first date, if any, after
January 8, 1997 on which the provisions of Wis. Stat. Section
180.0640(3) would not be violated by such redemption.
(3) Prior to January 8, 1997 Company shall not exercise its rights
under Section 2.c.(5) of its Articles of Incorporation to
redeem any Class A Preferred Shares except as described above
in this Section 1.2, and Company shall not liquidate or be
dissolved.
(4) Any Class A Preferred Shares held by Holdings that are
redeemed by Company on or after the date hereof shall be
cancelled upon redemption (rather than being treated, for
example, as "treasury stock") and shall not be issued
thereafter by Company.
1.2.(c) Restrictions While Class A Preferred Shares are
Outstanding. After the Closing, Buyer shall cause Company and each direct
or indirect subsidiary of Company to comply with each of the following
covenants while any Class A Preferred Shares are outstanding:
(1) Company shall not amend its Articles of Incorporation, By-laws
or other organic documents to change in any respect the
rights, privileges, or preferences of the holders of Class A
Preferred Shares.
(2) Company shall not be a party to any merger or consolidation,
whether or not Company is the surviving entity; provided,
however, that the foregoing restriction shall not prevent a
merger involving solely Company and Deltec Electronics
Corporation, a California company ("Deltec").
(3) No direct or indirect subsidiary of Company (other than
Deltec) shall declare or pay a dividend or make a
distribution, or shall redeem, purchase or otherwise acquire
its own stock, or shall purchase the stock of any corporation
that controls, or is controlled by, or is under common control
with, such subsidiary.
2. PURCHASE PRICE - PAYMENT
2.1. Purchase Price. The purchase price (the "Purchase Price") payable
for the purchase and/or redemption of the Shares shall be the sum of One
Hundred Ninety Five Million U.S. Dollars ($195,000,000), which shall be
allocated and paid as follows:
2.1.(a) To Holdings, the amounts specified in Sections
1.2(b)(1) and 1.2(b)(2) hereof;
2.1.(b) To Fiskars, an amount necessary to pay in full
Company's $10 million promissory note dated September 27, 1994 payable
to Fiskars;
2.1.(c) To Holdings, an amount necessary to pay all
intercompany debt owed by Deltec Electronics Corporation, a subsidiary
of Company ("Deltec"), to Holdings;
2.1.(d) To Fiskars, 1,875,000 shares of Buyer's common stock,
valued at a fixed price of $20.00 per share;
2.1.(e) To Fiskars, $10 million as the noncompete payment
provided in the Non-Compete Agreement annexed hereto as Schedule
5.1(a)(1) hereto;
2.1.(f) To Fiskars, $4 million as the prepaid royalties
provided in the License Agreement annexed hereto as Schedule 5.10;
2.1.(g) To Fiskars, $3 million representing the purchase price
for the trademarks listed in Schedule 2.1(g) hereto; and
2.1.(h) To Fiskars, the balance of the Purchase Price in
consideration for the purchase of the Common Shares.
Notwithstanding anything set forth in this Section 2.1, the
aggregate cash consideration to be paid by Buyer pursuant to this
Agreement shall not, except as set forth in Section 2.3(d) and 8.2, exceed
$157,500,000.
2.2. Payment of Purchase Price. All payments under Section 2.1(b), (c),
(e), (f), (g) and (h) shall be made at the Closing, and the payment
specified in Section 1.2(b)(1) on the day after Closing and the payment
specified in Section 1.2(b)(2) on January 8, 1997, by wire transfer of
immediately available funds to an account designated by the recipient not
less than one hour prior to the time for payment specified herein.
2.3. Post-Closing Adjustments.
2.3.(a) Preparation of Closing Date Balance Sheet. Within
sixty (60) days after the Closing Date, Price Waterhouse shall prepare
and deliver to the Buyer a consolidated balance sheet for the Company as
of the close of business on the Closing Date (the "Closing Date Balance
Sheet"). The Closing Date Balance Sheet shall be prepared in accordance
with U.S. generally accepted accounting principles ("GAAP"), using the
same methods and criteria employed in connection with the preparation of
the Company's December 31, 1994, consolidated balance sheet ("Latest
Year-End Balance Sheet").
2.3.(b) Resolution of Disputes. Unless Buyer notifies
Shareholders in writing within thirty (30) days after receipt of the
Closing Date Balance Sheet that Buyer disputes any matter with respect
to such Closing Date Balance Sheet, and specifies in reasonable detail
the basis for such objection and the amount in dispute, the Closing Date
Balance Sheet shall become final and binding upon the parties for
purposes of the post-closing adjustment to be made pursuant to this
Section 2.3. During the thirty (30) day period following Buyer's
receipt of the Closing Date Balance Sheet, Buyer and their
representatives shall have the right to review all books and working
papers of Shareholders and Price Waterhouse related to the preparation
of the Closing Date Balance Sheet. If Buyer provides such notice of
objection to Shareholders within such thirty-day period, Buyer and
Shareholders shall negotiate in good faith to resolve the issues set
forth in Buyer's notice of objection during the thirty-day period
following Buyer's notice. If Buyer and Shareholders are unable to
resolve such objections within such thirty-day period, the disputed
matters (and only the disputed matters) shall be submitted to one of the
nationally recognized independent accounting firms which is on the date
hereof among the six largest firms (the "Big Six Accounting Firm")
mutually selected by Buyer and Shareholders. Any reference to the Big
Six Accounting Firm shall be deemed to include a reference to any member
or employee thereof (who is a certified public accountant) which any
such firm may designate as the arbitrator on its behalf. If within ten
(10) days following commencement of the selection process Seller and
Shareholders shall have failed to agree upon the selection of the Big
Six Accounting Firm or such firm declines to act, then Buyer and
Shareholders shall each select a Big Six Accounting Firm and such firms
shall jointly select a third firm, with preference being given to any
one of the Big Six Accounting Firms, which firm shall then act as the
arbitrator (the "Arbitrator") to resolve the disputed matters. The
Arbitrator shall act promptly to resolve all disputed matters and its
decision with respect to all disputed matters shall be final and binding
upon the parties hereto and shall not be appealable to any court. The
fees, costs and expenses of the Arbitrator shall be shared equally
between Buyer and Shareholders.
2.3.(c) Determination of Closing Net Book Value. The Purchase
Price has been determined on the assumption, and the parties have
entered into this Agreement with the reasonable expectation, that the
excess of (i) the Total Assets of the Company as of the Closing Date,
over (ii) the Total Liabilities of the Company as of the Closing Date
(the "Closing Net Book Value"), will be $27,600,000. The term "Total
Assets" shall mean all assets as determined in accordance with U.S. GAAP
applied on a basis consistent with the Latest Year-End Balance Sheet,
excluding net unamortized goodwill and all intercompany receivables.
The term "Total Liabilities" shall mean all liabilities as determined in
accordance with U.S. GAAP applied on a basis consistent with the Latest
Year-End Balance Sheet, excluding all intercompany short and long term
debt, payables, and accrued liabilities, but including a $1,060,000
income tax reserve for the federal income tax risks associated with the
step-up of the assets in the Deltec Acquisition by Fiskars. The
calculation of Closing Net Book Value is to be determined in a manner
consistent with the preparation of the Recent Balance Sheet to be sold
(September 30, 1995) as listed in Schedule 3.4.
2.3.(d) Purchase Price Adjustment. Within ten (10) days after
the final and binding Closing Date Balance Sheet shall have been
prepared as provided in Section 2.3(b) hereof, and the Closing Net Book
Value shall have been determined as provided in Section 2.3(c) hereof,
the amount by which the Closing Net Book Value shall be less than
$27,600,000 shall be paid by Fiskars to Buyer as a reduction of the
Purchase Price, or the amount by which Closing Net Book Value shall be
more than $27,600,000 shall be paid by Buyer to Fiskars as an increase
in the Purchase Price, in either case plus interest computed on the
amount of the Purchase Price adjustment from the Closing Date to the
date of payment at the rate of 8% per annum, such payment to be made by
wire transfer as provided in Section 2.2 hereof.
3. JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES OF COMPANY AND
SHAREHOLDERS
Company and Shareholders, jointly and severally, make the following
representations and warranties to Buyer, each of which is true and correct
on the date hereof, shall remain true and correct to and including the
Closing Date, and shall survive the Closing of the transactions provided
for herein for the period provided for in Section 8.5(a). Regardless of
the foregoing, the representations and warranties set forth in Section 3.2
are made severally by each Shareholder, with respect to such Shareholder
only. With respect to those representations and warranties below which
are stated "to Shareholders' knowledge" or "to Company's knowledge",
"knowledge" shall mean the actual knowledge of those persons whose names
and titles are set out on Schedule 3.0 hereto. For the purposes of this
Section 3 (but excluding Sections 3.1 and 3.4), the term "Company" shall
include all subsidiaries of the Company. The exceptions, modifications,
descriptions and disclosures in any schedule attached hereto are made for
all purposes of this Agreement and are exceptions to all representations
and warranties set forth in the Agreement or in any agreement or
instrument delivered pursuant to or in connection with this Agreement.
Disclosure of an item in response to one section of this Agreement shall
constitute disclosure in response to every section of this Agreement
notwithstanding the fact that no express cross reference is made. Certain
documents attached to Shareholders' disclosure schedules are in non-
English languages. The Shareholders hereby represent and warrant that
none of such documents discloses information that would constitute a
breach of or qualify a representation or warranty by Shareholders or
Company in this Agreement. Until the foregoing documents are translated
into or summarized in English, Buyer shall not be deemed to have actual
knowledge of their content for purposes of Section 4.7 and 8.5(d).
3.1. Corporate.
3.1.(a) Organization. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Wisconsin.
3.1.(b) Corporate Power. Company has all requisite corporate
power and authority to own, operate and lease its properties and to
carry on its business as and where such is now being conducted.
3.1.(c) Qualification. Company is duly licensed or qualified
to do business as a foreign corporation, and is in good standing, in
each jurisdiction wherein the character of the properties owned or
leased by it, or the nature of its business, makes such licensing or
qualification necessary to avoid a material penalty. The states in
which Company is licensed or qualified to do business are listed in
Schedule 3.1(c).
3.1.(d) Subsidiaries. Schedule 3.1(d) sets forth the name,
jurisdiction of incorporation, capitalization, ownership and officers
and directors of each corporation in which the Company has a direct or
indirect equity interest ("Subsidiary") and the jurisdictions in which
each Subsidiary is qualified or licensed to do business as a foreign
corporation (the Company and Subsidiaries are referred to herein
collectively as the "Fiskars Companies" and separately as a "Fiskars
Company"). Except as listed in Schedule 3.1.(d), the Company does not
own, directly or indirectly, any capital stock or other equity
securities of any corporation or have any direct or indirect equity or
other ownership interest in any entity or business. All of the
outstanding shares of capital stock of each Subsidiary owned by the
Company are free and clear of any security interest, restriction,
option, voting trust or agreement, proxy, are validly issued, fully paid
and nonassessable except to the extent provided by Section
180.0622(2)(b) of the Wisconsin Business Corporation Law. There are no
(a) securities convertible into or exchangeable for the capital stock or
other securities of any Subsidiary, (b) options, warrants or other
rights to purchase or subscribe to capital stock or other securities of
any Subsidiary or securities which are convertible into or exchangeable
for capital stock or other securities of any Subsidiary, or (c) except
for the redemption rights described in Section 1.2 hereof, contracts,
commitments, agreements, understandings or arrangements of any kind
relating to the issuance, sale or transfer of any capital stock or other
equity securities of any Subsidiary, any such convertible or
exchangeable securities or any such options, warrants or other rights.
Each Subsidiary (x), except as disclosed in Schedule 3.1(d), is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation, (y) has full corporate
power and authority to carry on its business as it is now being
conducted and to own and lease the properties and assets it now owns and
leases, and (z) is in good standing and is duly qualified or licensed to
do business as a foreign corporation in each of the jurisdictions listed
opposite the name of such Subsidiary in Schedule 3.1.(d), which are the
only jurisdictions in which such Subsidiary is required to be so
qualified or licensed to avoid a material penalty.
3.1.(e) Capitalization of the Company. The authorized capital
stock of the Company consists entirely of 6,000 shares of common stock,
par value $0.01 per share and 3,000 shares of Class A preferred stock,
par value $0.01 per share. No shares of such capital stock are issued
or outstanding except for 600 shares of common stock of the Company
which are owned of record and beneficially by Fiskars and prior to the
redemptions described in Section 1.2 hereof, 1,500 shares of Class A
preferred stock of the Company which are owned of record and
beneficially by Holdings. All such shares of capital stock of the
Company are validly issued, fully paid and nonassessable except to the
extent provided by Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law. There are no (a) securities convertible into or
exchangeable for any of the Company's capital stock or other securities,
(b) options, warrants or other rights to purchase or subscribe to
capital stock or other securities of the Company or securities which are
convertible into or exchangeable for capital stock or other securities
of the Company, or (c) except for the redemption rights described in
Section 1.2 hereof, contracts, commitments, agreements, understandings
or arrangements of any kind relating to the issuance, sale or transfer
of any capital stock or other equity securities of the Company, any such
convertible or exchangeable securities or any such options, warrants or
other rights.
3.1.(f) Power. The Company has full power, legal right and
authority to enter into, execute and deliver this Agreement and the
other agreements, instruments and documents contemplated hereby (such
other documents sometimes referred to herein as "Ancillary
Instruments"), and to carry out the transactions contemplated hereby.
3.1.(g) Authorization. The execution and delivery of this
Agreement and the Ancillary Instruments, and full performance hereunder
and thereunder, have been duly authorized by the Board of Directors of
Company, and no other or further corporate act on the part of Company is
necessary therefor.
3.1.(h) Validity. This Agreement has been duly and validly
executed and delivered by Company and is, and when executed and
delivered each Ancillary Instrument will be, the legal, valid and
binding obligation of Company, enforceable in accordance with its terms,
except as such may be limited by bankruptcy, insolvency, reorganization
or other laws affecting creditors' rights generally, and by general
equitable principles.
3.2. Shareholders.
3.2.(a) Power. Each Shareholder has full power, legal right
and authority to enter into, execute and deliver this Agreement and the
Ancillary Instruments, and to carry out the transactions contemplated
hereby.
3.2.(b) Authorization. The execution and delivery of this
Agreement and the Ancillary Instruments, and full performance hereunder
and thereunder, have been duly authorized by the respective boards of
directors of each Shareholder, and no other or further corporate act on
the part of any such Shareholder is necessary therefor.
3.2.(c) Validity. This Agreement has been duly and validly
executed and delivered by each Shareholder and is, and when executed and
delivered each Ancillary Instrument will be, the legal, valid and
binding obligation of such Shareholder, enforceable in accordance with
its terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally, and
by general equitable principles.
3.2.(d) Title. At Closing Buyer or Company, as the case may
be, will receive, good and marketable title to the Shares to be sold or
transferred by such Shareholder hereunder, free and clear of all Liens
(as defined in Section 3.13) including, without limitation, voting
trusts or agreements, proxies, marital or community property interests.
3.3. No Violation. Except as set forth on Schedule 3.3, neither the
execution and delivery of this Agreement or the Ancillary Instruments nor
the consummation by Company and Shareholders of the transactions
contemplated hereby and thereby (a) will violate any statute, law,
ordinance, rule or regulation (collectively, "Laws") or any order, writ,
injunction, judgment, plan or decree (collectively, "Orders") of any
court, arbitrator, department, commission, board, bureau, agency,
authority, instrumentality or other body, whether federal, state,
municipal, foreign or other (collectively, "Government Entities"), (b)
except for applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), will require any authorization,
consent, approval, exemption or other action by or notice to any
Government Entity (including, without limitation, under any
"plant-closing" or similar law), or (c) subject to obtaining the consents
referred to in Schedule 3.3, will constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
or will result in the termination of, or accelerate the performance
required by, or result in the creation of any Lien (other than a Permitted
Lien) upon any of the assets of the Fiskars Companies (or the Shares)
under, any term or provision of the Articles of Incorporation and By-Laws
of Company or organic documents of Subsidiaries or breach of any contract,
commitment, understanding, arrangement, agreement or restriction of any
kind or character that is material to the Business or would have a
material effect on the ability of the Shareholders and the Company to
consummate the transactions contemplated hereby.
3.4. Financial Statements. Included as Schedule 3.4 are true and
complete copies of the following financial statements of the Company and
certain Subsidiaries consisting of (i) audited balance sheets of Deltec
and of FPS Power Systems Oy Ab and each of its subsidiaries as of
December 31, 1992, 1993, and 1994 and the related statements of income for
the years then ended (including the notes contained therein or annexed
thereto), (ii) an audited consolidated balance sheet for the Company as of
December 31, 1994, and an unaudited consolidated statement of income of
the Company for the year then ended, and (iii) an unaudited consolidated
balance sheet of the Company as of September 30, 1995, showing in such
balance sheet certain adjustments for cash, goodwill and intercompany
items (the "Recent Balance Sheet"), and the related unaudited statement of
income for the nine (9) months then ended. All of such financial
statements except the Recent Balance Sheet (including all notes and
schedules contained therein or annexed thereto) have been prepared in
accordance with generally accepted accounting principles in effect in the
jurisdictions where that Fiskars Company is incorporated (except as
disclosed on Schedule 3.4 and, in the case of unaudited statements, for
the absence of footnote disclosure) applied on a consistent basis, have
been prepared in accordance with the books and records of each applicable
Fiskars Company, and fairly present the financial position, the results of
operations and cash flows of the applicable Fiskars Company as of the
dates and for the years and periods indicated.
3.5. Tax Matters. Except as set forth on Schedule 3.5(a), all tax
returns, statements, reports and forms (including without limitation
estimated tax returns and reports and information returns and reports)
required to be filed with any tax authority with respect to any taxable
period ending on or before the Closing Date, by or on behalf of any of the
Fiskars Companies (collectively, the "Fiskars Returns"), have been or will
be filed when due (including any extensions of such due date), and all
amounts shown due thereon on or before the Closing Date have been or will
be paid on or before such date. The financial statements (i) fully accrue
all actual liabilities for taxes with respect to all periods through
September 30, 1995 and the Fiskars Companies have not and will not incur
any tax liability in excess of the amount reflected on the September 30,
1995 Recent Balance Sheet with respect to such periods, and (ii) properly
accrue in accordance with GAAP all liabilities, including deferred tax
liabilities for taxes payable after September 30, 1995 with respect to all
transactions and events occurring on or prior to such date. In no event
shall any tax deficiencies be offset by Shareholders or Company against
the $1,060,000 income tax reserve referred to in Section 2.3(c). All
information set forth in the notes to the financial statements relating to
tax matters is true, complete and accurate in all material respects. No
material tax liability since September 30, 1995 has been incurred other
than in the ordinary course of business and adequate provision will be
made for all taxes since that date in accordance with GAAP on at least a
quarterly basis. The Fiskars Companies have withheld and paid to the
applicable financial institution or tax authority all amounts required to
be withheld. The Fiskars Companies (or any member of any affiliated or
combined group of which any of them has been a member) have not granted
any extension or waiver of the limitation period applicable to any Fiskars
Returns. There is no material claim, audit, action, suit, proceeding, or
investigation now pending or threatened against or with respect to any of
the Fiskars Companies in respect of any tax or assessment. No notice of
deficiency or similar document of any tax authority has been received by
any of the Fiskars Companies, and there are no liabilities for taxes
(including liabilities for interest, additions to tax and penalties
thereon and related expenses) with respect to the issues that have been
raised (and are currently pending) by any tax authority that could, if
determined adversely to any of the Fiskars Companies, materially and
adversely affect the liability of any of the Fiskars Companies for taxes.
The Fiskars Companies are in full compliance with all the terms and
conditions of any tax exemptions or other tax-sharing agreement or order
of a foreign government and the consummation of the transactions
contemplated by this Agreement will not have any adverse effect on the
continued validity and effectiveness of any such tax exemption or other
tax-sharing agreement or order. There is no agreement, contract or
arrangement to which any of the Fiskars Companies is a party that may
result in the payment of any amount that would not be deductible by the
Fiskars Companies by reason of Sections 280G, 162 or 404 of the Internal
Revenue Code (the "Code"). As of the Closing, none of the Fiskars
Companies will be a party to any tax sharing or tax allocation agreement.
Except as may be required as a result of the transactions contemplated by
this Agreement, none of the Fiskars Companies have been or will be
required to include any material adjustment in taxable income for any tax
period (or portion thereof) pursuant to Section 481 or 263A of the Code or
any comparable provision under state or foreign tax laws as a result of
transactions, events or accounting methods employed prior to the
consummation of the transactions contemplated by this Agreement. None of
the Fiskars Companies have filed any consent under Section 341(f) of the
Code. For purposes of this Agreement, the following terms have the
following meanings: "tax" (and, with correlative meaning, "taxes" and
"taxable") means (i) any net income, alternative or add-on minimum tax,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property environmental or windfall profit tax,
custom, duty or other tax governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any governmental tax
authority responsible for the imposition of any such tax (domestic or
foreign), (ii) any liability for the payment of any amounts of the type
described in (i) as a result of being a member of any affiliated,
consolidated, combined or unitary group for any taxable period and (iii)
any liability for the payment of any amounts of the type described in (i)
or (ii) as a result of any express or implied obligation to indemnify any
other person.
3.5.(a) Tax Returns Filed. Except as set forth on Schedule
3.5.(a), all federal, state, foreign, county, local and other tax
returns required to be filed by or on behalf of a Fiskars Company have
been timely filed and when filed were true and correct in all material
respects, and the taxes shown as due thereon were paid or adequately
accrued. The Fiskars Companies have duly withheld and paid all taxes
which each is required to withhold and pay relating to salaries and
other compensation heretofore paid to the employees of the Fiskars
Companies.
3.5.(b) Tax Audits. The income tax returns of the Fiskars
Companies have been audited by taxing authorities for the periods and to
the extent set forth in Schedule 3.5.(b), and no Fiskars Company has
received from the Internal Revenue Service or from the tax authorities
of any country, state, county, local or other jurisdiction any notice of
underpayment of taxes or other deficiency which has not been paid nor
any objection to any return or report filed by the Fiskars Company.
There are outstanding no agreements or waivers extending the statutory
period of limitations applicable to any tax return or report.
3.5.(c) Consolidated Group. Schedule 3.5.(c) lists every year
Company or Deltec was a member of an affiliated group of corporations
that filed a consolidated tax return on which the statute of limitations
does not bar a federal tax assessment, and each corporation that has
been part of such group. No affiliated group of corporations of which
Company or Deltec has been a member has discontinued filing consolidated
returns during the past five years.
3.6. Absence of Certain Changes. Except as and to the extent set forth
in Schedule 3.6, since the date of the Recent Balance Sheet, there has not
been:
3.6.(a) No Adverse Change. Any material adverse change, or any
event or condition which could reasonably be expected to result in, a
material adverse change in the results of operations, financial
condition, assets or liabilities of the Fiskars Companies taken as a
whole (a "Material Adverse Effect").
3.6.(b) No Damage. Any loss, damage or destruction, whether
covered by insurance or not, affecting a material part of the Business
or the Fiskars Companies' properties;
3.6.(c) No Increase in Compensation. Except as disclosed in
Schedule 3.6(c) hereto, any increase in the compensation, salaries or
wages payable or to become payable to any employee or agent of a Fiskars
Company (including, without limitation, any increase or change pursuant
to any bonus, pension, profit sharing, retirement or other plan or
commitment), or any bonus or other employee benefit granted, made or
accrued, in any case other than in the ordinary course of business
consistent with past practice;
3.6.(d) No Labor Disputes. Any labor dispute or disturbance,
other than routine individual grievances which are or could reasonably
be expected to be material to the business, financial condition or
results of operations of the Fiskars Companies;
3.6.(e) No Commitments. Any commitment or transaction by a
Fiskars Company (including, without limitation, any borrowing or capital
expenditure) other than in the ordinary course of business consistent
with past practice;
3.6.(f) No Dividends. Except as described in Section 1.2 or
disclosed in Schedule 3.6(f) and except for the regular quarterly
dividend payable with respect to Preferred Shares, any declaration,
setting aside, or payment of any dividend or any other distribution in
respect of a Fiskars Company's capital stock; any redemption, purchase
or other acquisition by a Fiskars Company of any capital stock of a
Fiskars Company, or any security relating thereto; or any other payment
to any shareholder of a Fiskars Company as such a shareholder;
3.6.(g) No Disposition of Property. Any sale, lease or other
transfer or disposition of any material properties or assets of a
Fiskars Company, except for the sale of inventory items in the ordinary
course of business;
3.6.(h) No Indebtedness. Any indebtedness for borrowed money
incurred, assumed or guaranteed by a Fiskars Company, other than
intercompany indebtedness and trade payables incurred in the ordinary
course of business consistent with past practice and intercompany loans
to fund the redemption described in Section 1.2 hereof;
3.6.(i) Loans and Advances. Any loan or advance (other than
advances to employees in the ordinary course of business for travel and
entertainment in accordance with past practice) to any person including,
but not limited to, any Affiliate (for purposes of this Agreement, the
term "Affiliate" shall mean and include all Shareholders, directors and
officers of the Fiskars Companies; the spouse of any such person; any
person who would be the heir or descendant of any such person if he or
she were not living; and any entity in which any of the foregoing has a
direct or indirect interest, except through ownership of less than 5% of
the outstanding shares of any entity whose securities are listed on a
national securities exchange or traded in the national over-the-counter
market);
3.6.(j) Credit. Any grant of credit to any customer or
distributor on terms or in amounts more favorable than those which have
been extended to such customer or distributor in the past, any other
change in the terms of any credit heretofore extended, or any other
change of a Fiskars Company's policies or practices with respect to the
granting of credit;
3.6.(k) No Change in Contract Rights. Any entry into,
amendment of, relinquishment, termination or non-renewal by any of the
Fiskars Companies of any material distribution agreement, OEM agreement,
technology agreement or any other material contract to which any of them
are a party other than in the ordinary course of business consistent
with past practice; or
3.6.(l) No Other Agreements. Any agreement or arrangement made
by any of the Fiskars Companies to take any action which, if taken prior
to the date hereof, would have made any representation or warranty set
forth in this Section 3.6 untrue or incorrect as of the date when made.
3.7. Absence of Undisclosed Liabilities. Except as and to the extent
specifically disclosed in the Recent Balance Sheet, in this Agreement or
in Schedule 3.7, to Company's and each Shareholder's knowledge, none of
the Fiskars Companies have any liabilities, commitments or obligations
(secured or unsecured, and whether accrued, absolute, contingent, direct,
indirect or otherwise), except those incurred in the ordinary course of
the Business or which will not have a Material Adverse Effect.
3.8. Accounts Receivable. All accounts receivable as set forth on the
Recent Balance Sheet or arising since the date of the Recent Balance Sheet
(i) have arisen only in the ordinary course of business consistent with
past practice and (ii) to the knowledge of Company and Shareholders are
collectible in full at the recorded amounts thereof (free of any, and
subject to no, defenses, set-offs or counterclaims) in the ordinary course
of business, net of any allowance for doubtful accounts reflected in the
Recent Balance Sheet.
3.9. Inventory. The inventory as set forth on the Recent Balance Sheet
or arising since the date of the Recent Balance Sheet was acquired and has
been maintained in accordance with the regular business practices of the
Company and the Fiskars Companies, consists of items of a quality and
quantity useable or saleable in the ordinary course of business consistent
with past practice, and is valued at reasonable amounts based on the
ordinary course of business of such companies within the past 12 months.
3.10. No Litigation. Except as set forth in Schedule 3.10, there is
no action, suit, arbitration, proceeding, investigation or inquiry,
whether civil, criminal or administrative ("Litigation") pending or, to
Company's and each Shareholder's knowledge, threatened against the Fiskars
Companies or their respective officers or directors (in such capacity) and
to the knowledge of the Company or each Shareholder, no event has occurred
which might reasonably be expected to result in any such Litigation.
Schedule 3.10 also identifies all Litigation to which the Fiskars
Companies or any of their officers or directors (in such capacity) have
been parties since January 1, 1993. Except as set forth in Schedule 3.10,
no Fiskars Company is subject to any Order of any Government Entity and to
the knowledge of the Company or each Shareholder, no event has occurred
which might reasonably be expected to result in any such Litigation.
3.11. Compliance With Laws and Orders.
3.11.(a) Compliance. Except as set forth in Schedule 3.11.(a),
to Company's and each Shareholder's knowledge, the Fiskars Companies
have been (within the last three years) in substantial compliance with
all applicable Laws and Orders, including, without limitation, those
applicable to discrimination in employment, occupational safety and
health, trade practices, competition and pricing, product warranties,
zoning, building and sanitation, employment, retirement and labor
relations, product advertising and protection of the environment where
failure to comply with such Laws and Orders would have a Material
Adverse Effect. Except as set forth in Schedule 3.11.(a), no Fiskars
Company has received notice of any violation or alleged violation of any
Laws or Orders that have not been cured or resolved.
3.11.(b) Licenses and Permits. The Fiskars Companies have all
licenses and permits of all Government Entities and all certification
organizations required for the conduct of the business (as presently
conducted) and operation of the Facilities where the failure to have
same would have a Material Adverse Effect. All such licenses, permits,
approvals, authorizations and consents are in full force and effect and
will not be affected or made subject to loss, limitation or any
obligation to reapply as a result of the transactions contemplated
hereby.
3.12. Environmental Matters.
3.12.(a) For the purposes of this Agreement, the term
"Environmental Laws" shall mean all applicable international, federal,
state, local and applicable foreign environmental protection,
occupational, health and safety or similar laws, ordinances,
restrictions, licenses, rules, regulations and permit conditions,
including, without limitation, the Federal Water Pollution Control Act,
Resource Conservation & Recovery Act, Clean Air Act, Comprehensive
Environmental Response, Compensation and Liability Act, Emergency
Planning and Community Right to Know Act, Occupational Safety and Health
Act and other federal, state or local laws of similar effect, each as
amended, and the term "Hazardous Materials" shall mean any toxic or
hazardous substance, material or waste or any pollutant or contaminant,
or infectious or radioactive substance or material, including without
limitation, those substances, materials and wastes defined in or
regulated under any applicable Environmental Laws.
3.12.(b) No Fiskars Company has received any notices,
directives, violation reports, actions or claims from or by (i) any
federal, state or local governmental agency concerning any Fiskars
Company and any Environmental Laws, or (ii) any person alleging that, in
connection with Hazardous Materials, conditions at any real properties
leased or owned by any Fiskars Company have resulted in or caused or
threatened to result in or cause injury or death to any person or
damages to or contamination of any property, including, without
limitation, damage to natural resources, and to the best of each of
Company's and Shareholder's knowledge no such notices, directives,
violation reports, actions, claims, assessments or allegations exist;
(iii) no Fiskars Company currently leases, operates or owns any real
properties or, to the knowledge of Company or the Shareholders, has
disposed of Hazardous Materials at any property or facility that are
listed or, to the knowledge of Company or the Shareholders, are
threatened to be listed on a "Superfund" List or with respect to which
there is any pending proceeding or investigation under any Environmental
Law, and, to the best of each of Company's and Shareholder's knowledge,
no such proceeding or investigation is threatened; (iv) to the best of
each of Company's and Shareholder's knowledge, throughout the period of
operation of any real properties by any Fiskars Company, each Fiskars
Company has operated and continues to operate such real properties in
compliance with all Environmental Laws; (v) to the best of each of
Company's and Shareholder's knowledge, no underground storage tanks
either are or have been located at any of such real properties other
than those identified in Schedule 3.12(b) (which disclosure does not, in
and of itself, qualify any of Company's or Shareholders' representations
set forth in this Section 3); (vi) to the best of each of Company's and
Shareholder's knowledge, there has been no spill, discharge, release,
contamination or cleanup of or by any Hazardous Materials used,
generated, treated, stored, disposed of or handled by any of the Fiskars
Companies at such real properties and to the best of each of Company's
and Shareholder's knowledge, no spill, discharge or release or
contamination or cleanup of or by Hazardous Materials has occurred on or
to such real properties by any third party; (vii) to the best of each of
Company's and Shareholder's knowledge, no Fiskars Company has used,
generated, treated, stored, disposed of, handled, transported or
released any Hazardous Material in a manner which would give rise to any
liability under any Environmental Laws; (viii) neither the Company nor
any Shareholder is aware of any facts, events, or conditions (including,
without limitation, the generation, treatment, transport, storage,
emission, disposal, release or other placement, deposit or location of
any substance) which materially interfere with or prevent continued
compliance by any Fiskars Company with, or give rise to any present or
potential liability (including with respect to past activities) under
any Environmental Laws which would have a Material Adverse Effect; and
(ix) to the best of each of Company's and Shareholder's knowledge, no
Fiskars Company has released any other person from any claim under any
Environmental Laws nor waived any rights or defenses concerning any
environmental conditions.
3.13. Title to and Condition of Properties.
3.13.(a) Marketable Title. The Fiskars Companies have good and
marketable title to all of their assets, including, without limitation,
all such properties (tangible and intangible) reflected in the Recent
Balance Sheet, except for inventory disposed of in the ordinary course
of business since the dates of such Recent Balance Sheet, free and clear
of all mortgages, liens (statutory or otherwise), security interests,
claims, pledges, licenses, equities, options, conditional sales
contracts, assessments, levies, easements, covenants, reservations,
restrictions, rights-of-way, exceptions, limitations, charges or
encumbrances of any nature whatsoever except Permitted Liens
(collectively, "Liens"). "Permitted Liens" means, with respect to any
Fiskars Company: (i) Liens for taxes which are not yet due, are being
contested in good faith, or are not material; (ii) Liens arising under
applicable laws to the extent that such Liens secure obligations
thereunder not yet due, including (but not limited to) Liens incurred
and deposits made in connection with workmen's compensation,
unemployment insurance, social security and similar laws; (iii) Liens
disclosed or otherwise reflected in the Recent Financial Statements or
elsewhere in this Agreement; (iv) in the case of real property,
municipal and zoning ordinances and easements for public utilities, none
of which interfere with the use of the property as currently utilized;
and (v) the Liens disclosed on Schedule 3.13(a).
3.13.(b) Real Property. Schedule 3.13.(b) sets forth all real
property owned, used or occupied by the Fiskars Companies (the "Real
Property"), including a description of all land, and all encumbrances,
easements or rights of way of record (or, if not of record, of which a
Fiskars Company has notice or knowledge) granted on or appurtenant to or
otherwise affecting such Real Property and all plants, buildings or
other structures located thereon. Schedule 3.13.(b) also sets forth,
with respect to each parcel of Real Property which is leased, the
material terms of such lease. There are now in full force and effect
duly issued certificates of occupancy permitting the Real Property and
improvements located thereon to be legally used and occupied as the same
are now constituted.
3.13.(c) No Condemnation or Expropriation. To Company's and
each Shareholder's knowledge, neither the whole nor any portion of the
property or any other assets of a Fiskars Company is subject to any
Order to be sold or is being condemned, expropriated or otherwise taken
by any Government Entity with or without payment of compensation
therefor.
3.14. Contracts and Commitments.
3.14.(a) Real Property Leases. Except as set forth in Schedule
3.14.(a), the Fiskars Companies have no leases of real property that are
material to the Business.
3.14.(b) Personal Property Leases. Except as set forth in
Schedule 3.14.(b), the Fiskars Companies have no leases of personal
property involving consideration or other expenditure in excess of
$10,000 or involving performance over a period of more than 12 months.
3.14.(c) Powers of Attorney. Except as set forth in Schedule
3.14(c), the Fiskars Companies have not given a power of attorney, which
is currently in effect, to any person, firm or corporation for any
purpose whatsoever.
3.14.(d) Collective Bargaining Agreements. Except as set forth
in Schedule 3.14.(d), the Fiskars Companies are not a party to any
collective bargaining agreements with any unions, guilds, shop
committees or other collective bargaining groups or any national labor
union contract. Copies of all such agreements have heretofore been
delivered to Buyer.
3.14.(e) Loan Agreements. Except as set forth in Schedule
3.14.(e), the Fiskars Companies are not obligated under any loan
agreement, promissory note, letter of credit, or other evidence of
indebtedness as a signatory, guarantor or otherwise.
3.14.(f) Guarantees. Except as disclosed on Schedule 3.14.(f),
the Fiskars Companies have not guaranteed the payment or performance of
any person, firm or corporation, agreed to indemnify any person or act
as a surety, or otherwise agreed to be contingently or secondarily
liable for the obligations of any person.
3.14.(g) Non-Competition Agreements. Except as disclosed on
Schedule 3.14.(g), the Fiskars Companies have not entered into any
agreement or commitment containing any covenant limiting the freedom of
any of the Fiskars Companies to engage in any line of business,
including, without limitation, the Business, or compete with any person.
3.14.(h) Other Material Agreements. Except as set forth in
Schedule 3.14.(h) hereto, none of the Fiskars Companies have entered
into any agreement or commitment which involve payment or receipt by any
of them of $50,000 or more in the aggregate or which are not cancelable
without penalty within 180 days. [Schedule to be delivered after
signing]
3.15. Labor Matters. Except as set forth in Schedule 3.15, within
the last three years the Fiskars Companies have not experienced any labor
disputes, union organization attempts or any work stoppage due to labor
disagreements in connection with its business. Except to the extent set
forth in Schedule 3.15, (a) there is no unfair labor practice charge or
complaint against any Fiskars Company pending or threatened; (b) there is
no labor strike, dispute, request for representation, slowdown or stoppage
actually pending or, to Company's or Shareholder's knowledge, threatened
against or affecting any Fiskars Company nor any secondary boycott with
respect to products of any Fiskars Company; (c) no question concerning
representation has been raised or, to Company's or Shareholder's
knowledge, is threatened respecting the employees of any Fiskars Company;
(d) no grievance which might have a Material Adverse Effect, nor any
arbitration proceeding arising out of or under collective bargaining
agreements or any national labor union contract, is pending; and (e) there
are no administrative charges or court complaints against any Fiskars
Company concerning alleged employment discrimination or other employment
related matters pending or, to Company's or Shareholders' knowledge,
threatened before the U.S. Equal Employment Opportunity Commission or any
Government Entity.
3.16. Employee Benefit Plans.
3.16.(a) Disclosure. Schedule 3.16.(a) describes all pension,
thrift, savings, profit sharing, retirement, incentive bonus and other
material bonus, medical, dental, life, accident insurance, benefit,
employee welfare, disability, group insurance, stock appreciation,
executive or deferred compensation, hospitalization and other similar
fringe or employee benefit plans, programs and arrangements, and any
employment or consulting contracts, "golden parachutes," collective
bargaining agreements, severance agreements or plans, vacation and sick
leave plans, programs, arrangements and policies, including, without
limitation, all "employee benefit plans" (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), all employee manuals, and all written statements of policies
relating to employment, which are provided to, for the benefit of, or
relate to, any persons ("Employees") employed by a Fiskars Company and
under which a Fiskars Company has any obligation. Without regard to
Section 8.5(b) hereof, Shareholders have agreed to make certain payments
to certain officers of the Company which have not been disclosed to
Buyer and for which Shareholders shall be solely responsible. The items
described in the foregoing sentence are hereinafter sometimes referred
to collectively as "Employee Plans/Agreements," and each individually as
an "Employee Plan/Agreement." Each of the Employee Plans/Agreements is
identified on Schedule 3.16.(a), to the extent applicable, as one or
more of the following: an "employee pension benefit plan" (as defined
in Section 3(2) of ERISA), a "defined benefit plan" (as defined in
Section 414 of the Code), an "employee welfare benefit plan" (as defined
in Section 3(1) of ERISA), and/or as a plan intended to be qualified
under Section 401 of the Code. No Employee Plan/Agreement is a
"multiemployer plan" (as defined in Section 4001 of ERISA), and neither
the Fiskars Companies nor (except as disclosed in Schedule 3.16.(a)(i)
any entity affiliated since January 31, 1989, with the Fiskars Companies
under Code Section 414 ("ERISA Affiliate") has ever contributed nor been
obligated to contribute to any such multiemployer plan.
3.16.(b) Prohibited Transactions, etc. There have been no
"prohibited transactions" within the meaning of Section 406 or 407 of
ERISA or Section 4975 of the Code which could have a Material Adverse
Effect.
3.16.(c) Payments and Compliance. With respect to each Employee
Plan/Agreement, (i) all payments due from a Fiskars Company to date have
been made and all amounts properly accrued to date as liabilities of the
Fiskars Company which have not been paid have been properly recorded on
the books of the Fiskars Company and are reflected in the Recent Balance
Sheet; (ii) all reports and information relating to each such Employee
Plan/Agreement required to be disclosed or provided to participants or
their beneficiaries have been timely disclosed or provided; and (iii)
each such Employee Plan/Agreement which is intended to qualify under
Section 401 of the Code has received a favorable determination letter
from the Internal Revenue Service with respect to such qualification,
its related trust has been determined to be exempt from taxation under
Section 501(a) of the Code, and nothing has occurred since the date of
such letter that has or is likely to adversely affect such qualification
or exemption.
3.16.(d) Post-Retirement Benefits. Except as set forth in
Schedule 3.16.(a), no Employee Plan/Agreement provides benefits,
including, without limitation, death or medical benefits (whether or not
insured) with respect to current or former Fiskars Company employees
beyond their retirement or other termination of service other than (i)
coverage mandated by applicable law, (ii) death or retirement benefits
under any Employee Plan/Agreement that is an employee pension benefit
plan, (iii) deferred compensation benefits accrued as liabilities on the
books of the Fiskars Companies (including the Recent Balance Sheet),
(iv) disability benefits under any Employee Plan/ Agreement that is an
employee welfare benefit plan and which have been fully provided for by
insurance or otherwise or (v) benefits in the nature of severance pay.
3.16.(e) Liability. There is no existing condition or event
with regard to any employee benefit plans ever maintained by the Fiskars
Companies or by an ERISA Affiliate that could subject the parties to
this Agreement or any Employee Plan/Agreement to any risk of liability
which would have a Material Adverse Effect.
3.16.(f) Funding. Except as set forth in Schedule 3.16(a), each
employee benefit plan that is subject to Title IV of ERISA and/or to
Section 412 of the Code and that is maintained by a Fiskars Company or
by an ERISA Affiliate is fully funded on a termination basis.
3.16.(g) Compliance. Each Employee Plan/Agreement has been
operated in accordance with its terms and in material compliance with
all applicable laws, orders, governmental rules and regulations
including, but no limited to, ERISA and the Code.
3.16.(h) Right to Amend or Terminate. Except as disclosed in
Schedule 3.16.(h) hereto, no condition exists that would prevent
amendment or termination of any Employee Plan/Agreement.
3.16.(i) Parachute. Except as disclosed in Schedule 3.16(i), no
excess parachute payment, within the meaning of Code Section 280G will
become payable by any Fiskars Company as a result of the execution or
performance of this Agreement, or on the termination of any director,
officer, or employee after the Closing Date in connection with this
Agreement.
3.16.(j) No Triggering of Obligations. Other than by reason of
actions taken by Buyer following the Closing, and except as disclosed in
Schedule 3.16(j), the consummation of the transactions contemplated by
this Agreement will not (i) entitle any current or former employee of a
Fiskars Company to severance pay, unemployment compensation or any other
payment, except as expressly provided in this Agreement, (ii) accelerate
the time of payment or vesting, or increase the amount of compensation
due to any such employee or former employee or (iii) result in any
prohibited transaction described in Section 406 of ERISA or Section 4975
of the Code for which an exemption is not available.
3.16.(k) Non-US Employee Benefit Plans. Schedule 3.16(b) lists
(i) each non-governmental retirement plan maintained or contributed to
by or on behalf of the Shareholders or the Fiskars Companies applicable
to employees of any Fiskars Company located outside of the US (a "Non-US
Retirement Plan") and (ii) each non-governmental non-industry welfare
benefit plan maintained or contributed to by or on behalf of the
Shareholders or the Fiskars Companies applicable to employees of any
Fiskars Company located outside of the US and which, in the case of
clause (ii), obligates or may reasonably be expected to obligate any
Fiskars Company to pay more than US $100,000 annually (a "Non-US Welfare
Plan"). Except as set forth in Schedule 3.16(b), each such Non-US
Retirement Plan and Non-US Welfare Plan (collectively, the "Non-US
Plans") has been administered, in all material respects, in compliance
with its terms and the requirements of all applicable Laws and all
required contributions to each Non-US Plan have been made. The Company
and/or the Shareholders has heretofore delivered to Buyer true and
complete copies of all of the written Non-US Plans and written summaries
of the oral Non-US Plans and, where applicable, related trusts,
including all amendments. There are no inquiries or investigations by
any foreign government authority, no termination proceedings and no
actions, suits or claims (other than claims for benefits) pending or, to
the Company's or the Shareholders' knowledge, threatened against any
Non-US Plan (or any Shareholder or any Fiskars Company with respect
thereto) or the assets thereof. Except as set forth in Schedule
3.16(b), there are no unfunded obligations under any Non-US Plan
providing benefits after termination of employment to any employee or
former employee of any Fiskars Company (or to any beneficiary of any
such employee or former employee), including but not limited to retiree
health coverage and deferred compensation, but excluding insurance
conversion privileges under applicable foreign law. No Non-US Plan,
plan documentation or agreement, summary plan description or other
written communication distributed generally to employees of any Fiskars
Company by its terms prohibits the amendment or termination of any such
Non-US Plan. All reports, forms and other documents required to be
filed or advisable to be filed with any government entity with respect
to each Non-US Plan have been timely filed and are accurate.
3.17. Employment Compensation. Schedule 3.17 contains a true and
correct list of all employees to whom a Fiskars Company is paying
compensation, including bonuses and incentives, at an annual rate in
excess of Fifty Thousand Dollars ($50,000) for services rendered or
otherwise; and in the case of salaried employees such list identifies the
current annual rate of compensation for each employee and in the case of
hourly or commission employees identifies certain reasonable ranges of
rates and the number of employees falling within each such range.
[Schedule 3.17 to be delivered after signing]
3.18. Trade Rights. Schedule 3.18 lists all Trade Rights (as
defined below but excluding know-how and trade secrets) in which a Fiskars
Company now has any interest, specifying whether such Trade Rights are
owned, controlled, used or held (under license or otherwise) by the
Fiskars Company, and also indicating which of such Trade Rights are
registered. All Trade Rights shown as registered in Schedule 3.18 have
been properly registered, all pending registrations and applications have
been properly made and filed and all annuity, maintenance, renewal and
other fees relating to registrations or applications are current. To the
Shareholders' and Company's knowledge, no Fiskars Company is infringing or
has infringed any Trade Rights of another in the operation of the Business
nor, to the Shareholders' and Company's knowledge, is any other person
infringing the Trade Rights of a Fiskars Company. Except as set forth on
Schedule 3.18, no Fiskars Company has granted any license or made any
assignment of any Trade Right listed on Schedule 3.18 nor does any Fiskars
Company pay any royalties or other consideration for the right to use any
Trade Rights of others. The consummation of the transactions contemplated
hereby will not alter or impair any Trade Rights owned or used by the
Fiskars Companies in any material adverse manner. As used herein, the
term "Trade Rights" shall mean and include: all patents, trademarks,
trade names, service marks, copyrights and any applications therefor,
maskworks, trade secrets, know-how and internally generated and developed
computer software programs or applications (in both source code and object
code forms) that are used in and are material to the Business as currently
conducted. Trade Rights shall not include any trademark or trade name
rights in the word "Fiskars" or in any combination of words or expression
or logo containing "Fiskars" and any rights any of the Fiskars Companies
may have to use such trademark or trade name rights will be specifically
assigned to Fiskars as of the Closing pursuant to written assignments
reasonably acceptable to Fiskars. The Fiskars Companies are the sole and
exclusive owner or licensee of, with all right, title and interest in and
to (free and clear of any Liens), the Trade Rights (defined for this
purpose to exclude know-how and trade secrets), and have sole and
exclusive rights (and are not contractually obligated to pay any
compensation to any third party in respect thereof) to the use thereof or
the material covered thereby in connection with the services or products
in respect of which the Trade Rights (defined for this purpose to exclude
know-how and trade secrets) are being used. Except as disclosed in
Schedule 3.18, no claims have been asserted or, to the Company's or
Shareholder's knowledge, are threatened by any person nor are there any
valid grounds, to the Company's or Shareholder's knowledge, for any bona
fide claims (i) to the effect that the manufacture, sale, licensing or use
of any of the products of the Fiskars Companies as now manufactured, sold
or licensed or used by any of the Fiskars Companies infringes on any
copyright, patent, trademark, service xxxx or trade secret, (ii) against
the use by any of the Fiskars Companies of any trademarks, service marks,
trade names, trade secrets, copyrights, patents, technology, know-how or
computer software programs and applications used in any of the Fiskars
Companies' business as currently conducted, or (iii) challenging the
ownership by any of the Fiskars Companies, the validity, or the
effectiveness, of any of the Trade Rights. No Trade Right or product of
any of the Fiskars Companies is subject to any outstanding decree, order,
judgment, or stipulation restricting in any manner the licensing thereof
by any of the Fiskars Companies. The Company has a policy requiring
certain employees to execute a proprietary information and confidentiality
agreement.
3.19. Product Liability. Schedule 3.19 sets forth a list of all
claims since January 1, 1992 arising from or alleged to arise from any
injury to person or property as a result of the use of any product
manufactured and sold by any of the Fiskars Companies.
3.20. Bank Accounts. Schedule 3.20 sets forth the names and
locations of all banks, trust companies, savings and loan associations and
other financial institutions at which the Fiskars Companies maintain a
safe deposit box, lock box or checking, savings, custodial or other
account of any nature, the type and number of each such account and the
signatories therefor, a description of any compensating balance
arrangements, and the names of all persons authorized to draw thereon,
make withdrawals therefrom or have access thereto.
3.21. Affiliates' Relationships to Fiskars Companies.
3.21.(a) Contracts With Affiliates. All leases, contracts,
agreements or other arrangements between a Fiskars Company and any
Affiliate that is material to the Business or which involve payment by
any of them of $50,000 or more in the aggregate or which are not
cancelable without penalty within 180 days notice to terminate are
described on Schedule 3.21(a) [delivered after signing].
3.21.(b) No Adverse Interests. No Affiliate has any direct or
indirect interest in (i) any entity which does business with a Fiskars
Company or is competitive with the Business, or (ii) any property, asset
or right which is used by a Fiskars Company in the conduct of its
business that will not be assigned to the Fiskars Company as part of the
Closing other than trade name or trademark rights in the word "Fiskars,"
which are the subject of Section 3.18 and 5.10.
3.21.(c) Obligations. All obligations of any Affiliate to a
Fiskars Company, and all obligations of a Fiskars Company to any
Affiliate, are listed on Schedule 3.21.(c).
3.22. No Brokers or Finders. Neither Company nor the Shareholders,
nor any of their respective directors, officers, employees or agents have
retained, employed or used any broker or finder in connection with the
transaction provided for herein or in connection with the negotiation
thereof other than Xxxxxxx Xxxxx & Associates, Inc., whose commissions
will be paid by the Shareholders.
3.23. Insurance Coverage. There is set forth in Schedule 3.23
hereto a complete and accurate list of all material policies of insurance
maintained by the Fiskars Companies, showing, among other things, the
amount of coverage, the company issuing the policy and the expiration date
of each policy. Such policies are, in the opinion of the Company and the
Shareholders, adequate and in full force and effect and such policies, or
other policies covering the same risks, have been in full force and
effect, without gaps, continuously for the past two (2) years. Copies of
all current insurance policies of the Fiskars Companies have been made
available to Buyer for inspection. None of the Fiskars Companies is in
default under any of such policies, and none of the Fiskars Companies has
failed to give any notice or to present any claim under any such policy in
a due and timely fashion. Neither the Company or the Shareholders is
aware of any facts concerning any of the Fiskars Companies or their
respective business, operations, assets and liabilities, contingent or
otherwise, upon which an insurer might be justified in reducing or
cancelling coverage on existing policies.
3.24. Investment Representations. The representations and
warranties in this Section 3.24 are made by Fiskars exclusively and not by
Company or Holdings. Fiskars' financial condition is presently adequate
to bear the economic risks of owning Buyer's common stock and at the
present time Fiskars could afford a complete loss of such investment.
Buyer's common stock is being acquired by Fiskars for investment only and
not with a current view to resale or other disposition. Fiskars further
represents that Fiskars has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment that
requires the sale of Buyer's common stock except as may be permitted under
the Stockholder Agreement between Buyer and Fiskars. Fiskars acknowledges
that its right to sell any part or all of Buyer's common stock is limited
by and subject to the terms and provisions of the Stockholder Agreement.
In reaching the conclusion that Fiskars desires to acquire Buyer's common
stock as a result of the transactions contemplated by this Agreement,
Fiskars has carefully evaluated the financial resources and investment
position of Fiskars and the risks associated with the acquisition and
acknowledges that Fiskars is able to bear the economic risks of such
investment.
3.25. Limitations on Warranties and Disclaimers. The
representations and warranties set forth in this Article 3 and the
schedules, certificates and statements provided pursuant hereto are the
only representations and warranties made by Company and Shareholders with
respect to the Business, the Fiskars Companies or their assets,
liabilities, operations and financial condition. EXCEPT AS SPECIFICALLY
SET FORTH HEREIN, ALL WARRANTIES, EXPRESS OR IMPLIED, ARE HEREBY
DISCLAIMED AND EXCLUDED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL
COMPANY OR SHAREHOLDERS BE LIABLE FOR ANY OBLIGATIONS OR LIABILITIES WITH
RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY EXCEPT FOR THE REMEDIES,
INCLUDING INDEMNIFICATION, SPECIFICALLY SET FORTH IN THIS AGREEMENT,
WHETHER ARISING OUT OF BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING
NEGLIGENCE AND STRICT LIABILITY) OR OTHER THEORIES OF LAW. UNDER NO
CIRCUMSTANCES SHALL COMPANY OR SHAREHOLDERS BE LIABLE TO BUYER FOR AND
COMPANY AND SHAREHOLDERS HEREBY SPECIFICALLY DISCLAIM ALL CONSEQUENTIAL,
INCIDENTAL, PUNITIVE AND CONTINGENT DAMAGES WHATSOEVER ARISING FROM BREACH
OF THIS AGREEMENT. THE COMPANY AND SHAREHOLDERS MAKE NO REPRESENTATION OR
WARRANTY AS TO THE ACCURACY OR RELIABILITY OF ANY FORECASTS OF REVENUES,
SALES, EXPENSES OR PROFITS OF THE BUSINESS.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties to the
Shareholders, each of which is true and correct on the date hereof, shall
remain true and correct to and including the Closing Date and shall
survive the Closing of the transactions provided for herein for the period
provided for in Section 8.5(a).
4.1. Corporate.
4.1.(a) Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.
4.1.(b) Corporate Power. Buyer has all requisite corporate
power to enter into this Agreement and the other documents and
instruments to be executed and delivered by Buyer and to carry out the
transactions contemplated hereby and thereby.
4.2. Authority. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Buyer
pursuant hereto and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of
Buyer. No other corporate act or proceeding on the part of Buyer or its
shareholders is necessary to authorize this Agreement or the other
documents and instruments to be executed and delivered by Buyer pursuant
hereto or the consummation of the transactions contemplated hereby and
thereby. This Agreement constitutes, and when executed and delivered, the
other documents and instruments to be executed and delivered by Buyer
pursuant hereto will constitute, valid and binding agreements of Buyer,
enforceable in accordance with their respective terms, except as such may
be limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights generally, and by general equitable
principles.
4.3. No Violation. Except as set forth on Schedule 4.3, neither the
execution and delivery of this Agreement or the Ancillary Instruments nor
the consummation by Buyer of the transactions contemplated hereby and
thereby (a) will violate any Laws and Orders, (b) except for applicable
requirements of the HSR Act, will require any authorization, consent,
approval, exemption or other action by or notice to any Government Entity
(including, without limitation, under any "plant-closing" or similar law),
or (c) will constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or will result in the
termination of, any contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which the Buyer is a
party or by which the Buyer may be bound or affected, in any case where
such default, termination, acceleration would have a material effect on
the ability of Buyer to consummate the transactions contemplated hereby.
4.4. No Brokers or Finders. Neither Buyer nor any of its directors,
officers, employees or agents have retained, employed or used any broker
or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof, other than X.X. Xxxxxxx & Co.,
Inc., whose commissions will be paid by Buyer.
4.5. Investment Representations. Buyer's financial condition is
presently adequate to bear the economic risks of this investment and at
the present time Buyer could afford a complete loss of such investment
(including certain additional amounts under Wisconsin Statutes Section
180.0622(2)(b)). The Shares are being acquired by Buyer for investment
only and not with a view to resale or other distribution. Buyer further
represents that Buyer has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing
for or which is likely to compel a disposition in any manner of the
Company, that Buyer is not aware of any circumstances presently in
existence which are likely to promote in the future any disposition by
Buyer of the Company, and that Buyer does not presently contemplate any
sale of any part of the Company upon the occurrence or nonoccurrence of
any predetermined or undetermined event or circumstance. In reaching the
conclusion that Buyer desires to purchase the stock of Company, Buyer has
carefully evaluated the financial resources and investment position of
Buyer and the risks associated with the acquisition and acknowledges that
Buyer is able to bear the economic risks of such investment.
4.6. Buyer's Business Investigation. Without limiting Buyer's rights
under Section 6.5 of this Agreement, Buyer acknowledges that it has
conducted an investigation of the Fiskars Companies, their assets,
liabilities, operations and financial conditions, and the Business, it has
deemed necessary and advisable for purposes of determining to enter into
this Agreement and Ancillary Instruments. Except to the extent of the
express representations, warranties and agreements contained in this
Agreement, Buyer is purchasing the Shares in reliance upon its own
investigation of the Fiskars Companies. Buyer agrees and acknowledges
that it is experienced in the manufacturing business and has the knowledge
and ability to conduct a full investigation of the Fiskars Companies and
to evaluate the Fiskars Companies' business, operations, financial
conditions, assets and liabilities. BUYER EXPRESSLY REPRESENTS AND
WARRANTS THAT IT HAS NOT RELIED ON ANY PROJECTIONS OR REPRESENTATIONS
(ORAL OR WRITTEN) EXCEPT AS SET OUT HEREIN AND IN THE ANCILLARY
INSTRUMENTS, WHICH BUYER HAS OBTAINED FROM THE COMPANY, SHAREHOLDERS, ITS
AFFILIATED COMPANIES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES OR AGENTS OR THE FISKARS COMPANIES.
4.7. Knowledge of Buyer. Buyer has no actual knowledge of a breach of
any representation, warranty or covenant of Company and Shareholders
contained herein which gives rise, or following the Closing would give
rise, to an indemnification claim under Section 8.1.
4.8. Sufficient Financing. Buyer has sufficient funds or financing in
place to fund the Purchase Price to be paid at Closing to Shareholders for
the Shares.
5. COVENANTS
5.1. Noncompetition; Confidentiality; Non-Solicitation. Subject to the
Closing, and as an inducement to Buyer to execute this Agreement and
complete the transactions contemplated hereby, and in order to preserve
the goodwill associated with the Business, each Shareholder hereby
covenants and agrees as follows:
5.1.(a) Covenant Not to Compete. For a period of four (4)
years from the Closing Date (the Non-Compete Period), no Shareholder
will, directly or indirectly, engage in, continue in or carry on any
business which is competitive with the Business, including owning or
controlling any financial interest in any corporation, partnership, firm
or other form of business organization which is so engaged; provided,
however, that the foregoing shall not prohibit the ownership of
securities of Buyer as herein contemplated or in other corporations
which are listed on a national securities exchange or traded in the
national over-the-counter market in an amount which shall not exceed 5%
of the outstanding shares of any such corporation. Buyer confirms and
agrees that Fiskars, Inc., an affiliate of the Shareholders, currently
designs, manufactures and sells surge protectors and the other products
identified in Schedule 5.1.(a) and this Section 5.1 is not intended in
any manner to limit or restrict Fiskars, Inc. or any other affiliate of
the Shareholders from conducting any part of that business. The parties
agree that the geographic scope of this covenant not to compete shall
extend worldwide. The parties agree that Buyer may sell, assign or
otherwise transfer this covenant not to compete, in whole or in part, to
any person, corporation, firm or entity that purchases all or part of
the business of the Fiskars Companies. In the event a court of
competent jurisdiction determines that the provisions of this covenant
not to compete are excessively broad as to duration, geographical scope
or activity, it is expressly agreed that this covenant not to compete
shall be construed so that the remaining provisions shall not be
affected, but shall remain in full force and effect, and any such over
broad provisions shall be deemed, without further action on the part of
any person, to be modified, amended and/or limited, but only to the
extent necessary to render the same valid and enforceable in such
jurisdiction. As of the Closing, Buyer and Fiskars will enter into the
form of Non-Compete Agreement annexed hereto as Schedule 5.1(a)(1) which
will be consistent with the foregoing provisions.
5.1.(b) Covenant of Confidentiality. No Shareholder shall at
any time subsequent to the Closing, except as explicitly requested by
Buyer, (i) use for any purpose, (ii) disclose to any person, or (iii)
keep or make copies of documents, tapes, discs or programs containing,
any confidential information concerning the Fiskars Companies. For
purposes hereof, "confidential information" shall mean and include,
without limitation, all Trade Rights in which a Fiskars Company has an
interest (as limited by Sections 3.18 and 5.10), and all customer lists
and customer information.
5.1.(c) Non-Solicitation of Employees. Unless restricted by
applicable law, during the Non-Compete Period neither Shareholder will,
directly or indirectly, hire or offer employment to any employee of any
of the Fiskars Companies whose employment is continued by any of the
Fiskars Companies or the Buyer after the Closing Date unless such
Fiskars Company or the Buyer first terminates the employment of such
employee.
5.1.(d) Equitable Relief for Violations. Each Shareholder
agrees that the provisions and restrictions contained in this Section
5.1 are necessary to protect the legitimate continuing interests of
Buyer and Company in acquiring the Shares, and that any violation or
breach of these provisions will result in irreparable injury to Buyer
for which a remedy at law would be inadequate and that, in addition to
any relief at law which may be available to Buyer for such violation or
breach and regardless of any other provision contained in this
Agreement, Buyer shall be entitled to injunctive and other equitable
relief as a court may grant after considering the intent of this Section
5.1.
5.2. Xxxx-Xxxxx-Xxxxxx Act Filings. To the extent such filings have not
been completed prior to the execution of this Agreement, each of the
Shareholders shall cooperate with Buyer in its efforts to comply with the
HSR Act. Prior to making any communication, written or oral, with the
Federal Trade Commission, the Antitrust Division of the federal Department
of Justice or any other governmental agency or authority or members of
their respective staffs with respect to this Agreement or the transactions
contemplated hereby, the parties shall consult each other.
5.3. Access to Information and Records. During the period prior to the
Closing, Shareholders shall cause the Fiskars Companies to give Buyer, its
counsel, accountants and other representatives (i) access during normal
business hours to all of the properties, books, records, contracts and
documents of the Fiskars Companies for the purpose of such inspection,
investigation and testing as Buyer deems appropriate (and Company shall
furnish or cause to be furnished to Buyer and its representatives all
information with respect to the business and affairs of Company as Buyer
may request), and (ii) access to employees, agents and representatives for
the purposes of such meetings and communications as Buyer reasonably
desires.
5.4. Conduct of Business Pending the Closing. From the date hereof
until the Closing, except as otherwise approved in writing by the Buyer,
Shareholders shall use their best efforts to cause each of the following
to occur:
5.4.(a) No Changes. The Fiskars Companies will carry on the
Business in the same manner as heretofore and will not make or institute
any material changes in its methods of purchase, sale, management,
accounting or operation, except for the dividends disclosed in Schedule
3.6(f) and for the redemptions described in Section 1.2 hereof.
5.4.(b) Maintain Organization. Company will use its reasonable
efforts to preserve the business organization of the Fiskars Companies
intact, and to preserve present relationships with employees, suppliers,
customers and others having business relationships with the Fiskars
Companies.
5.4.(c) No Breach. Company and Shareholders will not do or
omit any act which may cause a breach of a contract, commitment or
obligation where such breach would have a Material Adverse Effect.
5.4.(d) No Material Contracts. No contract or commitment will
be entered into, and no purchase of raw materials or supplies and no
lease, license, encumbrance, sale or disposition of assets, goods or
services (real, personal, or mixed, tangible or intangible) will be
made, by or on behalf of a Fiskars Company, except contracts,
commitments, purchases or sales which are in the ordinary course of
business and consistent with past practice.
5.4.(e) No Corporate Changes. Company shall not amend its
Articles of Incorporation or By-Laws or make any changes in authorized
or issued capital stock.
5.4.(f) Maintenance of Insurance. Company shall maintain all
of the insurance in effect as of the date hereof for the Fiskars
Companies.
5.4.(g) Maintenance of Property. The Fiskars Companies shall
use, operate, maintain and repair all property of the Fiskars Companies
in a manner consistent with past practice.
5.4.(h) No Transfer of Common Shares. No Shareholder shall
transfer or attempt to transfer any of the Common Shares except to Buyer
pursuant hereto; and Company shall refuse to accept any certificates for
Common Shares to be transferred or otherwise to allow such transfers to
occur upon its books.
5.4.(i) Trade Rights. Transfer or license to any person or
entity or otherwise extend, amend or modify in any material respect any
Trade Rights other than licenses to customers in the ordinary course of
business consistent with past practices;
5.4.(j) Indebtedness. Incur any indebtedness for borrowed
money (other than pursuant to existing credit facilities in the ordinary
course of business or as described in Section 1.2(a) hereof) or
guarantee any such indebtedness or issue or sell any debt securities or
rights to acquire debt securities of any of the Fiskars Companies or
guarantee any debt of others;
5.4.(k) Revalue Assets. Revalue in any material respect any of
the Fiskars Companies' assets, including without limitation writing down
the value of inventory or writing off notes or accounts receivable other
than in the ordinary course of business consistent with past practice;
5.4.(l) Taxes. Make or change any material election in respect
of Taxes other than in the ordinary course and consistent with past
practice, adopt or change any accounting method in respect of Taxes,
file any material return or any amendment to a material return, enter
into any closing agreement, settle any claim or assessment in respect of
Taxes (except settlements effected solely through payment of immaterial
sums of money), or consent to any extension or waiver of the limitation
period applicable to any claim or assessment in respect of Taxes;
5.4.(m) Employee Compensation. Grant any severance or
termination pay (i) to any officer or (ii) to any other employee for
which any Fiskars Company would have any liability, except payments
consistent with past practices or pursuant to written agreements
outstanding, or policies existing, on the date hereof or as previously
disclosed to Buyer;
5.4.(n) Stock Issuance. Issue, grant or sell or authorize or
propose the issuance, grant or sale of, any shares of its capital stock
of any class or securities convertible into, or subscriptions, rights,
warrants or options to acquire, or enter into other agreements or
commitments of any character obligating it to issue, any such shares or
other convertible securities;
5.4.(o) Other Action. Take, or agree to take, any of the
actions described in Sections 5.4(a) through (n) above, or any action
which would cause or would be reasonably likely to cause any of the
conditions set forth in Article 6 not to be satisfied.
5.5. Consents. Company and Shareholders will use their best efforts
prior to Closing to obtain all consents that are material to the Business
and necessary for the consummation of the transactions contemplated
hereby. Buyer shall use its reasonable best efforts in response to any
reasonable request of Company to assist Company in obtaining any consents
of third parties necessary for the consummation of the transactions
contemplated by this Agreement.
5.6. Access to and Retention of Records. Following the Closing Date,
Buyer and Shareholders shall afford to each other and their duly
authorized representatives access at all reasonable times during normal
business hours to all books, records, documents and other information
concerning the Fiskars Companies as Buyer or Shareholders, as the case may
be, shall request in order to defend against, oppose or otherwise
investigate any claims or potential claims against Buyer, the Fiskars
Companies or Shareholders, as the case may be, arising as a result of any
acts, events or operations prior to the Closing Date or as a result of
this Agreement (including any claims for indemnification under Article 8).
Buyer and Shareholders each agree, and Buyer agrees to cause the Fiskars
Companies, to preserve and keep the records related to the Fiskars
Companies held by such party for a period of six (6) years from the
Closing, or for any longer period as may be required by law or any
government agency or ongoing litigation, and shall make such records and
personnel available, in the case of Buyer, to Shareholders, or in the case
of Shareholders, to Buyer as may be reasonably required in connection
with, among other things, any insurance claims, legal proceedings or
governmental investigations. If a party wishes to destroy such records at
that time, it first shall give ninety (90) days prior written notice to
the other party and the other party shall have the right at their option
and expense, upon prior written notice given within that ninety (90) day
period, to take possession of the records within one-hundred eighty (180)
days after the date of the initial notice.
5.7. Availability of Personnel. Buyer and Shareholders shall afford,
and shall cause their respective affiliates to afford, to each other on a
reasonable basis, but at no charge, personnel of Buyer, the Fiskars
Companies and Shareholders, as the case may be, as necessary to permit
Buyer or Shareholders, as the case may be, to defend against, oppose or
otherwise investigate any potential claim against Buyer or Shareholders,
as the case may be, in connection with the business or operations of the
Company or indemnifications provided hereunder.
5.8. Tax Matters.
5.8.(a) Returns. Shareholders shall cause the Fiskars
Companies to prepare and file all federal, state, local or foreign
returns required to be filed relating to tax periods ending prior to the
Closing Date. After the Closing Date, Buyer shall cause the Fiskars
Companies to prepare and file all federal, state, local or foreign
returns required to be filed relating to tax periods beginning on or
after the Closing Date.
5.8.(b) Access. Buyer shall make available to Shareholders, or
shall cause the Fiskars Companies to make available to Shareholders, as
may reasonably be requested by Shareholders, any and all records and/or
employees necessary or useful to Shareholders for (i) the preparation of
any tax returns required to be filed by Shareholders or (ii) the defense
of any audit, examination, administrative appeal or litigation of any
tax return in which the results of operations of the Fiskars Companies
were included. In addition, to the extent Shareholders need any
information concerning the Fiskars Companies, including financial
schedules, for the purpose of preparing or filing federal, state, local
or foreign tax returns or reports, or for any other business purpose,
Buyer agrees to furnish or cause the Fiskars Companies to furnish to
Shareholders with such information as shall be reasonably requested by
Shareholders within fifteen (15) calendar days of such request.
Shareholders shall make available to Buyer or the Fiskars
Companies, as may reasonably be requested by Buyer or the Fiskars
Companies, any and all records and/or employees retained by Shareholders
with respect to the Fiskars Companies necessary or useful to Buyer or
the Fiskars Companies for (i) the preparation of any tax returns
required to be filed by Buyer or the Fiskars Companies or (ii) the
defense of any audit, examination, administrative appeal or litigation
of any tax return in which the results of operations of the Fiskars
Companies were included. In addition, to the extent Buyer or the
Fiskars Companies needs any information concerning the Fiskars Companies
which is in the possession of Shareholders for the purpose of preparing
or filing federal, state, local or foreign returns or reports, or for
any other business purpose, Shareholders agree to furnish Buyer or the
Fiskars Companies with such information as shall be reasonably requested
by Buyer or the Fiskars Companies within fifteen (15) calendar days at
such request.
5.9. Corporate Identity. Buyer acknowledges that after the Closing Date
neither the Fiskars Companies nor Buyer has any right to use the name,
xxxx, trade name or trademark "Fiskars," the Fiskars corporate symbols or
logos, or any feature or xxxx similar to any of the foregoing either alone
or in any combination, all rights to which and the rights represented
thereby and pertaining thereto are being retained by Shareholders or their
affiliates. Within thirty (30) days following the Closing Date, Buyer
shall cause each of the Fiskars Companies that includes "Fiskars" in its
corporate or business name to change such name to one that does not
include such word or expression. Buyer agrees to deliver true and correct
copies of the instruments effecting each name change (showing public
filing data, if any) to Shareholders within five (5) business days
following such name change.
5.10. Transitional Use of Trademark. Fiskars agrees to grant to FPS
Power Systems Oy Ab ("FPS") the right to use the trademark "Fiskars"
("Trademark") solely in connection with the operation of the Business in
certain countries for a period of twenty-four (24) months from the Closing
Date, with an option to extend the license for an additional twelve (12)
months. During this period of transitional use, FPS shall not make or
commission any new uses of the Trademark and shall have no other right to
use the Trademark. FPS' limited right to use the Trademark shall be
subject to the terms of the License Agreement attached hereto as Schedule
5.10.
5.11. Plant Closing. Buyer shall defend and indemnify Shareholders,
their officers, directors, agents, and Affiliates, against any claim,
damage, or expense arising from the failure of any Fiskars Company to
comply with the Worker Adjustment and Retraining Notification Act ("WARN")
for a company "plant closing" or "mass layoff" (as those terms are defined
in the Act) occurring after the Closing Date or any state, local or
foreign law applicable to such matters.
5.12. Other Action. Each of the parties hereto shall use its best
efforts to cause the fulfillment at the earliest practicable date of all
of the conditions to the parties' obligations to consummate the
transactions contemplated in this Agreement.
5.13. Disclosure Schedule. Shareholders and Company shall have a
continuing obligation to promptly notify Buyer in writing with respect to
any matter hereafter arising or discovered which, if existing or known at
the date of this Agreement, would have been required to be set forth or
described in the Disclosure Schedule.
5.14. Notification of Breach. Buyer shall promptly notify
Shareholders and the Company of any information which makes, or if known
to Shareholders or the Company would make, any representation, warranty or
covenant of Shareholders or Company contained herein untrue.
5.15. Exclusivity. Unless and until this Agreement shall have
been terminated by either party pursuant to Article 10, Shareholders shall
not, directly or indirectly, (i) solicit, initiate or encourage submission
of proposals or offers from any person relating to any acquisition or
purchase of all or substantially all of the assets of or any equity
interest in any of the Fiskars Companies or any merger, consolidation,
business combination, purchase of shares or similar transaction with any
of the Fiskars Companies, or (ii) participating in any discussions or
negotiations with any third party regarding any of the foregoing. The
Shareholders will not furnish any information concerning any Fiskars
Company to any person other than Buyer for the purpose of, or with the
intent of, permitting such person or entity to evaluate a possible
acquisition of the Business, assets or capital stock of a Fiskars Company,
in whole or in part.
5.16. Release of Intercompany Payables. Effective upon the Closing,
the Shareholders and each Affiliate not constituting a Fiskars Company
release and discharge each Fiskars Company from all liabilities for
intercompany payables and any other amounts owing from any Fiskars Company
to either Shareholders or any Affiliates not constituting a Fiskars
Company except for payments provided hereunder and except for those
liabilities or payables reflected on the Closing Date Balance Sheet.
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of each of
the following conditions:
6.1. Representations and Warranties. Each of the representations and
warranties made by Shareholders and Company in this Agreement, and the
statements contained in the Disclosure Schedule, shall be (i) true and
correct in all material respects when made, and (ii) shall be true and
correct at and as of the Closing Date as though such representations and
warranties were made or given on and as of the Closing Date, except where
the failure of such representations or warranties to be true, complete and
correct would not have a Material Adverse Effect.
6.2. Compliance With Agreement. Shareholders and Company shall have in
all material respects complied with all of their agreements and
obligations under this Agreement which are to be complied with by them
prior to or on the Closing Date, including the delivery of the closing
documents specified in Section 9.1, except where the failure of such
compliance would not have a Material Adverse Effect.
6.3. Consents and Approvals. All approvals, consents (including
consents to the assignment of all material contracts of the Business) and
waivers that are required to effect the transactions contemplated hereby
shall have been received, and executed counterparts thereof shall have
been delivered to Buyer, except where the failure to obtain any such
approvals, consents or waivers would not have a Material Adverse Effect or
where such failure would not have a material effect on the ability of the
parties to consummate the transactions contemplated hereby.
6.4. Xxxx-Xxxxx-Xxxxxx Waiting Period. All applicable waiting periods
related to the HSR Act shall have expired.
6.5. Buyer's Due Diligence Investigation. Buyer's pre-closing due
diligence investigation of the Fiskars Companies shall not have uncovered
material facts that were not disclosed in this Agreement or the Disclosure
Schedules (the non-English documents referenced in the first paragraph of
Section 3 are deemed not to be disclosed for this purpose until translated
into or summarized in English) as of the date hereof and that would have a
Material Adverse Effect.
6.6. No Litigation. No Order shall have been issued or entered which
would be violated by the consummation of the transactions contemplated by
this Agreement and no litigation shall have been commenced seeking to
restrain or prohibit, this Agreement or the transactions contemplated
hereby.
7. CONDITIONS PRECEDENT TO SHAREHOLDERS' OBLIGATIONS
Each and every obligation of Shareholders to be performed on the Closing
Date shall be subject to the satisfaction prior to or at the Closing of
the following conditions:
7.1. Representations and Warranties. Each of the representations and
warranties made by Buyer in this Agreement shall be true and correct in
all material respects when made and shall be true and correct in all
material respects at and as of the Closing Date as though such
representations and warranties were made or given on and as of the Closing
Date.
7.2. Compliance With Agreement. Buyer shall have in all material
respects complied with all of Buyer's agreements and obligations under
this Agreement which are to be complied with by Buyer prior to or on the
Closing Date, including the delivery of the closing documents specified in
Section 9.2.
7.3. Xxxx-Xxxxx-Xxxxxx Waiting Period. All applicable waiting periods
related to the HSR Act shall have expired.
7.4. Release of Guarantees. All guarantees or other contingent
obligations of the Shareholders or their Affiliates other than the Fiskars
Companies for any liability or obligation of a Fiskars Company shall have
been released or terminated.
7.5. Terminate all Licenses. Except for the license described in
Schedule 5.10 hereto, all licenses of "Fiskars" trade names or trademarks
with any of the Fiskars Companies shall have been terminated and the
Fiskars Companies shall have assigned any rights they may have acquired in
the Fiskars trade names or trademarks to Fiskars pursuant to written
instruments reasonably acceptable to Fiskars.
7.6. No Litigation. No Order shall have been issued or entered which
would be violated by the consummation of the transactions contemplated by
this Agreement and no litigation shall have been commenced seeking to
restrain or prohibit, this Agreement or the transactions contemplated
hereby.
8. INDEMNIFICATION
8.1. By Shareholders. Subject to the terms and conditions of this
Article 8, each Shareholder, jointly and severally, hereby agrees to
indemnify, defend and hold harmless Buyer or any of the Fiskars Companies
from and against all Claims asserted against, resulting to, imposed upon,
or incurred by Buyer or any of the Fiskars Companies by reason of, arising
out of or resulting from (a) the inaccuracy or breach of any
representation or warranty of any Shareholder or Company contained in or
made pursuant to this Agreement, or (b) the breach of any covenant of any
Shareholder or the Company contained in this Agreement. As used in this
Article 8, the term "Claim" shall include (i) all losses, direct damages
(excluding any incidental, consequential, punitive or contingent damages),
judgments, awards, settlements, costs and expenses (including, without
limitation, interest, penalties, court costs and reasonable attorneys'
fees and expenses) actually suffered; and (ii) all suits, actions, causes
of action and proceedings.
8.2. By Buyer. Subject to the terms and conditions of this Article 8,
Buyer hereby agrees to indemnify, defend and hold harmless each
Shareholder from and against all Claims asserted against, resulting to,
imposed upon or incurred by any such person, directly or indirectly, by
reason of or resulting from (a) the inaccuracy or breach of any
representation or warranty of Buyer contained in or made pursuant to this
Agreement, or (b) the breach of any covenant of Buyer contained in this
Agreement.
8.3. Indemnification of Third-Party Claims. The obligations and
liabilities of any party to indemnify any other under this Article 8 with
respect to Claims relating to third parties shall be subject to the
following terms and conditions:
8.3.(a) Notice and Defense. The party or parties to be
indemnified (whether one or more, the "Indemnified Party") will give the
party from whom indemnification is sought (the "Indemnifying Party")
prompt written notice of any such Claim, and the Indemnifying Party will
undertake the defense thereof by representatives chosen by it.
Notwithstanding the foregoing, the failure of an Indemnified Party to
give prompt written notice of a Claim shall not relieve the Indemnifying
party of its indemnification obligations hereunder unless such failure
shall result in material prejudice to the Indemnifying Party. So long
as the Indemnifying Party is defending any such Claim actively and in
good faith, the Indemnified Party shall not settle such Claim. The
Indemnified Party shall make available to the Indemnifying Party or its
representatives all records and other materials required by them and in
the possession or under the control of the Indemnified Party, for the
use of the Indemnifying Party and its representatives in defending any
such Claim, and shall in other respects give reasonable cooperation in
such defense.
8.3.(b) Failure to Defend. If the Indemnifying Party, within a
reasonable time after notice of any such Claim, fails to defend such
Claim actively and in good faith, the Indemnified Party will (upon
further notice) have the right to undertake the defense, compromise or
settlement of such Claim or consent to the entry of a judgment with
respect to such Claim, on behalf of and for the account and risk of the
Indemnifying Party, and the Indemnifying Party shall thereafter have no
right to challenge the Indemnified Party's defense, compromise,
settlement or consent to judgment therein.
8.3.(c) Indemnified Party's Rights. Anything in this Section
8.3 to the contrary notwithstanding, (i) if there is a reasonable
probability that a Claim may materially and adversely affect the
Indemnified Party other than as a result of money damages or other money
payments which are less than $10,000,000, the Indemnified Party shall
have the right to defend, compromise or settle such Claim and (ii) with
respect to matters involving third party claimants or plaintiffs, the
Indemnifying Party shall not, without the written consent of the
Indemnified Party, settle or compromise any Claim or consent to the
entry of any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified
Party of a release from all liability in respect of such Claim.
8.4. Payment. Upon judgment, determination, settlement or compromise of
any third party Claim, the Indemnifying Party shall pay promptly on behalf
of the Indemnified Party, and/or to the Indemnified Party in reimbursement
of any amount theretofor required to be paid by it, the amount so
determined by judgment, determination, settlement or compromise and all
other Claims of the Indemnified Party with respect thereto, unless in the
case of a judgment an appeal is made from the judgment. Upon the payment
in full by the Indemnifying Party of such amounts, the Indemnifying Party
shall succeed to the rights of such Indemnified Party, to the extent not
waived in settlement, against the third party who made such third party
Claim. The Indemnified Party may not set off any amount owed to the
Indemnifying Party by the Indemnified Party for any indemnification amount
hereunder.
8.5. Limitations on Indemnification.
8.5.(a) Time Limitation. No claim or action shall be brought
by Buyer under this Article 8 (i) for a breach of the representations
and warranties made in Sections 3.10, 3.11 and 3.12 after the lapse of
three (3) years following the Closing, (ii) for a breach of the
representation and warranty made in Section 3.5 after the lapse of seven
(7) years following the Closing, and (iii) for breach of any other
representation or warranty after the lapse of eighteen (18) months
following the Closing. Any claim made hereunder for breach of a
representation or warranty served in accordance with the notice
provisions of Section 11.7 hereof prior to the termination of the
survival period for such claim shall be preserved despite the subsequent
termination of such survival period. Notwithstanding the foregoing,
there shall be no time limitations on claims or actions brought by Buyer
under this Article 8 for a breach of the representations and warranties
made in Sections 3.1(e) or 3.2.
8.5.(b) Amount Limitation. Buyer shall not be entitled to
indemnification under this Article 8 for breach of a representation or
warranty unless and then only to the extent the aggregate of the
Shareholders' indemnification obligations to the Buyer pursuant to this
Article 8 exceeds Two Million Five Hundred Thousand Dollars
($2,500,000), provided that the foregoing limitation shall not apply to
claims resulting from breach of Sections 3.1(d), (e), (f), (g), (h), 3.2
and 3.5 hereof. The Shareholders' aggregate liability for
indemnification claims hereunder shall be limited to fifty percent (50%)
of the Purchase Price.
8.5.(c) Reductions. Any determination of damages actually
incurred by an Indemnified Party shall be: (i) net of a reasonable
estimate of the present value of any tax benefits realized or reasonably
expected to be realized by the Indemnified Party by reason of the facts
and circumstances giving rise to the Indemnifying Party's liability
(after taking into consideration the tax effect of the receipt by the
Indemnified Party of the indemnification payment); and (ii) net of any
insurance proceeds received by the Indemnified Party in connection with
the facts giving rise to the right of indemnification. The parties
agree to use their best efforts to make claims on and pursue recovery
with respect to all insurance on account of such matters.
8.5.(d) Certain Claims Waived. Buyer hereby waives any right
it may have to file a claim for reimbursement or indemnity against
Shareholders under the terms of this Agreement concerning any matter
with respect to which it is ultimately determined that the employees,
agents or representatives of Buyer listed in Schedule 8.5(d) who
participated in a due diligence investigation of the Company or in any
of the management presentations conducted by the Company (i) has actual
personal knowledge prior to the Closing Date as a result of such due
diligence investigation or management presentations of specific facts
which clearly and obviously relate to such matter and constitute a
breach by a Shareholder of a representation or warranty made under this
Agreement and (ii) fails to disclose such facts to Shareholders to give
Shareholders a reasonable opportunity to cure such breach prior to the
Closing Date. Shareholders shall have the burden of proof with respect
to all facts triggering the waiver under this Section 8.5(d).
8.5.(e) Other Remedies. Nothing in this Agreement shall limit
a party's remedies for intentional misrepresentation or right to seek
injunctive relief or specific performance, for the breach of any
representation, warranty or covenant by any other party under this
Agreement.
9. CLOSING
The closing of this transaction (the "Closing") shall take place at the
offices of the Company, 0000 Xxxxx Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx, at close
of business on January 4, 1996, or at such other time and place as the
parties hereto shall agree upon. Such date is referred to in this
Agreement as the "Closing Date."
9.1. Documents to be Delivered by Company and Shareholders. At the
Closing, Company and Shareholders shall deliver to Buyer the following
documents, in each case duly executed or otherwise in proper form:
9.1.(a) Stock Certificate(s). A stock certificate or
certificates representing the Common Shares, duly endorsed for transfer
or with duly executed stock powers attached.
9.1.(b) Compliance Certificate. A certificate signed by each
Shareholder that each of the representations and warranties made by
Shareholders and the Company in this Agreement is true and correct in
all material respects on and as of the Closing Date as required by
Section 6.1, and that Company and Shareholders have complied with all of
Company's and Shareholders' obligations under this Agreement which are
to be complied with on or prior to the Closing Date as required by
Section 6.2.
9.1.(c) Opinion of Counsel. A written opinion of Xxxxx &
Lardner, counsel to Company and Shareholders, dated as of the Closing
Date, addressed to Buyer, substantially in the form of Schedule 9.1(c)
hereto.
9.1.(d) Certified Resolutions. Certified copies of the
resolutions of the Board of Directors of each Shareholder authorizing
and approving this Agreement and the consummation of the transactions
contemplated by this Agreement.
9.1.(e) Incumbency Certificate. Incumbency certificates
relating to each person executing (as a corporate officer or otherwise
on behalf of another person) any document executed and delivered to
Buyer pursuant to the terms hereof.
9.1.(f) Shareholder Agreement. Buyer's form of Shareholder
Agreement substantially in the form of Schedule 9.1(f) hereto.
9.1.(g) Other Documents. All other documents, instruments or
writings required to be delivered to Buyer at or prior to the Closing
pursuant to this Agreement, including, without limitation, the Non-
Compete Agreement in the form of Schedule 5.1(a)(1) hereto and the
License Agreement in the form of Schedule 5.10 hereto, and such other
certificates of authority and documents as Buyer may reasonably request.
9.2. Items to be Delivered by Buyer. At the Closing, Buyer shall
deliver or cause to be delivered to Shareholders the following items, in
each case duly executed or otherwise in proper form:
9.2.(a) Wire Transfers. To Fiskars and Holdings, wire
transfers of the amounts required by Section 2.2 hereof.
9.2.(b) Buyer's Stock Certificates. A stock certificate or
certificates representing the Buyer's stock to be issued and delivered
to Fiskars as provided in Section 2.1(d) hereof.
9.2.(c) Compliance Certificate. A certificate signed by Buyer
that the representations and warranties made by Buyer in this Agreement
are true and correct on and as of the Closing Date as required by
Section 7.1, and that Buyer has complied with all of Buyer's obligations
under this Agreement which are to be performed or complied with on or
prior to the Closing Date as required by Section 7.2.
9.2.(d) Opinion of Counsel. A written opinion of Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel to Buyer, dated as of the Closing Date,
addressed to Company, substantially in the form of Schedule 9.2(d)
hereto.
9.2.(e) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Buyer authorizing and approving
this Agreement and the consummation of the transactions contemplated by
this Agreement.
9.2.(f) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and delivered to
Company or Shareholders by Buyer pursuant to the terms hereof.
9.2.(g) Trademark Assignments. Assignments of any trademark or
trade name rights any of the Fiskars Companies may have in the "Fiskars"
trade name or trademark as required by Section 3.18.
9.2.(h) Other Documents. All other documents, instruments or
writings required to be delivered to the Shareholders at or prior to the
Closing pursuant to this Agreement, including, without limitation, the
Non-Compete Agreement in the form of Schedule 5.1(a)(1) hereto and the
License Agreement in the form of Schedule 5.10 hereto, and such other
certificates of authority and documents as the Shareholders may
reasonably request.
10. TERMINATION
10.1. Right of Termination Without Breach. This Agreement may be
terminated without further liability of any party at any time prior to the
Closing:
10.1.(a) by mutual written agreement of Buyer and Shareholders,
or
10.1.(b) by either party if the Closing shall not have occurred
on or before February 23, 1996, provided the terminating party has not,
through breach of a representation, warranty or covenant, prevented the
Closing from occurring on or before such date.
10.2. Termination for Breach.
10.2.(a) Termination by Buyer. If there has been a failure of
satisfaction of a condition to the obligations of Buyer as provided in
Article 6 hereof which has not been waived in writing by Buyer, then
Buyer shall notify Shareholders of such failure to give Shareholders the
opportunity, for thirty (30) business days following such notice, to
cure such failure if reasonably capable of being cured. If Shareholders
are unable to cure such failure within such thirty-day period, then,
subject to the last sentence of this Section, Buyer may, by written
notice to Shareholders at any time prior to Closing that such failure is
continuing, terminate this Agreement with the effect set forth in
Section 10.2.(c) hereof. Buyer shall have a right to terminate this
Agreement for breach by the Company or Shareholders of their
representations and warranties herein only with respect to those
breaches which would have a Material Adverse Effect and then only if
such breaches are not cured by Shareholders as provided in this Section
10.2(a). Buyer's sole remedy with respect to any other uncured breach
of representations and warranties shall be limited to Buyer's claiming
indemnification under Section 8.1 hereof.
10.2.(b) Termination by Shareholders. If (i) there has been a
failure of satisfaction of a condition to the obligations of
Shareholders as provided in Article 7 hereof which has not been waived
in writing by Shareholders, or (ii) Buyer shall have attempted to
terminate this Agreement under this Article 10 or otherwise without
grounds to do so, then Shareholders may, by written notice to Buyer at
any time prior to the Closing that such failure or wrongful termination
attempt is continuing, terminate this Agreement with the effect set
forth in Section 10.2.(c) hereof, provided that Buyer has not remedied
such matter (if reasonably capable of being remedied) within thirty (30)
business days following receipt of written notice from Shareholders.
10.2.(c) Effect of Termination. Termination of this Agreement
pursuant to this Section 10.2 shall not in any way terminate, limit or
restrict the rights and remedies of any party hereto against any other
party which has violated, breached or failed to satisfy any of the
representations, warranties, covenants, agreements, conditions or other
provisions of this Agreement prior to termination hereof.
11. MISCELLANEOUS
11.1. Disclosure Schedule. The Schedules have been compiled in a
volume (the "Disclosure Schedule") delivered to Buyer on the date of this
Agreement. Information set forth in the Disclosure Schedule specifically
refers to the article and section of this Agreement to which such
information is responsive but such information shall be deemed to have
been disclosed with respect to all other articles or sections of this
Agreement to which it is relevant.
11.2. Further Assurance. From time to time, at Buyer's request and
without further consideration, Company and Shareholders will execute and
deliver to Buyer such documents and take such other action as Buyer may
reasonably request in order to consummate more effectively the
transactions contemplated hereby.
11.3. Disclosures and Announcements. Announcements concerning the
transactions provided for in this Agreement by Buyer, Company or
Shareholders shall be subject to the approval of the other parties in all
essential respects; provided, however, that if either Buyer or
Shareholders reasonably determines that such party is required under
applicable securities laws or regulations or under the rules or
regulations of a stock exchange on which such party's stock is publicly
traded, to make such announcement or disclosure, that party may make such
announcement or disclosure as is required but will notify the other party
prior to doing so.
11.4. Assignment; Parties in Interest.
11.4.(a) Assignment. Except as expressly provided herein, the
rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the other
parties. Notwithstanding the foregoing, Buyer may, without consent of
any other party, cause one or more subsidiaries of Buyer to carry out
all or part of the transactions contemplated hereby; provided, however,
that Buyer shall, nevertheless, remain liable for all of its
obligations, and those of any such subsidiary, to Shareholders
hereunder.
11.4.(b) Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the respective
successors and permitted assigns of the parties hereto. Nothing
contained herein shall be deemed to confer upon any other person any
right or remedy under or by reason of this Agreement.
11.5. Law Governing Agreement. This Agreement may not be modified
or terminated orally, and shall be construed and interpreted according to
the internal laws of the State of California, excluding any choice of law
rules that may direct the application of the laws of another jurisdiction.
Fiskars irrevocably and unconditionally submits to the jurisdiction of
competent federal and state courts of the United States in any action
arising under this Agreement, whether in contract, tort, equity or
otherwise, and Fiskars hereby irrevocably and unconditionally agrees that
all claims in respect of any such actions may be heard and determined in
such courts. Fiskars shall appoint prior to the Closing and thereafter
shall maintain its own agent for service of summons or other legal process
in the United States of America, and shall prior to the Closing provide
Buyer with evidence of such appointment.
11.6. Amendment and Modification. Buyer and Shareholders may amend,
modify and supplement this Agreement in such manner as may be agreed upon
in writing between Buyer and the Shareholders.
11.7. Notice. All notices, requests, demands and other
communications hereunder shall be given in writing and shall be: (a)
personally delivered; (b) sent by telecopier, facsimile transmission or
other electronic means of transmitting written documents; or (c) sent to
the parties at their respective addresses indicated herein by registered
or certified U.S. mail, return receipt requested and postage prepaid, or
by private overnight mail courier service. The respective addresses to be
used for all such notices, demands or requests are as follows:
(a) If to Buyer, to:
Exide Electronics Group, Inc.
0000 Xxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
or to such other person or address as Buyer shall furnish to Shareholders
in writing.
(b) If to Shareholders, to:
Fiskars Oy Ab
Mannerheimintie 14 A
00101 Xxxxxxxx 00, Xxxxxxx
Attention: Xx. Xxxx Xxxxxxxx
Facsimile: 011-358-0-644016
(with a copy to)
Xx. Xxxx X. Xxxx
Xxxxx & Lardner
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
or to such other person or address as Shareholders shall designate in
accordance with this Agreement.
(c) If to Company, to:
Deltec Electronics Corporation
0000 Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
(with a copy to)
Xx. Xxxx X. Xxxx
Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Any notice to Company given after Closing shall also be given in the same
manner to Buyer.
If personally delivered, such communication shall be deemed delivered
upon actual receipt; if electronically transmitted pursuant to this
paragraph, such communication shall be deemed delivered the next business
day after transmission (and sender shall bear the burden of proof of
delivery); if sent by overnight courier pursuant to this paragraph, such
communication shall be deemed delivered upon receipt; and if sent by U.S.
mail pursuant to this paragraph, such communication shall be deemed
delivered as of the date of delivery indicated on the receipt issued by
the relevant postal service, or, if the addressee fails or refuses to
accept delivery, as of the date of such failure or refusal. Any party to
this Agreement may change its address for the purposes of this Agreement
by giving notice thereof in accordance with this Section.
11.8. Expenses. Regardless of whether or not the transactions
contemplated hereby are consummated:
11.8.(a) Brokerage. Except as to Xxxxxxx Xxxxx & Associates,
Inc., who shall be compensated by the Shareholders and X.X. Xxxxxxx &
Co., Inc., who shall be compensated by Buyer, the Shareholders and Buyer
each represent and warrant to each other that there is no broker
involved or in any way connected with the transfer provided for herein
on their behalf respectively (and Shareholders represent and warrant
that there is no broker involved on behalf of Company) and each agrees
to hold the other harmless from and against all other claims for
brokerage commissions or finder's fees in connection with the execution
of this Agreement or the transactions provided for herein.
11.8.(b) Expenses to be Paid by Buyer. Buyer shall pay, and
shall indemnify, defend and hold Shareholders harmless from and against,
each of the following:
(i) Transfer Taxes. Any sales, use, excise, transfer or
other similar tax imposed with respect to the transactions provided
for in this Agreement, and any interest or penalties related
thereto.
(ii) HSR Act Fees. The filing fees relating to compliance
with the HSR Act.
(iii) Professional Fees. All fees and expenses of Buyer's
legal, accounting, investment banking and other professional
counsel in connection with the transactions contemplated hereby.
11.8.(c) Other Expenses. Except as otherwise provided herein,
each of the parties shall bear its own expenses and the expenses of its
counsel and other agents in connection with the transactions
contemplated hereby. All expenses of advisors and counsel for the
Company shall be borne by the Shareholders.
11.8.(d) Costs of Litigation. The parties agree that the
prevailing party in any action brought with respect to or to enforce any
right or remedy under this Agreement shall be entitled to recover from
the other party or parties all reasonable costs and expenses of any
nature whatsoever incurred by the prevailing party in connection with
such action, including without limitation attorneys' fees and
prejudgment interest.
11.9. Entire Agreement. This instrument embodies the entire
agreement between the parties hereto with respect to the transactions
contemplated herein, and there have been and are no agreements,
representations or warranties between the parties other than those set
forth or provided for herein.
11.10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.11. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
11.12. Facsimile Versions. Facsimile copies of this Agreement and
any documents or instruments contemplated hereby that contain signatures
shall be deemed to be original signed documents for purposes of this
Agreement and the Closing.
11.13. Glossary of Terms. The following sets forth the location of
definitions of capitalized terms defined in the body of this Agreement:
"Affiliate" - Section 3.6.(j)
"Agreement" - First Paragraph
"Ancillary Instruments" - Section 3.2.(a)
"Business" - Recitals
"Buyer" - First Paragraph
"Claim" - Section 8.1
"Closing" - Preamble to Article 9
"Closing Date" - Section 9
"Common Shares" - Section 1.1
"Company" - First Paragraph
"Deltec" - Section 2.1.(c)
"Disclosure Schedule" - Section 11.1
"Employee Plans/Agreement(s)" - Section 3.16.(a)
"Employees" - Section 3.16.(a)
"ERISA" - Section 3.16.(a)
"Facilities" - Recitals
"Fiskars" - First Paragraph
"Fiskars Company" - Section 3.1.(d)
"Government Entities" - Section 3.3
"Holdings" - First Xxxxxxxxx
"XXX Xxx" - Section 3.3
"Indemnified Party" - Section 8.3.(a)
"Indemnifying Party" - Section 8.3.(a)
"Laws" - Section 3.3
"Lien" - Section 3.13.(a)
"Litigation" - Section 3.10
"Material Adverse Effect" - Section 3.6.(a)
"Orders" - Section 3.3
"Permitted Liens" - Section 3.13.(a)
"Preferred Shares" - Section 1.2
"Purchase Price" - Section 2.1
"Real Property" - Section 3.13.(b)
"Recent Balance Sheet" - Section 3.4
"Shareholder" - First Paragraph
"Shareholders' Knowledge" - Article 3 (Intro)
"Shares" - Recitals
"Subsidiary" - Section 3.1.(d)
"Trade Rights" - Section 3.18
"WARN" - Section 5.11
Where any group or category of items or matters is defined collectively
in the plural number, any item or matter within such definition may be
referred to using such defined term in the singular number.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
BUYER:
EXIDE ELECTRONICS GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxx
Title: Vice President, Chief Administrative
Officer and General Counsel
DELTEC POWER SYSTEMS, INC.
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Chairman
FISKARS OY AB
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: President
FISKARS HOLDINGS, INC.
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: President
