EXHIBIT 4.1
OPERATING AGREEMENT
dated as of
30. November 1999
among
MARKER INTERNATIONAL GMBH,
CT SPORTS HOLDING AG
and
MARKER INTERNATIONAL
TABLE OF CONTENTS
................................................................Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions...............................................2
ARTICLE II
RESTRICTIONS ON TRANSFERS
Section 2.1 Transfer/Encumbrance of Oldco Equity Interest.............6
Section 2.2 Transfer/Encumbrance of CT Sports Equity Interest;
Transfer of Equity Interests in CT Sports.................6
Section 2.3 Additional Provisions Relating to Transfers...............7
ARTICLE III
ISSUANCE OF ADDITIONAL SECURITIES
Section 3.1 Issuance of additional Securities.........................8
ARTICLE IV
ADDITIONAL RIGHTS AND OBLIGATIONS OF HOLDERS AND THE COMPANY
Section 4.1 Financial Statements......................................8
Section 4.2 Confidentiality...........................................9
Section 4.3 Obligation to Sell the Oldco Equity Interest;
Investment Act Breach..................................10
Section 4.4 Determination of Fair Market Value of the Oldco
Equity Interest........................................11
Section 4.5 Costs and Expenses.......................................12
Section 4.6 Income Taxes.............................................13
ARTICLE V
GOVERNANCE
Section 5.1 Governance...............................................13
ARTICLE VI
TERMINATION
Section 6.1 Termination..............................................15
Section 6.2 Termination of Other Sections............................16
ARTICLE VII
MISCELLANEOUS
Section 7.1 Governing Law; Arbitration...............................16
Section 7.2 Arbitration..............................................16
Section 7.3 Successors and Assigns...................................17
Section 7.4 No Waivers; Amendments...................................18
Section 7.5 Other Agreements.........................................18
Section 7.6 Notices..................................................18
Section 7.7 Inspection...............................................19
Section 7.8 Section Headings.........................................20
Section 7.9 Entire Agreement.........................................20
Section 7.10 Severability.............................................20
Section 7.11 Counterparts.............................................20
OPERATING AGREEMENT
THIS OPERATING AGREEMENT is dated as of 30. November, 1999 and entered
into by and among Marker International GmbH, a Swiss GmbH (the "Company" or
"Marker International GmbH"), CT Sports Holding AG, a Swiss corporation ("CT
Sports"), and Marker International, a Utah corporation and debtor and
debtor-in-possession under Chapter 11 of the Bankruptcy Code ("Oldco"). Each of
CT Sports, Oldco and any other Person who shall become a party to or agree to be
bound by the terms of this Agreement after the date hereof is sometimes
hereinafter referred to as a "Holder".
W I T N E S S E T H:
WHEREAS, pursuant to the Plan (as defined herein), Oldco and CT
Sports desire to organize and form Marker International GmbH, a joint venture
company, to carry on business activities and be located in Zug, Switzerland; and
WHEREAS, in the manner contemplated by the Asset Purchase Agreement
dated as of July 30, 1999 (as amended, supplemented or otherwise modified from
time to time, the "Asset Purchase Agreement"; any capitalized term used herein
without definition shall have the meaning ascribed to it in the Asset Purchase
Agreement) between Oldco and the Company, the Company acquired substantially all
of Oldco's assets pursuant to the Plan (as defined herein); and
WHEREAS, consistent with the Plan and pursuant to the Asset Purchase
Agreement, CT Sports made a capital contribution of cash equity to Marker
International GmbH in exchange for an 85% ownership interest in Marker
International GmbH, and Oldco made a capital contribution of equity consisting
of substantially all of its assets and liabilities (including the capital stock
of its subsidiaries), in exchange for a 15% ownership interest in Marker
International GmbH; and
WHEREAS, Marker International GmbH has filed an Entity Classification
Election (Form 8832) in the United States to be treated as a partnership joint
venture for U.S. tax purposes; and
WHEREAS, Swiss commercial law permits the joint venture capital
contributions of equity to Marker International GmbH by CT Sports and Oldco to
be structured in the manner described in the Asset Purchase Agreement; and
WHEREAS, the Company and the Holders have agreed that certain aspects
of their relationship and the management of the Company are to be governed by
the terms of this Agreement.
NOW, THEREFORE, the parties agree that the transactions described in
this Agreement and the Asset Purchase Agreement will fully achieve the intent of
the parties to capitalize Marker International GmbH through equity
contributions, and that the effect given to these transactions by all parties
shall be solely as contributions of equity capital to Marker International GmbH
in exchange solely for ownership interests in Marker International GmbH:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following
terms have the following meanings:
"ACTION" means any action, motion, application, complaint,
investigation, petition, suit or other proceeding, whether civil or criminal, in
law or in equity, or before any arbitrator or Governmental Entity, including,
without limitation, any motion, application, adversary proceeding, complaint or
other proceeding filed in the Bankruptcy Court or any appeal of any order
entered therein.
"AFFILIATE" means with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with such other
Person (it being understood and agreed that for purposes of this Agreement,
Tecnica, Volkl and H.D. Xxxxxx shall be deemed to be Affiliates of the Company
and CT Sports). For purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGREEMENT" means this Operating Agreement, as amended, supplemented
or otherwise modified from time to time.
"ARTICLES OF INCORPORATION" means the Articles of Incorporation of the
Company, as approved by the parties hereto on or before the date hereof and as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with applicable Laws and the terms thereof and hereof.
"ASSET PURCHASE AGREEMENT" shall have the meaning set forth in the
recitals.
"ASSOCIATE" of a Person means:
(i) a corporation or organization (other than the Company or a party
to this Agreement) of which such Person is an officer, partner, member or is,
directly or indirectly, the beneficial owner of 10% or more of any class of
equity securities;
(ii) any trust or other estate in which such Person has a 10% interest
or as to which such Person serves as trustee or in a similar capacity; and
(iii) any immediate family member or spouse of such Person.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
District of Delaware.
"BUSINESS DAY" means each day other than Saturdays, Sundays and days
when commercial banks are authorized to be closed for business in Zurich,
Switzerland or New York, New York.
"CALL OPTION" shall have the meaning set forth in Section 4.3(a).
"CALL OPTION NOTICE" shall have the meaning set forth in Section
4.3(a).
"COMPANY" shall have the meaning set forth in the preamble.
"CT SPORTS" shall have the meaning set forth in the preamble.
"CT SPORTS EQUITY INTEREST" means CT Sports' 85% ownership interest in
the Company as of the date hereof, as such percentage interest may be adjusted
from time to time pursuant to the terms hereof.
"ENCUMBRANCE" means any claim, charge, easement, encumbrance, lease,
covenant, security interest, hypothecation, lien, option, pledge, rights of
others, or restriction (whether on voting, sale, transfer, disposition or
otherwise), whether imposed by agreement, understanding, law, equity or
otherwise, except for any restrictions on transfer generally arising under any
applicable domestic or foreign securities Law.
"EQUITY INTEREST" means the Oldco Equity Interest, the CT Sports
Equity Interest and each other Person's ownership interest in the Company held
beneficially and of record from time to time by such Person, collectively.
"ESCROW AGREEMENT" means that certain Escrow Agreement dated as of the
date hereof by and among OldCo, the Company, CT Sports and the Bank of New York
as an Escrow Agent, as such agreement may be amended, supplemented or otherwise
modified from time to time.
"FAIR MARKET VALUE" shall have the meaning set forth in Section 4.4.
"GOVERNMENTAL ENTITY" means any government or any agency, bureau,
board, commission, court (including, without limitation, the Bankruptcy Court),
department, official, political subdivision, tribunal or other instrumentality
of any government, whether domestic or foreign.
"H.D. XXXXXX" means Xx. Xxxx Xxxxxx Xxxxxx, a natural person.
"HOLDER" shall have the meaning set forth in the preamble.
"INVESTMENT ACT" means the United States Investment Company Act of
1940, as amended, and the related regulations and published interpretations.
"INVESTMENT ACT BREACH" means the occurrence of either of the
following conditions or events:
(x) Breach of Investment Act Covenant:
(i) Oldco shall fail to perform or comply with any term or covenant
contained in Section 7.4 of the Asset Purchase Agreement; and
(ii) such failure to perform or comply shall adversely affect (as
determined in the reasonable judgment of the Company or CT Sports) any of the
Company's or CT Sports' rights under this Agreement; or
(y) Failure to Give Notice:
(i) Oldco or any of its Affiliates shall fail to promptly deliver to
the Company after receipt thereof (which in no event shall be later than three
business days after receipt of any oral or written communication, as the case
may be):
(A) a copy of any and all written communications (including, without
limitation, all demands, statements or notices) received from any Person,
including, without limitation, any Governmental Entity, that alleges Oldco
failed or is failing to comply with the Investment Act or the assumptions and
intentions set forth in the No Enforcement Request (as such term is defined in
the Asset Purchase Agreement); or
(B) a written summary of any oral communication from any Person,
including, without limitation, any Governmental Entity, that alleges Oldco
failed or is failing to comply with the Investment Act or the assumptions and
intentions set forth in the No Enforcement Request; and
(ii) the failure to comply with either clause (A) or (B) above shall
adversely affect (as determined in the reasonable judgment of the Company or CT
Sports) any of the Company's or CT Sports' rights under this Agreement.
"INVESTMENT ACT BREACH DATE" shall have the meaning set forth in
Section 4.3(b)(i).
"INVESTMENT ACT DEMAND DATE" means any date on or after the Investment
Act Breach Date on which the Company requests Oldco or the Escrow Agent to
Transfer the Oldco Equity Interest to the Company and to execute and deliver all
declarations, documents and instruments in order that the Transfer of the Oldco
Equity Interest to the Company can be entered in the Commercial Register.
"LAW" means any foreign or domestic constitutional provision, statute
or other law (including the common law), ordinance, rule, regulation, or
interpretation of any Governmental Entity and any order, judgement or decree of
any arbitrator, court or agency of government.
"NOTE" shall have the meaning set forth in Section 4.3(b)(i)(D).
"OLDCO" shall have the meaning set forth in the preamble.
"OLDCO EQUITY INTEREST" means Oldco's 15% ownership interest in the
Company as of the date hereof, as such percentage interest may be adjusted from
time to time pursuant to the terms hereof.
"PARTNER" means any Person (including, without limitation, CT Sports
and Oldco) that at any time or from time to time is the record and beneficial
holder of any Equity Interest.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, GmbHs, AGs, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and Governmental
Entities.
"PLAN" means Oldco's joint Chapter 11 plan of reorganization approved
by the Bankruptcy Court on 27. October 1999.
"REPLACEMENT INTEREST" shall have the meaning set forth in Section
4.3(b)(i)(C).
"SECURITY" shall mean any partnership interests, membership interests,
certificates of interest or participation in any profit-sharing agreement or
arrangement or any other equity interests, options or warrants issued by the
Company or any other Person, and shall include, without limitation, the Equity
Interest, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"SUBSIDIARY" means with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of the Person or Persons (whether directors, managers, trustees
or other Persons performing similar functions) having the power to direct or
cause the direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof.
"TECNICA" means Tecnica S.p.A., an entity organized under the Laws of
Italy.
"THIRD PARTY" shall mean any Person other than CT Sports or an
Affiliate of CT Sports or any Associate of any Affiliate of CT Sports.
"TRANSFER" means, with respect to any Equity Interest or any other
Securities, as the case may be, any direct or indirect transfer, retransfer,
sale, assignment or other disposition of ownership thereof or the entering into
of any swap, participation or other arrangement that transfers to another Person
(including, without limitation, the retransfer of any Equity Interest to the
Company) in whole or in part, any of the economic consequences of ownership of
such Equity Interest or other Securities. The Company's assignment of its rights
and obligations under and pursuant to the terms of Section 4.3 shall not be
deemed to be a "Transfer" for purposes of this Agreement.
"TRANSFEREE" means any transferee of any Equity Interest or other
Securities in a Transfer.
"UNAUTHORIZED TRANSFER ATTEMPT" shall have the meaning set forth in
Section 2.1.
"UNRESTRICTED TRANSFER DATE" means the earlier of (x) the date of an
Unauthorized Transfer Attempt and (y) the Investment Act Breach Date.
"VOLKL" means Volkl International AG, an entity organized under the
Laws of Germany.
ARTICLE II
RESTRICTIONS ON TRANSFERS
Section 2.1 TRANSFER/ENCUMBRANCE OF OLDCO EQUITY INTEREST.
(a) Oldco shall not at any time, without the prior written approval of
at least 75% of the Partners who at such time are the record and beneficial
owners of at least 75% of the Equity Interest, directly or indirectly,
voluntarily or involuntarily, by operation of law or otherwise, create an
Encumbrance on or Transfer to any Person any or all of the Oldco Equity
Interest, or any right, title or interest therein, other than a Transfer
pursuant to and in conformity with Section 4.3 or a Transfer to the stockholders
of Oldco pursuant to the terms of the Plan. Any attempt by Oldco to create an
Encumbrance on or Transfer any of the Oldco Equity Interest that is not in
compliance with applicable Law, the Articles of Incorporation, this Agreement or
the Plan shall be deemed an "Unauthorized Transfer Attempt". Nothing herein
shall be deemed to limit or otherwise affect the ability of the stockholders of
Oldco from transferring or creating an Encumbrance on their respective shares of
capital stock of Oldco; provided, however, that it is understood and agreed that
Oldco will not reapply for trading on NASDAQ National Markets or any exchange or
otherwise promote in any manner more active trading of its securities.
(b) Contemporaneous with the execution and delivery of this Agreement
Oldco shall deliver to the Escrow Agent all declarations, documents, instruments
and certificates of conveyance as may be necessary or desirable (in the opinion
of counsel to the Company and CT Sports) in order to give effect to the Transfer
provisions of this Agreement relating to the Oldco Equity Interest.
(c) Without limiting the generality of this section 2.1, Oldco
acknowledges and agrees that prior to the transfer of any or all of the Oldco
Equity Interest (whether such proposed transfer is pursuant to the Bankruptcy
Code or otherwise), Oldco shall first offer to sell the Oldco Equity Interest
(in whole or in part) to CT Sports or the Company in accordance with the terms
hereof (including, without limitation, Section 4.4).
Section 2.2 TRANSFER/ENCUMBRANCE OF CT SPORTS EQUITY INTEREST;
TRANSFER OF EQUITY INTERESTS IN CT SPORTS.
(a) (i) CT Sports shall not at any time prior to the Unrestricted
Transfer Date, without the prior written approval of (A) at least 75% of the
Partners who at such time are the record and beneficial owners of at least 75%
of the Equity Interest and (B) Oldco, directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, Transfer any or all of the CT
Sports Equity Interest, or any right, title or interest therein, to a Third
Party provided that the prior written approval of Oldco shall not be required if
CT Sports proposes to Transfer a portion of the CT Sports Equity Interest or any
right, title or interest therein to a CT Sports Nominee, Tecnica, Volkl or H.D.
Xxxxxx, and provided, further, that after giving effect to any such Transfer to
a CT Sports Nominee, CT Sports shall continue to be the record and beneficial
owner of at least 75% of the Equity Interest.
(ii) CT Sports may at any time after the Unrestricted Transfer
Date, subject only to the prior written approval of at least 75% of the Partners
who at such time are the record and beneficial owners of at least 75% of the
Equity Interest, (but without the prior written approval of Oldco), directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise,
Transfer any or all of the CT Sports Equity Interest, or any right, title or
interest therein, to a Third Party.
(b) CT Sports shall not at any time, without the prior written
approval of Oldco, directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, create an Encumbrance on any or all of the CT
Sports Equity Interest, or any right, title or interest therein; provided that
CT Sports may, without the prior written approval of Oldco, create an
Encumbrance on any or all of the CT Sports Equity Interest, or any right, title
or interest therein in order to secure any indebtedness or other obligations
incurred from time to time by the Company or any of its Subsidiaries or incurred
by CT Sports solely for the benefit of the Company or any of its Subsidiaries,
provided, further, that all of the proceeds of such indebtedness are utilized by
the Company or its Subsidiaries in their businesses.
(c) Nothing herein shall be deemed to limit or otherwise affect
Tecnica's or H.D. Xxxxxx'x right to freely Transfer at any time or from time to
time their respective Securities in CT Sports to any of their Affiliates or to
any Third Party, provided that after giving effect to any such Transfer to a
Third Party (i) the aggregate number of voting Securities owned or controlled by
Tecnica and H.D. Xxxxxx (or their Affiliates) is more than 50% of the total
issued and outstanding voting Securities of CT Sports and (ii) Tecnica and H.D.
Xxxxxx (or their Affiliates) shall otherwise control the Company. Nothing herein
shall be deemed to limit or otherwise affect Tecnica's or H.D. Xxxxxx'x right to
freely Encumber at any time or from time to time all or a portion of their
respective Securities in CT Sports.
(d) Notwithstanding anything herein to the contrary, Oldco hereby
consents to the Transfer by CT Sports of not more than (in the aggregate) 10% of
the Equity Interest to certain managers; provided that no such Transfer shall
dilute in any way the Oldco Equity Interest. Oldco agrees to execute and deliver
such declarations, documents and instruments as may be reasonably necessary to
effectuate such consent and the Transfer of such Equity Interests.
Section 2.3 ADDITIONAL PROVISIONS RELATING TO TRANSFERS. The following
provisions shall apply to and be a condition to the effectiveness of each
Transfer permitted under this Article II:
(a) No Transfer by a Holder permitted hereunder (other than a Transfer
to stockholders of Oldco pursuant to the Plan or a Transfer by CT Sports to
Tecnica, Volkl or H.D. Xxxxxx) shall relieve the transferor Holder of any of its
obligations or liabilities under this Agreement arising prior to or in
connection with consummation of such Transfer.
(b) In connection with each Transfer permitted hereunder (including a
Transfer to the stockholders of Oldco pursuant to the Plan and a Transfer by CT
Sports to Tecnica, Volkl or H.D. Xxxxxx), the Holder making the Transfer and the
Transferee (other than a Transferee who is already a Holder) shall deliver to
the Company and the parties to this Agreement such other documents and
instruments as such parties may reasonably request in order to effectuate such
Transfer in accordance with applicable Law, the Articles of Incorporation and
this Agreement. Without limiting the generality of the preceding sentence, the
parties to this Agreement shall use all reasonable efforts to take, or cause to
be taken, all actions and to do or cause to be done, all things necessary
(including, without limitation, in connection with obtaining any requisite
approval) to expeditiously consummate each Transfer permitted or required under
this Agreement or required under applicable Law. After giving effect to any such
Transfer, the Transferee (other than a Transferee who is already a Holder) shall
be deemed a "Holder" and a party hereto and shall be bound by the terms and
conditions hereof.
(c) Oldco will ensure that any Transfer of the Oldco Equity Interest
to the Company, CT Sports or any other Transferee shall be free and clear of all
Encumbrances.
ARTICLE III
ISSUANCE OF ADDITIONAL SECURITIES
Section 3.1 ISSUANCE OF ADDITIONAL SECURITIES CT Sports and the
Company hereby agree that upon the issuance of any additional Securities by the
Company, the Oldco Equity Interest will in no event be less than 15% (or such
lower percent as may be in effect immediately prior to the date of such proposed
issuance) on a fully diluted basis.
ARTICLE IV
ADDITIONAL RIGHTS AND
OBLIGATIONS OF HOLDERS AND THE COMPANY
Section 4.1 FINANCIAL STATEMENTS. (a) As soon as practicable following
the end of each fiscal year of the Company but in any event within 75 days after
the end of such fiscal year, the Board shall cause to be prepared and delivered
to each Holder statements of income and cash flows for the Company for such
fiscal year and a balance sheet of the Company as of the end of such fiscal
year, in each case setting forth comparative figures for the preceding fiscal
year, and certified by independent certified public accountants of recognized
international standing as to fairness of presentation, preparation in accordance
with generally accepted accounting principles (IAS) and consistency.
(b) No later than 20 days following the end of each fiscal quarter of
the Company (other than the last fiscal quarter of each fiscal year), the
Company shall prepare and deliver to each Holder statements of income and cash
flows of the Company for such quarter and for the year to date and an unaudited
balance sheet of the Company as of the end of such quarter, in each case setting
forth comparative figures for the related periods in the prior fiscal year and
certified by the chief financial officer of the Company as to fairness of
presentation, preparation in accordance with generally accepted accounting
principles (IAS) and consistency; provided that (i) the Board shall use its best
efforts to cause such quarterly financial statements and related materials to be
delivered within 20 days of the end of each fiscal quarter and (ii) in the event
that it is not possible to deliver such financial statements and related
information within the 20 day period specified in this Section 4.1(b), the
Company shall deliver drafts of such financial statements and related materials
(without any representation or warranty, express or implied) within such 20 day
period and shall deliver the final versions thereof as promptly as possible, but
in no event later than 30 days after the end of the relevant fiscal quarter.
(c) To the extent necessary for Oldco to comply with reporting
requirements under United States securities Laws, the Company shall use its best
efforts to furnish to Oldco on a timely basis all the information needed for the
preparation of financial statements utilizing generally accepted accounting
principles in effect in the United States; the Company shall also use its best
efforts to furnish to Oldco on a timely basis, such other information as may be
reasonably requested by Oldco; provided that Oldco shall bear the cost and
expense of preparing all such information and financial statements requested by
Oldco to the extent it is not prepared by the Company in the ordinary course of
the Company's business. It is understood and agreed that the Company does not
have any obligation to distribute or otherwise provide any financial statements
or any other information to the stockholders of Oldco or any other Person (other
than Oldco).
Section 4.2 CONFIDENTIALITY. All information received pursuant to
Section 4.1 shall be kept confidential by each Holder except for information
which (i) was available to such Holder on a non-confidential basis prior to its
provision to such Holder under this Agreement, (ii) becomes generally available
to the public other than as a result of a disclosure by such Holder, (iii)
becomes available to such Holder on a non-confidential basis other than as a
result of any transaction known by such Holder to constitute a breach of any
obligation to retain such information in confidence, (iv) is required to be
disclosed pursuant to the relevant securities regulation (including, without
limitation, as a result of Oldco's reporting obligations under U.S. securities
Laws) or (v) such Holder is otherwise legally compelled to disclose; provided,
however, that such Holder will provide the Company and the other Holder with
prompt notice of such order to disclose so that the Company or the other Holder
may seek a protective order or other appropriate remedy and/or waive compliance
with the provisions of this Agreement; provided, further, in the event that such
protective order, other remedy and/or waiver is not obtained, the Holder will
furnish only that portion of the information received pursuant to Section 4.1
which such Holder is advised by written opinion of such Holder's legal advisors
to be legally required and such Holder will exercise such Holder's reasonable
efforts to attempt to obtain reliable assurance that confidential treatment will
be accorded the information so to be furnished.
Section 4.3 OBLIGATION TO SELL THE OLDCO EQUITY INTEREST; INVESTMENT
ACT BREACH.
(a) So long as an Investment Act Breach has not occurred, upon the
earlier to occur of (x) an Unauthorized Transfer Attempt and (y) the second
anniversary of this Agreement, CT Sports will have the right (the "Call Option")
to purchase from Oldco (and Oldco will be unconditionally obligated to sell to
CT Sports) all, but not less than all, of the Oldco Equity Interest for such
Equity Interest's Fair Market Value. CT Sports shall provide Oldco and the
Escrow Agent with written notice (the "Call Option Notice") no less than five
(5) Business Days prior to the date on which it plans to exercise the Call
Option. The Call Option Notice shall specify CT Sports' valuation of the Oldco
Equity Interest and an investment bank that CT Sports proposes could determine
the Fair Market Value of the Oldco Equity Interest pursuant to Section 4.4.
(i) Within thirty (30) days following the date of the Call
Option Notice, Oldco shall deliver (to the extent it has not already done
so) to the Escrow Agent such certificates, declarations, documents and
instruments of conveyance as may be necessary or appropriate in the opinion
of counsel to CT Sports to effect the Call Option, in each case in form and
substance satisfactory to CT Sports.
(ii) Subject to Section 4.5 and the contemporaneous Transfer
of the Oldco Equity Interest to CT Sports in accordance with applicable
Law, CT Sports shall within 75 days of either (i) the parties agreement on
the Fair Market Value of the Oldco Equity Interest or (ii) the
determination by an investment bank of the Fair Market Value of the Oldco
Equity Interest pursuant to Section 4.4(b), remit to Oldco the total Fair
Market Value of the Oldco Equity Interest less such amounts as may be
payable by Oldco to the Company or CT Sports under the Asset Purchase
Agreement or hereunder.
(b) (i) If at any time an Investment Act Breach occurs (the
date of such occurrence being the "Investment Act Breach Date"):
(A) Upon demand of CT Sports, the Oldco Equity Interest
shall be transferred to CT Sports and Oldco shall execute and deliver
all declarations, documents and instruments which are necessary or
desirable (in the opinion of counsel to CT Sports) to effectuate the
Transfer of the Oldco Equity Interest to CT Sports and have it entered
in the Commercial Register (to the extent such declarations, documents
and instruments have not been previously delivered to the Escrow
Agent). It is hereby understood and agreed that neither CT Sports nor
the Company shall deliver a Breach Release Notice (as defined in the
Escrow Agreement) to the Escrow Agent unless an Investment Act Breach
has occurred.
(B) [Intentionally Omitted].
(C) So long as Oldco has complied with the terms of
this Section 4.3(b)(i) and the Oldco Equity Interest has been
transferred to CT Sports in accordance with applicable Law, after the
Investment Act Demand Date, Oldco shall have a right to payment of an
amount equal to the difference between (x) 15% of the Fair Market
Value of the Company determined in accordance with Section 4.4 minus
(y) such amounts as may be payable by Oldco to the Company or CT
Sports under the Asset Purchase Agreement or hereunder as of the
Investment Act Demand Date (the "Replacement Interest"). The
Replacement Interest shall be due and payable in accordance with
Section 4.3(b)(i)(D).
(D) CT Sports may, at any time within 75 days of the
Investment Act Demand Date, in its sole discretion, either (1) remit
to Oldco, subject to Section 4.5, the amount of the Replacement
Interest or (2) evidence its obligation to pay the Replacement
Interest by issuing to Oldco a promissory note (the "Note") in the
aggregate principal amount equal to the value of the Replacement
Interest. The Note shall bear interest at 5% per annum and the
Replacement Interest evidenced thereby together with accrued interest
thereon shall be payable no later than the third anniversary of the
issuance of the Note; provided that CT Sports may at any time or from
time to time make voluntary prepayments (without premium or penalty)
on the Note and such prepayments shall be applied to principal or
accrued interest as specified by CT Sports, and provided, further,
that any payments made under the Note shall be subject to the set off
provisions of the Asset Purchase Agreement and this Agreement.
(ii) Notwithstanding anything herein to the contrary, except
for the rights set forth in this Section 4.3(b), all of Oldco's rights (but
not its obligations) under this Agreement shall be terminated and the
provisions hereof granting Oldco such rights shall be of no further force
and effect, in each case, as of the Investment Act Breach Date.
Notwithstanding the provisions of the preceding sentence of this clause
(ii), in the event CT Sports exercises its rights pursuant to Section
4.3(b)(i)(A), the parties agree that (A) Oldco's rights to commence an
action in arbitration pursuant to Section 7.2 and seek thereunder any and
all available remedies or relief thereunder (including injunctive relief)
shall be preserved and (b) the provisions of Section 5.1(e) shall continue
in full force and effect as if such action by CT Sports shall not have
occurred for the longer of (x) 30 days following such action and (y) the
conclusion of any action in arbitration that is is initiated by Oldco prior
to the expiration of such 30 day period.
(iii) Upon any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, Oldco's right to receive any
payment (whether in cash or in kind) on account of the Oldco Equity
Interest, the Replacement Interest or the Note will be subject to Section
4.5 and will at no time rank senior to the right of CT Sports to receive
payment (whether in cash or in kind) on account of the CT Sports Equity
Interest and any such payments to the Holders shall be distributed pro
rata.
(c) The rights granted to and the obligations of CT Sports under this
Section 4.3 may be assigned by CT Sports to any Person (other than the Company)
at any time in CT Sports' sole discretion so long as CT Sports unconditionally
and irrevocably guarantees the performance of such obligations and any required
payments by such assignee.
Section 4.4 DETERMINATION OF FAIR MARKET VALUE OF THE OLDCO EQUITY
INTEREST.
(a) For purposes hereof, the "FAIR MARKET VALUE" with respect to the
Oldco Equity Interest at any date of determination shall mean the fair market
value of such Equity Interest as determined by an agreement of the parties. The
Fair Market Value shall be calculated using the DISCOUNTED CASH FLOW METHOD
provided that the parties are in agreement on (i) the interest rate to be
utilized (ii) financial projections and (iii) other essential elements necessary
to the utilization of such methodology. If the parties can not reach such an
agreement the Fair Market Value shall be determined by (A) an investment bank
selected by the party exercising the Call Option and specified in the Call
Option Notice; (B) if Oldco objects to such investment bank by an investment
bank selected by Oldco by written notice within five (5) Business Days of the
issuance of the Call Option Notice; or (C) if the party exercising the Call
Option Notice objects to the use of such alternative investment bank, then by an
investment bank chosen by the two investment banks suggested by each party.
(b) The parties shall instruct any investment bank determining the
Fair Market Value of the Oldco Equity Interest to conclude such determination
within (30) days after the date in which the selected investment bank has been
in-charged of the determination. Such determination shall be based on short term
and long term considerations that are customary in such valuations, including,
but not limited to, the most recent financial statements of the Company, with
consideration for any non-recurring events that would not normally affect the
value of the Company, public market values (or known recent private transaction
valuations) of comparable companies and/or companies in similar industries, and
structural and/or strategic changes to the Company and any other factors
(including the continuance of the distribution arrangements in accordance with
the terms thereof and the strategic and structural relationship among the
Company, Tecnica and Volkl) considered relevant by the investment bank
conducting the appraisal. The investment bank shall not take into account any
minority discount with respect to the Oldco Equity Interest. The determination
of the Fair Market Value pursuant to this Section 4.4 shall be final and
conclusive on the Company, Oldco and CT Sports.
(c) In determining the fair market value of the Oldco Equity interest,
the investment bank shall treat any loans and/or advances made by CT Sports (or
any of their Affiliates) to the Company in connection with the consummation of
the transactions contemplated by the Asset Purchase Agreement as equity of the
Company and any payments (or deemed payments) of interest or principal under
such loans and/or advances shall, for the purposes of such calculations only, be
reversed and deemed not to have been made.
Section 4.5 COSTS AND EXPENSES.
(a) So long as an Investment Act Breach has not occurred, each party
shall (subject to the terms of the Asset Purchase Agreement) pay its own
expenses incident to any Transfer of its Equity Interest, including but not
limited to the fees, expenses and disbursements of such party's accountants,
counsel and other representatives. Notwithstanding whether an Investment Act
Breach has occurred, the Company shall pay 85% of the aggregate fees, costs and
expenses of the investment bank selected pursuant to Section 4.4 and Oldco shall
pay the remaining 15%. Except as set forth in the preceding sentence and without
in any way limiting any of the Company's or CT Sports' rights hereunder, or
under the Asset Purchase Agreement or under applicable Law, from and after the
Investment Act Breach Date, Oldco shall pay all of the costs, fees, expenses and
disbursements (including, without limitation, the fees and expenses of counsel
and other professionals) incurred by the Company or CT Sports in connection with
or otherwise relating to the Investment Act Breach.
(b) Notwithstanding anything herein to the contrary, the Company's and
CT Sports' obligation to make any payment to Oldco pursuant to the terms hereof
(i) is subject to the set off rights of the Company and CT Sports under Section
10.3 and Section 10.4 of the Asset Purchase Agreement (including, without
limitation, the right to deliver any amounts due to Oldco pursuant to the terms
hereof to an escrow agent pending the settlement of any dispute under the Asset
Purchase Agreement) and (ii) shall be net of any amounts payable by Oldco to the
Company or CT Sports under the terms hereof (including, without limitation,
Section 4.6) and under the Asset Purchase Agreement and under the Escrow
Agreement.
Section 4.6 INCOME TAXES.
(a) So long as Oldco is not in default of any of its obligations under
the Asset Purchase Agreement or hereunder, upon written notice from Oldco
received by the Company at least 30 days prior to the due date for Oldco's
payment of its income tax liability for any taxable year or portion thereof
following the Closing, the Company shall advance to Oldco, in the form of a
loan, an amount equal to Oldco's income tax liability for such taxable year that
is attributable to allocations of the Company's income to Oldco; provided,
however, (a) the aggregate of such amounts loaned hereunder shall not exceed the
amounts then reasonably expected by the Company to become due to Oldco hereunder
and be available for offset in accordance with the terms of the Asset Purchase
Agreement, (b) such amounts shall be advanced by the Company only to the extent
permitted under the terms of its credit facilities and (c) the Company shall
have received with such notice proof satisfactory to the Company, in the
Company's reasonable discretion, of (i) the due date for Oldco's payment of its
income tax liability for the taxable year, and (ii) the amount of Oldco's income
tax liability for the taxable year that is attributable to allocations of
Company income.
(b) Any loans made pursuant to Section 4.6(a) shall bear interest at
5% per annum from the date of funding of such loan and the principal amount of
such loans together with accrued interest thereon shall be withheld and set off
(without notice of any kind to Oldco, such notice being expressly waived hereby)
from any amounts due to Oldco pursuant to the terms hereof. The Company's right
to withhold and set off such amounts are in addition to any rights now or
hereafter granted to the Company hereunder, under the Asset Purchase Agreement
and applicable law and the reimbursement of such amounts pursuant to the terms
hereof shall not be subject to the minimum liability floor or the Maximum
Liability cap set forth in Section 10.3(i) and (ii), respectively, of the Asset
Purchase Agreement.
(c) It is hereby understood and agreed that neither the Company nor CT
Sports shall have any obligation to make any loan or advance to Oldco under this
Agreement, the Asset Purchase Agreement or otherwise (i) on or after the date of
termination of this Agreement pursuant to Section 6.1 and (ii) for any of
Oldco's taxes arising from or relating to the Transfer of the Oldco Equity
Interest to CT Sports pursuant to the terms hereof.
ARTICLE V
GOVERNANCE
Section 5.1 GOVERNANCE (a) Since Marker International GmbH is
organized in the form of a Swiss GmbH there exists no Board of Directors like in
a corporation [Aktiengesellschaft]. According to Swiss Law all original Partners
of a GmbH are entitled and obligated to collectively manage and represent the
GmbH (Art. 811 Swiss Code of Obligations).
(b) The management and the representation of the Company may also be
transferred by the Articles of Incorporation or by company resolution to persons
who are not partners. The power and the responsibility of such persons shall be
subject to the provisions on managing partners (Art. 812 Swiss Code of
Obligations).
(c) In the Articles of Incorporation Marker International GmbH
empowers the managing officers to manage and represent the Company. The duties,
functions and obligations of the managing officers are described in the
organisation regulation [Organisationsreglement] of Marker International GmbH
and her bodies.
(d) Although the management and the representation of the Company has
been transferred to the managing officers, the Partner's Meeting stays the
supreme body of the Company. It has the following non assignable powers:
1. to adopt and amend the Articles of Incorporation;
2. to appoint and remove Managing Officers;
3. to appoint the Auditors;
4. to approve the profit and loss statement and the balance sheet and, if
any, the consolidated financial statements;
5. to take resolutions concerning the allocation of profits;
6. to grant discharge to Managing Officers;
7. to pass resolutions concerning all matters which are reserved to the
authority of the Meeting of Partners by law or by the Articles of
Incorporation, or which are submitted for resolution to the Meeting of
Partners by the Managing Officers.
(e) Notwithstanding the foregoing, unless an Unauthorized Transfer
Attempt or Investment Act Breach has occurred, Managing Officers shall not take
any of the following actions without the unanimous consent of the partners:
(i) enter into any transaction with CT Sports or any Affiliate of
CT Sports or any Associate of any Affiliate of CT Sports other than transactions
or agreements that are not less favorable to the Company as would have been
obtained on an arm's-length basis with a Third Party, as determined by the good
faith judgment of the Partners of the Company; provided, however, that prior to
any such determination, the Company shall provide the Oldco Partner with all
documentation and information as is reasonably requested by the Oldco Partner in
order to permit the Oldco Partner to review the determination to be made by the
Partners of the Company and the Partners of the Company shall provide the Oldco
Partner with prompt notice of any such determination;
(ii) pay any management or service fees to CT Sports or any of
its Affiliates or any Associate of any Affiliate of CT Sports other than fees
for services actually rendered as determined in accordance with the standard set
forth in subsection (i) of this Section 5.1(e);
(iii) declare any distributions that are limited to the Holder of
the CT Sports Equity Interest;
(iv) amend any provision of the Company's Articles of
Incorporation that would circumvent any provision of this Agreement;
(v) consolidate or be a party to a merger with any Person (except
if the Company is the surviving entity after giving effect to such consolidation
or merger);
(vi) convey, transfer or sell all or substantially all of its
assets (other than to a wholly owned Subsidiary of the Company);
(vii) after a conveyance, transfer or sale of all or
substantially all of its assets to a wholly-owned Subsidiary, (x) the sale or
transfer of all or a portion of the Company's ownership interest in such
Subsidiary, (y) the issuance of any warrants, options or other rights to acquire
an ownership interest in such Subsidiary to any Person other than the Company or
(z) the conveyance, transfer or sale of all or substantially all of such
Subsidiary's assets; and
(viii) dissolve, liquidate or wind up
In case of any violation of the provisions of Section 5(e)(iii)
through (viii) of this Agreement by the Managing Officers of the Company, Oldco
shall be entitled to liquidated damages amounting to USD 10,000,000, with the
exclusion of any further claims for damages. The liquidated damages shall be
payable upon first demand of Oldco without proof of any damages for Oldco. CT
Sports and the Company shall be jointly and severally liable for such payment.
All rights of CT Sports and the Company under this Agreement shall be preserved.
(f) According to Articles of Incorporation Partner's Meetings shall be
held at least once a year within six months after the close of the fiscal year.
ARTICLE VI
TERMINATION
Section 6.1 TERMINATION. (a) Except as provided in Section 6.1(b),
this Agreement shall terminate on the fifth anniversary of the date hereof;
provided that this Agreement shall automatically continue for three additional
years after the fifth anniversary of the date hereof unless either CT Sports or
Oldco gives six months prior written notice to the other party to terminate this
Agreement.
(b) This Agreement shall terminate upon the occurrence of any of the
following:
(i) the written agreement of each Holder;
(ii) the date of the consummation of any Transfer of all of the
Oldco Equity Interest pursuant to the Call Option in accordance with
Section 4.3(a) or the transfer by Oldco of all of the Oldco Equity Interest
to its stockholders pursuant to the Plan); or
(iii) the dissolution, liquidation or winding up of the Company.
Section 6.2 TERMINATION OF OTHER SECTIONS. Sections 3.2, 4.3(b) and
5.1(d) contain provisions with respect to termination of the relevant rights and
obligations set forth in such sections.
ARTICLE VII
MISCELLANEOUS
Section 7.1 GOVERNING LAW
This Agreement is governed by and construed in accordance with the
laws of Switzerland. Should any provision of this Agreement be void or
unenforceable, such clause shall be deemed to be replaced by another clause the
substance whereof shall be as close as possible to the original intent of the
parties. The validity of the other clauses of this Agreement shall not be
affected thereby.
Section 7.2 ARBITRATION In the event of a dispute between the parties
to this Agreement, the following shall apply:
(a) The party complaining (the "Initiator") shall immediately notify
the other (the "Respondent"), as the case may be, in writing, of the dispute or
breach (a "Dispute Notice");
(b) If the parties cannot informally resolve the dispute within ten
(10) Business Days following the receipt by a party of the Dispute Notice, then
the dispute shall be submitted to arbitration upon notice in writing by either
the Initiator or the Respondent (the "Arbitration Notice");
(c) Promptly following the giving of any Arbitration Notice hereunder,
the Initiator and the Respondent shall promptly meet and attempt in good faith
to select a single arbitrator acceptable to them;
(d) If a single arbitrator is not selected by mutual consent within
ten (10) Business Days after the giving of the Arbitration Notice, then either
party may apply to the President of the Zurich Chamber of Commerce for the
appointment of an arbitrator;
(e) The parties agree to instruct the arbitrator so selected, to
render a determination within fifteen (15) Business Days of the conclusion of
the arbitration hearing;
(f) Subject to the provisions hereof, the arbitration shall be
conducted in accordance with the arbitration provisions of the International
Arbitration Rules of Zurich Chamber of Commerce which presently exist or as same
may be amended from time to time;
(g) The parties will use their reasonable best efforts to ensure that
the arbitration commences at a location in Zurich, Switzerland to be chosen by
the arbitrator no later than fifteen (15) Business Days after the arbitrator has
been selected as aforesaid, and that such arbitration continues on each
consecutive Business Day therefrom until fully concluded, unless continued by
the arbitrator for good cause shown; provided, however, that the parties will
use their reasonable best efforts to ensure that such arbitration does not
continue for more than ten (10) Business Days from the commencement thereof;
(h) No examination for discovery (e.g. depositions, interrogatories,
request for admission) shall be permitted by either party in connection with
such arbitration. There shall be made available to the arbitrator all relevant
documents and the materials in connection with the dispute. The parties
nonetheless agree that they shall participate in an exchange of information
between them prior to the arbitration hearing in order to prepare for same;
(i) Each of the parties shall bear their respective expenses incurred
in connection with any arbitration but any expenses related to the compensation
and/or costs of the arbitrator shall be paid by the losing party in such
arbitration;
(j) Each of the parties agree that an arbitrator may compel specific
performance of this Agreement and/or injunctive relief (without requiring a
party to post a bond or other security) to enforce or prevent any violation of
the provisions of this Agreement;
(k) The arbitrator may not limit, expand or otherwise modify the terms
of this Agreement;
(l) The parties agree that the results, determinations, findings,
judgements and/or awards rendered through any such arbitration (i) shall be
limited to a holding for or against a party, and affording such monetary remedy
as is deemed equitable, just and within the scope of this Agreement; (ii) may
not include special or consequential or punitive damages; and (iii) shall be
final, binding and not subject to appeal of any kind;
(m) The parties, their representatives, other participants and the
arbitrator shall hold the existence, context and result of arbitration in
confidence;
(n) The parties agree that arbitration as set forth above shall be the
sole means of resolving any disputes, claims and controversies between them
arising out of this Agreement;
(o) The language of the arbitration proceedings shall be in English
and this Agreement shall be interpreted in and according to the laws of
Switzerland, without regard to conflicts of law doctrines, except to the extent
that certain matters are governed as a matter of controlling law by the law of
the jurisdiction of organization of the respective parties;
(p) Notwithstanding anything herein to the contrary, each party hereto
acknowledges and agrees that pending final resolution of any dispute arising out
of relating to this Agreement (i) such party shall continue to perform its
obligations hereunder and (ii) nothing herein is intended to limit such party's
rights under this Agreement; and
Section 7.3 SUCCESSORS AND ASSIGNS. This Agreement, and all
obligations and rights hereunder, shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Except as specifically provided in this Agreement, no rights or
obligations of Oldco or CT Sports under this Agreement may be assigned.
Section 7.4 NO WAIVERS; AMENDMENTS. (a) No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by Law.
(b) This Agreement may not be amended, modified or supplemented, and
no waivers of or consents to departures from the provisions hereof, may be given
unless consented to in writing by the parties hereto.
Section 7.5 OTHER AGREEMENTS. Nothing contained in this Agreement
shall be deemed to be a waiver of, or release from, any obligations any party
hereto may have under, or any restrictions on the transfer of the Equity
Interests of the Company imposed by, any other agreement.
Section 7.6 NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including telex, telecopy or similar
writing) and shall be given,
if to the Company:
Marker International GmbH
Xxxxxxxxxxxxxx 0
0000 Xxxx
Xxx
Xxxxxxxxxxx
Tel: 00-00-000-0000
Fax: 00-00-000-0000
if to CT Sports:
CT Sports Holding AG
Xxxxxxxxxxxxxx 0
0000 Xxxx
Xxx
Xxxxxxxxxxx
Tel: 00-00-000-0000
Fax: 00-00-000-0000
In each case, with a copy to:
Treuhand & Revisions AG
Xxxxxx Xxxx
Xxxxxxxxxxxxxx 0
XX-0000 Xxxxxx
Tel: 00-00-000-0000
Fax: 00-00-000-0000
if to Oldco:
MKR Holdings
[**1070 W. 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000**]
Tel: 00-000-000-0000
Fax: 00-000-000-0000
with a copy to:
Xxxx Xxxxx
Burki Rechtsanwalte
Xxxxxxxxxxxxxx 00
XX-0000 Xxxxxx Zollikon
Tel: 00-0-000-0000
Fax: 00-0-000-0000
and:
Stroock & Stroock & Xxxxx LLP
Xxxx X. Xxxxxxxxx
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000-0000
Tel: 00-000-000-0000
Fax: 00-000-000-0000
or to such other address or telecopy number and with such other copies, as such
party may hereafter specify by notice to the other parties. Each such notice,
request or other communication shall be effective (i) if given by telecopy, when
such telecopy is transmitted to the telecopy number specified in this Section
7.6 and evidence of receipt is received or (ii) if given by any other means,
upon delivery or refusal of delivery at the address specified in this Section
7.6.
Section 7.7 INSPECTION. So long as this Agreement shall be in effect,
this Agreement and any amendments hereto shall be made available for inspection
by any Holder at the principal offices of the Company.
Section 7.8 SECTION HEADINGS. The section headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
Section 7.9 ENTIRE AGREEMENT. This Agreement and the Asset Purchase
Agreement constitute the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersede any and all prior
agreements and understandings, written or oral, relating to the subject matter
hereof.
Section 7.10 SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by Law.
Section 7.11 COUNTERPARTS. This Agreement may be signed in
counterparts, each of which shall constitute an original and which together
shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer as of the day and year
first above written.
MARKER INTERNATIONAL GMBH
By:/s/ XXXXXXXXX XXXXXXX
------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: President
MARKER INTERNATIONAL
By: /s/ XXXXX XXXXX
-----------------------
Name: Xxxxx Xxxxx
Title: Chief Financial Officer
CT SPORTS HOLDING AG
By: /s/ XXXXXXXXX XXXXXXX
------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: President
Except as otherwise provided for in this Agreement, the undersigned Affiliates
of CT Sports agree for the benefit of Oldco that they will not (and in the case
of Volkl Sports Holding AG ensure that its Affiliate which is a shareholder of
CT Sports will not), directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, Transfer any Securities in CT Sports owned by it,
or any right, title or interest therein, at any time prior to the termination of
this Agreement.
TECNICA SpA VOLKL SPORTS HOLDING AG
By:/s/ XXXXXXXXX XXXXXXX By: /s/ XXXXXXXXX XXXXXXX
----------------------- ------------------------
Name: XXXXXXXXX XXXXXXX Name: Xxxxxxxxx Xxxxxxx
Title: President Title: CEO
